上工申贝(600843)2007年年度报告

上工申贝（集团）股份有限公司 600843 900924 2007 年年度报告 1 上工申贝（集团）股份有限公司 2007 年年度报告 目录 一、重要提示 ............................................................... 1 二、公司基本情况简介 ....................................................... 1 三、主要财务数据和指标 ..................................................... 2 四、股本变动及股东情况 ..................................................... 3 五、董事、监事和高级管理人员 ............................................... 8 六、公司治理结构 .......................................................... 11 七、股东大会情况简介 ...................................................... 14 八、董事会报告 ............................................................ 14 九、监事会报告 ............................................................ 24 十、重要事项 .............................................................. 25 十一、财务会计报告 ........................................................ 33 十二、备查文件目录 ........................................................ 33 上工申贝（集团）股份有限公司 2007 年度报告摘要 一、重要提示 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。 2、公司全体董事出席董事会会议。 3、立信会计师事务所有限公司为本公司出具了标准无保留意见的审计报告。 4、公司董事长兼 CEO 张敏先生、总经理马民良先生、会计机构负责人孟祥云女士声明： 保证本年度报告中财务报告的真实、完整。 二、公司基本情况简介 1、 公司法定中文名称：上工申贝（集团）股份有限公司 公司法定中文名称缩写：上工申贝 公司英文名称：SGSB GROUP CO.,LTD 公司英文名称缩写：SGSB 2、 公司法定代表人：张敏 3、 公司董事会秘书：张一枫 电话：021-68407515 传真：021-63302939 E-mail：zyf@sgsbgroup.com 联系地址：上海市浦东新区世纪大道 1500 号东方大厦 12 楼 公司证券事务代表：周勇强 电话：021-68407700*728 传真：021-63302939 E-mail：zyq@sgsbgroup.com 联系地址：上海市浦东新区世纪大道 1500 号东方大厦 12 楼 4、 公司注册地址：上海市浦东新区罗山路 1201 号 公司办公地址：上海市浦东新区世纪大道 1500 号东方大厦 12 楼 邮政编码：200122 公司国际互联网网址：http://www.sgsbgroup.com 公司电子信箱：sgsb@sgsbgroup.com 5、 公司信息披露报纸名称：《上海证券报》、香港《商报》 登载公司年度报告的中国证监会指定国际互联网网址：http://www.sse.com.cn 公司年度报告备置地点：公司办公室 6、 公司 A 股上市交易所：上海证券交易所 公司 A 股简称：上工申贝 公司 A 股代码：600843 公司 B 股上市交易所：上海证券交易所 公司 B 股简称：上工 B 股 公司 B 股代码：90924 7、 其他有关资料 公司首次注册登记日期：1993 年 12 月 16 日 公司首次注册登记地点：上海市工商行政管理局 1 上工申贝（集团）股份有限公司 2007 年度报告摘要 公司变更注册登记日期：2005 年 2 月 7 日 公司变更注册登记地址：上海市工商行政管理局 公司法人营业执照注册号：企股沪总字第 019029 号 公司税务登记号码：国地税沪字 310115132210544 公司组织机构代码：13221054-4 公司聘请的会计师事务所名称：立信会计师事务所有限公司 公司聘请的会计师事务所办公地址：上海市南京东路 61 号 4 楼 公司其他基本情况： 法律顾问:上海市震旦律师事务所 办公地址:上海市四川北路 1688 号 16 楼 三、主要财务数据和指标 (一)本报告期主要财务数据 单位:元 币种:人民币 项目 金额 营业利润 29,961,108.03 利润总额 91,643,070.06 归属于上市公司股东的净利润 28,030,284.53 归属于上市公司股东的扣除非经常性损益后的净利润 -47,083,827.13 经营活动产生的现金流量净额 30,669,664.85 (二)扣除非经常性损益项目和金额 单位:元 币种:人民币 非经常性损益项目 金额 非流动资产处置损益 68,675,959.73 计入当期损益的政府补助，但与公司业务密切相关，按照国家统一 5,820,588.44 标准定额或定量享受的政府补助除外 计入当期损益的对非金融企业收取的资金占用费，但经国家有关部 门批准设立的有经营资格的金融机构对非金融企业收取的资金占用 537,590.04 费除外 除上述各项之外的其他营业外收支净额 79,973.45 合计 75,114,111.66 (三)报告期末公司前三年主要会计数据和财务指标 单位:元 币种:人民币 2006 年 本年比上年增 主要会计数据 2007 年 2005 年 减(%) 调整前 调整后 营业收入 2,538,060,869.69 2,406,584,588.29 2,440,723,981.83 3.99 1,482,659,146.38 利润总额 91,643,070.06 23,488,575.39 31,343,301.49 192.38 -289,084,643.38 归属于上市公司股东的 28,030,284.53 4,893,123.59 6,571,852.74 326.52 -276,608,231.59 净利润 归属于上市公司股东的 扣除非经常性损益的净 -47,083,827.13 -28,596,074.58 -26,917,345.43 -74.92 -279,084,646.94 利润 2 上工申贝（集团）股份有限公司 2007 年度报告摘要 基本每股收益 0.0624 0.0109 0.0146 327.40 -0.6162 稀释每股收益 0.0624 0.0109 0.0146 327.40 -0.6162 扣除非经常性损益后的 -0.1049 -0.0637 -0.0600 -74.83 -0.6217 基本每股收益 全面摊薄净资产收益率 增加 3.57 个百 4.7958 0.8329 1.2279 -48.8802 （%） 分点 加权平均净资产收益率 增加 4.08 个百 5.1037 0.8610 1.0270 -38.4537 （%） 分点 扣除非经常性损益后全 减少 3.03 个百 面摊薄净资产收益率 -8.0558 -4.8678 -5.0294 -49.3200 分点 （%） 扣除非经常性损益后的 减少 4.37 个百 加权平均净资产收益率 -8.5728 -5.0300 -4.2066 -38.7980 分点 （%） 经营活动产生的现金流 30,669,664.85 116,517,385.91 116,517,385.91 -73.68 39,377,776.83 量净额 每股经营活动产生的现 0.0683 0.2596 0.2596 -73.69 0.0877 金流量净额 2006 年末 本年末比上年 2007 年末 2005 年末 末增减(%) 调整前 调整后 总资产 2,380,098,702.55 2,486,972,366.78 2,440,929,062.47 -2.49 2,451,740,460.71 所有者权益（或股东权 584,473,598.84 587,453,178.73 535,205,158.97 9.21 565,889,885.70 益） 归属于上市公司股东的 1.3021 1.3087 1.1923 9.21 1.2607 每股净资产 (四)采用公允价值计量的项目 单位:元 币种:人民币 项目名称 期初余额 期末余额 当期变动 对当期利润的影响金额 交易性金融资产 24,420,473.91 9,875,912.50 -14,544,561.41 70,231.94 可供出售金融资产 24,458,496.92 24,458,496.92 合计 24,420,473.91 34,334,409.42 9,913,935.51 70,231.94 公司可供出售金融资产系以前年度购买上市公司法人股(上海三毛、广电信息)流通上市， 按期末市价计算增加所致。 四、股本变动及股东情况 (一)股本变动情况 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 公 发 积 比例 行 送 比例 数量 金 其他 小计 数量 (%) 新 股 (%) 转 股 股 一、有限售条件股份 1、国家持股 132,841,017 29.59 -45,565,698 -45,565,698 87,275,319 19.44 2、国有法人持股 21,899,907 4.88 -21,899,907 -21,899,907 0 0 3、其他内资持股 17,192,500 3.83 -17,192,500 -17,192,500 0 0 其中： 境内法人持股 17,192,500 3.83 -17,192,500 -17,192,500 0 0 境内自然人持股 3 上工申贝（集团）股份有限公司 2007 年度报告摘要 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 171,933,424 38.30 -84,658,105 -84,658,105 87,275,319 19.44 计 二、无限售条件流通股份 1、人民币普通股 33,009,603 7.35 84,658,105 84,658,105 117,667,708 26.21 2、境内上市的外资 243,943,750 54.35 0 0 243,943,750 54.35 股 3、境外上市的外资 股 4、其他 无限售条件流通股 276,953,353 61.70 84,658,105 84,658,105 361,611,458 80.56 份合计 三、股份总数 448,886,777 100 0 0 448,886,777 100 股份变动情况说明： （1）按公司股权分置改革实施方案，公司有限售条件的流通股上市流通日为 2007 年 6 月 15 日。 （2）2007 年 5 月 31 日及 2007 年 9 月 20 日，中国长城资产管理公司（简称“长城资产公司”）和中 国东方资产管理公司（简称“东方资产公司”）分别偿还了本公司股改期间由上海市浦东新区国有资 产监督管理委员会（简称“新区国资委”）垫付的对价 724,802 股及 1,124,806 股，新区国资委所持 本公司股份由 107,870,050 股（占总股本 24.03%）调整到 109,719,658 股（占总股本 24.44%），根据 股改实施方案，其中无限售条件流通股份为 22,444,339 股。长城资产公司所持本公司股份由 9,785,316 股（占总股本 2.18%）调整为 9,060,514 股（占总股本 2.02%），于 2007 年 6 月 15 日上市流通；东方 资产公司所持本公司股份由 15,185,651 股（占总股本 3.38%） 调整为 14,060,845 股（占总股本 3.13%）， 于 2007 年 10 月 15 日上市流通。 2、限售股份变动情况表 单位:股 年初限售股 本年解除限售 本年增加限 年末限售股 限售原 解除限 股东名称 数 股数 售股数 数 因 售日期 上海市浦东新区 股改承 2007 年 6 国有资产监督管 107,870,050 22,444,339 1,849,608 87,275,319 诺 月 15 日 理委员会 上海国际信托投 股改承 2007 年 6 21,899,907 21,899,907 0 0 资有限公司 诺 月 15 日 2007 年 中国东方资产管 股改承 15,185,651 15,185,651 0 0 10 月 15 理公司 诺 日 中国长城资产管 股改承 2007 年 6 9,785,316 9,785,316 0 0 理公司 诺 月 15 日 其他社会募集法 股改承 2007 年 6 17,192,500 17,192,500 0 0 人股东 诺 月 15 日 张敏 39,300(B) 0 30,700(B) 70,000(B) 董事 马民良 5,520 0 0 5,520 董事 何忠源 10,792 0 0 10,792 监事 董事会 张一枫 5,058 0 0 5,058 秘书 4 上工申贝（集团）股份有限公司 2007 年度报告摘要 原公司 2008 年 3 王立喜 6,349 0 0 6,349 董事 月3日 原公司 2008 年 3 陈明其 3,174 0 0 3,174 高管 月3日 3、证券发行与上市情况 （1）前三年历次证券发行情况 截止本报告期末的前三年，公司未有增发新股、配售股份、可转换公司债券、分离 交易的可转换公司债券、公司债券及其他衍生证券的发行与上市情况。 （2）公司股份总数及结构的变动情况 1）报告期内没有因送股、转增股本、配股、增发新股等原因引起公司股份总数的变动情 况。 2）根据公司股权分置改革实施方案，公司于 2007 年 6 月 15 日安排有限售条件的流通 股 70,597,260 股上市流通（详见 2007 年 6 月 11 日本公司刊登在《上海证券报》019 号 公告），公司股本结构发生变化，情况如下（单位：股）： 本次上市前 变动数 本次上市后 1、国家持有股份 132,841,017 -31,504,853 101,336,164 有限售条件的 2、国有法人持有股份 21,899,907 -21,899,907 0 流通股份 3、其他境内法人持有股份 17,192,500 -17,192,500 0 有限售条件的流通股合计 171,933,424 -70,597,260 101,336,164 A股 33,009,603 +70,597,260 103,606,863 无限售条件的 B股 243,943,750 0 243,943,750 流通股份 无限售条件的流股份合计 276,953,353 +70,597,260 347,550,613 股份总数 448,886,777 0 448,886,777 3）根据公司股权分置改革实施方案，2007 年 9 月 20 日中国东方资产管理公司完成了偿 还上海市浦东新区国有资产监督管理委员会为其代垫的对价股份 1,124,806 股，其所持有 的有限售条件的流通股份 14,060,845 股于 2007 年 10 月 15 日上市流通（详见 2007 年 10 月 9 日本公司刊登在《上海证券报》033 号公告），公司股本结构发生变化，情况如下（单 位：股）： 本次上市前 变动数 本次上市后 1、国家持有股份 101,336,164 -14,060,845 87,275,319 有限售条件 2、国有法人持有股份 0 0 0 的流通股份 3、其他境内法人持有股份 0 0 0 有限售条件的流通股合计 101,336,164 -14,060,845 87,275,319 A股 103,606,863 +14,060,845 117,667,708 无限售条件 B股 243,943,750 0 243,943,750 的流通股份 无限售条件的流股份合计 347,550,613 +14,060,845 361,611,458 股份总数 448,886,777 0 448,886,777 (3) 现存的内部职工股情况 本报告期末公司无内部职工股。 5 上工申贝（集团）股份有限公司 2007 年度报告摘要 (二)股东情况 1、股东数量和持股情况 单位:股 报告期末股东总数 52,865 户，其中 A 股股东 21,496 户，B 股股东 31,369 户 前十名股东持股情况 持股比例 持有有限售条 质押或冻结的 股东名称 股东性质 持股总数 报告期内增减 (%) 件股份数量 股份数量 上海市浦东新区国 有资产监督管理委 国家 24.44 109,719,658 1,849,608 87,275,319 0 员会 上海国际信托投资 国有法人 3.91 17,557,971 -4,341,936 0 0 有限公司 SCBSH A/C CSFB S/A QINHAN CHINA 境外法人 3.64 16,338,700 16,338,700 0 未知 MASTER FUND （CAYMAN）LTD. MAIN FORCE ASSETS 境外法人 2.82 12,650,000 0 0 未知 LIMITED MESABI ASSETS 境外法人 2.69 12,075,000 0 0 未知 LIMITED 中国长城资产管理 0 国家 2.02 9,060,514 -724,802 0 公司 中国东方资产管理 0 国家 1.53 6,859,895 -8,325,756 0 公司 NORMAL WIN ASSETS 境外法人 1.13 5,084,780 -3,190,382 0 未知 LIMITED HONOUR FORCE 境外法人 0.61 2,730,000 -17,982,467 0 未知 INVESTMENTS LTD. 胡云菁 境外法人 0.55 2,481,750 2,481,750 0 未知 前十名无限售条件股东持股情况 股东名称 持有无限售条件股份数量 股份种类 上海市浦东新区国有资产监督管理委员会 22,444,339 人民币普通股 上海国际信托投资有限公司 17,557,971 人民币普通股 SCBSH A/C CSFB S/A QINHAN CHINA MASTER FUND 16,338,700 境内上市外资股 （CAYMAN）LTD. MAIN FORCE ASSETS LIMITED 12,650,000 境内上市外资股 MESABI ASSETS LIMITED 12,075,000 境内上市外资股 中国长城资产管理公司 9,060,514 人民币普通股 中国东方资产管理公司 6,859,895 人民币普通股 NORMAL WIN ASSETS LIMITED 5,084,780 境内上市外资股 HONOUR FORCE INVESTMENTS LTD. 2,730,000 境内上市外资股 胡云菁 2,481,750 境内上市外资股 未知前十名流通股股东之间是否存在关联关系或一致行动人的情况。 上述股东关联关系或一致行动关系的说明 未知前十名流通股股东与前十名股东之间是否存在关联关系。 6 上工申贝（集团）股份有限公司 2007 年度报告摘要 前十名有限售条件股东持股数量及限售条件 单位:股 有限售条件股份可上市交易情况 持有的有限 序 新增可上市 有限售条件股东名称 售条件股份 限售条件 号 可上市交易时间 交易股份数 数量 量 2008 年 6 月 15 股改承诺 22,444,339 上海市浦东新区国有资产监督管理 日 1 87,275,319 委员会 2009 年 6 月 15 64,830,980 日 2、控股股东及实际控制人简介 (1) 控股股东情况 控股股东名称：上海市浦东新区国有资产监督管理委员会 负责人：陆方舟 成立日期：1996 年 9 月 主要经营业务或管理活动：受上海市浦东新区人民政府委托，专司浦东新区国有资产管理 (2) 控股股东及实际控制人变更情况 本报告期内公司控股股东及实际控制人没有发生变更。 (3) 公司与实际控制人之间的产权及控制关系的方框图 上海市浦东新区国有资产监督管理委员会 24.44% 上工申贝（集团）股份有限公司 3、其他持股在百分之十以上的法人股东 截止本报告期末公司无其他持股在百分之十以上的法人股东。 7 上工申贝（集团）股份有限公司 2007 年度报告摘要 五、董事、监事和高级管理人员 (一)董事、监事、高级管理人员情况 单位:股 被 报告期被授予的 是否 授 股权激励情况 在股 予 报告期 东单 持有 的 内从公 期 位或 本公 限 司领取 可 已 姓 职 性 年 任期起始 任期终止 年初持股 年末持 变动 末 其他 司的 制 股份增减数 的报酬 行 行 行 名 务 别 龄 日期 日期 数 股数 原因 股 关联 股票 性 总额(万 权 权 权 票 单位 期权 股 元)（税 股 数 价 市 领取 票 前） 数 量 价 报酬、 数 津贴 量 二级 张 董事长、 2006 年 6 2009 年 6 39,300 70,000 30,700 男 45 市场 39.4 否 敏 CEO 月 26 日 月 25 日 (B) (B) (B) 买入 顾 2006 年 6 2009 年 6 副董事长 男 57 0 0 0 否 坚 月 26 日 月 25 日 马 执行董 2006 年 6 2009 年 6 民 事、总经 男 51 5,520 5,520 32.3 否 月 26 日 月 25 日 良 理 常 2006 年 6 2008 年 3 董事 男 40 0 0 0 否 江 月 26 日 月3日 贾 2006 年 6 2009 年 6 春 董事 男 59 0 0 0.8 是 月 26 日 月 25 日 荣 沈 2006 年 6 2009 年 6 逸 董事 男 41 0 0 0.8 是 月 26 日 月 25 日 波 刘 2006 年 6 2009 年 6 仁 独立董事 男 62 0 0 6.00 否 月 26 日 月 25 日 德 王 2006 年 6 2009 年 6 志 独立董事 男 59 0 0 6.00 否 月 26 日 月 25 日 乐 蒋 2006 年 6 2009 年 6 衡 独立董事 男 57 0 0 6.00 否 月 26 日 月 25 日 杰 何 监事会主 2006 年 6 2009 年 6 忠 男 59 10,792 10,792 24.2 否 席 月 26 日 月 25 日 源 姜 2006 年 6 2009 年 6 小 监事 女 49 0 0 11.2 否 月 26 日 月 25 日 书 王 2006 年 6 2009 年 6 监事 男 49 0 0 10.6 否 杰 月 26 日 月 25 日 诸 葛 2007 年 9 2009 年 6 副总经理 女 39 11.9 否 惠 月3日 月 25 日 玲 徐 财务负责 2006 年 6 2008 年 3 晓 女 54 0 0 13.6 否 人 月 26 日 月3日 晖 张 董事会秘 2006 年 6 2009 年 6 一 男 57 5,058 5,058 14.4 否 书 月 26 日 月 25 日 枫 合 / / / / / 60,670 91,370 / 30,700 / 177.2 / / / 计 董事、监事、高级管理人员最近 5 年的主要工作经历： (1)张敏,曾任上海冰箱压缩机股份有限公司总经理助理；上海扎努西电气机械有限公司 总经理；上海申贝办公机械有限公司党委副书记、总经理、副董事长、董事长。现任本公 司党委副书记、董事长兼 CEO。 (2)顾坚,曾任上海浦东国有资产投资管理公司总经理；上海浦东发展（集团）有限公司 副总经济师、总经济师；本公司董事。现任本公司党委书记、副董事长。 (3)马民良,曾任上海梅林正广和（集团）有限公司党委书记、总经理；上海轻工装备（集 8 上工申贝（集团）股份有限公司 2007 年度报告摘要 团）有限公司党委书记、副总经理；上海申贝办公机械有限公司党委书记、副总经理、总 经理；本公司副董事长兼 CFO。现任本公司执行董事、总经理。 (4)常江,曾任新天国际经贸股份有限公司董事、副总经理、总经理；新天国际经济技术 合作（集团）股份有限公司副董事长；上海浦东发展（集团）有限公司资产经营部副总经 理。现任上海浦东路桥建设股份有限公司副总经理、董事会秘书，报告期内任本公司董事。 (5)贾春荣,曾任上投投资管理有限公司副总经理，现任上投投资管理有限公司总经理、 董事长；本公司董事。 (6)沈逸波,曾任中国长城资产管理公司上海办事处综合管理部副处长、债权管理部副处 长、处长、资产经营一部处长。现任中国长城资产管理公司上海办事处副总经理，本公司 董事。 (7)刘仁德,曾任上海东亚会计师事务所有限公司党支部书记、副主任会计师。现任上海 宏大东亚会计师事务所有限公司党支部书记、副主任会计师，本公司独立董事。 (8)王志乐,曾任中国人民大学讲师、副教授。现任商务部研究院跨国公司研究中心主任 兼国家产业政策咨询委员会委员，中国集团公司促进会副会长、中国投资协会外资投资委 员会副会长，中国经济体制改革研究会特约研究员，南开大学跨国公司研究中心兼职教授。 本公司独立董事。 (9)蒋衡杰,曾任中国丝绸工业总公司办公室主任、总经理助理、副总经理；中国服装总 公司总经理、中国服装协会理事长、中国服装集团公司党委书记、第一副总经理、中国服 装协会会长。现任中国服装协会常务副会长（法人代表），全国服装标准化技术委员会主 任、中国纺织工程学会常务理事、清华大学美术学院苏州大学、江西服装学院、北京服装 学院客座教授。本公司独立董事。 (10)何忠源,曾任本公司副董事长。现任本公司监事会主席。 (11)姜小书,曾任上海申贝办公机械总公司工会副主席、主席、上海申贝办公机械有限 公司党委委员、纪委书记、工会主席。现任本公司党委副书记、纪委书记、工会主席、监 事。 (12)王杰,曾任上海新沪玻璃厂副厂长，上海申贝办公机械有限公司财务部副经理，本 公司财务审计部副经理。现任本公司审计室副主任、监事。 (13)诸葛惠玲,曾任本公司工会副主席、主席、公司党委副书记、第四届监事会职工监 事。现任公司副总经理。 (14)徐晓晖,曾任本公司资产管理办公室副主任、财务审计部经理。报告期内任本公司 财务部经理。 (15)张一枫,曾任本公司资产管理办公室主任、董事会办公室主任。现任本公司董事会 秘书。 (二)在股东单位任职情况 担任的职 任期终 是否领取报 姓名 股东单位名称 任期起始日期 务 止日期 酬津贴 贾春荣 上海市上投投资管理有限公司 总经理 2003 年 8 月 1 日 是 沈逸波 中国长城资产管理公司上海办事处 副总经理 2007 年 2 月 1 日 是 9 上工申贝（集团）股份有限公司 2007 年度报告摘要 在其他单位任职情况 是否 担任的职 领取 姓名 其他单位名称 任期起始日期 任期终止日期 务 报酬 津贴 贾春荣 上海海立（集团）股份有限公司 董事 2005 年 6 月 30 日 2008 年 6 月 30 日 否 贾春荣 上海联华合纤股份有限公司 董事 2005 年 8 月 18 日 2008 年 8 月 18 日 否 贾春荣 上海绅士汽车商城有限公司 董事长 否 贾春荣 北京华南大厦有限公司 董事 否 王志乐 中国海洋石油总公司 高级顾问 是 王志乐 北京新世纪跨国公司研究所 所长 是 蒋衡杰 上海九龙山股份有限公司 独立董事 2002 年 4 月 1 日 2008 年 5 月 1 日 是 (三)董事、监事、高级管理人员报酬情况 1、董事、监事、高级管理人员报酬的决策程序:独立董事报酬由股东大会决定。其他人员 报酬由公司董事会薪酬与考核委员会提出议案，报公司董事会审议批准。 2、董事、监事、高级管理人员报酬确定依据：公司实行基薪和加薪结合生产经营量化指 标绩效挂钩的方法，考核发放。 3、不在公司领取报酬津贴的董事、监事情况 不在公司领取报酬津贴的董事、监事的姓名 是否在股东单位或其他关联单位领取报酬津贴 顾坚 否 常江 否 (四)公司董事、监事、高级管理人员变动情况 （1）聘任情况 2007 年 9 月 3 日，公司召开第五届董事会第十一次会议，选举顾坚先生为公司副 董事长；经董事会提名委员会提名，聘任马民良先生为公司总经理；经公司总经理马民良 先生提名，聘任诸葛惠玲女士为公司副总经理。 （2）离任情况 1）2007 年 3 月 23 日，徐伟堃先生因工作变动，辞去公司副总经理职务。 2）2007 年 9 月 3 日，公司召开第五届董事会第十一次会议，同意马民良先生辞去公司副 董事长、首席财政官职务；同意王立喜先生因工作调动原因辞去公司董事、总经理、首席 运营官职务；同意陈明其先生、陈长保先生因工作岗位变动辞去公司副总经理职务。 3）2007 年 12 月 14 日，宫龙云先生因工作变动，辞去公司独立董事职务。 (五)公司员工情况 截止报告期末,公司员工为 2,570 人（不包括公司在海外的控股企业）。除各种原因 离岗外，实际在岗人数为 1,385 人。全公司现有离退休人员 5,939 人，需承担费用的离退 休职工为 0 人。 员工的结构如下： 1、专业构成情况 10 上工申贝（集团）股份有限公司 2007 年度报告摘要 专业类别 人数 生产人员 682 销售人员 135 工程技术人员 90 财务人员 65 其他人员 413 2、教育程度情况 教育类别 人数 研究生及本科生 116 大专 248 中专 168 高中及以下 853 六、公司治理结构 (一)公司治理的情况 1、报告期内，公司根据中国证监会《关于开展加强上市公司治理专项活动有关事项的通 知》（以下称“通知”）和上海证监局《关于开展辖区上市公司治理专项活动的通知》要 求，认真开展了公司专项治理活动： （1）公司制定了《关于开展公司治理专项活动的实施计划》，成立了治理专项活动工作 班子，公司董事长为治理专项活动总负责人，总经理为治理专项活动工作小组组长，董事 会秘书负责治理专项活动各个阶段的工作安排与落实。公司“治理专项活动工作小组”由 公司各部门负责人组成。 （2）对照中国证监会《通知》及附件《加强上市公司治理专项活动自查事项》，公司各 有关部门及其责任人分条线进行内部自查，通过自查针对存在的问题制订整改措施，明确 落实整改责任人、整改措施、整改时间等。 （3）通过自查，公司形成综合性的《上工申贝（集团）股份有限公司关于上市公司治理 专项活动的自查报告和整改计划》，提交公司五届九次董事会议审议通过后，于 2007 年 6 月 30 日，经上海证监局核准，公司治理专项活动自查报告和整改计划在上海证券交易 所网站和《上海证券报》上同时披露。 （4）公司通过专门设立的热线、传真和网络平台以及采用向长期持股的中小投资者发出 书面意见征询表等方式接受公众对公司治理现状的评价和建议。 2、公司通过专项治理活动自查发现的问题以及监管部门现场检查发现的问题、整改措施 和整改情况： （1）要加强制度建设，修订《总经理工作细则》和《控股股东行为规范》 公司已组织专门小组对公司内部控制制度进行完善和健全，共修订、新订了 42 项制度并 经相关会议批准后贯彻实施。《总经理工作细则》制订于 2001 年 7 月，近年公司实行“走 出去”战略，为适应国际化经营和境外企业管理需要，公司实行了首席执行官（CEO）制 度，为明确总经理和首席执行官之间的关系，分清职责和权限，公司正在着手修订《总经 理工作细则》。2005 年 12 月根据上海市委、市府推进国资国企改革要求，公司控股股东 发生变化，为规范控股股东与上市公司之间的行为，公司已与第一大股东就《控股股东行 为规范》达成了一致的意见。 11 上工申贝（集团）股份有限公司 2007 年度报告摘要 （2）要完善企业内部绩效评价体系 公司制定了相关的逐级考核制度，但公司对管理层的年度考核具体方案未能提交董事会审 议，自 2007 年第二季度开始，公司董事会薪酬与考核委员会根据公司实际情况，参照市 场行情对公司实行的薪酬方案（包括高管人员在内的全体员工）作了修改，并提交董事会 审议通过，于 2007 年 8 月正式实施。 （3）要充分发挥董事会下设的四个专业委员会的作用 公司虽按规定在董事会下设四个专业委员会，并制定了各专业委员会的实施细则，但是各 专业委员会的活动未能做到经常化、制度化，活动内容未能提前发出通知，活动内容记录 不全，未能充分发挥专业委员会的作用，对此，公司董事会根据董事人员变动情况及时调 整各专业委员会组成人选，并在各专业委员会配置了秘书人员，为各专业委员会开展活动 提供服务，公司明确要求各业务部门要为各专业委员会开展工作创造条件，使各专业委员 会对公司重大事项能够做到事前有沟通、有分析，事中有监控，事后有评价，为董事会的 决策提供重要支持。 （4）要增强服务投资者意识，改变信息披露“被动型”局面 公司在服务投资者方面虽然做了大量工作，但在信息披露方面处于被动状态，仅满足于“过 得去”。公司现已按照规定，重新修订了“信息披露事务管理制度”和“重大信息内部报 告制度”，公司董事会要求相关部门配合董事会秘书和证券事务代表提高公司信息披露质 量，做到及时、正确、完整、持续地提供信息，同时积极创造条件，尽可能推行股东大会 网络投票形式，让更多的投资者参与表决，行使出资者权利。 3、通过开展专项治理活动，公司进一步健全了内部控制制度，完善了内部约束机制和责 任追究机制，夯实了管理基础，提高了公司的质量，推动了公司的规范化运作，目前公司 治理结构情况如下： （1）关于股东与股东大会：公司通过股权分置改革，与股东之间的利益趋于一致，从而 保障所有股东，特别是中小股东充分行使自己的权利，通过电话、传真、电子信箱、网站 及不定期组织交流活动等方式，建立起有效沟通的渠道，促进公司与投资者之间建立长期、 稳定的良好关系。 （2）关于控股股东与上市公司的关系：公司具有独立的业务及自主经营能力；公司控股 股东行为规范，对上市公司的决策和经营活动没有进行直接和间接地干预；公司与控股股 东不存在同业竞争的行为；公司与控股股东进行的关联交易活动，能遵循商业原则，定价 依据充分披露，关联方在表决时，放弃表决权。 （3）关于董事和董事会：全体董事能够依据《董事会议事规则》出席董事会召开的会议； 董事会下设的四个专业委员会能按规定开展活动，有效地提高了董事会运作质量和效率； 独立董事能履行职责，对公司重大决策能发表独立意见，确保公司重大决策的正确性。 （4）关于监事与监事会：全体监事本着对公司负责，对股东负责的态度，对公司财务以 及董事、总经理和其他高级管理人员履行职责的合法合规性进行监督，并能独立发表意见。 （5）关于绩效评价与激励约束机制：公司建立了公开、透明的绩效评价与激励约束机制， 公司董事会设立的薪酬与考核委员会根据高层管理人员的工作实绩进行审核，并确定报 酬。 （6）关于利益相关者：公司重视自己的社会责任，努力维护银行及其他债权人、职工、 消费者、供应商、社区等利益相关者的合法权利，以实现股东、员工、社会等各方利益的 平衡，共同推动公司持续、健康、稳定地发展。 （7）关于信息披露与透明度：公司指定董事会秘书负责信息披露工作，接待投资者的来 12 上工申贝（集团）股份有限公司 2007 年度报告摘要 访和咨询；公司指定《上海证券报》和香港《商报》为公司信息披露的报纸；公司按照有 关规定，真实、准确、及时、完整地披露有关信息，确保所有投资者有平等的机会获得有 关信息。 (二)独立董事履行职责情况 1、独立董事参加董事会的出席情况 独立董事姓名 本年应参加董事会次数 亲自出席（次） 委托出席（次） 缺席（次） 备注 刘仁德 10 10 王志乐 10 10 蒋衡杰 10 10 报告期内，公司独立董事按照《独立董事工作制度》等法规要求，认真履行诚信和勤 勉义务，积极了解公司的经济运行情况，对公司高级管理人员变动、关联交易等事项发表 了专业性的意见，出具了独立董事意见书，维护了公司的整体利益和中小股东的合法权益。 2、独立董事对公司有关事项提出异议的情况 报告期内，公司独立董事未对公司本年度的董事会议案及其他非董事会议案提出异 议。 (三)公司相对于控股股东在业务、人员、资产、机构、财务等方面的独立情况 1、业务方面：公司拥有独立的原辅材料采购系统、生产系统和销售系统，具有独立自主 的经营能力，与控股股东之间不存在同业竞争的行为。 2、人员方面：公司建立了独立的劳动、人事及工资管理体系，公司的高级管理人员均在 本公司领取报酬，未在控股股东单位担任职务。 3、资产方面：公司资产独立、完整，拥有独立的土地使用权及知识产权。 4、机构方面：公司设置了独立的组织机构体系，不存在与控股股东合署办公的情况。 5、财务方面：公司设置独立的财务管理部门，建立了独立的财务核算体系和财务管理制 度，在银行独立开户，独立依法纳税。 (四)高级管理人员的考评及激励情况 公司制定了相关的考核制度，对高管人员的绩效评价由公司人事部门进行考核和测 评，年末由薪酬委员会综合评定，确定报酬情况，并提交董事会审议通过。 (五)公司内部控制制度的建立健全情况 根据中国证监会有关上市公司治理的规范文件以及《上海证券交易所上市公司内部控 制指引》的精神，公司高度重视内部控制制度的建设和执行。报告期内对内控制度组织进 行修订和完善，构建了公司风险控制框架，全面系统地设立内部管理控制点。公司确定审 计室为内部控制日常检查监督机构，并充实力量，负责对各项业务、分支机构、财务会计 等进行定期或不定期的稽核和监督，并直接对董事会负责。 公司建立了相关的控制程序，主要包括：交易授权控制、财务事权控制、责任分工控 制、凭证与记录控制、资产接触与记录使用控制、信息系统控制等。 公司现有的内部控制制度基本建立并注意不断完善，这些内控制度能够适应公司管理 的要求和公司发展的需要，对经营风险起到有效的控制作用。 13 上工申贝（集团）股份有限公司 2007 年度报告摘要 (六)公司披露董事会对公司内部控制的自我评估报告和审计机构的核实评价意见 本公司不披露董事会对公司内部控制的自我评估报告和审计机构的核实评价意见。 七、股东大会情况简介 (一)年度股东大会情况 公司于 2007 年 6 月 25 日召开 2006 年度股东大会。决议公告刊登在 2007 年 6 月 26 日的《上海证券报》、香港《商报》。 (二)临时股东大会情况 公司于 2007 年 12 月 13 日召开 2007 年第一次临时股东大会。决议公告刊登在 2007 年 12 月 14 日的《上海证券报》、香港《商报》。 八、董事会报告 (一)管理层讨论与分析 公司经营范围：本公司属缝纫设备机械制造行业，主营生产、销售工业用缝制设备及零部 件、缝纫机专用设备、技术开发与咨询。 1、报告期内公司总体经营情况 报告期内，公司营业收入 253,806 万元，同比增长 3.99%；营业利润 2,996 万元，同 比增长 496.31 %；净利润 2,803.03 万元，同比增长 326.52%。全年公司产品出口创汇 7,582 万美元，同比增长 8.8%（不含境外企业）。 报告期内公司按照年初设定的生产经营目标稳步地开展各项工作： （1）海外经营实现预定目标。德国杜克普﹒阿德勒股份有限公司（以下称 DA 公司） 通过市场定位，经营策略和业务架构的调整，2007 年经营业绩继续保持稳定增长的势头， 全年生产各类缝纫机设备 22,396 台（套），同期相比增长 9%，实现销售收入 162,988 万 元人民币，同期相比增长 15.75%。与此同时，DA 公司及其研发中心不仅在技术上给予国 内杜克普爱华工业制造（上海）有限公司大力支持，加快实现 DA 技术“上海制造”目标， 还启动了 DA 远东公司股权转让及向杜克普爱华贸易（上海）有限公司业务转移的工作， 为 DA 公司的产品在亚洲市场形成更大规模创造了条件。 （2）国内业务调整重组见效。杜克普爱华工业制造（上海）有限公司根据市场需求， 努力增加 DA251 高速平缝机、DA267 厚料机以及 GN7700 系列包缝机的产量，全年实现销 售收入 6,371 万元；杜克普爱华贸易（上海）有限公司以其在特种机销售方面的优势，积 极构筑 DA 产品在国内营销的网络，2007 年实现销售收入 7,770 万元；上海上工缝纫机有 限公司作为延续上工品牌的主要载体，在改制重组的基础上，调整产品结构，适时恢复 GD8 系列双针平缝机生产，扩大 20U 中速曲折缝、GE2108 钉扣机、GC5200 带刀平缝机和 GK28—1N 高速链缝机等生产，全年实现销售收入 6,672 万元；上工进出口公司努力开拓 越南、北非和南美市场，使上工品牌产品出口以及为胜家缝纫机公司定牌生产的外贸业务 都有较大的增长，全年实现销售收入 12,700 万元。 14 上工申贝（集团）股份有限公司 2007 年度报告摘要 2、公司主营业务及其经营状况 （1）主营业务分行业或分产品构成情况 单位：元 币种：人民币 营业收入比 营业成本比 营业利润率比 分行业 营业收入 营业成本 营业毛利率（%） 上年增减 上年增减 上年增减率 （%） （%） （%） 缝制及物料传 2,074,736,757.31 1,511,914,230.01 27.13 6.35 10.94 -9.99 输设备 出口贸易 268,556,776.21 263,518,624.61 1.88 -3.95 -2.22 -47.92 影像材料 66,987,266.00 61,893,651.83 7.60 7.77 8.50 -7.53 办公机械 60,658,367.14 53,998,023.18 10.98 -36.77 -37.46 9.91 其他 67,121,703.03 35,131,702.66 47.66 28.51 18.95 9.67 合计 2,538,060,869.69 1,926,456,232.29 24.10 3.99 6.71 -7.44 （2）主营业务分地区情况 单位：元 币种：人民币 地区 营业收入 营业收入比上年增减 境内 371,748,890.15 6.81% 境外 2,166,311,979.54 3.52% （3）各种主要产品的产销数量和市场占有率情况 报告期内，公司生产和销售工业机分别为 76,284 台和 86,168 台，（其中：DA 公司 的产量为 22,396 台（套），销量为 22,958 台（套））；通过定牌组织生产的蝴蝶牌家用 缝纫机出口量达到 628,237 台。 2007 年公司缝制设备工业缝纫机普通产品市场占有率低于 5%，德国 DA 公司生产的高 端产品在市场上具有绝对优势地位。 （4）主要供应商、客户情况 单位：万元 币种：人民币 前五名供应商采购金额合计 89,857,965.60 占采购总额比重（％） 4.81 前五名销售客户销售金额合计 361,917,250.10 占销售总额比重（％） 14.26 3、资产构成同比发生重大变化情况 单位：元 币种：人民币 2007 年 12 月 31 日 2006 年 12 月 31 日 所占比重同比增减百分 变化原 项目 金额 占总资产比重 金额 占总资产比重 点 因 % % 交易性金融 9,875,912.50 0.41 24,420,473.91 1.00 -59.56 注1 资产 应收票据 3,070,470.00 0.13 1,484,084.00 0.06 106.89 注2 其他流动资 1,245,523.34 0.05 794,017.49 0.03 56.86 注3 产 在建工程 3,682,674.12 0.15 6,179,403.35 0.25 -40.40 注4 长期待摊费 102,060.30 -100.00 注5 用 递延所得税 48,965,660.16 2.06 85,093,416.31 3.49 -42.46 注6 资产 注１：交易性金融资产年末数比年初数大幅减少主要是由于本年度在二级市场上出售部分流通股票所 致。 注２：应收票据年末数比年初数大幅增加主要是由于销售货物而收到的银行承兑汇票增加所致。 15 上工申贝（集团）股份有限公司 2007 年度报告摘要 注３：其他流动资产年末数比年初数大幅增加主要是由于年末支付的于以后期间收益的保险、租赁费 等所致。 注４：在建工程年末数比年初数大幅减少主要是由于本年度已经完工的工程项目结转计入固定资产所 致。 注５：长期待摊费用年末数已经为零，主要是由于相关的费用已经于本期摊销完毕所致。 注６：递延所得税资产年末数比年初数大幅减少主要是由于公司子公司上工欧洲控股有限公司按照新 的所得税税率大幅调减了累计的递延所得税资产，以及由于累计可抵扣亏损金额减少而相应调减了由 于亏损产生的递延所得税资产所致。 4、主要资产采用的计量属性 本公司资产中交易性金融资产和可供出售金融资产以公允价值计量，其他资产以历 史成本计量，具体计量方法见本公司会计政策相关表述。2007 年末公司帐面交易性金融 资产为中路股份，可供出售金融资产为已上市流通的广电信息、上海三毛的法人股股票。 5、财务数据同比发生重大变化情况 单位：元 币种：人民币 项目 2007 年 2006 年 同比增减% 变化原因 资产减值损失 28,293,238.29 56,543,278.57 -49.96 注1 公允价值变动收益 70,231.94 2,648,245.81 -97.35 注2 投资收益 48,988,699.35 13,535,220.54 261.93 注3 营业外收入 62,654,560.87 41,659,020.40 50.40 注4 营业外支出 972,598.84 2,616,096.13 -62.82 注5 所得税费用 59,313,753.73 17,547,131.81 238.03 注6 少数股东损益 4,299,031.80 7,224,316.94 -40.49 注7 注１：资产减值损失本年度比上年度大幅减少主要是由于公司控股子公司上工欧洲控股有限公司本年 度计提的坏账准备比上年度大幅减少所致 注２：公允价值变动收益本年度比上年度大幅减少主要是由于本年度出售了部分股票，以及同时将出 售的股票所对应的公允价值变动损益调整计入投资收益所致。 注３：投资收益本年度比上年度大幅增加主要是由于本年度股权投资处置以及出售部分股票收益增加 所致。 注４：营业外收入本年度比上年度大幅增加主要是由于本年度取得大额的地块转让收入所致。 注５：营业外支出本年度比上年度大幅减少主要是由于本年度发生的固定资产处置损失比上年度大幅 减少所致。 注６：所得税费用本年度比上年度大幅增加主要是由于公司的控股子公司上工欧洲控股有限公司按照 新的所得税税率大幅调减了累计的递延所得税资产，以及由于累计可抵扣亏损金额减少而相应调减了 由于亏损产生的递延所得税资产而相应大幅增加了递延所得税费用所致。 注７：少数股东损益本年度比上年度大幅减少主要是由于公司子公司上工欧洲控股有限公司本年度购 买了对其下属子公司德国 DA 公司的部分股权，从而导致少数股东比例的减少所致。 6、现金流量构成同比发生重大变化情况 单位：元 币种：人民币 项目 2007 年 2006 年 增减额 增减% 变化原因 经营活动产生的现金流量净额 30,669,664.85 116,517,385.91 -85,847,721.06 -73.68 注１ 投资活动产生的现金流量净额 17,773,364.53 21,355,392.22 -3,582,027.69 -16.77 注２ 筹资活动产生的现金流量净额 -149,123,082.60 -92,588,924.71 -56,534,157.89 -61.06 注３ 汇率变动对现金的影响 10,888,394.81 4,244,742.27 6,643,652.54 156.51 注４ 现金及现金等价物净增加额 -89,791,658.41 49,528,595.69 -139,320,254.10 -281.29 注5 16 上工申贝（集团）股份有限公司 2007 年度报告摘要 注１：经营活动产生的现金流量净额本年度比上年度大幅减少主要是由于公司本年度购买商品接受劳 务支付的现金比上年度大幅增加所致。 注２：投资活动产生的现金净流量比上年度减少主要是支付受让子公司申贝办公机械公司 10％股权款 所致。 注３：筹资活动产生的现金流量净额本年度比上年大幅度减少是由于本年度归还银行借款及偿还其他 长期负债增加所致。 注４：汇率变动对现金及现金等价物的影响本年度比上年度大幅增加主要是由于公司子公司上工欧洲 控股有限公司的外币现金因汇率变动的影响所致。 注５：现金及现金等价物净增加额本年度比上年度大幅减少是由于上述原因所致。 7、对公司设备利用情况、订单的获取情况、产品的销售和积压情况、主要技术人员 变动情况等与公司经营相关的重要信息的讨论与分析 德国 DA 公司是本公司缝制设备重点制造单位，其主要生产设备情况良好；DA 公司严格 执行以销定产，根据订单组织生产，主要技术人员在各自的岗位上履行职责，无重大变动 情况；2007 年 DA 公司投入的科技开发费达 5,887 万元，占营业收入的比例为 3.6%。 8、主要控股公司及参股公司的经营情况及业绩分析 （1）主要控股、参股公司的经营情况及业绩 单位：元 币种：人民币 公司名 业 主要产品或 注册资 持股 总资产 净资产 营业收入 净利润 称 务 服务 本 比例 性 质 上工（欧 投资、资产 资 洲）控股 管理以及生 产 1,000 有限责 产、加工、 100% 1,404,680,575.71 306,270,935.62 1,637,369,110.21 61,735,914.39 管 万欧元 任公 销售工业缝 理 司 纫设备 上海申 办公机械设 贝办公 生 备的制造和 12,500 100% 484,243,047.97 328,187,498.51 414,260,510.34 -3,511,205.77 机械有 产 销售 万元 限公司 上海蝴 各类缝制设 蝶进出 贸 1,000 备、机电产 80% 56,878,951.11 31,214,925.25 228,533,711.74 11,707,545.86 口有限 易 万元 品进出口 公司 （2）单个参股公司的投资收益对公司净利润影响达到 10%以上的情况 单位：万元 币种：人民币 公司名称 主营业务收入 主营业务利润 净利润 上海富士施乐有限公司 274,974.7 20,131.9 11,091.3 （二）对公司未来发展和展望 1、分析所处行业的发展趋势及公司面临的市场竞争格局等相关变化趋势，以及对公司可 能产生的影响程度。 缝纫机械制造是一个高度成熟和完全竞争性的产业，近年来，行业生产集中度呈现进 一步加速的趋势，日本、韩国及欧洲著名的缝制企业正在加快海外扩张的步伐，不断扩大 其在中国的生产规模；国内生产缝制设备及零部件的企业主要集中在江、浙、陕等地，特 17 上工申贝（集团）股份有限公司 2007 年度报告摘要 别是浙江的众多民营企业借助体制、机制的灵活性，通过大幅度扩大企业规模，凭借低成 本在缝制设备中低端产品竞争中取得显著优势。 我国已经成为世界缝制机械制造大国，缝制机械设备及零部件的产销量占世界市场的 份额日益扩大，缝制企业之间的竞争也日益激烈。 随着人民币加速升值、劳动力成本的上升、出口退税率的下降，以及国际贸易壁垒的 加强和行业标准、市场准入门槛的提高，行业内技术实力雄厚的企业正以自己的优势，努 力塑造自身的品牌形象。缝制设备制造行业出现的结构性调整，不仅有助于改变价格竞争 的模式，有利于提高“中国制造”的竞争优势，而且在挤压小规模经营实体的同时，也为 具有品牌优势的企业提供宽广的发展空间。 2、未来公司发展的机遇和挑战、发展战略 公司实现跨国并购后，缝制设备主业的技术能级得到了大幅度提升，在国际市场竞争 中处于有利的地位，但欧亚联动的格局尚未真正形成，德国 DA 公司技术向国内转移的速 度较为缓慢，德国 DA 品牌的潜在优势在亚洲市场还没有得到充分发挥，同时公司在国内 的缝纫机设备制造企业的调整还未最后完成，主业经营并未明显改善，在市场份额、生产 规模、产品品种、制造成本上与国内同行企业比较存在较大差距。 公司将坚定不移地贯彻实施“走出去”和“引进来”相结合的战略，进一步发挥德国 DA 公司技术和品牌的优势，加强研发力量，保持每年有高端新机种进入市场，在保持自动缝 制单元、服装特种机和厚料机等高端机种在全球领先的基础上，延伸产品链，进一步扩大 全球市场份额，同时将高端技术嫁接和运用到常规机种上，争取良好的规模效应；公司将 进一步推进欧亚联动，搞好业务整合，杜克普爱华贸易（上海）有限公司和杜克普爱华工 业制造（上海）有限公司将作为欧亚联动的主要平台在德国 DA 公司的强有力支持下，正 在建设成为亚洲的生产基地和营销分部，促进 DA 公司产品在亚洲市场能形成更大的增量； 公司将进一步加强国内同行业资源的整合，抓住国内区域经济发展格局的变化和长三角一 体化进程加快的机遇，尽快壮大国内的研发、采购和营销力量。 3、新年度经营计划 2008 年公司将进一步发挥欧亚两地业务联动的协同效应，转变发展方式，提升发展 水平，重点抓好以下几方面工作： （1）加强市场营销，扩大生产规模。要加强市场网络建设，稳定重点区域的销售客户， 大力培育区域经销商和二级经销商，做好技术培训和服务支持，建立售后联盟；要完善市 场营销策略，协调好 DA 品牌与上工品牌实施过程中的关系，确立各自的产品定位、规范 行销行为，DA 品牌将坚持立足于高端特种机的优势，向基础产品系列拓展，不断扩大产 品销量；上工品牌将应用于以 DA 技术改造的常规产品系列方面；要充分发挥国际国内两 个市场的作用，一方面扩大 DA 高端产品国内销售规模，另一方面，国内制造的家用缝纫 机（包括各类电脑绣花机、多功能家用机等）和工业缝纫机也要利用 DA 公司国际销售平 台，扩大出口规模。 （2）加快技术开发，提升产品能级。杜克普爱华工业制造（上海）有限公司要尽快完成 DA 品牌厚料机 069、269 型号的样机试制及批量生产，做好 767-373、767-273 厚料机和 2180 皮鞋机等样机试制和批量装配的准备工作，抓紧实施与德国 DA 公司合作开发的 480 双针机的新产品项目，配合德国 DA 公司开展电子控制系统的开发，抓好 281 无油（微油） 直驱电脑高速平缝机的第二批样机试制后的技术整改，尽快进入批量生产；要充分应用德 18 上工申贝（集团）股份有限公司 2007 年度报告摘要 国 DA 公司技术，利用国内企业低成本制造的优势，实施电子套接、钉扣、曲折缝等产品 的定牌生产，快速扩大基本产品系列范围；国内零件制造企业要立足提高配套能力，增强 业内配套的品种和数量，努力成为业内零件制造的重要基地，积极争取为海内外整机制造 企业提供配套服务；要继续保持德国 DA 公司在工业缝纫机技术研发中的核心地位，增强 技术研发的投入量，完善研发体系，探索 DA 技术和研发成果的共享，利用德国 DA 公司技 术提升上工品牌产品的技术能级，在实现 DA 技术“上工制造”的基础上，逐步打造具有 自主核心技术的上工品牌产品链。 （3）抓紧企业内部改革，推进小企业清理。要继续推进上海申贝办公机械有限公司实体 化改革进程，调整办公机械业务结构，并完成分公司改制；对有发展前途的办公机械、数 码影像产业，继续给予大力支持，通过改革调整，挖潜降本，抓住发展机遇，力争做强做 大；对前景不明的公司下属的中小企业将继续通过关、停、并、转等方式做好清理工作， 确保公司有效资源产生良好的经济效益。 （4）完善管控模式，规范有序经营。要重视企业的内控制度建设，重点抓好企业内部规 章制度的贯彻落实，加强和改进对海外公司的监控管理，努力规避投资风险；要进一步加 强企业内部的成本核算，做好节能环保工作；要创造条件，建立起企业内控机制实时化、 业务流程管理规范化和基础数据管理一体化的信息化管理系统。 4、公司为实现发展战略所需的资金及使用计划、以及资金来源情况 （1）通过资产抵押等措施向银行申请流动资金借款，具体金额根据公司经营情况确定； （2）创造条件，实现定向募集，争取通过资本市场筹措资金，用于欧亚两地资源整合和 扩大国内缝制设备主业项目需要； （3）加强资金管理，加速资金周转，加大应收帐款催讨力度，提高资金利用效率； （4）继续做好资源优化配置，抓好存量资产变现，为企业发展提供资金保障。 5、对公司未来发展战略和经营目标的实现产生不利影响的所有风险因素以及已（或拟） 采取的对策和措施 （1）业务经营风险 在缝制设备行业中，国际制造商凭借技术、资金方面的优势在高端产品市场具有较强 的竞争实力，国内制造商竞争主要体现在中低端产品的数量扩涨上，由于市场竞争中诸多 不确定因素的存在，导致本公司与同行业其他企业之间的竞争日益激烈。 本公司控股的德国 DA 公司拥有国际著名品牌、一流的制造技术和全球化的销售网络， 公司正在利用 DA 公司的技术开发适合亚洲市场的中高端缝制设备，使公司的综合能力排 名继续保持在国际同行的前例。 （2）人才管理风险 随着市场竞争的加剧，以及公司正在实施“走出去”与“引进来”相结合的战略，各企业 对人才特别是高级管理人才和优秀技术人才的争夺日趋激烈。公司面临着吸引人才、保留 人才的风险。 本公司将继续贯彻“以人为本”的管理思想，不断完善公司的人才竞争机制、激励机 制，一方面通过培训，提高现有管理、技术人员的业务素质，另一方面，从市场上积极引 进高素质的经营管理人才、机电一体化产品开发科技人才、国际营销人才和各类复合型人 才。 19 上工申贝（集团）股份有限公司 2007 年度报告摘要 (三)公司投资情况 1、 募集资金使用情况 单位:万元 币种:人民币 本年度已使用募集资金总额 3,693 募集资金总额 32,264 已累计使用募集资金总额 26,253 是 是 项目 否 否 是否已 可行 符 符 变更项 原计划 本年度 累计已 实际投 项目建成时 性是 本年度实 合 合 承诺项目 目（含 投入总 投入金 投入金 资进度 间或预计建 否发 现的收益 计 预 部分变 额 额 额 （％） 成时间 生重 划 计 更） 大变 进 收 化 度 益 收购 DA 公 否 20,096 - 15,072 － 5,984.7 2005-07-01 是 是 否 司项目 利用德国 DA 公司技 术建设电 否 19,500 3,693 11,181 － － － 是 － 否 脑特种工 业缝纫机 项目 合计 － 39,596 3,693 26,253 未达到计 划进度和 预算收益 － 的说明(分 具体项目) 变更原因 及变更程 － 序说明（分 具体项目） 尚未使用 的募集资 存放于指定的银行帐户 金用途及 去向 （1）2005 年 7 月 1 日，公司全资子公司上工（欧洲）控股有限责任公司完成了收购 德国 DA 公司股份的手续。当年度产生的收益金额为人民币 461.63 万元，2006 年度，海 外企业对公司的净利润贡献为人民币 7,209.5 万元。本年度，海外企业对公司的净利润贡 献为人民币 5,984.7 万元。 （2）为生产、销售高端技术含量的特种工业缝纫机，本公司与 DA 公司、香港远东 友诚公司分别以 40%、34%、26%比例出资组建杜克普爱华贸易（上海）有限公司，注册资 本为 400 万美元；同时本公司又与 DA 公司分别以 70%及 30%比例出资组建杜克普爱华工业 制造（上海）有限公司，注册资本为 1,000 万美元。上述二个公司作为亚洲的生产基地和 营销分部，为公司生产和销售高端技术含量的特种工业机正在发挥出重要的作用 20 上工申贝（集团）股份有限公司 2007 年度报告摘要 2、非募集资金项目情况 报告期内，公司无非募集资金投资项目。 (四)公司会计政策、会计估计变更或重大会计差错更正的原因及影响 根据财政部《企业会计准则第 38 号－首次执行企业会计准则》、中国证监会《公开 发行证券的公司信息披露规范问答第 7 号---新旧会计准则过渡期间比较会计信息的编制 和披露》等相关文件的规定，公司本报告的财务报表以 2007 年 1 月 1 日为新准则的首次 执行日，2007 年 1 月 1 日以前的交易事项按照原执行的《企业会计制度》和《企业会计 准则》及有关规定进行确认和计量，并在此基础上就《企业会计准则第 38 号－首次执行 企业会计准则》第 5 至 19 条规定对 2007 年 1 月 1 日以前的可比期间利润表和可比资产负 债表的影响进行了追溯调整；此外，按照《企业会计准则第 30 号---财务报表列报》的规 定对报表项目作了调整列示。 主要调整项目情况如下： 1．根据新企业会计准则以及相关解释等规定，同一控制下企业合并产生的商誉以及长期 股权投资差额，追溯调整期初留存收益；企业在首次执行日以前持有的对子公司长期股权 投资应该视同对该子公司自最初采用成本法核算，追溯调整前期报表。 2．根据新会计准则规定，对以前年度未确认的投资损失进行了调整。 3．根据新会计准则规定，对所得税核算采用资产负债表债务法，确认相应的递延所得税 资产和递延所得税负债。 4．根据新企业会计准则的规定，对于已经出租或持有并准备增值后转让的房屋建筑物以 及土地使用权进行重新分类，划入投资性房地产，并采用成本模式进行了后续计量。 5. 根据新企业会计准则的规定，对于公司持有的在二级市场上流通的股票重新进行了界 定调整，划归为交易性金融资产，并按照公允价值进行后续计量。 以上调整对公司 2007 年期初资产负债表主要项目的调整列示如下： 项目 2007 年报披露数 2006 年报披露数 差异数 长期股权投资 60,096,937.51 133,031,695.63 -72,934,758.12 投资性房地产 168,549,869.42 0.00 168,549,869.42 固定资产 377,952,942.01 492,600,744.75 -114,647,802.74 无形资产 127,876,518.30 249,483,784.78 -121,607,266.48 开发支出 38,467,958.48 0.00 38,467,958.48 商誉 29,912,474.40 0.00 29,912,474.40 递延所得税资产 85,093,416.31 84,084,736.98 1,008,679.33 资产总额 2,440,929,062.48 2,486,972,366.78 -46,043,304.30 未分配利润 -311,068,987.58 -251,161,084.31 -59,907,903.27 归属于母公司所有者权 535,205,158.97 587,453,178.73 -52,248,019.76 益 少数股东权益 104,207,221.61 103,164,634.78 1,042,586.83 所有者权益合计 639,412,380.58 690,617,813.51 -51,205,432.93 上列各项对公司合并报表的权益主要影响如下： 项 目 资本 盈余 未分配利润 未确认投资损 外币报表折算 少数股东权益 合计 公积 公积 失 差额 同一控制下企业合并 形成的长期股权投资 --- --- -58,702,296.65 --- --- --- -58,702,296.65 差额 控股子公司超额亏损 --- --- -8,549,839.52 7,507,252.69 --- 1,042,586.83 --- 21 上工申贝（集团）股份有限公司 2007 年度报告摘要 由母公司承担部分 以公允价值计量且其 变动计入当期损益的 --- --- 6,335,553.57 --- --- --- 6,335,553.57 金融资产 汇率折算差额 --- --- --- --- 152,630.82 --- 152,630.82 递延所得税资产 --- --- 1,008,679.33 --- --- --- 1,008,679.33 合计 --- --- -59,907,903.27 7,507,252.69 152,630.82 1,042,586.83 -51,205,432.93 报告期内公司无重大会计差错。 (五)董事会日常工作情况 1、董事会会议情况及决议内容 （1）、公司于 2007 年 2 月 12 日召开五届五次董事会议，决议公告刊登在 2007 年 2 月 13 日的《上海证券报》、香港《商报》。 （2）、公司于 2007 年 4 月 19 日召开五届六次董事会议，决议公告刊登在 2007 年 4 月 21 日的《上海证券报》、香港《商报》。 （3）、公司于 2007 年 4 月 27 日召开五届七次董事会议，决议公告刊登在 2007 年 4 月 28 日的《上海证券报》、香港《商报》。 （4）、公司于 2007 年 6 月 1 日召开五届八次董事会议，决议公告刊登在 2007 年 6 月 2 日的《上海证券报》、香港《商报》。 （5）、公司于 2007 年 6 月 29 日召开五届九次董事会议，决议公告刊登在 2007 年 6 月 30 日的《上海证券报》、香港《商报》。 （6）、公司于 2007 年 8 月 27 日召开五届十次董事会议，决议公告刊登在 2007 年 8 月 28 日的《上海证券报》、香港《商报》。 （7）、公司于 2007 年 9 月 3 日召开五届十一次董事会议，决议公告刊登在 2007 年 9 月 4 日的《上海证券报》、香港《商报》。 （8）、公司于 2007 年 10 月 25 日召开五届十二次董事会议，决议公告刊登在 2007 年 10 月 27 日的《上海证券报》、香港《商报》。 （9）、公司于 2007 年 10 月 30 日召开五届十三次董事会议，决议公告刊登在 2007 年 10 月 31 日的《上海证券报》、香港《商报》。 （10）、公司于 2007 年 11 月 26 日召开五届十四次董事会议，决议公告刊登在 2007 年 11 月 27 日的《上海证券报》、香港《商报》。 2、董事会对股东大会决议的执行情况 （1）根据公司《2006 年度股东大会》决议，报告期内公司聘请了立信会计师事务所有限 公司为公司 2007 年审计机构；母公司计划通过质押、抵押、信用担保等方式向相关银行 申请贷款 55,000 万元，实际向相关银行贷款 30,540 万元；为配合上海市政开发项目及世 博会用地，将龙华东路 519 号、573 号、647 号三幅房地产转让给卢湾区土地房屋发展中 心，截止本报告披露日，公司已收到上述地块转让的款项计 9,000 万元。 （2）根据公司《2007 年第一次临时股东大会》决议，公司受让上海市浦东新区国有资产 监督管理委员会所持上海申贝办公机械有限公司 10%股权，至本报告披露日前，公司已完 成了工商变更登记手续。 （3）报告期内，公司无利润分配、公积金转增股本执行事项，也无配股、增发新股等事 项。 22 上工申贝（集团）股份有限公司 2007 年度报告摘要 3、董事会下设的审计委员会的履职情况汇总报告 报告期内，公司独立董事、董事会审计委员会成员认真审阅公司季度、半年度及年度 报告，通过听取公司相关部门的汇报，查阅公司财务报表、咨询相关人员等方式，关注公 司的经营状况。 （1）根据中国证监会《关于做好上市公司 2007 年年度报告及相关工作的通知》要求，在 公司所聘请的立信会计师事务所有限公司注册会计师进场审计前，公司独立董事、董事会 审计委员会成员审阅了公司相关的财务报表，并于 2008 年 1 月 17 日通过多种方式就年 报审计工作安排情况与该所注册会计师作了沟通，对会计师事务所关于年度审计的计划安 排进行了解，并就公司年度审计工作提出了意见： 要求公司审计部门应在审计工作开始之前对审计工作整体计划再作一次详尽分析，要 求相关部门高度重视，充分准备，确保计划得到严格执行；同时在会计师事务所进入审计 过程中，公司应将年度工作总结书面报告每位独立董事和董事会审计委员会成员，以便于 独立董事和董事会审计委员会成员直观地了解企业情况，客观地发表独立意见。 公司董事会审计委员会 2008 年 3 月 6 日听取了注册会计师年度审计工作阶段性汇报， 并提出了下一步的工作要求。 （2）根据公司提供的年审初步意见，独立董事、董事会审计委员会成员在审阅了公司财 务会计报表后于 2008 年 3 月 28 日分别通过面谈及电话方式与注册会计师进行沟通交 流，就公司财务会计报表相关事项提出意见： 1）原则同意审计报告初稿内容，同时提出对审计报告的部分修改意见。 2）对公司应收帐款应组织力量，加快催讨，争取在 2008 年度有所改善。 3）对华源发展的重组情况公司应有专人负责跟踪，及时将进展情况通报公司董事会。 4）对存货应加强控制，并对时间较长的产品及时进行清理，以改进现金流量的周转。 （3）2008 年 4 月 10 日，独立董事、董事会审计委员会成员再次审阅了公司年度财务会 计报表，查阅了立信会计师事务所有限公司出具的本公司 2007 年度标准无保留意见的审 计报告后认为：公司财务管理规范、财务状况以及资金使用情况良好，立信会计师事务所 有限公司出具的本公司 2007 年度审计报告真实、准确、全面地反映了本公司的财务状况 和经营成果，同意公司将 2007 年度财务会计报告提交董事会审核。 （4）根据中国证监会《关于做好上市公司 2007 年年度报告及相关工作的通知》[证监 公司字（2007）235 号]要求，独立董事、董事会审计委员会成员对立信会计师事务所有 限公司能够按照中国注册会计师独立审计准则实施审计工作，基本遵循了独立、客观、公 开的执业准则，较好地完成了公司的审计工作，因此同意公司续聘立信会计师事务所有限 公司为公司 2008 年度的审计机构，并同意将该项议案提交公司董事会审议。 4、董事会下设的薪酬委员会的履职情况汇总报告 报告期内，公司董事会薪酬与考核委员会成员关心企业的经营状况，从公司实际出发， 参照市场行情对公司实行的薪酬方案作了修改，并提交董事会审议通过。 公司董事会薪酬与考核委员会认为，公司董事、监事和高级管理人员职责分明，勤勉 尽责，较好地完成了企业的各项工作目标。经审核，年度内对公司董事、监事和高级管理 人员支付的薪酬比较合理，符合公司的薪酬政策和目标责任考核要求，同意公司年度所披 露的支付董事、监事和高级管理人员的薪酬数额。 23 上工申贝（集团）股份有限公司 2007 年度报告摘要 (六)利润分配或资本公积金转增预案 经立信会计师事务所有限公司审计，公司 2007 年度实现合并净利润为 32,329,316.33 元，其中归属于母公司所有者的净利润为 28,030,284.53 元。 根据公司“章程”规定，在提取法定公积金之前，应当先用当年利润弥补亏损。母公 司当期净利润为 -23,324,191.59 元，加上 2007 年初未分配利润-472,825,079.18 元，本 年度末实际可供分配利润为-496,149,270.77 元，2007 年不进行利润分配,也不进行资本 公积金转增。 上述预案需提交公司 2007 年度股东大会审议并通过。 (七)公司本报告期内盈利但未提出现金利润分配预案 2007 年度，公司虽然盈利，但当期净利润冲抵可供分配利润后仍为负数，故本年度 不能进行利润分配。 九、监事会报告 (一)监事会的工作情况 报告期内,监事会共召开了 4 次会议. 1、2007 年 4 月 19 日，公司监事会召开五届四次会议,审议通过了公司 2006 年度监事会 工作报告、2006 年年度财务工作报告、2007 年度财务预算、2006 年度利润分配预案、公 司执行新的企业会计准则的议案、公司受让上海市浦东新区国有资产监督管理委员会所持 上海申贝办公机械有限公司 10%股权的议案、2006 年度报告及摘要。 2、2007 年 4 月 27 日，公司监事会召开五届五次会议,审议通过了公司 2007 年第一季度 报告全文和正文、公司制订的内部管理制度。 3、2007 年 8 月 24 日，公司监事会召开五届六次会议,审议通过了公司 2007 年半年度报 告全文和摘要、2007 年公司高管人员报酬的提案、公司在德国投资设立的全资子公司上 工（欧洲）控股有限责任公司受让控股子公司杜克普·阿德勒股份有限公司股权的议案。 4、2007 年 10 月 25 日，公司监事会召开五届七次会议,审议通过了公司 2007 年第三季度 报告。 (二)监事会对公司依法运作情况的独立意见 公司董事会严格按照《公司法》、《证券法》、《公司章程》规范运作，严格执行股 东大会的各项决议，不断地健全和完善内部管理和内部控制制度，决策程序符合法律法规 的要求，公司董事、总经理及其他高级管理人员在履行职责时忠于职守，秉公办事，无违 反法律法规的有关规定，没有损害公司和股东权益行为的发生。 (三)监事会对检查公司财务情况的独立意见 公司财务制度完善，管理规范，财务报告客观、真实地反映了公司财务状况和经营成 果。立信会计师事务所有限公司为公司出具的标准无保留意见的审计报告，客观、真实、 公允地反映了公司的财务状况和经营成果。 (四)监事会对公司最近一次募集资金实际投入情况的独立意见 公司募集资金使用程序合法，实际投入项目和承诺投入项目基本一致。 24 上工申贝（集团）股份有限公司 2007 年度报告摘要 (五)监事会对公司收购出售资产情况的独立意见 公司收购、出售资产时，交易价格合理，未发现有内幕交易及损害公司和股东权益的 情况。 (六)监事会对公司关联交易情况的独立意见 公司的关联交易严格执行了国家的有关法律法规以及公司《章程》的规定，遵循了公 开、公平、公正的原则，符合市场规则，符合公司的实际情况。 十、重要事项 (一)重大诉讼、仲裁事项 公司与上海华源企业发展股份有限公司（下称“华源发展”）因正常经营业务需要建 立互保关系，截止 2006 年末，公司为华源发展向中国建设银行股份有限公司上海市分行 （下称“建行市分行”）、深圳发展银行上海分行（下称“深发展上海分行”）借款金额 11,848.76 万元提供担保,华源发展以其持有的江西新余华源远东纺织有限公司 95%的股 权和上海华源针织时装有限公司 88.53%的股权作为本公司对华源发展的银行借款提供担 保的反担保质押标的。建行市分行和深发展上海分行以华源发展到期未还款为由，分别向 上海市第一中级人民法院（下称市一中院）提起诉讼，要求公司承担担保责任,代华源发 展偿付借款本息，二案合计人民币 13,912.8 万元。 深发展上海分行诉讼标的为 2,240.8 万元（其中本金 1,848.8 万元），该行采取诉讼 保全,查封了公司股东帐户卡内的股票以及公司部分银行帐户。该案已于 2007 年 9 月 11 日开庭审理并于 9 月 25 日作出一审判决，要求公司归还深发展上海分行本金 18,487,582 元及利息等，履行义务后有权向华源发展追偿。对此，公司已于 9 月 30 日向上海市高级 人民法院（下称市高院）提起上诉，并被受理。 建行市分行诉讼标的为 11,672 万元（其中本金 10,000 万元），该行采取诉讼保全， 查封了公司生产用地块，该案于 2007 年 8 月 7 日下午开庭审理，并在当年 12 月 13 日作 出判决，要求公司承担担保责任，公司于 2008 年 1 月 2 日向市高院提起上诉。 因华源发展在公司未知情况下将用于为公司反担保质押标的之一的江西新余远东纺 织有限公司 95%股权出售给江西新余市国资委，江西新余市国资委将远东纺织有限公司整 体产权通过江西省产权交易所网站公开挂牌转让。公司以此转让合同无效向市一中院提起 财产权属纠纷的诉讼，法院立案受理，江西新余市国资委以管辖地为由提出异议，向市高 院提起上诉，现已作出“驳回上诉，维持原裁定”的裁决，该案于 2008 年 2 月 14 日开庭 审理。2008 年 3 月 27 日经法院主持,本公司与华源发展达成和解协议,华源发展以其持有 的张家港中东石化实业有限公司 23.715%股权、江苏雅鹿实业股份有限公司 35.3259%的股 份替代原先的担保质押标的（关于上述诉讼事项详见公司 2007-024、026、028、2008-002 公告）。 截止本报告披露之日，本公司正在分别与建行市分行、深发展上海分行进行和解洽谈。 (二)报告期内公司收购及出售资产、吸收合并事项 1、经公司 2006 年度股东大会批准，同意将龙华东路 519 号、573 号、647 号地块的 13.47 亩土地及该土地上的房屋（建筑面积为 16,824.53 平方米）以不低于 9,564.10 万 元的价格转让给上海市卢湾区土地房屋发展中心。根据协议规定，报告期内，公司收到上 述地块的部分转让款 7,500 万元。 25 上工申贝（集团）股份有限公司 2007 年度报告摘要 2、经公司董事会五届十次会议审议通过，公司全资子公司上工（欧洲）控股有限责 任公司（下称上工欧洲公司）出资 4.7 万欧元（0.122 欧元/股）受让上海国际（欧洲） 集团公司所持 DA 公司股份 385,400 股（占 DA 公司总股份 4.7%）；出资 0.25 万欧元（0.152 欧元/股）受让 Fact Verwal tungs-und Beratungsge sell schaft mbH 公司所持 DA 公司 股份 16,400 股（占 DA 公司总股份 0.2%）。本次股权增持完成后，上工欧洲公司持有 DA 公司股份为 7,776,223 股，占 DA 公司总股份由 89.932%调整为 94.832%。 3、经公司董事会五届十二次会议审议通过，公司控股子公司杜克普爱华贸易（上海） 有限公司因资源整合，拟出资 50 万美元收购香港杜克普爱华远东有限公司 100%股权，截 止报告期末，此事尚在进行之中。 (三)报告期内公司重大关联交易事项 1、资产、股权转让的重大关联交易 经公司五届董事会第十四次会议及 2007 年第一次临时股东大会审议通过，同意受让 上海市浦东新区国有资产监督管理委员会所持上海申贝办公机械有限公司（下称申贝公 司）10%股权。本次股权受让有利于调整产业布局，增加投资收益，提升上市公司盈利水 平。根据上海财瑞资产评估有限公司（沪财瑞评报[2007]3-080 号）评估报告，以 2006 年 12 月 31 日为基准日，申贝公司股东全部权益价值为 525,279,448.15 元，公司受让申 贝公司 10%股权的价格为 5,252.79 万元，本公司于 2007 年 12 月 28 日以企业自有资金一 次性支付了上述股权受让费用。 2、关联债权债务事项 本年度公司无关联债权债务事项。 (四)托管情况 本年度公司无托管事项。 (五)承包情况 本年度公司无承包事项。 (六)租赁情况 本年度公司无租赁事项。 26 上工申贝（集团）股份有限公司 2007 年度报告摘要 (七)担保情况 单位:万元 币种:人民币 公司对外担保情况（不包括对子公司的担保） 是否 发生日期 是否 为关 担保对象 （协议签署 担保金额 担保类型 担保期限 履行 联方 日） 完毕 担保 上海华源 企业发展 2004 年 11 月 连带责任 2004 年 11 月 11 日～ 3,000 否 否 股份有限 11 日 担保 2005 年 11 月 9 日 公司 上海华源 企业发展 2005 年 3 月 连带责任 2005 年 3 月 29 日～ 849 否 否 股份有限 29 日 担保 2005 年 9 月 29 日 公司 上海华源 企业发展 2005 年 5 月 连带责任 2005 年 5 月 27 日～ 1,000 否 否 股份有限 27 日 担保 2006 年 5 月 23 日 公司 上海华源 企业发展 2005 年 6 月 连带责任 2005 年 6 月 13 日～ 1,000 否 否 股份有限 13 日 担保 2005 年 9 月 29 日 公司 上海华源 企业发展 2005 年 6 月 6 连带责任 2005 年 6 月 6 日～2006 3,000 否 否 股份有限 日 担保 年6月1日 公司 上海华源 企业发展 2005 年 7 月 连带责任 2005 年 7 月 14 日～ 3,000 否 否 股份有限 14 日 担保 2006 年 7 月 4 日 公司 上海浦东 发展(集 2006 年 6 月 9 连带责任 2006 年 6 月 9 日～2008 16,812 否 否 团)有限公 日 担保 年6月8日 司 报告期内担保发生额合计 0 报告期末担保余额合计 28,661 公司对子公司的担保情况 报告期内对子公司担保发生额合计 5,000 报告期末对子公司担保余额合计 22,205 公司担保总额情况（包括对子公司的担保） 担保总额 50,866 担保总额占公司净资产的比例 79 其中： 27 上工申贝（集团）股份有限公司 2007 年度报告摘要 为股东、实际控制人及其关联方提供担保的金额 0 直接或间接为资产负债率超过 70％的被担保对象提供的债务 29,054 担保金额 担保总额超过净资产 50％部分的金额 0 上述三项担保金额合计 29,054 1、本公司与上海华源企业发展股份有限公司（下称“华源发展”）签订了互为对方向银行贷款提供担 保的协议，至报告期末，公司为“华源发展”提供的担保尚余六笔，逾期金额为 11,849 万元，公司正 在采取积极措施，处置由担保引起的诉讼事项（详见本年度报告十、重要事项（一）重大诉讼、仲裁 事项）。 