BOE TECHNOLOGY GROUP CO., LTD.
INTERIM REPORT 2009
(Full Text)
August 20092
Contents
Section I Important Notice……………………………………………………..….....01
Section II Company Profile……………………………………………………......…02
Section III Changes in Share capital and Particulars about Shares Held by Major
Shareholders……………………………………………………………………….05
Section IV Particulars about Directors, Supervisors and Senior Executives…….......07
Section V Report of the Board of Director…………………………………………..08
Section VI Significant Events………………………………………………………..15
Section VII Financial Report…………………………………………………………22
Section VIII Documents Available for Reference……………………………………223
Section I Important Notice
The Board of Directors, the Supervisory Committee as well as all the directors,
supervisors and senior executives of BOE Technology Group Co., Ltd (hereinafter
referred to as the Company) hereby assure that there are no false records, misleading
statements or significant omissions in this report, and they would shoulder any
individual as well as joint liability concerning to the authenticity, accuracy and
completeness of the contents.
All the directors have attended the Board meeting.
Chairman of the Board Mr. Wang Dongsheng, President Mr. Chen Yanshun, CFO Ms.
Sun Yun, person in charge of Plan & Financial Dept. Ms.Yang Xiaoping hereby
declared that the Financial Report enclosed in the Interim Report is true and complete.
The Interim Financial Report of the Company was prepared in accordance with PRC
GAAP and other relevant regulations, and has not been audited.
The Interim Report was prepared in both Chinese and English. Should there be any
difference in interpretation between the two versions, the Chinese version shall
prevail.4
Section II Company Profile
I. Basic information of the Company
1. Legal Name of the Company in Chinese: 京东方科技集团股份有限公司
Abbreviation in Chinese: 京东方
Legal Name of the Company in English: BOE TECHNOLOGY GROUP
CO., LTD.
Abbreviation in English: BOE
2. Legal Representative: Mr. Wang Dongsheng
3. Secretary of the Board of Directors: Ms. Feng Liqiong
Securities Affairs Representative: Mr. Liu Hongfeng
Contact Address: No. 10, Jiuxianqiao Road, Chaoyang District, Beijing
Telephone: 010-64318888 ext.
Fax: 010-64366264
E-mail: Fengliqiong@boe.com.cn, liuhongfeng@boe.com.cn
4. Registered Address: No. 10, Jiuxianqiao Road, Chaoyang District, Beijing
Office Address: No. 10, Jiuxianqiao Road, Chaoyang District, Beijing
Postcode: 100015
Internet Website: http://www.boe.com.cn
E-mail: web.master@boe.com.cn
5. Newspapers Chosen by the Company for Disclosing the Information: Securities
Times, China Securities Journal, Shanghai Securities News and Hong Kong Ta
Kung Pao
Internet Website Designated by CSRC for Information Disclosure:
http://www.cninfo.com.cn
The Place Where the Interim Report is Prepared and Placed: Secretariat of the
Board of Directors of the Company
6. Stock Exchange Listed with: Shenzhen Stock Exchange
Short Form for A-share: BOE A
Stock Code for A-share: 000725
Short Form for B-share: BOE B
Stock Code for B-share: 200725
7. Other related information:
Initial Registration Date: Apr. 9, 1993
Initial Registration Place: No.10, Jiuxianqiao Road, Chaoyang District, Beijing
Registrations Date after the latest changing: 7 Aug. 2009
Registration Place after Change: No.10, Jiuxianqiao Road, Chaoyang District,
Beijing
Registration Number of Enterprise Legal Person’s Business License:
110000005012597
Registration Number of Taxation: JSZZ No.110105101101660
Organization Code: 10110166-0
Certified Public Accountants engaged by the Company:5
Name: KPMG Huazhen Certified Public Accountants
Office Address: the 8th Floor, Office Tower E2, Oriental Plaza, No.1 East Chang
An Avenue, Beijing
II. Main financial data and indices
1. Main accounting data and financial indices
Unit: RMB Yuan
At the end of report
period
At the end of last year
Increase/decrease compared
with the end of last year (%)
Total assets 26,038,941,804 13,941,120,322 86.78%
Owners’ equity 17,006,385,905 5,936,222,532 162.97%
Net asset per share 2.05 1.81 13.26%
In the report period (Jan.
– Jun. 2009)
The same period of last year
Increase/decrease year-on-year
(%)
Before
adjustment
After adjustment Before
adjustment
After
adjustment
Operating profit -924,589,637 629,626,389 629,626,389 -246.85% -246.85%
Total profit -912,323,863 684,093,481 684,093,481 -233.36% -233.36%
Net profit -749,429,569 504,963,265 504,963,265 -248.41% -248.41%
Net profit after deducting non-recurring gains
and losses
-759,585,540 432,669,965 403,439,455 -275.56% -288.28%
Basic earnings per share -0.18 0.18 0.18 -200% -200%
Diluted earnings per share -0.18 0.18 0.18 -200% -200%
Return on equity -4.41% 10.04% 10.04% -14.45% -14.45%
Net cash arising from operating activities -175,802,392 1,035,562,169 1,035,562,169 -116.99% -116.98%
Net cash flow per share arising from
operating activities
-0.02 0.36 0.36 -105.56% -105.56%
Notes:
(1) The above indices such as net profit, net profit after deducting non-recurring gains
and losses, owner’s equity, basic earnings per share, diluted earnings per share as well
as net assets per share are listed based on data attributable to shareholders of listed
company.
2) Increase/decrease of return on equity year-on-year was difference of amount of the
two periods.
(3) As of 30 Jun. 2009, total shares of the Company amounted to 8282902,447.
2. Items of non-recurring gains and losses
Unit: RMB Yuan
Items of non-recurring gains and losses Amount Notes (if applicable)
Gains and losses from disposal of non-current asset 626,031.00 —
Government subsidy recognized in gains and losses of current period, excluding government
subsidies with close relationship with the Company’s normal business, in line with
government policies and granted with fixed amount or quantity according to certain standards.
10,495,528.00 —
Other non-operating income and expenses except the above 1,144,215.00 —
Impact on income tax -26,848.00 —6
Impact on minority interest -2,087,955.00 —
Total 10,150,971.00 —
3. There was no difference between the financial statement prepared in line with PRC
GAAP and the financial statement prepared in line with IFRS.
Unit: RMB Yuan
PRC GAAP IFRS
Net profit attributable to parent company -749,429,569 -749,429,569
Net assets attributable to parent company 17,006,385,905 17,006,385,905
Explanation on difference No difference
Section III Changes in Share Capital and Particulars about
shares held by Major Shareholders
I. Changes in structure of share capital
During the reporting period, as approved by CSRC with document of ZJXK [2009]
No. 369, the Company completed the private offering to specific investors of A-share
amounting to 5,000,000,000 shares in Jun. 2009. Therefore, total amount of share
capital of the company has increase to 8.282.902.447 from 3,282,902,447.
II. Total number of shareholders
By 30 Jun. 2009, shareholders of the Company amounted to 148,851, of which
shareholders of A-share were 1108,212 and shareholders of B-share were 40,569.
III. Particulars about shares held by the top ten shareholders
As of 30 Jun. 2009, particulars about shares held by the top ten shareholders were as
follows:
Unit: Share
Total number of shareholders 148,851 (Including 108,282 shareholders of A-share and 40,569 ones of B-share)
Particulars about shares held by the top ten shareholders
Name of shareholders Nature of shareholders Proportion
Total number of
shares held
Shares subject to
trading moratorium
held
Shares pledged or frozen
Beijing BOE Investment & Development Co.,
Ltd.
Stated-owned corporation 8.74% 723,762,253 127,180,233 0
Ke Xiping Domestic natural person 8.45% 700,000,000 700,000,000 0
SHANGHAI NORDSION INFORMATION
TECHNOLOGY CO., LTD
Domestic non-state-owned
corporation
8.45% 700,000,000 700,000,000 0
HEFEI XINCHENG STATE-OWNED
ASSETS MANAGEMENT CO., LTD
Stated-owned corporation 7.55% 625,000,000 625,000,000 0
HEFEI LAN KE INVESTMENT CO., LTD Stated-owned corporation 7.55% 625,000,000 625,000,000 0
Being E-TOWN International Investment &
Development Co., Ltd
Stated-owned corporation 7.04% 583,333,334 583,333,334 0
Beijing Zhi Shuai Investment Consulting Co.,
Ltd
Domestic non-state-owned
corporation
4.95% 410,000,000 410,000,000 07
Haitong Securities Co., Ltd Domestic non-state-owned
corporation
4.83% 400,000,000 400,000,000 0
Aerospace Science & Technology Financial
Co., Ltd
Stated-owned corporation 4.26% 352,500,000 352,500,000 0
Hongta Securities Co., Ltd Stated-owned corporation 3.77% 312,500,000 312,500,000 0
Particulars about shares held by the top ten shareholders not subject t to trading moratorium
Name of shareholders
Number of shares not subject to trading moratorium
held
Type of shares
Beijing BOE Investment & Development Co., Ltd. 596,582,020 Renminbi ordinary share
Beijing State-owned Assets Management Co., Ltd 83,690,185 Renminbi ordinary share
Beijing Industrial Developing Investment Management Co., Ltd 78,570,452 Renminbi ordinary share
FIELDS PACIFIC LIMITED 69,695,678 Domestically listed foreign share
SUN HUNG KAI INVESTMENT SERVICES
LTD-CUSTOMERS A/C
33,013,643 Domestically listed foreign share
SBCI FINANCE ASIA LTD A/C SBC HONG KONG 32,461,315 Domestically listed foreign share
BOCI SECURITIES LIMITED 31,576,045 Domestically listed foreign share
Huang Yingbing 27,968,711 Domestically listed foreign share
Bank of China - Harvest Shanghai Shenzhen 300 Index
Securities Investment Fund
8,680,673 Renminbi ordinary share
Zhou Guangwu 8,364,300 Renminbi ordinary share
Explanation on associated relationship
among the aforesaid shareholders or
acting-in-concert
1. Beijing Industrial Development Investment Management Co., Ltd is the wholly-owned subsidiary company of
Beijing State-owned Assets Management Co, Ltd.
2. The Company is unknown whether there is any other associated relationship among top ten shareholders of tradable
shares except the afoementioned.
Notes:
1. During the report period, the Company issued non-public A-shares to special
investors, and the top ten shareholders and proportion of shares held by them change
greatly. For details please refer to Report on Non-public Offering Shares Namely
Public Notice on Listing Share (Full Text), which was published in
http://www.cninfo.com.cn on 9 Jun. 2009.
2. Tradable shares subject to trading moratorium amounting to 200 million held by Mr.
Ke Xiping, Shareholder of the Company, was pledged to China Minsheng Banking
Corp., Ltd Xiamen Branch to borrow fund, whose details please refer to public notice
dated 8 Aug. 2009 with announcement No. 2009-40
IV. Introduction to controlling shareholder and the actual controller of the Company
1. At the end of report period, Beijing BOE Investment & Development Co., Ltd is
still the actual controlling shareholder of the Company.
2. At the end of the report period, Beijing Electronics Holdings Co., Ltd is still actual
controller of the Company.
V. Particulars about shares subject to moratorium held by the shareholders and trading
moratorium
By date of disclosing this report, particulars about shares held by shareholders subject8
to moratorium and trading moratorium were as follows:
Unit: Share
Name of shareholders subject to moratorium
Number of shares
subject to trading
moratorium
Date to be
listed
Number of
additional
marketable
shares
Trading moratorium
Beijing BOE Investment & Development Co.,
Ltd
127,180,233
After T1+36
months
127,180,233
Shares shall not be transferred within
36 months since T1
Beijing Electronics Holdings Co., Ltd 290,697,675
After T1+36
months
290,697,675
Shares shall not be transferred within
36 months since T1
HEFEI XINCHENG STATE-OWNED ASSETS
MANAGEMENT CO., LTD
625,000,000
After T2+36
months
625,000,000
Shares shall not be transferred within
36 months since T2
HEFEI LAN KE INVESTMENT CO., LTD
625,000,000
After T2+36
months
625,000,000
Shares shall not be transferred within
36 months since T2
Ke Xiping 700,000,000
After T2+12
months
700,000,000
Shares shall not be transferred within
12 months since T2
SHANGHAI NORDSION INFORMATION
TECHNOLOGY CO., LTD
700,000,000
After T2+12
months
700,000,000
Shares shall not be transferred within
12 months since T2
Being E-TOWN International Investment &
Development Co., Ltd
583,333,334
After T2+12
months
583,333,334
Shares shall not be transferred within
12 months since T2
Beijing Zhi Shuai Investment Consulting Co.,
Ltd
410,000,000
After T2+12
months
410,000,000
Shares shall not be transferred within
12 months since T2
Haitong Securities Co., Ltd 400,000,000
After T2+12
months
400,000,000
Shares shall not be transferred within
12 months since T2
Aerospace Science & Technology Financial Co.,
Ltd
352,500,000
After T2+12
months
352,500,000
Shares shall not be transferred within
12 months since T2
Hongta Securities Co., Ltd 312,500,000
After T2+12
months
312,500,000
Shares shall not be transferred within
12 months since T2
Southwest Securities Co., Ltd 291,666,666
After T2+12
months
291,666,666
Shares shall not be transferred within
12 months since T2
Notes:
1. T1 refers to the date when non-public A-shares offered in Shenzhen Stock Exchange in 2006 list.
2. T2 refers to the date when non-public A-shares offered in Shenzhen Stock Exchange in 2009 list.
3. 201,096,892 shares held by Chengdu Industry Investment Group Co., Ltd, 127,970,749 shares
held by Chengdu Hi-tech Investment Group Co., Ltd and 82,266,911 shares held by Beijing
Economic-Technological Investment & Development Co., Ltd had been released from trading
moratorium on 23 Jul. 2009.9
Section IV Particulars about Directors, Supervisors and Senior
Executives
I. Particulars about shares held by directors, supervisors and senior executives
No. Name Office title
Number of shares held at the
period-begin (share)
Number of shares held at the
period-end (share)
1 Wang Dongsheng
Chairman of the Board, Director of
Executive Committee 24,921 24,921
2 Liang Xinqing Vice Chairman of the Board 9,969 9,969
3 Han Guojian Executive Director, Vice President 9,968 9,968
4 Mu Chengyuan Supervisor, 2,492 2,492
5 Song Ying Vice President 24,921 24,921
6 Wang Yanjun Vice President 9,968 9,968
7 Sun Yun CFO 4,984 4,984
Total - - 87,223 87,223
In the report period, no other director, supervisor or senior executives held any share
of the Company.
II.The company has not implement equipty incentive plan. In the report period,
directors, supervisors and senior executives of the Company neither hold stock option
of the Company nor be authorized restricted shares.
III. Engagement or dismissal of directors, supervisors and senior executives of the
Company in the report period
In the report period, the board of the Company received written resignation from
director Mr. Han Yansheng. Mr. Han Yansheng submitted to resign from his post of
Vice Chairman of the Board and director of the Company due to old age. Meanwhile,
he also resigned his post of member in Nomination, Remuneration and Appraisal
Committee under the Board of Directors.
As reviewed and approved by the 22nd Meeting of the 5th Board of Directors and the
Annual Shareholders’ General Meeting 2008, Mr. Yuan Hanyuan was elected as
director of the 5th Board of Directors since 22 May 2009, meanwhile, he replaced
positions in Nomination, Remuneration and Appraisal Committee under the Board of
Directors with office term starting from 22 May, 2009 to the date of expiration of the
5th Board of Directors. Mr. Yuan Hanyuan was elected as Vice Chairman of the Board
at the 26th Meeting of the 5th Board of Directors.10
Section V Report of the Board of Directors
I. Operation of the Company
(1) Retrospection of the operation of the company in the report period
Facing changeful operating environment and market situation both with chance and
challenge of the first half year of 2009, the Company put forward development
strategy of “seek opportunities out of crisis, change market downturn into chance and
make achievements in difficulties”, carried out core idea of “value driven” when in
progress of actualization of targets and plan, and executed “Steel-sword strategy.”
1. Realization of main operating indices
Influenced by shrink of market demand and large drop of price, production & sales
volume and operating income decreased by a large margin compared with the same
period of last year, the Company realized operating income about 2.3 billion in the
first half year of 2009, and made a loss in operating; since Apr. 2009, market became
stable gradually, price picked up and cash flow turned positive. In the report period,
the Company realized production of TFT-LCD used for IT and TV approximately
4.05 million pieces, sales of TFT-LCD realized about 4.12 million pieces, and other
major business operation increased at different range. Projects applied for patent in
the first half year was over 200.
Details for implementation of each business
(1) TFT-LCD and relevant business
TFT-LCD used for IT and TV: main indices such as net profit and operating cash flow
realized business plan although the market was declined. The market revived in the
second quarter, the Company realized recovery of high operating rate in industry
earlier than other entities in the industry, and the cash flow turned positive in Apr.
2009; meanwhile, the Company strengthened exploitation of clients of notebook, and
successfully introduced many clients with the first-line brand. Meanwhile, the
Company strengthened programming and management of supply chain to ensure
stable material supply and production and enhanced organization and administration
of production to ensure safe production and stable technology.
TFT-LCD for Mobile and Application Products: Through strengthening budget and
treasury stock management, the Company effectively controlled fixed expense and
stock scale to ensure stable cash flow and safety production. Meanwhile, the
Company adhered to execute the company strategy, complete consolidation of internal
organization and separation of business, and actively explored new commercial model
under new character of market according to current situation and character of market.
Products of lighting display: The Company got substantial breakthrough in
exploration of new marker. Market occupation ratio of big-sized products rose up and
supply mechanism of medium and small-sized products was successfully enlarged.
(2) Business of Other Display Devices and Supporting Products
For CRT and VFD Products, the Company strengthened structure adjustment and
reform in the first half year of 2009. As for supporting products, the Company seized
chance, explored new products and enlarged sales of products with high additional11
value.
(3) International Business Park
In the first half year, the Company built a platform for the Group’s real estate
development, adhered to stability in Business Park, basically realized operating plan,
road programming and making scheme on implementation of technology of 2009, and
key project construction and investment invitation progressed smoothly.
2. Orderly Advancement of Significant Projects as Scheduled
The first half year of 2009 was the year when the Company invested the most and has
the most projects. New industrial upgrading and restructuring started with global
financial crisis, and new market was important to push development of world
economy. The Company was in uncommon period of chance for development:
(1) Chengdu the 4.5th Generation TFT-LCD Production Line Project went on
successfully as expected. The Company organized earnestly and effectively advanced
in accordance with principle of “five concurrents and five ensures”, that is, in the
progress of construction, the Company will lay out products plan and accelerate
development of products concurrently; lay out market and clients and accelerate
development of strategic clients concurrently; lay out strategy on supply chain,
promote pricing ability and stabilize and perfect partner relationship with strategic
supplier concurrently; do well in project management and construction and
standardization of technical document & IT system concurrently; enhance
organization, train staff and prepare for production and operation concurrently. In the
progress of construction, the Company will ensure quality of project, project budget,
project security, project progress and organization administration mechanism to
ensure successful operation.
The Company completed general project of workshop in Feb., installed and
commissioning equipment during Mar. to May, and carried through trial production in
Jun.; the Company also enhanced development & research of products, construction
of supply chain, preparation for clients as well as construction of production
organization, staff training and enterprise informationization system when built the
factory.
(2) Hefei the 6th Generation TFT-LCD Production Line Project was started. Hefei the
6th Generation TFT-LCD Production Line was the first domestic LCD production line
used for TV, and also the first electronic information industry project with big scale
after declare of government investment with RMB 4,000 billion and promotion plan
of electronic information industry, which was focused on by the country and all social
classes. With strong support of Hefei Municipal Government, the 6th Generation
TFT-LCD Production Line started on 13 Apr. 2009 as scheduled, and was in progress
of foundation construction. It was expected to seal the top of main body project in
later of December 2009, and entered in phase of operation in the fourth quarter of
2010.
(3) National Engineering Laboratory Project got into operation. National engineering
laboratory was the first one in domestic display field with core of company and united
with other enterprises in the industry and set up jointly with many domestic famous
universities and research institutions. It is very important to promote display12
technology innovation ability and technical competitive power of the Company even
the country. National Engineering Laboratory was laid a foundation on 21 Apr. 2009,
and project construction, estimation on technology of technics equipment,
programming on specific products and relevant preparation work for operation were
advancing as scheduled. It was expected to complete project construction, install and
commissioning and enter in phase of trial operation in the first quarter of 2010.
(4) About non-public offering A-share. The Company completed non-public offering
A-share amounting to 5 billion on 10 Jun. 2009 and raised capital totaled RMB 12
billion.
It was obvious that net assets of the Company increased due to execution of the
project, which relaxed cash flow, decreased liability ratio by a large margin, improved
financial structure,, and raised capital for construction of Hefei the 6th Generation
TFT-LCD Production Line.
(II) Main business scope and operation
1. Main business scope
Business scope of the Company remained unchanged in the report period. The
Company belongs to electronics and information industry, mainly engaging in
manufacture, sale as well as research & development of TFT-LCD. The major
business scope includes business of TFT-LCD and relevant business, other display
devices & supporting products as well as international business park.
2. Operation status of main business
(1) Classified according to industries and products
Unit: RMB ’0000Yuan
Main business classified according to industries
Industries/products Operating income Operating cost
Gross profit
ration (%)
Increase/decrease of
operating income
year-on-year (%)
Increase/decrease of
operating cost
year-on-year (%)
Increase/decrease of
gross profit ratio
year-on-year (%)
TFT-LCD industry 174,497 212,376 -21.71% -62.19% -42.63% -41.50%
Other business 97,067 83,142 14.35% -30.01% -30.92% 1.13%
Offset -41,753 -35,874 14.08% 15.92% 19.27% 3.56%
Total 229,811 259,644 -12.98% -58.26% -41.80% -31.96%
Main business classified according to products
TFT-LCD industry 174,497 212,376 -21.71% -62.19% -42.63% -41.50%
Other business 97,067 83,142 14.35% -30.01% -30.92% 1.13%
Offset -41,753 -35,874 14.08% 15.92% 19.27% 3.56%
Total 229,811 259,644 -12.98% -58.26% -41.80% -31.96%
(2) Classified according to regions
Unit: RMB ’0000Yuan
Regions Operating income Increase/decrease compared with the same period in last year (%)
China 184,458 -42.43%
Other Asian countries and regions 78.712 -68.92%
Europe 8,255 -48.32%
America 140 -3.43%
Offset -41,753 -15.92%13
Total 229,811 -58.26%
(3) There were no other operations made great effect on net profit in the report period.
3. Analysis on financial status
(1) Analysis on change in main items of balance sheet
Unit: RMB’0000 Yuan
Items 30 Jun. 2009 31 Dec. 2008
Change
range
Main influencing factors
Monetary capital 1,407,859 390,374 260.64% Non-public offering A-share increased money capital
Accounts receivable 90,978 48,592 87.23%
revival of TFT industry, sales volume increased and product price
raised
Advance payment 48,167 4,647 936.52%
New project was in period of construction, and expenditure from
purchase of equipment increased.
Financial assets available
for sale
7,409 5,371 37.94%
The Company held part shares of TPV, whose price increased in
the report period.
Long-term equity
investment
20,984 34,078 -38.42% Net assets of affiliated company decreased.
Construction in progress 205,296 44,545 360.87%
New project was in period of construction, project construction
and equipment purchase increased.
Notes payable 19,852 10,600 87.28%
New project project construction and equipment purchase
increased.
Accounts payable 151,634 106,225 42.75%
Increase of construction and equipment purchase due to new
project project; revival of TFT industry
Non-current liabilities due
within 1 year
52,020 200,914 -74.11%
Term of syndicated loan was reorganized and balance of loan
transfer into long-term borrowings.
Long-term borrowings 487,675 293,413 66.21%
Term of syndicated loan was reorganized and non-current
liabilities due within 1 year was transferred in; increase of part
long-term borrowings in this year.
Share capital 828,290 328,290 152.30% Completion of non-public offering A-share
Capital Reserves 1,132,400 450,496 151.37% Completion of non-public offering A-share
(2) Analysis on Change of Assets Composition
Unit: RMB’0000 Yuan
30 Jun. 2009 31 Dec. 2008
Items
Amount
Proporti
on
Amount
Proporti
on
Change
range
Main influencing factors
Monetary capital 1,407,859 54.07% 390,374 28.00% 93.09% Non-public offering A-share increased money capital
Advance payment 48,167 1.85% 4,647 0.33% 454.95%
New project was in period of construction, and expenditure from
purchase of equipment increased.
Long-term equity 20,984 0.81% 34,078 2.44% -67.03% Net assets of affiliated company decreased.
Construction in
progress
205,296 7.88% 44,545 3.20% 146.75%
New project was in period of construction, project construction and
equipment purchase increased.
Non-current
liabilities due within
1 year
52,020 2.00% 200,914 14.41% -86.14%
Term of syndicated loan was reorganized and non-current
liabilities due within 1 year was transferred in; increase of part
long-term borrowings in this year.14
Long-term
borrowings
487,675 18.73% 293,413 21.05% -11.01%
Term of syndicated loan was reorganized and non-current
liabilities due within 1 year was transferred in; increase of part
long-term borrowings in this year.
Share capital 828,290 31.81% 328,290 23.55% 35.08% Completion of non-public offering A-share
Capital Reserves 1,132,400 43.49% 450,496 32.31% 34.58% Completion of non-public offering A-share
(3) Analysis on changes in expense and income tax during the report period
Unit: RMB’0000 Yuan
Items Jan.-Jun. 2009 Jan.-Jun. 2008 Change range Main influencing factors
Operating
income
229,811 550,590 -58.26%
Influenced by financial crisis and fluctuation of TFT-LCD industry,
income of the Company decreased due to decline of market demand
and drop of price.
Sales
expenses
4,828 9,574 -49.57%
Influenced by financial crisis and fluctuation of TFT-LCD industry,
sales volume dropped, which caused decrease of relevant expenses.
Administrati
ve expenses
51,983 34,364 51.27%
Influenced by financial crisis and fluctuation of TFT-LCD industry,
the Company recorded depreciation and dynamical expense which
was stopped using due to lack of operating ratio into administrative
expense; meanwhile, investment in research and development in the
report period increased.
Financial
expenses
6,328 1,268 399.05%
Income from exchange of the Company in the report period decreased
by a large margin year-on-year due to fluctuation of exchange rate of
USD and JPY.
Loss from
impairment
of assets
-13,624 257 -5,401.17%
In the report period, TFT-LCD industry revived and price of products
rose, which charged back stock depreciation reserve withdrew in the
previous period
Investment
income
-12,377 5,091 -343.12% Net assets of affiliated company decreased in the report period.
(4) Change in cash flow statement of the Company
Unit: RMB’0000 Yuan
Items Jan.-Jun. 2009 Jan.-Jun. 2008 Change range Main influencing factors
Subtotal of cash inflow from
operating activities
201,981 636,746 -68.28%
Influenced by financial crisis and fluctuation of
TFT-LCD industry, income of the Company
decreased due to decline of market demand and
drop of price.
Subtotal of cash outflow from
operating activities
219,561 533,190 -58.82%
Influenced by financial crisis and fluctuation of
TFT-LCD industry, turnout of main products of the
Company decreased and purchase volume reduced.
