深圳中华自行车（集团）股份有限公司
2009 ANNUAL REPORT
IMPORTANT NOTICES:
Directors, supervisors and senior executives of the Shenzhen China Bicycle Company (Holdings)
Limited (hereinafter referred to as the Company) hereby confirm that there are no any important
omissions, fictitious statements or serious misleading information carried in this report, and shall
take all responsibilities, individual and/or joint, for the reality, accuracy and completion of the
whole contents.
Shenzhen Pengcheng Certified Public Accountants issued auditor’s report with disclaimer of
opinions for the 2009 Financial Report of the Company. The Board of Directors of the Company
made specific explanations on the relevant matters; the Supervisory Committee of the Company
expressed definite opinions on the specific explanations by the Board of Directors. The investors
are suggested to read for details.
No director, supervisor and senior executives stated that they couldn’t ensure the correctness,
accuracy and completeness of the contents of 2009 Annual Report or have objection for this report.
Director Mr. Liu Linfeng was absent from the board meeting due to go on business outside, but
authorized to entrust Director Mr. Yang Fenbo to attend and exert voting rights on behalf;
Independent Director Ms. Zhang Xinmiao was absent from the board meeting due to other works,
but authorized to entrust Independent Director Mr. Shao Liangzhi to attend and exert voting rights
on behalf.
Chairman and Person in Charge of the Company Mr. Li Gang, Person in Charge of Accounting
Works Mr. Wang Cheng and Person in Charge of Accounting Organ Mr. Sun Longlong hereby
confirm that the Financial Report of 2009 Annual Report is true and complete.2
I. Company Profile
1. Legal Name of the Company in Chinese: 深圳中华自行车（集团）股份有限公司
In English: SHENZHEN CHINA BICYCLE COMPANY (HOLDINGS) LIMITED
Short form of English Name: CBC
2. Legal Representative: Li Gang
3. Secretary of the Board of Directors: Li Hai
Tel: (86) 755 –28181666
Contact Address: Zhonghua Industrial Park, Yousong Industrial Zone, Longhua, Shenzhen,
Guangdong Province, China
Fax: (86) 755 –28181009
E-mail: dmc@szcbc.com
4. Registered Address and Office Address: No. 3008, Buxin Road, Shenzhen, Guangdong Province,
PRC
Post Code: 518019
Office Address: Zhonghua Industrial Park, Yousong Industrial Zone, Longhua, Shenzhen,
Guangdong Province, China
Post Code: 518131
The Company’s Internet Website: www.cbc.com.cn
E-mail: cbc@szcbc.com
5. Newspapers Chosen for Disclosing the Information: Securities Times and Hong Kong Wen Wei
Po
Internet Website Designated for Publishing the Annual Report: www.cninfo.com.cn
Place Where the Annual Report is Prepared and Placed: Secretariat of the Board of Directors
6. Stock Exchange Listed with, Short Form of the Stock and Stock Code:
Stock Exchange Listed with: Shenzhen Stock Exchange
Short Form of the Stock: SST ZHONGHUA – A, ST ZHONGHUA – B
Stock Code: 000017 for A-share, 200017 for B-share
7. Other Information about the Company
(1) Initial registered date: Aug. 24, 1984
(2) Initial registered place: Buxin Road, Shenzhen
(3) Registration number for business license of legal person of corporation: 440301501122085
(4) Registration number of tax:
State Revenue SHEN ZI No. 440301618830452,
Land Tax SHEN ZI No. 440303618830452
(5) Name and office address of the Certified Public Accountants engaged by the Company:
Shenzhen Pengcheng Certified Public Accountants Co., Ltd.
Office Address: 7/F, Tower A, Union Square, No..5022, Binhe Da Dao, Futian District, Shenzhen,
P.R.China
II. Summary of Accounting Highlight and Bussiness Highlight
1. Major profit indexes as of the year 2009
(1) Major profit indexes as of the year 2009 (Unit: RMB)
Operating profit -117,738,892.27
Total profit -106,160,775.903
Net profit attributable to the shareholders of the listed
company
-105,757,549.50
Net profit attributable to the shareholders of the listed
company after deducting non-recurring gains and losses
-115,020,042.60
Net cash flow arising from operating activities 3,920,586.97
(2) Items of non-recurring gains and losses (Unit: RMB)
Items of non-recurring gains and losses Amount Notes
(If applicable)
Gains and losses from the disposal of
non-current assets
4,491,326.30
Net income from disposal of fixed
assets
Gains and losses caused by debts restructuring 5,045,542.00
Released the guarantee for Guangdong
Sunrise Group Company Limited
Other non-operating income and expenditure
except for the aforementioned items
2,041,248.07 -
Influenced amount of income tax -2,315,623.27
Total 9,262,493.10 -
2. Major accounting data and financial indexes over the recent three year at the end of report year
(Unit: RMB)
(1) Main accounting data
Unit: RMB
2009 2008
Increase/d
ecrease in
this year
compared
with that
of last year
(%)
2007
Before
adjustment After adjustment After
adjustment Before adjustment After adjustment
Total operating
income 260,908,108.82 274,202,840.48 274,202,840.48 -4.85% 234,601,314.71 234,601,314.7
1
Total profit -106,160,775.90 -44,489,780.00 -44,489,780.00 138.62% 72,885,796.46 72,885,796.46
Net profit
attributable to
shareholders of
the listed
company
-105,757,549.50 -44,893,006.40 -44,893,006.40 135.58% 63,036,241.24 63,036,241.24
Net profit
attributable to
shareholders of
the listed
company after
deducting
non-recurring
gains and losses
-115,020,042.60 -60,660,142.06 -60,660,142.06 89.61% -6,276,043.85 -75,834,643.37
Net cash flow
arising from
operating
activities
3,920,586.97 -14,392,427.25 -14,392,427.25 -127.24% -2,591,980.11 -2,591,980.114
At the end of 2009 At the end of 2008
Increase/d
ecrease at
the end of
this year
compared
with that at
the end of
last year
(%)
At the end of 2007
Before adjustment After adjustment After
adjustment Before adjustment After adjustment
Total assets 169,696,420.47 190,897,705.53 190,897,705.53 -11.11% 214,381,530.57 214,381,530.57
Owners’ equity
attributable to
shareholders of
the listed
company
-1,861,014,519.6
7 -1,803,059,381.39 -1,803,059,381.
39 3.21% -1,784,339,460.
68
-1,807,032,302.
68
Share capital 479,433,003.00 479,433,003.00 479,433,003.00 0.00% 479,433,003.00 479,433,003.00
(2) Main financial indexes (Unit: RMB)
2009 2008
Increase/decrea
se this year
compared with
that last year
(%)
2007
Before
adjustment
After
adjustment
After
adjustment
Before
adjustment
After
adjustment
Basic earnings per share
(RMB/Share) -0.2206 -0.0936 -0.0936 135.68% 0.1315 0.1315
Diluted earnings per share
(RMB/Share) -0.2206 -0.0936 -0.0936 135.68% 0.1315 0.1315
Basic earnings per share
calculated based on latest share
capital(RMB/Share)
-0.1925 - - - - -
Basic earnings per share after
deducting non-recurring gains
and losses (RMB/Share)
-0.2399 -0.1265 -0.1265 89.65% -0.0131 -0.1582
Weighted average return on
equity (%) 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Weighted average return on
equity after deducting
non-recurring gains and losses
(%)
0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Net cash flow arising from
operating activities per share
(RMB/Share)
0.01 -0.03 -0.03 -133.33% -0.0054 -0.0054
At the end of
2009 At the end of 2008
Increase/decrea
se at the end of
this year
compared with
that at the end
of last year (%)
At the end of 2007
Before
adjustment
After
adjustment
After
adjustment
Before
adjustment
After
adjustment
Net asset per share attributable to
shareholders of listed company
(RMB/Share)
-3.8817 -3.7608 -3.7608 3.21% -3.72 -3.76915
III. Changes in Share Capital & Particulars about Shareholders
(I) Particulars about change in share capital
1. Change in share capital
Unit: Share
Before the change Increase/decrease of this time (+, - ) After the change
Amount Proportion
New
shares
issued
Bo
nus
sha
res
Capitaliz
ation of
public
reserve
Oth
ers Subtotal Amount Proportion
I. Restricted shares 186,713,192 38.94% 186,713,192 38.94%
1. State-owned shares 0 0.00% 0 0.00%
2. State-owned legal
person’s shares 16,340,000 3.41% 16,340,000 3.41%
3. Other domestic shares 95,267,002 19.87% 95,267,002 19.87%
Including: Domestic
non-state-owned legal
person’s shares
95,267,002 19.87% 95,267,002 19.87%
Domestic natural
person’s shares 0 0.00% 0 0.00%
4. Foreign shares 75,106,190 15.67% 75,106,190 15.67%
Including: Foreign legal
person’s shares 75,106,190 15.67% 75,106,190 15.67%
Foreign natural person’s
shares 0 0.00% 0 0.00%
5. Senior executives’
shares 0 0.00% 0 0.00%
II. Unrestricted shares 292,719,811 61.06% 292,719,811 61.06%
1. RMB Ordinary shares 76,752,000 16.01% 76,752,000 16.01%
2. Domestically listed
foreign shares 215,967,811 45.05% 215,967,811 45.05%
3. Overseas listed foreign
shares 0 0.00% 0 0.00%
4. Others 0 0.00% 0 0.00%
III. Total shares 479,433,003 100.00% 479,433,003 100.00%
Statement on changes of restricted shares
Unit: Share
Name of shareholders
Restricted
shares at
year-begin
Restric
ted
shares
release
d in
current
year
Increased
restricted
shares in
current
year
Restricted
shares at
year-end
Reason for restriction
Date for
releasing the
restriction
27,567,397 0 0 27,567,397
Restriction
commitment of share
merger reform
March 17, 2011
27,567,397 0 0 27,567,397
Restriction
commitment of share
merger reform
March 17, 2012
Shenzhen Guocheng Energy
Investment Development Co.,
Ltd.
9,963,618 0 0 9,963,618
Restriction
commitment of share
merger reform
March 17, 20136
27,567,397 0 0 27,567,397
Restriction
commitment of share
merger reform
March 17, 2011
Hong Kong Zhuorun
Technology Co., Ltd.
16,536,849 0 0 16,536,849
Restriction
commitment of share
merger reform
March 17, 2012
Hong Kong (Link) Bicycles
Limited 26,000,000 0 0 26,000,000
Restriction
commitment of share
merger reform
March 17, 2011
Shenzhen Kangsheng
Investment Development Co.,
Ltd.
11,968,590 0 0 11,968,590
Restriction
commitment of share
merger reform
March 17, 2011
Xinliyi Investment
Management Co., Ltd. 11,200,000 0 0 11,200,000
Restriction
commitment of share
merger reform
March 17, 2011
Airline Trust and Investment
Co., Ltd. 10,340,000 0 0 10,340,000
Restriction
commitment of share
merger reform
March 17, 2011
China Resources SZITIC Trust
Co., Ltd. 6,000,000 0 0 6,000,000
Restriction
commitment of share
merger reform
March 17, 2011
Jingchao Investment Co., Ltd. 5,001,944 0 0 5,001,944
Restriction
commitment of share
merger reform
March 17, 2011
Shanghai Yanxin Industrial
Investment Co., Ltd. 3,500,000 0 0 3,500,000
Restriction
commitment of share
merger reform
March 17, 2011
Shanghai Gaorong Investment
Consultation Co., Ltd. 3,000,000 0 0 3,000,000
Restriction
commitment of share
merger reform
March 17, 2011
Guangzhou Hengyong
Yingfeng Enterprise
Development Co., Ltd.
500,000 0 0 500,000
Restriction
commitment of share
merger reform
March 17, 2011
Total 186,713,192 0 0 186,713,192 － －
2. Issuance and listing of the share:
(1) The Company has not issued new shares and derivative securities over the recent three years
ended the report period.
(2) In the report period, the shares capital of the Company has not been changed. The Company
issued 5.3 million inner employee’s shares at the issuance price of RMB 3.75 per share dated Dec.
28, 1991. Of the total, the Company holds 135,000 inner employee’ shares now (of which 75,000
shares are held by present directors of the Company), and entrusted Shenzhen Securities
Registration Company Limited for the trusteeship; other 5,165,000 shares were all listed.
(3) On March 18, 2010, the Company carried out conversion of capital reserve into share capital
and share merger reform prospectus, the share capitals of the Company have changed from
479,433,003 shares to 551,347,947 with an increase of 71,914,944 shares.
(II) About shareholders at the end of report period
1. In the report period, the Company had no changes on share capital. Ended Dec. 31, 2009, the
Company had 32,191 shareholders in total.
2. Particulars about shares held by the top ten shareholders (Unit: Share)
Full name of shareholders
Amount of
shares held
in year-end
Proport
ion (%)
Amount of
non-circulat
ing shares
held
Amount of
shares
pledged or
frozen
Nature of
shareholders7
Shenzhen Guocheng Energy Investment
Development Co., Ltd. 65,098,412 13.58 65,098,412 0
Domestic
non-state-owned
legal person
Hong Kong Zhuorun Technology Co.,
Ltd. 44,104,246 9.20 44,104,246 40,000,000 Foreign legal
person
Hong Kong (Link) Bicycles Limited 26,000,000 5.42 26,000,000 26,000,000 Foreign legal
person
Shenzhen Kangsheng Investment
Development Co., Ltd. 11,968,590 2.50 11,968,590 0
Domestic
non-state-owned
legal person
Xinliyi Investment Management Co.,
Ltd. 11,200,000 2.34 11,200,000 0
Domestic
non-state-owned
legal person
Airline Trust and Investment Co., Ltd. 10,340,000 2.16 10,340,000 0 State-owned
legal person
Shenzhen New Land Tool Consultants
PTE. LTD 9,857,556 2.06 9,857,556 0
Domestic
non-state-owned
legal person
GUOTAI JUNAN
SECURITIES(HONGKONG) LIMITED 9,574,844 2.00 9,574,844 0 Foreign legal
person
China Resources SZITIC Trust Co., Ltd. 6,000,000 1.25 6,000,000 0 State-owned
legal person
Jingchao Investment Co., Ltd. 5,001,944 1.04 5,001,944 0 Foreign legal
person
Note: Among the top ten shareholders the Company was unaware of whether there existed
associated relationship or whether there existed consistent actionist regulated in the Management
Measure of Information Disclosure on Change of Shareholding for Listed Companies; among the
other circulating shareholders, the Company was unaware of whether there existed associated
relationship or whether there existed consistent actionist regulated in the Management Measure of
Information Disclosure on Change of Shareholding for Listed Companies
3. Introduction of the controlling shareholder or actual controller of the Company
(1) The controlling shareholder and the actual controller of the Company remained unchanged in
the report period.
(2) Introduction of the controlling shareholder or actual controller of the Company
i. Introduction to controlling shareholders: Shenzhen Guocheng Energy Investment Development
Co., Ltd.
Address: 501C Pacific Commercial Town of New Asia, No. 8 Zhonghang Road, Futian District,
Shenzhen; Legal representative: Shang Shijun; Registeration capital: RMB 70 million; Operation
scope: Establishing industry (additional application for specific items); domestic commerce,
industry of supply and distribution of materials (excluded commodities which were monopolized,
under special control and sold exclusively).
The controlling shareholder of Shenzhen Guocheng Energy Investment Development Co., Ltd was
Shenzhen Guomin Investment Development Co., Ltd with holding 100% shares.
ii. Introduction to actual controller: Shenzhen Guomin Investment Development Co., Ltd.
Controlling shareholder: Zhang Yanfen with holding 44% shares, Ji Hanfei with holding 20% shares,
Huang Yinquan with holding 36% shares.
Address: Pacific Commercial Town of New Asia, Junction between Zhenzhong Road and
Zhonghang Road, Futian District, Shenzhen; Legal representative: Zhang Yanfen; Registration
capital: RMB 250 million; Operation scope: Establishing industry (additional application for
specific items); domestic commerce, industry of supply and distribution of materials (excluded
commodities which were monopolized, under special control and sold exclusively); supply and8
distribution of automobiles (excluded cars); and open and manage E-Town of New Asia. Main
business: Commerce, operation and management of real-estate, and industry investment.
3. The property relationship between the actual controller and the Company was as follows:
44% 20% 36%
100%
100%
13.58%
4. The top ten circulating shareholders of the Company.
Name of shareholders
Amount of
circulating
shares held
shareholders
(share)
Types
Shenzhen New Land Tool Consultants PTE. LTD. 9,857,556 RMB common share
GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED 9,574,844 Domestically listed
foreign shares
Rao Weishuang 2,000,000 Domestically listed
foreign shares
TANG JING YUAN 1,924,500 Domestically listed
foreign shares
Zhang Huiling 1,921,273 Domestically listed
foreign shares
Lin Shaowei 1,728,700 Domestically listed
foreign shares
Shanghai (HK) Wanguo Securities Co., Ltd. 1,517,360 Domestically listed
foreign shares
CMS Asset Management (HK) Co., Ltd. 1,476,700 Domestically listed
foreign shares
Xu Wanqi 1,285,902 Domestically listed
foreign shares
Li Jinling 1,238,402 Domestically listed
foreign shares
IV. Particulars about Directors, Supervisors, Senior Executives & Employees
(I) Directors, supervisors and senior executives
1. Basis information:
Name Title Sex Age Begin date of office
term
End date of office
term
Shares
held at
Shares
held at
Reason
for
Shenzhen Guomin Investment Development Co., Ltd.
