Semi-Annual Report 2012
SHENZHEN ZHONGHENG HUAFA CO., LTD.
Semi-Annual Report 2012
I Important Notice
The Board of Directors and its directors, Supervisory Committee and its supervisors, senior
executives of SHENZHEN ZHONGHENG HWAFA CO., LTD. (hereinafter referred to as the
Company) hereby confirm that there are no false recordation, misleading statements or material
omissions carried in this report, and shall take all responsibilities, individually and/or jointly, for the
reality, accuracy and completeness of the whole contents.
All of the directors are present the meeting of the Board for deliberating the semi-annual report of
the Company
Financial report of this semi-annual repot 2012 has not been audited by CPA.
Li Zhongqiu, person in charge of the Company, JiangYanjun, person in charge of accounting works
as well as person in charge of accounting institution (accounting officer) Wu Aijie hereby confirm
the truthfulness and completeness of the Financial Report in the Semi-annual Report 2012.
II. Company Profile
(I) Company information
Code for A-share 000020 Code for B-share 200020
Short form for A-share SHEN HUAFA-A Short form for B-share SHEN HUAFA-B
Listing stock exchange Shenzhen Stock Exchange
Legal Chinese name of the
深圳中恒华发股份有限公司
Company
Abbr. of legal Chinese name
深华发
of the Company
Legal English name of the
SHENZHEN ZHONGHENG HWAFA CO., LTD.
Company
Abbr. of legal English name
of the Company
Legal Representative Li Zhongqiu
Registered Add. 411 Bldg., Huafa (N) Road, Futian District, Shenzhen
Post Code of registered add. 518031
Office Add. 6/F, East Tower of 411 Bldg., Huafa (N) Road, Futian District, Shenzhen
Post Code of office add. 518031
Internet website http://www.hwafa.com.cn
E-mail hwafainvestor@163.com
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Semi-Annual Report 2012
(II) Contact person and ways
Secretary of the Board Rep. of security affairs
Name Weng Xiaojue Niu Yuxiang
6/F, East Tower of 411 Bldg., Huafa 6/F, East Tower of 411 Bldg., Huafa
Contact adds.
(N) Road, Futian District, Shenzhen (N) Road, Futian District, Shenzhen
Tel. (0755)61389198、83352206 (0755) 61389198、83352206
Fax. (0755) 61389001 (0755) 61389001
E-mail hwafainvestor@163.com hwafainvestor@163.com
(III) Information disclosure and place for preparation
Newspapers Designated for indormation China Securities Journal, Securities Times and Hong Kong Comercial
disclosure Daily
Website desinated by CSRC for
http://www.cninfo.com.cn
publishing semi-annual report
place for preparation of semi-annual
6/F, East Tower of 411 Bldg., Huafa (N) Road, Futian District, Shenzhen
report
III. Major accounting data and business abstract
(I) Major accounting data and financial indexes
Whether retroactive adjusted on previous financial report or not
□Yes √ No □ non-applicable
Major accounting data
Reporting period (Jan. Increase/decrease in this report
Major accounting data Same period of last year
to June) period year-on-year (%)
Total business revenue(RMB) 383,517,298.55 461,498,937.23 -16.90%
Business profit(RMB) 8,530,952.36 11,111,623.21 -23.22%
Total profit(RMB) 8,760,673.78 11,066,688.81 -20.84%
Net profit attributable to
shareholders of the listed company 6,426,237.82 9,280,724.63 -30.76%
(RMB)
Net profit attributable to
shareholders of the listed company
6,253,946.76 9,325,659.03 -32.94%
after deducting non-recurring gains
and losses(RMB)
Net cash flow arising from operating
74,868,494.91 -15,077,925.90 ——
activities(RMB)
Increase/decrease in this
End of this period End of last period period-end over that of last
period-end (%)
Total assets(RMB) 758,088,451.72 668,385,621.82 13.42%
Owners‘ equity attributable to
shareholders of the listed 283,365,391.03 276,939,153.21 2.32%
company(RMB)
Share capital(Share) 283,161,227.00 283,161,227.00 0%
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Semi-Annual Report 2012
Major financial indexes
Reporting period Same period Increase/decrease in this report period
Major financial indexes
(Jan. to June) of last year year-on-year (%)
Basic earnings per share (RMB/Share) 0.0227 0.0328 -30.76%
Diluted earnings per share
0.0227 0.0328 -30.76%
(RMB/Share)
Basic EPS after deducting
non-recurring gains/losses 0.0221 0.0329 -32.94%
(RMB/Share)
Fully diluted ROE (%) 2.27% 3.36% 1.09percentage points down
Weighted average ROE (%) 2.29% 3.42% 1.13percentage points down
Fully diluted ROE after deducting
2.21% 3.38% 1.17percentage points down
non-recurring gains/losses (%)
Weighted average ROE after deducting
2.23% 3.44% 1.21 percentage points down
non-recurring gains/losses (%)
Net cash flow per share arising from
0.26 -0.05 ——
operating activities (RMB/Share)
End of last Increase/decrease in this period-end
End of this period
period over same period of last period-end (%)
Net assets per share attributable to
shareholder of listed company (RMB/ 1 0.98 2%
Share)
Asset-liability ratio (%) 65.97% 67.47% 1.50 percentage points down
(II) Difference of accounting data under CAS and IAS
1. Difference of net profit and net assets disclosed in financial report based on IAS and CAS
□ Applicable √ Non-applicable
2. Difference of net profit and net assets disclosed in financial report based on foreign
accounting standards and CAS
□ Applicable √ Non-applicable
3. Detail items for major differences
Explanation on IAS
Items with major
Amount involved (RMB) Reasons for differences and(or) foreign accounting
differences
standards involved
N/A N/A N/A N/A
4. Explanation on accounting data difference under the foreign/domestic accounting
standards: Nil
(III) Item and amount with non-recurring gains/losses deducted
√Applicable □Non-applicable
Items Amount (RMB) Note
Gains and losses from disposal of non-current assets
Tax refund or exemption out of authorization, with absence
of official approval document or accidentally
Governmental subsidy calculated into current gains and
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Semi-Annual Report 2012
losses(while closely related with the normal business of
the Company, excluding the fixed-amount or
fixed-proportion governmental subsidy according to the
unified national standard)
Fund occupation expenses received from non-financial
enterprises that reckon into current gains/losses
Income occurred when investment cost paid by enterprise
for obtaining subsidiaries, associates and joint ventures are
lower than its share in fair value of net realizable assets
of invested units
Gains and losses from exchange of non-monetary assets
Gains and losses from entrusted investment or
management assets
Various asset impairment reserve provided for force
majeure, such as natural disaster
Gains/losses from debt reorganization
Reorganization expenses, such as expenditure for
allocation of employees and integration fee
Gains and losses from excess of transaction which are
conducted on a non-fair-valued basis over its fair value
Current net gains and losses of subsidiaries occurred from
combination under the same control commencing from
period-begin to combination date
Gains and losses from contingent events which has no
relation with normal business of the Company
Gains and losses from change of fair values of
held-for-transaction financial assets and financial liabilities
except for the effective hedge business related to normal
business of the Company, and investment income from
disposal of transactional financial assets and liabilities and
financial assets available for sale
Reversal of impairment reserve for account receivable
with separate impairment testing
gains/ losses from external entrustment loans
Gains and losses arising from change of fair value of
investment properties whose follow-up measurement are at
fair value
Affect upon current gains/losses arising from the one-off
adjustment in subject to requirement of laws and rules in
relation to taxation and accounting
Income from entrusted custody operation
Other non-operating income and expenditure except the
229,721.42
abovementioned
Other item that satisfied the definition of non-recurring
gains and losses
Influenced amount of minority shareholders‘ equity
Impact on income tax -57,430.36
Total 172,291.06 --
Explanation on ―Other item that satisfied the definition of non-recurring gains and losses‖ and defined non-recurring gains and losses
as recurring gain/loss according to natures and characteristic of self-operation status
Amount involved
Item Note
(RMB)
Default punishment income 164,779.00 Default punishment from cancellation of the contract in advance
Penalty income 64,942.42 Quality penalty of suppliers
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Semi-Annual Report 2012
IV. Changes in Share Capital and Particular about Shareholders
(I) Changes in share capital
1. Statement of changes in shares
□Applicable √Non-applicable
2. Changes in restricted shares
□Applicable √Non-applicable
(II) Security offering and listing
1. Security offering in previous three years
□Applicable √Non-applicable
2. Changes of total shares and structures as well as outcome of asset-liability structures
□Applicable √Non-applicable
3. Current shares held by internal staffs
□Applicable √Non-applicable
(III) Shareholders and actual controller
1. Total shareholders at period-end
Till end of reporting period, total shareholders of the Company amounting to 29,964.
2. Shares held by top ten shareholders
Particulars about the shares held by the top ten shareholders
Amount of Shares pledged or frozen
Proportion of
Shareholders (full Nature of Total amount the
shares held
name) shareholders of shares held restricted Share status Amount
(%)
shares held
Wuhan Zhongheng New pledged 116,489,894
Domestic
Science & Technology
non-state-owne 41.14% 116,489,894 116,489,894
Industrial Group Co., frozen 0
d legal person
Ltd.
SEG (HONG KONG) Foreign legal pledged 0
5.85% 16,569,560 0
CO., LTD. persons frozen 0
GOOD HOPE pledged 0
Foreign legal
CORNER 4.91% 13,900,000 0
persons frozen 0
INVESTMENTS LTD
Domestic pledged 0
Zeng Ying 1.31% 3,715,941 0
natural persons frozen 0
Domestic pledged 0
Jia Wenjun 0.44% 1,253,032 0
natural persons frozen 0
Domestic pledged 0
BINGHUA LIU 0.31% 876,213 0
natural persons frozen 0
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Semi-Annual Report 2012
Domestic pledged 0
Li Jianfeng 0.28% 799,000 0
natural persons frozen 0
Domestic pledged 0
Xie Weiliang 0.22% 616,100 0
natural persons frozen 0
Domestic pledged 0
Zhu Ming 0.22% 611,348 0
natural persons frozen 0
Domestic pledged 0
Yang Xiaoping 0.2% 553,100 0
natural persons frozen 0
On 25 December 2009, controlling shareholder Wuhan Zhongheng New
Science & Technology Industrial Group Co., Ltd mortgaged all the
holding limited current stock of the Company 116,489,894 shares to
CITIC Bank Corporation Limited Wuhan Branch, mortgage period lasted
from Dec 25th of 2009 to pledge applying thaw. Equity Mortgage
Explanation on shareholders
registration had been completed in China Securities Depository and
Clearing Co., Ltd. Shenzhen Branch. Till the reporting period ended, total
116,489,894 shares Wuhan Hunching Group held in the Company took up
100% equity of the Company, taking up 41.14% of total equity of the
Company.
Particulars about the shares held by the top ten unrestricted shareholders
√Applicable □Non-applicable
Amount of Type/amount of shares
Shareholders unrestricted shares
held at period-end Type Amount
SEG (HONG KONG) CO., LTD. 16,569,560 B-share 16,569,560
GOOD HOPE CORNER INVESTMENTS
13,900,000 B-share 13,900,000
LTD
Zeng Ying 3,715,941 B-share 3,715,941
Jia Wenjun 1,253,032 A-share 1,253,032
BINGHUA LIU 876,213 B-share 876,213
Li Jianfeng 799,000 B-share 799,000
Xie Weiliang 616,100 A-share 616,100
Zhu Ming 611,348 B-share 611,348
Yang Xiaoping 553,100 B-share 553,100
Zheng Qiaofen 550,000 B-share 550,000
Explanation on associated relationship among the top ten shareholders or (and) consistent action
Among the top ten shareholders, Wuhan Zhongheng New Science & Technology Industrial Group Co., Ltd.
neither bears associated relationship with other shareholders, nor belongs to the consistent actor that are
prescribed in Measures for the Administration of Disclosure of Shareholder Equity Changes of Listed Companies.
The Company neither knew whether there exists associated relationship among the other tradable shareholders,
nor they belong to consistent actors that are prescribed in Measures for the Administration of Disclosure of
Shareholder Equity Changes of Listed Companies.
3. Controlling shareholders and actual controller
(1) Changes of controlling shareholders and actual controller
□Applicable √Non-applicable
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Semi-Annual Report 2012
(2) Introduction of controlling shareholders and actual controller
Whether has new actual controller or not
□Yes √No □non-applicable
Name of actual controller Li Zhongqiu
Type of actual controller Individual
Explanations
Actual controller of the Company is the legal representative of Wuhan Zhongheng New Science & Technology Industrial Group Co.,
Ltd. Mr. Li Zhongqiu
Li Zhongqiu: Male, born in 1962; Master of Engineering, the representative of 10th session in Hubei Province, merit of national labor
day in Wuhan City. He serves as the Chairman for Wuhan Zhongheng Group since 1996 and serves as Chairman and GM of the
Company since 2007
(3) Block diagram of property rights and controlling relationship between the Company and
actual controller
Li Zhongqiu
99%
Wuhan Zhongheng New Science & Technology Industrial Group Co., Ltd
41.14%
Shenzhen Zhongheng Huafa Co., Ltd.
(4) Actual controller controlling the Company by means of entrust or other assets
management
□Applicable √Non-applicable
4. Other legal person’s shareholders with over ten percent shares held
□Applicable √Non-applicable
(IV) Convertible bonds
□Applicable √Non-applicable
V. Directors, Supervisors and Senior Executives
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Semi-Annual Report 2012
(I) Changes of shares held by directors, supervisors and senior executive
Whether
Amount of received
Amount of Amount of
shares Including: remuneration
Shares held at shares Shares held stock option
Office dated Office dated increase in restricted Reasons for from
Name Title Sex Age period-begin(S decreased in at period-end held at
from ended this shares held changes shareholders‘
hare) this period (Share period-end
period(Share (Share) unit or other
(Share) (Share)
) related unit
or not
Li Chairman、
M 50 2010-08-11 2013-08-10 0 0 0 0 0 0 N/A No
Zhongqiu GM
Tang
Director M 52 2010-08-11 2013-08-10 0 0 0 0 0 0 N/A Yes
Chongyin
Chen
Director M 39 2010-08-11 2013-08-10 0 0 0 0 0 0 N/A Yes
Zhigang
Director、
Deputy GM、 M 43 2010-08-11 2013-08-10 0 0 0 0 0 0 N/A No
Jiang Yanjun CFO
Secretary of
M 43 2011-01-14 2012-04-10 0 0 0 0 0 0 N/A No
the Board
Independent
Li Ding‘an M 67 2010-08-11 2013-08-10 0 0 0 0 0 0 N/A No
Director
Independent
Zhang Yi M 42 2010-08-11 2013-08-10 0 0 0 0 0 0 N/A No
Director
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Semi-Annual Report 2012
Independent No
Li Xiaodong M 46 2010-08-11 2013-08-10 0 0 0 0 0 0 N/A
Director
Cao Li Supervisor F 42 2010-08-11 2013-08-10 0 0 0 0 0 0 N/A No
Tang Ganyu Supervisor F 35 2010-08-11 2012-01-15 0 0 0 0 0 0 N/A Yes
Huang Supervisor
F 50 2012-01-16 2013-08-10 0 0 0 0 0 0 N/A Yes
Yanbo
Geng Qu Supervisor F 43 2012-04-09 2013-08-10 0 0 0 0 0 0 N/A No
Supervisor F 32 2010-08-09 2012-04-08 0 0 0 0 0 0 N/A No
Weng
Secretary of
Xiaojue F 32 2012-04-11 2013-08-10 0 0 0 0 0 0 N/A No
the Board
Total -- -- -- -- -- -- --
Directors, supervisor and senior executives who awarded equity incentive in report period
□Applicable √Non-applicable
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Semi-Annual Report 2012
(II) Representation
Representation in shareholders‘ unit
√Applicable □Non-applicable
Position in Starting date Get remuneration
Name of Ending date if
Name of shareholders shareholder of term of in shareholder
office staff term of service
units service units or not
Wuhan Zhongheng New Technology
Li Zhongqiu President 1996-03-21 —— No
Industrial Group Co., Ltd
Executive
Chen Wuhan Zhongheng New Technology Deputy
2008-08-18 —— Yes
Zhigang Industrial Group Co., Ltd General
Manager
Director of
property
manageme
Tang
Shenzhen SEG Co., Ltd nt and 2008-06-02 —— Yes
Chongyin
administrati
on
department
Subsidiary of Wuhan Zhongheng Deputy
New Technology Industrial Group Project
Co., Ltd Manager
Tang Ganyu 2006-08-01 2011-12-14 Yes
and
Wuhan Hengsheng Photoelectricity Director of
Industrial Co., Ltd Factory
Assistant of
Wuhan Zhongheng New Technology
General 2008-08-18 2012-05-15 Yes
Industrial Group Co., Ltd
Huang Yanbo Manager
Wuhan Zhongheng New Technology Financial
2012-05-16 —— Yes
Industrial Group Co., Ltd Director
Statement on
service in
None
shareholder
units
Representation in other unit
√Applicable □Non-applicable
Name of Get remuneration in other
Name of other units Position in other units
office staff units or not
Tang
Shenzhen Daming Electronic Co., Ltd President No
Chongyin
Li Dingan South China University of Technology professor Yes
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Semi-Annual Report 2012
Chinese Peoples' Political Consultative
Conference, the 10th session of Standing Commissioner No
Committee of Guangdong
Guangzhou Xintai Technology Co., Ltd Independent director Yes
Huafu Sefang Co., Ltd Independent director Yes
Shenzhen Gelinmei Technology Co., Ltd Independent director Yes
Guangdong Anjubao Digital Technology
Independent director Yes
Co., Ltd
Guangdong Junyan Law Office Partner and lawyer Yes
Shanxi Jiaohua Co., Ltd Independent director Yes
Zhang Ji
Shenzhen Zhongnuo Telecommunication
Independent director Yes
Co., Ltd
Director, deputy-general
Li Xiaodong Shenzhen Walkers Technology Co., Ltd manager, secretary of Yes
Board of Directors
Statement on
service in
None
shareholder
units
(III) Remuneration of directors, supervisors and senior executives
Decision procedure for
remuneration of Remuneration and appraisal commission raised up plan, being appraised after Board of
directors supervisors Directors, submitting to shareholders‘ meeting for appraisal.
and senior executives
Confirmation basis for
remuneration of Formulating according to remuneration standard of industry and scale the Company is
directors, supervisors located in, as well as actual operation of the Company.
and senior executives
Actual payment of
remuneration of
Giving out monthly
directors, supervisors
and senior executives
(IV) Changes of directors, supervisors and senior executives
Name Position Change Date of change Reason of change
Tang Resigned as
Supervisor 2012-01-15 Resigned for too busy work
Ganyu supervisor
Huang Supplemented as
Supervisor 2012-01-16 Resulting from job
Yanbo supervisor
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Semi-Annual Report 2012
Resigned as
Weng Staff
supervisor of staff 2012-04-08 Resulting from job change
Xiaojue supervisor
representatives
Supplemented as
Staff
Geng Qu supervisor of staff 2012-04-09 Resulting from job
supervisor
representatives
Secretary of Resigned as
Jiang Resigned for too busy work, continuously take
Board of secretary of Board 2012-04-10
Yanjun post of deputy general manager
Directors of Directors
Secretary of Recruited as
Weng
Board of secretary of Board 2012-04-11 Resulting from work change
Xiaojue
Directors of Directors
(V) Staff of the Company
Person on-jobs 1,202
Retirement person whose charges undertake by the
0
Company
Professional categories
Types of professional category Numbers of professional category
Production staff 702
Salesman 46
Technician 111
Financial staff 15
Administration staff 328
Education background
Type of education background Numbers (people)
Master 3
Undergraduate 53
Junior college 118
High school and below 1,028
VI. Report of the Board
(I) Management discussion and analysis
In the first half year of 2012, international and domestic economic situation is still tough. Situation
of Euro debts is becoming worse. Weak market and stagnant consumption led sharp decline of
air-conditioners, color TV sets and refrigerators. Prospect of home appliance began to fall. With
unfavorable external environment, operation performance declined as a result of processing
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Semi-Annual Report 2012
production of injection molding dramatically fell. In reporting period, business income was realized
RMB 383,517,300 with a decrease rate of 16.9. Total profit was attained RMB 8,760,700 with a
decrease rate of 20.84.
In aspect of industry production: in reporting period the injection molding department encountered
multiple troubles such as price falling from clients, staff cost increase and fierce competition of
industry. Though recent years we have been trying to reduce cost through planning in advance,
successively transforming machine hands and servo system, profit kept declining with a rate of 40
because of decrease of order quantity and processing fees. While profit of Styrofoam department
remained due to a series of measurements about energy-saving and consuming-reducing, restructure
and staff-reducing and production-increasing such as optimization of products structure, regulation
of labor productivity, improvement of technical and enhancement of production management,
regardless of declining of sales volume and income. With gradual recover of LCD industry in the
first half year, overall LCD machine price slightly rose. Short supplying of board of LCD monitors
in up-streaming led the reluctant decreasing production of related monitors. Regulation of sales
strategy led the abandoning taking over orders with low profit. Video machine business present
profit-sapping quantity increase situation, and at the same time also in the LCD TV, outdoor
advertising machine, electronic whiteboard, etc. Differentiation and high added value field a
preliminary attempt and exploration.
In aspect of property: affected by economic situation, part of commercial tenants couldn‘t pay the
rent or surrendered the tenancy in advance. Property department positively applied measurements
according to actual situation of tenement thus strive to ensure above 98% leasing rate in urban and
Gongming. Rent of partial units increased slightly thus profit of the first half year of 2012 increased
RMB 2,360,000 with an increase rate of 14.
Unit: RMB
Item Balance at Balance at
Ratio Reasons for changes
period-end period-begin
Monetary fund 253,754,229.24 141,426,712.65 79.42% Increase of short-term loans and receivable notes to mature
Note receivable 26,253,903.07 59,258,576.59 -55.70% Most of the notes are to fall due
Account receivable Resulted from the peak/off season of injection business and
119,011,974.89 85,553,134.14 39.11%
Paul iron business
Account paid in
6,689,609.88 9,724,896.44 -31.21% Business from subsidiary decline in this period
advance
Other account The historic arrears are recover by lawsuit from Wanshang
4,580,166.06 9,970,760.59 -54.06%
receivable Department Store in this period
Construction in process Construction in process from subsidiary are transfer into fixed
1,787,854.00 2,667,769.50 -32.98%
assets
Short-term loans Short-term turnover capital are increased by financing from
166,595,489.19 104,543,897.22 59.35%
exportation invoice in this period
Account payable Resulted from the peak/off season of injection business and
56,359,048.39 43,332,376.94 30.06%
Paul iron business
Account received in
4,234,860.70 263,497.35 1507.17% Deposit for video business soaring in this period from clients
advance
Tax payable 15,939,501.71 719,584.69 2115.10% Export tax refund from subsidiary
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Semi-Annual Report 2012
Item Jan.-June 2012 Jan.-June 2011 Ratio Reasons for changes
Deductible before-tax for income tax assets are exist in parent
Income tax 2,334,435.96 1,785,964.18 30.71%
company for last period
Net profit attributable to
shareholder of parent 6,426,237.82 9,280,724.63 -30.76% Profit of injection business decreased
company
Refunds of taxes
16,881,021.33 0 － Export tax refund from subsidiary
received
Taxes paid The input tax of VAT are totally retained for export tax rebate,
6,093,709.12 2,828,520.42 115.44%
which higher the VAT payable in this period
Cash paid for
purchasing fixed asstes,
1,983,565.01 11,339,162.84 -82.51% Purchase of major amount fixed assets are decreased
intangible assets and
other long-term assets
Net cash flow arising Cash paid for purchasing commodity and labor service
from operation activity 74,868,494.91 -15,077,925.90 － received decline due to the decrease of cash from export tax
refund as well as the decrease of business by subsidiary
Net cash flow arising Short-term turnover capital are increased by financing from
39,444,490.54 22,192,295.39 77.74%
from financing activity exportation invoice in this period
Net increase amount of
Cash flow from operation activity and financing activity are
cash and cash 112,327,516.59 -4,144,645.87 －
increased
equivalent
Balance of cash and
Cash flow from operation activity and financing activity are
cash equivalent at 253,754,229.24 109,542,109.98 131.65%
increased
period-end
The difference between the actual operating results of the Company and the profit forecast or operation plan in
respect of this reporting period which have been disclosed publicly exceeds 20% (no matter lower or higher) or
not:
□ Yes √ No □Non applicable
Operation and performance of subsidiaries and share-taking companies
1. Shenzhen Zhongheng Huafa Property Co., Ltd: register capital RMB one million, controlled by
the Company fully. Main business located in leasing agent and property management of self-owned
property; Income of the first half year of 2012 reached RMB 939,300 while the loss was RMB
74,900.
2. Wuhan Hengfa Technology Co., Ltd: register capital RMB 181,643,100, wholly owned
subsidiary in Wuhan of the Company. It mainly engaged in manufacture of LCD monitors and
processing of injection and foam appliance. Income of the first half year was RMB 357,555,100 and
net profit was RMB 4,698,400.
All the risks which may create unfavorable impact to future development strategy and operation
goal
The Company signed House Leasing Contract and supplementary term with Shenzhen Wanshang
Youyi General Merchandise Co., Ltd in 2001, which showed term of lease of 1-4 floors of Huafa
Building, will end on the end of August of 2012. The Company will regulate 1-3 floors of Huafa
Building and then bring business there. The vacant period and weak external economic situation
will lead the decrease of leasing income in a short time. Besides, the market competition keep
14
Semi-Annual Report 2012
intense, labor cost keep increasing, price-rising of raw materials and clients reducing processing
fees and other unfavorable factors, thus pressure on operation of the Company further intensified.
1. Main business and operations
(1)Statement of main business classified according to industries and products
Unit: RMB
Increase or decrease Increase or decrease Increase or decrease
Classified
of operating revenue of operating cost of gross profit ratio
according to Operating Gross profit ratio
Operating cost over the last same over the last same over the last same
industries or revenue (%)
period of last year period of last year period of last year
products
(%) (%) (%)
According to industries
Plastic injection 3.04 percentage
97,981,143.65 87,147,320.47 11.06% -5.1% -1.74%
hardware points down
2.35 percentage
LCD 228,931,374.36 219,869,406.77 3.96% -24.08% -25.9%
points up
1.41 percentage
Foam (Styrofoam) 33,456,625.17 27,879,111.12 16.67% -2.37% -3.99%
points up
According to products
Plastic injection 3.04 percentage
97,981,143.65 87,147,320.47 11.06% -5.1% -1.74%
hardware points down
2.35 percentage
LCD 228,931,374.36 219,869,406.77 3.96% -24.08% -25.9%
points up
1.41 percentage
Foam (Styrofoam) 33,456,625.17 27,879,111.12 16.67% -2.37% -3.99%
points up
Explanation on main business classified according to industries and products: Nil
Explanation on major changes of gross profit over same period of last year: Nil
(2) Main business classified according to areas
Unit: RMB
Increase/decrease in revenue from operations
Areas Operating revenue
over the same period of last year (%)
Hong Kong 225,819,692.14 62.66%
Central China 134,549,451.04 37.34%
Explanation on main business according to areas
Nil
Explanation on main business institution
Nil
(3) Explanation on reasons of material changes in main operations and its structure
□Applicable √Non-applicable
15
Semi-Annual Report 2012
(4) Explanation on reasons of material changes in profitability (gross profit ratio) of main
operations compared with that of last year
□Applicable √Non-applicable
(5) Analysis on reasons of material changes in profit structure compared with the previous
year
□Applicable √Non-applicable
(6) Business nature, main products or service as well as net profit for stock jointly enterprises
who take over 10% of the net profit
□Applicable √Non-applicable
(7) Problems and difficulties in operation
This year, home appliance went slowly under pressure of previous national support policy and
falling economic situation. Purchasing ability declined thus the industry turned worse. And the
injection business and Styrofoam business which supply affiliated service for home appliances
industry suffered negative effects at different degree. A part of clients restarted bid in order to
reduce purchasing expense. The above factors led decrease of order quantity and processing fees of
industrial production.
2. Internal control mechanism related with fair-value measurement
□Applicable √Non-applicable
3. Foreign currency financial assets and financial liabilities held
□Applicable √Non-applicable
(II) Investment of the Company
1. General Application of the raised proceeds
□Applicable √Non-applicable
2. Commitments on projects of raised funds
□Applicable √Non-applicable
3. Changes of projects of raised funds
□Applicable √Non-applicable
4. Investment on major projects of non-raised funds
□Applicable √Non-applicable
(III) The modification of Board to the business plan for the second half of the year
□Applicable √Non-applicable
(IV) Prediction of business performance from January – September 2012
Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss
probably or the warning of its material change compared with the corresponding period of the last year and
explanation on reason
□Applicable √Non-applicable
16
Semi-Annual Report 2012
(V) Explanation on “Qualified Opinion” from the Certified Public Accountants in the report
period by the Board of Directors
□Applicable √Non-applicable
(VI) Explanation of the Management on changes and disposal of the issues involved in
“Qualified Opinion” from the Certified Public Accountants in the last year by the Board of
Directors
□Applicable √Non-applicable
(VII)Stating the discussion results issued by the Board on changes in the Company’s
accounting policies and accounting estimates or reasons for material accounting error
correction and influences thereof
□ Applicable √ Non-applicable
(VIII) Determination and implementation of cash dividend policies of the Company
For further normalizing profit distribution of the Company and protecting majority shareholders‘
equity, in accordance with related rules of Notice to Further Carrying Out Cash Dividend of Listed
Companies (ZJF[2012]No. 37) issued by China Securities Commission, Notice to Conduct the
Notice to Further Carrying Out Cash Dividend of Listed Companies (SZJGSZ[2012]No.43) issued
by Shenzhen Securities Bureau, Stock Listing Rules of Shenzhen Securities Exchange and Article
of Association, the Company formulated Dividend Repay Plan for Shareholders (2012-2014) and
revised related terms about profit distribution showed in Article of Association, defined dividend
condition and ratio, completed related decision procedure, established scientific, persistent and
stable repay mechanism for investors, on basis of overall analysis on development strategy,
profitability, financial condition, repay for shareholders, external financing environment and
financing cost.
In process of prove of shareholders dividend and application for appraisal of shareholders‘ meeting,
the Company listened vast shareholders‘ opinion and requirements through various channels such as
telephone, fax, email and internet. Independent directors issued independent opinion on
responsibilities fulfillment. The case has been approved and passed in the 3rd shareholders‘ meeting
in 2012 and 2012 the 2nd extraordinary shareholders‘ meeting. Details could be seen from report
disclosed on August 8 of 2012 and August 25 of 2012.
Retained profit at period-end after annual net profit making up losses in previous years recent 3
years was still minus. According to rules of Article of Association, the Company hadn‘t the ability
of cash dividend. Thus in recent years the Company didn‘t rise up cash profit distribution.
