Transcription

1 2004

2

3 INNER MONGOLIA YITAI COAL COMPANY LIMITED IMYCC [email protected] [email protected] B B B

4 2004 : : 409,253, ,667, ,837, ,795,979, ,416, ,525, ,793, ,478, ,088, ,795, : : 348,667,495 72,502, ,623,882 1,205,067,933 29,709,378 29,709,378 5,140,489 2,372,894-52,089,008-46,948, ,550 13,622,206-1,553,843-1,438,293 40, , ,434-1,937,241-1,632, , ,029-5,104,361-4,996,332 1,407,737-5,599,973 1,407, ,718-1,509,000-1,509,000-1,303, ,641,113 84,132, ,939,429 1,179,660, ,709, ,242, ,140,489 46,948, ,086 (A) ,464 (B) A+B= 115,550-1,438,293 2

5 IAS ,880-1,632, ,200, ,029-4,996, ,939 (C) 1,415,676 (D) 2004 D-C= 1,407, , ,509, ,303,445 : : 70,273, , ,284, ,361, ,169, : : (%) 2,568,898, ,679,253, ,679,253, ,147,229, ,147,229, ,253, ,574, ,574, ,078, ,078, ,667, ,502, ,502, ,328, ,328, ,837, ,639, ,639, ,659, ,659, (%) 2,952,061, ,654,404, ,654,404, ,483,862, ,483,862, ,205,067, ,623, ,623, ,340, ,080, ,088, ,780, ,780, ,379, ,379,

6 2004 (%) % % % % (%)

7 : : % : : 366,000, ,468, ,191, ,095, ,867, ,623, ,866, ,433, ,667, ,967, ,220, ,220, ,000, ,468, ,058, ,529, ,315, ,205,067, : 1 200,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000,000 5

8 ,000, ,000, ,000, ,000,000 2 (1) : : ,000, ,000,000 (2) (3) 1 24,529 1 B 24,528 2 : ( ) (%) 0 200,000, HTHK-VALUE PARTNERS INTELLIGENT 7,053,514 7,053, FUNDS-CHINA B SHARE FUND SKANDIA GLOBAL FUNDS PLC 243,717 3,623, VALUE PARTNERS INTELLIGENT FUNDS- 3,458,499 3,458, CHINESE MAINLAND FOCUS FUND GUOTAL JUNAN SECURITIES(HONGKONG 2,733,936 2,733, KONG) LIMITED HTHK S/A MANULIFE GLOBAL FUND-CHINA VALUE 2,310,728 2,310, MERRILL LYNCH FAR EAST LIMITED 2,016,956 2,229, TOYO SECURITIES ASIA LTD. A/C CLIENT 1,582,843 1,858, SCBSH A/C GOLDEN CHINA FUND 1,848,968 1,848, ,676,608 1,676,

9 ,430, % ( " ") 20,000, 54.64%

10 A B H HTHK-VALUE PARTNERS INTELLIGENT FUNDS-CHINA B SHARE FUND 7,053,514 B SKANDIA GLOBAL FUNDS PLC 3,623,682 B VALUE PARTNERS INTELLIGENT FUNDS-CHINESE MAINLAND FOCUS FUND 3,458,499 B GUOTAL JUNAN SECURITIES(HONGKONG KONG) LIMITED 2,733,936 B HTHK S/A MANULIFE GLOBAL FUND-CHINA VALUE 2,310,728 B MERRILL LYNCH FAR EAST LIMITED 2,229,906 B TOYO SECURITIES ASIA LTD. A/C CLIENT 1,858,105 B SCBSH A/C GOLDEN CHINA FUND 1,848,968 B 1,676,608 B SCBHK A/C KG INVESTMENTS ASIA ASIA LIMITED 1,576,323 B 1 :

11 (1) (2) (3) (4) (5) (6) (7) (8) (9) , (10) (11) (12)

12 2004 (13) (14) (15) (16) (17) (18) (19) (20) (21) (22) (23) (24) (25)

13 * * 1+ *10000 * * 1+ * % 3 : : 9,126,548 2,580,000 1,320,000 36, ,000-1,000, , , , , ,

14 , ) 2) 3) 4) 12

15 2004 5) 1) , ,239, % 1 200,000, % 19 1,239, % 2) % 3) ) B ,477, % 1 200,000, % 9 1,477, % 2) 13

16 2004 3) % % , % 179, % 34, , % % 54.87% 44.83% % 61% 143% 128%

17 , (1) (2) : : (%) (%) 2,501,195, ,774,708, ,402, ,679, , , ,657, ,446, ,458, ,534, : / / / / 2,568,898, (3) : : (%) (%) : / / / / (4) : : (%) (%) 957,907, ,064,945, ,847, ,914, ,222, , : 15

18 2004 / / / / 2,568,898, (5) 98 (6) 10% : : (%) 2,501,195, ,487, (7) % (8), 2 (1) : : 85,400, ,843, ,499, ,000, ,986, ,360, % ,663, % 14.9% 5.86% % 2003 " " 16

19 % % GMP % , , (2) 10% % : : 66,731, (%) ,186, (%) , 17

20 ,175,746,000 2,568,898,402 2,026,339,900 2,079,241, ,710, ,193, ) 113,000, ) 66,000, ) 8,115, ) 14,457, : : 2,952,061, ,654,404, ,297,657, ,795,979, ,202,920, ,058, ,667, ,502, ,164, ,795, ,843, ,638, ,205,067, ,623, ,444, (1) (2) (3) (4)

21 2004 (5) , [2004]87 [2004]248 [2004]1563 BOT BOT BOT )

22 % 2004 OO OO ) ) OO OO B12 4) C 5) OO (1) " (2) B B ,667, ,641, % 34,866, % 17,433, ,367, ,340,

23 ,867, ,633, ,920, ,315, ,054, ,315, ,200, ,115, ,854, B [2003] : : 0 48, , [2003]56 " "

24 , , OO ,990, B

25 % 48, ( ) ,443,

26 2004 8,723, , ,093, % 35, [2004] , ,873.61, % [2004] , , , % 50% ,514, ,650, ,164, ,164, %=9,401, ,736, ,401, ,458, %=367,598, % 50 10% 4 : : 48, / / 24

27 , , , , : : ,000 5,900 5,

28 % 5% 500, , ,050, ,100,

29 2004 ( )

30 : : : 425,207, ,250, ,039, ,947, ,740, , ,740, , ,164, ,630, ,164, ,630, ,752, ,780, ,887, ,884, ,049, ,779, ,950, ,087, ,008, ,069, ,445, ,567, ,907, ,587, ,834, ,547, ,297, ,021, ,292, ,759, ,127, ,956, ,353, ,261, ,529, ,094, ,039, ,826, ,529, ,094, ,039, ,826, ,979, ,865,593, ,540, ,879, ,874, ,750, ,728, ,557, ,105, ,488,843, ,811, ,321, ,135, ,367, ,902, ,920, ,970, ,480,476, ,909, ,401, ,280, ,798, ,280, ,494, ,251, ,726,275, ,190, ,895, ,672, ,117, ,125, ,192,

31 2004 4,823, ,619, ,496, ,736, ,125, ,192, ,654,404, ,952,061, ,517,708, ,135,176, ,053, ,053, ,053, ,053, ,000, ,450, ,000, ,450, ,265, ,842, ,053, ,531, ,961, ,208, ,314, ,258, ,680, ,250, ,638, ,979, ,781, ,695, ,185, ,933, ,206, ,762, , , , , ,933, ,627, ,450, ,776, ,805, ,151, ,192, ,143, ,712, ,083, ,712, ,532, ,448, ,112,343, ,684, ,505, ,000, ,424, ,000, ,000, ,240, ,990, ,400, ,300, ,240, ,414, ,400, ,300, ,688, ,619,758, ,084, ,805, ,091, ,235, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,468, ,468, ,468, ,468,

32 ,287, ,587, ,287, ,587, ,095, ,529, ,095, ,529, ,867, ,315, ,867, ,315, ,920, ,200, ,920, ,200, ,303, ,623, ,205,067, ,623, ,206,371, ,654,404, ,952,061, ,517,708, ,135,176, : : : 2004 : : : 2,568,898, ,679,253, ,520,072, ,644,880, ,370, ,769, ,812, ,892, ,548, ,563, ,656, ,223, ,795,979, ,202,920, ,772,602, ,186,763, ,416, ,918, ,766, ,996, : 1,093,464, ,844, ,082,433, ,406, ,701, ,408, ,622, ,908, ,704, ,229, ,578, ,172, ,525, ,356, ,735, ,272, ,793, , ,787, ,266, , , , , ,931, ,908, ,483, ,981, ,253, ,574, ,695, ,488, ,426, ,986, ,028, ,986, ,537, ,913, ( -1,303,

33 2004 ) - 348,667, ,502, ,667, ,502, ,867, ,500, ,867, ,500, ,535, ,003, ,535, ,003, ,866, ,250, ,866, ,250, ,433, ,625, ,433, ,625, ( ) 380,235, ,127, ,235, ,127, ,920, ,260, ,920, ,260, ( - ) 336,315, ,867, ,315, ,867, ( ) 4. ( ) ,227, ,418, ,227, ,418, : : : 31

34 : : : 2,905,863, ,848,840, ,005, ,739, ,908,868, ,850,580, ,117, ,642, ,955, ,209, ,530, ,532, ,230, ,664, ,151, ,151, ,794, ,968, ,257,780, ,219,168, ,088, ,412, , , , , ,231, ,005, ,857, ,630, ,099, ,952, ,300, ,800, ,399, ,752, ,542, ,121, , , ,500, ,500, ,000, ,500, ,500, ,500, ,736, ,332, ,104, ,050,

