(Incorporated in the Cayman Islands with limited liability) (Stock code: 2348)
The board of directors (the “Board”) of Dawnrays Pharmaceutical (Holdings) Limited increased by 12 approvals as compared with the total of 33 approvals received On 18 February 2004, the Company’s research and development centre was (the “Company”) is pleased to announce the audited consolidated results of the in 2003. In 2005, it is prudently estimated that the Group will receive more endorsed by the Department of Science and Technology of Jiangsu Province as Company and its subsidiaries (collectively the “Group”) for the year ended 31 than 40 approvals on clinical testing and production, which will include the the first batch of foreign research and development entities in Jiangsu December 2004 together with the comparative amounts for 2003 as follows: fourth generation cephalosporin and several generic drugs (system specific On 28 May 2004, Amlodipine Besylate bulk medicine and its tablet, a product For cephalosporin, the Group will conduct further research so as to improve its of the Company, were endorsed by the Department of Science and Technology RMB491,388,000) for the year ended 31 December 2004, which was increased by technique and technologies, thereby reducing costs and enhancing yield rate.
of Jiangsu Province as a high tech product of Jiangsu Province; 19.0% from that of 2003. Net profit from ordinary activities attributable to As to generic drugs (system specific medicine), the Group will adopt various On 7 July 2004, Amlodipine Besylate bulk medicine and its tablet, a product shareholders was approximately RMB80,171,000 (2003: RMB108,022,000), which models for cooperation, which will facilitate knowledge exchange with various of the Company, were endorsed by the Ministry of Science and Technology as was decreased by 25.8% from that of 2003. The growth in turnover was mainly research institutes and multinational technology companies for determination a project under the State Torch Plan; and attributable to the significant increase in the production and sales volume of on the academic orientation. Finasteride Tablet and Metformin Hydrochloride cephalosporin powder for injection form and bulk medicine, as well as new types of & Glibenclamide Tablet which commenced production in bulk in 2004 On 12 August 2004, Xi Ke Wei (Cetirizine Hydrochloride Tablet), a product of generic drugs (system specific medicine) which successfully tapped into the market complemented the generic drugs (system specific medicine) portfolio of the the Company, was endorsed by the Department of Science and Technology of as planned (with an average gross profit margin over 70%). The decrease in profit was Group that was previously made up of Amlodipine Besylate Tablet, Compound Jiangsu Province as a high tech product of Jiangsu Province.
principally attributable to the following reasons: Ranitidine Capsule, Cetirizine Hydrochloride Tablet and Bismuth Potassium Construction projects for the expansion of production facilities
On 7 June 2004, the National Development and Reform Commission of the Citrate Capsule etc. Such portfolio will be developed to a greater extent in The construction of engineering projects for the Group in 2004 proceeded as PRC ordered a reduction in the retail price of antibiotics. The average rate of reduction in price for 24 species of antibiotics was about 30%. The Group took Pool of resources and central coordination for marketing of
the initiative to reduce the ex-factory price of cephalosporin powder for generic drugs (system specific medicine)
85% of the overall construction work of the new workshop of Suzhou injection form so as to expand its market share. In 2004, the sales volume of Dawnrays Pharmaceuticals Co., Ltd. for the cephalosporin bulk medicine was cephalosporin powder for injection form was increased by 51.4%, whilst the In 2004, the Group devoted more efforts to the establishment of a new sales completed. It is expected to commence operation in June 2005. After the gross profit margin was 42.0% (2003: 54.6%), representing a decrease of team for the marketing and sales of generic drugs (system specific medicine).
construction is completed, it is expected that the output of cephalosporin will 12.6%. The turnover of cephalosporin powder for injection form was A team dedicated to serve the medical sector was also established. Finasteride be increased by 450 tonnes. The Group’s products will become more RMB216,979,000 (2003: RMB230,976,000), representing a decrease of tablet which commenced production in 2004 and Amlodipine Besylate tablet comprehensive and enjoy comparative advantage in terms of costs. It will also which commenced production in 2002 were centrally coordinated by the new solidify the Group’s leading position in third generation cephalosporin.