Subtotal of cash outflow from
investing activities
222,474 101,166 119.91% Investment on fixed assets of new project increased.
Subtotal of cash inflow from
financing activities
1,455,932 75,765 1821.64%
Completion of non-public offering A-share; loan
from bank increased.
Subtotal of cash outflow from
financing activities
235,972 126,355 86.75% The Company repaid some loans from bank.15
4. Problems and difficulties encountered in operation
Excellent progress has been made in the first half in terms of all businesses of the
Company, especially the major projects. However, the Company has not fully
accomplish the financial objectives set in its business plan, with a large operation
deficit in the first six months. As the causes for the deficit, the Company has not done
its utmost in running the “Two Developments” strategy. In addition, it is in lack of a
sound mechanism responsive to market changes and a strong cost control. More
importantly, it still lags behind the top enterprises in the trade concerning the
development of competitive products, because it lacks means and measures making it
highly responsive to market changes and customer changes, which leads to the
Company’s being unable to gain the initiative in regard to product prices and
quantities. As a result, the Company has to bear a relatively high product cost, which
results in a weak competitiveness of the Company’s products in the market.
5. Business development plan for the second half of 2009
For the second half of this year, the Company will still find itself in a complex and
changeable economic and industrial environment. However, the financial crisis has
been gradually eased by relevant policies of the governments all over the world. And
a series of measures have been taken by the Chinese Government to stabilize and
boost the economic development, including measures to stimulate the development of
the TFT-LCD industry. All these provide a great opportunity for the development of
the Company. Therefore, as the core development strategies for the second half of
2009, the Company will continue to carry out the “Steel-sword Strategy” and the
“Two Developments”, increase its profits and transform the crisis to an opportunity
for growth. Meanwhile, it will also ensure the accomplishment of all the operation
objectives, as well as the smooth progress of all the key projects.
Ⅱ. Investments of the Company
(Ⅰ) Use of raised proceeds in report period
Unit:RMB’0000 Yuan
Total amount of raised proceeds used
in report period
128,486
Total amount of raised proceeds 1,522,051
Total amount of raised proceeds used
accumulatively
310,359
Committed projects
Planned
investment
amount
Whether or not
to change the
project
Actual
investment
amount
About accrued
amount of
earnings
Compliant with
schedule or not
Compliant with
estimated earnings
or not
Project of Investment Increase for
Production Expansion of BOE
Optoelectronics Technology Co.,
Ltd. (BOEOT)
39,112 No 39,112 Good Yes Yes
Production Line Project of
Color-filters (CF) for Large-size
TFT-LCD
0 Yes Inapplicable Inapplicable Inapplicable Inapplicable16
Production Line Project of the
4.5th-generation TFT-LCD (4.5G
Project)
180,545 No 91,289 Inapplicable Yes Yes
Project of Increasing Investment
in BOEOT for Bank Loan
Repayment
0 Yes Inapplicable Inapplicable Inapplicable Inapplicable
Production Line Project of the
6th-generation TFT-LCD (6G
Project)
1,078,331 No 46,046 Inapplicable Yes Yes
Supplementing Working Capital
(2008)
43,644 No 43,644 Inapplicable Yes Yes
Supplementing Working Capital
(2009)
100,000 No 9,849 Inapplicable Yes Yes
Total 1,441,632 — 229,940 — — —
Explanation on failing to reach
the planned progress or get the
expected gains (with details down
to each project)
Not applicable
Explanation on reasons for and
procedures of changes (with
details down to each project)
Not applicable
Use and control of the remaining
raised proceeds
The remaining raised proceeds were mainly for the 4.5G Project and the 6G Project, which would be
specifically controlled in the specific deposit account.
Notes:
1. The Proposal on Postponing Investing Raised Funds in Production Line Project of Large-sized CF for TFT-LCD, the Proposal on
Changing the Use of Part of Raised Funds and the Proposal on Increasing Investment for the Second Time in Beijing BOE
Optoelectronics Technology Co., Ltd. to Expand Production Line of the 5th-generation TFT-LCD were reviewed and approved at the 4th
Provisional Shareholders’ General Meeting in 2007. And the aforesaid change of projects invested with raised funds has been
accomplished by the end of the report period.
2. The Proposal on Altering the Use of Some Raised Funds was reviewed and approved in the 1st Provisional Shareholders’ General
Meeting in 2008, which stopped the Project of Increasing Investment in Beijing BOE Optoelectronics Technology for Bank Loan
Repayment
(2) Use of raised proceeds after change
Unit: RMB’0000 Yuan
Total raised proceeds invested in
changed projects
80,419
Project after change
Project before
change
Planned input into
project after change
Actual input
Compliant with
schedule or not
Estimated gains
from project after
change
About accrued
amount of
earnings
Project of Increasing
Investment for the
Production Line
Project of
67,739 67,739 100% 21,668 Good17
Second Time to
Expand Production
Line of the
5th-generation
Thin-film Transistor
LCD (TFT-LCD) of
BOEOT
Color-filters (CF)
for Large-size
TFT-LCD
Supplementing
working capital
Production Line
Project of
Color-filters (CF)
for Large-size
TFT-LCD
12,680 12,680 100% 0 -
Total - 80,419 80,419 - 21,668 0
Explanation on
failing to reach the
planned progress or
get the expected
gains (with details
down to each
project)
Naught
(Ⅱ) Significant investments with non-raised proceeds in report period
Unit:RMB’0000 Yuan
Name of project Amount Progress Gains
Factory Re-construction of Beijing Yinghe Century Science
& Technology Development Co., Ltd.
7,697
In progress Normal
Phosphorus Removal System 1,510 In progress Normal
Building Supporting Factories for BOE Electronics Co.,
Ltd.
2,880
In progress Normal
State Engineering Lab for TFT-LCD Technologies 1,028 In progress Normal
Total 13,115 -18
Section VI Significant Events
Ⅰ. Corporate governance
In the report period, the Company enjoyed a sound corporate governance structure,
with its actual corporate governance in line with requirements of relevant regulatory
documents.
Ⅱ. Plans of profit distribution, capitalization of public reserves and new stock
issuance, as well as their implementation
(Ⅰ) In the report period, the Company did not distribute profits or turn public
reserves to share capital.
(Ⅱ) The Company did not put forward pre-plans of profit distribution or
capitalization of public reserves for the first half of 2009.
(Ⅲ) Implementation of new stock issuance plan
1. On 7 Nov. 2008, the Proposal on Plan for A-share Private Placement was reviewed
and approved at the 17th Meeting of the 5th Board of Directors;
2. On 25 Nov. 2008, the Proposal on Plan for A-share Private Placement was
reviewed and approved at the 2nd Provisional Shareholders’ General Meeting in 2008;
3. On 11 Feb. 2009, the application documents for the Company’s A-share private
placement was officially acknowledged by CSRC;
4. On 1 Apr. 2009, the application of the Company’s A-share private placement was
reviewed and approved by the Review Board of CSRC;
5. On 7 May 2009, the Company received the Approval Letter ZJXK [2009] 369 from
CSRC, which authorized the Company to issue A-shares within six months upon the
arrival of the said Approval Letter.
6. On 10 Jun. 2009, the Company issued 5 billion new A-shares in Shenzhen Stock
Exchange.
(Ⅳ) At present, the Company has no plans of equity incentive.
Ⅲ. In the report period, the Company was not involved in any significant lawsuits or
arbitrations, nor there existed such lawsuits or arbitrations carried down from previous
periods.
Ⅳ. The Company holds neither shares of financial enterprises such as commercial
banks, securities companies, insurance companies, trust companies and futures
companies, nor shares of companies to be listed.19
Ⅴ. Significant asset acquisition, sale and reorganization
(Ⅰ) In the report period, there occurred no significant asset acquisition.
(Ⅱ) In the report period, there occurred no significant sales of assets.
(Ⅲ) Particulars about mergers in report period
Hefei BOE Opto-electronics Technology Co., Ltd. had originally been a jointly
operated subsidiary of the Company, with the Company holding 19% of its shares.
Later, the Company unilaterally increased its investment in the said subsidiary with
RMB 300 million, RMB 300 million and RMB 700 million respectively in Jan. 2009,
Mar. 2009 and May 2009. And the shareholding ratio of the Company in the said
subsidiary rose to 97% as at 30 Jun. 2009. Consequently, the Company included the
said subsidiary in its consolidated statements starting from Jan. 2009.
Ⅵ. Related transactions
(Ⅰ) Related transactions arising from routine operation
The Proposal on Routine Related Transactions in 2009 was reviewed and approved at
the Company’s 2008 Annual Shareholders’ General Meeting and the execution of the
relevant routine related transactions was specified as follows:
Unit: RMB’0000 Yuan
Items Related party Transaction items
Estimated
transaction
amount in
2009
Actual amount as
at interim of 2009
Beijing Matsushita Color CRT Co., Ltd
CRT metal parts, moulds, stands,
glass poles, low-melting solders
and energy
3,000 840
Beijing Electronics Holding Co., Ltd. and
its affiliated companies
Energy 150 25
Beijing Nissin Electronic Precision Parts
Co., Ltd
Energy 400 78
Beijing Nittan Electronics Co., Ltd Energy 100 24
Sale
Subtotal: 3,650 967
Beijing Electronics Holding Co., Ltd. and
its affiliated companies
Spare parts for equipment
maintenance, apheliotropic
raw/auxiliary materials, power
panel, ceramic parts, steam, etc.
1,500 872
Beijing Nissin Electronic Precision Parts
Co., Ltd
Metal frames 800 -
Beijing Nittan Electronics Co., Ltd
Electronic devices and wire
materials
100 3
Purchase
Subtotal: 2,400 875
Beijing Nissin Electronic Precision Parts
Co., Ltd
Income from rent and property
management
House rent 250 81
Beijing Nittan Electronics Co Ltd Income from rent and property 250 11020
(Ⅱ) Capital flows between the Company and its related parties
Unit: RMB’0000 Yuan
Capital
flows with
related
parties
Name of transaction party
Relationship
between the
Company and
transaction party
Accounting
entry
Beginning
balance of
transaction
amount
Closing
balance of
transaction
amount
Cause of
transaction
Nature of
transaction
Accounts
receivable
7 30
Goods sale,
energy fee and
rent
Operational
capital flows
Accounts
payable
241 301 Goods purchase
Operational
capital flows
Beijing Electronics Holding
Co., Ltd. and its affiliated
companies
Actual controller
and its affiliated
companies
Other payables 25 25
Goods purchase
and greening fee
Operational
capital flows
Beijing Nissin Electronic
Precision Parts Co., Ltd
Affiliated company
Accounts
receivable
4 30
Rent and energy
fee receivable
Operational
capital flows
Beijing Nittan Electronics
Co., Ltd
Affiliated company
Accounts
receivable
- 64
Rent and energy
fee receivable
Operational
capital flows
Beijing Nittan Electronics
Co., Ltd
Affiliated company
Accounts
payable
12 - Goods purchase
Operational
capital flows
Beijing Matsushita Color
CRT Co., Ltd
Affiliated company
Accounts
receivable
716 532
Goods sale and
energy fee
Operational
capital flows
Related
parties of the
Company
Total - - 1,005 982 -
Operational
capital flows
The independent directors of the Company were of the opinion that the capital flows
incurred between the Company and its related parties in the report period were all
operational, with no capital occupation by the controlling shareholder or other related
parties.
(Ⅲ) Liabilities and guarantees between the Company and its related parties
The actual controller of the Company—Beijing Electronics Holdings Co., Ltd.—took
on joint and several guarantee liabilities for the syndicated loan of USD 740 million
of the Company’s controlling subsidiary—BOE Optoelectronic Technology Co., Ltd..
In the report period, relevant guarantee fee has not been paid.
management
Subtotal: 500 191
Beijing Electronics Holding Co., Ltd. and
its affiliated companies
Guarantee fee, retired staff
management fee, house repair fee
and other fees paid
800 386
Beijing State-Owned Assets Management
Co., Ltd.
Interest of entrusted loan 2,000 1,065
Other
major
related
transactions
Subtotal: 2,800 1,451
Total 9,350 3,48421
Ⅶ. Significant contracts and their execution
(Ⅰ) Guarantees in report period
1. Guarantees provided by the Company for external parties
Zhejiang BOE Display Technology Co., Ltd (hereinafter referred to as “Zhejiang
BOE”), one of the Company’s subsidiaries, provided a guarantee for the loan of
Zhejiang Huanyu Construction Group Co., Ltd. standing at RMB 20,000,000 as at 30
Jun. 2009（RMB 20,000,000 as at 31 Dec. 2008）, with the term of loan from 30 Oct.
2008 to 8 Jan. 2010.
2. Guarantees provided by the Company to internal parties
The Company provided a guarantee for the loan of its subsidiary—Zhejiang
BOE—standing at RMB 47,000,000 as at 30 Jun. 2009 (RMB 50,000,000 as at 31
Dec. 2008). In addition, the Company also provided a guarantee for the long-term
borrowings of its subsidiary—BOE Optoelectronic Technology Co., Ltd.. According
to the relevant guarantee contract, the actual guarantee amount provided by the
Company stood at RMB 2,068,111,266 as at 30 Jun. 2009 (RMB 2,068,111,266 as at
31 Dec. 2008).
Meanwhile, Zhejiang BOE provided a guarantee for the loan of its
subsidiary—Shaoxing BOE Ueno Electronic Components Co., Ltd.—amounting to
RMB 28,000,000 as at 30 Jun. 2009 (naught as at 31 Dec. 2008).
(Ⅱ) In the report period, the Company did not entrust others with financial affairs, or
asset custody, contracting or leasing.
Ⅷ. Commitments made by the Company or shareholders holding over 5% shares of
the Company
(Ⅰ) Commitments concerning split share structure reform
In the report period, there existed no commitments on the split share structure reform
of the Company.
(Ⅱ) Commitments on non-public offering of securities
For details of the Company’s non-public offering of securities, please refer to “Ⅴ.
Particulars about shares subject to moratorium held by the shareholders and trading
moratorium” of “Section Ⅲ Changes in Share Capital and Particulars about Shares
Held by Major Shareholders” of this report.
(Ⅲ) For details of other commitments of the Company, please refer to relevant notes
to the accounting statements concerning commitments.
Ⅸ. Other significant events, as well as analysis and explanation on their influence and
relevant solutions22
(Ⅰ) The Company did not make any securities investment in the report period.
(Ⅱ) Shares of other listed companies held by the Company
Unit: RMB Yuan
Stock code
Short form
of stock
Initial
investment
amount
Proportion
of shares in
this
company
Book value at
period-end
Gains or
losses in
report
period
Changes of
Owners’ equity in
report period
HK0903
TPV
Technology
1,078,440,560 1.15% 74,086,125 830,515 20,378,603
Total - 1,078,440,560 - 74,086,125 830,515 20,378,603
(Ⅲ) In the report period, shareholders holding over 5% shares of the Company did
not make such commitments as prolonging trading moratorium, setting or increasing
the lowest price to reduce shareholding.
Ⅹ. Specific explanation and independent opinion of independent directors on capital
occupation by related parties and external guarantees by the Company
According to the Circular on Certain Issues Regarding Regulating Capital Flows
between Listed Companies and Related Parties and Provision of External Guarantees
by Listed Companies, the Circular on Regulating Provision of External Guarantees by
Listed Companies, and the Guiding Opinions on Establishment of Independent
Director System by Listed Companies issued by CSRC, as well as the Stock-listing
Rules of Shenzhen Stock Exchange and other relevant laws and regulations, as the
independent directors of the Company, we conducted a careful examination on capital
occupation by the Company’s controlling shareholder and other related parties, as
well as on the external guarantees by listed companies, and expressed our independent
opinions as follows:
In the report period, the capital flows between the Company and its related parties
were all operational, with no capital occupied by the controlling shareholder or other
related parties; and the Company did not provide guarantees for its controlling
shareholder, actual controller or other related parties. The total guarantee amount did
not exceed 50% of the net assets as audited at the latest, with no single guarantee
amount exceeding 10% of the net assets as audited at the latest. The Company’s
external guarantees were totally in line with relevant laws and regulations, with no
harm done to the legitimate rights and interests of shareholders.
Ⅺ. The Financial Report for the report period has not been audited and the CPA firm
remained the same one.
Ⅻ . In the report period, the Company, its directors, supervisors and senior
management staff neither received any administrative punishment or criticism by
circular from CSRC, nor received any punishment from other administrative23
authorities or any open criticism from the stock exchange.
ⅩⅢ. Researches, interviews and visits received by the Company in report period
Reception date Reception place Reception way Visitor
Main content of discussion and materials provided
by the Company
9 Jan. 2009
Meeting Room of
the Company
Field research
Bank of China
International Securities
and Bohai Industrial
Investment Fund
Management
12 Feb. 2009
Meeting Room of
the Company
Field research
Everbright Securities and
Minsheng Securities
17 Feb. 2009
Meeting Room of
the Company
Field research Guosen Securities
18 Feb. 2009
Meeting Room of
the Company
Field research
Fortune SGAM Fund
Management
13 Mar. 2009
Meeting Room of
the Company
Field research Deutsche Securities
19 Mar. 2009
Meeting Room of
the Company
Field research Citic Securities
27 Mar. 2009
Meeting Room of
the Company
Field research Changjiang Securities
15 Apr. 2009
Meeting Room of
the Company
Field research
Southwest Securities and
Hongta Securities
Main content of discussion:
1. Operation status and future development strategies
of the Company;
2. Present status and development trends in the
industry;
3. Issues concerning the non-pubic offering of the
Company;
4. Particulars about Chengdu 4.5G Project and Hefei
6G Project.
Materials provided by the Company:
2007 Annual Report of the Company, company
brochure and other disclosed materials
28 Apr. 2009
Meeting Room of
the Company
Field research Sunline Group
5 May 2009
Meeting Room of
the Company
Field research
Aerospace Science &
Industry Finance Co., Ltd.
and Youngor Investment
6 May 2009
Meeting Room of
the Company
Field research
China International
Capital Co., Ltd.
7 May 2009
Meeting Room of
the Company
Field research
Bohai Securities, Rising
Securities and ABN
AMRO TEDA Fund
Management
8 May 2009
Meeting Room of
the Company
Field research Suzhou Trust
13 May 2009
Meeting Room of
the Company
Field research China Asset Management
18 May 2009
Meeting Room of
the Company
Field research Morgan Stanley (Taiwan)
8 Jun. 2009
Meeting Room of
the Company
Field research SouthChina Securities
9 Jun. 2009 Meeting Room of Field research T.Rowe Price
Main content of discussion:
1. Operation status and future development strategies
of the Company;
2. Present status and development trends in the
industry;
3. Issues concerning the non-pubic offering of the
Company;
4. Particulars about Chengdu 4.5G Project and Hefei
6G Project.
Materials provided by the Company:
2008 Annual Report of the Company, company
brochure and other disclosed materials24
the Company
12 Jun. 2009
Meeting Room of
the Company
Field research Citic Securities
15 Jun. 2009
Meeting Room of
the Company
Field research
Hong Yuan Securities and
China Jianyin Investment
Securities
ⅩⅣ. Index of provisional public notices disclosed in report period
Sequenc
e No.
Date of
disclosure
Name of public notice
1 13 Jan. 2009 Public Notice on Tie-up of Some Shares of the Company Held by Actual Controller
2 14 Jan. 2009 Public Notice on Progress of Hefei 6th-generation Production Line Project of TFT-LCD
3 14 Jan. 2009 Public Notice on Adjustment of Import Tariff Rate of the Company’s Main Products
4 20 Jan. 2009 Public Notice on Earnings Estimate
5 4 Feb. 2009 Suggestive Public Notice
6 24 Feb. 2009 Public Notice on Obtaining Certificate of High-tech Enterprise
7 25 Feb. 2009 Public Notice on Resolutions Made at the 20th Meeting of the 5th Board of Directors
8 25 Feb. 2009
Public Notice of Provision of Reciprocal Guarantee by Zhejiang BOE Display Technology Co., Ltd.
for External Party
9 21 Mar. 2009 Public Notice on Progress of Hefei Production Line Project of 6th-generation TFT-LCD
10 1 Apr. 2009
Public Notice on Submitting Application for Private Placement of A-shares to Issuance Examination
Committee of CSRC
11 2 Apr. 2009
Public Notice on Conditional Approval of the Company’s Private Placement of A-shares by Issuance
Examination Committee of CSRC
12 9 Apr. 2009 Public Notice on Resolutions Made at the 21st Meeting of the 5th Board of Directors
13 14 Apr. 2009 Public Notice on Progress of Renewing Term of Syndicated Loan to Controlling Subsidiary
14 21 Apr. 2009 Public Notice on Resignation of Director
15 21 Apr. 2009 Public Notice on Resolutions Made at the 22nd Meeting of the 5th Board of Directors
16 21 Apr. 2009 Public Notice on Resolutions Made at the 9th Meeting of the 5th Board of Supervisors
17 21 Apr. 2009 Summary of 2008 Annual Report (Chinese Version)
18 21 Apr. 2009 Circular on Convening 2008 Annual Shareholders’ General Meeting
19 21 Apr. 2009 Public Notice on Routine Related Transactions in 2009
20 21 Apr. 2009 Public Notice on Providing Bank Loan Guarantee for Zhejiang BOE Display Technology Co., Ltd.
21 29 Apr. 2009 Text of the 1st Quarterly Report in 2009
22 8 May 2009 Public Notice on CSRC Approving the Company’s Private Placement of A-shares
23 11 May 2009 Public Notice on Resolutions Made at the 24th Meeting of the 5th Board of Directors25
24 11 May 2009 Public Notice on Related Transaction
25 12 May 2009 Public Notice on Progress of Hefei Production Line Project of 6th-generation TFT-LCD
26 23 May 2009 Public Notice on Resolutions Made at 2008 Annual Shareholders’ General Meeting
27 9 Jun. 2009 Public Notice on A-share Non-public Issuance Report & Listing Particulars (Abstract)
28 10 Jun. 2009 Suggestive Public Notice
29 12 Jun. 2009
Public Notice on Changing Sponsor Representative Continuously Supervising the A-share Private
Placement Project 2008
30 13 Jun. 2009 Public Notice on Shareholding Reduction by Shareholder
31 24 Jun. 2009 Public Notice on Resolutions Made at the 26th Meeting of the 5th Board of Directors
32 24 Jun. 2009
Public Notice on Guarantee Provision by Zhejiang BOE Display Technology Co., Ltd. for Its
Subsidiaries
33 24 Jun. 2009 Public Notice on Signing Agreement of Three-party Supervision on Raised Funds
Section VII Financial Report (Un-audited)
Ⅰ. The interim financial report 2009 has not been audited.
Ⅱ. Accounting statements (see the attachments)
1. Balance sheet
2. Income statement
3. Cash flow statement
4. Statement of changes in owners’ equity
Ⅲ. Notes to accounting statements
Section VIII Documents Available for Reference
Ⅰ. Text of Interim Report with signature of Legal Representative;
Ⅱ. Text of Financial Report with signatures and seals of Legal Representative, CEO,
CFO and person-in-charge of accounting agency;
Ⅲ. Originals of all documents and public notices ever disclosed on newspapers
designated by CSRC in report period.
Chairman of Board of Directors (Signature): Wang Dongsheng
Board of Directors
BOE Technology Group Co., Ltd.
