Baoshan Iron & Steel Co. Ltd.

Transcription

1 P Quarter Baoshan Iron & Steel Co. Ltd. st 2005 Report 1P 1.Important Notices 1.1 The Board of the Company and its directors warrant that there are no misrepresentatives, misleading statements or deliberate omissions in this Report, and have accepted joint and several liabilities for the authenticity, accuracy and completeness of the information contained herein. 1.2 Director He Wenbo and Director Xu Lejiang was absent from the meeting of the Board of Directors, and had entrusted Director Ouyang Yingpeng to attend and vote on the former s behalf. 1.3 No audit was carried out in respect of this Quarterly Report. 1.4 The following members of the Company warrant the authenticity and completeness of the financial and accounting statements in this Quarterly Report: The Board Chairwoman Director-in-charge Ms. Xie Qihua; the Financial Supervisor in charge of the accounting operation Chen Ying; and the Chief of Finance and Accounting Division and Principal, Accounting Department, Wang Mingdong. 2 Company Profile 2.1 Company Profile Stock Name Baosteel Stock Code Secretary to Board of Representative of Securities affairs Directors Name Chen Ying Yu Hong Contact Address Guoyuan, Fujin Road, Baoshan District, Shanghai Telephone Facsimile HUir@baosteel.comUH 2.2 Financial Information Principal Accounting Data and Financial Targets March 31, 2005 Unit: RMB million Rise & Fall Over Same December 31, 2004 Period Last Year (%) Total assets 68, ,

2 P 0.18 Shareholders equity (excluding minority shareholder s equity) 44, , Net assets per share (RMB) Net assets per share after adjustments (RMB) January to June 2005 January to March 2005 Rise & Fall over Same Period Last Year (%) Net cash flow from operating activities 5, , Earnings per share (RMB) Earnings per share (RMB) P Note Net return on assets (%) Increase of 0.14% Returns on net assets with non-recurring gains/losses deducted (%) Increase of 0.31% Unit: RMB million Extraordinary Profit/Loss Items Amount Profits from investments Extraordinary income 0.89 Recovery of bad debts 0.01 Extraordinary expense Impact of above items on corporate income tax Total N.B.:Between the end of the Reporting Period and the release date of the Report, the Company issed 5 billion new shares, increasing the share capital from billion shares to billion shares; earnings per share will henceforth be calculated on the basis of new share capital Profit and Loss Account (unaudited) Item Unit: RMB million January to March 2005 January to March 2004 Consolidated Holding Company Consolidated Holding Company 1. Operating Income 17, , , , Less: Operating costs 12, , , , Taxes and other expenses relating to Principal

3 operations 2. Operating Profits 5, , , , Add: Other profits Less: Operating expenses Management expenses Financial expenses Operating Profits 4, , , , Add: Gains from investments Extraordinary income Less: expense Extraordinary Total Profits 4, , , , Less: Income tax 1, , , , Minority profit or loss shareholder s Net Profits 3, , , , Total number of shareholders at end of Reporting Period and Shareholdings Statement of Top 10 Shareholders of Tradable Shares Total number of shareholders at end of Reporting Period 151,370 Top 10 Shareholders of Tradable Shares Full Name of Shareholder Shareholding of Tradable Shares at end of Reporting Period Category (A, B, H share or others) Shanghai Securities 50 ETF 51,581,683 A E Fund 50 Index Securities Investment Fund 47,956,951 A UBS LIMITED 46,410,762 A Fortis Haitong Income Fund 46,046,163 A Fenghe Value Securities Investment Fund 40,699,291 A Anshun Securities Investment Fund 38,888,000 A SYWG BNP Paribas Securities Investment Fund 37,320,749 A