(IX) Plan of profit distribution or capital reserve capitalizing
□Applicable √Non-applicable
(X) Positive retained profit accumulated at end of 2011 without cash distribution carried out
□Applicable √Non-applicable
(XI) Other events disclosed
1. For completing internal information management system, enduring confidentiality of internal
information, effectively preventing and dealing with behaviors against laws about securities such as
internal information, the Company comprehensively revised Administration System to Internal
Information and Insiders and changed it to Administration System to Registration of Insiders of
Internal Information according to Rules to Listed Companies Establishing Insiders Registration and
Administration System (ZJHGG[2011]No. 30) issued by CSRC in Oct. of 2011. The Company
17
Semi-Annual Report 2012
strictly enhanced inspection management on internal information. Besides of daily files-building
and emails-informing, we reported Registration Sheet about Insiders of Internal Information to
supervision department periodically, finding no buying or selling stocks of the Company using
significant and sensitive internal information before disclosure.
2. There existed no major environmental or other major social safety problem in the Company.
3. In reporting period, the Company chosen China Securities Journal, Securities Times and Hong
Kong Commercial Daily as information disclosure media, Juchao website as the disclosure site.
(XII) Liabilities, credit changes and cash arrangement for debt paying in later year (Only
applies to listed company with corporate convertible bonds offered)
□Applicable √Non-applicable
VII. Significant Event
(I)Corporate governance
Recent years the Company strictly complied with requirements of related regulations and rules of
Company Law, Securities Law and Governance Rules of Listed Companies, constantly perfected
modern corporation system, thus orderly operation of shareholders‘ meeting, board of directors and
board of supervisors made a responsibility-clearness and effective corporate governance structure
between rights, decision and supervision institutions. Actual situation conformed to requirements of
related rules of listed companies. In reporting period, the Company continuously carried out check
on internal control documents and actual operation. Based on risk appraisal, through persistent
observation, inspection and confirmation, we gradually refined goal of various procedures,
corresponding risk and measurements, check and make up leaks, conclude and correct, edited
Handbook of Internal Control and completed self-appraisal report of 2012 semi-annual internal
control.
The Company didn‘t do things such as submitting undisclosed information to shareholders and
actual controller periodically or randomly. The Company and subordinate subsidiaries never had
deposit of major shareholders in financial institution.
The horizontal competition didn‘t exist between the Company and controlling shareholder, actual
controller and its subordinate companies.
(II) Implementation of profit distribution plan, capital reserve capitalizing or shares offering
that plan out previously and carry out in this reporting period
□Applicable √Non-applicable
(III) Material lawsuits and arbitrations
□Applicable √Non-applicable
No material lawsuits and arbitrations occurred in this period
(IV) Related event of bankruptcy reorganization
□Applicable √Non-applicable
18
Semi-Annual Report 2012
(V) Equity of other listed company and stock jointly financial enterprise held by the Company
1. Security investment
□Applicable √Non-applicable
Explanation on security investment
2. Equity of other listed company held by the Company
□Applicable √Non-applicable
Explanation on equity of other listed company held by the Company
3. Equity of non-listed financial enterprise held by the Company
□Applicable √Non-applicable
Explanation on equity of non-listed financial enterprise held by the Company
4. Buying and selling shares of other listed company
□Applicable √Non-applicable
Explanation on shares dealing of other listed company
(VI) Assets transaction
1. Assets purchased or acquired
□Applicable √Non-applicable
Explanation on assets purchased
2. Assets sold
□Applicable √Non-applicable
Explanation on assets sold
3. Assets replacement
□Applicable √Non-applicable
Explanation on assets replacement
4. Business combination
□Applicable √Non-applicable
5. Progress of the events and their influence on the Company’s operating results and
financial status in the report period after the Report on Assets Restructure or Public Notice
on Acquisition and Sales of Assets being published
□Applicable √Non-applicable
(VII) Explanation on shareholding increase proposed or implemented by largest shareholder
of the Company and its persons acting in concert in reporting period
□Applicable √Non-applicable
(VIII) Implementation and its influence of equity incentive
□Applicable √Non-applicable
19
Semi-Annual Report 2012
(IX) Significant related transaction
1. Related transaction related to daily operation
√ Applicable □ Non-applicable
Price of Amount of Ration in Reason for
Type of
Parties of Contents of related related amount of Accounts-sett difference
Related related Pricing principle of Market price(10 thousand
related related trade (10 trade (10 similar lement of Impact on profit of the Company between trade
relationship trade related trade yuan)
trade trade thousand thousand related trade related trade price and
yuan) yuan) (%) market price
The average market price is to
point to in the industry
The Hengsheng throughout the day the recognized authority from the
specialty is engaged in the LCD module global famous professional
design and production, such as long-term market research company
Wuhan
Sharing the Purchasing Confirmed with 1% GuanJie for domestic and international website http://www.display
Hengsheng Telegraphic
same parent Purchase LCD of current market 787.48 787.48 1.90% famous display manufacturers to provide search.com and LCD None
Yutian transfer
company monitors average price supporting services, the product quality is professional market research
Industrial
stable, and the company to cooperate with company website
Co., Ltd
the purchasing cost is low, help to further http://www.witsview.com
enhance the market competitive power query of the same
specification the price of the
product
Hong Purchasing Purchasing the price Because of the raw materials for the bonded
Kong LCD of raw materials and materials, use the controlling shareholder of
Sharing the
Yutian monitors market quotation Telegraphic foreign wholly owned subsidiary channels in
same parent Purchase 30,287.96 30,287.96 73.26% —— None
Internation and overall synchronous; Import transfer bonded materials processing complex export
company
al monitor products according to turn again import mode operation can reduce
Investment machine the customer's sales the cost of the intermediate links, prevent the
20
Semi-Annual Report 2012
Co., Ltd set order price receipt and payment funds risk, which is
beneficial to improve the level of corporate
profits.
According to the
Hong
customer sales order
Kong Purchasing
price sure, at the
Yutian Sharing the overall
same time pay per Telegraphic
Internation same parent Sales monitor 22,737.84 22,737.84 59.35% The same with the upper —— None
single $100 of transfer
al company machine
customs clearance
Investment set
for incidental
Co., Ltd
expenses
Total -- -- 53,813.28 -- -- -- --
details of returned large sales N/A
Essentiality and persistence of related trade, as well
as reason for choosing trading with related parties Daily related trade could reduce production cost of overall LCD monitor and improve sustainable development of the Company.
(not other traders in market)
Impact on individuality of listed companies from The company and related party in business, personnel, assets, institutions and financial aspects separates completely, the independent complete autonomy in operation
related trade ability, connected transaction does not affect the independence of the company.
Dependence on related parties from the Company,
The Company and related parties were cooperation relationship, existing no dependence.
as well as related measurements (for example)
In reporting period, Hengfa Technology actually purchasing LCD approximately 7.8748 million yuan from Hengsheng Yutian, 1.62% in total occurring amount that
Predict on total amount of daily related trade on the
predicted at year-begin; purchasing LCD approximately 226.4498 million yuan from Hong Kong Yutian, 27.10% in total occurring amount that predicted at year-begin;
way in this period according to classification, as
selling LCD whole-set approximately 227.3784 million yuan to Hong Kong Yutian, 13.16% in total occurring amount that predicted at year-begin and Huafa Trading
well as actual implementation in reporting period
actually purchasing LCD whole-set approximately 76.4298 million yuan from Hong Kong Yutian, 77.40% in total occurring amount that predicted at year-begin
Statement on related trade N/A
Related transactions concerned with routine operations
21
Semi-Annual Report 2012
Selling products and providing labor service to related party Purchasing commodity and accepting labor service from related party
Related party Proportion in similar transactions Proportion in similar transactions
Trading amount(10 thousand yuan) Trading amount(10 thousand yuan)
amount (%) amount (%)
Wuhan Hengsheng Yutian Industrial Co.,
787.48 1.90%
Ltd.
Hong Kong Yutian International Investment
22,737.84 59.35% 30,287.96 73.26%
Co., Ltd.
Total 22,737.84 59.35% 31,075.44 75.16%
Of which: in reporting period, RMB 227,378,400 was arising from related transaction by selling commodity to controlling shareholders and its subsidiary or providing labor service.其中：报告
Note: Wuhan Hengsheng Photoelectricity Industry Co., Ltd changes its name to Wuhan Hengsheng Yutian Industrial Co., Ltd. in January 2012
2. Related transaction incurred by purchase or sales of assets
□Applicable √Non-applicable
3. Significant related transaction from jointly investment outside
□Applicable √Non-applicable
4. Current related liabilities and debts
□Applicable √Non-applicable
Fund occupation and progress of paying off
□Applicable √Non-applicable
22
Semi-Annual Report 2012
Till end of reporting period, accountability plan proposed by the Board for completed no non-operational fund
occupation from listed company
□Applicable √Non-applicable
5. Other significant related transaction
Nil
(X) Significant contracts and its implementation
1. Profits earned from trusteeship, contract and lease reached over 10% (10% included) of
total profit in this period
(1) Trusteeship
□Applicable √Non-applicable
(2) Contract
□Applicable √Non-applicable
(3) Lease
□Applicable √Non-applicable
2. Guarantees
√Applicable □Non-applicable
Unit: RMB00‘000
Particulars about the external guarantee of the Company (Barring the guarantee for the controlling subsidiaries)
Guarante
Actual date of Complete e for
Related
Name of the happening (Date Actual Guarantee implemen related
Announcement Guarantee limit Guarantee type
Company guaranteed of signing guarantee limit term tation or party
disclosure date
agreement) not (Yes or
no)
N/A N/A N/A N/A N/A N/A N/A N/A N/A
Total approving external guarantee in Total actual occurred external
0 0
report period (A1) guarantee in report period (A2)
Total actual balance of external
Total approved external guarantee at
0 guarantee at the end of report 0
the end of report period ( A3)
period (A4)
Guarantee of the Company for the subsidiaries
Guarante
Actual date of Complete e for
Related
Name of the happening (Date Actual Guarantee implemen related
Announcement Guarantee limit Guarantee type
Company guaranteed of signing guarantee limit term tation or party
disclosure date
agreement) not (Yes or
no)
Wuhan Hengfa USD 10
2010-10-15 2010-11-01 853.92 guarantee 2years No No
Technology Co., Ltd. million/month
23
Semi-Annual Report 2012
Wuhan Hengfa 2012-04-05、
2012-01-17 30000 15589.68 guarantee 1year No No
Technology Co., Ltd. 04-17、08-11
Total amount of actual occurred
Total amount of approving guarantee
30,000 guarantee for subsidiaries in 32,315.49
for subsidiaries in report period (B1)
report period (B2)
Total amount of approved guarantee Total balance of actual
for subsidiaries at the end of reporting 67,980 guarantee for subsidiaries at the 16,443.6
period (B3) end of reporting period (B4)
Total amount of guarantee of the Company( total of two abovementioned guarantee)
Total amount of actual occurred
Total amount of approving guarantee
30,000 guarantee in report period 32,315.49
in report period (A1+B1)
(A2+B2)
Total balance of actual
Total amount of approved guarantee at
67,980 guarantee at the end of report 16,443.6
the end of report period (A3+B3)
period (A4+B4)
The proportion of the total amount of actually guarantee in the net assets
58.03
of the Company(that is A4+ B4)
Including:
Amount of guarantee for shareholders, actual controller and its related
0
parties(C)
The debts guarantee amount provided for the guaranteed parties whose
0
assets-liability ratio exceed 70% directly or indirectly(D)
Proportion of total amount of guarantee in net assets of the Company
2,275.33
exceed 50%(E)
Total amount of the aforesaid three guarantees(C+D+E) 2,275.33
Explanations on possibly bearing joint and several liquidating
N/A
responsibilities for undue guarantees
Explanations on external guarantee against regulated procedures N/A
Note:
①For ensuring sufficient account for wholly owned subsidiary Wuhan Hengfa Technology Co., Ltd to pay
Shanghai Zhonghang Photo-electricity Co., Ltd for loan produced during trade. The Company offered guarantee
for Wuhan Hengfa Technology Co., Ltd for debts formed according to main contract signed with Shanghai
Zhonghang Photo-electricity Co., Ltd. The principle is due based on actual trade amount, below USD 10 million
every month.
From Jan. to Jun. of 2012, the Company accumulatively offered guarantee for the above trades of Wuhan Hengfa
Technology Co., Ltd USD 13.0316 million, and accumulatively removed USD 19.031 million of guarantees. Till
Jun. 30 of 2012 balance of guarantee was USD 1.349 million.
②For ensuring capital for production and operation of wholly owned subsidiary Wuhan Hengfa Technology Co.,
Ltd, the Company offered joint guarantee to Wuhan Hengfa Technology Co., Ltd for 2012 annual bank
borrowings according to our actual situation. The guarantee amount wasn‘t beyond RMB 300 million.
In reporting period, the Company acted as guarantors for Wuhan Hengfa Technology Co., Ltd to apply RMB 80
million in line of credit from Minsheng Bank, RMB 50 million in line of credit from Bank of Communication,
USD 10 million from Hankou Bank, and take of joint responsibility.
24
Semi-Annual Report 2012
In the first half year of 2012, the Company accumulatively offered guarantee for Wuhan Hengfa Technology Co.,
Ltd RMB 43.7987 million and USD 31.1005 million, removed accumulatively guarantee RMB 44.0775 million
and USD 22.3875 million. Till Jun. 30 of 2012, balance of guarantee was RMB 46.9985 million and USD 17.2035
million.
3. Trust financing
□Applicable √Non-applicable
4. Implementation of material contracts entered into during the normal operation
(1) The Company signed House Leasing Contract and supplementary term with Shenzhen
Wanshang Youyi General Merchandise Co., Ltd in 2002. Place located in 1-4 floors of Huafa
Building. The term of lease ends on the end of August of 2012. The contract was implemented well
in reporting period.
(2) Details of guarantee contract please see Guarantee Situation.
5. Other significant contract
√ Applicable □ Non-applicable
The Company signed Contract of Assets Replacement on Apr. 29 of 2009 (details could be seen on
report disclosed on Apr. 30 of 2009). The contract was implemented well (details could be seen on
2010 annual report). Including, part of placed out assets, 2 lands for industry (real estate license
SFDZ No.7226760 and SFDZ No.7226763, land No.A627-005 and A627-007, about 48200 square
meters) located in Shenzhen Guangming New Region Gongming Town Haifa Road were involved
in 2012 Annual Formulation Plan for Change in Unit Plan of Shenzhen. Presently the above lands
hadn‘t been transferred.
(XI) Explanation on corporate bonds offering
□Applicable √Non-applicable
(XII) Implementation of commitments
25
Semi-Annual Report 2012
1. Commitments made by the Company or shareholders holding above 5% shares of the Company in reporting period or extending to
reporting period.
√Applicable □Non-applicable
Commitment Commitment
Item of Commitments Promisee Content of commitments Implementation
date term
1. On 5 June 2008, approving by the 3rd Extraordinary Meeting of
Board of Directors 2008, the Company purchased relevant assets of
Within 1 year after transferred of plastic injection products from Wuhan Zhongheng Group by cash of
Wuhan
this equity acquisition: RMB 27 million, the commitment have been implemented;
Zhongheng New
1. Injected relevant capital of 2. In the first 10 days of May, 2008, the Company officially started off
Commitments for Share Merger Science &
plastic injection business into the 2007 Within 12 months the significant asset restructures work of purchasing the 70% equities
Reform Technology
Company; 2. 70% equity of the of Hengsheng Photoelectricity.; engaged financial consultant and law
Industrial Group
Hengsheng Photoelectricity will consultant to carry out earnest investigation on the restructure assets
Co., Ltd.
inject into the Company. that may be involved, and negotiated with relevant departments which
were in charge of this. However, due to that relevant condition was
not mature; there still remain obstacles in material asset restructure.
Wuhan
Non-tradable shares of the The commitment have been implemented on 18 May 2010;
Zhongheng New
Company should not be listed for considering all 116,489,894 shares of the Company are in the
Commitments in report of Science &
trading within 36 months since the 2007 Within 36 months situation of being pledged, till the end of this report period, Wuhan
acquisition or equity change Technology
date of listed tradable right Zhongheng Group have not applied the released procedure to
Industrial Group
obtained. Shenzhen Stock Exchange for the abovementioned restricted shares.
Co., Ltd.
Commitments in assets
N/A N/A N/A N/A N/A
replacement
Commitments made in issuing N/A N/A N/A N/A N/A
26
Semi-Annual Report 2012
Other commitments for medium
N/A N/A N/A N/A N/A
and small shareholders
Completed on time or not □ Yes √ No □ Non applicable
Detail reasons for un-complement
‖Found in ―Implementation‖
and further plan
Whether made a promise to
horizontal competition and related □ Yes √ No □Non applicable
transactions that resulted or not
Solution term promised N/A
Solution way N/A
Complementation N/A
27
Semi-Annual Report 2012
2. Explanation on assets or projects that reached the original profit forecast as well as its
reasons while the reporting period still in forecast period, and there are profit forecast on
assets or projects of the Company
□Applicable √Non-applicable
(XIII) Items of other consolidated income
Unit: RMB
Items This period Last period
1. Gains(losses) from financial assets available for sales
Less: Income tax influences from financial assets available for sales
Net amount reckoned into other consolidated income in previous period
but transferred into gains/losses in current period
Subtotal
2. Shares in the other consolidated income of the investee calculated
based on equity method
Less: Income tax influences of shares in the other consolidated income
of the investee calculated based on equity method
Net amount reckoned into other consolidated income in previous period
but transferred into gains/losses in current period
Subtotal
3. Gains(losses) from cash flow hedge instrument
Less: Income tax influences from cash flow hedge
Net amount reckoned into other consolidated income in previous period
but transferred into gains/losses in current period
Adjusted amount transferred to initial confirmed amount of the
arbitraged items
Subtotal
4. Differences from translating foreign currency financial statements
Less: Net amount of disposing overseas business transferred to current
gains/losses
Subtotal
5. Others
Less: Income tax influences by others reckoned into other consolidated
income
Net amount reckoned into other consolidated income in previous period
but transferred into gains/losses in current period
Subtotal
Total 0.00 0.00
(XIV)Registration form of receiving research, communication and interview in the report
period
Content discussed and documents
Date Place Way Type Object
provided
Headquarter Telephone Operation situation of the
January-June Individual
of the Communic Individual Company, assets status and process
2012 investor
Company ation of projects
(XV) Engagement and non-reappointment of CPA
Whether the semi-annual report was audited or not
□ Yes √ No □Non-applicable
28
Semi-Annual Report 2012
Whether re-engaged the CPA or not
□ Yes √ No □Non-applicable
(XVI) Punishment and rectification for listed company and its directors, supervisor, senior
executives, shareholders of the Company, actual controller and purchasers
□Applicable √Non-applicable
(XVII) Explanation on other significant events
□Applicable √Non-applicable
(XVIII) Major changes of profitability of turn debt guarantor, assets status and credit
standings
(Only applies to listed company with corporate convertible bonds offered)
□Applicable √Non-applicable
(XIX) Index for information disclosure
Name and page of
Event Date of disclosed Internet website and searching route
publishing press
Resolution notice of 1st extraordinary China Securities Journal, Juchao
2012-01-17
shareholders‘ general meeting 2012 Securities Times Website(http://www.cninfo.com.cn)
More position of staff supervisor for China Securities Journal, Juchao
2012-04-14
7th session of supervisory committee Securities Times Website(http://www.cninfo.com.cn)
Resolution notice of 7th meeting of China Securities Journal, Juchao
2012-04-14
7th session of the board Securities Times Website(http://www.cninfo.com.cn)
Resolution notice of 7th meeting of China Securities Journal, Juchao
2012-04-14
7th session of supervisory committee Securities Times Website(http://www.cninfo.com.cn)
Self-assessment report of internal China Securities Journal, Juchao
2012-04-14
control for year of 2011 Securities Times Website(http://www.cninfo.com.cn)
China Securities Journal,
Juchao
Summary of annual report 2011 Securities Times, Hong 2012-04-14
Website(http://www.cninfo.com.cn)
Kong Commercial Daily
China Securities Journal, Juchao
Abnormal Variation of Stock 2012-04-17
Securities Times Website(http://www.cninfo.com.cn)
China Securities Journal,
Juchao
Text of 1st quarterly report 2012 Securities Times, Hong 2012-04-26
Website(http://www.cninfo.com.cn)
Kong Commercial Daily
China Securities Journal, Juchao
Abnormal Variation of Stock 2012-05-28
Securities Times Website(http://www.cninfo.com.cn)
Resolution notice of 2nd China Securities Journal, Juchao
2012-06-07
extraordinary meeting of the board Securities Times Website(http://www.cninfo.com.cn)
Convening annual shareholders China Securities Journal, Juchao
2012-06-07
general meeting 2011 Securities Times Website(http://www.cninfo.com.cn)
China Securities Journal, Juchao
Suggestive Notice 2012-06-26
Securities Times Website(http://www.cninfo.com.cn)
Resolution notice of annual China Securities Journal, Juchao
2012-06-29
shareholders general meeting 2011 Securities Times Website(http://www.cninfo.com.cn)
29
Semi-Annual Report 2012
VIII. Financial Report
(I) Auditing report
Audited the semi-annual report or not
□ Yes √No □Non-applicable
(II) Financial statement
Whether consolidated statement or not:
√Yes □No □Non-applicable
Unless otherwise, currency for this statement refers to RMB (Yuan)
Currency used in note of financial statement is RMB (Yuan)
1. Consolidated Balance Sheet
Prepared by SHENZHEN ZHONGHENG HWAFA CO., LTD
Unit: RMB
Items Note Balance at period-end Balance at period-begin
Current assets:
Monetary funds 253,754,229.24 141,426,712.65
Settlement provisions
Capital lent
Transaction finance asset
Notes receivable 26,253,903.07 59,258,576.59
Accounts receivable 119,011,974.89 85,553,134.14
Accounts paid in advance 6,689,609.88 9,724,896.44
Insurance receivable
Reinsurance receivables
Contract reserve of
reinsurance receivable
Interest receivable
Dividend receivable
Other receivables 4,580,166.06 9,970,760.59
Purchase restituted finance
asset
Inventories 43,511,217.27 55,927,484.28
Non-current asset due within
one year
Other current assets
30
Semi-Annual Report 2012
Total current assets 453,801,100.41 361,861,564.69
Non-current assets:
Granted loans and advances
Finance asset available for
sales
Held-to-maturity investment
Long-term account receivable
Long-term equity investment
Investment real estate 34,491,207.89 35,730,725.03
Fixed assets 208,326,343.97 207,570,220.77
Construction in progress 1,787,854.00 2,667,769.50
Engineering material
Disposal of fixed asset
Productive biological asset
Oil and gas asset
Intangible assets 51,199,512.24 51,963,537.72
Expense on Research and
Development
Goodwill
Long-term expenses to be
1,129,566.63 1,541,966.67
apportioned
Deferred income tax asset 7,352,866.58 7,049,837.44
Other non-current asset
Total non-current asset 304,287,351.31 306,524,057.13
Total assets 758,088,451.72 668,385,621.82
Current liabilities:
Short-term loans 166,595,489.19 104,543,897.22
Loan from central bank
Absorbing deposit and
interbank deposit
Capital borrowed
Transaction financial
liabilities
Notes payable 31,316,864.98 33,795,522.26
Accounts payable 56,359,048.39 43,332,376.94
31
Semi-Annual Report 2012
Accounts received in advance 4,234,860.70 263,497.35
Selling financial asset of
repurchase
Commission charge and
commission payable
Wage payable 3,604,833.92 4,005,890.25
Taxes payable 15,939,501.71 719,584.69
Interest payable
Dividend payable
Other accounts payable 21,546,238.54 18,400,291.35
Reinsurance payables
Insurance contract reserve
Security trading of agency
Security sales of agency
Non-current liabilities due
within 1 year
Other current liabilities 971,214.71
Total current liabilities 300,568,052.14 205,061,060.06
Non-current liabilities:
Long-term loans 173,910,800.00 186,141,200.00
Bonds payable
Long-term account payable
Special accounts payable
Projected liabilities 244,208.55 244,208.55
Deferred income tax
liabilities
Other non-current liabilities
Total non-current liabilities 174,155,008.55 186,385,408.55
Total liabilities 474,723,060.69 391,446,468.61
Owner‘s equity (or shareholders‘
equity):
Paid-up capital (or share
283,161,227.00 283,161,227.00
capital)
Capital public reserve 109,496,837.33 109,496,837.33
Less: Inventory shares
32
Semi-Annual Report 2012
Reasonable reserve
Surplus public reserve 77,391,593.25 77,391,593.25
Provision of general risk
Retained profit -186,684,266.55 -193,110,504.37
Balance difference of foreign
currency translation
Total owner‘s equity attributable to
283,365,391.03 276,939,153.21
parent company
Minority interests
Total owner‘s equity(or
283,365,391.03 276,939,153.21
shareholders‘ equity)
Total liabilities and owner‘s
758,088,451.72 668,385,621.82
equity(or shareholders‘ equity)
Legal representative: Li Zhongqiu
Person in charge of accounting works: Jiang Yanjun
Person in charge of accounting institution: Wu Aijie
2. Balance Sheet of parent company
Unit: RMB
Items Note Balance at period-end Balance at period-begin
Current assets:
Monetary funds 19,957,354.03 26,428,341.78
Transaction finance asset
Notes receivable 1,200,000.00 1,905,914.85
Accounts receivable 45,519,683.23 46,527,773.17
Accounts paid in advance 751,356.62
Interest receivable
Dividend receivable
Other receivables 70,540,421.16 66,524,564.98
Inventories 3,347,846.88 14,806.50
Non-current asset due
within one year
Other current assets
Total current assets 141,316,661.92 141,401,401.28
Non-current assets:
Finance asset available
for sales
33
Semi-Annual Report 2012
Held-to-maturity
investment
Long-term account
receivable
Long-term equity
184,708,900.00 184,708,900.00
investment
Investment real estate 34,491,207.89 35,730,725.03
Fixed assets 111,216,028.48 111,933,449.28
Construction in progress 1,659,354.00 1,623,356.00
Engineering material
Disposal of fixed asset
Productive biological
asset
Oil and gas asset
Intangible assets 5,640,802.14 5,713,275.00
Expense on Research and
Development
Goodwill
Long-term expenses to be
1,129,566.63 1,541,966.67
apportioned
Deferred income tax asset 7,965,043.75 7,753,550.21
Other non-current asset
Total non-current asset 346,810,902.89 349,005,222.19
Total assets 488,127,564.81 490,406,623.47
Current liabilities:
Short-term loans
Transaction financial
liabilities
Notes payable
Accounts payable 12,609,850.04 9,582,988.12
Accounts received in
3,256,310.70 90,347.35
advance
Wage payable 979,878.92 636,334.24
Taxes payable 13,066,166.78 12,605,519.17
Interest payable
Dividend payable
34
Semi-Annual Report 2012
Other accounts payable 13,579,758.54 12,930,265.33
Non-current liabilities due
within 1 year
Other current liabilities
Total current liabilities 43,491,964.98 35,845,454.21
Non-current liabilities:
Long-term loans 173,910,800.00 186,141,200.00
Bonds payable
Long-term account
payable
Special accounts payable
Projected liabilities 244,208.55 244,208.55
Deferred income tax
liabilities
Other non-current liabilities
Total non-current liabilities 174,155,008.55 186,385,408.55
Total liabilities 217,646,973.53 222,230,862.76
Owner‘s equity (or
shareholders‘ equity):
Paid-up capital (or share
283,161,227.00 283,161,227.00
capital)
Capital public reserve 109,496,837.33 109,496,837.33
Less: Inventory shares
Reasonable reserve
Surplus public reserve 77,391,593.25 77,391,593.25
Provision of general risk
Retained profit -199,569,066.30 -201,873,896.87
Balance difference of
foreign currency translation
Total owner‘s equity(or
270,480,591.28 268,175,760.71
shareholders‘ equity)
Total liabilities and owner‘s
488,127,564.81 490,406,623.47
equity(or shareholders‘ equity)
3. Consolidated Profit Statement
Unit: RMB
35
Semi-Annual Report 2012
Items Note Amount in this period Amount in last period
I. Total operating income 383,517,298.55 461,498,937.23
Including: Operating income 383,517,298.55 461,498,937.23
Interest income
Insurance gained
Commission charge and
commission income
II. Total operating cost 374,986,346.19 450,387,314.02
Including: Operating cost 336,861,526.85 417,065,770.56
Interest expense
Commission charge and
commission expense
Cash surrender value
Net amount of expense of
compensation
Net amount of withdrawal of
insurance contract reserve
Bonus expense of
guarantee slip
Reinsurance expense
Operating tax and extras 1,655,984.64 1,737,536.45
Sales expenses 3,466,307.56 3,328,879.52
Administration expenses 21,570,404.40 19,453,213.98
Financial expenses 10,220,006.16 8,801,913.51
Losses of devaluation of
1,212,116.58 0.00
asset
Add: Changing income of fair
value(Loss is listed with ―-‖)）
Investment income (Loss
is listed with ―-‖)
Including: Investment
income on affiliated company and joint
venture
Exchange income (Loss is
listed with ―-‖)
III. Operating profit (Loss is listed
8,530,952.36 11,111,623.21
with ―-‖)
36
Semi-Annual Report 2012
Add: Non-operating income 229,821.42 16,726.00
Less: Non-operating expense 100.00 61,660.40
Including: Disposal loss of
non-current asset
IV. Total Profit (Loss is listed with
8,760,673.78 11,066,688.81
―-‖)
Less: Income tax expense 2,334,435.96 1,785,964.18
V. Net profit (Net loss is listed with
6,426,237.82 9,280,724.63
―-‖)
Including: net profit realized
before consolidation by mergered party
Net profit attributable to owner‘s
6,426,237.82 9,280,724.63
of parent company
Minority shareholders‘ gains and
losses
VI. Earnings per share -- --
i. Basic earnings per share 0.0227 0.0328
ii. Diluted earnings per share 0.0227 0.0328
VII. Other consolidated income
VIII. Total comprehensive income 6,426,237.82 9,280,724.63
Total consolidated income
attributable to owners of parent 6,426,237.82 9,280,724.63
company
Total consolidated income
attributable to minority shareholders
The merger realized net profit RMB 0.00 before consolidation during enterprises consolidation under a same
control.