Zhang Yanfen Ji Hanfei Huang Yinquan
Shenzhen Guocheng Energy Investment Development Co., Ltd.
Shenzhen China Bicycle Company (Holding) Limited
司9
year-be
gin
year
-end
change
Wu Jun Chairman of
the Board M 54 Aug. 13, 2009 March 9, 2010 0 0 -
Jiang Houjin Director,
President M 41 July 31, 2007 July 30, 2010 0 0 -
Yang Fenbo Director M 53 July 31, 2007 July 30, 2010 0 0 -
Liu Linfeng Director M 53 July 31, 2007 July 30, 2010 0 0 -
Wang Cheng Director,
CFO M 38 Aug. 13, 2009 July 30, 2010 0 0 -
Xu Yuening Director M 53 Aug. 13, 2009 July 30, 2010 0 0 -
Guan Yueyu Director M 48 June 30, 2009 July 30, 2010 0 0 -
Li Chun Independent
Director M 53 July 31, 2007 March 30, 2010 0 0 -
Shao Liangzhi Independent
Director M 46 July 31, 2007 July 30, 2010 0 0 -
Zhang
Xinmiao
Independent
Director F 42 July 31, 2007 July 30, 2010 0 0 -
Wei Chuanyi Independent
Director M 39 July 31, 2007 July 30, 2010 0 0 -
Yao
Zhengwang Supervisor M 35 June 27, 2008 June 26, 2011 0 0 -
Lan Qihua Supervisor M 60 June 27, 2008 June 26, 2011 0 0 -
Zheng
Zhonghuan Supervisor M 48 June 27, 2008 June 26, 2011 10,500 10,500 -
Li Hai
Vice
President,
Secretary of
the Board
M 41 Oct. 25, 2007 Oct. 25, 2010 0 0 -
Xia Bofu
Vice
President M 40 Oct. 25, 2007 Oct. 25, 2010 0 0 -
Shang Shijun Chairman M 49 July 31, 2007 Aug. 13, 2009 0 0 -
Li Ronghui Director M 39 Oct. 25, 2007 Aug. 13, 2009 0 0 -
Zhu Jianqi Director M 35 Nov. 20, 2008 Aug. 13, 2009 0 0 -
He Yili
Chief
Accountant F 38 Oct. 25, 2007 Aug. 13, 2009 0 0 -
Total - - - - - 10,500 10,500 -
Note: In the report period, the on-job supervisor Zheng Zhonghuan holds 10,500 A-shares of the
Company by purchasing from the secondary market, there was no shares of the Company held by
other directors, supervisors, and senior executives in the report period.
2. Particulars about directors or supervisors holding the position in Shareholding Company
Name Name of Shareholding Company
Title in
Shareholding
Company
Office term
Wu Jun Shenzhen Guomin Investment Development
Co., Ltd. Vice Chairman Jan. 2007-July 2009
Shang Shijun Shenzhen Guocheng Energy Investment
Development Co., Ltd. Chairman 2007 till now10
Yang Fenbo Shenzhen Ruifude Group Co., Ltd. President No changes in report period
Liu Linfeng Shenzhen Ruifude Group Co., Ltd. Vice President No changes in report period
Xu Yuening Shenzhen Guomin Investment Development
Co., Ltd. Vice President April 4, 2009 till now
Guan Yueyu Hong Kong Zhifeng Co., Ltd. CFO 2003 till now
Li Ronghui Shenzhen Guomin Investment Development
Co., Ltd. Supervisor Since Nov. 2007
Zhu Jianqi Shenzhen Guomin Investment Development
Co., Ltd.
Deputy General
Manager of
Strategy
Management
Center
Since Jan. 2007
Yao
Zhengwang
Shenzhen Guomin Investment Development
Co., Ltd.
Deputy General
Manager of
Investment
Department
Feb. 2003 till now
3. Main work experiences of directors, supervisors and senior executives
Mr. Wu Jun, Bachelor of Computer Software, took positions of Senior Vice President of Thia Tai
Land Investment Co., Ltd., Co-CEO of Thai Tai Commercial Real Estate Co., Ltd., Senior
Consultant of Thai Tai Group from January of 2005 to January of 2007; held posts of Vice
Chairman and Vice President of Shenzhen Guomin Investment Development Co., Ltd. from January
of 2007 to July of 2009; and served as Director and Chairman in the Company since August of 2009.
Mr. Wu Jun has rich managerial experience, as he acted as senior executive in domestic A Share
listing company for many years as well as assumed the role of senior executive in many enterprise
well-known both at home and abroad for decades.
Mr. Jiang Houiin, accountant with bachelor degree of management, from 2002 to Apr., 2006,
successively took the post of Senior Manager of Investment Department, Chief Financial Planner of
China Merchants Dichain Group Co. Ltd. and Vice Present of China Merchants Dichain Investment
Holding Co. Ltd. From May 2006 to August 2007, he took the post of General Manger of
Investment Management Center of Shenzhen Guomin Investment Development Co. Ltd.; now, he is
the Director and Vice President of the Company.
Mr. Yang Fenbo, China senior economist with master degree of MBA and engineer, held the
position of minister of development department, concurrently minister of science and technology
department, assistant general manager, assistant to chairman, deputy chief engineer and chief
engineer at Shenzhen Lionda Group; took the chairman and concurrently general manager of
Guangdong Sunrise Holding Co., Ltd.; now, he is the chairman of Shenzhen Liona Group Co., Ltd.
Mr. Xu Yuening, MBA. He has successively took the post of Deputy General Manager of Shenzhen
Company of Ping An Insurance (Group) Co. of China Ltd., General Manager of Shanghai Company
of Ping An Insurance (Group) Co. of China Ltd., General Manager in East zone of property
insurance of Ping An Insurance (Group) Co. of China Ltd.; Chairman and General Manager of
Shanghai Dayang Insurance Appraisal Co., Ltd. Since Apirl 2009, he has been the Vice-president of
Shenzhen Guomin Investment Development Co., Ltd. He has been in position of senior
management in financial and insurance enterprises and had abundant management experiences.
Mr. Wang Cheng, Master of Accounting, Certified Public Accountant, once took positions of Senior
Auditor in Zhongxin Yongdao Certified Public Accountants Co., Ltd., Project Manager in11
ShineWing Certified Public Accountants Co., Ltd. and CEO Assistant in Chia Tai Holding Group
Co., Ltd.; has been holding posts of Director, CFO of the Company since August of 2009, and has
rich financial management experience as he works at financial management for many years.
Mr. Liu Linfeng, MBA, born in 1957, senior engineer, ever took the post of director, general
manager, standing deputy general manager and secretary of Communist Party of Shenzhen China
Bicycle Company (Holdings) Limited; now he is the Vice-president of Shenzhen Furuide Group Co.,
Ltd and Executive President of Shenzhen Angel Drinking Water Group Co., Ltd.
Mr. Guan Yueyu: Bachelor Degree of Hong Kong Social Science, fellowship member of Chartered
Association of Certified Accountants, member of Hong Kong Institute of Certified Public
Accountants. Since he joined in Zhifeng Co., Ltd. in 2003, now he is the CFO. He has over 20 years
experiences in accounting and financial works; and 10 more years experiences in production and
manufacture industry.
Mr. Li Chun, born in 1957, scholar of Company Law and Security Law, founder of the first legal
group of China- Grandall Legal Group, now took the post of Chairman of Shenzhen Lawyers
Association, Vice-Chairman of Guangdong Lawyers Association, Vice-director of Development
Strategy Committee of Chinese National Lawyers Association, Development Strategy Committee of
National Counsel Association, Finance and Securities Committee of National Counsel Association,
Chief Researcher of Venture Investment Law Research Center and Managing Partner of Grandall
Legal Group. He has ever been the first committee member of Listing Committee of Shenzhen
Security Exchange, Chief Expert of Law Committee of studying team of Natinal Debt Restructuring
of State-owned Enterprises; successively took part in the drafting and discussing work of several
laws and regulations such as Company Law, Security Law and Interim Provisions on the Takeover
of Domestic Enterprises by Foreign Investors.
Mr. Shao Liangzhi, born in 1964, senior accountant with master degree of economic, from Mar.,
2000 to Mar. 2004, took the post of Deputy Manager and Manager of Audit Department of
Shenzhen Nanyoh Group Co. Ltd., committee member of Discipline Inspection Committee and
Employee Supervisor of Supervisory Committee of Nanyoh Group Co. Ltd., and concurrently took
the post of Chief Supervosor of the subsidiary company of Nanyoh Group Co. Ltd.- Nanyoh Jujian
House Priority Company; from Mar. 2004 till now, took the post of Deputy General Manager
concurrent CFO of Shenzhen Square Automobile Zone Co. Ltd. He has ever concurrently took the
post of Vice Secretary of Chinese Institute of Finance and Cost for Young and Mid-career
Professionals, Standing Director of Shenzhen Internal Audit Association; now concurrently took the
post of Standing Director of Chinese Institute of Finance and Cost for Young and Mid-career
Professionals and committee member of the third Jury Committee of Guangdong senior accountant
qualification.
Ms. Zhang Xinmiao, born in 1968, with bachelor degree, successively engaged legal affairs in the
First Engineering Bureau of Water Resources & Electric Power Department, Shenzhen Jinhu Law
Firm, and Guangdong Guanghe Law Firm. She obtained certification of lawyer issued by Ministry
of Justice of People’s Republic of China in 1994. From 1999 till now, she took the post of
partnership lawyer of Guangdong Chuangji Law Firm.
Mr. Wei Chuanyi, born in 1971, economist with bachelor degree, took the post in Shenzhen
Zhonghe Group Co. Ltd., and now is the Chairman of the Board of Yibang Craftwork Co.
Ltd.(Shenzhen).
Mr. Yao Zhengwang, born in 1975, with bachelor degree of law, successively took the post of12
Supervisor of Supervision Office, Deputy Manager of Sales Department, and Deputy Manager of
Legal Affairs Department of Shenzhen Guomin Investment Development Co. Ltd. Now he is
Deputy Manager of Investment Department of Shenzhen Guomin Investment Development Co. Ltd.
He has engaged in real estate development and investment business for ten years and has lots of
experiences of relevant business.
Mr. Lan Qihua, graduated from three-years regular college, has ever worked in the army, and taken
the post of director; successively took the post of Deputy Director of Supervision Office, Director
of Party Office and concurrent Secretary of Party Committee of Lionda Group Corporation, General
Manager and concurrent Secretary of Party Branch of Shenzhen Papermaking Company. Since Jun.,
2000, he has taken the post of Chairman of the Trade Union of Shenzhen China Bicycle (Group)
Holdings Co. Ltd. with lots of Experiences of management of enterprise.
Mr. Zheng Zhonghuan, engineer with bachelor degree, successively took the post in Shenzhen Light
Texile Industry Company and Shenzhen Light Industry Company; since Oct. 1985, entered
Shenzhen China Bicycle (Group) Holdings Co. Ltd. and successively took the post of Deputy
Manager, Manager of Planning Department and Manager of Material Department; now is Manager
of Manufacture Department of the Company.
Mr. Li Hai graduated from Economic department of Shenzhen University in major of accounting,
on-study Doctorate of MBA; he took the turns of deputy manager of finance department, chief
supervisor associate of finance department and secretary of the Board, etc. of the Company, and
now is in charge of vice president and secretary of the baord of the Company.
Mr. Xia Bofu, graduated from the Central Party School with bachelor degree of law. He
successively took the post of Manager of Business Department of Shenzhen Jiabeinianhua Industry
Co. Ltd., Office Director of Shenzhen Lionda Technology Co. Ltd. and Chairman of the Board of
Shenzhen Taiyang PCCP Co. Ltd. Since Oct. 2007, he has taken the post of Vice Present of the
Company.
II. Particulars about the annual salary of directors, supervisors and senior executives
Referring to the standard of the same industry and local salary situation, the Company decided the
annual salary of the above personnel integrated the operating achievements of the Company. The
total annual remunerations of present directors, supervisors and senior executives received from the
Company were RMB 2,344,700.
(1) There are total 15 of directors, supervisors and senior executives in the Company, total 7 persons
drew the remuneration from the Company, they are: Mr. Jiang Houjin amounting to RMB 521,000,
Mr. Wangcheng amounting to RMB 236,600(August to Dec. of 2009), Mr. Lan Qihua amounting to
RMB 176,400, Mr. Zheng Zhonghuan amounting to RMB 132,300, Mr. Li Hai amounting to RMB
468,900, Mr. Xia Bofu amounting to RMB 452,500 and Ms. He Yili amounting to RMB 196,700
(Jan.-Aug. of 2009),.
(2) The Company paid the allowance of independent director of RMB 40,000 respectively. The
Company reimbursed the expenses for business trips according to the actual situation, which
independent directors attended the Board meeting and shareholders’ general meeting.
III. Directors, supervisors and senior executives leaving the office and the reason in the report year
1. Mr. Guan Yuyue was elected to be Director of the 7th Board with tenure contemporaneous with
this term of the Board at the 18th Shareholders’ General Meeting for 2009 held on Jun. 30, 2009.
2. Director and President Mr. Shang Shijun, Director Mr. Li Ronghui and Director Mr. Zhu Jianqi13
respectively requested resignation on the posts as director and chairman of the 7th board towards the
Board on Jul. 27th, 2009, because of their personal jobs. According to recommendation of largest
shareholder-- Shenzhen Guocheng Energy Investment Development Co., Ltd., the 1st Extraordinary
Shareholders’ General Meeting for 2009 held on Aug. 13th, 2009 approved and elected Mr. Wu Jun,
Mr. Wang Cheng and Mr. Xu Yuening to be Director of the 7th Board with their tenure
contemporaneous with this term of the Board.
3. The 7th Board of Director held 13th meeting in Aug. 13th, 2009 and elected Mr. Wu Jun to be the
new Chairman of the 7th Board, approved Ms. He Yili to resign her position as Chief Accountant for
personal reasons, and engaged Mr. Wang Cheng as CFO of the Company with his tenure
contemporaneous with this term of operation team.
4. Mr. Wu Jun resigned his post of Director and Chairman of the 7th Board on Mar. 9th, 2010. The
2nd Extraordinary Shareholders’ General Meeting of 2010 and the 19th Extraordinary Meeting of the
7th Board of Directors held on Mar. 31st, 2010 elected Mr. Li Gang to be the new Director and
Chairman with his tenure contemporaneous with this term of Board.
5. Mr. Li Chun resigned his post of Independent Director of 7th Board due to personal reasons
concerning job, and the 2nd Extraordinary Shareholders’ General Meeting of 2010 held on Mar. 3rd,
2010 elected Mr. Cui Jun to be Independent Director of the 7th Board with his tenure
contemporaneous with this term of Board.
IV. About staff
1. The Company has totally 87employees at present, including:
(1) Classified according to professional/occupational composition: 30 production personnel; 12
salespersons; 15 technicians; 11 financial personnel and 19 administrative personnel.
(2) Classified according to the educational background: master degree or above: 3 persons of
Master degree, 25 persons of bachelor degree; 21 persons of junior college graduates. Proportion of
the personnel with education background of junior college or above in the whole staff: 24%.
2. The Company did not need to bear the expenses of retirees.
V. Corporate Governance Structure
I. Corporate Governance
During the report period, the Company strictly compared its actual conditions with regulations of
Company Law, Securities Law, and Code of Corporate Governance for Listed Companies and
relevant laws and rules and regulatory documents, constantly perfected its legal person
administration structure and strived to establish modern enterprise system. Convening, holding and
operating of shareholders’ general meetings, Board meetings and meetings of Supervisory
Committee were all in strict accordance with relevant regulations of Articles of Association, etc.,
safeguarding the integrated interest of the Company. Realities of legal person administration
structure were in line with provisions of regulatory documents with respect to administration of
listed companies issued by CSRC.
(I) Establishment of Internal Control System
1. During the report period, the Company established a special team with Secretary of Board
Director being the main officer-in-charge for revision works of internal control system to conduct
overall organization of various systems of the company, supplement and amend related systems, and
finally completed the compiling of all systems. Among the systems, the Company revised 16 ones
such as Articles of Association, Discussion Rules for “three meetings” (the Board meeting,
shareholders’ general meeting and meeting of Supervisory Committee), Independent Director
System, Working Specification for President and Rules on the Management of Shares Held by the
Directors, Supervisors and Senior Management Officers of Listed Companies and the Changes
Thereof; newly formulated System for Engagement of CPAs and Management System for Inside14
Information and Insiders in conformity with requirements of securities regulatory departments , put
them under approval procedures of the Board or shareholders’ general meeting and had already
carried out them up to now.