35 ,341, ,882, ,341, ,382, ,795, ,091, ,667, ,667, ( - ) -5,537, ,303, ,667, ,746, ,063, ,710, ,981, ,623, , ,275, ,532, ,474, ,258, ,750, ,967, ( : ) 68,492, ,456, ,270, ,825, ,516, ,510, ,727, ,713, ( ) -61,192, ,851, ( ) 154,372, ,676, ,088, ,412, ,250, ,947, ,045, ,039, ,795, ,091, : : : 33

36 : : : 22,814, ,050, ,870, ,870, ,994, ,654, ,121, ,580, ,580, ,195, ,160, ,928, ,290, ,290, ,798, , , , , , , , ,894, , , ,007, , ,815, ,927, , , , , , ,135, ,920, ,687, ,687, ,367, , ,920, , , ,344, ,455, ,432, ,432, , : : : 34

37 : : : 13,529, ,522, ,005, ,005, ,046, ,587, ,158, ,649, ,649, ,095, ,942, ,364, ,356, ,356, ,950, , , , , , ,010 5,902, ,920,000 5,902, ,902, ,920,000 7,920,000 7,920,000 5,902, ,902, ,902, : : : 35

38 : : : 366,000, ,000, ,000, ,000, ,468, ,468, ,468, ,468, ,191, ,941, ,866, ,250, ,866, ,250, ,866, ,250, ,058, ,191, ,058, ,191,

39 ,095, ,470, ,433, ,625, ,433, ,625, ,529, ,095, ,867, ,500, ,667, ,502, ,220, ,135, ,315, ,867, : 256,200, ,920, : : : 2004 : : : , ,607, , ,009, ,325, , ,820, ,325, ,152, ,994, : : : 37

40 % B ISO B % 10% %

41

42 2004, % % % % : , 40

43 % 20% 20% 20% 20% 20% 50% 50% 50% [2003]10 ( ) :,,,,,

44 %-5% 10% %-4% 12.13%-2.4% 10 4% 9.6% %-4% 3% 45 3% 2.16% % 9.70%-2.77% %-10% 19.8%-4.75% 5 A B C D E 13 A 3 B C 14 42

45 A B C D A B C

46 % 50% 50% 2 [1995]11 (3) 90% 10% % : ,427, ,270,

47 ,528, :, 6% 13%, 17% 2 : 3%, 5% 20% 3 :, [2004] / 4 : [2003] % [2003] % [2002]47 15% 5 1% 5% 7% 6 3% % % 45

48 % % : , ,998, ,000, ,707, : 640, ,270, ,285, ,545, ,207, ,250, % ,837,

49 ,262, , ,262, , , , ,861, , ,262, , : ,164, ,630, ,835, % 8,291, ,033, % 10,701, ,804, % 1,620, ,343, % 651, ,206, % 1,551, ,313, % 328, ,560, % 7,190, ,285, % 514, ,407, % 18,654, ,976, % 12,195, % 5% 27,682, % 22,865, % 21,182, % 15,523, % 14,515, % 101,768, % 47

50 2004 1,597, , ,310, , ,461, ( , ,580, ,044, % 980, ,934, % 1,596, ,745, % 261, ,392, % 358, , % 248, , % 95, ,425, % 2,670, ,866, % 2,746, ,209, % 4,160, ,577, % 4,798, : 5% 5% 8,000, % 5,486, % 1,849, % 1,000, % 716, % 17,052, % 149,

51 , , ,006, , , , ,693, , ( , ,290, ,898, % 39,986, % , % 3,870, % , % 3 54, % 212, % 11,008, % 44,069, % 5%( 5%) 3 7 6,939, , ,888, ,538, ,344, , ,986, ,830, , ,639, ,927,

52 , , ,145, ,659, ,536, , ,595, ,007, : GMP 8 25,247, ,789, ,785, , , , , , ,297, ,021, ,529, ,081, ,516, ,094, ,529, ,081, ,516, ,094, , % 108,000, % 108,827, ,276, , , ,881, ,415, ,465, ,157, ,516, ,266,

53 ,979, ,060,558, ,944, ,865,593, ,924, ,951, ,128, ,746, ,785, ,785, ,688, ,054, ,094, ,648, ,468, ,468, ,875, ,556, ,432, ,097, ,321, , ,409, ,928, ,336, ,074, ,191, ,466, ,083, ,638, ,911, ,874, ,364, ,488, ,750, ,541, ,339, ,382, ,499, ,959, ,959, ,947, ,189, ,723, ,413, ,292, ,292, ,774, ,276, ,050, ,278, ,646, , ,922, ,404, ,336, ,573, ,167, ,927, ,325, ,807, ,444, ,105, ,193, ,455, ,488,843, :

54 , ,920, , ,922, , , ,455, ,432, , ,135, ,920, ,687, ,367, % ,750, ,115, , ,518, % 151, ,320, ,261, , , % 421, ,381, ,882, , ,801, % 62,088, ,806, ,895, % 1,561, ,457, , ,588, ,986, % 1,910, , ,795, , , % 2,464, ,629, ,062, , % 2,617, , ,221, % 1,604, , , ,222, % 1,185, , , % 1,080, ,411, ,636, , % 75,879, ,879, % 21,076, , ,048, % 5,441, ,441, % 2,148, ,521, , % 571, ,860, ,431, % 235, ,239, , ,727, % 3,639, ,116, ,999, , ,835, ,272, ,272, % 85,280, ,901, ,740, ,643, ,798,

55 ,843, ,604, ,375, ,772, ,181, ,045, ,025, ,143, ,799, ,772, , , ,125, ,462, , , ,245, ,468, ,887, , , ,742, ,384, ,559, , ,112, ,271, , , , , , , , , , , , , , , , , , , , , ,076, ,334, , ,665, ,411, ,203, ,203, , , ,019, ,171, ,171, , , ,167, ,800, ,358, , , ,202, ,044, ,883, , , ,722, ,042, ,253, ,817, ,612, ,584, ,457, , , , , , ,604, ,270, , , ,143, ,208, ,736, , ,157, ,051, ,521, ,746, ,734, ,509, ,012, , , , , , ,757, ,757, ,757, ,817, ,817, ,964, ,964, ,852, , , , , , , , , , , , ,139, ,672, ,463, ,037, ,981, ,985, ,117,

56 ,945, ,783, , , ,729, ,343, ,040, , , ,938, ,251, ,061, , ,300, ,950, ,540, ,823, ,061, , ,921, ,619, ,000, % 16,553, % 7,500, % 30,000, % 20,000, % 50,000, % 22,000, % 6,000, % 30,000, % 202,053, ,553, ,450, : %( 5%) 54

57 ,604, % 133,091, % 1-2 2,167, % 4,187, % , % 847, % 3 419, % 714, % 63,265, % 138,842, % : 5%( 5%) 1,514, ,748, % 14,088, % , % , % 120, % 32,961, % 14,208, % 5%( 5%) ,680, ,250,

58 ,781, ,695, ,954, ,164, % 17% 8,072, ,406, % 60, , , , % 5% 7% 462, , % 5% 20% 600, , / 7, , ,185, ,933, , , , , % 69, , ,695, % 358,322, % 1-2 5,737, % 5,974, % 2-3 1,119, % 2,313, % 3 2,380, % 11,015, % 48,933, % 377,627, % 56

59 2004 : 12 62% % 263,329, , , , , , , ,440, ,390, , ,354, ,459, ,513, ,089, , ,000, , ,065, , , ,805, ,151, ,000, % 7,000, % 100,000, % 10,000, % 20,227, % 35,000, % 4,655,

60 2004 6,200, ,083, ,000, % 20,000, % 9,000, % 218,424, % 35,000, % 40,000, % 14,000, % 436,424, ( ) 12,400, ,300, ,000, ,000, ,900, ,900, , , , , , , , , , , ,240, ,990,000.00, 58

61 ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,386, ,386, , , ,607, ,607, ,161, ,161, , , ,468, ,468,

62 ,191, ,866, ,058, ,095, ,433, ,529, ,287, ,300, ,587, % 5% 30-1,303, ,303, ,867, ,667, ,220, ,315, (1) % 5% ( ) 32 2,501,195, ,581,424, ,402, ,106, ,211, , , ,657, ,418, ,458, ,568,898, ,679,253, ,186,312.65, 38.70% 60

63 ,487, ,038, ,722, ,719, , , ,211, ,914, ,924, ,370, ,769, ,454, ,247, %-20% 13,590, ,851, / 307, , % 5% 7% 196, , % 15,548, ,563, [2004] / 35 40,335, ,479, ,523, ,840, ,462, , , , , , ,831, ,415, ,093,464, ,844,

64 ,701, ,408, ,270, ,977, : 1,790, ,064, , , : , , , ,704, ,229, , , ,516, , , , ,793, , , , , , , , , ,

65 ,920, , ,075, ,094, ,514, ,104, ,386, , , , , , , , ,931, ,908, % ,426, ,986, ,702, , ,200, ,005, ,954, ,988, ,762,

66 2004 3,295, ,734, ,123, ,734, ,511, ,840, ,879, ,426, ,150, ,711, ,000, ,424, ,000, , ,024, ,830, ,802, ,794, ,104, ,759, ,514, , , ,422,