Legal representative: Li Zhongqiu
Person in charge of accounting works: Jiang Yanjun
Person in charge of accounting institution: Wu Aijie
4. Profit Statement of parent company
Unit: RMB
Items Note Amount in this period Amount in last period
I. Operating income 25,442,959.65 21,045,959.33
Less: operating cost 4,803,869.50 1,667,103.70
Operating tax and extras 1,593,263.20 1,538,172.11
Sales expenses 157,599.62 174,622.90
37
Semi-Annual Report 2012
Administration expenses 10,980,472.57 9,498,164.72
Financial expenses 4,153,425.53 4,527,872.18
Losses of devaluation of
845,974.14
asset
Add: Changing income of fair
value(Loss is listed with ―-‖)
Investment income (Loss
is listed with ―-‖)
Including: Investment
income on affiliated company and
joint venture
II. Operating profit (Loss is
2,908,355.09 3,640,023.72
listed with ―-‖)
Add: Non-operating income 164,779.00 16,726.00
Less: Non-operating expense 20.00 60,760.40
Including: Disposal loss of
non-current asset
III. Total Profit (Loss is listed
3,073,114.09 3,595,989.32
with ―-‖)
Less: Income tax expense 768,283.52
IV. Net profit (Net loss is listed
2,304,830.57 3,595,989.32
with ―-‖)
V. Earnings per share -- --
i. Basic earnings per share 0.0081 0.0127
ii. Diluted earnings per share 0.0081 0.0127
VI. Other consolidated income
VII. Total comprehensive income 2,304,830.57 3,595,989.32
38
Semi-Annual Report 2012
5. Consolidated Cash Flow Statement
Unit: RMB
Item Amount in this period Amount in last period
I. Cash flows arising from operating
activities:
Cash received from selling
commodities and providing labor 417,965,876.17 452,076,662.93
services
Net increase of customer
deposit and interbank deposit
Net increase of loan from central
bank
Net increase of capital
borrowed from other financial
institution
Cash received from original
insurance contract fee
Net cash received from
reinsurance business
Net increase of insured savings
and investment
Net increase of disposal of
transaction financial asset
Cash received from interest,
commission charge and commission
Net increase of capital
borrowed
Net increase of returned
business capital
Write-back of tax received 16,881,021.33
Other cash received concerning
20,074,140.41 24,796,515.05
operating activities
Subtotal of cash inflow arising from
454,921,037.91 476,873,177.98
operating activities
Cash paid for purchasing
commodities and receiving labor 321,575,178.15 444,560,216.90
service
39
Semi-Annual Report 2012
Net increase of customer loans
and advances
Net increase of deposits in
central bank and interbank
Cash paid for original
insurance contract compensation
Cash paid for interest,
commission charge and commission
Cash paid for bonus of
guarantee slip
Cash paid to/for staff and
26,880,503.47 22,214,509.42
workers
Taxes paid 6,093,709.12 2,828,520.42
Other cash paid concerning
25,503,152.26 22,347,857.14
operating activities
Subtotal of cash outflow arising
380,052,543.00 491,951,103.88
from operating activities
Net cash flows arising from
74,868,494.91 -15,077,925.90
operating activities
II. Cash flows arising from
investing activities:
Cash received from recovering
investment
Cash received from investment
income
Net cash received from
disposal of fixed, intangible and
other long-term assets
Net cash received from disposal
of subsidiaries and other units
Other cash received concerning
investing activities
Subtotal of cash inflow from
0.00 0.00
investing activities
Cash paid for purchasing fixed,
intangible and other long-term 1,983,565.01 11,339,162.84
assets
Cash paid for investment
40
Semi-Annual Report 2012
Net increase of mortgaged
loans
Net cash received from
subsidiaries and other units
Other cash paid concerning
investing activities
Subtotal of cash outflow from
1,983,565.01 11,339,162.84
investing activities
Net cash flows arising from
-1,983,565.01 -11,339,162.84
investing activities
III. Cash flows arising from
financing activities
Cash received from absorbing
investment
Including: Cash received from
absorbing minority shareholders‘
investment by subsidiaries
Cash received from loans 144,728,932.31 155,585,303.70
Cash received from issuing
bonds
Other cash received concerning
financing activities
Subtotal of cash inflow from
144,728,932.31 155,585,303.70
financing activities
Cash paid for settling debts 94,907,740.34 124,418,515.30
Cash paid for dividend and
10,376,701.43 8,974,493.04
profit distributing or interest paying
Including: Dividend and profit
of minority shareholder paid by
subsidiaries
Other cash paid concerning
financing activities
Subtotal of cash outflow from
105,284,441.77 133,393,008.34
financing activities
Net cash flows arising from
39,444,490.54 22,192,295.36
financing activities
IV. Influence on cash and cash
-1,903.85 80,147.48
equivalents due to fluctuation in
41
Semi-Annual Report 2012
exchange rate
V. Net increase of cash and cash
112,327,516.59 -4,144,645.90
equivalents
Add: Balance of cash and cash
141,426,712.65 113,686,755.90
equivalents at the period -begin
VI. Balance of cash and cash
253,754,229.24 109,542,110.00
equivalents at the period -end
6. Cash Flow Statement of parent company
Unit: RMB
Item Amount in this period Amount in last period
I. Cash flows arising from
operating activities:
Cash received from selling
commodities and providing labor 27,872,770.71 22,993,971.40
services
Write-back of tax received
Other cash received
17,641,385.73 13,564,025.31
concerning operating activities
Subtotal of cash inflow arising
45,514,156.44 36,557,996.71
from operating activities
Cash paid for purchasing
commodities and receiving labor 1,633,075.63 1,305,400.85
service
Cash paid to/for staff and
5,039,553.20 2,635,998.00
workers
Taxes paid 3,188,605.17 2,630,581.04
Other cash paid concerning
22,332,905.98 13,514,544.58
operating activities
Subtotal of cash outflow arising
32,194,139.98 20,086,524.47
from operating activities
Net cash flows arising from
13,320,016.46 16,471,472.24
operating activities
II. Cash flows arising from
investing activities:
Cash received from
recovering investment
42
Semi-Annual Report 2012
Cash received from investment
income
Net cash received from
disposal of fixed, intangible and
other long-term assets
Net cash received from
disposal of subsidiaries and other
units
Other cash received
concerning investing activities
Subtotal of cash inflow from
0.00 0.00
investing activities
Cash paid for purchasing
fixed, intangible and other 1,293,235.50 533,492.40
long-term assets
Cash paid for investment
Net cash received from
subsidiaries and other units
Other cash paid concerning
investing activities
Subtotal of cash outflow from
1,293,235.50 533,492.40
investing activities
Net cash flows arising from
-1,293,235.50 -533,492.40
investing activities
III. Cash flows arising from
financing activities
Cash received from
absorbing investment
Cash received from loans
Cash received from issuing
bonds
Other cash received
concerning financing activities
Subtotal of cash inflow from
0.00 0.00
financing activities
Cash paid for settling debts 12,230,400.00 9,116,400.00
Cash paid for dividend and
6,265,464.86 6,143,759.23
profit distributing or interest
43
Semi-Annual Report 2012
paying
Other cash paid concerning
financing activities
Subtotal of cash outflow from
18,495,864.86 15,260,159.23
financing activities
Net cash flows arising from
-18,495,864.86 -15,260,159.23
financing activities
IV. Influence on cash and cash
equivalents due to fluctuation in -1,903.85
exchange rate
V. Net increase of cash and cash
-6,470,987.75 677,820.61
equivalents
Add: Balance of cash and
cash equivalents at the period 26,428,341.78 29,345,694.04
-begin
VI. Balance of cash and cash
19,957,354.03 30,023,514.65
equivalents at the period -end
7. Consolidated Statement on Changes of Owners' Equity
Amount in this period
Unit: RMB
Amount in this period
Owners' equity attributable to the parent company
Items Less: Reason General Minority‘s Total owners‘
Paid-up capital
Capital reserves Treasur able Surplus reserves risk Retained profit Others equity equity
(Share capital)
y Stock reserve provision
I. Balance at the end of last year 283,161,227.00 109,496,837.33 77,391,593.25 -193,110,504.37 276,939,153.21
Add: Changes of accounting
policy
Error correction of the last
period
Others
II. Balance at the beginning of this
283,161,227.00 109,496,837.33 77,391,593.25 -193,110,504.37 276,939,153.21
year
III. Increase/ Decrease in this year
6,426,237.82 6,426,237.82
(Decrease is listed with'"-")
(i) Net profit 6,426,237.82 6,426,237.82
(ii) Other consolidated income
Subtotal of (i)and (ii) 6,426,237.82 6,426,237.82
44
Semi-Annual Report 2012
(III) Owners' devoted and decreased
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
capital
1. Owners' devoted capital
2. Amount calculated into owners'
equity paid in shares
3. Others
(IV)Profit distribution 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1．Withdrawal of surplus reserves
2．Withdrawal of general risk
provisions
3．Distribution for owners
(shareholders)
4. Others
(V) Carrying forward internal owners'
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
equity
1. Capital reserves conversed to
capital (share capital)
2. Surplus reserves conversed to
capital (share capital)
3. Remedying loss with surplus
reserve
4. Others
(VI) Reasonable reserve
1. Withdrawal in this period
2. Usage in this period
(VII) Other
IV. Balance at the end of the report
283,161,227.00 109,496,837.33 77,391,593.25 -186,684,266.55 283,365,391.03
period
Amount in last period
Unit: RMB
Amount in last period
Owners' equity attributable to the parent company
Items Minority‘s Total owners‘
Less: Reason General
Paid-up capital
Capital reserves Treasur able Surplus reserves risk Retained profit Others equity equity
(Share capital)
y Stock reserve provision
I. Balance at the end of last 283,161,227.00 109,496,837.33 77,391,593.25 -203,485,025.57 266,564,632.01
45
Semi-Annual Report 2012
year
Add: retroactive adjustment
arising from enterprise
consolidation under the same
control
Add: Changes of
accounting policy
Error correction of the
last period
Others
II. Balance at the beginning of
283,161,227.00 109,496,837.33 77,391,593.25 -203,485,025.57 266,564,632.01
this year
III. Increase/ Decrease in this
year (Decrease is listed 10,374,521.20
with'"-")
(i) Net profit 10,374,521.20
(ii) Other consolidated income
Subtotal of (i)and (ii) 10,374,521.20
(III) Owners' devoted and
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
decreased capital
1. Owners' devoted capital
2. Amount calculated into
owners' equity paid in shares
3. Others
(IV)Profit distribution 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1. Withdrawal of surplus
reserves
2. Withdrawal of general risk
provisions
3. Distribution for owners
(shareholders)
4. Others
(V) Carrying forward internal
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
owners' equity
1. Capital reserves conversed
to capital (share capital)
2. Surplus reserves conversed
to capital (share capital)
46
Semi-Annual Report 2012
3. Remedying loss with
surplus reserve
4. Others
(VI) Reasonable reserve
1.Withdrawal in this period
2.Usage in this period
(VII) Other
IV. Balance at the end of the
283,161,227.00 109,496,837.33 77,391,593.25 -193,110,504.37 276,939,153.21
report period
8. Statement on Changes of Owners' Equity of Parent Company
Amount in this period
Unit: RMB
Amount in this period
Less: Reason
Item Paid-up capital General risk Total owners‘
Capital reserves Treasur able Surplus reserves Retained profit
(Share capital) reserve equity
y Stock reserve
I. Balance at the end of last year 283,161,227.00 109,496,837.33 77,391,593.25 -201,873,896.87 268,175,760.71
Add: Changes of accounting policy
Error correction of the last
period
Others
II. Balance at the beginning of this year 283,161,227.00 109,496,837.33 77,391,593.25 -201,873,896.87 268,175,760.71
III. Increase/ Decrease in this year
2,304,830.57 2,304,830.57
(Decrease is listed with'"-")
(i) Net profit 2,304,830.57 2,304,830.57
(ii) Other consolidated income
Subtotal of (i)and (ii) 2,304,830.57 2,304,830.57
(III) Owners' devoted and decreased
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
capital
1. Owners' devoted capital
2. Amount calculated into owners'
equity paid in shares
3. Others
(IV) Profit distribution 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1. Withdrawal of surplus reserves
2．Withdrawal of general risk reserve
47
Semi-Annual Report 2012
3. Distribution for owners
(shareholders)
4. Others
(V) Carrying forward internal owners'
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
equity
1. Capital reserves conversed to capital
(share capital)
2. Surplus reserves conversed to capital
(share capital)
3. Remedying loss with surplus
reserves
4. Others
(VI) Reasonable reserve
1. Withdrawal in this period
2. Usage in this period
(VII) Other
IV. Balance at the end of the report
283,161,227.00 109,496,837.33 77,391,593.25 -199,569,066.30 270,480,591.28
period
Amount in last year
Unit: RMB
Amount in last period
Less: Reason
Item Paid-up capital General risk Total owners‘
Capital reserves Treasur able Surplus reserves Retained profit
(Share capital) reserve equity
y Stock reserve
I. Balance at the end of last year 283,161,227.00 109,496,837.33 77,391,593.25 -209,040,012.94 261,009,644.64
Add: Changes of accounting
policy
Error correction of the last
period
Others
II. Balance at the beginning of this
283,161,227.00 109,496,837.33 77,391,593.25 -209,040,012.94 261,009,644.64
year
III. Increase/ Decrease in this year
7,166,116.07 7,166,116.07
(Decrease is listed with'"-")
(i) Net profit 7,166,116.07 7,166,116.07
(ii) Other consolidated income
48
Semi-Annual Report 2012
Subtotal of (i)and (ii) 7,166,116.07 7,166,116.07
(III) Owners' devoted and decreased
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
capital
1. Owners' devoted capital
2. Amount calculated into owners'
equity paid in shares
3. Others
(IV) Profit distribution 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1. Withdrawal of surplus reserves
2. Withdrawal of general risk reserve
3. Distribution for owners
(shareholders)
4. Others
(V) Carrying forward internal owners'
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
equity
1. Capital reserves conversed to
capital (share capital)
2. Surplus reserves conversed to
capital (share capital)
3. Remedying loss with surplus
reserves
4. Others
(VI) Reasonable reserve
1. Withdrawal in this period
2. Usage in this period
(VII) Other
IV. Balance at the end of the report
283,161,227.00 109,496,837.33 77,391,593.25 -201,873,896.87 268,175,760.71
period
(III) Basic information of the Company
Shenzhen Zhongheng Huafa Co., Ltd. (―the Company‖ for short, but ―the Company (or the Group‘)‖ when
including subsidiaries), previously known as Shenzhen Zhongheng Huafa Co., Ltd. (renamed as set out herein in
this term), is a Sino-foreign joint venture jointly invested and incorporated by such three legal persons as
Shenzhen Electronics Group Co., Ltd. (―SEG‖ for short), China Zhenhua Electronics Group Co., Ltd. (―Zhenhua
Group‖ for short) and Luks Industrial (Group) Limited (―Luks Group‖ for short) on 08 December 1981. In 1991,
the Company was reorganized as a company of limited liabilities by stocks (registered number of the License for a
Corporation Legal Person: Q.G.Y.S.Z.Z.No. 100296 and is changed as 440301501120670 in this term) and made
its IPO in the same year, issuing 53,130,000 shares of RMB common stock with par value 1 Yuan per share,
including 29,630,000 shares of A shares and 23,500,000 shares of B shares. In 1992, the Company launched it‘s A
shares and B shares in Shenzhen Stock Exchange, 53,130,000 shares were tradable and 159,203,000 shares
remaining unlisted.
In November 1996, Luks Group assigned 12% of its shares in the Company, totaling 25,500,000 shares, to SEG
49
Semi-Annual Report 2012
through agreement, which was approved in the reply of Shenzhen Stock Regulatory Office and ceded on 05 March
1997. After such assignment, Luks Group held 25,796,663 shares of the Company, accounting for 12.16% of the
total shares capital, and SEG held 25,500,000 shares of the Company, accounting for 12% of the total shares
capital.
In December 1997, the Company conducted shares allotment program, issuing extra 63,699,895 shares to all
shareholders by the ratio of 10:3 against the total 212,332,989 shares before the allotment, among which,
30,777,997 shares were allotted to domestic corporate shareholders and 3,600,000 shares were subscribed, with
the remaining 27,177,997 shares assigned to public shareholders on paid basis, 15,388,998 shares were allotted to
foreign corporate shareholders and 1,800,000 shares were subscribed with 13,588,998 shares abandoned, and also
9,777,900 shares allotted to public shareholders and 7,755,000 shares to domestic-listed foreign shareholders.
In January 1998, the Company carried out the capital reserve-to-capital program for year 1996, i.e. based on the
total 212,332,989 shares ended 1996, 2 shares will be increased to per 10 shares for all shareholders, and based on
the total 240,701,488 shares ended 1997 after allocation, 1.764 shares will be increased to each 10 shares for all
shareholders.
On 5 January 2001, upon ratification, the increased shares of the Company, totaling 6,394,438 shares, went public
in Shenzhen Stock Exchange.
On 29 May 2001, upon the approval of CSRC, the non-listed foreign capital totaling 62,462,914 shares of the
Company were transferred as listed circulating stock, marking the circulation of entire foreign capital.
On 30 November 2001 and 7 December 2001, Luks Group reduced the B-share of the Company, totaling
14,158,000 shares and 14,159,000 shares respectively. As of 17 December 2001, SEG had aggregately reduced
B-share of the Company totaling 14,487,400 shares, accounting for 5.12% of total shares capital of the Company.
On 6 June 2005, the Company bulletined that original shareholder SEG and China Zhenhua Group assigned the
state-owned corporate capital they held in the Company totaling 124,920,000 shares to Wuhan Zhongheng New
Tech Industry Group Co., Ltd. (―Wuhan Zhongheng‖ for short), which was ratified by the State-owned Assets
Committee, the State Ministry of Commerce and CSRC with relevant assignment procedures completed on 11
April 2007.
On 13 November 2006, the Board of Shareholders of the Company passed the Share Merger Reform Program of
Shenzhen Zhongheng Huafa Co., Ltd. In line the program, Wuhan Zhongheng carried out assets reorganization to
the Company, including bestowing assets and integrating industries covered by the Company, also paying 1.5
shares as consideration for per 10 shares to all A-share shareholders enrolled as at the equity registration day for
the program, totaling 8,435,934 shares which may be tradable since the first business day after the implementation
of the program. On May 18, 2007, the Company accomplished the implementation of consideration of shares in
the share merger reform scheme. As of August 2007, the Company had completed the share merger reform
program with ceding procedures for bestowed assets completed.
As ending at 30 June 2012, the aggregate shares of the Company are 283.16 million shares, among which,
restricted shares total to 116,489,894 shares, accounting for 41.14% of total shares, and unrestricted shares total to
166,671,333 shares, accounting for 58.86% of total shares. Among the unrestricted shares, there are 64,675,497A
shares and 101,995,836 B shares, accounting for 22.84% and 36.02% of total shares respectively.
The business scope: manufacturing & operating each kind of color TV, LCD monitor, LCD screen (subject to
branch offices), hi-fi equipment, digital watch, TV game player and computer as well as auxiliary circuit boards,
precise injection molding ware, light packing materials (manufacturing & operating in Wuhan), hardware
(including molds), electroplate and solder stick, real estate development and operation (ref. S.F.D.C.No. 7226760),
property management. Establish affiliated companies in Wuhan and Jilin, branch offices in each capital city
(excluding Lhasa) and cities directly under jurisdiction of the Central Government.
Its major business is manufacturing and sales of circuit board, processing of precise injection molding ware,
hardware (including molds); property lease and processing and sales of LCD displayer and color TV. The
Company is registered at Block 411, Huafabei Road, Futian District, Shenzhen City; legal representative is Li
Zhongqiu.
The parent company of the Company is Zhongheng Group, and the shareholders meeting is its agency of power,
which executes the decision right on material matter such as operation guidelines, funding, investment and profit
distribution. Board of directors shall answer for shareholders meeting, which implements operation and decision
right of the company according to laws; Managers take charge for organizing and executing the decisions made in
shareholders meeting and board of directors meeting, as well as presiding the production and operation
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management work of the company. The functional management departments include Enterprise Planning
Department, Financial Department, Comprehensive Management Department, Business Center, Video Business
Department, Circuit Panel Business Department, Plastic Injection Business Department, Auditing Department,
Office of Board of Directors etc., the branches include Wuhan branch etc., and subsidiaries mainly include
Shenzhen Huafa Property Lease Management Co., Ltd.(Huafa Property Lease Company), Shenzhen Zhongheng
Huafa Property Co., Ltd.,(Huafa Property) ,Wuhan Hengfa Scientific and Technology Co., Ltd.(Hengfa
Scientific& Technology for short) and Wuhan Zhongheng Huafa Trade Co., Ltd. (Huafa Trade Company) etc.
(IV) Accounting Policies, Accounting Estimates and Errors of previous term
1. Basis Preparation of the Financial Statements
This preparation of the Financial Statements is based on the continual operation of the Company, according to the
actual transaction and event, pursuant to the Corporate Accounting Principles and relevant rules, and grounded on
the accounting policy and estimations stated in Note IV Important accounting policy & estimation and method for
preparation of consolidated financial statements.
2. Statement of Compliance with the Accounting Standards for Business Enterprises
The Financial Statement prepared by the Company complies with the requirements of Business Accounting
Standards, and reflect such information regarding enterprise financial situation, operation result and cash flows,
etc. on the factual and complete basis.
3. Fiscal period
The accounting year of the company is from 1 January to 31 December of the Gregorian calendar year.
4. Currency used in book-keeping
The Company‘s reporting currency is the RMB Yuan.
Book-keeping currency for oversea subsidiary (Non applicable)
5. Accounting treatment of the merging entities under common control and different control
(1) Merger of entities under common control
In a business combination under the same control, the assets and liabilities that the combining party obtains in a
business combination shall be measured on the basis of their carrying amount in the combined party on the
combining date. The additional paid-in capital shall be adjusted according to the balance between the carrying
amount of the net assets obtained by the combining party and the carrying amount of the consideration paid by it;
if the additional paid-in capital is not sufficient to be offset, the retained earnings shall be adjusted.
(2) Business combination not under the same control
In a business combination not under the same control, the combination costs shall be the fair values, on the
acquisition date, of the assets paid, the liabilities incurred or assumed and the equity securities issued by the
acquirer in exchange for the control on the acquiree. The acquirer shall recognize the positive balance between the
combination costs and the fair value of the identifiable net assets it obtains from the acquiree as good will; if the
combination costs are less than the fair value of the identifiable net assets it obtains from the acquiree, it shall
record the balance into the gains and losses of the current period after re-examination.
6. Preparing method of consolidated financial statements
(1) Preparing method of consolidated financial statements
Principles of Recognition of Scope for Consolidation
The Group incorporates those subsidiaries actually controlled and objects with special purpose into the scope of
the Consolidated Financial Statement.
Account Method Adopted in the Consolidated Accounting Statement
The Group has prepared for the Consolidated Financial Statement in line with the Business Accounting Standards
No.33- Consolidated Financial Statement and its relevant regulations, with all key internal trades and transactions
within the scope of consolidation offset. Among the shareholders equity of subsidiaries, the part that does not
belong to the parent company shall be presented under shareholders equity as minority interest in the consolidated
financial statement.
Where the accounting policy or accounting period adopted by subsidiaries and the Company is inconsistent, it
shall make necessary adjustment on subsidiaries‘ financial statements according to the accounting policy or
accounting period adopted by the Company when prepare consolidated financial statement.
As to the subsidiary acquired through business combination not under the same control, when prepare
consolidated financial statement, it shall make adjustment on individual financial statement based on the fair value
of the net assets recognized on the purchasing day; As to the subsidiary acquired through business combination
under the same control, it will be regarded existing since the begin of the year of the current period of
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combination, and its assets, liabilities, operating results and cash flows will be included into the consolidated
financial statement based on its original carrying value since the begin of the year of the current period of
combination.
(2)Disclosure of related accounting method for buy-and-resell or sell-and-repurchase of equities in the same
subsidiary within two successive accounting years
7. Determination criteria of cash and cash equivalent
The cash in the Group‘s cash flow statement is storage cash and deposits available for payment anytime. The cash
equivalents in the cash flow statement are the investment of 3-month-blow holding period, strong mobility, easy
change into the cash of the known sum and slight risk of the value change.
8. Foreign currency business and the conversion of foreign currency statement
(1) Foreign currency transaction
As for the Group‘s foreign currency transaction, the sum in foreign currency is converted into the one in RMB on
market exchange disclosed by People‘s Bank of China at beginning of the month. On the balance sheet day, the
monetary item in foreign currency is converted into the one in RMB on the current rate on the balance sheet day,
and the difference arising is reckoned into the current loss/gain besides the one on the capitalization principled, of
the specific foreign currency borrowing for the construction and production of the assets qualified for
capitalization. As for the non-monetary item in foreign currency and on the fair value measurement, it is converted
into the one in RMB on the current rate on the day of fair value recognition, and the difference arising is directly
reckoned into the current loss/gain as the fair value change. As for the non-monetary item in foreign currency and
on historic cost measurement, is still converted on the current exchange rate on the day of the actual transaction,
without the change in its sum in RMB.
(2) Conversion of financial statement in foreign currency
The assets/liabilities items in the balance sheet in the foreign currency are converted on the current exchange rate
on the balance sheet day; owners‘ equity items besides the ―retained profit‖ are converted on the current exchange
rate on the actual business day; income/expense items in the profit statement are converted on the current
exchange rate disclosed by People‘s Bank of China on the current beginning of the month. The differences arising
from the above conversions of the financial statement in foreign currency is specifically listed in owners‘ equity
items. The foreign currency cash flow is converted on the current exchange rate disclosed by People‘s Bank of
China on the current beginning of the month while cash flow occurred. The cash sum influenced by the fluctuation
of the exchange rate, is listed specifically in the cash flow statement.
9. Financial instruments
The financial instruments refer to the financial assets that form an enterprise and the contract that form the
financial liabilities or equity instruments for other units.
(1) Classification of financial instrument
The Group‘s owned financial assets are divided on the investment purpose and the economic nature into the four
categories as ones measured on the fair value and with its change reckoned into the current loss/gain, the
long-term investment, loan & account receivable, and the tradable ones
As for the financial assets on fair value measurement and with its change reckoned into the current loss/gain, they
are ones mainly for short-term sales and listed as the tradable financial assets in the balance sheet.
As for the long-term investment held maturity, it is non- derivative financial assets of fixed due date, of fixed or
certain recoverable, and of the management‘s identified intention for and capability of holding due.
As for the loan and the account receivable, they are the non-derivative financial assets of no quotation in the
active market, but of a fixed or certain recoverable.
The financial assets available for sale, consist of the non-derivative ones designated as available for sale and other
ones undivided
(2) Recognition basis and measurement method for financial instruments
When the financial assets become one party of financial instrument contract in the Group, confirm according to
fair value in statement of assets and liabilities. As for the financial assets measured by fair value and whose
changes reckon in the current profits and losses, the relevant trading expenses during obtaining should be
reckoned in the current profits and losses, and relevant trading expenses of other financial assets should be
reckoned in initially confirming amount.
As for the financial assets on fair value measurement and with its change reckoned the current loss/gain, and the
financial assets available for sale, are on fair value follow-up measurement; the loan & the account receivable, and
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the long-term investment held maturity are measured on the actual rate and listed on diluted cost.
The fair value change of the financial assets on fair value measurement and with its change reckoned into the
current loss/gain, is reckoned into the loss/gain of the fair value change. The interest or cash dividend obtained
during holding the investment are recognized as the investment return; upon the disposal, the difference between
its fair value and initial book kept sum is recognized as investment loss/gain, and meanwhile the adjustment is
made on the fair value change.
Except exchange gain or loss formed by impairment losses and foreign monetary financial assets, the fair value
changes of financial assets available for sale should be directly reckoned in stockholder's equity, when the
financial assets terminate the confirmation, the accumulated amount of fair value changes originally reckoned in
equity shifts into the current gains and losses. Interests of debt instrument investment available for sale
calculatedly actual interest rate during the holding period and cash dividends related to equity instruments
investment available for sale released by investment units should be reckoned in current profits and losses as
investment income.
Financial assets impairment
(3) Recognition basis and measurement method for transfer of financial assets
The financial assets meet one of following requirements will be terminated recognition: ① The contract rights of
collecting cash flow of the financial assets is terminated; ②The financial assets has already been transferred, and
the Company has transferred almost all risks and remunerations of financial assets ownership to the transferee;
③The financial assets has been transferred, even though the Company has neither transferred nor kept almost all
risks and remunerations of financial assets ownership, the Company has given up controlling the financial assets.
If the enterprise has neither transferred or kept almost all risks and remunerations of financial assets ownership,
nor given up controlling the financial assets, then confirm the relevant financial assets according to how it
continues to involve into the transferred financial assets and confirm the relevant liabilities accordingly. The
degree of keeping involving into the transferred financial assets refers to the risk level with which the fluctuation
of this financial asset value makes the enterprise face.
If the entire transfer of financial assets satisfies the demand for derecognizing, reckon the balance between the
book value of the transferred financial assets and the sum of consideration received from transfer and fluctuation
accumulated amount of fair value formerly reckoned in other consolidated income in the current profits and
losses.
If part transfer of financial assets satisfies the demand for derecognizing, apportion the integral book value of the
transferred financial assets between the derecognized parts and the parts not yet derecognized according to each
relative fair value, and reckon the balance between the sum of consideration received from transfer and fluctuation
accumulated amount of fair value formerly reckoned in other consolidated income that should be apportioned to
the derecognized parts and the apportioned aforementioned carrying amounts in the current profits and losses.
(4) Recognition condition for termination of financial liability
In the initial recognition, the financial liabilities are divided into financial liabilities on the fair value measurement
and with their change reckoned into the current loss/gain, and other financial liabilities.
As for the financial liabilities on the fair value measurement and with their change reckoned into the current
loss/gain, they consist of the tradable liabilities and ones on fair value measurement in the initial recognition and
with their change reckoned into the current loss/gain; the follow-up measurement is taken on them on the fair
value; and the profit or loss from the fair value change and the relevant dividend and the interest, are reckoned
into the current loss/gain.
The follow-up measurement is taken on other financial liabilities on the actual rate and the diluted cost.
When the whole or part of current obligations of financial liabilities has been removed, stop confirming the
removed part of these financial liabilities or obligations. The balance between the book value of the part that has
been terminated and the paying consideration shall be reckoned in the current profits and losses.
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(5) Deciding of fair value of financial assets and financial liabilities
As for the financial instruments that have active market, the market price in active market is used for confirming
its fair value. In the active market, the financial assets held by the Group or financial assets planned to assume
shall take the current bid as the fair value for corresponding assets or liabilities; the financial assets planned to be
purchased or financial assets assumed by the Group shall take the current price as the fair value for corresponding
assets or liabilities. As for the financial assets and financial liabilities that don‘t have current bid or price, and
whose economic environment has no great changes after the nearest trading day, adopt the market price used in
the nearest trading to confirm the fair value of financial assets and financial liabilities. When the economic
environment has great changes after the nearest trading day, refer to the current price or interest rate like financial
assets or financial liabilities, and adjust the market price for the recent trading so as to confirm the fair value of
this financial assets and financial liabilities. When the Group has sufficient evidence to indicate that the nearest
trading market price is not fair value, appropriately adjust the nearest trading market price so as to confirm the fair
value of this financial assets and financial liabilities.
As the financial instrument is not in the active market, the fair value is recognized on the evaluation technology.
The evaluation method consists of the reference to the price in the market transaction between the parties familiar
to the situations and voluntary in the transaction, the reference to the current fair value of other substantially same
financial assets, the conversion of the cash flow, the stock pricing model.
(6) Impairment of financial assets (excluding account receivable)
Except for the financial assets measured by fair value and whose changes are reckoned in the current gains and
losses, the Group shall check the book value of other financial assets on the balance sheet date, if there is
objective evidence indicates that a certain financial asset decreases in value, provision shall be made for
impairment.
When the financial assets calculated by amortized cost decrease in value, count and draw the provision for
impairment according to the balance between present value and book value of predicted future cash flows
(Excluding future credit losses that haven‘t occurred yet.). If there is any objective evidence to indicate that the
financial assets has recovered and is objectively connected with matters occurred after confirming the losses, the
formerly confirmed impairment losses will be reversed and reckoned in current profits and losses.