2. According to requirements of Notice of Doing Well in 2009 Annual Report and Relevant Works
of Listed Companies (CSRC Notice (2009) No. 34) issued by CSRC and Notice of Request on
Establishing Responsibility Investigation System for Major Error in Annual Report Information
Disclosure of Listed Companies issued by Shenzhen Securities Regulatory Bureau, the Company
further perfected internal management system and enacted Responsibility Investigation System for
Major Error in Annual Report Information Disclosure for the purpose of enhancing accountability
mechanism for corporate finance. The aforesaid system had been approved by the 21st Meeting of
the 7th Board of Directors and put into practice.
(II) Implementation of special administration campaign during the report period
In 2009, the Company pushed forward activities of “Year for Administration and Rectification of
Listed Companies” in a active and deep-going way. Complying with the requirements and
deployment of Notice of Doing Well in Related Works of Administration for Listed Companies for
2009 (SZJGSZ (2009) No. 65) issued by Shenzhen Securities Regulatory Bureau, and taking special
administration campaign in 2007 and rectification for on-spot inspection conducted by Shenzhen
Securities Regulatory Bureau on the Company in 2008 into consideration, the Company earnestly
organized and arranged issues listed in the rectification report and conducted self-inspection and
correction item by item, effectively consolidating working achievements accomplished in corporate
administration, information disclosure, financial management, accounting verification and other
special administration undertakings.
3.Through self-rectification, in 2009, there were no nonstandard situations on administration of the
Company such as supply private informations to large shareholder and actual controller.
II. Particulars about duty performance of independent directors
In the report period, independent directors of the Company could all earnestly take their
responsibility, actively took part in work of special committees of the board of directors, meeting of
the board of directors and general shareholders’ meeting, and expressed independent opinions on
significant events. In special governance campaign and spot inspection of Shenzhen Securities
Regulatory Bureau, they also made independent and objective judgment with their professional
knowledge, and made active contribution for the development of the Company.
In 2009, particulars about independent directors attending the Board Meeting are as follows:
Name of the directors Positions
Due
Presence
(times)
Presence
in person
(times)
Attending the
meeting in way of
communication
(times)
Entrusted
presence
Absence
(times)
Li Chun
Independent
Director
8 5 3 0 0
Shao Liangzhi
Independent
Director
8 4 3 1 0
Zhang Xinmiao
Independent
Director
8 5 3 0 0
Wei Chuanyi
Independent
Director
8 5 3 0 0
In the report period, independent directors of the Company had no different opinions on various
proposals approved by the Board of Directors of the Company or other significant events.
III. Separation from the Controlling Company in respect of Business, Personnel, Organization and15
Finance etc.
The Company totally separated its Business, Personnel, Organization and Finance etc. with majority
shareholders and related parties, and had independent and complete operation ability.
IV. Establishment and perfection of internal control system
According to regulations of Basic Standard for Enterprise Internal Control issued by Ministry of
Finance and Shenzhen Stock Exchange and Guidelines for the Internal Control of Listed Companies
issued by Shenzhen Stock Exchange, the Company established Self-estimation Report of Internal
Control of the Company (2009) (Details could be found in Juchao Website.)
Independent directors expressed opinions on Self-estimation Report of Internal Control of the
Company as follows: in 2009, according to the requirements of Guidelines for the Internal Control
of Listed Companies issued by Shenzhen Stock Exchange,, combined with problems found in
special governance campaign by CSRC, the company timely revised and perfected internal control
system, and made a total reform of the problems found in inspection and self-inspection. The
self-estimation report of internal control could truly, objectively and integrally reflect the
implementation and effect of internal control system.
The supervisory committee expressed opinions on Self-estimation Report of Internal Control of the
Company as follows: according to relevant regulations of CSRC and Shenzhen Stock Exchange,
following basic principle of internal control, combined with self actual conditions, the Company
constantly established and perfected internal control system, ensured the normal operation of the
Company, and safeguarded the assets’ safety and integrality. In 2009, there was no behavior
violating Guidelines for the Internal Control of Listed Companies. The self-estimation of internal
control comprehensively, truly and exactly reflected the actual conditions of internal control of the
Company.
V. Establishment and Implementation of Performance Evaluation and Encouragement Mechanism
and Relevant Rewarding System for Senior Executives
The Company firstly has established open and transparent performance evaluation criteria and
encouragement and restriction mechanism for directors, supervisors and managers. The engagement
of the managers conformed to the regulations of laws with openness and transparency.
VI. Brief Introduction to the Shareholders’ General Meeting
In the report period, the Company held Annual Shareholders’ General Meeting and two
Extraordinary Shareholders’ General Meeting. Basic information are as follows:
1. On Jun. 30, 2008, the 18th Shareholders’ General Meeting (2008) was held, and the resolution of
the meeting has been published on Securities Times and Hong Kong Wen Wei Po dated July 1,
2009.
2. On August 13, 2009, the 1st Extraordinary Shareholders’ General Meeting 2009 was held, and the
resolution of the meeting has been published on Securities Times and Hong Kong Wen Wei Po
dated August 14, 2009.
3. On Nov. 24, 2009, the 2nd Extraordinary Shareholders’ General Meeting 2009 was held, and the
resolution of the meeting has been published on Securities Times and Hong Kong Wen Wei Po
dated Nov. 25, 2009.
VII. Report of the Board of Directors16
I. Discussion and analysis of whole operation in the report period
1. Overall operation of main business in the report period
In 2009, lots of export-based manufacturing enterprises of the Company transferred to domestic
market, bicycle and electric vehicle market took price as main competition method, as well as under
the condition of fierce clash of domestic consumption market from global financial crisis; with the
guidance of right decisions of the Board, operation team of the Company led all staffs to carry out
works surrounding main business of bicycle, conducting human resource integrity and dealing with
lawsuit as well as promoting debts restructuring and process of share merger reform etc. Through
efforts of all staffs, the Company basically successfully finished the operation target made by the
Board at year begin. From January to December of 2009, the Company realized operating income
of RMB 260,908,100; and net profit was loss of RMB 105,757,500.
(1) Main business of electric vehicle and bicycle. In 2009, in order to further adapt to the changing
environment of market, the Company actively regulated operation strategy and products structure,
conducted a variety of business strategy, strengthened network construction and after service work,
perfected service system, meanwhile took more effort on products development, reasonably
distributed production base etc, vigorously developed operating business, largely expanded main
business of electric vehicle and bicycle, thus realized main operating income of RMB 250,514,800
in the whole year.
(2) Property lease and property management business. Present stock properties were fully utilized
and abundant abnormally-occupied properties were clean up. Many channels were adopted to
enlarge leasing area. Totally income of RMB 9.65 million was realized through leasing business for
the whole year, and RMB 1.09 million rents owed in history had been called back. By means of
rational layout for ground and integrity of production base in head office, workshop available for
leasing in Longhua production base approximately approached to 50,000 square meters. Currently,
the Company is taking various measures to clear stock materials, with the aim to ensure maximum
external leasing in 2010, thus to improve cash flow and economic benefit of the Company.
2. Analysis on main business and operation of the Company
The Company is mainly engaged in the production and sales of bicycles, electric bicycles and
accessories and fittings. In the report period, the Company realized revenue from main operation
amounting to RMB 250,514,800, and profit from main operation amounting to RMB 10,986,000.
(1) Statement of main operations classified according to products
Unit: RMB’0000
Main operations classified according to industries
Classified according
to industries or
products
Operating
income
Operating
cost
Operating
profit ratio (%)
Increase/decrease
in operating
income over last
year (%)
Increase/decrease
in operating cost
over last year (%)
Increase/de
crease in
operating
profit ratio
over last
year (%)
Bicycles manufacture
and sales of
accessories and
fittings
24,835.74 23,612.37 4.93% -5.34% -6.44% -1.12%
Main operations classified according to products
OEM electric vehicle 19,894.95 18,802.60 5.49% 1.31% 1.71% -0.37%
OEM bicycles 4,758.75 4,558.93 4.20% -18.52% -23.96% 6.86%
(2)Particulars about main operations classified according to areas
Unit: RMB’0000
Areas Operating income Increase/decrease in operating
income over last year (%)
Shandong 8,329.16 31.92%17
Henan 5,697.82 21.84%
Guangdong 2,958.92 11.34%
Jiangsu 2,907.22 11.14%
Sichuan 560.26 2.15%
(3)Major suppliers and customers
In the report period, the purchasing amount of top five suppliers amounted to RMB 252,588,300,
taking 89.79% of annual purchasing amount; the sales amount to top five suppliers amounted to
RMB 213,126,200, taking 81.69% of annual sales amount.
3. Change on formation of asset and expenses of the Company in the report period.
Unit: RMB
2009 2008
Amount
Proportion
in total
asset（%）
Amount
Proportion
in total
asset（%）
Increase/ decrease
ratio in proportion
in total asset (%)
Monetary fund 22,232,425.07 13.10% 10,086,599.53 5.28% 147.95%
Account receivable 413,823.13 0.24% 385,033.41 0.20% 20.91%
Inventory 32,564,369.59 19.19% 36,197,343.93 18.96% 1.20%
Long-term equity
investment 2,619,840.50 1.54% 2,619,840.50 1.37% 12.49%
Net values of fixed
asset 23,932,824.06 14.10% 56,010,305.12 29.34% -51.93%
Short-term loan 395,326,572.82 232.96% 399,661,355.35 209.36% 11.27%
Long-term loans due
within one year 870,518,082.14 512.99% 873,090,594.28 457.36% 12.16%
2009 2008 Increase/decrease
(%)
Operating expense 6,481,033.36 5,408,121.48 19.84%
Administrative
expense 25,405,353.86 36,231,031.25 -29.88%
Financial expense 93,466,133.09 32,083,564.27 191.32%
Income tax 0.00 0.00 -
Note: (1) Administrative expense of this period decreased by 29.88% compared to the same period
of last year mainly due to that in the same period of last year compensation of RMB 11,450,000 for
economic layoffs was paid while this expense of this year largely decreased;
(2) Financial expense of this period increased by 191.32% compared to the same period of last year
mainly due to that the first half year obvious RMB appreciation led to large foreign exchange gains.
4. Changes on cash flow of the Company
Item 2008 2007 Increase/decre
ase amount
Increase/de
crease
proportion
(%)
Net cash flow arising from
operating activities 3,920,586.97 -14,392,427.25 18,313,014.22 -127.24%
Net cash flow arising from
investing activities 8,225,238.57 10,439,829.52 -2,214,590.95 -21.21%
Net cash flow arising from
financing activities --- --- --- ---
Note: (1) Net cash flow arising from operating activities of this period increased RMB 18,313,000
compared to the same period of last year mainly due to that operation account drawn in the report
period increased about RMB 6.5 million and less RMB 10 million in compensation charges for
economic staff dismissal in the report period.18
(2) Net cash flow arising from investing activities of this period decreased RMB 2,214,600
compared to the same period of last year mainly due to the balance between RMB 10 million of
property disposal account which was taken back in last report period and RMB 8 million of
investment project disposal account on Jiangxi Lihua which was taken back in the report period.
5. The operation and analysis to the operation and achievements of the main holding company and
shareholding companies of the Company
(1) Shenzhen Emmelle Industry Co., Ltd.: Its registered capital is RMB 2 million, with its main
business scope in establishing industry. The asset scale of the Company amounted to RMB
40,196,200 and the net profit amounted to RMB -1,693,400.
(2) Shenzhen Anjule Property Management Co., Ltd.: Its registered capital is RMB 2 million, with
its main business scope in property management. The asset scale of the Company amounted to
RMB 3,781,800 and the net profit amounted to RMB -2,447,600.
(3) China Bicycles (Hong Kong) Co., Ltd.: Its registered capital is HKD 5 million and its place of
registration is Hong Kong, with its main business scope in bicycle trading. The Company hasn’t any
trading business in recent years.
II. Prospect for the future development of the Company
1. The development trend in the industry of the Company and the market competitive pattern the
Company faces
The Company set foot in industry of electric bicycle since 2002. In 2007, the competition in
industry of electric bicycle and bicycle present more fury, while the uncertainty brought by the new
standard for industry of electric bicycle and the releasing time brings negative influence to sale of
electric bicycle. The industry starts to walk into the step of standardized riffle. At the same time, the
lasting sharp rise in prices for raw material results in rise in cost for manufacture and use electric
bicycle. Particularly the sharp price rise in consume fittings such as battery seriously affect the
market demand trend, even the develop potential of the whole industry of electric bicycle.
2. The challenges for future and operation plan of the Company for the next year
(1) Fully cooperate and actively promote bankruptcy restructuring of the Company.
(2) Fully promote reform in management, and improve operation management level.
(3) Significantly explore main business, meanwhile take more effort on properties leasing, thus
improve overall operation income of the Company.
(4) Strengthen cashing for spare stock properties in other place and stock materials, and effectively
improve economic benefit of stock assets.
3. The unfavorable risk factors for the development of the Company
(1) The global financial crisis fiercely clashed domestic consumption market, lots of export-based
manufacturing enterprises of the Company transferred to domestic market, bicycle and electric
vehicle market took price as main competition method. All these factors led a complicated market
environment.
(2) Huge debt approximately approaching to RMB 2 billion is still the biggest problem for the
Company. Due to that the debts have been made for a long time, situation is complicated, and
creditors are various, it is rather difficult to deal with the debts.
Faced with the aforesaid problems, on one hand, the Company tries to expand its products sales,
especially in the production and sales of electric bicycles with high additional values; on the other
hand, the Company actively promotes the integrated restructuring of the Company, including the
debts restructuring.
III. Investment of the Company19
During the report period, the Company has not raised proceeds and significant investment.
IV. Auditor’s opinion and accounting policy
1. Auditor’s opinion offered by Shenzhen Pengcheng Certified Public Accountants Co., Ltd.:
Shenzhen Pengcheng Certified Public Accountants Co., Ltd. offered 2009 Financial Report with the
disclaimer of opinion.
2. Explanations of the Board of Directors about 2009 Financial Report of the Company with the
disclaimer of opinions issued by Shenzhen Pengcheng Certified Public Accountants Co., Ltd.:
The Board of Directors agreed the 2009 Auditor’s Report offered by Shenzhen Pengcheng Certified
Public Accountants Co., Ltd.
Due to that the debt restructuring work of the Company had not been completely finished in 2009,
so risk of bearing huge debt still remained with many significant uncertainties. The CPAs was not
able to offer opinion on the financial debt, tax payable, contingent proceedings, lawsuits and
sustainable operation. In light of that, the Board of the Company made the following explanations:
i. Financial debt
Shenzhen Pengcheng CPAs held that: the letters replied from the financial creditors for the inquiry
showed that the Company missed to record an interest balance totaling to RMB 211,053,921.33,
and some letters were replied without confirmation on interest for the principal of loans totaling to
RMB 76,170,169.82, and principal of loans which haven’t been replied totaled to RMB
82,230,832.77, so it was not available to confirm influence on financial statement by financial debt.
The Company provided explanation in Note 10 for details of interest confirmation balance: when
some creditors implemented the document ((2004) No.6) released by China Committee on Bank
Supervision, they had different understanding on this document with the Company. The document
noticed that: Bank of China and other 11 financial organizations stop calculating the interest of the
Company for 3 years since Jan 1st of 2002 and at the same time, exempt all the interest payable of
the Company (including penalty interest and compound interest) occurred before Dec 31st of 2001.
Some assets management companies and banks considered that the Company was expected to
return the interest exempted and stop-calculated, and some assets management companies had not
confirmed the proceeding of interest calculation. The Company had transferred all the interest of
loans payable owed before Dec 31st of 2001, RMB 357,993,665.24, (including penalty interest and
compound interest) to capital public reserve. Interest was stopped with calculation from Jan 1st of
2002 to Dec 31st of 2004. The exempt term was due on Dec 31st of 2004. The Company held it was
not necessary for him to return the interest exempted and stop-calculated, so when the term was due,
the Company started to withdraw interest according to normal loan for those interests which needed
to be returned. The stop-calculated interest and compound interest from Jan 1st of 2002 to Dec 31st
of 2004 was not accrued. The company began to accrued interest till the interest-ceasing period
ended.
Besides, the financial debt of the Company was formed in history which had occurred for a long
time and the amount of period–end had not changed for years. Body qualification of some creditors
had been transferred and the particular personnel for handling had also changed, so the creditors
needed time to check clearly the amount of creditor and debt of both involved parties and that was
why some creditors had not replied the letters to confirm.
The Company would continuously advance the account-check work with the relevant creditors of
financial debt, trying as soon as possible to check clearly the interest on principal of the financial
debt. Once progress is made, relevant information would be disclosed according to relevant
regulation.
ii. Issues on tax payable
Shenzhen Pengcheng Certified Public Accountants Co., Ltd. thought that: in the audit process, the
CPAs implemented audit procedures including inspection and inquiry, inquiring book tax amount
payable, custom guarantee and penalty balance totaling to RMB 118,913,018.88. Until the audit
report day, no reply has been received, so it was impossible for us to confirm the influence on20
financial statement of the Company.