drug sales department. As at year end, the new drug sales department has about In 2004, the Group established an effective mechanism for optimizing 30 offices across the PRC, and actively engaged in academic promotion The project for the output expansion of Ceftriaxone Crude for Suzhou technologies, marketing, research and development, as well as determining Dawnrays Chemical Co., Ltd. proceeded smoothly. After the construction is remuneration so as to motivate management. Experts in high-end technologies completed, it is expected to increase the output of Ceftriaxone Crude from 200 and marketing were recruited from competitors for the development of generic Scale of development and economies of scale
drugs (system specific medicine). Bonuses given during the year amounted to In 2004, the production capacity for the workshop of cephalosporin powder for Expansion in the workshop of Suzhou Dawnrays Chemical Co., Ltd. for the injection form was upgraded to 240 million vials. As the average gross profit recycling of solvents was completed successfully. The capability in recycling As the Group was listed on 11 July 2003, no expense was incurred in the head margin for cephalosporin is demonstrating a downward trend, the Group is is now expanded to 15,500 tonnes per annum, and will provide enormous office in Hong Kong for the first half of 2003. In 2004, administrative expenses expected to expand its output significantly in 2005 in order to expand the support as to cost savings for cephalosporin products.
incurred in the head office in Hong Kong amounted to RMB9,979,000 (2003: market share and cultivate the brand. At the same time, in June 2005, a As at the end of 2004, the projects of the pilot production workshop, upgrade RMB5,155,000), representing an increase of RMB4,824,000; and workshop of 450 tonnes for cephalosporin bulk medicine will commenceoperation. Hence, the production capacity of the Group’s third generation of environmental protection facilities, and quality assurance for the Group In 2004, the Group devoted more efforts to the research and development of cephalosporin bulk medicine will exceed 800 tonnes, and account for about established and commenced smoothly. It is expected to complete within the 30% of the total market share in the third generation cephalosporin bulk first half of 2005, which will optimize the infrastructure facilities and enhance the overall competitiveness of the Group.
Tapping into international market and actively seeking strategic
partners for cooperation
The Group’s principal product, third generation cephalosporin, has been the most The Board has declared a final dividend of HK$0.023 per share for the year ended 31 Sales to overseas increased by four times compared with that in 2003, and popular medicine within its category in the PRC. It is anticipated that the demand of December 2004, amounting to a total sum of HK$18,400,000 (equivalent to amounted to RMB22,088,000. It is expected that, as a powerful sales strategy, cephalosporin will increase in 2005. Various cephalosporin products of the Group through devoting more efforts to expand the international market for have adopted our core technology. The potential growth of sales remains high. Sales Together with the interim dividend of HK$0.015 per share, this will bring the total cephalosporin, the Group will be able to set off the effect of the government of cephalosporin powder for injection form in 2005 will not be limited by the dividend distribution for the year to HK$0.038 per share, representing a dividend price reduction policy. Meanwhile, it will also solidify a foundation for production capacity. With the 450 tonnes workshop for cephelosporin bulk medicine expanding the sales of generic drugs (system specific medicine) in the commencing operation in June 2005, it is expected that production capabilities and sales of cephalosporin bulk medicine will exceed 800 tonnes per annum. In 2005, the BUSINESS OUTLOOK
Group will also launch the fourth generation cephalosporin products into the market Under the premises of globalized economy and China’s accession to World Analysis on market positioning of cephalosporin
so as to assure its competitive edge. However, followed by the increasing keen Trade Organisation, the Group has been actively seeking partners for strategic competition in the cephalosporin medicine market, the market will be driven by the cooperation so as to expand its capital operation and provide opportunities for integrated and consolidated pharmaceutical business model of “Intermediate - Bulk medicine - Preparation medicine”. Price competition will soon emerge. The Group cephalosporin in the PRC as a whole exceeded RMB10 billion in 2002. As will continue to devote efforts in strengthening antibiotics as a foundation for stable indicated by such analysis, the growth in the consumption of cephalosporin per Tightening cost control
annum was increased by more than 20% in the recent five years.
