1ContentsCORPORATE INFORMATION2CHAIRMANS STATEMENT4MANAGEMENT DISCUSSION AND ANALYSIS6BIOGRAPHICAL DETAILS OF DIRECTORS AND SENIOR MANAGEMENT11REPORT OF THE DIRECTORS13AUDITORS REPORT24CONSOLIDATED INCOME STATEMENT25CONSOLIDATED BALANCE SHEET26BALANCE SHEET27CONSOLIDATED STATEMENT OF CHANGES IN EQUITY28CONSOLIDATED CASH FLOW STATEMENT29NOTES ON THE FINANCIAL STATEMENTS30FOUR YEARS FINANCIAL SUMMARY61NOTICE OF ANNUAL GENERAL MEETING63Corporate Information2BOARD OF DIRECTORSMr. Chiu Ka Leung, ChairmanMs. Yeh Shu Ping, Vice-ChairmanMr. Jiao Shaoliang, Executive DirectorMr. Lan Daoying, Executive DirectorMr. Guo Guoqing,Independent Non-Executive DirectorMr. Liu Jian,Independent Non-Executive DirectorAUDIT COMMITTEE MEMBERSMr. Guo GuoqingMr. Liu JianCOMPANY SECRETARYMr. Hui Pang To, ACCA, AHKSAREGISTERED OFFICECentury Yard,Cricket Square,Hutchins Drive,P.O. Box 2681 GT,George Town,Grand Cayman,Cayman Islands,British West IndiesHEAD OFFICE AND PRINCIPAL PLACE OFBUSINESSUnit 2003B5, 20th Floor,Yen Sheng Centre,64 Hoi Yuen Road,Kwun Tong,Hong KongAUDITORSKPMGCertified Public Accountants8th Floor, Princes Building,10 Chater Road,Central,Hong KongLEGAL ADVISERSAs to Hong Kong law:Stephenson Harwood (b) the closing price of a share ofthe Company as stated in the daily quotations sheet of the Stock Exchange on the Date of Offer,which must be a trading day; and (c) the average closing price of a share of the Company asstated in the Stock Exchanges daily quotations sheets for the five trading days immediatelypreceding the Date of Offer.The total number of Companys shares available for issue under the Scheme as at 31 March2003 is 54,500,000 shares, being 9.08% of the existing issued share capital of the Company asat the date of this report.19Report of the Directors (Continued)The total number of shares in respect of which options may be granted under the Scheme is notpermitted to exceed 10% of the shares of the Company in issue as at the Listing Date, unlessapproval for refreshing the 10% limit from the Companys shareholders has been obtained. Thenumber of shares which may be issued upon exercise of all outstanding options granted and yetto be exercised under the Scheme and any other share option schemes of the Company must notexceed 30% of the shares in issue from time to time.In respect of the maximum entitlement of each participant under the Scheme, the number ofCompanys shares issued and to be issued upon exercise of the options granted to each participantin the 12-month period up to and including the date of further grant is limited to 1% of the sharecapital of the Company in issue for the time being. Any further grant of share options in excessof this limit is subject to the shareholders approval in a general meeting.Share options granted to Directors, chief executive or substantial shareholder of the Company orto any of their associates shall be approved by the independent non-executive directors of theCompany. In addition, any share options granted to a substantial shareholder or an independentnon-executive director of the Company or to any of their associates, in excess of 0.1% of theshares of the Company in issue for the time being or with an aggregate value (based on theclosing price of the Companys shares at the date of grant) in excess of HK$5 million, within any12-month period up to and including the date of such grant, are subject to shareholdersapproval in advance in a general meeting.As at 31 March 2003, the Company has granted options to subscribe for 11,300,000 shares inthe Company under the Scheme. The options are granted at nominal consideration of HK$10 foreach lot of share options granted under the Scheme. Each option gives the holder the right tosubscribe for one share. The share options are not recognised in the financial statements untilthey are exercised.Report of the Directors (Continued)20Details of the share options under the Scheme were as follows:ClosingLapsed/OutstandingOutstandingGrantedpriceExercisedcancelledas atas atduringDate ofExerciseExercisebefore dateduringduring31 MarchName1 April 2002the yeargrantperiodpriceof grantthe yearthe year2003HK$HK$DirectorsMr. Jiao Shaoling1,100,0009.9.2002See note0.3750.3651,100,000belowMr. Lan Daoying1,200,0009.9.2002See note0.3750.3651,200,000belowContinuous contract9,000,0009.9.2002See note0.3750.3655,800,0003,200,000employees in aggregatebelowTotal11,300,0005,800,0005,500,000Note:Exercise period is 9 Years from 9 September 2003 to 8 September 2012 (a “Year” shall mean theperiod from 9 September to 8 September of the next year) provided that subject to the option thatthe grantee is entitled to exercise but not yet exercised and the shares of the Company that may besubscribed by the grantee in respect of such unexercised option in the previous relevant Year(s), nomore than 10% of the total number of shares under the options granted (the “Total Number”) maybe subscribed in each Year; that the remaining 10% of the Total Number ma