Annual Report 2005
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SHENZHEN INTERNATIONAL ENTERPRISE CO., LTD. ANNUAL REPORT 2005 April 22, 2006 SHENZHEN INTERNATIONAL ENTERPRISE CO., LTD ANNUAL REPORT 2005 Section I. Important Notes, Paraphrase and Contents I. Important Notes The Board of Directors, the Supervisory Committee, directors, supervisors and senior executives of Shenzhen International Enterprise Co., Ltd. (hereinafter referred to as the Company) individually and collectively accept responsibility for the correctness, accuracy and completeness of the contents of this report and confirm that there are no material omissions nor errors which would render any statement misleading. Independent Director Shen Jinghua was absent from the Board meeting due to work reason. Independent Director Fang Yuji was absent from the Board meeting due to work reason, and authorized Director Song Shengjun to represent him and vote on his behalf at the board meeting.. Reanda Certified Public Accountants issued a standard unqualified Auditor ’s Report for the Company. Chairman of the Board of the Company Mr. Li Jinquan, General Manager Ms. Song Shengjun and Person in charge of Accounting and Chief Financial Supervisor Mr. Cai Yanhong hereby confirm that the Financial Report of the Annual Report is true and complete. II. Paraphrase The following shortened forms have the following meanings in this report unless otherwise stated: The Company: Shenzhen International Enterprise Co., Ltd. SDG: Shenzhen Special Economic Zone Development (Group) Co., Ltd. Foh Chong & Sons: Malaysia Foh Chong & Sons SDN.BHD. Taitian Industrial: Shenzhen Taitian Industrial Development Co., Ltd. Rongfa Company: Shenzhen Rongfa Investment Co., Ltd. III. Contents Section Ⅰ. Important Notes, Paraphrase and Contents-------------------------------------1 Section Ⅱ. Company Profile-------------------------------------------------------------------2 Section Ⅲ. Summary of Financial Highlight and Business Highlight-------------------3 Section Ⅳ. Changes in Share Capital and Particulars about Shareholders--------------5 Section Ⅴ. Particulars about Directors, Supervisors, Senior Executives and Staffs----9 Section .Ⅵ Corporate Governance-----------------------------------------------------------12 Section .Ⅶ Brief Introduction to the Shareholders ’ General Meeting------------------14 Section .Ⅷ Report of the Board of Directors ----------------------------------------------15 Section .Ⅸ Report of the Supervisory Committee----------------------------------------24 Section Ⅹ. Significant Events---------------------------------------------------------------25 Section Ⅺ. Financial Report-----------------------------------------------------------------31 Section Ⅻ. Documents for Reference-------------------------------------------------------31 - 1 - SHENZHEN INTERNATIONAL ENTERPRISE CO., LTD ANNUAL REPORT 2005 Section II. Company Profile 1. Legal Name of the Company In Chinese: 深圳市国际企业股份有限公司 In English: SHENZHEN INTERNATIONAL ENTERPRISE CO., LTD. 2. Legal Representative: Li Jinquan 3. Secretary of the Board of Directors: Zhou Meng Securities Affairs Representative: Zhang Weidong Tel: (86) 755-82281888, 82285565 Contact Address: Investment and Management Dept., on 23/F of Development Center Bldg., Renmin South Road, Shenzhen Fax: (86) 755-82285573 E-mail: [email protected] 4. Registered Address and Office Address: on 23/F of Development Center Bldg., Renmin South Road, Shenzhen Post Code: 518001 Company’s Internet Website: http://www.china-ia.com E-mail: [email protected] 5. Newspapers Chosen for Disclosing the Information of the Company: Securities Times and Hong Kong Ta Kung Pao Internet Website Designated by CSRC for Publishing the Annual Report: http://www.cninfo.com.cn The Place Where the Annual Report is Prepared and Placed: Investment and Management Dept. of the Company 6. Stock Exchange Listed with: Shenzhen Stock Exchange Short Form of the Stock: SZIEC-A SZIEC-B Stock Code: 000056 200056 7. Initial Registration Date: March 1993; Place: Shenzhen, Guangdong Registration Date after the Adjustment: Dec. 2002; Place: Shenzhen Guangdong Registration Code of Enterprise Corporate Business License: 4403011016891 Registration Code of Tax: 440303192179083 The Certified Public Accountants Engaged by the Company: Domestic: Reanda Certified Public Accountants Office Address: Room 808, Sun Dong An Plaza, No. 138, Wangfujing Av., Dongcheng District, Beijing International: BDO International Certified Public Accountants Office Address: 2008, East District of Zhubang 2000, No. 100, Balizhuangxili, Chaoyang District, Beijing - 2 - SHENZHEN INTERNATIONAL ENTERPRISE CO., LTD ANNUAL REPORT 2005 Section III. Summary of Financial Highlights and Business Highlights I. Major accounting data and business indexes as