67 ,361, ,169, ,501,195, ,581,424, ,487, ,038, ,402, ,106, ,722, ,719, ,211, , , , , ,657, ,418, ,211, ,914, ,458, ,924, ,568,898, ,679,253, ,370, ,769, ,907, ,736, ,064,945, ,658, ,847, ,863, ,914, ,996, ,222, , ,568,898, ,679,253,

68 ,430, ,430, ,000, ,000, ,400, ,400, ,290, ,000, ,290, ,400, ,400, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000,

69 ,000, % 200,000, % 186,000, % 186,000, % 74,400, % 74,400, % 25,297, % 25,297, % 1,800, % 1,800, % 18,000, % 13,000, % 5,000, % 940, % 940, % 6,000, % 3,000, % 3,000, % ,723, ,280, ,443, ,352, , ,050, ,093,

70 , , , , , , , ,353, , , ,000, ,000, ,329, ,717, ,059, ,335, % [2004] % 50% ,514, ,650, ,164, ,164, %=9,401, ,736, ,401, ,458, %=367,598,

71 2004 (2) 141, , ( ) ,598, % , % % 5% 69

72 % % (1) (2) #

73 ,957, ,795, ,837, % % % [2004] % 49% % [2004]63 71

74 ,591, ,303, ,

75 ,913, % 7,745, ,364, % 9,856, ,395, % 959, , % 3, ,617, % 904, , , ,548, % 1,977, , % 235, ,474, % 11,587, ,980, % 10,095, % 5% 27,682, % 22,865, % 21,182, % 15,523, % 14,515, % 101,768, % 1,597, , ,310, ,649, ,051, % 875, ,433, % 1,469, ,334, % 200, ,153, % 323, , % 227, , % 36,

76 ,597, % 639, , % 120, ,892, % 1,942, ,037, % 1,950, : % 5% 8,000, % 1,849, % 1,000, % 716, % 500, % 12,065, % 149, , , ,006, ,356, ,039, ,129, ,342, ,826, ,039, ,129, ,342, ,826, ,484, % -30,926, ,915,

77 ,276, % 559, , ,772, % 272, , , % 108,000, % 313,361, ,095, ,083, ,881, ,415, ,465, ,881, ,415, ,465, ,501,567, ,581,424, ,402, ,106, ,211, , , ,520,072, ,644,880,047.98, 5 727,031, ,038, ,722, ,719, , , ,812, ,892, ,095, ,367, ,415, , , , , ,787, ,266,

78

79 ( )

80

81 R ( ) ( ) ( )

82 ,604,922 1,679,254 (737,451) (467,391) 1,867,471 1,211,863 19,072 38,408 1,790 1,078 (1,093,464) (958,253) (274,991) (126,637) (43,271) (43,067) 7 476, ,392 (25,240) (25,992) (1,509) ,882 97,970 8 (72,669) (17,986) 377,213 79,984 5,428 4, ,641 84,

83 ,789, , , , (1,190) (1,413) , ,906 45, ,628 2,206, , ,060 70,781 20, 33 25, , , ,630 17, , , , , ,671 3,000,311 1,592,

84 , , , ,939 1,179, , ,132 9, , , ,952 17, ,735 5, , , ,960 24, ,995 6,928 24, 33 5,083 16, , , ,450-34,329 8, , ,666 1,129, ,399 3,000,311 1,592,

85 ( 1) ( 2) ( 2) , ,387 (26,368) 18,941 9,471 71, , ,132 84, ,250 - (7,250) ,625 (3,625) - ( 8) (40,260) (40,260) , ,387 (26,368) 26,191 13, , , , , ,867 - (34,867) ,433 (17,433) - ( 8) (43,920) (43,920) , ,387 (26,368) 61,058 30, ,054 1,179,660 (1) (2) 10% 50% 5% 10% - 5 -

86 , , ,978 63,590 27, , ,715 1,138 (223) (222) (124) (124) (1,790) (1,078) 78,289 20,116 3, ( ) 304 (99) (24) - ( )/ (4,550) 2, , ,816 (44,670) (13,692) ( )/ (24,590) 440 ( )/ (41,926) 20,829 /( ) 6,534 (15,864) ( )/ (11,521) 13,518 44,973 4,241 55, , ,288 (41,119) (17,317) (25,240) (25,992) 618, ,

87 ,790 1, ,592 (107,200) (800) (266,698) (183,672) (54,463) (12,093) (255) (599) (502) - (599) 27 (57,462) - (483,642) (7,490) (43,920) (40,260) (494,217) (460,048) 340, ,379 (149) (25) ( )/ (8,231) 2, ( )/ (205,757) 65,354 ( )/ (70,957) 238, , , , ,

88 ( ) ( ) ( ) 200,000, B ( ) 15 2,101 (2003 1,325 ) 2. B ( )

89 4. ( ) ( ) ( ) ( ) ( ) ( )

90 ( )

91 ( )

92 ,227,

93 ( ) ( ) ( ) ( ) ( )

94 4. - ( ) ,546,709 1,617,030 40,482 48,211 17,731 14,013 2,604,922 1,679,

95 ,270, ,278 17,731 1,596 43,144 40, ,604, , ,523 - (90,147) - 2,271, ,434 17,731 1,692 43,144 49, (90,147) 2,604,922 ( ) 409, , (33,269) (2,212) 2, ,607 (25,240) (1,509) ,882 (72,669) 377,213 48,769 6,340 6,606 4,024 28, ,029 5, ,951 38,638 21,265 34,536 4,824 2,980 12, ,987 27, , ,716 20,832 52,094-1,100 1,374 2, , ,172, , ,241 40, ,884 1,234,563 1,497-3,000, ,240 13,338 1,728 12,058 26, ,236 2, , ,932 1,593,

96 ,469, ,553 14,013 2,114 31,777 48, ,679,254 74, (74,701) - 1,469, ,254 14,013 2,114 31,777 48, (74,701) 1,679,254 91,829 47,361 (1,770) (27,302) (3,469) 16, ,392 (25,992) ,970 (17,986) 79,984 53,109 14, ,095 26,106 45,002 6, ,450 29,613 25,219 2,053 1,812 1,144 3, ,238 4, ,136 6, ,372 11, ,116 2, (6) (200) , , ,932 95,985 59,314 98, , ,592, ,895 13,015 1,326 13,467 32, , , ,

97 ,978 63,590 ( ) ,715 1,138 ( ) (124) (124) ( ) (223) (222) 81,785 64,835 1,372 3, (24) - 3, ,289 20,116 27, ,952 ( )/ (4,550) 2,319 /( ) 304 (99) ,426 17,986 ( 26) 5,243-72,669 17, % 33% 15%

98 ,882 97,970 33% 148,461 32,330 1,174 1,912 (253) (1,194) (2,240) (4,690) 12,638 11,212 (87,111) (21,584) 72,669 17, ,107 58,810 12,046 13,529 1,391 1, , ,036 79, , , , ,297 97,

99 ( ) 43,920,000 ( ,260,000 ) ,641,000 ( ,132,000 ) 366,000,000 ( ,000,000 ) , , , ,273 81, , ,974 6,341 10, ,037 10, , , , ,306 38, , ,420 4, ,832 99,240-41,607 - (250,367) - (44,094) (1,407) (38,628) - (21,305) - - (105,434) , , , , ,909 92, ,775 2,088, ,908 16,279 80,346-45,584 6, ,723 24,229 10,386 22,148 1,130 22,549 34, , , ,862 (4,723) (54) (11,328) - (11,040) - - (27,145) ,414 26, ,028 1,130 57,093 41, , , , , , ,816 51, ,775 1,789, ,780 96, , ,689 75, , ,251 25,013, ,849,000 (2003 )

100 , (3,854) ,854, ,575 ( 27) 4, , , , , ,598,000 ( )62% 4,998,

101 , , , , ( ) % % ( ) ( ) ( )

102 , ( )30% ,446 3,688 16,519 1,435 48,088 3,375-50, , , , (767) (767) ,858 3,688 67, , , ,323 1, , , (123) (123) , , , ,961 2,939 64, , ,011 3,040 16,519 1,195 45, ,

103 ,609 56,150 9,579 4,596 12,100 6,563 1,772 3, ,060 70, ,000,000 ( ,000,000 ) 20. (i) 227,000,000 ( ,000,000 ) 11,000,000 ( ,000,000 ) 44,000,000 ( ,000,000 ) 22,000,000 ( ,000,000 ) 29 ( ) 18,000,000 ( ,000,000 ) (ii) (iii) (iv)

104 , ,000, , ,000,000 1 B 166, ,000 B B

105 , , , , ,424 30, , ,666 ( ) (414,936) (306,666) 436, , , ,111 16,553 16, , % 7.6% ( % 6.7%) ,500,000 (2003 ) ,553, (i) ,261,000 ( ,261,000 ) 3,691,000 (2003 3,840,000 ) 3,691,

106 24. - (ii) 46 ( ) 58,000, (iii) (iv) 261,995, ,200, (1994 ) , , ,

107 , , ,598,000 62% 882,455 62, , , , ,806-11,806 46,838-46,838 (130,220) - (130,220) (500,651) - (500,651) (118,118) (104,121) (222,239) 192, , ,600 4, ,

108 , , ,598 (104,300) 46,838 (57,462) 4,087, , ,017,000 18,823, , ,000,000 30% 800, ,598,000 62% 104,300, ,298,

109 ,908 28,785 72,000 54, , ,728 84, ,592, ,748 4, , % ,805,000 (2003 2,670,000 ) ,185,000 ( ,000 )

110 ,000 ( ,000 ) ,200, ,995 6,928 25, ,083 16, ,723 3, ,403 1,050 62%367, ,647 22,088-2,470 2,470 3, ,443 73,