Due to the Company’s tax payable was formed in the past, which had a long time, forming reasons
were complex, personnel of specific affairs had changed, and tax department needed time to check
clear the debts rights and amounts of both sides, therefore, we are not able to receive confirmation
letter from tax department. According to the regulations in Administration of Tax Collection
regulated by the State, it is possible to repay the penalties and overdue fine. The Company will
continue to follow up the work of checking account of tax department, check clear the amount of
tax payable as soon as possible, and will disclose information according to the requirements of
relevant regulations if there is some progress.
iii. Contingent events and lawsuits
Shenzhen Pengcheng Certified Public Accountants believed that: card information for loans of the
Company was not accordant because of system updating and other seasons; during the auditing, the
CPAs made field verification in relevant courts involved in lawsuits for external guarantee and
overdue loans of the Company as substitute audit procedure, while no confirmation document had
been obtained from the relevant courts. Besides, due to that it was hard to implement other effective
audit procedures, it was unable for us to judge whether the Company had disclosed complete
contingent events and lawsuits, and impacts on its financial statement.
The historically formed loan and guarantee lawsuit had existed rather long time; in the report period,
there was no newly-added undisclosed guarantee events and lawsuits; part courts in charge of those
lawsuits changed, and specific responsible people also altered; the court needs time to check details
and amount of the case, so the court didn’t write back for confirmation. The Company will continue
follow up the check work by certified public accountants with related courts, and checks clear the
contingent events and lawsuits as soon as possible. If there is any progress, information disclosure
will be made according to requirements of relevant regulations.
iv. Matters on sustainable operations
Shenzhen Pengcheng Certified Public Accountants thought that, the Company’ asset could
seriously not offset the debt; and could not be able to get adequate and proper audit evidence to
confirm it could effectively improve the continuous operations of the Company; thus, we could not
judge whether the financial report 2009 prepared by the Company based on imagined continuous
operations was proper. Thus the Company and its largest creditor took the following
measurements:
Since March 2003, the promotion on debt restructuring by the former largest creditor of the
Company-China Huarong Asset Management Corporation acquired a certain development, China
Banking Regulatory Commission and relevant departments approved to exempt and stop all the
interests of the financial debts the Company owed ended Dec.31, 2004.
The Company and International Finance Corporation signed Reconciled Agreement on Mar 29th of
2007, in which it was agreed to settle all the credits and liabilities between the two parties with
USD equivalent to RMB 2 million. The liabilities amount was consisted of principal approximately
amounting to USD 3.87 million and an accrued interest approximately amounting to RMB 42.78
million.
On Dec. 30, 2006, China Huarong Asset Management Corporation transferred its creditor right to
Shenzhen Guocheng Energy Investment Development Co., Ltd (hereinafter Guocheng Energy
Company for short). Guocheng Energy Company now was actively promoting the restructuring
works on relevant debts and got certain development. Regarding the largest shareholder and creditor
had changed and new bankruptcy law was conducted, in Jan of 2010 Guocheng Energy Company
applied to Shenzhen Intermediate People’s Court for restructuring of the Company according to the
regulations of Bankruptcy Law, with goal of resuming and further improving sustainable operating
ability through restructuring. Presently the court has been checking up. Guocheng Energy Company
agreed to stop calculation of RMB 47,802,400 of loan interest of 2009 as well as loan interest of the
following years after this year.
Along with the promotion of debt restructuring the main business of the Company also realized
stable development and continuously profited. Pressure of short-term payment of the Company had21
largely decreased, constant operation ability got a certain improvement. The Board of Directors of
the Company thought that with constant development of the implementation of debt and assets
restructuring, the operating environment, operating situation and constant operating ability of the
Company would be improved further.
V. Routine Works of Board of Directors
(I) Board of Directors of the Company held 8 meetings in total during the report period, and
particulars about meetings and resolutions are as follows:
1. The 9th (Extraordinary) Meeting of the 7th Board of Directors was held in the way of voting by
communication on Jan. 20th, 2009. Resolutions were published on Securities Times and Hong Kong
Wen Wei Po dated Jan. 21st, 2009.
2. The 10th Meeting of the 7th Board of Directors was held on Apr. 23rd, 2009. Resolutions were
published on Securities Times and Hong Kong Wen Wei Po dated Apr. 25th, 2009.
3. The 11th (Extraordinary) Meeting of the 7th Board of Directors was held on Jun. 8th, 2009.
Resolutions were published on Securities Times and Hong Kong Wen Wei Po dated Jun. 10th, 2009.
4. The 12th (Extraordinary) Meeting of the 7th Board of Directors was held on Jul. 27th, 2009.
Resolutions were published on Securities Times and Hong Kong Wen Wei Po dated Jul. 29th, 2009.
5. The 13th Meeting of the 7th Board of Directors was held on Aug. 13th, 2009. Resolutions were
published on Securities Times and Hong Kong Wen Wei Po dated Aug. 15th, 2009.
6. The 14th (Extraordinary) Meeting of the 7th Board of Directors was held in the way of voting by
communication on Oct. 31st, 2009. Resolutions were published on Securities Times and Hong Kong
Wen Wei Po dated Nov. 4th, 2009.
7. The 15th (Extraordinary) Meeting of the 7th Board of Directors was held on Oct. 29th, 2009.
Resolutions were published on Securities Times and Hong Kong Wen Wei Po dated Oct. 31st, 2009.
8. The 16th (Extraordinary) Meeting of the 7th Board of Directors was held in the way of voting by
communication on Nov. 5th, 2009. Resolutions were published on Securities Times and Hong Kong
Wen Wei Po dated Nov. 7th, 2009.
(II) Implementation of resolutions of Shareholders’ General Meeting by the board of directors:
1. The Board of Directors strictly implemented all resolutions of Shareholders’ General Meeting in
the report period with no material warps or errors.
2. In the report period, the Company had no profit distribution plan, plan of converting public
reserve into share capital, rights offering as well as additionally equity offerings.
3. Duty performance of the special committee of the board of directors:
The Audit Committee of the Board consists of 3 directors, 2 of which are independent directors and
independent director takes the post of convener. In the report period, according to regulations of
Working Rules of Audit Committee of the Board and Working Procedure of Audit Committee for
Annual Report, the Committee periodically checked the internal audit report, financial statement
and internal control system of the Company, and earnestly performed its obligation.
In the report period, with professional knowledge and experience, the members of the Committee
examined the annual financial statement prepared by the Company. According to relevant
regulations and demands of CSRC, the Audit Committee presented two examination opinions for
the annual financial statement.
Before the certified public accountants enter for annual audit, the Audit Committee issued the first
written opinion on the un-audited financial statements: according to the 38 detailed principles of
Accounting Standard for Enterprise-Basic Standard, Accounting Standard for Enterprise
No.1-Inventory and the relevant regulation in the Company’s financial system, the Audit Committee
takes close eye on the reality and completeness of the financial statements, and on the preparation22
of the statements whether they were prepared in strict accordance to the new Accounting Standard
for Enterprise and relevant regulation in the Company’s financial system. With inquiry and analysis
on the financial files, the Audit Committee holds that: the Company stipulated its rational
accounting policy and adequate accounting estimation, according to the relevant request of the new
Accounting Standard for Enterprise and taking the actual status of the Company into consideration;
the transaction records were real and complete; and the financial accounting statements prepared by
the Company really reflected the financial status of the Company till Dec 31st of 2009, and the
operation achievement and cash flow of the Company in 2009. It is agreed to take these financial
statements as basis to carry out the financial audit work of 2009.
After the CPA issued the initial audit opinion, the Audit Committee read the first audit report in time
and negotiated with the CPA. The Audit Committee and the CPA had no disputation on the
important issues concerned by the annual financial report of the Company. The financial report of
the Company complies with the Accounting Standard for Enterprise and regulations of relevant
laws. The Audit Committee agreed to take these financial statements as basis to prepare the 2009
Annual Report and its Summary, which made it available for the Company to disclose the 2009
Annual Report in time.
4. Duty performance of the Remuneration and Examination Committee of the Board:
During the report period, the Remuneration and Examination Committee of the Board examined the
remuneration policy and scheme of the directors, supervisors and senior executives of the Company.
It is believed that the remuneration of the directors, supervisors and senior executives of the
Company disclosed in the V. of this report is real and accurate.
VI. Profit distribution preplan or preplan of capitalization
1. As audited by Shenzhen Pengcheng Certified Public Accountants, the losses of the Company
amounted to RMB 105,757,500 in 2009. The Company has neither dividend distribution nor share
capital conversion from capital public reserve.
2. Particulars about the cash bonus of the Company in previous three years
Unit: RMB
Amount of cash bonus
(tax included)
Net profit attributable to
shareholders of listed
company in consolidated
statement of bonus year
Ratio of net profit
attributable to shareholders
of listed company in
consolidated statement
2008 0.00 -44,893,006.40 0.00%
2007 0.00 63,036,241.24 0.00%
2006 0.00 -12,012,582.39 0.00%
VII. Other issues
(I) Explanation on the external guarantees of the Company, accumulative total and the current ones,
issued by the independent directors:
According to the regulations of the notice (CSRCF (2003) No.56) on Standardize Fund Exchange
Between Listed Companies and Related Parties and on Problem of External Guarantee of Listed
Companies, as the independent directors of Shenzhen China Bicycle Company (Holdings) Limited,
we made inspection on the accumulative and current external guarantees of the Company and also
on the guarantee getting out of line, together according to the document (SPSZSZ[2009] No.205)
issued by Shenzhen Pengcheng CPAs on Special Explanation on Fund Occupancy and Guarantee
Getting out of Line of the Controlling Shareholders and Other Related Parties of Shenzhen China
Bicycle Company (Holdings) Limited and relevant data. Here comes the detail information:
During the report period, no guarantee or guarantee out of line has been provided by the Company23
for its controlling shareholders and the enterprises where they take posts. The guarantees or
guarantees out of line provided by the Company for its controlling shareholders and the enterprises
where they take posts were those happened from year 1996 to year 1999, belonging to the events
left in history. Due to that most units receiving guarantee are not able to repay, the Company treated
most guarantees as projected liabilities which amounted to RMB 179,088,442.92.
(II) In the report period, the Company tried to promote the Share Merger Reform. With active
cooperation and coordination of the board and management team and shareholders, the share
merger reform of the Company obtained breakthrough progress and cleaned off various obstacles;
the share merger reform prospectus has been implemented on March 18, 2010 and the A-shares of
the Company resumed trading on the same day.
VIII. Report of Supervisory Committee
In the spirit of being responsible to shareholders and strictly according to regulations in PRC
Company Law, Securities Law and Articles of Association of the Company, the Supervisory
Committee has dutifully performed its obligations endowed by relevant laws and legislations,
carried out work positively and hard, and safeguarded the legal rights and interests of the Company
and shareholders in 2009. It has also put forward its opinions and suggestions promptly towards
significant decisions made for productions, management and investment, and supervised the
behaviors of directors and senior executives in terms of implementation of their obligations.
I. Work of the Supervisory Committee in the report period
In the report period, the Supervisory Committee of the Company held altogether 2 meetings.
1. The 3rd meeting of the 6th Supervisory Committee was held on April 23, 2009. The public notice
of relevant resolutions was published on Securities Times and Hong Kong Wen Wei Po dated April
25, 2009.
2. The 4th meeting of the 6th Supervisory Committee was held on August 13, 2009, in which 2009
Annual Report and its Summary was examined and approved in way of resolution.
II. Opinions on relevant issues in 2009 expressed by the Supervisory Committee
1. Operation according to law:
In accordance with relevant national laws and regulations, the Supervisory Committee has carried
out supervision work on the holding procedures of Shareholders’ General Meetings and Board
meetings, resolution, implementation of resolutions of Shareholders’ General Meetings by the
Board of Directors, performance of duties of senior executives as well as the Company’s
administration system etc.; it believes that, in 2009, the Board of Directors strictly complied with
PRC Company Law, Securities Law, Rules for Stock Listing, Articles of Association and other
relevant regulations and systems, operated in a standardized manner, worked conscientiously,
conducted business and made decisions in a scientific and reasonable way, and further improved
internal administration and internal control system; the directors and managers haven’t violated any
laws, regulations, the Articles of Association or done harm to the interests of the Company and
shareholders when performing duties.
2. Financial Inspection
In the report period, Shenzhen Pengcheng Certified Public Accountants issued auditor’s report with
disclaimer of opinion for the Financial Statement 2009 of the Company. The Financial Report of the
Company objectively and truly reflected the financial status and operation achievements of the
Company this year.
3. Use of raised funds:24
The Company has not raised funds in the report period.
4. Purchases and sales of assets:
In the report period, the Company has no initiative to purchases assets: they thought the sales of
assets conformed to the laws and regulations and relevant provisions of the Company.
5. Opinions towards related transactions
Related transactions conducted by the Company are fair and square, and haven’t done harm to the
interests of the Listed Company, and there was no insider dealing.
6. Implementation on resolution of shareholders’ general meeting by the Board
Supervisors of the Company attended shareholders’ general meeting and presented each meeting of
the Board without voting rights. The Supervisory of the Company supervised implementation on
resolution of shareholders’general meeting, and it thought that the Board earnestly implemented the
various resolutions of shareholders’general meeting.
III. Opinion issued by the Board on the auditor’s report with disclaimer of opinion issued by
Shenzhen Pengcheng Certified Public Accountants
Shenzhen Pengcheng CPAs issued the audit report with disclaimer of opinion for 2009. The Board
had made special explanation on the events concerned by the report. The Supervisory Committee
believed that: the audit report issued by Shenzhen Pengcheng CPAs truthfully reflected the financial
condition and operation achievement of the Company; the explanation presented by the Board of
the Company on the events concerned by the audit opinion complied with the actual condition of
the Company. The Supervisory Committee would actively cooperate with the Board to carry out its
works, supervise and urge the Board to intensify power in debt restructure and try to improve the
persistent operating ability of the Company.
IX. Significant Events
I. Material lawsuits and arbitrations in the report period:
The details about the material lawsuits or arbitrations that occurred in the previous years are in the
Notes 12 of the Financial Statement.
II. Purchases and sales of assets of the Company in the report period
The Company had no active purchase of assets in the report period. And the sales of assets are in
item 30 of Notes 5 of the Financial Statement.
III. Significant related transactions in the report period
In the report period, there was no new significant related transaction; details about the significant
related transactions that occurred in the previous years are in the Notes 10 of Financial Statement.
IV. Significant Contracts and Implementation of Contracts
1. In the report period, the Company had not entrusted, contracted or leased the assets of other
companies, nor had other companies entrusted, contracted or leased the assets of listed companies.
2. In the report period, the Company had not entrusted financing events.
3. In the report period, the Company did not happenthe situations of guarantees on controlling
subsidiary, the guaranteed occurred in previous years were as follows:
Unit: RMB’0000
Particulars about the external guarantee of the Company (Barring the guarantee for the controlling subsidiaries)
Name of the Company
guaranteed
Date of happening
(Date of signing
Amount
of Guarantee type Guarant
ee term
Compl
ete
Guarantee
for related25
agreement) guarantee Implem
entatio
n or not
party (Yes or
no)
Guangdong Sunrise Group Co.,
Ltd. July 26, 2006 2,800.00 Joint
responsibility
4
months No No
Guangdong Sunrise Group Co.,
Ltd. Sep. 30, 1999 681.83 Joint
responsibility
12
months No No
Guangdong Sunrise Group Co.,
Ltd. Apr. 30, 1998 260.00 Joint
responsibility
11
months No No
Guangdong Sunrise Group Co.,
Ltd. July 30, 1997 250.00 Joint
responsibility
7
months No No
Guangdong Sunrise Group Co.,
Ltd. June 4, 1997 300.00 Joint
responsibility
8
months No No
Gintian Industry (Group) Co.,
Ltd. Oct. 30, 1998 5,000.00 Joint
responsibility
6
months No No
Shenzhen Tianma Cosmetics
Co., Ltd. Sep. 30, 1994 800.00 Joint
responsibility
12
months No No
Total amount of guarantee in the report period 0.00
Total balance of guarantee at the end of the report period 10,091.83
Guarantee of the Company for the controlling subsidiaries
Total amount of guarantee for controlling subsidiaries during the report
period 0.00
Total balance of guarantee for controlling subsidiaries at the end of the
report period 7,817.01
Total amount of guarantee of the Company (including guarantee for controlling subsidiaries)
Total amount of guarantees 17,908.84
Ratio of total guarantee to net assets of the Company -9.62%
Including:
Amount of guarantee for shareholders, actual controller and its related
parties 0.00
The debts guarantee amount provided for the guarantee of which the
assets-liability ratio exceeded 70% directly or indirectly 17,908.84
Proportion of total amount of guarantee in net assets of the Company
exceeded 50% 17,908.84
Total amount of the aforesaid three guarantees 35,817.68
Explanations on possibly bearing joint and several responsibilities for undue
guarantees Naught
Note: Guangdong Sunrise Group Co., Ltd. was the shareholder of the Company, its equity was
auctioned by the court and now it is not the shareholder of the Company.