2、根据本公司与德国 FAG Kugelfischer GmbH（下称“FAG 公司”）签订的德国 DA 公司股份转让协议， 本公司需对下述事项承担一定的连带担保责任： （1）根据协议，收购德国 DA 公司除了支付 949,821 欧元的股份对价款之外，本公司下属全资子 公司上工（欧洲）控股有限责任公司（下称“上工欧洲”）还需承担对 FAG 公司 36,525,132.28 欧元 的股东贷款对价。截止 2005 年末，已经支付了股份对价款以及 9,482,436.84 欧元的股东贷款，剩余 的 27,042,695.44 欧元股东贷款原约定由“上工欧洲”自 2005 年 6 月 30 日后第二个周年日（2007 年 6 月 30 日）开始分九年等额支付，分期付款的利息自 2005 年 6 月 30 日起按照 6%的年利率计算利息， 并从 2005 年 6 月 30 日起每年支付一次。 对于上述“上工欧洲”的支付义务，本公司承担连带担保责任。但是对于剩余股东贷款对价以及 应计利息所承担的连带责任，以其实际数额的 50%为限，且最高额不超过 12,500,000.00 欧元。 截止 2007 年末，“上工欧洲”已经归还 FAG 公司第一期贷款对价 3,004,743.94 欧元，剩余贷款 对价为 24,037,951.50 欧元。 （2）2005 年度，本公司为 DA 公司在美国子公司的房屋租赁向 FAG 公司出具了金额不超过 530 万 美元的担保函，担保期限从 2005 年 6 月 30 日至 2015 年 10 月 31 日；同时“上工欧洲”于 2005 年 6 月 30 日向 FAG 公司提供了 63.5 万欧元、同等期限的现金质押，用于对 FAG 公司为 DA 公司在美国的一 家子公司与 UTF Norcross L.L.C.之间的房屋售后回租交易所提供的担保提供再担保。 截止 2007 年 12 月 31 日止，本公司尚未因上述担保事项发生经济利益的流出。 (八)委托理财情况 本年度公司无委托理财事项。 (九)其他重大合同 本年度公司无其他重大合同。 (十)承诺事项履行情况 持有本公司 5％以上股份的股东为上海市浦东新区国有资产监督管理委员会，能严格履 行其在股权分置改革中作出的一般承诺。 (十一)聘任、解聘会计师事务所情况 报告期内，公司改聘会计师事务所，聘请立信会计师事务所有限公司为公司的审计机 构，截至本报告期末，该会计师事务所系第一年为本公司提供审计服务。 本年度公司支付给立信会计师事务所有限公司的财务审计费用为 75 万元（上年度支 付给上海众华沪银会计师事务所有限公司的审计费用为 64 万元），其他专项审计费用 0 元，承担审计期内差旅费（含境外审计调查）97,463 元（上年度支付给上海众华沪银会 28 上工申贝（集团）股份有限公司 2007 年度报告摘要 计师事务所有限公司的差旅费为 0.8 万元）。 (十二)上市公司及其董事、监事、高级管理人员、公司股东、实际控制人处罚及整改情况 1、本报告期内，公司及其董事、监事、高级管理人员、公司股东、实际控制人均未受中 国证监会稽查、行政处罚、通报批评及上海证券交易所的公开谴责。 2、本报告期内，根据中国证监会《关于开展加强上市公司治理专项活动有关事项的通 知》要求，中国证监会上海监管局于 2007 年 9 月 18 日至 19 日对本公司的治理情况进行 了现场检查，并于 2007 年 10 月 23 日出具了《公司治理状况整改通知书》（沪证监公司 字[2007]442 号），2007 年 10 月 29 日，公司又收到上海证券交易所出具的《公司治理状 况评价意见》。 对此，公司高度重视，组织公司董事、监事和高级管理人员对《整改通知书》和《评 价意见》进行学习，本着规范、自律的原则，对照《公司法》、《证券法》、《上市公司 治理准则》等法规文件，就存在的问题制订措施、逐项落实，并将整改报告提交公司董事 会五届十三次会议审议通过（详见 2007 年 10 月 31 日在《上海证券报》、香港《商报》 上刊登的本公司 035 号公告）。 （十三）其它重大事项 2008 年 3 月 3 日，公司召开五届十五次董事会议，审议通过公司董事及高管人员变 动事宜。因工作变动，常江先生不再担任公司董事职务；增补 Alfred Wadle 先生和鞠卫 峰先生为公司董事候选人；推荐石良平先生为公司独立董事人选。上述董事人选将提交公 司年度股东大会审议批准。经总经理马民良先生提名，聘任孟祥云女士为公司财务总监、 财务负责人。徐晓晖女士不再担任公司财务负责人（详见 2008—001 公告）。 (十四)其它重大事项及其影响和解决方案的分析说明 1、证券投资情况 证证 占期末证 序 券券 证券简 初始投资金 持有数量 期末账面值 报告期损益 券总投资 号 品代 称 额（元） （股） （元） （元） 比例（％） 种码 华 基 1 安 A 160,402 100,000.00 121,818.65 550,498.48 100 333,853.42 金 股 报告期已出售证券投资损 - - - - 69,099.93 益 合计 100,000.00 - 550,498.48 100% 402,953.35 29 上工申贝（集团）股份有限公司 2007 年度报告摘要 2、持有其他上市公司股权情况 单位:元 报 证 股 占该公司 告 会计 证券代 券 报告期所有者权 份 初始投资金额 股权比例 期末账面值 期 核算 码 简 益变动 来 （％） 损 科目 称 源 益 法 广 可供 人 电 出售 600637 67,600.00 等 38 项具体准 则的通知》，公司从 2007 年 1 月 1 日起，执行新《企业会计准则》；并根据《企业会计 准则第 38 号－首次执行企业会计准则》所规定的 5-19 条相关内容，对财务报表项目进 行了追溯调整。 上列各项对报表的主要影响如下： 项 目 资本 盈余 未分配利润 未确认投资损 外币报表折算 少数股东权益 合 计 公积 公积 失 差额 同一控制下企业合并形成的 --- --- -58,702,296.65 --- --- --- -58,702,296.65 长期股权投资差额 控股子公司超额亏损由母公 --- --- -8,549,839.52 7,507,252.69 --- 1,042,586.83 --- 司承担部分 以公允价值计量且其变动计 --- --- 6,335,553.57 --- --- --- 6,335,553.57 入当期损益的金融资产 汇率折算差额 --- --- --- --- 152,630.82 --- 152,630.82 递延所得税资产 --- --- 1,008,679.33 --- --- --- 1,008,679.33 合 计 --- --- -59,907,903.27 7,507,252.69 152,630.82 1,042,586.83 -51,205,432.93 三、税项 公司主要税种和税率 税 率 税 种 母公司 子公司 增值税 17％ 17％ 营业税 5％ 5％ 企业所得税 15％ 15％、33% 注 1：母公司为高新技术企业，所得税税率为：15%。 注 2：境外子公司按各国税法规定执行法定税率。 四、企业合并及合并财务报表 合并财务报表按照 2006 年 2 月颁布的《企业会计准则第 33 号—合并财务报表》执 行。公司所控制的全部子公司均纳入合并财务报表的合并范围。 合并财务报表以母公司和纳入合并范围的子公司的个别财务报表为基础，根据其他 有关资料为依据，按照权益法调整对子公司的长期股权投资后，由母公司编制。合并时 对内部权益性投资与子公司所有者权益、内部投资收益与子公司利润分配、内部交易事 项、内部债权债务进行抵销。 本节所列数据除非特别注明，金额单位为人民币万元。 57 上工申贝（集团）股份有限公司 2007 年度报告摘要 （一）通过同一控制下的企业合并取得的子公司 注册 注册资 本公司年末实 实质上构成对子公司的 本公司合计 本公司合计享有 合并范围内表 被投资单位全称 业务性质 经营范围 地 本 际投资额 净投资的余额 持股比例 的表决权比例 决权比例 上海申贝办公机 办公机械 上海 12,500 办公机械设备等 12,500 12,500 100% 100% 100% 械有限公司 设备等 上海蝴蝶进出口 缝制设备 各类缝制设备、机电产 上海 1,000 800 800 80% 80% 80% 有限公司 进出口等 品等进出口。 1、 同一控制下企业合并的判断依据 以上参与合并的企业与公司在合并前后均受上海轻工控股（集团）公司控制，故判 断为同一控制下企业合并。 2、 同一控制的实际控制人 上述通过同一控制下的企业合并取得的子公司，同一控制的实际控制人为上海轻工控 股（集团）公司。 58 上工申贝（集团）股份有限公司 2007 年度报告摘要 （二）非企业合并方式取得的子公司 本公司合 合并范 本公司年 实质上构成对 本公司合 计享有的 围内表 被投资单位全称 注册地 业务性质 注册资本 经营范围 末实际投 子公司的净投 计持股比 表决权比 决权比 资额 资的余额 例 例 例 上工运输服务公司 上海 运输 210 运输 210 210 100% 100% 100% 缝纫机械设备等批 杜克普爱华贸易 上海 缝制设备进出口等 USD150 发、佣金代理和进出 USD60 USD60 40% 40% 65% (上海）有限公司 口。 上海上工进出口有 机电设备、仪表仪器 上海 缝制设备进出口等 3,200 2,880 2,880 90% 90% 90% 限公司 等进出口 上海双重包缝机有 生产开发销售包缝 上海 缝制设备等 1,200 1,080 1,080 70% 70% 90% 限公司 机 上海上工方天机械 工业缝纫机及其配 上海 缝制设备等 300 240 240 60% 60% 80% 有限公司 件的生产和销售 上海上工兴达衣车 曲折缝系列工业缝 上海 缝制设备等 310 270 270 67.74% 67.74% 87.09% 机械有限公司 纫机的生产销售。 上海上工松达机械 生产销售缝纫设备 上海 缝制设备等 300 225 225 65% 65% 75% 有限公司 及配件 上海上工缝纫机有 事业投资管理咨询 上海 实业投资等 2,700 2,700 2,700 100% 100% 100% 限公司 等。 杜克普爱华工业制 设计制造缝制设备、 造（上海）有限公 上海 缝制设备等 USD1,000 销售自产产品，提供 USD700 USD700 70% 70% 100% 司 积水服务和咨询， 上海上工佳源机电 生产销售缝纫设备 上海 缝制设备等 300 216 216 67% 67% 72% 有限公司 及配件。 上海工缝房地产发 房地产开发、销售咨 上海 房地产开发等 500 450 450 90% 100% 100% 展有限公司 询物业管理 上海索营置业有限 上海 房地产开发等 1,300 房地产开发等 897 897 69% 69% 69% 公司 上海工业缝纫机物 缝制设备及零部件 上海 缝制设备等 465 465 465 100% 100% 100% 产总公司 销售劳务服务。 上海永德经济发展 上海 机电设备销售等 200 机电设备销售等 160 160 80% 80% 80% 有限公司 上海富华轻机有限 上海 生产销售服装机械 USD100 生产销售服装机械 USD55 USD55 55% 55% 55% 公司 上工(欧洲)控股有 德国 缝制设备等 EUR1,000 缝制设备等 EUR1,000 EUR1,000 100% 100% 100% 限责任公司 （三）本年合并报表范围的变更情况 1、与上年相比本年新增合并单位 1 家，原因为：2006 年上工运输服务公司因资产规 模和损益金额对公司整体影响较小未纳入 2006 年度合并范围，2007 年将其纳入合并范围。 2、本年减少合并单位 3 家，原因为：上海四方同济净水有限公司于 2007 年出售股 权；上海飞人进出口有限公司于 2007 年办理了工商注销；上海上原科技开发有限公司于 2007 年完成税务注销，目前正在办理工商注销。 （四）子公司向母公司转移资金的能力受到严格限制的情况 无子公司向母公司转移资金的能力受到严格限制的情况。 （五）少数股东权益和少数股东损益 （单位：人民币元） 本年少数股东损 本年退出合并范 其他权益增 单位名称 年初金额 本年资本投入 年末金额 益增减 围 减 --- 12,366,467.71 --- 上工(欧洲)控股有限责任公司（注 1） 43,259,701.88 1,889,136.26 32,782,370.43 上海申贝办公机械有限公司（注 2） 33,069,870.43 -33,069,870.43 --- --- --- --- 上海申贝办公机械进出口有限公司 1,000,000.00 --- --- --- --- 1,000,000.00 上海申贝置业发展有限公司 260,863.10 --- --- 260,863.10 --- --- 上海索营置业有限公司 4,636,203.23 --- 46,693.51 --- --- 4,682,896.74 上海缝建物业有限公司 49,169.22 --- 4,914.38 --- --- 54,083.60 萍乡市东旭房地产开发有限公司 299,508.73 --- -30.37 --- --- 299,478.36 上海上工缝纫机有限公司（注 2） 3,000,000.00 -3,000,000.00 --- --- --- --- 上海上工进出口有限公司 1,236,493.92 --- 7,239.44 --- --- 1,243,733.36 上海上工佳源机电有限公司 1,977,151.78 --- 97,891.77 --- --- 2,075,043.55 59 上工申贝（集团）股份有限公司 2007 年度报告摘要 上海上原科技开发有限公司 17,851.07 --- --- 17,851.07 --- --- 上海上工方天机械有限公司 743,632.26 --- -292,501.54 --- --- 451,130.72 上海富华轻机有限公司 2,944,200.43 --- -115,389.32 --- --- 2,828,811.11 上海蝴蝶进出口有限公司 3,901,475.88 --- 2,341,509.17 --- --- 6,242,985.05 上海永德经济发展有限公司 250,800.18 --- 356,526.73 --- 604,440.00 1,211,766.91 上海飞人进出口有限公司 1,190,630.65 --- --- 1,190,630.65 --- --- 上海上工松达机械有限公司 1,394,746.48 --- -241,667.84 --- --- 1,153,078.64 杜克普爱华贸易(上海）有限公司 4,081,802.52 --- 317,029.77 --- --- 4,398,832.29 上海上工兴达衣车机械有限公司 393,119.85 --- -112,320.16 --- --- 280,799.69 上海工缝房地产发展有限公司 500,000.00 --- --- --- --- 500,000.00 合 计 104,207,221.61 -36,069,870.43 4,299,031.80 13,835,812.53 604,440.00 59,205,010.45 注 1：为上工(欧洲)控股有限责任公司合并报表形成。 注 2：为受让少数股东股权，成为全资子公司。 60 上工申贝（集团）股份有限公司 2007 年度报告摘要 五、合并财务报表主要项目注释 （以下金额单位若未特别注明者均为人民币元，凡未注明年初余额的均为年末余额） （一）货币资金 年末余额 年初余额 项 目 外币金额 折算率 人民币金额 外币金额 折算率 人民币金额 现金 人民币 1,371,446.76 1,474,759.18 欧 元 59,164.99 10.6669 631,107.03 48,026.05 10.2665 493,059.44 现金折合人民币合计金 --- --- 2,002,553.79 --- --- 1,967,818.62 额 银行存款 人民币 --- --- 168,851,432.49 --- --- 191,440,170.83 欧 元 20,422,550.16 10.6669 217,845,300.30 21,620,095.57 10.2665 221,962,711.17 美 元 6,321,231.79 7.3046 46,174,069.73 14,198,197.56 7.8087 110,869,465.28 日 元 --- --- --- 5,238,001.00 0.0656 343,770.01 银行存款折合人民币合 --- --- 432,870,802.52 --- --- 524,616,117.29 计金额 其他货币资金 人民币 --- --- 3,419,484.16 --- --- 1,500,562.97 其他货币资金小计 --- --- 3,419,484.16 --- --- 1,500,562.97 合 计 438,292,840.47 528,084,498.88 抵押、冻结等限制变现的款项： 1、 EUR100 万元授信额度保证金抵押给德国银行。 2、 EUR65 万元存单抵押给 FAG 库格福斯有限公司。 3、 上海银行国际业务部定期银行存单 5,000,000.00 美元质押给上海银行福民支行。 4、 中国建设银行上海市第三支行银行账号被法院冻结，年末余额为 61,638.73 元。 （二）交易性金融资产 项 目 年末公允价值 年初公允价值 指定为以公允价值计量且其变动计入本年损益的金融资产 其中：1、交易性债券投资 --- 210,620.00 2、交易性权益工具投资 9,325,414.02 23,789,145.47 3、其 他 550,498.48 420,708.44 合 计 9,875,912.50 24,420,473.91 2007 年 12 月 31 日中路股份共计 518,400 股，成本 2,479,302.73 元，市价 7,283,520.00 元，已被冻结。 （三）应收票据 种 类 年末余额 年初余额 银行承兑汇票 3,070,470.00 1,484,084.00 注：年末无未到期已贴现的银行承兑汇票、商业承兑汇票。 61 上工申贝（集团）股份有限公司 2007 年度报告摘要 （四）应收账款 年末余额 年初余额 项 目 占总额 坏账准备计 占总额 坏账准备计 账面余额 坏账准备 账面余额 坏账准备 比例% 提比例（％） 比例% 提比例（％） 1、单项金额重大并已 单独计提坏账准备的 --- --- --- --- --- --- --- --- 款项 2、单项金额非重大并 已单独计提坏账准备 73,444,027.38 12.01 --- 59,907,731.38 72,695,982.96 13.05 --- 72,695,982.96 的款项 3、其他按账龄段划分 为类似信用风险特征 538,115,738.87 87.99 --- 125,955,834.77 484,247,383.04 86.95 --- 94,865,042.01 的款项 其中：1 年以内 419,409,345.91 68.58 5 20,207,691.77 392,860,502.60 70.54 5 19,643,025.13 1-2 年 14,115,886.43 2.31 20 2,823,177.28 13,082,377.57 2.35 20 2,616,475.51 2-3 年 3,331,081.08 0.54 50 1,665,540.27 11,397,923.00 2.05 50 5,698,961.50 3 年以上 101,259,425.45 16.56 100 101,259,425.45 66,906,579.87 12.01 100 66,906,579.87 合 计 611,559,766.25 100.00 185,863,566.15 556,943,366.00 100.00 167,561,024.97 净 额 425,696,200.10 389,382,341.03 1、年末应收账款中无持本公司 5％以上（含 5％）表决权股份的股东单位款项。 2、应收账款期年末余额中前五名金额合计为 90,081,970.50 元，占应收账款年末余 额的 14.73%。 （五）预付款项 1、账龄分析 年末余额 年初余额 账 龄 金 额 占总额比例 金 额 占总额比例 1 年以内 27,810,701.07 98.11% 33,321,751.91 98.13% 1－2 年 55,652.67 0.20% 163,917.19 0.48% 2－3 年 12,203.18 0.04% --- --- 3 年以上 467,821.64 1.65% 467,821.14 1.39% 合 计 28,346,378.56 100.00% 33,953,490.24 100.00% 2、年末预付款项中无持本公司 5％以上（含 5％）表决权股份的股东单位欠款。 （六）其他应收款 年末余额 年初余额 项 目 占总额 坏账准备计 占总额 坏账准备计 账面余额 坏账准备 账面余额 坏账准备 比例% 提比例（％） 比例% 提比例（％） 1、单项金额重大并已单独 --- --- --- --- --- --- --- --- 计提坏账准备的款项 2、单项金额非重大并已单 --- --- --- --- --- --- --- --- 独计提坏账准备的款项 3、其他按账龄段划分为类 111,135,909.66 100.00% --- 32,612,878.54 129,056,155.90 100.00% --- 38,242,035.53 似信用风险特征的款项 其中：1 年以内 73,535,830.63 66.16% 5 3,676,791.53 84,378,935.23 65.38% 5 4,218,946.76 1-2 年 6,581,433.94 5.92% 20 1,316,286.79 11,428,472.24 8.86% 20 2,285,694.45 2-3 年 6,797,689.76 6.12% 50 3,398,844.89 3,022,708.22 2.34% 50 1,511,354.11 3 年以上 24,220,955.33 21.80% 100 24,220,955.33 30,226,040.21 23.42% 100 30,226,040.21 合 计 111,135,909.66 100.00% 32,612,878.54 129,056,155.90 100.00% 38,242,035.53 净 额 78,523,031.12 90,814,120.37 1、年末其他应收款中无持本公司 5％以上（含 5％）表决权股份的股东单位款项。 2、其他应收款年末余额中前五名金额合计为 20,812,921.34 元，占其他应收款年末 余额的 18.73%。 62 上工申贝（集团）股份有限公司 2007 年度报告摘要 （七）存货及存货跌价准备 年末余额 年初余额 项 目 账面余额 跌价准备 账面余额 跌价准备 原材料 274,646,521.49 59,012,276.38 239,038,605.41 58,094,500.93 在产品 177,555,202.59 33,445,158.92 165,634,663.57 37,761,182.82 库存商品（产成 218,984,693.92 42,626,185.12 228,483,183.31 65,646,668.76 品） 材料成本差异 -1,371,625.75 --- -388,273.31 --- 委托加工物资 1,678,448.38 25,573.13 1,358,195.08 25,573.13 其 他 5,540,539.61 2,166,889.90 6,594,560.48 2,166,889.90 合 计 677,033,780.24 137,276,083.45 640,720,934.54 163,694,815.54 净 额 539,757,696.79 477,026,119.00 存货跌价准备变动如下： 存货种类 年初账面余额 本年计提额 本年转销 年末账面余额 原材料 58,094,500.93 2,130,709.34 1,212,933.89 59,012,276.38 在产品 37,761,182.82 1,826,258.93 6,142,282.83 33,445,158.92 库存商品（产成品） 65,646,668.76 6,846,047.07 29,866,530.71 42,626,185.12 委托加工物资 25,573.13 --- --- 25,573.13 其 他 2,166,889.90 --- --- 2,166,889.90 合 计 163,694,815.54 10,803,015.34 37,221,747.43 137,276,083.45 （八）其他流动资产 项 目 年末余额 年初余额 租金、保险费 1,178,329.14 770,902.55 其 他 67,194.20 23,114.94 合 计 1,245,523.34 794,017.49 （九）可供出售金融资产 项 目 年末公允价值 年初公允价值 可供出售权益工具 24,458,496.92 --- 其中：无限售条件的可供出售股票 24,458,496.92 --- 所持有股票禁售期已于 2007 年度内结束，公司管理当局认定其为可供出售金融资产。 （十）长期股权投资 年末余额 年初余额 账面余额 减值准备 账面余额 减值准备 长期股权投资 52,222,276.27 3,266,278.65 63,898,993.30 3,802,055.79 净 额 48,955,997.62 60,096,937.51 63 上工申贝（集团）股份有限公司 2007 年度报告摘要 1、被投资单位主要信息 本企业在被投 本企业持 年末净资产总 本年营业 本年 被投资单位名称 注册地 业务性质 资单位表决权 股比例 额 收入总额 净利润 比例 上海易畅办公用品有限公司 上海 商业 50% 50% --- 622,155.81 -126,170.24 上海申贝慧合办公设备有限公司 上海 商业 30% 30% --- --- --- 上海申贝光通信器材有限公司 上海 工业 30% 30% 5,348,217.86 9,137,481.97 308,818.23 上海申贝长风碳棒有限公司 上海 工业 20.768% 20.768% 22,357,591.40 22,374,587.75 515,673.85 上海华之杰塑胶有限公司 上海 商业 25% 25% 2,945,134.64 --- --- 上海号码机厂销售经理部 上海 商业 100% 100% 5,915,320.70 --- --- 常熟市启兴电镀五金有限责任公司 常熟 工业 90% 90% 4,546,370.44 --- --- 上海豹驰长城印刷号码机械有限公司 上海 工业 20% 20% 6,171,611.83 3,417,238.20 -412,909.72 2、按成本法核算的长期股权投资 （1）法人股投资 被投资单位名称 股票数量 初始投资金额 年初余额 本年增减额 年末余额 广电信息 --- 67,600.00 67,600.00 -67,600.00 --- 上海三毛 --- 4,892,327.00 4,892,327.00 -4,892,327.00 --- 锦江股份 --- 220,000.00 220,000.00 -220,000.00 --- 新黄浦 --- 303,800.00 303,800.00 -303,800.00 --- 中卫国脉 --- 226,000.00 226,000.00 -226,000.00 --- 白猫股份 --- 290,400.00 290,400.00 -290,400.00 --- 其他法人股 34,385 310,000.00 310,000.00 -194,000.00 116,000.00 合 计 6,310,127.00 6,310,127.00 -6,194,127.00 116,000.00 （2）其他成本法核算的股权投资 被投资单位名称 股权比例 年初账面余额 本年投资增减额 年末账面余额 减值准备 上海新光内衣厂 14.3% 308,033.99 --- 308,033.99 308,033.99 上工泉州销售公司（注 1） 33.3% 500,000.00 -500,000.00 --- --- 上工安庆销售公司（注 1） 33.3% 500,000.00 --- 500,000.00 500,000.00 上工辽宁外贸公司（注 1） 33.3% 500,000.00 --- 500,000.00 500,000.00 上海新沪玻璃有限公司（注 1） 20% 6,168,235.27 --- 6,168,235.27 --- 上海申丝企业发展有限公司（注 1） 36% 4,320,000.00 --- 4,320,000.00 --- 上海上工佳汇缝纫设备有限公司（注 2） 39% 1,160,000.00 --- 1,160,000.00 1,160,000.00 无锡上工缝纫机有限公司（注 2） 80% 153,814.26 --- 153,814.26 153,814.26 南通上工缝纫机有限公司（注 3） 65% 442,880.04 -442,880.04 --- --- 上海四方同济工贸有限公司（注 3） 92% 200,000.00 -200,000.00 --- --- 上海华联缝制有限公司 15.53% 400,000.00 --- 400,000.00 --- 上海富士施乐有限公司 15.82% 29,140,749.49 --- 29,140,749.49 --- 上海上工佳荣衣车有限公司 12.5% 500,000.00 --- 500,000.00 470,530.40 上海胜家缝纫机有限公司 10% 3,974,779.84 -3,974,779.84 --- --- 上海南蝶缝制设备有限公司 ，应当分别调整归属于普通股股东的报告期净利润和发行在外普通股加权平均 数，并据以计算稀释每股收益。 稀释每股收益 稀释每股收益=[P+（已确认为费用的稀释性潜在普通股利息－转换费用）×（1-所得 税率）]/（S0 ＋ S1 ＋ Si×Mi÷M0 － Sj×Mj÷M0—Sk+认股权证、股份期权、可转换 债券等增加的普通股加权平均数） 其中，P 为归属于公司普通股股东的净利润或扣除非经常性损益后归属于公司普通股 股东的净利润。公司在计算稀释每股收益时，已考虑所有稀释性潜在普通股的影响，直 至稀释每股收益达到最小。 （二）公司不具有稀释性但以后期间很可能具有稀释性的潜在普通股。 （三）资产负债表日至财务报告批准报出日之间，公司发行在外普通股或潜在普通股 股数未发生重大变化。 82 上工申贝（集团）股份有限公司 2007 年度报告摘要 十五、补充资料 （一）2006 年度合并净利润差异调节 本公司已经按照《公开发行证券的公司信息披露规范问答第 7 号——新旧会计准则过 渡期间比较财务会计信息的编制和披露》（以下简称“第 7 号规范问答”）的有关规定 编制了调整后的上年同期利润表和 2007 年年初资产负债表，对上年同期利润表的追溯调 整情况列示如下： 项 目 金 额 2006 年度净利润（原会计准则） 4,893,123.59 加：少数股东损益（原会计准则） 6,246,771.27 追溯调整项目影响合计数 2,656,274.82 其中：1、以公允价值计量且其变动计入当期损益的金融资产 -1,446,411.05 2、递延所得税资产 24,657.30 3、未确认投资损失 -5,101,888.75 4、原股权投资差额摊销 9,179,917.32 2006 年度净利润（新会计准则） 13,796,169.68 假定全面执行新会计准则的备考信息 其他项目影响合计数 1,410,126.99 其中：计提的应付福利费余额转回 1,410,126.99 2006 年度全面模拟新会计准则净利润 15,206,296.67 （二）2007 年初合并股东权益差异调节 本公司按照《企业会计准则第 38 号——首次执行企业会计准则》和《企业会计准则 解释第 1 号》（财会〔2007〕14 号）的要求，对年初所有者权益的调节过程以及做出修 正的项目、影响金额及其原因列示如下： 编号 项目名称 2007 年报披露数 2006 年报披露数 差异 原因说明 2006 年 12 月 31 日股东权益（原会计准则） 587,453,178.73 587,453,178.73 --- 1 长期股权投资差额 -54,672,023.22 -54,174,594.87 -497,428.35 其中：同一控制下企业合并形成的长期股权投资差额 -54,672,023.22 -54,174,594.87 -497,428.35 注1 2 少数股东权益（原会计准则） 103,164,634.78 102,020,875.32 1,143,759.46 注2 3 未确认的投资收益 --- 750,725.27 -750,725.27 注2 4 所得税 1,008,679.33 1,159,843.15 -151,163.82 注3 5 以公允价值计量且其变动计入当期损益的金融资产 6.335,553.57 6.335,553.57 --- 6 企业合并 -3,877,642.61 -3,877,642.61 --- 其中：同一控制下企业合并商誉的账面价值 -3,877,642.61 -3,877,642.61 --- 2007 年 1 月 1 日股东权益（新会计准则） 639,412,380.58 639,667,938.56 -255,557.98 上列年初股东权益差异调节说明： 注 1：公司受让同一控制下企业的股权，按交易基准日账面净资产与交易价之间的差 额进行了重新认定，相应作了追溯调整。 注 2：控制子公司超额亏损由母公司承担，相应作了追溯调整。 注 3：根据实际经营情况，公司对账面价值与计税基础的暂时性差异进行了重新认定， 相应调整了 2007 年初的递延所得税资产。 十六、财务报表的批准报出 本财务报表业经公司董事会于 2008 年 4 月 18 日批准报出。 83 合 并 资 产 负 债 表 2007-12-31 编制单位：上工申贝（集团）股份有限公司 资 产 年末余额 年初余额 负债和所有者权益（或股东权益） 流动资产： 流动负债： 货币资金 438,292,840.47 528,084,498.88 短期借款 结算备付金 - - 向中央银行借款 拆出资金 - - 吸收存款及同业存放 交易性金融资产 9,875,912.50 24,420,473.91 拆入资金 应收票据 3,070,470.00 1,484,084.00 交易性金融负债 应收账款 425,696,200.10 389,382,341.03 应付票据 预付款项 28,346,378.56 33,953,490.24 应付账款 应收保费 - - 预收款项 应收分保账款 - - 卖出回购金融资产款 应收分保合同准备金 - - 应付手续费及佣金 应收利息 - - 应付职工薪酬 应收股利 879,792.24 738,337.48 应交税费 其他应收款 78,523,031.12 90,814,120.37 应付利息 买入返售金融资产 - - 应付股利 存货 539,757,696.79 477,026,119.00 其他应付款 一年内到期的非流动资产 - - 应付分保账款 其他流动资产 1,245,523.34 794,017.49 保险合同准备金 流动资产合计 1,525,687,845.12 1,546,697,482.40 代理买卖证券款 代理承销证券款 非流动资产： 一年内到期的非流动负债 发放贷款及垫款 - - 其他流动负债 可供出售金融资产 24,458,496.92 - 流动负债合计 持有至到期投资 - - 非流动负债： 长期应收款 - - 长期借款 长期股权投资 48,955,997.62 60,096,937.51 应付债券 投资性房地产 161,003,519.93 168,549,869.42 长期应付款 固定资产 364,153,089.40 377,952,942.01 专项应付款 在建工程 3,682,674.12 6,179,403.35 预计负债 工程物资 - - 递延所得税负债 固定资产清理 - - 其他非流动负债 生产性生物资产 - - 非流动负债合计 油气资产 - - 负债合计 无形资产 123,127,892.57 127,876,518.30 所有者权益（或股东权益）： 开发支出 48,984,446.87 38,467,958.48 实收资本（或股本） 商誉 31,079,079.84 29,912,474.40 资本公积 长期待摊费用 - 102,060.30 减：库存股 递延所得税资产 48,965,660.16 85,093,416.31 盈余公积 其他非流动资产 - - 一般风险准备 非流动资产合计 854,410,857.43 894,231,580.08 未分配利润 外币报表折算差额 归属于母公司所有者权益合计 少数股东权益 所有者权益合计 资产总计 2,380,098,702.55 2,440,929,062.48 负债和所有者权益总计 法定代表人： 主管会计工作负责人： 总会计师（或财务总监）： 合 并 利 润 表 2007年度 编制单位：上工申贝（集团）股份有限公司 项 目 本年金额 一、营业总收入 2,538,060,869.69 其中： 营业收入 2,538,060,869.69 利息收入 - 已赚保费 - 手续费及佣金收入 - 二、营业总成本 2,557,158,692.95 其中： 营业成本 1,926,456,232.29 利息支出 - 手续费及佣金支出 - 退保金 - 赔付支出净额 - 提取保险合同准备金净额 - 保单红利支出 - 分保费用 - 营业税金及附加 3,936,059.63 销售费用 293,543,940.46 管理费用 268,197,205.58 财务费用 36,732,016.70 资产减值损失 28,293,238.29 加: 公允价值变动收益（损失以“-”号填列） 70,231.94 投资收益（损失以“-”号填列） 48,988,699.35 其中：对联营企业和合营企业的投资收益 - 汇兑收益（损失以“-”号填列） - 三、营业利润（亏损以“-”号填列） 29,961,108.03 加：营业外收入 62,654,560.87 减：营业外支出 972,598.84 其中：非流动资产处置损失 - 四、利润总额（亏损总额以“-”号填列） 91,643,070.06 减：所得税费用 59,313,753.73 五、净利润（净亏损以“-”号填列） 32,329,316.33 其中：被合并方在合并前实现的净利润 归属于母公司所有者的净利润 28,030,284.53 少数股东损益 4,299,031.80 六、每股收益： （一）基本每股收益 （二）稀释每股收益 法定代表人： 主管会计工作负责人： 总会计师（或财务总监）： 会 合 并 现 金 流 量 表 2007年度 会合03表 编制单位：上工申贝（集团）股份有限公司 单位：元 项 目 本年金额 上年金额 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 2,705,038,087.20 2,755,064,932.95 客户存款和同业存放款项净增加额 向中央银行借款净增加额 向其他金融机构拆入资金净增加额 收到原保险合同保费取得的现金 收到再保险业务现金净额 保户储金及投资款净增加额 处置交易性金融资产净增加额 收取利息、手续费及佣金的现金 拆入资金净增加额 回购业务资金净增加额 收到的税费返还 64,013,195.30 60,998,442.60 收到其他与经营活动有关的现金 72,694,165.59 38,019,809.10 经营活动现金流入小计 2,841,745,448.09 2,854,083,184.65 购买商品、接受劳务支付的现金 1,904,638,480.09 1,836,700,748.82 客户贷款及垫款净增加额 存放中央银行和同业款项净增加额 支付原保险合同赔付款项的现金 支付利息、手续费及佣金的现金 支付保单红利的现金 支付给职工以及为职工支付的现金 694,008,362.90 685,790,746.94 支付的各项税费 29,880,231.11 29,890,280.33 支付其他与经营活动有关的现金 182,548,709.14 185,184,022.65 经营活动现金流出小计 2,811,075,783.24 2,737,565,798.74 经营活动产生的现金流量净额 30,669,664.85 116,517,385.91 二、投资活动产生的现金流量： 收回投资收到的现金 48,638,046.40 30,352,008.01 取得投资收益收到的现金 28,724,807.29 14,728,295.13 处置固定资产、无形资产和其他长期资产收回的现金净额 96,355,413.85 48,569,810.34 处置子公司及其他营业单位收到的现金净额 8,748,979.31 7,058,480.62 收到其他与投资活动有关的现金 - 1,292,267.90 投资活动现金流入小计 182,467,246.85 102,000,862.00 购建固定资产、无形资产和其他长期资产支付的现金 80,868,282.39 74,117,893.30 投资支付的现金 73,033,786.13 5,235,308.58 质押贷款净增加额 取得子公司及其他营业单位支付的现金净额 - 支付其他与投资活动有关的现金 10,791,813.80 投资活动现金流出小计 164,693,882.32 79,353,201.88 投资活动产生的现金流量净额 17,773,364.53 22,647,660.12 三、筹资活动产生的现金流量： 吸收投资收到的现金 - 4,015,407.00 其中：子公司吸收少数股东投资收到的现金 - 取得借款收到的现金 488,186,749.50 603,765,000.00 发行债券收到的现金 收到其他与筹资活动有关的现金 - 筹资活动现金流入小计 488,186,749.50 607,780,407.00 偿还债务支付的现金 588,603,034.50 660,319,831.38 分配股利、利润或偿付利息支付的现金 48,706,797.60 41,341,768.23 其中：子公司支付给少数股东的股利、利润 - 支付其他与筹资活动有关的现金 筹资活动现金流出小计 637,309,832.10 701,661,599.61 筹资活动产生的现金流量净额 -149,123,082.60 -93,881,192.61 四、汇率变动对现金及现金等价物的影响 10,888,394.81 4,244,742.27 五、现金及现金等价物净增加额 -89,791,658.41 49,528,595.69 加：期初现金及现金等价物余额 528,084,498.88 478,555,903.19 六、期末现金及现金等价物余额 438,292,840.47 528,084,498.88 法定代表人： 主管会计工作负责人： 总会计师（或财务总监）： 会计机构负责人（会计主管人员）： 合 并 所 有 者 权 益 （股东权益） 变 动 表 2007年度 编制单位：上工申贝（集团）股份有限公司 本年金额 归属于母公司所有者权益 归属于母公司所有者权益 少数股东权益 所有者权益合计 项 目 实收资本（或股本） 资本公积 减：库存股 盈余公积 一般风险准备 未分配利润 未确认投资损失 外币报表折算差额 实收资本（或股本） 资本公积 减：库存股 盈余公积 一般风险准备 一、上年年末余额 448,886,777.00 397,177,336.51 4,546,242.52 -251,161,084.31 -7,507,252.69 -4,488,840.30 103,164,634.78 690,617,813.51 448,886,777.00 383,789,877.38 26,001,680.07 -59,907,903.27 7,507,252.69 152,630.82 1,042,586.83 -51,205,432.93 加：会计政策变更 - 前期差错更正 448,886,777.00 397,177,336.51 - 4,546,242.52 - -311,068,987.58 - -4,336,209.48 104,207,221.61 639,412,380.58 448,886,777.00 383,789,877.38 - 26,001,680.07 - 二、本年年初余额 - 三、本年增减变动金额（减少以“-”号填列） 28,030,284.53 4,299,031.80 32,329,316.33 （一）净利润 - 14,040,908.08 - - - -167,017.58 7,364,264.84 - 21,238,155.34 13,387,459.13 - - （二）直接计入所有者权益的利得和损失 16,636,296.92 16,636,296.92 1．可供出售金融资产公允价值变动净额 2．权益法下被投资单位其他所有者权益变动 16,862,640.73 16,862,640.73 3,034,747.51 的影响 - 3．与计入所有者权益项目相关的所得税影响 -19,458,029.57 -167,017.58 7,364,264.84 -12,260,782.31 10,352,711.62 4．其他 - 14,040,908.08 - - - 27,863,266.95 7,364,264.84 4,299,031.80 53,567,471.67 - 13,387,459.13 - - 上述（一）和（二）小计 - - - - - - - -49,301,242.96 -49,301,242.96 - - - - （三）所有者投入和减少资本 -49,301,242.96 -49,301,242.96 1．所有者投入资本 - 2．股份支付计入所有者权益的金额 - 3．其他 - -21,455,437.55 （四）利润分配 - -21,455,437.55 1．提取盈余公积 - 2．提取一般风险准备 - 3．对所有者（或股东）的分配 - 4．其他 - （五）所有者权益内部结转 - 1．资本公积转增资本（或股本） - 2．盈余公积转增资本（或股本） - 3．盈余公积弥补亏损 - 4．其他 448,886,777.00 411,218,244.59 - 4,546,242.52 - -283,205,720.63 - 3,028,055.36 59,205,010.45 643,678,609.29 448,886,777.00 397,177,336.51 - 4,546,242.52 四、本年年末余额 法定代表人： 主管会计工作负责人： 总会计师（或财务总监）： 资 产 负 债 表 2007-12-31 编制单位：上工申贝（集团）股份有限公司 资 产 年末余额 年初余额 负债和所有者权益(或股东权益） 流动资产： 流动负债： 货币资金 92,076,908.44 167,879,113.66 短期借款 交易性金融资产 7,834,018.48 23,107,955.44 交易性金融负债 应收票据 334,400.00 1,414,084.00 应付票据 应收账款 31,498,164.32 51,941,651.74 应付账款 预付款项 1,478,532.26 6,231,819.38 预收款项 应收利息 - - 应付职工薪酬 应收股利 2,261,201.23 6,068,863.25 应交税费 其他应收款 67,991,151.45 51,898,711.76 应付利息 存货 13,041,173.35 55,376,089.15 应付股利 一年内到期的非流动资产 其他应付款 其他流动资产 一年内到期的非流动负债 流动资产合计 216,515,549.53 363,918,288.38 其他流动负债 非流动资产： 流动负债合计 可供出售金融资产 20,373,696.92 - 非流动负债： 持有至到期投资 - - 长期借款 长期应收款 - - 应付债券 长期股权投资 533,629,462.77 447,245,836.43 长期应付款 投资性房地产 53,764,823.92 58,911,991.35 专项应付款 固定资产 81,072,420.89 106,652,105.59 预计负债 在建工程 258,744.72 1,475,063.85 递延所得税负债 工程物资 - - 其他非流动负债 固定资产清理 - - 非流动负债合计 生产性生物资产 - - 负债合计 油气资产 - - 所有者权益（或股东权益）： 无形资产 48,621,781.01 72,545,904.94 实收资本（或股本） 开发支出 - - 资本公积 商誉 - - 减：库存股 长期待摊费用 - - 盈余公积 递延所得税资产 - - 未分配利润 其他非流动资产 - - 所有者权益（或股东权益）合计 非流动资产合计 737,720,930.23 686,830,902.16 资产总计 954,236,479.76 1,050,749,190.54 负债和所有者权益（或股东权益）总计 法定代表人： 主管会计工作负责人： 总会计师（或财务总监）： 利 润 表 2007年度 编制单位：上工申贝（集团）股份有限公司 项 目 本年金额 一、营业收入 90,811,372.18 减：营业成本 89,680,251.72 营业税金及附加 487,136.20 销售费用 1,100,682.67 管理费用 61,310,093.07 财务费用 19,672,312.79 资产减值损失 19,448,452.00 加：公允价值变动收益（损失以“-”号填列） -1,080,837.82 投资收益（损失以“-”号填列） 16,134,441.11 其中：对联营企业和合营企业的投资收益 - 二、营业利润（亏损以“-”号填列） -85,833,952.98 加：营业外收入 62,686,387.77 减：营业外支出 176,626.38 其中：非流动资产处置损失 138,528.00 三、利润总额（亏损总额以“-”号填列） -23,324,191.59 减：所得税费用 - 四、净利润（净亏损以“-”号填列） -23,324,191.59 五、每股收益： （一）基本每股收益 （二）稀释每股收益 法定代表人： 主管会计工作负责人： 总会计师（或财务总监）： 现金流量表 2007年度 编制单位：上工申贝（集团）股份有限公司 项 目 本年金额 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 102,805,063.77 收到的税费返还 - 收到其他与经营活动有关的现金 20,622,290.82 经营活动现金流入小计 123,427,354.59 购买商品、接受劳务支付的现金 51,708,677.55 支付给职工以及为职工支付的现金 26,153,031.65 支付的各项税费 7,250,090.36 支付其他与经营活动有关的现金 89,760,326.25 经营活动现金流出小计 174,872,125.81 经营活动产生的现金流量净额 -51,444,771.22 二、投资活动产生的现金流量： 收回投资收到的现金 30,485,413.59 取得投资收益收到的现金 6,488,630.54 处置固定资产、无形资产和其他长期资产收回的现金净额 89,401,876.81 处置子公司及其他营业单位收到的现金净额 - 收到其他与投资活动有关的现金 - 投资活动现金流入小计 126,375,920.94 购建固定资产、无形资产和其他长期资产支付的现金 401,170.87 投资支付的现金 93,192,595.00 取得子公司及其他营业单位支付的现金净额 - 支付其他与投资活动有关的现金 - 投资活动现金流出小计 93,593,765.87 投资活动产生的现金流量净额 32,782,155.07 三、筹资活动产生的现金流量： 吸收投资收到的现金 - 取得借款收到的现金 357,400,000.00 收到其他与筹资活动有关的现金 - 筹资活动现金流入小计 357,400,000.00 偿还债务支付的现金 401,549,000.00 分配股利、利润或偿付利息支付的现金 18,082,780.01 支付其他与筹资活动有关的现金 - 筹资活动现金流出小计 419,631,780.01 筹资活动产生的现金流量净额 -62,231,780.01 四、汇率变动对现金及现金等价物的影响 5,092,190.94 五、现金及现金等价物净增加额 -75,802,205.22 加：期初现金及现金等价物余额 167,879,113.66 六、期末现金及现金等价物余额 92,076,908.44 法定代表人： 主管会计工作负责人： 总会计师（或财务总监）： 会 所 有 者 权 益（股东权益）变 动 表 2007年度 编制单位：上工申贝（集团）股份有限公司 本年金额 项 目 实收资本（或股本） 资本公积 减：库存股 盈余公积 未分配利润 所有者权益合计 实收资本（或股本） 资本公积 一、上年年末余额 448,886,777.00 397,177,336.51 4,546,242.52 -246,475,130.11 604,135,225.92 448,886,777.00 383,789,877.38 加：会计政策变更 -4,515,441.94 -226,349,949.07 -230,865,391.01 -1,480,694.43 前期差错更正 - 二、本年年初余额 448,886,777.00 392,661,894.57 - 4,546,242.52 -472,825,079.18 373,269,834.91 448,886,777.00 382,309,182.95 三、本年增减变动金额（减少以“-”号填列） （一）净利润 -23,324,191.59 -23,324,191.59 （二）直接计入所有者权益的利得和损失 - 16,636,296.92 - - - 16,636,296.92 - 10,352,711.62 1．可供出售金融资产公允价值变动净额 16,636,296.92 16,636,296.92 2．权益法下被投资单位其他所有者权益变动的影响 - 3．与计入所有者权益项目相关的所得税影响 - 4．其他 - 10,352,711.62 上述（一）和（二）小计 - 16,636,296.92 - - -23,324,191.59 -6,687,894.67 - 10,352,711.62 （三）所有者投入和减少资本 1．所有者投入资本 - 2．股份支付计入所有者权益的金额 - 3．其他 - （四）利润分配 1. 提取盈余公积 - 2．对所有者（或股东）的分配 - 3．其他 - （五）所有者权益内部结转 1．资本公积转增资本（或股本） - 2．盈余公积转增资本（或股本） - 3．盈余公积弥补亏损 - 4．其他 - 四、本年年末余额 448,886,777.00 409,298,191.49 - 4,546,242.52 -496,149,270.77 366,581,940.24 448,886,777.00 392,661,894.57 法定代表人： 主管会计工作负责人： 总会计师（或财务总监）： 2007 ANNUAL REPORT SGSB GROUP CO., LTD. 600843 900924 April 18, 2008 CONTENTS I. Important Note II. Basic Information about the Company III. Financial and Business Highlights IV. Variation of Stock Capital and Information about Shareholders V. Information about Directors, Supervisors and Senior Managerial Team VI. Corporate Governance of the Company VII. Brief Information about Shareholders’ General Meetings VIII. Report by the Board of Directors IX. Report by the Board of Supervisors X. Significant Events XI. Annual Financial Statements XII. For Reference 1 Chapter I. Important Note 1. The Board of Directors, the Board of Supervisors, and all the directors, supervisors, senior managers, guarantee that there are no false statements, vital misunderstandings or important omissions in this report, and hold both individual and joint liability for the authenticity, accuracy and integrity of its contents. 2. All the members of the Board of Directors attended the meetings of BOD. 3. Shulun Pan Certified Public Accountants Co., Ltd. expressed an independent, clean audit opinion on the Company’s statements for the year 2007 based in their audit. 4. As particular emphasis, Mr. Zhang Min, Chairman of BOD & CEO, Mr. Ma Minliang, General Manager and Ms. Meng Xiangyun, Accounting Chief, make the pledge for the authenticity and integrity of the attached financial statements. 2 Chapter II. Basic Information about the Company 1. Legal name of the Company: SGSB GROUP CO., LTD. (Abbreviated as SGSB) 2. Legal representative of the Company: Zhang Min 3. Secretary to Board of Directors: Zhang Yifeng Contact address: 12th floor, Orient Mansion, No. 1500 Century Avenue, Pu Dong New Area, Shanghai, PRC Tel: 86-21-6840 7515 Fax: 86-21-6330 2939 E-mail: zyf@sgsbgroup.com Designated representative for stock affairs: Zhou Yongqiang Contact address: 12th floor, Orient Mansion, No. 1500 Century Avenue, Pu Dong New Area, Shanghai, PRC Tel: 86-21-6840 7700*728 Fax: 86-21-6330 2939 E-mail: zyq@sgsbgroup.com 4. Address of registration: 1201 Luoshan Road, Pu Dong New Area, Shanghai, PRC Office address: 12th floor, Orient Mansion, No. 1500 Century Avenue, Pu Dong New Area, Shanghai, 200122, PRC Official Website: http://www.sgsbgroup.com E-mail address: sgsb@sgsbgroup.com 5. Designated newspaper for information disclosure: and Internet login designated by China Securities Regulatory Commission to carry the Company’s Annual Report: http://www.sse.com.cn Place for consulting the Company’s Annual Report: General Office of the Company 6. Authorized stock exchange for A shares: Shanghai Stock Exchange A shares stock-code 600843, abbreviated as SGSB Authorized stock exchange for B shares: Shanghai Stock Exchange B shares stock-code 900924, abbreviated as SGC 7. Other information: First-time registration date: December 16, 1993 Registration authority: Shanghai Municipal Industrial and Commercial Admin. Date of the latest registration modification: February 7, 2005 Authority for the latest modification: Shanghai Municipal Industrial and Commercial 3 Administration Business license registration code: QGHZZ019029 Tax registration code: GSHZ31011532210544 Organization code of the Company: 13221054-4 Auditor: Shulun Pan Certified Public Accountants Co., Ltd. Office address: 4F, 61 East Nanjing Road, Shanghai, PRC Advisor on legal affairs: Shanghai Zhendan Law Office Office address: 16/F, 1688 North Sichuan Road, Shanghai, PRC 4 Chapter III. Financial and Business Highlights 1. Business highlights during report year: RMB’ Operating profits 29,961,108.03 Total profit 91,643,070.06 Net profit attributed to shareholders 28,030,284.53 Net profit attributed to shareholders after non-recurrent account profit/loss -47,083,827.13 Net cash flows generated from business operations 30,669,664.85 2. Deducted terms of non-recurrent account profit/loss: RMB’ Non-recurrent account profit/loss Sum Profit/loss from disposal of non-current assets 68,675,959.73 Government subsidies accounted into current profit/loss 5,820,588.44 Funds dispossession surcharge charged to non-financial institutions in 537,590.04 current profit/loss Other non-operating income and expenditure 79,973.45 Total 75,114,111.66 3. The Company’s main accounting data and financial index in the last three years (combined statements): RMB’ Item 2007 2006 Increase 2005 Adjusted Before adjustment (%) Operating income 2,538,060,869.69 2,406,584,588.29 2,440,723,981.83 3.99 1,482,659,146.38 Total profit 91,643,070.06 23,488,575.39 31,343,301.49 192.38 -289,084,643.38 Net profit attributed to 28,030,284.53 4,893,123.59 6,571,852.74 326.52 -276,608,231.59 shareholders Net profit attributed to shareholders after -47,083,827.13 -28,596,074.58 -26,917,345.43 -74.92 -279,084,646.94 non-recurrent account profit/loss Earning per share, basic 0.0624 0.0109 0.0146 327.40 -0.6162 Earning per share, diluted 0.0624 0.0109 0.0146 327.40 -0.6162 EPS after non-recurrent -0.1049 -0.0637 -0.0600 -74.83 -0.6217 account profit/loss, basic Return on net assets, diluted 4.7958 0.8329 1.2279 3.57+ -48.8802 (%) Return on net assets, weighted 5.1037 0.8610 1.0270 4.08+ -28.4537 (%) Return on net assets after non-recurrent account -8.0558 -4.8478 -5.0294 3.03- -49.3200 profit/loss, diluted (%) Return on net assets after non-recurrent gain/loss, -8.5728 -5.0300 -4.2066 4.37- -38.7980 weighted (%) Net cash flows generated from 30,669,664.85 116,517,385.91 116,517,385.91 -73.68 39,377,776.83 operating activities Net cash flows per share generated from operating 0.0683 0.2596 0.2596 -73.69 0.0877 activities 2007 Dec 31, 2006 Increase Dec 31, 2005 5 Adjusted Before adjustment (%) Total assets 2,380,098,702.55 2,486,972,366.78 2,440,929,062.47 -2.49 2,451,740,460.71 Owners’ equity 584,473,598.84 587,453,178.73 535,205,158.97 9.21 565,889,885.70 Net asset per share attributed to 1.3021 1.3087 1.1923 9.21 1.2607 shareholders 4. Items accounted at fair value RMB’ Item Beginning balance Ending balance Current changes Impact to current profit/loss Trading financial assets 24,420,473.91 9,875,912.50 -14,544,561.41 70,231.94 Financial assets available for sale - 24,458,496.92 24,458,496.92 - Total 24,420,473.91 34,334,409.42 9,913,935.51 70,231.94 The increase in financial assets available for sale is mainly due to that the originally non-tradable legal shares of Sanmao Textiles and SVA Information acquired by the Company in previous years have converted into tradable shares and their marketing price have been significantly revaluated. 6 Chapter IV. Variation of Share Capital and Information about Shareholders 1. Variation of share capital: (1) Changes in share capital (as of December 31, 2007): Increase/decrease in the report period Before current variation Shares by After current variation Ration Bonus shares shares public Other Total reserve Prop. Prop. Sum Sum (%) (%) 1. Shares subject to conditional sales 1) State-owned shares 132,841,017 29.59 -45,565,698 -45,565,698 87,275,319 19.44 2) Shares owned by 21,899,907 4.88 -21,899,907 -21,899,907 0 0 state legal entities 3) Shares owned by other domestic 17,192,500 3.83 -17,192,500 -17,192,500 0 0 investors Including: by domestic 17,192,500 3.83 -17,192,500 -17,192,500 0 0 legal entities Including: by domestic natural persons 4) Shares owned by int’l investors Including: by int’l legal entities Including: by int’l natural persons Total shares subject to 171,933,424 38.30 -84,658,105 -84,658,105 87,275,319 19.11 conditional sales 2. Unconditionally tradable shares 1) Tradable A shares 33,009,603 7.35 +84,658,105 +84,658,105 117,667,708 26.21 2) Tradable B shares 243,943,750 54.35 0 0 243,943,750 54.35 3) Tradable shares issued abroad 4) Others Total tradable shares 276,953,353 61.70 +84,638,105 -84,658,105 361,611,458 80.56 3. Total equities 448,886,777 100 0 0 448,886,777 100 Reasons for the variations: ① According to the reform proposal of non-tradable shares, June 15, 2007 is set as initial tradable date of the shares subject to conditional sales. ② On May 31, 2007 and September 20, 2007, China Great Wall Assets Management Co. (GWAMCC) and China Oriental Assets Management Co. (COAMC) reimbursed respectively the consideration of 724,802 shares and 109,719,658 shares that Shanghai Pudong New Area State-owned Assets Supervision and Administration Commission (PSASAC) paid antecedently for them during the reform of non-tradable shares. As a result, the quantity of shares held by PSASAC increased from 107,870,050 shares (24.03% stock equity) to 109,719,658 shares (24.44% stock equity), among which, 22,444,339 are unconditionally tradable shares. The portion of GWAMCC represents 9,060,514 shares (2.02% stock equity) instead of 9,785,316 shares (2.18% stock equity), tradable since June 15, 2007; and the portion of COAMC 14,060,845 shares (3.13% stock equity) instead of 15,815,651 shares (3.38% stock equity), tradable since October 15, 2007. 