21 August 200926
Prepared by BOE Technology Group Co., Ltd Unit: RMB Yuan
30 Jun. 2009 31 Dec. 2008 30 Jun. 2009 31 Dec. 2008
Consolidation Consolidation Parent company Parent company
Current Assets:
Monetary funds 1 4,078,586,689 3,903,740,704 11,024,873,639 572,867,082
Transaction financial asset - - -
Notes receivable 2 40,688,147 305,340,503 165,053,778 3,583,603
Account receivable 9 09,783,165 485,918,608 40,159,231 34,063,202
Account paid in advance 4 81,668,145 46,467,616 111,158,366 9 48,730
Interest receivable 1 8,713,672 6,561,758 15,478,696 438,965
Dividend receivable - - 8,204,147 8,204,147
Other account receivable 6 6,292,696 91,430,944 871,755,073 632,207,456
Inventories 6 09,923,915 472,233,966 4 ,648,647 4,789,090
Non-current assets due within 1 year - - - -
Other current assets 2 24,731,520 290,049,691 5 00,590 -
Total current assets 1 6,630,387,949 5,601,743,790 12,241,832,167 1,257,102,275
Non-current assets:
Available for sale financial assets 7 4,086,125 53,707,522 74,086,125 53,707,522
Held to maturity investments - - -
Long-term account receivable - - - -
Long-term equity investment 2 09,838,134 340,783,862 7,498,917,581 6,275,363,309
Investing property 1 69,523,463 174,553,402 77,814,356 79,259,202
Fixed assets 6 ,136,442,636 6,542,076,001 1 45,776,451 151,948,575
Construction in progress 2 ,052,959,033 4 45,452,403 37,766,691 21,543,069
Engineering material - - - -
Disposal of fixed assets - - - -
Intangible assets 6 99,239,960 715,814,320 59,533,726 52,228,556
Development expense - - -
Goodwill 4 7,364,310 47,364,310 - -
Long-term deferred expenses 1 4,834,223 14,611,367 3,399,374 3,583,125
Deferred tax assets 4 ,265,971 5,013,345 - -
Other non-current assets - - - -
Total of non-current assets 9 ,408,553,855 8,339,376,532 7,897,294,304 6,637,633,358
Total assets 2 6,038,941,804 13,941,120,322 20,139,126,471 7,894,735,633
Balance Sheet
Items27
Prepared by BOE Technology Group Co., Ltd Unit: RMB Yuan
30 Jun. 2009 31 Dec. 2008 30 Jun. 2009 31 Dec. 2008
Consolidation Consolidation Parent company Parent company
Current liabilities:
Short-term borrowings 6 73,534,032 509,073,028 164,400,000 -
Transaction financial liabilities - - - -
Notes payable 1 98,524,811 106,000,000 - -
Account payable 1 ,516,344,169 1,062,249,179 3 ,768,477 4,207,258
Account received in advance 1 34,890,718 225,371,127 4 0,004,419 41,183,980
Employee’s compensation payable 1 01,279,501 109,085,872 2 9,072,225 27,241,016
Tax payable 1 0,939,267 15,774,385 7 99,723 2,398,167
Interest payable 2 5,492,519 11,781,276 5 ,041,286 6,210,585
Dividend payable 7 ,085,412 8,093,845 6,453,790 6,453,790
Other account payable 1 80,957,488 129,185,287 7 6,120,270 32,696,258
Non-current liabilities due within 1 year 5 20,200,000 2,009,143,046 5 10,000,000 510,000,000
Other current liabilities 4 0,519,487 29,974,002 - -
Total current liabilities 3 ,409,767,404 4,215,731,047 8 35,660,190 630,391,054
Non-current liabilities:
Long-term borrowings 4 ,876,752,519 2,934,127,561 1 25,000,000 4 5,000,000
Bonds payable - - - -
Long-term payables - - - -
Specific payables - - - -
Estimated liabilities - - - -
Deferred tax liabilities - - - -
Other non-current liabilities 8 4,006,102 72,460,091 293,694,200 4 9,553,200
Total non-current liabilities 4 ,960,758,621 3,006,587,652 4 18,694,200 9 4,553,200
Total liabilities 8 ,370,526,025 7,222,318,699 1,254,354,390 7 24,944,254
Owner’s equity
Share capital 8 ,282,902,447 3,282,902,447 8,282,902,447 3,282,902,447
Capital reserves 1 1,323,997,180 4 ,504,955,589 11,329,014,281 4 ,525,326,846
Less: Treasury Stock - - -
Surplus reserves 4 99,092,613 499,092,613 499,092,613 499,092,613
Retained profits - 3,097,360,310 -2,347,930,741 -1,226,237,260 -1,137,530,527
Foreign exchange difference - 2,246,025 -2,797,376 - -
Total owners' equity attributable to parent company 1 7,006,385,905 5 ,936,222,532 18,884,772,081 7 ,169,791,379
Minority interest 6 62,029,874 782,579,091 - -
Total owner’s equity 1 7,668,415,779 6 ,718,801,623 18,884,772,081 7 ,169,791,379
Total liabilities and owner’s equity 2 6,038,941,804 13,941,120,322 20,139,126,471 7 ,894,735,633
Balance Sheet (Continued)
Items28
Prepared by BOE Technology Group Co., Ltd Unit: (RMB) Yuan
Jan.-Jun. 2009 Jan.-Jun. 2008 Jan.-Jun. 2009 Jan.-Jun. 2008
Consolidation Consolidation Parent company
Parent
company
I. Total sales 2,298,113,686 5,505,901,872 94,502,859 107,969,289
Less: cost of sales 2,596,443,022 4,461,221,959 34,196,769 38,807,074
Taxes and associate charges 7 ,330,781 11,330,331 3,284,427 3,852,677
Selling expenses 48,281,242 95,740,202 314,883 1,305,469
Administrative expenses 519,834,580 343,636,500 45,927,555 62,794,676
Financial expenses 63,283,810 12,684,533 -21,267,397 -11,500,176
Impairment loss -136,237,477 2,568,398 -292,470 66,538
Add: gain from change in fair value (“-” means loss) - - - -
Gain from investment (“-” means loss) -123,767,365 50,906,440 -120,615,213 57,158,147
Including: income form investment on affiliated enterprise -124,597,880 -22,919,277 -121,445,728 -16,667,570
Ⅱ. Business profit -924,589,637 629,626,389 -88,276,121 69,801,178
Add: non-operation income 14,063,040 56,443,357 9 8,842 2,968,904
Less: non-business expense 1 ,797,266 1,976,265 529,454 1,093,644
Including: loss from non-current asset disposal 25,195 57,812 - 10,000
Ⅲ. Total profit -912,323,863 684,093,481 -88,706,733 71,676,438
Less: Tax expense 6 ,804,077 56,722,560 - -
Ⅳ. Net profit -919,127,940 627,370,921 -88,706,733 71,676,438
Attributable to owners of parent company -749,429,569 504,963,265 -88,706,733 71,676,438
Minority interest -169,698,371 122,407,656 - -
Ⅴ. Earnings per share
(I) Basic earnings per share - 0.18 0.18 -0.02 0 .02
(II) Diluted earnings per share - 0.18 0.18 -0.02 0 .02
Profit Statement
Items29
Prepared by BOE Technology Group Co., Ltd
Jan.-Jun. 2009 Jan.-Jun. 2008 Jan.-Jun. 2009 Jan.-Jun. 2008
C o n s o l i d a t i o n C o n s o l i d a t i o n P a r e n t c o m p a n y P a r e n t c o m p a n y
I. Cash flows from operating activities:
Cash received from sale of commodities and rendering of se 1,757,061,013 6,143,067,264 27,779,048 57,341,452
Tax refunds received 17,765,133 17,763,581 - -
Other cash received relating to operating activities 244,985,100 206,632,490 349,281,060 77,082,085
Subtotal of cash inflows from operating activities 2,019,811,246 6,367,463,335 377,060,108 134,423,537
Cash paid for purchase of commodities and reception of ser 1,611,334,084 4,593,629,675 11,175,496 31,098,382
Cash paid to and for employees 307,245,407 367,776,765 24,967,260 39,281,505
Various taxes paid 53,154,099 157,710,360 12,493,303 22,649,033
Payment of cash relating to operating activities 223,880,048 212,784,366 50,668,480 35,000,181
Subtotal of cash outflows from operating activities 2,195,613,638 5,331,901,166 99,304,539 128,029,101
Net cash flows from operating activities -175,802,392 1,035,562,169 277,755,569 6 ,394,436
II. Cash Flows from investment activities:
Cash received from return of investments - - - -
Cash received from investment income 830,515 4,606,094 830,515 6,806,094
Net cash received from disposal of fixed assets, intangible a 275,480 215,640 - 60,000
Cash received from combination of subsidiaries 95,833,615 218,993,295 - -
Net cash received from disposal of subsidiary or other opera - - - -
Restricted deposits drawn back from financial institutions - - - -
Other cash received relating to investment activities 32,429,494 7 ,341,483 13,508,854 53,531,363
Subtotal of cash inflows from investment activities 129,369,104 231,156,512 14,339,369 60,397,457
Cash paid for subsidiary disposal - - - -
Cash paid to acquire fixed assets, intangible assets and oth 1,920,930,533 589,489,494 120,925,259 6 ,678,248
Increase of restricted deposit in financial organ 251,498,691 181,645,209 - 40,500,000
Cash paid for investment - 240,000,000 1,300,000,000 240,000,000
Net cash paid for acquiring subsidiaries and other operating - - - -
Payment of cash relating to other investment activities 52,309,829 527,102 277,395,572 516,507,045
Subtotal of cash outflows from investment activities 2,224,739,053 1,011,661,805 1,698,320,831 803,685,293
Net cash flows from investment activities -2,095,369,949 -780,505,293 -1,683,981,462 -743,287,836
III. Cash flows from Financing Activities:
Cash received from absorbing investment 1 1,828,252,000 - 11,828,252,000 -
Cash received from borrowings 2,731,063,940 757,651,132 1,664,400,000 196,368,000
Other cash received relating to financing activities - - - -
Subtotal of cash inflows from financing activities 1 4,559,315,940 757,651,132 13,492,652,000 196,368,000
Cash repayments of amounts borrowed 2,224,097,103 1,106,101,147 1,584,400,000 -
Cash paid for interest expenses and distribution of dividends 95,258,519 155,272,681 10,847,942 16,557,280
Other cash payments relating to financing activities 40,364,327 2 ,175,555 39,163,234 2 ,175,555
Sub-total of cash outflows from financing activities 2,359,719,949 1,263,549,383 1,634,411,176 18,732,835
Net cash flow from financing activities 1 2,199,595,991 -505,898,251 1 1,858,240,824 177,635,165
IV. Effect of foreign exchange rate changes on cash and - 5,076,356 -15,074,025 -8,374 -1,242,929
V. Increase in cash and cash equivalents 9,923,347,294 -265,915,400 1 0,452,006,557 -560,501,164
Add: Cash and cash equivalents at the year-begin 3,528,597,814 1,452,160,200 572,867,082 928,184,272
VI. Cash and cash equivalents at the period-end 1 3,451,945,108 1,186,244,800 1 1,024,873,639 367,683,108
C a s h F l o w S t a t e m e n t
Unit: (RMB) Yuan30
Prepared by BOE Technology Group Co., Ltd Unit: (RMB) Yuan
Minority equity Owners' equity
share capital Capital reservelus public re at have not bee Others Subtotal Minority equityl of owners’ eq
Balance at 1 Jan. 2009 3 ,282,902,447 4 ,504,955,589 4 99,092,613 (2,347,930,741) (2,797,376) 5 ,936,222,532 782,579,091 6,718,801,623
Increase/decrease of this year 5 ,000,000,000 6 ,819,041,591 - (749,429,569) 5 51,351 1 1,070,163,373 (120,549,217) 1 0,949,614,156
1.Net losses - - - (749,429,569) - (749,429,569) (169,698,371) (919,127,940)
2.Gain/loss listed to owners’ equity directly - 3 5,732,760 - - 5 51,351 36,284,111 4 9,149,154 85,433,265
-Net amount on changes in fair value of fi - 2 0,378,604 - - - 2 0,378,604 - 2 0,378,604
-Effect on changes in other owners’ equity
of invested units under equity method - 15,354,156 - - - 15,354,156 - 15,354,156
-Others - - - - 5 51,351 551,351 4 9,149,154 49,700,505
Subtotal of 1 and 2 - 3 5,732,760 - (749,429,569) 5 51,351 (713,145,458) (120,549,217) (833,694,675)
3.Capital input by shareholders 5 ,000,000,000 6 ,783,308,831 - - - 1 1,783,308,831 - 1 1,783,308,831
4.Profit Distribution - - - - - - - -
-distribution to shareholders - - - - - - - -
balance at 30 Jun. 2009 8 ,282,902,447 11,323,997,180 499,092,613 (3,097,360,310) (2,246,025) 1 7,006,385,905 662,029,874 17,668,415,779
Director of the Board: Wang Dongsheng CEO: Chen Yanshun CFO: Sun Yun
Prepared by BOE Technology Group Co., Ltd Unit: (RMB) Yuan
Minority equity Owners' equity
share capital Capital reserveplus public resat have not been Others Subtotal Minority equity tal of owners’ equ
Balance at 1 Jan. 2008 2 ,871,567,895 2 ,740,627,893 4 99,092,613 (1,540,405,268) (303,984) 4 ,570,579,149 950,760,025 5,521,339,174
Increase/decrease of the year - (42,154,628) - 5 04,963,265 (2,352,350) 4 60,456,287 1 41,547,476 602,003,763
1.Net losses - - - 5 04,963,265 - 5 04,963,265 1 22,407,656 627,370,921
2.Gain/loss listed to owners’ equity directly - (42,154,628) - - (2,352,350) (44,506,978) 23,159,820 (21,347,158)
-Net amount on changes in fair value of fin - (42,154,628) - - - (42,154,628) - (42,154,628)
- Effect on changes in other owners’
equity of invested units under equity - - - - - - - -
-Effect of subsidiary acquisition on minori - - - - - - - -
-Foreign exchange difference - - - - (2,352,350) (2,352,350) 2 3,159,820 20,807,470
Subtotal of 1 and 2 - (42,154,628) - 504,963,265 (2,352,350) 4 60,456,287 145,567,476 606,023,763
3.Capital contribution by shareholders - - - - - - - -
4.Profit distribution - - - - - - (4,020,000) (4,020,000)
-distribution to shareholders - - - - - - - -
balance at 30 Jun. 2008 2 ,871,567,895 2 ,698,473,265 4 99,092,613 -1,035,442,003 - 2,656,334 5 ,031,035,436 1,092,307,501 6,123,342,937
Director of the Board: Wang Dongsheng CEO: Chen Yanshun CFO: Sun Yun
Items
Consolidated Statement of Changes in Owners' Equity
Owners’ equity attributable to parent company
Owners’ equity attributable to parent company
Person-in-charge of accounting agency: Yang Xiaoping
Person-in-charge of accounting agency: Yang Xiaoping
Consolidated Statement of Changes in Owners' Equity (Continued)
Items31
Unit: (RMB) Yuan
Items S h a r e c a p i t a l C a p i t a l r e s e r v e S u r p l u s r e s e r v e R e t a i n e d p r o f i t T o t a l o w n e r s ' e q u i t y
Balance as at 1 Jan. 2009 3 ,282,902,447 4 ,525,326,846 4 99,092,613 (1,137,530,527) 7 ,169,791,379
Increase or decrease of this year 5,000,000,000 6,803,687,435 - (88,706,733) 11,714,980,702
1.Net losses - - - (88,706,733) (88,706,733)
2.Gains and losses directly included in owners' equity - 20,378,604 - - 20,378,604
-Net amount on changes in fair value of financial assets available for sale - 20,378,604 - - 20,378,604
-Shift from equity method of long-term equity investment to cost method - - - - -
Subtotal of 1 and 2 - 20,378,604 - (88,706,733) (68,328,129)
3. Capital contribution by shareholders 5,000,000,000 6,783,308,831 - - 11,783,308,831
Balance as at 30 Jun. 2009 8,282,902,447 11,329,014,281 499,092,613 (1,226,237,260) 18,884,772,081
Unit: (RMB) Yuan
Items S h a r e c a p i t a l C a p i t a l r e s e r v e S u r p l u s r e s e r v e R e t a i n e d p r o f i t T o t a l o w n e r s ' e q u i t y
Balance as at 1 Jan. 2008 2 ,871,567,895 2 ,770,165,978 4 99,092,613 (1,049,614,309) 5 ,091,212,177
Increase/decrease of the year - (42,154,628) - 71,676,438 29,521,810
1. Net losses - - - 71,676,438 71,676,438
2.Gains or losses directly included in owners' equity - (42,154,628) - - (42,154,628)
-Net amount on changes in fair value of financial assets available for sale - (42,154,628) - - (42,154,628)
Subtotal of 1 and 2 - (42,154,628) - 71,676,438 29,521,810
3. Capital contribution by shareholders - - - - -
Balance as at 30 Jun. 2008 2,871,567,895 2,728,011,350 499,092,613 (977,937,871) 5,120,733,987
S t a t e m e n t o f C h a n g e s i n O w n e r s ' E q u i t y o f P a r e n t C o m p a n y ( C o n t i n u e d )
Prepared by BOE Technology Group Co., Ltd
Prepared by BOE Technology Group Co., Ltd
S t a t e m e n t o f C h a n g e s i n O w n e r s ' E q u i t y o f P a r e n t C o m p a n y32
BOE Technology Group Co., Ltd
Notes to the financial statements
(Expressed in Renminbi)
1 About the Company
BOE Technology Group Co., Ltd (hereinafrer referred to as “the Company”) is a
company limited by shares established on 9 April 1993 in Beijing, with its head
office located in Beijing. The parent company of the Company is Beijing
Electronic Tube Factory (after “debt-equity swap” restructuring converted to
“Beijing Orient Investment and Development Company Limited” (“BOID”). The
Company’s ultimate holding company is Beijing Electronics Holdings Co., Ltd.
(“Electronics Holdings”).
With the approval of the Office of Economic Restructuring of Beijing Municipality
JTGBZ [1992] No. 22, the Company was founded by the former Beijing Electronic
Tube Factory as the main promoter by way of directional stock flotation. In
accordance with relevant China laws and regulations, the related assets and
liabilities transferred from the former Beijing Electronic Tube Factory were
revalued and the revaluation amount was certified by the governmental state-owned
assets administration department. The Company used the revaluation amount as
the initial value for Company’s accounting records.
As approved by the State Council Securities Commission through document ZWF
[1997] No. 32, the Company issued 115,000,000 B shares on 19 May 1997 at
Shenzhen Stock Exchange, with a face value of RMB 1.00 each, getting listed on
10 June 1997 on the Shenzhen Stock Exchange. As approved by China Securities
Regulatory Commission (“CSRC”) through document ZJGSZ [2000] No. 197, the
Company issued 60,000,000 ordinary shares denominated in renminbi on 23
November 2000 at Shenzhen Stock Exchange, with a face value of RMB 1.00 each,
getting listed on 12 January 2001 on the Shenzhen Stock Exchange.
As approved by the CSRC through document ZJFXZ [2004] 2, “The Notice on
approving BOE Technology Group Co.,Ltd’s further share offering”, the Company
additionally issued 316,400,000 B shares on 16 Jan 2004, with a face value of
RMB 1.00 and issuing value of HKD 6.32, which raised capital amounting to HKD
1,999,648,000. After deducting all the relevant issuance fees, the B shares further
offering raised capital of HKD 1,922,072,431 (RMB 2,048,160,383), with total
share capital increased to RMB 975,864,800.
Pursuant to the resolution approved by the 2003 Annual Shareholders’ General
Meeting held on 28 May 2004, the Company implemented its plan of transferring
capital reserve into share capital at the rate of “5 shares for every 10 shares” to all
shareholders in June 2004. Upon the completion of the transfer, the Company’s
total share capital increased to RMB 1,463,797,200.
Pursuant to the resolution passed by the 2005 1st Extraordinary Shareholders’
General Meeting held on 5 July 2005, based on the total share capital of
1,463,797,200 shares as at 31 December 2004, the Company transferred capital
reserve into share capital at the rate of “5 shares for every 10 share” to all33
shareholders on 19 July 2005. Upon completion of the transfer, the Company’s
total share capital increased to RMB 2,195,695,800.
In accordance with “The Approval Notice on BOE’s Split Share Structure Reform
Plan” issued by Stated-owned Assets Supervision and Administration Commission
of Beijing Municipality (JGZCQZ [2005] 119), the Company implemented itssplit
share structure reform plan agreed by the shareholders on 24 November 2005.
According to the plan, those registered tradable RMB-denominated ordinary share
shareholders on 29 November 2005 would receive 4.2 shares for every 10 listed
shares. This had contributed to the change in percentage of tradable and
non-tradable shares of the Company.
Pursuant to the 21st session of the 4th directors meeting and the Extraordinary
Shareholders’ General Meeting held on 18 April 2006 and 19 May 2006
respectively, and the approval from the CSRC through document ZJFXZ [2006] 36,
the Company issued 675,872,095 non-public targeted ordinary shares (A shares)
with face value of RMB 1. On 9 October 2006, the Company completed shares
registration and escrow in China Securities Depository and Clearing Company
Limited Shenzhen branch. Upon completion of the issuance, the Company’s total
share capital increased to RMB 2,871,567,895.
Pursuant to the 3rd session of the 5th directors meeting and the 2007 4th
Extraordinary Shareholders’ General Meeting held on 29 August 2007 and 26
September 2007 respectively, and the approval from the CSRC through document
ZJFXZ [2008] 587, the Company issued 411,334,552 non-public targeted
RMB-denominated ordinary share with the face value of RMB 1. On 16 July
2008, the Company completed shares registration and escrow in China Securities
Depository and Clearing Company Limited Shenzhen branch. Upon completion
of the issuance, the Company’s total share capital increased to RMB 3,282,902,447.
The Company revised its Articles of Association on August 2008, and obtained the
renewed business license as legal person with No. 110000005012597 on 8
September 2008.
Pursuant to the the 17th session of the 5th Board of Director and the 2nd
Extraordinary Shareholders’ General Meeting 2008 held on 7 Nov. 2008 and 25
Nov. 2008 respectively, and the approval from the CSRC through document ZJXK
[2009] 369 issued on 7 May 2009, the Company issued 5,000,000,000 non-public
targeted RMB-denominated ordinary shares with the face value of RMB 1. On 4
Jun. 2009, the Company completed shares registration and escrow in China
Securities Depository and Clearing Company Limited Shenzhen branch. Upon
completion of the issuance, the Company’s total share capital increased to RMB
8,282,902,447.
The Company and its subsidiaries (“the Group”) comprise two main business
segments on a worldwide basis: Thin Film Transistor-Liquid Crystal Display
business(“TFT-LCD business”) and other business. The other business includes
precision electronic parts and materials business and proprietary property
development and management business, etc.34
2 Basis of preparation
(1) Statement of compliance
The financial statements have been prepared in accordance with the
requirements of the China Accounting Standards for Business Enterprises
(CAS (2006)) issued by the Ministry of Finance (“MOF”). These financial
statements present truly and completely the consolidated financial position
and financial position, the consolidated results of operations and results of
operations and the consolidated cash flows and cash flows of the Company.
Moreover, these financial statements of the Group also comply with the
disclosure requirements of “Regulation on the Preparation of Information
Disclosures of Companies Issuing Public Shares, No. 15: General
Requirements for Financial Reports” as revised by the CSRC in 2007.
(2) Accounting year
The accounting year of the Group is from 1 January to 31 December.
(3) Measurement basis
The measurement basis used in the preparation of the financial statements is
historical cost basis except that the assets and liabilities set out below:
. Available-for-sale financial assets(See Note 3(12))
(4) Functional currency and presentation currency
The Company’s functional currency is renminbi. These financial statements
are presented in renminbi. The Company translates the financial statements
of subsidiaries from their respective functional currencies into renminbi (see
Note 3(2)) if the subsidiaries’ functional currencies are not renminbi.
3 Significant accounting policies and accounting estimates
(1) Business combination and consolidated financial statements
(a) Business combination involving entities under common control
A business combination involving enterprises under common control is
a business combination in which all of the combining enterprises are
ultimately controlled by the same party or parties both before and after
the business combination, and that control is not transitory. The assets
and liabilities obtained in combination by combining party are
measured at the carrying amounts as recorded by the enterprise being
combined at the combination date. The difference between the35
carrying amount of the net assets obtained and the carrying amount of
consideration paid for the combination (or the total face value of shares
issued) is adjusted to share premium (or asset premium) in the capital
reserve. If the balance of share premium (or asset premium) is
insufficient, any excess is adjusted to retained earnings. The
combination date is the date on which one combining enterprise
effectively obtains control of the other combined enterprise.
(b) Business combinations involving entities not under common control
A business combination involving entities not under common control is
a business combination in which all of the combining entities are not
ultimately controlled by the same party or parties both before and after
the business combination. The cost of a business combination paid by
the acquirer is the aggregate of the fair value at the acquisition date of
assets given, liabilities incurred or assumed, and equity securities issued
by the acquirer, in exchange for control of the acquiree plus any cost
directly attributable to the business combination. The difference
between the fair value and the carrying amount of the assets given is
recognised in profit or loss. The acquisition date is the date on which
the acquirer effectively obtains control of the acquiree.
The acquirer, at the acquisition date, allocates the cost of the business
combination by recognising the acquiree’s identifiable asset, liabilities
and contingent liabilities at their fair value at that date.
Any excess of the cost of a business combination over the acquirer’s
interest in the fair value of the acquiree’s identifiable net assets is
recognised as goodwill (See Note 3(10)).
Any excess of the acquirer’s interest in the fair value of the acquiree’s
identifiable net assets over the cost of a business combination is
recognised in profit or loss.
(c) Consolidated financial statements
The consolidated financial statements comprise the Company and
subsidiaries controlled by the Company. Control is the power to
govern the financial and operating policies of an entity so as to obtain
benefits from its operating activities. The operation results and
financial positions of subsidiaries are included in the consolidated
financial statements from the date that control commences until the date
that control ceases.
Where a subsidiary was acquired during the reporting period through a
business combination involving entities under common control, the
financial statements of the subsidiary are included in the consolidated
financial statements as if the combination had occurred at the date that36
common control was established. Therefore the opening balances and
the comparative figures of the consolidated financial statements are
restated correspondently. In the preparation of the consolidated
financial statements, the subsidiary’s assets, liabilities and results of
operations are included in the consolidated balance sheet and the
consolidated income statement, respectively, based on their carrying
amount from the date that common control was established.
Where a subsidiary was acquired during the reporting period through a
business combination involving entities not under common control, the
identifiable assets, liabilities and results of operations of the
subsidiaries are consolidated into consolidated financial statements
from the acquisition date, base on the fair value of those identifiable
assets and liabilities at the acquisition date.
Where the Company acquired a minority interest from a subsidiary’s
minority shareholders, the difference between the investment cost for
acquiring the minority interest and the corresponding reduction of
minority interest in the consolidated financial statements, is adjusted to
the capital reserve in the consolidated balance sheet. If the credit
balance of capital reserve is insufficient, any excess is adjusted to
retained earnings.
Minority interest is presented separately in the consolidated balance
sheet within shareholders’ equity. Net profit or loss attributable to
minority shareholders is presented separately in the consolidated
income statement below the net profit line item.
Where losses attributable to the minority shareholders of a subsidiary
exceeds the minority shareholders’ interest in of the equity of the
subsidiary, the excess, and any further losses attributable to the
minority shareholders, are allocated against the equity attributable to
the Company except to the extent that the minority shareholders have a
binding obligation under the articles of association or an agreement and
are able to make additional investment to cover the losses. If the
subsidiary subsequently reports profits, such profits are allocated to the
equity attributable to the Company until the minority shareholders’
share of losses previously absorbed by the Company has been
recovered.
When the accounting period or accounting policies of a subsidiary are
different from those of the Company, the Company makes necessary
adjustments to the financial statements of the subsidiary based on the
Company’s own accounting period or accounting policies.
Intra-group balances and transactions, and any unrealised profit or loss
arising from intra-group transactions, are eliminated in preparing the
consolidated financial statements. Unrealised losses resulting from
intra-group transactions are eliminated in the same way as unrealized
gains but only to the extent that there is no evidence of impairment.37
(2) Translation of foreign currencies
When the Group receives capital in foreign currencies from investors, the
capital is translated to renminbi at the spot exchange rate at the date of the
receipt. Other foreign currency transactions are, on initial recognition,
translated to renminbi at the spot exchange rates at the dates of the
transactions.
A spot exchange rate is an exchange rate quoted by the People’s Bank of
China, the State Administration of Foreign Exchanges or a cross rate
determined based on quoted exchange rates. A rate that approximates the
spot exchange rate is a rate determined under a systematic and rational
method, normally weighted average exchange rate of the current period.
Monetary items denominated in foreign currencies are translated to renminbi
at the spot exchange rate at the balance sheet date. The resulting exchange
differences are recognised in profit or loss, except those arising from the
principals and interests on foreign currency borrowings specifically for the
purpose of acquisition and construction of qualifying assets (see Note 3(19)).
Non-monetary items denominated in foreign currencies that are measured at
historical cost are translated to renminbi using the foreign exchange rate at
the transaction date. Non-monetary items denominated in foreign currencies
that are measured at fair value are translated using the foreign exchange rate
at the date the fair value is determined; the exchange differences are
recognised in profit or loss, except for the differences arising from the
translation of available-for-sale financial assets, which is recognised in capital
reserve.
The assets and liabilities of foreign operation are translated to renminbi at the
spot exchange rate at the balance sheet date. The equity items, excluding
“Retained earning”, are translated to renminbi at the spot exchange rates at
the transaction dates. The income and expenses of foreign operation are
translated to renminbi at the rates that approximate the spot exchange rates at
the transaction dates. The resulting exchange differences are recognised in a
separate component of equity. Upon disposal of a foreign operation, the
cumulative amount of the exchange differences recognised in equity which
relates to that foreign operation is transferred to profit or loss in the period in
which the disposal occurs.
(3) Cash and Cash equivalents
Cash and cash equivalents comprise cash on hand, demand deposits, and
short-term, highly liquid investments, which are readily convertible into
known amounts of cash and are subject to an insignificant risk of change in
value.
(4) Inventories
Inventories are carried at the lower of cost and net realisable value.38
Cost of inventories comprises all costs of purchase, costs of conversion and
other costs. Inventories are initially measured at their actual cost. Cost of
inventories is calculated using the weighted average method. In addition to
the purchasing cost of raw materials, work in progress and finished goods
include direct labour costs and an appropriate allocation of production
overheads.
Any excess of the cost over the net realisable value of each class of
inventories is recognised as a provision for diminution in the value of
inventories. Net realisable value is the estimated selling price in the normal
course of business less the estimated costs to completion and the estimated
expenses and related taxes necessary to make the sale.
Reusable materials include low-value consumables, packaging materials and
other materials, which are amortised in full by adopting one-off write-off
method. The amounts of the amortisation are included in the cost of the
related assets or profit or loss.
The Group maintains a perpetual inventory system.