4 P quarter P quarter P quarter CITIGROUP GLOBAL MARKETS LIMITED 30,535,109 A Hua An Securities Co. Ltd. 25,550,000 A Southern Steady Growth Securities Investment Fund 3 Management Discussions and Analyses 25,000,032 A 3.1 Brief analysis of overall operating conditions of the Company during the Reporting Period Applicable Not applicable st The State Government had during the 1P further consolidated and developed the achievements of macro-controls, resulting in domestic economy maintaining a steady st and fast pace of growth. GDP grew by 9.5%, a drop of 0.3% from that in the 1P of The Company had also made steady progress on various fronts, holding fast to its annual production and operation targets, and achieving sterling results in both production st and sales. In the 1P the Company sold million tons of steel billets, a growth of 1.70% from the same period last year. The Company also sold million tons of strategic products, a growth of 12.06% from the same period last year; among them sale of automotive steel was 441,700 tons, roughly the same as the same period last year. The Company also spared no efforts in promoting innovation, and has applied for 102 patents, or 34% of the annual plan. As regards the reduction in costs and increase in efficiency, the Company realized RMB 390 million, or 31% of the annual plan. Income from principal operations on a consolidated basis was RMB billion, resulting in total profits of RMB billion, an increase respectively of 34.22% and 22.10% from the same period last year. The Company made smooth progress in its key engineering projects. Hot run test of 1800 Pickling Line & Tandem Cold Mill, Continuous Annealing Line, No. 1 Continuous Galvanized Line were respectively conducted on December 16, 2004, February 27, 2005 and March 30, They were respectively ahead of schedule by 3 months, 1 month and 1 month. Hot run test of Heavy Plate Mill of Continuous Casting Line and Rolling Line were conducted respectively on December 12, 2004 and March 1, 2005, and were ahead of schedule by 18 days and 1.5 months. In 2005, the vast increase in the prices of iron ores put tremendous pressure on the downstream steel and iron industry. This, along with increases in the prices of coal and iron alloys, had also increased cost pressure on the Company. The Company undertook cost reduction and increase in efficiency through enhanced metallurgical technologies, optimized coal supply structure, energy-saving and reduction in wastes. At the same time, as the Company s focus was on the high-end market for its products, the strong domestic demand and relatively higher international steel prices had provided effective support for

5 the prices of domestic high-end products Principal activities or products contributing over 10% of operating revenue or operating profit Applicable Not applicable Unit: RMB million By industry Revenue from principal operations Costs of principal operations Gross profit margin Steel industry 16, , Comprising: Related transactions 13, , By products Revenue from principal operations Costs of principal operations (%) Gross profit margin Cold rolled steel products 9, , Hot rolled sheets and coils 4, , Comprising: Related transactions 11, , Seasonal or cyclical nature of the Company s operations Applicable Not applicable (%) Composition of profits during the Reporting Period Applicable Not applicable Unit: RMB million Item January to June Total Profits Total Profits Amount Amount Ratio(%) Ratio(%) Changes(%) Operating Profits 5, , Decrease of 4.39% Other Profits Decrease of 0.38% Interim Expenses , Decrease of 7.39% Profits investments Net Extraordinary Income from Increase of 0.11% Decrease of 2.72% Total Profits 4, ,

6 There were no major changes in the profit components of the various items, compred to the previous Reporting Period Reasons for material changes in principal operations and their components compared to the previous Reporting Period Applicable Not applicable Reasons for changes in the principal operations profitability (gross profit margins) compared to the previous Reporting Period Applicable Not applicable 3.2 Analysis and description of major events, their impact and relevant solutions Applicable Not applicable The Company on April 15, 2005 and by way of public notice issued shares subscription prospectus for the subscription of 5 billion new shares, of which 3 billion new shares were issued to Shanghai Baosteel Group Corporation, and 2 billion new shares issued to the public. Results of the new shares issue was published on April 26, 2005, in which the issue price was RMB5.12 per share, and the net capital raised was RMB billion. As such profit distribution for the year 2004 by way of dividends would be based on billion shares. 3.3 Material changes in accounting policies and estimates, scope of consolidation and major accounting errors Applicable Not applicable 3.4 Announcements by the Board of Directors and the Board of Supervisors regarding qualified opinions issued in the course of audit Applicable Not applicable 3.5 Warnings and reasons for forecast of cumulative net profits becoming losses between the beginning of the year and the end of the next Reporting Period, or for significant change compared to the same period last year Applicable Not applicable 3.6 Rolling adjustments to the Company s disclosed annual operation plans or budgets Applicable Not applicable Board of Directors Baoshan Iron & Steel Co., Ltd. April 29, 2005