of the year 2005 (Unit: In RMB) As of the year 2005 Item Consolidated Statement Total profit 29,806,095.24 Net profit 7,001,516.39 Net profit after deducting non-recurring gains and losses -36,261,354.66 Profit from main operations 47,939,472.24 Profit from other operations 10,529,579.43 Operating profit -10,398,394.11 Investment income 32,190,880.00, Subsidy income - Net income / expense from non-operating 8,013,609.35 Net cash flows arising from operating activities 57,088,012.80 Net increase in cash and cash equivalents 5,862,427.39 Note: Items of deducting non-recurring gains and losses and the relevant amounts: Items Amount (RMB) (I) Gains/losses from disposal of long-term equity investment, fixed assets, project in construction, intangible assets and other long-term assets 42,280,939.69 (II) Gains and losses form short-term investment, excluded Gains and losses form short-term investment obtained by financial institutions with operating qualification approved to be set up by the administration of the State - (III) Other various non-operating income/expenses after deducting daily reserve for impairment of assets withdrawn by the Company in line with the regulations of Accounting System for Business -619,174.61 (IV)change of fund-occupation from non-financial corporation accounted for in income statement 1,445,786.89 (V) Return of Impairment loss withdrawn in the previous years 2,194,432.09 (VI) Losses of debts reorganization -1,445,786.89 (Ⅶ)Impact on income tax -581,837.28 Total of non-operating gains and losses 43,262,871.05 The explanation on the difference between the auditing results under PRC GAAP and IAS: As audited by Reanda Certified Public Accountants according to PRC GAAP and by BDO International Certified Public Accountants according to IAS promulgated by International Accounting Standard Committee, the Company ’s profit after taxation as of the year 2005 respectively was RMB 7,002 and RMB 27,271. The adjustment for the differences was as follows: - 3 - SHENZHEN INTERNATIONAL ENTERPRISE CO., LTD ANNUAL REPORT 2005 (Unit: In RMB’000) Consolidated statement as of the year 2005 Profit after tax as audited by Reanda Certified Public Accountants 7,002 Adjustment to conform with IAS: - Unconfirmed investment losses 4,942 Increase of depreciation charge - Taxation paid - Gains and losses form long-term investment return 3,781 Expense from non-operating 7,363 Finacial expense- Interest expense 4,182 Profit after tax as audited by BDO International Certified Public Accountants 27,271 Difference in the profit after taxation as audited by Reanda Certified Public Accountants Co., Ltd. under PRC GAAP and by BDO International Certified Public Accountants under IAS is due to the different regulations in PRC GAAP and IAS. II. Accounting data and financial indexes in the recent three years as at the end of report year Unit: In RMB Index 2005 2004 2003 Income from main operations 188,946,531.61 86,671,267.67 114,629,436.25 Net profit 7,001,516.39 -73,686,632.08 714,849.30 Total assets 728,664,738.16 937,464,009.62 1,030,478,158.12 Shareholder’s equity (excluding minority 200,927,031.38 177,437,673.14 305,460,975.24 interests) Earnings per share (RMB/share) 0.03 -0.334 0.0032 Weighted average earnings per share 0.032 -0.334 0.0032 Fully diluted earnings per share 0.0317 -0.334 0.0032 Earnings per share after deducting -0.164 -0.258 -0.089 non-recurring gains and losses Net assets per share (RMB/share) 0.91 0.80 1.38 Net assets per share after adjustment 0.68 0.74 1.34 (RMB/share) Net cash flows per share arising from 0.26 0.27 0.11 operating activities Return on equity (%) 3.48 -41.53 0.23 Weighted average return on equity after -20.04 -23.57 -6.44 deducting non-recurring gains and losses III. In accordance with the regulations of Editing and Reporting Rules Regarding Information Disclosure for Companies Publicly Issuing Securities (No. 9) promulgated by CSRC, the Company ’s return on equity and earning per share as of the year 2005 are calculated based on fully diluted method and weighted average - 4 - SHENZHEN INTERNATIONAL ENTERPRISE CO., LTD ANNUAL REPORT 2005 method are as follows: Return on equity (%) Earnings per share (RMB/Share) Profit in the report period Fully diluted Weighted average Fully diluted Weighted average Profit from main operations 23.86 26.49 0.22 0.22 Operating profit -5.18 -5.75 -0.05 -0.05 Net profit 3.84 3.87 0.0317 0.03 Net profit after deducting non-recurring gains and -18.05 -20.04 -0.1642 -0.16 losses 4. Changes in shareholders’ equity in the report year (Unit: RMB) Statutory Surplus public Total shareholders’ Items Share capital Capital reserve public Retained profit reserve equity welfare fund Amount at the 220,901,184 51,109,680.43 95,801,417.55 24,211,865.99 -160,249,804.81 177,437,673.14 year-begin Increase in