7 (2) Information about shares subject to conditional sales: Shareholder Beginning Unblocked Increase su Ending Reason Unblock balance in current bject to co balance date year nditional sales Shanghai Pudong New Area 107,870,050 22,444,339 1,849,608 87,275,319 Reform June 15, State-owned Assets Supervision and proposal 2007 Admin. Commission Shanghai International Trust and 21,899,907 21,899,907 0 0 Reform June 15, Investment Company proposal 2007 China Oriental Assets Management Co., 15,185,651 15,185,651 0 0 Reform Oct. 15, Ltd. proposal 2007 China Great Wall Assets Management 9,785,316 9,785,316 0 0 Reform June 15, Co., Ltd. proposal 2007 Other social collected shareholders 17,192,500 17,192,500 0 0 Reform June 15, proposal 2007 Zhang Min 39,300 B 0 30,700 B 70,000 B Director Ma Minliang 5,520 0 0 5,520 Director He Zhongyuan 10,792 0 0 10,792 Supervisor Zhang Yifeng 5,058 0 0 5,058 Secretary to BOD Wang Lixi 6,349 0 0 6,349 Ex-director March 3, 2007 Chen Mingqi 3,174 0 0 3,174 Ex-Senior March 3, 2007 (3) Stock issuance and IPO progress ① Stock issuance during the last three years During the last three years, the Company didn’t launch new stock issuance, stock allotment, changeable corporation bonds, corporation bonds or other derivative securities. ② Variation of the Company’s stock capital and equity structure a. During report year, there were no bonus shares, new shares capitalized from capital reserve, allotted shares or newly-issued shares causing the variation of the Company’s stock capital and equity. b. According to the Company’s reform proposal on non-tradable shares, the Company permitted the circulation of 70,597,260 shares subject to conditional sales on June 15, 2007 (details for the resolution No. 19 carried in dated June 11, 2007). Therefore, the equity structure of the Company has changed as following: Before the variation Changed portion After the variation Shares subject to 1.State-owned shares 132,841,017 -31,504,853 101,336,164 conditional sales 2.State-owned corporate 21,899,907 -21,899,907 0 shares 3.Other domestic 17,192,500 -17,192,500 0 corporate shares Total shares subject to 171,933,424 -70,597,260 101,336,164 conditional sales Unconditionally A shares 33,009,603 +70,597,260 103,606,803 tradable shares B shares 243,943,750 0 243,943,750 Total unconditionally 276,953,353 +70,597,260 347,550,615 tradable shares Total equity 448,886,777 0 448,886,777 c. According to the Company’s reform proposal on non-tradable shares, COAMC repaid the consideration amounted 1,124,806 shares that PSASAC paid for it during the reform. As a result, the 14,060,845 shares subject to conditional sales it held got the tradable status on Oct. 15, 2007 (details for the resolution No. 33 carried in dated Oct. 9, 2007) and the equity structure of the Company has changed as following: Before the variation Changed portion After the variation Shares subject to 1.State-owned shares 101,336,164 -14,060,845 87,275,319 conditional sales 2.State-owned corporate 0 0 0 shares 8 3.Other domestic 0 0 0 corporate shares Total shares subject to 101,336,164 -14,060,845 87,275,319 conditional sales Unconditionally A shares 103,606,863 +14,060,845 117,667,708 tradable shares B shares 243,943,750 0 243,943,750 Total unconditionally 347,550,613 +14,060,845 361,611,458 tradable shares Total equity 448,886,777 0 448,886,777 ③ Information about employee shares Till the end of report year, the Company hasn’t issued any employee shares. 2. Information about shareholders: (1) Information about shareholders and distribution of stock right: Number of shareholders at end of report 52,865 shareholders, among whom 21,496 are classified as A stock shareholders and 31,369 as year B stock shareholders. Top 10 shareholders Shareholder Shareholder Prop. Quantity of Current Shares subject Quantity status (%) shares increase to conditiona in pawn l sales or frozen Shanghai Pudong New Area State-owned 24.44 109,719,658 1,849,608 87,275,319 0 State-owned Assets Supervision and shareholder Admin. Commission Shanghai International Trust and Corporate 3.91 17,557,971 -4,341,936 0 0 Investment Company shareholder SCBSH A/C CSFB S/A Qinhan China Foreign investor 3.64 16,338,700 16,338,700 0 Unknown Master Fund (Cayman) Ltd. Main Force Assets Limited Foreign investor 2.82 12,650,000 0 0 Unknown Mesabi Assets Limited Foreign investor 2.69 12,075,000 0 0 Unknown China Great Wall Assets Management State-owned 2.02 9,060,514 -724,802 0 0 Co., Ltd. shareholder China Oriental Assets Management Co., State-owned 1.53 6,859,895 -8,325,756 0 0 Ltd. shareholder Normal Win Assets Limited Foreign investor 1.13 5,084,780 -3,190,382 0 Unknown Honour Force Investments Ltd. Foreign investor 0.61 2,730,000 -17,982,467 0 Unknown Hu Yunjing Foreign investor 0.55 2,481,750 2,481,750 0 Unknown Top 10 unconditionally tradable stock shareholders Shareholder Quantity of shares Classification Shanghai Pudong New Area State-owned Assets 22,444,339 A shares Supervision and Admin. Commission Shanghai International Trust and Investment Company 17,557,971 A shares SCBSH A/C CSFB S/A Qinhan China Master Fund 16,338,700 B shares (Cayman) Ltd. Main Force Assets Limited 12,650,000 B shares Mesabi Assets Limited 12,075,000 B shares China Great Wall Assets Management Co., Ltd. 9,060,514 A shares China Oriental Assets Management Co., Ltd. 6,859,895 A shares Normal Win Assets Limited 5,084,780 B shares Honour Force Investments Ltd. 2,730,000 B shares Hu Yunjing 2,481,750 B shares Explanation for affiliated It remains unknown to the Company if there exists any affiliated relationship or concerted-party relationship or concerted-action relationship among SGSB’s top ten unconditionally tradable stock shareholders. It remains relationship between the main unknown to the Company if there exists any affiliated relationship between SGSB’s top ten shareholders unconditionally tradable stock shareholders and top ten shareholders. Information about shareholders whose shares are subject to conditional sales Company Quantity Information Conditions to be Sales date Quantity unblocked sold Shanghai Pudong New Area State-owned 87,275,319 June 15, 2008 22,444,339 As proposed in the Assets Supervision and Admin. Commission reform proposal June 15, 2009 64,830,980 (2) Profile of the holding shareholder and real controller of the Company: ① Profile of the holding shareholder 9 Organization: Shanghai Pudong New Area State-owned Assets Supervision and Administration Commission Representative: Lu Fangzhou Date of foundation: September, 1996 Principal business or administration activities: especially engaged in the administration of state-owned assets in Pudong New Area, entrusted by Shanghai Pudong New Area People’s Government. ② Change of the holding shareholder and real controller of the Company During report period, there is no variation about the holding shareholder and real controller of the Company. ③ Relationship of the Company and its real controller: Shanghai Pudong New Area State-owned Assets Supervision and Administration Commission 24.44% SGSB Group Co., Ltd. (3) Other legal entity stock shareholders who take singly more than 10% equity of the Company: At the end of report year, none of other legal entity stock shareholders took singly more than 10% stock equity of the Company. 10 Chapter V. Information about Directors, Supervisors and Senior Managerial Team 1. Brief information about Directors, Supervisors and senior managers Name Position Sex Age Term of office (RMB’000, before tax) Salary during report year Stock option practice other associated parties Payment from shareholders or Increase/decrease Variation cause Blocked shares Stock option Year- begin Year- end Zhang Chairman 26/06/2006- 39,300 70,000 30,700 M 45 Buy-in 394 No Min & CEO 25/06/2009 B shares B shares Bshares Vice-Chair 26/06/2006- Gu Jian M 57 0 0 0 No man 25/06/2009 Executive Ma Director 26/06/2006- M 51 5,520 5,520 323 No Minliang General 25/06/2009 Manager Chang 26/06/2006- Director M 40 0 0 0 No Jiang 03/03/2008 Jia 26/06/2006- Director M 59 0 0 8 Yes Chunrong 25/06/2009 26/06/2006- Shen Yibo Director M 41 0 0 8 Yes 25/06/2009 Indep. 26/06/2006- Liu Rende M 62 0 0 60 No Director 25/06/2009 Wang Indep. 26/06/2006- M 59 0 0 60 No Zhile Director 25/06/2009 Jiang Indep. 26/06/2006- M 57 0 0 60 No Hengjie Director 25/06/2009 He Zhong Supervisory 26/06/2006- M 59 10,792 10,792 242 No yuan Chairman 25/06/2009 Jiang 26/06/2006- Supervisor F 49 0 0 112 No Xiaoshu 25/06/2009 26/06/2006- Wang Jie Supervisor M 49 0 0 106 No 25/06/2009 Zhuge 03/09/2007- Deputy GM F 39 0 0 119 Huiling 25-06-2009 Xu Accounting 26/06/2006- F 54 0 0 136 Xiaohui Leader 03/03/2008 Zhang Secretary of 26/06/2006- M 57 5,058 5,058 144 No Yifeng BOD 25/06/2009 39,300 70,000 B shares B shares 30,700 Total - - - - 1,772 - 21,370 21,370 B shares A shares A shares Experience of the Directors, Supervisors and senior managers during the last 5 years: (1) Mr. Zhang Min took successively the posts of Assistant to General Manager in Shanghai Refrigerator Compressor Co., Ltd., General Manager of Shanghai Zunussi Electromecanica Co., Ltd., Deputy Secretary of CCP Committee, General Manager, Vice Chairman and Chairman of BOD of Shanghai SMPIC Corporation. Currently as Deputy Secretary of CCP Committee, Chairman of BOD and CEO of SGSB. (2) Mr. Gu Jian took successively the offices of General Manager of Shanghai Pudong State-owned Assets Investment and Management Co., Ltd., Deputy Chief Economist and Chief Economist of Shanghai Pudong Development (Group) Co., Ltd. Actually as Secretary of CCP 11 Committee and Vice Chairman of BOD of SGSB. (3) Mr. Ma Minliang successively assumed the offices of Secretary of CCP Committee and General Manager of Shanghai Maling Acualius Co., Ltd., Secretary of CCP Committee and Deputy General Manager of Shanghai Light Industries Equipment Co., Ltd., Secretary of CCP Committee, Deputy General Manager and General Manager of SMPIC Corporation, Vice Chairman of BOD and CFO of SGSB. Actually as Executive Director and General Manager of SGSB. (4) Mr. Chang Jiang once took the seats of Director, Deputy General Manager and General Manager of Suntime International Trade Co., Ltd., Vice Chairman of BOD of Suntime International Eco.&Tech. Cooperation Co., Ltd., Deputy General Manager of Assets Management Dept. of Shanghai Pudong Development (Group) Co., Ltd. Currently as Deputy General Manager, Secretary to BOD of Shanghai Pudong Road & Bridge Construction Co., Ltd. In report year, he was Director of SGSB. (5) Mr. Jia Chunrong was once designated as Deputy General Manager of Shangtou Investment Management Co., Ltd. Now he assumes office of General Manager and Chairman of BOD of Shangtou Investment Management Co., Ltd. and Director of SGSB. (6) Mr. Shen Yibo once took the positions as Vice Director of General Admin. Dept., Vice Director and Director of Creditor Rights Dept. of China Great Wall Assets Management Corporation Shanghai Branch. Now as Director of Assets Operation No.1 Division of the same company’s Shanghai branch and Director of SGSB. (7) Mr. Liu Rende took the seat of CCP Committee Secretary and Vice Chief Accountant of NEXIA HDDY Certificated Public Accountants (Shanghai) Co., Ltd. Now he is CCP Committee Secretary and Vice Chief Accountant of NEXIA HDDY Certificated Public Accountants (Shanghai) Co., Ltd., and Independent Director of SGSB. (8) Mr. Wang Zhile was once as Docent and Associate Professor of People’s University of China. Actually he takes the places of Director of Transnational Corporations Studies Center of the Research Institute of the Ministry of Commerce, Member of State Industrial Policy Advisory Committee. Besides as Independent Director of SGSB, he also takes the positions of Vice Chairman of China Group Companies Promotion Association, Vice Chairman of Foreign Investment Committee of IAC (Investment Association of China), Invited Researcher of China Society of Economic Reform and Part-time Professor of the Multinational Companies Study Center of Nankai University. (9) Mr. Jiang Hengjie successively took the positions as Director of General Office, Assistant to General Manager, Deputy General Manager of China Silk Industrial & Trading Co., Chairman of China National Garment Association, Secretary of CCP Committee, First Deputy General Manager of China National Garment Group Co. and President of China National Garment Association. Currently as Executive Vice President (Legal entity representative) of China National Garment Association, Director of National Garment Standardization Tech. Committee, member of Standing Committee of China Textile Engineering Academy, Invited Professor of Tsinghua University, Suzhou University, Jiangxi Garment Institute, Beijing Institute of Clothing and Textiles, and Independent Director of the Company. (10) Mr. He Zhongyuan once took the seat of Vice Chairman of BOD of the Company and actually as Chairman of Supervisory Board of the Company. (11) Ms. Jiang Xiaoshu successively took the position of Vice Chairman, Chairman of Labour Union of SMPIC General Company, Member of CCP Committee, Secretary of Disciplinary Board and Chairman of Labour Union of SMPIC Corporation. Actually as Deputy Secretary of CCP Committee, Secretary of Disciplinary Board, Chairwoman of Labour Union and Supervisor of the Company. (12) Mr. Wang Jie was once designated as Vice Director of Shanghai Xinhu Glass Factory, Vice Director of Financing Dept. of Shanghai SMPIC Corporation and Vice Director of Financing & Audit Dept. of the Company. Currently he is designated as Vice Director of Audit Department and Supervisor of the Company. (13) Ms. Zhuge Huiling was once Deputy Chairwoman, Chairwoman of Labour Union, Deputy Secretary of CCP Committee and Supervisor of the Company. Currently as Deputy General Manager of the Company. 12 (14) Ms. Xu Xiaohui once took the position of Vice Director of Assets Management Office and Head of Financing Dept. of the Company. During report year, she acted as Director of Financing Department of SGSB. (15) Mr. Zhang Yifeng once took the posts of Director of Assets Management Office and Head of BOD General Office. Currently as Secretary to BOD of SGSB. 2. Concurrent posts the senior officials take in the shareholder or other non-shareholder units: Name Shareholder Position Term of Office Subsidy paid Initial date Conclusion or not date Jia Chunrong Shanghai Shangtou Investment General Manager 01/08/2003 Yes Management Co. Shen Yibo China Great Wall Assets Deputy General Manager 01/02/2007 Yes Management Co. Shanghai Branch Name Entity Concurrent Post Beginning date Closing date of Compensation and of the post the post subsidies paid or not Shanghai Highly Group Co., Ltd. Director 30/06/2005 30/06/2008 No Shanghai Lian Hua Fiber Co., Director 18/08/2005 18/08/2008 No Ltd. Jia Chunrong Shanghai Shenshi Auto. Chairman of BOD No Commercial City Co. Beijing Southern China Mansion Director No Co., Ltd. China National Offshore Oil Senior Consultant Yes Corporation Wang Zhile Beijing New Century General Director Yes Transnational Companies Studies Center Jiang Hengjie Shanghai Nine Dragon Co., Ltd. Indep. Director 04/2002 05/2008 Yes 3. Annual compensation of the managerial personnel (1) Decision-making procedures for compensation of Directors, Supervisors and senior Managers: the compensation for Independent Directors is decided by the General Meeting of Shareholders and the remuneration for other senior Directors and executives is under the proposal of the Compensation & Appraisal Committee and approval of the Company’s Board of Directors. (2) The compensation and welfare system for senior managers is a combination of the basic salary, the bonus and the premium directly linked with target-oriented performance appraisal in business operations. (3) Directors and Supervisors who don’t get compensation from the Company: Directors and Supervisors who don’t get payment from the Company Paid by shareholder or other related units Gu Jian No Chang Jiang No 13 4. Rotation of Directors, Supervisors and Managers during report year (1) Appointments On September 3, 2007, the 11th meeting of the Fifth Board of Directors elected Mr. Gu Jian Vice Chairman of BOD of the Company, approved the suggestion of its Nomination Committee to designate Mr. Ma Minliang as General Manager of the Company, and accepted the proposal of Mr. Ma Minliang to have Ms. Zhuge Huiling as Deputy General Manager of the Company. (2) Leave-offices ① On March 23, 2007, Mr. Xu Weikun left the post of Deputy General Manager for reason of job transfer. ② On September 3, 2007, the 11th meeting of the Fifth BOD of the Company agreed Mr. Ma Minliang to resign the position as Vice Chairman of BOD and CFO, approved Mr. Wang Lixi to resign the posts as Director, General Manager and COO for job transfer, and agreed Mr. Chen Mingqi and Mr. Chen Changbao to leave the position of Deputy General Manager for the same reason of job transfer. ③ On December 14, 2007, Mr. Gong Longyun resigned the post of Independent Director of the Company for reason of job transfer. 5. Staff profile of the Company At the end of 2007, SGSB’s employment register counted 2,570 employees (employees in overseas subsidiaries excluded), among whom 1,385 are actually working in their positions. Besides, the Company takes a total number of 5,939 retired persons, whose pension and medical costs are covered by social pension security system. The profession and education structure of the staff shows as following: (1) Professional structure of the staff Profession division Number of employees Manufacture 682 Sales 135 Engineering 90 Financing 65 Others 413 (2) Educational structure of the staff Education level Number of employees Postgraduate & bachelor 116 Junior college 248 Technical school 168 Senior high school and below 853 14 Chapter VI. Corporate Governance of the Company (1) Overview of the Company’s actual administration (1) During report year, the Company developed a special mission of corporate governance in line with the (abbreviated as The Notice) by China Securities Regulatory Commission and the by Shanghai Securities Regulatory Bureau: ① The Company elaborated and organized a special working group for the mission. The Chairman of BOD acted as the leader of the special campaign, the General Manager as Head of the special working group, and the Secretary to BOD in charge of the concrete arrangement and implementation of every stage of the campaign. All the departments’ leaders are members of the working group. ② According to The Notice and the attached , all the concerned departments and their leaders practiced an internal self-check, elaborated correspondent reform measures, and defined in-charge persons, measures and timetable for the reform. ③ Through the self-check, the Company drafted a comprehensive , which was considered and approved by the 9th meeting of the Fifth BOD. Authorized by Shanghai Securities Regulatory Bureau, the self-check report and reform program was carried in and the website of Shanghai Stock Exchange on June 30, 2007. ④The Company collected the comments and suggestions about its corporate governance by preparing special hotline, facsimile, Internet platform for the public, and sending theme questionnaire to long-term small & middle investors. (2) Problems found during self-check and regulatory inspection, reform measures and reform progress: ① Enforcing its system-build and revising , The Company has organized a special group to perfect and optimize the internal control mechanism. The special group has revised and drafted 42 systems which have been authorized by relevant meeting and put into effect. was elaborated in July 2001. In recent years, the Company adopted a Go Abroad strategy and put the position of CEO for adapting itself to the internalized business and administration on foreign units. With purpose of defining the relationship between CEO and General Manager, the Company is preparing for the revision of . In December 2005, under the reform guideline of CCP Committee and Municipal Government of Shanghai, the holding shareholder of the Company has been changed. For regularizing the conduct between the holding shareholder and the Company itself, SGSB has reached a common understanding with the holding shareholder on . ② Perfecting internal performance evaluation system Although the Company has established relevant check system, the annual performance evaluation proposal hasn’t been submitted to the meeting of BOD. Since the second quarter of 2007, the remuneration and appraisal committee of BOD has revised the all-around remuneration framework (for all the staff including senior managers) based on the marketing common practice and put it into effect since August 2007. ③ Bringing into full play the function of the four committees of BOD Although the Company has set four special committees under BOD and elaborated detailed rules for the function of these committees, the activities of these committees aren’t in a regular and systematic manner yet. The activities’ notice and record system is not efficient and the committees can’t fully play their roles. The BOD has adjusted the personnel of these committees and armed them with special secretaries who full-timely offer services for the function of these committees. The Company has clearly required that all business units should create conditions for the activities of these committees so that they could realize analysis, supervision and evaluation in all the stages upon the significant events of the Company and offer important support to the decision making of the BOD. ④ Emphasizing the service awareness and changing the passive information disclosure Although the Company has made many efforts in its service for investors, the information disclosure remains passive reaction. Recently, the Company revised and . The BOD also required all the business units to support the Secretary to BOD and Representative for stock affairs in improving the quality of information disclosure and assuring the in-time, accuracy, integrity and continuity of information disclosure. At the same time, the Company actively creates conditions for the online voting system in General Meetings of Shareholders so that more investors could vote and exercise their rights. (3) Through the development of special campaign of corporate governance, the Company perfected its internal control system, optimized internal restraint and responsibility mechanism, consolidated its administration, improved the corporate qualification, and pushed forward the regularized operation. ① About shareholders and the general meetings of shareholders: After the reform of non-tradable shares, the interests of the Company tend to be identical with the interests of its shareholders. The Company tries its best to ensure equal interests of all the shareholders, especially the medium & minor ones. Through telephone, facsimile, email, website and organizing irregular activities, the Company has also established a bridge for efficient communication with its shareholders. All these measures make it possible for the Company to build long-term, stable and sound relations with its investors. ② About relationship between the holding shareholder and the Company: The Company is fully independent in business and management. The holding shareholder regularizes -3- conscientiously its conduct and doesn’t intervene directly or indirectly in the decisions and operations of the Company. When running affiliated transactions with its holding shareholder, the Company can observe the business practice, disclose the pricing basis, and the related parties can abandon automatically their right to vote. ③ About Directors and the Board of Directors: Under the , all the Directors attend the meetings of BOD. The four affiliated special committees develop regular activities and improve the quality and efficiency of BOD, and the Independent Directors fulfill diligently their duties and express independent opinion upon significant decisions of the Company. ④ About Supervisors and the Board of Supervisors: With the stand of responsible to the Company and the investors, all the Supervisors run consciously their duties of supervising the financial affairs of the Company, the legitimacy and regularity of which the Directors, Managers and other senior executives carry out their responsibilities, and expressing independently their opinions. ⑤ About performance evaluation, incentive and monitoring mechanism: The Company has elaborated open and transparent performance evaluation, incentives and monitoring, mechanism. The compensation and appraisal committee evaluates the performance of senior managers and defines their salaries linked with their progress. ⑥ About interested parties: For keeping balance of interests among shareholders, employees, social communities, and maintaining the sustainable, healthy and stable development of the Company, SGSB pays much attention to keep its social responsibilities, soundly respects and protects legitimate rights and interests of the banks and creditors, employees, consumers, suppliers, community and other interested parties. ⑦ About information disclosure and transparency: The Company appoints Secretary to BOD to disclose the information, receive the investors and answer their consultations. and are newspapers designated by the Company for information disclosure. The Company guarantees the authenticity, accuracy, integrity and promptness of information disclosure and ensures that all the shareholders have equal opportunity to obtain related information. (2) Duty fulfillment of Independent Directors (1) Attendance records of Independent Directors in BOD meetings: Name Scheduled meetings Personal attendances Entrusted attendances Absences Note Liu Rende 10 10 Wang Zhile 10 10 Jiang Hengjie 10 10 During report year, under orientation of the , the Independent Directors fulfill their duties with honesty and diligence, inspect zealously the business operations of the Company, express professional opinions on the rotation of senior managers, external guarantee affairs, affiliated transactions and other significant affairs, summit written opinion of Independent Director, and safeguard the overall interests of the Company and legitimate rights of medium and minor shareholders. -4- (2) Independent Directors’ objection against significant events of the Company: During report year, the Independent Directors haven’t expressed any objection against the proposals launched by the BOD or other non-BOD units. (3) Structural independence of the Company from the holding shareholder (1) In respect to its business, SGSB Co., Ltd. runs independently productive, auxiliary manufacture, accessories, purchasing and sales chains. The business structure of the Company is integrated, independent and without any conflict or repetition to that of the holding shareholder. (2) Concerning HR resources, the Company runs independent labor & personnel management structure and wage system. All the senior managers get salary from the Company, and none of them holds administrative positions in the holding shareholder (or the real controller). (3) In respect to its assets, the Company owns independently and exclusively all the assets, including land utility right and intellectual property right. (4) Regarding institutional system, the Company has established an organic structure totally independent from its holding shareholder and owns independent office location. (5) Besides, the Company has independent accounting sector, and has established accounting and financing administration system as well. SGSB Co., Ltd. has also opened its own banking account and pay taxes in conformity with legal provisions. (4) Appraisal and incentive system for senior executives The Company has elaborated incentive policies for senior executives. The Company’s HR department regularly examines and appraises the performance of all high-level managers, and the compensation and appraisal committee realizes annual comprehensive appraisal and determines compensation of every manager at year-end. (5) Construction and perfection of internal control mechanism According to the norms on corporate governance of listed companies by China Securities Regulatory Commission and , the Company pays high priority to the construction and implementation of internal control mechanism. During report year, SGSB has revised and perfected the internal control mechanism, built the risk management framework, and -5- established systematically internal administration points. The Company designated Audit Dept. as inspection and supervision unit of internal control, which is in charge of regular and irregular inspection upon business, business units, accounting affairs, and reports directly to BOD. SGSB has fixed a variety of control programs, mainly including transaction authorization control, accounting affairs control, responsibility division control, receipts and records control, assets’ utilization control and information system control. The Company continues to perfect the existing basic internal control mechanism, which can adapt to the requirement of corporate administration and development, and make effects on operation risk restraint. (6) Disclosure of self-appraisal report by BOD and verification opinion by auditor upon internal control mechanism For current report year, the Company doesn’t disclose any information about self-appraisal report by BOD and verification opinion by auditor upon internal control mechanism. -6- Chapter VII. Brief Information about Shareholders’ General Meetings 1. Annual general meeting of shareholders On June 25, 2007, the Company convened its 2006 Annual General Meeting of Shareholders, and carried the resolution announcements in and dated June 26, 2007. 2. Provisional general meeting of shareholders On December 13, 2007, the Company held its 2007 First Provisional General Meeting of Shareholders. The resolutions were announced in and dated December 14, 2007. -7- Chapter VIII. Report by the Board of Directors 1. Retrospect and analysis from the view of management team Business fields of the Company: The Company, as sewing machinery manufacturer, is mainly engaged in production and sales of sewing machines and components, special-purposed sewing equipments, technical development and consulting services. (1) Retrospect of the overall business operation during report period During report year, the Company realized principal operating income of RMB 2,538,060,000, an increase of 3.99%; principal operating profit of RMB 29,960,000, an increase of 496.31%; and net profit of RMB 28,030,300, an increase of 326.52%. The exportation (international subsidiaries excluded) increased by 8.8% to USD 75.82 million. During report year, the Company developed steadily all the works in light of the business goals fixed at year beginning. ① Overseas business reaching the annual goal By adjustment in marketing positioning, operation strategy and business structure, Durkopp Adler AG maintained a stable business growing trend through the year of 2007. Durkopp Adler AG completed a production of 22,396 sewing machinery units, an increase of 9%, and a sales income of RMB 1,629,880,000, an increase of 15.75%. Furthermore, Durkopp Adler AG offered technological support for Durkopp Adler Industrial Manufacturing (Shanghai) Co., Ltd. with purpose of achieving the target of “DA Made in Shanghai”. Parallel to this mission, Durkopp Adler AG also initiated the equity transfer of DA Far East and the operational movement to Durkopp Adler Trading (Shanghai) Co., Ltd. so as to create conditions for a bigger marketing share of DA’s products in Asian market. ② Domestic operation restructure being effective For satisfying demands of the market, Durlopp Adler Industrial Manufacturing (Shanghai) Co., Ltd. made efforts to enlarge the production of DA251 high-speed lockstitch sewing machines, DA267 heavy duty sewing machines, GN7700 overlock stitch sewing machines, and achieved an annual sales income of RMB 63.71 million. Durkopp Adler Trading (Shanghai) Co., Ltd., taking advantage of its experience in special-purposed sewing equipments, built actively a domestic distribution network and realized an income of RMB 77 million in 2007. Shanghai Shanggong Sewing Machines Co., Ltd., as the main platform carrying the trademarks of Shanggong, adjusted the products’ structure on basis of organizational transformation, reinitiated the production of GD8 double needle lockstitch sewing machines, enlarged the production of 20U zigzag sewing machines, GE2108 button sewing machines, GC5200 sewing machines with edge trimmer, GK28-1N high-speed chainstitch sewing machines, and realized an annual income of RMB 66.72 million. Shanggong Imp. & Exp. Co., Ltd., with active exploration of Vietnam, North African and South American markets, made considerable progress in international trade of Shanggong-marked products and OEM Singer-marked products, and achieved a sales income -8- of RMB 127 million. (2) Principal operating activities and performance ① Principal operating activities, by sectors and products RMB’ Sector Operating Operating Operating Income Expense Margin income expense gross increase % increase % increase margin % % Sewing machines and 2,074,736,757.31 1,511,914,230.01 27.13 6.35 10.94 -9.99 material conveyers International trade 268,556,776.21 263,518,624.61 1.88 -3.95 -2.22 -47.92 Film materials 66,987,266.00 61,893,651.83 7.60 7.77 8.50 -7.53 Office appliances 60,658,367.14 53,998,023.18 10.98 -36.77 -37.46 9.91 Others 67,121,703.03 35,131,702.66 47.66 28.51 18.95 9.67 Total 2,538,060,869.69 1,926,456,232.29 24.10 3.99 6.71 -7.44 ② Principal operating activities, by regions RMB’ Region Principal operating income Increase/decrease with last year (%) Domestic 371,748,890.15 6.81 Overseas 2,166,311,979.54 3.52 ③ Production/sales volume and market share of main products During report year, the Company manufactured and sold respectively 76,284 and 86,168 industrial sewing machines (including Durkopp Adler AG’s production of 22,396 and sales of 22,958). The exportation of OEM Butterfly household sewing machines reached 628,237 units. In 2007, the market share of the Company’s common industrial sewing machines is less than 5%, but the high-rank products of Durkopp Adler AG are overwhelmingly dominant in the market. ④ Main suppliers and customers RMB’ Purchase from top 5 suppliers 89,857,965.60 Proportion in total purchase volume 4.81 Sale to top 5 customers 361,917,250.10 Proportion in total sales volume 14.26 (3) Significant change in assets’ structure RMB’ Dec 31, 2007 Dec 31, 2006 Increase Reason Sum % in Sum % in Percentage total total point Trading financial assets 9,875,912.50 0.41 24,420,473.91 1.00 -59.56 Note1 Bills receivable 3,070,470.00 0.13 1,484,084.00 0.06 106.89 Note2 Other current assets 1,245,523.34 0.05 794,017.49 0.03 56.86 Note3 Construction in progress 3,682,674.12 0.15 6,179,403.35 0.25 -40.40 Note4 Long-term deferred expenses 0 102,060.30 -100.00 Note5 Deferred income tax, assets 48,965,660.16 2.06 85,093,416.31 3.49 -42.46 Note6 Note1: the year-end balance of trading financial assets has significantly decreased in comparison