The Group constructed and operated a system for the recycling of solvents, The Group is principally engaged in the PRC in the manufacture and sale of which is able to recycle 15,500 tonnes of chemical solvents per year, thereby The Group has devoted a lot of efforts and resources to develop the business of non-patented chemical medicine, including cephalosporin bulk medicine and reducing the production costs on the purchases of solvents.
generic drugs (system specific medicine) in 2004, which now accounts for about 9% powder for injection form. It is one of the few third generation cephalosporin of the total sales. The Group has improved its market expansion capability for system Corporate governance
manufacturers in the PRC which has adopted a comprehensive vertically specific medicine and is now well positioned to grow. It is believed that satisfactory The Board has established an Audit Committee and a Remuneration integrated production process. The Group plans to launch the fourth generation results will be achieved by strengthening marketing efforts and network building.
Committee, which contributed to the development of the Group into a more cephalosporin bulk medicine and powder for injection form into the market in The Group has been implementing a standard system of corporate governance, which forms the basis for the conduct of globalization strategy. The Group will actively cefoperazone is a leading technology employed in the PRC, having a market develop international trade and cooperation projects, and seek strategic cooperation remuneration structure. The Board will continue to improve the capabilities of share of about 60% in the PRC. The market share of Ceftriaxone was about in the international capital market so as to optimize the Group’s capital structure, the Group in the area of corporate governance, so as to enhance the flexibility absorb premium resources and state-of-the-art management philosophies in the and the science of the management platform. Effective internal control As the market prospects of the production of cephalosporin is highly attractive, mechanism on financial management was also established, so as to maintain sustainable and healthy development of the enterprise. This will further FINANCIAL REVIEW
enterprises, foreign invested enterprises and private owned enterprises, are solidify the foundation for the Group’s growth in capital operations.
gradually starting to increase their investments in this industry. However, the Sales and Gross Profit
PRC government is expected to further reduce the retail price of cephalosporin The creation of future jointly by the enterprise and its staff
During the year, the Group recorded a turnover of approximately RMB584,758,000, so that more people will be able to afford to use cephalosporin. Therefore, we After the Group was listed, the Board increased its pace in the training and representing an increase of 19.0% as compared with the previous year. Gross profit consider that enterprises with adequate capital, technical process advantages recruitment of expertise with international perspectives and good knowledge of was approximately RMB192,677,000, representing a decrease of 6.4% as compared and strong sales capabilities will have a competitive advantage in the the national situation of the PRC, so as to meet with the needs for the rapid with the previous year. Gross profit margin was 32.9% (2003: 41.9%). The main cephalosporin pharmaceutical industry. Competition among such enterprises, development in the enterprise professionalization and internationalization. In reasons for the decrease in gross profit margin are as follows: firstly, the Group took in particular with respect to price, will also increase.
2004, share options to subscribe for about 3.5% (2003: 5%) of the Company’s the initiative in reducing prices of cephalosporin powder for injection form to gain Analysis on market positioning of generic drugs (system specific
shares as at 31 December 2004 were granted to the senior management. The higher market share; secondly, the Group increased sales proportion of bulk medicine medicine)
Group has always treated its management team as well as its staff nationwide which has relatively lower gross profit margin.
as the most valuable intangible assets of the Group, which have been the In an article titled “Game theory” of The Lex Column on page 14 of the greatest driving force behind the further development of the Group. I would During the year, sales of bulk medicine amounted to RMB311,457,000, representing Financial Times of UK published on 22 February 2005, it was stated that “It like to take this opportunity to express my deepest gratitude to the members of an increase of 48.3% as compared with RMB209,950,000 of the previous year. Sales is a testament to the woes of the pharmaceuticals sector that off-patent drugs the Board, and to the staff of the Group’s subsidiary companies and various of bulk medicine accounted for 53.2% of total sales (2003: 42.7%). Gross margin of have become its sexiest segment. In the US alone, some $60bn of prescription departments who have used their best endeavours at work and dedicatedly bulk medicine was approximately 19.3% (2003: 20.2%).
medicines will lose legal protection over the next four years, slowing industry Sales of powder for injection form amounted to RMB216,979,000, representing a revenue growth to 7-8 per cent per annum. By contrast, generics are winning decrease of 6.1% as compared with RMB230,976,000 of the previous year. Sales of market share, as cost pressures on healthcare providers increase, and should BUSINESS REVIEW
powder for injection form accounted for 37.1% of total sales (2003: 47.0%). Gross grow by more than 10 per cent a year”, and also in another article titled Production & Sales Operation
margin of powder for injection form was approximately 42.0% (2003: 54.6%).
