华新水泥(600801)G华新2005年年度报告摘要

华新水泥股份有限公司 2005 年度报告摘要 华新水泥股份有限公司 2005 年度报告摘要 §1 重要提示 1.1、本公司董事会、监事会及董事、监事、高级管理人员保证本报告所载资料不存在任何虚假 记载、误导性陈述或者重大遗漏，并对其内容的真实性、准确性和完整性承担个别及连带责任。 1.2、独立董事林宗寿先生因工作原因未出席本次董事会，授权董事张天武先生代为出席并行使 表决权。 1.3、公司董事长陈木森先生、总裁李叶青先生，财务总监孔玲玲女士，会计机构负责人何凤萍 女士声明：保证本年度报告中财务报告的真实、完整。 §2 上市公司基本情况简介 2.1 基本情况简介 股票简称 华新水泥 股票代码 600801 上市交易所 上海证券交易所 股票简称 华新 B 股 股票代码 900933 上市交易所 上海证券交易所 注册地址和办公地址 湖北省黄石市黄石大道 897 号 邮政编码 435002 公司国际互联网网址 http//www.huaxincem.com 电子信箱 investor@huaxincem.com 2.2 联系人和联系方式 董事会秘书 证券事务代表 姓名 王锡明 王璐 联系地址 湖北省黄石市黄石大道 897 号 湖北省黄石市黄石大道 897 号 电话 0714-6328310 0714-6328471 传真 0714-6235204 0714-6235204 电子信箱 investor@huaxincem.com investor@huaxincem.com §3 会计数据和财务指标摘要 3.1 主要会计数据 单位:元 本年比上年增 2005 年 2004 年 2003 年 减(%) 主营业务收入 2,639,380,167.10 2,188,101,303.80 20.62 1,188,827,685.49 利润总额 81,377,759.92 255,160,148.41 -68.11 117,841,100.71 净利润 62,073,249.69 148,550,557.65 -58.22 68,244,142.01 扣除非经常性损益的净利润 58,348,087.76 120,802,513.29 -51.70 68,741,266.17 经营活动产生的现金流量净额 503,134,090.50 490,510,424.42 2.57 294,856,868.91 本年末比上年 2005 年末 2004 年末 2003 年末 末增减(%) 总资产 6,108,292,177.68 4,955,799,957.40 23.26 3,017,709,764.81 股东权益（不含少数股东权益） 1,213,617,527.85 1,166,712,965.39 4.02 806,816,113.16 第 1 页 共 19 页 华新水泥股份有限公司 2005 年度报告摘要 3.2 主要财务指标 单位:元 2005 年 2004 年 本年比上年增减(%) 2003 年 每股收益 0.19 0.45 -57.78 0.21 净资产收益率（%） 5.11 12.73 减少 7.62 个百分点 8.46 扣除非经常性损益的净利润为基础计 4.81 10.35 减少 5.54 个百分点 8.51 算的净资产收益率（%） 每股经营活动产生的现金流量净额 1.53 1.49 2.68 0.90 本年末比上年末增 2003 年 2005 年末 2004 年末 减(%) 末 每股净资产 3.70 3.55 4.23 2.46 调整后的每股净资产 3.58 3.43 4.37 2.41 非经常性损益项目 单位:元 非经常性损益项目 金额 处置长期股权投资、固定资产、在建工程、无形资产、其他长期资 3,707,350.96 产产生的损益 扣除公司日常根据企业会计制度规定计提的资产减值准备后的其他 -800,758.35 各项营业外收入、支出 所得税影响数 818,569.32 合计 3,725,161.93 3.3 国内外会计准则差异（人民币千元） 本公司股权持有人 本公司股权持有人 应占之利润 应占之净资产 中国法定帐目所列 62,073 1,213,617 国际财务报告准则和其他调整之影响: —拨回以前年度已冲销之商誉的摊销 261 (1,861) —将开办费于发生当期计入利润 表 101 (1,192) —国家补贴计入递延收入或补贴收入 1,447 (9,125) --冲回对正商誉之摊销 1,060 1,060 —借款利息资本化入物业、机器及设 备 6,296 6,296 将长期应付款按折现值重列所产生的差异 （349） （349） 确认递延税项 8,269 28,106 经国际财务报告准则调整后所重列 79,158 1,236,552 第 2 页 共 19 页 华新水泥股份有限公司 2005 年度报告摘要 §4 股本变动及股东情况 4.1 股份变动情况表 单位:股 本次变动前 本次变动增减（＋，－） 本次变动后 比例 发行新 公积金 比例 数量 送股 其他 小计 数量 (%) 股 转股 (%) 一、有限售条件股份 1、国家持股 91,526,880 27.9 -12,276,232 79,250,648 24.1 2、国有法人持股 3、其他内资持股 其中：境内法人持股 24,873,120 7.6 -2,123,768 22,749,352 6.9 境内自然人持股 ４、外资持股 其中：境外法人持股 境外自然人持股 有限售条件股份合计 116,400,000 35.4 -14,400,000 102,000,000 31.1 二、无限售条件股份 1、人民币普通股 48,000,000 14.6 +14,400,000 62,400,000 19.0 2、境内上市的外资股 164,000,000 49.9 164,000,000 49.9 3、境外上市的外资股 4、其他 无限售条件股份合计 212,000,000 64.6 226,400,000 68.9 三、股份总数 328,400,000 328,400,000 4.2 股东数量和持股情况 单位:股 报告期末股东总数 36,626 前十名股东持股情况 持有有限售 股东性 持股比例 股东名称 持股总数 条件股份数 质押或冻结的股份数量 质 (%) 量 外资股 HOLCHIN B.V. 26.1 85,761,300 东 国家拥有股份(由华新集团有限公司代国 国 有 股 质押 24.1 79,250,648 79,250,648 家持有) 东 36,000,000 华新集团有限公司 其他 3.0 9,870,232 9,870,232 外资股 MEINL BANK AKTIENGESELLSCHAFT 1.6 5,199,735 东 荆州沙隆达财务咨询有限公司 其他 1.2 4,100,000 4,100,000 中国工商银行－申万巴黎盛利精选证券投 其他 1.0 3,349,442 资基金 全国社保基金一零九组合 其他 0.8 2,643,339 黄石铁路联营公司 其他 0.8 2,520,000 2,520,000 泰康人寿保险股份有限公司 其他 0.6 1,953,621 外资股 NAITO SECURITIES CO., LTD. 0.5 1,695,779 东 前十名无限售条件股东持股情况 第 3 页 共 19 页 华新水泥股份有限公司 2005 年度报告摘要 股东名称 持有无限售条件股份数量 股份种类 HOLCHIN B.V. 85,761,300 境内上市外资股 MEINL BANK AKTIENGESELLSCHAFT 5,199,735 境内上市外资股 中国工商银行－申万巴黎盛利精选证券投资 3,349,442 人民币普通股 基金 全国社保基金一零九组合 2,643,339 人民币普通股 泰康人寿保险股份有限公司 1,953,621 人民币普通股 NAITO SECURITIES CO., LTD. 1,695,779 境内上市外资股 TOYO SECURITIES ASIA LTD. A/C CLIENT 1,609,589 境内上市外资股 全国社保基金六零一组合 1,263,228 人民币普通股 南京豪盾节能科技有限责任公司 1,155,286 人民币普通股 中国银行－银华优势企业(平衡型)证券投资 955,773 人民币普通股 基金 上述股 东关联 除华新集团有限公司代国家持有的国家股份外，前 10 名股东之间不存在关联关系，也 关系或 不属于《上市公司持股变动信息披露管理办法》中规定的一致行动人。 一致行 公司未知前 10 名有限售条件流通股股东之间是否存在关联关系或一致行动关系。公司 动关系 未知前 10 名股东和前 10 名有限售条件流通股股东之间是否存在关联关系或一致行动关系。 的说明 4.3 控股股东及实际控制人情况介绍 4.3.1 控股股东及实际控制人变更情况 □适用√不适用 4.3.2 控股股东及实际控制人具体情况介绍 （1）法人控股股东情况 控股股东名称：华新集团有限公司 法人代表：陈木森 注册资本：370,000,000 元 成立日期：1996 年 11 月 14 日 主要经营业务或管理活动：制造、销售水泥制品、机械配件、房地产开发、商业、服务等 （2）法人实际控制人情况 实际控制人名称：黄石市国有资产管理委员会 4.3.3 公司与实际控制人之间的产权及控制关系的方框图 黄石市国有资产管理委员会 100% 华新集团有限公司 27.1%（合计持有） 华新水泥股份有限公司 第 4 页 共 19 页 华新水泥股份有限公司 2005 年度报告摘要 §5 董事、监事和高级管理人员 5.1 董事、监事和高级管理人员持股变动及报酬情况 单位:股 是否 在股 报告期内 东单 从公司领 年初 年末 位或 姓名 职务 性别 年龄 任期起止日期 变动原因 取的税后 持股数 持股数 其他 报酬总额 关联 (万元) 单位 领取 购股、股改送股 2003-04-28～ 陈木森 董事长 男 57 14,900 97,900 和部分年薪购股 59 否 2006-04-28 所致 董事、总 2003-04-28～ 股改送股和部分 李叶青 男 42 24,300 54,042 59 否 裁 2006-04-28 年薪购股所致 Tom 2004-10-21～ 董事 男 59 / 否 Clough 2006-04-28 Daniel 2005-04-26～ 董事 男 43 / 否 Bach 2006-04-28 Paul 2003-04-28～ 董事 男 40 / 否 Thaler 2006-04-28 2003-04-28～ 股改送股和部分 纪昌华 董事 男 52 15,300 35,160 38 否 2006-04-28 年薪购股所致 2003-04-28～ 张天武 独立董事 男 43 5 否 2006-04-28 2003-04-28～ 谢获宝 独立董事 男 39 5 否 2006-04-28 2003-04-28～ 林宗寿 独立董事 男 49 5 否 2006-04-28 监事会主 2003-04-28～ 股改送股和部分 周家明 男 52 15,100 30,900 38 否 席 2006-04-28 年薪购股所致 2003-04-28～ 杨春华 监事 男 55 6 否 2006-04-28 2003-04-28～ 阮汉文 监事 男 48 6 否 2006-04-28 2003-04-28～ 占卫国 监事 男 33 4 否 2006-04-28 2003-04-28～ 樊彤涛 监事 男 37 2 否 2006-04-28 副总裁兼 2003-04-28～ 股改送股和部分 王锡明 董事会秘 男 47 15,000 32,500 39 否 2006-04-28 年薪购股所致 书 2003-04-28～ 股改送股和部分 彭清宇 副总裁 男 46 15,900 33,100 39 否 2006-04-28 年薪购股所致 2003-04-28～ 股改送股和部分 孔玲玲 副总裁 女 42 15,300 31,260 39 否 2006-04-28 年薪购股所致 2003-04-28～ 股改送股和部分 冯东光 副总裁 男 39 6,500 20,800 38 否 2006-04-28 年薪购股所致 2003-04-28～ 股改送股和部分 柯友良 副总裁 男 41 6,500 21,100 38 否 2006-04-28 年薪购股所致 合计 / / / / 128,800 356,762 / 420 / 注：董事 Tom Clough 先生、Daniel Bach 先生、Paul Thaler 先生自愿放弃 2005 年度董事津贴 USD5,910 元。 第 5 页 共 19 页 华新水泥股份有限公司 2005 年度报告摘要 §6 董事会报告 6.1 管理层讨论与分析 （一）管理层讨论与分析 1、报告期内公司经营情况的回顾 (1)报告期内总体经营情况 2005 年，是水泥行业经营最困难的一年。随着国家宏观调控政策效应的逐步显现，固定资产投 资增幅下降，房地产降温，水泥产销量增长明显放缓，水泥供过于求的局面日益凸现。产能过剩直接 导致价格下滑，加之煤、电涨价的双重挤压，全行业利润大幅下滑。根据中国水泥网统计结果，2005 年全国水泥产量达到 10.48 亿吨，年增幅 11.7%；水泥销售收入 2,608.35 亿元，同比增长 16.2%；但 水泥利润总额却只有 80.50 亿元，同比下降了 38.0%。 2005 年，公司同样面临非常严峻的外部市场环境。一方面，前几年水泥行业过热投资所形成的 产能规模，在 2004~05 年集中释放，使得我国水泥产能规模严重过剩，而产能过剩直接导致价格下 滑，公司产品全年的平均售价降至近 10 年的新低；另一方面，占公司产品成本约六成的煤和电与 2004 年相比，价格均大幅上涨，使得公司产品成本呈刚性上扬之态，极大地蚕食了公司的盈利空 间。公司的盈利能力未能与规模扩张同步提升，产能发挥也由此明显受限，公司的生产经营滑向低 谷。 面对困难与挑战，公司采取了强有利的应对措施，不仅在严酷的市场环境下取得了相对较好的经 营业绩，而且公司规模更加壮大，市场份额稳步提高，竞争力进一步增强。目前，公司已具有年产 1200 万吨熟料、2200 万吨水泥的生产能力，使公司真正成为业内具有重要影响的水泥行业龙头企 业。 公司的主要做法如下： 在生产管理上，公司进一步精细管理，以 IT 信息技术为基础，以扁平、矩阵、协调、效益、效 率、创新为原则，以设备系统运行效率为突破口，提高和优化生产运行的指标、效率，力控运行成 本。淘汰落后生产工艺，调整了集团内能耗高的三台湿法窑生产线及六条干法中空窑的生产作业计 划，并以现代新型干法生产线来替代生产，保证集团内的生产综合平衡。 在市场营销上，讲求理性，有所为有所不为。公司适时收减在上海市场的销量，加大在湖北市场 的销售力度，提升市场占有份额。同时谋求新的销售渠道，重开产品的出口业务。公司仍以效益优先 为原则，参与价格竞争，但不挑起价格竞争。 在发展上，公司以战略管理为手段，统筹规划，规范管理。项目规划、建设、资金落实、人员配 备、项目投产、产品投放等工作有条不紊，新建项目已成为公司主要的利润来源。年内，公司已建成 投产武穴 6000 吨/日熟料水泥生产线、宜都二期 2500 吨/日熟料生产线、苏州金猫 3500 吨/日熟料生 产线、西藏山南 1000 吨/日熟料水泥生产线和岳阳年产 80 万吨水泥粉磨站、武汉武钢华新二期年产 第 6 页 共 19 页 华新水泥股份有限公司 2005 年度报告摘要 60 万吨水泥粉磨线、华新南通二期年产 65 万吨水泥粉磨线及武汉年产 120 万方混凝土搅拌站项目， 新增水泥生产能力 750 万吨、混凝土 120 万方。目前，公司在湖北省的战略布局已基本完成。 2005 年，本集团水泥和熟料销售总量 1518 万吨（内部统计口径，下同），其中水泥销量 1340 万吨，熟料销量 178 万吨，产销量名列全国前茅。实现主营业务收入 2,639,380,167.10 元、经营活 动产生的现金流量净额 503,134,090.50 元，分别比 2004 年增长 21%、3%。实现利润总额 81,377,759.92 元、净利润 62,073,249.69 元，虽较 2004 年分别下降 68%、58%，但仍为公司自上市 以来较好的年份之一。 (2)公司主营业务及经营状况 主营业务分行业、分产品情况表 单位:元 主营业务 主营业务 主营业 分行业或分 收入比上 成本比上 主营业务利润率比 主营业务收入 主营业务成本 务利润 产品 年增减 年增减 上年增减（%） 率(%) （％） （％） 行业 水泥 2,574,343,439.41 2,076,888,915.66 18.67 20.0 31.4 减少 7.09 个百分点 其他 65,036,727.69 40,868,379.62 34.82 50.0 70.7 减少 6.43 个百分点 合计 2,639,380,167.10 2,117,757,295.28 19.07 20.6 32.0 减少 6.99 个百分点 产品 32.5 等 级 水 1,434,385,968.74 1,115,995,277.06 21.55 44.6 51.4 减少 3.58 个百分点 泥 42.5 等 级 及 减少 11.35 个百分 1,056,933,573.80 890,656,512.26 15.08 -5.3 9.3 以上水泥 点 熟料 83,023,896.87 70,237,126.34 14.75 125.5 147.0 减少 7.48 个百分点 其他 65,036,727.69 40,868,379.62 34.82 50.0 70.7 减少 6.43 个百分点 合计 2,639,380,167.10 2,117,757,295.28 19.07 20.6 32.0 减少 6.99 个百分点 主营业务分地区情况表 单位:元 地区 主营业务收入 主营业务收入比上年增减(％) 湖北省 1,297,375,096 57.0 江苏省 599,580,832 -23.9 上海市 111,076,563 -66.4 重庆市 126,431,786 597.4 安徽省 、 江西省 108,927,969 -11.3 河南省 106,375,873 288.3 湖南省 68,417,647 214.4 浙江省 、福建省 44,803,440 -15.9 西藏自治区 33,121,220 / 出口 143,269,740 / 合计 2,639,380,167 20.6 第 7 页 共 19 页 华新水泥股份有限公司 2005 年度报告摘要 生产经营的主要产品及市场占有率情况的说明 本集团生产经营的主要产品为水泥和熟料。2005 年，公司在湖北销售水泥 736 万吨，市场占有率 21.6%，同比增长 44%；在江苏销售水泥 305 万吨，市场占有率 4.2%；在上海销售水泥 57 万吨，市场占有 率 2.7%；在西藏销售水泥 8 万吨，市场占有率 4.6%；在重庆销售水泥 51 万吨，市场占有率 2.3%；在安 徽、江西销售水泥 59 万吨；在河南销售水泥 58 万吨；在湖南销售水泥 44 万吨；在浙江、福建销售水泥 22 万吨（以上数据均源自内部统计）。 主要供应商、客户情况 单位：元 前五名供应商采购金额合计 504,289,768.35 占采购总额比重 36.18 前五名销售客户销售金额合计 309,981,291.26 占销售总额比重 11.74 (3)主要控股及参股公司的经营情况及业绩 单位：元 公司名称 业务性质 主要产品或服务 注册资本 资产规模 净利润 华新水泥（宜昌）有限公司 有限责任公司 生产及销售水泥 150,000,000 755,061,000 48,509,978 华新水泥（阳新）有限公司 有限责任公司 生产及销售水泥 500,000,000 647,869,000 62,064,911 华新水泥（恩施）有限公司 有限责任公司 生产及销售水泥 60,000,000 271,717,000 35,273,345 华新水泥（西藏）有限公司 有限责任公司 生产及销售水泥 50,000,000 182,938,000 5,216,337 华新水泥（仙桃）有限公司 有限责任公司 生产及销售水泥 23,900,000 37,163,000 974,863 混凝土的制造及 华新混凝土（武汉）有限公司 有限责任公司 10,000,000 42,937,739 2,195,927 销售 - 华新金猫水泥(苏州)有限公司 中外合资 生产及销售水泥 USD,136,000,000 1,450,953,000 48,952,805 武汉武钢华新水泥有限公司 有限责任公司 生产及销售水泥 40,000,000 162,648,000 8,381,196 华新南通水泥有限公司 中外合资 生产及销售水泥 108,000,000 191,282,000 -6,910,476 生产及销售水泥 黄石华新包装有限公司 有限责任公司 8,000,000 42,252,000 3,419,773 包装袋 黄石华新水泥科研设计有限公 建材、建筑工程 有限责任公司 1,000,000 60,604,47 915,519 司 设计 华新水泥（岳阳）有限公司 有限责任公司 生产及销售水泥 25,000,000 97,422,000 -3,092,017 华新水泥（昭通）有限公司 有限责任公司 生产及销售水泥 75,000,000 167,189,514 / 华新水泥（武汉）有限公司 有限责任公司 生产及销售水泥 60,000,000 139,810,888 / 第 8 页 共 19 页 华新水泥股份有限公司 2005 年度报告摘要 2、公司未来发展的展望 （1） 公司所处行业的发展趋势及面临的市场竞争格局 2006 年是实施“十一五”规划的开局之年。作为循环经济的重点行业---水泥行业，将进入新的发展 阶段。预计“十一五”我国 GDP 增长率和固定资产投资增长率仍将保持较高的水平。工业化、城市化和基 础设施建设投资的增长，必然带动水泥产业的发展。另外，我国水泥业的集中度低、落后工艺产能仍超过 半壁江山的现实，也决定了新型干法生产线仍将继续发展。水泥产业结构的进一步升级、规模化生产、集 约化经营将成为中国水泥产业发展的总趋势，大型企业仍将保持在整合、并购中的竞争优势，获得加快发 展的机会。 但仅就 2006 年而言，水泥行业仍处在发展过程中的收缩周期，增长率有可能出现稍低于 GDP 增长的情 况。随着前几年投资形成的生产能力陆续投产，预计水泥生产总量将达到 11.3 亿吨左右，同比上年仍有增 长。但是，受国家宏观调控、水泥需求增速下降和前期新增水泥产能增速过快的影响，水泥投资会继续下 降。据中国水泥协会的预测，2006 年，全国新建新型干法水泥生产线将达到 50 条左右，新增产能 4000 万 吨。