with that of year-beginning, mainly due to the current-year sale of some tradable shares through stock exchange. Note2: the bills receivable have sharply increased during report year, mainly attributed to the increase of bank acceptance receipt after the sales of goods. Note3: the significant decrease of current-year other current assets is attributed to the payment of insurance and rent that could be repaid during posterior accounting periods. Note4: the decrease of construction in progress during current year is caused by the transfer of finished constructions to fixed assets. -9- Note5: the year-end long-term deferred expenses have been cleared to zero, for that all the related expenses have been amortized completely in report year. Note6: the significant decrease of deferred income tax assets is attributed to two important factors, on one side, Shanggong (Europe) Holding Co., Ltd. employed new income tax rate and the accumulated deferred income tax assets dropped much; on the other side, the accumulated deductible loss has decreased and so did the deferred income tax assets as result. (4) Principles adopted for the calculation of assets The Company adopts fair value principle for the calculation of trading financial assets and available-for-sale financial assets, and other assets are calculated on historical cost. Detailed accounting methods are disclosed in accounting policy of current annual report. At year of year, the trading financial assets refer to the equity of Zhonglu Co., Ltd., and the available-for-sale financial assets are composed of tradable shares of SVA Information Co., Ltd. and Shanghai Sanmao Co., Ltd. (5) Significant changes in financial highlights RMB’ Item Year 2007 Year 2006 Increase/ Reason decrease % Loss on assets depreciation 28,293,238.29 56,543,278.57 -49.96 Note1 Income on changes in fair value 70,231.94 2,648,245.81 -97.35 Note2 Investment income 48,988,699.35 13,535,220.54 261.93 Note3 Non-operating income 62,654,560.87 41,659,020.40 50.40 Note4 Non-operating expense 972,598.84 2,616,096.13 -62.82 Note5 Income tax 59,313,753.73 17,547,131.81 238.03 Note6 Minority interest 4,299,031.80 7,224,316.94 -40.49 Note7 Note1: the decrease of loss on assets depreciation is attributed to the decrease of provision for bad debts accrued by Shanggong (Europe) Holding Co., Ltd. Note2: the income on changes in fair value has decreased considerably because of the sale of some tradable shares and the transfer of the corresponding changes in fair value to the investment income. Note3: the significant increase of investment income is mainly attributed to the disposal of equity investment and the sale of some tradable shares. Note4: the non-operating income has increased significantly for the receipt of land parcels’ transfer compensation. Note5: the considerable decrease of non-operating expense is attributed to the loss in disposal of fixed assets during current report year. Note6: the significant increase of income tax is attributed to two important factors, on one side, Shanggong (Europe) Holding Co., Ltd. employed new income tax rate and the accumulated deferred income tax assets dropped much; on the other side, the accumulated deductible loss has decreased and so did the deferred income tax assets as result. Note7: the minority interest has sharply decreased for that Shanggong (Europe) Holding Co., Ltd. acquired partial equity of Durkopp Adler AG and the minority interest percentage has dropped as a result. (6) Significant changes and differences in cash flows structure RMB’ - 10 - Item Year 2007 Year 2006 Increase Increase Reason /decrease /decrease (%) Net cash flow from operating activities 30,669,664.85 116,517,385.91 -85,847,721.06 -73.68 Note1 Net cash flow from investing activities 17,773,364.53 21,355,392.22 -3,582,027.69 -16.77 Note2 Net cash flow from financing activities -149,123,082.60 -92,588,924.71 -56,534,157.89 -61.06 Note3 Influence of fluctuation of exchange rate 10,888,394.81 4,244,742.27 6,643,652.54 156.51 Note4 Net increase in cash and cash equivalents -89,791,658.41 49,528,595.69 -139,320,254.10 -281.29 Note5 Note1: the considerable decrease of net cash flow from operating activities is mainly attributed to the evident increase of cash paid for goods purchased and labor services received. Note2: the decrease of net cash flow from investing activities is mainly caused by the payment of compensation for the acquisition of 10% equity of SMPIC. Note3: the net cash flow from financing activities has decreased significantly due to the increase of repayment of bank borrowings and other long-term liabilities during report year. Note4: the significant growth of influence of fluctuation of exchange rate is mainly attributed to the influence of fluctuation of exchange rate upon the foreign currency held by Shanggong (Europe) Holding Co., Ltd. Note5: the decrease of net increase in cash and cash equivalents is attributed to the joint impacts of the above-mentioned factors. (7) Utilization of equipments, acquisition of orders, sale and overstock of products, flow of chief technical staff and other important information about the Company’s operation Durkopp Adler AG, key sewing machinery manufacturing unit of the Company, has all its main production equipments soundly running. DA strictly organizes its production under principle of produce-to-order. DA’s core technical staff, particularly technicians in key positions, keeps on their positions and fulfills diligently their duties. In 2007, Durkopp Adler AG poured in R&D an investment of RMB 58.87 million, 3.6% of the operating income. (8) Business retrospect and analysis upon main subsidiaries and associate undertakings ① Business performance of main subsidiaries and associate undertakings RMB’ Company Type Products/ Register Total Net Operating Net Share-hold services capital assets assets income profit % Shanggong Holding Investment, assets EUR 100 1,414,680,575.71 306,270,935.62 1,637,369,110.21 61,735,914.39 (Europe) Hol management, 10,000,000 ding Co., Lt production, d. processing and sales of industrial sewing machines SMPIC Manu. Production and sale 125,000,000 100 484,243,047.97 328,187,498.51 414,260,510.34 -3,511,205.77 of office supplies Shanghai Trading Imp. & exp. of 10,000,000 80 56,878,951.11 31,214,925.25 228,533,711.74 11,707,545.86 Butterfly sewing machines and Imp. & Exp. M&E equipments Co., Ltd. ② Single associate which influences more than 10% of the Company’s net profits RMB’000 Company Principal operating income Principal operating profit Net profit Shanghai Fuji Xerox Limited 2,749,747 201,319 110,913 - 11 - 2. Prospects for the Company’s future development (1) Development trend of the industrial sewing machinery sector, market competition situation and their possible impacts on the Company The sector of industrial sewing machinery is a highly mature and fully competitive industry. In recent years, the trend of concentration seems to be more obvious in the industry. On one side, the famous sewing manufacturers in Japan, South Korea and Europe are accelerating their overseas expansion and enlarging their production capacity in China. On the other side, most of domestic sewing machinery and components manufacturers are concentrated in the provinces of Jiangsu, Zhejiang and Shanxi. In particular, the private companies in Zhejiang avail their flexibility in mechanism and organization and gain obvious advantage in mid and low-class products through scale expansion and low cost strategy. China has been a big producer of sewing machines, with more international marketing share in sewing machinery and components, and more competition among the local manufacturers. With the upward of labor cost and revaluation of Renminbi, the downward of export rebates, the enforcement of international trade barriers and the tightening of market access and industrial standards, the enterprises with strong technology ability are forming their trademark and company images. The structural adjustment in the industry will not only transform the competition mode focused on price and enhance the advantage of Made in China, but also squeeze the small-scaled business entities and opens spacious development possibility for those with prestigious trademarks. (2) Opportunities, challenges and development strategy of the Company After the international M&A, although the Company obtained a significant improvement of technology ability in its sewing machinery sector and occupied a privileged position in the international competition, the efficient concerted operation hasn’t been established between its European and Asian business units. The technology transfer from Durkopp Adler AG to domestic business units is slow and the potential advantages of DA trademark haven’t been fully played in Asian market. At the same time, the Company hasn’t finished its internal restructure for domestic sewing machinery units and its planning for improvement of principal operations. Compared with its domestic counterparts, the Company still has a long way to go in market share, production scale, diversity of products and production cost. In the future, the Company will fulfill steadily the combined strategy of “Going outside and bringing in”. In international level, it will give full play to DA’s advantage and reputation in technology and trademark, enforce the R&D, keep putting high-rank products into market every year, maintain leadership in automatic sewing units, special-purposed machines and heavy duty machines, extend the product chain, enlarge the worldwide market share, graft high-rank technology into common products and seek the scale effects. The Company will impulse the Euro-Asian concerted effects, perfect the business integration, avail the strong support of Durkopp Adler to build DA Manufacturing and DA Trading as main platforms of Asian production base and distribution unit and explore more space in Asian market for DA’s products. In domestic level, the Company will strengthen the integration of domestic resources in the community, seize the opportunities created by the transformation of regional - 12 - economy development and unification of Yangtze Delta, and expand as soon as possible the forces in R&D, purchase and sales. (3) Business planning for the coming year In 2008, the Company will further promote the concerted effects between Europe and Asia, transform development methods, enhance development level, and attach priority to the following missions: ① Strengthen the sales and marketing, enlarge the production scale The Company will enforce the building of market network, stabilize the key customers, cultivate the regional dealers and secondary distributors, offer efficient technology training and supporting services, and set up after-sale alliance. The Company should also perfect the marketing strategy, coordinate well the relation between DA trademark and Shanggong trademark, making clear product positioning and sales standards. DA trademark should maintain its advantage in high-rank and special-purposed products, and enlarge the sales volume through penetration into basic products series. Shanggong should be positioned to common products transformed with DA’s technology. The international and local markets should be availed in two-way, which is to enlarge the DA’s sales in domestic market and expand exportation of domestic made household and industrial sewing units through DA’s international sales platform. ② Accelerate technology development, enhance level of products Durkopp Adler Industrial Manufacturing (Shanghai) Co., Ltd. should finish as soon as possible the trial and batch production of DA 069 and 269 heavy duty sewing machines, prepare for the trial and batch production of DA 767-373 and 767-273 heavy duty machines and 2180 shoe machines, cooperate with DA Germany in the development of new 480 double needle stitch sewing machines, support DA Germany in the development of e-control system, complete the technological reform of the second trial batch of 281 oil-free directly driven computer-controlled high-speed lockstitch sewing machines and put it into batch production soon. DA Industrial Manufacturing Shanghai will fully avail the technology of DA Germany together with the low-cost advantage of local made to realize the OEM of electronic bartacking, button, zigzag sewing machines, and enlarge rapidly the basic series of products. Besides, local components producers should try to make themselves important bases of components production and appliers of auxiliary equipment services for sewing machinery manufacturers home and abroad through upgrading equipment ability and expanding variety of equipment products. Durkopp Adler Germany should maintain its core R&D status in industrial sewing machinery, strengthen investment in R&D activities, perfect R&D system, explore shared service of its R&D achievements, and elevate Shanggong’s level with its technological advantage. In a word, based on Products of Shanggong with DA’s technology, the Company should forge a complete product chain marked as Shanggong and armed with its own core technology. ③ Seize the internal reform, impulse the clearance of small business units The Company will further advance the organizational reform of SMPIC, adjust the business structure of office appliances sector and complete the mechanism reform of subsidiaries. For the sunrise sectors such as office appliances and film materials, the Company will enforce its support by improving structural reform and cost control. In case of those M&S - 13 - subsidiaries without clear perspective, the Company will follow the strategy of “Close, Suspend, Merger and Shift” in the clearance work and assure the sound economic benefits of those effective resources. ④ Perfect administration mechanism, regularize order competition The Company will pay special attention to the construction of internal control mechanism, attach priority to the implementation of internal regulations, strengthen and improve supervision of overseas business units, and avoid investment risks. It will also create conditions for the building of informatization management system with internal control real-time, business processing standardization and basic data management integration. (4) Funds demanded for the realization of development strategy, planning of capital utilization, and capital sources ① Apply for current fund loans to banks through assets mortgage, and define the loan volume by real business situation of the Company. ② Create conditions for direct collection, try to collect funds through capital market for the integration of Euro-Asian business units and enlargement of local sewing machinery operations. ③ Strengthen funds management, accelerate capital turnover, press the return of accounts receivable and improve efficiency of funds. ④ Continue to optimize resources allocation, tap idle assets and offer capital assurance for the Company’s development. (5) Negative factors and risks possibly affecting the realization of the development strategies and business targets, and the countermoves and measures adopted or to be adopted ① Business risks In the sewing machinery industry, the international manufacturers are more competitive in high-rank market for their technology and capital advantages. The competition among local companies remains focusing on the quantity of mid and low-level products, and the competition between the Company and other local enterprises is tight for the numerous undefined factors in the market. Durkopp Adler AG, subsidiary of the Company, owns internationally prestigious trademark, first-class technology and global sales network. In the future, the Company will take advantage of DA’s technology to develop mid and high-rank sewing machines tailored for Asian market and keep its comprehensive leading position in international sewing machinery industry. ② HR administration risks Along with the tightening of competition and the strategy of “Going outside and bringing in”, all the companies are eager for senior management and technological talents. The Company is facing the challenges of how to attract and keep with talents. The Company will further practice the human-oriented management and perfect the talent competition mechanism and incentive mechanism. On one side, it will try to elevate HR qualification of managers and technicians through training. On the other side, it will recruit qualified talents for business management, R&D of electrical-mechanical products, international sales and marketing and other comprehensive operations. - 14 - 3. Investments by the Company during the report period (1) Utility of raised funds RMB’000 Total raised funds 322,640 Current-year utilized amount 36,930 Accumulated utilized amount 262,530 Project Any Planned Devoted Accumu- Rate of Current Comple- As Income as Significant variation investment amount lated progress year tion date planned anticipated variation or not amount in amount (%) earning schedule or not of (partial current or not feasibility variation year or not included) Acquisition of No 200,960 - 150,720 - 59,847 July 1, Yes Yes No Durkopp Adler AG 2005 Production project No 195,000 36,930 111,810 - - Yes - No of computerized special-purposed industrial sewing machines availing technology of DA Total - 395,960 36,930 262,530 Explanation for not getting anticipated progress or income - Reasons and procedures for variation - Utilization and direction of collected capitals to be used In designated bank accounts On July 1, 2005, Shanggong (Europe) Holding Co., Ltd., wholly-owned subsidiary of the Company, finished all the acquisition procedures of Durkopp Adler AG. This acquisition created a profit of RMB 4,616,300 in the same year. In 2006, the overseas business contributed a net profit of RMB 72,095,000 to the Company. In report year, the overseas business created a net profit of RMB 59,847,000 for the Company. For the production of high-rank special-purposed sewing machines, the Company, together with Durkopp Adler AG and Hong Kong Far East Honest Ltd., cofounded a USD 4 million register-capital Durkopp Adler Trading (Shanghai) Co., Ltd. at an investment distribution of 40%, 34% and 26%. At the same time, the Company cooperated with Durkopp Adler AG, at an investment share of 70:30, establishing Durkopp Adler Industrial Manufacturing (Shanghai) Co., Ltd. with register capital of USD 10 million. These two companies, as production base and sales dealer in Asian market, are playing important role in the production and sales of high-rank special-purposed sewing machinery products. (2) Utility of non-raised funds During report year, the Company didn’t develop non-raised funds investment. 4. Reason and impact of accounting policy and accounting estimation’s change or important accounting errors According to by the Ministry of Finance, by China Securities Regulatory Commission and other regulations, the Company takes January 1, 2007 as date of - 15 - initial implementation of the new since, keeping all the business transactions before January 1, 2007 under the measurement of old accounting system and standards, and adjusts retroactively the comparative profit/loss statements and balance sheet in line with the articles 5-19 of . Besides, the Company adjusts some items of the financial statements according to . The important adjustments are as following: (1) According to and related regulations, the goodwill and difference of long-term equity investment caused by the business combinations under the same control shall adjust retroactively the year-beginning remained earnings. On the date of initial implementation, the Company shall retroactively adjust the previous accounting statements, with consideration of employing at very beginning the cost method for all the long-term equity investment acquired in previous accounting periods. (2) According to , the unrecognized investment losses in previous periods shall be adjusted. (3) According to , the Company employs balance sheet debt method for the measurement of income tax and the recognition of deferred income tax assets/liabilities. (4) According to , the Company has reclassified the houses & buildings and land use right rented or held and prepared for transfer after appreciation as investment real estate, and employs cost method for sequent measurement. (5) According to , the Company has reclassified the stocks available for circulation in stock exchange as trading financial assets and employs fair value method for sequent measurement. The above-mentioned adjustments have impacted the2007 year-beginning balance sheet in the following items: Item 2007 Annual Report 2006 Annual Report Difference Long-term equity investment 60,096,937.51 133,031,695.63 -72,934,758.12 Investment real estate 168,549,869.42 0.00 168,549,869.42 Fixed assets 377,952,942.01 492,600,744.75 -144,647,802.74 Intangible assets 127,876,518.30 249,483,784.78 -121,607,266.48 R&D expense 38,467,958.48 0.00 38,467,958.48 Goodwill 29,912,474.40 0.00 29,912,474.40 Deferred income tax, assets 85,093,416.31 84,084,736.98 1,008,679.33 Total assets 2,440,929,062.48 2,486,972,366.78 -46,043,304.30 Undistributed profits -311,068,987.58 -251,161,084.31 -59,907,903.27 Owner’s equity attributable to the 535,205,158.97 587,453,178.7. -52,248,019.76 holders of parent company Minority interest 104,207,221.61 103,164,634.78 1,042,586.83 Total owners’ equity 639,412,380.58 690,617,813.51 -51,205,432.93 The above-mentioned adjustments have impacted the 2007 consolidated equities in the - 16 - following items: Item Capital Surplus Undistributed Unrecognized Converted Minority Total reserves reserves profit investment difference interest loss in foreign currency statements Long-term equity - - -58,702,296.65 - - - -58,702,296.65 investment difference by business combinations under the same control Excess losses of - - -8,549,839.52 7,507,252.69 - 1,042,586.83 - subsidiary attributable to parent company Financial assets at fair - - 6,335,553.57 - - - 6,335,553.57 value and in current profit/loss Translation difference of - - - - 152,630.82 - 152,630.82 currency exchange Deferred income tax - - 1,008,679.33 - - - 1,008,679.33 assets Total - - -59,907,903.27 7,507,252.69 152,630.82 1,042,586.83 -51,205,432.93 5. Routine activities of the Board of Directors (1) Meetings and resolutions of the Board of Directors during report year ① The Fifth Board of Directors held its 5th session on February 12, 2007, and the resolutions were published in and dated February 13, 2007. ② The 6th session of the Fifth Board of Directors was convened on April 19, 2007 and the resolutions were announced in and dated April 21, 2007. ③ The 7th session of the Fifth Board of Directors, convened on April 27, 2007, considered and approved a series of amended internal norms such as . The announcements appeared in and dated April 28, 2007. ④ The Fifth Board of Directors convened its 8th meeting on June 1, 2007, and the resolutions were carried in and dated June 2, 2007. ⑤ The Fifth Board of Directors held the 9th gathering on June 29, 2007, and the resolutions were published in and dated June 30, 2007. ⑥ The 10th meeting of the Fifth Board of Directors was organized on August 27, 2007. The resolutions were carried in and dated August 28, 2007. ⑦ The Fifth Board of Directors held its 11th meeting on September 3, 2007, and the resolutions were published in and dated September 4, 2007. ⑧ The 12th meeting of the Fifth Board of Directors was gathered on October 25, 2007, and the resolutions were announced in and dated October 27, 2007. ⑨ The 13th session of the Fifth Board of Directors was convened on October 30, 2007. - 17 - The resolutions were carried in and dated October 31, 2007. ⑩ The 14th meeting of the Fifth Board of Directors was held on November 26, 2007, and the resolutions were disclosed in and dated November 27, 2007. (2) Implementation of the resolutions made by General Meetings of Shareholders ① According to the resolutions made by 2006 Annual General Meeting of Shareholders, the Company contracted Shulun Pan Certified Public Accountants Co., Ltd. as auditor for the year 2007, and the parent company planned to obtain bank borrowings totally RMB 550 million through mortgage, impawn and credit guaranty (really receiving borrowings of RMB 305.4 million). For supporting the urban development projects of the city and the mega event of EXPO 2010, the Company transferred three buildings at No. 519, No. 573 and No. 647 east Longhua Road to Housing and Land Development Center of Luwan District. Till the disclosure of current report, the Company had received the compensation totally RMB 90 million. ② In line with the resolutions made by 2007 First Provisional General Meeting of Shareholders, the Company accepted the 10% equity of SMPIC from Shanghai Pudong New Area State-owned Assets Supervision and Administration Commission. Till the disclosure of current report, the Company had finished all the variation procedures for industry and commerce register. ③ During report year, the Company didn’t developed profit appropriation, reserve fund capitalization, nor stock allotment or additional equity offer. (3) Report of Audit Committee under the Board of Directors During report year, the Independent Directors and the Audit Committee of BOD reviewed carefully the quarter reports, interim report and annual report of the Company, and paid close attention to the business operation of the Company through hearing reports from business units, checking financial statements and consulting in-charge persons. ① According to the by China Securities Regulatory Commission, the Independent Directors and members of the Audit Committee of BOD reviewed all the financial materials before the auditors from Shulun Pan Certified Public Accountants Co., Ltd. realizing their audit work, exchanged ideas with the auditors about the annual audit timetable on January 17, 2008, got informed the progress of annual audit work, and expressed their opinion upon the audit of annual report: The audit department of the Company should develop another detailed analysis for the audit timetable before practicing the audit work. All the relative departments should pay priority to the strict execution of audit procedures. During the audit period, the Company should prepare written report of its annual working review for all the Independent Directors and members of Audit Committee so that they could get directly known about the Company and express independent and objective opinions. On March 6, 2008, the Audit Committee heard the stage report by the auditors and expressed its requirement for the next stage of audit work. - 18 - ② According to the preliminary opinion on annual audit offered by the Company, the Independent Directors and members of Audit Committee reviewed the financial statements and exchanged opinions with the auditors through face-to-face and telephone communication on March 28, 2008. Based on these activities, they expressed the following opinion upon the financial statements of the Company: a. The Committee agrees in principle the draft audit report, and has expressed some suggestion for amendment. b. The Company shall organize special force to collect debts and accounts receivable, and try to improve the performance in thus work for the coming year of 2008. c. The Company shall designate representatives to follow the restructure progress of China Worldbest and inform without any delay the situation to the Board of Directors. d. The Company shall enforce the inventory control and clear in time the finished goods that stay long time in inventory, so as to improve the cash flow circulation. ③ On April 18, 2008, the Independent Directors and members of Audit Committee overlooked again the annual financial statements and reviewed the clear opinion audit report issued by Shulun Pan Certified Public Accountants Co., Ltd. In their opinion, the Company is healthy in accounting management, financial status and capital turnover; the clear opinion audit report reflects truly, exactly and all-roundly the financial status and business performance of the Company. They agreed to submit the annual audit report to the consideration of BOD. ④ According to the by China Securities Regulatory Commission, the Independent Directors and members of Audit Committee observed that Shulun Pan Certified Public Accountants Co., Ltd. developed the audit work under the orientation of , and completed well the audit work following basically the professional principles of independent, objective and open. They agreed to renew contracting Shulun Pan Certified Public Accountants Co., Ltd. as 2008 annual auditor of the Company and submit this proposal to the consideration of BOD. (4) Report of Compensation and Appraisal Committee under the Board of Directors During report year, the members of Compensation and Appraisal Committee paid close attention to the operation of the Company, revised the remuneration program from consideration of the actual situation and the market price, and submitted the revised program to the approval of the Board of Directors. In the opinion of Compensation and Appraisal Committee, all the Directors, Supervisors and senior managers of the Company can fulfill diligently and responsibly their duties and complete the working targets of the Company in line with the remuneration policy and requirements of target responsibility check. The Committee agrees to approve the annual remuneration paid for Directors, Supervisors and senior managers. 6. Proposal on profit appropriation or reserve fund capitalization As audited by Shulun Pan Certified Public Accountants Co., Ltd., the consolidated net profit - 19 - for the year 2007 amounted to RMB 32,329,316.33, and the net profit attributable to the holders of parent company totaled RMB 28,030,284.53. As stipulated by the , the current-year profits should make up the existing loss before accruing statutory surplus reserve. The current-year parent company profits of RMB -23,324,191.59, together with the anterior-period profits of RMB -472,825,079.18, amount to current-year distributable profits of RMB -496,149,270.77. Because the distributable profits remain negative, the Company doesn’t propose profit appropriation or reserve fund capitalization for report year. The above-mentioned proposal is to be considered and approved by the 2007Annual General Meeting of Shareholders. 7. Reasons for not proposing profit appropriation Although the Company achieved current-year earning in report year, the current-year profits wasn’t enough to write-off the remaining negative distributable profits. As a result, the Company couldn’t develop any profit appropriation proposal. - 20 - Chapter IX. Report by the Board of Supervisors 1. Function of the Board of Supervisors The Board of Supervisors held four meetings during report year: (1) The Fifth Board of Supervisors had its 4th session on April 19, 2007, in which the Supervisors considered and approved , , , , , and . (2) The 5st session of the Fifth Board of Supervisors, held on April 27, 2007, discussed and approved and internal governance regulations. (3) On August 24, 2007, the Fifth Board of Supervisors held the 6th meeting, in which the Supervisors discussed and approved , , and . (4) On October 25, 2007, the 7th meeting of the Fifth Board of Supervisors considered and passed . 2．Independent opinion on the law-abiding operations of the Company During report year, the Board of Supervisors works strictly in line with , , , implements seriously the resolutions made by the General Meetings of Shareholders, and perfects continuously internal administration and control mechanisms. The decisions of the Company can progress strictly in conformity with legal procedures. All the Directors and senior managers run their duties with honesty, diligence, earnestness, and no behaviors have been found among them violating laws, regulations or articles of association of the Company, nor acts infringing rights and interests of the Company and its shareholders. 3. Independent opinion on accounting affairs of the Company The Company runs perfect accounting system and standardized financial administration. The financial statements objectively and truly reflect the Company’s financial status and operation achievements. Shulun Pan Certified Public Accountants Co., Ltd. offered a clear - 21 - audit report, which gives a true, objective and accurate view of the Company’s financial position and the results of its operations. 4. Independent opinion on utility of collected capital of the Company The Board of Supervisors checked the real utility of collected capital of the Company and confirmed the basic identity of real utility and the original proposal. 5. Independent opinion on acquisition and sale of assets of the Company The acquisition and sale of assets of the Company is based on fair price. The Board of Supervisors found no behind-the-scene deals or behaviors harming the benefits of the Company and its shareholders. 