1 2 SHANGHAI LINGYUN CURTAIN WALL SCIENCE &TECHNOLOGY CO., LTD. 1 sd01@elingyun.com 2 sd02@elingyun.com 877 18 021 50813736 021 50819380 1 877 18 2 877 18 200122 3 http://www.elingyun.com 1 2 3 http://www.sse.com.cn 1 B 2 900957 3 1 1998 12 28 2 2000 9 28 2001 11 1
3 027376 4 310115631343827 5 26 610 2002 23,904,631 23,682,402 8,495,590 12,649,798 12,645,149-9,992,178 33,883,777 ---- 13,033-41,975,339 17,006,615 7,839,272 7,334,507 17,498 4,465 15,186,812 2002 2001 2000 83,492,330 594,113,141 779,412,108 23,682,402 46,727,893 75,490,641 2,138,712,480 1,436,847,977 1,460,754,268 642,658,908 616,078,842 576,330,949 ( ) 0.07 0.13 0.22 0.07 0.13 0.31 0.02 0.10 0.80 2002 12 31 2001 12 31 2000 12 31
1.84 1.77 1.66 1.83 1.76 1.65 1.35 (%) 7.79 19.49-0.12-0.03-0.10 9 2002 % / 1.97 2.00 0.04 0.04-1.55-1.58-0.03-0.03 3.69 3.75 0.07 0.07 1.32 1.35 0.02 0.02 349,000,000 349,000,000 179,975,922 6,387,664 186,363,586 25,163,484 2,298,650 4,134,349 23,327,785 12,581,744 1,149,325 2,067,175 11,663,894 49,357,692 22,945,951 72,303,643 616,078,842 32,781,590 6,201,524 642,658,908 (+,-) 1 165,000,000 165,000,000 2 3 4 165,000,000 165,000,000 1 2 184,000,000 184,000,000
2 3 184,000,000 184,000,000. 349,000,000 349,000,000. 2000 7 6 B 16000 0.238 2000 7 28 16000 2000 8 10 2400 18400 34900 35819 5 16500 (B )35814 18400 % 1 84,670,000 24.26% 2 68,180,000 19.53% 3 5,670,000 1.62% 4 4,050,000 1.16% 5 2,430,000 0.70% 6 1,600,000 0.46% B 7 1,200,000 0.34% B 8 1,126,000 0.32% B 9 WONGWAICHING 94,000 0.27% B 10 WANXIANG INTERNATIONAL INVESTMENT CORPORATION 84,000 0.24% B 2002 3 18 8467 2002 3 22 2002 4 15 6818 2002 12 3 6818
2002 4 18 2002 12 10 5% 7800 : 6000 2002 8 21 4578 250 44 2002520055 46 2002520055 48 2002520055 37 2002520055 39 2002520055 46 2002520055 40 2002520055 40 2002520055 49 2002520055 52 2002520055 40 2002520055 39 2002520031 43 2002520055 52 2002520055 36 2002520055 36 2002520055 1998
2001 2001 1 8 103.5 2 2025 4 819 4 3 61 4 64.6 5 5 6 2002 5 25 2002 2 2002 5 25 2002 3 2002 5 25 1200 42 % 26 % 11 5 % 15 % 8% 45%
1 2 3 4 5 2001 2001 2002 5 25 19 2001 2001 2001 2001 2002
2002 5 28 2002 12002 2002 7 1 4 2002 7 2 22002 2002 7 2 1 2002 7 3 32002 2002 12 1 10 60% 4500 4000 3500 47.92%
2002 12 3 2002 12 22 1 B 15000 2002 12 23 52002 2002 12 30 1 5018.51 60% 5018.51 2002 12 31 2002 12 31 83,492,330 12,649,798 23,682,402 % % 29,715,768 35.60 6,011,909 47.53 53,776,562 64.40 6,637,889 52.48 1 56,756 2002 2700 2002 13.79 % 2002 2003 2003 4 16 2002
1 2 15000 1897 7000 464 6000T 3S 4200 2950 12000T 4996 0 4000 768 4850 1201 4083 0 44129 7280 3 112000T 3
2002 2 3 2001 WTO 2002 4 31079 12000T 9079 9079 0 0 22000 2361 0 15000 31079 12000T 9079 B 27.97% 2 22000 B 67.79% 2361
2002 12 31 2001 12 31 % 2,138,712,480 1,436,847,977 48.85 642,658,908 616,078,842 4.32 1,349,194,574 816,298,980 65.29 89,834,186 8,238,824 990.38 2002 2001 % 83,492,330 594,113,141-85.95 12,649,798 110,478,962-88.55 23,682,402 46,727,893-49.32 2002 2002 4 17 20 2002 4 19 2002 5 25
2002 2002 5 30 2002 6 26 3000 2002 2002 7 3 3000 2002 7 6 2002 8 18 2002 8 20 2002 8 20 2002 2002 10 19 2001 12000 4500
2002 10 22 2002 10 24 2002 10 28 2002 10 29 2002 2002 11 9 3500 2002 11 9 2002 12 22 15% 1737.37 2000 2002 12 24 2002 12 31 90% 3420 2001 2002 2002 2002 23,682,402 2002 79,241,61 3,447,975, 75,793,643 2002 34900 10 0.10 3490000 B 2002 12 31 18.2773 22.2295
2002 5 25 2002 8 20 2002 2002 10 19 4500 2002 10 24
2002 10 29 2002 2002 12 22 2002 6 3 11,812,168, 98% 3430 33,591,682.46 2001 12 31 2001 12 31 65,628,432.12 17,835,268.86 46,753,997.41 1,039,165.85 99,220,114.58 90% 99,220,114.58 2002 7 2 2002
2001 12 31 16,781,100.00 13.75% 1650 2002 12 1 2002 294 2001 12 31 60% 3000, 2002 12 1 2002 2001 12 31 98% 2940 2002 12 1 2002 2001 12 31 49,755,500.00 60% 2002 12 30 2002 17,225,000.00 15% 20028 90% 2002121 2002 3420 2002 12000T 9079 15000 1 5000 2002 4 17 2001 1400 2 3000
2002 7 3 3 7000 2002 10 24 2002 11 9 2003 7000 5% 95 [2000]1054 B [2000]0023 2002 12 3275.49 98% 3800 43.2% 2002 8 4000 35% 1 2.5 850 15000 3 20 3 28 2002 12 22
2003 1 2000 2003 1 23 2003
2002 12 31 525,629,510 506,927,720 402,273,273 418,906,875 1,094,985 17,695,574 974,985 7,957,776 - - 1,478,103 1,052,045 1,478,103 1,052,045 22,479,425 380,842,664-431,663,135 111,676,100 247,139,313 473,894,064 6,054,000 37,523,692-663,282,525 75,797,741 505,840 356,271 505,840 237,272-71,111,901 - - 1,652,187,523 1,202,983,708 652,371,514 902,048,032 223,221,870 20,000,000 647,163,043 228,442,611-223,221,870 20,000,000 647,163,043 228,442,611 28,097,942 265,800,113 22,157,040 19,721,247 (1,637,450) (77,946,209) (786,930) (447,183) 26,460,492 187,853,904 21,370,110 19,274,064 (2,300,000) (2,300,000) (2,300,000) (2,300,000) 24,160,492 185,553,904 19,070,110 16,974,064 103,467,744 23,621,921 127,628,236 209,175,825 19,070,110 16,974,064 88,602,001 2,260,619 19,035,742 61,080 47,072,850 2,366,745 135,674,851 4,688,444 19,035,742 2,138,712,480 1,436,847,977 1,337,640,409 1,147,464,707 :
723,000,000 527,900,000 652,000,000 471,000,000 6,000,000 1,000,000 69,956 135,488,402-81,672,755 39,585,939 2,513,035 2,513,035 155,525 1,954,265-442,428 4,984,267 117,542 459,299 18,299,784 38,112,480 18,299,784 38,112,480 6,098,081 33,297,313 695,814 3,166,783 41,143 177,095 398,072,930 9,204,312 11,749,451 5,205,477 2,351,827 5,070,875 2,062,951 1,689,967 8,977,248 2,745,950 20,178,711 3,539,258 1,259,360,388 808,060,156 687,438,577 523,147,041 81,595,362 - - 8,238,824 8,238,824 8,238,824 8,238,824 - - 89,834,186 8,238,824 8,238,824 8,238,824-1,349,194,574 816,298,980 695,677,401 531,385,865 146,858,998 4,470,155-349,000,000 349,000,000 349,000,000 349,000,000 186,363,586 179,975,922 186,363,586 179,975,922 34,991,679 37,745,228 34,991,679 31,543,704 11,663,894 12,581,744 11,663,894 10,514,569 72,303,643 49,357,692 71,607,743 55,559,216 642,658,908 616,078,842 641,963,008 616,078,842 2,138,712,480 1,436,847,977 1,337,640,409 1,147,464,707