When the fair value of financial assets available for sale goes down substantially or non- transiently, the
accumulating losses previously and directly reckoned in shareholder's equity and formed due to shrinkage of fair
value will be transferred and reckoned in impairment losses. As for the debt instrument investment available for
sale with confirmed impairment losses, if its fair value rises after and it is objectively connected with matters
occurred after confirming the primary impairment losses, the formerly confirmed impairment losses will be
reversed and reckoned in current profits and losses. And the debt instrument investment available for sale with
confirmed impairment losses shall be directly reckoned in stockholder's equity if its fair value rises after.
(7)As for reclassification of un-matured held-to-maturity investments into financial assets available for sale,
please explain the holding purposes or references for change of ability
a. The deadline for holding the financial assets is not certain
b. When there are market rate changes, liquidity need changes, substitution for investment opportunities, other
invest return rate changes, financing sources and condition changes, and exchange risks, sell this financial assets.
c. The release party of the financial assets can pay off according to the amount obviously lower than the amortized
cost.
d. No available financial resources persistently invest or provide capital support for the financial assets so that the
financial assets investment can be held to maturity.
e. Restricted by laws and regulations, it is hard for the enterprise to hold the financial assets investment to
maturity.
f. Others indicate that the enterprise has no intention or ability to hold the financial assets investment with fixed
term to maturity.
10. Recognition standards and accrual method for bad debt provision for accounts receivable
Bad debt provision for accounts receivable
The following cases are taken as the principle of the recognition of the loss of the bad debts of the account
receivable: due to the cancellation, bankruptcy, insolvency, sever deficiency in the cash flow, and the incidence of
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the fatal natural disaster, the institutional debtor stops and is unable to pay off the debts in the expectable future;
the institutional debtor has not fulfilled its debts payoff over 5 years; other solid evidence show no chance or little
chance of recovery.
Adjust accounts of the possible bad debt losses by adopting allowance method, do impairment test alone or by
combination at the end of period, make provision for bad debt reserve and reckon in current profits and losses. As
for the nonrecoverable accounts receivables with unambiguous evidence, regard as bad debt loss after approved
by the Group according to established procedures, and charge against the provision for bad debt reserve.
(1) Bad debt provision for accounts receivable with single major amount
Regard accounts receivables of non-related party with single
Determine basis or amount standards for single significant amount
amount over 500,000 Yuan as great accounts receivables
Make provision for bad debt reserve according to the balance
withdrawal method for account with single significant amount and
between its present values of future cash flows and its book
withdrawal single item bad debt provision
value
(2) Accounts whose bad debts provision was accrued by combination
Methods on withdrawal of
Combination bad debt provision based on Basis for combination recognized
combination
Divided combination by credit risk characteristic based on age of
Age combination age analysis
account receivable
In combination, accounts whose bad debts provision was accrued by age analysis:
√ Applicable □ non-applicable
Account age Rate for receivables (%) Rate for other receivables (%)
Within 1 year (included) 0% 0%
1－2 years 5% 5%
2－3 years 10% 10%
Over 3 years 30% 30%
3－4 years
4－5 years
Over 5 years 100% 100%
In combination, withdrawal proportion of bad debt provision based on balance proportion:
□applicable √non-applicable
In combination, withdrawal proportion of bad debt provision based on other methods:
□applicable √non-applicable
(3) Accounts with single significant amount and bad debts provision accrued individually
Reasons for withdrawal single item bad debt provision:
As for the accounts receivables whose single amount is not great and bad debt reserve cannot reflect its risk
characteristics by combination provision
Withdrawal method for bad debt provision:
Make provision for bad debt reserve according to the balance between its present values of future cash flows and
its book value
11. Inventories
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(1) Categorizing of inventory
Inventories of the Group include raw materials, packing materials, low-value consuming product, product in
progress and goods in stock etc..
(2) Calculation method of inventory
√ FIFO □Weighted Average □ Specific Identification □ other
The perpetual inventory system is applied to inventories. Purchasing are priced at the actual cost, receiving and
selling raw materials are calculated by first-in first-out method. Low-value consuming goods and packing
materials are amortized by one-off write-off method.
(3) Recognition basis of realizable net value of inventory and providing basis of inventory impairment
provision
At the period end, the inventories at term end shall be priced at the lower one between cost and net realizable
value, the provisions for inventories depreciation shall be drawn against the predicted uncollectible cost caused by
inventories damage, part or entire out-of-fashion or selling price lower than cost. The provisions depreciation of
finished products and large bulk of raw materials shall be drawn against the excess part between the cost of single
inventory item and its net realizable value. The provisions depreciation of the other raw and auxiliary materials
with various kinds and low unit price shall be drawn as per category.
For such stocked goods directly for sales as products in stocks, products in progress and materials for sales, their
net realizable value shall be recognized after deducting the estimated sales expenses and relevant taxes from
estimated sales price of such inventories. For stocked materials for production use, their net realizable value shall
be recognized after deducting estimated cost occurring at completion, sales expenses and relevant tax from
estimated sales price of products to be manufactured.
(4) Inventory system
√Perpetual Inventory System □ Periodic Inventory System □ other
Inventory implemented perpetual system
(5) Amortization of low-value consumables and wrappage
Low-value consumables
Amortization Method: One-time amortize method
Wrappage
Amortization Method: One-time amortize method
12. Long-term equity investment
(1) Recognition of initial investment cost
Long-term equity investment mainly includes the equity investment held by the Group that may produce control,
joint control or significant influence over invested entity, or the equity investment that does not have control, joint
control or significant influence on the invested entity, and has no offer in active market and its fair value cannot be
reliably measured.
If the long-term equity investment is acquired via business merger under the same control, it shall, on the day of
merger, regard the share of the carrying amount of the owner's equity of the merged enterprise as the initial cost of
the long-term equity investment. As for the long-term equity investment acquired via business merge under
different control, the merger cost shall be, the fair values, on the merger (acquiring) date, of the assets given, the
liabilities incurred or assumed, and the equity securities issued by the acquirer, in exchange for the control of the
merged (acquired) enterprise, which will be, on the merger (acquiring) date, further regarded as the initial
investment cost of long-term equity investment.
Apart from the aforesaid long-term equity investment acquired through business merger, those long-term equity
investment, if acquiring through paying cash, shall consider its purchasing price actually paid as the initial
investment cost, which includes expenses, taxes and other necessary expenditure directly related to the acquiring
of the long-term equity investment; if acquired by issuing equity securities, shall consider the fair value of issuing
equity securities as the initial investment cost; if invested by investors, shall consider the value agreed in the
investment contract or agreement as the initial investment cost; if acquiring from debt reorganization or
non-monetary assets exchange, shall confirm the initial investment cost according to the regulation of relevant
accounting rule.
(2) Subsequent measurement and recognition of gains/losses
The investment of the Group to its subsidiaries shall be calculated through cost method and shall be adjusted
through equity method in the Financial Statement; the investment to its associated companies shall be calculated
through equity method; For the long-term equity investment without any control, joint control or serious influence
for which there is no offer in the active market and of which the fair value cannot be reliably measured, the Group
adopts cost method to calculate it; For the long-term equity investment without any control, joint control or
serious influence for which there is offer in the active market and of which the fair value can be reliably measured,
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Semi-Annual Report 2012
the Group shall calculate it under the entry of ―Financial Assets available for Sales‖.
The price of a long-term equity investment measured by employing the cost method shall be included at its initial
investment cost. When calculated by equity method, the loss or profits of current period shall be the attributable or
shareable the net profits or losses of the invested entity in current year. The investing enterprise shall, on the
ground of the fair value of all identifiable assets of the invested entity when it obtains the investment, according to
the accounting policies and period of the Group, offset the loss or profits from internal transaction with joint
enterprise, and calculate the part belonging to the investing enterprise based on the shares holding ration,
recognize the attributable share of the net profits and losses of the invested entity after it adjusts the net profits of
the invested entity.
As for the long-term stock investment of no common control over or significant influence on the invested
organization any longer due to the investment decrease, and of no quotation in the active market and no reliable
measurement on its fair value, it is changed to be on cost check; as for the long-term stock investment of common
control over the invested organization due to the investment addition, it is also changed to be on cost check; as for
the long-term stock investment of the exertion of the common control over or the significant influence on the
invested organization but of no control due to the investment addition, or of no control over the invested
organization any longer but the exertion of the common control or the significant influence on the invested
organization due to the investment disposal, it is changed to be on equity check.
As for the long-term stock investment disposed, the difference between its book value and the price actually
obtained is reckoned into the current loss/gain. As for the long-term stock investment reckoned into the owners‘
equity due to the change in owners‘ equity besides the net loss/gain of the invested organization, its original part
reckoned into the owners‘ equity is transferred into the current investment return on corresponding proportion in
disposal of the investment.
(3) Basis of deciding the common control and major influence on the invested enterprise
Joint control refers to the mutual control to a certain economic activity according to the contract. The evaluation
criteria for point control is that the production and operating activities of cooperative enterprises cannot be
independently controlled by any jointly owned party; the decisions referring to basic operating activities of
cooperative enterprises must be agreed by all jointly owned parties.
Significant impact refers to the rights to participate in the financing and operating policies of the units being
invested, but cannot control the policy-making. The affirmation basis for significant impact is mainly the stock
with voting power of the units being invested, more than 20% (including 20%）but less than 50% of which is
directly held by the Group or indirectly held by the subsidiaries, if theirs is evidence indicates not to participate in
the production and operation policies of the units being invested under this circumstances, then no major impact
will be formed.
(4) Impairment test method and withdrawal method of impairment provision
The Group has, on each reporting day of Balance Sheet, checked the long-term equity investment, fixed assets,
project in progress and intangible assets, etc.. In case of any of the following circumstances, possible impairment
has occurred to assets. We will conduct impairment test at each year end over good will and those intangible assets
without fixed beneficiary term. If difficult to test the recoverable amount of a single asset item, the test may be
applied to the asset group or combined asset group containing such asset.
After an impairment test to an asset, if the book value of such asset exceeds its recoverable amount, the positive
difference shall be recognized as impairment loss. The impairment loss of above assets shall not be reversed in
later accounting period after being recognized. The recoverable amount shall be determined according to the net
amount of the fair value of an asset minus the disposal expenses, and the current value of the expected future cash
flow of the asset, whichever is higher.
The following circumstances may constitute a sign of possible asset impairment:
a. The current market price of an asset declines drastically, and the price drop is obviously higher than the
expected drop over time or due to the normal use;
b. The economic, technological or legal environment in which the enterprise conducts its business operations, or
the market where an asset is situated has or will have any significant change in the current period or in the near
future, and thus has or will have an adverse impact on the enterprise;
c. The market interest rate or any other market investment return rate has risen in the current period, and the
enterprise' calculation of capitalization rate of the current value of the expected future cash flow of the asset is
affected and thus leads to a big fall in the recoverable amount of asset;
d. Any evidence shows that an asset has become obsolete or it has been damaged substantially;
e. An asset has been or will be left unused, or the use of an asset has been or will be terminated, or an asset has
been or will be disposed of ahead of schedule;
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Semi-Annual Report 2012
f. Any evidence in the internal report of the enterprise shows that the economic performances of an asset has been
or will be lower than the expected performances, for example, the net cash flow created by an asset or business
profit (or loss) realized (incurred) an asset is lower (higher) than the excepted amount, etc.; and
g. Other evidence that indicates that asset impairment has probably occurred.
13. Investment real estate
The investment property consists of the land use right leased, the land use right held and to be transferred after
appreciation, and house building leased.
The cost of the investment property is taken as its book value. The cost of investment property purchased includes
purchasing payment, relevant taxes and other expenditures which may be directly ascribed to such assets; the cost
of investment property self-built consists of all actual necessary expenditure of the assets construction before up to
expectant availability.
The follow-up measurement on cost is taken on the investment property; the depreciation is accrued or diluted on
its estimative service life and the net remnant rate and in the average year method. The estimative service life, net
remnant rate and depreciation (dilution) rate are as follows:
Annual depreciation
Type Depreciation year(year) Net estimative remnant rate (%)
rate (%)
Land use right 50 10.00% 1.80%
House building 5—50 10.00% 1.80%—18.00%
In case the property of investment is taken for self-use, such property shall be recorded as fixed assets or
intangible assets since the date of taking. If the self-use property is taken for rent or capital appreciating, such
fixed assets or intangible assets shall be recorded as property of investment since the date of taking. For such
recording, the book value before it shall be taken as the recording value after that.
As the investment property is disposed, or is permanently withdrawn from use and estimated unable to obtain the
economic profit from its disposal, the termination of the recognition of the investment property is available. The
sum of the disposal income from sale, transfer, discarding or break deducting its book value and relevant tax, is
reckoned into the current loss/gain.
14. Fixed assets
(1)Recognition of fixed assets
The fixed assets are ones of all the following characters, namely the tangible assets of 1-year-above service life, of
RMB 2,000-above unit value and held for the goods production, labor supply, lease, or operation & management.
(2) Basis of deciding the fixed assets from financing rental and its calculation
Fixed assets include houses & buildings, machinery equipment, mold equipment, transport equipment, apparatus
equipment, tooling equipment and office equipment. Fixed assets shall be measured at their cost, among which,
the cost of a purchased fixed asset includes the purchase price, VAT, import duties and relevant taxes as well as
other disbursements that bring the fixed asset to the expected conditions for use and that may be attributed to the
fixed asset; the cost of self-constructed fixed assets shall be formed by the necessary disbursements incurred for
bringing the asset to the expected conditions for use. The cost put into fixed assets by the investor shall be
determined according to the value as stipulated in the investment contract or agreement, with the exception of
those of unfair value as is stipulated in the contract or agreement. The costs of fixed assets acquired through
financial leasing shall be determined at an amount equal to the fair value of the leased asset or the present value of
the minimum lease payments, whichever is lower.
The subsequent disbursement relevant to fixed assets mainly composes of repair expense, renovation expense etc.,
where the expenses meet the condition to be recognized as fixed assets, it shall be accrued into cost of fixed assets;
for the substituted part, its book value shall be terminating from recognition; where it does not meet the condition
to be recognized as fixed assets, it shall be accrued into current loss and profit at occurring.
(3) Depreciation of various fixed assets
Besides the capital assets of the sufficient depreciation accrual but in the continual use, and the land specifically
booked, the depreciation of all other capital assets is accrued. The depreciations are accrued in the average year
method, and are respectively reckoned into relevant assets cost or current expense according to their purpose.
Depreciation year
Type Remnant rate (%) Annual depreciation rate (%)
(year)
House building 20-50 years 10.00% 1.80-4.50%
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Machine equipment 10 years 10.00% 9.00%
electronic equipment
Transportation equipment 5 years 10.00% 18.00%
Device equipment 5 years 10.00% 18.00%
Tool equipment 5 years 10.00% 18.00%
Office appliance 5 years 10.00% 18.00%
Mold equipment 3 years 10.00% 30.00%
other equipments
Fixed assts rent-in by financing: -- -- --
Including: Houses & buildings
equipment and machinery
electronic equipment
transportation equipment
other equipments
(4) Impairment test on fixed asset and providing of impairment provision
The Group has, on each reporting day of Balance Sheet, checked the long-term equity investment, fixed assets,
project in progress and intangible assets, etc.. In case of any of the following circumstances, possible impairment
has occurred to assets. We will conduct impairment test at each year end over good will and those intangible assets
without fixed beneficiary term. If difficult to test the recoverable amount of a single asset item, the test may be
applied to the asset group or combined asset group containing such asset.
After an impairment test to an asset, if the book value of such asset exceeds its recoverable amount, the positive
difference shall be recognized as impairment loss. The impairment loss of above assets shall not be reversed in
later accounting period after being recognized. The recoverable amount shall be determined according to the net
amount of the fair value of an asset minus the disposal expenses, and the current value of the expected future cash
flow of the asset, whichever is higher.
The following circumstances may constitute a sign of possible asset impairment:
a. The current market price of an asset declines drastically, and the price drop is obviously higher than the
expected drop over time or due to the normal use;
b. The economic, technological or legal environment in which the enterprise conducts its business operations, or
the market where an asset is situated has or will have any significant change in the current period or in the near
future, and thus has or will have an adverse impact on the enterprise;
c. The market interest rate or any other market investment return rate has risen in the current period, and the
enterprise' calculation of capitalization rate of the current value of the expected future cash flow of the asset is
affected and thus leads to a big fall in the recoverable amount of asset;
d. Any evidence shows that an asset has become obsolete or it has been damaged substantially;
e. An asset has been or will be left unused, or the use of an asset has been or will be terminated, or an asset has
been or will be disposed of ahead of schedule;
f. Any evidence in the internal report of the enterprise shows that the economic performances of an asset has been
or will be lower than the expected performances, for example, the net cash flow created by an asset or business
profit (or loss) realized (incurred) an asset is lower (higher) than the excepted amount, etc.; and
g. Other evidence that indicates that asset impairment has probably occurred.
(5) Other explanation
At the Year-end, the check is taken on the estimative service of, net estimative remnant of and the depreciation
method for the fixed assets and the change is dealt with as the one in the accounting estimation.
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As the fixed assets cannot generate the economic interest by the disposal, or expectantly by use or disposal, the
termination of the recognition is available. For those fixed assts for sale, transfer, and disposal income of discard
or damaged fixed assets, the amount after deducting its book carrying value and relevant taxes, shall reckoned into
current gains/losses.
15. Construction-in-progress
(1) Classification of construction in progress
The project under construction is on the actual cost measurement. The self-operating project shall be measured in
line with direct materials, direct salary and direct construction expenses, etc. The out-contracted project shall be
measured in line with project price payable, etc. Equipment installation project shall determine its cost as per the
occurring disbursements as equipment value, installation charge and project trial running, etc. The cost of project
in progress also includes borrowing costs to be capitalized and exchange loss and profit.
(2) Standards and time while construction in progress transfer to fixed assets
From the day of the project under construction up to the expectant availability, the fixed assets are transferred and
settled on the estimative value according to the project budget, construction price or the actual project cost, and
the depreciation is accrued on the next day, and the inconsistency of the original value is adjusted upon the project
final account.
(3) Method of impairment testing and impairment provision for construction in progress
The Group has, on each reporting day of Balance Sheet, checked the long-term equity investment, fixed assets,
project in progress and intangible assets, etc.. In case of any of the following circumstances, possible impairment
has occurred to assets. We will conduct impairment test at each year end over good will and those intangible assets
without fixed beneficiary term. If difficult to test the recoverable amount of a single asset item, the test may be
applied to the asset group or combined asset group containing such asset.
After an impairment test to an asset, if the book value of such asset exceeds its recoverable amount, the positive
difference shall be recognized as impairment loss. The impairment loss of above assets shall not be reversed in
later accounting period after being recognized. The recoverable amount shall be determined according to the net
amount of the fair value of an asset minus the disposal expenses, and the current value of the expected future cash
flow of the asset, whichever is higher.
The following circumstances may constitute a sign of possible asset impairment:
a. The current market price of an asset declines drastically, and the price drop is obviously higher than the
expected drop over time or due to the normal use;
b. The economic, technological or legal environment in which the enterprise conducts its business operations, or
the market where an asset is situated has or will have any significant change in the current period or in the near
future, and thus has or will have an adverse impact on the enterprise;
c. The market interest rate or any other market investment return rate has risen in the current period, and the
enterprise' calculation of capitalization rate of the current value of the expected future cash flow of the asset is
affected and thus leads to a big fall in the recoverable amount of asset;
d. Any evidence shows that an asset has become obsolete or it has been damaged substantially;
e. An asset has been or will be left unused, or the use of an asset has been or will be terminated, or an asset has
been or will be disposed of ahead of schedule;
f. Any evidence in the internal report of the enterprise shows that the economic performances of an asset has been
or will be lower than the expected performances, for example, the net cash flow created by an asset or business
profit (or loss) realized (incurred) an asset is lower (higher) than the excepted amount, etc.; and
g. Other evidence that indicates that asset impairment has probably occurred.
16. Borrowing expenses
(1) Recognition principle of capitalizing of borrowing expenses
The borrowing costs shall include interest on borrowings, amortization of discounts or premiums on borrowings,
ancillary expenses, and exchange balance on foreign currency borrowings. The borrowing costs incurred to an
enterprise that can be directly attributable to the acquisition and construction or production of assets eligible for
capitalization, shall be capitalized after the asset disbursements have already incurred, the borrowing costs have
already incurred, and the acquisition and construction or production activities which are necessary to prepare the
asset for its intended use or sale have already started; When the qualified asset under acquisition and construction
or production is ready for the intended use or sale, the capitalization of the borrowing costs shall be ceased. The
remaining borrowing costs shall be recognized as expenses in current period.
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(2) Capitalization period
Asset qualified for the capitalization conditions refers to the fixed assets, property of investment and inventory
which must spend long term (usually above 1 year) to purchase, build or produce before reaching expected service
or sales status.
(3) Capitalize cost suspension
Where the acquisition or construction of assets that meet the capitalization conditions is interrupted abnormally
for more than 3 consecutive months, such borrowing costs shall be suspended capitalizing till the acquisition or
construction of the asset restarts.
(4) The calculation method of loan cost capitalization
As for specifically borrowed loans, the to-be-capitalized amount of interests shall be determined in light of the
actual cost incurred of the specially borrowed loan at the present period minus the income of interests earned on
the unused borrowing loans as a deposit in the bank or as a temporary investment. As for the general borrowing, it
calculate and determine the to-be-capitalized amount of interests on the general borrowing by multiplying the
weighted average asset disbursement of the part of the accumulative asset disbursements minus the general
borrowing by the capitalization rate of the general borrowing used.
17. Biological assets
18. Oil/gas assets
19. Intangible assets
(1) Measurement of intangible assets
The intangible assets of the Group include land-use right, patented technologies and non-patented technologies,
etc., and shall be measured according to the actual cost when acquired. The acquired intangible assets, determined
its actual cost by actual payment and relevant other expenditures. The intangible assets invested by investors
shall be recognized its actual cost for value that agreed in investment contract or Agreements; for those values are
agreed without fair value in contract or Agreement, determined actual cost by fair value.
(2) Service life estimation for intangible assets with limited service life
The land-use right shall be averagely amortized based on its useful years since the beginning date of use; the
patented technologies, non-patented technologies and other intangible assets will be averagely amortized by
installments depending the shortest one among predicted service years, benefiting years set out in the contract and
legal effective years. The amortized amount shall be accrued into relevant assets cost and current loss and profit as
per their beneficiary objects.
Item Service life expected Basis
(3) Determination basis for intangible assets with uncertain service life
The Group shall, at the end of each year, check the service life and the amortization method of intangible assets
with limited service life and adjust where appropriate. It shall also check the service life of intangible assets with
uncertain service life during each accounting period, where there are evidences to prove the intangible assets have
limited service life, it shall be estimated of its service life, and be amortized within such estimated life.
(4) Withdrawal of impairment of intangible assets
The Group has, on each reporting day of Balance Sheet, checked the long-term equity investment, fixed assets,
project in progress and intangible assets, etc.. In case of any of the following circumstances, possible impairment
has occurred to assets. We will conduct impairment test at each year end over good will and those intangible assets
without fixed beneficiary term. If difficult to test the recoverable amount of a single asset item, the test may be
applied to the asset group or combined asset group containing such asset.
After an impairment test to an asset, if the book value of such asset exceeds its recoverable amount, the positive
difference shall be recognized as impairment loss. The impairment loss of above assets shall not be reversed in
later accounting period after being recognized. The recoverable amount shall be determined according to the net
amount of the fair value of an asset minus the disposal expenses, and the current value of the expected future cash
flow of the asset, whichever is higher.
The following circumstances may constitute a sign of possible asset impairment:
a. The current market price of an asset declines drastically, and the price drop is obviously higher than the
expected drop over time or due to the normal use;
b. The economic, technological or legal environment in which the enterprise conducts its business operations, or
the market where an asset is situated has or will have any significant change in the current period or in the near
future, and thus has or will have an adverse impact on the enterprise;
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c. The market interest rate or any other market investment return rate has risen in the current period, and the
enterprise' calculation of capitalization rate of the current value of the expected future cash flow of the asset is
affected and thus leads to a big fall in the recoverable amount of asset;
d. Any evidence shows that an asset has become obsolete or it has been damaged substantially;
e. An asset has been or will be left unused, or the use of an asset has been or will be terminated, or an asset has
been or will be disposed of ahead of schedule;
f. Any evidence in the internal report of the enterprise shows that the economic performances of an asset has been
or will be lower than the expected performances, for example, the net cash flow created by an asset or business
profit (or loss) realized (incurred) an asset is lower (higher) than the excepted amount, etc.; and
g. Other evidence that indicates that asset impairment has probably occurred.
(5) Specific standards for classification of research stage and development for R&D projects in the
Company
For those expenses in R&D stage, if meeting the following conditions simultaneously, than recognized as
intangible assets:
a. In respect of the technology, it is feasible to finish the intangible asset for use or sale;
b. It is intended to finish and use or sell the intangible asset;
c. There is a potential market for the products manufactured by applying this intangible asset or that there is a
potential market for the intangible asset itself;
d. With the support of sufficient technologies, financial resources and other resources, it is able to finish the
development of the intangible asset, and it is able to use or sell the intangible asset; and
e. The disbursements attributable to the development of the intangible asset can be reliably measured.
(6) Calculation of expenditure for internal R&D projects
The expenditures for its internal research and development projects of the Company shall be classified into
research expenditures and development expenditures depending on the project property and the degree of
uncertainty of the intangible assets finally brought out. The research disbursements for the internal research and
development project shall be recorded in the profits and losses of the current period;
The development disbursement not meeting the above conditions will be accrued into current loss and profit at
occurring. The development disbursement accrued into loss and profit in previous term will not be recognized as
assets as term thereafter. The development disbursement capitalized will be presented as ―Development
Disbursement‖ in the Balance Sheet and then be brought forward to intangible assets since such project has
reached the expected service status.
20. Amortization method of long-term prepaid expenses
The long-term deferred and prepaid expenses of the Group refers to fitment costs for houses and buildings with
amortization period over a year (exclude 1 year) and for renting offices that have been paid but should be assumed
by the current or later periods , these costs should be equally amortized during the benefit period. If the long-term
deferred and prepaid expenses can not benefit from future accounting time period, shift the amortized value of the
project not yet amortized to current profits and losses.
21. Assets transfer with repurchase condition attached
22. Estimative debts
(1) Recognition standards for estimative debts
In case all the obligations in relation to such contingent items as external guarantee, pending lawsuit or arbitration,
product quality guarantee, staff cutback plan, loss contract, restructuring obligation and fixed assets discarding
obligation, etc. comply with the following conditions simultaneously, the Group will recognize them as liabilities.
Such obligations are constant burdened by the Group; the execution of such obligations will possibly result in the
out-flowing of economic benefit from the Group; the amount of such obligations can be reliably measured.
(2) Measurement method for estimative debts
The predictable liabilities shall be initially measured as per the best estimated amount to be paid for executing
relevant instant obligations in combination with such factors as risk, uncertainty and time value of money
regarding contingent issues. If the time value of money exerts serious effect, the best estimated amount shall be
determined through discounting relevant cash outflows in the future. On the date of Balance Sheet, the Company
shall double check the book value of predictable liabilities and makes adjustment to it so as to reflect the best
estimated amount at present.
23. Shares payment and equity instrument
Share-based payments refer to a transaction in which an enterprise grants equity instruments or undertakes
equity-instrument-based liabilities in return for services from employee or other parties.
The equity-settled share-based payment in return for employee services shall be measured at the fair value of the
equity instruments granted to the employees. As to a equity-settled share-based payment in return for employee
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Semi-Annual Report 2012
services, if the right cannot be exercised until the vesting period comes to an end or until the prescribed
performance conditions are met, then on each balance sheet date within the vesting period, the services obtained
in the current period shall, based on the best estimate of the number of vested equity instruments, be included in
the relevant costs or expenses using straight-line method ,and the capital reserves shall be increased accordingly.
A cash-settled share-based payment shall be measured in accordance with the fair value of liability calculated and
confirmed based on the shares or other equity instruments undertaken by the Company; If the right may be
exercised immediately after the grant, the fair value of the liability undertaken by the Company shall, on the date
of the grant, be included in the relevant costs or expenses, and the liabilities shall be increased accordingly; If the
right may not be exercised until the vesting period comes to an end or until the specified performance conditions
are met, on each balance sheet date within the vesting period, the services obtained in the current period shall,
based on the best estimate of the information about the exercisable right, be included in the relevant costs or
expenses and the corresponding liabilities at the fair value of the liability undertaken by the Company.
On each balance sheet date and on each account date prior to the settlement of the relevant liabilities, the fair
value of the liabilities is measured again and with its change reckoned into the current loss/gain.
(1) Category of shares payment
The share-based payments shall consist of equity-settled share-based payments and cash-settled share-based
payments.
(2) Recognition method for fair-value of equity instrument
Equity Instruments refer to the contract which may proves holding all remain equity of the Company after
deducting all liabilities. During business combination, the transactional expenses for issuing the equity instrument
by combining party offset the premium revenue of equity instruments, if it is not enough to offset, reduce the
reserve profits. Other equity instruments, the consideration received at issuing will increase shareholder‘s equity
after deducting transactional expenses. The consideration and transactional expenses paid for purchasing back the
equity instruments will decrease shareholder‘s equity. It will not recognize profits and losses when issuing,
purchasing back, selling or writing off the equity instruments.
The distribution (excluding dividend) to the party who owns the equity instrument by the Company shall decrease
shareholder‘s equity. The Company does not recognize the change of fair value of equity instruments.
(3) The basis for confirming the vested equity instruments as the best estimation
During the waiting period, make the best estimation according to the follow-up information such as the latest
vested employee number changes obtained on each balance sheet date, and revise the quantity of predicted vested
equity instruments.
(4) Accounting treatments related to implementing, modifying and terminating the share-based payment
a. Implementation of share-based payment
Exchange the share-based payment of settled by rights and interests for fair value measurement for granting equity
instruments and providing services for the staff. Pay immediately based on the shares settled by rights and
interests for those have vesting and exchange for staff services after grant, reckon in the relevant costs or expenses
on the grant date according to the fair value of equity instruments, and correspondently increase capital reserves.
As for the share payments based on rights and interests settlement that complete the services during waiting
period and exchange for staff services with specified performances as the vesting condition, on each balance sheet
date during the waiting period, based on the best estimate to the quantity of vesting equity instruments, reckon the
services obtained at the current period in the relevant costs or expenses and capital reserves according to the fair
value of equity instruments on the grant date. On balance sheet date, as for the follow-up information indicates
that the quantity of vesting equity instruments is different to the estimated one, adjust to the quantity of actual
vesting equity instruments on vesting date. As for the share payments whose vesting conditions is during the
formulated service period, the waiting period is during the grant date to vesting date; as for the share payments
whose vesting conditions is the formulated performances, predict the waiting period on the grant date according to
the most possible performance. The enterprise shall not adjust the confirmed amount of relevant costs or expenses
and owner's equity after the vesting date.
Exchange the share-based payments by rights and interests settlement for other services:
As for the fair value of other services that can be reliably measured, reckon in the relevant costs or expenses
according to the fair value of other services on the grant date, and correspondently increase owner's equity. As for
the fair value of other services that can not be reliably measured but the fair value of equity instruments can be
reliably measured, reckon in the relevant costs or expenses according to the fair value of equity instruments on the
service grant date, and correspondently increase owner's equity. On the vesting date, the enterprise calculates the
amount that confirmed to be rolled in paid-in capital or share capital according to the actual quantity of vesting
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Semi-Annual Report 2012
equity instruments, and rolls it in the paid-in capital or share capital.