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8 Supplemental Data Consolidated Balance Sheet (Unaudited) Company: Baosteel Unit: RMB Assets March 31, 2005 December 31, 2004 Current Assets Cash in bank and on hand 1,646,770, ,581,342, Short-term investments 4,589,737, ,182,827, Notes receivable 3,233,863, ,923,857, Accounts payable 2,655,519, ,380,085, Other receivables 31,301, ,076, Prepayments 380,083, ,456, Dividends receivable - - Inventories 6,871,045, ,540,932, Total current assets 19,408,321, ,953,578, Long-term Investments Long-term equity investments 92,394, ,916, Long-term investments in debentures. - - Total long-term investments 92,394, ,916, Including: Consolidation difference 25,696, ,366, Fixed Assets Fixed assets at book value 112,312,752, ,245,454, Less: accumulated depreciation 68,395,713, ,661,636, Net value of fixed asset 43,917,038, ,583,817, Less: Provisions for impairment and loss 2,394, ,282, Net fixed assets 43,914,643, ,581,534, Construction in progress 4,987,173, ,367,730, Total fixed assets 48,901,817, ,949,265, Intangible and other Assets Long-term deferred and prepaid expenses 166,668, ,265, Total of intangible and other assets 166,668, ,265, Deferred taxation Deferred tax debits 93,694, ,398, Total Assets 68,662,896, ,255,424,559.98

9 Liabilities March 31, 2005 December 31, 2004 Current Liabilities Short-term loans 1,517,871, ,185,795, Notes payable 130,205, ,131, Accounts payable 5,204,759, ,165,836, Prepayments 2,514,000, ,854,879, Wages payable 354,439, ,879, Welfare charge payable 104,257, ,735, Dividends payable 10,419, ,480, Taxes payable 1,040,368, ,509, Other debits 17,277, ,263, Other payables 225,273, ,318, Provisions 54,295, ,091, Long-term liabilities due within one year 792,825, ,298, Accounts payable to holding company - 125,902, Long-term accounts payable to holding company within one year 3,242,000, ,200,000, Total current liabilities 15,207,991, ,136,122, Long-term Liabilities Long-term loans 2,963,305, ,905,529, Special accounts payable 296, , Long-term accounts payable to holding company 5,399,999, ,200,000, Total long-term liabilities 8,363,602, ,105,726, Deferred taxation Deferred tax credits - - Total Liabilities 23,571,594, ,241,848, Minority Shareholders Equity 157,286, ,491, Shareholders Equity Share capital 12,512,000, ,512,000, Capital reserve 12,122,290, ,122,298, Surplus reserves 7,265,566, ,260,333,008.18

10 Including: Statutory public welfare fund 2,639,866, ,639,866, Undistributed profits 13,034,158, ,966,453, P Comprisng: Cash dividends as proposed by the Board of Note DirectorsP 5,603,840, ,603,840, Total shareholders equity 44,934,016, ,861,084, Total Liabilities and Shareholders Equity 68,662,896, ,255,424, Legal Representative: Xie Qihua Financial Supervisor: Chen Ying Principal, Accounting Division: Wang Mingdong Balance Sheet (Unaudited) Company: Baosteel Current Assets Unit: RMB Assets March 31, 2005 December 31, 2004 Cash in bank and on hand 1,446,511, ,397,795, Short-term investments 4,589,737, ,182,827, Notes receivable 3,290,843, ,948,186, Dividends receivable 29,349, Accounts payable 2,708,594, ,371,514, Other receivables 10,376, ,595, Prepayments 316,170, ,031, Inventories 6,577,980, ,319,556, Total current assets 18,969,563, ,508,507, Long-term Investments Long-term equity investments 1,787,041, ,847,050, Total long-term equity investments 1,787,041, ,847,050, Fixed Assets Fixed assets at book value 109,627,941, ,876,103, Less: Accumulated depreciation 68,192,520, ,491,796, Net value of fixed asset 41,435,420, ,384,307, Less: Provisions for impairment loss 2,394, ,282, Net fixed assets 41,433,025, ,382,024, Construction in progress 4,595,023, ,194,866, Total fixed assets 46,028,049, ,576,891,287.30