6. Independent opinion on affiliated transactions of the Company The affiliated transactions of the Company are executed strictly under related regulations and norms of the country and the , in line with the principles of openness, equality and fairness. The Board of Supervisors considers the transactions in keeping with the marketing rules and current situation of the Company. - 22 - Chapter X. Significant Events 1. Important arbitration and litigation proceedings Because of normal operations, the Company contracted mutual guarantee relationship with Shanghai Worldbest Industry Development Co., Ltd. (Worldbest Development). Till the end of 2006, the balance of borrowings from China Construction Bank Shanghai Branch (CCB SH) and Shenzhen Development Bank Shanghai Branch (SDB SH) was of RMB 118,487,600. Worldbest Development offered 95% equity of Jiangxi Xinyu Worldbest Far East Textile Co., Ltd. and 88.53% equity of Shanghai Worldbest Jerseys Co., Ltd. as counter-mortgage tender for the Company. Under the reason that Worldbest Development didn’t repay the borrowings on time, CCB SH and SDB SH launched lawsuits at Shanghai No. 1 Intermediate People’s Court (SH No.1 Inter. Court), claiming that the Company should complete the obligation as guarantor and repay the principal and interest totaled RMB 139,128,000 for Worldbest Development. SDB SH claimed litigation preserving acts for its litigation object totaled RMB 22,408,000 (the principal RMB 18,488,000), sealing up some equity in the Company’s stock account and some of its banking accounts. SH No.1 Inter. Court has accepted the case and scheduled the hearing for September 11, 2007. On September 25, 2007, the same Court acted the first instance result, charging the Company to repay the principal RMB 18,487,582 and the interest to SDB SH and claim recoupment to Worldbest Development. The Company lodged an appeal to the Higher People’s Court of Shanghai (Higher Court SH), which accepted the lawsuit on September 30, 2007. CCB SH claimed litigation preserving acts for its litigation object totaled RMB 11,672,000 (the principal RMB 100,000,000), sealing up the production land piling of the Company. SH No.1 Inter. Court has accepted the case and scheduled the hearing for August 7, 2007. On December 13, 2007, the same Court acted the first instance result, charging the Company to fulfill the joint liability responsibility. The Company lodged an appeal to the Higher People’s Court of Shanghai (Higher Court SH), which accepted the lawsuit on January 2, 2008. Without informing and getting the permission of the Company, Worldbest Development sold 95% equity of Jiangxi Xinyu Worldbest Far East Textile Co., Ltd., which served as counter-mortgage tender of rights for the Company, to Xinyu State-owned Assets Supervision & Administration Commission (XY S&A Commission). XY S&A Commission developed an open integral equity transfer through Jiangxi Assets and Equity Exchange. The Company has launched a litigation of properties and assets at Shanghai No. 1 Intermediate People’s Court, claiming invalid the transfer agreement. SH No.1 Inter. Court accepted the lawsuit, but XY S&A Commission claimed a jurisdiction objection at the Higher People’s Court of Shanghai. The Higher Court SH rejected the appeal and sustained the original judgment. On February, 2008, the hearing was held in SH No.1 Inter. Court. On March 27, 2008, the Company reached agreement with Worldbest Development, who promised to offer 23.715% equity of Zhangjiagang Middle East Petrochemical Industrial Co., Ltd. and 35.3259% equity - 23 - of Jiangsu Yalu Industrial Co., Ltd. as substitution of the original tender of rights. (The related lawsuits’ progress was disclosed in the announcements 2007-024, 026, 028 and 2008-002.) On the disclosure of current report, the negotiation between the Company and CCB SH, SDB SH was still in progress. 2. Acquisition/sale of assets, M&A during report year (1) The 2006 Annual General Meeting of Shareholders agreed to transfer the land parcels located at No. 519, 573 and 647, East Long Hua Road, with the properties adhered (land area 13.47 mus and housing area 16,824.53 m2) to Shanghai Luwan Land & Properties Development Center at a price no lower than RMB 95,641,000. According to the agreement, the Company received partially the compensation of RMB 75,000,000 during report year. (2) The 10th meeting of the Fifth Board of Directors considered and approved that Shanggong (Europe) Holding Co., Ltd. (SG Europe) acquired 385,400 shares, 4.7% of Durkopp Adler’s equity, at a price of € 47,000 (€ 0.122 per share) from Shanghai International Holding Corp. Europe, and acquired 16,400 shares, 0.2% of DA’s equity, at a price of € 2,500 (€ 0.152 per share) from Fact Verwal tungs-und Beratungsge sell schaft mbH. After these acquisitions, SG Europe holds 7,776,223 shares, 94.832% equity of Durkopp Adler AG. (3) The 12th meeting of the Fifth Board of Directors discussed and agreed that Durkopp Adler Trading (Shanghai) Co., Ltd., with purpose of resources’ integration, could acquire 100% equity of Durkopp Adler Far East Co., Ltd. HK at a price of USD 500,000. Till the end of report year, the acquisition is in progress. 3. Significant affiliated transactions during report year (1) Significant affiliated transactions of assets and stock equity The 14th meeting of the Fifth Board of Director and the 2007 First Provisional General Meeting of Shareholders considered and approved the Company to acquire 10% equity of SMPIC from PSASAC. This equity transfer will be helpful to the industrial restructure of the Company, improve its investment profits and enhance its earning ability. According to the appraisal report (HCRPB2007-3-080) by Shanghai Cairui Assets Appraisal Co., Ltd., taking December 31, 2006 as evaluation date, the shareholders’ equity of SMPIC totaled RMB 525,279,448.15. The Company paid with its own funds RMB 52,527,900 for the acquisition on December 28, 2007. (2) Creditor rights and debts with affiliated parties The Company didn’t assume any creditor rights or debts with affiliated parties during report year. - 24 - 4. Information about intrusting affairs The Company didn’t entrust its assets to other companies during report year. 5. Information about contract affairs The Company didn’t contract its assets to other companies during report year. 6. Information about lease affairs The Company didn’t lease its assets to other companies during report year. 7. Information about guarantee cases RMB’000 Company Incurred date Guaranteed Relationship Valid period Com- Affiliat- (dd/mm/yy) amount pleted ed-party or not guarante e or not Shanghai Worldbest Industry 11/11/2004 30,000 Joint-Liability 11/11/2004- No No Development Co., Ltd. Guarantee 09/11/2005 Shanghai Worldbest Industry 29/03/2005 8,490 Joint-Liability 29/03/2005- No No Development Co., Ltd. Guarantee 29/09/2005 Shanghai Worldbest Industry 27/05/2005 10,000 Joint-Liability 27/05/2005- No No Development Co., Ltd. Guarantee 23/05/2006 Shanghai Worldbest Industry 13/06/2005 10,000 Joint-Liability 13/06/2005- No No Development Co., Ltd. Guarantee 29/09/2005 Shanghai Worldbest Industry 06/06/2005 30,000 Joint-Liability 06/06/2005- No No Development Co., Ltd. Guarantee 01/06/2006 Shanghai Worldbest Industry 14/07/2005 30,000 Joint-Liability 14/07/2005- No No Development Co., Ltd. Guarantee 04/07/2006 Shanghai Pudong Development 09/06/2006 168,120 Joint-Liability 09/06/2006- No No (Group) Co., Ltd. Guarantee 08/06/2008 Guarantee sum incurred in report year 0 Remaining sum at end of report year 286,610 Guaranties for subsidiary undertakings Guarantee sum incurred in report year 50,000 Remaining sum at end of report year 222,050 Total guarantee amount (guaranties for subsidiary undertakings included) Total guarantee amount incurred 508,660 Proportion in the net assets Including: Guarantee for holding shareholder, real controller 0 and their affiliated parties Direct or indirect guarantee for organizations 290,540 whose assets-liabilities ratio is more than 70% Exceedance of total guarantee amount than the half 0 of the net assets Total guarantee amount under these three items 290,540 (1) The Company contracted mutual credit guarantee relationship with Shanghai Worldbest Industry Development Co., Ltd. At end of report year, the Company acted as guarantor for six borrowings of Shanghai Worldbest Industry Development Co., Ltd., with an overdue amount of RMB 118,490,000. The Company is taking active measures to dispose the lawsuits caused by the joint liability guarantees. - 25 - (2) According to related articles in the equity acquisition agreement signed with FAG Kugelfischer AG (FAG), the Company should take certain joint-liability responsibility for the following affairs: ① Besides the payment of € 949,821 for equity acquisition of Durkopp Adler AG, Shanggong (Europe) Holding Co., Ltd. (SG Europe), wholly-owned subsidiary of the Company, should bear the banking loans of DA’s original shareholders valued € 36,525,132.28. As at end of 2005, SG Europe had paid all the equity acquisition consideration and € 9,482,436.84 for banking loans. As originally agreed, the rest banking loans around € 27,042,695.44 would be covered with equal payment in nine years at an interest rate of 6% every June 30 since the year 2005. The Company assumed joint-liability responsibility for the equity acquisition, as well as the banking loans and interests. But the guarantee for banking loans and interests was maximum 50% of actual amount and € 12,500,000.00. Till the end of report year, SG Europe had paid first-period principal of banking loans € 3,004,743.94 for FAG, with the remaining amount to be € 24,037,951.50. ② In 2005, the Company offered a letter of guarantee valued USD 5,300,000 to FAG Kugelfischer AG for the housing lease contract of DA’s subsidiary in the United States, valid from June 30, 2005 to October 31, 2015. On the same day June 30, 2005, SG Europe offered a cash mortgage of € 635,000 to FAG (with the same period of validity) for re-guaranteeing the latter’s responsibility in the sale and lease-back deal between DA’s subsidiary and UTF Norcross L.L.C. Till December 31, 2007, this guarantee deal didn’t cause outflow of economic interest from the Company. 8. Information about trust investment The Company didn’t contract trust investment during report year. 9. Other significant contracts The Company didn’t sign other significant contracts during report year. 10. Fulfillment of the commitments by the Company or the shareholders taking 5% or more of the Company’s stock right Shanghai Pudong New Area State-owned Assets Supervision and Administration Commission, shareholder with more than 5% stock right of the Company, can fulfill strictly the promises it has made during reform of non-tradable shares. 11. Engagement and dismissal of accounting firms - 26 - During report year, the Company newly contracted Shulun Pan Certified Public Accountants Co., Ltd. as auditor of annual reports. The year 2007 is the first year that Shulun Pan in charge of the Company’s audit services. In current year, the Company paid RMB 750,000 to Shulun Pan Certified Public Accountants Co., Ltd. as auditor fee (RMB 640,000 in anterior year to BDO Shanghai Zhonghua Certified Public Accountants), RMB 0 for specific affairs auditor service, and RMB 97,463 as subsidy of accommodation and transportation (RMB 8,000 in the previous year to BDO Shanghai Zhonghua Certified Public Accountants). 12. Punishment upon the Company, its BOD, Directors, Supervisors, senior managers, shareholders, or the real controller, and the correction measures (1) During the report year, the Board of Directors, the Directors, or the Company itself, had neither received any check, administration punishment or criticism notice from China Securities Regulatory Committee, nor been publicly condemned by Shanghai Stock Exchange. (2) During report year, under the spirit of , China Securities Regulatory Commission Shanghai Bureau realized a spot inspection on September 18 & 19, 2007, and issued (HZJGSZ2007-442). On October 29, 2007, the Company received from Shanghai Stock Exchange. With high attention to this point, the Company organized the Directors, Supervisors and senior managers to study the and , and elaborated article by article the measures in line with , and . The 13th meeting of the Fifth Board of Directors considered and approved these measures (resolutions for Announcement 035 in and dated October 31, 2007). 13. Other significant events On March 3, 2008, the 15th meeting of the Fifth Board of Directors considered and approved the transfer of some Directors and senior managers. Because of job change, Mr. Chang Jiang no longer took the duty as member of BOD. The Company proposed to supplement Mr. Alfred Wadle and Mr. Ju Weifeng as candidates of Director and Mr. Shi Liangping as Independent Director. This proposal would be submitted to the consideration of General Meeting of Shareholders. As nominated by General Manager Ma Minliang, the Company had Ms. Meng Xiangyun as Accounting Director and leader of accounting affairs. Ms. Xu Xiaohui no longer took the duty as Accounting Director. - 27 - 14. Other significant events, their impacts and the resolution proposals (1) Investment in stock exchange RMB’ Type Code Number Initial Quantity Year-end Prop. in investment Current investment of shares book value in stock exchange profit/loss Funds HuaAn A 160402 100,000.00 121,818.65 550,498.48 100% 333,853,42 Profit/loss current-year sale of investment - - - - 69,099.93 Total 100,000.00 - 550,498.48 100% 402,953.35 (2) Stock equity of other listed companies held by the Company RMB’ Code Entity Initial Prop. in Year-end Profit Change in Account title Origin of investment the book value /loss shareholder equity invested equity company 600637 SVA Info. 67,600.00 D7 2007-01-05 http://www.sse.com.cn BOD B3 Official website of Shanghai Stock Exchange Transfer of properties D7 2007-01-05 http://www.sse.com.cn B3 Official website of Shanghai Stock Exchange Transfer of properties D7 2007-01-05 http://www.sse.com.cn B3 Official website of Shanghai Stock Exchange Transfer of properties by subsidiary D7 2007-01-05 http://www.sse.com.cn B3 Official website of Shanghai Stock Exchange Transfer of properties D7 2007-01-05 http://www.sse.com.cn B3 Official website of Shanghai Stock Exchange Announcement on the estimated profit D7 2007-01-05 http://www.sse.com.cn B3 Official website of Shanghai Stock Exchange Resolutions by the 5th meeting of the Fifth D15 2007-02-13 http://www.sse.com.cn BOD B3 Official website of Shanghai Stock Exchange Reception of special subsidies B6 2007-03-08 http://www.sse.com.cn B8 Official website of Shanghai Stock Exchange Transfer of senior managers 39 2007-03-24 http://www.sse.com.cn B4 Official website of Shanghai Stock Exchange Affiliated transaction acquiring 10% 54 2007-04-21 http://www.sse.com.cn equity of SMPIC from PSASAC B4 Official website of Shanghai Stock Exchange Resolutions by the 4th meeting of the Fifth 54 2007-04-21 http://www.sse.com.cn Supervisory Board B4 Official website of Shanghai Stock Exchange Resolutions by the 7th meeting of the Fifth 39 2007-04-28 http://www.sse.com.cn BOD B4 Official website of Shanghai Stock Exchange Resolutions by the 8th meeting of the Fifth 27 2007-06-02 http://www.sse.com.cn BOD B10 Official website of Shanghai Stock Exchange Disposal of the land parcels at No. 519, 27 2007-06-02 http://www.sse.com.cn 573, 647, East Long Hua Road B10 Official website of Shanghai Stock Exchange Notice for convening 2006 Annual 27 2007-06-02 http://www.sse.com.cn General Meeting of Shareholders B10 Official website of Shanghai Stock Exchange Repayment of consideration by the 27 2007-06-02 http://www.sse.com.cn shareholders of equity subject to B10 Official website of conditional sales Shanghai Stock Exchange Announcement on the abnormal 27 2007-06-02 http://www.sse.com.cn fluctuation of stock price B10 Official website of Shanghai Stock Exchange Circulation of shares subject to A14 2007-06-11 http://www.sse.com.cn conditional sales Official website of Shanghai Stock Exchange Estimation of profit increase during the D13 2007-06-20 http://www.sse.com.cn first half of report year B5 Official website of Shanghai Stock Exchange Announcement on the abnormal D5 2007-06-22 http://www.sse.com.cn fluctuation of stock price A9 Official website of Shanghai Stock Exchange Resolutions by 2006 Annual General D31 2007-06-26 http://www.sse.com.cn Meeting of Shareholders A10 Official website of Shanghai Stock Exchange Resolutions by the 9th meeting of the Fifth 34 2007-06-30 http://www.sse.com.cn BOD B7 Official website of Shanghai Stock Exchange Announcement D13 2007-07-11 http://www.sse.com.cn B4 Official website of Shanghai Stock Exchange Dispute issues about guarantee D24 2007-08-02 http://www.sse.com.cn agreements A11 Official website of Shanghai Stock Exchange Change of counter-guarantee tender by D24 2007-08-02 http://www.sse.com.cn - 29 - Shanghai Worldbest Industry A11 Official website of Development Co., Ltd. Shanghai Stock Exchange Announcement on the abnormal D24 2007-08-02 http://www.sse.com.cn fluctuation of stock price A11 Official website of Shanghai Stock Exchange Announcement 18 2007-08-04 http://www.sse.com.cn B6 Official website of Shanghai Stock Exchange Resolutions by the 10th meeting of the D42 2007-08-28 http://www.sse.com.cn Fifth BOD B3 Official website of Shanghai Stock Exchange Resolutions by the 6th meeting of the Fifth D42 2007-08-28 http://www.sse.com.cn Supervisory Board B3 Official website of Shanghai Stock Exchange Resolutions by the 11th meeting of the D18 2007-09-04 http://www.sse.com.cn Fifth BOD B7 Official website of Shanghai Stock Exchange Repayment of consideration by the 23 2007-09-29 http://www.sse.com.cn shareholders of equity subject to B5 Official website of conditional sales Shanghai Stock Exchange Reminder announcement about circulation D20 2007-10-09 http://www.sse.com.cn of shares subject to conditional sales B5 Official website of owned by China Orient Assets Shanghai Stock Exchange Management Co. Resolutions by the 12th meeting of the 42 2007-10-27 http://www.sse.com.cn Fifth BOD A9 Official website of Shanghai Stock Exchange Resolutions by the 13th meeting of the D58 2007-10-31 http://www.sse.com.cn Fifth BOD B5 Official website of Shanghai Stock Exchange Resolutions by the 14th meeting of the D10 2007-11-27 http://www.sse.com.cn Fifth BOD B7 Official website of Shanghai Stock Exchange Notice for convening 2007 First D10 2007-11-27 http://www.sse.com.cn Provisional General Meeting of B7 Official website of Shareholders Shanghai Stock Exchange Resolutions by 2007 First Provisional D14 2007-12-14 http://www.sse.com.cn General Meeting of Shareholders B5 Official website of Shanghai Stock Exchange Resignation of Mr. Gong Longyun from D27 2007-12-18 http://www.sse.com.cn position of Independent Director B5 Official website of Shanghai Stock Exchange - 30 - Chapter XI. Financial Statements by the Auditor The 2007 Annual Report of the Company has been audited by Dai Dingyi and Zhang Qi, certified public accountants of Shulun Pan Certified Public Accountants Co., Ltd., who offers a clear audit opinion for the current Annual Report. The Audit Report, financial statements and financial annotations are carried in the attachments. - 31 - Chapter XII. For Reference 1. Financial Statements signed by the legal representative, chief accountant and accounting manager 2. Original audit report signed by the certified public accountants and sealed by the accounting firm 3. Original documentation and announcements about the Company, carried in the newspaper assigned by China Security Regulatory Committee within the report year If the English Version of this Annual Report involves any differences from the Chinese Version, the latter shall be effective. - 32 - Attachments: 1. Audit Report 2. Financial Statements Balance sheet, consolidated Profit/loss statement, consolidated Cash flow statement, consolidated Owners’ equity statement, consolidated Balance sheet, parent company Profit/loss statement, parent company Cash flow statement, parent company Owners’ equity statement, parent company 3. Financial Annotations - 33 - Auditor’s Report: XinKuaiShiBaoZi (2008) No. 11268 To the Board of Directors of SGSB Group Co., Ltd. We have audited the accompanying financial statements of SGSB (Group) Co., Ltd. (hereafter referred to as SGSB) as of 31 December 2007, including the Company’s balance sheet, profit/loss and profit distribution statements, statement of changes in owners’ equity, cash flow statements, together with their consolidated versions, and related annotations for the year then ended. (1) Responsibility of the Company’s management Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with the rules and regulations in . This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. (2) Responsibility of the certified public accountants Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with PRC Independent Standards on Audit for Certified Accountants. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. (3) Audit opinion In our opinion, the consolidated financial statements of the Company present fairly, in all - 34 - material respects, the financial position of the Group as of 31 December 2007 and the results of its operations, its cash flows and the changes in owners’ equity for the year then ended, in accordance with the regulations of “Accounting Norms for Business Enterprises” and “Accounting System for Limited Companies”. Shulun Pan Certified Public Accountants Co., Ltd. Dai Dingyi PRC Certified Public Accountant Zhang Qi PRC Certified Public Accountant Shanghai, PRC, 18 April 2008 - 35 - Annotations to Financial Statements 1. General information SGSB Group Co., Ltd. (the Company), joint stock limited company with publicly issued A & B shares on Shanghai Stock Exchange, is the first listed company in the sewing machinery sector of People’s Republic of China. The Company got the Corporate Business License authorized by local administration of industry and commerce in April, 1994. The Company, with register capital of RMB 448,886,777, has 1201 Luoshan Road, Pudong New Area, Shanghai PRC as register address, and Mr. Zhang Min as legal representative. The Company is mainly engaged in the manufacture and sales of industrial sewing machines and equipment, with more than 10 major categories of products with a total of 21 series and over 100 different varieties of sewing machines, including high speed lockstitch sewing machines, high speed overlock sewing machines, leather products sewing machines, bartacking sewing machines, bag closing sewing machines, button hole sewing machines and other specialized sewing equipment. Almost all its products are marked with the five registered trademarks “Shanggong”, “Shuanggong”, “Butterfly”, “Bee” and “Flying Man”. During recent years, the Company pays priority to the R&D of new sewing machinery products. Particularly after the acquisition of Durkopp Adler AG (public listed company in Germany) in 2005, the Company has been availing the advanced technology of Durkopp Adler to realize the upgrade and development of the products’ structure, and moving gradually the production of DA’s products which are popular in Asian market to Chin with purpose of satisfying the growing demand of customers for auto-running sewing machines. At the meantime, the Company has also expanded its business in recent years, and entered material transmission equipment, office appliances, sensitive films, international trade and logistic industries. On May 22, 2005, the General Meeting of Shareholders considered and approved the non-tradable equity reform proposal, whose core content is that the non-tradable equity stockholders pay partially their shares to all the tradable equity shareholders at a ratio of 10:6 as consideration of getting tradable rights. After the payment, the total number of shares remains unchanged, but the equity structure has changed as following: as at Dec 31, 2007, the total number of shares is of 448,886,777, including 87,275,319 shares, 19.44% of total equity, subject to conditional sales, and 361,611,458 unconditionally tradable shares, 80.56% of total equity. 2. Principal accounting policies, estimations and early errors 2.1 Declaration about the adoption of “Accounting Standards for Business Enterprises” The financial statements and annotations prepared by the Company, strictly under the guideline of “Accounting Standards for Business Enterprises”, reflect truly and integrally the information such as financial status, business achievements and cash flows of the Company. 2.2 Basis used for the preparation of the financial statements - 36 - Based on the sustainable operation and according to really occurred transactions and affairs, the Company adopts “Accounting Standards for Business Enterprises-Basic Standards” and related additional regulations in the preparation of its financial statements. Among the year-beginning balance in the balance sheet and the comparative profit/loss statement, the items which the articles 5 to 19 of require to be adjusted retroactively are prepared under retroactive adjustment approach following the notices ZJF2006-136 and ZJKJZ2007-10. 2.3 Accounting Calendar The Company adopts the Gregorian calendar and defines every accounting year as beginning at January 1 and ending at the same December 31. 2.4 Measurement currency The Company maintains its books and records in Renminbi (RMB). 2.5 Adoption of accounting measurements changed during report year Generally, the Company adopts historical cost convention for the preparation of its statements. In line with accounting systems for business enterprises, replacement cost, net realizable value, present value or fair value could be adopted for some accounting elements whose value can be reliably obtained and measured. 2.5.1 Accounting measurements of fair value Under the fair value measurement, the assets/liabilities are accounted at the price taken in a fair transaction between both parties who understand well the situation and are willing to exchange assets or liquidate liabilities. The accounting elements adopting fair value measurement are trading financial assets and financial assets available for sale. The Company adopts the last-trading-day closing price in report year as fair value of related assets. 2.5.2 Accounting measurements changed during report year There are no changes in accounting measurements during report year. 2.6 Cash equivalent For the purpose of the cash flow statement, cash equivalent comprises short-term investments with maturity within three months that are characterized with active fluidity, easy to transfer to realizable value and less risky for value fluctuation. 2.7 Foreign currency calculation Foreign currency transactions are translated into the measurement currency using the spot exchange rate prevailing at the date of the transaction. The balance of foreign currency monetary items is adjusted and translated into measurement currency at balance sheet date using the spot exchange rate. The foreign currency non-monetary items at fair value are adjusted and translated into measurement currency at adoption date of fair value using the spot exchange rate. Regarding the year-end differences of translation in foreign currency special borrowing accounts, those under the acquisition, building or production of assets to be capitalized are capitalized and accounted into related assets cost, and other differences are - 37 - accounted into financing expenses. The difference of translation between different currencies is accounted into financing expenses. 2.8 Calculation of financial assets 2.8.1 Classification of financial assets The Company classifies the financial assets by their purposes: financial assets at fair value and accounted into current profit/loss (for example, tradable financial assets); held to maturity investments; loans and receivable accounts; financial assets available for sale and other financial liabilities. 2.8.2 Definition and measurement of financial assets 2.8.2.1 Financial assets at fair value and accounted into current profit/loss The fair value (less than cash dividend to be distributed and bonds interest to be received) of the assets on the acquisition should be adopted as initial recognized value, and related transaction expenses should be accounted into current profit/loss. The interests and cash dividend received should be recognized as investment income during the period, and the difference of fair value between initial and spot dates should be accounted into current profit/loss. On the disposal of the assets, the difference between the obtained price and the book value of investment should be recognized as investment income, and the accumulated fair value profit/loss should be accordingly adjusted. 2.8.2.2 Held to maturity investments The fair value (less than bonds’ interests to be received) of the assets on the acquisition, together with the transaction expenses, should be adopted as initial recognized value. During the holding period, the interest income should be recognized on basis of amortized cost and real interest rate (fixed on the acquisition and unchangeable during the period) and accounted into investment income. The difference between the sale price and its book value are to be accounted into investment profit/loss on the disposal of the assets. 2.8.2.3 Receivable accounts and loans The contract price charged to the buyers should be recognized as initial value for those receivable accounts which mainly composes of the receivable creditor’s right caused by the sale of goods and the providing of labor services, and receivables in other companies excluding debt instruments priced in active markets, includes but not limits in receivable bills, receivable accounts, other receivables, prepayments and long-term receivables. The differences between sale value and book value should be accounted into current profit/loss on its recovery or disposal. 2.8.2.4 Financial assets available for sale The fair value (less than cash dividend to be distributed and bonds’ interest to be received) and relevant transaction expenses of the assets on the acquisition should be adopted as initial recognized value. The interests and cash dividend received should be recognized as investment income during the period, and the difference of fair value between initial and spot dates should be accounted into capital reserve (other capital reserve). On the disposal of the assets, the difference between fair value and initial value should be recognized as investment profit/loss, and the accumulated variance of fair value caused by the disposal should be simultaneously moved from shareholders’ equity to investment profit/loss. - 38 - 2.8.2.5 Other financial liabilities The Company adopts the fair value and relevant transaction expenses as initial recognized value and takes amortized cost for subsequent measurement. 2.8.3 Recognition and measurement of the financial assets transfer On the transfer of financial assets, these assets should be no longer recognized if nearly all the risks and rewards relating to the ownership have been transferred to the transferee; if in contrary cases, they should be still recognized as financial assets of the Company. The principle of “Substance over Form” is adopted in judging the termination or not of recognizing financial assets. The transfer of financial assets is also divided into two cases: entire transfer and partial transfer. If the transfer of an entire financial asset satisfies the conditions for stop recognition, the difference between the amounts of the following 2 items shall recorded in the profits and losses of the current period: (1) The carrying amount of the transferred financial asset; (2)The aggregate consideration received from the transfer, and the accumulative amount of the changes of the fair value originally recorded in the owner’s equities (in the event that the financial asset involved in the transfer is a financial asset available for sale). If the transfer of partial financial asset satisfies the conditions for stopping recognition, the carrying amount of the entire financial asset transferred shall, between the portion whose recognition has stopped and the portion whose recognition has not stopped (under such circumstance, the service asset retained shall be deemed as a portion whose recognition has not stopped), be allocated at their respective relative fair value, and the difference between the amounts of the following 2 items: (1) The carrying amount of the portion whose recognition has stopped; (2) The aggregate consideration of the portion whose recognition has stopped, and the portion of the accumulative amount of the changes in the fair value originally recorded in the owner’s equities which is corresponding to the portion whose recognition has stopped (in the event that the financial asset involved in the transfer is a financial asset available for sale). The Company should recognize financial assets and recognize the reception of consideration as financial liabilities in case the transfer of these financial assets doesn’t satisfy the definition of termination. 2.8.4 Definition of fair value of financial assets and liabilities The Company adopts the year-end quotations in active markets as fair value of financial assets and liabilities. 2.8.5 Depreciation reserves for financial assets (1) Depreciation reserves for financial assets available for sale At end of report year, the accumulated loss caused by the fair value decrease should be reclassified from the original item of owners’ equity and recognized as impairment loss in case the fair value of financial assets available for sale has decreased significantly or the decrease trend is considered to be non-temporary under all the related conditions. (2) Depreciation reserves for held to maturity investments The impairment loss of held to maturity investments is calculated in the light of the treatment of accounts receivable’s depreciation. 