111 ,500,000 ( ,500,000 ) ,553,000 (2004 )

112 ,668 72,503 1,205, ,624 29,709-29,709-5,140 2,374 (46,949) (52,089) ,621 (1,439) (1,555) (1,633) (1,937) (4,996) (5,104) 1,408 (5,600) 1, (1,509) - (1,509) - (1,303) ,641 84,132 1,179, ,939

113 INNER MONGOLIA YITAI COAL CO., LTD. Financial Statements For the year ended 31 December 2004

114 INNER MONGOLIA YITAI COAL CO., LTD. REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2004 CONTENTS PAGE(S) REPORT OF THE AUDITORS 1 CONSOLIDATED INCOME STATEMENT 2 CONSOLIDATED BALANCE SHEET 3 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 4 CONSOLIDATED CASH FLOW STATEMENT 5 & 6 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 7-30

115 R REPORT OF THE AUDITORS TO THE SHAREHOLDERS OF INNER MONGOLIA YITAI COAL CO., LTD. (Established in the People's Republic of China with limited liability) We have audited the accompanying consolidated balance sheet of Inner Mongolia Yitai Coal Co., Ltd. (the "Company") and its subsidiaries (hereafter collectively referred to as the "Group") as of 31 December 2004 and the related consolidated statements of income, cash flows and changes in equity for the year then ended. These financial statements are the responsibility of the Group's management. It is our responsibility to express an opinion on these financial statements based on our audit and to report solely to you, as a body, in accordance with our agreed terms of engagement, and for no other purpose. We do not assume responsibility towards or accept liability to any other persons for the contents of this report. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Group's financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements present fairly, in all material respects, the financial position of the Group as of 31 December 2004 and the results of its operations and its cash flows for the year then ended, in accordance with International Financial Reporting Standards. Deloitte Touche Tohmatsu CPA Ltd. 12 April

116 INNER MONGOLIA YITAI COAL CO., LTD. CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2004 NOTES RMB'000 RMB'000 Turnover 5 2,604,922 1,679,254 Cost of sales (737,451) (467,391) Gross profit 1,867,471 1,211,863 Other operating income 19,072 38,408 Interest on bank balances 1,790 1,078 Distribution costs (1,093,464) (958,253) Administrative expenses (274,991) (126,637) Other operating expenses (43,271) (43,067) Profit from operations 7 476, ,392 Interest on bank borrowings wholly repayable within five years (25,240) (25,992) Share of result of an associate (1,509) - Income from investments 24 - Gain on dilution of interest in a subsidiary Profit before income tax 449,882 97,970 Income tax expense 8 (72,669) (17,986) Profit after income tax 377,213 79,984 Minority interest 5,428 4,148 Net profit for the year 382,641 84,132 Earnings per share 10 - basic RMB1.05 RMB diluted N/A N/A - 2 -

117 INNER MONGOLIA YITAI COAL CO., LTD. CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2004 ASSETS NOTES RMB'000 RMB'000 Non-current assets Property, plant and equipment 11 1,789, ,251 Agriculture assets ,126 Goodwill 13 5, Negative goodwill 14 (1,190) (1,413) Interest in an associate ,491 - Other assets ,906 45,765 Unlisted investments ,628 2,206, ,448 Current assets Inventories ,060 70,781 Amounts due from related parties 20 & 33 25, Trade and other receivables , ,869 Notes receivable 20 10,630 17,164 Investments held for trading ,740 Bank balances and cash , , , ,671 Total assets 3,000,311 1,592,119 EQUITY AND LIABILITIES Capital and reserves Share capital , ,000 Reserves 813, ,939 1,179, ,939 Minority interest 227,132 9,821 Non-current liabilities Unsecured bank loans - due after one year , ,000 Other long-term liabilities 24 16,952 17,101 Deferred income 25 5,735 5,859 Deferred tax liability 26 5, , ,960 Current liabilities Amount due to immediate holding company 24 & ,995 6,928 Amounts due to related parties 24 & 33 5,083 16,604 Trade and other payables , ,179 Notes payable 24 55,450 - Tax liabilities 34,329 8,022 Unsecured bank loans - due within one year , ,666 1,129, ,399 Total equity and liabilities 3,000,311 1,592,

118 INNER MONGOLIA YITAI COAL CO., LTD. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2004 Reserves Statutory Statutory Share Share Capital surplus welfare Accumulated capital premium reserve reserve reserve profits Total RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 (Note 1) (Note 2) (Note 2) Balance at 1 January , ,387 (26,368) 18,941 9,471 71, ,067 Net profit for the year ,132 84,132 Transfer to statutory surplus reserve ,250 - (7,250) - Transfer to statutory welfare reserve ,625 (3,625) - Dividends (note 8) (40,260) (40,260) Balance at 31 December 2003 and 1 January , ,387 (26,368) 26,191 13, , ,939 Net profit for the year , ,641 Transfer to statutory surplus reserve ,867 - (34,867) - Transfer to statutory welfare reserve ,433 (17,433) - Dividends (note 8) (43,920) (43,920) Balance at 31 December , ,387 (26,368) 61,058 30, ,054 1,179,660 Notes: (1) The reserve represents the difference between the value of assets and liabilities included in the net assets injected into the Company pursuant to the group restructuring, which was approved by the Inner Mongolia Autonomous Regional Government on 26 March 1997 determined in accordance with International Financial Reporting Standards and the value confirmed by the State Assets Administration Bureau at the time of the formation of the Company. (2) The reserves consist of appropriations from the profit after taxation and form part of the shareholders' equity. The Company and the subsidiaries are required by law in the People's Republic of China (the "PRC") to maintain a statutory surplus reserve and a statutory welfare reserve. The directors have the discretion to appropriate the amount set aside for the discretionary surplus reserve. Appropriation to the statutory surplus reserve is fixed at 10% of the profit after-tax based on the PRC statutory financial statements, until the total balance of the statutory and discretionary surplus reserve reaches 50% of the registered capital. These reserves are not distributable other than in liquidation. Appropriation to the statutory welfare reserve is required to be at 5-10% of the profit after-tax based on the PRC statutory financial statements. The reserve is used for the collective welfare of the Group's employees. Title to these capital items will remain with the Group. This reserve is non-distributable other than in liquidation

119 INNER MONGOLIA YITAI COAL CO., LTD. CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2004 NOTE RMB'000 RMB'000 OPERATING ACTIVITIES Profit from operations 476, ,392 Adjustments for: Depreciation of property, plant and equipment 114,978 63,590 Impairment loss on property, plant and equipment 27, Impairment loss on goodwill - 4,952 Amortisation of goodwill Amortisation of other assets 4,715 1,138 Release of negative goodwill to income (223) (222) Release of deferred income (124) (124) Interest on bank balances (1,790) (1,078) Loss on disposal of property, plant and equipment 78,289 20,116 Impairment loss on agriculture assets 3,854 - Loss on disposal of other assets Unrealised loss (gain) on investments held for trading 304 (99) Gain on disposals of investments held for trading (24) - (Recovery of) allowance for bad and doubtful debts (4,550) 2,319 Operating cash flows before movements in working capital 700, ,816 Increase in inventories (44,670) (13,692) (Increase) decrease in amounts due from related parties (24,590) 440 (Increase) decrease in trade and other receivables (41,926) 20,829 Decrease (increase) in notes receivables 6,534 (15,864) (Decrease) increase in amounts due to related parties (11,521) 13,518 Increase in trade and other payables 44,973 4,241 Increase in notes payables 55,450 - Cash generated from operations 684, ,288 Income taxes paid (41,119) (17,317) Interest paid (25,240) (25,992) NET CASH GENERATED FROM OPERATING ACTIVITIES 618, ,979 INVESTING ACTIVITIES Interest received 1,790 1,078 Proceeds from disposals of property, plant and equipment - 189,592 Investment in an associate (107,200) (800) Purchases of property, plant and equipment (266,698) (183,672) Purchases of other assets (54,463) (12,093) Increase in agriculture assets (255) (599) Proceeds from disposal of investments held for trading Acquisition of additional interest in a subsidiary - (502) Purchase of investments held for trading - (599) Acquisition of a subsidiary 27 (57,462) - NET CASH USED IN INVESTING ACTIVITIES (483,642) (7,490) - 5 -

120 INNER MONGOLIA YITAI COAL CO., LTD RMB'000 RMB'000 FINANCING ACTIVITIES Capital contribution to a subsidiary by a minority shareholder Dividends paid (43,920) (40,260) Repayments of bank loans (494,217) (460,048) New bank loans raised 340, ,379 Repayments of other long-term liabilities (149) (25) (Decrease) increase in amount due to immediate holding company (8,231) 2,348 New government loans raised NET CASH GENERATED FROM FINANCING ACTIVITIES (205,757) 65,354 NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (70,957) 238,843 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 425, ,364 CASH AND CASH EQUIVALENTS AT END OF YEAR, represented by bank balances and cash 354, ,