83,492,330 594,113,141 212,092,598 (471,529,155) (176,776,646) (1,858,823) (12,105,024) (3,492,271) 12,649,798 110,478,962 31,823,681 12,645,149 461,088 12,587,500 (6,907) (2,542,532) (19,397,644) (6,407,565) (15,790,539) (44,631,661) (10,633,984) (23,895,888) (16,954,054) (17,653,326) (14,894,889) (11,045,366) (9,992,178) 29,257,419 (12,941,373) (9,532,045) 33,883,777 8,964,984 35,929,260 46,225,860 588,251 17,498 4,347,755 4,239,765 (4,466) (1,549,372) (1,385) (1,139,049) 23,904,631 41,609,037 22,986,502 39,794,531 5,042,885 6,933,362 (222,229) ( 75,971) - 23,682,402 46,727,893 22,986,502 46,727,893 55,559,216 22,820,507 55,559,216 22,820,507 79,241,618 (2,298,650) (1,149,325) 75,793,643 69,548,400 (8,807,138) (4,403,570) 56,337,692 (3,490,000) (6,980,000) 78,545,718 (2,298,650) (1,149,325) 75,097,743 (3,490,000) 69,548,400 (4,672,789) (2,336,395) 62,539,216 (6,980,000) - 72,303,643 71,607,743 49,357,692 55,559,216
79,370,715 577,356,329 13,250,000 164,468,740 7,994,251 7,406,000 68,802,537 17,892,363 62,177,212 17,752,954 148,173,252 603,242,943 75,427,212 189,627,694 (68,750,146) (424,250,529) (1,000,000) (140,089,062) (8,012,948) (33,065,206) (3,621,994) (21,588,048) (2,752,155) (17,011,582) (17,500) (5,364,889) (110,633,342) (140,559,120) (7,852,788) (69,753,420) (190,148,591) (614,886,437) (12,492,282) (236,795,418) (41,975,339) (11,643,494) 62,934,930 (47,167,724) 9,844,874 111,958,515 9,844,874 111,958,515 29,484,339-29,484,339 - - - 12,216,994 12,216,994 39,329,213 124,175,509 39,329,213 124,175,509 (3,235,180) (39,384,576) (1,142,536) (8,444,000) (8,500,000) - (248,500,000) (50,000,000) (77,318,534) (32,771,461) 17 467 214 (17,467,214) (121,825,175) (56,851,790) (249,642,536) (75,911,214) (82,495,962) 67,323,719 (210,313,323) 48,264,295 - - 747,000,000-726,000,000 - - - 747,000,000-726,000,000 - (553,008,177) (134,976,741) (545,000,000) (135,876,741) (52,544,464) (37,695,015) (51,980,941) (33,797,687) (37,316,212) (1,800,000) (800,000) (605,552,641) (174,471,756) (596,980,941) (207,790,640) 141,447,359 (174,471,756) 129,019,059 (174,471,756) 30,557 (54,113) 30,557 (54,113) 17,006,615 (118,845,644) (18,328,777) (206,748,182)
1 46,727,893 46,727,893 (75,971) - 2,236,890 1,474,742 15,701,017 4,144,554 1,352,620 377,782 45,502 16,680 154,169 (2,067,180) (468,410) (308,102) 145,575 29,439 34,245,641 30,171,800 (8,964,984) (46,225,860) 43,937,404 33,547,059 (110,494,524) (104,864,583) (36,186,316) (10,191,948) (11,634,494) (47,167,724) 2 3 167,714,594 150,707,979 44,358,357 62,687,134 (150,707,979) (269,553,623) (62,687,134) (269,435,316) 17,006,615 (118,845,644) (18,328,777) (206,748,182)
72,438,296 2,275,465 71,267,830-3,445,931 71,267,830 112,962 71,267,830 112,962 1,170,466 2,162,503-3,332,969 3,252,010 141,791 3,003,874 389,927 3,252,010 141,791 3,003,874 389,927 2,414,140 2,414,140 2,414,140 2,414,140 6,820,052 6,820,052 6,820,052 6,820,052 2,300,000 2,300,000 2,300,000 2,300,000
71,301,406 1,136,890-72,438,296 70,505,682 762,148 71,267,830 795,724 374,742-1,170,466 3,252,010 3,252,010 3,252,010 3,252,010 2,414,140 2,414,140 2,414,140 2,414,140 1,200,000 1,100,000 2,300,000 1,200,000 1,100,000 2,300,000
1998 12 28 B B 2000 7 2002 4 6818 2002 7 2002 12 19.53%2002 3 8467 24.26% 2002 12 31 (2003 3 26 [2003]115 ) 1 2 3 4 5 6 7 10
8 1 2 (1) 3 15 70 100 (2) 1 9 10 (1) A B C 20%20% 20%
20% 20%20% 50% ( 50%) 50% 10 10 10 10 (2) (3), 11 (1) (2) :,, 12 2,000 3% % 1050 9.71.94 712 13.868.08 5 19.4
512 19.48.08 13 14 (1) (2) A B C A 3 B 15 10
16, 17 18 (1) ; (2) 10%, 50% ; (3) 5% ; (4), ; (5) 19 (1) [1996]2 (2) A. B. C. 1 17% 2 3%5% 3 33% [2000]1054 B 2001 12 2002 043 2002 4 5 7% 6 3%
1 2000 11 27 2000 11 27 250,000,000 167,225,000 66% 50,000,000 23,604,996 60% 120,000,000 99,244,277 90% 2000 8 29 35,000,000 34,300,000 98% 2001 6 12 120,000,000 106,781,100 88.75% 2000 12 12, 1999 10 21 54,503,892 49,755,500 60% ; 20,000,000 15,000,000 75% 1993 12 31 100,000,000 98,000,000 98% ( 2001 4 24 ) 1,000,000 550,000 55% ( ) 2002 5 22 500,000 450,000 90% 2000 11 14 2001 9 24 2,000,000 1,100,000 55% 2002 12 17,225,000 15% 15000 66 2002 292 2002 7 98% 33,615,845.63 65,628,432.12 99,244,277.25 90% 2002 12 23,604,996.69 60% 2002 11 16,781,100 13.75% 2002 12 9000 88.75 2002 12 49,755,500 60% 98%
75% 2002 3 18 8457 2002 2001 2 68,000,000 32,754,900 43.2% 2002 7 8 50,000,000 4,860,121 10% 2001 3 20 226,000,000 20,000,000 8.85% 500,000 250,000 50% 50% 2001 6 15 2002 9 30 32,754,900 98% 2002 11 3800, 43.2% 2002 6 15 60% 10% 3 1,537,591.37 1,971.10-2,141.81 621,747.99 29,403.85-394,018.51 84,171.03 10,734.12-38,938.45 [1996]2
( ) 1 a 2002 12 31 2001 12 31 202,917.13 175,444 1,920 8.2984 15,933 202,917.13 191,377 164,451,615.03 105,270,076 43,599,517.69 8.2773 360,886,287.78 43,504,608 8.2766 360,069,404 48,033 1.0576 50,800 525,337,902.81 465,390,280 88,689.64 33,812,202 1,993,209 5,540,652 88,689.64 41,346,063 525,629,509.58 506,927,720 (b) 2002 12 31 43,240,539.27 2 a 2002 12 31 2001 12 31 1,484,911.88 389,927..34 1,094,984.54 20,947,584 3,252,010 17,695,574 1,484,911.88 389,927.34 1,094,984.54 20,947,584 3,252,010 17,695,574 b / 100,000.00 97,200.00 180 20,000.00 19,440.00 1,359,911.88 974,984.54 5,000.00 9,400.00 c 2002 12 31 d 92.96% 3 1,478,103.33 4 a 2002 12 31 2001 12 31 22,592,387.00 452,110,494 112,961.94 71,267,830 22,479,425.06 380,842,664
b 2002 12 31 (%) 22,592,387.00 100% 112,961.94 22,592,387.00 100% 112,961.94 2001 12 31 (%) 250,419,502 55% 15,221,637 120,485,271 27% 14,622,415 32,740,801 7% 11,043,716 48,464,920 11% 30,380,062 452,110,494 100% 71,267,830 c 2002 12 31 10,373,381.00 46% d 95% e 5% 5%
5 a 2002 12 31 2001 12 31 434,996,103.20 112,846,566 3,332,968.63 1,170,466 431,663,134.57 111,676,100 b 2002 12 31 2001 12 31 394,615,086.91 90.72% 83,850,057 74% 40,104,103.29 9.22% 7,547,457 7% 140,313.00 0.03% 9,885,427 9% 136,600.00 0.03% 11,563,625 10% 434,996,103.20 100% 112,846,566 100% c 2002 12 31 306,955,417.13, 71% d 285% e 5%(5%) 6 a 2002 12 31 2001 12 31 5,354,000.00 88% 34,429,040 92% 700,000.00 12% 2,323,387 6% 511,423 1% 259,842 1% 6,054,000.00 100% 37,523,692 100% b1-2 70 c 84% d 5 5
7 a 2002 12 31 2001 12 31 0.00 63,954,566 0.00 1,571,498 0.00 12,685,817 663,282,525.35 663,282,525.35 78,211,881 2,414,140 663,282,525.35 75,797,741 b 775% c 8 2002 12 31 ( ) 19,041.63 18,400.00 37,441.63 0.00 198,331.96 180,000.00 378,331.96 0.00 0.00 501,000.00 501,000.00 0.00 0.00 195,760.00 195,760.00 0.00 6,024.00 19,272.00 6,024.00 19,272.00 12 0.00 1,722,819.30 1,236,251.08 486,568.22 5 13,874.54 0.00 13,874.54 0.00 118,998.87 0.00 118,998.87 0.00 356,271.00 2,637,251.30 2,487,682.08 505,840.22 9 a 2002 12 31 2001 12 31 203,939,197.62 6,820,051.96 197,119,145.66 20,000,000.00 20,000,000.00 26,102,724.30 26,102,724.30 230,041,921.92 6,820,051.96 223,221,869.96 20,000,000.00 20,000,000.00