(5) Long-term equity investments
(a) Investments in subsidiaries
In the Group’s consolidated financial statements, investment in
subsidiaries are accounted for in accordance with the principles
described in Note 3(1)(c).
In the Company’s financial statements, investments in subsidiaries are
accounted for using the cost method. The investments are stated at
cost less impairment losses (see Note 3(13)(c)) in the balance sheet.
At initial recognition, such investments are measured as follows:
. The initial investment cost of a long-term equity investment obtained
through a business combination involving entities under common
control is the Company’s share of the subsidiary’s equity at the
combination date. The difference between the initial investment
cost and the carrying amounts of the consideration given is adjusted
to share premium in capital reserve. If the balance of the share
premium is insufficient, any excess is adjusted to retained earnings.
. The initial investment cost of a long-term equity investment obtained
through a business combination involving entities not under
common control is the cost of acquisition determined at the
acquisition date.
. An investment in a subsidiary acquired otherwise than through a
business combination is initially recognised at actual payment cost if39
the Group acquires the investment by cash, or at the fair value of the
equity securities issued if an investment is acquired by issuing equity
securities, or at the value stipulated in the investment contract or
agreement if an investment is contributed by shareholders.
(b) Investment in jointly controlled enterprises and associates
A jointly controlled enterprise is an enterprise which operates under
joint control in accordance with a contractual agreement between the
Group and other parties. Joint control is the contractual agreed
sharing of control over an economic activity, and exists only when the
strategic financial and operating decisions relating to the activity
require the unanimous consent of the parties sharing the control.
An associate is an enterprise over which the Group has significant
influence. Significant influence is the power to participate in the
financial and operating policy decisions of an investee but is not control
or joint control over those policies.
An investment in a jointly controlled enterprise or an associate is
accounted for using the equity method, unless the investment is
classified as held for sale (see Note 3(11)).
At year-end, the Group makes provision for impairment loss of
investments in jointly controlled enterprises and associates (see Note
3(13)(c)).
An investment in a jointly controlled enterprise or an associate is
initially recognised at actual payment cost if the Group acquires the
investment by cash, at the fair value of the equity securities issued if an
investment is acquired by issuing equity securities, or at the value
stipulated in the investment contract or agreement if an investment is
contributed by an investor.
The Group makes the following accounting treatments when using the
equity method:
. Where the initial investment cost of a long-term equity investment
exceeds the Group’s interest in the fair value of the investee’s
identifiable net assets at the date of acquisition, the investment is
initially recognised at the initial investment cost. Where the initial
investment cost is less than the Group’s interest in the fair value of
the investee’s identifiable net assets at the date of acquisition, the
investment is initially recognised at the investor’s share of the fair
value of the investee’s identifiable net assets, and the difference is
charged to profit or loss.
. After the acquisition of the investment, the Group recognises its
share of the investee’s net profits or losses after deducting the
amortisation of the debit balance of equity investment difference as
investment income or losses, and adjusts the carrying amount of the40
investment accordingly. Once the investee declares any cash
dividends or profits distributions, the carrying amount of the
investment is reduced by that attributable to the Group.
The Group recognises its share of the investee’s net profits or losses
after making appropriate adjustments to align the accounting policies
or accounting periods with those of the Group based on the fair
values of the investee’s identifiable net assets at the date of
acquisition. Profits and losses resulting from transactions between
the Group and its associates or jointly controlled enterprises are
eliminated to the extent of the Group’s interest in the associates or
jointly controlled enterprises. Unrealised losses resulting from
transactions between the Group and its associates or jointly
controlled enterprises are eliminated in the same way as unrealized
gains but only to the extent that there is no evidence of impairment.
. The Group discontinues recognising its share of net losses of the
investee after the carrying amount of the long-term equity
investment and any long-term interest that in substance forms part of
the Group’s net investment in the associate or the jointly controlled
enterprise is reduced to zero, except to the extent that the Group has
an obligation to assume additional losses. Where net profits are
subsequently made by the associate or jointly controlled enterprise,
the Group resumes recognising its share of those profits only after its
share of the profits equals the share of losses not recognised.
(c) Other long-term equity investments
Other long-term equity investments refer to investments where the
Group does not have control, joint control or significant influence over
the investees, and the investments are not quoted in an active market
and their fair value cannot be reliably measured.
Such investments are initially recognised at the cost determined in
accordance with the same principles as those for jointly controlled
enterprises and associates, and then accounted for using the cost
method. At year-end the Group makes provision for impairment
losses on such investments (see Note 3(13)(b)).
(6) Investment property
Investment property is a property held either to earn rental income or for
capital appreciation or for both. Investment property is accounted for using
the cost model and stated in the balance sheet at cost less accumulated
depreciation and impairment loss (see Note 3(13)(c)). Investment property
is depreciated or amortised using the straight-line method over its estimated
useful life, unless the investment property is classified as held for sale (see
Note 3(11)).41
Estimated Estimated Depreciation
useful life residual value rate
Building 25-35 years 3%-10% 2.6%-3.9%
Land use right 50 years 0% 2%
(7) Fixed assets and construction in progress
Fixed assets represent the tangible assets held by the Group for use in the
production of goods or supply of services for rental to others or for operation
and administrative purposes with useful lives over one year.
Fixed assets are stated in the balance sheet at cost less accumulated
depreciation and impairment losses (see Note 3(13)(c)). Construction in
progress is stated in the balance sheet at cost less impairment losses (see Note
3(13)(c)).
The cost of a purchased fixed asset comprises the purchase price, related
taxes, and any directly attributable expenditure for bringing the asset to
working condition for its intended use. The cost of self-constructed assets
includes the cost of materials, direct labour, capitalised borrowing costs (see
Note 3(19)), and any other costs directly attributable to bringing the asset to
working condition for its intended use.
Construction in progress is transferred to fixed assets when it is ready for its
intended use. No depreciation is provided against construction in progress.
Where parts of an item of fixed asset have different useful lives or provide
benefits to the Group in different patterns thus necessitating use of different
depreciation rates or methods, each part is recognised as a separate fixed
asset.
The subsequent costs including the cost of replacing part of an item of fixed
assets are recognised in the carrying amount of the item if the recognition
criteria are satisfied, and the carrying amount of the replaced part is
derecognised. The costs of the day-to-day servicing of fixed assets are
recognised in profit or loss as incurred.
Gains or losses arising from the retirement or disposal of an item of fixed
asset are determined as the difference between the net disposal proceeds and
the carrying amount of the item and are recognised in profit or loss on the
date of retirement or disposal.
Fixed assets are depreciated using the straight-line method over their
estimated useful lives, unless the fixed assets is classified as held for sale (see
Note 3(11)). The estimated useful lives, residual values and depreciation
rates of each class of fixed assets are as follows:42
Estimated Depreciation
Useful life residual value rate
Plants and buildings 20-40 years 3%-10% 2.3%-4.9%
Equipment 2-15 years 0-10% 6%-50%
Others 2-10 years 0-10% 9%-50%
Useful lives, residual values and depreciation methods are reviewed at least
each year-end.
(8) Leases
A lease is classified as either a finance lease or an operating lease. A
finance lease is a lease that transfers substantially all the risks and rewards
incidental to ownership of a leased asset to the lessee, irrespective of whether
the legal title to the asset is eventually transferred or not. An operating lease
is a lease other than a finance lease.
(a) Assets acquired under finance leases
When the Group acquires an asset under a finance lease, the asset is
measured at an amount equal to the lower of its faire values and the
present value of the minimum lease payments, each determined at the
inception of the lease. The minimum lease payments are recorded as
long-term payables. The difference between the value of the leased
assets and the minimum lease payments is recognised as unrecognised
finance charges. Initial direct costs that are attributable to a finance
lease incurred by the Group are added to the amounts recognised for the
leased asset. Depreciation and impairment losses are accounted for in
accordance with the accounting policies described in Notes 3(7) and
3(13)(c), respectively.
If there is reasonable certainty that the Group will obtain ownership of a
leased asset at the end of the lease term, the leased asset is depreciated
over its estimated useful life. Otherwise, the leased asset is
depreciated over the shorter of the lease term and its estimated useful
life.
Unrecognised finance charge under finance lease is amortised using an
effective interest method over the lease term. The amortisation is
accounted for in accordance with policies of borrowing costs (see Note
3(19)).
At the balance sheet date, long-term payables arising from finance
leases, net of the unrecognised finance charges, are presented into
long-term payables and non-current liabilities due within one year,
respectively in the balance sheet.43
(b) Operating lease charges
Rental payments under operating leases are recognised as costs or
expenses on a straight-line basis over the lease term.
(c) Assets leased out under operating leases
Fixed assets leased out under operating leases, except for investment
property (see Note 3(6)), are depreciated in accordance with the
Group’s depreciation policies described in Note 3(7). Impairment
losses are provided for in accordance with the accounting policy
described in Note 3(13)(c). Income derived from operating leases is
recognised in the income statement using the straight-line method over
the lease term. If initial direct costs incurred in respect of the assets
leased out are material, the costs are initially capitalised and
subsequently amortised in profit or loss over the lease term on the same
basis as the lease income. Otherwise, the costs are charged to profit or
loss immediately.
(9) Intangible assets
Intangible assets are stated in the balance sheet at cost less accumulated
amortisation (where the estimated useful life is finite) and impairment losses
(see Note 3(13)(c)). For an intangible asset with finite useful life, its cost
less residual value and impairment loss is amortised on the straight-line
method over its estimated useful life, unless the intangible assets is classified
as held for sale (see Note 3(11)). The respective amortisation periods for
such intangible assets are as follows:
Useful lives
Land use right 35-50 years
Technology rights 8-20 years
Patent 5-10 years
Computer software 3-10 years
An intangible asset is regarded as having an indefinite useful life and is not
amortised when there is no foreseeable limit to the period over which the
asset is expected to generate economic benefits for the Group. At the
balance sheet date, the Group doesn’t have any intangible assets with
indefinite useful lives.
Expenditures on an internal research and development project are classified
into expenditures on the research phase and expenditures on the development
phase. Research is original and planned investigation undertaken with the
prospect of gaining new scientific or technical knowledge and understanding.
Development is the application of research findings or other knowledge to a
plan or design for the production of new or substantially improved materials,
devices, products or processes before the start of commercial production or
use.44
Expenditures on research phase are recognised in profit or loss when incurred.
Expenditures on development phase are capitalised if development costs can
be measured reliably, the product or process is technically and commercially
feasible, and the Group intends to and has sufficient resources to complete
development. Capitalised development costs are stated at cost less
impairment losses (see Note 3(13)(c)). Other development expenditures are
recognised as expenses in the period in which they are incurred.
(10) Goodwill
Goodwill represents the excess of cost of acquisition over the acquirer’s
interest in the fair value of the identifiable net assets of the acquiree under the
business combination involving entities not under common control.
Goodwill is not amortised and is stated at cost less accumulated impairment
losses (see Note 3(13)(c)). On disposal of an asset group or a set of asset
groups, any attributable amount of purchased goodwill is written off and
included in the calculation of the profit or loss on disposal.
(11) Non-current assets held for sale
A non-current asset is classified as held for sale when the Group has made a
decision and signed a non-cancellable agreement on the transfer of the asset
with the transferee, and the transfer is expected to be completed within one
year. Such non-current assets may be fixed assets, intangible assets,
investment property subsequently measured using the cost model, long-term
equity investment etc. but not include deferred tax assets. Non-current
assets held for sale are stated at the lower of carrying amount and net
realisable value. Any excess of the carrying amount over the net realisable
value is recognised as impairment loss. At balance sheet date, non-current
assets held for sale are still presented under corresponding asset classification
as they were.
(12) Financial instruments
Financial instruments comprise cash at bank and on hand, investments in
equity securities other than long-term equity investments (see Note 3(5)),
receivables, payables, loans and borrowings and share capital, etc.
(a) Recognition and measurement of financial assets and financial
liabilities
A financial asset or financial liability is recognised in the balance sheet
when the Group becomes a party to the contractual provisions of a
financial instrument.
The Group classifies financial assets and liabilities into different
categories at initial recognition based on the purpose of acquiring assets
or assuming liabilities: financial assets and financial liabilities at fair
value through profit or loss, loans and receivables, held-to-maturity45
investments, available-for-sale financial assets and other financial
liabilities.
Financial assets and financial liabilities are measured initially at fair
value. For financial assets and financial liabilities at fair value
through profit or loss, any directly attributable transaction costs are
charged to profit or loss; for other categories of financial assets and
financial liabilities, any attributable transaction costs are included in
their initial costs. Subsequent to initial recognition financial assets
and liabilities are measured as follows:
. Financial assets and financial liabilities at fair value through profit or
loss (including financial assets or financial liabilities held for
trading)
A financial asset or financial liability is classified as at fair value
through profit or loss if it is acquired or incurred principally for the
purpose of selling or repurchasing it in the near term or if it is a
derivative.
Subsequent to initial recognition, financial assets and financial
liabilities at fair value through profit or loss are measured at fair
value, and changes therein are recognised in profit or loss.
. Receivables
Receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market.
Subsequent to initial recognition, receivables are subsequently stated
at amortised cost using the effective interest method.
. Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets
with fixed or determinable payments and fixed maturity that the
Group has the positive intention and ability to hold to maturity.
Subsequent to initial recognition, held-to-maturity investments are
stated at amortised cost using the effective interest method.
. Available-for-sale financial assets
Available-for-sale financial assets include non-derivative financial
assets that are designated upon initial recognition as available for
sales and other financial assets which do not fall into any of the
above categories.
An investment in equity instrument which does not have a quoted
market price in an active market and whose fair value cannot be46
reliably measured is measured at cost subsequent to initial
recognition.
Other than investments in equity instruments whose fair value
cannot be measured reliably as described above, subsequent to initial
recognition, other available-for-sale financial assets are measured at
fair value and changes therein, except for impairment losses and
foreign exchange gains and losses from monetary financial assets,
which are recognised directly in profit or loss, are recognised
directly in equity. When an investment is derecognised, the
cumulative gain or loss in equity is removed from equity and
recognised in profit or loss. Dividend income from these equity
instruments is recognised in profit or loss when the investee declares
the dividends. Interest on available-for-sale financial assets
calculated using the effective interest method is recognised in profit
or loss (see Note 3(17)(c)).
. Other financial liabilities
Financial liabilities other than the financial liabilities at fair value
through profit or loss are classified as other financial liabilities.
Other financial liabilities include the liabilities arising from financial
guarantee contracts. Financial guarantees are contracts that require
the issuer (i.e. the guarantor) to make specified payments to
reimburse the beneficiary of the guarantee (the holder) for a loss the
holder incurs because a specified debtor fails to make payment when
due in accordance with the terms of a debt instrument. Where the
Group issues a financial guarantee, subsequent to initial recognition,
the guarantee is measured at the higher of the amount initially
recognised less accumulated amortisation and the amount of a
provision determined in accordance with the principles of contingent
liabilities (see Note 3(16)).
Except for the liabilities arising from financial guarantee contracts
described above, subsequent to initial recognition, other financial
liabilities are measured at amortised cost using the effective interest
method.
(b) Determination of fair values
If there is an active market for a financial asset or financial liability, the
quoted price in the active market without adjusting for transaction costs
that may be incurred upon future disposal or settlement is used to
establish the fair value of the financial asset or financial liability. For
a financial asset held or a financial liability to be assumed, the quoted
price is the current bid price and, for a financial asset to be acquired or
a financial liability assumed, it is the current asking price.
If no active market exists for a financial instrument, a valuation
technique is used to establish the fair value. Valuation techniques47
include using recent arm’s length market transactions between
knowledgeable, willing parties; reference to the current fair value of
another instrument that is substantially the same and discounted cash
flow analysis. The Group calibrates the valuation technique and tests
it for validity periodically.
(c) Derecognition of financial assets and financial liabilities
A financial asset is derecognised if the Group’s contractual rights to the
cash flows from the financial asset expire or if the Group transfers
substantially all the risks and rewards of ownership of the financial
asset to another party.
Where a transfer of a financial asset in its entirety meets the criteria of
the derecognition, the difference between the two amounts below is
recognised in profit or loss:
. carrying amount of the financial asset transferred
. the sum of the consideration received from the transfer and any
cumulative gain or loss that has been recognised directly in equity.
The Group derecognises a financial liability (or part of it) only when
the underlying present obligation (or part of it) is discharged.
(d) Equity instrument
An equity instrument is a contract that proves the ownership interest of
the assets after deducting all liabilities in the Company.
The consideration received from the issuance of equity instruments net
of transaction costs is recognised in share capital and capital reserve.
Consideration and transaction costs paid by the Company for
repurchasing self-issued equity instruments are deducted from
shareholders’ equity.
(13) Impairment of financial assets and non-financial long-term assets
(a) Impairment of financial assets
The carrying amounts of financial assets (other than those at fair value
through profit or loss) are reviewed at each balance sheet date to
determine whether there is objective evidence of impairment. If any
such evidence exists, impairment loss is provided.
. Receivables and held-to-maturity investments48
Held-to-maturity investments are assessed for impairment on an
individual basis. Receivables are assessed for impairment both on
an individual basis and on a collective group basis.
Where impairment is assessed on an individual basis, an impairment
loss in respect of a receivable or held-to-maturity investment is
calculated as the excess of its carrying amount over the present value
of the estimated future cash flows (exclusive of future credit losses
that have not been incurred) discounted at the original effective
interest rate. All impairment losses are recognised in profit or loss.
The assessment is made collectively where receivables share similar
credit risk characteristics (including those having not been
individually assessed as impaired), based on their historical loss
experiences, and adjusted by the observable figures reflecting
present economic conditions.
If, after an impairment loss has been recognised on receivables or
held-to-maturity investments, there is objective evidence of a
recovery in value of the financial asset which can be related
objectively to an event occurring after the impairment was
recognised, the previously recognised impairment loss is reversed
through profit or loss. A reversal of an impairment loss will not
result in the asset’s carrying amount exceeding that which would
have been determined had no impairment loss been recognised in
prior years.
. Available-for-sale financial assets
Available-for-sale financial assets are assessed for impairment on an
individual basis.
When an available-for-sale financial asset is impaired, the
cumulative loss arising from decline in fair value that has been
recognised directly in equity is removed from equity and recognised
in profit or loss even though the financial asset has not been
derecognised.
If, after an impairment loss has been recognised on an
available-for-sale debt instrument, the fair value of the debt
instrument increases in a subsequent period and the increase can be
objectively related to an event occurring after the impairment loss
was recognised, the impairment loss is reversed through profit or
loss. An impairment loss recognised for an investment in an equity
instrument classified as available-for-sale is not reversed through
profit or loss.
(b) Impairment of other long-term equity investments
Other long-term equity investments (see Note 3(5)(c)) are assessed for
impairment on an individual basis.49
For other long-term equity investments, the amount of the impairment
loss is measured as the difference between the carrying amount of the
investment and the present value of estimated future cash flows
discounted at the current market rate of return for a similar financial
asset. Such impairment loss is not reversed.
(c) Impairment of non-financial long-term assets
The carrying amounts of the following assets are reviewed at each
balance sheet date based on the internal and external sources of
information to determine whether there is any indication of impairment:
. fixed assets
. construction in progress
. intangible assets
. investment property measured using a cost model
. long-term equity investments in subsidiaries, associates and jointly
controlled entities.
If any indication exists that an asset may be impaired, the recoverable
amount of the asset is estimated. In addition, the Group estimates the
recoverable amount of goodwill at no later than each year-end,
irrespective of whether there is any indication of impairment or not.
Goodwill is tested for impairment together with its related asset groups
or sets of asset groups.
An asset group is the smallest identifiable group of assets that generates
cash inflows that are largely independent of the cash inflows from other
assets or asset groups. An asset group is composed of assets directly
relating to cash-generation. Identification of an asset group is based
on whether major cash inflows generated by the asset group are largely
independent of the cash inflows from other assets or asset groups. In
identifying an asset group, the Group also considers how management
monitors the Group’s operations and how management makes decisions
about continuing or disposing of the Group’s assets.
The recoverable amount of an asset, asset group or set of asset groups is
the higher of its fair value less costs to sell and its present value of
expected future cash flows.
An asset’s fair value less costs to sell is the amount determined by the
price of a sale agreement in an arm’s length transaction, less the costs
that are directly attributable to the disposal of the asset. The present
value of expected future cash flows of an asset is determined by
discounting the future cash flows, estimated to be derived from
continuing use of the asset and from its ultimate disposal, to their
present value using a pre-tax discount rate that reflects current market50
assessments of the time value of money and the risks specific to the
asset.
If the result of the recoverable amount calculating indicates the
recoverable amount of an asset is less than its carrying amount, the
carrying amount of the asset is reduced to its recoverable amount.
That reduction is recognised as an impairment loss and charged to
profit or loss for the current period. A provision for impairment loss
of the asset is recognised accordingly. For impairment losses related
to an asset group or a set of asset groups, first reduce the carrying
amount of any goodwill allocated to the asset group or set of asset
groups, and then reduce the carrying amount of the other assets in the
asset group or set of asset groups on a pro rata basis. However, the
carrying amount of an impaired asset will not be reduced below the
highest of its individual fair value less costs to sell (if determinable),
the present value of expected future cash flows (if determinable) and
zero.
Once an impairment loss is recognised, it is not reversed in a
subsequent period.
(14) Employee benefits
Employee benefits are all forms of considerations given and other relevant
expenditures incurred in exchange for services rendered by employees.
Except for termination benefits, employee benefits are recognised as a
liability in the period in which the associated services are rendered by
employees, with a corresponding increase in cost of relevant assets or
expenses in the current period.
(a) Pension benefits
Pursuant to the relevant laws and regulations of the PRC, the Group has
joined a basic pension insurance for the employees arranged by local
Labour and Social Security Bureaus. The Group makes contributions
to the pension insurance at the applicable rates based on the amounts
stipulated by the government organisation. The contributions are
recognised as cost of assets or charged to profit or loss on an accrual
basis. When employees retire, the local Labour and Social Security
Bureaus are responsible for the payment of the basic pension benefits to
the retired employees. The Group does not have any other obligations
in this respect.
(b) Housing fund and other social insurances
Besides the pension benefits, pursuant to the relevant laws and
regulations of the PRC, the Group has joined defined social security
contributions for employees, such as a housing fund, basic medical
insurance, unemployment insurance, injury insurance and maternity51
insurance. The Group makes contributions to the housing fund and
other social insurances mentioned above at the applicable rate(s) based
on the employees’ salaries. The contributions are recognised as cost
of assets or charged to profit or loss on an accrual basis.
(c) Termination benefits
When the Group terminates the employment relationship with
employees before the employment contracts have expired, or provides
compensation as an offer to encourage employees to accept voluntary
redundancy, a provision for the termination benefits provided, is
recognised in profit or loss when both of the following conditions have
been satisfied:
- The Group has a formal plan for the termination of employment or
has made an offer to employees for voluntary redundancy, which
will be implemented shortly.
- The Group is not allowed to withdraw from termination plan or
redundancy offer unilaterally.
(15) Income tax
Current tax and deferred tax are recognised in profit or loss except to the
extent that they relate to items recognised directly in equity, in which case
they are recognised in equity.
Current tax is the expected tax payable calculated at the applicable tax rate on
taxable income for the year, and any adjustment to tax payable in respect of
previous years.
At the balance sheet date, current tax assets and liabilities are offset if the
taxable entity has a legally enforceable right to set off them and the entity
intends either to settle on a net basis or to realise the asset and settle the
liability simultaneously.
Deferred tax assets and liabilities arise from deductible and taxable temporary
differences respectively, being the differences between the carrying amounts
of assets and liabilities for financial reporting purposes and their tax bases,
which include the deductible losses and tax credits carry forward to
subsequent periods. Deferred tax assets are recognised to the extent that it is
probable that future taxable profits will be available against which deductible
temporary differences can be utilised.
Deferred tax is not recognised for the temporary differences arising from the
initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting profit nor taxable profit (or
tax loss). Deferred tax is not recognised for taxable temporary differences
arising from the initial recognition of goodwill.52
At the balance sheet date, the amount of deferred tax recognised is measured
based on the expected manner of recovery or settlement of the carrying
amount of the assets and liabilities, using tax rates that are expected to be
applied in the period when the asset is recovered or the liability is settled in
accordance with tax laws.
At the balance sheet date, deferred tax assets and liabilities are offset if all the
following conditions are met:
- the taxable entity has a legally enforceable right to set off current tax
assets against current tax liabilities, and
- they relate to income taxes levied by the same tax authority on either:
- the same taxable entity; or
- different taxable entities which either to intend to settle the current tax
liabilities and assets on a net basis, or to realize the assets and settle the
liabilities simultaneously, in each future period in which significant
amounts of deferred tax liabilities or assets are expected to be settled or
recovered.
(16) Provisions and contingent liabilities
A provision is recognised for an obligation related to a contingency if the
Group has a present obligation that can be estimated reliably, and it is
probable that an outflow of economic benefits will be required to settle the
obligation. Where the effect of time value of money is material, provisions
are determined by discounting the expected future cash flows.
In terms of a possible obligation resulting from a past transaction or event,
whose existence will only be confirmed by the occurrence or non-occurrence
of uncertain future events or a present obligation resulting from a past
transaction or event, where it is not probable that the settlement of the above
obligation will cause an outflow of economic benefits, or the amount of the
outflow can not be estimated reliably, the possible or present obligation is
disclosed as a contingent liability.
(17) Revenue recognition
Revenue is the gross inflow of economic benefit arising in the course of the
Group’s ordinary activities when the inflows result in increase in
shareholder’s equity, other than increase relating to contributions from
shareholders. Revenue is recognised in profit or loss when it is probable
that the economic benefits will flow to the Group, the revenue and costs can
be measured reliably and the following respective conditions are met:
(a) Sale of goods
Revenue from sale of goods is recognised when all of the general
conditions stated above and following conditions are satisfied:53
. The significant risks and rewards of ownership of goods have been
transferred to the buyer;
. The Group retains neither continuing managerial involvement to the
degree usually associated with ownership nor effective control over
the goods sold.
Revenue from the sale of goods is measured at the fair value of the
considerations received or receivable under the sales contract or
agreement.
(b) Rendering of services
At the balance sheet date, where the outcome of a transaction involving
the rendering of services can be estimated reliably, revenue from the
rendering of services is recognised in the income statement by reference
to the stage of completion of the transaction based on the progress of
work performed.
Where the outcome of rendering of services cannot be estimated
reliably, if the costs incurred are expected to be recoverable, revenues
are recognised to the extent that the costs incurred that are expected to
be recoverable, and an equivalent amount is charged to profit or loss as
service cost; if the costs incurred are not expected to be recoverable, the
costs incurred are recognised in profit or loss and no service revenue is
recognised.
(c) Interest income
Interest income is recognised on a time proportion basis with reference
to the principal outstanding and the applicable effective interest rate.
(d) Operating lease income
Rental income generated from operating lease is recognised based on
straight line method over the lease term.
(18) Government grants
Government grants are transfers of monetary assets or non-monetary assets
from the government to the Group at no consideration except for the capital
contribution from the government as an investor in the Group. Special
funds such as investment grants allocated by the government, if clearly
defined in official documents as part of “capital reserve” are dealt with as
capital contributions, and not regarded as government grants.