“Generics bring potent ingredient to drug mix” on page 16, it was stated that“Novartis1 predicts the generics market will be worth about $100bn by 2010, Each of the Group’s products in terms of production volume and sales volume Sales of generic drugs (system specific medicine) amounted to RMB51,554,000, by which time it expects to have a 10 per cent share”. With doubts in the recorded growth over the previous year. During the year, 371.4 tonnes of bulk representing an increase of 5.9% as compared with RMB48,681,000 of the previous medical sector on the safety of the new drugs launched recently by major medicine were produced, which was increased by 66.5% over the previous year. The proportion of generic drugs (system specific medicine) to total sales was prescription drugs manufacturers resulting in some cases of suspension of year. Sales of bulk medicine were 301.0 tonnes, which was increased by 66.5% 8.8% (2003: 9.9%). Gross profit margin for generic drugs (system specific medicine) production, as well as increasing concerns over the deficit incurred by the over the previous year. 85,766,000 vials of cephalosporin powder for injection was approximately 73.6% (2003: 77.5%).
medical welfare funds of governments around the world, and the increase in form were produced, which was increased by 35.9% over the previous year.
During the year, overseas export sales increased rapidly as compared with the pressure on reimbursement by private medical insurance arising from aging Sales of cephalosporin powder for injection form were 85,736,000 vials, which previous year, which was mainly attributable to the increased overseas export sales of problems in the population, generic drugs (system specific medicine) are was increased by 51.4% over the previous year. 8,915,000 boxes of generic bulk medicine from RMB3,769,000 of the previous year to RMB21,086,000 of this expected to be warmly received by communities.
drugs (system specific medicine) were produced, which was increased by32.9% over the previous year. Sales of generic drugs (system specific year, representing an increase of 459%.
Meanwhile, it is expected that the development of generic drugs will draw the medicine) were 8,396,000 boxes, which was increased by 28.1% over the Expenses
attention of the pharmaceutical manufacturers to the distinct predictability in previous year. Overseas export sales of medicine increased rapidly by about the market, lower costs in the development techniques, shorter product four times over the previous year to more than ten countries over Europe, development cycle, higher gross profit margin, and longer cycle for RMB108,221,000, representing an increase of 14.7% over the previous year. Total expenses as a percentage of turnover was 18.5% (2003: 19.2%).
Products In The Pipeline
Novartis Group, the largest Swiss pharmaceutical company with operations covering more Of which, selling and distribution costs amounted to RMB58,987,000, representing an than 140 countries and regions around the world.
In 2004, the Group obtained 22 production permits from the State Food and increase of 3.9% over the previous year. Selling and distribution costs as a percentage Drug Administration of the PRC. Of which, there were five new medicines, Our strategies
of turnover was 10.1% (2003: 11.6%).
namely Cefuroxime Sodium Sterile bulk medicine, Cefixime bulk medicine, Under such circumstances, the Group has formulated and implemented the Finasteride bulk medicine, Finasteride tablet, Metformin Hydrochloride & Administrative expenses and other operating expenses amounted to RMB49,234,000, Glibenclamide tablet. The Group was also awarded 23 permits for clinical representing an increase of 34.0% over the previous year. The increase was due to the testing. 16 projects for pre-clinical testing and 10 projects for clinical testing full year operation of the head office in Hong Kong, increase in research and Establishment of an expert network
were completed. The Group’s research and development team, completed a development expenditure, and the giving of bonuses to attract experts and attractive In 2004, the Group successfully established an expert network which was survey covering the local and global market, trend of frequent illness, trend of remuneration to motivate core members with technology expertise.