b 75% 15,000,000.00 1,183,483.11 1,183,483.11 98% 9,8000,000.00 133,431,861.48 133431861.48 50% 250,000.00 2,602,646.16 2,602,646.16 55% 550,000.00 333,289.82 333,289.82 55% 1,100,000.00 791,320.91 791,320.91 90% 450,000.00 72,941.36 72,941.36 115,350,000.00 138,415,542.84 138,415,542.84 43.2% 32,754,900.00 32,663,533.40 32,663,533.40 32,754,900.00 32,663,533.40 32,663,533.40 8.85% 20,000,000.00 20,000,000.00 20,000,000.00 20,000,000.00 10% 4,860,121.38 4,860,121.38 4,860,121.38 19% 8,000,000.00 8,000,000.00 6,820,051.96 1,179,948.04 32,860,121.38 20,000,000.00 32,860,121.38 6,820,051.96 26,040,069.42 180,965,021.38 20,000,000.00 203,939,197.62 6,820,051.96 197,119,145.66 c 4,631,291.89 120 38,594.10 4,592,697.79 119 166,229.13 447,864.73 120 1,385.24 164,843.89 119 120 3,732.21 444,132.52 119 13,435,054.32 120 13,435,054.32 120 7,465,995.78 120 7,465,995.78 120 26,146,435.85 43,711.55 26,102,724.30 (d ) 8,000,000.00 6,820.051.96 6,820.051.96
10 2002 12 31 75,204,692.77 171,264,454.00 9,007,527.39 10,323,439.25 265,800,113.41 1,293,258.07 1,264,945.66 164,176.00 1,462,265.33 4,184,645.06 2,630,932.67 280,063.45 2,891,904.90 5,802,901.02 201,929.55 59,995.25 261,924.80 57,926,734.62 172,589,394.91 8,521,447.89 8,914,065.05 247,951,642.47 21,404,078.44 930,318.95 5,763,544.43 28,097,941.82 10,035,706.57 58,331,428.81 5,210,894.51 4,368,178.79 77,946,208.68 156,415.31 48,194.06 621,013.85 825,623.22 267,912.69 3,161,927.23 273,242.45 586,634.99 4,289,717.36 10,293,205.15 61,493,356.04 5,106,480.10 4,531,057.86 81,424,099.15 166,829.42 425,850.92 1,044,769.77 1,637,450.11 2,300,000.00 2,300,000.00 2,300,000.00 2,300,000.00 18,937,249.02 504,468.03 4,718,774.66 24,160,491.71 62,868,986.21 112,933,025.19 3,796,632.88 5,955,260.06 185,553,904.34 2001 12 31 62,202,659 127,669,104 7,520,521 6,870,524 204,262,808 230,000 230,000 13,034,034 43,763,803 1,717,006 3,222,915 61,737,758 32,000 168,453 200,453 75,204,693 171,264,454 9,007,527 10,323,439 265,800,113 8,732,611 46,113,790 3,991,608 3,462,061 62,300,070 1,305,656 12,269,956 1,219,287 906,118 15,701,017 2,561 52,317 54,878 10,035,706 58,331,429 5,210,895 4,368,179 77,946,209 1,200,000 1,200,000 1,100,000 1,100,000 2,300,000 2,300,000 62,868,987 112,933,025 3,796,632 5,955,260 185,553,904 52,270,048 81,555,314 3,528,913 3,408,463 140,762,738 11 150,000,000.00 23,619,592.00 23,619,592.00 103,467,744.51 103,467,744.51 2,329.00 550,377.34 290,781.54 261,924.80 23,621,921.00 104,018,121.85 23,910,373.54 261,924.80 103,467,744.51
12 2,590,000.00 1,036,000.00 1,036,000.00 /2,885,000.00 862,536.00 269,250.00 593,286.00 2,338,341.00 211,751.41 112,422.00 99,329.41 436,580.00 150,332.00 12,150.00 138,182.00 16,434.00 16,434.00 16,434.00 19,035,741.93 19,035,741.93 19,035,741.93 403~505 72,971,600.00 70,295,974.74 729,715.98 69,566,258.76 572 100,273,696.93 2,260,619.41 89,348,150.67 1,139,971.98 1,866,797.41 88,602,000.69 13 47,072,850
14 a 2002 12 31 342,000,000.00 4.536%~5.31% US$43,240,539.27 381,000,000.00 5.04%~6552% 723,000,000.00 2001 12 31 80,000,000 6.14%-6.44% 40,000,000 5.58% 30,000,000 6.14% 20,000,000 6.44% 170,000,000 341,000,000 5.58%-6.14% 43,039,381 6,000,000 5.94% 2,000,000 5.94% 8,900,000 6.34% 357,900,000 527,900,000 b 15 a 2002 12 31 178,710.51 5.58% 20,000,000.00 5.841% 20,178,710.51 16 a 2002 12 31 2001 12 31 69,956.00 100% 110,598,867.00 82% 18,531,557.00 14% 3,378,577.00 2% 2,979,401.00 2% 69,956.00 100% 135,488,402.00 100% b c 5%(5%). 17 2002 12 31 2001 12 31 81,672,755.00 39,585,939 a 106% b 5
18 2002 12 31 2001 12 31 16,459,665.00 34,432,480.00 1,840,000.00 3,680,000.00 118.86 18,299,783.86 38,112,480.00 19 2002 12 31 2001 12 31 3,442,306.11 33% 1,890,477 2,454,258.48 5% \3% 22,789,727 125,423.09 7% 1,365,983 42,434.42 1% 6,674,294 33,658.76 576,832 6,098,080.86 33,297,313 202002 12 31 2001 12 31 (a) 398,072,930.22 9,204,312 265,396,362.57 5,896,499.81 259,499,862.76 5(5%) 21 2002 12 31 2001 12 31 1,351,827.37 1,692,711 1,899,422 1,000,000.00 1,478,742 2,351,827.37 5,070,875
22 2002 12 31 2001 12 31 8,977,247.69 2,745,950.00 2002 6 3 (2002) 3, 11,812,168.00 2001 6 1 4% 2002 6 17 23 1 165,000,000 165,000,000 165,000,000 165,000,000 2 3 4 165,000,000 165,000,000 1 2 184,000,000 184,000,000 3 4 184,000,000 184,000,000 349,000,000 349,000,000 2002 12 31 349,000,000 349,000,000 1 24 a 2002 12 31 6,387,664.39 6,387,664.39 39,423,769.00 39,423,769.00 B 140,552,153.00 140,552,153.00 179,975,922.00 186,363,586.39 b2002 7 98% 33,615,845.63 65,628,432.12 90% 25 a 25,163,484.00 2,298,650.20 4,134,349.25 23,327,784.95 12,581,744.00 1,149,325.10 2,067,175.00 11,663,894.10
37,745,228.00 3,447,975.30 6,201,524.25 34,991,679.05 b 10 2,298,650.20 5 1,149,325.10 c 26 2002 12 31 2001 12 31 23,682,402.04 46,727,893 49,357,692.02 22,820,507 6,201,524.00 79,241,618.06 69,548,400 2,298,650.20 8,807,138 1,149,325.10 4,403,570 75,793,642.76 56,337,692 3,490,000.00 6,980,000 72,303,642.76 49,357,692 25c 27 / a 29,715,768.00 387,788,065 53,776,562.35 206,325,076 83,492,330.35 594,113,141 11,512,947.00 13.79%
b 23,081,897.30 295,941,292 45,901,812.16 175,587,863 68,983,709.46 471,529,155 28 13,250,000.00 662,500.00 12,587,500.00 865,150.43 807,501.56 57,648.87 14,115,150.43 1,470,001.56 12,645,148.87 29 29,717,583.64 34,191,528 12,722,487.10 16,690,001 74,991.68 54,113 33,948.68 97,686 16,954,053.54 17,653,326 30 0.00 3,596,421.32 3,596,421.32-43,711.55 0.00-43,711.55 7,839,271.69 7,839,271.69 22,832,530.00-414,211.90 0.00 22,418,318.10 73,477.29 0.00 73,477.29 22,832,530.00-340,734.61 11,435,693.01 33,883,776.85 8,964,984 8,964,984 8,964,984 8,964,984 31 55,060,932.67 13,741,604.31 68,802,536.98 ------------------------- 102,539,682.88 5,897,623.69 2,196,035.16 110,633,341.73
1 a 2002 12 31 2001 12 31 249,549,811.70 475,064,530.00 2,410,498.12 1,170,466.00 247,139,313.58 473,894,064.00 b 2002 12 31 2001 12 31 248,194,952.32 99.45% 474,652,626.00 99.91% 1,077,946.38 0.43% 411,904.00 0.09% 140,313.00 0.06% 136,600.00 0.05% 249,549,811.70 100% 475,064,530.00 100% c 5 5% d 2002 12 31 209,551,503.14 84