A government grant is recognised when there is reasonable assurance that the
grant will be received and that the Group will comply with the conditions
attaching to the grant.54
If a government grant is in the form of a transfer of a monetary asset, it is
measured at the amount that is received or receivable. If a government grant
is in the form of a transfer of a non-monetary asset, it is measured at its fair
value.
A government grant related to an asset is recognised initially as deferred
income and amortised to profit or loss on a straight-line basis over the useful
life of the asset. A grant that compensates the Group for expenses to be
incurred in the subsequent periods is recognised initially as deferred income
and recognised in profit or loss in the same periods in which the expenses are
recognised. A grant that compensates the Group for expenses incurred is
recognised in profit or loss immediately.
(19) Borrowing costs
Borrowing costs incurred directly attributable to the acquisition, construction
of a qualifying asset are capitalised as part of the cost of the asset.
Except for the above, other borrowing costs are recognised as financial
expenses in the income statement when incurred.
During the capitalisation period, the amount of interest (including
amortisation of any discount or premium on borrowing) to be capitalised in
each accounting period is determined as follows:
. Where funds are borrowed specifically for the acquisition, construction of
a qualifying asset, the amount of interest to be capitalised is the interest
expense calculated using effective interest rates during the period less any
interest income earned from depositing the borrowed funds or any
investment income on the temporary investment of those funds before
being used on the asset.
. Where funds are borrowed generally and used for the acquisition,
construction of a qualifying asset, the amount of interest to be capitalised
on such borrowings is determined by applying a capitalisation rate to the
weighted average of the excess amounts of cumulative expenditures on the
asset over the above amounts of specific borrowings. The capitalisation
rate is the weighted average of the interest rates applicable to the
general-purpose borrowings.
The effective interest rate is determined as the rate that exactly discounts
estimated future cash flow through the expected life of the borrowing or,
when appropriate, a shorter period to the initially recognised amount of the
borrowings.
During the capitalisation period, exchange differences related to the principal
and interest on a specific-purpose borrowing denominated in foreign currency
are capitalised as part of the cost of the qualifying asset. The exchange
differences related to the principal and interest on foreign currency55
borrowings other than a specific-purpose borrowing are recognised as a
financial expense in the period in which they are incurred.
The capitalisation period is the period from the date of commencement of
capitalisation of borrowing costs to the date of cessation of capitalisation,
excluding any period over which capitalisation is suspended. Capitalisation
of borrowing costs commences when expenditure for the asset is being
incurred, borrowing costs are being incurred and activities of acquisition,
construction or production that are necessary to prepare the asset for its
intended use are in progress, and ceases when the assets become ready for
their intended use. Capitalisation of borrowing costs is suspended when the
acquisition, construction activities are interrupted abnormally and the
interruption lasts over three months.
(20) Dividends appropriated to investors
Dividends or distributions of profits proposed in the profit appropriation plan
which will be authorised and declared after the balance sheet date, are not
recognised as a liability at the balance sheet date but disclosed in the notes
separately.
(21) Related parties
If a party has the power to control, jointly control or exercise significant
influence over another party, or vice versa, or where two or more parties are
subject to common control, jointly control, or significant influence from
another party, they are considered to be related parties. Related parties may
be individuals or enterprises. Enterprises with which the Company is under
common control only from the State and that have no other related party
relationships are not regarded as related parties of the Group. Related
parties of the Group and the Company include, but are not limited to:
(a) the Company’s parent
(b) the Company’s subsidiaries
(c) enterprises that are controlled by the Company’s parent
(d) investors that have joint control or over exercise significant influence
over the Group
(e) enterprise or individuals if a party has control, joint control or
significant influence over both the enterprises or individuals and the
Group
(f) joint ventures of the Group
(g) associates of the Group
(h) principal individual investors and close family members of such
individuals
(i) key management personnel of the Group and close family members of
such individuals
(j) key management personnel of the Company’s parent
(k) close family members of key management personnel of the Company’s
parent; and56
(l) other enterprises that are controlled, jointly controlled or significantly
influenced by principal individual investors, key management personnel
of the Group, and close family members of such individuals.
Besides the related parties stated above determined in accordance with the
requirements of CAS (2006), the following enterprises and individuals are
considered as (but not restricted to) related parties based on the disclosure
requirements of “Administrative Procedures on the Information Disclosures
of Listed Companies” issued by the CSRC:
(m) enterprises, or persons that act in concert, that hold 5% or more of the
Company’s shares or persons that act in concert
(n) individuals and close family members of such individuals who directly
or indirectly hold 5% or more of the Company’s shares
(o) enterprises that satisfy any of the aforesaid conditions in (a), (c) and (m)
during the past 12 months or will satisfy them within the next 12
months pursuant to a relevant agreement;
(p) individuals who satisfy any of the aforesaid conditions in (i), (j) and (n)
during the past 12 months or will satisfy them within the next 12
months pursuant to a relevant agreement; and
(q) enterprises, other than the Company and subsidiaries controlled by the
Company, which are controlled directly or indirectly by an individual
defined in (i), (j), (n) or (p), or in which such an individual assumes the
position of a director or senior executive.
(22) Segment reporting
Business segment within the Group is a separable integral part that can
provide individual or group of related products or services, its risk and
compensation is different from other component.
Segment revenue, expenses, results, assets and liabilities include items
directly attributable to a segment as well as those that can be allocated on a
reasonable basis to that segment. Segment revenue, expenses, assets and
liabilities are determined before intra-group balances and intra-group
transactions are eliminated as part of the consolidation process, except to the
extent that such intra-group balances and transactions are between group
entities within a single segment. Inter-segment pricing is based on similar
terms as those available to other external parties.
Segment capital expenditure is the total cost incurred during the period to
acquire or construct segment fixed assets and intangible assets.
Unallocated items mainly comprise interest income and expenses, dividend
income, investment income or loss arising from long-term equity investment,
non-operating income and expenses, and income tax expenses.
(23) Significant accounting estimates and judgments57
The preparation of financial statements requires management to make
estimates and assumptions that affect the application of accounting policies
and the reported amounts of assets, liabilities, income and expenses. Actual
results may differ from these estimates. Estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised and in
any future periods affected.
Notes 22 and 52 contain information about the assumptions and their risk
factors relating to impairment of goodwill and fair value of financial
instruments. Other key sources of estimation uncertainty are as follows:
(a) Impairment of receivables
As described in Note 3(13)(a), receivables that are measured at
amortisation cost are reviewed at each balance sheet date to determine
whether there is objective evidence of impairment. If any such
evidence exists, impairment loss is provided. Objective evidence of
impairment includes observable data that comes to the attention of the
Group about loss events such as a significant decline in the estimated
future cash flow of an individual debtor or the portfolio of debtors, and
significant changes in the financial condition that have an adverse effect
on the debtor. If there is an indication that there has been a change in
the factors used to determine the provision for impairment, the
impairment loss recognised in prior years is reversed.
(b) Impairment of non-financial long-term assets
As described in Note 3(13)(c), non-financial long-term assets are
reviewed at each balance sheet date to determine whether the carrying
amount exceeds the recoverable amount of the assets. If any such
indication exists, impairment loss is provided.
The recoverable amount of an asset (asset group) is the greater of its net
selling price and its present value of expected future cash flows. Since
a market price of the asset (the asset group) cannot be obtained reliably,
the fair value of the asset cannot be estimated reliably. In assessing
value in use, significant judgements are exercised over the asset’s
production, selling price, related operating expenses and discounting
rate to calculate the present value. All relevant materials which can be
obtained are used for estimation of the recoverable amount, including
the estimation of the production, selling price and related operating
expenses based on reasonable and supportable assumption.
(c) Depreciation and amortisation
As described in Notes 3(6), (7) and (9), investment property, fixed
assets and intangible assets are depreciated and amortised using the
straight-line method over their useful lives after taking into account
residual value. The useful lives are regularly reviewed to determine58
the depreciation and amortisation costs charged in each reporting
period. The useful lives are determined based on historical
experiences of similar assets and the estimated technical changes. If
there is an indication that there has been a change in the factors used to
determine the depreciation or amortisation, the amount of depreciation
or amortisation is revised.
(d) Warranty provisions
As described in Note 35, the Group makes provisions under the
warranties it gives on sale of its TFT-LCD products taking into account
the group’s recent claim experience. Any increase or decrease in the
provision will affect profit or loss in future years.
4 Taxation
(1) The types of taxes applicable to the Group’s sale of goods and rendering of
services include business tax, value added tax (“VAT”), city construction tax,
education surcharge and land appreciation tax etc.
Business tax rate: 5%
VAT rate: 13% or 17%
City construction tax rate: 7%
Education surcharge rate: 1-5%
Land appreciation tax rate: 30%
(2) Income tax
The income tax rate applicable to the Company for the year is 15% (2008:
15%).
The Corporate Income Tax Law of the People’s Republic of China (“new tax law”) took
effect on 1 January 2008. According to the new tax law, a unified enterprise income
tax rate of 25% is applied to PRC entities from 1 January 2008. Corporate income tax
for key advanced and new technology enterprises supported by the State shall be at a
reduced tax rate of 15%.
Certain entities previously taxed at a preferential rate are subject to a
transition period during which their tax rate will gradually be increased to the
unified rate of 25% over a five year period starting from 1 January 2008.
The enterprises that previously enjoy “2-year exemption and 3-year half
payment”, “3-year exemption and 3-year half payment” of the enterprise
income tax may, after the implementation of the new tax law,, continue to
enjoy the relevant preferential treatments under the preferential measures and
the time period prescribed in the former tax law, administrative regulations
and relevant documents until the expiration of the said time period.
However, if such an enterprise has not enjoyed the preferential treatments yet
because of its failure to make profits, its preferential time period shall be
calculated from 2008.
Pursuant to the Administration and Measures on the Recognition of High-tech59
Enterprises and the Guidelines for the Administration of the Recognition of
High-tech Enterprises, the Company was recognised as a high-tech enterprise
and obtained No. GR200811000615 High-tech Enterprise Certificate on 18
December 2008 after applied to and assessed by the experts of Beijing
Municipal Science and Technology Commission, Beijing Municipal Financial
Bureau, Beijing Municipal State Administration of Taxation and Beijing
Municipal Local Administration of Taxation. The Company is subject to a
preferential income tax rate of 15% since the date of certification with the
valid period of three years.
Pursuant to the new tax law, the income tax rate applicable to other
subsidiaries of the Group is changed to 25% from 1 January 2008 apart from
the following subsidiaries.
The subsidiaries that are entitled to preferential tax treatments are as follows:
Name of
enterprises
Preferential
rate Reason
Beijing BOE
Vacuum
Electronics Co.,
Ltd.
15% Obtained the High-tech Enterprises Certificate of No
GR200811000215 jointly issued by Beijing Municipal Science and
Technology Commission, Beijing Municipal Financial Bureau,
Beijing Municipal State Administration of Taxation and Beijing
Municipal Local Administration of Taxation on 18 December 2008.
Subject to a preferential enterprise income tax rate of 15% within the
valid period of three years.
Suzhou BOE
Chatani
Electronics
Co., Ltd.
10% Pursuant to Reply of State Council on Issues relating to
Development and Construction of Suzhou Industrial Park (Guohan
[1994] No.9), foreign investment enterprises established in Suzhou
Industrial Park engaging in manufacturing activities is subject to a
preferential corporate income tax rate of 15%, and entitled to full
exemption of income tax from the first and second profit making
year, followed by a 50% reduction of income tax from the third to
fifth year. Further pursuant to Notice of the State Council on the
Implementation of the Transitional Preferential Policies in respect of
corporate Income Tax, the enterprise is subject to the corporate
income tax rate of 20% in 2009, and continues to enjoy the
preferential treatments of “2-year exemption and 3-year half
payment” until the expiration of the said time period. 2005 is the
first profit making year of Suzhou BOE Chatani Electronics Co.,
Ltd. And 2009 is the third entitlement year for 50% reduction of
enterprise income tax.
BOE
Semi-conducto
r Co., Ltd.
15% Obtained the High-tech Enterprises Certificate of No
GR200811001006 jointly issued by Beijing Municipal
Science and Technology Commission, Beijing Municipal
Financial Bureau, Beijing Municipal State Administration of
Taxation and Beijing Municipal Local Administration of
Taxation on 18 December 2008. Subject to a preferential60
enterprise income tax rate of 15% within the valid period
three years.
Beijing BOE
Optoelectronics
Technology
Co., Ltd.
15% Obtained the High-tech Enterprises Certificate of No
GR200811001006 jointly issued by Beijing Municipal
Science and Technology Commission, Beijing Municipal
Financial Bureau, Beijing Municipal State Administration of
Taxation and Beijing Municipal Local Administration of
Taxation on 18 December 2008. Subject to a preferential
enterprise income tax rate of 15% within the valid period
three years.
BOE (Hebei)
Mobile
Technology
Co., Ltd.
0% The foreign investment enterprise is exempted from income
tax payment for its first and second year of making profits,
and entitled to a 50% reduction of income tax from the third
to the fifth year. Because the enterprise has not enjoyed the
preferential treatments yet because of its failure to make
profits, its preferential time period is calculated from 2008.
Beijing BOE
Vacuum
Electronics Co.,
Ltd.
15% On 27 May 2009, Beijing Municipal Science & Technology
Commission, Beijing Municipal Bureau of Finance, Beijing
Municipal office State Administration Taxation of China and
Beijing Local Taxation Bureaujointly issued《Beijing Name
of the First Batch of High-Tech Enterprises to be Recognized
in 2009》, the said company was among these enterprises. At
present, this company is just waiting for the promulgation of
《The Certificate of High-Tech Enterprise》. Within the
duration of validaity of the Certificate, the said company is
subject to a preferential enterprise income tax rate of 15%.
The valid period is three years.
5 Taxes payable61
30 June 2009 31 December 2008 30 June 2009 31 December 2008
RMB RMB RMB RMB
VAT payable 789,069 1,912,114 - 613,791
Business tax payable 904,119 1,856,061 425,294 1,117,216
Income tax payable 449,890 4,948,921 - -
Education surcharge pa 340,586 3 25,783 12,759 51,930
Withholding individual 4,003,123 4,306,554 331,899 494,059
Others 4,452,480 2,424,952 29,771 121,171
Total 1 0,939,267 15,774,385 799,723 2,398,167
The Group The Company
As at 30 June 2009, the Group reclassified the balance of prepaid VAT deductible
amounting to RMB 223,693,249 to other current assets.62
6 Business combination and the consolidated financial statements
(1) As at 30 June 2009, the Company’s subsidiaries are as follows:
Closing Direct
balance of the Actual and indirect and indirect
Organization Registration Registered Business nature Company’s investment shareholding voting right
Name of investee code place capital and scope investment net value percentage percentage
Zhejiang BOE Display 14590874-9 Shaoxing, China RMB 129,194,000 Research, development, RMB 106,391,635 RMB 106,391,635 69.29% 69.29%
Technology Co., Ltd. manufacture and sale of
(ZJBOE) small size electronic display
components, display module
and related fittings; engaged
in import and export business
Beijing BOE Vacuum 63370950-3 Beijing, China RMB 35,000,000 Manufacture and sale of RMB 19,250,000 RMB 19,250,000 55% 55%
Electronics Co., Ltd. vacuum electronic products;
(Vacuum Electronics) development, consulting,
service, transfer and training
of related technology; sale of
self-developed products except
for the projects of specific
approval
BOE Semi-conductor 10171147-7 Beijing, China RMB 15,000,000 Process, manufacture, sale of RMB 9,450,000 RMB 9,450,000 63% 63%
Co., Ltd. precision electronic metal
(BOE Semi- conductor) accessory, semi-conductor
products and micromodule;
micro-electronics components
and electronic material;
telecommunication, broadcasting
and television equipment projects;
import and export of goods
Beijing BOE Special 70022206-9 Beijing, China RMB 60,000,000 Development of display RMB 60,000,000 RMB 60,000,000 100% 100%
Display Technology products, network and
Co., Ltd. telecommunication technology;
(Special Display) sale of electronic products,
computer software and hardware,
telecommunication equipments
and computer system integration63
6 Business combination and the consolidated financial statements (continued)
Closing Direct
balance of the Actual and indirect and indirect
Organization Registration Registered Business nature Company’s investment shareholding voting right
Name of investee code place capital and scope investment net value percentage percentage
Beijing Yinghe Century 60006648-4 Beijing, China RMB 69,931,560 Lease and operation of offices RMB 123,271,833 RMB 123,271,833 100% 100%
Co., Ltd. (Predecessor: and middle grade hotel houses;
Beijing Orient Heng business and entertainment
Tong Property Center) service; toll parking lots
(Yinghe Century) (b)
Suzhou BOE Chatani 73574009-3 Suzhou, China USD 8,552,000 Development and manufacture RMB 53,087,904 RMB 53,087,904 75% 75%
Electronics Co., Ltd. of backlight and related parts
(Suzhou Chatani) and components for LCD
BOE Hyundai LCD 73765024-3 Beijing, China USD 5,000,000 Development, manufacture RMB 31,038,525 RMB 31,038,525 75% 75%
(Beijing) Display and sale of liquid display for
Technology Co., Ltd. mobile termination; sale and
(BOE Hyundai) technical service for
self-manufactured products
Beijing BOE 74935339-3 Beijing, China USD 550,000,000 Research, development, RMB 3,494,892,513 RMB 3,494,892,513 78.54% 78.54%
Optoelectronics design and manufacture of
Technology Co., Ltd. TFT-LCD; debugging,
(BOEOT) maintain, technical consulting
and service or self-manufactured
products
BOE Land Co., Ltd. 60003888-9 Beijing, China RMB 55,420,000 Development, construction, RMB 7,731,474 RMB 7,731,474 70% 70%
(BOE Land) property management and
service of workshop and ancillary
facilities; real estate information
consulting (excluding agency
service); lease of commercial
facilities; operation of catering,
commecial service and other
ancillary facilities
Beijing BOE Chatani 77255085-4 Beijing, China RMB 37,244,248 Manufacture of flat screen RMB 372,443 RMB 372,443 100% (c) 100%
Electronics Co., Ltd. display products and related
(Beijing Chatani) parts.
Beijing BOE Digital 60008644-2 Beijing, China USD 10,000,000 Research, development RMB 12,416,550 RMB 12,416,550 75% 75%
Technology Co., Ltd. manufacture and sale of digital
(BOE Digital) cameras and digital visual
wireless transfer platform64
6 Business combination and the consolidated financial statements (continued)
Closing Direct
balance of the Actual and indirect and indirect
Organization Registration Registered Business nature Company’s investment shareholding voting right
Name of investee code place capital and scope investment net value percentage percentage
BOE Optoelectronics N/A British Virgin USD 600,000 Design, manufacture and RMB 1,654,700 RMB 1,654,700 100% 100%
Holding Company Ltd. Island trading of electronics
(Optoelectronics Holding) information technology
products and investing activities
BOE (Hebei) Mobile 78574713-8 Langfang, China USD 20,000,000 Manufacture and sale of RMB 120,307,500 RMB 120,307,500 75% 75%
Technology Co., Ltd. mobile flat screen display
(BOE Hebei) technical products and
related services
Beijing BOE Sales 79160756-1 Beijing, China RMB 500,000 Sales of communications RMB 500,000 RMB 500,000 100% 100%
and Marketing Co., Ltd. equipment (except for radio
(BOE Sales &Marketing) transmission equipment),
computer hardware, software
and peripheral equipment,
electronic products, equipment
maintenance (except for special
approval of the project); technology
development, transfer, consulting
and services; import and export of
products, agency and technology
BOE (Korea) Co., Ltd. N/A Korea USD 100,000 Research, development and sale RMB 788,450 RMB 788,450 100% 100%
(BOE Korea) of products and related supporting
services
Beijing BOE Vacuum 66050630-6 Beijing, China RMB 32,000,000 Development of vacuum RMB 32,000,000 RMB 32,000,000 100% 100%
Technology Co., Ltd. technology, design, manufacture
(Vacuum Technology) and sale of vacuum products
and related services; technical
development and transfer,
consulting and services,
exhibition contractor
Xiamen BOE Electronics 66474162-9 Xiamen, China RMB 37,500,000 Development, manufacture RMB 37,500,000 RMB 37,500,000 100% 100%
Co., Ltd. (Xiamen BOE) and sale of LCD products and
related parts; Assembly production
detection of electronic components
and parts; Sale of products; Export
of products and import of materials65
6 Business combination and the consolidated financial statements (continued)
Closing Direct
balance of the Actual and indirect and indirect
Organization Registration Registered Business nature Company’s investment shareholding voting right
Name of investee code place capital and scope investment net value percentage percentage
Shaoxing BOE Ueno 71549059-2 Shaoxing, China RMB 27,000,000 Development, manufacture and - - 60% (c) 60%
Electronics Apparatus sale of electronics products
Co., Ltd. (Shaoxing BOE) and mold; processing and sale of
conductive glass and flat glass
BOE Optoelectronics N/A Bermuda USD 600,000 Investment holding - - 100% 100%
Technology Co., Ltd.
(Optoelectronics
Technology)
BOE Technology N/A USA USD 200,000 Research, development, RMB 1,743,697 RMB 1,743,697 100% 100%
Incorporation manufacture and sale of
(BOE Technology)(a) high technology electronic
infrastructure products
Beijing Asahi Electron 60001557-2 Beijing, China RMB 61,576,840 Development, manufacture RMB 30,888,470 RMB 30,888,470 100% 100%
Glass Co., Ltd. and sale of glass products
(BeiAsahi Glass ) and TV multiform glass
(Note 6 (2) (a)) rod and CTV glass frit; sale
of self-manufactured products
Chengdu BOE. 66755664-8 Chengdu, China RMB 1,830,000,000 Development, manufacture RMB 1,805,454,000 RMB 1,805,454,000 98.66% 98.66%
Optoelectronics. Of TFT-LCD; investment,
Technology Co., Ltd. construction, research ,
(Chengdu BOE.) development, manufacture
(Note 6 (2) (b)) and sale of TFT-LCD products
And ancillary products
Beijing BOE. 68285446-7 Beijing, China RMB 500,000 Technology development, - - 100% (c) 100%
LCD Display service and counseling to
Technology Co., Ltd. display product, computer network,
(BOE LCD) and telecommunication products;
sales of electronic products,
hardware and software of
computers and telecommunication
equipments; computer system
integration; import and export of
products, agency of import and export;
manufacture of LCD products66
Hefei BOE Opto-electronics 68082289-1 Industrial Park Zone, RMB 1,350,000,000 Investment, R&D, production and sale of RMB 1,309,500,000 RMB 1,309,500,000 97% 97%
Technology Co., Ltd. Xinzhan District, Hefei products related to TFT-LCD and the
(“Hefei BOE”) auxiliary products
Beijing BOE Display
Technology Co. Ltd.
(“BOE Display) 68435138-8 Beijing, China RMB 50,000,000 Design and technical development of RMB 45,000,ooo RMB 45,000,000 90% 90%
TFT-LCD; sale of TFT-LCD, LCD TV
and electronic products.67
(a) Since Optoelectronics Technology has entered into write-off procedure, the
Company did not include it into the consolidation financial statements and has
provided full impairment losses for the related long-term equity investments.
(b) The Company holds 1% of the sharholder’s equity of Beijing Chatani and holds the
remaining 99% through its 75% shareholding subsidiary, Suzhou Chatani;
The Company holds 60% of the sharholder’s equity of Shaoxing BOE through its
69.28% shareholding subsidiary, ZJBOE;
The Company holds 100% of the sharholder’s equity of BOE LCD through its 100%
shareholding subsidiary, Special Display.
(2) Business combinations involving entities not under common control during the year
(a) Hefei Opto-electronics
Hefei Opto-electonics was established on 16 Oct. 2008. As at 5 Jan. 2009, Hefei
Opto-electronics is the affiliated enterprise of the Company. The Company holds
19% equities of Hefei Opto-electronics. Pursuant to relevant provisions in the
Investment Framework Agreement on Hefei Production Line Project of the
6th-generation TFT-LCD jointly signed by the Company, Hefei Municipal People’s
Government, Hefei Construction & Investment Holding (Group) Co., Ltd.
(hereinafter referred to as “HFCI”) and Hefei Xincheng State-owned Assets
Management Co., Ltd. (HFXC) and fund demand for project progress, the Company
increased investment amount of RMB 300 million, RMB 300 million and RMB 700
million unilaterally on 5 Jan. 2009, 3 Mar. 2009 and 6 May 2009 respectively. As at
30 June 2009, the shareholding proportion held by the Company to Hefei BOE rose
to 97%.68
7 Cash at bank and on hand
The Group
Original currency Exchange rate RMB/RMB equivalents Original currency Exchange rate RMB/RMB equivalents
RMB RMB RMB RMB
Cash on hand
- RMB 210,238 133,851
- USD 39,520 6.8319 269,999 53,967 6.8346 368,840
- Korean Won 427,490 0.0053 2,249 633,906 0.0045 3,221
- Japanese Yen 1 ,330,634 0.0711 94,631 1,839,794 0.0757 139,180
- Other foreign currencies 134,046 73,444
Subtotal 711,164 7 18,536
Bank deposit
- RMB 1 3,365,502,212 2,343,902,186
- USD 12,242,267 6.8319 83,637,947 172,706,077 6.8346 1,180,376,956
- Korean Won - 0.0053 - 351,859,999 0.0045 1,584,098
- Japanese Yen 9 ,168,767 0.0711 652,055 200,519 0.0757 15,169
- HKD 1 ,214,475 0.8815 1 ,070,559 1,214,357 0.8819 1,070,930
- Other foreign currencies 371,171 929,939
Subtotal 1 3,451,233,944 3,527,879,278
Other monetary funds
- RMB
- RMB 474,866,166 360,766,393
- USD 9 ,580,039 6.8319 65,449,866 765,621 6.8346 5,232,706
- Japanese Yen 1,213,852,509 0.0711 86,325,549 120,869,678 0.0757 9,143,791
Subtotal 626,641,581 375,142,890
Total 1 4,078,586,689 3 ,903,740,704
30 June 2009 31 Dec. 2008
The Company
Original currency Exchange rate RMB/RMB equivalents Original currency Exchange rate RMB/RMB equivalents
RMB RMB RMB RMB
Cash on hand
- RMB 39,296 37,768
- USD 35,766 6.8319 244,346 48,212 6.8346 329,508
- Korean Won 249,464 0.0053 1,313 249,465 0.0045 1,332
- Japanese Yen 979,699 0.0711 69,673 1,488,859 0.0757 112,632
- Other foreign currencies 131,430 70,402
Subtotal 486,058 5 51,642
Bank deposit
- RMB 1 1,006,669,295 553,856,884
- USD 2 ,436,764 6.8319 16,647,727 2,544,059 6.8346 17,387,626
- HKD 1 ,214,475 0.8815 1 ,070,559 1,214,357 0.8819 1,070,930
Subtotal 1 1,024,387,581 572,315,440
Total 1 1,024,873,639 5 72,867,082
30 June 2009 31 Dec. 2008
All of other monetary funds are the deposits in commercial banks as security.69
8 Bills receivable
The Company
30 June 2009 31 December 2008 30 June 2009 31 December 2008
RMB RMB RMB RMB
Bank acceptance bills 2 25,176,797 286,797,950 165,053,778 3,583,603
Commercial acceptance bills 1 5,511,350 18,542,553 - -
Total 2 40,688,147 305,340,503 165,053,778 3,583,603
The Group
(a)All of the above bills held by the Groupare due with one year.