V. Commitments of the Company and the shareholders holding more than 5% equity in the report
period or lasting to the report period
The Company or the shareholders holding more than 5% equity had no commitments made in the
report period or made in previous period but carried forward to the report period that were likely to
produce significant influence on the operation achievements and financial status of the Company.
VI. Engagement and Disengagement of Certified Public Accountants of the Company
In the report period, the Company engaged Shenzhen Pengcheng Certified Public Accountants as
the auditing organ in this year with term of one year. In 2009, the Company paid auditing fee
amounting to RMB 0.5 million to Shenzhen Pengcheng Certified Public Accountants.
VII. Particulars about punishment received by the Company, the Board of Directors of the Company
and the directors from supervisory department.
In the report period, the Company, the Board of Directors of the Company and the directors have
not been inspected, given administrative punishment or public criticism by CSRC, or publicly26
condemned by Shenzhen Stock Exchange.
VIII. Particulars about the Company’s Reception of Investigation and Interview
In accordance with the requirements of Guidance for Fair Information Disclosure for Listed
Companies of Shenzhen Stock Exchange, the Company earnestly implements the System of
Reception and Popularization. The Company and relevant personnel in charge of information
disclosure strictly follow the principle of fair information disclosre. Situation that different treaty
policy is implemented, information is disclosed for appointed person or non-public significant
information is disclosed or leaked out has never happened.
Reception
date
Reception place Reception way
Person
receipted
Main content of talk and information provided
2009
Office of the
Company
Phone
communication
Shareholders of
circulating
shares
Progress of the share merger reform and the
debt restructure project of the Company27
X. Financial Report (see attachment)
Auditors’ Report
Shenzhen Pengcheng GSZi [2010] No.124
To the shareholders of Shenzhen China Bicycle Company (Holdings) Limited,
We have audited the accompanying financial statements of Shenzhen China Bicycle Company
(Holdings) Limited (“the Company”), including consolidated balance sheet of the Company of 31
December 2009, and consolidated profit statement of the Company, and consolidated statement on
changes of shareholders’ equity of the Company, and consolidated cash flow statement of the
Company for the year ended, and notes to the financial statements for the year ended.
I. Management's responsibility for the financial statements
It is the responsibility for the management of the Company to prepare financial statements
according to the stipulations of the business accounting rules. This responsibility includes: (1)
devising, implementing and maintaining internal control related to the preparation of the financial
statements so as to ensure that the financial statements do not contain major errors caused by
fraudulence or mistake; (2) choosing and adopting appropriate accounting policies; and (3) making
reasonable accounting estimations.
II. Proceedings which result in disclaimer of opinion
We noticed that:
1. During the audit, we have specially implemented the audit procedures such as visit for inspection
and inquiry, focusing on the financial debts of Shenzhen China Bicycle Company (Holdings)
Limited which have expired for long time till the end of Dec 31st of 2009. Until the audit report day,
the replied letters told that a balance in interest of RMB 211,053,921.33 has been omitted by
Shenzhen China Bicycle Company (Holdings) Limited; besides, some letters were replied to show
unconfirmed interest on borrowing principal converting to RMB 76,170,169.82; to the un-replied
letters, the total borrowing principal was converted into RMB 80,890,643.04. As to the aforesaid
omitted interest balance, the Company provided explanation in Note 13.1 that when implementing
the document (YJBT (2004) No.6) released by China Committee on Bank Supervision for offering a
reference of the loan interest restructure of Shenzhen China Bicycle Company (Holdings) Limited,
the Company and some creditors had different understanding on this document, which brought the
aforesaid omission. Since the accounts had not been adjusted, we are not able to ensure the
influence of this balance to the financial statements of the Company.
2. During the audit, we have specially implemented the audit procedures such as visit for inspection and inquiry,
focusing on the tax payable of Shenzhen China Bicycle Company (Holdings) Limited which have expired for long
time till the end of Dec 31st of 2009, in want of verification that whether the unpaid tax, tariff bond and
amercement balance was totaling up to RMB 118,913,018.88 as the Company’s book said. While
until the audit report day, nothing got replied. Thus, it was impossible for us to ensure the influence on the
financial statements of the Company brought by the uncertainty.
3. In the process of audit, the information of credit card which we received from the account bank
of the Company is not able to be checked whether contingency such as related guarantee
information accord with disclosure, for it did not be annually inspected and credit card system did
not upgrade related information. Therefore, we implement substitutive audit procedure of field
checking the related courts to the claims of the Company caused by external guarantee and overdue
loan. However, related courts all only make some oral explanations or provide some information
which could only be used as reference. Otherwise, we are not able to implement other efficient audit
procedure, so that we are not able to judge the integrity of the contingency disclosed in Note 11 and
the lawsuits disclosed in Note 12 of the Company and possible effects of the issues on the
Company’s financial report.
4. Refer to Note 15, until Dec. 31, 2009, total asset of Shenzhen China Bicycle Company (Holdings)28
Limited was RMB 169,696,420.47; total debt was RMB 2,030,710,940.14; net asset was RMB
-1,861,014,519.67 with debts beyond assets. Shenzhen China Bicycle Company (Holdings) Limited
disclosed improving methods in Note 10.2 of financial statement, especially the largest shareholder
and creditor Shenzhen Guocheng Energy Investment Development Co., Ltd. applied to Shenzhen
Intermediate People’s Court for restructuring according to Bankruptcy Law in Jan. of 2010. But
ended as day of auditor’s report, Shenzhen Intermediate People’s Court has not accepted the case,
thus making us unable to get complete and appropriate auditing evidence to identify whether it can
improve continuous operation ability for Shenzhen China Bicycle Company (Holdings) Limited
effectively. Therefore, we can not judge whether the 2009 financial statement which was made
under continuous operation assumption of Shenzhen China Bicycle Company (Holdings) Limited is
appropriate or not.
III. Auditing Opinion
Due to that the aforesaid events could possibly occur very significant and aboard influences, we
could not issue auditor’ opinion on the financial statement of the Company.
Shenzhen Pengcheng Certified Public
Accountants
China Certified Accountant
Shenzhen .. P.R.C.
April 26, 2010
Li Hailin
China Certified Accountant
Wei Changying29
Shenzhen China Bicycle Company (Holdings) Limited
2009 Financial Report
Consolidated Balance Sheet
Dec. 31, 2009
Prepared by Shenzhen China Bicycle Company (Holdings) Limited Unit: Yuan Currency: Renminbi
Items Notes Amount at period-end Amount at year-begin
Current assets:
Monetary funds V.1 22,232,425.07 10,086,599.53
Settlement provisions - -
Capital lent - -
Transaction finance asset - -
Notes receivable V.2 5,800,000.00 5,408,792.00
Accounts receivable V.3 413,823.13 385,033.41
Accounts paid in advance V.4 195,298.09 504,440.40
Insurance receivable - -
Reinsurance receivables - -
Contract reserve of reinsurance receivable - -
Interest receivable - -
Dividend receivable - -
Other receivables V.5 24,221,035.93 42,193,937.90
Purchase restituted finance asset - -
Inventories V.6 32,564,369.59 36,197,343.93
Non-current asset due within one year - -
Other current assets - -
Total current assets 85,426,951.81 94,776,147.17
Non-current assets:
Granted loans and advances - -
Finance asset available for sales - -
Held-to-maturity securities - -
Long-term account receivable - -
Long-term equity investment V.7 2,619,840.50 2,619,840.50
Investment property V.8 31,399,514.80 10,311,261.40
Fixed assets: V.9 23,932,824.06 56,010,305.12
Construction in progress - -
Engineering material - -
Disposal of fixed asset - -
Productive biological asset -
Oil and gas asset -
Intangible assets V.10 26,317,289.30 27,180,151.34
Expense on Research and Development - -
Goodwill - -
Long-term expenses to be apportioned - -
Deferred income tax asset - -
Other non-current asset - -
Total non-current asset 84,269,468.66 96,121,558.36
Total assets 169,696,420.47 190,897,705.5330
Consolidated Balance Sheet (Con.)
Dec. 31, 2009
Prepared by Shenzhen China Bicycle Company (Holdings) Limited
Unit: Yuan Currency: Renminbi
Items Notes Amount at period-end Amount at year-begin
Current liabilities:
Short-term loans V.12 395,326,572.82 399,661,355.35
Loan from central bank - -
Absorbing deposit and interbank
deposit - -
Capital borrowed - -
Transaction financial liabilities - -
Notes payable - -
Accounts payable V.13 125,874,371.36 130,714,884.86
Accounts received in advance V.14 23,083,981.59 21,333,035.66
Selling financial asset of
repurchase - -
Commission charge and
commission payable - -
Wage payable V.15 5,268,781.80 1,686,297.83
Taxes payable V.16 96,149,009.88 95,399,029.08
Interest payable V.17 165,838,645.23 118,881,087.74
Dividend payable - -
Other accounts payable V.18 168,836,440.31 168,604,764.50
Reinsurance payables - -
Insurance contract reserve - -
Security trading of agency - -
Security sales of agency - -
Non-current liabilities due
within 1 year V.19 870,518,082.14 873,090,594.28
Other current liabilities V.20 726,612.09 48,826.30
Total current liabilities 1,851,622,497.22 1,809,419,875.60
Non-current liabilities:
Long-term loans - -
Bonds payable - -
Long-term account payable - -
Special accounts payable - -
Projected liabilities V.21 179,088,442.92 184,133,984.92
Deferred income tax liabilities - -
Other non-current liabilities - -
Total non-current liabilities 179,088,442.92 184,133,984.92
Total liabilities 2,030,710,940.14 1,993,553,860.52
Shareholders’ equity):
Paid-in capital (or share capital) V.22 479,433,003.00 479,433,003.00
Capital public reserve V.23 458,695,975.55 410,893,564.33
Less: Inventory shares - -
Reasonable reserve - -
Surplus public reserve V.24 32,673,227.01 32,673,227.01
Provision of general risk - -
Retained profit V.25 -2,831,816,725.23 -2,726,059,175.73
Balance difference of foreign
currency translation - -
Total shareholders’ equity attributable
to parent company -1,861,014,519.67 -1,803,059,381.39
Minority interests - 403,226.40
Total shareholders’ equity -1,861,014,519.67 -1,802,656,154.9931
Total liabilities and shareholders’
equity 169,696,420.47 190,897,705.53
Balance Sheet of Parent Company
Dec. 31, 2009
Prepared by Shenzhen China Bicycle Company (Holdings) Limited
Unit: Yuan Currency: Renminbi
Assets Notes Amount at period-end Amount at year-begin
Current assets:
Monetary funds 365,121.06 417,444.51
Transaction finance asset - -
Notes receivable - -
Accounts receivable XI.1 4,840,655.31 136,120,228.45
Accounts paid in advance - -
Interest receivable - -
Dividend receivable - -
Other receivables XI.2 44,469,377.15 87,659,723.49
Inventories 20,240,562.11 26,922,910.94
Non-current asset due within
one year - -
Other current assets - -
Total current assets 69,915,715.63 251,120,307.39
Non-current assets:
Finance asset available for
sales - -
Held-to-maturity securities - -
Long-term account receivable - -
Long-term equity investment XI.3 2,619,840.50 2,619,840.50
Investment property 31,399,514.80 10,311,261.40
Fixed assets: 23,131,963.21 55,334,097.37
Construction in progress - -
Engineering material - -
Disposal of fixed asset - -
Productive biological asset - -
Oil and gas asset - -
Intangible assets 26,317,289.30 27,180,151.34
Expense on Research and
Development - -
Goodwill - -
Long-term expenses to be
apportioned - -
Deferred income tax asset - -
Other non-current asset - -32
Total non-current asset 83,468,607.81 95,445,350.61
Total assets 153,384,323.44 346,565,658.00
Balance Sheet of Parent Company (Con.)