121 INNER MONGOLIA YITAI COAL CO., LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER GENERAL Inner Mongolia Yitai Coal Co., Ltd. (the "Company") was established as a joint stock company with limited liability in the People's Republic of China (the "PRC") on 2 August Its holding company is Inner Mongolia Yih Ju League Coal Group Company ("YJLC"), a state-owned enterprise also established in the PRC. Prior to the formation of the Company, its businesses were carried out by YJLC. Pursuant to a group restructuring (the "Restructuring"), which was approved by the Inner Mongolia Autonomous Regional Government on 26 March 1997, YJLC acted as the promoter of the Company, and transferred its core coal operations, the related assets and liabilities including certain subsidiaries to the Company in exchange for the subsequently issued 200,000,000 stateowned shares in the Company with a par value of RMB1. On 8 August 1997, the Company's "B shares" were listed on the Shanghai Stock Exchange. The Company and its subsidiaries (hereafter collectively referred to as the "Group") are principally engaged in the purchase, mining, distribution and sale of coal and coal processed products, and the production and sale of liquorice related products, operation of roadways and railway, manufacture of medicine and hotel operation. The principal activities of the Company's subsidiaries are set out in note 15. The average number of the employees of the Group during the year was 2,101 (2003: 1,325). 2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS The statutory financial statements are prepared in accordance with accounting standards and regulations applicable to enterprises in the PRC ("PRC GAAP"). However, these financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") promulgated by the International Accounting Standards Board for the shareholders of the Company's B shares listed on the Shanghai Stock Exchange. Differences between IFRS and PRC GAAP are identified in supplementary information. These financial statements are presented in Renminbi ("RMB"), the currency in which the majority of the Group's transactions are denominated

122 INNER MONGOLIA YITAI COAL CO., LTD. 3. ADOPTION OF NEW/REVISED INTERNATIONAL FINANCIAL REPORTING STANDARD In 2004, the International Accounting Standards Board issued a number of new or revised International Accounting Standards ( IAS(s) ) and IFRSs (hereinafter collectively referred to as new IFRSs ). IFRS 3 Business Combinations and IAS 36 Impairment of Assets apply to business combinations for which the agreement is on or after 31 March Goodwill arising on acquisitions after 31 March 2004 is carried at cost less impairment losses. Such goodwill is tested annually for impairment, and whenever there is an indication that the cash generating unit to which the goodwill is allocated may be impaired. However, the adoption of IFRS 3 and IAS 36 to business combinations after 31 March 2004 had no material effect on the results of the Group for the year ended 31 December Goodwill arising on acquisition prior to 31 March 2004 is carried at cost less accumulated amortisation and accumulated impairment losses. The Group has not early adopted IFRS 3 and IAS 36. For these new IFRSs that the Group was not early adopted in the financial statements for the year ended 31 December 2004, the Group has commenced considering the potential impact of these new IFRSs but is not yet in a position to determine whether these new IFRSs would have a significant impact on how its results of operations and financial position are prepared and presented. These new IFRSs may result in changes in the future as to how the results and financial position are prepared and presented. 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements have been prepared in accordance with IFRS. The financial statements have been prepared on the historical cost basis, except for the revaluation of agriculture assets and financial instruments. The principal accounting policies adopted are set out below. Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and enterprises controlled by the Company (its subsidiaries) made up to 31 December each year. Control is achieved where the Company has the power to govern the financial and operating policies of an investee enterprise so as to obtain benefits from its activities. On acquisition, the assets and liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess (deficiency) of the cost of acquisition over (below) the fair values of the identifiable net assets acquired and contingent liabilities assumed is recognised as goodwill (negative goodwill). The interest of minority shareholders is stated at the minority's proportion of the fair values of the assets and liabilities recognised. The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group. All significant inter company transactions and balances between group enterprises are eliminated on consolidation

123 INNER MONGOLIA YITAI COAL CO., LTD. 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued Interest in an associate An associate is an enterprise over which the Group is in a position to exercise significant influence, but not control or joint control, through participation in the financial and operating policy decisions of the investee. The results and assets and liabilities of the associate are incorporated in these financial statements using the equity method of accounting. Interest in an associate is carried in the consolidated balance sheet at cost as adjusted by post-acquisition changes in the Group's share of the net assets of the associate, less any impairment in the value of individual investments. Any excess (deficiency) of the cost of acquisition over (below) the Group's share of the fair values of the identifiable net assets of the associate at the date of acquisition is recognised as goodwill (negative goodwill). Goodwill arising on acquisitions of an associate prior to 31 March 2004 is included within the carrying amount of the associate and amortised on a straight-line basis over its estimated useful life. Where a group enterprise transacts with an associate of the Group, unrealised profits and losses are eliminated to the extent of the Group's interest in the relevant associate, except to the extent that unrealised losses provide evidence of an impairment of the asset transferred. Goodwill Goodwill arising on acquisitions after 31 March 2004 represents the excess of the cost of acquisition over the Group's interest in the fair value of the identifiable assets and liabilities and contingent liabilities assumed of a subsidiary at the date of acquisition. Goodwill arising on acquisitions after 31 March 2004 is recognised as an asset and reviewed for impairment at least annually. Any impairment is recognised immediately in profit or loss and is not subsequently reversed. Goodwill arising on acquisitions prior to 31 March 2004 is recognised as an asset and amortised on a straight-line basis over its estimated useful life. Goodwill arising on acquisitions after 31 March 2004 is tested annually for impairment, and whenever there is an indication that the cash generating unit to which the goodwill is allocated may be impaired. An impairment loss is determined by comparing the carrying amount of the cash generating unit, including the goodwill, with the recoverable amount of the cash generating unit. Where the recoverable amount of the cash generating unit is less than the carrying amount, an impairment loss is recognised in the income statement. Where goodwill forms part of a cash generating unit and part of the operation within that unit are disposal of, the goodwill associated with the operation disposed of is included in the carrying amount of the operations when determining the gain or loss on disposal of the operation. Negative goodwill Negative goodwill arising on acquisitions prior to 31 March 2004 represents the excess of the Group's interest in the fair value of the identifiable assets and liabilities of a subsidiary or associate at the date of acquisition over the cost of acquisition

124 INNER MONGOLIA YITAI COAL CO., LTD. 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued Negative goodwill arising on acquisitions prior to 31 March 2004 is released to income based on an analysis of the circumstances from which the balance resulted. To the extent that the negative goodwill is attributable to losses or expenses anticipated at the date of acquisition, it is released to income in the period in which those losses or expenses arise. The remaining negative goodwill is recognised as income on a straight-line basis over the remaining average useful life of the identifiable acquired depreciable assets. To the extent that such negative goodwill exceeds the aggregate fair value of the acquired identifiable non-monetary assets, it is recognised in income immediately. Negative goodwill arising on acquisitions after 31 March 2004 is released to profit and loss in the period of acquisition. Revenue recognition Sales of goods are recognised when goods are delivered and title has passed. Service income earned from hotel services and transportation services is recognised when services are rendered. Interest income is accrued on a time basis, by reference to the principal outstanding and at the interest rate applicable. Operating leases Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease. Foreign currencies Transactions in currencies other than RMB are initially recorded at the rates of exchange prevailing on the dates of the transactions. Monetary assets and liabilities denominated in such currencies are retranslated at the rates prevailing on the balance sheet date. Profits and losses arising on exchange are included in net profit or loss for the period. Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in net profit or loss in the period in which they are incurred. Government grants Non-monetary assets received by way of government grants are recognised at fair value, with a corresponding credit to deferred income. The assets are amortised over their useful lives, and the deferred income is released to the income statement over the same period

125 INNER MONGOLIA YITAI COAL CO., LTD. 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued Retirement benefit costs The Group participates in defined contribution retirement schemes organised by the PRC government. The contributions to the schemes are charged to operating expenses when incurred. Taxation Income tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. The carrying amount of deferred assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Property, plant and equipment Property, plant and equipment, other than construction in progress, are stated at cost less accumulated depreciation and any recognised impairment loss. Properties in the course of construction for production, rental or administrative purposes, or for purposes not yet determined, are carried at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Group's accounting policy. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use

126 INNER MONGOLIA YITAI COAL CO., LTD. 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued Property, plant and equipment - continued Depreciation is charged so as to write off the cost of assets, other than coal-mines and construction in progress, over their estimated useful lives, using the straight-line method at the following basis: Roadways years years Buildings, including leasehold improvement 5-40 years 8 40 years Machinery, furniture, office equipment and others 3-20 years 3-20 years Track 45 years N/A Hotel, including leasehold improvement 5-33 years years Coal-mines are depreciated using unit of production method. Upon a reassessment of the estimated useful lives of roadways, certain buildings, equipments and leasehold improvement of hotel by the Group, with effective from 1 January 2004, their useful lives shorten accordingly. The change in depreciation rates have increased the depreciation charge for the year by approximately RMB45,214,000. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the income statement. Construction in progress represents coalmines under exploration, properties for planting liquorice under development, machinery and equipment pending installation, and other facilities under construction, and is stated at cost, which typically includes costs of exploration and development, cost of construction and costs of machinery and equipment. Construction-in-progress is not depreciated until such time when the assets are completed and put into operational use. Mining rights, land use rights and grassland use rights The prepaid rentals of mining rights, land use rights and grassland use rights are charged to the income statement on a straight-line basis over the lease terms. Research and development expenditure Expenditure on research activities is recognised as an expense in the period in which it is incurred. An internally-generated intangible asset arising from the development is recognised only if all of the following conditions are met: an asset is created that can be identified; it is probable that the asset created will generate future economic benefits; and the development cost of the asset can be measured reliably. Where no internally-generated intangible asset can be recognised, development expenditure is recognised as an expense in the period in which it is incurred. Internally-generated intangible assets are amortised on a straight-line basis over their useful lives