到 2006 年底，全国水泥产能将达到 13.7 亿吨，其中新型干法水泥产量的比重将由 2005 年的 40%提高 到 2006 年 45%左右，结构将进一步优化。节能、环保和发展循环经济的效果逐渐显现。 2006 年，水泥价格将继续维持低位运行略有波动的态势，部分地区可能有恢复性增长。水泥行业整体 供大于求、落后的产能明显过剩、需求增速放缓仍然是水泥价格难有大幅上升的主要原因。尽管水泥价格 仍将维持在低位徘徊，但水泥企业 2006 年盈利总水平回升应该是有望的。 本公司是中国水泥业界有重要影响的大型集团，是中南地区最大的水泥生产企业，产能规模位居全国 前列。公司现在已先于任何竞争对手在湖北省东西南北中等各地都进行了战略布局，并将在今后一两年内 形成 3000 万吨的产能规模；在湖北地区的销售份额将超过 40%，区域竞争优势明显。湖北作为中部地区， 将保持高于全国平均水平较多的固定资产投资增长率，为本公司引导该地区水泥市场规范、有序的竞争创 造了条件。而展望公司另一目标市场--华东地区，预计水泥市场仍会延续 2005 年的态势，供给严重大于需 求，竞争依然残酷、价格依然低位整理，市场形势难有大的改观。 2006 年，随着煤炭行业投资建设的加快，煤炭供应紧张的局面将会有效缓解。据国家发改委的预测， 全年煤炭总产量将达到 22 亿吨，需求 21.6 亿吨，供需大体平衡。预计一度制约公司生产的煤炭紧张局 面，在 2006 年不会出现。但 2005 年下半年开始征收的“煤炭价格调节资金”和煤炭资源税的调整以及煤 电联动政策的推动，预计 2006 年煤炭出厂价格仍将继续高位小幅波动运行。相对 2005 年，本公司煤炭采 购价格虽然将继续维持市场同步的高位，但在煤炭品质的保证上将有相应提高，按照单位热值计算的煤炭 第 9 页 共 19 页 华新水泥股份有限公司 2005 年度报告摘要 相对采购成本会有下降。另外，影响公司成本的另一大能源—电力，在 2006 年不会再紧张的情况下，价格 会继续维持在高位，但如果国家推行煤电联动，则不排除因煤价上涨而带动电力涨价情况的出现。 2005 年 12 月，国务院新发布了《促进产业结构调整暂行规定》和产业结构调整指导目录。产业结构 调整政策和 2006 年 7 月 1 日即将实施的新环保标准，将会对小水泥企业的生产起到抑制作用，对大水泥企 业将是新的机遇。但 2006 年实际能带来的影响还有待观察。 （2） 公司未来发展机遇、新年度经营计划 新的产业结构调整政策和环保标准，将会进一步加大新型干法水泥生产线替代立窑、湿法窑等落后水 泥生产线的力度；节约资源、发展循环经济；建设社会主义新农村、缩小城乡差距；公司的主导市场湖北 2006 年的固定资产投资还将保持 30%左右的增长速度、并将成为促进中部地区崛起的重要战略支点等等， 这些都将成为公司未来的发展机遇。 新年度经营计划：2006 年，生产熟料 1300 万吨,生产水泥 2000 万吨,商品混凝土 60 万方立方米、设 备制造总量 10000 吨、销售收入 43 亿元。 （3）重大资本支出计划。 2006 年，公司将继续按照战略规划、战略布局实施新建扩建水泥生产线。工程总投资 12,69 亿元。资 金来源构成：①经营活动净现金流 5.27 亿元，②净增银行贷款 3.83 亿元，③其余资金通过股权融解决。 资本支出计划中在建及新建项目概况如下： 单位：万元 项目名称 产能 总投资 2006 年计划投资 熟料生产线 214,341 88,769 阳新 二期 年产水泥 200 万吨 32,879 23,015 武穴 二期 年产水泥 250 万吨 35,487 2,000 襄樊 一期 年产水泥 150 万吨 34,434 13,619 咸宁 一期 年产水泥 150 万吨 37,511 25,258 云南昭通 年产水泥 150 万吨 37,037 9,479 河南光山 年产水泥 150 万吨 36,993 15,398 粉磨站 32,871 14,374 武汉一期 年产水泥 200 万吨 16,871 3,374 湖南湘钢 年产水泥 300 万吨 16,000 11,000 混凝土搅拌站 6,126 6,126 汉口 年产 120 万方 2,166 2,166 汉阳 年产 120 万方 2,166 2,166 黄石 年产 60 万方 1,794 1,794 合计 253,338 109,269 第 10 页 共 19 页 华新水泥股份有限公司 2005 年度报告摘要 （4）公司面临的风险因素分析 2006 年，公司面临的最大风险是在建新建项目不能如期投产。另外，持续的高速发展带来公司 自有资金的不足以及资金时间结点的不平衡，是公司面临的风险因素。 面对风险，公司将加大项目监管力度，全力推进新建在建项目的进度。同时，科学调节资金，积 极寻求新的资金渠道，缓解公司的资金压力。今年，要创造条件实现股权融资计划。 6.2 主营业务分行业、产品情况表 请见前述 6.1 6.3 主营业务分地区情况 请见前述 6.1 6.4 募集资金使用情况 □适用√不适用 变更项目情况 □适用√不适用 6.5 非募集资金项目情况 项目名称 项目金额（万元） 项目进度 项目收益情况 武穴 6000 吨/日熟料水泥 生产熟料 120 万吨，生产 47,349 该生产线已于 2005 年 4 月 26 日点火投产 生产线 水泥 54 万吨 西藏山南 1000 吨/日熟料 生产熟料 10 万吨，生产 14,494 该生产线已于 2005 年 6 月 28 日建成投产 水泥生产线 水泥 9 万吨 第一套水泥磨系统于 2004 年 10 月 18 日建 苏州金猫 130 万吨水泥粉 6,420 成，第二套水泥磨系统于 2005 年 4 月 26 日 生产水泥 67.87 万吨 磨站技改工程 建成投产 苏州金猫 3500 吨/日熟料 5,287 已于 2005 年 8 月 28 日建成投产 生产熟料 25 万吨 生产线技术改造工程 宜都二期 2500 吨/日熟料 水泥磨系统于 2005 年 8 月 30 日建成投产， 生产熟料 14 万吨，生产 17,103 生产线工程 窑系统于 2005 年 9 月 25 日建成投产 水泥 36 万吨 武汉年产 120 万方混凝土 3,250 2005 年 6 月建成投产 生产商品混凝土 5.4 万方 搅拌站项目 云南 4000 吨/日熟料水泥 37,037 预计 2006 年 6 月建成投产 生产线工程 襄樊 4000 吨/日熟料水泥 34,434 预计 2006 年 7 月建成投产 生产线工程 武汉年产 200 万吨水泥粉 16,871 预计 2006 年 4 月建成投产 磨站 华新水泥（阳新）有限公 司 4800 吨/日熟料水泥生 32,879 预计 2006 年 10 月建成投产 产线二期工程 合计 215,124 / / 6.6 董事会对会计师事务所“非标意见”的说明 □适用√不适用 第 11 页 共 19 页 华新水泥股份有限公司 2005 年度报告摘要 6.7 董事会本次利润分配或资本公积金转增预案 经信永中和会计师事务所审计，2005 年母公司实现净利润 62,587,119.94 元，合并后净利润为 62,073,249.69 元。根据公司章程的规定，提取 10%法定盈余公积金 6,258,712.00 元，提取 10%法定 公益金 6,258,712.00 元。截止 2005 年 12 月 31 日合并后可分配利润 183,152,698.79 元。 公司董事会审议通过如下利润分配预案：以 2005 年末总股本 32,840 万股为基数，每股派发现金 红利 0.06 元(含税)，合计分配 19,704,000 元，余额全部转入未分配利润。2005 年度，不进行资本 公积金转增股本。 以上利润分配预案须经公司股东大会批准后实施。 公司本报告期盈利但未提出现金利润分配预案 □适用√不适用 §7 重要事项 7.1 收购资产 □适用√不适用 7.2 出售资产 □适用√不适用 7.3 重大担保 单位:元 公司对控股子公司的担保情况 报告期内对控股子公司担保发生额合计 155,000,000.00 报告期末对控股子公司担保余额合计 377,540,000.00 公司担保总额情况（包括对控股子公司的担保） 担保总额 377,540,000.00 担保总额占公司净资产的比例(%) 31.11 7.4 重大关联交易 7.4.1 与日常经营相关的关联交易 单位:万元 向关联方销售产品和提供劳务 向关联方采购产品和接受劳务 关联方 占同类交易金 占同类交易金 交易金额 交易金额 额的比例(%) 额的比例(%) 华新纤维水泥制品有限公司 336 0.13 华新集团有限公司 480 100 Holcim 242 100 合计 336 722 其中：报告期内上市公司向控股股东及其子公司销售产品或提供劳务的关联交易金额 336 万元。 7.4.2 关联债权债务往来 □适用√不适用 第 12 页 共 19 页 华新水泥股份有限公司 2005 年度报告摘要 报告期末资金被占用情况及清欠方案 □适用√不适用 清欠方案是否能确保公司在 2006 年底彻底解决资金占用问题 □是□否√不适用 7.5 委托理财 □适用√不适用 7.6 承诺事项履行情况 公司股权分置改革方案已经 2005 年 12 月 16 日华新水泥股份有限公司股权分置改革 A 股市场相 关股东会议通过，并于 12 月 26 日实施。公司控股股东华新集团有限公司在《华新水泥股份有限公司 股权分置改革方案》中承诺：(1) 自股权分置改革方案实施之日起，十二个月内不上市交易或者转 让。(2)其代国家持有的华新水泥国家股及其持有的华新水泥境内法人股自股权分置改革方案实施之 日起第十三至第三十六个月内不通过上海证券交易所挂牌交易出售。(2)其代国家持有的华新水泥国 家股自股权分置改革方案实施之日起第三十七至第四十八个月内通过上海证券交易所挂牌交易出售的 数量不超过股权分置改革后华新集团代国家持有的国家股数量的 5%(相当于公司目前总股本的 1.21%)，出售价格不低于 9 元/股（如果自股权分置改革方案实施之日起至华新集团出售股份期间有 派息、送股、资本公积金转增股本等事项，将对该价格进行除权除息处理）。(4)其代国家持有的华 新水泥国家股自股权分置改革方案实施之日起第四十九至第六十个月内通过上海证券交易所挂牌交易 出售的数量不超过股权分置改革后华新集团代国家持有的国家股数量的 10%(相当于公司目前总股本 的 2.41%)，出售价格不低于 9 元/股（如果自股权分置改革方案实施之日起至华新集团出售股份期间 有派息、送股、资本公积金转增股本等事项，将对该价格进行除权除息处理）。(5)其代国家持有的 华新水泥国家股通过上海证券交易所挂牌交易出售的数量每达到华新水泥的股份总数 1%时，自该事 实发生之日起两个工作日内做出公告，但公告期间无需停止出售股份。 该项承诺正在履行过程中。 7.7 重大诉讼仲裁事项 □适用√不适用 §8 监事会报告 监事会认为公司依法运作、公司财务情况、公司募集资金使用、公司收购、出售资产交易和关联 交易不存在问题。 § 9 财务报告 9.1 审计意见 本公司 2005 年度财务会计报告经信永中和会计师事务所审计并由张克东、李素平注册会计师出 具无保留意见的审计报告。 9.2 披露比较式合并及母公司的资产负债表、利润表及利润分配表和现金流量表 第 13 页 共 19 页 华新水泥股份有限公司 2005 年度报告摘要 资产负债表 单位:元 合并 母公司 项目 合并 期末数 期初数 期末数 期初数 资产： 流动资产： 货币资金 五-1 368,316,897.24 397,339,808.76 116,523,790.75 168,790,952.83 短期投资 应收票据 五-2 104,574,447.75 117,045,564.16 55,038,800.53 48,826,221.90 应收股利 应收利息 304,555.62 应收账款 五-3 109,388,504.02 65,581,732.92 50,082,233.45 29,087,547.97 其他应收款 五-4 82,937,052.52 67,521,873.19 262,157,755.66 131,709,886.31 预付账款 五-5 16,112,108.95 43,448,775.66 25,289,952.47 46,197,660.96 应收补贴款 存货 五-6 328,836,476.04 285,613,147.56 123,314,015.16 135,474,166.76 待摊费用 五-7 1,123,035.17 1,266,224.48 827,322.45 894,685.11 一年内到期的长 期债权投资 其他流动资产 流动资产合计 1,011,288,521.69 978,121,682.35 633,233,870.47 560,981,121.84 长期投资： 长期股权投资 五-8 22,711,800.80 23,950,917.77 1,482,498,456.48 914,709,627.19 长期债权投资 五-8 59,057.32 59,057.32 59,057.32 59,057.32 长期投资合计 22,770,858.12 24,009,975.09 1,482,557,513.80 914,768,684.51 其中：合并价差 五-8 8,003,799.64 9,251,145.04 固定资产： 固定资产原价 五-9 5,635,949,416.58 4,550,430,830.57 2,408,334,950.34 2,339,725,759.39 减：累计折旧 五-9 1,596,682,649.93 1,378,073,394.33 855,023,065.10 756,364,608.04 固定资产净值 五-9 4,039,266,766.65 3,172,357,436.24 1,553,311,885.24 1,583,361,151.35 减：固定资产减 五-9 65,456,142.75 102,879,245.77 4,047,235.70 4,047,235.70 值准备 固定资产净额 五-9 3,973,810,623.90 3,069,478,190.47 1,549,264,649.54 1,579,313,915.65 工程物资 五-10 116,090,592.93 73,190,483.12 在建工程 五-11 440,347,060.74 448,111,293.23 188,083,767.64 269,659,546.03 固定资产清理 固定资产合计 4,530,248,277.57 3,590,779,966.82 1,737,348,417.18 1,848,973,461.68 无形资产及其他 资产： 无形资产 五-12 512,819,727.58 329,695,355.41 84,724,047.31 71,078,173.38 长期待摊费用 五-13 31,164,792.72 33,192,977.73 11,198,709.46 12,179,248.30 其他长期资产 无形资产及其他 543,984,520.30 362,888,333.14 95,922,756.77 83,257,421.68 资产合计 递延税项： 递延税款借项 资产总计 6,108,292,177.68 4,955,799,957.40 3,949,062,558.22 3,407,980,689.71 第 14 页 共 19 页 华新水泥股份有限公司 2005 年度报告摘要 负债及股东权 益： 流动负债： 短期借款 五-14 581,300,000.00 445,380,000.00 360,700,000.00 283,200,000.00 应付票据 五-15 195,396,247.88 77,430,625.01 72,201,399.24 14,685,625.01 应付账款 五-16 481,526,792.21 384,040,381.29 164,351,726.73 138,115,439.40 预收账款 五-17 85,799,398.18 49,688,371.11 151,945,799.35 142,179,982.98 应付工资 8,617,457.22 22,436,260.55 1,582,000.00 12,295,103.00 应付福利费 7,341,878.01 6,639,807.98 3,248,691.60 4,699,902.53 应付股利 五-18 393,006.80 702,119.60 393,006.80 702,119.60 应交税金 五-19 60,406,138.88 57,716,542.69 24,646,484.71 52,607,711.45 其他应交款 五-20 12,038,818.28 8,889,820.25 9,838,518.17 7,650,834.10 其他应付款 五-21 129,607,479.64 108,347,299.42 61,896,754.20 63,697,314.90 预提费用 五-22 6,544,801.68 23,990,999.37 3,809,821.15 12,281,320.76 预计负债 一年内到期的长 五-23 427,155,356.45 384,338,902.68 329,155,356.45 255,338,902.68 期负债 其他流动负债 流动负债合计 1,996,127,375.23 1,569,601,129.95 1,183,769,558.40 987,454,256.41 长期负债： 长期借款 五-24 2,050,484,081.12 1,546,464,534.89 1,532,444,081.12 1,229,924,534.89 应付债券 长期应付款 五 25- 128,831,336.31 61,568,450.69 12,305,943.81 15,273,058.19 专项应付款 五-26 3,795,701.96 6,000,000.00 3,795,701.96 6,000,000.00 其他长期负债 长期负债合计 2,183,111,119.39 1,614,032,985.58 1,548,545,726.89 1,251,197,593.08 递延税项： 递延税款贷项 负债合计 4,179,238,494.62 3,183,634,115.53 2,732,315,285.29 2,238,651,849.49 少数股东权益 五-27 715,436,155.21 605,452,876.48 股东权益： 股本 五-28 328,400,000.00 328,400,000.00 328,400,000.00 328,400,000.00 减：已归还投资 股本净额 328,400,000.00 328,400,000.00 328,400,000.00 328,400,000.00 资本公积 五-29 548,926,840.93 544,391,528.16 549,388,282.66 544,852,969.89 盈余公积 五-30 153,137,988.13 140,620,564.13 153,137,988.13 140,620,564.13 其中：法定公益 43,165,506.99 36,906,794.99 43,165,506.99 36,906,794.99 金 未分配利润 五-31 183,152,698.79 153,300,873.10 185,821,002.14 155,455,306.20 其中：拟分配现 五-32 19,704,000.00 19,704,000.00 金股利 股东权益合计 1,213,617,527.85 1,166,712,965.39 1,216,747,272.93 1,169,328,840.22 负债和股东权益 6,108,292,177.68 4,955,799,957.40 3,949,062,558.22 3,407,980,689.71 总计 第 15 页 共 19 页 华新水泥股份有限公司 2005 年度报告摘要 利润及利润分配表 单位:元 合并 母公司 项目 合并 本期数 上年同期数 本期数 上年同期数 一、主营业务收入 五-33 2,639,380,167.10 2,188,101,303.80 1,407,992,916.08 1,240,150,338.16 减：主营业务成本 五-33 2,117,757,295.28 1,604,559,832.97 1,219,514,499.88 919,909,557.17 主营业务税金及附 五-34 18,262,075.13 13,233,330.55 10,000,266.91 9,596,988.78 加 二、主营业务利润 503,360,796.69 570,308,140.28 178,478,149.29 310,643,792.21 加：其他业务利润 五-35 2,829,450.25 4,522,839.91 10,454,477.02 -446,244.22 减: 营业费用 187,353,041.67 141,005,322.44 74,902,179.68 79,493,364.09 管理费用 161,102,470.33 165,148,266.48 74,587,498.84 105,261,316.74 财务费用 五-36 111,112,219.92 85,863,859.69 76,846,799.18 61,103,593.85 三、营业利润 46,622,515.02 182,813,531.58 -37,403,851.39 64,339,273.31 加：投资收益 五-37 -1,239,116.97 -825,033.61 83,483,602.37 75,634,057.81 补贴收入 五-38 30,882,780.26 38,477,512.83 8,381,529.27 12,879,284.63 营业外收入 五-39 10,808,085.86 39,514,722.33 848,889.52 39,328,431.67 减：营业外支出 5,696,504.25 4,820,584.72 527,742.84 824,389.11 四、利润总额 81,377,759.92 255,160,148.41 54,782,426.93 191,356,658.31 减：所得税 10,707,805.26 60,295,586.82 -7,804,693.01 41,006,174.30 减：少数股东损益 8,596,704.97 46,314,003.94 五、净利润 62,073,249.69 148,550,557.65 62,587,119.94 150,350,484.01 加：年初未分配利 153,300,873.10 54,524,412.25 155,455,306.20 54,878,918.99 润 其他转入 六、可供分配的利 215,374,122.79 203,074,969.90 218,042,426.14 205,229,403.00 润 减：提取法定盈余 6,258,712.00 15,035,048.40 6,258,712.00 15,035,048.40 公积 提取法定公益金 6,258,712.00 15,035,048.40 6,258,712.00 15,035,048.40 七、可供股东分配 202,856,698.79 173,004,873.10 205,525,002.14 175,159,306.20 的利润 减：应付优先股股 利 提取任意盈余公积 应付普通股股利 19,704,000.00 19,704,000.00 19,704,000.00 19,704,000.00 转作股本的普通股 股利 八、未分配利润 183,152,698.79 153,300,873.10 185,821,002.14 155,455,306.20 其中：拟分配现金 19,704,000.00 19,704,000.00 股利 补充资料： 1.