Dec. 31, 2009
Prepared by Shenzhen China Bicycle Company (Holdings) Limited
Unit: Yuan Currency: Renminbi
Items Notes Amount at period-end Amount at year-begin
Current liabilities:
Short-term loans 338,507,120.98 338,713,085.90
Transaction financial liabilities - -
Notes payable - -
Accounts payable 155,610,619.08 324,940,555.98
Accounts received in advance 10,664,592.85 14,605,306.04
Wage payable 4,099,102.35 1,550,365.19
Taxes payable 94,821,236.83 94,220,632.13
Interest payable 165,838,645.23 118,881,087.74
Dividend payable - -
Other accounts payable 126,959,911.53 134,698,784.49
Non-current liabilities due within 1
year 870,518,082.14 873,090,594.28
Other current liabilities 726,612.09 -
Total current liabilities 1,767,745,923.08 1,900,700,411.75
Non-current liabilities:
Long-term loans - -
Bonds payable - -
Long-term account payable - -
Special accounts payable - -
Projected liabilities 179,088,442.92 184,133,984.92
Deferred income tax liabilities - -
Other non-current liabilities - -
Total non-current liabilities 179,088,442.92 184,133,984.92
Total liabilities 1,946,834,366.00 2,084,834,396.67
Owner’s equity (or shareholders’ equity): - -
Paid-in capital (or share capital) 479,433,003.00 479,433,003.00
Capital public reserve 458,695,975.55 410,893,564.33
Less: Inventory shares - -
Reasonable reserve - -
Surplus public reserve 32,673,227.01 32,673,227.01
Provision of general risk - -
Retained profit -2,764,252,248.12 -2,661,268,533.01
Total owner’s equity(or shareholders’
equity) attributable to parent company -1,793,450,042.56 -1,738,268,738.6733
Total liabilities and owner’s equity(or
shareholders’ equity) 153,384,323.44 346,565,658.00
Consolidated Profit Statement
2009
Prepared bt Shenzhen China Bicycle Company (Holdings) Limited
Unit: Yuan Currency: Renminbi
Items Notes Amount in this
period
Amount in last
period
I. Total operating income 260,908,108.82 274,202,840.48
Including: Operating income V.26 260,908,108.82 274,202,840.48
Interest income - -
Insurance gained - -
Commission charge and commission income - -
II. Total operating cost 378,647,001.09 345,036,984.40
Including: Operating cost V.26 248,699,643.75 262,279,584.11
Interest expense - -
Commission charge and commission expense - -
Cash surrender value - -
Net amount of expense of compensation - -
Net amount of withdrawal of
insurance contract reserve - -
Bonus expense of guarantee slip - -
Reinsurance expense - -
Operating tax and extras V.27 164,314.97 210,719.66
Sales expenses 6,481,033.36 5,408,121.48
Administration expenses 25,405,353.86 36,231,031.25
Financial expenses 93,466,133.10 32,083,564.27
Losses of devaluation of asset V.28 4,430,522.05 8,823,963.63
Add: Changing income of fair value
(Loss is listed with “-”) - -
Investment income (Loss is listed with “-”) V.29 - -874,997.07
Including: Investment income on
affiliated company and joint venture - -
Exchange income (Loss is listed with “-”) -
III. Operating profit (Loss is listed with “-”) -117,738,892.27 -71,709,140.99
Add: Non-operating income V.30 12,729,475.16 27,591,925.55
Less: Non-operating expense V.31 1,151,358.79 372,564.56
Including: Disposal loss of non-current asset - -
IV. Total Profit (Loss is listed with “-”) -106,160,775.90 -44,489,780.00
Less: Income tax - -
V. Net profit (Net loss is listed with “-”) -106,160,775.90 -44,489,780.00
Net profit attributable to shareholders
of parent company -105,757,549.50 -45,076,994.90
Minority shareholders’ gains and losses -403,226.40 587,214.90
VI. Earnings per share - -
i. Basic earnings per share V.32 -0.2206 -0.0936
ii. Diluted earnings per share V.32 -0.2206 -0.093634
VII. Other consolidated income - -
VIII. Total consolidated income -106,160,775.90 -44,489,780.00
Total consolidated income attributable to owners of parent
company -105,757,549.50 -45,076,994.90
Total consolidated income attributable to minority
shareholders -403,226.40 587,214.90
Profit Statement of Parent Company
2009
Prepared by Shenzhen China Bicycle Company (Holdings) Limited
Unit: Yuan Currency: Renminbi
Items Notes Amount in this period Amount in last period
I. Operating income XI.4 17,485,643.49 18,798,716.14
Less: Operating cost XI.4 11,699,612.00 16,118,210.88
Business taxes and surtax - 84.83
Sales expenses 262,795.77 771,808.21
Administration expenses 21,178,901.29 32,408,627.72
Financial expenses 94,449,263.86 35,722,902.67
Losses of devaluation of asset 4,430,522.05 8,698,064.11
Add: Changing income of fair value(Loss is
listed with “-”) - -
Investment income (Loss is listed with “-”) XI.5 - -874,997.07
Including: Investment income on affiliated
company and joint venture - -
II. Operating profit (Loss is listed with “-”) -114,535,451.48 -75,795,979.35
Add: Non-operating income 12,702,225.16 27,548,141.04
Less: Non-operating expense 1,150,488.79 151,462.93
Including: Disposal loss of non-current
asset - -
III. Total Profit (Loss is listed with “-”) -102,983,715.11 -48,399,301.24
Less: Income tax - -
IV. Net profit (Net loss is listed with “-”) -102,983,715.11 -48,399,301.24
V. Earnings per share - -
i. Basic earnings per share -0.2148 -0.101035
ii. Diluted earnings per share -0.2148 -0.1010
VI. Other consolidated income - -
VII. Total consolidated income -102,983,715.11 -48,399,301.24
Consolidated Cash Flow Statement
2009
Prepared by Shenzhen China Bicycle Company (Holdings) Limited
Unit: Yuan Currency: Renminbi
Items Notes Amount in this
period
Amount in last
period
I. Cash flows arising from operating activities:
Cash received from selling commodities and
providing labor services
155,845,542.24 170,135,054.82
Net increase of customer deposit and interbank
deposit
- -
Net increase of loan from central bank - -
Net increase of capital borrowed from other
financial institution
- -
Cash received from original insurance contract
fee
- -
Net cash received from reinsurance business - -
Insured savings and net increase of investment - -
Net increase of disposal of transaction financial
asset
- -
Cash received from interest, commission charge
and commission
- -
Net increase of capital borrowed - -
Net increase of returned business capital - -
Write-back of tax received - -
Other cash received concerning operating
activities V.33.（1） 20,368,255.24 8,033,821.67
Subtotal of cash inflow arising from operating
activities 176,213,797.48 178,168,876.49
Cash paid for purchasing commodities and
receiving labor service 139,060,216.75 147,502,490.17
Net increase of customer loans and advances - -
Net increase of deposits in central bank and
interbank - -
Cash paid for original insurance contract
compensation - -
Cash paid for interest, commission charge and
commission - -
Cash paid for bonus of guarantee slip - -
Cash paid to/for staff and workers 14,641,347.69 23,596,434.77
Taxes paid 4,478,878.32 6,363,405.90
Other cash paid concerning operating activities V.33.（2） 14,112,767.75 15,098,972.90
Subtotal of cash outflow arising from operating
activities 172,293,210.51 192,561,303.74
Net cash flows arising from operating activities 3,920,586.97 -14,392,427.25
II. Cash flows arising from investing activities: - -
Cash received from recovering investment 8,000,000.00 -
Cash received from investment income - -36
Net cash received from disposal of fixed,
intangible and other long-term assets 550,000.00 10,554,667.52
Net cash received from disposal of subsidiaries
and other units - -
Other cash received concerning investing
activities - -
Subtotal of cash inflow from investing activities 8,550,000.00 10,554,667.52
Cash paid for purchasing fixed, intangible and
other long-term assets 324,761.43 114,838.00
Cash paid for investment - -
Net increase of mortgaged loans - -
Net cash received from subsidiaries and other
units - -
Other cash paid concerning investing activities - -
Subtotal of cash outflow from investing activities 324,761.43 114,838.00
Net cash flows arising from investing activities 8,225,238.57 10,439,829.52
III. Cash flows arising from financing activities - -
Cash received from absorbing investment
Including: Cash received from absorbing
minority shareholders’ investment by subsidiaries - -
Cash received from loans
Cash received from issuing bonds - -
Other cash received concerning financing
activities - -
Subtotal of cash inflow from financing activities - -
Cash paid for settling debts - -
Cash paid for dividend and profit distributing or
interest paying - -
Including: Dividend and profit of minority
shareholder paid by subsidiaries - -
Other cash paid concerning financing activities - -
Subtotal of cash outflow from financing activities - -
Net cash flows arising from financing activities - -
IV. Influence on cash due to fluctuation in exchange
rate
- -23,001.17
V. Net increase of cash and cash equivalents 12,145,825.54 -3,975,598.90
Add: Balance of cash and cash equivalents at the
period -begin
10,086,599.53 14,062,198.43
VI. Balance of cash and cash equivalents at the period
-end
22,232,425.07 10,086,599.53
Cash Flow Statement of Parent Company
2009
Prepared by Shenzhen China Bicycle Company (Holdings) Limited
Unit: Yuan Currency: Renminbi
Items Notes Amount in this
period
Amount in last
period
I. Cash flows arising from operating activities:
Cash received from selling commodities and
providing labor services
700.00 7,060,524.04
Write-back of tax received - -
Other cash received concerning operating activities 18,087,589.94 11,778,462.9937
Subtotal of cash inflow arising from operating
activities
18,088,289.94 18,838,987.03
Cash paid for purchasing commodities and receiving
labor service
- 1,438,426.75
Cash paid to/for staff and workers 1,572,561.53 2,323,782.46
Taxes paid 2,806,433.30 3,534,493.44
Other cash paid concerning operating activities 13,743,287.94 11,592,003.89
Subtotal of cash outflow arising from operating
activities
18,122,282.77 18,888,706.54
Net cash flows arising from operating activities -33,992.83 -49,719.51
II. Cash flows arising from investing activities:
Cash received from recovering investment - -
Cash received from investment income - -
Net cash received from disposal of fixed,
intangible and other long-term assets
- 115,942.92
Net cash received from disposal of subsidiaries and
other units
- -
Other cash received concerning investing activities - -
Subtotal of cash inflow from investing activities - 115,942.92
Cash paid for purchasing fixed, intangible
and other long-term assets
18,330.62 103,438.00
Cash paid for investment - -
Net cash paid for subsidiaries and other units - -
Other cash paid concerning investing activities - -
Subtotal of cash outflow from investing activities 18,330.62 103,438.00
Net cash flows arising from investing activities -18,330.62 12,504.92
III. Cash flows arising from financing activities - -
Cash received from absorbing investment - -
Cash received from loans - -
Other cash received concerning financing activities - -
Subtotal of cash inflow from financing activities - -
Cash paid for settling debts - -
Cash paid for dividend and profit distributing or
interest paying
- -
Other cash paid concerning financing activities - -
Subtotal of cash outflow from financing activities - -
Net cash flows arising from financing activities - -
IV. Influence on cash due to fluctuation in exchange rate - -23,001.17
V. Net increase of cash and cash equivalents -52,323.45 -60,215.76
Add: Balance of cash and cash equivalents at the
period -begin
417,444.51 477,660.27
VI. Balance of cash and cash equivalents at the
period–end
365,121.06 417,444.5138
Consolidated Statement on Changes of Shareholders' Equity
2009
Prepared by Shenzhen China Bicycle Company (Holdings) Limited
Unit: Yuan Currency: Renminbi
Amount in this report period
Owners’ equity attributable to the parent company
Items Paid-up
capital (Share
capital)
Capital
reserves
Less:
Treasury
Stock
Reason
able
reserve
Surplus
reserves
General
risk
provision
Retained
profit
Other
s
Minority’s
equity
Total owners’
equity
I. Balance at the end of the last
year
479,433,003.
00
410,893,564
.33 - -
32,673,227.
01 -
-2,726,059,1
75.73 - 403,226.40
-1,802,656,15
4.99
Add: Changes of accounting
policy - - - - - - - - - -
Error correction of the last period - - - - - - - - - -
Others - - - - - - - - - -
II. Balance at the beginning of
this year
479,433,003.
00
410,893,564
.33 - -
32,673,227.
01 -
-2,726,059,1
75.73 - 403,226.40
-1,802,656,15
4.99
III. Increase/ Decrease in this year
(Decrease is listed with “-”) -
47,802,411.
22 - - - -
-105,757,549
.50 - -403,226.40
-58,358,364.6
8
(I) Net profit - - - - - -
-105,757,549
.50 - -403,226.40
-106,160,775.
90
(II) Other consolidated income - - - - - - - - - -
Subtotal of (I) and (II) - - - - - -
-105,757,549
.50 - -403,226.40
-106,160,775.
90
(III) Owners’ devoted and
decreased capital -
47,802,411.
22 - - - - - - - 47,802,411.22
1. Owners’ devoted capital - - - - - - - - - -
2. Amount calculated into
owners’ equity paid in shares - - - - - - - - - -
3. Others -
47,802,411.
22 - - - - - - - 47,802,411.22
(IV) Profit distribution - - - - - - - - - -
1. Withdrawal of surplus reserves - - - - - - - - - -
2. Withdrawal of general risk
provisions - - - - - - - - - -
3. Distribution for owners
(shareholders) - - - - - - - - - -39
Consolidated Statement on Changes of Shareholders' Equity
2009
Prepared by Shenzhen China Bicycle Company (Holdings) Limited
Unit: Yuan Currency: Renminbi
Amount in this report period
Owners’ equity attributable to the parent company
Items Paid-up
capital (Share
capital)
Capital
reserves
Less:
Treasury
Stock
Reason
able
reserve
Surplus
reserves
General
risk
provision
Retained
profit
Other
s
Minority’s
equity
Total owners’
equity
4. Others - - - - - - - - - -
(V) Carrying forward internal
owners’ equity - - - - - - - - - -
1. Capital reserves conversed to
capital (share capital) - - - - - - - - - -
2. Surplus reserves conversed to
capital (share capital) - - - - - - - - - -
3. Remedying loss with surplus
reserve - - - - - - - - - -
4. Others - - - - - - - - - -
(VI) Reasonable reserve - - - - - - - - - -
1. Withdrawal in the report period - - - - - - - - - -
2. Usage in the report period - - - - - - - - - -
IV. Balance at the end of the
report period
479,433,003.
00
458,695,975
.55 - -
32,673,227.
01 -
-2,831,816,7
25.23 - -
-1,861,014,51
9.6740
Consolidated Statement on Changes of Shareholders’ Equity
2009
Prepared by Shenzhen China Bicycle Company (Holdings) Limited
Unit: Yuan Currency: Renminbi
Amout in the same period of last year
Owners’ equity attributable to the parent company
Items
Paid-up capital
(Share capital) Capital reserves
Less:
Treasur
y Stock
Reason
able
reserve
Surplus
reserves
General
risk
provisio
n
Retained profit Oth
ers
Minority’
s equity
Total owners’
equity
I. Balance at the end of the last
year 479,433,003.00 362,027,636.64 - - 32,673,227.01 - -2,658,473,327.33 - - -1,784,339,460.68
Add: Changes of accounting
policy - - - - - - - - - -
Error correction of the last period - - - - - - -22,692,842.00 - - -22,692,842.00
Others - - - - - - - - - -
II. Balance at the beginning of
this year 479,433,003.00 362,027,636.64 - - 32,673,227.01 - -2,681,166,169.33 - -
-1,807,032,302.68
III. Increase/ Decrease in this year
(Decrease is listed with “-”) - 48,865,927.69 - - - - -44,893,006.40 - 403,226.40
4,376,147.69
(I) Net profit - - - - - - -44,893,006.40 - 403,226.40 -44,489,780.00
(II) Other consolidated income - - - - - - - - - -
Subtotal of (I) and (II) - - - - - - -44,893,006.40 - 403,226.40 -44,489,780.00
(III) Owners’ devoted and
decreased capital - 48,865,927.69 - - - - - - -
48,865,927.69
1. Owners’ devoted capital - - - - - - - - - -
2. Amount calculated into
owners’ equity paid in shares - - - - - - - - -
-
3. Others - 48,865,927.69 - - - - - - - 48,865,927.69
(IV) Profit distribution - - - - - - - - - -
1. Withdrawal of surplus reserves - - - - - - - - - -
2. Withdrawal of general risk
provisions - - - - - - - - - -
3. Distribution for owners
(shareholders) - - - - - - - - - -
4. Others - - - - - - - - - -
(V) Carrying forward internal
owners’ equity - - - - - - - - - -41
Consolidated Statement on Changes of Shareholders’ Equity
2009
Prepared by Shenzhen China Bicycle Company (Holdings) Limited
Unit: Yuan Currency: Renminbi
Amout in the same period of last year
Owners’ equity attributable to the parent company
Items
Paid-up capital
(Share capital) Capital reserves
Less:
Treasur
y Stock
Reason
able
reserve
Surplus
reserves
General
risk
provisio
n
Retained profit Oth
ers
Minority’
s equity
Total owners’
equity
1. Capital reserves conversed to
capital (share capital) - - - - - - - - - -
2. Surplus reserves conversed to
capital (share capital) - - - - - - - - - -
3. Remedying loss with surplus
reserve - - - - - - - - - -
4. Others - - - - - - - - - -
(VI) Reasonable reserve - - - - - - - - - -
1. Withdrawal in the report period - - - - - - - - - -
2. Usage in the report period - - - - - - - - - -
IV. Balance at the end of the
report period 479,433,003.00 410,893,564.33 - - 32,673,227.01 - -2,726,059,175.73 - 403,226.40 -1,802,656,154.9942
Statement on Changes of Shareholders’ Equity of Parent Company
2009
Prepared by Shenzhen China Bicycle Company (Holdings) Limited
Unit: Yuan Currency: Renminbi
Amount in this report period
Items Paid-up capital
(Share capital)
Capital
reserves
Less:
Treasury
Stock
Reasonable
reserve
Surplus
reserves
General
risk
provision
Retained profit Total owners’
equity
I. Balance at the end of the last year 479,433,003.00 410,893,564.33 - - 32,673,227.01 - -2,661,268,533.01 -1,738,268,738.67
Add: Changes of accounting policy - - - - -
Error correction of the last period - - - - -
Others - - - - -
II. Balance at the beginning of this
year 479,433,003.00 410,893,564.33 - - 32,673,227.01 - -2,661,268,533.01
-1,738,268,738.67
III. Increase/ Decrease in this year
(Decrease is listed with “-”) - 47,802,411.22 - - - - -102,983,715.11
-55,181,303.89
(I) Net profit - - - - -102,983,715.11 -102,983,715.11
(II) Other consolidated income - - - -
Subtotal of (I) and (II) - - - - - - -102,983,715.11 -102,983,715.11
(III) Owners’ devoted and
decreased capital - 47,802,411.22 - - - - - 47,802,411.22
1. Owners’ devoted capital - - - -
2. Amount calculated into owners’
equity paid in shares - - - -
3. Others - 47,802,411.22 - - 47,802,411.22
(IV) Profit distribution - - - - - - - -
1. Withdrawal of surplus reserves - - - - -
2. Withdrawal of general risk
provisions - - - - -
3. Distribution for owners
(shareholders) - - - - -
4. Others - - - - -
(V) Carrying forward internal
owners’ equity - - - - - - - -
1. Capital reserves conversed to
capital (share capital) - - - - -
2. Surplus reserves conversed to
capital (share capital) - - - - -43
Statement on Changes of Shareholders’ Equity of Parent Company
2009
Prepared by Shenzhen China Bicycle Company (Holdings) Limited
Unit: Yuan Currency: Renminbi
Amount in this report period
Items Paid-up capital
(Share capital)
Capital
reserves
Less:
Treasury
Stock
Reasonable
reserve
Surplus
reserves
General
risk
provision
Retained profit Total owners’
equity
3. Remedying loss with profit
surplus - - - - -
4. Others - - - - -
(VI) Reasonable reserve - - - - - - - -
1. Withdrawal in the report period - - - - -
2. Usage in the report period - - - - -
IV. Balance at the end of the report
period 479,433,003.00 458,695,975.55 - - 32,673,227.01 - -2,764,252,248.12 -1,793,450,042.560
Statement on Changes of Shareholders’ Equity of Parent Company
2009
Prepared by Shenzhen China Bicycle Company (Holdings) Limited
Unit: Yuan Currency: Renminbi
Amount in the same period of last year
Items Paid-up
capital (Share
capital)
Capital
reserves
Less: Treasury
Stock
Reasonable
reserve
Surplus
reserves
General
risk
provision
Retained profit Total owners’
equity
I. Balance at the end of the last year 479,433,003.00 362,027,636.64 - - 32,673,227.01 - -2,590,176,389.77 -1,716,042,523.12
Add: Changes of accounting policy - - - - - - -
Error correction of the last period - - - - - -22,692,842.00 -22,692,842.00
Others - - - -
II. Balance at the beginning of this
year 479,433,003.00 362,027,636.64 - - 32,673,227.01 - -2,612,869,231.77 -1,738,735,365.12
III. Increase/ Decrease in this year
(Decrease is listed with “-”) - 48,865,927.69 - - - - -48,399,301.24 466,626.45
(I) Net profit - - - - - - -48,399,301.24 -48,399,301.24
(II) Other consolidated income - - - - - - - -
Subtotal of (I) and (II) - - - - - - -48,399,301.24 -48,399,301.24
(III) Owners’ devoted and
decreased capital - 48,865,927.69 - - - - - 48,865,927.69
1. Owners’ devoted capital - - - - - - - -
2. Amount calculated into owners’
equity paid in shares - - - - - - - -
3. Others - 48,865,927.69 - - - - - 48,865,927.69
(IV) Profit distribution - - - - - - - -
1. Withdrawal of surplus reserves - - - - - - - -
2. Withdrawal of general risk
provisions - - - - - - - -
3. Distribution for owners
(shareholders) - - - - - - - -
4. Others - - - - - - - -
(V) Carrying forward internal
owners’ equity - - - - - - - -
1. Capital reserves conversed to - - - - - - - -1
Statement on Changes of Shareholders’ Equity of Parent Company
2009
Prepared by Shenzhen China Bicycle Company (Holdings) Limited
Unit: Yuan Currency: Renminbi
Amount in the same period of last year
Items Paid-up
capital (Share
capital)
Capital
reserves
Less: Treasury
Stock
Reasonable
reserve
Surplus
reserves
General
risk
provision
Retained profit Total owners’
equity
capital (share capital)
2. Surplus reserves conversed to
capital (share capital) - - - - - - - -
3. Remedying loss with profit
surplus - - - - - - - -
4. Others - - - - - - - -
(VI) Reasonable reserve - - - - - - - -
1. Withdrawal in the report period - - - - - - - -
2. Usage in the report period - - - - - - - -
IV. Balance at the end of the report
period 479,433,003.00 410,893,564.33 - - 32,673,227.01 - -2,661,268,533.01 -1,738,268,738.672
Shenzhen China Bicycle Company (Holdings) Limited
Notes to Financial Statement
FY2009
I. Company Profile
1. Company History
According to the Approval Document SFBF (1991) No. 888 issued by the People’s Government of
Shenzhen, Shenzhen China Bicycle Company (Holdings) Limited (hereinafter referred to as the
Company) was reincorporated as the company limited by shares in November 1991. On 28
December 1991, upon the Approval Document SRYFZ(1991) No. 119 issued by Shenzhen Special
Economic Zone Branch of the People’s Bank of China, the Company got listed on Shenzhen Stock
Exchange. The Company reserves the business license for the enterprise legal person (QGYSZFZ
No.101165) [the registered number has been altered as 440301501122085] with the registered
capital of RMB479, 433, 003.00.