(b)As at 30 June 2009, the bank acceptance bills that have been pledged by the Group amounting to
RMB 27,411,826, and all of which are used for short-term loans and shall be due by 26 Sep. 2009
(2008: due by 27 Mar. 2009). The bank acceptance bills amounting to RMB 164,400,000 were
pledged by the Company, and all of which are used for short-term loans and shall be due by 20 Aug.
2009 (2008: Nil).
(c)As at 30 June 2009, the Group’s outstanding endorsed bank acceptance bills (with recourse)
amounting to RMB 49,621,053, all of which will be due by 22 Nov. 2009. The Company’s
outstanding endorsed or discounted bank acceptance bills (with recourse) amounting to RMB
90,000, all of which will be due by 2 Sep. 2009.
(d)For the current year, there is no amount transferred to accounts receivable from acceptance bills
due to non-performance of the issuers by the Group and the Company (2008: nil).
(e)No amount due from shareholders who hold 5% or more of the voting rights of the Company is
included in the above balance of bills receivable.
9 Accounts receivable
(1) The Group’s accounts receivable by currency type
RMB/RMB RMB/RMB
Original currency equivalents Original currency equivalents
RMB RMB RMB RMB
4 35,527,797 300,306,295
7 2,589,276 6 .8319 495,922,676 3 0,579,727 6.8346 209,000,204
9 31,450,473 509,306,499
2 1,667,308 2 3,387,891
9 09,783,165 485,918,608
30 June 2009 31 Dec. 2008
Subtotal
Less: provision for
Total
USD
Exchange rate Exchange rate
RMB
(a)As at 30 June 2009, the Company had no accounts receivable denominated in foreign
currencies (2008: nil).
(b)No amount due from shareholders who hold 5% or more of the voting rights of the
Company is included in the above balance of account receivables.
(c)As at 30 June 2009, the account receivables that have been pledged by the Group
amounting to RMB 78,363,938 and USD 1,529,585 (2008: RMB 76,070,625), all of which70
are as security for short-term loans amounting to USD 9,484,135 (2008: RMB 9,238,567).
As at 30 June 2009, the total amount of accounts receivable due from the five biggest debtors
of the Group and the Company are as follows:
30 June 2009 31 December 2008 30 June 2009 31 December 2008
309,006,641 2 16,681,532 31,380,694 25,145,884
Percentage of total 33% 43% 75% 70%
The Group The Company
Amounts (RMB)
(2) The ageing analysis of accounts receivable is as follows:
30 June 2009 31 December 2008 30 June 2009 31 December 2008
RMB RMB RMB RMB
831,588,576 3 34,365,618 15,909,562 18,620,130
7 6,094,898 148,531,562 23,101,466 14,454,613
5,320,509 8,515,458 378,352 1,311,102
4,161,510 10,108,061 499,164 325,915
1 4,284,980 7,785,800 2,213,606 1,453,828
931,450,473 5 09,306,499 42,102,150 36,165,588
2 1,667,308 23,387,891 1,942,919 2,102,386
909,783,165 4 85,918,608 40,159,231 34,063,202
3-12 months
1-3 months
The Group The Company
Less: provision for
Total
1 and 2 years (incl
2 and 3 years (incl
Over 3 years
Subtotal
(3) An analysis of provision for bad and doubtful debts is as follows:
As at 30 June 2009, the Group and the Company assessed all the account receivable balances for
impairment on an individual basis. The impairment will be recognised immediately, if there exists
the objective evidence indicating that the amount could not be recovered.
As at 30 June 2009, the Group and the Company had no individually significant write-off or
recovery of doubtful debts which had been fully or substantially provided for in prior years.
10 Prepayments
(1) The ageing analysis of prepayments is as follows:
The Group
Amount Percentage Amount Percentage
RMB RMB
481,109,738 100% 41,900,028 90%
432,945 0% 3,905,314 8%
3 8,230 0% 31,263 1%
8 7,232 0% 631,011 1%
481,668,145 100% 46,467,616 100%
30 June 2009 31 December 2008
Within 1 year (inclusive)
1 and 2 years ((inclusive)
2 and 3 years (inclusive)
Over 3 years
Total71
The Company
Amount Percentage Amount Percentage
RMB RMB
1 11,158,366 100% 948,730 100%
30 June 2009 31 December 2008
Within 1 year (inclusive)
The ageing is counted starting from the date prepayments is recognised.
As at 30 June 2009, the Group’s prepayments with ageing more than one year are mainly
prepayment in relation to the purchasing activities which has yet to make settlement.
No amount due from shareholders who hold 5% or more of the voting rights of the Company is
included in the above balance of prepayment.
11 Interests receivable
30 June 2009 31 December 2008 30 June 2009 31 December 2008
RMB RMB RMB RMB
Time deposit interest 1 8,713,672 6,561,758 15,478,696 4 38,965
The Group The Company
At 30 June 2009, no significant amount of interest receivable of the Group and the Company is
denominated in foreign currency.
12 Dividends receivable
30 June 2009 31 December 2008 30 June 2009 31 December 2008
RMB RMB RMB RMB
Yinghe Century - - 8 ,204,147 8,204,147
Total - - 8 ,204,147 8,204,147
The Group The Company
13 Other receivables
(1) The Group’s other receivables by currency72
RMB/RMB RMB/RMB
Original currency Exchange equivalents Original currency Exchange equivalents
RMB rate RMB RMB rate RMB
68,139,117 9 4,509,200
148,987,011 0.0053 783,672 174,874,490 0.0045 795,404
554,832 3 35,639
69,477,621 9 5,640,243
3,184,925 4 ,209,299
66,292,696 9 1,430,944
Subtotal
Less：Provision for bad and do
Total
RMB
Korean Won
Other foreign currencies
30 June 2009 31 December 2008
As at 30 June 2009, the Company had no accounts receivable denominated in foreign
currencies (2008: nil).
No amount due from shareholders who hold 5% or more of the voting rights of the Company
is included in the above balance of other receivables.
As at 30 June 2009, the total amount of other receivables due from the five biggest debtors of
the Group and the Company are as follows:
30 June 2009 31 December 2008 30 June 2009 31 December 2008
35,582,920 21,760,431 839,440,559 557,382,657
51% 23% 96% 88%
The Group The Company
Amounts (RMB)
Percentage of other receivable
(2) The ageing analysis of other receivables is as follows:
30 June 2009 31 December 2008 30 June 2009 31 December 2008
RMB RMB RMB RMB
54,750,506 77,556,595 299,660,372 587,971,293
6,511,155 6,822,690 531,863,421 25,976,373
5,025,102 7,685,217 1,254,394 507,368
3,190,858 3,575,741 39,249,184 18,016,664
69,477,621 95,640,243 872,027,371 632,471,698
3,184,925 4,209,299 272,298 264,242
66,292,696 91,430,944 871,755,073 632,207,456
The Group The Company
Within 1 year (inclusive)
1 and 2 years (inclusive)
Subtotal
Less: Provision for bad and
doubtful debts
Total
2 and 3 years (inclusive)
Over 3 years
(3) An analysis of provision for bad or doubtful debts for other receivables is as follows:
As at 30 June 2009, the Group and the Company assessed all the other receivable balances for
impairment on an individual basis. The impairment will be recognised immediately, if there
exists the objective evidence indicating that the amount could not be recovered.73
For the current year, the Group and the Company do not have any individually significant
other receivables with full bad-debts provision or with a significant bad-debts provision made
in previous years which have been fully or partly written off during the year.
14 Inventories
(1) An analysis of the movements of inventories for the year is as follows:
The Group
Opening
balance
Addition
during the
period
Reduction
during the
period
Closing
balance
RMB RMB RMB RMB
Raw materials 351,767,388 2,673,508,642 2,701,143,742 324,132,288
Work in progress 58,952,510 2,782,452,447 2,748,758,872 92,646,085
Commodity stocks 316,923,897 3,104,492,775 3,161,657,074 259,759,598
Reusable materials 51,593,226 63,416,568 59,869,297 55,140,497
Subtotal 779,237,021 8,623,870,432 8,671,428,985 731,678,468
Less: Provision for
diminution in value
of inventories 307,003,055 5,708,999 190,957,501 121,754,553
Total 472,233,966 8,618,161,433 8,480,471,484 609,923,915
The Company
Opening
balance
Addition
during the
period
Reduction
during the
period
Closing
balance
RMB RMB RMB RMB
Raw materials 2,376,129 2,265,224 2,376,129 2,265,224
Work in progress 11,146,430 1,389,503 1,670,954 10,864,979
Commodity stocks 6,964,063 4,465,909 4,301,930 7,128,042
Reusable materials 64,480 - 64,480 -
Subtotal 20,551,102 8,120,636 8,413,493 20,258,245
Less: Provision for
diminution in value
of inventories 15,762,012 - 152,414 15,609,598
Total 4,789,090 8,120,636 8,261,079 4,648,647
As at 30 June 2009, the Group and the Company had no inventory pledged as security.74
(2) An analysis of provision for diminution in value of inventories is as follows:
Opening
balance
Addition
during the
period
Closing
balance
Reversal Write-off
RMB RMB RMB RMB RMB
The Group
Raw materials 147,253,255 206,759 89,200,073 49,693,339 8,566,602
Work in progress 15,681,135 - 6,353 - 15,674,782
Commodity stocks 141,733,326 5,502,240 50,241,905 1,807,547 95,186,114
Reusable materials 2,335,339 - - 8,284 2 , 3 2 7 , 0 5 5
Total 307,003,055 5,708,999 139,448,331 51,509,170 121,754,553
The Company
Raw materials 596,605 - 141,059 11,355 444,191
Work in progress 9,742,465 - - - 9,742,465
Commodity stocks 5,367,400 - - - 5,367,400
Reusable materials 55,542 - - - 55,542
Total 15,762,012 - 141,059 11,355 15,609,598
Reduction during the period
15 Available-for-sale financial assets
30 June 2009 31 December 2008 30 June 2009 31 December 2008
RMB RMB RMB RMB
Equity instrument 7 4,086,125 5 3,707,522 7 4,086,125 5 3,707,522
The Group The Company
The available-for-sale financial asset held by the Group and the Company represented stock
investment in TPV Technology Limited (“TPV Technology”), which was measured at fair value at
year end. TPV Technology is listed on the Stock Exchange of Hong Kong (Stock code: 0903).
As at 30 June 2009, the fair value of the investment in TPV Technology held by the Group and the
Company was HKD 84,042,659, which is equivalent to RMB 74,086,125 (2008: HKD 60,900,478,
which is equivalent to RMB 53,707,522).
16 Held-to-maturity investments
The Group and the Company’s held-to-maturity investments represented the convertible bonds of
Hyundai LCD Inc. (“Hyundai LCD”). Due to business operation difficulties, Hyundai LCD could
not pay back the convertible bond. Thus, the Group and the Company had provided full
impairment losses for the convertible bond balances amounting to USD 2,170,000 (RMB
17,960,946) in 2005.75
As at 30 June 2009, the Company have not received the equity nor interest, and the Group and the
Company retain the previous provision since the recoverability of this claim is uncertain.
17 Long-term equity investments
30 June 2009 31 December 2008 30 June 2009 31 December 2008
RMB RMB RMB RMB
Investments in subsidiaries - - 7,301,495,997 5 ,946,995,997
Investments in joint ventures - - - -
Investments in associates 1 92,470,134 3 23,415,862 192,470,134 3 23,415,862
Other long-term equity investments 1 9,866,697 1 9,866,697 19,866,697 1 9,866,697
Sub total 2 12,336,831 3 43,282,559 7,513,832,828 6 ,290,278,556
Less: Provision for impairment 2 ,498,697 2 ,498,697 14,915,247 1 4,915,247
Total 2 09,838,134 3 40,783,862 7,498,917,581 6 ,275,363,309
The Group The Company76
(1) As at 30 June 2009, the Company’s investments in subsidiaries were as follows:
ZJBOE
Vacuum
Electronics Yinghe Century BOE Semi-conductor Suzhou Chatani BOE Hyundai BOE Land BOEOT Special Display Beijing Chatani BOE Hebei
RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB
Initial investment cost 1 06,391,635 19,250,000 123,271,833 9 ,450,000 53,087,904 3 1,038,525 7,731,474 3,494,892,513 60,000,000 3 72,443 120,307,500
Movement of investment cost
Balance as at 31 Dec. 2008 1 06,391,635 19,250,000 123,271,833 9 ,450,000 53,087,904 3 1,038,525 7,731,474 3,494,892,513 60,000,000 3 72,443 120,307,500
Add: Acquisition of subsidiaries
Additional investment - - - - - - - - - - -
Less: Disposal investment - - - - - - - - - - -
Balance as at 30 Jun. 2009 1 06,391,635 19,250,000 123,271,833 9 ,450,000 53,087,904 3 1,038,525 7,731,474 3,494,892,513 60,000,000 3 72,443 120,307,500
Less: Provision for impairment
Balance as at 30 Jun. 2009 - - - - - - - - - - -
Carrying amount
Carrying amount as at 30 Jun. 2009 1 06,391,635 19,250,000 123,271,833 9 ,450,000 53,087,904 3 1,038,525 7,731,474 3,494,892,513 60,000,000 3 72,443 120,307,500
Carrying amount as at 31 Dec.2008 1 06,391,635 1 9,250,000 123,271,833 9 ,450,000 53,087,904 3 1,038,525 7,731,474 3,494,892,513 60,000,000 3 72,443 120,307,500
Optoelectronics Holding BOE Korea
BOE Sales and
Marketing BOE Digital
Vacuum
Technology Xiamen BOE BeiAsahi Glass
Chengdu
Optoelectronics Hefei BOE BOE Display Total
RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB
Initial investment cost 1 ,654,700 788,450 500,000 1 2,416,550 32,000,000 3 7,500,000 30,888,470 1,805,454,000 9 ,500,000 45,000,000 6 ,001,495,997
Movement of investment cost
Balance as at 31 Dec. 2008 1 ,654,700 788,450 500,000 1 2,416,550 32,000,000 3 7,500,000 30,888,470 1,805,454,000 - 5,946,995,997
Add: Acquisition of subsidiaries - - - - - - - - 9,500,000 - 9,500,000
Additional investment - - - - - - - - 1,300,000,000 45,000,000 1 ,345,000,000
Less: Disposal investment - - - - - - - - - - -
Balance as at 30 Jun. 2009 1 ,654,700 788,450 500,000 1 2,416,550 32,000,000 3 7,500,000 30,888,470 1,805,454,000 1,309,500,000 45,000,000 7 ,301,495,997
Less: Provision for impairment -
Balance as at 31 Dec. 2008 - - - 12,416,550 - - - - - - 12,416,550
Balance as at 30 Jun. 2009 - - - 12,416,550 - - - - - - 12,416,550
Carrying amount -
Carrying amount as at 30 Jun. 2009 1 ,654,700 788,450 500,000 - 32,000,000 3 7,500,000 30,888,470 1,805,454,000 1,309,500,000 45,000,000 7 ,289,079,447
Carrying amount as at 31 Dec.2008 1 ,654,700 788,450 500,000 - 32,000,000 3 7,500,000 30,888,470 1,805,454,000 - - 5,934,579,447
-
For detailed information about the subsidiaries, please refer to Note 6. As at 30 June 2009, The Group and the Company has mortgaged 15%
(2007: 15%) of the equity interest in BOEOT held by the Company. Please refer to Note 34. The Company provides guarantees for loans
borrowed by its subsidiaries, ZJBOE and BOEOT. Please refer to Note 52 for detailed information.
(2) At 30 June 2009, the Group and Company’s investments in associates are as follows:
(a) The Company’s associates77
Hefei BOE Matsushita Color CRT Nissin Nittan Julong Total
RMB RMB RMB RMB RMB RMB
Initial investment cost 9,500,000 3 61,303,605 18,613,234 6 ,650,640 8,000,000 404,067,479
Movement of investment costs
Beginning balance 8,882,568 2 59,041,107 36,619,784 11,925,404 6,946,999 323,415,862
Add: Additional investment - - - - - -
Adjustments under equity method 6 17,432 (120,607,805) (2,168,286) 712,931 - (121,445,728)
Less: Disposal - - - - - -
Acquisition of subsidiary 9,500,000 - - - - 9,500,000
Cash dividends receivable - - -
Ending balance - 138,433,302 34,451,498 12,638,335 6,946,999 192,470,134
Less: Provision for impairment - - - - - -
Beginning balance
Increase -
Written off on disposal - - - - - -
Ending balance - - - - -
Carrying amounts -
Carrying amount as at 30 Jun.
2009 - 138,433,302 34,451,498 12,638,335 6,946,999 192,470,134
Carrying amount as at 31 Dec.2008 8,882,568 2 59,041,107 36,619,784 11,925,404 6,946,999 323,415,862
Note: Hefei Opto-electronics is the affiliated enterprise of the Company. The Company holds 19% equities of Hefei Opto-electronics. The
Company increased investment amount of RMB 300 million, RMB 300 million and RMB 700 million unilaterally on 5 Jan. 2009, 3 Mar.
2009 and 6 May 2009 respectively. As at 30 June 2009, the shareholding proportion held by the Company to Hefei BOE rose to 97%.
Therefore, the Company included the said company into the consolidation scope.78
(b) Details of the Company’s associates are as follows:
The Company’s
Organisation Shareholders voting
Name of investee code Registered plce Business nature Registered capital percentage rights
Matsushita 60000014-3 No.9 Manufacture and JPY 28,412,280,000 30% 30%
Jiuxianqiao Road sale of color picture
Chaoyang District, tubes and color
Beijing display tubes
Nissin 600042335 No. 10, Manufacture and USD 7,100,000 40% 40%
Jiuxianqiao Road sale of electronics
Chaoyang District, connectors and
Beijing spare parts
Nittan 60004203-6 No. 10, Manufacture USD 2,000,000 40% 40%
Jiuxianqiao Road and sale of
Chaoyang District, terminals connectors
Beijing and stampers
Julong 78525829-7 13th floor Skyworth Research, develop, RMB 20,000,000 40% 40%
Tower Gao Xin South manufacture and sale
1 Avenue Shennan of TFT-LCD products
District, Shenzheng and related services79
(3) At 30 June 2009, other long-term equity investments of the Group and Company are as follows:
The Group and the Company’s other equity investments:
Beijing Damei
Textile Group
Corp.
Beijing Orient
Electronics Industry
Co., Ltd.
Beijing
Chinatelecom
Xinke Network
Systme Co.,
Ltd. BOE Technology
Beijing
Municipal
Administration &
Communication
Card Co., Ltd.
Beijing
Electronics Zone
Co., Ltd.
Teralane
Semiconductor
Inc. Total
RMB RMB RMB RMB RMB RMB RMB RMB
Initial investment cost 1 00,000 1 80,000 475,000 1 ,743,697 2,500,000 3 ,000,000 11,868,000 1 9,866,697
Movement of investment costs
Beginning balance 1 00,000 1 80,000 475,000 1 ,743,697 2,500,000 3 ,000,000 11,868,000 1 9,866,697
Add: Additional investment -
Less: Disposal -
Ending balance 1 00,000 1 80,000 475,000 1 ,743,697 2,500,000 3 ,000,000 11,868,000 1 9,866,697
Less: Provision for impairment -
Beginning balance 1 00,000 1 80,000 475,000 1 ,743,697 - - - 2,498,697
Increase -
Ending balance 1 00,000 1 80,000 475,000 1 ,743,697 - - - 2,498,697
Carrying amounts
Carrying amount as at 30 Jun.
2009 - - - - 2,500,000 3 ,000,000 11,868,000 1 7,368,000
Carrying amount as at 31 Dec.2008 - - - - 2,500,000 3 ,000,000 11,868,000 1 7,368,00080
18 Investment property
Land use rights Buildings Total Land use rights Buildings Total
RMB RMB RMB RMB RMB RMB
Cost:
Beginning balance 13,617,550 219,999,251 233,616,801 - 98,933,859 98,933,859
Increase during
the reporting
period
- - - - - -
Decrease during
the reporting
period
- - - - - -
Ending balance 13,617,550 219,999,251 233,616,801 - 98,933,859 98,933,859
Accumulated
depreciation or
amortization
Beginning balance 1,452,818 57,610,581 59,063,399 - 19,674,657 19,674,657
Increase during
the reporting
period
136,176 4,893,763 5,029,939 - 1,444,846 1,444,846
Decrease during
the reporting
period
- - - - - -
Ending balance 1,588,994 62,504,344 64,093,338 - 21,119,503 21,119,503
At the end of
the period
12,028,556 157,494,907 169,523,463 - 77,814,356 77,814,356
At the
beginning of
the period
12,164,732 162,388,670 174,553,402 - 79,259,202 79,259,202
The Group The company
Carrying amounts:
As at 30 June 2009, the Group mortgaged the buildings in investment property with the
carrying amount of RMB 74,574,487 (31 December 2008: RMB 76,359,399) and land
use rights with the carrying amount of RMB 7,541,950 (31 December 2008: RMB
7,626,850) as security for short-term loans, long-term loans and non-current liabilities
due within one year.
19 Fixed assets
The Group81
Plant & buildings Equipment Others Total
RMB RMB RMB RMB
Cost:
Beginning balance 1 ,388,909,233 9 ,276,026,680 29,324,640 10,694,260,553
Additions during the period 28,793 17,483,840 1,643,303 19,155,936
Transfer from construction in progress 147,479,258 6,903,760 - 154,383,018
Disposals during the p eriod 6,109,909 3,841,767 306,352 10,258,028
Ending balance 1 ,530,307,375 9 ,296,572,513 30,661,591 10,857,541,479
Less: Accumulated depreciation
Beginning balance 236,588,252 3 ,832,575,508 16,147,399 4,085,311,159
Written off on disposals 21,053,780 551,970,118 1,799,877 574,823,775
Disposals during the p eriod 2,831,387 2,788,365 289,732 5,909,484
Ending balance 254,810,645 4 ,381,757,261 17,657,544 4,654,225,450
Less: Provision for impairment
Beginning balance - 66,873,393 - 66,873,393
Withdrawal for the period - - - -
Written off on disposals - - - -
Ending balance - 66,873,393 - 66,873,393
Carrying amounts:
Ending balance 1 ,275,496,730 4 ,847,941,859 13,004,047 6,136,442,636
Beginning balance 1 ,152,320,981 5 ,376,577,779 13,177,241 6,542,076,001
The Company82
Plant & buildings Equipment Others Total
RMB RMB RMB RMB
Cost:
Beginning balance 214,108,020 87,792,443 3,874,460 305,774,923
Additions during the period - 1,658,981 - 1,658,981
Transfer from construction in progress - - - -
Disposals during the p eriod - - - -
Ending balance 214,108,020 89,451,424 3,874,460 307,433,904
Less: Accumulated depreciation
Beginning balance 80,273,838 64,227,512 2,203,390 146,704,740
Written off on disposals 4,623,374 2,972,297 235,434 7,831,105
Disposals during the p eriod - - - -
Ending balance 84,897,212 67,199,809 2,438,824 154,535,845
Less: Provision for impairment
Beginning balance - 7,121,608 - 7,121,608
Withdrawal for the period - - - -
Written off on disposals - - - -
Ending balance - 7,121,608 - 7,121,608
Carrying amounts:
Ending balance 129,210,808 15,130,007 1,435,636 145,776,451
Beginning balance 133,834,182 16,443,323 1,671,070 151,948,575
(a) As at 30 June 2009, the Group mortgaged plants and buildings with carrying
amount of RMB 945,814,994 (2008: RMB 801,317,977) and equipment with
carrying amount of RMB 4,600,141,764 (2008: RMB 5,107,479,332) as security
for short-term loans, long-term loans due within one year and long-term loans. As
at 30 June 2009, there is no restriction placed on the ownership of fixed assets of
the Company.（2008：nil）
(b) As at 30 June 2009, certain fixed assets with the cost of RMB 220,258,775 (2008:
RMB 171,597,781) are fully depreciated but still in use by the Group. As at 30
June 2009, certain fixed assets with the cost of RMB 52,284,793 (2008: RMB
45,023,005) are fully depreciated but still in use by the Company.
(c) As at 30 June 2009, the Group’s and the Company’s fixed assets acquired under
finance leases were set out as follows:
The Group The Company
RMB RMB
Balance at the end of the period
Cost 1 1,291,665 11,291,665
Less: Accumulated depreciation 1,916,760 1,916,760
Carrying amount 9,374,905 9,374,905
Balance at the beginning of the period
Cost 1 1,291,665 11,291,665
Less: Accumulated depreciation 1,779,849 1,779,849
Carrying amount 9,511,816 9,511,81683
20 Construction in progress
The Group The Company
30 June 2009 30 June 2009
Cost
Balance at the beginning of the year 4 67,081,398 4 3,172,064
Additions during the year 1,774,661,098 2 4,349,606
Transfer to fixed assets 1 54,383,018 -
Decrease during the year 12,771,450 8,125,984
- -
Balance at the end of the year 2,074,588,028 5 9,395,686
Less: Provision for impairmen
Balance at the beginning of the year 21,628,995 2 1,628,995
Additions during the year - -
- -
Ending balance 21,628,995 2 1,628,995
Carrying amount
At the end of the period 2,052,959,033 3 7,766,691
At the beginning of the period 4 45,452,403 2 1,543,069
New subsidiaries transferred to fixed
assets
New subsidiaries transferred to fixed
assets
The carrying amounts of the Group at the end of the year included capitalized
borrowing cost of RMB 65,526,842 (2008: 2,691,277). The interest rate per annum, at
which the borrowing costs were capitalized for the current year by the Group were
4.11% to 5.94% (2007: 5.58% to 6.34%). The ending carrying amounts of the
Company did not include capitalized borrowing cost.
As at 30 June 2009, the Group mortgaged construction in process with carrying amount
of RMB 1,810,705,549 (2008: 334,910,754) as security for long-term loans. As at 30
June 2009, there is no restriction placed on the ownership of construction in process of
the Company.