formed by well known experts, such as Professor Zhong Nan Shan and overall adjustment of medicine development and analysis of the outlook for all Net Profit From Operating Activities Attributable to Shareholders
Professor Mei Hua, who are very influential in the medical sector, as kinds of medicine markets, and incorporated the Group’s special features and representatives. Such network provided support to the decision on the the direction of research and development, and completed the preliminary During the year, net profit from operating activities attributable to shareholders marketing strategies of the Group in the medical and pharmaceutical sectors.
report on the development of products. A total of 20 projects were embarked amounted to RMB80,171,000, representing a decrease of approximately 25.8% as Enhancement of research and development capabilities with
integrated m odels of research and development, and launch

Recognitions obtained in 2004
Analysis on return of assets
generic drugs (system specific medicine) with huge market
On 5 February 2004, Ceftriaxone Sodium Sterile bulk medicine and powder for As at 31 December 2004, net assets of the Group were about RMB411,471,000. Net potential and business value
injection form, and Amlodipine Besylate bulk medicine and its tablets were return on assets, which is defined as the net profit from operating activities In 2004, the Group received 45 approvals on clinical testing and production classified as projects under the Torch Plan in Jiangsu Province by the attributable to shareholders divided by net assets, was 19.5 %. The turnover days for from the State Food and Drug Administration of the PRC in total, which Department of Science and Technology of Jiangsu Province; account receivables on bulk medicine (including notes receivables) was about 135 days. The turnover days for the account receivables on cephalosporin powder for Basis of consolidation
economic development zones of the PRC, are exempted from corporate income tax of the PRC injection form and generic drugs (system specific medicine) was about 100 days, for the two years starting from the first profitable year of operation, after setting off losses The consolidated financial statements comprise the financial statements of the Company and whilst the inventory turnover was about 65 days.
carried forward, and are entitled to a 50% relief from corporate income tax of the PRC for the its subsidiaries. The financial statements of the subsidiaries are prepared using consistent accounting policies. Subsidiaries are consolidated from the date on which control is transferred Cashflow
to the Group and ceased to be consolidated from the date on which control is transferred out Suzhou Dawnrays Pharmaceuticals is in its fourth profitable year in 2004 and therefore its of the Group. All significant intercompany transactions and balances within the Group are applicable income tax rate is 12%. However, Suzhou Dawnrays Pharmaceuticals obtained tax approval from the relevant tax authorities as a qualified foreign-owned manufacturing Net cash inflows from operating activities were RMB73,740,000; enterprise engaging in technology-intensive and knowledge-intensive projects (“Double- Minority interests represent the interests of outside shareholders in the results and net assets intensive Enterprise”). According to PRC tax laws and regulations, Suzhou Dawnrays Expenditures on construction projects and purchases of fixed assets amounted Pharmaceuticals is subject to the corporate income tax of the PRC at a rate of 7.5% from 1 The consolidated financial statements for the year ended 31 December 2003 had been prepared January 2003 to 31 December 2005, and at 15% from 1 January 2006 onwards. Its status as a by adopting uniting of interests method of accounting as a result of the Group Reorganisation Double-intensive Enterprise is subject to periodic reassessment by the relevant PRC Profit distributions (including dividend paid to minority shareholders) which involved entities under common control. Under this method, the Company had been treated as the holding company of its subsidiaries for the year ended 31 December 2003 rather The paid-up capital of Suzhou Dawnrays Pharmaceuticals was increased by US$15,000,000 than from the date of acquisition of the subsidiaries. The consolidated results, statements of As at 31 December 2004, the Group has RMB98,382,000 cash and cash equivalents, from US$10,000,000 to US$25,000,000 during the year. According to PRC tax laws and changes in equity, cash flows and the consolidated balance sheets of the companies now regulations, taxable profits generated in the first two years and the three years thereafter from comprising the Group had been prepared as if the current Group structure had been in existence the aforesaid additional capital is exempted from corporate income tax and 50% at a reduced Liquidity, financial resources and capital structure
tax rate, respectively. The relevant PRC tax laws and regulations also granted enterprises Impact of recently issued International Financial Reporting Standards
qualified an option to use the tax concession in respect of the taxable profit in the following As at 31 December 2004, the Group’s current assets amounted to approximately year after the additional capital has been contributed. Since the operation period for the RMB435,900,000, whilst current liabilities was approximately RMB274,896,000. Net The following revised, amended and new standards which are generally effective for aforesaid additional capital injected is less than six months, Suzhou Dawnrays Pharmaceuticals accounting periods beginning on or after 1 January 2005 may result in changes in the future current assets were approximately RMB161,004,000.