Share-based payment settled by cash
Measure according to the indebted fair value confirmed by calculating on the basis of shares or other equity
instruments that assumed by the enterprise. As for share-based payments settled by cash and with immediate
vesting after grant, reckon in the relevant costs or expenses according to the indebted fair value assumed by the
enterprise on the grant date, and correspondently increase liabilities. As for share-based payments settled by cash
and with specified performances as the vesting condition, on each balance sheet date during the waiting period,
based on the best estimate to the quantity of vesting equity instruments, reckon the services obtained at the current
period in the relevant costs or expenses and capital reserves according to the fair value amount of liabilities
assumed by the enterprise. On balance sheet date, as for the follow-up information indicates that the fair value
assumed by the enterprise is different to the estimated one, adjust to the actual vesting level on vesting date. The
enterprise shall re-measure the fair value of liabilities and reckon its changes in current profits and losses on each
balance sheet date or account day before relevant liabilities settlement.
b. Modification of share-based payment
The modification increases the fair value for granted equity instruments, so correspondently confirm the increase
of services according to the increase in fair value of equity instruments. As for the modification during waiting
period, the fair value obtained services during the confirmed modification date to vesting date after modification,
including not only the service amount confirmed on the basis of fair value on grant date of original equity
instrument during the remaining waiting period, but also the increase in fair value of equity instruments. As for the
modification after the vesting date, immediately confirm the increase in fair value of equity instruments. If the
share-based payment requires that the staff can only obtain the modified equity instruments after completing
longer services, confirm the increase in fair value of equity instruments during the whole waiting period. The
modification increases the quantity of granted equity instruments, and correspondently confirms the increase in
fair value of equity instrument to be the increase of obtained services. As for the modification during waiting
period, and the fair value obtained services during the confirmed modification date to vesting date of increased
equity instruments, including not only the service amount confirmed on the basis of fair value on grant date of
original equity instruments during the remaining waiting period, but also the increase in fair value of equity
instruments. If modify the vesting conditions by a way which is in favor of the staff, such as shortening the
waiting period, changing or canceling the performance conditions (non-market conditions)，consider the vesting
conditions after modification when handing vesting conditions. If the modification decreases the fair value of
granted equity instruments, continue to confirm the amount of the obtained services on the basis of fair value on
grant date of equity instruments, but not consider the decrease in fair value of equity instruments. If the
modification decreases the quantity of granted equity instruments, take the decreased part as the cancellation for
the granted equity instruments. If modify the vesting conditions by a way which goes against the staff, such as
lengthening the waiting period, changing or increasing the performance conditions (non-market conditions)，don‘t
consider the vesting conditions after modification when handing vesting conditions.
c. Termination of share-based payment
Handle the cancellation or settlement as accelerated vesting, and immediately affirm the amount which should be
affirmed during the remaining waiting period. All payments paid to the staff should be handled as buy-back of
rights and interests during cancellation or settlement, the amount paid for buy-back which is higher than the fair
value of equity instrument on buy-back date should be reckoned in current expenses. As for those new equity
instruments granted to the staff and the granted new equity instruments that are affirmed to be used to substitute
for the cancelled equity instruments on new equity instruments grant date, the enterprise should handle the granted
substitution equity instruments by the same items and conditions used for handling the original equity instruments.
If the enterprise buys back the feasible equity instruments of the staff, debits owner's equity, the amount paid for
buy-back should be higher than the fair value of equity instruments on buy-back date and reckoned in the current
expenses.
24. Shares of the Company repurchased
25. Income
(1) Detail judgment standards for recognition of selling goods revenue
When the Group has transferred the significant risks and rewards of ownership of the goods to the buyer; the
Group retains neither continuous management right that usually keeps relation with the ownership nor effective
control over the sold goods; The relevant amount of revenue can be measured in a reliable way; The relevant
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Semi-Annual Report 2012
economic benefits may flow into the enterprise; The relevant costs incurred or to be incurred can be measured in a
reliable way, it may recognize the realization of revenue.
(2) Recognition of revenue of assets using right abalienation
The revenue from alienating of right to use assets may be recognized on the condition that the relevant economic
benefits are likely to flow into the Company and the amount of revenues can be measured in a reliable way.
(3) Recognition basis and method of construction progress completion while recognize revenue from labor
service providing and from construction contract by percentage of completion method
When total revenue and total cost from labor service can be measured in a reliable way; the relevant economic
benefits are likely to flow into the enterprise; the schedule of completion under the transaction can be confirmed
in a reliable way; it may recognize the realization of revenue from labor service. On the date of Balance Sheet,
where the result of a transaction concerning the providing of labor service can be measured in a reliably way, it
shall recognize relevant revenue according to the schedule of completion; where the result of a transaction
concerning the providing of labor service cannot be measured in a reliably way and the cost of labor services
incurred is expected to be compensated, the revenue from the providing of labor services shall be recognized in
accordance with the amount of the cost of labor services incurred, and the cost of labor services shall be carried
forward at the same amount; where the result of a transaction concerning the providing of labor service cannot be
measured in a reliably way and the cost of labor services incurred is not expected to compensate, the cost incurred
should be included in the current profits and losses, and no revenue from the providing of labor services may be
recognized.
26. Government Subsidies
(1) Category
The government grant may be recognized on the condition that the Group complies with the conditions for the
government grant and that the Group can receive the government grant. If a government grant is a monetary asset,
it shall be measured on the basis of the amount received, or that receivable if such grant is appropriated as fixed
quota standard. If a government grant is a non-monetary asset, it shall be measured at its fair value or at its
nominal amount (1 Yuan) if its fair value cannot be obtained reliably.
(2) Accounting treatment
A government grant pertinent to assets shall be recognized as deferred income, equally distributed within the
useful lives of the relevant assets, and included in the current profits and losses. The government grant pertinent to
incomes, if used for compensating the related future expenses or losses of the Company, shall be recognized as
deferred income and shall include in the current profits and losses during the period when the relevant expenses
are recognized; or if used for compensating the related expenses or losses incurred to the Company, shall be
directly included in the current profits and losses.
27. Deferred income tax assets and deferred income tax liabilities
(1) Recognition basis for deferred income tax assets
The deferred income tax assets and deferred income tax liabilities shall be priced at the difference (temporary
difference) between the tax base of assets and liabilities and their book value. For any deductible loss or tax
deduction that can be carried forward to the next year, the corresponding deferred income tax asset shall be
determined to the extent that the amount of future taxable income to be offset by the deductible loss or tax
deduction to be likely obtained. On the balance sheet date, the deferred income assets and deferred income tax
liabilities shall be measured at the tax rate applicable to the period during which the assets are expected to be
recovered or the liabilities are expected to be settled.
The Company shall recognize the deferred income tax assets arising from a deductible temporary difference to the
extent of the amount of the taxable income which it is most likely to obtain and which can be deducted from the
deductible temporary difference. For the determined deferred income tax assets, if it is unlikely to obtain sufficient
taxable income to offset against the benefit of the deferred income tax asset, the carrying amount of the deferred
income tax assets shall be written down. Any such write-down should be subsequently reversed where it becomes
probable that sufficient taxable income will be available.
(2) Recognition basis for deferred income tax liability
Deferred income tax liability of the Company are recognized as the difference (taxation temporary difference)
between the taxation basis of assets and liability and their book values; measuring deferred income tax assets and
deferred income tax liability on applicable tax rate in liquidation period for the above liability on balance sheet
date
28. Operation leasing, financing leasing
(1) Accounting treatment of operation leasing
The Group classifies a lease as a financing lease and an operating lease on the lease beginning date.
Financing lease refers to a lease that has transferred in substance all the risks and rewards related to the ownership
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Semi-Annual Report 2012
of an asset. On the lease beginning date, the Group as lessee shall record the lower one of the fair value of the
leased asset and the present value of the minimum lease payments on the lease beginning date as the entering
value in an account, recognize the amount of the minimum lease payments as the entering value in an account of
long-term account payable, and treat the balance between the recorded amount of the leased asset and the
long-term account payable as unrecognized financing charges.
(2) Accounting treatment of financing leasing
Operating lease refers to a lease other than a financing lease. Where the Group is lessee, the rents shall be
recorded in the relevant asset costs or the profits and losses of the current period by using the straight-line method
over each period of the lease term. Where the Group is lesser, the rents shall be recorded in the profits and losses
of the current period by using the straight-line method over each period of the lease term.
29. Assets held for sales
(1) Recognition of assets held for sales
(1) The confirmation standard of holding assets available for sale
The non-current assets that satisfy below conditions at the same time are divided into available for sale assets:
decision has been made for handling the non-current assets; irrepealably assignment agreement has been signed
with transferee; this assignment shall be completed in one year.
Handle other non-current assets such as intangible assets meet the demands for assets available for sale according
to above principles, but excluding deferred income tax assets, financial assets fit the standards of , investment
real estate and biological assets measured by fair value, or contract rights generated from insurance contracts.
(2) Accounting treatment of assets held for sales
Roll out this part of assets from non-liquid asset as current assets, stop depreciation or amortization, measure by
using book value and fair value to deduct selling expenses. The amount of book value which is higher than fair
value deducting selling expenses reckons in the current profits and losses.
30. Assets securitization
31. Hedge accounting
32. Changes of major accounting policies and accounting estimation
Whether there have changes of major accounting policies and accounting estimation in report period or not
□ Yes √ No □Non applicable
(1) Changes in accounting policies
Whether have changes in accounting policies in report period
□ Yes √ No □Non applicable
(2) Changes in accounting estimates
Whether have changes in accounting estimates in report period
□ Yes √ No □Non applicable
33. Error correction of previous accounting
Whether has error correction of previous accounting occurred in this period?
□ Yes √ No □Non applicable
(1) Retrospective Restatement
Is there has errors of previous accounting adopt retrospective restatement in this period
□ Yes √ No □Non applicable
(2) Prospective Application
Is there has errors of previous accounting adopt retrospective restatement in this period
□ Yes √ No □Non applicable
34. Other major accounting policy, accounting estimation and preparation method for financial statement
(V) Taxations
1. The types of tax applicable to the Company, and their tax rates
Type Tax base Rate
VAT Sales amount domestically 17%
Consumption tax
Operation tax Taxable labor operation amount 5%
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Semi-Annual Report 2012
City maintaining & construction tax Taxable turnover amount 7%
Corporation income tax Taxable income tax for enterprise 25%
The income tax rates applicable to each Branch Company or plant
Main tax and tax rate applicable to Group as follows:
Corporate income tax: applicable tax rate for corporate income tax of the Group, vary branch and subsidiary was
25%;
Value-added tax: The value-added tax is applicable to the Group‘s goods sales income, among which, the output
rate of domestic-sales goods is 17%.
As the input value-added tax paid for the raw materials purchase, can deduct the output tax, the rate is 17%,
among which, the rebate is applicable to the input tax paid for the export goods.
Taxable value-added tax is the balance of the current output tax deducting the current input tax.
Operation income: The operation income is applicable to the Group‘s lease income, and the applicable rate is 5%.
Extra charges of, city planning tax and educational expenses: The city planning tax and educational expenses
extra were levy on payable turn-over taxes for the Company and its all subsidiaries with applicable rate of 7% and
3% respectively since 1 December 2010.
Housing property tax: The 70% of the previous value of the housing property is taken as the taxation basis, with
the 1.2% tax rate.
2. Tax preference and approvals
3. Other explanation
(VI) Enterprise consolidation and consolidated financial statements
General explanation for enterprise consolidation and consolidated financial statement:
Business combinations refer to a transaction or event bringing together two or more separate enterprises into one
reporting entity. The Group confirms the acquired assets and liabilities due to business combinations on the
combining date or purchasing date. Combining date refers to the date on which the combining party actually
obtains control on the combined or purchased party.
In a business combination under the same control, the assets and liabilities that the combining party obtains in a
business combination shall be measured on the basis of their carrying amount in the combined party on the
combining date. The additional paid-in capital shall be adjusted according to the balance between the carrying
amount of the net assets obtained by the combining party and the carrying amount of the consideration paid by it;
if the additional paid-in capital is not sufficient to be offset, the retained earnings shall be adjusted.
In a business combination not under the same control, the combination costs shall be the fair values, on the
acquisition date, of the assets paid, the liabilities incurred or assumed and the equity securities issued by the
acquirer in exchange for the control on the acquiree. The acquirer shall recognize the positive balance between the
combination costs and the fair value of the identifiable net assets it obtains from the acquiree as good will; if the
combination costs are less than the fair value of the identifiable net assets it obtains from the acquiree, it shall
record the balance into the gains and losses of the current period after re-examination.
The Group has prepared for the Consolidated Financial Statement in line with the Business Accounting Standards
No.33- Consolidated Financial Statement and its relevant regulations, with all key internal trades and transactions
within the scope of consolidation offset. Among the shareholders equity of subsidiaries, the part that does not
belong to the parent company shall be presented under shareholders equity as minority interest in the consolidated
financial statement.
Where the accounting policy or accounting period adopted by subsidiaries and the Company is inconsistent, it
shall make necessary adjustment on subsidiaries‘ financial statements according to the accounting policy or
accounting period adopted by the Company when prepare consolidated financial statement.
As to the subsidiary acquired through business combination not under the same control, when prepare
consolidated financial statement, it shall make adjustment on individual financial statement based on the fair value
of the net assets recognized on the purchasing day; As to the subsidiary acquired through business combination
under the same control, it will be regarded existing since the begin of the year of the current period of
combination, and its assets, liabilities, operating results and cash flows will be included into the consolidated
financial statement based on its original carrying value since the begin of the year of the current period of
combination.
67
Semi-Annual Report 2012
1. Subsidiary
(1) Subsidiary obtained by establishment or investment
Unit: RMB
Stateme
The balance after the parent
nts company‘s owner‘s equity writing
Amount in minority
Holdin Voting Minorit down the excess of the current loss
Currenc Balance of other combin interest used for
Registratio Business Investment amount g right y undertaken by minority
Name Type Registered capital Business scope items materially writing down
n place nature y actual at period-end proporti proporti ed or interest shareholders of the subsidiary over
forming net minority gain and
on (%) on (%) the share enjoyed by minority
investment to not loss
shareholders in the original
subsidiary
owner‘s equity of the subsidiary
Shenzhen
Huafa Property leasing and
Limited Property
Property Lease Shenzhen 1,000,000.00 CNY management of 600,000.00 600,000.00 60% 60% Yes
Liability Management
Management self-owned property
Co., Ltd.
Shenzhen
Zhongheng Property leasing and
Limited Property
Huafa Shenzhen 1,000,000.00 CNY management of 1,000,000.00 1,000,000.00 100% 100% Yes
Liability Management
Property Co., self-owned property
Ltd.
Wuhan Hengfa production and sale
Science&Tech Limited Production of packing material
Wuhan 181,643,111.00 CNY 181,643,111.00 181,643,111.00 100% 100% Yes
nology Co., Liability and Sale and plastic products
Ltd. etc.
Wuhan Sales of
Zhongheng Limited Photoelectricity
Wuhan Sale 100,000.00 CNY 100,000.00 100,000.00 100% 100% Yes
Huafa Trade Liability products, Imp&Exp
Co., Ltd. business of goods
Other explanation on subsidiary obtained by establishment or investment:
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Semi-Annual Report 2012
(2) Subsidiaries acquired by business combination under the common control
Unit: RMB
Balance between the
owners‘ equity in
parent offsetting the
Balance of current losses
other items Amount in attributable to
which minority minority
Actual
actually Consolidated interest sharehoders of
Name of Type of Registered Business Registered Business investment Holding Voting Minority
Currency constitutes statement available to subsidiaries over the
subsidiary subsidiary place nature capital scope amount at proportion% proportion% interests
net Yes/No offset minority share of beginning
period-end
investment gains and owner‘s equity in
in losses such subsidiaries by
subsidiaries the minority
shareholders
N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Other explanation for subsidiaries acquired by business combination under the common control:
(3) Subsidiaries acquired by business combination not under the common control
Unit: RMB
Balance between
the owners‘ equity
in parent offsetting
the current losses
Balance of other attributable to
Amount in
Actual items which minority
Consolidated minority interest
Name of Type of Registered Business Registered Business investment actually Holding Voting Minority sharehoders of
Currency statement available to
subsidiary subsidiary place nature capital scope amount at constitutes net proportion% proportion% interests subsidiaries over
Yes/No offset minority
period-end investment in the share of
gains and losses
subsidiaries beginning owner‘s
equity in such
subsidiaries by the
minority
shareholders
N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Other explanation for subsidiaries acquired by business combination not under the common control:
69
Semi-Annual Report 2012
2. Special purposes entity or operation entity where controlling right is formed under
entrusted operation or leasing
□ Applicable √ Non-applicable
Other explanation for special purposes entity or operation entity where controlling right is formed
under entrusted operation or leasing:
3. Explanation for changes in consolidation scope
Explanation for changes in consolidation scope:
□ Applicable √ Non-applicable
4. Entities newly included in consolidate scope during the reporting period and entities ceasing to be
included in consolidate scope during the reporting period
Subsidiaries, special purposes entities, operation entity where controlling right is formed under
entrusted operation or leasing newly included in consolidation scope during the period
Unit: RMB
Name Net assets as at period-end Net profit for the period
N/A N/A N/A
Subsidiaries, special purposes entities, operation entity where controlling right is formed under
entrusted operation or leasing ceasing to be included in consolidation scope during the period
Unit: RMB
Net profit from the year-begin
Name Net assets as at the disposal date
to the disposal date
N/A N/A N/A
Other explanation on entities newly included in consolidation scope and entities ceasing to be
included in consolidation scope:
5. Business combination under the common control during the reporting period
Unit: RMB
Consolidated
Basis for Consolidated
Consolidated net operating
determination of income for the
Actual controller profit from this activities cash
Party to be business period from the
under the period to flow from this
consolidated combination period-begin to
common control consolidation period to
under the consolidation
date consolidation
common control date
date
N/A N/A N/A N/A N/A N/A
Other explanation for business combination under the common control:
6. Business combination not under the common control during the reporting period
Unit: RMB
Party to be consolidated Amount of goodwill Calculation method for goodwill
N/A N/A N/A
Other explanation for business combination not under the common control:
7. Loss of subsidiaries due to disposal of equity interests without controlling rights during the
reporting period
Subsidiary Disposal date Recognition method for gains and
70
Semi-Annual Report 2012
losses
N/A N/A N/A
Other explanation for loss of subsidiaries due to disposal of equity interests without controlling
rights
8. Counter purchase occurred during the reporting period
Calculation method for
goodwill recognized in
Basis for determination of Determination method for consolidation or recorded
Backdoor
counter purchase consolidated costs in current gains and losses
N/A N/A N/A N/A
Other explanation for counter purchase:
9. Absorption consolidation occurred during the reporting period
Unit: RMB
Types of absorption consolidation Major assets consolidated Major liabilities consolidated
Absorption consolidation under common
Item Amount Item Amount
control
N/A N/A N/A N/A N/A
Absorption consolidation not under
Item Amount Item Amount
common control
N/A N/A N/A N/A N/A
Other explanation for absorption consolidation:
10. Translation exchange rates for items in major statements of overseas operating entities
(VII) Notes to major items in consolidated financial statements
1. Monetary capital
Unit: RMB
Amount at period-end Amount at period-beginning
Item Excha
RMB Original Exchange
Original currency nge RMB conversion
conversion currency rate
rate
Cash: -- -- 545,081.48 -- -- 228,112.79
RMB -- -- 492,745.65 -- -- 176,052.82
HKD 53,134.42 0.82 43,330.59 53,134.43 0.81 43,098.39
USD 1,422.45 6.33 9,005.24 1,422.45 6.3 8,961.58
Bank deposits: -- -- 230,429,793.64 -- -- 107,516,615.58
RMB -- -- 209,757,114.14 -- -- 45,362,799.71
HKD 114,404.58 0.82 93,295.79 114,393.52 0.81 92,786.86
USD 3,253,445.34 6.33 20,579,383.71 9,849,552.68 6.3 62,061,029.01
Other monetary
-- -- 22,779,354.12 -- -- 13,519,104.28
capital:
RMB -- -- 22,779,354.12 -- -- 13,519,104.28
HKD 0.81
USD 3,200,000.00 6.3 20,162,880.00
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Semi-Annual Report 2012
Total -- -- 253,754,229.24 -- -- 141,426,712.65
Separate explanation is required for accounts with restricted application purposes, deposited
overseas and of potential recovery risks arising from pledge, mortgage or frozen:
Balance of other monetary fund mainly was the margin of note payable and short-term loans.
2. Transactional financial assets
(1) Transactional financial assets
Unit: RMB
Item Fair value as at period-end Fair value as at period-begin
Transactional debt investments — —
Transactional equity instrument investments — —
Financial assets designated at fair value through
— —
profit and losses
Derivative financial assets — —
Hedge instruments — —
Others — —
Total
(2) Realization of restricted transactional financial assets
Unit: RMB
Other significant restrictions on restriction
Item Amount as at period-end
conditions for sale or realization
N/A N/A N/A
(3) Explanation for hedge instruments and related hedge transactions
3. Notes receivables
(1) Classification of notes receivables
Unit: RMB
Types Amount at period-end Amount at period-begin
Bank acceptance bill 22,025,793.71 56,540,214.07
Commercial acceptance bill 4,228,109.36 2,718,362.52
Total 26,253,903.07 59,258,576.59
(2) Notes receivables pledged at period-end
Unit: RMB
Issuer Issue date Expiring date Amount Notes
Hefei Haier Logistic Co.,
2012-03-20 2012-09-20 30,597.64 Hankou Bank pledge
Ltd.
Qingdao Haier Part
2012-04-16 2012-10-16 25,413.99 Hankou Bank pledge
Purchasing Co., Ltd.
72
Semi-Annual Report 2012
Qingdao Haier Part
2012-04-16 2012-10-16 33,940.30 Hankou Bank pledge
Purchasing Co., Ltd.
Qingdao Haier Part
2012-04-16 2012-10-16 47,183.76 Hankou Bank pledge
Purchasing Co., Ltd.
Qingdao Haier Part
2012-04-16 2012-10-16 80,570.66 Hankou Bank pledge
Purchasing Co., Ltd.
Qingdao Haier Part
2012-04-16 2012-10-16 199,755.78 Hankou Bank pledge
Purchasing Co., Ltd.
Qingdao Haier Part
2012-04-16 2012-10-16 2,437,426.60 Hankou Bank pledge
Purchasing Co., Ltd.
Hefei Haier Logistic Co.,
2012-04-20 2012-10-19 889,865.40 Hankou Bank pledge
Ltd.
Qingdao Haier Part
2012-06-15 2012-12-14 7,514,541.36 Hankou Bank pledge
Purchasing Co., Ltd.
Total -- -- 11,259,295.49 --
Explanation:
(3)Transfer of notes to notes receivable due to the issuer’s impossibility to perform its
obligations, and unmatured notes endorsed to others by the Company as at the period-end
Unit: RMB
Issuer Issue date Expiring date Amount Notes
N/A N/A N/A N/A N/A
Total -- -- --
Explanation:
Unmatured notes endorsed to others by the Company
Unit: RMB
Issuer Issue date Expiring date Amount Notes
N/A N/A N/A N/A N/A
Total -- -- --
Explanation for commercial acceptance notes discounted or pledged: Nil
4. Dividend receivables
Unit: RMB
Amount at Increase in this Amount at
Items Decrease in this period
period-begin period period-end
Dividend receivables
N/A N/A N/A N/A
aging within 1 year
Including:
Dividend receivables
N/A N/A N/A N/A
aging over 1 year
Including: -- -- -- --
Total
73
Semi-Annual Report 2012
Explanation:
5. Interests receivables
(1) Interests receivables
Unit: RMB
Amount at Increase in this Decrease in this
Items Amount at period-end
period-begin period period
N/A N/A N/A N/A N/A
Total
(2)Overdue interests
Unit: RMB
Loan provider Times overdue (days) Overdue interests
N/A N/A N/A
Total --
(3)Explanation for interest’s receivables
6. Account receivables
(1) Classified by categories
Unit: RMB
Amount at period-end Amount at period-begin
Book balance Bad debt reserve Book balance Bad debt reserve
Categories
Proporti Proportio Proportion Proportion
Amount Amount Amount Amount
on (%) n (%) (%) (%)
Account receivable with single
significant amount and
111,917,782.40 86.09% 5,758,937.93 5.15% 6,404,866.28 6.72% 4,533,611.78 70.78%
withdrawal bad debt provision
separately
Account receivable of bad debt provision withdrawal by combination
Account receivable with minor
single amount but has more risk
12,959,171.63 9.97% 106,041.21 0.82% 83,787,920.85 87.91% 106,041.21 0.13%
after credit risk characteristic
combination
Subtotal of group 12,959,171.63 9.97% 106,041.21 0.82% 83,787,920.85 87.91% 106,041.21 0.13%
Account receivable with single
minor amount but withdrawal 5,116,838.00 3.94% 5,116,838.00 100% 5,116,838.00 5.37% 5,116,838.00 100%
bad debt provision singelly
Total 129,993,792.03 -- 10,981,817.14 -- 95,309,625.13 -- 9,756,490.99 --
Explanation for category of account receivables/A
Account receivable with single significant amount and withdrawal bad debt provision separately
√ Applicable □ Non-applicable
Unit: RMB
Contents of account receivables Book balance Bad debt provision Provision proportion Reason for provision
Qingdao Haier Part Purchasing Co., Ltd. 58,104,870.92 1,225,326.15 2.11% Checking difference
74
Semi-Annual Report 2012
s
Hong Kong Yutian International
25,313,691.63 —
Investment Co., Ltd.
TCL Air –conditioner (Wuhan) CO., Ltd. 7,185,839.25 —
Hefei Haier Logistic Co., Ltd. 5,312,096.01 —
Gree 3,424,088.99 —
Wuhan Branch of Hefei East China
2,603,532.21 —
Package Co., Ltd.
Shenzhen Boteman Bowling Club
2,555,374.75 2,555,374.75 100% unable to recover
Co. ,Ltd.
HORACE INDUSTRIAL LTD. 1,870,887.18 187,088.72 10% By age
Wuhan Yintai Technology 1,817,556.53 —
Guanjie Display Technology
1,751,240.58 —
(Wuhan)Co., Ltd.
TCL (Huizhou) Co., Ltd. 1,325,431.75 1,325,431.75 100% unable to recover
Skyworth Multimedia (Shenzhen) Co.,
653,172.60 465,716.56 71.3% unable to recover
Ltd.
Total 111,917,782.40 5,758,937.93 --
Account receivable provided for bad debt reserve under aging analysis method in the groups:
√ Applicable □ Non-applicable
Unit: RMB
Amount at period-end Amount at period-begin
Book balance Book balance
Aging
Proportio bad debt reserve Proportio bad debt reserve
Amount Amount
n (%) n (%)
within 1 year
Including: -- -- -- -- -- --
within 1 year 12,600,561.27 83,429,310.49
Subtotal of
12,600,561.27 0% 0.00 83,429,310.49 0% 0.00
within 1 year
1-2 years 1,792.00 5% 89.60 1,792.00 5% 89.60
2-3 years 5,021.50 10% 502.15 5,021.50 10% 502.15
Over 3 years 351,796.86 30% 105,449.46 351,796.86 30% 105,449.46
3-4 years
4-5 years
Over 5 years
Total 12,959,171.63 -- 106,041.21 83,787,920.85 -- 106,041.21
Account receivables provided for bad debt reserve under balance percentage method in the groups:
□Applicable√ Non-applicable
Account receivables provided for bad debt reserve under other method in the groups:
□Applicable√ Non-applicable
Account receivable with single minor amount but withdrawal bad debt provision separately as at period-end
√ Applicable □ Non-applicable
Unit: RMB
Contents of account
Book balance Bad debt provision Provision proportion Reason for provision
receivables
75
Semi-Annual Report 2012
Shenzhen Huixin Video
381,168.96 381,168.96 100% Over 5-year book age
Technology Co., Ltd.
Shenzhen Wondial Number
Science & Technology Co., 351,813.70 351,813.70 100% Over 5-year book age
Ltd.
Shenzhen Tianlong Electronic
344,700.00 344,700.00 100% Over 5-year book age
Co., Ltd.
Shenzhen Qunping Electronic
304,542.95 304,542.95 100% Over 5-year book age
Co., Ltd.
China Galaxy Electronic
288,261.17 288,261.17 100% Over 5-year book age
(HK) LTD
Dongguan Weite Electronic
274,399.80 274,399.80 100% Over 5-year book age
Co., ltd.
Hong Kong New Century
207,409.40 207,409.40 100% Over 5-year book age
Electronic Co., Ltd.
Shenyang Beitai Electronic
203,304.02 203,304.02 100% Over 5-year book age
Co., Ltd.
Beijing Xinfan Weiye
193,000.00 193,000.00 100% Over 5-year book age
Technology Co., Ltd.
TCL Electronic (HK) Co.,
145,087.14 145,087.14 100% Over 5-year book age
Ltd.
Huizhou TCL Xinte
142,707.14 142,707.14 100% Over 5-year book age
Electronic Co., Ltd.
Shenzhen Skyworth – RGB
125,215.13 125,215.13 100% Over 5-year book age
Electronic Co., Ltd.
Shenzhen Xinfa Electronic
119,094.78 119,094.78 100% Over 5-year book age
Co., Ltd.
Other company 2,036,133.81 2,036,133.81 100% Over 5-year book age
Total 5,116,838.00 5,116,838.00 100% --
(2) Reversal or recovery of account receivables during the reporting period
Unit: RMB
Basis for Accumulated
Contents of account Reason for reversal determination of provision of bad debt Amounts reversed or
receivables of recovery original bad debt reserve before recovered
reserve reversal or recovery
N/A N/A N/A N/A N/A
Total -- -- --
Provision for bad debt reserve for account receivable with single significant or minor amount but
tested for impairment separately as at period-end:
Contents of account Provision proportion
Book balance Bad debt amount Reasons
receivables (%)
N/A N/A N/A N/A N/A
Total -- --
Explanation for account receivable with single minor amount while the risks of the group categorized with similar risk characteristics
are relative significant: Nil
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Semi-Annual Report 2012
(3) Account receivables actually written-off during the reporting period
Unit: RMB
Whether arising
Nature of account Amount written Reason for
Name of unit Time of write-off from related
receivables off write-off
transactions
N/A N/A N/A N/A N/A N/A
Total -- -- -- --
Explanation for write-off of account receivables: Nil
(4) Account receivables due from the shareholders holding 5% or above voting shares of the
Company during the reporting period
□Applicable √Non-applicable
(5) Top 5 account receivable
Unit: RMB
Relationship Proportion in total
Name of the company with the Amount Terms account receivables
Company (%)
Qingdao Haier Part
Client 58,104,870.92 Within 1 year 48.82%
Purchasing Co., Ltd.
Hong Kong Yutian Same
International Investment Co., controlling 25,313,691.63 Within 1 year 21.27%
Ltd. shareholder
TCL AIR –CONDITIONER
Client 7,185,839.25 Within 1 year 6.04%
(WUHAN) CO., LTD.
Hefei Haier Logistic Co.,
Client 5,312,096.01 Within 1 year 4.46%
Ltd.
