09:18 MUDAN AUTO<08188> - Yearly Results Announcement (4) (iii) The Company has entered into lease agreement with Jiangsu Mudan whereby the Company is granted rights to use a property in the PRC for a term of 20 years. The annual fixed rental payment is RMB100,000. (iv) The Company has entered into a lease agreemetn with Jiangsu Mudan whereby the Company is granted rights to use a conveyor belt system in the PRC for a term of 20 years. The annual fixed rentral payment is RMB100,000. (v) In October 2001, the Company entered into a custodian agreement with Jiangsu Mudan for an indefinite period whereby the management of Factory No.1 and Factory No.7 and certain production facilities of Jiangsu Mudan ("the business") are rested with the Company. In return, the Company receives a management fee of RMB200,000 per annum. Assets and liabilities arising from the business are held for the benefit of Jiangsu Mudan and are not assumed by the Company. In addition, the Company is not liable, whether severally or jointly and severally, for debts and obligations incurred by the business. The custodian agreemetn with Jiangsu Mudan was terminated in April 2003. (vi) During the year, the Company acquired two motor vehicles and one production line from Jiangsu Mudan at an amount of RMB100,000 (2003: RMB Nil) and RMB509,162 (2003: RMB68,080,923). (vii) During the year, no subcontracting fees was paid from the Company to Jiangsu Mudan (2003: RMB9,892,723). (viii) During the year, the Company sold certain scrap materials to the shareholders (Zhangjiagang Mudan Bus Parts Co., Ltd. and Zhangjiagang Mudan Automobile Accessories Co., Ltd.) which amounted to RMB1,525,928 (2003: RMB827,402). (ix) During the year ended 31 December 2004, the Company utilised its bills facilities and instructed its bankers to issue certain bills to Jiangsu Mudan. In addition, the Company transferred certain of its bills, which the Company received from its customers, to Jiangsu Mudan. The total value of its bills issued/transferred to Jiangsu Mudan amounted to RMB395,080,685 (2003: RMB617,733,258). On the other hand,the Company received certain bills from Jiangsu Mudan, totalling RMB242,799,800 (2003: RMB418,739,808). In consequence, the Company provided certain interest-free advances to Jiangsu Mudan during the year ended 31 December 2004. The maximum outstanding balance of the advances to Jiangsu Mudan was RMB161,893,620 during the year ended 31 December 2004 and the outstanding balance of the advances was RMB152,280,885 at 31 December 2004. During the year ended 31 December 2003, the company provided certain interest-free advances to Jiangsu Mudan. The maximum outstanding balance of the advances to Jiangsu Mudan was RMB148,769,216 during the year ended 31 December 2003 and the outstanding balance of the advances was RMB Nil at 31 December 2003. (x) During the years ended 31 December 2003 and 2004, Jiangsu Mudan allowed the Company to use the trademark of "Mudan", certain of its sales office, office equipment and public facilities at nil consideration. (xi) Jiangsu Mudan received sales receipts on behalf of the Company which amounted to RMB70,630,102 (2003: RMB1,645,000) during the year ended 31 December 2004. (xii) The Company received sales receipts on behalf of Jiangsu Mudan which amounted to RMB1,227,975 during the year ended 31 December 2004. There was no sales receipt by the Company on behalf of Jiangsu Mudan for the year ended 31 December 2003. (xiii) During the year ended 31 December 2003, the Company acted as the agent of Jiangsu Mudan and purchased certain raw materials, totalling RMB4,355,974, on its behalf. On the other hand, Jiangsu Mudan acted as the agent of the Company and purchased certain raw materials, totalling RMB3,133,037, on behalf of the Company. No service fee was received.paid by the Company in this respect. During the year ended 31 December 2004, the Company ceased to be the agent of Jiangsu Mudan in connection with the purchase of raw materials. (xiv) During the year ended 31 December 2003, Jiangsu Mudan acted as the agent of the Company in connection with certain export sales, totalling RMB40,193,903. No service fee was paid by the Company in this respect. During the year ended 31 December 2004, Jiangsu Mudan ceased to be the agent of the Company in connection with certain export sales. (xv) Jiangsu Mudan made payments for certain expenses on behalf of the Company which amounted to RMB13,267,067 (2003: RMB3,689,020) during the year ended 31 December 2004.