has opted to commence the tax concession in 2005. Consequently, profits generated from the as to how the Group’s financial performance and financial position are prepared and presented: aforesaid additional capital is still subject to the corporate income tax of the PRC at a rate of As at 31 December 2004, the Group has aggregate bank facilities of approximately IAS 1 Presentation of Financial Statements (amended 2004); RMB387,000,000, with no asset being pledged to banks.
Shanghai Dawnrays Chemical is in its third profitable year based on the income for statutoryfinancial reporting purposes. It is subject to the corporate income tax of the PRC at a rate of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (revised 12% and local corporate income tax at a rate of 1.5% from 1 January 2004 to 31 December approximately RMB91,989,000 which will be funded by proceeds from listing and by IAS 10 Events after the Balance Sheet Date (amended 2004); Suzhou Dawnrays Chemical and Suzhou Dawnrays Technology had no assessable profits and Financial management, financial instruments and exchange rate risk
therefore, no provision for income tax has been made for the year.
IAS 16 Property, Plant and Equipment (amended 2004); The Group implements a steady and prudent financial strategy. Exposure incurred No provision for deferred tax has been made as the net effect of all temporary differences is during its course of financial management are managed in accordance with policies IAS 24 Related Party Disclosures (revised 2003); The reconciliation between tax expense and the product of accounting profit in the IAS 27 Consolidated and Separate Financial Statements (amended 2004); accompanying consolidated results of operation multiplied by the applicable income tax rate Substantially all of the Group’s operations are normally transacted in Renminbi, IAS 32 Financial Instruments: Disclosure and Presentation (amended 2004); which is not freely convertible into foreign currencies.
Group — 2004
IAS 33 Earnings per Share (amended 2004); The Group’s monetary assets and liabilities are normally denominated in Hong Kong RMB’000
IAS 39 Financial Instruments: Recognition and Measurement (amended 2004); and The carrying amount of the Group’s cash and cash equivalents, trade receivables and payables, other receivables and payables, borrowings and balances with related The Group has not early adopted these revised, amended and new standards for the year end parties approximate their values because of the short maturity of these instruments.
31 December 2004. The Group has commenced its assessment of the impact of these standardsbut it is not yet in a position to state whether these standards would have a material impact on The Group did not enter into any foreign exchange forward contracts or other hedging its results of operations and financial position.
Lower tax rate for specific provinces or local authorities (21,735)
instruments to hedge against fluctuations, and the Group did not use any financial Segment information
The Group’s turnover and profit were mainly derived from the sale of medicines by the subsidiaries located and operated in the PRC to customers in the PRC. The principal assetsemployed by the Group are located in the PRC. Accordingly, no segmental analysis by business Tax charge at the Group’s effective rate Human resources is the most valuable assets of the Group. A professional, pragmatic, and geographical segments is provided.
and highly efficient management team together with the staff as a whole is the Turnover and revenue
Company’s most valuable competitive advantage. The Group provides a competitive Group — 2003
Turnover represents the net invoiced value of goods sold, net of value-added tax, after allowances for returns, trade discounts and various types of business tax and government As at 31 December 2004, the Group employed approximately 1,200 employees (31 December 2003: approximately 749 employees) with attractive remuneration and employee benefits such as defined contribution retirement schemes, share option scheme and medical coverage. The Group provides certain of its employees in PRC RMB’000
Lower tax rate for specific provinces or local authorities unemployment insurance funds and State housing fund for the employees in the PRC.