出售、处置部门 或被投资单位所得 849,271.00 收益 第 16 页 共 19 页 华新水泥股份有限公司 2005 年度报告摘要 现金流量表 单位:元 本期数 项目 合并 合并数 母公司数 一、经营活动产生的现金流量： 销售商品、提供劳务收到的现金 3,140,685,680.41 1,706,762,072.31 收到的税费返还 41,175,857.75 14,630,627.29 收到的其他与经营活动有关的现金 五-40 36,286,375.00 103,043,113.13 经营活动现金流入小计 3,218,147,913.16 1,824,435,812.73 购买商品、接受劳务支付的现金 2,170,863,181.21 1,340,148,191.99 支付给职工以及为职工支付的现金 181,782,685.29 92,523,514.69 支付的各项税费 242,931,480.10 91,636,982.27 支付的其他与经营活动有关的现金 五-41 119,436,476.06 121,575,768.22 经营活动现金流出小计 2,715,013,822.66 1,645,884,457.17 经营活动现金流量净额 503,134,090.50 178,551,355.56 二、投资活动产生的现金流量： 收回投资所收到的现金 其中：出售子公司收到的现金 取得投资收益所收到的现金 2,230,085.85 处置固定资产、无形资产和其他长期资产而收回的现金 14,975,312.61 4,499,869.81 收到的其他与投资活动有关的现金 五-42 2,000,000.00 投资活动现金流入小计 16,975,312.61 6,729,955.66 购建固定资产、无形资产和其他长期资产所支付的现金 1,070,713,644.59 489,018,348.27 投资所支付的现金 40,000,000.00 支付的其他与投资活动有关的现金 39,900,000.00 投资活动现金流出小计 1,070,713,644.59 568,918,348.27 投资活动产生的现金流量净额 -1,053,738,331.98 -562,188,392.61 三、筹资活动产生的现金流量： 吸收投资所收到的现金 其中：子公司吸收少数股东权益性投资收到的现金 借款所收到的现金 1,680,600,000.00 1,075,700,000.00 收到的其他与筹资活动有关的现金 五-43 1,922,804.23 538,804.23 筹资活动现金流入小计 1,682,522,804.23 1,076,238,804.23 偿还债务所支付的现金 988,921,010.75 608,911,010.75 分配股利、利润或偿付利息所支付的现金 170,085,547.49 135,052,255.02 其中：支付少数股东的股利 支付的其他与筹资活动有关的现金 五-44 1,378,523.16 364,207.02 其中：子公司依法减资支付给少数股东的现金 筹资活动现金流出小计 1,160,385,081.40 744,327,472.79 筹资活动产生的现金流量净额 522,137,722.83 331,911,331.44 四、汇率变动对现金的影响 -556,392.87 -541,456.47 五、现金及现金等价物净增加额 -29,022,911.52 -52,267,162.08 第 17 页 共 19 页 华新水泥股份有限公司 2005 年度报告摘要 补充材料 1、将净利润调节为经营活动现金流量： 净利润 62,073,249.69 62,587,119.94 加：少数股东损益(亏损以“-”号填列) 8,596,704.97 减：未确认的投资损失 加：计提的资产减值准备 -5,447,129.82 -3,621,513.23 固定资产折旧 269,962,163.11 118,419,282.04 无形资产摊销 13,300,147.10 2,280,215.40 长期待摊费用摊销 11,229,976.16 4,702,461.72 待摊费用减少（减：增加） 143,189.31 67,362.66 预提费用增加（减：减少） -17,934,868.94 -6,647,308.06 处理固定资产、无形资产和其他长期资产的损失(减: -3,707,350.96 291,264.55 收益) 固定资产报废损失 财务费用 114,896,741.98 78,732,595.14 投资损失（减：收益） 1,239,116.97 -83,483,602.37 递延税款贷项（减：借项） 存货的减少（减：增加） -29,450,325.99 -25,830,116.51 经营性应收项目的减少(减：增加) -18,008,264.08 -25,855,725.97 经营性应付项目的增加(减：减少) 96,240,741.00 56,909,320.25 其他(预计负债的增加) 经营活动产生的现金流量净额 503,134,090.50 178,551,355.56 2．不涉及现金收支的投资和筹资活动： 债务转为资本 一年内到期的可转换公司债券 融资租入固定资产 3、现金及现金等价物净增加情况： 现金的期末余额 368,316,897.24 116,523,790.75 减：现金的期初余额 397,339,808.76 168,790,952.83 加：现金等价物的期末余额 减：现金等价物的期初余额 现金及现金等价物净增加额 -29,022,911.52 -52,267,162.08 第 18 页 共 19 页 华新水泥股份有限公司 2005 年度报告摘要 9.3 如果与最近一期年度报告相比，会计政策、会计估计和核算方法发生变化，提供具体说明 与最近一期年度报告相比，会计政策、会计估计和核算方法未发生变化 9.4 重大会计差错的内容、更正金额、原因及其影响 本报告期无重大会计差错更正 9.5 与最近一期年度报告相比，合并范围发生变化如下： 1、本公司于 2005 年 2 月 22 日与黄石亿瑞达投资有限公司共同设立华新水泥（阳新）有限公司 （以下简称阳新公司），阳新公司注册资本 500,000 千元，本公司以实物资产出资 400,000 千元，持 股比例为 80%，另一股东黄石亿瑞达投资有限公司以无形资产出资 100,000 千元，持股比例为 20%。 阳新公司位于湖北省阳新县，会计报表已纳入合并范围。 2、本公司于 2005 年 9 月 25 日与阳新公司共同设立华新水泥（武汉）有限公司（以下简称武汉 公司），注册资本 60,000 千元，本公司以实物形式出资 42,000 千元，持股比例为 70%，阳新公司以 实物形式出资 18,000 千元，持股比例 30%。武汉公司位于湖北省武汉市，会计报表已纳入合并范 围。 3、本公司于 2005 年 4 月 8 日与阳新公司共同设立华新混凝土（武汉）有限公司（以下简称混凝 土公司），混凝土公司注册资本 10,000 千元，本公司以货币资金出资 7,000 千元，持股比例为 70%，阳新公司以货币资金出资 3,000 千元，持股比例为 30%。混凝土公司位于武汉市青山区，会计 报表已纳入合并范围。 董事长：陈木森 华新水泥股份有限公司 2006 年 3 月 3 日 第 19 页 共 19 页 Huaxin Cement Co., Ltd. 华新水泥股份有限公司 The Twenty Sixth Meeting of the Fourth Board of Directors 第四届董事会第二十六次会议 convened on 2006.03.03 召开于 2006.03.03 Abstract of Annual Report for 2005 2005 年度报告摘要 HUAXIN CEMENT CO., LTD. ABSTRACT 1. IMPORTANT 1.1. The Board of Directors of the Company and its members, Supervisory Committee of the Company and its members and members of senior management guarantee that there is no false or misleading statement or material omission in this report and shall be severally and jointly liable for the truthfulness, accuracy and completeness of its contents. 1.2. Independent Director Mr. Lin Zongshou did not attend this board meeting due to other commitments and authorized director Mr. Zhang Tianwu to attend and exercise voting rights on his behalf. 1.3. Chairman of the Company Mr Chen Musen, CEO Mr Li Yeqing, CFO Mdm Kong Lingling, and chief of financial department Mdm He Fengping declare and guarantee that the financial statements in this annual report is true and complete. 2. GENERAL INFORMATION 2.1. General Share abbreviation Huaxin Cement Share code 600801 Place of listing Shanghai Stock Exchange Share abbreviation Huaxin B share Share code 900933 Place of listing Shanghai Stock Exchange Registered and administrative 897 Huangshi Avenue, Huangshi, Hubei, China location Post code 435002 Company website http//www.huaxincem.com E-mail investor@huaxincem.com 2.2. Contact Secretary to the board Securities affairs representative Name Wang Ximing Wang Lu Contact 897 Huangshi Avenue, Huangshi, 897 Huangshi Avenue, Huangshi, address Hubei, China Hubei, China Tel (0714)6328310 (0714)6328471 Fax (0714)6235204 (0714)6235204 E-mail investor@huaxincem.com investor@huaxincem.com 600801-G 华新-426 K5 AR 摘要 EN.doc 1 Huaxin Cement Co., Ltd. 华新水泥股份有限公司 The Twenty Sixth Meeting of the Fourth Board of Directors 第四届董事会第二十六次会议 convened on 2006.03.03 召开于 2006.03.03 Abstract of Annual Report for 2005 2005 年度报告摘要 3. FINANCIAL HIGHLIGHTS AND INDICATORS 3.1. Financial highlights Unit: RMB 2005 2004 Increase % 2003 Income from major 2,639,380,167.10 2,188,101,303.80 20.62 1,188,827,685.49 operations Total profit 81,377,759.92 255,160,148.41 -68.11 117,841,100.71 Net profit 62,073,249.69 148,550,557.65 -58.22 68,244,142.01 Net profit after elimination of 58,348,087.76 120,802,513.29 -51.70 68,741,266.17 extra-ordinary items Net cash flows from 503,134,090.50 490,510,424.42 2.57 294,856,868.91 operating activities 2005 end 2004 end Increase % 2003 end Total assets 6,108,292,177.68 4,955,799,957.40 23.26 3,017,709,764.81 Shareholders’ equity, excluding minority 1,213,617,527.85 1,166,712,965.39 4.02 806,816,113.16 interest 3.2. Major financial indicators Unit: RMB 2005 2004 Increase % 2003 Earnings per share 0.19 0.45 -57.78 0.21 Return on Net Assets, % -7.62 5.11 12.73 percentage 8.46 points Return on Net Asset after -5.54 extraordinary items % 4.81 10.35 percentage 8.51 points Net Cash Flow Per Share 1.53 1.49 2.68 0.90 from Operating Activities 2005 end 2004 end Increase % 2003 end Net Assets Per Share 3.70 3.55 4.23 2.46 Net Assets Per Share after 3.58 3.43 4.37 2.41 adjustments Extraordinary items Unit: RMB Extra-ordinary items Amount Gains from disposal of assets except for products 3,707,350.96 Other non-operating incomes less provisions for -800,758.35 impairment Impact for income tax 818,569.32 Total 3,725,161.93 600801-G 华新-426 K5 AR 摘要 EN.doc 2 Huaxin Cement Co., Ltd. 华新水泥股份有限公司 The Twenty Sixth Meeting of the Fourth Board of Directors 第四届董事会第二十六次会议 convened on 2006.03.03 召开于 2006.03.03 Abstract of Annual Report for 2005 2005 年度报告摘要 3.3. Difference between national and international accounting standards Unit: 000 RMB profit net assets attributable attributable to shareholders to shareholders As per the PRC accounts 62,073 1,213,617 Impact of IFRS and other adjustments: Reversal of amortisation of goodwill having been written off in prior years. 261 (1,861) Recognition of pre-operating expenses in income statement when they are incurred 101 (1,192)- Government grants recognised as deferred income and subsidy income 1,447 (9,125) Reversal of amortisation of positive goodwill 1,060 1,060 Interest capitalised in property, plant and equipment 6,296 6,296 Difference arising from restatement of long-term payables to their current value (349) (349) Deferred tax assets 8,269 28,106 As restated after IFRS and other adjustments 79,158 1,236,552 4. CHANGES IN SHARE CAPITAL AND SHAREHOLDERS 4.1. Changes in share capital structure Unit: share Before the change Change during the period +/- After the change Capital Placement Bonus Shares % reserves others Sub-total Shares % issue issue to share 1. shares subject to conditional sales 1. State-owned shares -12,276, 91,526,880 27.9 79,250,648 24.1 232 2. Shares held by State legal person 3. Shares held by other domestic investors Including: Shares held by -2,123,7 24,873,120 7.6 22,749,352 6.9 domestic legal persons 68 Shares held by domestic natural persons 4. Shares held by foreign investor Including: Shares held by foreign legal persons Shares held by foreign natural persons Sub-total -14,400, 116,400,000 35.4 102,000,000 31.1 000 2. shares not subject to conditional sales 1.RMB ordinary shares 14,400, 48,000,000 14.6 62,400,000 19.0 000 600801-G 华新-426 K5 AR 摘要 EN.doc 3 Huaxin Cement Co., Ltd. 