Annual Report of the Company; Investors Are Advised to Take Note in Reading This Summary
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Contents I Company profile . 2 II. Summary of accounting and business data . 3 III. Change in share capital and shareholders . 5 IV Directors, supervisors, senior management and employees . .9 V Corporate governance structure . 14 VI Brief notes on general meetings . 19 VII Report of the directors . 20 VIII Report of the supervisory committee . 41 IX Connected transactions . 43 X Significant events . 50 XI Financial reports . 57 XII Documents available for inspection . 172 Important Notice The Board of Directors (the “Board”) and Supervisory Committee of Luoyang Glass Company Limited (the “Company”) and its directors (the “Directors”), supervisors and senior management warrant that there is no false representation and misleading statement in or material omission from this report and jointly and severally accept responsibilities for the truthfulness, accuracy and completeness of the content contained herein. All Directors attended the Board meeting. The financial statements were prepared in accordance with the People’s Republic of China (“PRC”) Accounting Rules and Regulations and International Financial Reporting Standards and audited by Daxin Certified Public Accountants Co., Ltd. and PKF Certified Public Accountants respectively. The auditors have issued auditors’ reports with explanatory paragraphs and non-qualified opinions. Detailed explanations were also given by the Board and the Supervisory Committee of the Company in the 2008 Annual report of the Company; investors are advised to take note in reading this summary. Mr. Gao Tianbao, the Chairman, Ms. Song Fei, the Chief Financial Controller and Ms. Hai Sumin, the Head of Finance Department, warrant the authenticity and completeness of the financial statements set out in the annual report. Annual Report 2008 1 Company profile 1. Registered company name in Chinese: 洛陽玻璃股份有限公司 Company’s Short Name: Luoyang Glass Registered company name in English: Luoyang Glass Company Limited (Abbreviation: LYG) 2. Legal representative: Gao Tianbao 3. Secretary to the Board: Song Fei Correspondence address: Secretary office of the Board of Luoyang Glass Company Limited No. 9, Tang Gong Zhong Lu, Xigong District, Luoyang Municipal, Henan Province, the PRC Telephone: 86-379-63908588,63908507 Fax: 86-379-63251984 Email: [email protected] Securities representative: Zhang Kefeng Correspondence address: Secretary Office of the Board of Luoyang Glass Company Limited No. 9, Tang Gong Zhong Lu, Xigong District, Luoyang Municipal, Henan Province, the PRC Telephone: 86-379-63908629 Fax: 86-379-63251984 Email: [email protected] 4. Registered address and office address: No.9, Tang Gong Zhong Lu, Xigong District Luoyang Municipal, Henan Province, The People’s Republic of China (the “PRC’’) Postal code: 471009 Internet website: http://www.zhglb.com/ Corporate email: [email protected] 5. Newspapers for information disclosure: China Securities Journal and Shanghai Securities News The website for publishing the annual report: http://www.sse.com.cn, http://www.hkexnews.hk Company’s annual report available at: Secretary Office of the Board of Luoyang Glass Company Limited 6. A Shares — Place of Listing: Shanghai Stock Exchange Stock Code: 600876 Stock Name: *ST Luoyang Glass H Shares — Place of Listing: The Stock Exchange of Hong Kong Limited Stock Code: 1108 Stock Name: Luoyang Glass 7. Date of the First Registration of the Company: 6 April 1994 Place of the Registration of Luoyang Administration for Industry and Commerce the Company: 8. Date and Place of Registration of 19 April 1995 at the Luoyang Administration for Industry and Commerce Change of the Company: 9 August 1996 at Luoyang Administration for Industry and Commerce (Approved by the State Administration for Industry and Commerce). 9. Legal Person Business Registration Qi Ye Yu Luo Zong Zi 000327 Number of the Company: 10. Taxation Registration Number of the Company: 41030300100100027 11. Enterprise Code Certificate: 61480889-9 12. Accountants the Company appointed The PRC: Daxin Certified Public Accountants 7-8/F Blk. A-B, Golden Resources World Centre,1166 Zhongshan Ave, Wuhan China International: PKF Certified Public Accountants 26/F., Citicorp Centre, 18 Whitfield Road, Causeway Bay, Hong Kong 13. Legal Advisors Legal advisor of the PRC: Henan Weizheng Law Office (河南魏征律師事務所) Address: Room 402, Zhongshi Business Centre, Jiandong Road, Luoyang, Henan, the PRC Legal advisor of Hong Kong: Li & Partners Solicitors Address: 21/F, World Wide House, Central, Hong Kong 14. Custodian for the Company’s GUOSEN SECURITIES CO., LTD. Non-circulating Shares: 15. Share Registrars and Transfer Office Hong Kong Registrars Limited for H Shares: Rooms 1901-5, Hopewell Centre, 19th Floor, 183 Queen’s Road East, Wanchai, Hong Kong 2 Luoyang Glass Company Limited Summary of accounting and business data (Unless stated otherwise, the figures disclosed in this sections (1) to (4) below are prepared