127 INNER MONGOLIA YITAI COAL CO., LTD. 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued Impairment At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets (other than goodwill arising on acquisitions after 31 March 2004) to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. Impairment losses are recognised as an expense immediately. Where an impairment loss subsequently reverses, the carrying amount of the asset (cashgenerating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised as income immediately. Inventories Inventories other than liquorice product Inventories other than liquorice product are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the weighted average method. Net realisable value represents the estimated selling price less all estimated costs to completion and costs to be incurred in marketing, selling and distribution. Liquorice produce Liquorice produce is the harvested product of the Group's agricultural assets awaiting disposal or processing. Liquorice produce is recognised at the point at which the liquorice crops are harvested and is initially measured at fair value less estimated point-of-sale costs at that date, which is deemed to be its cost for the purpose of subsequent accounting under International Accounting Standard ("IAS") 2 "Inventories" at the lower of cost and net realisable value. Agriculture assets The Group's agriculture assets are its liquorice crop. Agriculture assets are measured on initial recognition and at each balance sheet date at their fair value less estimated point-of-sale costs, except where the fair value cannot be measured reliably, in which case, the agriculture assets are measured at cost less any accumulated depreciation and any identified impairment loss. Changes in fair value of agriculture assets are included in net profit or loss for the year

128 INNER MONGOLIA YITAI COAL CO., LTD. 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued Financial instruments Financial assets and financial liabilities are recognised on the Group's balance sheet when the Group has become a party to the contractual provisions of the instrument. Trade and other receivables, notes receivables, and amount due from related parties are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts. Trading investments, which are held-for-trading investments, are recognised on a trade-date basis and are initially measured at cost, including transaction costs. They are measured at subsequent reporting dates at fair value, with gains and losses arising from changes in fair value included in net profit or loss for the period. Unlisted equity investment, which is an available-for-sale investment, is recognised on a tradedate basis and is initially measured at cost. It is measured at subsequent reporting dates at fair value, with unrealised gains and losses recognised directly in equity, until the security is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in the net profit or loss for the year. Interest-bearing bank loans are recorded at the proceeds received, net of direct issue costs. Finance charges, including premiums payable on settlement or redemption, are accounted for on an accrual basis to the profit and loss account using effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. Trade and other payables, notes payable, amount due to immediate holding company, amounts due to related parties and other long-term liabilities are stated at their nominal value. 5. TURNOVER An analysis of the Group's revenue is as follows: RMB'000 RMB'000 Sales of goods 2,546,709 1,617,030 Rendering of transportation services 40,482 48,211 Revenue from hotel operations 17,731 14,013 2,604,922 1,679,

129 INNER MONGOLIA YITAI COAL CO., LTD. 6. BUSINESS AND GEOGRAPHICAL SEGMENTS Business segments For management purpose, the Group is currently organised into six operating divisions - coal sales, coal production, hotel operation, liquorice planting, manufacture of medicine and rendering of transportation services. The six divisions are the basis on which the Group reports its primary segment information. Principal activities are as follows: Coal sales Coal production Hotel operation Liquorice planting Manufacture of medicine Transportation Segment information about these businesses is presented below. - Trading of coal - Coal mine exploitation and production - Operation of Yitai Hotel - Planting, manufacturing, processing and sale of liquorice and related products - Manufacturing and selling medicines - Construction and operations of roadways and railways 2004 Coal Hotel Liquorice Manufacturing Coal sales production operation planting of medicine Transportation Others Eliminations Consolidated RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 REVENUE External sales 2,270, ,278 17,731 1,596 43,144 40, ,604,922 Inter-segment sales * , ,523 - (90,147) - Total revenue 2,271, ,434 17,731 1,692 43,144 49, (90,147) 2,604,922 * Inter-segment sales are charged at prevailing market rates. RESULT Profit (loss) from operations 409, , (33,269) (2,212) 2, ,607 Finance costs (25,240) Share of result of an associate (1,509) Income from investment 24 Profit before income tax 449,882 Income tax expense (72,669) Profit after income tax 377,213 OTHER INFORMATION Capital expenditure 48,769 6,340 6,606 4,024 28, ,029 5, ,951 Depreciation and amortisation 38,638 21,265 34,536 4,824 2,980 12, ,987 Impairment losses recognised in income 27, , ,716 Loss on disposal of property, plant and equipment 20,832 52,094-1,100 1,374 2, ,289 Loss on disposal of other assets Unrealised loss on investments hold for trading BALANCE SHEET ASSETS Consolidated total assets 1,172, , ,241 40, ,884 1,234,563 1,497-3,000,311 LIABILITIES Segment liabilities 515,240 13,338 1,728 12,058 26, ,236 2, ,587 Unallocated corporate liabilities 890,932 Consolidated total liabilities 1,593,

130 INNER MONGOLIA YITAI COAL CO., LTD. 6. BUSINESS AND GEOGRAPHICAL SEGMENTS - continued Business segments - continued 2003 Coal Hotel Liquorice Manufacturing Coal sales production operation planting of medicine Transportation Others Eliminations Consolidated RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 REVENUE External sales 1,469, ,553 14,013 2,114 31,777 48, ,679,254 Inter-segment sales * - 74, (74,701) - Total revenue 1,469, ,254 14,013 2,114 31,777 48, (74,701) 1,679,254 * Inter-segment sales are charged at prevailing market rates. RESULT Profit (loss) from operations 91,829 47,361 (1,770) (27,302) (3,469) 16, ,392 Finance costs (25,992) Gain on dilution of interest in a subsidiary Profit before income tax 97,970 Income tax expense (17,986) Profit after income tax 79,984 OTHER INFORMATION Capital additions 53,109 14, ,095 26,106 45,002 6, ,450 Depreciation and amortisation 29,613 25,219 2,053 1,812 1,144 3, ,238 Impairment losses recognised in income 4, ,136 Loss on disposal of property, plant and equipment 6, ,372 11, ,116 Allowance for bad and doubtful debts 2, (6) (200) ,319 BALANCE SHEET ASSETS Consolidated total assets 909, ,932 95,985 59,314 98, , ,592,119 LIABILITIES Segment liabilities 167,895 13,015 1,326 13,467 32, ,671 Unallocated corporate liabilities 512,688 Consolidated total liabilities 741,359 Geographical segment The Group's operations are principally located in the PRC. The Group does not currently have direct export rights and all of its export sales must be made through a third party. The final customer destination of the Group's export sales is determined by the third party. Accordingly, no geographical segment analysis is provided

131 INNER MONGOLIA YITAI COAL CO., LTD. 7. PROFIT FROM OPERATIONS RMB'000 RMB'000 Profit from operations has been arrived at after charging (crediting): Depreciation 114,978 63,590 Amortisation Goodwill (included in other operating expenses) Other assets (included in other operating expenses) 4,715 1,138 Release of deferred income (included in other operating income) (124) (124) Release of negative goodwill to income (included in other operating income) (223) (222) Staff costs 81,785 64,835 Research and development costs 1,372 3,089 Net foreign exchange losses Gain on disposal of investments held for trading (24) - Impairment loss on agriculture assets 3,854 - Loss on disposal of other assets Loss on disposal of property, plant and equipment 78,289 20,116 Impairment on property, plant and equipment 27, Impairment on goodwill - 4,952 (Recovery of) allowance for bad and doubtful debts (4,550) 2,319 Unrealised loss (gain) on investments held for trading 304 (99) 8. INCOME TAX EXPENSE RMB'000 RMB'000 Current tax 67,426 17,986 Deferred tax (Note 26) 5,243-72,669 17,986 The domestic tax authority granted the Company a preferential income tax rate at 15% from 2001 to The Company's subsidiaries are subject to income tax calculated at 33% or 15% on the assessable income. The income tax expense for the year can be reconciled to the profit per the consolidated income statement as follows: RMB'000 RMB'000 Profit before income tax 449,882 97,970 Tax at the income tax rate of 33% 148,461 32,330 Tax effect of expenses not deductible for tax purpose 1,174 1,912 Tax effect of income not taxable for tax purpose (253) (1,194) Utilisation of deferred tax assets previously not recognised (2,240) (4,690) Tax effect of tax losses and other deductible temporary differences not recognised 12,638 11,212 Income tax on concessionary rate (87,111) (21,584) Income tax expense 72,669 17,

132 INNER MONGOLIA YITAI COAL CO., LTD. 8. INCOME TAX EXPENSE - continued At the balance sheet date, the Group has unprovided tax losses and deductible temporary differences as follows: RMB'000 RMB'000 Tax losses of certain subsidiaries, which expire at various dates from 2006 to ,107 58,810 Allowance for bad debts 12,046 13,529 Deferred expenditure 1,391 1,555 Others 492 5, ,036 79,526 The Group has not recognised the above deferred tax assets due to the unpredictability of future profit streams and it is not probable that taxable profit will be available against which the deductible temporary differences can be utilised. 9. DIVIDENDS On 16 April 2004, the directors proposed a dividend of RMB0.12 (2003: RMB0.11) per share, amounting to RMB43,920,000 (2003: RMB40,260,000), for the year ended 31 December This dividend was approved by shareholders on 25 May 2004 and was paid during the year. On 12 April 2005, the directors proposed a dividend of RMB0.70 per share, the details of which are set out in note EARNINGS PER SHARE The calculation of the basic earnings per share is based on the net profit for the year of RMB382,641,000 (2003: RMB84,132,000) and on 366,000,000 shares (2003: 366,000,000 shares) in issue during the year. Diluted earnings per share is not shown as the Company has no potential ordinary shares outstanding during both years