11 Intangible and other assets Intangible assets - - Long-term deferred and prepaid expenses 155,875, ,750, Other long-term assets Total of intangible and other assets 155,875, ,750, Deferred taxation Deferred tax debits 90,125, ,346, Total Assets 67,030,655, ,183,546, Liabilities and Shareholders Equity March 31, 2005 December 31, 2004 Current Liabilities Short-term loans 248,295, ,295, Notes payable 102,139, ,128, Accounts payable 4,741,195, ,994,680, Prepayments 2,582,147, ,886,308, Welfare charge payable 101,008, ,877, Taxes payable 1,012,997, ,494, Other debits 17,036, ,086, Other payables 244,194, ,384, Wages payable 348,020, ,920, Provisions 33,187, ,818, Long-term liabilities due within one year 792,825, ,298, Accounts payable to holding company - 125,902, Long-term accounts payable to holding company within one year 3,242,000, ,200,000, Total current liabilities 13,465,047, ,001,195, Long-term Liabilities Long-term loans 2,963,305, ,905,529, Special accounts payable 100, Long-term accounts payable to 5,399,999, ,200,000,000.00

12 P 5,603,840, holding company Total long-term liabilities 8,363,405, ,105,529, Deferred taxation Deferred tax credits - - Total Liabilities 21,828,452, ,106,724, Shareholders Equity Share capital 12,512,000, ,512,000, Capital reserve 12,188,256, ,188,263, Surplus reserves 7,225,313, ,225,313, Including: Statutory public welfare fund 2,629,311, ,629,311, Undistributed profits 13,276,632, ,151,244, Comprisng: Cash dividends as proposed Note by the Board of DirectorsP 5,603,840, Total shareholders equity 45,202,203, ,076,821, Total Liabilities and Shareholder s Equity 67,030,655, ,183,546, Legal Representative: Xie Qihua Financial Supervisor: Chen Ying Principal, Accounting Division: Wang Mingdong Consolidated Profit and Loss Account (unaudited) Company:Baosteel Unit: RMB Item January March 2005 January March Operating Income 17,787,606, ,252,799, Less: Operating costs 12,112,375, ,658,552, Taxes and other expenses relating to Principal operations 133,302, ,445, Operating Profits 5,541,928, ,475,802, Add: Other profits 16,745, ,884, Less: Operating expenses 107,820, ,257, Management expenses 644,191, ,670, Financial expenses 49,799, ,004, Operating Profits 4,756,862, ,813,754, Add: Gains from investments 8,758, , Subsidy income - -

13 Extraordinary income 889, ,435, Less: Extraordinary expense 115,003, ,496, Total Profits 4,651,506, ,809,644, Less: Income tax 1,559,074, ,248,868, Minority shareholder s profit or loss 19,492, ,655, Net Profits 3,072,939, ,546,119, Add: Undistributed profit at beginning of year 9,966,453, ,537,016, Profit for Distribution 13,039,392, ,083,136, Less: Transfer to statutory surplus reserve 3,235, Transfer to statutory welfare fund - 3,235, Transfer to enterprise development fund 5,233, Profit for Distribution among Shareholders 13,034,158, ,076,665, Less: Transfer to other surplus reserve 5,405, Dividends for ordinary shares Undistributed Profits 13,034,158, ,071,259, Legal Representative: Xie Qihua Financial Supervisor: Chen Ying Principal, Accounting Division: Wang Mingdong Company:Baosteel Profit and Loss Account (unaudited) Unit: RMB Item January March 2005 January March Operating Income 18,013,594, ,679,451, Less: Costs of principal operations 12,334,471, ,194,194, Taxes and other expenses relating to Principal operations 131,614, ,027, Operating Profits 5,547,508, ,367,229, Add: Other operating profit 9,650, ,645, Less: Operating expenses 100,726, ,114,692.71