华新水泥股份有限公司 The Twenty Sixth Meeting of the Fourth Board of Directors 第四届董事会第二十六次会议 convened on 2006.03.03 召开于 2006.03.03 Abstract of Annual Report for 2005 2005 年度报告摘要 2.Domestic listed foreign 164,000,000 49.9 164,000,000 49.9 investment shares 3. Overseas listed foreign investment shares 4. Others Sub-total 212,000,000 64.6 226,400,000 68.9 Total 328,400,000 328,400,000 4.2. Number of shareholders and listed-share holders Unit: share Total numbers of shareholders at the end of 36,626 report period Top ten shareholders and listed-share holders Shares Share subject to Mortgage Names of Shareholders holder In % Total Shares hold conditional or frozen type sales HOLCHIN B.V. Foreign 26.1 85,761,300 State-owned Shares (held by Huaxin Group 79,250,64 36,000,000 State 24.1 79,250,648 Co., Ltd.) 8 mortgaged Huaxin Group Co., Ltd. Other 3.0 9,870,232 9,870,232 MEINL BANK AKTIENGESELLSCHAFT Foreign 1.6 5,199,735 Jingzhou Shalong Financial Consultant Co., Other 1.2 4,100,000 4,100,000 Ltd ICBC – Shenwan balishengli Securities Other 1.0 3,349,442 Investment Fund Pension Fund Project 109 Other 0.8 2,643,339 Huangshi Railway Joint Operating Other 0.8 2,520,000 2,520,000 Company Taikang Life Insurance Co., Ltd. Other 0.6 1,953,621 NATIO SECURITIES CO., LTD. Foreign 0.5 1,695,779 Top ten holders of shares not subject to conditional sales Names of Shareholders Number of Shares Type of share HOLCHIN B.V. Domestic listed foreign 85,761,300 investment shares Domestic listed foreign MEINL BANK AKTIENGESELLSCHAFT 5,199,735 investment shares ICBC – Shenwan balishengli Securities RMB ordinary shares Investment Fund 3,349,442 Pension Fund Project 109 2,643,339 RMB ordinary shares Taikang Life Insurance Co., Ltd. 1,953,621 RMB ordinary shares Domestic listed foreign NATIO SECURITIES CO., LTD. 1,695,779 investment shares TOYO SECURITIES ASIA LTD. A/C CLIENT Domestic listed foreign 1,609,589 investment shares Pension Fund Project 601 1,263,228 RMB ordinary shares Nanjing Haodun energy efficiency S&T Co., RMB ordinary shares Ltd. 1,155,286 Bank of China – Yinhua Advanced Enterprise RMB ordinary shares (Balanced) Securities Investment Fund 955,773 600801-G 华新-426 K5 AR 摘要 EN.doc 4 Huaxin Cement Co., Ltd. 华新水泥股份有限公司 The Twenty Sixth Meeting of the Fourth Board of Directors 第四届董事会第二十六次会议 convened on 2006.03.03 召开于 2006.03.03 Abstract of Annual Report for 2005 2005 年度报告摘要 Remark on related None of the top ten shareholders are co-related parties, or concert-actors referred to in the partnerships and “Administrating Measures of Disclosing Changes in Shareholding for Listed Companies”. concert-action except that state shares held by Huaxin Group Co., Ltd. on behalf of the State. ships of the above It is unknown to the Company whether or not there exists any related party relationship or shareholders concert-action relationship between any of the top ten holders of listed shares subject to conditional sales. It is unknown to Company whether or not there exists any related party relationship or concert-action relationship between any of the top ten shareholders and top ten holders of listed shares subject to conditional sales. 4.3. Controlling shareholder and actual controllers 4.3.1. Changes in the Controlling shareholder and actual controllers Applicable ; Not Applicable 4.3.2. Controlling shareholder and actual controllers 1). Legal person controlling shareholder Name of controlling shareholder: Huaxin Group Co., Ltd. Legal Representative: Mr. Chen Musen Registered capital: RMB 370,000,000 Date of incorporation: November 14, 1996 Business range: manufacture and sales of cement product, parts of machines, development of real estate, commerce, service and so on.` 2). Legal person actual controller Name of actual controller: Huangshi Municipal State Assets Administration 4.3.3. Ownership and controlling relationship between the Company and actual controller Huangshi Municipal State Assets Administration 100% Huaxin Group Co., Ltd 27.1% (in total) Huaxin Cement Co., Ltd. 5. DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT 5.1. Changes of shares held by directors, supervisors and senior management 600801-G 华新-426 K5 AR 摘要 EN.doc 5 Huaxin Cement Co., Ltd. 华新水泥股份有限公司 The Twenty Sixth Meeting of the Fourth Board of Directors 第四届董事会第二十六次会议 convened on 2006.03.03 召开于 2006.03.03 Abstract of Annual Report for 2005 2005 年度报告摘要 Unit: share Payment Share Share Payment from from S s held s held Reason for the Company ( shareholde Name Position e Age Term at year at year changes after tax) s or othe x begin end (10 k yuan) relevant ning parties Purchased shares, No grant shares from Chen 2003.4.28~ Share Partition R Mushen Chairman M 57 2006.4.28 14,900 97,900 eform or shares b 59 ought with part of annual pay Grant shares from No Share Partition Ref 2003.4.28~ Li Yeqing Director/CEO M 42 2006.4.28 24,300 54,042 orm or shares bou 59 ght with part of an nual pay Tom 2004.10.21 No Clough Director M 59 ~ 2006.4.28 / Daniel 2005.4.26~ No Bach Director M 43 2006.4.28 / Paul 2003.4.28~ No Thaler Director M 40 2006.4.28 / Grant shares from No Share Partition Ref Ji 2003.4.28~ Changhua Director M 52 2006.4.28 15,300 35,160 orm or shares bou 38 ght with part of an nual pay Zhang Independent 2003.4.28~ No Tianwu director M 43 2006.4.28 5 Xie Independent 2003.4.28~ No Huobao director M 39 2006.4.28 5 Lin Independent 2003.3.28~ No Zongshou director M 49 2006.4.28 5 Grant shares from No Chairman of Share Partition Ref Zhou the 2003.4.28~ Jiaming Supervisory M 52 2006.4.28 15,100 30,900 orm or shares bou 38 ght with part of an Committee nual pay Yang 2003.4.28~ No Chunhua Supervisor M 55 2006.4.28 6 Ruan 2003.4.28~ No Hanwen Supervisor M 48 2006.4.28 6 Zhan 2003.4.28~ No Weiguo Supervisor M 33 2006.4.28 4 Fan 2003.4.28~ No Tongtao Supervisor M 37 2006.4.28 2 Grant shares from No Share Partition Ref Wang VP, secretary 2003.4.28~ Ximing to the board M 47 2006.4.28 15,000 32,500 orm or shares bou 39 ght with part of an nual pay Grant shares from No Share Partition Ref Peng 2003.4.28~ Qingyu VP M 46 2006.4.28 15,900 33,100 orm or shares bou 39 ght with part of an nual pay Grant shares from No Share Partition Ref Kong 2003.4.28~ Lingling VP F 42 2006.4.28 15,300 31,260 orm or shares bou 39 ght with part of an nual pay Grant shares from No Share Partition Ref Feng 2003.4.28~ Dongguan VP M 39 2006.4.28 6,500 20,800 orm or shares bou 38 ght with part of an nual pay Grant shares from No Share Partition Ref Ke 2003.4.28~ Youliang VP M 41 2006.4.28 6,500 21,100 orm or shares bou 38 ght with part of an nual pay 128,80 356,76 / Toatl / / / / 0 2 / 420 Note: Directors Mr. Tom Clough, Mr. Daniel Bach and Mr. Paul Thaler voluntarily waived their director allowances for 2005, amounting in total to USD5,910. 600801-G 华新-426 K5 AR 摘要 EN.doc 6 Huaxin Cement Co., Ltd. 华新水泥股份有限公司 The Twenty Sixth Meeting of the Fourth Board of Directors 第四届董事会第二十六次会议 convened on 2006.03.03 召开于 2006.03.03 Abstract of Annual Report for 2005 2005 年度报告摘要 6. DIRECTORS' REPORT 6.1. Discussion and analysis 1. Review of the Company’s operation in the report period (1) Overall operation in the report period 2005 was the toughest year for the operation of the cement industry. With the gradual occurrence of effect of the state macro control policy, the growth rate of the fixed assets investment decreased, the real estate business was cooling and the production and sales of cement slowed down, so that the cement was becoming more and more oversupplied . Capacity redundancy led to the falling of prices, meanwhile due to dual pressure from the price escalation of coal and power, the profit of the whole industry decreased substantially. According to the statistic results of “China cements”, in 2005, the cement output in China reached 1.048 billion tons, and yearly growth was 11.7%; the sales revenue of the cement was 260.835 billion yuan, with an increase of 16.2% compared with the same period of last year; the total cement profit was only 8.050 billion yuan, a decrease of 38.0% compared with the same period last year. In 2005, the Company also faced austere external marketing environment. On one hand, the release of the capacity in 2004~05 from the overheated investment in last few years led to the over surplus of cement production capacity, causing a decrease in the prices, so that the Company’s annual average sales price fell to the lowest point in 10 years; on the other hand, the price of coal and power which accounts for 60% of the cost of the product was rising sharply as compared to 2004, thus the cost took away the profit. So the profitability failed to improve with the expansion of the capacity, and the production capacity was not brought into play, the production and operation of the Company went to low level. Facing with challenges and difficulties, the Company adopted effective measures. The Company not only made good operation achievements, but also enlarged the capacity, increased the market share and enhanced the competitiveness. At present, the Company has the capacity of a yearly output of 12 million tons of clinker or 22 million tons of cement, making the Company the influential leader in the industry. The main measures are: In production, the Company further refined the management. With the IT as the basis, and flat, matrix, coordination, benefit, efficiency, and innovation as principle, the operating efficiency of the equipment system as breakthrough point, the Company optimized the operating index and efficiency to control the operating cost. Discarded the out-of-date process, adjusted the operating plans of 3 wet-process kiln and 6 dry-process kiln production lines that consume high energy, and replaced the production with new dry-process production lines, so as to guarantee the overall balance of the Group. In marketing, the Company emphasized the rationality, act or not according the situation. The Company timely decreased the sales in Shanghai, and made more sales effort in Hubei, to raise market share, while seeking for new sales channel, and restarting export. The priority was still given to the benefit. Participated in price competition, but did not initiate the price competition. In the development, the Company took strategic management as a method, to make overall planning, and standardize the management. Project planning, construction, capital, staffing, 600801-G 华新-426 K5 AR 摘要 EN.doc 7 Huaxin Cement Co., Ltd. 