2. Business Scope and Operation
The Company belongs to the machinery manufacture industry and mainly engages in the production
and assembly of various bicycles and spare parts, components, parts, mechanical product, sport
machinery, fine chemicals, carbon fiber composites material, household electrical appliance and
affiliated components, etc..
The Company is specialized in making the middle-top rank bicycles, the main brands are
EMMELLE and CHIMO, and various electrical bicycles.
The majority of its products were previously exported, however, the sales volume sharply declined
in recent years because of the antidumping litigation. Hence, the Company commences on the debt
reorganization and makes greater efforts to develop and research the new products, and creates a
range of electrical bicycles to occupy the domestic market.
3. Approval Issuer and Date for Financial Statement
The financial statement was deliberated and approved in the 21st meeting of the 7th Board Meeting
held on 25 April 2010.3
II. Main Accounting Policy, Accounting Estimate and Errors
1. Compilation Basis of Financial Statement
The financial statement has been prepared on the basis of going-concern assumption and in
compliance with the occurred transactions and items, as well as the Enterprise Accounting
Standards — Basic Standards and other accounting standards to conduct the confirmation and
measurement.
2. Announcement for Following the Enterprise Accounting Standards
The financial statement complied by the Company pursuant to the foresaid compilation basis truly
and fully reflects such related information as financial status as of 31 December 2009, operation
achievement and cash flows of the Company for 2009.
3. Accounting Period
The company adopts Gregorian calendar, namely each 1 January to 31 December should be one
fiscal year.
4. Standard Accounting Currency
The Company adopts Renminbi as the standard accounting currency.
5. Accounting Treatment Method for Business Combinations under the Same Control and not
under the Same Control
A. The business combination under the same control: The assets and liabilities that the combining
party obtains in a business combination shall be measured on the basis of their carrying amount in
the combined party on the combining date. As for the balance between the carrying amount of the
net assets obtained by the combining party and the carrying amount of the consideration paid by it
(or the total par value of the shares issued), the additional paid-in capital shall be adjusted. If the
additional paid-in capital is not sufficient to be offset, the retained earnings shall be adjusted. The
direct cost for the business combination of the combining party shall, including the expenses for
audit, assessment and legal services, be recorded into the profits and losses at the current period.
Where a relationship between a parent company and a subsidiary company is formed due to a4
business combination, the parent company shall, on the combining date, prepare a consolidated
balance sheet, a profit statement and a cash flow statement. In the consolidated balance sheet, the
assets and liabilities of the combined party shall be measured pursuant to their carrying amount. If
it is necessary to make an adjustment according to the present Standard because the accounting
policy adopted by the combined party is different from that adopted by the combining party, the
assets and liabilities of the combined party (parties) shall be measured on the basis of the
post-adjustment carrying amount. The consolidated profit statement shall include the incomes,
expenses and profits of the combining party incurred from the beginning of the current period to
the combining date. The net profits of the combined party which has been realized prior to the
combination shall be reflected through an item separately presented in the profit statement. The
consolidated cash flow statement shall include the cash flow of the parties to the combination from
the beginning of the current period to the combining date.
B. Business Combination Not under the Same Control: The combination costs shall be the fair values,
on the acquisition date, of the assets paid, the liabilities incurred or assumed and the equity
securities issued by the acquirer in exchange for the control on the acquiree, as well as all relevant
direct costs incurred to the acquirer for the business combination shall also be recorded into the cost
of business combination. The acquirer shall, on the acquisition date, measure the assets given and
liabilities incurred or assumed by an enterprise for a business combination in light of their fair
values, and shall record the balances between them and their carrying amounts into the profits and
losses at the current period. The acquirer shall recognize the positive balance between the
combination costs and the fair value of the identifiable net assets it obtains from the acquiree as
business reputation. The acquirer shall reexamine the measurement of the fair values of the
identifiable assets, liabilities and contingent liabilities it obtains from the acquiree as well as the
combination costs, If, after the reexamination, the combination costs are still less than the fair value
of the identifiable net assets it obtains from the acquiree, it shall record the balance into the profits
and losses of the current period. Where a relationship between a parent company and a subsidiary
company is formed due to a business combination, the parent company shall prepare a combined
balance sheet on the acquisition date, which shall present the identifiable assets, liabilities and
contingent liabilities acquired in the combination at their fair values.5
6. Compilation Party of Consolidated Financial Statements
A. The scope for the consolidated financial statements shall be confirmed based on the principle of
control. The consolidated financial statements shall be compiled based on the financial
statements of the Company and all related subsidiaries incorporated into the scope of
consolidated financial statements. The long-term equity investment to the subsidiary shall be
adjusted according to the equity method, and then all related investments and transaction
between the Company and related subsidiaries in the scope of the consolidated financial
statement are offset, besides, the minority interest income and rights are consolidated.
B. In case of any inconsistency of the accounting policy between the subsidiary and the head office,
the accounting policy adopted by the head office shall prevail.
C. The consolidation for the subsidiary acquiring from the enterprise acquisition under the same
control shall be deemed that such consolidation has been occurred at the early stage of the
current period, which assets, liabilities, operation achievement and cash flow shall be
incorporated into the consolidated financial statement.
D. As for the consolidation under the same control, the net profits and loss suffered by the
reorganized party shall be recorded as the on-recurring profit and loss and independently
itemized in the financial statements.
E. As for the reorganization of non-enterprise consolidation under the same controller, the reference
profit statement shall be compiled from the beginning of the consolidation period in case that
total assets at the end of previous fiscal year, or the operating income or the total profit of the
reorganized party for the previous fiscal year reaches or exceeds 20% of the reorganizing party
before the reorganization.
1. F. As for the subsidiary acquiring from the enterprise acquisition not under the same control, it
requires adjusting some financial statements based on the fair value of the identified net assets
on the acquisition day when compiling the consolidated financial statements.
7. Confirmation Standard for Cash and Cash Equivalent
Cash refers to cash on hand and deposits that are available for payment at any time.6
Cash equivalent refers to short-term and highly liquid investments that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of change in value.
8. Foreign Currency Transactions and Foreign Currency Statement Translation
A. Foreign currency transactions
The occurred foreign currency transactions should be converted into Renminbi with taking spot
exchange rate at the transaction date as the exchange rate. The approximate spot exchange rate
refers to the exchange rate at the beginning of current month.
The Company shall, on the balance sheet date, treat the foreign currency monetary items and
foreign currency non-monetary items in accordance with the following provisions:
a. The foreign currency monetary items shall be translated at the spot exchange rate on the balance
sheet date. The balance of exchange arising from the difference between the spot exchange rate on
the balance sheet date and the spot exchange rate at the time of initial recognition or prior to the
balance sheet date shall be recorded into the profits and losses at the current period.
b. The foreign currency non-monetary items measured at the historical cost shall still be translated
at the spot exchange rate on the transaction date, of which the amount of functional currency shall
not be changed.
The foreign currency non-monetary items measured at the fair value shall be translated at the spot
exchange rate on the day for the confirmation of the fair value, the balance between the Renminbi
and the original standards currency shall be recorded into the profits and losses at the current period
as the changes of the fair value.
B. Translation of foreign currency financial statements
When translating the financial statements on the overseas businesses, the Company shall comply
with the following provisions:
a. The asset and liability items in the balance sheets shall be translated at a spot exchange rate on
the balance sheet date. Among the owner's equity items, except the ones as "undistributed profits",
others shall be translated at the spot exchange rate at the time when they are incurred.
b. The income and expense items in the profit statements shall be translated at the spot exchange
rate of the transaction date, or at a spot exchange rate which is determined through a systematic and7
reasonable method and is approximate to the spot exchange rate of the transaction date.
The balance arisen from the translation of foreign currency financial statements in compliance with
the aforesaid Items (a) and (b) shall be presented separately under the owner's equity item of the
balance sheets.
9. Financial Instruments
A. Classification of the financial instruments
The financial assets covers the financial assets measured at the fair value and its changes was
recorded into the profits and losses at the current period (including the tradable financial assets and
its changes recording into the profits and losses at the current period), held-to-maturity investment,
loan and account receivables, saleable financial assets.
A. Measurement of Financial Instruments
a. The financial assets shall be measured at the fair value at the time of initially reorganization. The
relevant expenses for the financial assets measured at the fair value and its changes recording into
the profits and losses at the current period shall be directly recorded into the profits and losses at the
current period; and the relevant expenses for other financial assets shall be recorded into the
initially confirmed amount.
b. The enterprise made subsequent measurement on its financial assets according to their fair
values, and may not deduct the transaction expenses that may occur when it disposes of the said
financial asset in the future. However, those under the following circumstances shall be excluded:
1) The investments held until their maturity, loans and accounts receivable shall be measured on the
basis of the post-amortization costs by adopting the actual interest rate method;
The equity instrument investments for which there is no quotation in the active market and whose
fair value cannot be measured reliably, and the derivative financial assets which are connected with
the said equity instrument and must be settled by delivering the said equity instrument shall be
measured on the basis of their costs.
C. Confirmation of financial assets’ fair value
a. As for the financial assets for which there is an active market, the quoted prices in the active
market shall be used to determine the fair values thereof;8
b. Where there is no active market for financial assets, the Company adopts value appraisal
techniques to determine its fair value. The result obtained by adopting value appraisal techniques
shall be able to reflect the transaction prices that may be adopted in fair dealings on the value
appraisal day.
D. Transfer of financial assets
If the Company has transferred all or part of the risks and rewards related to the ownership of the
financial asset to the transferee, these financial assets shall be stopped recognizing, where if it
retained nearly all of the risks and rewards related to the ownership of the financial asset, it shall not
stop recognizing these financial assets.
E. Impairment of financial assets
The Company carries out an inspection, on the balance sheet day, on the carrying amount of the
financial assets other than those measured at their fair values and of which the variation is recorded
into the profits and losses of the current period. Where there is any objective evidence proving that
such financial asset has been impaired, an impairment provision shall be made. The objective
evidences that can prove the impairment of a financial asset shall include:
a. A serious financial difficulty occurs to the issuer or debtor;
b. The debtor breaches any of the contractual stipulations, for example, fails to pay or delays the
payment of interests or the principal, etc.;
c. The Company makes any concession to the debtor which is in financial difficulties due to
economic or legal factors, etc.;
d. The debtor will probably become bankrupt or carry out other financial reorganizations;
e. The financial asset can no longer continue to be traded in the active market due to serious
financial difficulties of the issuer;
f. It is impossible to identify whether the cash flow of a certain asset within a certain combination of
financial assets has decreased or not. But after making an overall appraisal according to the public
data available, it is found that the predicted future cash flow of the said combination of financial
assets has indeed decreased since it was initially recognized and such decrease can be measured, ;
g. Any seriously disadvantageous change has occurred to technical, market, economic or legal
environment, etc. wherein the debtor operates its business, which makes the investor of an equity9
instrument unable to take back its investment;
h. Where the fair value of the equity instrument investment drops significantly or not
contemporarily; and
i. Other objective evidences showing the impairment of the financial asset.
F. Measurement of impairment of financial assets
a. The impairment test is not required for the financial assets measured at the fair value and its
changes recording into the profits and losses of current period;
b. Measurement of the impairment of held-to-maturity investment: the impairment provision shall
be made according to the balance that the future cash flow shall be lower than the ending book
value;
c. Confirmation standards and provisions for bad debt of accounts receivables: An impairment
test shall be made on the financial assets with significant single amounts. If any objective evidence
shows that the accounts receivable has been impaired, the impairment-related losses shall be
recognized to prepare the provisions for bad debts according to the balance between the future
present value and the book value. With regard to the financial assets with insignificant single
amounts, if any objective evidence shows that the accounts receivable suffers no impairment, the
account age analysis method shall be adopted, and withdraw and confirm the impairment loss
according to the account age and specified ratio; With regard to the financial assets with
insignificant single amounts, an independent impairment test may be carried out, or they may be
included in a combination of financial assets with similar credit risk features so as to carry out an
impairment-related test. As for the account receivable without any impairment, after the
independent impairment test, the impairment loss shall be made according to the account age and
the ratio as stipulated.
d. Judgment of impairment of saleable financial assets: Provided that the fair value of saleable
financial asset has great depreciation, or takes into any related factors account, it shows that such
depreciation is permanent, it shall be recognized the impairment.
10. Account Receivable
A. Confirmation and Method for Provisions for Bad Debts of Single Significant Amount10
Confirmation of single significant
account receivable
Single significant account receivable refers to the amount
paid by the client with an amount of RMB5,000,000
beyond
Single significant other account receivables refer to the
other account receivables with an amount of
RMB5,000,000 beyond
A. Provisions method for bad debts of
single significant amount
An impairment test shall be made on the financial assets
with significant single amounts. If any objective
evidence shows that the accounts receivable has been
impaired, the impairment-related losses shall be
recognized to prepare the provisions for bad debts
according to the balance between the future present value
and the book value.
B. Confirmation basis and provision method for single insignificant amount that is of great risk
after combined according to the credit risk features
Confirmation basis of credit risks
feature combination
The single insignificant account receivable with great risk
after combined based on the credit risk features refers to the
account receivables of which the single amount is with an
amount of less than RMB5,000,000 and the account age is
less than 3 years
The single insignificant account receivable with great risk
after combined based on the credit risk features refers to the
account receivables of which the single amount is with an
amount of less than RMB5,000,000 and the account age is
less than 3 years
Provision method confirmed based on the credit risk: As for the single insignificant account
receivable and the single significant account receivable that has been proved to be impaired after
the test, the provisions for bad debt shall be made according to the account age analysis method.11
C. Account age analysis method
Account Age Ratio for Account
Receivable
Ratio for other account
receivables
Below one year (including one year) 0.3% 0.3%
1 – 2 years 0.3% 0.3%
2 – 3 years 0.3% 0.3%
Above 3 years 100% 100%
Interpretation for
provisions for bad debts
The Company made the impairment test for the account receivables on
the balance sheet date and withdrawn the provisions for bad debts. The
impairment test has been made on the financial assets with significant
single amounts. If any objective evidence shows that the accounts
receivable has been impaired, the impairment-related losses shall be
recognized to prepare the provisions for bad debts according to the
balance between the future present value and the book value. With
regard to the single insignificant account receivable and the single
significant account receivable that has been proved to be impaired after
the test, the provisions for bad debt has been made according to the
account age analysis method, namely making the provisions for bad debt
according to the account age of the account receivables and the
stipulated ratio.
11. Inventory
A. Classification of inventory
The inventory of the Company refers to such seven classifications as the raw materials, product in
process, goods on hand, wrappage, low value consumables, materials for consigned processing and
goods sold.
B. Valuing of the delivered inventory12
The Company adopts the historical cost for obtaining or the planned cost to value the inventory
according to its actual situation, and weighted average method for the issued inventory.
C. Confirmation of net realizable value for the inventory and provision for inventory impairment
The net realizable value for the inventory refers to, in the course of general operation, the estimated
amount with deducting the estimated cost, estimated sales expense and related taxes from the
estimated sales price.