During the year, staff costs amounted to RMB39,682,000 (31 December 2003: Turnover
Less: Sales tax and government surcharges Tax charge at the Group’s effective rate The Company has adopted a share option scheme. Under the share option scheme, theEligible Persons (including the executive and independent non-executive directorsand employees of the Group (whether full time or part time)) may be granted options which enable them to subscribe for shares in the Company, up to a maximum of 10% As Suzhou Dawnrays Pharmaceuticals is an approved Double-intensive Enterprise as of the shares of the Company in issue on the date of adoption of the scheme.
mentioned above, Suzhou Dawnrays Pharmaceuticals received a refund of the excess of the Other revenue
corporate income tax paid in 2003 in relation to the aforesaid reduced corporate income tax Options in respect of about 3.5% of shares in the Company as at 31 December 2004 rate amounting to RMB4,818,000 in 2004.
has been granted by the Company to Eligible Persons during the year.
Pursuant to board resolutions of Suzhou Dawnrays Pharmaceuticals dated 15 December 2003 Charge on assets
Dividend income from short term investments and 8 March 2004, Suzhou Dawnrays Pharmaceuticals declared a dividend of RMB82,205,630to Dawnrays International Company Limited (“Dawnrays International”) pertaining to the year As at 31 Decmber 2004, no asset of the Company was pledged to banks to obtain Gain on disposal of short term investments ended 31 December 2003. Pursuant to board resolutions of Dawnrays International dated 18 December 2003 and 9 March 2004, Dawnrays International reinvested the aforesaid dividendof RMB82,205,630 into Suzhou Dawnrays Pharmaceuticals. According to PRC tax laws and Plans for significant investments and expected source of funding
regulations, Dawnrays International accrued a tax refund in relation to the aforesaid Details of the Group’s future plans for significant investments and their expected reinvestment amounting to RMB9,708,000 in 2003, based on the then effective corporateincome tax of 12%. As Suzhou Dawnrays Pharmaceuticals is now an approved Double- source of funding have been stated in the Company’s prospectus dated 30 June 2003 intensive Enterprise, Dawnrays International reduced the tax refund accrued in relation to the under the section headed “Future Plans and Use of Proceeds”.
aforesaid reinvestment to RMB6,612,000 by RMB3,096,000 which has been charged to thecurrent year tax expense.
In order to further expand the Group’s production facilities, the Group plans to investRMB38,823,000 to construct five infrastructure projects commencing from 2005: Dividends
Profit from operating activities
The Group’s profit from operating activities is arrived at after charging/(crediting): Pharmaceuticals Co., Ltd. of around RMB4,575,000; RMB’000
Pharmaceuticals Co., Ltd. of around RMB15,570,000; RMB’000
Dividend pertaining to the prior year declared during the An integrated warehouse for Suzhou Dawnrays Pharmaceuticals Co., Ltd. ofaround RMB10,000,000; Interim - HK$0.015 (2003: HK$0.015) per ordinary share Upgrade of auxiliary utilities facilities for the whole plant of Suzhou DawnraysChemical Co., Ltd. of around RMB7,112,000; and Expansion of the workshop for the intermediates of cephalosporin for Suzhou Dawnrays Chemical Co., Ltd. of around RMB1,566,000.
Proposed final - HK$0.023 (2003: HK$0.035) per Other than those disclosed above, the Group did not have any plan for material Loss on disposal of property, plant and equipment investments or acquisition of capital assets.
Minimum lease payments under operating leases in On 7 March 2005, the Company declared a final dividend for the year ended 31 December Contingent liabilities
2004, at HK$0.023 per share, amounting to a total sum of HK$18,400,000 (equivalent toRMB19,543,000).
As at 31 December 2004, the Group had no material contingent liabilities (31 Staff costs (including directors’ remuneration): Earnings per share
The calculation of basic earnings per share is based on the net profit attributable to shareholders for the year of RMB80,171,000 (2003: RMB108,022,000), and the weighted average of 800,000,000 (2003: 696,438,356) ordinary shares in issue during the year.
As the exercise price of outstanding share options is higher than the average fair value of the ordinary share during the year, the conversion to ordinary shares would increase earnings per RMB’000
The diluted earnings per share amount for the year ended 31 December 2004 has not been TURNOVER
presented, as the share options outstanding during the year had an anti-dilutive effect on thebasic earnings per share calculation.