133 INNER MONGOLIA YITAI COAL CO., LTD. 11. PROPERTY, PLANT AND EQUIPMENT Machinery, furniture, office equipment Construction Coal-mines Roadways Buildings Track and others Hotel in progress Total RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 COST At 1 January , , , ,273 81, , ,974 Additions 6,341 10, ,037 10, , ,698 Acquired on acquisition of a subsidiary , ,306 38, , ,420 Reclassification 4, ,832 99,240-41,607 - (250,367) - Disposals (44,094) (1,407) (38,628) - (21,305) - - (105,434) At 31 December , , , , ,909 92, ,775 2,088,658 ACCUMULATED DEPRECIATION AND IMPAIRMENT At 1 January ,908 16,279 80,346-45,584 6, ,723 Charge for the year 24,229 10,386 22,148 1,130 22,549 34, ,978 Impairment , ,862 Eliminated on disposals (4,723) (54) (11,328) - (11,040) - - (27,145) At 31 December ,414 26, ,028 1,130 57,093 41, ,418 NET BOOK VALUES At 31 December , , , , ,816 51, ,775 1,789,240 At 31 December ,780 96, , ,689 75, , ,251 During the year, the directors of the Company reviewed the carrying amount of certain buildings with reference to the recoverable amount, an impairment loss of approximately RMB25,013,000 (2003: Nil) was identified and charged to the income statement. In addition, due to the change of city construction plan by the government during the year, the directors considered that certain buildings were also full impaired and an impairment loss of approximatley RMB2,849,000 (2003: Nil) was identified and charged to the income statement. During the year, there are still two coalmines of which the mining rights certificates belonged to YJLC. The directors are in the opinion that such mining rights certificates will be issued to the Group in due course. 12. AGRICULTURE ASSETS RMB'000 COST At 1 January ,126 Additions 255 Impairment loss recognised (3,854) At 31 December During the year, the Group recognised an impairment loss of approximately RMB3,854,000 in respect of liquorice crop due to a natural disaster. The directors consider that the remaining balance of liquorice crop approximates to its fair value

134 INNER MONGOLIA YITAI COAL CO., LTD. 13. GOODWILL RMB'000 COST At 1 January ,575 Acquisition of a subsidiary (Note 27) 4,998 At 31 December ,573 AMORTISATION AND IMPAIRMENT At 1 January ,484 Charge for the year 9 At 31 December ,493 NET BOOK VALUES At 31 December ,080 At 31 December Goodwill arising on acquisitions prior to 31 March 2004 is amortised over its estimated useful life of 10 years. In November 2004, the Company acquired 62% equity interest of Inner Mongolia Zhundong Railway Co., Ltd. ( Zhundong ) from YJLC at a consideration of approximately RMB367,598,000 which resulted in a goodwill of approximately RMB4,998,000. Such a goodwill is carried at cost less impairment losses, if any. 14. NEGATIVE GOODWILL RMB'000 COST At 1 January and 31 December ,223 RELEASE At 1 January Released in the year 223 At 31 December ,033 NET BOOK VALUE At 31 December ,190 At 31 December ,413 Negative goodwill is released to income on a straight-line basis over a period of 10 years, the weighted average useful life of the depreciable assets acquired

135 INNER MONGOLIA YITAI COAL CO., LTD. 15. SUBSIDIARIES Details of the Company's subsidiaries at 31 December 2004 are as follows: Place of Proportion of registration ownership interest Name of subsidiary and operation and voting power held Principal activity Directly Indirectly Inner Mongolia Yitai PRC 87.12% - Liquorice planting and Biological High-tech Co., Ltd. processing ("Biological") Yitai Auto Transportation Co., Ltd. PRC 90% - Auto transportation Zhundong PRC 62% - Railway transportation Inner Mongolia Yitai Dan-long PRC % Manufacture and sale of Pharmaceuticals Co., Ltd. medicine ("Dan-long") Chifeng Dan-long Pharmaceuticals PRC % Manufacture and sale of Co., Ltd. medicine Inner Mongolia Yitai Medicine Wholesale Co., Ltd. PRC % Medicine trading Chifeng Medicine Research PRC % Technology development Institute and consulting services Inner Mongolia Yitai Medicine PRC % Technology development Technology Development Co., Ltd. and consulting services Inner Mongolia Yitai Medicine Chain Stores Co., Ltd. PRC % Medicine Retail Note: The companies are registered as a company with limited liability under the Company Law of the PRC. 16. INTEREST IN AN ASSOCIATE RMB'000 RMB'000 Share of net assets 106,491 - At 31 December 2004, the Group held 30% of the registered capital of Inner Mongolia Huzhun Railway Co., Ltd. ("Huzhun"). Huzhun was a company established in the PRC, which will be engaged in operation of railways but has not yet commenced its business. As at 31 December 2004, the railways are under construction and are expected to be completed in

136 INNER MONGOLIA YITAI COAL CO., LTD. 17. OTHER ASSETS Land Grassland Mining use rights use rights rights Others Total RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 COST At 1 January ,446 3,688 16,519 1,435 48,088 Additions 3,375-50, ,463 Acquired on acquisition of a subsidiary 211, ,037 Disposals (767) (767) At 31 December ,858 3,688 67, ,821 AMORTISATION At 1 January , ,323 Charge for the year 1, , ,715 Eliminated on disposals (123) (123) At 31 December , , ,915 NET BOOK VALUES At 31 December ,961 2,939 64, ,906 At 31 December ,011 3,040 16,519 1,195 45,765 The cost of land use right and mining right is charged to the consolidated income statement over the terms of the relevant rights of 5 to 50 years on a straight-line basis. Grassland use rights comprise grassland use fees paid for periods ranging from 20 to 40 years, for the rights to use the grassland where the Group raises liquorice crops. 18. UNLISTED INVESTMENTS RMB'000 RMB'000 Unlisted investment, at cost 828 1,628 Unlisted investments represent equity investments in companies which are held for long-term purpose

137 INNER MONGOLIA YITAI COAL CO., LTD. 19. INVENTORIES RMB'000 RMB'000 AT COST Coal products 92,609 56,150 Medicine 9,579 4,596 Materials 12,100 6,563 Others 1,772 3,472 Total 116,060 70,781 The costs of inventories recognised as expenses in the consolidated income statement were approximately RMB704 million (2003: RMB404 million). 20. OTHER FINANCIAL ASSETS (i) Trade and other receivables The receivables comprise of gross amounts receivable from the sale of goods of RMB227 million (2003: RMB187 million), other receivables of RMB11 million (2003: RMB26 million), advances to suppliers of RMB44 million (2003: RMB10 million) and prepaid expenses of RMB22 million (2003: RMB28 million). The average credit period taken on sale of goods is 29 days (2003: 39 days). An allowance has been made for estimated irrecoverable amounts from the sale of goods of RMB18 million (2003: RMB23 million). This allowance has been determined by reference to past experience of default repayment. (ii) Notes receivable The receivables represent unconditional orders in writing issued by customers of the Group which entitle the Group to collect a sum of money from banks. (iii) Bank balances and cash The amounts comprise cash and short-term deposits held by the Group for its treasury function. (iv) Amounts due from related parties The amounts represent receivables arising from transactions with the related parties, and are unsecured, non-interest bearing and have no fixed repayment terms. The directors consider that the carrying amounts of amounts due from related parties, trade and other receivables, notes receivables and bank balances and cash approximate to their fair values

138 INNER MONGOLIA YITAI COAL CO., LTD. 20. OTHER FINANCIAL ASSETS - continued Credit risk The Group's credit risk is primarily attributable to its trade receivables. The amounts presented in the consolidated balance sheet are net of allowances for doubtful receivables, estimated by the Group's management based on prior experience and the current economic environment. The credit risk on liquid funds and notes receivables is limited because the counterparties are PRC financial institutions. The Group has no significant concentration of credit risk, with exposure spreading over a large number of counterparties and customers. 21. INVESTMENTS HELD FOR TRADING RMB'000 RMB'000 Investments held for trading, at fair value 838 1,740 The investments represented investments in investment funds that present the Group with an opportunity for return through dividend income and trading gains. They have no fixed maturity or coupon rate. The fair values of the trading investment are based on quoted market price. 22. SHARE CAPITAL 2004 & 2003 RMB'000 Registered, issued and fully paid: 200,000,000 state-owned shares of RMB1 each 200, ,000,000 B shares of RMB1 each 166, ,000 The state-owned shares are solely held by YJLC and are not listed and B shares are listed on the Shanghai Stock Exchange. The holders of state-owned and B shares, with minor exceptions, are entitled to the same economic and voting rights. There were no movements in the share capital of the Company for both years

139 INNER MONGOLIA YITAI COAL CO., LTD. 23. UNSECURED BANK LOANS The bank loans are repayable as follows: RMB'000 RMB'000 Within one year 414, ,666 Within one to two years 114, ,000 Within three to five years 322,424 30, , ,666 Less: Amounts due within one year shown under current liabilities (414,936) (306,666) Amounts due after one year 436, ,000 Analysis of bank loans by currency: Denominated in Denominated in Denominated in RMB United States dollars Koweit Dinar RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 Bank loans 591, ,111 16,553 16, ,974 - Bank loans bear interest ranging from 4.1% to 7.6% (2003: 2.9% to 6.7%) per annum. The directors estimate the fair value of bank loans to be not materially different from their carrying amounts. At 31 December 2004, bank loans amounted to approximately RMB497,500,000 (2003: Nil) are guaranteed by YJLC. At 31 December 2003, bank loans amounted to approximately RMB36,553,000 (2004: Nil) were guaranteed by a subsidiary of YJLC. 24. OTHER FINANCIAL LIABILITIES (i) Other long-term liabilities At 31 December 2004, the amounts represent mining right fee payable of approximately RMB13,261,000 (2003: RMB13,261,000) and government loans of approximately RMB3,691,000 (2003: RMB3,840,000). The government loans of RMB3,691,000 was granted as the Group's liquorice planting operations were classified as high or new technology project which are encouraged by the government. The amounts are unsecured and interest-free. In the opinion of the directors, the amounts will not be repayable within one year from the balance sheet date and are accordingly classified as non-current in the consolidated balance sheet. In view of the terms of the non-interest bearing mining right fee payable and government loans, the directors consider that it is not practicable to determine their fair values