2 2002 12 31 17,479,887.70 531,985.50 1,709,373.80 19,721,247.00 1,293,258.07 118,270.00 1,024,265.33 2,435,793.40 18,773,145.77 650,255.50 2,733,639.13 22,157,040.40 226,895.65 220,286.97 447,182.62 148,134.09 191,613.95 339,748.04 375,029.74 411,900.92 786,930.66 2,300,000.00 2,300,000.00 2,300,000.00 2,300,000.00 16,473,145.77 275,225.76 2,321,738.21 19,070,109.74 15,179,888.00 305,089.00 1,489,087.00 16,974,064.00 2001 12 31 60,944,828.00 88,831,088.00 7,520,521.00 6,870,524.00 164,166,961.00 3,201,087.00 4,075,210.00 199,348.00 583,355.00 8,059,000.00 32,000.00 32,000.00 46,634,027.00 92,906,298.00 7,187,884.00 5,744,505.00 152,472,714.00 17,479,888.00 531,985.00 1,709,374 19,721,247.00 8,495,867.00 35,204,516.00 3,991,608.00 3,462,061.00 51,154,052.00 381,469.00 3,149,346.00 281,244.00 332,495.00 4,144,554.00 2,561.00 2,561.00 8,874,775.00 38,353,862.00 4,045,956.00 3,574,269.00 54,848,862.00 226,896.00 220,287.00 447,183.00 1,200,000.00 1,200,000.00 1,100,000.00 1,100,000.00 2,300,000.00 2,300,000.00 15,179,888.00 305,089.00 1,489,087.00 16,974,064.00 51,248,961.00 53,626,572.00 3,528,913.00 3,408,463.00 111,812,909.00 2002 12 31 3 a 2002 12 31 2001 12 31 621,060,318.40 621,060,318.40 228,442,610.25 228,442,610.25
26,102,724.30 26,102,724.30 647,163,042.70 647,163,042.70 228,442,610.25 228,442,610.25 b 75% 15,000,000.00 1,183,483.11 1,183,483.11 1,183,483.11 98% 9,8000,000.00 139,349,331.48 133,431,861.48 133,431,861.48 98% 34,300,000.00 33,591,682.46 0.00 0.00 89% 106,781,100.00 2,614,861.56 104,764,669.67 104,764,669.67 90% 105,631,942.27-656,744.38 104,975,197.89 104,975,197.89 60% 23,604,996.69-55,130.39 23,102,001.57 23,102,001.57 60% 49,755,500.00 36,320,445.68 36,320,445.68 66% 167,225,000.00 159,759,004.22 159,759,004.22 600,298,538.96 174,124,497.05 1,902,986.79 563,536,663.62 563,536,663.62 43.2% 32,754,900.00 74,862.53 32,663,533.40 32,663,533.40 32,754,900.00 74,862.53 32,663,533.40 32,663,533.40 8.85% 20,000,000.00 20,000,000.00 20,000,000.00 20,000,000.00 10% 4,860,121.38 34,318,113.20 4,860,121.38 4,860,121.38 24,860,121.38 54,318,113.20 24,860,121.38 24,860,121.38 657,913,560.34 228,442,610.25 1,977,849.32 621,060,318.40 621,060,318.40 c 4,631,291.89 120 38,594.10 4,592,697.79 119 166,229.13 447,864.73 120 1,385.24 164,843.89 119 120 3,732.21 444,132.52 119 13,435,054.32 120 13,435,054.32 120 7,465,995.78 120 7,465,995.78 120 26,146,435.85 43,711.55 26,102,724.30 4 3,596,421.32 3,596,421.32-43,711.55-43,711.55 7,839,271.69 7,839,271.69 73,477.29 73,477.29 22,832,530.00 1,631,271.69 24,463,801.69 22,832,530.00 1,704,748.98 11,391,981.46 35,929,260.44
78,000,000 100,000,000 250,000,000 50,000,000 120,000,000 120,000,000, 54,503,892 ; 20,000,000 100,000,000 2002 3 18 8457 24.26% 2002 12 31 2003 3 26 [2003]115 78,000,000 78,000,000 100,000,000 100,000,000 100,000,000 150,000,000 250,000,000 50,000,000 50,000,000 120,000,000 120,000,000 30,000,000 90,000,000 120,000,000 47,344,500 7,159,392 54,503,892 20,000,000 20,000,000 100,000,000 100,000,000
% % 84,670,000 24.26 84,670,000 24.26 165,000,000 165,000,000 66.00 30,000,000 30,000,000 60.00 108,000,000 108,000,000 90.00 106,500,000 106,500,000 88.75 32,702,335 32,702,335 60.00 15,000,000 15,000,000 75.00 98,000,000 98,000,000 98.00 2002 12 17,225,000 1650 15 2002 7 98% 33,615,845.63 65,628,432.12 99,244,277.25 90% 2002 12 23,604,996.69 60% 2002 12 16,781,100 13.75% 13.75 2002 12 49,755,500 60% 2002 12 20,329,000 19,035,741.93 1,293,258.07 2002 6 7 2002 10 16 500 250 250 2002 8 28 500 ( ) 110,000 55,000
A 2002 12 31 31,316,092.41 5,896,499.81 8,238,824 B 259,499,862.76 1 2002 6 3 11,812,168, 8,977,247.69 2 7000 2002 10 24 2002 11 9 2003 7000 2003 11 6 2003 11 24 3 5000 2002 4 17 1400 2003 5 20 12002 3 18 8467 2003 3 26 2 2002 7 1 B 9,000 3 2002 12 22 B 15,000 42002 12 3275.49 98% 3800 43.2% 5 2002 8 4000 35% 1 2.5
850 12003 4 14 98% 75% 8.85% 10% 97.5% 2002 12 31 2 2003 4 22 2002 0.01 3,490,000, % 1.97% 2.00% 0.04 0.04-1.55% -1.58% -0.03-0.03 3.69% 3.75% 0.07 0.07 1.32% 1.35% 0.02 0.02
AUDITORS REPORT TO THE SHAREHOLDERS OF SHANGHAI LINGYUN CURTAIN WALL SCIENCE AND TECHNOLOGY COMPANY LIMITED (incorporated in the People s Republic of China with limited liability) We have audited the financial statements on pages 2 to 47 which have been prepared in accordance with International Accounting Standards. Respective responsibilities of Directors and Auditors The Company s directors are responsible for the preparation of financial statements which give a true and fair view. In preparing financial statements which give a true and fair view, it is fundamental that appropriate accounting policies are selected and applied consistently. It is our responsibility to form an independent opinion, based on our audit, on those statements and to report our opinion to you. Basis of opinion We conducted our audit in accordance with International Standards on Auditing. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the Directors in the preparation of the financial statements and of whether the accounting policies are appropriate to the Group s circumstances, consistently applied and adequately disclosed. We planned our audit in accordance with International Standards on Auditing so as to obtain all the information and explanations which was considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. We believe that our audit provides a reasonable basis for our opinion. Qualified opinion arising from disagreement over accounting treatment As set out in more details in note 2(a) to the financial statements, the Group lost the financial and operational control of two of its subsidiaries (the Unconsolidated Subsidiaries ) during the year and no reliable financial information of the Unconsolidated Subsidiaries is available. In addition, the Unconsolidated Subsidiaries will be disposed of subsequent to 31 December 2002 in accordance with a proposed share exchange arrangement. As of 31 December 2002, the Group accounted for its interest in the Unconsolidated Subsidiaries using the cost method of accounting. In our opinion, the financial statements of the Unconsolidated Subsidiaries should have been consolidated into the Group s financial statements in accordance with International Accounting Standard IAS 27 Consolidated financial statements and accounting for investments in subsidiaries. However, there were no practical audit procedures that we could perform to verify (i) the amounts which should have been consolidated and (ii) the amount of dividend income received from the Unconsolidated Subsidiaries relating to the year ended 31 December 2002. Page 1