Gree Client 3,424,088.99 Within 1 year 2.88%
Total -- 99,340,586.80 -- 83.47%
(6) Account receivables due from related parties
Unit: RMB
Relationship with the Proportion in total account
Name of the company Amount
Company receivables (%)
Hong Kong Yutian
Same controlling
International Investment Co., 25,313,691.63 21.27%
shareholder
Ltd.
Total -- 25,313,691.63 21.27%
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Semi-Annual Report 2012
(7) Account receivables derecognized
Unit: RMB
Item De-recognition amount Gains or losses related to derecognizing
N/A N/A N/A
Total
(8) As for securities with account receivables as target subject, list the assets and liabilities
arising from further involvement
Unit: RMB
Item Period-end
Assets:
N/A N/A
Assets subtotal
Liabilities:
N/A N/A
Liabilities subtotal
7. Other receivables
(1) Disclosure of other receivables by classification
Unit: RMB
Amount at period-end Amount at period-begin
Book balance Bad debt reserve Book balance Bad debt reserve
Categories
Proportio Proportion Proportion Proportion
Amount Amount Amount Amount
n (%) (%) (%) (%)
Other receivable with single
significant amount and withdrawal 7,978,279.29 52.48% 6,548,757.96 82.08% 11,931,305.53 56.89% 6,928,109.97 58.07%
bad debt provision separately
Other receivable of bad debt provision withdrawal by combination
Other receivable with minor single
amount but has more risk by credit 3,578,061.37 23.54% 427,416.64 11.95% 5,203,832.97 24.81% 427,416.64 8.21%
risk characteristic combination
Subtotal of group 3,578,061.37 23.54% 427,416.64 11.95% 5,203,832.97 24.81% 427,416.64 8.21%
Other receivable with single minor
amount while withdrawal bad debt 3,644,837.51 23.98% 3,644,837.51 100% 3,835,986.21 18.3% 3,644,837.51 95.02%
provision separately
Total 15,201,178.17 -- 10,621,012.11 -- 20,971,124.71 -- 11,000,364.12 --
Explanation for category of other receivables: Nil
Other receivable with single significant amount and withdrawal bad debt provision separately
√ Applicable □ Non-applicable
Unit: RMB
Contents of other receivables Book balance Bad debt provision Provision proportion Reason for provision
Shenzhen Boteman Bowling
4,021,734.22 4,021,734.22 100% Over 5-year book age
Club Co. ,Ltd.
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Semi-Annual Report 2012
Zhao Baomin 939,354.00 939,354.00 100% unable to recover
Shenzhen Wanshang
No Checking
Friendship Department Store 701,898.20 511,862.93 72.93%
differences
Co., Ltd.
Hengfa Technology
639,486.06 —
(Canteen)
Bidding margin 600,000.00 —
Traffic accident
555,785.81 555,785.81 100% Over 5-year book age
compensation receivable
Hebei Botou Court 520,021.00 520,021.00 100% Over 5-year book age
Total 7,978,279.29 6,548,757.96 -- --
Other receivable provided for bad debt reserve under aging analysis method in the groups:
√ Applicable □ Non-applicable
Unit: RMB
Amount at period-end Amount at period-begin
Book balance Book balance
Aging
Proporti bad debt reserve Proporti bad debt reserve
Amount Amount
on (%) on (%)
within 1 year
Including:
within 1 year 1,773,405.78 3,399,177.38
Subtotal of within 1 year 1,773,405.78 0% 0.00 3,399,177.38 0% 0.00
1-2 years 304,892.00 5% 15,244.60 304,892.00 5% 15,244.60
2-3 years 188,786.00 10% 18,878.60 188,786.00 10% 18,878.60
Over 3 years 1,310,977.59 30% 393,293.44 1,310,977.59 30% 393,293.44
3-4 years
4-5 years
Over 5 years
Total 3,578,061.37 -- 427,416.64 5,203,832.97 -- 427,416.64
Other receivables provided for bad debt reserve under balance percentage method in the groups:
□ Applicable √ Non-applicable
Other receivables provided for bad debt reserve under other method in the groups:
□ Applicable √ Non-applicable
Other receivable with single minor amount but withdrawal bad debt provision separately as at period-end
√ Applicable □ Non-applicable
Unit: RMB
Bad debt
Contents of other receivables Book balance Provision proportion Reason for provision
provision
Employees canteen etc. 796,041.46 796,041.46 100% unable to recover
UNABLE TO
Total loans from individual 713,205.72 713,205.72 100%
RECOVER
UNABLE TO
Labor union 226,255.05 226,255.05 100%
RECOVER
UNABLE TO
Chuangjing work office 192,794.00 192,794.00 100%
RECOVER
79
Semi-Annual Report 2012
Shenzhen Lotus Island UNABLE TO
151,040.00 151,040.00 100%
Restaurant Co., Ltd. RECOVER
Fujian Zhangzhou Weili UNABLE TO
112,335.62 112,335.62 100%
Electronic Enterprise Co., Ltd. RECOVER
Shenzhen Shiyan Elementary UNABLE TO
100,000.00 100,000.00 100%
School RECOVER
UNABLE TO
SEG 93,694.37 93,694.37 100%
RECOVER
UNABLE TO
Lotus Island Restaurant 85,253.80 85,253.80 100%
RECOVER
UNABLE TO
Haiyan Textile Co., Ltd. 82,219.76 82,219.76 100%
RECOVER
UNABLE TO
Other 1,091,997.73 1,091,997.73 100%
RECOVER
Total 3,644,837.51 3,644,837.51 100% --
(2) Reversal or recovery of other receivables during the reporting period
Unit: RMB
Basis for Accumulated
Reason for
determination of provision of bad debt Amounts reversed or
Contents of other receivables reversal of
original bad debt reserve before recovered
recovery
reserve reversal or recovery
Shenzhen Boteman Bowling Court executio
Over 5-year book age 15,481.20 15,481.20
Club Co. ,Ltd. n
Shenzhen Wanshang Friendship
Court execution Over 5-year book age 363,870.81 363,870.81
Department Store Co., Ltd.
Total -- -- 379,352.01 --
Provision for bad debt reserve for other receivable with single significant or minor amount but
tested for impairment separately as at period-end:
Contents of account Provision proportion
Book balance Bad debt amount Reasons
receivables (%)
N/A N/A N/A N/A N/A
Total -- --
Explanation for other receivable with single minor amount while the risks of the group categorized with similar
risk characteristics are relative significant:
Nil
(3) Other receivables actually written-off during the reporting period
Unit: RMB
Whether arising
Nature of other Amount written Reason for
Name of unit Time of write-off from related
receivables off write-off
transactions
N/A N/A N/A N/A N/A N/A
Total -- -- -- --
80
Semi-Annual Report 2012
Explanation for write-off of other receivables:
(4) Other receivables due from the shareholders holding 5% or above voting shares of the
Company during the reporting period
□Applicable □Non-applicable
(5) Nature or content of other receivables with significant amount
Unit: RMB
Nature or content of Proportion in total other
Name of the company Amount
account receivables (%)
Shenzhen Boteman Bowling
4,021,734.22 Rent 26.46%
Club Co. ,Ltd.
Zhao Baomin 939,354.00 Rent 6.18%
Shenzhen Wanshang Friendship
701,898.20 Decoration amount 4.62%
Department Store Co., Ltd.
Hengfa Technology (Canteen) 639,486.06 Connect amount 4.21%
Bidding margin 600,000.00 Margin 3.95%
Traffic accident compensation 555,785.81 Compensation 3.66%
Hebei Botou Court 520,021.00 Execution charge 3.42%
Total 7,978,279.29 -- 52.48%
Explanation: Nil
(6) Top 5 other receivable
Unit: RMB
Relationship
Proportion in total
Name of the company with the Amount Terms
account receivables (%)
Company
Shenzhen Boteman Bowling Club
Lessee 4,021,734.22 Over 5 years 26.46%
Co. ,Ltd.
Zhao Baomin Lessee 939,354.00 2-3 years 6.18%
Shenzhen Wanshang Friendship
Lessee 701,898.20 Over 5 years 4.62%
Department Store Co., Ltd.
Hengfa Technology (Canteen) Lessee 639,486.06 1-2 years 4.21%
Bidding margin Client 600,000.00 Over 5 years 3.95%
Total -- 6,902,472.48 -- 45.41%
(7) Other receivables due from related parties
Unit: RMB
Relationship with the Proportion in total other
Name of the company Amount
Company receivables (%)
N/A N/A N/A N/A
Total --
81
Semi-Annual Report 2012
(8) Other receivables derecognized
Unit: RMB
Item De-recognition amount Gains or losses related to de-recognition
N/A N/A N/A
Total
(9) As for securities with other receivables as target subject, list the assets and liabilities
arising from further involvement
Unit: RMB
Item Period-end
Assets:
N/A N/A
Assets subtotal
Liabilities:
N/A N/A
Liabilities subtotal
8. Payment in advance
(1) Analysis of payments in advance by aging
Unit: RMB
Amount at period-end Amount at period-begin
Aging Proportion Proportion
Amount Amount
(%) (%)
within 1 year 6,689,609.88 100% 9,724,896.44 100%
1-2 years
2-3 years
Over 3 years
Total 6,689,609.88 -- 9,724,896.44 --
Explanation for aging analysis of payments in advance:
Nil
(2) Top 5 of payments in advance
Unit: RMB
Relationship with Reason for
Name of the company Amount Time
the Company unsettlement
Beijing Jingdongfang
Supplier 2,844,330.00 Purchasing
Photoelectron Co., Ltd
Qingdaio Kejie Automation Supplier
1,035,360.00 Purchasing
Equipment Co., Ltd
Guanjie Display Technology Supplier
502,110.23 Purchasing
(Wuhan)Co., Ltd.
82
Semi-Annual Report 2012
Shenzhen Han Ante Technology Supplier
269,200.00 Purchasing
Co., Ltd
Wuhan Branch of Shanghai Supplier
159,000.00 Purchasing
Henglian Elevator Co.,Ltd
Total -- 4,810,000.23 -- --
Explanation for major units paid in advance: N/A
(3) Shareholders holding 5% or above voting shares of the Company in payments in advance
during the reporting period
□ Applicable √ Non-applicable
(4) Explanation for payment in advance
Nil
9. Inventory
(1) Classification
Unit: RMB
Amount at period-end Amount at period-begin
Item Depreciation Depreciation
Book balance Book value Book balance Book value
provision provision
Raw materials 32,394,483.75 4,278,405.85 28,116,077.90 37,020,848.22 4,278,405.85 32,742,442.37
Product in
627,578.53 0.00 627,578.53
process
Stock products 12,860,537.17 3,481,301.24 9,379,235.93 21,146,510.85 3,115,158.80 18,031,352.05
Revolving
materials
Consumptive
biological assets
Low value
1,710,023.92 363,236.79 1,346,787.13 1,601,371.53 363,236.79 1,238,134.74
consumable
Self-made
semi-manufacture 4,012,527.00 250,244.88 3,762,282.12 3,209,301.17 250,244.88 2,959,056.29
products
Trusted process
279,255.66 0.00 279,255.66 956,498.83 956,498.83
products 资
Total 51,884,406.03 8,373,188.76 43,511,217.27 63,934,530.60 8,007,046.32 55,927,484.28
(2) Inventory impairment provision
Unit: RMB
Kinds of Book-balance as Provision for this Decrease during this year Book-balance as at
inventories at period-begin period Reversal Written-off period-end
83
Semi-Annual Report 2012
Raw materials 4,278,405.85 4,278,405.85
Product in process 0.00
Stock products 3,115,158.80 366,142.44 3,481,301.24
Revolving
materials
Consumptive
biological assets
Low-value
363,236.79 363,236.79
Consumables
Self-made
semi-manufacture 250,244.88 250,244.88
products
Trusted process
products
Total 8,007,046.32 366,142.44 0.00 0.00 8,373,188.76
(3) Particular about inventory impairment provision
Proportion of the reversal
Reason for reversal during amount during the year in
Item Provision basis
the year the period-end balance of
the inventory
The lower one between
Raw materials book value and net
realizable value
The lower one between
Stock commodities book value and net
realizable value
The lower one between
Goods in process book value and net
realizable value
The lower one between
Turn-over material book value and net
realizable value
The lower one between
Consumption biological
book value and net
assets
realizable value
The lower one between
Low-value Consumables book value and net
realizable value
The lower one between
Self-made
book value and net
semi-manufacture products
realizable value
The lower one between
Trusted process products book value and net
realizable value
Explanation on inventory
Nil
10. Other current assets
Unit: RMB
84
Semi-Annual Report 2012
Item Amount at period-end Amount at period-begin
N/A N/A N/A
Total
Explanation on other current assets
Nil
11. Financial assets available for sale
(1) Particular about financial assets available for sale
Unit: RMB
Item Fair-value at period-end Fair-value at period-begin
Bond available for sale — —
Equity instrument available for sale — —
Other — —
Total
For financial assets available for sale that re-category from investment held to maturity, re-category amounting as 0 yuan, and takes
0% of the investment held to maturity before re-category.
Explanation on financial assets available for sale
(2) Long-term debt investment in financial assets available for sales
Unit: RMB
Interest
Initial Balance at receivable
Expired Balance at
Bond Type Book value investment period-begi Interest or received
dated period-end
cost n accumulati
ve
N/A N/A N/A N/A N/A N/A N/A N/A N/A
Total -- -- --
Explanation on long-term debt investment in financial assets available for sales
Nil
12. Held-to-maturity investment
(1) Particular about held-to-maturity investment
Unit: RMB
Item Book balance at period-end Book balance at period-begin
N/A N/A N/A
Total
Explanation on held-to-maturity investment
(2) Held-to-maturity investment that sold in report period but not expired
Unit: RMB
Item Amount Proportion in amount before sold (%)
N/A N/A N/A
Total --
85
Semi-Annual Report 2012
Explanation on held-to-maturity investment that sold in report period but not expired
13. Long-term account receivable
Unit: RMB
Type Amount at period-end Amount at period-begin
Financing leasing — —
Incl: Un-realized financing
— —
income
Commodity sales for
— —
installment receivables
Labor service provided for
— —
installment receivables
Other — —
Total
14. Investment for affiliated enterprise and joint ventures
Unit: RMB
Proporti
Equity Total
on of Total Total
proporti Total operatio Net
Invested voting liability net
Register Legal Busines Register Currenc on held assets at n profit in
compan Type rights in at assets at
place rep. s nature capital y by the period-e revenue this
y invested period-e period-e
Compan nd in this period
compan nd nd
y (%) period
y (%)
I. Joint venture
N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
II. Affiliated enterprise
N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Explanation on major accounting policy and accounting estimation in joint venture and affiliated enterprises difference from the
policy and estimation of the Company:
86
Semi-Annual Report 2012
15. Long-term equity investment
(1) Details of long-term equity investment
Unit: RMB
Explanation
on the
incongruity
Proportion of Proportion of in share Impairment
Initial
Invested Calculation Balance at Increase/decr Balance at share holding voting rights holding Impairment provision of Cash bonus
investment
company method period-begin ease(+,-) period-end in invested in invested proportion provision accruing this this year
cost
company (%) company (%) and voting year
proportion in
invested
company
N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Total -- -- -- --
87
Semi-Annual Report 2012
(2) Limited ability for capital transfer to investment enterprise
Unit: RMB
Long-term equity investment that
un-recognized investment losses
has limited ability of capital transfer Restriction reasons
accumulative in period
to investment enterprise
N/A N/A N/A
Explanation on long-term equity investment
16. Investment real estate
(1) Investment real estate measured by cost
√application □ non-application
Unit: RMB
Book balance at Increase during the Decrease during the
Item Book balance at period-end
period-begin period period
I. Total original book
107,661,686.94 107,661,686.94
value
1. Houses and
107,661,686.94 107,661,686.94
buildings
2. Land use rights
II. Accumulated
depreciation and
71,930,961.91 1,239,517.14 73,170,479.05
accumulated
amortization
1. Houses and
71,930,961.91 1,239,517.14 73,170,479.05
buildings
2. Land use rights
III. Total net book
value of investment 35,730,725.03 34,491,207.89
real estate
1. Houses and
35,730,725.03 34,491,207.89
buildings
2. Land use rights
IV. Total accumulate
provision for
impairment of
investment real estate
1. Houses and
buildings
2. Land use rights
V. Total book value of
35,730,725.03 34,491,207.89
investment real estate
1. Houses and
35,730,725.03 34,491,207.89
buildings
2. Land use rights
Unit: RMB
This period
Depreciation and amortization amount in this period 1,239,517.14
Withdrawal of impairment provision for investment real estate
(2) Investment real estate measured by fair value
□ Application √ non-application
Explain the investment real estate that changing measurement mold in report period, and the investment real estate without property
certificate done as well as the reasons for property certificate un-finished and predicted the time to obtained that certificates
88
Semi-Annual Report 2012
17. Fixed assets
(1) Particular about fixed assets
Unit: RMB
Book balance at Decrease during this Book balance at
Item Increase during this period
period-begin period period-end
I. total of book balance: 333,627,416.76 7,863,480.51 341,489,303.57
Including: House &
215,248,162.38 1,821,478.98 217,069,641.36
buildings
Machinery equipments 76,548,465.79 3,901,117.88 80,449,583.67
Transportation tools 4,668,556.59 830,000.00 5,498,556.59
Office equipment 6,181,874.97 110,894.81 800.00 6,291,969.78
Instruments 13,490,480.33 204,176.82 13,694,657.15
Tool equipment 7,323,352.65 52,222.23 793.70 7,374,781.18
Mould equipment 10,166,524.05 943,589.79 11,110,113.84
Book balance at Increase during Accrual in this Decrease during this Book balance at
--
period-begin this period period period period-end
II. total of accumulated
123,171,661.77 7,106,483.61 720.00 130,277,425.38
depreciation:
Including: House &
51,695,618.46 2,608,853.20 54,304,471.66
buildings
Machinery equipments 40,101,806.90 2,676,498.91 42,778,305.81
Transportation tools 2,992,917.96 407,900.86 3,400,818.82
Office equipment 5,249,108.72 117,995.27 720.00 5,366,383.99
Instruments 11,443,693.28 260,695.26 11,704,388.54
Tool equipment 2,960,233.41 655,077.74 3,615,311.15
Mould equipment 8,728,283.04 379,462.37 9,107,745.41
Book balance at Book balance at
-- --
period-begin period-end
III. total net value of fixed
210,455,754.99 -- 211,211,878.19
assets
Including: House &
163,552,543.92 -- 162,765,169.70
buildings
Machinery equipments 36,446,658.89 -- 37,671,277.86
Transportation tools 1,675,638.63 -- 2,097,737.77
Office equipment 932,766.25 -- 925,585.79
Instruments 2,046,787.05 -- 1,990,268.61
Tool equipment 4,363,119.24 -- 3,759,470.03
Mould equipment 1,438,241.01 -- 2,002,368.43
IV. total of impairment
2,885,534.22 -- 2,885,534.22
provision
Including: House &
--
buildings
Machinery equipments 1,499,613.30 -- 1,499,613.30
Transportation tools 104,388.91 -- 104,388.91
Office equipment 72,480.11 -- 72,480.11
Instruments 1,088,204.88 -- 1,088,204.88
Tool equipment 120,847.02 -- 120,847.02
Mould equipment --
89
Semi-Annual Report 2012
V. total book value of fixed
207,570,220.77 -- 208,326,343.97
assets
Including: House &
163,552,543.92 -- 162,765,169.70
buildings
Machinery equipments 34,947,045.59 -- 36,171,664.56
Transportation tools 1,571,249.73 -- 1,993,348.87
Office equipment 860,286.14 -- 853,105.68
Instruments 958,582.17 -- 902,063.73
Tool equipment 4,242,272.22 -- 3,638,623.01
Mould equipment 1,438,241.01 -- 2,002,368.43
Depreciation amount in this period amounting as 7,106,483.61 yuan; original value transfer into fixed assets from construction in
process amounting as 1,044,413.50 yuan
(2) Temporary idle fixed assets
Unit: RMB
Original book Depreciation Impairment
Item Net book value Note
value accumulative provision
House &
— — — —
buildings
Machinery
— — — —
equipments
Transportation
— — — —
tools
(3) Fixed assets leasing-in by financing lease
□ Application √ non-application
(4) Fixed assets leasing-out by operational lease
□ Application √ non-application
(5) Fixed assets held for sale in period-end
Unit: RMB
Disposal expense Disposal date
Item Book value Fair value
predicted predicted
N/A N/A N/A N/A N/A
(6) Fixed assets with un-completed property certificates
Times expected for certificate
Item Reasons for un-completed certificate
completed
N/A N/A N/A
Explanation on fixed assets:
18. Construction in process
(1)
Unit: RMB
Amount at period-end Amount at period-begin
Item Book Provision Book Provision Book Provision
balance reserve balance reserve balance reserve
90
Semi-Annual Report 2012
Reforming project of
654,356.00 654,356.00 654,356.00 654,356.00
Huafa Building
Reforming project of
Gongming Electronic 969,000.00 969,000.00 969,000.00 969,000.00
Town
Tube reforming project of
Gongming Electronic 35,998.00 35,998.00
Town
Dormitory projects 74,500.00 74,500.00
Expansion project of
injection warehouse
Corridor grid project of
injection warehouse
Foam warehouse projects
Reforming project of
foam workshop
Reforming of building
54,000.00 54,000.00
project of foam plant area
Fire engineering of foam
884,288.50 884,288.50
workshop
Floor reconstruction of
160,125.00 160,125.00
video workshop
Total 1,787,854.00 1,787,854.00 2,667,769.50 2,667,769.50
91
Semi-Annual Report 2012
(2) Changes of material construction in process
Unit: RMB
Proportion including:
Accumulated Interest
Amount at Increase of project interest
Transfer to Other amount of capitalizatio Capital Amount at
Name Budget period-begi during the investment Progress capitalized
fixed assets decrease interest n rate of the source period-end
n period in budget amount of the
capitalization year (%)
(%) year
N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Total -- -- -- --
Explanation on changes of major projects under construction
92
Semi-Annual Report 2012
(3) Construction in process impairment provision
Unit: RMB
Amount at Increase during Decrease during Amount at
Item Accrual Reason
period-begin this period this period period-end
N/A N/A N/A N/A N/A N/A
Total --
(4) Progress of material construction in progress
Item progress Note
N/A N/A N/A
(5) Explanation of construction in process
Nil
19. Construction materials
Unit: RMB
Amount at Increase in this Decrease in this Amount at
Item
period-beginning term term period-end
N/A N/A N/A N/A N/A
Total
Explanation on construction materials
20. Disposal of fixed assets
Unit: RMB
Book balance at Book balance at
Item Reasons for turn to disposal
period-beginning period-end
N/A N/A N/A N/A
Total --
Explain the progress of disposal of fixed assets transfer over one year
21. Productive biological assets
(1) Measured by cost
√ Application □ non-application
(2) Measured by fair value
□ Application √ non-application
22. oil/gas assets
Unit: RMB
Item Book balance at Increase in this term Decrease in this term Book balance at
93
Semi-Annual Report 2012
period-beginning period-end
I. Total original book
value
1. Equity of mine
exploitation
2. Equity of mine
un-exploited
3. Well and relevant
equipment
II. Total consumption
accumulative
1. Equity of mine
exploitation
2. Well and relevant
equipment
III. Total impairment of
oil/gas assets
accumulative
1. Equity of mine
exploitation
2. Equity of mine
un-exploited
3. Well and relevant
equipment
IV. Total book value of
oil/gas assets
1. Equity of mine
exploitation
2. Equity of mine
un-exploited
3. Well and relevant
equipment
Explanation on oil/gas assets
23. Intangible assets
(1) Particular about intangible assets
Unit: RMB
Book balance at Increased in the Book balance at
Item decreased in the period
period-begin period period-end
I. total of original
55,540,235.25 0.00 0.00 55,540,235.25
value
Land use right 55,187,826.36 55,187,826.36
Non-patent technology 352,408.89 352,408.89
II. total accumulated
3,576,697.53 764,025.48 0.00 4,340,723.01
amortization
94
Semi-Annual Report 2012
Land use right 3,347,391.45 754,556.04 4,101,947.49
Non-patent technology 229,306.08 9,469.44 238,775.52
III. total net book
value of intangible 51,963,537.72 0.00 0.00 51,199,512.24
assets
Land use right 51,840,434.91 51,085,878.87
Non-patent technology 123,102.81 113,633.37
IV. Accumulated
intangible asset 0.00 0.00 0.00 0.00
impairment provisions
Land use right
Non-patent technology
Total of intangible
51,963,537.72 0.00 0.00 51,199,512.24
asset book value
Land use right 51,840,434.91 51,085,878.87
Non-patent technology 123,102.81 113,633.37
Amount amortized in this period was 0 yuan
(2) Expenditure of project development
Unit: RMB
Decrease during the period
Amount at Increase during Record into Amount at
Item Confirm as
period-beginning the period current gains and period-end
intangible assets
losses
N/A N/A N/A N/A N/A N/A
Total
The development expenditure occupies 0% of total expenditure in R&D projects in reporting period
The intangible assets form by internal R&D occupies 0% of total book value of intangible assets at period-end
For development projects, including single price over one million yuan occurred in this period and the assessment price has been kept
in book, disclosed the assessment institution and way of assessment: Nil
(3) Intangible assets without property certificate obtained
24. Goodwill
Unit: RMB
Amount at
Increase during Decrease during Amount at Depreciation
Items period-beginnin
the period the period period-end reserves
g
N/A N/A N/A N/A N/A N/A
Total
Explain the impairment testing method and withdrawal method for impairment provision of goodwill:
25. Long-term deferred expense
Unit: RMB
Amortization
Balance at Increased in Balance at Reasons for
Item during this Other decrease
period-begin the period period-end other decrease
period
95
Semi-Annual Report 2012
Financial
consultant charge
875,000.00 375,000.00 500,000.00
from China
Construction Bank
Golf membership
666,966.67 37,400.04 629,566.63
charge
Total 1,541,966.67 0.00 412,400.00 0.00 1,129,566.63 --
Explanation on long-term deferred expense:
(1) In long-term expenses to be amortized, the financial consultant charge 3 million yuan in total, was entered into with Shangbu
Sub-branch of CCB; service term is from 19 March 2009 to 18 March 2013
(2) Golf membership charge will amortize in 10-year term
26. Deferred income tax assets and deferred income tax liabilities
(1) Net amount of deferred income tax assets and deferred income tax liabilities before
deduction
√application □non-application
Deferred income tax assets and deferred income tax liability that recognized
Unit: RMB
Item Closing amount Opening amount
Deferred income tax assets:
Assets impairment provision
Opening charge
Deductible deficit
Deferred income tax assets arising from bad
4,612,489.17 4,400,995.64
debt provision
Deferred income tax assets arising from
1,957,941.71 1,866,406.10
inventory depreciation provision
Deferred income tax assets arising from
721,383.56 721,383.56
provision of fixed assets impairment
Deferred income tax assets arising from
61,052.14 61,052.14
accrual liability
Subtotal 7,352,866.58 7,049,837.44
Deferred income tax liability:
Evaluation of transactional financial
instrument and derivative financial
instrument
Variation of fair value of financial assets
available for sale that reckoned into capital
reserve
Subtotal
Details of un-recognized deferred income tax assets
Unit: RMB
Item Closing amount Opening amount
96
Semi-Annual Report 2012
Deductible temporary differences 3,694,594.45 3,694,594.45
Deductible deficit 1,061,584.26 1,061,584.26
Total 4,756,178.71 4,756,178.71
The deductible deficit of un-recognized deferred income tax assets is due in follow years
Unit: RMB
Year Closing amount Opening amount Note
2013 3,458.00 3,458.00
2014 210,527.72 210,527.72
2015 290,960.95 290,960.95
2016 556,637.59 556,637.59
Total 1,061,584.26 1,061,584.26 --
Details of taxable difference and deductible differences
Unit: RMB
Amount of temporary differences
Item
Closing amount Opening amount
Items of taxable difference
Subtotal
Items of deductible differences
Provision of bad debt impairment 18,449,656.74 17,603,682.60
Provision of inventory impairment 7,831,766.82 7,465,624.38
Provision of fixed assets impairment 2,885,534.22 2,885,534.22
Accrual liability 244,208.54 244,208.54
Subtotal 29,411,166.32 28,199,049.74
(2) Net amount of deferred income tax assets and deferred income tax liabilities after
deduction
□application √non-application
Explanation on deferred income tax assets and deferred income tax liabilities
27. Details of asset impairment provision
Unit: RMB
Balance as at Increase during Decrease during this period Balance as at
Item
period-begin this period Reversal Written-off period-end
21,602,829.2
I. Bad debt reserve 20,756,855.11 1,225,326.15 379,352.01
5
II. Inventory falling price
8,007,046.32 366,142.44 0.00 0.00 8,373,188.76
reserves
III. Impairment provision of
financial assets available for
sale
IV. Impairment provision of
97
Semi-Annual Report 2012
investment held to maturity
V. Long-term equity
investment impairment
provision
VI. Investment real estate
impairment provision
VII. Fixed asset impairment
2,885,534.22 2,885,534.22
provision
VIII. Impairment provision
for construction materials
IX. Construction-in-process
impairment provision
X. Capitalized Biological
assets impairment provision
Including: Impairment
provision for maturity
production biological assets
XI. oil assets impairment
provision
XII. Intangible assets
0.00 0.00 0.00
impairment provision
XIII. Goodwill impairment
provision
XIV. other
32,861,552.2
Total 31,649,435.65 1,591,468.59 379,352.01 0.00
3
Explanation on asset impairment provision:
28. Other non-current assets
Unit: RMB
Item Amount at period-end Amount at period-begin
N/A N/A N/A
Total
Explanation on other non-current assets
29. Short-term loans
(1) Type of Short-term Loans
Unit: RMB
Item Amount as at period-end Amount as at period-begin
Mortgage loans
Collateral loan 39,000,000.00 69,345,388.74
Ensure loans 11,152,593.00
Guarantee loans 127,595,489.19 24,045,915.48
Total 166,595,489.19 104,543,897.22
Explanation on short-term loans
98
Semi-Annual Report 2012
1. Amount at period-end increase 62051591.97 yuan over that of period-begin, a 59% up; mainly because short-term turnover capital
increased in this period for export invoice financing
2. Ended as 30 June 2012, the Company has due short-term loans unpaid
(2) Short-term loans un-paid by expired
Unit: RMB
Predicted payment
Unit Loan amount Loan rates Using in Reasons of un-paid
date
N/A N/A N/A N/A N/A N/A
Total -- -- -- --
Totaling 0 yuan has been paid after balance sheet date.