华新水泥股份有限公司 The Twenty Sixth Meeting of the Fourth Board of Directors 第四届董事会第二十六次会议 convened on 2006.03.03 召开于 2006.03.03 Abstract of Annual Report for 2005 2005 年度报告摘要 project operation, product sales were carried out in due order, the newly built projects had already become the main profit sources of the Company. In 2005, the Company has already built and put into operation Wuxue 6,000 tpd clinker production line, Yidu 2,500 tpd clinker production line, phase II, Suzhou Golden Cat 3,500 tpd clinker production line, Tibet Shannan 1,000 tpd clinker production line, Yueyang 800,000 tpy cement grinding station, Wuhan Wugang Huaxin 600,000 tpy cement grinding line, phase II, Huaxin Nantong 650,000 tpy cement grinding lines phase II, Wuhan 1200 km3py RMC station project, so the added capability was 7.5 million tons of cement and 1200 km3 of concrete. At present, the strategic layout of the Company in Hubei had been basically completed. In 2005, the total sales of cement and clinker of the Group was 15.18 million tons (internal statistics, the same below), in which, the sales of cement was 13.40 million tons, and the clinker was 1.78 million tons. The amount of production and sales took the lead in China, and the main operating income was 2,639,380,167.10 yuan, the net cash flow from the operating activities was 503,134,090.50 yuan, which increases by 21%, and 3% respectively compared with that of 2004. The total profit was 81,377,759.92 yuan, and net profit was 62,073,249.69 yuan, which dropped by 68%, and 58% respectively, compared with 2004, yet 2005 is still one of the good years since listing. (2) Major operations 1) The classification of major operation according to industry and product Unit RMB Operating Income Cost Operating profit change change Profit Income from over the Industry or Operating % over the change Product major previous over the cost previous operations year last year year % % % Industry -7.09 Cement 2,574,343,439.41 2,076,888,915.66 18.67 20.0 31.4 percentage points -6.43 Others 65,036,727.69 40,868,379.62 34.82 50.0 70.7 percentage points -6.99 Total 2,639,380,167.10 2,117,757,295.28 19.07 20.6 32.0 percentage points Product -3.58 Cement 1,434,385,968.74 1,115,995,277.06 21.55 44.6 51.4 percentage 32.5 points Cement -11.35 42.5 and 1,056,933,573.80 890,656,512.26 15.08 -5.3 9.3 percentage above points -7.48 Clinker 83,023,896.87 70,237,126.34 14.75 125.5 147.0 percentage points -6.43 Others 65,036,727.69 40,868,379.62 34.82 50.0 70.7 percentage points Total 2,639,380,167.10 2,117,757,295.28 19.07 20.6 32.0 -6.99 percentage 600801-G 华新-426 K5 AR 摘要 EN.doc 8 Huaxin Cement Co., Ltd. 华新水泥股份有限公司 The Twenty Sixth Meeting of the Fourth Board of Directors 第四届董事会第二十六次会议 convened on 2006.03.03 召开于 2006.03.03 Abstract of Annual Report for 2005 2005 年度报告摘要 points 2) The classification of major operation according to regions Unit: RMB Region Income from major operations Income change over the last year % Hubei 1,297,375,096 57.0 Jiangsu 599,580,832 -23.9 Shanghai 111,076,563 -66.4 Chongqing 126,431,786 597.4 Anhui, Jiangxi 108,927,969 -11.3 Henan 106,375,873 288.3 Hunan 68,417,647 214.4 Zhejiang, Fujian 44,803,440 -15.9 Tibet 33,121,220 / Export 143,269,740 / Total 2,639,380,167 20.6 3) Main products and market share The main products produced and operated by the Group were cement and clinker. In 2005, the Company sold cement 7.36 million tons In Hubei, and market share was 21.6%, an increase of 44% compared with the same period of last year; sold cement 3.05 million tons In Jiangsu, market share was 4.2%; sold cement 0.57 million tons in Shanghai, market share was 2.7%; sold cement 0.08 million tons in Tibet, market share was 4.6%; sold cement 0.51 million tons in Chongqing, market share was 2.3%; sold cement 0.59 million tons in Anhui and Jiangxi; sold cement 0.58 million tons in Henan; sold cement 0.44 million tons in Hunan; sold cement 0.22 million tons in Zhejiang and Fujian (Internal statistics). 4) Main supplier and clients Unit: RMB Total of top 5 suppliers 504,289,768.35 % of total amount 36.18 Total of top 5 clients 309,981,291.26 % of total amount 11.74 (3) Operation and achievement of major subsidiaries Unit: RMB .Name Type Products or service Registered capital Assets scale Net profit Huaxin Cement Limited Production and sales 150,000,000 755,061,000 48,509,978 (Yichang) Co., liabilities of cement Ltd. Huaxin Cement Limited Production and sales 500,000,000 647,869,000 62,064,911 (Yangxin) Co., liabilities of cement Ltd. Huaxin Cement Limited Production and sales 60,000,000 271,717,000 35,273,345 (Enshi) Co., Ltd. liabilities of cement Huaxin Cement Limited Production and sales 50,000,000 182,938,000 5,216,337 (Tibet) Co., Ltd. liabilities of cement Huaxin Cement Limited Production and sales 23,900,000 37,163,000 974,863 (Xiantao) Co., liabilities of cement Ltd. 600801-G 华新-426 K5 AR 摘要 EN.doc 9 Huaxin Cement Co., Ltd. 华新水泥股份有限公司 The Twenty Sixth Meeting of the Fourth Board of Directors 第四届董事会第二十六次会议 convened on 2006.03.03 召开于 2006.03.03 Abstract of Annual Report for 2005 2005 年度报告摘要 Huaxin Concrete Limited Production and sales 10,000,000 42,937,739 2,195,927 (Wuhan) Co., liabilities of concrete Ltd. Huaxin Golden Cat Cement Sino-Joint Production and sales USD,136,000,000 1,450,953,000 -48,952,805 (Suzhou) Co., venture of cement Ltd. Wuhan Wugang Limited Production and sales 40,000,000 162,648,000 8,381,196 Huaxin Cement liabilities of cement Co., Ltd. Huaxin Nantong Sino-joint Production and sales 108,000,000 191,282,000 -6,910,476 Cement Co., Ltd. venture of cement Huangshi Huaxin Limited Production and sales 8,000,000 42,252,000 3,419,773 Packaging Co. liabilities of cement bag Ltd. Huangshi Huaxin Cement Building material, Limited 1,000,000 60,604,47 915,519 Research and building engineering liabilities Designing Co., designing Ltd. Huaxin Cement Limited Production and sales 25,000,000 97,422,000 -3,092,017 (Yueyang) Co., liabilities of cement Ltd. Huaxin Cement Limited Production and sales 75,000,000 167,189,514 / (Zhaotong) Co., liabilities of cement Ltd. Huaxin Cement Limited Production and sales 60,000,000 139,810,888 / (Wuhan) Co., liabilities of cement Ltd. 2. Outlook of the future development of the Company (1) Development and Competition 2006 is the beginning year of “the eleventh five year” plan period. As the major industry in cycling economy – cement industry will step into a new development phase. The growth rate of China’s GDP and the fixed asset investment are expected to remain at high level in “the eleventh five year” period. The increase of the investment in the industrialization, urbanization and the infrastructural construction will lead to the further development of the cement industry. There will be more new type dry process lines, considering that the Chinese cement industry is not intensified, and that the backward capacities cover over half of the total national capacity. The further upgrading of the cement industrial structure, scaled production, and intensive operation will be the general trend of the cement industrial development; large enterprises will still keep the competitive advantage by means of the acquisitions and mergers in order to gain the opportunity of quickening the development. But in 2006, the cement industry is in the down cycle of the development, so the growth ratio may be lower than the GDP’s. With the gradual putting into production of the capacity from the investment in previous years, it is predicated that the whole production output of the cement will be up to about 1.13 billion tons, the output still increases as compared with that of last year. However, the investment of the cement will continue to fall, due to the state macro control, decrease in the cement demand growth and the over rapid increase in the cement capacity in the previous years. China Cement Association predicts that there will be 50 new dry process cement production lines and the new increased capacity will reach 40 million tons in 2006. In the end of year 2006, the China’s cement capacity will be up to 1.37 billion tons, the percentage of the output from the new dry process will be about 45% in 2006 from 40% in 2005, and then the structure will be further optimized. The effects of energy saving, environmental protection and developing cycling economy will gradually appear. In 2006, the cement price will continue to keep in a low level with little fluctuation, but in some 600801-G 华新-426 K5 AR 摘要 EN.doc 10 Huaxin Cement Co., Ltd. 