140 INNER MONGOLIA YITAI COAL CO., LTD. 24. OTHER FINANCIAL LIABILITIES - continued (ii) Trade and other payables The amounts principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period taken for trade purchases is 46 days (2003: 41 days). Included in other payables is an amount of RMB58,000,000 (2003: Nil) due from Zhundong to local government. The amount is unsecured, non-interest bearing and repayable on demand. (iii) Notes payable The amounts represent unconditional orders in writing issued by the Group which entitle the creditors to collect a sum of money from banks. (iv) Amount due to immediate holding company and amounts due to related parties The amounts represent payables for transactions with the related parties and are unsecured, non-interest bearing and have no fixed repayment terms except for the amount due to immediate holding company of RMB261,995,000 with maturity on 30 November The directors consider that the carrying amounts of amount due to immediate holding company, amounts due to related parties and trade and other payables approximate to their fair values. 25. DEFERRED INCOME In 2002, the government waived the amount payable for the acquisition of land use right in 2001 with fair value of RMB6,200,000. In accordance with IAS 20 "Accounting for government grants and disclosure of government assistance", the Group recorded the land use right at fair value as other assets and the grant as deferred income. The deferred income will be recognised as operating income in the consolidated income statement over the useful life of the land use right which is amortised over the same period of 50 years. The deferred income as stated under non-current liabilities in the consolidated balance sheet is as follows: 2004 RMB'000 COST At 1 January and 31 December ,200 RELEASED TO INCOME At 1 January Released in the year 124 At 31 December NET BOOK VALUES At 31 December ,735 At 31 December ,859 There are no unfulfilled conditions or other contingencies attaching to the government grant

141 INNER MONGOLIA YITAI COAL CO., LTD. 26. DEFERRED TAX LIABILITIES The following are the deferred tax liabilities recognised by the Group and movements thereon during the current and prior reporting period. Write-off security and maintenance reserve RMB'000 At 1 January 2004 and 31 December Charge to income for the year 5,243 At 31 December , ACQUISITION OF A SUBSIDIARY On 30 November 2004, the Group acquired 62% equity interest of Zhundong from YJLC for a consideration of RMB367,598,000. This acquisition has been accounted for using the purchase method. Net assets acquired: Carrying Fair value amounts adjustments Fair values RMB'000 RMB'000 RMB'000 Property, plant and equipment 882,455 62, ,420 Land use rights - 211, ,037 Inventories Trade and other receivables 11,806-11,806 Bank balances and cash 46,838-46,838 Trade and other payables (130,220) - (130,220) Unsecured bank loans (500,651) - (500,651) Minority interest (118,118) (104,121) (222,239) 192, , ,600 Goodwill 4,998 Total consideration 367, RMB'000 Satisfied by: Cash 104,300 Amount due to immediate holding company 263, ,598 Net cash inflow arising on acquisition: Cash consideration (104,300) Cash and cash equivalents acquired 46,838 (57,462)

142 INNER MONGOLIA YITAI COAL CO., LTD. 27. ACQUISITION OF A SUBSIDIARY - continued The subsidiary acquired during the year contributed approximately RMB4,087,000 to the Group's turnover, and approximately RMB758,000 to the Group's profit from operations. If the acquisition had been completed on 1 January 2004, unaudited consolidated turnover and profit attributable to the equity holders of the Company for the year ended 31 December 2004 would have been increased by approximately RMB57,017,000 and RMB18,823,000, respectively. The pro forma information is presented for illustrative purposes only and is not necessarily an indicative turnover and results of operations of the Group that actually would have been achieved had the acquisition been completed on 1 January 2004, nor is it intended to be a projection of future results. 28. NON-CASH TRANSACTION During the year ended 31 December 2004, the Group increased its equity interest in Huzhun from RMB800,000 to RMB108,000,000, representing 30% of total equity interest. Accordingly, the investment of RMB800,000 was transferred from unlisted investments to interest in an associate. During the year ended 31 December 2004, the Group acquired 62% equity interest of Zhundong for a total consideration of approximately RMB367,598,000, of which approximately RMB104,300,000was settled in cash and the remining outstanding amount of approximately RMB263,298,000 included in the amount due to immediate holding company. There was no significant non-cash transaction in COMMITMENTS RMB'000 RMB'000 Contracted but not provided for: Property, plant and equipment 107,908 28,785 Investment in a unlisted company 72,000 54,000 Patent 820 2, ,728 84,825 In addition, the Group was committed to incur expenditures of approximately RMB34,592,000 (2003: Nil) as at 31 December 2004 for the security and maintenance of coal-mines. 30. OPERATING LEASE ARRANGEMENTS RMB'000 RMB'000 Minimum lease payments under operating lease recognised in income for the year 3,748 4,

143 INNER MONGOLIA YITAI COAL CO., LTD. 30. OPERATING LEASE ARRANGEMENTS - continued At the balance sheet date, the Group had outstanding commitments under non-cancelable operating leases, which fall due as follows: RMB'000 RMB'000 Within one year In the second to fifth year inclusive 669-1, RETIREMENT BENEFITS PLANS, HEALTH CARE ASSURANCE AND HOUSING FUND The Group's full-time employees are covered by a state-managed defined contribution pension scheme, and are entitled to a monthly pension at their retirement dates. The PRC government is responsible for the pension liability to these retired employees. The Group is required to make annual contributions to the retirement plan at a rate of 17% of employees' salaries, which are charged to operations as an expense when the contributions are due. For the year ended 31 December 2004, the retirement plan contributions made by the Group amounted to approximately RMB2,805,000 (2003: RMB2,670,000). Pursuant to regulations stipulated by the State Council and the government, the Group started a defined contribution health care scheme in Under this scheme, all full-time employees of the Group have to make a specified contribution for health care benefits calculated at a certain percentage of their salaries, and the Group is required to make the same amount of contribution as the employees contribution. For the year ended 31 December 2004, the medical care contributions made by the Group amounted approximately to RMB1,185,000 (2003: RMB989,000). Furthermore, the Group's full-time employees are entitled to participate in a state-sponsored housing fund. The fund can be used by the employees to purchase apartment, or claimed upon their retirement. The Group is required to make annual contributions to the housing fund equal to a percentage of each full-time employee's salary based on service period and position. For the year ended 31 December 2004, the Group made housing fund contributions amounted to approximately RMB801,000 (2003: RMB955,000). Contributions are charged to expense when they become due. 32. SUBSEQUENT EVENT On 12 April 2005, the directors proposed a dividend of RMB0.70 per share, totalling RMB256,200,000, for the year ended 31 December The proposed dividend distribution is subject to shareholders' approval in their next meeting

144 INNER MONGOLIA YITAI COAL CO., LTD. 33. RELATED PARTY TRANSACTIONS At the balance sheet date, the Group has the following balances with related parties: Amounts due Amounts due from related parties to related parties RMB'000 RMB'000 RMB'000 RMB'000 YJLC ,995 6,928 Other related parties 25, ,083 16,604 All balances with related parties are unsecured, interest-free and repayable on demand. Other related parties are the subsidiaries of YJLC. In addition, the Group entered into the following transactions with the related parties: YJLC Other related parties Nature of transaction RMB'000 RMB'000 RMB'000 RMB'000 Purchase of goods - - 8,723 3,281 Sale of goods - - 4,403 1,050 Acquisition of 62% equity interest in Zhundong 367, Acquisition of property, plant and equipment 24,647 22,088-2,470 Purchase of other assets 2,470 3, Transportation expenses paid ,443 73,353 The above transactions were entered at terms mutually agreed by the Group and the related parties. At 31 December 2004, bank loans amounted to RMB497,500,000 (2003: RMB295,500,000) are guaranteed by YJLC. At 31 December 2003, bank loans amounted to approximately RMB36,553,000 (2004:Nil) were also guaranteed by a subsidiary of YJLC. 34. APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements (set out on pages 2 to 30) were approved and authorised for issue by the directors of the Company on 12 April

145 INNER MONGOLIA YITAI COAL CO., LTD. SUPPLEMENTARY INFORMATION SUMMARY OF DIFFERENCE BETWEEN THE FINANCIAL STATEMENTS PREPARED UNDER IFRS AND PRC GAAP Net profit Net assets RMB'000 RMB'000 RMB'000 RMB'000 As reported under PRC GAAP 348,668 72,503 1,205, ,624 Reversal of security and maintenance reserve 29,709-29,709 - Reversal of revaluation surplus on assets and the related depreciation and amortisation 5,140 2,374 (46,949) (52,089) Difference in deferred expenditure recognition ,621 (1,439) (1,555) Reversal of income recorded in capital reserve Reversal of negative goodwill recorded in capital reserve (1,633) (1,937) Reversal of deferred income recorded in capital reserve (4,996) (5,104) Goodwill not recognised under PRC GAAP 1,408 (5,600) 1,408 - Difference in gain on dilution of interest in a subsidiary Write off of pre-operating expenses of an associate (1,509) - (1,509) - Difference on consolidation of loss from PRC subsidiaries in excess of the investments (1,303) As restated under IFRS 382,641 84,132 1,179, ,939