Explanation on short-term loans: for those expired short-term loans obtained expansion period, explain the
expansion condition and new expiration:
Nil
30. Transactional financial liabilities
Unit: RMB
Item Fair value at period-end Fair value at period-begin
Transactional bonds offered
Financial liability designated for fair
value measurement and variation of fair
value recon into current gains/losses
Derivative financial liability
Other financial liability
Total
Explanation on transactional financial liabilities:
31. Note payable
Unit: RMB
Type Amount at period-end Amount at period-begin
Commercial acceptance bill
Bank acceptance bill 31,316,864.98 33,795,522.26
Total 31,316,864.98 33,795,522.26
Amount expired in next accounting period:
Explanation on note payable:
32. Account payables
(1)
Unit: RMB
Item Amount as at period-end Amount as at period-begin
within 1 year 43,230,516.17 30,642,895.84
Over 1 year 13,128,532.22 12,689,481.10
Total 56,359,048.39 43,332,376.94
(2)Accounts payable to shareholders holding 5% or above voting shares of the Company
□ Application√ non-application
Explanation on major account payable with over one year age:
99
Semi-Annual Report 2012
Account payable with major amount for over one year book age mainly refers to the account payable of circuit board division that
suspended for operation and the payable of former Shenzhen Video division, which transfer to subsidiary Hengfa Technology
33. Account received in advance
(1)
Unit: RMB
Item Amount as at period-end Amount as at period-begin
within 1 year 4,234,860.70 263,497.35
Total 4,234,860.70 263,497.35
(2)Accounts received in advance to shareholders holding 5% or above voting shares of the
Company
□ Application√ non-application
Explanation on major account received in advance with over one year age:
34. Wages payable
Unit: RMB
Balance as at Increase during this Decrease during this Balance as at
Item
period-begin period period period-end
I. Wage, bonus,
allowance and 3,352,323.50 20,993,010.94 21,468,435.40 2,876,899.04
subsidy
II. Employees‘
welfare
III. Social
24,648.18 2,483,041.17 2,408,673.04 99,016.31
security
24,648.18 2,483,041.17 2,408,673.04 99,016.31
IV. Housing
218,130.00 218,130.00
public reserve
V. Compensation
from labor
relationship
dismissed
VI. Other 628,918.57 42,739.00 42,739.00 628,918.57
Outlay for labor
union and staff 628,918.57 42,739.00 42,739.00 628,918.57
educational
Total 4,005,890.25 23,736,921.11 24,137,977.44 3,604,833.92
Wages payable has 0 yuan for arrears
Outlay for labor union and staff educational charge amounting，non-monetary welfare amounting, compensation
for dismiss of labor relationship
The wages payable expected to pay and the amount for payment;
35. Tax payable
Unit: RMB
100
Semi-Annual Report 2012
Item Amount as at period-end Amount as at period-begin
VAT 2,935,846.28 -11,149,770.47
Consumption tax
Business tax 1,289,381.37 1,252,058.11
Enterprise income tax 11,121,520.93 9,276,957.98
Personal income tax 18,534.56 48,424.56
City maintenance and construction tax 29,087.43 26,474.78
Property right tax 345,049.10 910,557.90
Land use right taxes 187,251.34 306,074.38
Educational surcharge 12,896.83 11,777.10
Price adjustment fund -13,938.62 13,938.62
Local education surcharge 8,243.91 17,287.85
Other 5,628.58 5,803.88
Total 15,939,501.71 719,584.69
Explanation on tax payable: if the local taxation bureau agrees mutual adjustment between vary branches and
plants, explain taxation calculation:
Taxes payable at period-end increase 15,219,917.02 yuan over that of period-begin, mainly due to the exportation
tax rebate in this period
36. Interest payable
Unit: RMB
Item Amount as at period-end Amount as at period-begin
Interest of long-term loans of installment and
— —
interest charges
Corporate bond interest — —
Interest payable for short-term loans — —
Total
Explanation on interest payable:
37. Dividend payable
Unit: RMB
Amount as at Amount as at Reasons for un-payment over
unit
period-end period-begin one year
N/A N/A N/A N/A
Total --
Explanation on dividend payable:
Nil
38. Other payables
(1)
Unit: RMB
Item Amount as at period-end Amount as at period-begin
within 1 year 8,971,062.68 6,790,411.59
Over 1 year 12,575,175.86 11,609,879.76
Total 21,546,238.54 18,400,291.35
101
Semi-Annual Report 2012
(2) Others payable due to shareholders units holding over 5% (5% included) voting shares of
the Company at period-end
□application √non-application
(3) Explanation on other account payable with over one year age
Item Amount Age Nature or content
Shenzhen Wanshang Friendship
Department Store Co., Ltd. 3,477,008.00 Over 5 years Rental margin
Shenzhen Shangbu Sub-branch Consultant service
of CCB 1,000,000.00 3-4 years charge
Linghang Technology
(Shenzhen) Co., Ltd. 626,144.95 3-4 years Connected amount
Shenzhen Tongxing Electronic
Co., Ltd. 578,259.83 3-4 years Connected amount
Total 5,681,412.78
(4) Explanation on unit of major connected amount for other account payable
Item Amount Age Nature or content
Shenzhen Wanshang Friendship
Department Store Co., Ltd. 3,477,008.00 Over 5 years Rental margin
Shenzhen Shangbu Sub-branch Consultant service
of CCB 1,000,000.00 3-4 years charge
House Leasing management Rental
bureau of Futian District management
Shenzhen 687,720.90 within 1 year charge
Linghang Technology
(Shenzhen) Co., Ltd. 626,144.95 3-4 years Connected amount
Shenzhen Tongxing Electronic
Co., Ltd. 578,259.83 3-4 years Connected amount
Total 6,369,133.68
39. Predicted liability
Unit: RMB
Amount at Increase during the Carry-forward Amount at
Item
period-begin period during the year period-end
Guarantee provided
externally
Un-settle lawsuit 244,208.55 244,208.55
Products quality
security
Reorganization
obligation
Dismiss welfare
Deficit contract for
implemented
Other
102
Semi-Annual Report 2012
Total 244,208.55 0.00 0.00 244,208.55
Explanation on predicted liability:
Found more details in Contingency ―
40. Non-current liability due within one year
(1)
Unit: RMB
Item Amount as at period-end Amount as at period-begin
Long-term loans due within one year — —
Bond payable due within one year — —
Long-term account payable due within
— —
one year
Total
(2) Long-term loans due within one year
Long-term loans due within one year
Unit: RMB
Item Amount as at period-end Amount as at period-begin
Mortgage loans — —
Collateral loan — —
Ensure loans — —
Guarantee loans — —
Total
In long-term loans due within one year, amount of undue but with expansion time amounting as:
Top five long-term loans due within one year:
Unit: RMB
Starting Terminatio Amount at period-end Amount at period-begin
Unit date for n date for Currency Rate (%) Foreign Local Foreign Local
loans loans currency currency currency currency
N/A N/A N/A N/A N/A N/A N/A N/A N/A
Total -- -- -- -- -- --
Due loans in long-term loans due within one year:
Unit: RMB
Annual rate
Unit Amount loans Undue date Using purpose Unpaid reasons Paid expected
(%)
N/A N/A N/A N/A N/A N/A N/A
Total -- -- -- -- --
Totaling 0 yuan has been paid after balance sheet date.
Explanation on long-term loans due within one year:
103
Semi-Annual Report 2012
(3) Bond payable due within one year
Unit: RMB
Interest
Interest Interest Amount at
Issuing Issuing Interest paid payable in
Name Value Terms payable at payable in period-en
date amount in this period this
period-begin this period d
period-end
N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Explanation on bond payable due within one year:
(4) Long-term account payable due within one year
Unit: RMB
Interest Amount at
Unit Terms Initial amount Rate (%) Loan condition
reckoned period-end
N/A N/A N/A N/A N/A N/A N/A
Explanation on long-term account payable due within one year:
41. Other current liability
Unit: RMB
Item Book balance at period-end Book balance at period-begin
Charge accrual 971,214.71 0
Total 971,214.71 0
Explanation on other current liability:
Water & electricity charge accrual
42. Long-term loan
(1) Category of long-term loans
Unit: RMB
Item Amount at period-end Amount at period-begin
Mortgage loans
Collateral loan 173,910,800.00 186,141,200.00
Ensure loans
Guarantee loans
Total 173,910,800.00 186,141,200.00
Explanation on long-term loans:
On 12 March 2009, the Company signed a Loan Contract of Jie 2009 Shang 0181008R with Construction Bank of China Shangbu
Sub-branch for obtaining RMB 230 million loans. Term of the loans is 7 years namely from 12 March 2009 to 11 March 2016,
floating rate will be adopt for this loan, 20th of every month was the interest settlement date that listed in the contract. According to
the contract, RMB140 million have been obtained on 12 March 2009 by property mortgage of the 2 nd, 3rd and 4th floor of Huafa
Mansion (Number of property certificate: SFDC No. 3000522977, 3000522975 and 3000522976); RMB 90 million loans on 3 April
2009 by property mortgage of the 1st, 5th and 6th floor of Huafa Mansion (Number of property certificate: SFDC No. 3000503696,
3000503720 and 3000511945). Among which RMB 140 million was constant amortization mortgage, RMB 90 million was monthly
interest payment for principal payment while expire.
104
Semi-Annual Report 2012
(2) Top five long-term loans
Unit: RMB
Amount at period-end Amount at period-begin
Starting date Termination
Unit Currency Rate (%) Foreign Local Foreign Local
for loans date for loans
currency currency currency currency
benchmark
173,910,80 186,141,20
CCB 2009-3-12 2016-3-11 CNY lending rate
0.00 0.00
of Bank
173,910,80 186,141,20
Total —— —— —— ——
0.00 0.00
Explanation on long-term loans: if there has long-term loans from undue with expansion obtained, explain the
expansion condition, principle, interest and predicted payment arrange:
Nil
43. Bond payable
Unit: RMB
Interest
Interest Interest Balance at
Issuing Issuing Interest paid payable in
Name Value Terms payable at payable in period-en
date amount in this period this
period-begin this period d
period-end
N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Bond payable including convertible corporate bond‘s condition and time for shares transfer:
Nil
44. Long-term account payable
(1) Top five long-term account payable
Unit: RMB
Interest Balance at
Unit Term Initial amount Rate (%) Loan condition
reckoned period-end
N/A N/A N/A N/A N/A N/A N/A
(2)Details of financing rent payable in long-term payable
Unit: RMB
Amount at period-end Amount at period-begin
Unit
Foreign currency RMB Foreign currency RMB
N/A N/A N/A N/A N/A
Total
Amount of guarantee from independent third party for the financing rent of the Company was 0 yuan.
Explanation on long-term payable:
Nil
45. Specific account payable
Unit: RMB
105
Semi-Annual Report 2012
Amount at Increase in this Decrease in Amount at
Item Note
period-begin period this period period-end
N/A N/A N/A N/A N/A N/A
Total --
Explanation on specific account payable:
Nil
46. Other non-current liability
Unit: RMB
Item Book balance at period-end Book balance at period-begin
N/A N/A N/A
Total
Other non-current liability, including vary government subsidy related with assets and income as well as its
balance at period-end:
Nil
47. Share capital
Unit: RMB
Increased (decreased) in this year
Amount at Shares Amount at
period-begin New shares converted period-end
Bonus shares Other Sub-total
issued from public
reserve
Total of
283,161,227 283,161,227
shares
Explanation on share capital changes, if there has capital increase/decrease in reporting period, disclosed the
CPA‘s name and verification documents; for company limited within 3 years operation, explain the net assets
before establishment; for those company limited changed from limited liability company, explain the verification
condition while established.
Nil
48. Stock shares
Explanation on stock shares:
49. Specific Reserve
Explanation on specific Reserve:
50. Capital reserves
Unit: RMB
Amount at Increase during this Decrease during Amount at
Item
period-begin period this period period-end
Capital premium (Share
96,501,903.02 96,501,903.02
capital premium)
Other capital reserve 7,571,423.92 7,571,423.92
Total 109,496,837.33 109,496,837.33
Explanation on capital reserve:
106
Semi-Annual Report 2012
51. Surplus reserves
Unit: RMB
Amount at Increase during this Decrease during Amount at
Item
period-begin period this period period-end
Statutory surplus reserves 21,322,617.25 21,322,617.25
Free surplus reserve 56,068,976.00 56,068,976.00
Service fund 0.00 0.00
Enterprise development
0.00 0.00
fund
Other 0.00 0.00
Total 77,391,593.25 77,391,593.25
Explanation on surplus reserve, if share capital converted from surplus reserve, remedy deficit and dividend
distributed, explain relevant resolutions:
Nil
According to the Company Law of P. R.C, the Article of Association and the resolution of Board, the Company withdrawal statutory
surplus reserves based on the 10% of the amount after remedying previously deficit with annual net profit and stop withdrawal ling
while the accumulated statutory surplus reserve occupied over 50% of the share capital. The approval statutory surplus reserves
can be used for deficit remedy or increasing the share capital. Except for deficit remedy, the balance after share capital increasing
shall not less than the 25% of share capital before increasing.
52. General risk provision
Explanation on general risk provision:
Nil
53. Undistributed profits
Unit: RMB
Withdrawal or
Item Amount
Allocation Ratio
Undistributed profits at the end of last
-193,110,504.37 --
year before adjustment
Adjust the total undistributed profits at
the beginning of the year (Increase +, 0.00 --
Decrease -)
Undistributed profits at the beginning
-193,110,504.37 --
of the year after adjustment
Increase: The net profits belong to
owners of patent company of this 6426237.82 --
period
Decrease: Withdraw legal surplus
0.00
reserves
Withdraw free surplus reserves 0.00
Withdraw general risk reserves 0.00
Handle common stock dividends 0.00
Common stock dividends transferred to
0.00
be capital stock
107
Semi-Annual Report 2012
Undistributed profits at the end of the
-186,684,266.55 --
period
Details about adjusting the undistributed profits at the beginning of the year:
1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new regulations
affect the undistributed profits at the beginning of the year amounting to 0 Yuan.
2) The changes in accounting policies affect the undistributed profits at the beginning of the year amounting to 0
Yuan.
3) The major accounting error correction affects the undistributed profits at the beginning of the year amounting
to 0 Yuan.
4) Merge scope changes caused by the same control affect the undistributed profits at the beginning of the year
amounting to 0 Yuan.
5) Other adjustments affect the undistributed profits at the beginning of the year amounting to 0 Yuan.
The undistributed profits explain that the company initial public offering bonds should clearly state if the
accumulated profits are decided to be shared by old and new shareholders by general meeting of stockholders
before issuing; while the company should clearly disclose that the profits in the dividends payable belong to old
shareholders after auditing if the general meeting of stockholders decides the accumulated profits are allocated
and shared by old shareholders before issuing.
Nil
54. Operating income and cost
(1) Operating income and cost
Unit: RMB
Item Amount of this period Amount of last period
Main operating income 360,369,143.18 439,066,510.07
Other operating income 23,148,155.37 22,432,427.16
Operating cost 336,861,526.85 417,065,770.56
(2) Primary business (By industries)
√ Applicable □ Not Applicable
Unit: RMB
Amount of this period Amount of last period
Industry name
Operating income Operating cost Operating income Operating cost
Injections 97,981,143.65 87,147,320.47 103,242,855.44 88,686,938.21
LCD 228,931,374.36 219,869,406.77 301,553,845.91 296,717,272.38
Foam (Styrofoam) 33,456,625.17 27,879,111.12 34,269,808.72 29,038,727.56
Total 360,369,143.18 334,895,838.36 439,066,510.07 414,442,938.15
(3) Primary business (By products)
□Applicable Not Applicable
108
Semi-Annual Report 2012
(4) Primary business (By districts)
□Applicable √Not Applicable
(5) The operating income of the top five customers of the Company
Unit: RMB
The percentage in all operating income of the
Customer name Primary business income
Company (%)
Hong Kong Yutian
International Investment Co., 227,378,382.27 59.29%
Ltd.
Qingdao Haier Part
100,167,389.41 26.12%
Purchasing Co., Ltd.
TCL AIR –CONDITIONER
13,725,311.34 3.58%
(WUHAN) CO., LTD.
Hefei Haier Logistic Co., Ltd. 7,758,426.95 2.02%
Guangjie Display Technology
5,301,180.48 1.38%
(Wuhan) Co., Ltd
Total 354,330,690.45 92.39%
Introductions to operating income
55. Contract item income
□Applicable √Not Applicable
Introductions to contract item
56. Business tax and surcharges
Unit: RMB
Amount of last Calculating and payment
Item Amount of this period
period standards
Consumption tax
Business tax 1,282,579.93 1,123,307.64 5%
City maintenance and
182,712.73 89,217.57 7%
construction tax
Education surcharge 38,797.29 38,797.29 3%
Resources tax
Property taxes 181,778.52 0.12%
Land use right tax 155,516.66
Price adjustment fund 141,059.91 141,059.91 0.1%
Other 10,834.78 7,858.86
Total 1,655,984.64 1,737,536.45 --
Introductions to business tax and surcharges
109
Semi-Annual Report 2012
57. Income of fair value changes
Unit: RMB
Sources generating income of fair value
Amount of this period Amount of last period
changes
Trading financial assets — —
Thereinto: Income of fair value changes
— —
generated by derivative financial instruments
Trading financial assets liabilities — —
Investment real estate measured by fair
— —
value
Others — —
Total
Introductions to income of fair value changes
58. Investment income
(1) Particulars about investment income
Unit: RMB
Item Amount of this period Amount of last period
Income of long-term equity investment
— —
calculated based on cost
Income of long-term equity investment
— —
calculated based on equity
Investment income obtained from disposal
— —
of long-term equity investment
Investment income obtained during holding
— —
trading financial assets
Investment income obtained during
held-to-maturity investment gaining — —
investment income
Investment income obtained during holding
— —
available-for-sale financial assets
Investment income obtained by handling
— —
trading financial assets
Investment income obtained from
— —
held-to-maturity investment
Investment income obtained from
— —
available-for-sale financial assets
Others — —
Total
110
Semi-Annual Report 2012
(2) Income of long-term equity investment calculated based on cost
Unit: RMB
Amount of last
Company name Amount of this period Reasons of change (+,-)
period
N/A N/A N/A N/A
Total --
(3) Income of long-term equity investment calculated based on equity
Unit: RMB
Amount of last
Company name Amount of this period Reasons of change (+,-)
period
N/A N/A N/A N/A
Total --
Investment income description: It should be introduced if there is significant restrictions to repatriation of
investment income; it also should be introduced if there is no this kind of significant restrictions.
59. Asset impairment loss
Unit: RMB
Item Amount of this period Amount of last period
1. bad debt loss 845,974.14 0.00
2. inventory falling price loss 366,142.44
3. impairment loss of available-for-sale
financial assets
4. impairment loss of held-to-maturity
investment assets
5. impairment loss of long-term equity
investment
6. impairment loss of investment real estate
7. impairment loss of fixed assets
8. impairment loss of project goods and
material
9. impairment loss of construction in process
10. impairment loss of productive living beings
11. impairment loss of oil gas
12. impairment loss of intangible assets
13. goodwill impairment loss
14. Others
Total 1,212,116.58 0.00
111
Semi-Annual Report 2012
60. Non-operating income
(1)
Unit: RMB
Item Amount of this period Amount of last period
non-current assets disposal gains 0.00 0.00
thereinto: fixed assets disposal gains 0.00 0.00
intangible assets disposal gains 0.00 0.00
debt restructuring gains 0.00 0.00
exchange of non-monetary assets gains 0.00 0.00
accepting donations 0.00 0.00
government grants 0.00 0.00
liquidated damages income 164,779.00 16,726.00
Penalty income 65,042.42
Total 229,821.42 16,726.00
(2) Details of government grants
Unit: RMB
Item Amount of this period Amount of last period Note
N/A N/A N/A N/A
Total 0.00 0.00 --
Introductions to on-operating income
61. Non-operating expenditure
Unit: RMB
Item Amount of this period Amount of last period
non-current assets disposal losses
thereinto: fixed assets disposal losses 60,760.40
intangible assets disposal losses
debt restructuring losses
exchange of non-monetary assets losses
donations
Other 100.00
Total 100.00 61,660.40
Explanation on non-operating expenditure:
62. Income tax expense
Unit: RMB
Item Amount of this period Amount of last period
112
Semi-Annual Report 2012
current income tax calculated based on tax law and
2,637,465.10 1,785,964.18
relevant rules
deferred income tax adjustment -303,029.15
Total 2,334,435.95 1,785,964.18
63. The computational process of basic EPS (earnings per share) and diluted EPS
Item Serial Amount of this period Amount of last period
Net profit attributable to shareholders of
the parent Company 1 6,426,237.82 9,280,724.63
Non-recurring gains/losses attributable
to parent Company 2 172,291.07 -44,934.40
Net profit attributable to shareholders of
the parent Company after deducting
non-recurring gains and losses 3=1-2 6,253,946.75 9,325,659.03
Total shares at year-begin 4 283,161,227.00 283,161,227.00
Shares increase from capital reserve
conversion or shares dividend allocation
(I) 5
Shares increase from new shares
offering or shares converted from debt
(II) 6
Total months accumulative from next
month of shares increased (II) to end of
the year 7
Shares decreased by re-purchasing 8
Total months accumulative from next
month of shares decreased to end of the
year 9
Shares decreased from share deduction 10
Months in reporting period 11 6 6
12=4+5+6×7÷11
Weighted average amount of ordinary
shares offering outside -8×9÷11-10 283,161,227.00 283,161,227.00
Basic EPS (I) 13=1÷12 0.0227 0.0328
Basic EPS (II) 14=3÷12 0.0221 0.0329
Diluted potential common dividend that
with expenses recognized 15
Conversion charge 16
Rate of income tax 17
Weighted average amount of ordinary
shares increased by warrants, option
exercise and convertible bonds 18
19=[1+(15-16)×(1-17)]÷
Diluted EPS (I) (12+18) 0.0227 0.0328
19=[3+(15-16)×(1-17)]÷
Diluted EPS (II) (12+18) 0.0221 0.0329
113
Semi-Annual Report 2012
64. Other consolidated income
Unit: RMB
Item Amount of this period Amount of last period
1.gains (losses) amount generated by —
—
available-for-sale financial assets
subtract: affected by income tax generated by —
—
available-for-sale financial assets
net amount reckoned in other consolidated income at —
earlier stage but turned to gains and losses at the —
current period
subtotal — —
2. shares shared in other consolidated income of —
invested enterprises checked according to the equity —
law
subtract: affected by income tax generated by shares —
shared in other consolidated income of invested —
enterprises calculated according to equity law
net amount reckoned in other consolidated income at —
earlier stage but turned to gains and losses at the —
current period
subtotal — —
3. gains (losses) amount generated by cash flow —
—
hedging instruments
subtract: affected by income taxes generated by —
—
cash flow hedging instruments
net amount reckoned in other consolidated income at —
earlier stage but turned to gains and losses at the —
current period
subtract: adjustment to initially recognition amount —
—
turned to be hedged items
subtotal — —
4.translation differences of foreign currency financial —
—
statement
subtract: net amount of overseas operation turns to —
—
gains and losses at current period
subtotal — —
5. others — —
subtract: affected by income tax reckoned in other —
—
consolidated income
net amount reckoned in other consolidated income at —
earlier stage but turned to gains and losses at the —
current period
subtotal — —
Total
Introductions to other consolidated income
114
Semi-Annual Report 2012
65. Notes to statement of cash flow
(1) Other cash received in relation to operation activities
Unit: RMB
Item Amount
Cash received from other operation activity 20,074,140.41
Total 20,074,140.41
Explanaination on other cash received in relation to operation activities:
Other cash received in relation to operation activities in this period mainly including: collected utilities and management charge,
personal connected, margin and other connected amount etc
(2) Other cash paid in relation to operation activities
Unit: RMB
Item Amount
Other cash paid in relation to operation activities 25,503,152.26
Total 25,503,152.26
Explanation on other cash paid in relation to operation activities
Other cash paid in relation to operation activities in this period mainly including: management charge paid in cash, sales
expenses, personal connected, margin, utilities collected for paying and management charge etc
(3) Cash received from other investment activities
Unit: RMB
Item Amount
N/A N/A
Total
Explanation on cash received from other investment activities
(4) Cash paid related with investment activities
Unit: RMB
Item Amount
N/A N/A
Total
Explanation on cash paid related with investment activities
(5) Other cash received in relation to financing activities
Unit: RMB
Item Amount
N/A N/A
Total
Explanation on other cash received in relation to financing activities
(6) Cash paid related with financing activities
Unit: RMB
Item Amount
N/A N/A
Total
Explanation on cash paid related with financing activities
115
Semi-Annual Report 2012
66. Supplementary information to statement of cash flow
(1) Supplementary information to statement of cash flow
Unit: RMB
Supplementary information Amount as at this period Amount as at previous period
1．Net profit adjusted to cash flow of operation
-- --
activities：
Net profit 6,426,237.82 9,280,724.63
Add: assets impairment losses 1,212,116.58 0.00
Depreciation of fixed assets, consumption of oil
assets and depreciation of productive biology 7,105,763.61 7,962,362.97
assets
Amortization of intangible assets 764,025.48 387,394.82
Amortization of long-term deferred expenses 412,400.00 263,719.08
Loss from disposal of fixed assets, intangible
assets and other long-term assets(gain is listed with -873.70 60,710.40
―-‖)
Loss of disposing fixed assets(gain is listed with
―-‖)
Loss from change of fair value(gain is listed with
―-‖)
Financial expenses (gain is listed with ―-‖) 10,220,006.16 7,601,931.51
Investment loss (gain is listed with ―-‖)
Decrease of deferred income tax asset( (increase is
-303,029.14 524,621.88
listed with ―-‖)
Increase of deferred income tax liability (decrease
is listed with ―-‖)
Decrease of inventory (increase is listed with ―-‖) 4,696,020.93 -14,737,179.79
Decrease of operating receivable accounts
-19,131,734.21 -65,105,203.65
(increase is listed with ―-‖)
Increase of operating payable accounts (decrease is
63,467,561.38 -34,340,413.44
listed with ―-‖)
Others 4,031.94
Net cash flow arising from operating activities 74,868,494.91 -15,077,925.90
2．Material investment and financing not involved
-- --
in cash flow
Liabilities converted to capital
Convertible bond expire in 1 year
Fixed assets leased through financing
3．Net change of cash and cash equivalents： -- --
Balance of cash at period end 253,754,229.24 109,542,109.98
Less: Balance of cash at year-begin 141,426,712.65 113,686,755.85
Plus: Balance of cash equivalents at the period end
Less: Balance of cash equivalent at year-begin
Net increasing of cash and cash equivalents 112,327,516.59 -4,144,645.87
116
Semi-Annual Report 2012
(2) Relevant information about obtaining/disposal of subsidiary and other business unit in
report period
Unit: RMB
Supplementary Amount in this period Amount in last period
I. Relevant information about obtaining subsidiary
-- --
and other business units:
1. Price of obtaining subsidiary and other business
units
2. Cash and cash equivalent paid for obtaining
subsidiary and other business units
Less: Cash and cash equivalent held by subsidiary
and other business units
3. Net cash paid for obtaining subsidiary and other
business unit
4. Net assets obtained from subsidiary
Current assets
Non-current assets
Current liability
Non-current liability
II. Relevant information about disposal of
-- --
subsidiary and other business units:
1. Price of disposal of subsidiary and other business
units
2. Cash and cash equivalent received from disposal
of subsidiary and other business units
Less: Cash and cash equivalent held by subsidiary
and other business units
3. Net cash received from disposal of subsidiary and
other business units
4. Disposal of net assets
Current assets
Non-current assets
Current liability
Non-current liability
(3) Constitution of cash and cash equivalent:
Unit: RMB
Item Balance as at period-end Balance as at period-begin
I. Cash 253,754,229.24 141,426,712.65
Including: stock cash 545,081.48 228,112.79
Bank deposit available for payment at any time 230,429,793.64 107,516,615.58
Other monetary fund available for payment at
22,779,354.12 33,681,984.28
any time
Account available for payment that saving in
central bank
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Semi-Annual Report 2012
account save interbank
account split interbank
II. Cash equivalent
Including: bond investment matured within 3
months
III. Balance of cash and cash equivalent at
253,754,229.24 141,426,712.65
year-end
Explanation on constitution of cash and cash equivalent:
67. Notes of changes of owners’ equity
Explain the name and adjusted amount in ―Other‖ at end of last period as well as the retroactive adjustment
arising from enterprise combination under same control:
(VIII) Accounting treatment of assets securitization
1. Explain the main exchange of assets securitization and its accounting treatment and
provision of bankruptcy-remote
2. Subject of special purpose without controlling rights on hand by actually bear the risks
Unit: RMB
Total assets at Total liability Net assets at Operating
Name Net profit Note
period-end at period-end period-end income
N/A N/A N/A N/A N/A N/A N/A
(IX) Related Parties and Transactions
1. Parent company of the Company
Unit: RMB
Proportio Proportio
n of n of Final
Registra Legal shares voting controll Organiz
Parent Relation Busines Registered Currenc
Nature tion represen held to right to er of the ation
company ship s nature capital y
place tative the the Compan code
Company Company y
(%) (%)
Wuhan
Wuhan
Zhongh
Zhonghe
eng
ng New
Limite New
Science Controll Liu Science
& ing d 138,000,00 7119546
Wuhan Zuodo CNY 41.14% 41.14% &
Technolo sharehol liabilit 0.00 01
ng Technol
gy der y ogy
Industry
Industry
Group
Group
Co., Ltd
Co., Ltd
Explanation on parent company of the enterprise: Nil
118
Semi-Annual Report 2012
2. Subsidiary of the Company
Unit: RMB
Legal Proportion of
Subsidiary of Registration Business Registered Proportion of Organization
Type Nature representativ Currency shares held
the Company place nature capital voting right (%) code
e (%)
Shenzhen
Huafa
Property Controlling Limited Property
Shenzhen Liu Zuodong 1,000,000.00 CNY 60% 60% 708438593
Lease subsidiary liability management
Management
Co., Ltd.
Shenzhen
Zhongheng Controlling
Limited Property
Huafa Shenzhen Li Zhongqiu 1,000,000.00 CNY 100% 100% 683788414
liability management
Property Co., subsidiary
Ltd.
Wuhan
Hengfa Controlling Limited Manufacture,
Science&Tec Wuhan Li Zhongqiu 181,643,111.00 CNY 100% 100% 679115161
liability sales
hnology Co., subsidiary
Ltd.
Wuhan
Huafa Controlling Limited
Wuhan Li Zhongqiu Sales 100,000.00 CNY 100% 100% 562332146
Trading subsidiary liability
Company
119
Semi-Annual Report 2012
3. Details of joint-venture and affiliated enterprise of the Company
Unit: RMB
Proportio
Equity
n of Total Total
proportio Total Total net
voting liability operation Net profit
Invested Register Business Register n held by assets at assets at Relations Organizat
Type Legal rep. Currency rights in at revenue in this
company place nature capital the period-en period-en hip ion code
invested period-en in this period
Company d d
company d period
(%)
(%)
I.
Joint-ventu -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
re
N/A
II.
Affiliated -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
enterprise
N/A
120
Semi-Annual Report 2012
4. Particulars about other related parties
other related parties Relationship Organization code
Wuhan Hengsheng Yutian Industrial
Subsidiary of parent company
Co., Ltd. 73108664-5
Shenzhen Zhongheng Huafa
Subsidiary of parent company
Technology Co., Ltd 68536237-X
Wuhan Xindongfang Real Estate
Subsidiary of parent company
Development Co., Ltd 74476047-5
Wuhan Zhongheng Property
Subsidiary of parent company
Management Co., Ltd 75180426-1
Wuhan Guanggu Display System
Subsidiary of parent company
Co., Ltd 75510305-9
Hong Kong Yutian International
Subsidiary of parent company
Investment Co., Ltd.