华新水泥股份有限公司 The Twenty Sixth Meeting of the Fourth Board of Directors 第四届董事会第二十六次会议 convened on 2006.03.03 召开于 2006.03.03 Abstract of Annual Report for 2005 2005 年度报告摘要 areas there may be a slight rebound. Supply exceeding demand, obvious surplus capacity of lagged process and slow demand are the main reasons which makes it difficult for the cement price to rise. Although the cement price still keeps at the low level, it shall be prospective for the cement enterprises to recover to the general level profitability in 2006. The Company is a big influential group in Chinese cement industry, and is the biggest cement manufacturer in the mid-south China area, with its capacity in the lead in the country. At present, the company has carried out the strategy arrangement in each area in Hubei preceding any rival, and the capacity will be up to 30 million tons in one or two years; the marketing share will exceed 40% in Hubei, it is easy to see that the area competitive advantage is obvious. As the midland, Hubei will keep the growth ratio of the fixed asset investment at a level above the national average a lot, which will create the conditions for the Company to lead the regulated and ordered competition of the cement market in this area. Looking forward to another target market – east China, it is predicated that the cement market will still continue the status of the year 2005, the supply will exceed the demand seriously, the competition will be bitter, the price will also be at a low level, so it is difficult to foresee a big change in the market. In 2006, with the acceleration of the investment for construction in coal industry, the tension in the coal supply will be relieved effectively. The State Development and Reform Commission predicts that the total output of the coal in the year will be up to 2.2 billion tons, and the demand 2.16 billion tons, the supply can balance the demand. It is predicted that the coal shortage which limited production once a while will not occur in 2006. With the drive of levying “regulating fund of the coal price” which was started in the second half year of 2005, adjustment in the coal resource tax, coal and power linkage policy, it is predicted that the ex-mine price of the coal will still be at high level with little fluctuation. Compared with the year of 2005, although the procurement price of the coal will still keep the high market level, the quality of the coal will improve, so the procurement price of the coal which is calculated according to the specific heat value will decrease accordingly. Additionally, another big energy which influences the cost of the company – power, without the shortage in 2006, the price will continue to keep at high level, but if the state implements the coal and power linkage policy, the situation which the rising price of the coal drives the rising price of the power may occur. In December 2005, the State Council issued “Provisional Regulations on Promoting Industrial Restructuring” and the Table of Contents of Guidelines for Industrial Restructuring. The industrial restructuring policy and the new environmental protection standard which will be implemented as from July 1, 2006 will restrain the production of the small cement companies, which is a new opportunity for large cement enterprises. But the actual impact in 2006 is to be observed. (2) Future development opportunity and operation plan for the new year The new industrial restructuring policy and environmental protection standard will further the step to use the new dry process cement production line to replace the lagged cement production lines, such as shaft kiln, wet process kiln and so on; to save the energy, develop cycling economy; build new socialist country side, reduce the gap between the city and the village; the leading market Hubei will keep the growth rate of the fixed asset investment at around 30% in 2006, and it will be the main strategy point to promote the uprising of the middle China. The above will become the future development opportunity for the Company. Operation plan of the new year：in 2006, produce 13 million tons clinker, 20 million tons cement, and RMC 600,000m3; the total output of equipment 10 k tons, sales revenue 4.3 billion yuan. (3) Capital expenditure plan In 2006, the Company shall continue to increase the cement production lines according to 600801-G 华新-426 K5 AR 摘要 EN.doc 11 Huaxin Cement Co., Ltd. 华新水泥股份有限公司 The Twenty Sixth Meeting of the Fourth Board of Directors 第四届董事会第二十六次会议 convened on 2006.03.03 召开于 2006.03.03 Abstract of Annual Report for 2005 2005 年度报告摘要 strategic planning and layout. The total investment of the project is 1.269 billion yuan. The sources of the fund: a. cash flow from the operation activities 0.527 billion yuan, b. net increase of the bank loan 0.383 billion yuan, c. the rest fund from equity financing. New projects and CIPs in the Capital Expenditures Plan are as follows: Unit: 10 k yuan Names of the Projects Capacity Total investment Planned investment in 2006 Clinker production line 214,341 88,769 Yangxin Phase II 2000ktpy cement 32,879 23,015 Wuxue Phase II 2500ktpy cement 35,487 2,000 Xiangfan Phase I 1500ktpy cement 34,434 13,619 Xianning Phase I 1500ktpy cement 37,511 25,258 Zhaotong, Yunnan 1500ktpy cement 37,037 9,479 Guangshan, Henan 1500ktpy cement 36,993 15,398 Grinding station 32,871 14,374 Wuhan Phase I 2000ktpy cement 16,871 3,374 Xianggang, Hunan 3000ktpy cement 16,000 11,000 RMC station 6,126 6,126 Hankou 1,200,000 m3py 2,166 2,166 3 Hanyang 1,200,000 m py 2,166 2,166 3 Huangshi 600,000 m py 1,794 1,794 Total 253,338 109,269 (4) Analysis of the risk for the Company In 2006, the biggest risk for the Company is whether or not the new projects and CIPs will be put into operation as scheduled. Additionally, other risks are the shortage of the Company’s own capital and different cash availabilities at different times due to the continuous and rapid development of the Company. In face of such risks, the company will enhance project supervision, push ahead progresses of the construction for the new projects and CIPs, properly arrange allocations of capital and seek new financing channels in order to ease the cash pressure for the Company. This year, the company shall try to make it possible to realize the equity financing plan. 6.2. The classification of major operation according to industry and products Please find the details in 6.1. 6.3. The classification of major operation according to regions Please find the details in 6.1. 6.4. Raised capital 600801-G 华新-426 K5 AR 摘要 EN.doc 12 Huaxin Cement Co., Ltd. 华新水泥股份有限公司 The Twenty Sixth Meeting of the Fourth Board of Directors 第四届董事会第二十六次会议 convened on 2006.03.03 召开于 2006.03.03 Abstract of Annual Report for 2005 2005 年度报告摘要 Applicable ; Not Applicable Changes of projects Applicable ; Not Applicable 6.5. Non-raised capital Unit: 0000 RMB Name of project Investment Process of project Project benefit Wuxue 6000tpd clinker Clinker 1200 k tons, cement 540 production line 47,349 Started operation on April 26, 2005 k tons Tibet Shannan 1000tpd Clinker 100 k tons, cement 90 k clinker production line 14,494 Stared operation on June 28, 2005 tons Technical renovation of The first cement mill system was completed on Suzhou Golden Cat 1300 k tpy cement grinding 6,420 October 18, 2004 and the second was completed Cement 678.7 k tons and put into operation on April 26, 2005 station Technical renovation of Suzhou Golden Cat 3500tpd clinker 5,287 Stared operation on August 28, 2005 Clinker 250 k tons production line Yidu 2500tpd clinker Cement mill system was put into operation on Clinker 140 k tons, cement 360 production line project, 17,103 August 30, 2005, and the kiln system was put into k tons phase II operation on September 25, 2005 3 Wuhan 1,200 KM py 3 RMC station project 3,250 Stared operation in June, 2005 RMC 54 k km Yunnan 4000tpd clinker production line project 37,037 Estimated to be completed in June 2006 Xiangfan 4000tpd clinker production line project 34,434 Estimated to be completed in July 2006 Wuhan 2000 k tpy cement grinding station 16,871 Estimated to be completed in April 2006 Huaxin Cement (Yangxin) Co., Ltd. 4800tpd clinker production line project, 32,879 Estimated to be completed in October 2006 phase II Total 215,124 / / 6.6. Board’s remarks on “None Standard Opinions” by accounting frim Applicable ; Not Applicable 6.7. Proposal in respect of the profit distribution plan or capital reserves capitalization According to the results of audits by ShineWing CPAs, the net profit of the Company for 2005 was 62,587,119.94 yuan (parent company) or 62,073,249.69 yuan after consolidation. Pursuant to the provisions contained in the Company Law and the Articles of Association of the Company, 10%, i.e. 6,258,712.00 yuan will be appropriated to statutory surplus common reserve fund; 10%, i.e. 6,258,712.00 yuan, to statutory public welfare fund. The consolidated allocable profit (consolidated) is 183,152,698.79 yuan by the end of December 2005. The board reviewed and adopted the following profit distribution proposal: on the basis of the 328.40 million shares as at the year end, a cash dividend of 0.06 yuan per share (incl. tax) shall be distributed to all shareholders, hence 19,704,000 yuan shall be distributed, and the whole of the remaining shall be booked as unallocated profit. No capital reserve shall be converted into share capital for 2005. The above profit distribution proposal shall be subject to the approval by shareholders' general meeting before implementation. 600801-G 华新-426 K5 AR 摘要 EN.doc 13 Huaxin Cement Co., Ltd. 华新水泥股份有限公司 The Twenty Sixth Meeting of the Fourth Board of Directors 第四届董事会第二十六次会议 convened on 2006.03.03 召开于 2006.03.03 Abstract of Annual Report for 2005 2005 年度报告摘要 Profiting in the report period, but no cash profit distribution proposal. Applicable ; Not Applicable 7. Major Events 7.1. Assets acquisition Applicable ; Not Applicable 7.2. Assets disposal Applicable ; Not Applicable 7.3. Major guarantees Unit: RMB Guarantee from the Company to subsidiaries Guarantee amount for subsidiaries occurred in the report period 155,000,000.00 Guarantee amount from subsidiaries left at the report period end 377,540,000.00 Total guarantee amount (including guarantee for subsidiaries) Total guarantee amount 377,540,000.00 % in net asset of the Company 31.11 7.4. Major related transaction 7.4.1. The related transaction in connection with the daily operation Unit: 0000 RMB Sold products and provide Purchase products and received services to related parties service from related parties Related party % in same % in same Amount Amount transaction type transaction type Huaxin Cement Fabric Product Co., 336 0.13 Ltd. Huaxin Group Co., Ltd. 480 100 Holcim 242 100 Total 336 722 Note: related transactions of products and services with its controlling shareholder and their controlled subsidiaries amounted to 3.36 million yuan. 7.4.2. Related obligations and liabilities Applicable ;Not Applicable Capital utilization during the report period and clearing plan Applicable ;Not Applicable Whether or not the above clearing plan will ensure a complete resolution of the capital utilization by the end of 2006 600801-G 华新-426 K5 AR 摘要 EN.doc 14 Huaxin Cement Co., Ltd. 