AUDITORS REPORT TO THE SHAREHOLDERS OF SHANGHAI LINGYUN CURTAIN WALL SCIENCE AND TECHNOLOGY COMPANY LIMITED (incorporated in the People s Republic of China with limited liability) (CONTINUED) Qualified opinion arising from disagreement over accounting treatment (continued) Except for any adjustments that might have been found to be necessary had the above disagreement over accounting treatment not existed, in our opinion the financial statements give a true and fair view of the state of affairs of the Group as at 31 December 2002 and of its profit and cash flows for the year then ended. HORWATH HONG KONG CPA LIMITED Certified Public Accountants 25 April 2003 Chan Kam Wing, Clement Practising Certificate number P02038 2001 Central Plaza 18 Harbour Road Wanchai Hong Kong Page 2
SHANGHAI LINGYUN CURTAIN WALL SCIENCE AND TECHNOLOGY COMPANY LIMITED CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2002 (Expressed in Renminbi thousands) 2002 2001 Notes RMB 000 RMB 000 Revenue, net 4 81,633 582,008 Cost of sales (68,984) (471,517) Gross profit 12,649 110,491 Other operating income 47,320 14,362 Distribution costs (2,543) (19,398) Administrative expenses (15,934) (44,632) Other operating expenses - (1,701) Profit from operations 41,492 59,122 Finance costs, net 5 (16,996) (17,502) Share of losses of associates and unconsolidated subsidiaries (270) - Profit before taxation 6 24,226 41,620 Income tax 7-5,043 Profit after taxation 24,226 46,663 Minority interests (222) 73 Profit attributable to shareholders 24,004 46,736 Proposed dividend 8 3,490 6,980 Basic earnings per share 9 RMB0.07 RMB0.13 The notes on pages 9 to 47 form part of these financial statements. Page 3
SHANGHAI LINGYUN CURTAIN WALL SCIENCE AND TECHNOLOGY COMPANY LIMITED Assets CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2002 (Expressed in Renminbi thousands) 2002 2001 Notes RMB 000 RMB 000 Non current assets Property, plant and equipment 10 11,891 173,283 Construction-in-progress 11 103,468 23,623 Investment properties 12 12,270 12,270 Intangible assets 13 135,675 2,261 Goodwill: 14 - Goodwill 25,938 - - Negative goodwill (6,069) - Interests in associates and unconsolidated subsidiaries 15 171,244 - Long term investments 16 26,040 20,000 Non-current receivables - 2,367 Other non-current assets - 61 480,457 233,865 Current assets Inventories, net 17-75,798 Properties held for sale or under development 18 663,282 - Gross amount due from customers for contract work 19-71,112 Due from related parties 28(c) 115,063 6,963 Prepayments and other current assets 324,638 142,606 Trade receivables, net 20 22,479 379,671 Short-term investments 21 1,095 17,696 Pledged bank time deposits 25 357,915 356,220 Cash and cash equivalents 167,715 150,708 1,652,187 1,200,774 Total assets 2,132,644 1,439,639 Page 4
SHANGHAI LINGYUN CURTAIN WALL SCIENCE AND TECHNOLOGY COMPANY LIMITED CONSOLIDATED BALANCE SHEET (CONTINUED) AS AT 31 DECEMBER 2002 (Expressed in Renminbi thousands) Equity and liabilities 2002 2001 Notes RMB 000 RMB 000 Capital and reserves Share capital 22 349,000 349,000 Reserves 23 291,080 274,056 640,080 623,056 Minority interests 146,859 4,470 Non-current liabilities Due to related parties, non-current portion 30(c) 8,239 8,239 Bank borrowings due after one year 25 81,595-89,834 8,239 Current liabilities Trade payables - 138,173 Deposits from customers 81,673 39,586 Accruals and other current liabilities 142,181 20,936 Due to related parties 30(c) 267,930 1,565 Dividends payable 14,810 31,132 Gross amount due to customers for contract work 24-3,539 Taxes payable 6,098 33,297 Bank borrowings due within one year 25 743,179 527,900 Provision for warranty - 2,746 1,255,871 798,874 Total equity and liabilities 2,132,644 1,434,639 The financial statements were approved and authorized for issue by the board of directors on 22 April 2003. Director Director The notes on pages 9 to 47 form part of these financial statements. Page 5
SHANGHAI LINGYUN CURTAIN WALL SCIENCE AND TECHNOLOGY COMPANY LIMITED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY FOR THE YEAR ENDED 31 DECEMBER 2002 (Expressed in Renminbi thousands) Statutory surplus reserve fund Statutory public welfare fund Total shareholders equity Share capital Capital reserve Retained profits Total reserves (Note 22) (Note 23) RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 RMB 000 Balance at 31 December 2000 349,000 179,976 16,356 8,178 65,192 269,702 618,702 Net profit for the year - - - - 46,736 46,736 46,736 Profit appropriations - Statutory surplus reserve fund - - 4,673 - (4,673) - - - Statutory public welfare fund - - - 2,336 (2,336) - - Appropriations to statutory reserves by a subsidiary - - 4,134 2,068 (6,202) - - - Dividends declared (Note 8) - - - - (42,382) (42,382) (42,382) Balance at 31 December 2001 349,000 179,976 25,163 12,582 56,335 274,056 623,056 Net profit for the year - - - - 24,004 24,004 24,004 Profit appropriations - Statutory surplus reserve fund - - 2,299 - (2,299) - - - Statutory public welfare fund - - - 1,149 (1,149) - - Reversal on deconsolidation of subsidiaries - - (4,134) (2,068) 6,202 - - - Dividends declared (Note 8) - - - - (6,980) (6,980) (6,980) Balance at 31 December 2002 349,000 179,976 23,328 11,663 76,113 291,080 640,080 The notes on pages 9 to 47 form part of these financial statements. Page 6
SHANGHAI LINGYUN CURTAIN WALL SCIENCE AND TECHNOLOGY COMPANY LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2002 (Expressed in Renminbi thousands) 2002 2001 Notes RMB 000 RMB 000 Cash flows from operating activities Profit before tax 24,226 41,620 Adjustment for: Share of results of associates and unconsolidated subsidiaries 270 - Depreciation of property, plant and equipment 4,288 15,701 Loss on disposal of property, plant and equipment - 146 Impairment loss of investment properties - 1,100 Amortisation of intangible assets and other non-current assets 1,142 1,385 Amortisation of goodwill 42 - Release of negative goodwill as income (319) - Provision for doubtful debts 1,432 1,138 Provision for warranty - 1,176 Provision for impairment in value of long term investment 71 - Interest expense 29,645 34,192 Interest income (12,722) (16,690) Dividend income (22,833) - Gain on partial disposal of investment in an unconsolidated subsidiary (839) - Gain on disposal of investments held for trading (3,954) (3,667) Income from investments held to maturity - (8,550) Unrealised loss on investments held for trading 390 3,252 Operating profit before working capital changes 20,839 70,803 (Increase) / decrease in inventories (5,822) 43,937 Decrease in properties held for sale or under development 1,937 - Increase in amounts due from related parties (19,649) (13,672) Increase in prepayments and other current assets (160,460) (22,667) Increase in trade receivables (158,855) (75,756) Decrease in trade payables (6,467) (10,853) (Decrease) / increase in deposits from customers (3,189) 3,028 Increas e / (decrease) in accruals and other current liabilities 230,916 (3,410) Decrease in amounts due to related parties (54,103) (4,396) Decrease in gross amount due to customers for contract work - (29,560) (Decrease)/increase in taxes payable (1,475) 8,132 Cash used in operations (156,328) (34,414) Interest expense paid (30,256) (34,015) Income tax refunded - 4,824 Net cash used in operating activities (186,584) (63,605) Page 7