Yutian Property (Wuhan) Co., Ltd Subsidiary of parent company 66348637-1
Wuhan Xiahua Zhongheng
Subsidiary of parent company
Electronic Co., ltd
Wuhan Zhongheng Yutain Property
Subsidiary of parent company
Co., Ltd 56559237-3
Wuhan Yutian Hongguang Property
Subsidiary of parent company
Co., Ltd 56234774-3
Explanation on other related parties:
5. Related transaction
(1) Statement of commodity purchased and labor service received
Unit: RMB
Amount in this period Amount in last period
Pricing way and Ratio in Ratio in
Related party Content decision making similar similar
Amount Amount
procedures transactio transactio
ns (%) ns (%)
Wuhan Hengsheng Yutian The daily related
Purchasing LCD 7,874,769.12 1.90% 90,322,747.61 16.3%
Industrial Co., Ltd. transaction has
been deliberated
Hong Kong Yutian and approved in 1st
Purchasing LCD and
International Investment extraordinary 302,879,584.49 73.26% 258,875,026.53 46.72%
whole-set of LCD
Co., Ltd. shareholders‘
general meeting of
121
Semi-Annual Report 2012
2012
Shenzhen Zhongheng
0 0.00% 64,905.00 0.01%
Huafa Technology Co., Ltd
Total 310,754,353.61 75.16% 349,262,679.14 63.03%
Amount in this period Amount in last period
Pricing way and Ratio in Ratio in
Related party Content decision making similar similar
Amount Amount
procedures transactio transactio
ns (%) ns (%)
The daily related
transaction has
been deliberated
Hong Kong Yutian
and approved in 1st
International Sales of LCD 227,378,382.27 59.35% 301,259,106.74 68.61%
extraordinary
Investment Co., Ltd.
shareholders‘
general meeting of
2012
Total 227,378,382.27 59.35% 301,259,106.74 68.61%
Statement of commodity sales and labor service provided
(2) Related trusteeship/contract
Statement of related trusteeship/contract
Unit: RMB
Entrusted Income
Assignee/ Entrusted Influence
Assigner/c /contract Starting Terminate Pricing recognize
contract-o /contract Assts type from the
ontractor assets from d dated basis d in this
ut party assets income
amount period
N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Statement of entrusted management and contract
Unit: RMB
Entrusted Income
Assignee/ Entrusted Influence
Assigner/c /contract Starting Terminate Pricing recognized
contract-o /contract Assts type from the
ontractor assets from d dated basis in this
ut party assets income
amount period
N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Explanation on related truster ship and contract
122
Semi-Annual Report 2012
(3) Related leasing
Leasing-out
Unit: RMB
Pricing Leasing
Leasing
Amount for Starting Terminated basis for income
Lessor Lessee Type of leasing Leasing asses income
leasing from dated leasing recognized
influence
income in period
Shenzhen
Shenzhen Plant, facility Price rented
Zhongheng
Zhongheng and integrity to third
Huafa 2012-01-01 2012-03-31 418,198.88 418,198.88
Huafa Co., supporting party as
Technology
Ltd service same place
Co., Ltd
Statement of leasing
Unit: RMB
Pricing Leasing
Leasing
Amount for Starting Terminated basis for income
Lessor Lessee Type of leasing Leasing asses income
leasing from dated leasing recognized
influence
income in period
N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Explanation on related leasing:
(4) Related guarantee
Unit: RMB
Whether guarantee
Guarantee provided Guarantee received Guarantee amount Starting from Terminated dated
implemented or not
N/A N/A N/A N/A N/A N/A
Explanation on related guarantee
(5) Borrowed funds from related party
Unit: RMB
Related party Borrowed funds Starting from Terminated dated Note
Borrow-in
N/A N/A N/A N/A N/A
Borrow-out
N/A N/A N/A N/A N/A
(6) Assets transfer, debt restructure of related party
Unit: RMB
Amount in this period Amount in last period
Pricing way and
decision-making Ratio in Ratio in
Related party Type Content
Amount similar Amount similar
procedure
transactio transactio
123
Semi-Annual Report 2012
ns (%) ns (%)
N/A N/A N/A N/A N/A N/A N/A N/A
(7) Other related transactions
6. Account receivable/payable for related parties
Account receivable from related parties
Unit: RMB
Item Related parties Amount at period-end Amount at period-begin
Hong Kong Yutian International
Account receivable 25,313,691.63 24,364,131.78
Investment Co., Ltd.
Account payable for related parties
Unit: RMB
Item Related parties Amount at period-end Amount at period-begin
N/A N/A N/A N/A
(X) Share payment
1. General particular about share payment
Total vary equity instrument granted by
—
the Company
Total vary equity instrument vesting by
—
the Company
Total vary equity instrument expired in
—
this period
Price of exercise/option range for those
shares offering outside in period-end and —
their remain term in contract
Price of exercise for other equity
instrument at period-end and their —
remains term in contract
Explanation on share payment
2. Share payment settled by equity
Unit: RMB
Determination method for fair value of equity
—
instrument in granted dated
Determination method for best estimation of vesting
—
equity instrument
Reasons of major difference in this period over
—
estimation last period
Share payment accumulated by equity settlement in —
124
Semi-Annual Report 2012
capital reserve
Total amount of share payment by equity settlement —
Explanation on share payment settled by equity
3. Share payment settled by cash
Unit: RMB
Fair value determine method of liability that bear by the
Company and calculated by share or other equity —
instrument
Liability amount accumulated arising from cash payment
—
in liabilities
Total expenses of shares payment settled by cash —
Explanation on share payment settled by cash
4. Service payment for shares
Unit: RMB
Total staff service exchange by share payment —
Total other service exchange by share payment —
5. Particular about amendment of share payment and its termination
(XI) Contingent events
1. Contingent liability and its financial influence formed by un-settle lawsuits or arbitration
(1) Dispute case that Shanxi Linghua Electronics Co., Ltd sued Company for undertaking contract
Dispute case that Shanxi Linghua Electronics Co., Ltd. (hereafter referred as ―Shanxi Linghua‖) sued Company
for undertaking contract (No. 2441Civil Secondary First Shen Fu Court 2007): Shanxi Linghua sued the Company
for the compensation for its loss caused by the printed circuit boards (PBC) of latent quality problems sold to it in
the period from 30 May 2006 to 9 May 2007, with the object of action of RMB 3,100,773.20. The Company
received the summons on the case from the People‘s Court of Futian District on 14 January 2008; Court of First
Instance started the first hearing on Mar 6th of 2008. Questioning of evidence has been done by two parties.
The Company prosecuted the countercharge to the action on 12 November 2007, and sued the Shanxi Liinghua in
arrears with loans from the Company and relevant interest, with the object of action of RMB 1,054,290.19. Court
of First Instance started the first hearing on Mar 6th of 2008 and questioning of evidence has been done by two
parties.
On 25 July 2009, the People‘s Court of Futian District of Shenzhen Municipality made judgment on the above
cases (No. 2441Civil Secondary First Shen Fu Court 2007): the Company might pay to Shanxi Hualing the
liquidated damages of RMB 1,797,975.48, and Shanxi Hualing to the Company the remnant loans of RMB
869,458.96 and the interest loss, within10 days from the judgment validity day.
The Company appealed against the judgment to the People‘s Intermediate Court of Shenzhen Municipality on 31
August 2009; People‘s Intermediate Court of Shenzhen Municipality made civil decision (No. 2227 Civil
Secondary Final Shen Intermediate Court (2009)) on the case on 22 March 2010, with the reason that the previous
judgment was of the unclear identification on and insufficient evidence to the major facts in the case, and repealed
the No. 2441 Civil Judgment (Civil Secondary First Shen Fu Court) of the People‘s Court of Futian District of
125
Semi-Annual Report 2012
Shenzhen Municipality (2007) and remanded to the People‘s Court of Futian District of Shenzhen Municipality.
Pursuant to ―Introduction to Dispute Case of Undertaking Contract between Shenzhen Zhongheng Huafa Holding
Co., Ltd. and Shanxi Linghua Electronics Co., Ltd.‖ presented on 22 April 2010 by Lawyer Zhang Guozhi of
Gongdong Jiang Shanhong CPAs: based on the existing evidence, as the People‘s Court of Futian District of
Shenzhen Municipality retries the case, the Company has big chance to recovery. The lawsuit expense of RMB
179,797.55 for the case was accrued last year and recognized as estimative liability. As ending at the day of the
approved presentation of the Financial Report, the case has not been concluded.
On 15 February 2012, the first instance of retrial has been trail in People‘s Court of Futian District of Shenzhen
Municipality without decisions been made.
Ended as the approval date for this financial report carry out, the case is not concluded.
(2) Labor dispute that recognized as accrual liability in previous years without execution so far
Concerning the Execution Notice ([2008] SFFZZ No.: 522-529) from People‘s Court of Futian District of
Shenzhen Municipality, the arbitration award of SLZC[2007] No. 1069-1077, No.: 1079, No.: 1081 and
No.:1085-1087 from Shenzhen Labor Dispute Arbitration Committee, have been effected legally for the labor
disputation of 14 persons including Cai Yaoqiang. According to the information of Basic Credit Report for
Enterprise, the Company still has totally l38, 386.00 yuan labour dispute un-executed, which has been accrual as
liability recognized by the Company.
Former employee Yang Guangze suits the Company for owing salary, bonus, over-time charge, public reserve and
holiday bonus totally amounted as 23,851.00 yuan; the Company recognized as accrual liability in accordance
with relevant ruling from people‘s court.
2. Contingent liability and its financial influence formed from debt guarantee offered to other
units
Nil
Other contingent liability and its financial influence:
Except for the above contingent events, the Company has no other material contingency ended as 30 June 2012.
(XII) Commitments
1. Material commitments
The Company has no material commitments that should be disclosed ended as 30 June 2012.
1.Commitments made previously
(XIII) Subsequent events of balance sheet
1. Explanation on major event after balance sheet date
Unit: RMB
Reasons for no
Influence on financial status and
Item Content estimation on influence
operation results
amount
N/A N/A N/A N/A
2. Profit distribution after balance sheet date
nit: RMB
Profit or dividend plans to distributed N/A
Profit or dividend declare to distributed which have
N/A
been approved
3. Other explanation after balance sheet date
The Company has other material events after balance sheet date ended as the approval dated for this financial
statement
126
Semi-Annual Report 2012
(XIV) Other explanations on major event
1. Non-monetary asets exchange
2. Debt reorganization
3. Enterprise combination
4. Leasing
5. Financial instrument issued outside and convertible to shares in report period
6. Main content of annuity plan and major changes
7. Other events needs disclosure
The Company has no other material events needs disclosed ended as 30 June 2012
(XV) Principle notes of financial statements of parent company
1. Accounts receivable
(1) Accounts receivable
Unit: RMB
Single amount is large, and Closing balance Opening balance
accounts receivable of single
Book balance Bad debt reserves Book balance Bad debt reserves
counting and drawing bad debt
reserves
counting and drawing accounts
Proportion Proportion Proportion Proportion
receivable of bad debt reserves Amount Amount Amount Amount
(%) (%) (%) (%)
by group
subtotal 5,083,695.69 9.47% 3,203,563.18 63.02% 3,849,491.53 7.2% 1,978,237.03 51.39%
though the single amount is not large, accounts receivable of single counting and drawing bad debt reserves
total
Single amount is large, and
accounts receivable of single
43,745,089.78 81.52% 105,539.06 0.24% 44,762,057.73 83.76% 105,539.06 0.24%
counting and drawing bad debt
reserves
counting and drawing accounts
receivable of bad debt reserves 4,832,295.13 9.01% 4,832,295.13 100% 4,832,295.13 9.04% 4,832,295.13 100%
by group
53,661,080.60 -- 8,141,397.37 -- 53,443,844.39 -- 6,916,071.22 --
127
Semi-Annual Report 2012
Introductions to types of accounts receivable
Terminal single amount is large, and accounts receivable of single counting and drawing bad debt reserves
√Applicable □ Not Applicable
Unit: RMB
counting and counting and
accounts receivable book balance bad debt reserves
drawing ratio drawing reasons
HORACE INDUSTRIAL LTD. 1,870,887.18 187,088.72 10% By age
UNABLE TO R
TCL (HUIZHOU) CO., LTD. 1,325,431.75 1,325,431.75 100%
ECOVER
Qingdao Haier Part Purchasing Checking
1,225,326.15 1,225,326.15 100%
Co., Ltd. differences
Skyworth Multimedia (Shenzhen) UNABLE TO
653,172.60 465,716.56 71.3%
Co., Ltd. RECOVER
Total 5,083,695.69 3,203,563.18 -- --
In combination, counting and drawing accounts receivable of bad debt reserves by adopting aging of accounts
√Applicable □ Not Applicable
Unit: RMB
Closing balance Opening balance
Age Book balance Book balance
Bad debt reserves Bad debt reserves
Amount Proportion Amount Proportion
within 1 year
Including: -- -- -- -- -- --
208,358.20 7,560,400.23
Subtotal within
208,358.20
1 year
1-2years 7,560,400.23
2-3years 43,184,934.79 36,849,860.71
Over 3years 351,796.79 30% 105,539.06 351,796.79 30% 105,539.06
3-4years
4-5years
Over 5years
Total 43,745,089.78 -- 105,539.06 44,762,057.73 -- 105,539.06
In combination, counting and drawing accounts receivable of bad debt reserves by adopting balance percentage of
approach:
□Applicable √Not Applicable
In combination, counting and drawing accounts receivable of bad debt reserves by adopting other
methods:
128
Semi-Annual Report 2012
□Applicable √Not Applicable
Terminal single amount is not large, but accounts receivable of single counting and drawing bad debt reserves:
√Applicable □ Not Applicable
Unit: RMB
counting and drawing counting and drawing
accounts receivable book balance bad debt reserves
ratio reasons
Shenzhen Huixin Video
381,168.96 381,168.96 100% Over 5-year book age
Technology Co., Ltd.
Shenzhen Wondial Number
Science & Technology Co., 351,813.70 351,813.70 100% Over 5-year book age
Ltd.
Shenzhen Tianlong Electronic
344,700.00 344,700.00 100% Over 5-year book age
Co., Ltd.
Shenzhen Qunping Electronic
304,542.95 304,542.95 100% Over 5-year book age
Co., Ltd.
China Galaxy Electronic (HK)
288,261.17 288,261.17 100% Over 5-year book age
LTD
Dongguan Weite Electronic
274,399.80 274,399.80 100% Over 5-year book age
Co., ltd.
Hong Kong New Century
207,409.40 207,409.40 100% Over 5-year book age
Electronic Co., Ltd.
Shenyang Beitai Electronic
203,304.02 203,304.02 100% Over 5-year book age
Co., Ltd.
Beijing Xinfan Weiye
193,000.00 193,000.00 100% Over 5-year book age
Technology Co., Ltd.
TCL ELECTRONIC (HK)
145,087.14 145,087.14 100% Over 5-year book age
CO., LTD.
Huizhou TCL Xinte Electronic
142,707.14 142,707.14 100% Over 5-year book age
Co., Ltd.
Shenzhen Skyworth – RGB
125,215.13 125,215.13 100% Over 5-year book age
Electronic Co., Ltd.
Shenzhen Xinfa Electronic
119,094.78 119,094.78 100% Over 5-year book age
Co., Ltd.
Other company 1,751,590.94 1,751,590.94 100% Over 5-year book age
Total 4,832,295.13 4,832,295.13 100% --
(2) Accounts receivable switched back or taken back during the report period
Unit: RMB
129
Semi-Annual Report 2012
switching back or
reasons for taking back the
Basis for confirming Amount switched
Accounts receivable switching back or counted or drawn bad
bad debt reserves back or taken back
taking back debt reserves
accumulated before
N/A N/A N/A N/A N/A
Total -- -- --
Terminal single amount is large, or not large, but counting and drawing bad debt reserves of accounts receivable
by doing impairment test alone:
counting and drawing
accounts receivable book balance bad debt reserves Reasons
ratio
N/A N/A N/A N/A N/A
Total -- --
Explanation on account receivable with minor single amount but has more risk after credit risk characteristic:
(3) Accounts receivable should be cancelled after verification during the report period
Unit: RMB
accounts
Whether caused by
Unit name receivable Canceling time Canceling amount Canceling reasons
related transaction
properties
N/A N/A N/A N/A N/A N/A
Total -- -- -- --
Introductions to cancellation of accounts receivable
(4) Shareholder units holding more than 5 %( Including 5%) voting shares of the Company in
accounts receivable during the report period
□Applicable √Not Applicable
(5) Properties and contents of other accounts receivable with large amount
(6) Units with top five accounts receivable amount
Unit: RMB
Relationship with Percentage in accounts
Unit name Amount Age limit
the Company receivable amount (%)
130
Semi-Annual Report 2012
Hengfa Technology Co., subsidiary 43,184,934.79 2-3years 80.49%
HORACE INDUSTRIAL
Main clients 1,870,887.18 2-3 years 3.49%
LTD.
TCL (HUIZHOU) CO.,
Main clients 1,325,431.75 3-5 years 2.47%
LTD.
Qingdao Haier Part
Main clients 1,225,326.15 within 1 year 2.28%
Purchasing Co., Ltd.
Skyworth Multimedia
Main clients 653,172.60 2-3 years 1.22%
(Shenzhen) Co., Ltd.
Total -- 48,259,752.47 -- 89.95%
(7) Accounts receivable of related party
Unit: RMB
Relationship with the Percentage in accounts
Unit name Amount
Company receivable amount (%)
Hengfa Technology Co., subsidiary 43,184,934.79 80.49%
Total -- 43,184,934.79 80.49%
(8)
Transferring amount is 0 Yuan for accounts receivable not conforming to terminate the
confirmation.
(9) It is required to introduce the relevant transaction arrangement for asset securitization
taking accounts receivables as the standard
2. Other accounts receivable
(1) Other accounts receivable
Unit: RMB
Closing balance Opening balance
Type book balance bad debt reserves book balance bad debt reserves
Amount Ratio (%) Amount Ratio (%) Amount Ratio (%) Amount Ratio (%)
single amount is large, and other
accounts receivable of single
11,297,652.38 13.23% 11,107,617.11 98.32% 16,490,164.68 20.17% 11,486,969.12 69.66%
counting and drawing bad debt
reserves
counting and drawing other accounts receivable of bad debt reserves by group
131
Semi-Annual Report 2012
Other receivable with single minor
amount but has major risk after 70,777,433.51 82.87% 427,047.62 0.6% 61,752,545.62 75.52% 427,047.62 0.69%
credit characteristic combination
subtotal 70,777,433.51 82.87% 427,047.62 0.6% 61,752,545.62 75.52% 427,047.62 0.69%
though the single amount is not
large, other accounts receivable of
3,331,582.62 3.9% 3,331,582.62 100% 3,527,454.04 4.31% 3,331,582.62 94.45%
single counting and drawing bad
debt reserves
Total 85,406,668.51 -- 14,866,247.35 -- 81,770,164.34 -- 15,245,599.36 --
Introductions to cancellation of accounts receivable
Terminal single amount is large, and other accounts receivable of single counting and drawing bad debt reserves
√Applicable □ Not Applicable
Unit: RMB
Other accounts
book balance bad debt reserves counting and drawing ratio Reasons
receivable
UNABLE TO
Huafa Leasing Co., 4,558,859.15 4,558,859.15 100%
RECOVER
Shenzhen Boteman
4,021,734.22 4,021,734.22 100% Over 5-year book age
Bowling Club Co. ,Ltd.
UNABLE TO
Zhao Baomin 939,354.00 939,354.00 100%
RECOVER
Wanshang Department Checking differences in
701,898.20 511,862.93 72.93%
Store two parties
Traffic accident
555,785.81 555,785.81 100% Over 5-year book age
compensation
Hebei Botou Court 520,021.00 520,021.00 100% Over 5-year book age
Total 11,297,652.38 11,107,617.11 -- --
In combination, counting and drawing other accounts receivable of bad debt reserves by adopting aging of
accounts
√Applicable □ Not Applicable
Unit: RMB
Closing balance Opening balance
accounts receivable
book balance book balance
age bad debt reserves bad debt reserves
Amount Ratio (%) Amount Ratio (%)
within 1 year
Including: -- -- -- -- -- --
11,237,548.12 680,273.50
132
Semi-Annual Report 2012
Subtotal within 1
11,237,548.12 680,273.50
year
1-2years 25,689,048.82 0.06% 14,875.60 19,999,011.06 0.07% 14,875.60
2-3years 32,539,858.50 0.06% 18,878.60 39,762,282.99 0.05% 18,878.60
Over 3 years 1,310,978.07 30% 393,293.42 1,310,978.07 30% 393,293.42
3-4years
4-5years
Over 5years
Total 70,777,433.51 -- 427,047.62 61,752,545.62 -- 427,047.62
In combination, counting and drawing other accounts receivable of bad debt reserves by adopting balance
percentage of approach:
□Applicable √Not Applicable
In combination, counting and drawing other accounts receivable of bad debt reserves by adopting other methods:
□Applicable √Not Applicable
Terminal single amount is not large, but other accounts receivable of single counting and drawing bad debt
reserves:
√Applicable □ Not Applicable
Unit: RMB
Other accounts receivable book balance bad debt reserves counting and drawing ratio Reasons
Employee canteen etc 796,041.46 796,041.46 100% UNABLE TO RECOVER
Total personal lending 684,305.72 684,305.72 100% UNABLE TO RECOVER
Labor union 226,255.05 226,255.05 100% UNABLE TO RECOVER
Chuangjing work office 192,794.00 192,794.00 100% Over 5-year book age
Shenzhen Lotus Island Restaurant Co., Ltd. 151,040.00 151,040.00 100% Over 5-year book age
Fujian Zhangzhou Weili Electronic Enterprise
112,335.62 112,335.62 100% Over 5-year book age
Co., Ltd.
Shenzhen Shiyan Elementary School 100,000.00 100,000.00 100% Over 5-year book age
Other 1,068,810.77 1,068,810.77 100% Over 5-year book age
Total 3,331,582.62 3,331,582.62 100% --
(2) Other accounts receivable switched back or taken back during the report period
Unit: RMB
switching back or taking
reasons for switching Basis for confirming bad back the counted or Amount switched back
Other accounts receivable
back or taking back debt reserves drawn bad debt reserves or taken back
accumulated before
133
Semi-Annual Report 2012
Shenzhen Boteman Bowling
Court execution Over 5-year book age 15,481.20 15,481.20
Club Co. ,Ltd.
Wanshang Department Store Court execution Over 5-year book age 363,870.81 363,870.81
Total -- -- 379,352.01 --
Terminal single amount is large, or not large, but counting and drawing bad debt reserves of other accounts
receivable by doing impairment test alone:
counting and drawing
accounts receivable book balance bad debt reserves Reasons
ratio
N/A N/A N/A N/A N/A
Total -- --
Introductions to other accounts receivable, the single amount of which is not large, but the credit risks are large
after combining according to the credit risks characters:
(3) Other accounts receivable should be cancelled after verification during the report period
Unit: RMB
Other accounts
Canceling Canceling Whether caused by
Unit name receivable Canceling time
amount reasons related transaction
properties
N/A N/A N/A N/A N/A N/A
Total -- -- -- --
Introductions to cancellation of other accounts receivable
(4) Shareholder units holding more than 5% (Including 5%) voting shares of the Company in
other accounts receivable during the report period
□Applicable √Not Applicable
(5) Properties and contents of other accounts receivable with large amount
(6) Units with top five other accounts receivable amount
Unit: RMB
Relationship
Percentage in accounts
Unit name with the Amount Age limit
receivable amount (%)
Company
Hengfa Technology Co., Subsidiary 65,702,372.16 1-3 years 76.43%
Huafa Leasing Co., Subsidiary 4,558,559.15 Over 5 years 5.45%
134
Semi-Annual Report 2012
Shenzhen Boteman Bowling
Leasee 4,037,215.42 Over 5 years 4.83%
Club Co. ,Ltd.
Shenzhen Zhongheng Huafa
Subsidiary 1,532,386.73 within 1 year 1.83%
Property Co., Ltd.
Zhao Baomin Leasee 939,354.00 2-3 years 1.12%
Total -- 76,769,887.46 -- 89.67%
(7) Other accounts receivable of related party
Unit: RMB
Relationship with the Percentage in accounts
Unit name Amount
Company receivable amount (%)
Hengfa Technology Co., Subsidiary 65,702,372.16 76.43%
Huaf Leasing Co., Subsidiary 4,558,559.15 5.45%
Shenzhen Zhongheng
Subsidiary 1,532,386.73 1.83%
Huafa Property Co., Ltd.
Total -- 71,793,318.04 83.71%
(8)
Transferring amount is 0 Yuan for other accounts receivable not conforming to terminate the
confirmation.
(9) It is required to introduce the relevant transaction arrangement for asset securitization
taking other accounts receivables as the standard
3. Long-term equity investment
Unit: RMB
Counting
Description of and Cash
increas
Share holding Vote inconformity of drawing dividen
e and
Invested percentage in percentage share holding Impairment impairmen ds at
Calculating methods Initial Opening balance decreas
units Closing balance invested units in invested percentage and reserves t reserves the
investment costs e
(%) units (%) vote percentage at the current
changes
in invested units current period
period
Huaf Long-term equity
Leasing investment based on cost 600,000.00 600,000.00 600,000.00 60% 60% 600,000.00
Co., and equity
135
Semi-Annual Report 2012
Huafa Long-term equity
Property investment based on cost 1,000,000.00 1,000,000.00 1,000,000.00 100% 100%
Co and equity
Hengfa Long-term equity
Technolog investment based on cost 183,608,900.00 183,608,900.00 183,608,900.00 100% 100%
y Co., and equity
Huafa Long-term equity
Trading investment based on cost 100,000.00 100,000.00 100,000.00 100% 100%
Co and equity
Total -- 185,308,900.00 185,308,900.00 185,308,900.00 -- -- -- 600,000.00
Introductions to long-term equity investment
Nil
4. Operating income and cost
(1) Operating income and cost
Unit: RMB
Item Amount of this period Amount of last period
Main operating income 3,111,682.22
Other operating income 22,331,277.43 21,898,477.83
Operating cost 4,803,869.50 1,667,103.70
Total 20,639,090.15 20,231,374.13
(2) Primary business (By industries)
√Applicable □ Not Applicable
Amount of this period Amount of last period
Industry name
Operating income Operating cost Operating income Operating cost
Display screen 3,111,682.22 3,184,995.34
Total 3,111,682.22 3,184,995.34
(3) Primary business (By products)
□Applicable √Not Applicable
(4) Primary business (By districts)
□Applicable √Not Applicable
136
Semi-Annual Report 2012
(5) The operating income of the top five customers of the Company
Unit: RMB
The
percentage in
Customer name Primary business income all operating
income of the
Company (%)
Shenzhen Resource Vanguard Co., Ltd 9,939,090.00 39.06%
Wanshang Youyi Department Store 3,020,722.46 11.87%
China Great Wall Computer (Shenzhen) Co., Ltd 2,962,550.77 11.64%
Dijie Company 952,560.00 3.74%
Duan Lintao 943,836.00 3.71%
Total 17,818,759.23 70.03%
Introductions to operating income
5. Investment income
(1) Particulars about investment income
Unit: RMB
Item Amount of this period Amount of last period
Income of long-term equity investment calculated —
—
based on cost
Income of long-term equity investment calculated —
—
based on equity
Investment income obtained from disposal of —
—
long-term equity investment
Investment income obtained during holding trading —
—
financial assets
Investment income obtained during held-to-maturity —
—
investment gaining investment income
Investment income obtained during holding —
—
available-for-sale financial assets
Investment income obtained by handling trading —
—
financial assets
Investment income obtained from held-to-maturity —
—
investment
Investment income obtained from available-for-sale — —
137
Semi-Annual Report 2012
financial assets
Others — —
Total
(2) Income of long-term equity investment calculated based on cost
Unit: RMB
Amount of this Amount of last
Company name Reasons of change (+,-)
period period
N/A N/A N/A N/A
Total --
(3) Income of long-term equity investment calculated based on equity
Unit: RMB
Amount of the Amount of the
Company name Reasons for changes (+,-)
current period last period
N/A N/A N/A N/A
Total --
Introduction to investment income:
6. Supplementary information of cash flow statement
Unit: RMB
Amount of the current
Supplementary information Amount of the last period
period
1. adjust the net profits to be cash flow for operating
-- --
activities
net profits 2,304,830.57 3,595,989.32
Add: assets impairment preparation 845,974.14
fixed assets depreciation, oil-and-gas assets loss ,
72,472.86 72,472.86
productive living beings depreciation
intangible assets amortization 412,400.04 263,719.08
long-term deferred expenses amortization 60,710.40
losses from handling fixed assets, intangible assets and
assets(profits fill with ―-― )
loss on retirement of fixed assets(profits fill with ―-― )
fair value change loss(profits fill with ―-― ) 6,267,368.71 4,527,892.18
138
Semi-Annual Report 2012
financial costs(profits fill with ―-― )
investment losses(profits fill with ―-―) 211,493.54
deferred income tax assets decrease(increases fill with ―-― )
deferred income tax liabilities increase(decreases fill with
3,333,040.38 653,343.77
―-― )
stock decreases(increases fill with ―-― ) -3,235,896.58 2,797,221.61
operating receivables decrease(increases fill with ―-― ) 6,608,528.43 1,275,666.15
operating payables increase(decreases fill with ―-― )
Others
cash flow net amount generated by operating activities 13,320,016.46 16,471,472.24
2. significant investment financial activities not involving
-- --
and cash deposit and withdrawal
debt turns to capital
convertible bonds due in one year
fixed assets financed by leasing
3. net changes of cash and cash equivalents -- --
ending balance of cash 19,957,354.03 30,023,514.65
decrease: opening balance of cash 26,428,341.78 29,345,694.04
increase: ending balance of cash equivalents
decrease: opening balance of cash equivalents
net increase of cash and cash equivalents -6,470,987.75 677,820.61
7. Assets and liabilities enter into the account book with assessed value by counter
purchase
Unit: RMB
Assets and liabilities enter into the account book
assessed value Original book value
with assessed value
Assets
N/A N/A N/A
Liabilities
N/A N/A N/A
(XVI) Supplementary Information
1. REO and earnings per share
Unit: RMB
139
Semi-Annual Report 2012
Weighted average ROE Earnings per share
Profits during report period
(%) Basic EPS diluted EPS
net profits belong to common stock
2.27% 0.0227 0.0227
stockholders of the Company
net profits belong to common stock
stockholders of the Company after 2.21% 0.0221 0.0221
deducting nonrecurring gains and losses
2．Abnormalities and reasons of the accounting statement items of the Company
IX File catalog for future reference
File catalog for future reference
I. Text of semi-annual report carrying signature of the Chairman;
II. Text of financial report carrying signature and seal of person in charge of the Company, person in charge of
accounting works and person in charge of accounting institution;
III. All files disclosed on China Securities Journal, Securities Times and Hong Kong Commercial Daily
appointed by CSRC;
IV. Article of Association;
V. Other relevant files
[Note]: This Report is prepared respectively both in Chinese and English. Should be there any difference in
interpretation of these two versions, the Chinese version shall prevail.
Chairman: Li Zhongqiu
Submit date approved by the board of directors: August 24, 2012
140