14 Management expenses 626,509, ,480, Financial expenses 36,202, ,254, Operating Profits 4,793,720, ,738,025, Add: Investment gains -14,647, ,827, Subsidy income - - Extraordinary income 671, ,229, Less: Extraordinary expenses 114,985, ,056, Total Profits 4,664,759, ,779,026, Less: Income tax 1,539,370, ,247,078, Net Profits 3,125,388, ,531,947, Add: Undistributed profit at beginning of year 10,151,244, ,624,527, Profit for Distribution 13,276,632, ,156,474, Less: Transfer to statutory surplus reserve - Transfer to statutory welfare fund - 7. Profit for Distribution among Shareholders 13,276,632, ,156,474, Less: Transfer to other surplus reserve - - Dividends for ordinary shares - - Ordinary dividends converted into share capital Undistributed Profits 13,276,632, ,156,474, Legal Representative: Xie Qihua Financial Supervisor: Chen Ying Principal, Accounting Division: Wang Mingdong Consolidated Cash Flow Statement (Unaudited) Company: Baosteel Unit: RMB Item January March Cash flows from operating activities: Cash from sale of goods and provision of services 20,782,965, Tax refunds 233,192.81

15 Cash received from other activities relating to operations 14,798, Subtotal of cash inflows 20,797,997, Cash paid for goods and services received 10,937,863, Cash paid to and on behalf of employees 886,189, Various taxes paid 3,001,091, Cash paid for other activities relating to operations 330,566, Subtotal of cash outflows 15,155,711, Net cash flow from operating activities 5,642,285, Cash flows from investing activities: - Cash received from investment activities 4,647, Cash received from return of investments 16,003, Net cash received from disposal of fixed and intangible assets and other long-term assets 390, Other cash received relating to investment activities 2,094, Subtotal of cash inflows 23,136, Cash paid to acquire fixed and intangible assets and other long-term assets 1,744,064, Cash paid to acquire investments 100,000, Other cash paid relating to investment activities - Subtotal of cash outflows 1,844,064, Net cash flows from investing activities -1,820,927, Cash flows from financing activities Cash received from investors - Cash received from borrowings 1,349,076, Cash received relating to other financing activities - Subtotal of cash inflows 1,349,076, Cash repayment of debts 1,920,365, Cash paid for distribution of dividends, profits or payment of interests 65,567, Cash paid relating to other financial activities 800,024, Subtotal of cash outflows 2,785,957, Net cash flows from financing activities -1,436,880, Effect of foreign exchange fluctuations on cash -7,491, Net increase in cash and cash equivalents 2,376,985, Supplemental Data Item January March Reconciliation of net profit to cash flows from operating activities

16 Net Profit 3,072,939, Add: Transfer of provisions for impairment loss of assets 18,666, Depreciation of fixed assets 1,910,548, Amortization of long-term expenditure 11,038, Increase in provisions(less: decrease) 41,203, Losses in disposal of fixed and intangible assets and other long-term assets (less: profits) 114,151, Financial expenses 47,942, Investment loss (less: profit) -8,758, Minority shareholder s profit or loss 19,492, Deferred tax credits (decrease: debits) -6,295, Decrease of inventories (less: increase) -329,511, Decrease in operating receivables (less: increase) -664,664, Increase in operating payables (less: decrease) 1,415,532, Net cash flow from operating activities 5,642,285, Investing and financing activities not involving cash income and expenses: Debt transfer to capital reserve - Convertible debentures due in one year - Financing leases transferred to fixed assets - 3.Net increase in cash and cash equivalents: Cash and cash equivalents at end of reporting period 5,449,974, Less: Cash and cash equivalents at beginning of reporting period 3,072,989, Net increase in cash and cash equivalents 2,376,985, Legal Representative: Xie Qihua Financial Supervisor: Chen Ying Principal, Accounting Division: Wang Mingdong Cash Flow Statement (Unaudited) Company: Baosteel Unit: RMB Item January March Cash flows from operating activities: Cash from sale of goods and provision of services 20,794,387,220.82