in accordance with the Accounting Standards for Enterprises issued by the Ministry of Finance of the People’s Republic of China (“PRC Accounting Standards”) (1) Major financial data in the reporting period Items Amount (Rmb) Operating profit (294,201,665.20) Total profit (37,209,125.73) Net profit attributable to shareholders of the Company 12,783,782.14 Net profit after non-recurring items attributable to shareholders of the Company (245,984,788.36) Net cash flow from operating activities (47,722,300.79) (2) Net profit after non-recurring items Non-recurring items Amount (Rmb) Profit or loss on disposal of non-current assets 233,884,733.31 Government subsidies through profit or loss for the reporting period 21,989,800.00 Profit or loss from reorganization of debt 21,949.98 Other non-operating income and expenses 1,101,056.19 One-off adjustment to current profit or loss (in accordance with laws and regulations of tax and accounting) 2,721,732.84 Effect of non-recurring profit or loss on income tax Effect of non-recurring profit or loss on minority interest (950,701.82) Total 258,768,570.50 (3) Differences between IFRSs and the PRC Accounting Standards Unit: (Rmb) PRC accounting standards IFRSs Net profit attributable to shareholders of the Company 12,783,782.14 54,040,000.00 Equity attributable to shareholders of the Company 229,156,045.71 197,859,000.00 Explanations for difference Significant differences between the annual financial reports of the Group for the year prepared under the PRC Accounting Standards and IFRSs are set out in this summary. Annual Report 2008 3 Summary) of accounting and business data (Continued) (4) Principal accounting data and financial indicators in the previous three years as at the end of the reporting period Unit: (Rmb) Increase/ decrease as compared Principal with last financial indicators 2008 2007 year (%) 2006 Operating revenue 1,322,532,854.82 1,508,756,180.44 -12.34 1,247,337,711.19 Total profit/(loss) (37,209,125.73) (73,009,423.96 ) -49.04 (429,031,589.40) Net profit attributable to shareholders 12,783,782.14 (95,343,480.67 ) N/A (372,466,837.52) of the listed company Net profit after extraordinary profit or loss attributable to shareholders of (245,984,788.36) (110,186,360.07 ) 123.24 (366,922,000.00) the listed company Net cash flow from operating activities (47,722,300.79) (10,720,925.72 ) 345.13 (7,550,394.26) Total assets 2,003,149,707.07 2,039,580,095.59 1.79 2,189,293,094.26 Equity attributable to shareholders 229,156,045.71 216,372,263.57 5.91 311,715,744.24 of the parent company Basic earnings per share (Rmb) 0.03 (0.19) N/A (0.53) Diluted earnings per share (Rmb) 0.03 (0.19) N/A (0.53) Basic earning per share after extraordinary items (Rmb) (0.49) (0.22) 122.73 (0.52) Return on net assets (fully diluted) (%) 5.58 (44.06 ) Increased by 49.64 (119.49) percentage points Weighted average return on net assets (%) 5.74 (36.11 ) Increased by 41.85 (48.21) percentage points Return on net assets after non-recurring (107.34) (50.92 ) Decreased by 56.42 (117.71) items (fully diluted) (%) percentage points Weighted average return on net assets (110.42) (41.73 ) Decreased by 68.69 (47.49) after non-recurring items (%) percentage points Net cash flow per share from operating (0.10) (0.02) 400.00 (0.02) activities (Rmb) Net assets per share attributable to 0.46 0.43 6.98 0.62 shareholders of the listed company (Rmb) 4 Luoyang Glass Company Limited Change in share capital and shareholders (Unless stated otherwise, the information of this section is prepared in accordance with the Listing Rules of Shanghai Stock Exchange) (I) Share changes Unit: Share Before change Increase/(decrease) After change Converted New from share Bonus capital Items Number Percentage Issue issue reserve Others Sub-total Number Percentage I. Share subject to trading moratorium 179,018,242 35.80% 179,018,242 35.80% 1. State-owned shares 2. State-owned legal person shares 179,018,242 35.80% 179,018,242 35.80% 3. Other domestic shares Including: shares held by domestic corporations Shares held by domestic natural persons 4. Foreign invested shares Including: shares held by overseas corporations Shares held by overseas individuals II. Share not subject to trading moratorium 321,000,000 64.20% 321,000,000 64.20% 1. Ordinary domestic shares 71,000,000 14.20% 71,000,000 14.20% 2. Domestically listed foreign invested shares 3. Overseas listed foreign invested shares 250,000,000 50% 250,000,000 50% 4. Others III. Total shares 500,018,242 100% 500,018,242 100% Changes in shares subject to trading moratorium Number of shares Number of Numbers of subject to shares Increase of shares subject trading with trading shares subject to trading moratorium at moratorium to trading moratorium Reason for Expiry date the beginning released moratorium at the end trading of trading Name of shareholder of the year in the year in the year of the year moratorium moratorium China Luoyang Float Glass (Group) Company Limited 179,018,242 0 0 179,018,242 Share Reform Nil Undertaking (II) Issuance and Listing of Securities 1.