SHANGHAI LINGYUN CURTAIN WALL SCIENCE AND TECHNOLOGY COMPANY LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2002 (Expressed in Renminbi thousands) 2002 2001 Notes RMB 000 RMB 000 Net cash used in operating activities (186,584) (63,605) Cash flows from investing activities Proceeds from disposal of investments held for trading 10,600 15,626 Proceeds from disposal of investments held to maturity - 108,550 Proceeds from disposal of an unconsolidated subsidiary 30,000 - Interest income received 12,722 17,892 Dividend received 28,750 - Assets reorganisation, net of cash and cash equivalent acquired 26(a) 50,899 - Deconsolidation of subsidiaries 26(b) (74,745) - Cash paid for investments held for trading (53) (17,467) Purchase of property, plant and equipment and investment properties (4,184) (39,000) Expenditures for construction-in-progress (550) - Purchase of intangible assets (19,036) (385) Net cash generated from investing activities 34,403 85,216 Cash flows from financing activities Payment of share issuance costs - (800) Increase / (decrease) in bank borrowings 194,185 (27,100) Dividends paid (23,302) (3,680) Increase in bank time deposits pledged for short-term borrowings (1,695) (107,877) Cash paid for other financing activities - (1,000) Net cash generated from / (used in) financing activities 169,188 (140,457) Net increase / (decrease) in cash and cash equivalents 17,007 (118,846) Cash and cash equivalents at beginning of year 150,708 269,554 Cash and cash equivalents at the end of year 167,715 150,708 The notes on pages 9 to 47 form part of these financial statements. Page 8
SHANGHAI LINGYUN CURTAIN WALL SCIENCE AND TECHNOLOGY COMPANY LIMITED NOTES TO THE FINANCIAL STATEMENTS (Expressed in Renminbi thousands) 1. ORGANISATION AND OPERATIONS Shanghai Lingyun Curtain Wall Science and Technology Company Limited (the Company ) was established as a joint stock limited company in the People s Republic of China (the PRC ) on 28 December 1998 subsequent to a corporate reorganization in preparation for the listing of its foreign investment ordinary shares (the B Shares ). The B shares have been listed on the Shanghai Stock Exchange since July 2000. On 18 March 2002, Wuhan Lingyun Technology Group Company Limited ( Lingyun Group ) and Tianjin Huanbohai Holding Group Company Limited ( Huanbohai Group ) entered into a share transfer agreement whereby Lingyun Group will transfer its holding of 84,670,000 shares in the Company, representing 24.26% of its issued share capital to Huanbohai Group. On 26 March 2003, the share transfer had been approved by The Ministry of Finance. However, as of the date of this report, the share transfer is still in progress. On 15 April 2002, Hunan Zhensheng Aluminum Company Limited ( Hunan Zhensheng ) and Guoji Environmental Science and Technology Company Limited ( Guoji Environmental ) entered into a share transfer agreement whereby Zhensheng Aluminum transferred its entire shareholding in the Company, representing 68,180,000 shares (19.53%) to Guoji Environmental which became the second largest shareholder of the Company. As at 31 December 2002, the major shareholders of the Company were Lingyun Group which was the ultimate controlling shareholder, and Guoji Environmental. The Company and its subsidiaries are collectively referred to as the Group. The Group is principally engaged in the manufacture and sale of aluminum extrusion materials and the design, manufacture and installation of curtain wall systems; real estate development, tourism development and operations; educational institution operations, services and investment, forestry and plantation, and timber processing. Details of the subsidiaries are set out in Note 27 of the financial statements. The registered office of the Company is located at 18 th Floor, Jiaxing Mansion, 877 Dongfang Road, Shanghai, the PRC. As of 31 December 2002, the Group had 1,200 employees (2001 : 1,189). Page 9
SHANGHAI LINGYUN CURTAIN WALL SCIENCE AND TECHNOLOGY COMPANY LIMITED 2. PRINCIPAL ACCOUNTING POLICIES The financial statements of the Group have been prepared in accordance with International Accounting Standards ( IAS ). The Group also prepares financial statements which comply with accounting regulations in the People s Republic of China. A reconciliation of the Group s results and shareholders equity under IAS and PRC accounting regulations is presented in Note 31 to the financial statements. The principal accounting policies adopted are as follows: (a) Basis of presentation The directors are of the opinion that the Group could no longer be in a position to exercise operational or financial control or significant influence over Wuhan Lingyun High Grade Construction Decoration Materials Company Limited ( Lingyun Construction Materials ) and Wuhan Lingyun Construction Decoration Engineering Company Limited ( Wuhan Lingyun ) notwithstanding that the Company owns 75% and 98% of their equity interest respectively. As a result, certain account balances and transactions of Lingyun Construction Materials and Wuhan Lingyun as reflected in their financial statements for the year ended 31 December 2002 cannot be satisfactorily substantiated or otherwise supported. Subsequent to 31 December 2002, the Company has entered into a proposed assets exchange agreement whereby the Company s equity interests in Lingyun Construction Materials and Wuhan Lingyun will be disposed of. Please refer to Note 26(a) of the financial statements for further