2.9 Recognition and accruement of provision for bad debt in accounts receivable - 39 - At end of report year, when objective evidences show that the accounts receivable are depreciated, the book value of these accounts receivable should be accounted into recoverable sum and the decrease should be recognized as impairment loss of current profit/loss. The recoverable sum should be calculated through the estimation of future cash flows (not including credit loss not occurred yet) discounted at original real interest rate and the price of related guarantee (after estimated disposal expenses). The original real interest rate means the real interest rate at the original recognition of the accounts receivable. The estimated future cash flow of short-term accounts receivable shouldn’t be discounted at the calculation of their impairment loss for the minor difference between their present value and future cash flow. At end of period, the Company takes individual depreciation test for those significant receivable accounts (including accounts receivable, bills receivable, prepayments, other receivables and long-term accounts receivable), determines the impairment loss and makes provision for bad debts based on the difference between their future cash flow value and book value. Significant receivable accounts refer to those accounts which are top five big-ticket accounts receivable or other receivables. For those insignificant receivable accounts, the Company classifies them as several groups whose credit risk level is similar to those individually tested non-depreciation accounts, and determines the impairment loss and makes proportional provision for bad debts based on the end-of-period balance. Except those accounts receivable whose depreciation reserves have been individually accrued, the Company determines the following proportion of provision for bad debts based on the actual loss ratio of the anterior-periods receivable accounts with similar credit risk, and the consideration of actual situations: Age distribution Provision proportion Within one year 5% 1-2 years 20% 2-3 years 50% Over 3 years 100% 2.10 Accounting of inventories 2.10.1 Classification of inventories The inventories of the Company comprise: materials in transit, raw materials, inventory products, finished products, work in progress, material in outside processing, etc. 2.10.2 Inventory pricing method on their delivery (1) Inventory products are accounted with weighted average method on their delivery. (2) Amortization of circulating materials: the treatment of low value articles and packing materials adopts one-off amortization method. 2.10.3 Inventory system The Company adopts perpetual inventory system to take periodic or non-periodic inventory checkup. 2.10.4 Provision for depreciation reserves of inventories The Company takes inventory checkup at end of each accounting period, and states or adjusts depreciation reserves of inventories at the lower of cost or net realizable value. During normal production, the cash realizable value of inventories directly for sale, such as products, merchants and materials for sale is accounted by the estimated price less the estimated - 40 - sales expenses and taxes. During normal production, the cash realizable value of materials to be processed is accounted by the estimated price of finished product less the estimated cost, sales expenses and taxes. For those inventories with purpose of implementing sales contract or labor contract, the cash realizable value is based on the contract price; if the inventories held more than fixed in the contract, the cash realizable value of surplus part is accounted based on the market price. At end of report year, the Company accrues individual provision for depreciation reserves of the inventories. In case of low-cost and numerous-in-variety inventories, the Company classifies the provision for depreciation of each kind of inventories. And the Company consolidates the provision for depreciation of those inventories related to the production and sales of products in the same region, with the same or similar utilization and purpose, and difficult to calculate separately. In case the factors impacting the write-down of the inventories’ value disappear, the write-down amount should be recovered and the according provision of impairment should be returned to current profit/loss. 2.11 Classification and measurement of investment real estate Investment real estate refers to the real estate held with purpose of rent earning, capital gaining or both of them, including land user which has been rented out or is held for transference after capital appreciation, and buildings which has been rented out. The Company adopts cost calculation mode for measurement of investment real estate. On calculating the depreciation, the Company adopts the same policy of fixed assets for measurement of investment real estate and assets for rent, and the same policy of intangible assets for measurement of right of land use for rent. On appearance of evidence for depreciation, the Company estimates the recoverable value and defines the impairment loss when the recoverable value is lower than its book value. 2.12 Calculation and depreciation of fixed assets 2.12.1 Definition of fixed assets The fixed assets of the Company refer to those tangible assets with service life more than one year and related to production, labor services, for lease or management. The Company recognizes the fixed assets when they meet the following conditions: (1) The economic benefits pertinent to the fixed asset are likely to flow into the enterprise; and (2) The cost of the fixed asset can be measured reliably. 2.12.2 Classification of fixed assets The fixed assets of the Company are composed of house and construction, machinery and equipment, motor vehicles, electronic equipments, office equipment and other equipments. 2.12.3 Initial measurement of fixed assets The initial measurement of a fixed asset shall be made at its real cost. The cost of a purchased fixed asset consists of the purchase price, the relevant taxes, freights, loading and unloading fees, professional service fees and other expenses that bring the fixed asset to the expected conditions for use and that may be relegated to the fixed asset. The cost of a self-constructed fixed asset shall be formed by the necessary expenses incurred for bringing the asset to the expected conditions for use. The book value of the fixed assets acquired as debt assets through the recombination of liabilities shall be accounted on basis of the fair value of the fixed assets, and the difference between the - 41 - book value of recombined liabilities and the fair value of debt assets should be accounted into current profit/loss. Under the conditions that the exchange of non-monetary assets is characterized with business essence, and the fair value of the assets received or surrendered can be accounted in a reliable way, the book value of assets received is defined on basis of the fair value of assets surrendered, except there are conclusive evidences for the stronger reliability of the fair value of assets received. For the exchange of those non-monetary assets not meeting the above premises, the book value of assets surrendered and related taxes should be accounted as cost of assets received and the profit/loss shouldn’t be concluded. The book value of the fixed assets acquired through merger of enterprises under the same control should be accounted at the book value of the merged enterprise. The book value of the fixed assets acquired through merger of enterprise not under the same control should be accounted at the fair value of the acquired assets. 2.12.4 Provision for depreciation of fixed assets The provision for decrease in value of fixed assets, except those with special approval, is made with straight-line method, with consideration of the category of the assets, their estimates of service life and net salvage. The fixed assets fit-up fee eligible for capitalization should be accrued individually in straight-line method adopting the shorter period between two fit-ups and the remaining service life. The estimated service life and depreciation rate of fixed assets by category is as following: Category Service year Annual rate of depreciation House and construction 20-50 1.8% - 4.5% Machinery and equipment 5-15 6% - 18% Motor vehicles 5-10 9 % - 18% Electric appliances 5-10 9-18% Fixtures Rational beneficial period -- Others 5-10 9% - 18% 2.13 Accounting of construction in progress 2.13.1 Category of construction in progress The Company distinguishes the characteristics of each construction in progress in their real cost accounting. 2.13.2 Standards and conversion date from construction in progress to fixed assets The book value of construction in progress is accounted into fixed assets at all the expenses occurred before the build-up of such assets available for intended use. After available for intended use but before the final settlement, the built-up fixed assets are accounted at estimated value and accrued under the depreciation policy of fixed assets based on construction’s budget, cost or real cost. After the settlement, the Company should adjust the provisional estimate by real cost, but not the accrued. 2.14 Calculation of intangible assets 2.14.1 Pricing of intangible assets The Company accounts its intangible assets at their real acquisition cost. The intangible assets shall be initially measured according to its cost. The cost of outsourcing intangible assets shall include the purchase price, relevant taxes and other necessary expenditures directly attributable to intangible assets for the expected purpose. Where the payment of - 42 - purchase price for intangible assets is delayed beyond the normal credit conditions, which is of financing intention, the cost of intangible assets shall be determined on the basis of the current value of the purchase price. The book value of the intangible assets acquired through merger of enterprises under the same control should be accounted at the book value of the merged enterprise. The book value of the intangible assets acquired through merger of enterprise not under the same control should be accounted at the fair value of the acquired assets. 2.14.2 Service life and amortization of intangible assets (1) Estimate of service life for the intangible assets with limited life Classification Service life Land use right 50 years Others 10 years At end of report year, the Company should recheck the service life and amortization method of the limited-life intangible assets. The recheck in current period shows that there is no difference in the estimate of service life and adoption of amortization method. (2) Amortization of intangible assets The intangible assets with limited service life should be amortized by straight-line method during the period when the intangible asset can bring economic benefits to the enterprise. If it is unable to forecast the period when the intangible asset can bring economic benefits to the enterprise, it shall be regarded as an intangible asset with uncertain service life and not be amortized. The cost of intangible asset formed during internal development activities consists of the materials, labor cost, register fee, amortization of other patents and franchise right during development period, interests paid for capitalization, and other direct expenses before the intangible assets available for intended use. The internal development fee shall be collected into R&D expenditure on occurrence, converted into administrative expenses at end of year, and into intangible assets on available for intended use. 2.14.3 Division standards for research stage and development stage during R&D The R&D cost of internal projects, during development stage, is defined as intangible assets when satisfying the following conditions: (1) The completion of such intangible assets for use or sale is technically feasible. (2) The Company has the intention to use or sell the intangible assets after their completion. (3) The method in which the intangible assets bring economic benefits shows that there exists consumption market for the products with use of these intangible assets or the intangible assets themselves, or that they are useful in case of internal utilization. (4) The Company has sufficient technological, financial and other resources to complete the R&D of the intangible assets and the ability to make them available for use or sale. (5) The Company can measure in reliable way the expense of such intangible assets during the development stage. 2.15 Depreciation of other main assets except inventories, investment real estate and financial assets 2.15.1 Long-term equity investment For the long-term investments on stocks accounted with cost method, whose quotation can’t be found in active market and fair value can’t be precisely evaluated, the - 43 - impairment loss is determined on basis of the difference between book value and present value defined by discounted future cash flow at current marketing rate of return of similar financial assets. For other long-term investments on stocks, the difference should be determined as impairment loss when the calculation shows that the recoverable value is the long-term investment is lower than its book value. The impairment loss of long-term investments on stocks can’t be recovered in posterior accounting periods once determined. 2.15.2 Fixed assets, construction in progress, intangible assets, goodwill and other long-term non-financial assets Concerning fixed assets, construction in progress, intangible assets, goodwill and other long-term non-financial assets, the Company judges the possibility of impairment loss at end of each accounting period. Concerning the goodwill formed by the merger of enterprises and the intangible assets whose service life is uncertain, the Company makes devaluation test every year, no matter if exists indication of depreciation or not. After confirming the indication of depreciation, the Company will further estimate the recoverable value of the assets, which is determined as higher of the net value after fair value less disposal expense and the present value of predicted cash flow. If the estimates of recoverable value show that the recoverable value is lower than its book value, the Company will write-down the assets’ book value to recoverable value and the write-down difference will be determined as assets’ depreciation loss and accounted into current profit/loss. After determining the assets’ devaluation loss, the expenses of depreciation or amortization should be accordingly adjusted in future periods so that the adjusted book value (after salvage) could be amortized systematically during the rest service life of the assets. The impairment loss of assets can’t be recovered in posterior accounting periods once determined. If there are evidences showing the possibility of depreciation of certain individual asset, the Company estimates the recoverable value based on the asset itself. 2.16 Calculation of long-term equity investment 2.16.1 Initial measurement (1) Long-term equity investment formed in the merger of enterprises For the merger of enterprises under the same control, if the consideration of the merging enterprise is that it makes payment in cash, transfers non-cash assets or bear its debts, it shall, on the date of merger, regard the share of the book value of the owner's equity of the merged enterprise as the initial cost of the long-term equity investment. The difference between the initial cost of the long-term equity investment and the payment in cash, non-cash assets transferred as well as the book value of the debts borne by the merging party shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. All the directly related expenses, including audit fee, appraisal fee, legal services fee etc, shall be accounted into current profit/loss. For the merger under different control, the merging party shall, on the date of merger, regard the merger costs ascertained in accordance with the as the initial cost of the long-term equity investment. (2) Long-term equity investment by other methods - 44 - The initial cost of a long-term equity investment obtained by making payment in cash shall be the purchase cost which is actually paid. The initial cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fair value of the equity securities issued. The initial cost of a long-term equity investment of an investor shall be the value stipulated in the investment contract or agreement except the unfair value stipulated in the contract or agreement. Under the conditions that the exchange of non-monetary assets is characterized with business essence, and the fair value of the assets received or surrendered can be accounted in a reliable way, the book value of assets received is defined on basis of the fair value of assets surrendered, except there are conclusive evidences for the stronger reliability of the fair value of assets received. For the exchange of those non-monetary assets not meeting the above premises, the book value of assets surrendered and related taxes should be accounted as cost of assets received and the profit/loss shouldn’t be concluded. The initial cost of long-term equity investment obtained by recombination of liabilities shall be accounted at fair value. 2.16.2 Evidences for significant influences and the invested entity under joint control Certain control is considered as joint control with other parties over the invested entity when it happens over an economic activity in accordance with the contracts and agreements, which does not exist unless the investing parties of the economic activity with one an assent on sharing the control power over the relevant important financial and operating decisions. Certain case is considered as significant influences when the investing entity owns the power to participate in making decisions on the financial and operating policies of an enterprise, but not to control or do joint control together with other parties over the formulation of these policies. 2.16.3 Subsequent measurement and recognition of income Where an investing enterprise does joint control over or has significant influences on the invested entity, if the initial cost of a long-term equity investment is more than the investing enterprise' attributable share of the fair value of the invested entity's identifiable net assets for the investment, the initial cost of the long-term equity investment may not be adjusted; if the initial cost of a long-term equity investment is less than the investing enterprise' attributable share of the fair value of the invested entity's identifiable net assets for the investment, the difference shall be included in the current profits and losses and the cost of the long-term equity investment shall be adjusted simultaneously. For a long term equity investment on the subsidiary company of an investing enterprise, the investing enterprise shall accounted by employing the cost method as prescribed by these Standards, and shall make an adjustment by employing the equity method when it works out consolidated financial statements. The cost method shall be employed when a long-term equity investment of the investing enterprise that does not do joint control or does not have significant influences on the invested entity,, and has no offer in the active market and its fair value cannot be reliably measured. A long-term equity investment of the investing enterprise that does joint control or significant influences over the invested entity shall be measured by employing the equity method. Under cost method, the investment income recognized by the investing enterprise shall be limited to the amount received from the accumulative net profits that arise after the invested entity has accepted the investment. Where the amount of profits or cash dividends obtained by the investing entity exceeds the aforesaid amount, it shall be regarded as recovery of initial investment cost. - 45 - Under equity method, an investing enterprise shall recognize the net losses of the invested enterprise as following process: firstly, it shall dilute the book value of the long-term equity investment; secondly, if the book value of the long-term equity investment is insufficient to dilute, it shall dilute the book value of the long-term receivables under the limit of other long-term rights and interests which substantially form the net investment made to the invested entity; lastly, after the above treatments, it shall recognize the accrued liabilities according to the responsibilities in investment contract or agreement and account them into current profits and losses. If the invested entity realizes profits in posterior periods, the investing enterprise shall adopt the contrary process, after the unrecognized losses, to write down the balance of the accrued liabilities, recover the book value of other long-term rights and interests which substantially form the net investment made to the invested entity, and recognize the investment profits. Where any change is made to the owner's equity other than the net profits and losses of the invested entity, the book value of the long-term equity investment shall be adjusted and be included in the owner's equity, and the capital reserves (other capital reserves) shall be accordingly adjusted, in accordance with the attributable share of the net profits or losses of the invested entity. 2.17 Revenue recognition 2.17.1 Selling goods No revenue from selling goods may be recognized unless the following conditions are met simultaneously: the significant risks and rewards of ownership of the goods have been transferred to the buyer by the enterprise; the enterprise retains neither continuous management right that usually keeps relation with the ownership nor effective control over the sold goods; the relevant amount of revenue can be measured in a reliable way; the relevant economic benefits may flow into the enterprise; and the relevant costs incurred or to be incurred can be measured in a reliable way. 2.17.2 Providing labor services If an enterprise can, on the date of the balance sheet, reliably estimate the outcome of a transaction concerning the labor services it provides, it shall recognize the revenue from providing services employing the percentage-of-completion method. An enterprise may adopt the measurement of the work completed to ascertain the schedule of completion under the transaction concerning the providing of labor services. If an enterprise can’t, on the date of the balance sheet, measure the result of a transaction concerning the providing of labor services in a reliable way, it shall be conducted in accordance with the following circumstances, respectively: (1) If the cost of labor services incurred is expected to be compensated, the revenue from the providing of labor services shall be recognized in accordance with the amount of the cost of labor services incurred, and the cost of labor services shall be carried forward at the same amount; or (2) If the cost of labor services incurred is not expected to compensate, the cost incurred should be included in the current profits and losses, and no revenue from the providing of labor services may be recognized. 2.17.3 Abalienating the Right to Use Assets No revenue from abalienating of right to use assets may be recognized unless the following conditions are met simultaneously: the relevant economic benefits are likely to flow into the enterprise; and the amount of revenues can be measured in a reliable way. 2.18 Income taxes - 46 - The income taxes include current income tax expenses and deferred income tax expenses, which shall be accounted into current profit/loss as income tax expenses or incomes, except the adjusted goodwill arising from business combination or expenses related to the transactions or affairs directly accounted into owners’ equity. The current income tax expenses refer to the current payable income taxes based on the taxable income. The taxable income is measured on the adjustments according to the tax law upon pre-tax accounting profit. The current income tax liabilities (or assets) incurred in the current period or prior periods shall be measured in light of the expected payable (refundable) amount of income taxes according to the tax law. The Company shall employ balance sheet debt method to accrue deferred income tax based on the temporary difference between the assets/liabilities book value and tax basis on balance sheet date. Except for the deferred income tax liabilities arising from the following transactions, an enterprise shall recognize the deferred income tax liabilities arising from all taxable temporary differences: (1) The initial recognition of business reputation, or the initial recognition of assets or liabilities arising from the following transactions which are simultaneously featured by the following: the transaction is not business combination; and at the time of transaction, the accounting profits will not be affected, nor will the taxable amount (or the deductible loss) be affected. (2) The taxable temporary differences related to the investments of subsidiary companies, associated enterprises and joint enterprises, the investing enterprise can control the time of the reverse of temporary differences; and the temporary differences are unlikely to be reversed in the excepted future. An enterprise shall recognize the deferred income tax liabilities arising from a deductible temporary difference to the extent of the amount of the taxable income which it is most likely to obtain and which can be deducted from the deductible temporary difference. However, the deferred income tax assets, which are arising from the initial recognition of assets or liabilities during a transaction which is simultaneously featured by the following, shall not be recognized: (1) This transaction is not business combination; and at the time of transaction, the accounting profits will not be affected, nor will the taxable amount (or the deductible loss) be affected. (2) Where the deductible temporary difference related to the investments of the subsidiary companies, associated enterprises and joint enterprises can meet the following requirements simultaneously, the enterprise shall recognize the corresponding deferred income tax assets: the temporary differences are likely to be reversed in the expected future; and it is likely to acquire any amount of taxable income tax that may be used for making up the deductible temporary differences. On the balance sheet day, the deferred income tax assets and deferred income tax liabilities shall be measured at the tax rate applicable to the period during which the assets are expected to be recovered or the liabilities are expected to be settled, and shall reflect the effect of the expected asset recovery or liability settlement method on the balance sheet day on the income taxes. The carrying amount of deferred income tax assets shall be reexamined on balance sheet day. If it is unlikely to obtain sufficient taxable income taxes to offset the benefit of the deferred income tax assets, the carrying amount of the deferred income tax assets shall be written down. When it is probable to obtain sufficient taxable income taxes, such write-down amount shall be subsequently reversed. 2.19 Changes in accounting policies, estimates, important correction of errors and the influences - 47 - According to CK2006-3 by the Ministry of Finance, the Company employs the new since January 1, 2007, and adjusts retroactively the financial statements in line with the articles 5-19 of . The adjustments make the following important influences to the financial statements: Item Capital Surplus Undistributed Unrecognized Converted Minority Total reserves reserves profit investment loss difference in interest foreign currency statements Long-term equity investment - - -58,702,296.65 - - - -58,702,296.65 difference by business combinations under the same control Excess losses of subsidiary - - -8,549,839.52 7,507,252.69 - 1,042,586.83 - attributable to parent company Financial assets at fair value - - 6,335,553.57 - - - 6,335,553.57 and in current profit/loss Translation difference of - - - - 152,630.82 - 152,630.82 currency exchange Deferred income tax assets - - 1,008,679.33 - - - 1,008,679.33 Total - - -59,907,903.27 7,507,252.69 152,630.82 1,042,586.83 -51,205,432.93 3. Taxation Important taxes and tax rates Type Tax rate Parent company Subsidiaries V.A.T. 17% 17% Business tax 5% 5% Income tax 15%, 33% 15%, 33% (1) The parent company is considered as Hi-tech enterprise and employs an income tax rate of 15%. (2) The overseas subsidiaries employ the tax rates according to their countries’ tax law. 4. Merger of enterprises and consolidated of financial statements The Company employs for the preparation of consolidated financial statements and puts all the subsidiaries under its control in the consolidation. The consolidated financial statements, prepared by the parent company, take as basis the separate financial statements of the parent company and the consolidated subsidiaries, and adjust by equity method the long-term equity investment on the subsidiaries. Through the preparation of consolidated version, the internal equity investment and owners’ equity in subsidiaries, the internal - 48 - investment earnings and the distribution of profits in subsidiaries, the internal transaction affairs and the internal creditor’s rights/liabilities shall be offset. The subsidiary shall adopt the same accounting policies with the parent company. (For the inconsistency between the policies of subsidiaries and parent company, necessary adjustments have been made upon those of subsidiaries.) Except specially noted, the monetary unit in this chapter is RMB’000. 4.1 Subsidiaries acquired in business combinations under the same control Invested entity Register place Classification Register capital Business scope year end Real investment at balance Net % Equity proportion Voting share % voting share % Consolidated investment SMPIC Shanghai Office 125,000 Transport 125,000 125,000 100 100 100 supplies and equipment Shanghai Shanghai Imp. & Exp. 10,000 Imp. & Exp. 8,000 8,000 80 80 80 Butterfly Imp. of sewing of sewing & Exp. Co. machines machines, M&E products, etc. (1) Reason for adopting the definition of business combination under the same control All the above-listed entities and the Company itself were under the control of Shanghai Light Industries Holding (Group) Company, so the business combinations were defined as under the same control. (2) Real controller of the same control All the above-listed entities acquired in business combinations were under the control of the same real controller Shanghai Light Industries Holding (Group) Company. 4.2 Subsidiaries acquired not in business combinations Invested entity Register place Classification Register capital Business scope year end Real investment at balance Net % Equity proportion Voting share % voting share % Consolidated investment Shanggong Shanghai Transport 2,100 Transport 2,100 2,100 100 100 100 Transport Service Co. Durkopp Shanghai Imp. & Exp. USD1,500 Wholesale, USD975 USD975 40 40 65 Adler Trading of sewing broker and Shanghai Co. machines Imp. & Exp. of sewing machines Shanghai Shanghai Imp. & Exp. 32,000 Imp. & Exp. 28,800 28,800 90 90 90 Shanggong of sewing of M&E Imp. & Exp. machines products and Co. instruments Shanghai Shanghai Sewing 12,000 Production 10,800 10,800 70 70 90 Shuangchong machines, and Sewing etc. development Machines Co. of overlock sewing machines Shanghai Shanghai Sewing 3,000 Production 2,400 2,400 60 60 80 Shanggong machines, and sales of Fangtian etc. industrial - 49 - Machinery Co. sewing machines and components Shanghai Shanghai Sewing 3,100 Production 2,700 2,700 67.74 67.74 87.09 Shanggong machines, and sales of Xingda etc. zigzag Sewing industrial Machines Co. sewing machines Shanghai Shanghai Sewing 3,000 Production 2,250 2,250 65 65 75 Shanggong machines, and sales of Songda etc. sewing Machinery Co. machines and components Shanghai Shanghai Industrial 27,000 Management 27,000 27,000 100 100 100 Shanggong investment consulting of Sewing etc. industrial Machines Co. investment Durkopp Shanghai Sewing USD1,000 Design, USD1,000 USD1,000 70 70 100 Adler machines, production Industrial etc. and sales of Manufacturing sewing Shanghai Co. machines, consulting service Shanghai Shanghai Sewing 3,000 Production 2,160 2,160 67 67 72 Shanggong machines, and sales of Jiayuan M&E etc. sewing Co. machines and components Shanghai Shanghai Real estate 5,000 Real estate 4,500 4,500 90 90 90 Gongfeng development development Real Estate Development Co. Shanghai Shanghai Real estate 13,000 Real estate 8,970 8,970 69 69 69 Suoying Real development development Estate Co. Shanghai Shanghai Sewing 4,650 Sales of 4,650 4,650 100 100 100 Industrial machines, sewing Sewing etc. machines Machines and Materials components General Co. Shanghai Shanghai Sales of 2,000 1,600 1,600 1,600 80 80 80 Yongde Eco. M&E Development products, Co. etc. Shanghai Shanghai Production USD1,000 Production USD550 USD550 55 55 55 Fuhua Light and sales of and sales of Sewing apparel apparel Machines Co. machinery machinery Shanggong Germany Sewing EUR10,000 Sewing EUR10,000 EUR10,000 100 100 100 (Europe) machines, machines, Holding Co. etc. etc. 4.3 Changes in the consolidation of financial statements 4.3.1 Compared with that of last year, the financial statements absorb in current consolidation a new subsidiary, Shanggong Transport Service Co., whose assets and profits/losses had minor influence in the Company’s performance in 2006. 4.3.2 There are three enterprises quitting from current consolidation. Shanghai Sifang Tongji Pure Water Co., Ltd. was transferred in 2007; Shanghai Flying Man Imp. & Exp. Co., Ltd. has - 50 - cancelled its business registration in industrial & commercial authorities; shanghai Shangyuan S&T Development Co., Ltd. has completed the cancellation of tax registration in 2007 and is proceeding with business registration cancellation. 4.4 Strict restriction of fund transfer ability from subsidiaries to the parent company There is no strict restriction of fund transfer ability from subsidiaries to the parent company. 4.5 Minority interest income and losses RMB’ Entity Year-beginning Current Current Current out of Increase of Year-end investment increase of consolidation other interest minority interest Shanggong (Europe) Holding Co. (1) 43,259,701.88 1,889,136.26 12,366,467.71 32,782,370.43 SMPIC (2) 33,069,870.43 -33,069,870.43 0.00 SMPIC Imp.&Exp. Co. 1,000,000.00 1,000,000.00 SMPIC Real Estate Development Co. (2) 260,863.10 260,863.10 0.00 Shanghai Suoying Real Estate Co. 4,636,203.23 46,693.51 4,682,896.74 Shanghai Fengjian Properties Co. (3) 49,169.22 4,914.38 54,083.60 Pingxiang Dongxu Real Estate Development Co. 299,508.73 -30.37 299,478.36 (3) Shanghai Shanggong Sewing Machines Co. (2) 3,000,000.00 -3,000,000.00 0.00 Shanghai Shanggong Imp.