As at 30 June 2009, the group’s major construction projects in progress were set out as
follows:84
Transfer to Percentage of
Project Budget Opening balance Additions fixed assets
Decreases due
to other reasons Ending balance input/budget Source of funds
RMB RMB RMB RMB RMB RMB RMB
The 4.5th generation TFT-LCD
production line in Chengdu Optoelectronics 3,413,951,817 334,910,754 1,626,104,191 1 47,479,258 2,830,138 1,810,705,549 57%
Capital-raising
and loans
The 6th generation TFT-LCD
production line in Hefei Optoelectronics 16,000,000,000 - 89,843,480 - - 89,843,480 1% Capital-raising
BOE Electronic workshop project(a) 1 71,640,000 15,015,075 13,784,898 - - 28,799,973 29% Self-financing
Yinghe Century UP3 workshop reconstruction 78,327,000 65,585,624 13,141,629 - 1,761,004 76,966,249 101% Self-financing
Phosphating system 55,882,900 14,643,915 4 60,000 - - 15,103,915 27% Self-financing
Other - 1 5,297,035 31,326,900 6,903,760 8,180,308 31,539,867 -
Total - 445,452,403 1,774,661,098 1 54,383,018 1 2,771,450 2,052,959,033 -
(a) The Group has made provision of impairment loss amounting to RMB 21,628,995 for BOE Electronic workshop project.85
21 Intangible assets
The Group
Land use right
Technology
rights Patent Software Total
RMB RMB RMB RMB RMB
Cost
Balance at the beginning of the period 1 13,619,091 6 54,058,394 1 ,750,000 151,362,338 920,789,823
Addition during the period 8,125,985 - - 2,151,094 10,277,079
Reduction during the period - - - -
Balance at the end of the period 1 21,745,076 6 54,058,394 1 ,750,000 153,513,432 931,066,902
Less: Accumulated Amortisation
Balance at the beginning of the period 14,098,726 140,472,115 1 ,589,583 48,815,079 204,975,503
Addition during the period 1,301,925 17,624,731 87,500 7,837,283 26,851,439
Reduction during the period - - - - -
Balance at the end of the period 15,400,651 158,096,846 1 ,677,083 56,652,362 231,826,942
Less: Provision for impairmen
Balance at the beginning of the period - - - - -
Addition during the period - - - - -
Reduction during the period - - - - -
Balance at the end of the period - - - - -
Carrying amount
At the end of the period 1 06,344,425 4 95,961,548 72,917 96,861,070 699,239,960
At the beginning of the period 99,520,365 513,586,279 160,417 102,547,259 715,814,32086
The Company
Land use right Software Total
RMB RMB RMB
Cost
Balance at the beginning of the period 59,791,931 4,071,236 63,863,167
Addition during the period 8,125,984 193,944 8 ,319,928
Reduction during the period - - -
Balance at the end of the period 67,917,915 4,265,180 72,183,095
Less: Accumulated Amortisation
Balance at the beginning of the period 9,220,180 2,414,431 11,634,611
Addition during the period 654,166 360,592 1 ,014,758
Reduction during the period - - -
Balance at the end of the period 9,874,346 2,775,023 12,649,369
Less: Provision for impairmen
Balance at the beginning of the period - - -
Addition during the period - - -
Reduction during the period - - -
Balance at the end of the period - - -
Carrying amount
At the end of the period 58,043,569 1,490,157 59,533,726
At the beginning of the period 50,571,751 1,656,805 52,228,556
(a)As at 30 June 2009, the Group mortgaged land use right with carrying amount of RMB
30,396,663 (2008: RMB 30,771,608) and other intangible assets (land use right excluded) with
carrying amount of RMB 1,847,034 (2008: Nil) as security for short-term loans, long-term loans
and non-current liabilities due within one year. As at 30 June 2009, there is no restriction placed on
the ownership of intangible assets of the Company.
(b)The carrying amounts of the Group and the Company did not include capitalized borrowing cost
at the end of reporting period (2008: Nil)
22 Goodwill
(a)
Yinghe Century Other Total
RMB RMB RMB
Cost
Opening/ending balance 42,940,434 4,423,876 4 7,364,310
Carrying
Opening/ending balance 42,940,434 4,423,876 4 7,364,310
Yinghe Century
The Group paid RMB 63,271,833 as combination cost for the purchase of 95% equity interest of Yinghe
Century in 2001. The excess of combination cost over the Group’s interest in the book value of Yinghe
Century’s identifiable assets and liabilities, amounting to RMB 53,340,273, was recognised as goodwill
attributable toYinghe Century. During the prior periods, the goodwill was amortised on a straight line87
basis and recorded into profit or loss for the periods. The Group retrospectively adjusted the amount of
the goodwill to RMB 42,940,434 at 1 January 2007. The Group performed an impairment test on the
31 December 2008 and determined that no provision on impairment loss needs to be made.
23 Long-term deferred expenses
30 June 2009 31 December 2008 30 June 2009 31 December 2008
RMB RMB RMB RMB
Cost of operating lease assets improvement 9 ,573,583 11,028,242 - -
Other 5 ,260,640 3 ,583,125 3,399,374 3 ,583,125
Total 1 4,834,223 1 4,611,367 3 ,399,374 3 ,583,125
The Group The Company
24 Deferred tax assets and liabilities
30 June 2009 31 December 2008
RMB RMB
Deferred tax assets, net 4,265,971 5,013,345
Deferred tax liabilities, net - -
Total 4,265,971 5,013,345
Current year
increase/decrease
Opening
balance
charged to profit
or loss Ending balance
RMB RMB RMB
852,742 (50,402) 802,340
2,966,484 (700,148) 2,266,336
8 4,398 26,758 111,156
914,768 5 ,289 920,057
194,953 (28,870) 166,083
Total 5,013,345 (747,374) 4,265,971
Deferred tax assets / (liabilities)
Provision for bad and doubtful debts
Provision for diminution in value of
inventories
Difference of
depreciation/amortization
Provision for impairment against
fixed assets
Unrealised profit and loss within
the group88
25 Provisions for impairment
As at 30 June 2009, the provisions for impairment of the Group are set out as follows:
Items Note
Opening
balance
Charge
during the
period Ending balance
Reversal Write off
RMB RMB RMB RMB RMB
Account Receivables 2 3,387,891 1 ,041,730 2,742,950 1 9,363 21,667,308
Other Receivables 4 ,209,299 9 9,860 896,785 2 27,449 3,184,925
Inventories 3 07,003,055 5 ,708,999 139,448,331 5 1,509,170 121,754,553
Held-to-maturity investments 1 7,960,946 - - - 17,960,946
Long-term equity investments 2 ,498,697 - - - 2,498,697
Fixed assets 6 6,873,393 - - - 66,873,393
Construction in progress 2 1,628,995 - - - 21,628,995
Total 4 43,562,276 6 ,850,589 143,088,066 5 1,755,982 255,568,817
Decreasing during the period
As at 30 June 2009, the provisions for impairment losses of the Company are set out below:
Items
Opening
balance
Charge
during the
period
Ending
balance
Reversal Write off
RMB RMB RMB RMB RMB
Account Receivables 2 ,102,386 - 159,467 - 1,942,919
Other Receivables 2 64,242 8 ,056 - - 272,298
Inventories 1 5,762,012 - 141,059 1 1,355 15,609,598
Held-to-maturity investments 1 7,960,946 - - - 17,960,946
Long-term equity investments 1 4,915,247 - - - 14,915,247
Fixed assets 7 ,121,608 - - - 7,121,608
Construction in progress 2 1,628,995 - - - 21,628,995
Total 7 9,755,436 8 ,056 300,526 1 1,355 79,451,611
Decreasing during the period89
26 Restricted assets
As at 30 June 2009, the assets with restrictions placed on their ownership were as follows:
Type Opening balance
Increasing
during the
period
Decreasing
during the
period
Ending balance
RMB RMB RMB RMB
Assets guaranteed
-Cash at bank and on hand 242,340,404 384,301,177 - 626,641,581
-Bills receivables 136,468,625 77,032,879 1 36,468,625 77,032,879
-Account receivables 76,070,625 12,743,287 - 88,813,912
-Investment property 83,986,249 - 1,869,812 82,116,437
-Fixed assets 5,951,085,651 - 405,128,893 5 ,545,956,758
-Construction in progress 334,910,754 1,475,794,795 - 1 ,810,705,549
-Intangible assets 31,716,052 527,645 - 32,243,697
Total 6,856,578,360 1,950,399,783 543,467,330 8 ,263,510,813
As at 30 June 2009, the Group and the Company mortgaged 15% of stock equity of BOEOT (Dec.
31, 2008: 15%) as security for long-term loans and long-tern loans due within one year. Otherwise
there is no restriction placed on the ownership of assets of the Company.
27 Short-term loans
The Group
30 June 2009
RMB/RMB
Principal Exchange rate equivalent Annual
interest rate
Secured/
guaranteed
RMB RMB
Bank loans
- RMB 191,811,827 1.56%-7.47% Pledge
- RMB 118,200,000 5.10%-5.84% Mortgage
- RMB 123,000,000 5.10%-5.84% Secured
Foreign currency bank loans
-JPY 2,274,029,422 0.0711 161,722,150 2.84%-2.97% Credit
-USD 9,484,135 6.8319 64,794,660 2.08%-3.24% Pledge
-USD 2,050,000 6.8319 14,005,395 2.89%-3.60% Mortgage
673,534,03290
31 December 2008
RMB/RMB
Principal Exchange rate equivalent Annual
interest rate
Secured/
guaranteed
RMB RMB
Bank loans
- RMB 130,700,000 5.29%-8.64% Mortgage
- RMB 103,000,000 5.31%-9.49% Secured
- RMB 2 6,211,454 3.20%-7.23% Pledge
Foreign currency bank loans
-USD 2 ,050,000 6.8346 14,010,930 3.60% Mortgage
-USD 4 00,000 6.8346 2 ,731,520 3.67% Secured
-USD 9 ,238,567 6.8346 63,141,907 5.10%-6.92% Pledge
-JPY 2 ,237,636,702 0 .0757 169,277,217 3.31% Credit
509,073,028
The Company
Amount Annual
interest rate
Secured/
guaranteed
Amount Annual
interest rate
Secured/
guaranteed
RMB RMB
Bank loans
- RMB 1 64,400,000 Pledge - - -
1 64,400,000 -
30 June 2009 31 December 2008
As at 30 June 2009:
(a) The secured short-term loans of ZJBOE and its subsidiaries, amounting to RMB 48,000,000
were guaranteed jointly by Zhejiang Huanyu Construction Company Limited and Zhejiang
Yuegong Steel Structure Co., Ltd.. The other secured short-term loans were guaranteed by
the entities within the Group.
(b) The short-term loans of the Group, amounting to RMB 105,000,000, was secured by plant
and buildings with the net amounts of RMB 115,484,758, investment property with the
carrying amounts of RMB 3,059,726 and land use rights of RMB 5,452,929..
(c) The short-term loans of the Group, amounting to RMB 13,200,000 and USD 2,050,000, were
secured by plant and buildings with the net amount of RMB 40,975,014.
(d) The short-term loan of the Group, amounting to RMB 27,411,827, was pledged by bills
receivable with the carrying amount of RMB 27,411,827.91
（e） The short-term loans of the Group, amounting to USD 9,484,135, was pledged by accounts
receivable with the net amount of RMB 78,363,938 and USD 1,529,585.
(f) The short-term loans of the Group, amounting to RMB 164,400,000, was pledged by bills
receivable, wich will be due by 20 Aug. 2009. .
(g) No amount due to shareholders who hold 5% or more of the voting rights of the Company was
included in the above balance of short-term loans.
28 Bills payable
30 June 2009 31 December 2008
RMB RMB
Bank acceptance bills 198,524,811 1 06,000,000
The Group
The above bills are due within one year.
No amount due to shareholders who hold 5% or more of the voting rights of the Company is
included in the above balance of bills payable.
29 Accounts payable
The Group’s accounts payable by currency type
Original currency
Exchange
rate
RMB/RMB
equivalents
Original currenc
Exchange
rate
RMB/RMB
equivalents
RMB RMB RMB RMB
RMB 5 50,133,619 3 93,703,871
USD 8 2,827,763 6.8319 5 65,870,992 60,425,837 6.8346 4 12,991,645
JPY 5 ,629,352,039 0.0711 4 00,339,558 3,378,382,010 0.0757 2 55,553,663
Total 1 ,516,344,169 1,062,249,179
30 June 2009 31 December 2008
The Company’s accounts payable by currency type:
Original currency
Exchange
rate
RMB/RMB
equivalents
Original currenc
Exchange
rate
RMB/RMB
equivalents
RMB RMB RMB RMB
RMB 3 ,652,280 4 ,207,258
USD 1 7,008 6.8319 1 16,197 - - -
Total 3 ,768,477 4 ,207,258
30 June 2009 31 December 2008
No amount due to shareholders who hold 5% or more of the voting rights of the Company is
included in the above balance of accounts payable.92
As at 30 June 2009, the Group and the Company had no individually significant accounts payable
more than one year past due.
30 Advances from customers
No amount due to shareholders who hold 5% or more of the voting rights of the Company was
included in the above balance of advances from customers.
As at 30 June 2009, the Group and the Company had no individually significant advances from
customers more than one year past due.
31 Employee benefits payable
The Group
Beginning balance
Increase during
the period
Decrease
during the
period
Ending balance
RMB RMB RMB RMB
Salaries, bonuses, allowances 47,026,035 211,853,248 2 25,167,545 33,711,738
Staff welfare fees - 2 6,943,318 2 6,943,318 -
Social insurances 20,874,664 36,724,872 3 3,496,693 24,102,843
Medical insurance premium 15,113,017 11,557,204 8 ,783,002 1 7,887,219
Pension insurance premium 5,001,741 20,437,189 2 0,231,939 5 ,206,991
Unemployment insurance premium 411,265 1,173,943 1,250,730 3 34,478
Work injury insurance premium 137,743 992,563 1 ,001,196 1 29,110
Maternity insurance premium 210,898 606,334 6 15,257 201,975
Others - 1 ,957,638 1,614,569 3 43,069
Housing fund 2,253,501 7,550,127 8,925,156 8 78,472
Labour union fee, staff and
workers’ education fee
23,380,389 8,103,733 3,560,151 2 7,923,971
Termination benefits - 2 ,551,822 2,551,822 -
Staff bonus and welfare fund 14,439,542 - - 1 4,439,542
Others 1,111,741 4,117,408 5,006,214 2 22,935
Total 1 09,085,872 297,844,528 3 05,650,899 1 01,279,50193
The Company
Beginning balance
Increase during
the period
Decrease
during the
period
Ending balance
RMB RMB RMB RMB
Salaries, bonuses, allowances 13,903,450 18,295,306 18,599,076 13,599,680
Staff welfare fees - 547,666 547,666 -
Social insurances 9 ,532,260 4,078,543 2,555,333 11,055,470
Medical insurance premium 8 ,291,923 1,735,219 379,251 9,647,891
Pension insurance premium 1 ,074,499 2,058,212 1,873,188 1,259,523
Unemployment insurance premium 83,699 102,807 122,422 64,084
Work injury insurance premium 43,544 106,075 9 6,557 53,062
Maternity insurance premium 38,595 7 6,230 8 3,915 30,910
Housing fund (2,460) 1,093,637 1,097,667 (6,490)
Labour union fee, staff and
workers’ education fee
3 ,807,766 812,609 197,070 4,423,305
Others - 447,496 447,236 260
Total 27,241,016 25,275,257 23,444,048 29,072,225
32 Dividends payable
30 June 2009 31 December 2008 30 June 2009 31 December 2008
RMB RMB RMB RMB
Beijing Picture Tubes Factory 1 ,504,648 1,504,649 1 ,504,649 1,504,649
Beijing Huayin Industrial Development Company 1 ,436,962 1,436,963 1 ,436,963 1,436,963
Internal employee’s share 2 ,605,645 2,605,645 2 ,605,645 2,605,645
Others 1 ,538,157 2,546,588 9 06,533 906,533
Total 7 ,085,412 8,093,845 6 ,453,790 6,453,790
The Group The Company
33 Other payables
The Group
Original currency
Exchange
rate
RMB/RMB equivalents Original currency
Exchange
rate
RMB/RMB equivalents
RMB 1 80,789,368 129,068,877
USD 2 4,608 6.8319 1 68,120 309 6.8346 2 ,115
Other foreign currencies - 114,295
Total 1 80,957,488 129,185,287
30 June 2009 31 December 2008
RMB RMB RMB RMB
No amount due to the shareholders who hold 5% or more of the voting rights of the Company was
included in the balance of other payables.
As at 30 June 2009, the Group and the Company had no individually significant other payable more
than one year past due.94
34 Non-current liabilities due within one year
30 June 2009 31 December 2008 30 June 2009 31 December 2008
RMB RMB RMB RMB
Long-term loans 520,200,000 2,009,143,046 510,000,000 510,000,000
Total 520,200,000 2,009,143,046 510,000,000 510,000,000
The Group The Company
The analysis of loans due within one year is set out as follows:
The Group
30 June 2009
RMB/ Annual Secured/
Original currency Exchange rate RMB equivalents
interest
rate
guaranteed
RMB RMB
Bank loans
-RMB 10,200,000 5.76% Mortgage
Other loans
-RMB Entrust loans 3 10,000,000 5.76% Mortgage
-RMB Entrust loans 2 00,000,000 Interest-free Credit
Total 5 20,200,000
31 December 2008
RMB/ Annual Secured/
Original currency Exchange rate RMB equivalents
interest
rate
guaranteed
RMB RMB
Bank loans
-RMB 10,200,000 7.38% Mortgage
-RMB 7 15,994,915 5.94% Credit and
secured
-USD 113,093,397 6.8346 772,948,131 3.24% Credit and
secured
Other loans
-RMB Entrust loans 3 10,000,000 5.76% Mortgage
-RMB Entrust loans 2 00,000,000 Interest-free Credit
Total 2,009,143,046
The Company95
Secured/ Secured/
Amount
Annual
interest
rate
guaranteed Amount
Annual
interest
rate
guaranteed
RMB RMB
Other loans
-RMB Entrust loans 3 10,000,000 5.76% Mortgage 3 10,000,000 5.76% Mortgage
-RMB Entrust loans 2 00,000,000 Interest-free Credit 2 00,000,000 Interest-free Credit
5 10,000,000 510,000,000
30 June 2009 31 December 2008
As at 30 June 2009:
(a) The long-term loan due within one year of the Group and the Company, amounting to RMB
310,000,000 was secured by the 15% (2008: 15%) of equity interest in BOEOT held by the
Company.
(b) Please refer to Note 35 for the mortgage information for loans due within one year of the
Group, amounting to RMB 10,200,000.
(c) No amount due to the shareholders who hold 5% or more of the voting rights of the
Company was included in the above balance of loans due within one year.
。
35 Long-term loans
The Group96
30 June 2009
RMB/ Secured/
Original currency
Exchange
rate
RMB equivalents
Annual
interest
rate
guaranteed
RMB RMB
Bank loans
-RMB 1,654,276,616 5.76%-5.94% Mortgage & secured
-RMB 21,100,000 5.76% Mortgage
-USD 450,032,334 6.8319 3,074,575,903 2.41%-4.11% Mortgage & secured
Other loans
-Entrust loans 125,000,000 0.01% Credit
-Loan transferred from state bond 1 ,800,000 2.55% Credit
4,876,752,519
31 December 2008
RMB/ Secured/
Original currency
Exchange
rate
RMB equivalents
Annual
interest
rate
guaranteed
RMB RMB
Bank loans
-RMB 5 58,281,701 5.94% Mortgage & secured
-RMB 2 6,200,000 7.38% Mortgage
-USD 1 86,938,937 6 .8346 1 ,277,652,860 3.24% Mortgage & secured
-USD 1 50,000,000 6 .8346 1 ,025,193,000 4.94% Mortgage & secured
Other loans
-Entrust loans 4 5,000,000 0.01% Credit
-Loan transferred from state bond 1 ,800,000 2.55% Credit
2 ,934,127,561
The Company
Secured/ Secured/
Amount
Annual
interest
rate
guaranteed Amount
Annual
interest
rate
guaranteed
RMB RMB
Bank loans
-Entrust 1 25,000,000 0.01% Mortgage 4 5,000,000 0.01% Credit
Total 1 25,000,000 4 5,000,000
30 June 2009 31 December 2008
As at 30 June 2009:
(a) The long-term loan of the Group, amounting to RMB 1,074,276,616 and USD 300,032,334
was secured by fixed assets with the net amount of RMB 5,237,394,355 and land use right97
with the amount of 9,900,285, and was partially secured by Electronics Holdings.
(b) The long-term bank loans of the Group, amounting to RMB 580,000,000 and USD
150,000,000 were secured by construction in progress, fixed assets, land use right and
intangible assets with the respective carrying amount of RMB 1,810,705,549, RMB
152,102,631, RMB 15,043,449 and RMB 1,847,034.
(c) The entrust loans of the Group with amount to RMB 125,000,000 was provided by China
Construction Bank Co., Ltd Beijing Ecomonic and Technological Development Branch and
Bank of Beijing Co., Ltd Beijing Ecomonic and Technological Development Branch.
(d) The long-term loan of the Group, amounting to RMB 21,100,000, and non-current liabilities
due within one year, amounting to RMB 10,200,000 were secured by investment property,
included plant and buildings and land use right with the respective carrying amount of RMB
71,514,761 and RMB 7,541,950.
(e) The long-term loan of the Group, amounting to RMB 1,800,000, is the loan transferred from
state bond was provided to ZJBOE by the Finance Bureau of Shaoxing in 2003, with a
maturity of ten years and bearing interest per annum at 2.55%.
(f) No amount due to the shareholders who hold 5% or more of the voting rights of the Company
is included in the above balance of long-term loans.
36 Share Capital
30 June 2009 31 Dec. 2008
RMB RMB
(1) Shares subject to selling restrictions 5 ,829,277,878 8 29,277,878
- State-owned shares 2 90,697,675 2 90,697,675
-儃 Shares held by state-owned legal persons 3 ,328,514,785 5 38,514,785
-儃 Shares held by domestic natural persons 7 00,065,418 6 5,418
-Shares held by domestic non-state-owned legal persons 1 ,510,000,000 -
(2) Shares not subject to selling restrictions 2 ,453,624,569 2 ,453,624,569
- 儃 RMB-denominated ordinary shares 1 ,338,074,569 1 ,338,074,569
- 儃 Domestically listed foreign shares 1 ,115,550,000 1 ,115,550,000
Total 8 ,282,902,447 3 ,282,902,447
37 Capital reserve
The Group98
Beginning balance
Addition
during the
period
Decrease
during the
period
Ending balance
RMB RMB RMB RMB
Share premiums 4 ,576,739,397 6,783,308,831 - 11,360,048,228
Other capital reserves -
-Available-for-sale f (80,950,636) 2 0,378,603 - (60,572,033)
-Equity investment p 9,166,828 15,354,157 24,520,985
Total 4 ,504,955,589 6,819,041,591 - 11,323,997,180
The Company
Beginning balance
Addition
during the
period
Decrease
during the
period
Ending balance
RMB RMB RMB RMB
Share premiums 4 ,576,739,397 6,783,308,832 - 11,360,048,229
Other capital reserves -
-Available-for-sale f (80,950,636) 2 0,378,603 - (60,572,033)
-Transfer from items 2 9,538,085 - - 29,538,085
Total 4 ,525,326,846 6,803,687,435 - 11,329,014,281
(a)Among the other capital reserve, Available-for-sale financial assets arise from the change in the
fair value of the equity interest in TPV Technology Limited (see Note 15).
(b)Transfer from previous capital reserves arises from price differences of related party transactions
in previous years.
(c)Equity investment provision arises from sharing of the increase of capital reserve in subsidiary
caused by the special government grants.
38 Surplus reserve99
The Group
and the
Company
Statutory
surplus
reserve
Discretionary
surplus
reserve Total
RMB RMB RMB
209,421,304 289,671,309 499,092,613
209,421,304 289,671,309 499,092,613
Balance at the beginning of the year
Balance at the end of the year
As the Group and the Company are at accumulated losses by the end of June 30, 2009, they were
not required to appropriate the statutory surplus reserve and discretionary surplus reserve.
39 Retained profit
The increase of retained profit is arising from net profit transferred in.
40 Profit distribution
The Group and the Company are at accumulated losses by the end of June 30, 2009.
41 Operating income
Operating income of the Group is from revenue for production and sales of TFT-LCD and other
business. The relevant data has been listed, please refer to Note 49.
The Group’s sales to the top five customers for the current period are amounting to RMB
772,010,000, which accounts for 34% of the total sales.
Operating income of the Company is from revenue for precision electronic components and
materials business, and real estate management business.
42 Operating cost
Operating cost of the Group is from costs for production and sales of TFT-LCD and other business.
The relevant data has been listed, please refer to Note 49.
43 Financial expenses
Jan.-Jun. 2009 Jan.-Jun. 2008 Jan.-Jun. 2009 Jan.-Jun. 2008
RMB RMB RMB RMB
Interest expenses from loans and payables 116,625,723 157,959,202 9,658,471 7,680,442
Interest income from deposits and receivables (49,927,170) (29,688,470) (30,974,827) (20,473,930)
Net exchange (gains)/losses (7,917,540) (129,904,698) 8,418 1,258,942
Other financial expenses 4,502,797 14,318,499 40,541 34,370
Total 63,283,810 12,684,533 (21,267,397) (11,500,176)
The Group The Company100
44 Impairment losses
Jan.-Jun. 2009 Jan.-Jun. 2008 Jan.-Jun. 2009 Jan.-Jun. 2008
RMB RMB RMB RMB
Receivables (2,498,144) 8 20,043 (151,411) 36,541
Inventories (133,739,333) 1 ,748,355 (141,059) 2 9,997
Total (136,237,477) 2 ,568,398 (292,470) 6 6,538
The Group The Company
45 Investment (losses)/income
Jan.-Jun. 2009 Jan.-Jun. 2008 Jan.-Jun. 2009 Jan.-Jun. 2008
RMB RMB RMB RMB
Long-term equity investments losses (124,597,880) (22,919,277) (121,445,728) (16,667,570)
Available-for-sale financial assets
-Dividends received 830,515 13,825,717 830,515 13,825,717
(Losses)/income on investment transfer 60,000,000 60,000,000
total (123,767,365) 50,906,440 (120,615,213) 57,158,147
The Group The Company
(1) The analysis of the Group’s long-term equity investment (losses)/income from major
investees is as follows:
Jan.-Jun. 2009 Jan.-Jun. 2008
RMB RMB
Jointly controlled entities
-BeiAsahi Glass - 527,832
Associates
-Matsuhita ( 120,607,805) (24,116,153)
-Nissin ( 2,168,286) 548,261
-Nittan 7 12,931 392,490
-Chengdu BOE - (271,707)
-Hefei BOE ( 2,534,720) -
Subtotal ( 124,597,880) (22,919,277)
Other enterprises - -
Total ( 124,597,880) (22,919,277)
The analysis of the Company’s long-term equity investment income/(losses) from major
investees is as follows:101
Jan.-Jun. 2009 Jan.-Jun. 2008
RMB RMB
Subsidiaries
-Semi-conductor - 3,780,000
-Vacuum Electronics - 2,200,000
Subtotal - 5,980,000
Jointly controlled entities
-BeiAsahi Glass - 527,832
Associates
-Matsuhita ( 120,607,805) (24,116,153)
-Nissin ( 2,168,286) 548,261
-Nittan 7 12,931 392,490
-Hefei BOE 6 17,432 -
Total ( 121,445,728) (22,647,570)
Total - -
Total ( 121,445,728) (16,667,570)
46 Non-operating income
Note
Jan.-Jun. 2009 Jan.-Jun. 2008 Jan.-Jun. 2009 Jan.-Jun. 2008
RMB RMB RMB RMB
Gains on disposal of non-current assets 6 51,226 3 82,120 - 60,000
Gains on inventory profit - 94,700 - -
Penalty income 1 52,114 1 75,744 27,000 9 ,200
Government grants （1） 1 0,495,528 4 3,276,317 4 1,500 2,868,204
Gains on lawsuits - 5,000,000 - -
Others 2 ,764,172 7 ,514,476 3 0,342 31,500
Total 1 4,063,040 5 6,443,357 9 8,842 2,968,904
（1）Government grants
Jan.-Jun. 2009 Jan.-Jun. 2008 Jan.-Jun. 2009 Jan.-Jun. 2008
RMB RMB RMB RMB
-LCD project(Note(ⅰ)) - 24,135,844 - -
-Key technology development for Large size
LCDTV panel(Note(ⅱ)) - 3,432,572 - 1,200,000
-Research and industrialization on TFT-LCD used for
large dimension liquid crystal TV(Note (ⅲ)) - 3,700,000 - 300,000
-Research and industrialization on TFT-LCD module
used for large dimension liquid crystal TV(Note(ⅲ)) - 2,775,000 - 225,000
-Financial special fund for high-tech technology
industrial development (Note (ⅳ)) - 6,841,900 - -
-Special project on flat plate display
industrialization (Note (ⅴ)) 7 ,200,000 -
-Development on ultra-thin TFT mobile displays
device and key materials (Note (Ⅵ)) 1 ,300,000 - - -
-Special fund on import discount interest (Note (Ⅶ)) 1 ,103,388 - - -
-Others 8 92,140 2,391,001 4 1,500 1,143,204
Total 1 0,495,528 4 3,276,317 4 1,500 2,868,204
The Group The Company
The Group The Company102
Note(i) Pursuant to Reply of Preferential Policies Concerning BOE Technology Company’s LCD
Project (the B.M.S& T.C’s document [2003] No. 47), Beijing Municipal Science &
Economic Commission agreed to provide subsidies for the loan interest of the Group’s total
borrowings of USD 740 million for the TFT-LCD project. The subsidies are calculated at
2 percent of the total loan amount. The interest subsidies will be remitted to the Group’s
account annually for three consecutive years. The annual interest subsidies are about RMB
116 million. The last RMB 24,135,844 among the said interest subsidies have been carried
down as revenue in the same period of last year.
