09:17     MUDAN AUTO<08188> - Yearly Results Announcement (2)                 

                                                                              
                                    2004                 2003                 
                                    RMB                  RMB                  
    Revenue                                                                   
    PRC                         562,293,179          862,368,956              
    Other countries              76,270,601           47,742,426              
                                638,563,780          910,111,382              
                                                                              
    3. Income tax expense/(benefit)                                           
                                                                              
    (a) Income tax expense/(benefit) represents:                              
                                                                              
                                    2004                2003                  
                                    RMB                 RMB                   
    Current tax expense              -               2,555,755                
    Deferred tax (note 18)        6,430,712        (10,049,751)               
                                                                              
    Income tax expense/(benefit)  6,430,712        (7,493,996)                
                                                                              
    The charge for PRC income tax is calculated at the unified tax rate       
    of 33% (2003: 33%) of the estimated assessable income for the year        
    as determined in accordance with the relevant income tax rules and        
    regulations of the PRC applicable to items that are charged or            
    credited to the income statement in the same or different periods.        
                                                                              
    (b) The following is a reconciliation of income taxes calculated          
    at the applicable tax rate with income tax expense benefit:               
                                                                              
                                            2004               2003           
                                             RMB                RMB           
    Accounting profit/(loss) before tax    4,611,751       (22,909,078)       
                                                                              
    Income tax expense/(benefit) computed                                     
         by applying tax rate of 33%       1,521,877        (7,559,996)       
    Non-deductible expenses                4,908,835            66,000        
                                                                              
    Income tax expense/(benefit)           6,430,712        (7,493,996)       
                                                                              
    4. Basic Earnings/(Loss) per share                                        
                                                                              
    The calculation of basic loss per share is based on the loss              
    attributable to shareholders of RMB1,818,961 (2003: loss                  
    attributable to shareholders of RMB15,415,082) divided by                 
    the weighted average number of shares in issue during the                 
    year of 284,800,000(2003:284,800,000).                                    
                                                                              
    The amount of diluted loss per share is not presented as there were       
    no dilutive potential ordinary shares in existence for either years.      
                                                                              
    5. Dividends                                                              
                                                                              
    (a) Dividends attributable to the year                                    
                                                                              
                                                 2004            2003         
                                                  RMB             RMB         
        Final dividend proposed after the                                     
          balance sheet date of RMB Nil                                       
          per share (2003: RMB Nil)                -               -          
                                                                              
    There was no final dividends proposed after the balance sheet date.       
                                                                              
    (b) Dividends attributable to the previous financial year, approved       
        and paid during the year                                              
                                                                              
                                                 2004            2003         
                                                  RMB             RMB         
        Final dividend in respect of the                                      
          previous financial year, approved                                   
          and paid during the year, of RMB Nil                                
          per share (2003: RMB0.015 per share)    -           4,272,000       
                                                                              
    6. Qualified opinions arising from limitation of audit scope              
                                                                              
    The auditor of the company has expressed the following qualified          
    opinions in the auditor report of the Company for the year ended          
    31 December 2004                                                          
                                                                              
    (1) Included in the company's balance sheet as at 31 December 2004        
    are amounts due from certain trade debtors of RMB31,888,033, net of       
    provisions of RMB9,579,248.  In arriving at the aforesaid                 
    provisions, the company has written back provisions for doubtful          
    debts made in prior period amounting to RMB12,109,902 during              
    the current year, and reversed deferred tax asset of                      
    RMB 4,465,642 recognised previously in respect of the above.              
    Due to the lack of adequate financial information in respect of           
    these trade debtors, the auditor were unable to carry out                 
    auditing procedures necessary to satisfy themselves as to whether         
    this provision was appropriate and adequate. Any adjustment to            
    the figure may have a consequential effect on the loss for the year       
    and the net assets at 31 December 2004.