华新水泥股份有限公司 The Twenty Sixth Meeting of the Fourth Board of Directors 第四届董事会第二十六次会议 convened on 2006.03.03 召开于 2006.03.03 Abstract of Annual Report for 2005 2005 年度报告摘要 Applicable ;Not Applicable 7.5. Entrustment Applicable ; Not Applicable 7.6. Executive of commitment The Proposal of Share Partition Reform of the Company was reviewed and adopted by the Meeting of relevant holders of A shares for the Share Partition Reform on December 16, 2005 and was implemented on December 26. The controlling shareholder Huaxin Group Co., Ltd. committed the following in the “Proposal of Share Partition Reform of Huaxin Cement Co., Ltd.”: 1. None of the shares shall be listed, traded or transferred 12 months after the Share Partition Reform Plan is successfully implemented. 2. None of the state shares held on behalf of the state and the domestic legal person shares shall be listed, traded or sold in the SSE during the period from the thirteenth month to the thirty sixth month after the Share Partition Reform Plan is successfully implemented. 3. The number of the state shares held on behalf of the state that would be listed, traded or sold in the SSE from the thirty seventh month to the forty eighth month shall not exceed 5% (equivalent to 1.21% of the current total shares of the Company) of the state shares that Huaxin Group Co., Ltd. holds after the Share Partition Reform, and the transaction price shall not be lower than 9 yuan/share (subject to conversions in case of dividends distribution, bonus issue, capital reserve conversion during the period from the implementing date of Share Partition Reform to sales of the shares by Huaxin Group, if any). 4. The number of the state shares held on behalf of the state that would be listed, traded or sold in the SSE from the forty ninth month to the sixtieth month shall not exceed 10% (equivalent to 2.41% of the current total shares of the Company) of the state shares that Huaxin Group Co., Ltd. holds after the Share Partition Reform, and the transaction price shall not be lower than 9 yuan/share (subject to conversions in case of dividends distribution, bonus issue, capital reserve conversion during the period from the implementing date of Share Partition Reform to sales of the shares by Huaxin Group, if any). 5. For each 1% of the total shares of Huaxin Cement that are held on behalf of the state and sold through the listing system of the SSE, an announcement will be made within 2 working days after such transaction, during which 2 days the transactions do not have to be suspended. The above commitments are being implemented. 7.7. Major lawsuit or arbitration Applicable ; Not Applicable 8. SUPERVISORS' REPORT In the opinion of the Supervisory Committee, the Company operated according to the law, there were no problems in its financial position, application of proceeds, company acquisition, assets disposal and related transactions. 600801-G 华新-426 K5 AR 摘要 EN.doc 15 Huaxin Cement Co., Ltd. 华新水泥股份有限公司 The Twenty Sixth Meeting of the Fourth Board of Directors 第四届董事会第二十六次会议 convened on 2006.03.03 召开于 2006.03.03 Abstract of Annual Report for 2005 2005 年度报告摘要 9. FINANCIAL REPORT 9.1. Auditors’ opinion The financial statements of the Company for 2005 were audited by Shine Wing CPAs, and certified public accounts Zhang Kedong and Li Suping issued their auditing report without reservations. 9.2. Financial statement 600801-G 华新-426 K5 AR 摘要 EN.doc 16 Huaxin Cement Co., Ltd. 华新水泥股份有限公司 The Twenty Sixth Meeting of the Fourth Board of Directors 第四届董事会第二十六次会议 convened on 2006.03.03 召开于 2006.03.03 Abstract of Annual Report for 2005 2005 年度报告摘要 Balance Sheet In RMB Yuan Assets Notes Consolidated The company 2005.12.31 2004.12.31 2005.12.31 2004.12.31 Current assets Cash 5(1) 368,316,897.24 397,339,808.76 116,523,790.75 168,790,952.83 Short term investment - - - - Notes receivable 5(2) 104,574,447.75 117,045,564.16 55,038,800.53 48,826,221.90 Dividends receivable - - - - Interest receivable - 304,556 - - Accounts receivable 5(3) 109,388,504.02 65,581,732.92 50,082,233.45 29,087,547.97 Other receivables 5(4) 82,937,052.52 67,521,873.19 262,157,755.66 131,709,886.31 Prepayments 5(5) 16,112,108.95 43,448,775.66 25,289,952.47 46,197,660.96 Subsidiary receivable - - - - Inventories 5(6) 328,836,476.04 285,613,147.56 123,314,015.16 135,474,166.76 Deferred and prepaid 1,123,035.17 1,266,224.48 827,322.45 894,685.11 expenses 5(7) Long term bonds investment within one - - - - year Other current assets - - - - Total current assets 1,011,288,521.69 978,121,682.35 633,233,870.47 560,981,121.84 Long term investments Long-term equity 22,711,800.80 23,950,917.77 1,482,498,456.48 914,709,627.19 investments 5(8) Long-term debts 59,057.32 59,057.32 59,057.32 59,057.32 investments 5(8) Total Long term 22,770,858.12 24,009,975.09 1,482,557,513.80 914,768,684.51 Investment Consolidation difference 8,003,799.64 9,251,145.04 - - 5(8) Fixed assets Fixed assets - cost 5(9) 5,635,949,416.58 4,550,430,830.57 2,408,334,950.34 2,339,725,759.39 Less: Accumulated 1,596,682,649.93 1,378,073,394.33 855,023,065.10 756,364,608.04 depreciation 5(9) Fixed assets - net book 4,039,266,766.65 3,172,357,436.24 1,553,311,885.24 1,583,361,151.35 value 5(9) Less:provision for fixed 65,456,142.75 102,879,245.77 4,047,235.70 4,047,235.70 assets 5(9) Fixed assets-net value 5(9) 3,973,810,623.90 3,069,478,190.47 1,549,264,649.54 1,579,313,915.65 Construction materials 5(10) 116,090,592.93 73,190,483.12 - - Construction in progress 5(11) 440,347,060.74 448,111,293.23 188,083,767.64 269,659,546.03 Fixed assets pending for - - - - disposal Total fixed assets 4,530,248,277.57 3,590,779,966.82 1,737,348,417.18 1,848,973,461.68 Intangible and other assets Intangible assets 5(12) 512,819,727.58 329,695,355.41 84,724,047.31 71,078,173.38 Long term deferred 31,164,792.72 33,192,977.73 11,198,709.46 12,179,248.30 expenses 5(13) Other long-term assets - - - - Total intangible and 543,984,520.30 362,888,333.14 95,922,756.77 83,257,421.68 other assets Deferred tax charges: Deferred tax charges - - - - Total assets 6,108,292,177.68 4,955,799,957.40 3,949,062,558.22 3,407,980,689.71 600801-G 华新-426 K5 AR 摘要 EN.doc 17 Huaxin Cement Co., Ltd. 华新水泥股份有限公司 The Twenty Sixth Meeting of the Fourth Board of Directors 第四届董事会第二十六次会议 convened on 2006.03.03 召开于 2006.03.03 Abstract of Annual Report for 2005 2005 年度报告摘要 Balance Sheet (Continued) In RMB yuan LIABILITIES AND OWNERS' EQUITY Notes Consolidated The Company 2005.12.31 2004.12.31 2005.12.31 2004.12.31 Current liabilities Short term loans 5(14) 581,300,000.00 445,380,000.00 360,700,000.00 283,200,000.00 Notes payable 5(15) 195,396,247.88 77,430,625.01 72,201,399.24 14,685,625.01 Accounts payable 5(16) 481,526,792.21 384,040,381.29 164,351,726.73 138,115,439.40 Advances from 85,799,398.18 49,688,371.11 151,945,799.35 142,179,982.98 customers 5(17) Accrued payroll 8,617,457.22 22,436,260.55 1,582,000.00 12,295,103.00 Staff and workers' bonus and welfare 7,341,878.01 6,639,807.98 3,248,691.60 4,699,902.53 fund Dividends payable 5(18) 393,006.80 702,119.60 393,006.80 702,119.60 Taxes payable 5(19) 60,406,138.88 57,716,542.69 24,646,484.71 52,607,711.45 Other statutory 12,038,818.28 8,889,820.25 9,838,518.17 7,650,834.10 payables 5(20) Other payables 5(21) 129,607,479.64 108,347,299.42 61,896,754.20 63,697,314.90 Accrued expenses 5(22) 6,544,801.68 23,990,999.37 3,809,821.15 12,281,320.76 Accrued - - - - payables Long term liabilities due within 427,155,356.45 384,338,902.68 329,155,356.45 255,338,902.68 one year 5(23) Other current - - - liabilities Total current 1,996,127,375.23 1,569,601,129.95 1,183,769,558.40 987,454,256.41 liabilities Long term liabilities Long term loans 5(24) 2,050,484,081.12 1,546,464,534.89 1,532,444,081.12 1,229,924,534.89 Debentures - - - - payables Long term 128,831,336.31 61,568,450.69 12,305,943.81 15,273,058.19 payables 5(25) Special payables 5(26) 3,795,701.96 6,000,000.00 3,795,701.96 6,000,000.00 Other long term - - - - liabilities Total long term 2,183,111,119.39 1,614,032,985.58 1,548,545,726.89 1,251,197,593.08 liabilities Deferred tax charge: Deferred taxes - - - - liabilities Total liabilities 4,179,238,494.62 3,183,634,115.53 2,732,315,285.29 2,238,651,849.49 Minority interests Minority interests 5(27) 715,436,155.21 605,452,876.48 - - Owner' equity Share capital 5(28) 328,400,000.00 328,400,000.00 328,400,000.00 328,400,000.00 Capital reserve 5(29) 548,926,840.93 544,391,528.16 549,388,282.66 544,852,969.89 Surplus reserve 5(30) 153,137,988.13 140,620,564.13 153,137,988.13 140,620,564.13 Including: Welfare 43,165,506.99 36,906,794.99 43,165,506.99 36,906,794.99 reserves Undistributed 183,152,698.79 153,300,873.10 185,821,002.14 155,455,306.20 profits 5(31) Including: Cash 19,704,000.00 19,704,000.00 dividends 5(32) Total owners' 1,213,617,527.85 1,166,712,965.39 1,216,747,272.93 1,169,328,840.22 equity Total liablities and owners' 6,108,292,177.68 4,955,799,957.40 3,949,062,558.22 3,407,980,689.71 equity 600801-G 华新-426 K5 AR 摘要 EN.doc 18 Huaxin Cement Co., Ltd. 