Note(ii)Pursuant to Reply of Beijing Municipal Commission of Science and Technology
Concerning 2006 Beijing Project Initiation on Enhancing Technology Competitiveness of
Key Industries (the JKJF doucument [2006] No. 271), the Group has been carried down
the last income of RMB 3,432,572 in the same period of last year.
Note(iii) Pursuant to Circular Concerning Issuing the Second Batch of Project Plan of 2006
Development Fund for Electronics and Information Industry (XYBF docuemnt), the Group
has been carried down income of RMB 6,475,000 in the same period of last year.
Note(iv) Pursuant to Circular of Beijing Municipal Service Center for Transformation of New and
High-tech Achievements (“the Center”) Concerning Appropriation of 2007 Beijing
Municipal Financial Special Funds for Supporting High-tech Industrial Development, the
Group, in Jan. 2008, has received the special funds amounting to RMB 6,841,900 for
igh-tech Industrial Development appropriated by the Center.
Note(v) Pursuant to Reply of National Development and Reform Commission General Office
Concerning Special Project of 2007 New Panel LCD Industrialization (FGBGB document
[2007] No. 2453), the Group carried down RMB 7,200,000 as revenue from the said project
in the reporting period.
Note(vi) Pursuant to Contract of Science and Technology Bureau of Hebei Province Concerning
Significant Technical Renovation Project Task of Hebei Province, the Group received the
last special funds amounting to RMB 1,300,000 in the reporting period, all of which are
transferred in the revenue.
Note(vii)Pursuant to Circular of Beijing Municipal Bureau of Commerce Concerning Appropriation
of 2007 Interest Subsidy for Import Products, the Group obtained the special funds for
import discount interest amounting to 1,103,388 in the reporting period.
47 Non-operating expenses103
Jan.-Jun. 2009 Jan.-Jun. 2008 Jan.-Jun. 2009 Jan.-Jun. 2008
RMB RMB RMB RMB
Losses on disposal of non-current assets 2 5,195 57,812 - 10,000
Donation expense 1 ,500,000 1 ,186,730 5 00,000 1,080,000
Penalty expense 3 0,182 58,766 - -
Others 2 41,889 6 72,957 2 9,454 3,644
Total 1 ,797,267 1 ,976,265 5 29,454 1,093,644
The Group The Company
48 Supplement to cash flow statement
(1) Reconciliation of net profit to cash flows from operating activities:
Jan.-Jun. 2009 Jan.-Jun. 2008 Jan.-Jun. 2009 Jan.-Jun. 2008
RMB RMB RMB RMB
Net (loss)/ profit (919,127,940) 627,370,921 (88,706,733) 71,676,438
Add: Impairment provisions of fixed assets (136,237,477) 2,568,398 (292,470) 66,538
Depreciation of fixed assets and investment
property
579,853,714 536,471,809 9,275,951 7,796,651
Amortisation of intangible assets 26,851,439 25,966,451 1,014,758 803,307
Amortisation of long-term deferred expenses 1,929,657 2,750,760 183,750 -
Gains on disposal of fixed assets assets, intangible
assets and other long-term assets
(617,849) 25,967 - (50,000)
Losses on scrapping of fixed assets - - - -
Losses on change in fair value - - - -
Financial expense 63,283,810 12,684,533 (21,267,397) (11,500,176)
Losses arising from investments 123,767,365 (50,906,440) 120,615,213 (57,158,147)
Decrease/(increase) in deferred tax assets 747,374 32,314,297 - -
(Decrease)/ increase in deferred tax liabilities - (168,463) - -
Decrease in gross inventories 47,558,552 (164,906,349) 292,857 4,655,478
Decrease/(increase) in operating receivables (348,878,030) (3,054,208) 34,246,366 (18,508,702)
(Decrease) /increase in operating payables 385,066,994 14,444,493 222,393,275 8,613,049
Other - - - -
Net cash flow from operating activities (175,802,391) 1,035,562,169 277,755,570 6,394,436
The Group The Company
(2) Significant investing and financing activities not involving receipts and disbursements
In the reporting period and the same period of last year, both the Group and the Company have no
significant investing and financing activities not involving receipts and disbursements.
(3) Net change in cash and cash equivalents104
30 June 2009 30 June 2008 30 June 2009 30 June 2008
RMB RMB RMB RMB
Cash at the end of the period 13,451,945,108 1,186,244,800 11,024,873,639 367,683,108
Less: Cash at the beginning of the period 3,528,597,814 1,452,160,200 572,867,082 928,184,272
Add: Cash equivalents at the end of the period - - - -
Less: Cash equivalents at the beginning of the
period
- - - -
Net increase/ (decrease) in cash and cash
equivalents
9,923,347,294 (265,915,400) 10,452,006,557 (560,501,164)
The Group The Company
(4) Cash and cash equivalents held by the Group and Company are as follows:
30 June 2009 30 June 2008 30 June 2009 30 June 2008
RMB RMB RMB RMB
Cash at bank and on hand 14,078,586,689 1,620,166,213 11,024,873,639 416,583,108
-Cash on hand 711,164 1,179,749 486,058 870,632
-Bank deposits available on demand 13,451,233,944 1,185,065,051 11,024,387,581 366,812,476
-Cash with restricted usage 626,641,581 433,921,413 - 48,900,000
Closing balance of cash and cash equivalents 14,078,586,689 1,620,166,213 11,024,873,639 416,583,108
Including: cash with restricted usage 626,641,581 433,921,413 - 48,900,000
Closing balance of cash and cash equivalents
available on demand
13,451,945,108 1,186,244,800 11,024,873,639 367,683,108
The Group The Company105
49 Segment reporting
The Group comprises two main operation segments, namely TFT-LCD and other business. Other business includes Precision Electronic Components and
materials business, and real estate management business.
Reportable information on each of the Group’s operation segment is set out as follows:
Jan.-Jun. 2009 Jan.-Jun. 2008 Jan.-Jun. 2009 Jan.-Jun. 2008 Jan.-Jun. 2009 Jan.-Jun. 2008 Jan.-Jun. 2009 Jan.-Jun. 2008 Jan.-Jun. 2009 Jan.-Jun. 2008
RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB
Operating income 1,744,973,644 4,615,566,326 970,672,738 1,386,936,927 (417,532,696) (496,601,381) - - 2,298,113,686 5,505,901,872
Including: external transaction 1,640,810,877 4,533,874,880 657,302,809 972,026,992 - - 2,298,113,686 5,505,901,872
inter-segment transacti 104,162,767 81,691,446 313,369,929 414,909,936 (417,532,696) (496,601,381) - - - -
Operating expenses 2,509,799,503 4,010,458,793 1,015,094,347 985,594,828 (368,178,344) (30,271,745) 65,987,816 (89,506,392) 3,222,703,323 4,876,275,484
Operating profits/(losses） (764,825,859) 605,107,533 (44,421,609) 401,342,099 (49,354,352) (466,329,636) (65,987,816) 89,506,392 (924,589,637) 629,626,388
Total assets 12,469,795,602 9,911,685,219 10,070,083,154 8,456,769,389 (6,979,011,754) (5,002,151,559) 10,478,074,802 44,018,775 26,038,941,804 13,410,321,824
Total liabilities 7,152,142,170 5,483,774,260 1,892,945,401 1,905,560,758 (1,473,961,546) (813,861,911) 799,400,000 706,368,000 8,370,526,025 7,281,841,107
Supplementary information:
1. Depreciation and amortization ex 556,931,662 515,012,742 51,703,149 46,947,213 - - - - 608,634,810 561,959,955
2. Impairment loss for current perio (134,234,479) 4,144,961 (2,002,998) (1,558,932) - (17,630) - - (136,237,477) 2,568,398
3. Capital expenditure 1,729,279,917 708,682,820 367,697,909 105,786,224 (276,309,352) (22,511,775) - - 1,820,668,473 791,957,269
TFT-LCD Others Elimination Remained item Total106
50 Risk analysis, sensitivity analysis, and determination of fair values for financial instruments
The Group has exposure to the following risks from its use of financial instruments:
?Credit risk
?Liquidity risk
?Interest rate risk
?Foreign currency risk
This note presents information about the Group’s exposure to each of the above risks and their
sources, the Group’s objectives, policies and processes for measuring and managing risks, etc.
The Group’s risk management policies are established to identify and analyse the risks faced by the
Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.
Risk management policies and systems are reviewed regularly to reflect changes in market
conditions and the Group’s activities. The internal audit of the Group undertakes both regular and
ad hoc reviews of risk management controls and procedures.
(1) Credit risk
The Group’s credit risk is primarily attributable to receivables. Exposure to these credit
risks are monitored by management on an ongoing basis.
In respect of receivables, the Group’s Board of Director has established a credit policy under
which individual credit evaluations are performed on all customers requiring credit over a
certain amount. These evaluations focus on the external ratings of the customers and the
record of fore passed transactions. Receivables are due within 15 to 120 days from the date
of billing. Debtors with balances that are past due are requested to settle all outstanding
balances before any further credit is granted. Normally, the Group does not demand
collateral from customers.
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of
each customer rather than the industry, country or area in which the customers operate and
therefore significant concentrations of credit risk arise primarily when the Group has
significant exposure to individual customers. At the balance sheet date, the Group and the
Company had a certain concentration of credit risk, as 33% and 51% of the total accounts
receivable and other receivables was due from the five largest customers of the Group and the
Company within LCD products business segment, respectively.
The Group and the Company did not possess any significant account receivable that are past
due but not impaired on individual and collective assessment.
The maximum exposure to credit risk is represented by the carrying amount of each financial
asset in the balance sheet. Except for the financial guarantees given by the Group and the
Company as set out in Notes 52, the Group and the Company do not provide any other
guarantees which would expose the Group or the Company to credit risk. The maximum
exposure to credit risk in respect of these financial guarantees at the balance sheet date is
disclosed in Notes 52.107
(2) Liquidity risk
The Company and its individual subsidiaries are responsible for their own cash management,
including short term investment of cash surpluses and the raising of loans to cover expected
cash demands, subject to approval by the Company’s board when the borrowings exceed
certain predetermined levels of authority. The Group’s policy is to regularly monitor its
liquidity requirements and its compliance with lending covenants, to ensure that it maintains
sufficient reserves of cash, readily realisable marketable securities and adequate committed
lines of funding from major financial institutions to meet its liquidity requirements in the
short and longer term.
The maturity analysis of long-term debts is disclosed in Note 35.108
(3) Interest rate risk
Interest-bearing financial instruments at variable rates and at fixed rates expose the Group to
cash flow interest rate risk and fair value interest risk, respectively.
(a) As at 30 June 2009, the Group and the Company held the following interest-bearing financial
instruments:
Fixed rate instruments
The Group The Company
30 June 2009 30 June 2009
RMB RMB
Financial assets
-Cash at bank and on hand 14,078,445,033 11,024,731,983
Financial liabilities
-Non-current liabilities due within one year (200,000,000) (200,000,000)
-Long-term loans (126,800,000) (125,000,000)
13,751,645,033 10,699,731,983
Variable rate instruments
The Group The Company
30 June 2009 30 June 2009
RMB RMB
Financial liabilities
-Short-term loans (673,534,032) (164,400,000)
-Non-current liabilities due within one year (320,200,000) (310,000,000)
-Long-term loans (4,749,952,519) -
(5,743,686,551) (474,400,000)
(b) Sensitivity analysis
As at 30 June 2009, it is estimated that a general increase/decrease of 100 basis points in
interest rates, with all other variables held constant, would decrease/increase the
Group’s and the Company’s net profit and equity by RMB 28,720,000 and RMB
2370,000 respectively .
The above-mentioned sensitivity analysis is based on the assumption that exchange rate
is change on the balance sheet date, and the said change is subject to all derivative and
non-derivative of the Group. The change of 100 basis points is a rational expectation on
the basis of interest rate changes from 1 Jan. 2009 to 30 Jun. 2009.
(4) Foreign currency risk
In respect of accounts receivables and payables denominated in foreign currencies other than
the functional currency, the Group ensures that its net exposure is kept to an acceptable level
by buying or selling foreign currencies at spot rates when necessary to address short-term
imbalances.
(a) The Group’s and the Company’s exposure as at 30 June to currency risk arising from recognised
assets or liabilities denominated in foreign currencies is as follows. For presentation purposes,109
the amounts of the exposure are shown in renminbi, translated using the spot rate at the balance
sheet date. Differences resulting from the translation of the financial statements denominated
in foreign currency are excluded.
The Group
USD KRW JPY USD KRW JPY
RMB RMB RMB RMB RMB RMB
Cash at bank and on hand 149,357,812 2,249 87,072,230 87,538,207 5,225,776 7,799,117
Accounts receivable 495,922,676 - - 890,919,462 17,917.4125 -
Short-term loans (79,884,357) - (161,722,150) (205,832,131) - -
Non-current liabilities due within one year - - - (514,762,773) - -
Long-term loans (3,074,575,903) - - (1,646,204,687) - -
Accounts payable (565,870,992) - (400,339,558) (602,257,320) (93,912) (405,751,716)
Gross balance sheet exposure (3,075,050,765) 2,249 (474,989,478) (1,990,599,240) 5,149,781 (397,952,599)
The Company
USD KRW JPY USD KRW JPY
RMB RMB RMB RMB RMB RMB
Cash at bank and on hand 16,892,073 1,313 69,673 1,410,464 - -
Accounts receivable - - - - - -
Short-term loans - - - - - -
Non-current liabilities due within one year - - - - - -
Long-term loans - - - - - -
Accounts payable (116,197) - - - - -
Gross balance sheet exposure 16,775,876 1,313 69,673 1,410,464 - -
30 June 2009 30 June 2008
30 June 2009 30 June 2008
(b)The following are the significant exchange rates applied by the Group and Company
30 June 2009 30 June 2008 30 June 2009 30 June 2008
USD 6.8335 7.0794 6.8319 6.8591
KRW 0.0050 0.0071 0.0053 0.0065
JPY 0.0715 0.0649 0.0711 0.0645
Average rate Reporting date mid-spot rate
Sensitivity analysis
Assuming all other risk variables remained constant, a 5% strengthening of the renminbi
against the US dollar, KRW and JPY dollar at 30 June 2009 would have increased
(decreased) equity and net profit by the amount shown below, whose effect is in RMB
and translated using the spot rate at the balance sheet date:110
The Group The Company The Group The Company
RMB RMB RMB RMB
30 June 2009
USD (76,876,269) 419,397 (76,876,269) 419,397
KRW 56 33 56 33
JPY (11,874,737) 1,742 (11,874,737) 1,742
Total (88,750,950) 421,172 (88,750,950) 421,172
30 June 2008
USD (49,764,981) 35,262 (49,764,981) 35,262
KRW 128,745 - 128,745 -
JPY (9,948,815) - (9,948,815) -
Total (59,585,051) 35,262 (59,585,051) 35,262
Equity Net profit
The above-mentioned sensitivity analysis arose from, based on the assumption that exchange rate is
change on the balance sheet date, remeasurement to financial instrument held by the Group or the
Company and facing risk of foreign exchange on the balance sheet date. The aforesaid analysis excluded
difference of foreign currency translation.
(5) Other price risks
Other price risks mainly include stock price risk.
(6) Fair values
All financial instruments are carried at amounts not materially different from their fair values
as at 30 June.111
(7) Estimation of fair values
The following summarises the major methods and assumptions used in estimating the fair
values of financial assets and liabilities held for trading and available-for-sale financial assets
on the balance sheet date.
(a) Debts and equity investments
Fair value is based on quoted market prices at the balance sheet date for
available-for-sale financial assets if there is an active market.
(b) Receivables
The fair value is estimated as the present value of the future cash flows, discounted at
the market interest rates at the balance sheet date.
(c) Loans
The fair value is estimated as the present value of future cash flows, discounted at the
market rate of interest at the balance sheet date.
(d) Interest rates used for determining fair value
The interest rates used to discount estimated cash flows are based on the market interest
rates for the financial instruments of comparable credit status at the balance sheet date.
51 Commitments
(1) Capital commitments
As at 30 June 2009, the capital commitments of the Group and the Company are summarised
as follows:
30 June 2009 31 December 2008 30 June 2009 31 December 2008
RMB RMB RMB RMB
Investment contracts entered into but
not performed or performed partially 8,774,325,997 3,417,770,912 7,699,534,270 2,006,295,381
The Group The Company
(2) Operating lease commitments
As at 30 June 2009, operating lease commitments of the Group and the Company are listed as
below:112
30 June 2009 31 December 2008 30 June 2009 31 December 2008
RMB RMB RMB RMB
Within 1 year (inclusive) 2 ,805,427 3,012,702 - 145,000
After 1 year but within 2 years (inclusive) 9 75,725 9 31,872 - -
After 2 years but within 3 years (inclusive) 9 75,725 9 75,725 - -
After 3 years (inclusive) - 975,725 - -
Total 4,756,876 5,896,024 - 145,000
The Group The Company
52 Contingencies
As at 30 June 2009, the contingent liabilities of the Group and the Company are summarized as
follows:
(1) Outstanding litigations and arbitration
The Group is a defendant in certain lawsuits as well as the plaintiff in other proceedings
arising in the ordinary course of business. Although the outcomes of such contingencies,
lawsuits or other proceedings cannot be determined at present, management believes that any
resulting liabilities will not have a material adverse impact on the financial position or
operating results of the Group.
(b) Providing guaranty to any other party
(i) External guarantee
As at 30 June 2009, Zhejiang BOE, the subsidiary of the Company, provided the guarantee
for a loan amounting to RMB 20,000,000 (31 Dec. 2008: RMB 20,000,000) of Zhejiang
Huanyu Construction Group Co., Ltd. The life of loan is from 30 Oct. 2008 to 8 Jan. 2010.
(ii) Internal guarantee
As at 30 June 2009, the Company provided the guarantee for a loan amounting to RMB
47,000,000 (31 Dec. 2008: RMB 50,000,000) of Zhejiang BOE, the subsidiary of the
Company. In addition, the Company provided the guarantee for long-term loan of BOE
Opto-electronics. Pursuant to guarantee agreement, the Company, as of 30 June 2009,
actually provided the guarantee of RMB 2,068,111,266 (31 Dec. 2008: RMB 2,068,111,266)
As at 30 June 2009, Zhejiang BOE provided the guarantee for a loan of RMB 28,000,000 (31
Dec. 2008: Nil) of its subsidiary, Shaoxing BOE Ueno Electronic Components Co., Ltd.
53 Non-adjusting post balance sheet events
On 9 July 2009, Beijing Municipal Science & Technology Commission, Beijing Municipal
Bureau of Finance, Beijing Municipal office State Administration Taxation of China and
Beijing Local Taxation Bureaujointly issued《Beijing Name of the Third Batch of High-Tech113
Enterprises to be Recognized in 2009》, BOE Hyundai LCD (Beijing), Beijing BOE Chatani
Electronics Co., Ltd., Beijing BOE Special Display Technology Co., Ltd. and Beijing Asahi
Electron Glass Co., Ltd., the subsidiaries of the Company were among these enterprises. At
present, these companies are just waiting for the promulgation of《The Certificate of
High-Tech Enterprise》. Within the duration of validaity of the Certificate, the said company
is subject to a preferential enterprise income tax rate of 15%. The valid period is three years.
54 Related party relationships and transactions
(1) Information on the parent of the Company is listed as follows:
Company
name Organisation code Registered place Business nature
Registered
capital
Directly
shareholding
percentage
RMB
Electronics
Holding
633647998
No. 12, Jiuxianqiao
Road Chaoyang
District, Beijing
Operation and
management of
state-owned
assets within
authorization
1,307,370,000 3.51.%
BOID 101101249
No. 10, Jiuxianqiao
Road Chaoyang
District, Beijing
Manufacture and
sale electronic
product
680,982,000 8.74%
(2) For the information on the subsidiaries of the Company, refer to Note 6.
(3) Relationships with related parties under the transactions stated
Relationship with the Company
Electronics Holdings Ultimate holding company
BOID Direct holding company
BSOAMC Investors that exercise
significant influence over the Group
BETIDC Investors that exercise
significant influence over the Group
Beijing Dongdian Industrial Development Co., Ltd Enterprises that are controlled by the
Company’s ultimate holding company
Beijing SevenStar Front Electronics Co.,Ltd. Enterprises that are controlled by the
Company’s ultimate holding company
Beijing SevenStar Hongtai Electronics Equipment Enterprises that are controlled by the
Co.,Ltd. Company’s ultimate holding company
Beijing Sevenstar Electronics Co.,Ltd. Enterprises that are controlled by the
Company’s ultimate holding company
Beijing SevenStar Flight Electronics Co.,Ltd. Enterprises that are controlled by the
Company’s ultimate holding company114
Beijing Zhengdong Electronic Power Group Co., Ltd. Enterprises that are controlled by the
Company’s ultimate holding company
Beijing Sevenstar huasheng Electronics & Machinary Enterprises that are controlled by the
Co., Ltd. Company’s ultimate holding company
Beijing Orient Electronics Material Corp. Enterprises that are controlled
or significant influenced
by the Company’s ultimate holding company
Beijing Jiuxin Property Management Co., Ltd. Enterprises that are controlled
or significant influenced
by the Company’s ultimate holding company
Nissin Associates
Nittan Associates
Matsushita Associates
Hefei BOE Associates115
(4) Transaction among the Group, the Company and related parties：
(a) Transaction amounts with related parties:
RMB RMB
Sales of goods 7,464,037 9 ,118,810
Purchase of goods 8,753,381 247,564
Rendering of services 2,228,694 4 ,200,527
Receiving services 3,856,870 2 ,113,965
Advanced disbursement payable 259,354 -
Lease income 1,968,057 2 ,340,023
Payment for interest 1 0,645,405 12,801,555
Jan. -Jun. 2009 Jan. -Jun. 2008
The Group
(b) The balances of transactions with related parties as at 30 June 2009,
are set out as follows:
The Group
30 June 2009 31 December 2008
RMB RMB
Accounts receivable 6,554,002 7 ,270,364
Other receivables - 50,615
Accounts payable 3,006,829 2 ,528,504
Other payables 249,794 248,354
55 Non-recuuring gains and losses
In accordance with Interpretive Pronouncement on the Preparation of
Information Disclosures of Companies Issuing Public Shares No. 1 –
Extraordinary Gain and Loss (revised in 2007), the extraordinary gain and loss
of the Group is listed as follows:116
Jan. -Jun. 2009 Jan. -Jun. 2008
RMB RMB
6 26,031 60,324,308
10,495,528 43,276,317
1,144,215 10,866,468
12,265,774 114,467,093
26,848 1,737,605
12,238,926 112,729,488
10,150,971 101,523,810
2,087,955 11,205,678
Total
Attributable to: Equity shareholders of the Company
Minority interests
Disposal of non-current assets
Non-rationed Government grants
Other non-operating net income
Less: Effect on taxation
56 Earnings per share
(1) Earnings per share of the Group
Basic Diluted Basic Diluted
RMB RMB RMB RMB
(a)
(Losses)/earnings per share
inclusive of extraordinary gain and
loss
(0.18) (0.18) 0.18 0.18
- (Losses)/profit attributable to the
Company’s ordinary equity
shareholders
(749,429,569) (749,429,569) 504,963,265 504,963,265
-Weighted average number of the
Company’s ordinary shares
4,116,235,780 4,116,235,780 2,871,567,895 2,871,567,895
(b)
(Losses)/earnings per share net
of extraordinary gain and loss
(0.18) (0.18) 0.14 0.14
-(Loss)/Profit deducted
extraordinary gains and loss
attributable to the Company’s
ordinary equity shareholders
(759,580,540) (759,580,540) 403,439,455 403,439,455
-Weighted average number of the
Company’s ordinary share
4,116,235,780 4,116,235,780 2,871,567,895 2,871,567,895
Jan. -Jun. 2009 Jan. -Jun. 2008
(2) Weighted average of common share/Weighted average of common share
(diluted)117
Jan. -Jun. 2009 Jan. -Jun. 2008
Issued ordinary shares at 1 January 3,282,902,447 2,871,567,895
833,333,333 -
4,116,235,780 2,871,567,895
Add: Weighted average number of ordinary shares issued
during current period
Weighted average number of ordinary shares (diluted) at 30
June
(3) Return on net assets of the Group
Fully diluted Weighted average Fully diluted Weighted average
(a)
(Losses)/return on net assets
inclusive of extraordinary gain and
loss
(4%) (10%) 10% 11%
-Net (losses)/profit attributable to
the Company’s ordinary equity
shareholders
(749,429,569) (749,429,569) 5 04,963,265 5 04,963,265
-Year-end equity attributable to
the Company’s ordinary equity
shareholders
17,006,470,303 - 5,031,035,436 -
-Weighted average of equity
attributable to the Company’s
ordinary equity shareholders
- 7,543,576,807 - 4,800,807,293
(b)
(Losses)/return on net assets net
of extraordinary gain and loss
(4%) (10%) 8% 8%
-Net (losses)/profit deducted
extraordinary gain and loss
attributable to the Company’s
ordinary equity shareholders
(759,580,540) (759,580,540) 403,439,455 403,439,455
-Year-end equity attributable to
the Company’s ordinary equity
shareholders
17,006,470,303 - 5,031,035,436 -
-Weighted average of equity
attributable to the Company’s
ordinary equity shareholders
- 7,543,576,807 - 4,800,807,293
Jan. -Jun. 2009 Jan. -Jun. 2008