&Exp. Co. 1,236,493.92 7,239.44 1,243,733.36 Shanghai Shanggong Jiayuan M&E Co. 1,977,151.78 97,891.77 2,075,043.55 Shanghai Shangyuan S&T Development Co. 17,851.07 17,851.07 0.00 Shanghai Shanggong Fangtian Machinery Co. 743,632.26 -292,501.54 451,130.72 Shanghai Fuhua Light Sewing Machines Co. 2,944,200.43 -115,389.32 2,828,811.11 Shanghai Butterfly Imp.&Exp. Co. 3,901,475.88 2,341,509.17 6,242,985.05 Shanghai Yongde Eco. Development Co. 250,800.18 356,526.73 604,440.00 1,211,766.91 Shanghai Flying Man Imp.&Exp. Co. 1,190,630.65 1,190,630.65 0.00 Shanghai Shanggong Songda Machinery Co. 1,394,746.48 -241,667.84 1,153,078.64 Durkopp Adler Trading Shanghai Co. 4,081,802.52 317,029.77 4,398,832.29 Shanghai Shanggong Xingda Sewing 393,119.85 -112,320.16 280,799.69 Machines Co. Shanghai Gongfeng Real Estate Development Co. 500,000.00 500,000.00 Total 104,207,221.61 -36,069,870.43 4,299,031.80 13,835,812.53 604,440.00 59,205,010.45 (1) Shanggong (Europe) Holding Co., Ltd. consolidated in current-year statements. - 51 - (2) Subsidiaries of the Company by the acquisition of minority equity. (3) Subsidiaries of Shanghai Suoying Real Estate Co. 5. Important notes for consolidated financial statements (All the following items adopt RMB’ and year-end data except those specially indicated.) 5.1 Cash and bank Year-end Year-beginning Item Original Exchange Amount to Original Exchange Amount to currency rate RMB currency rate RMB Renminbi 1,371,446.76 1,474,759.18 EUR EUR59,164.99 10.6669 631,107.03 48,026.05 10.2665 493,059.44 Subtotal cash in RMB --- --- 2,002,553.79 --- --- 1,967,818.62 Renminbi 168,851,432.4 191,440,170.8 --- --- --- --- 9 3 EUR EUR20,422,55 217,845,300.3 221,962,711.1 10.6669 21,620,095.57 10.2665 0.16 0 7 USD USD6,321,231 110,869,465.2 7.3046 46,174,069.73 14,198,197.56 7.8087 .79 8 JPY 5,238,001.00 0.0656 343,770.01 Subtotal bank in 432,870,802.5 524,616,117.2 --- --- --- --- RMB 2 9 Renminbi --- --- 3,419,484.16 --- --- 1,500,562.97 Subtotal other --- --- 3,419,484.16 --- --- 1,500,562.97 money-capitals Total 438,292,840.4 528,084,498.8 7 8 Accounts with limited cashability of mortgage or freeze: (1) The credit line guaranty of EUR 1,000,000 has been mortgaged to German banks. (2) The deposit certificate of EUR 650,000 has been mortgaged to FAG Kugelfischer AG. (3) The time certificate of USD 5,000,000 in the Int’l Business Dept. of Bank of Shanghai has been mortgaged to Bank of Shanghai, Fumin Branch. (4) The bank account in China Construction Bank Shanghai No.3 Branch, whose year-end balance is of RMB 61,638.73, was frozen by the tribunal. 5.2 Trading financial assets Year-end Year-beginning fair value fair value Financial assets accounted at fair value and into current profits/losses 1. Investment on tradable bonds - 210,620.00 2. Investment on tradable equity 9,325,414.02 23,789,145.47 5. Others 550,498.48 420,708.44 Total 9,875,912.50 24,420,473.91 As at Dec 31, 2007, all the 518,400 shares of Zhonglu Co., Ltd. held by the Company, at a original cost of RMB 2,479,302.73 and a marketing value of RMB 7,283,520.00, were frozen. 5.3 Bills receivable Year-end Year-beginning Bank acceptance 3,070,470.00 1,484,084.00 - 52 - Total 3,070,470.00 1,484,084.00 At the year end, there was no discount due of bank acceptance or commercial acceptance. 5.4 Accounts receivable Year-end Year-beginning 8 Bala 9 Bala n Prop. Provision for n Prop. Provision for c (%) bad debts c (%) bad debts e e 1. Significant accounts individually --- --- --- --- --- --- accrued 2. Insignificant accounts 73,444,027.38 12.01 59,907,731.38 72,695,982.96 13.05 72,695,982.96 individually accrued 3. Other accounts with similar risk 538,115,738.87 87.99 125,955,834.77 484,247,383.04 86.95 94,865,042.01 nature and divided by age Including: within 1 year 419,409,345.91 68.58 20,207,691.77 392,860,502.60 70.54 19,643,025.13 1-2 years 14,115,886.43 2.31 2,823,177.28 13,082,377.57 2.35 2,616,475.51 2-3 years 3,331,081.08 0.54 1,665,540.27 11,397,923.00 2.05 5,698,961.50 Over 3 years 101,259,425.45 16.56 101,259,425.45 66,906,579.87 12.01 66,906,579.87 Total 611,559,766.25 100.00 185,863,566.15 556,943,366.00 100.00 167,561,024.97 Net value 425,696,200.10 389,382,341.03 (1) Among the year-end accounts receivable, there is no obligator who holds 5% or more equity of the Company. (2) The top five accounts receivable represent an amount of RMB 90,081,970.50, 14.73% of total year-end balance of accounts receivable. 5.5 Other receivables Year-end Year-beginning 10 Bala 11 Bala n Provision for n Provision for Prop. (%) Prop. (%) c bad debts c bad debts e e 1.Significant accounts --- --- --- --- --- --- individually accrued 2.Insignificant accounts --- --- --- --- --- --- individually accrued 3.Other accounts with similar 111,135,909.66 100.00% 32,612,878.54 129,056,155.90 100.00% 38,242,035.53 risk nature and divided by age Including: within 1 year 73,535,830.63 66.16% 3,676,791.53 84,378,935.23 65.38% 4,218,946.76 1-2 years 6,581,433.94 5.92% 1,316,286.79 11,428,472.24 8.86% 2,285,694.45 2-3 years 6,797,689.76 6.12% 3,398,844.89 3,022,708.22 2.34% 1,511,354.11 Over 3 years 24,220,955.33 21.80% 24,220,955.33 30,226,040.21 23.42% 30,226,040.21 Total 111,135,909.66 100.00% 32,612,878.54 129,056,155.90 100.00% 38,242,035.53 Net value 78,523,031.12 90,814,120.37 (1) Among the year-end accounts receivable, there is no obligator who holds 5% or more equity of the Company. (2) The top five accounts receivable represent an amount of RMB 20,812,921.34, 16.13% of total year-end balance of accounts receivable. 5.6 Prepayments 5.6.1 Analysis of age - 53 - Year-end Year-beginning Age distribution Balance Proportion (%) Balance Proportion (%) Within I year 27,810,701.07 99.10% 33,321,751.91 98.13% 1-2 years 55,652.67 0.09% 163,917.19 0.48% 2-3 years 12,203.18 0.03% --- --- Over 3 years 467,821.64 0.78% 467,821.14 1.39% Total 28,346,378.56 100.00% 33,953,490.24 100.00% 5.6.2 Among the year-end prepayments, there is no creditor who holds 5% or more equity of the Company. 5.7 Inventories and inventories falling price reserves Year-end Year-beginning Item Balance Falling price reserves Balance Falling price reserves Raw materials 274,646,521.49 59,012,276.38 239,038,605.41 58,094,500.93 Work in progress 177,555,202.59 33,445,158.92 165,634,663.57 37,761,182.82 Finished products 218,984,693.92 42,626,185.12 228,483,183.31 65,646,668.76 Material cost differences -1,371,625.75 --- -388,273.31 --- Goods in outside processing 1,678,448.38 25,573.13 1,358,195.08 25,573.13 Others 5,540,539.61 2,166,889.9 6,594,560.48 2,166,889.9 Total 677,033,780.24 137,276,083.45 640,720,934.54 163,694,815.54 Net value 539,757,696.79 477,026,119.00 Falling price reserves Year-beginning Accrued in report Transfer or write-off Year-end balance year Raw materials 274,646,521.49 59,012,276.38 239,038,605.41 58,094,500.93 Work in progress 177,555,202.59 33,445,158.92 165,634,663.57 37,761,182.82 Finished products 218,984,693.92 42,626,185.12 228,483,183.31 65,646,668.76 Goods in outside processing -1,371,625.75 --- -388,273.31 --- Others 1,678,448.38 25,573.13 1,358,195.08 25,573.13 Total 5,540,539.61 2,166,889.9 6,594,560.48 2,166,889.9 5.8 Other current assets Item Year-end Year-beginning Rent and assurance 1,178,329.14 770,902.55 Others 67,194.20 23,114.94 Total 1,245,523.34 794,017.49 5.9 Financial assets available for sale Year-end fair value Year-beginning fair value 1. Equity instrument available for sale 24,458,496.92 -- Among which: stock equity without conditions of trading 24,458,496.92 -- The year-end balance of financial assets available for sale has increased by RMB 24,548,496.92, 200% of the year-beginning, for that the lock-up period of the shares subject to conditional sale has terminated in 2007 and the authorities of the Company consider them financial assets available for sale. 5.10 Long-term equity investment Year-end Year-beginning - 54 - Balance Depreciation reserves Balance Depreciation reserves Long-term equity investment 52,222,276.27 3,266,278.65 63,898,993.30 3,802,055.79 Net value 48,955,997.62 60,096,937.51 5.10.1 Information about invested entities Invested entity Register Business Equity Voting Year-end net Current Current net place prop. share assets operating profit (%) (%) income Shanghai Yichang Shanghai Commercial 50% 50% 0.00 622,155.81 -126,170.24 Office Supplies Co. SMPIC Huihe Office Shanghai Commercial 30% 30% 0.00 0.00 0.00 Equipment Co. SMPIC Optical Shanghai Industrial Communication 30% 30% 5,348,217.86 9,137,481.97 308,818.23 Equipment Co. SMPIC Changfeng Shanghai Industrial 20.768% 20.768% 22,357,591.40 22,374,587.75 515,673.85 Carbon Blocks Co. Shanghai Huazhijie Shanghai Commercial 25% 25% 2,945,134.64 0.00 0.00 Plastic Co. Shanghai Number Shanghai Commercial Machine Factory 100% 100% 5,915,320.70 0.00 0.00 Sales Dept. Changshu Qixing Changshu Industrial Electric-plating 90% 90% 4,546,370.44 0.00 0.00 Hardware Co. Shanghai Baochi Shanghai Industrial Great Wall Number 20% 20% 6,171,611.83 3,417,238.20 24,458,496.92 Prints Co. 5.10.2 Long-term equity investment by cost method (1) Investment in legal shares Invested entity Quantity of Original Year-beginning Current Year-end shares investment balance increase / balance decrease of investment SVA Information 67,600.00 67,600.00 -67,600.00 --- Sanmao Textiles 4,892,327.00 4,892,327.00 -4,892,327.00 --- New Jin Jiang 220,000.00 220,000.00 -220,000.00 --- New Huang Pu 303,800.00 303,800.00 -303,800.00 --- China Satcom Guomai 226,000.00 226,000.00 -226,000.00 --- Pufa Machinery 204,551 90,000.00 90,000.00 --- 90,000.00 Shuang Lu Co. 290,400.00 290,400.00 -290,400.00 --- SGSB 34,385 310,000.00 310,000.00 -194,000.00 116,000.00 Total 6,400,127.00 6,400,127.00 206,000.00 (2) Other equity investment by cost method Invested entity Current Original Year-beginning increase / Year-end Depreciation investment balance decrease of balance reserves investment Shanghai Xinguang Dyeing Weaving & Shirt 14.3% 308,033.99 --- 308,033.99 308,033.99 Manufacturing Mill Shanggong Quanzhou Sales 33.3% 500,000.00 -500,000.00 --- --- Co. Shanggong Anqing Sales Co. 33.3% 500,000.00 --- 500,000.00 500,000.00 Shanggong Liaoning Int’l 33.3% 500,000.00 --- 500,000.00 500,000.00 Trading Co. - 55 - Shanghai Shanggong Jiahui 39% 1,160,000.00 --- 1,160,000.00 1,160,000.00 Sewing Machines Co. Wuxi Shanggong Sewing 80% 153,814.26 --- 153,814.26 153,814.26 Machines Co. Nantong Shanggong Sewing 65% 442,880.04 -442,880.04 --- --- Machines Co. Shanghai Hualian Sewing 15.53% 400,000.00 --- 400,000.00 --- Machines Co. Shanghai Sifang Tongji 92% 200,000.00 -200,000.00 --- --- Industrial & Trading Co. Shanghai Fuji-Xerox Co. 15.82% 29,140,749.49 --- 29,140,749.49 --- Shanghai Xinhu Glass Co. 20% 6,168,235.27 --- 6,168,235.27 --- Shanghai Shensi Enterprise 36% 4,320,000.00 --- 4,320,000.00 --- Development Co. Shanghai Singer Sewing 10% 3,974,779.84 -3,974,779.84 --- --- Machines Co. Shanghai Shanggong Jiarong 55% 500,000.00 --- 500,000.00 470,530.40 Sewing Machines Co. Shanghai Nandie Sewing , the long-term equity investment and deferred tax, assets were retroactively adjusted, which influences the year-beginning undistributed profit by RMB - -59,907,903.27. 5.33 Operating income and cost Item Current year Last year Principal Other Subtotal Principal Other Subtotal operations operations operations operations Operating 2,478,005,802.84 60,055,066.85 2,538,060,869.69 2,401,715,959.48 39,008,022.35 2,440,723,981.83 income Operating 1,893,686,213.34 32,770,018.95 1,926,456,232.29 1,781,885,500.21 23,395,873.20 1,805,281,373.41 expense Operating 584,319,589.50 27,285,047.90 611,604,637.40 619,830,459.27 15,612,149.15 635,442,608.42 profit 5.33.1 Principal operating income and expense, by business sector Principal operating income Principal operating expense Current year Last year Current year Last year Sewing machines 1,669,338,471.39 1,627,725,289.02 1,194,119,071.67 1,114,112,635.46 Int’l trading agent 268,556,776.21 279,613,557.31 263,518,624.61 269,513,294.15 Material transmission 405,398,285.92 323,068,406.81 317,795,158.34 248,733,552.18 equipment Office supplies 60,658,367.14 95,925,675.78 53,998,023.18 86,340,620.20 Film equipment 66,987,266.00 62,158,450.53 61,893,651.83 57,047,078.08 Others 7,066,636.18 13,224,580.03 2,361,683.71 6,138,320.14 Total 2,478,005,802.84 2,401,715,959.48 1,893,686,213.34 1,781,885,500.21 5.33.2 Other operations’ income and expense Principal operating income Principal operating expense Current year Last year Current year Last year Sales of materials 10,485,115.99 8,208,314.12 10,952,158.43 9,836,015.61 Rent 20,661,365.71 18,355,354.73 1,254,606.49 3,274,465.71 Services 2,645,884.28 1,199,663.28 177,358.40 77,678.25 Others 26,262,700.87 11,244,690.22 20,385,895.63 10,207,713.63 Total 60,055,066.85 39,008,022.35 32,770,018.95 23,395,873.20 5.33.3 Principal operating income and expense, by location of entities Principal operating income Principal operating expense Current year Last year Current year Last year - 63 - Domestic 901,511,243.22 891,612,807.70 840,274,853,36 824,898,434.41 Abroad 3,637,369,110.21 1,510,103,151.78 1,114,285,910.57 956,987,065.80 Subtotal 2,538,880,353.43 2,401,715,959.48 1,954,560,763.93 1,781,885,500.21 Less: write-off 60,874,550.59 --- 60,874,550.59 --- between regions Total 2,478,005,802.84 2,401,715,959.48 1,893,686,213.34 1,781,885,800.21 Domestic and abroad refer to the location of subsidiaries. 5.33.4 The sales to the top five customers total RMB 361,917,250.10, 14.26% of the annual operating income. 5.34 Business tax and extra charges Current year Last year Business tax 1,574,369.15 2,212,071.58 Tax on city maintenance and construction 459,900.14 545,518.56 House property tax 886,827.69 1,008,007.19 Extra fee for education 195,037.81 231,796.58 Others 819,924.84 19,268.01 Total 3,936,059.63 4,016,661.92 5.35 Financial expense Type Current year Last year Interest expenses 36,973,760.19 57,005,592.86 Less: interest income 14,282,930.32 15,076,197.51 Exchange loss 15,498,233.07 11,184,010.61 Less: exchange earning 2,689,981.15 1,334,531.75 Others 1,232,934.91 1,284,391.80 Total 36,732,016.70 53,063,266.01 5.36 Assets depreciation loss Current year Last year Loss in bad debts 16,923,193.05 47,376,583.49 Loss in inventory devaluation 10,803,015.34 6,893,221.38 Loss in depreciation of long-term equity investment 567,029.90 1,482,473.70 Loss in depreciation of construction in progress --- 791,000.00 Total 28,293,238.29 56,543,278.57 5.37 Income from changes in fair value Sources of income from changes in fair value Current year Last year Financial instruments 70,231.94 2,648,245.81 Total 70,231.94 2,648,245.81 5.38 Investment income Invested entity Current year Last year 1.Financial assets investment income 27,230,957.96 4,372,623.14 2.Equity investment income 21,757,741.39 9,023,005.10 (1)By cost method 13,213,294.41 13,859,341.75 (2)By equity method -2,173,001.93 -5,625,482.76 - 64 - (3)Gain on disposal of investment 10,717,448.91 789,146.11 Total 48,988,699.35 13,395,628.24 There are no significant restrictions for the back of investment income to the Company. 5.39 Non-operating income Current year Last year Gains from disposal of fixed assets 56,486,661.00 3,073,066.27 Government grants 5,834,983.00 37,394,594.29 Amercement income and liquidated damages 19,071.76 10,000.00 Others 313,845.11 1,181,359.84 Total 62,654,560.87 41,659,020.40 5.40 Non-operating expense Current period Same period last year Losses in disposal of fixed assets 861,708.04 2,564,801.57 Charitable donation 5,484.27 6,000.00 Extraordinary loss 11,000.00 --- Penalties and overdue fine 48,721.27 23,287.84 Indemnity expense 20,730.04 22,006.26 Others 24,955.22 0.46 Total 972,598.84 2,616,096.13 5.41 Income tax expense Item Current year Last year Current income tax expense 19,971,892.60 13,444,863.82 Deferred income tax expense 39,341,861.13 4,102,267.99 Total 59,313,753.73 17,547,131.81 The current income tax has increased by 238.03%, mainly due to the rise of legal tax rate for Shanggong Europe Holding Co., Ltd., subsidiary of the Company. 5.42 Attachment of cash flow statement 5.42.1 Other cash inflow related to operating activities Item Current year Receipt of current account 52,243,335.40 Specific subsidies 5,834,983.00 Penalties and liquidated damages 332,916.87 Interest income 14,282,930.32 Total 72,694,165.59 5.42.2 Other cash outflow related to operating activities Item Current year Current account 238,123.25 Expenses 182,199,695.09 Penalties and overdue fine 110,890.80 Total 182,548,709.14 5.42.3 Other cash outflow related to investment activities Item Current year Caused by the reduction of consolidation 10,791,813.80 Total 10,791,813.80 5.42.4 Supplements of cash flow statement Item Current year Net profit attributable to equity holders of the parent 28,030,284.53 Add: Minority interest 4,299,031.80 - 65 - Depreciation reserves 28,293,238.29 Depreciation of fixed assets, oil/gas assets and productive living assets 83,090,542.84 Amortization of intangible assets 24,257,502.51 Amortization of long-term deferred expenses 102,060.30 Losses on disposal of fixed assets, intangible assets and other long-term assets (less: income) -55,624,952.96 Losses on scrapping of fixed assets (less: income) --- Losses on changes in fair value (less: income) -70,231.94 Financial expense (less: income) 37,818,402.79 Investment loss (less: income) -48,988,699.35 Decrease in deferred income tax assets (less: increase) 36,127,756.15 Increase in deferred income tax liabilities (less: decrease) 1,235,915.09 Decrease of inventories (less: increase) -38,579,567.02 Decrease in receivables under operating activities (less: increase) -80,745,467.83 Increase in payables under operating activities (less: decrease) 11,423,849.65 Others --- Net cash flows from operating activities 30,669,664.85 6. Important notes for parent company financial statements (All the following items adopt RMB’ and year-end data except those specially indicated.) 6.1 Accounts receivable 6.1.1 Composition of accounts receivable Year-end Year-beginning 14 Ba 13 Bala l n Prop. Provision for a Prop. Provision for c (%) bad debts n (%) bad debts e c e 1.Significant accounts individually --- --- --- --- --- --- accrued 2.Insignificant accounts individually 12,593,493.35 10.72 12,593,493.35 22,621,667.05 18.74 22,621,667.05 accrued 3.Other accounts with similar risk 104,854,357.53 89.28 73,356,193.21 98,107,580.99 81.26 46,165,929.25 nature and divided by age Including: within 1 year 23,772,104.31 20.24 1,188,605.22 49,590,221.03 41.08 2,479,511.05 1-2 years 11,143,331.54 9.49 2,228,666.31 0.00 0.00 0.00 2-3 years 0.00 0.00 0.00 9,661,883.52 8.00 4,830,941.76 Over 3 years 69,938,921.68 59.55 69,938,921.68 38,855,476.44 32.18 38,855,476.44 100.0 120,729,248.0 100.0 Total 117,447,850.88 85,949,686.56 68,787,596.30 0 4 0 Net value 31,498,164.32 51,941,651.74 6.1.2 There are no accounts receivable to obligator who holds 5% or more equity of the Company. 6.1.3 The top five obligators’ year-end balance is of RMB 33,149,510.23, 28.23% of year-end accounts receivable. 6.1.4 The accounts receivable related to affiliated parties represent 0.10% of total receivables. 6.2 Other receivables 6.2.1 Composition of other receivables Year-end Year-beginning - 66 - 15 Bala 16 Bala Provision Provision n Prov. n Prov. Prop. for bad Prop. for bad c prop. c prop. debts debts e e 76.23 65.85 5.00 Within 1 year 67,510,354.03 5.00% 3,375,517.70 48,320,093.45 2,416,004.67 % % % 3.37 9.67 20.00 1-2 years 2,988,836.45 20.00% 597,767.29 7,099,074.40 1,419,814.88 % % % 3.31 0.86 50.00 2-3 years 2,930,491.92 50.00% 1,465,245.96 630,726.92 315,363.46 % % % 17.09 100.00 15,135,905.7 23.62 100.0 17,331,791.5 Over 3 years 15,135,905.72 17,331,791.53 % % 2 % 0% 3 100.0 20,574,436.6 100.0 21,482,974.5 Total 88,565,588.12 73,381,686.30 0% 7 0% 4 Net value 67,991,151.45 51,898,711.76 6.2.2 There are no other receivables to obligator who holds 5% or more equity of the Company. 6.2.3 The top five big-ticket other receivables at year end is of RMB 59,241,495.91, 66.89% of year-end other receivables. 6.3 Long-term equity investment Year-end Year-beginning Balance Depreciation reserves Balance Depreciation reserves Stock investment --- --- 4,247,800.00 --- Other equity investment 543,851,311.02 10,221,848.25 454,162,764.72 11,164,728.29 Total 543,851,311.02 10,221,848.25 458,410,564.72 11,164,728.29 Net value 533,629,462.77 447,245,836.43 6.3.1 Long-term equity investment by cost method Invested entity Original Year-beginning Current Year-end Depreciation investment balance increase / balance reserves decrease of investment Shanghai Xinguang Dyeing Weaving & Shirt 308,033.99 308,033.99 --- 308,033.99 308,033.99 Manufacturing Mill Shanggong Quanzhou Sales 500,000.00 500,000.00 -500,000.00 --- --- Co. Shanggong Anqing Sales Co. 500,000.00 500,000.00 --- 500,000.00 500,000.00 Shanggong Liaoning Int’l 500,000.00 500,000.00 --- 500,000.00 500,000.00 Trading Co. Shanghai Shanggong Jiahui 360,000.00 360,000.00 --- 360,000.00 360,000.00 Sewing Machines Co. Wuxi Shanggong Sewing 153,814.26 153,814.26 --- 153,814.26 153,814.26 Machines Co. Nantong Shanggong Sewing 442,880.04 442,880.04 -442,880.04 --- --- Machines Co. Shanghai Hualian Sewing 400,000.00 400,000.00 --- 400,000.00 --- Machines Co. Durkopp Adler Industrial 5,553,702.00 5,553,702.00 47,670,224.00 53,223,926.00 --- Manufacturing (Shanghai) Co. Shanghai Gongfeng Real 4,500,000.00 4,500,000.00 --- 4,500,000.00 --- Estate Development Co. Shanghai Shanggong Xingda 2,100,000.00 2,100,000.00 --- 2,100,000.00 --- Sewing Machines Co. - 67 - Durkopp Adler Trading 4,811,443.11 4,811,443.11 --- 4,811,443.11 --- (Shanghai) Co. Shanghai Industrial Sewing Machines Materials General 4,600,000.00 4,600,000.00 --- 4,600,000.00 --- Co. Shanghai Shanggong Songda 1,950,000.00 1,950,000.00 --- 1,950,000.00 --- Machinery Co. Shanghai Shanggong Transport 2,100,000.00 2,100,000.00 --- 2,100,000.00 --- Co. Shanghai Yongde Eco. 1,600,000.00 1,600,000.00 --- 1,600,000.00 --- Development Co. Shanghai Butterfly Imp.&Exp. 10,318,153.64 10,318,153.64 --- 10,318,153.64 --- Co. Shanghai Fuhua Light Sewing 3,168,000.00 3,168,000.00 --- 3,168,000.00 --- Machines Co. Shanghai Shanggong Fangtian 1,800,000.00 1,800,000.00 --- 1,800,000.00 --- Machinery Co. Shanghai Shanggong Jiayuan 2,170,728.50 2,170,728.50 --- 2,170,728.50 --- M&E Co. Shanghai Shuangchong 8,400,000.00 8,400,000.00 --- 8,400,000.00 8,400,000.00 Sewing Machines Co. Shanghai Suoying Real Estate 10,313,953.16 10,313,953.16 --- 10,313,953.16 --- Co. Shanghai Shanggong 28,800,000.00 28,800,000.00 --- 28,800,000.00 --- Imp.&Exp. Co. Shanghai Shanggong Sewing 27,000,000.00 27,000,000.00 --- 27,000,000.00 --- Machines Co. SMPIC 213,544,414.72 213,544,414.72 52,527,900.00 266,072,314.72 --- Shanggong (Europe) Holding 107,942,043.64 107,942,043.64 --- 107,942,043.64 --- CO. Bank of Shanghai Caoxi Credit 551,400.00 551,400.00 --- 551,400.00 --- Union Baoding Investment Co. 7,500.00 7,500.00 --- 7,500.00 --- Shenyin & Waiguo Securities 200,000.00 200,000.00 --- 200,000.00 --- Co. Shanghai Hirose Precision 2,840,376.00 --- --- --- --- Machinery Co. Total 447,436,443.06 444,596,067.06 99,255,243.96 543,851,311.02 10,221,848.25 6.3.2 Long-term equity investment by equity method Invested entity Original investment Year-beginning Current-year Year-end balance balance increase/decrease Shanghai Shangyuan S&T 4,200,000.00 -- --- Development Co. Shanghai Flying Man 8,505,858.12 9,525,045.16 -9,525,045.16 --- Imp.&Exp. Co. Shanghai Sifang Tongji Pure 6,003,801.56 41,652.50 -41,652.50 --- Water Co. Total 18,709,659.68 9,566,697.66 -9,566,697.66 --- 6.3.3 Depreciation reserves for long-term equity investment Invested entity Year-beginning Current increase Current decrease Year-end Shanghai Shuangchong Sewing 8,400,000.00 --- --- 8,400,000.00 Machines Co. Shanghai Xinguang Dyeing Weaving & Shirt Manufacturing 308,033.99 --- --- 308,033.99 Mill Shanggong Quanzhou Sales Co. 500,000.00 --- 500,000.00 --- Shanggong Anqing Sales Co. 500,000.00 --- --- 500,000.00 - 68 - Shanggong Liaoning Int’l Trading 500,000.00 --- --- 500,000.00 Co. Shanghai Shanggong Jiahui Sewing 360,000.00 --- --- 360,000.00 Machines Co. Wuxi Shanggong Sewing Machines 153,814.26 --- --- 153,814.26 Co. Nantong Shanggong Sewing 442,880.04 --- 442,880.04 --- Machines Co. Total 11,164,728.29 --- 942,880.04 10,221,848.25 6.3.4 The year-end long-term equity investment has increase by RMB 85,940,746.30, 18.75% more than that of the year-beginning, mainly due to the increase of investment in Durkopp Adler Industrial Manufacturing (Shanghai) Co., Ltd. by non-patent technology and cash, and the cash acquisition of 10% equity of SMPIC. 6.4 Operating revenue and operating expense Current year Last year Principal Other Subtotal Principal Other Subtotal operations operations operations operations Revenue 70,460,500.74 20,350,871.44 90,811,372.18 97,059,145.15 13,449,160.54 110,508,305.69 Expense 77,467,564.45 12,212,687.27 89,680,251.72 95,460,816.99 9,820,514.63 105,281,331.62 Gross profit -7,007,063.71 8,138,184.17 1,131,120.46 1,598,328.16 3,628,645.91 5,226,974.07 6.5 Investment income Item or invested entity Current year Last year Financial instruments 15,098,594.45 2,965,450.95 Equity investment instruments at fair value and into current profit/loss 15,098,594.45 2,965,450.95 Equity investment income 1,035,846.66 -7,665,338.17 1. By cost method 773,521.59 --- 2. By equity method -5,648,522.06 -9,004,783.38 3. Gain on disposal of investments 5,910,847.13 1,339,445.21 Total 16,134,441.11 -4,699,887.22 The remitted-back of investment income isn’t under any significant restrictions. 7 Accumulated amortization 7.1 Profile of affiliated parties where a control relationship exists 7.1.1 Affiliated parties where a control relationship exists Controller of the Company Controller In-charge Foundation Relationship Principal activities Change of holding Equity and person date shareholder or real control prop. of controller the controller Shanghai Pudong New Area Lu Sept. 1996 Holding Administration of state-owned No changes in 24.44% State-owned Assets Fangzhou shareholder assets by entrust of Shanghai current year Supervision and Pudong New Area People’s Administration Commission Government 7.1.2 Register capital and change of affiliated parties where a control relationship exists RMB’000 Entity Year-beginning Current Current Year-end increase decrease Shanggong Transport Services Co., Ltd. 2,100 - - 2,100 Shanghai Butterfly Imp. & Exp. Co., Ltd. 10,000 - - 10,000 - 69 - Durkopp Adler Trading (Shanghai) Co., Ltd. USD1,500 - - USD1,500 Shanghai Shanggong Imp. & Exp. Co., Ltd. 32,000 - - 32,000 Shanghai Shuangchong Sewing Machines Co., Ltd. 12,000 - - 12,000 Shanghai Shanggong Fangtian Machinery Co., Ltd. 3,000 - - 3,000 Shanggong Xingda Sewing Machine Co., Ltd. 3,100 - - 3,100 Shanggong Songda Machinery Co., Ltd. 3,000 - - 3,000 Shanghai Shanggong Sewing Machines Co., Ltd. 30,000 - 3,000 27,000 Durkopp Adler Manufacturing (Shanghai) Co., Ltd. USD1,000 USD9,000 - USD10,000 Shanggong Jiayuan Mechanical & Electrical 3,000 - - 3,000 Technology Co., Ltd. Shanghai Industrial Sewing Properties Development 5,000 - - 5,000 Co., Ltd. Shanghai Suoying Property Co., Ltd. 13,000 - - 13,000 Shanghai Industrial Sewing Machines Materials 4,650 - - 4,650 Trading Company Shanghai Yongde Economic Development Co., Ltd. 2,000 - - 2,000 Shanghai Fuhua Light Industrial Machinery Co., Ltd. USD1,000 - - USD1,000 SMPIC Corporation 125,000 - - 125,000 Shanggong (Europe) Holding Co., Ltd. EUR10,000 - - EUR10,000 7.1.3 Equity and change in affiliated parties where a control relationship exists RMB’000 Entity Year-beginning Current Year-end increase/decrease Sum % Sum % Sum % Shanggong Transport Services Co., Ltd. 2,100 100 - - 2,100 100 Shanghai Butterfly Imp. & Exp. Co., Ltd. 8,000 80 - - 8,000 80 Durkopp Adler Trading (Shanghai) Co., Ltd. USD600 40 - - USD600 40 Shanghai Shanggong Imp. & Exp. Co., Ltd. 28,800 90 - - 28,800 90 Shanghai Shuangchong Sewing Machines Co., Ltd. 8,400 70 - - 8,400 70 Shanghai Shanggong Fangtian Machinery Co., Ltd. 1,800 60 - - 1,800 60 Shanggong Xingda Sewing Machine Co., Ltd. 2,100 67.74 - - 2,100 67.74 Shanggong Songda Machinery Co., Ltd. 1,950 65 - - 1,950 65 Shanghai Shanggong Sewing Machines Co., Ltd. 27,000 90 - - 27,000 90 Durkopp Adler Manufacturing (Shanghai) Co., Ltd. USD700 70 USD6,300 - USD7,000 70 Shanggong Jiayuan Mechanical & Electrical 2,010 67 - - 2,010 67 Technology Co., Ltd. Shanghai Industrial Sewing Properties Development 4,500 90 - - 4,500 90 Co., Ltd. Shanghai Suoying Property Co., Ltd. 8,970 69 - - 8,970 69 Shanghai Industrial Sewing Machines Materials 4,650 100 - - 4,650 100 Trading Company Shanghai Yongde Economic Development Co., Ltd. 1,600 80 - - 1,600 80 Shanghai Fuhua Light Industrial Machinery Co., Ltd. USD550 55 - - USD550 55 SMPIC Corporation 112,500 90 12,500 10 125,000 100 Shanghai Sifang Tongji Pure Water Co., Ltd. 6,380 91.45 -6,380 -91.45 - - Nantong Shanggong Sewing Machines Co., Ltd. 520 65 -520 -65 - - Shanghai Shangyuan S&T Development Co., Ltd. 4,200 70 - - 4,200 70 Shanghai Flying Man Imp. & Exp. Co., Ltd. 8,000 80 -8,000 -80 - - Shanggong (Europe) Holding Co., Ltd. EUR10,000 100 - - EUR10,000 100 7.2 Affiliated transactions 7.2.1 The transactions between the consolidated subsidiaries and between the Company and the consolidated subsidiary have been written-off. 7.2.2 Other affiliated transactions - 70 - (1) Details about the guarantees offered for affiliated parties are disclosed in 8.3. (2) Significant affiliated assets or equity transfer The 14th meeting of the Fifth Board of Directors and 2007 First Provisional General Meeting of Shareholders considered and agreed the Company to acquire the 10% equity of SMPIC from Shanghai Pudong New Area State-owned Assets Supervision and Administration Commission. This equity acquisition will be useful for the industrial restructure, the improvement of investment income and the enhancement of earning ability. According to the appraisal report HCRPB2007-3-080 by Shanghai Cairui Assets Appraisal Co., Ltd., taking Dec. 31, 2007 as evaluation date, the shareholders’ equity of SMPIC totaled RMB 525,279,448.15, and the 10% equity was priced at RMB 52,527,900. On Dec. 28, 2007, the Company paid in one time the acquisition price by its own funds. (3) Remuneration of key managers In 2007, the key managers of the Company received a remuneration totaled RMB 1,772,000 (RMB 1,723,600 in 2006). The key employees are composed of 15 managers including Directors, Supervisors, General Manager, Deputy General Manager, Accounting Head, etc (19 persons in 2006). 8 Contingent Items 8.1 Contingent liabilities arising from pending litigations or arbitrations Because of normal operations, the Company contracted mutual guarantee relationship with Shanghai Worldbest Industry Development Co., Ltd. (Worldbest Development). Till the end of 2006, the balance of borrowings from China Construction Bank Shanghai Branch (CCB SH) and Shenzhen Development Bank Shanghai Branch (SDB SH) was of RMB 118,487,600. Worldbest Development offered 95% equity of Jiangxi Xinyu Worldbest Far East Textile Co., Ltd. and 88.53% equity of Shanghai Worldbest Jerseys Co., Ltd. as counter-mortgage tender for the Company. Under the reason that Worldbest Development didn’t repay the borrowings on time, CCB SH and SDB SH launched lawsuits at Shanghai No. 1 Intermediate People’s Court (SH No.1 Inter. Court), claiming that the Company should complete the obligation as guarantor and repay the principal and interest totaled RMB 139,128,000 for Worldbest Development. SDB SH claimed litigation preserving acts for its litigation object totaled RMB 22,408,000 (the principal RMB 18,488,000), sealing up some equity in the Company’s stock account and some of its banking accounts. SH No.1 Inter. Court has accepted the case and scheduled the hearing for September 11, 2007. On September 25, 2007, the same Court acted the first instance result, charging the Company to repay the principal RMB 18,487,582 and the interest to SDB SH and claim recoupment to Worldbest Development. The Company lodged an appeal to the Higher People’s Court of Shanghai (Higher Court SH), which accepted the lawsuit on September 30, 2007. CCB SH claimed litigation preserving acts for its litigation object totaled RMB 11,672,000 (the principal RMB 100,000,000), sealing up the production land piling of the Company. SH No.1 Inter. Court has accepted the case and scheduled the hearing for August 7, 2007. On December 13, 2007, the same Court acted the first instance result, charging the Company to fulfill the joint liability responsibility. The Company lodged an appeal to the Higher People’s Court of Shanghai (Higher Court SH), which accepted the lawsuit on January 2, 2008. - 71 - Without informing and getting the permission of the Company, Worldbest Development sold 95% equity of Jiangxi Xinyu Worldbest Far East Textile Co., Ltd., which served as counter-mortgage tender of rights for the Company, to Xinyu State-owned Assets Supervision & Administration Commission (XY S&A Commission). XY S&A Commission developed an open integral equity transfer through Jiangxi Assets and Equity Exchange. The Company has launched a litigation of properties and assets at Shanghai No. 1 Intermediate People’s Court, claiming invalid the transfer agreement. SH No.1 Inter. Court accepted the lawsuit, but XY S&A Commission claimed a jurisdiction objection at the Higher People’s Court of Shanghai. The Higher Court SH rejected the appeal and sustained the original judgment. On February, 2008, the hearing was held in SH No.1 Inter. Court. On March 27, 2008, the Company reached agreement with Worldbest Development, who promised to offer 23.715% equity of Zhangjiagang Middle East Petrochemical Industrial Co., Ltd. and 35.3259% equity of Jiangsu Yalu Industrial Co., Ltd. as substitution of the original tender of rights. (The related lawsuits’ progress was disclosed in the announcements 2007-024, 026, 028 and 2008-002.) On the disclosure of current report, the negotiation between the Company and CCB SH, SDB SH was still in progress. 