华新水泥股份有限公司 The Twenty Sixth Meeting of the Fourth Board of Directors 第四届董事会第二十六次会议 convened on 2006.03.03 召开于 2006.03.03 Abstract of Annual Report for 2005 2005 年度报告摘要 INCOME AND INCOME APPROPRIATION STATEMENT In RMB yuan Item Notes Consolidated The Company 2005 2004 2005 2004 Operating income 5(33) 2,639,380,167.10 2,188,101,303.80 1,407,992,916.08 1,240,150,338.16 Less: Operating cost 5(33) 2,117,757,295.28 1,604,559,832.97 1,219,514,499.88 919,909,557.17 Operating tax and 5(34) 18,262,075.13 13,233,330.55 10,000,266.91 9,596,988.78 surcharge Gross profit 503,360,796.69 570,308,140.28 178,478,149.29 310,643,792.21 Add: Other operating profit 5(35) 2,829,450.25 4,522,839.91 10,454,477.02 -446,244.22 Less: Operating expenses 187,353,041.67 141,005,322.44 74,902,179.68 79,493,364.09 General and administrative 161,102,470.33 165,148,266.48 74,587,498.84 105,261,316.74 expenses Financial expenses 5(36) 111,112,219.92 85,863,859.69 76,846,799.18 61,103,593.85 Operating profit / (loss) 46,622,515.02 182,813,531.58 -37,403,851.39 64,339,273.31 Add: Income from 5(37) -1,239,116.97 -825,033.61 83,483,602.37 75,634,057.81 investments Subsidiary income 5(38) 30,882,780.26 38,477,512.83 8,381,529.27 12,879,284.63 Non-operating income 5(39) 10,808,085.86 39,514,722.33 848,889.52 39,328,431.67 Less: Non-operating 5,696,504.25 4,820,584.72 527,742.84 824,389.11 expenses Total profit 81,377,759.92 255,160,148.41 54,782,426.93 191,356,658.31 Less: Income tax 10,707,805.26 60,295,586.82 -7,804,693.01 41,006,174.30 Minority interests 8,596,704.97 46,314,003.94 - - Net profit/(loss) afiter tax 62,073,249.69 148,550,557.65 62,587,119.94 150,350,484.01 Add: Undistribution profit 153,300,873.10 54,524,412.25 155,455,306.20 54,878,918.99 Add: surplus reserve - - - - Profit available to 215,374,122.79 203,074,969.90 218,042,426.14 205,229,403.00 distribution Less: Mandatory appropriation to surplus 6,258,712.00 15,035,048.40 6,258,712.00 15,035,048.40 reserves Mandatory appropriation to welfare 6,258,712.00 15,035,048.40 6,258,712.00 15,035,048.40 reserves Profit available to 202,856,698.79 173,004,873.10 205,525,002.14 175,159,306.20 distribution to shareholder Less: Preferred dividend - - - - payable Discretionary appropriation to surplus - - - - reserves Dividends payable 19,704,000.00 19,704,000.00 19,704,000.00 19,704,000.00 Dividends transferred to - - - - share Undistribution profit 183,152,698.79 153,300,873.10 185,821,002.14 155,455,306.20 Including: Cash - 19,704,000.00 - 19,704,000.00 dividends Supplement information Item Consolidated The Company Notes 2005 2004 2005 2004 Gain on sale and disposal of a department or an invested 849,271.00 - - - enterprise Losses arising from natural - - - - diasters Increase/decrease in income before tax due to a change in - - - - accounting policy Increase/decrease in income before tax due to a change in - - - - accounting estimate Losses arising from debt retructurings Others 600801-G 华新-426 K5 AR 摘要 EN.doc 19 Huaxin Cement Co., Ltd. 华新水泥股份有限公司 The Twenty Sixth Meeting of the Fourth Board of Directors 第四届董事会第二十六次会议 convened on 2006.03.03 召开于 2006.03.03 Abstract of Annual Report for 2005 2005 年度报告摘要 CASH FLOW STATEMENT In RMB yuan Item Notes Consolidated 2005 The Company 2005 1. Cash flows from operating activities Cash received from sales of goods or 3,140,685,680.41 1,706,762,072.31 rendering of services Refund of tax 41,175,857.75 14,630,627.29 Other cash received relating to operating 36,286,375.00 103,043,113.13 activities 5(40) Sub-total of cash inflows 3,218,147,913.16 1,824,435,812.73 Cash paid for goods and services 2,170,863,181.21 1,340,148,191.99 Cash paid to and on behalf of employees 181,782,685.29 92,523,514.69 Various kinds of tax paid 242,931,480.10 91,636,982.27 Other cash paid relating to operating activities 5(41) 119,436,476.06 121,575,768.22 Sub-total of cash outflows 2,715,013,822.66 1,645,884,457.17 Net cash from operating activities 503,134,090.50 178,551,355.56 2. Cash flows from investing activities: Cash received from return of investments - - Cash received from distribution of dividends - 2,230,085.85 or profits Net cash received from disposal of fixed 14,975,312.61 4,499,869.81 assets, intangible assets and other long-term assets Other cash received relating to investing 2,000,000.00 - activities 5(42) Sub-total of cash inflows 16,975,312.61 6,729,955.66 Cash paid to acquire fixed assets, intangible 1,070,713,644.59 489,018,348.27 assets and other long-term assets Cash paid to acquire equity investments 0.00 40,000,000.00 Other cash paid relating to investing activities - 39,900,000.00 Sub-total of cash outflows 1,070,713,644.59 568,918,348.27 Net cash from investing activities -1,053,738,331.98 -562,188,392.61 3. Cash flows from financing activities Proceeds form issuing shares - - Including: cash from minority interests - - Proceeds from issue of bonds - - Proceeds from borrowings 1,680,600,000.00 1,075,700,000.00 Other proceeds relating to financing activities 5(43) 1,922,804.23 538,804.23 Sub-total of cash inflows 1,682,522,804.23 1,076,238,804.23 Cash repayments of amounts borrowed 988,921,010.75 608,911,010.75 Cash payments for distribution of dividends or 170,085,547.49 135,052,255.02 profits Other cash payments relating to financing 1,378,523.16 364,207.02 activities 5(44) Sub-total of cash outflows 1,160,385,081.40 744,327,472.79 Net cash from financing activities 522,137,722.83 331,911,331.44 4. Effect of foreign exchange rate changes on -556,392.87 -541,456.47 cash 5. Net increase in cash and cash equivalents -29,022,911.52 -52,267,162.08 600801-G 华新-426 K5 AR 摘要 EN.doc 20 Huaxin Cement Co., Ltd. 华新水泥股份有限公司 The Twenty Sixth Meeting of the Fourth Board of Directors 第四届董事会第二十六次会议 convened on 2006.03.03 召开于 2006.03.03 Abstract of Annual Report for 2005 2005 年度报告摘要 CASH FLOW STATEMENT (Continued) In RMB yuan ITEM Notes Consolidated 2005 The Company 2005 1. Reconciliation of net profit to cash flows from operating activities Net profit 62,073,249.69 62,587,119.94 Add: Minority Interest 8,596,704.97 Add: Provision for loss on assets -5,447,129.82 -3,621,513.23 Depreciation of fixed assets 269,962,163.11 118,419,282.04 Amortization of intangible assets 13,300,147.10 2,280,215.40 Depreciation of long-term deferred expenses 11,229,976.16 4,702,461.72 Deferred Expenses 143,189.31 67,362.66 Accrued expenses -17,934,868.94 -6,647,308.06 Losses on disposal of fixed assets, intangible -3,707,350.96 291,264.55 assets and other long-term Losses on scrapping of fixed assets 0.00 - Financial expenses 114,896,741.98 78,732,595.14 Losses arising from investments (or deduct: 1,239,116.97 -83,483,602.37 gains) Deferred tax credit (or deduct : debit) - - Decrease in inventories (or deduct: increase) -29,450,325.99 -25,830,116.51 Decrease in operating receivables (or deduct: -18,008,264.08 -25,855,725.97 increase) Increase in operating payables (or deduct: 96,240,741.00 56,909,320.25 decrease) Other Net cash flows from operating activities 503,134,090.50 178,551,355.56 2. Investing and financing activities that do not involve in cash receipts and payments Capital by the transfer of debts - - Convertible bonds within one year - - Fixed assets by financial lease - - 3. Net increase in cash and cash equivalents cash at the end of the period 368,316,897.24 116,523,790.75 Less: cash at the beginning of the period 397,339,808.76 168,790,952.83 Add: cash equivalents at the ending of the period - - Less: cash equivalents at the beginning of the - - period Net increase in cash and cash equivalents -29,022,911.52 -52,267,162.08 9.3. Compared with the previous annual report, there were no changes in accounting policies, estimating and calculating methods: 9.4. There were no corrections in announced financial figured in the report period. 9.5. Compared with the previous annual report, there are the following changes in the scope of 600801-G 华新-426 K5 AR 摘要 EN.doc 21 Huaxin Cement Co., Ltd. 华新水泥股份有限公司 The Twenty Sixth Meeting of the Fourth Board of Directors 第四届董事会第二十六次会议 convened on 2006.03.03 召开于 2006.03.03 Abstract of Annual Report for 2005 2005 年度报告摘要 consolidation: 1. The Company jointly established Huaxin Yangxin Cement Co., Ltd. (“Yangxin Company”) with Huangshi Yiruida Investment Co., Ltd. The registered capital of Yangxin Company is RMB500, 000 thousand. According to the contract, the company holds 80% of its share interests with physical capital amounted to RMB400, 000 thousand, and Yiruida Company holds 20% with intangible assets amounted to RMB100,000 thousand. It is located in Yangxin County, Hubei Province and the financial statements were consolidated. 2. The Company jointly established Huaxin Wuhan Cement Co., Ltd. (“Wuhan Company”) with Huaxin Yangxin Cement Co., Ltd. The registered capital of Wuhan Company is RMB60, 000 thousand. According to the contract, the company holds 70% of its share interests with physical capital amounted to RMB42, 000 thousand, and Yangxin Company holds 30% with physical capital amounted to RMB18, 000 thousand. It is located in Wuhan City, Hubei Province and the financial statements were consolidated. 3. The Company jointly established Huaxin Wuhan Concrete Co., Ltd. (“Concrete Company”) with Huaxin Yangxin Cement Co., Ltd. The registered capital of Concrete Company is RMB10, 000 thousand. According to the contract, the company holds 70% of its share interests with money capital amounted to RMB7, 000 thousand, and Yangxin Company holds 30% with money capital amounted to RMB3, 000 thousand. It is located in Qingshan District, Wuhan City, Hubei Province and the financial statements were consolidated. Chairman: Chen Musen Huaxin Cement Co., Ltd. March 3, 2006 600801-G 华新-426 K5 AR 摘要 EN.doc 22