details of the assets exchange. The financial statements of Lingyun Construction Materials and Wuhan Lingyun have not been consolidated into the Group s financial statements. The Group s interests in these unconsolidated subsidiaries were accounted for using cost method of accounting as at 31 December 2002. (b) Principles of consolidation The financial statements of the Group incorporate the financial statements of the Company and all operating subsidiaries that are controlled by the Company. Where an entity either began or ceased to be controlled by the Company during the year, the results are included only from the date control commenced or up to the date control ceased. All significant intercompany balances and transactions, including intercompany profits and unrealised profits and losses are eliminated on consolidation. The equity and net income attributable to minority shareholders interests are shown separately in the consolidated balance sheet and statement of income, respectively. Consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances. Page 10
SHANGHAI LINGYUN CURTAIN WALL SCIENCE AND TECHNOLOGY COMPANY LIMITED 2. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) (c) Subsidiary A subsidiary is a company over which the Company exercises control. Control exists when the Company has the power to govern the financial and operating policies of the subsidiary so as to obtain economic benefits from it s activities. (d) Investment in associates An associate is a company, not being a subsidiary, over which the Group is in a position to exercise significant influence, through participation in the financial and operating policy decisions of the investee. In the consolidated balance sheet, investments in associates are stated at the Group s share of associates net assets together with any premium paid on acquisition in so far as it has not been written off or amortized. The consolidated income statement includes the Group s share of result of its associates for the year. (e) Investments These are investments in various unlisted companies in which the Group neither holds, directly or indirectly, 20% or more of the voting powers, nor exercises significant influence. Investments held for long term purpose are initially recognised at cost, being the fair value of the consideration given and including acquisition charges associated with the investment securities. After initial recognition, such investments are measured at fair value and unrealised gains and losses are reported as a separate component of equity until the investment is sold, collected or otherwise disposed of, or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is included in the income statement. For investment actively traded in recognized financial markets, fair value generally determined by reference to stock exchange quoted market prices at the close of business on the balance sheet date. For investment in an equity instrument that does not have a quoted market price in active market and for which other methods of reasonably estimating fair value are clearly inappropriate or unworkable, the instrument would be measured at cost, subject to review of impairment. For an investment that has a fixed maturity, the instrument would be measured at cost using the effective interest rate method, subject to review of impairment Page 11
SHANGHAI LINGYUN CURTAIN WALL SCIENCE AND TECHNOLOGY COMPANY LIMITED 2. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) (f) Goodwill Goodwill represents the excess of the cost of acquisition over the fair value of the identifiable net assets of a subsidiary at the date of acquisition. Goodwill is recognised as an asset and is amortised using the straight-line method over estimate period that benefits are expected to be received. The carrying amount of goodwill is reviewed annually and written down for impairment when it is considered necessary. Negative goodwill arising on the acquisition of subsidiaries, associates and jointly-controlled entities represents the excess of the Group s share of the fair values of the identifiable assets and liabilities acquired as at the date of acquisition, over the cost of the acquisition. To the extent that negative goodwill relates to expectations of future losses and expenses that are identified in the acquisition plan and that can be measured reliably, but which do not represent identifiable liabilities as at the date of acquisition, that portion of negative goodwill is recognised as income in the consolidated income statement when the future losses and expenses are recognised. To the extent that negative goodwill does not relate to identifiable expected future losses and expenses as at the date of acquisition, negative goodwill is recognised in the consolidated income statement on a systematic basis over the remaining average useful life of the acquired depreciable/amortisable assets. The amount of any negative goodwill in excess of the fair values of the acquired non-monetary assets is recognised as income immediately. In the case of associates and jointly-controlled entities, any negative goodwill not yet recognised in the consolidated income statement is included in the carrying amount thereof, rather than as a separately identified item on the consolidated balance sheet. On disposal of subsidiaries, associates or jointly-controlled entities, the gain or loss on disposal is calculated by reference to the net assets at the date of disposal, including in the attributable amount of goodwill or negative goodwill which has not been recognised in the consolidated income statement and any relevant reserves as appropriate. Page 12