8.2 Contingent liabilities arising from debt guarantees for other entities as at Dec. 31, 2007 RMB’000 Guaranteed entity Sum Period Type Fulfilled or Impact on the financial status Dd/mm/yy not Non affiliated party: Shanghai Worldbest 30,000 11/11/2004- Joint liability No The Company is taking active measures Industry Development 09/11/2005 guarantee to dispose the litigation arising from the Co., Ltd. guarantee. Shanghai Worldbest 8,490 29/03/2005- Joint liability No The Company is taking active measures Industry Development 29/09/2005 guarantee to dispose the litigation arising from the Co., Ltd. guarantee. Shanghai Worldbest 10,000 27/05/2005- Joint liability No The Company is taking active measures Industry Development 23/05/2006 guarantee to dispose the litigation arising from the Co., Ltd. guarantee. Shanghai Worldbest 10,000 13/06/2005- Joint liability No The Company is taking active measures Industry Development 29/09/2005 guarantee to dispose the litigation arising from the Co., Ltd. guarantee. Shanghai Worldbest 30,000 06/06/2005- Joint liability No The Company is taking active measures Industry Development 01/06/2006 guarantee to dispose the litigation arising from the Co., Ltd. guarantee. Shanghai Worldbest 30,000 14/07/2005- Joint liability No The Company is taking active measures Industry Development 04/07/2006 guarantee to dispose the litigation arising from the Co., Ltd. guarantee. Shanghai Pudong 168,120 09/06/2006- Joint liability No This guarantee will not be overdue and Development Group Co. 08/06/2008 guarantee no negative impacts will be arisen. Subtotal 286,610 8.3 Other contingent items 8.3.1 The Company offered 48.96% equity of SMPIC as counter-guarantee equity tender of rights for the loan guarantee sized RMB 168,120,000 (really used balance of RMB 115,600,000 till Dec. 31, 2007) by Shanghai Pudong Development (Group) Co., Ltd. The guarantee period is from June 9, 2006 to June 8, 2008. - 72 - 8.3.2 Shanghai Xinhu Glass Co., Ltd. is an associated undertaking in which SMPIC occupies 20% equity. The bank borrowings of RMB 4,800,000 under its name are guaranteed by China Economic Technology Investment Guarantee Co., Ltd. and counter-guaranteed by SMPIC. The guarantee period is from June 25, 2007 to June 25, 2008. 9 Significant events 9.1 The Company has contracted mutual guarantee relationship with Shanghai Worldbest Industry Development Co., Ltd. (Worldbest Development). Till the end of report year, all the remained six borrowing guarantees have been overdue, with an amount of RMB 118,490,000. The Company is taking active measures to dispose the litigations arising from the guarantee relationship. 9.2 According to related articles in the equity acquisition agreement signed with FAG Kugelfischer AG (FAG), the Company should take certain joint-liability responsibility for the following affairs: 9.2.1 Besides the payment of € 949,821 for equity acquisition of Durkopp Adler AG, Shanggong (Europe) Holding Co., Ltd. (SG Europe), wholly-owned subsidiary of the Company, should bear the banking loans of DA’s original shareholders valued € 36,525,132.28. As at end of 2005, SG Europe had paid all the equity acquisition consideration and € 9,482,436.84 for banking loans. As originally agreed, the rest banking loans around € 27,042,695.44 would be covered with equal payment in nine years at an interest rate of 6% every June 30 since the year 2005. The Company assumed joint-liability responsibility for the equity acquisition, as well as the banking loans and interests. But the guarantee for banking loans and interests was maximum 50% of actual amount and € 12,500,000.00. Till the end of report year, SG Europe had paid first-period principal of banking loans € 3,004,743.94 for FAG, with the remaining amount to be € 24,037,951.50. 9.2.2 In 2005, the Company offered a letter of guarantee valued USD 5,300,000 to FAG Kugelfischer AG for the housing lease contract of DA’s subsidiary in the United States, valid from June 30, 2005 to October 31, 2015. On the same day June 30, 2005, SG Europe offered a cash mortgage of € 635,000 to FAG (with the same period of validity) for re-guaranteeing the latter’s responsibility in the sale and lease-back deal between DA’s subsidiary and UTF Norcross L.L.C. Till December 31, 2007, this guarantee deal didn’t cause outflow of economic interest from the Company. 10 Commitments 10.1 External investment contract made and unfulfilled or not fully fulfilled and the related accounting expenditure Till Dec. 31, 2007, the Company hasn’t any contract made and unfulfilled or not fully fulfilled to be disclosed. - 73 - 10.2 Big-ticket outsourcing contract made and in progress or to be fulfilled and the related accounting influence Till Dec. 31, 2007, the Company hasn’t any big-ticket outsourcing contract in progress or to be fulfilled to be announced. 10.3 Lease contract made and in progress or to be fulfilled and the related accounting influence Till Dec. 31, 2007, the Company hasn’t any lease contract made and in progress or to be fulfilled to be disclosed. 10.4 Merger agreement made and in progress or to be fulfilled Till Dec. 31, 2007, the Company hasn’t any merger agreement made and in progress or to be fulfilled to be announced. 10.5 Restructure program made and in progress or to be fulfilled Till Dec. 31, 2007, the Company hasn’t any restructure program made and in progress or to be fulfilled to be disclosed. 10.6 Other significant accounting commitments 10.6.1 Mortgaged assets RMB’000 Mortgage Purpose Sum Borrower Period dd/mm/yy Building at 1201 Luoshan Road Bank borrowing 26,300 SGSB Group 06/07/2007-08/04/2008 Building at 1201 Luoshan Road Bank borrowing 16,500 SGSB Group 06/07/2007-13/06/2008 Building at 175 Xiangyang Road Bank borrowing 42,000 SGSB Group 16/08/2007-15/08/2008 1407 South Xizang Road Bank borrowing 62,000 SGSB Group 21/11/2007-20/11/2008 11F, 1500 Century Avenue Bank borrowing 10,000 SGSB Group 05/02/2007-05/02/2008 Time deposit of USD 5,000,000 Bank borrowing 33,000 SGSB Group 12/11/2007-12/02/2008 436 Jumen Road, 12F&17F 1500 Bank borrowing 50,000 SMPIC 19/03/2007-05/03/2008 Century Avenue 669 Wusong Road Bank borrowing 24,000 SMPIC 05/07/2007-17/04/2008 2669 Xietu Road Credit deposit 10,000 SMPIC 19/08/2007-19/08/2008 Inventory EUR 4,429,000 and fixed Bank borrowing EUR 89 Shanggong Europe Less than one year assets EUR 427,000 5,000 Holding Co. EUR 1,000,000 Credit deposit Shanggong Europe Less than one year Holding Co. EUR 650,000 Deposit Shanggong Europe 30/06/2005-31/10/2010 Holding Co. 10.6.2Other entities offering guarantee for the Company RMB’000 Guarantor Guarantee Purpose Sum Period dd/mm/yy Shanghai Pudong Development (Group) Co., SGSB Group Bank borrowing 17,500 09/06/2007-19/05/2008 Ltd. Shanghai Pudong Development (Group) Co., SGSB Group Bank borrowing 27,100 06/07/2007-24/06/2008 Ltd. Shanghai Pudong Development (Group) Co., SGSB Group Bank borrowing 22,000 06/07/2007-04/07/2008 Ltd. Shanghai Pudong Development (Group) Co., SGSB Group Bank borrowing 20,000 23/08/2007-22/08/2008 Ltd. Shanghai Pudong Development (Group) Co., SGSB Group Bank borrowing 29,000 29/08/2007-29/08/2008 Ltd. - 74 - Total 115,600 11 Events occurring after balance sheet date Till the disclosure of current financial statements, there are no events occurring after balance sheet date that the Company shall announce. 12 Other important items that shall be disclosed 12.1 Acquisition / transfer of assets and business combinations 12.1.1 As approved by 2006 Annual General Meeting of Shareholders, the Company agreed to transfer the land parcels and three cohesive buildings at No. 519, No. 573 and No. 647 east Longhua Road (floor space 16,824.53m2) to Housing and Land Development Center of Luwan District at a price no lower than RMB 95,641,000. According to the transfer agreement, the price was set at RMB 105,000,000. As transfer conditions, the Company should terminate all the lease contracts related to the land parcels, clear all the lessees and vacate the buildings. During report year, the transfer registration formalities related to the parcels have been completed and the Company received partly the transfer price of RMB 75,000,000. 12.1.2 The 10th meeting of the Fifth Board of Directors considered and approved that Shanggong (Europe) Holding Co., Ltd. (SG Europe) acquired 385,400 shares, 4.7% of Durkopp Adler’s equity, at a price of EUR 47,000 (EUR 0.122 per share) from Shanghai International Holding Corp. Europe, and acquired 16,400 shares, 0.2% of DA’s equity, at a price of EUR 2,500 (EUR 0.152 per share) from Fact Verwal tungs-und Beratungsge sell schaft mbH. After these acquisitions, SG Europe holds 7,776,223 shares, 94.832% equity of Durkopp Adler AG. 12.1.3 The 12th meeting of the Fifth Board of Directors discussed and agreed that Durkopp Adler Trading (Shanghai) Co., Ltd., with purpose of resources’ integration, could acquire 100% equity of Durkopp Adler Far East Co., Ltd. HK at a price of USD 500,000. Till the end of report year, the acquisition is in progress. 12.2 R&D expenditures during report year In 2007, the Company invested an amount of RMB 76,202,300 in the R&D. 13 Current-year non-current profit/loss RMB’ Item Sum 1. Disposal of non-current assets 69,290,845.43 2. Government subsidies in current profit/loss 5,825,986.40 3. Funds dispossession surcharge 632,458,87 4. Other net non-operating income and expenditure 141,453.26 5. Influence on income tax -776,632.30 Total 75,114,111.66 - 75 - 14 Rate of return on net assets and earning per share Net profit Rate of return on net assets Earning per share Diluted Weighted Basic Diluted Net profit attributable to common shareholders 4.80% 5.10% 0.0624 0.0624 Net profit attributable to common shareholders after -8.06% -8.57% -0.1049 -0.1049 non-current profit/loss 14.1 Calculation method The above-listed data is result of the following calculations: Diluted rate of return on net assets Diluted rate of return on net assets=P/E P represents the net profit attributable to common shareholders or the net profit attributable to common shareholders after non-current profit/loss. E represents the year-end net assets attributable to common shareholders. The net profit attributable to common shareholders doesn’t include minority interest. The net profit attributable to common shareholders after non-current profit/loss is the consolidated net profit excluding minority interest after non-current profit/loss of parent company and non-current profit/loss of subsidiaries attributable to common shareholders of parent company. The year-end net assets attributable to common shareholders don’t include minority interest. Weighted rate of return on net assets Weighted rate of return on net assets=P/(E0+NP/2+Ei*Mi/M0+/-Ek*Mk/M0) P represents the net profit attributable to common shareholders or the net profit attributable to common shareholders after non-current profit/loss. NP means the net profit attributed to common shareholders. E0 represents the year-beginning net assets attributable to common shareholders, Ei as net assets created in current report year by new equity or bonus stocks attributable to common shareholders, Ej as net assets decreased in current report year by buying-back or cash bonus attributed to common shareholders. M0 means the number of months of report year, Mi the number of months from the next one after newly-added net assets to the end of report year, and Mj the number of months from the next one after newly-transferred net assets to the end of report year. Ek means the increase/decrease of assets caused by other transactions or events, Mk is the number of months from the next month after the increase/decrease of assets to the end of report year. Basic earning per share Basic earning per share=P/S S=S0+S1+Si*Mi/M0-Sj*Mj/M0-Sk P represents the net profit attributable to common shareholders or the net profit attributable to common shareholders after non-current profit/loss. S means the weighted mean of common equity publicly issued. S0 is the year-beginning equity number, S1 the added part of equity by capitalization of capital reserves or bonus shares, Si the added shares by newly issuance or debt-to-equity program, Sj the decreased part of equity by buying-back in report year, and Sk means the number of shrunk shares. M0 means the number of months of report year, Mi the number of months from the next one after newly-issued shares to the end of report year, and Mj the number of months from the next one after newly-decreased net assets to the end of report year. In case the enterprise owns dilutive potential common shares, it shall adjust respectively the current net profit attributable to common shareholders and the weighted mean of common shares, and calculate on thus basis the diluted earning per share. - 76 - Diluted earning per share Diluted earning per share= 【 P+(dilutive potential common equity interest recognized as expense-transfer charge)*(1-income tax rate 】 /(S0+S1+Si*Mi/M0-Sj*Mj/M0-Sk+stock right warrants, stock option, convertible bonds and other newly-added weighted mean of common shares) P represents the net profit attributable to common shareholders or the net profit attributable to common shareholders after non-current profit/loss. On calculating the diluted earning per share, the enterprise has considered all the influences of dilutive potential common shares. 14.2 There are no common shares currently non-dilutive but possibly dilutive potential in posterior periods in the Company’s equity structure. 14.3 There are no significant changes in common shares or potential common shares from the balance sheet date to the disclosure of current financial report. 15 Supplementary information 15.1 Difference adjustment of consolidated net profit in the year 2006 The Company has prepared the adjusted profit statement of the year 2006 and the balance sheet at beginning of 2007 in line with the spirits of . Item Sum RMB’ 2006 net profit under old accounting standards 4,893,123.59 Add: minority interest under old accounting standards 6,246,771.27 Influences of retroactive adjustments 2,656,274.82 Including: 1. Financial assets at fair value and in current profit/loss -1,446,411.05 2. Deferred income tax assets 24,657.30 3. Unrecognized investment loss -5,101,888.75 4. Amortization of original equity investment difference 9,179,917.32 2006 net profit under new accounting standards 13,796,169.68 Reference for the overall adoption of new accounting standards Other items’ influence subtotal 1,410,126.99 Including: return of payable staff welfare 1,410,126.99 Net profit of 2006 simulating new accounting standards 15,206,296.67 15.2 equity at beginning of 2007 According to and , the Company lists as following the adjustment of year-beginning owners’ equity, amended items, influences and their reasons: Item 2007 RMB’ 2006 RMB’ Difference Reason Shareholders’ equity as at Dec. 31, 2006 under old accounting 587,453,178.73 587,453,178.73 --- standards Long-term equity investment difference -54,672,023.22 -54,174,594.87 -497,428.35 Among which: long-term equity investment difference of -54,672,023.22 -54,174,594.87 -497,428.35 Note1 business combinations under the same control - 77 - Minority interest 103,164,634.78 102,020,875.32 1,143,759.46 Note2 Unrecognized investment loss --- 750,725.27 -750,725.27 Note2 Income tax 1,008,679.33 1,159,843.15 -151,163.82 Note3 Financial assets at fair value into current profit/loss 6.335,553.57 6.335,553.57 --- Business combinations -3,877,642.61 -3,877,642.61 --- Including: book value of goodwill by business combinations -3,877,642.61 -3,877,642.61 --- under the same control Shareholders’ equity as at Jan. 1, 200 under new accounting 639,412,380.58 639,667,938.56 -255,557.98 standards Note1: The Company rechecked the difference between book-value net assets and trading price at transaction basis date and made retroactive adjustments for those equity acquisitions under the same control. Note2: The excess losses of subsidiaries were attributable to parent company and retroactive adjustments were made correspondingly. Note3: According to the real operation situations, the Company rechecked the temporary differences between book value and tax basis and adjusted the 2007 year-beginning deferred income tax assets. 16 Authorization of the publication of financial statements The current financial statements have been authorized by the Board of Directors on April 18, 2008 to be submitted to the related authorities and the public. SGSB (Group) Co., Ltd. April 18, 2008 - 78 - Consolidated Balance Sheet 2007-12-31 Prepared by SGSB Group Co., Ltd. Assets Ending Balance Beginning Balance Liabilities and Owners' Equipty (or Stockholder's Equipty) Current Assets: Current Liabilities Cash and bank 438,292,840.47 528,084,498.88 Short-term loans Settlement reserve - - Central bank loan Capital lent - - Absorbing and bankers' deposit Tradable assets 9,875,912.50 24,420,473.91 Capital borrowed Bills receivable 3,070,470.00 1,484,084.00 Tradable financial liabilities Accounts receivable 425,696,200.10 389,382,341.03 Bills payable Prepayments 28,346,378.56 33,953,490.24 Accounts payable Receivable premium - - Advances on sale Receivable rein. accounts - - Sell repo. financial assets Receivable rein. contract reserve - - Commission unpaid Interest receivable - - Wages and salaries unpaid Dividend receivable 879,792.24 738,337.48 Tax unpaid Other receivables 78,523,031.12 90,814,120.37 Interest unpaid Reverse repo. financial assets - - Dividend unpaid Inventories 539,757,696.79 477,026,119.00 Other payables Long-term creditor-investment to be expired in one year - - Payable rein. accounts Other current assets 1,245,523.34 794,017.49 Insurance contract reserve Total current assets 1,525,687,845.12 1,546,697,482.40 Securities trading agency accounts Securities consignment accounts Non-current assets Long-term liabilities to be expired in one year Loans launched and advances - - Other current liabilities Available for sale financial assets 24,458,496.92 -Total current liabilities Held-to-maturity investment - - Non-current liabilities Long-term receivables - - Long-term loans Long-term investment on stocks 48,955,997.62 60,096,937.51 Bonds payable Investment properties 161,003,519.93 168,549,869.42 Long-term accounts payable Fixed assets 364,153,089.40 377,952,942.01 Specific payable Construction in progress 3,682,674.12 6,179,403.35 Contingent liabilities Construction materials - - Deferred tax liability Disposal of fixed assets - - Other non-current liabilities Consumable biological asset - - Total non-current liabilities Oil&gas asset - - Total liabilities Intangible assets 123,127,892.57 127,876,518.30 Owners' equity R&D expense 48,984,446.87 38,467,958.48 Paid-up capital (or stock) Goodwill 31,079,079.84 29,912,474.40 Capital reserve fund Long-term unamortized expense - 102,060.30 Less: treasury stock Deferred tax asset 48,965,660.16 85,093,416.31 Surplus reserve fund Other non-current assets - - Common risk reserve Total non-current assets 854,410,857.43 894,231,580.08 Undistributed profit Difference of foreign currency translation Total owners' equity attributable to parent company Minority interests Total owners' equity Total Assets 2,380,098,702.55 2,440,929,062.48 Total liabilities and owners' equity Legal representative: Accounting Principal: Chief Accountant (or CFO): A Consolidated Income Statement Year 2007 Prepared by SGSB Group Co., Ltd. Item Current Year 1. Total operating revenues 2,538,060,869.69 Including: Operating revenues 2,538,060,869.69 Interest revenue - Earned premium - Commissions earned - 2. Total operating expense 2,557,158,692.95 Including: Operating expense 1,926,456,232.29 Interest expense - Handling charge and Commission expense - Surrender value - Loss expense net value - Insurance contract reserve net value - Policy dividend expense - Reinsurance expense - Sales tax and extra charges 3,936,059.63 Sales expense 293,543,940.46 Administration expense 268,197,205.58 Financial expense 36,732,016.70 Loss in assets' devaluation 28,293,238.29 Add: Net income in fluctuation of fair value (less: net loss) 70,231.94 Investment income 48,988,699.35 Including: Investment income in associated and joint-ventured enterprises - Exchange gains and losses (less: loss) - 3. Operating profit 29,961,108.03 Add: Non-operating income 62,654,560.87 Less: Non-operating expense 972,598.84 Including: Net loss in disposal of non-current assets - 4. Total profit 91,643,070.06 Less: Income tax expense 59,313,753.73 5. Net profit 32,329,316.33 Including: Net profit earned by the merged enterprise before merger Net profit attributable to parent company 28,030,284.53 Minority interest 4,299,031.80 6. Earning per share (1) Basic earning per share (2) Diluted earning per share Accounting Legal representative: Accounting Principal: Chief Accountant (or CFO): Accountant) Consolidated Owners' Equipty (Stockholders' Equipty) Movement Statement Year 2007 Prepared by SGSB Group Co., Ltd. Current Year Owners' equity attributable to parent company Owners' equity attributable to parent com Converted difference in Minority interest Total owners' equity Less: Un-recongnized Less: treasury Common Risk Undistributed profit foreign currency Treassury Investment Loss Item Paid-up capital Capital reserve stock Surplus reserve Reserve statements Paid-in Capital Capital Surplus Stock Surplus reserve General Reser 1. Last accounting period balance 448,886,777.00 397,177,336.51 4,546,242.52 -251,161,084.31 -7,507,252.69 -4,488,840.30 103,164,634.78 690,617,813.51 448,886,777.00 383,789,877.38 26,001,680.07 -59,907,903.27 7,507,252.69 152,630.82 1,042,586.83 -51,205,432.93 Add: accounting policy changes - Correction of previous-period accounting errors 448,886,777.00 397,177,336.51 - 4,546,242.52 - -311,068,987.58 - -4,336,209.48 104,207,221.61 639,412,380.58 448,886,777.00 383,789,877.38 - 26,001,680.07 - 2. Beginning balance - 3. Increase/decrease 28,030,284.53 4,299,031.80 32,329,316.33 (1) Net profit - 14,040,908.08 - - - -167,017.58 7,364,264.84 - 21,238,155.34 13,387,459.13 - - (2) Gains and losses directly into owners' equity a. Net value of fluctuation in fair value of tradable 16,636,296.92 16,636,296.92 financial assets b. Influence of changes of other owners' equity from 16,862,640.73 16,862,640.73 3,034,747.51 invested units under equity method - c. Influence of income tax related to owners' equity -19,458,029.57 -167,017.58 7,364,264.84 -12,260,782.31 10,352,711.62 d. Others - 14,040,908.08 - - - 27,863,266.95 7,364,264.84 4,299,031.80 53,567,471.67 - 13,387,459.13 - - Subtotal of (1) and (2) - - - - - - - -49,301,242.96 -49,301,242.96 - - - - (3) Owner inputs and reducing capital -49,301,242.96 -49,301,242.96 a. Owner inputs capital - b. Shares included in owners' equity - c. Others - -21,455,437.55 (4) Profit distribution - -21,455,437.55 a. Surplus reserve - b. Common risk reserve - c. Distribution to owners or shareholders - d. Others - (5) Inner carry-over of owners' equity - a. Capital reserve turn to stock equity - b. Surplus reserve turn to stock equity - c. Surplus reserve to recover loss - d. Others 448,886,777.00 411,218,244.59 - 4,546,242.52 - -283,205,720.63 - 3,028,055.36 59,205,010.45 643,678,609.29 448,886,777.00 397,177,336.51 - 4,546,242.52 4. Ending balance Legal representative: Accounting Principal: Chief Accountant (or CFO): Consolidated Cash Flow Statement Year 2007 Consolidated report - 03 Prepared by SGSB Group Co., Ltd. in CNY Item Current Year Previous Year 1. Cash flows from operating activities: Cash inflow from sale of goods and provision of services 2,705,038,087.20 2,755,064,932.95 Net increase in customers and bankers' deposit Net increase in borrowing from central bank Net increase in capital borrowed from other financial institutions Cash received from original insurance contract premium Net cash received from reinsurance Net increase in customers' deposit and investment Net increase in disposal of tradable financial assets Cash received as interest and commissions Net increase in capital borrowed Net increase in buy-back capital Repayment of tax received 64,013,195.30 60,998,442.60 Other cash flow related to operating activities 72,694,165.59 38,019,809.10 Total cash inflow from operating activities 2,841,745,448.09 2,854,083,184.65 Cash outflow for purchase of goods and services 1,904,638,480.09 1,836,700,748.82 Net increase in customers loans and advance payment Net increase in deposit in central bank and other bankers Cash payment for original insurance contract loss Cash for interest and commissions Payment of policy dividend Payment to and for staff 694,008,362.90 685,790,746.94 Taxation paid 29,880,231.11 29,890,280.33 Other payment related to operating activities 182,548,709.14 185,184,022.65 Total cash outflow from operating activities 2,811,075,783.24 2,737,565,798.74 Net cash in/outflow generated from operations 30,669,664.85 116,517,385.91 2. Cash flow from investing activities Cash inflow from retirement of investment 48,638,046.40 30,352,008.01 Cash inflow from profit of investment 28,724,807.29 14,728,295.13 Cash gain from disposal of fixed assets, intangible assets, and other long-term investment 96,355,413.85 48,569,810.34 Cash inflow from disposal of subsidiaries and other operating units 8,748,979.31 7,058,480.62 Other proceeds related to investment activities - 1,292,267.90 Total cash inflow from investing activities 182,467,246.85 102,000,862.00 Cash paid for acquisition of fixed assets, intangible assets and other long-term assets 80,868,282.39 74,117,893.30 Cash paid for investment 73,033,786.13 5,235,308.58 Net increase in pledge loan Cash paid for acquisition of subsidiaries and other operating units - Cash paid for other activities related to investment 10,791,813.80 Total cash outflow from investing activities 164,693,882.32 79,353,201.88 Net cash in/outflow generated from investment activities 17,773,364.53 22,647,660.12 3. Cash flow from financing activities Absorption of investment - 4,015,407.00 Among which: absorption of stock investment of minority shareholders by subsidiary companies - Borrowings raised 488,186,749.50 603,765,000.00 Cash raised by bond flotation Other cash inflow related to financing activities - Total cash inflow from financing activities 488,186,749.50 607,780,407.00 Borrowings repaid 588,603,034.50 660,319,831.38 Dividend, interest and profit paid 48,706,797.60 41,341,768.23 Among which: pay for dividends of minority shareholders - Other cash outflow related to financing activities Total cash outflow from financing activities 637,309,832.10 701,661,599.61 Net cash in/outflow from financing activities -149,123,082.60 -93,881,192.61 4. Influence of fluctuation of exchange rate 10,888,394.81 4,244,742.27 5. Net increase/decrease in cash and cash equivalents -89,791,658.41 49,528,595.69 Add: beginning balance of cash and cash equivalents 528,084,498.88 478,555,903.19 6. Ending balance of cash and cash equivalents 438,292,840.47 528,084,498.88 Accounting Department In-charge (In-charge Legal representative: Accounting Principal: Chief Accountant (or CFO): Accountant): Balance Sheet 2007-12-31 Prepared by SGSB Group Co., Ltd. Liabilities and Owners' Equipty (or Stockholder's Assets Ending Balance Beginning Balance Equipty) Current Assets: Current Liabilities Cash and bank 92,076,908.44 167,879,113.66 Short-term loans Tradable assets 7,834,018.48 23,107,955.44 Tradable financial liabilities Bills receivable 334,400.00 1,414,084.00 Bills payable Accounts receivable 31,498,164.32 51,941,651.74 Accounts payable Prepayments 1,478,532.26 6,231,819.38 Advances on sale Interest receivable - - Wages and salaries unpaid Dividend receivable 2,261,201.23 6,068,863.25 Tax unpaid Other receivables 67,991,151.45 51,898,711.76 Interest unpaid Inventories 13,041,173.35 55,376,089.15 Dividend unpaid Long-term creditor-investment to be expired in one year Other payables Other current assets Non-current liabilities to be expired in one year Total current assets 216,515,549.53 363,918,288.38 Other current liabilities Non-current assets Total current liabilities Available for sale financial assets 20,373,696.92 - Non-current liabilities Held-to-maturity investment - - Long-term loans Long-term receivables - - Bonds payable Long-term investment on stocks 533,629,462.77 447,245,836.43 Long-term accounts payable Investment properties 53,764,823.92 58,911,991.35 Specific payable Fixed assets 81,072,420.89 106,652,105.59 Contingent liabilities Construction in progress 258,744.72 1,475,063.85 Deferred tax liability Construction materials - - Other non-current liabilities Disposal of fixed assets - - Total non-current liabilities Consumable biological asset - - Total liabilities Oil&gas asset - - Owners' equity Intangible assets 48,621,781.01 72,545,904.94 Paid-up capital (or stock) R&D expense - - Capital reserve fund Goodwill - - Less: treasury stock Long-term unamortized expense - - Surplus reserve fund Deferred tax asset - - Undistributed profit Other non-current assets - - Total Owners' Equity (or Stockholder's Equipty) Total non-current assets 737,720,930.23 686,830,902.16 Total Assets 954,236,479.76 1,050,749,190.54 Total liabilities and owners' equity Legal representative: Accounting Principal: Chief Accountant (or CFO): Income Statement Year 2007 Prepared by SGSB Group Co., Ltd. Item Current Year 1. Total Operating Revenues 90,811,372.18 Less: Operating Cost 89,680,251.72 Operating Tax and Surcharge 487,136.20 Sales expense 1,100,682.67 Administration expense 61,310,093.07 Financial expense 19,672,312.79 Loss in assets' devaluation 19,448,452.00 Add: Net income in fluctuation of fair value (less: net loss) -1,080,837.82 Investment income 16,134,441.11 Including: Investment income in associated and joint-ventured enterprises - 2. Operating profit -85,833,952.98 Add: Non-operating income 62,686,387.77 Less: Non-operating expense 176,626.38 Including: Net loss in disposal of non-current assets 138,528.00 3. Total profit -23,324,191.59 Less: Income tax expense - 4. Net profit -23,324,191.59 5. Earning per share (1) Basic earning per share (2) Diluted earning per share Legal representative: Accounting Principal: Chief Accountant (or CFO): Owners' Equipty (Stockholders' Equipty) Movement Statement Year 2007 Prepared by SGSB Group Co., Ltd. Current Year Item Paid-in Capital Capital Surplus Less: Treassury Stock Surplus Reserve Undistributed profit Total Owners' Equity Paid-in Capital Capital Surplus 1. Last accounting period balance 448,886,777.00 397,177,336.51 4,546,242.52 -246,475,130.11 604,135,225.92 448,886,777.00 383,789,877.38 Add: accounting policy changes -4,515,441.94 -226,349,949.07 -230,865,391.01 -1,480,694.43 Correction of previous-period accounting errors - 2. Beginning balance 448,886,777.00 392,661,894.57 - 4,546,242.52 -472,825,079.18 373,269,834.91 448,886,777.00 382,309,182.95 3. Increase/decrease (1) Net profit -23,324,191.59 -23,324,191.59 (2) Gains and losses directly into owners' equity - 16,636,296.92 - - - 16,636,296.92 - 10,352,711.62 a. Net value of fluctuation in fair value of tradable financial assets 16,636,296.92 16,636,296.92 b. Influence of changes of other owners' equity from invested - units under equity method c. Influence of income tax related to owners' equity - d. Others - 10,352,711.62 Subtotal of (1) and (2) - 16,636,296.92 - - -23,324,191.59 -6,687,894.67 - 10,352,711.62 (3) Owner inputs and reducing capital a. Owner inputs capital - b. Shares included in owners' equity - c. Others - (4) Profit distribution a. Surplus reserve - b. Distribution to owners or shareholders - c. Others - (5) Inner carry-over of owners' equity a. Capital reserve turn to stock equity - b. Surplus reserve turn to stock equity - c. Surplus reserve to recover loss - d. Others - 4. Ending balance 448,886,777.00 409,298,191.49 - 4,546,242.52 -496,149,270.77 366,581,940.24 448,886,777.00 392,661,894.57 Legal representative: Accounting Principal: Chief Accountant (or CFO): Cash Flow Statement Year 2007 Prepared by SGSB Group Co., Ltd. Item Current Year 1. Cash flows from operating activities: Cash inflow from sale of goods and provision of services 102,805,063.77 Repayment of tax received - Other cash flow related to operating activities 20,622,290.82 Total cash inflow from operating activities 123,427,354.59 Cash outflow for purchase of goods and services 51,708,677.55 Payment to and for staff 26,153,031.65 Taxation paid 7,250,090.36 Other payment related to operating activities 89,760,326.25 Total cash outflow from operating activities 174,872,125.81 Net cash in/outflow generated from operations -51,444,771.22 2. Cash flow from investing activities Cash inflow from retirement of investment 30,485,413.59 Cash inflow from profit of investment 6,488,630.54 Cash gain from disposal of fixed assets, intangible assets, and other long-term investment 89,401,876.81 Cash inflow from disposal of subsidiaries and other operating units - Other proceeds related to investment activities - Total cash inflow from investing activities 126,375,920.94 Cash paid for acquisition of fixed assets, intangible assets and other long-term assets 401,170.87 Cash paid for investment 93,192,595.00 Cash paid for acquisition of subsidiaries and other operating units - Cash paid for other activities related to investment - Total cash outflow from investing activities 93,593,765.87 Net cash in/outflow generated from investment activities 32,782,155.07 3. Cash flow from financing activities Absorption of investment - Borrowings raised 357,400,000.00 Other cash inflow related to financing activities - Total cash inflow from financing activities 357,400,000.00 Borrowings repaid 401,549,000.00 Dividend, interest and profit paid 18,082,780.01 Other cash outflow related to financing activities - Total cash outflow from financing activities 419,631,780.01 Net cash in/outflow from financing activities -62,231,780.01 4. Influence of fluctuation of exchange rate 5,092,190.94 5. Net increase/decrease in cash and cash equivalents -75,802,205.22 Add: beginning balance of cash and cash equivalents 167,879,113.66 6. Ending balance of cash and cash equivalents 92,076,908.44 A Legal representative: Accounting Principal: Chief Accountant (or CFO): ch