Unrealised loss on revaluation of short term investments PURCHASE, REDEMPTION OR SALE OF LISTED SECURITIES OF THE

Neither the Company, nor any of its subsidiaries purchased, redeemed or sold any of Dividend income from short term investments the Company’s listed securities during the year.
Gain on disposal of short term investments CODE OF BEST PRACTICE
The Company has complied with the Code of Best Practice as set out in Appendix 14 (34,375)
The amortisation of deferred development costs for the year are included in “Other of the Rules Governing the Listing of Securities of The Stock Exchange of Hong (14,859)
operating expenses” on the face of the consolidated income statement.
Kong Limited for the year ended 31 December 2004.
The amortisation of land use rights for the year are included in “Administrative AUDIT COMMITTEE
expenses” on the face of the consolidated income statement.
The Company has an audit committee which was established in compliance with Rule Finance costs
3.21 of the Listing Rules for the purpose of reviewing and providing supervision over the Group’s financial reporting process and internal controls. The audit committee comprises the three independent non-executive directors of the Company.
The audited financial statements of the Company for the year ended 31 December 2004 have been reviewed by the Audit Committee before recommending it to the CLOSURE OF REGISTER OF MEMBERS
The Register of Members of the Company will be closed from Monday, 18 April 2005 to Friday, 22 April 2005 (both days inclusive) during which period no transfer ofshares of the Company will be registered and effected. In order to qualify for the final NET PROFIT FROM ORDINARY
dividend, all transfers of shares of the Company accompanied by the relevant share ACTIVITIES ATTRIBUTABLE TO
certificates and the appropriate share transfer forms must be lodged with the SHAREHOLDERS
Company’s Registrars in Hong Kong, Abacus Share Registrars Limited, at Ground The income tax expense, all current, charged to the consolidated income statement for the year Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong not later than 4:00 p.m. on Friday, 15 April 2005.
All the financial and other related information of the Company required byparagraphs 45(1) to 45(3) of Appendix 16 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited in force prior to 31 March 2004, which remain applicable to results announcement in respect of accounting EARNINGS PER SHARE
periods commencing before 1 July 2004 under transitional arrangements, will be RMB0.1002
published on the Stock Exchange’s website in due course.
Li Kei Ling
Basis of preparation
No provision for Hong Kong profits tax has been made as the Group had no profits arising inHong Kong during the year.
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards According to the Income Tax Law of the PRC, four subsidiaries of the Company, namely Board, the disclosure requirements of the Hong Kong Companies Ordinance and the Rules Suzhou Dawnrays Pharmaceuticals Co., Ltd. (“Suzhou Dawnrays Pharmaceuticals”), Suzhou As at the date of this announcement, the Board comprises nine directors, of which six are executive Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. They have directors, namely Ms. Li Kei Ling, Mr. Hung Yung Lai, Mr. Zhang Jing Xing, Mr. Lam Kam Wah, Mr. been prepared under the historical cost convention, except for the periodic remeasurement of Pharmaceutical Technology Co., Ltd. (“Suzhou Dawnrays Technology”) and Shanghai Li Tung Ming and Mr. Xu Kehan; three are independent non-executive directors, namely Mr. Pan Xue certain short term listed investments.
Dawnrays Chemical Co., Ltd. (“Shanghai Dawnrays Chemical”), which operate in approved Tian, Mr. Lee Cheuk Yin Dannis and Mr. Choi Tat Ying Jacky.

Source: http://notice.singtao.com/ADMA/02348/epdf/Dawnrays11.pdf

Microsoft word - 2001- flora & airto.doc

FLORA & AIRTO 05-15-01 The Significant Other and I took in renowned jazz vocalist Flora Purim with Airto Moriera and others at Yoshis. The pair brought down the house after opening with a scorching latin-inflected version of Brubeck's "Take Five". Far from the cool school detachment of academic jazz, this pair had the house rocking on their feet to the back of the room w



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