17 Tax refunds - Cash received from other activities relating to operations 14,038, Subtotal of cash inflows 20,808,425, Cash paid for goods and services received 10,931,352, Cash paid to and on behalf of employees 860,576, Various taxes paid 2,967,502, Cash paid for other activities relating to operations 308,159, Subtotal of cash outflows 15,067,590, Net cash flow from operating activities 5,740,834, Cash flows from investing activities: Cash received from investment activities 4,647, Cash received from return of investments 16,003, Net cash received from disposal of fixed and intangible assets and other long-term assets 335, Other cash received relating to investment activities 2,094, Subtotal of cash inflows 23,081, Cash paid to acquire fixed and intangible assets and other long-term assets 1,547,344, Cash paid to acquire investments 100,000, Other cash paid relating to investment activities - Subtotal of cash outflows 1,647,344, Net cash flows from investing activities -1,624,263, Cash flows from financing activities Cash received from investors - Cash received from borrowings 450,000, Cash received relating to other financing activities - Subtotal of cash inflows 450,000, Cash repayment of debts 1,357,365, Cash paid for distribution of dividends, profits or payment of interests 41,474, Cash paid relating to other financial activities 800,000, Subtotal of cash outflows 2,198,839, Net cash flows from financing activities -1,748,839, Effect of foreign exchange fluctuations on cash -7,458, Net increase in cash and cash equivalents 2,360,273, Supplemental Data Item January March Reconciliation of net profit to cash flows from operating activities

18 Net Profit 3,125,388, Add: Transfer of provisions for impairment loss of assets 16,673, Depreciation of fixed assets 1,876,548, Amortization of long-term expenditure 10,875, Increase in provisions(less: decrease) 30,369, Losses in disposal of fixed and intangible assets and other long-term assets (less: profits) 114,158, Financial expenses 34,345, Investment loss (less: profit) 14,647, Deferred tax credits (decrease: debits) -5,778, Decrease of inventories (less: increase) -258,094, Decrease in operating receivables (less: increase) -734,435, Increase in operating payables (less: decrease) 1,516,136, Net cash flow from operating activities 5,740,834, Investing and financing activities not involving cash income and expenses: Debt transfer to capital reserve - Convertible debentures due in one year - Financing leases transferred to fixed assets - 3.Net increase in cash and cash equivalents: Cash and cash equivalents at end of reporting period 5,249,715, Less: Cash and cash equivalents at beginning of reporting period 2,889,441, Net increase in cash and cash equivalents 2,360,273, Legal Representative: Xie Qihua Financial Supervisor: Chen Ying Principal, Accounting Division: Wang Mingdong

19 P Provisional P Session P Board Notes to Financial Statement The Company completed its issue of a total of 5 billion new shares, priced at RMB 5.12 per share, on April 27, 2005, raising a net amount of RMB billion. Pursuant to the st resolution passed at the 1P Shareholders Conference for the year 2004 concerning the entitlement of new and old shareholders of accumulated and undistributed th nd profits, and the resolution passed at the 9P of the 2P of Directors concerning the proposed profit distribution of Baoshan Iron & Steel Corporation, the Company s profits for the year 2004 will be shared between the old and new shareholders. Profit distribution will be based 17,512,000,000 shares as the benchmark, and it is proposed to pay to all shareholders, cash dividend of RMB 3.2 (inclusive of tax) for every 10 shares. Total dividends to be paid are RMB 5,603,840,000.