SHANGHAI LINGYUN CURTAIN WALL SCIENCE AND TECHNOLOGY COMPANY LIMITED 2. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) (g) Property, plant and equipment and depreciation Property, plant and equipment are stated at cost less accumulated deprecation and accumulated impairment loss. The initial cost of an asset comprises its purchase price, construction cost and any directly attributable costs of bringing the asset to its purchase price, construction cost and any directly attributable cost of bringing the asset to its working condition and location for its intended use. Expenditures incurred after the property, plant and equipment have been put into operation, such as overhaul, repairs and maintenance costs, are recognised as an expense in the period in which they are incurred. In situations where it is probable that the expenditures have resulted in an increase in the future economic benefits expected to be obtained from the use of the asset beyond its originally assessed standard of performance, the expenditures are capitalised as an additional cost of the asset. Depreciation is calculated using the straight-line method to write off the cost, after taking into account the estimated residual value, of each asset over its expected useful life. The expected useful lives are as follows: Buildings Machinery and equipment Motor vehicles Furniture, fixtures and equipment 10-50 years 7-12 years 5-12 years 5 years The useful lives of assets and depreciation method are reviewed periodically to ensure that the method and period of depreciation are consistent with the expected pattern of economic benefit from items of property, plant and equipment. When property, plant and equipment are sold or retired, their costs, accumulated depreciation and accumulated impairment loss are eliminated from the accounts and any gain or loss resulting from their disposal is included in the statement of income. (h) Construction-in-progress Construction-in-progress represents buildings and plant under construction and machinery and equipment under installation and testing, and is stated at cost. This includes cost of construction, plant and machinery and other direct costs plus borrowing costs which include interest charges and exchange differences arising from foreign currency borrowings used to finance these projects during the construction period, to the extent these are regarded as an adjustment interest costs. Construction-in-progress is not depreciated until such time as the asset is completed and put into operational use. Page 13
SHANGHAI LINGYUN CURTAIN WALL SCIENCE AND TECHNOLOGY COMPANY LIMITED 2. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) (i) Investment properties Investment properties are treated as long term investments and carried at market value determined annually by external independent valuers. Investment properties are not subject to depreciation. Increases or decrease in their carrying amount are credited or charged to the statement of income. (j) Intangible assets Intangible assets are measured initially at cost. Intangible assets are recognised if it is probable that the future economic benefits that are attributable to the assets will flow to the enterprise, and the cost of the asset can be measured reliably. After initial recognition, intangible assets are measured at cost less accumulated amortisation and any accumulated impairment losses. Intangible assets are amortised on a straight-line basis over the best estimation of their useful lives set as follows: Patent Know-how Utility use rights Land use rights Forest use rights 5 years 5 years 5 years 33-50 years 50 years The amortisation period and method are reviewed annually at each financial year-end. (k) Inventories Inventories, including work-in-process, are stated at the lower of cost and net realisable value, after provision for obsolete items. Cost includes costs of raw materials computed using the first-in, first-out method (contracting business) and weighted average method (manufacturing business) of costing. For work-in-process and finished goods, cost also includes an attributable portion of fixed and variable overhead costs based on a normal operating capacity. Net realisable value is the estimated selling price in the original course of business less the estimated costs of completion, marketing and distribution. Unrealisable inventory has been fully written off. Provision is made for obsolete, slow-moving or defective items where appropriate. When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the period the write down or losses occur. Any reversal of write down of inventories, arising from an increase in net realisable value, is recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs. Page 14
SHANGHAI LINGYUN CURTAIN WALL SCIENCE AND TECHNOLOGY COMPANY LIMITED 2. PRINCIPAL ACCOUNTING POLICIES (CONTINUED) (l) Properties held for sale or under development Properties held for sale or under development are stated at the lower of cost and net realizable value. Cost comprises purchase cost of land use rights, development costs and an appropriate proportion of interest expense and foreign currency translation difference in respect of borrowed funds during the development period. Net realizable value is determined by reference to the proceeds of properties sold in the ordinary course of business subsequent to the balance sheet date or management estimates based on prevailing market condition. (m) Construction contracts The accounting policy for the recognition of contract revenue is set out in Note r(i) below. When the outcome of a construction contract can be estimated reliably, contract costs are recognised as expenses by reference to the stage of completion of the contract activity at the balance sheet date. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately. When the outcome of a construction contract cannot be estimated reliably, contract costs are recognised as an expense in the period in which they are incurred. Construction contracts in progress at the balance sheet date are recorded at the net amount of costs incurred plus recognised profits less recognised losses and progress billings, and are presented in the balance sheet as Gross amount due from customers for contract work (as an asset) or Gross amount due to customers for contract work (as a liability), as applicable. Cost includes an attributable portion of direct materials, computed on a first-in, first-out basis, cost of machinery and equipment, and direct overheads. Amounts received before the related contract work is performed are included in the balance sheet as Deposits from customers. Amount billed, but not yet paid by the customers, for work performed on a contract are included in the balance sheet as Trade receivables. Where anticipated cost on individual contracts exceed anticipated revenue, the excess amount is shown separately as Provision for losses on contracts. (n) Receivables Receivables are stated at fair value of the consideration given and are carried at cost, after provision for impairment. Page 15