Provision for inventory impairment: Based on making an overall check of the inventory at the
middle and end of the year, the Company measures the whole or partial out-of-dated inventory or
the inventory with extremely lower price according to the cost or the net realizable value, whichever
is lower; and withdraws the impairment provisions for the single inventory according to the balance
between the net realizable value and the cost and recorded into the profits and losses of current
period. In addition to the holding purpose and the price and cost fluctuation as of the balance sheet
date, the Company shall take into the future event account when confirming the net realizable value.
D. Rake inventory
In addition to the periodic inventory system for the products, the Company adopts the perpetual
inventory system for other inventories.
E. Amortization method for the low-value consumables and wrappage
Low-value consumables
The Company adopts one-off amortization method to amortize the low-value consumables
F. Wrappage
The Company adopts one-off amortization method to amortize the wrappage at the time of receipt.
12. Long-term equity investment
(1)Determination of initial investment cost
a.Merger of the units controlled by the same entity is effected through payment in cash, non-cash
asset transfer or debt transfer. On the date of the merger, the book value of the equities of the units13
merged is made the initial investment costs of the long-term equipty investment. The capital surplus
is adjusted on the basis of the difference between the initial costs of long-term equity investment,
payment in cash, non-cash assets transferred and the debts. In case the capital surplus is not enough
for deducting, the retained earnings will be adjusted.
In case the units being merged through issuing equity securities, the book value of equity of units
being merged is made the initial costs of long-term equity investment on the date of merger. The
total face value of the securities issued is regarded as equity capital. The capital surplus is adjusted
on the basis of the difference between the initial costs of long-term equity investment and the facel
value of the securities issued. In case the capital surplus is not enough for deducting, the retained
earnings will be adjusted.
b. In case of merger that is not effected under the same controlling entity, the merger costs
determined by the following regulations is made the initial investment costs:
1/ In case the merger is effected through one-time swap, the merger cost is the the assets, debts or
equity securities paid by the purchaser on the date of merger.
2/ In case of a merger effected through a series of transactions, the merger cost is the total of all the
separate transactions.
3/ The related costs incurred by the purchaser for the merger is all charged to the enterprise merger
costs.
4/ In case the merger contract or agreement have any regulation that may influence the cost of
merger in the future, or it is predicted on the purchasing date that the merger costs will definitely be
influenced in the future, the influence is charged to the merger costs.
B.Beside the long-term equity investment produced by merger, the long-term equity investment
produced through other means shall be determined of its initial costs according to the following
regulations:
a.The initial investment costs of the long-term equity investment produced through payment in cash
is determined on the basis of the actual payment for the purchase. The initial investment cost
includes the immediately related expenses, taxe or other costs necessary for the long-term equity
investment.
b.In case of long-term equity investment produced through issuing equity securities, the fair value14
of the equity securities is initial investment cost.
c.In case of input as long-term equity investment by investors, the value agreed upon in the
investment contract or agreement is the initial investment cost; but, except the case that the value is
not fair in the contract or agreement.
d.In case of long-term equity investment produced through commercially-natured non-monetary
assets transactions, the fair value of the incoming long-term equipty investment and the related
taxes is the initial investment cost. In case of long-term equity investment produced through
non-commercially-natured non-monetary assets transactions, the book value of the outgoing assets
and the related taxes is the initial investment cost.
e. In case of long-term equity investment produced through debt restructuring, the initial investment
cost is its fair value and the payable taxes.
(2)Subsequent reckoning as well as profits and loss determination method
A.Costing method is applied for the long-term equity investment in case the company has a control
over the invested unit, or, the company cann’t co-control or has no material influence on the unit
and there is no quotation on the market or the fair value is reliable.
The long-term equipty investment accounted by cost method is priced on the basis of the initial
investment cost. When adding or withdrawing the investment, the cost of the long-term equity
investment is adjusted.
B.Equity method is applied for the case the company can co-control or has material influence on the
invested unit.
In case the initial investment cost of the long-term equity investment is greater than fair value of the
net descinible assets that should be enjoyed from the invested unit at the time of investment, the
initial investment cost of the long-term equipty investment is not to be adjusted. In case the initial
investment cost of the long-term equity investment is less than fair value of the net descinible assets
that should be enjoyed from the invested unit at the time of investment, the difference should be
charged to the profits or loss of the term, and at the same time, the cost of long-term equity
investment should be adjusted.15
After the company obtains a long-term equity investment, the investment profits or losses shall be
determined, and the book value of the lont-term equity investment shall be adjusted, according to
the sharable net profits or losses created at the invested unit. The book value of the long-term equity
investment shall be reduced according to the sharable profits or cash interests published by the
invested unit. In case the net losses of the invested unit is confirmed by the company, the book
value of the long-term equity investment and other long-term interests of the invested company can
be reduced not beyond the limit of 0, except the case where the company undertakes additional
responsibilities for loos. In case the invested unit reaps profits thereafter,
When determining the entitled share of the net profits or loss of the invested unit, the net profits or
loss of the invested unit is adjusted on the basis of the fair discernible value of various assets of the
invested unit. If the accounting policies and term of the invested unit is not the same as those of the
investing unit, those of the investing units prevail, on the basis of which, the financial statements of
the invested unit are adjusted and the investment profts or losses are determined.
C.For the long-term equity investment, the difference between the book value and actually obtained
payment shall be charged to the profits and loss of the term.
(3)The basis for the co-control over and material imfluence on the invested unit
Co-control refers to a contract-based joint control over a certain ecomomic activity, which is valid
only when unanimously agreed upon by the investors with control right to the important financial
and operation decisions for the activity.
Material influence refers to having right to take part in, but cannot control or co-control, the
financial or operation decision making processes in an enterprise.
(4)Depreciation test method and depreciation allowance
The long-term equity investment shall be checked on the date of the balance sheet to determine if
the long-term equity investment has suffered any depreciation. If there is sign of depreciation for
worsening operation of the company, then estimates shall be made of the recoverable amount. If the
estimate indicates that the recoverable amount for the long-term equity investment is lower than the
book value, then the book value is reduced to the recoverable amount, where the reduction amount16
is charged to asset depreciation loss, the profits or losses of the term, and the corresponding
long-term investment depreciation allowance. Once the long-term investment depreciation loss is
determined, it will not be transferred back in the subsequent period of time.
13.Investment-natured real property
The company’s investment-natured real property refer to the real properties for the purpose of rental
or value increase or both; they mainly include:
A.leased land use right;
B.the land use right held and ready to be transferred after appreciation；
C.leased buildings;
Cost method is applied for the company’s investment-natured real property
The costs of the investment-natured real property is subject to the deduction of the accumulative
depreciation and net scrap value on the basis of straight line method and the estimated life of use,
which is charged to the profits and loss of the term.
In evaluation of the investment-natured real property and recoverable amount on the date of balance
sheet, if the recoverable maount is lower than the cost, the difference therebetween is accrued as
depreciation allowance.
14.Fixed assets
A.Fixed assets confirmation conditions
Fixed assets refer to the tangible assets for production of products, provision of labor, lease or
operation, and with a service life in excess of 1 finanical year. The fixed assets shall be evaluated
initially at the actual costs. Fixed assets’ related financial benefits shall flow into the enterprise and
their value can be measured.
B.Depreciation methods for various fixed assets
Categories years of
depreciation(years)
scrap value rate(%) yearly depreciation
rate(%)
housing buildings 20 years 10 4.5
machines and 10 years 10 9%17
equipment
Office equipment 5 years 10 18%
Electronic equipment 5 years 10 18%
Transportation
equipment
5 years 10 18%
Other equipment 5 years 10 18%
C.Depreciation test method and depreciation allowance method for fixed assets
It is necessary to judge if the fixed assets have had any depreciation on the date of the balance sheet.
If their market value goes down steadily, or technologically old or damaged, or laying idle for long
time, the recoverable amount of the fixed assets shall be estimated. If the recoverable amount is
lower thant their book value, then the book value of the fixed assets shall be reduced to the
recoverable amount. The reduction shall be charged to asset depreciation allowance and the loss and
profits of the term. When the depreciation of the fixed assets is confirmed, it will not be transferred
back in the subsequent time.
D. Determination and evaluation method for fixed assets financed by leasing
If all the risks and remunerations related to a certain fixed asset financed by leasing have been
materially transferred, the company will regard it as a case of fixed asset financed by leasing. For
the assets financed by leasing, the book value of the assets financed by leasing shall be the fair
value of the assets on the date of leasing or the lowest price for leasing, whichever is lower, plus the
initial costs of the leasing project. The lowest leasing fees is the book value of the long-term
accounts payable, their difference is being regarded as fiancing costs. The unconfirmed financing
costs are amortized in the leasing term with the actual interest rate method. The depreciation and
depreciation rate shall be determined on the basis of the leasing term and the estimated scrap value.
15. Project under Construction
A. Calculation Method of Project under Construction
The project under construction includes the preparation before execution, construction engineering,18
installation work, technical modification work and big repair work during the execution, etc. It can
be calculated upon the sub-project according to the expenditure actually incurred and transferred
into the fixed asset when the project reaches the scheduled usable status. The borrowing cost
(including loan interest, amortization of premium and exchange loss or gain, etc) relevant with the
project under construction can be counted into the cost of the engineering before the relevant
engineering reaches the scheduled usable status; while it can be counted into the financial expense
of the current period after the relevant engineering reaches the scheduled usable status.
B. Depreciation Reserves of Project under Construction
The project under construction shall be fully inspected on the date of Balance Sheet to judge
whether there is depreciation probably incurring on it. If so, (1) the project under construction shall
be stopped for a long time and shall not be re-started within three years upon prediction; (2) If the
project under construction is out of date in its performance and technology, and the economic
benefit has great uncertainty, it can recover its amount upon estimation. According to the calculation
result of recoverable amount, if the recoverable amount of the project under construction is lower
than the carrying value, then the carrying value of the project under construction shall be decreased
to the recoverable amount. The decreased amount is defined as the loss on asset depreciation and
counted into the loss or gain of the current period. Meanwhile, corresponding depreciation reserves
for the project under construction shall be accrued. The depreciation loss of the project under
construction shall not be transferred back during the future accounting year once its confirmation.
16. Borrowing Costs
A. The borrowing costs incurred, which can directly belong to the purchase and production of assets
in accordance with the capitalization can be capitalized and counted into relevant capital cost; and
the other borrowing costs can be counted into the loss or gain of the current period according to the
incurred amount. And the borrowing costs can be capitalized if meeting the following conditions:
a. The asset expenditure has been incurred, which includes the paid cash used to purchase or
produce the assets in accordance with the capitalization conditions, and the expenditure incurred
during transferring the non-cash assets or bearing the debt with interest;
b. The borrowing costs has been incurred;19
c. The purchase or production activities have been started, which are necessary to make the
assets reach the scheduled usable or vendible status.
B. The borrowing costs stop the capitalization when the purchased or produced assets in accordance
with the capitalization reach the scheduled usable or vendible status. And the borrowing costs
incurred after the assets in accordance with the capitalization conditions reach the scheduled usable
or vendible status, are confirmed to be the expenditures according to the incurred amount and
counted into the loss or gain of the current period.
17. Intangible Assets
A. The intangible assets refer to the identifiable and non-currency assets without physical form
owned or controlled by the enterprise, including the patents and land tenure, etc.
B. The intangible assets are valuated according to the actual costs during the acquirement.
C. The intangible assets, of which the service life has been defined, can be amortized with
straight-line method during the period since the usable time, and counted into the loss or gain of the
current period; the intangible assets, of which the service life has been not defined, are not
amortized. The company shall check the service life and amortization method of the intangible
assets at the end of the year. If the service life and amortization are not the same as before, then they
shall be changed.
D. Depreciation Reserves of Intangible Assets
At the end of the period, check each kind of intangible assets, which can be predicted to bring the
future economic benefits to the company, one of the following circumstances shall exist: (1) A
certain intangible asset has been replaced by other new technology, which makes the ability to
create the economic benefits for the company greatly influenced; (2) The market price of a certain
intangible asset greatly decreases at the current period and shall not restore within the residual
amortization period upon prediction; (3) A certain intangible asset has surpassed the limit of legal
protection, but it remains part of use value. It can recover the amount upon estimation. According to
the calculation result of recoverable amount, if the recoverable amount is lower than the carrying
value, then the carrying value of intangible asset shall be decreased to the recoverable amount. The
decreased amount is defined as the loss on asset depreciation and counted into the loss or gain of the20
current period. Meanwhile, corresponding depreciation reserves shall be accrued; (4) For a certain
intangible asset, which has incurred the depreciation reserves upon enough evidence, and if the
recoverable amount is lower than the carrying value upon estimation, the balance between them
shall be accrued for depreciation reserves of intangible assets. The depreciation loss of intangible
assets shall not be transferred back during the future accounting year once its confirmation.
18. Long-term Deferred Expenses
A. Long-term deferred expenses refer to the various expenses with the allocated time limit for the
current period and future each period over one year.
B. Long-term deferred expenses are valuated according to the actual cost during the acquirement.
The promotion expense is counted into the loss or gain of the current period when the incurrence;
the decoration expense of the operating leased fixed assets is amortized on average during the lease
period; and other long-term deferred expenses are amortized on average during the profitable
period. For the long-term deferred expenses which cannot bring predicated economic benefits
during the accounting period, the company shall transfer the all amortized values without
amortization into the loss or gain of the current period.
19. Estimated Liabilities
A. The duty or the duty relevant with the matter shall be confirmed as the estimated liability,
complying with the following conditions: the duty is the current duty assumed by the company; the
performance of the duty may cause the economic benefit flows out of the enterprise; the amount of
the duty can be reliably counted;
B. For all or part expenditures required for the payment of the estimated liabilities, which are
expected to be compensated by the third party, and when the compensation amount can be received
only once it is basically defined, then the asset can be singly confirmed. Meanwhile, the
compensation amount confirmed for the asset through the single calculation shall not surpass the
corresponding carrying amount.21
20. Revenue
A. Revenue of commodity sales
The enterprise has transferred the main risk and remuneration on the ownership of the commodities
to the buyer; the enterprise doesn’t reserve the continuous management right in connection with the
ownership and executes effective control on the sold commodities. The revenue amount can be
reliably counted; relevant economic interest may flow out of the enterprise; and the relevant
incurred cost or cost to be incurred can be reliably counted.
B. Revenue from labor service
For the labor service which starts and ends within the same accounting year, the revenue shall be
confirmed when it ends; if the labor service which starts and ends not in the same accounting year,
the relevant revenue shall be confirmed according to the percentage of the completion under the
condition that the result to provide labor trade can be reliably estimated.
C. Revenue from abalienating the right to use assets
The revenue from abalienating the right to use assets includes interest revenue and operating cost
revenue. The former is calculated and defined according to the time when others use the monetary
fund of the company and the actual interest rate; while the latter is calculated and defined according
to the charging time and method negotiated according to the relevant contract or agreement.
21. Government Grants
Government grants include financial allocation, financial discount, tax rebate and free
assignment of non-currency assets. The government grants received by the company and relevant
with the assets are confirmed as the deferred income, which is counted into the loss or gain of each
period within the service life of the asset since it reaches the scheduled usable stats. And the
deferred income balance shall be transferred into the loss or gain of asset disposal of the current
period if it is sold, transferred, rejected or destroyed before the service life ends. The government
grants received relevant with the income and used to compensate the relevant cost or loss
afterwards are confirmed as the deferred income, which shall be counted into the loss or gain of the
current period when confirming the relevant costs; and those used to compensate the incurred
relevant cost or loss shall be directly counted into the loss or gain of the current period.22
22. Deferred tax assets / deferred income tax liabilities
A.The confirmation of deferred income tax assets
a.Our company is likely to take the deductible temporary differences taxable income used to be
deducted as the limit, confirming the deferred tax asset is produced by the deductible temporary
differences. However, when the transactions possess the following characteristics at the same time,
the deferred tax asset produced due to the initial confirmation of assets or liabilities are not
confirmed:
1/ the transaction is not a corporate combination;
2/ Transactions affect neither the accounting profit nor taxable income (or deductible loss).
b.Our company , subsidiaries , affiliated companies and joint venture companies invest the related
deductible temporary differences, while meeting the following conditions, confirming the
corresponding deferred income tax assets:
1/ the temporary differences in the foreseeable future is likely to be reversed;
2/ the taxable income used for deductible temporary differences is likely to be gained in the future.
c.Our company offsets the deductible losses and tax credits which can be carried forward for future
years, taking the future taxable income which can be used to deduct the deductible losses and tax
credits as the limit, and confirming the corresponding deferred income tax assets.
B.The confirmation of deferred income tax liabilities
Besides the following deferred income tax liabilities, our company confirms all deferred income tax
liabilities produced by the taxable temporary differences:
a.The initial confirmation of creditworthiness;
b.The assets or liabilities which meets the following characteristics of the transactions generated is
confirmed:
1/ the transaction is not a corporate combination;
2/ Transactions affect neither the accounting profit nor taxable income (or deductible loss).
c.Our company , subsidiaries , affiliated companies and joint venture companies invest the related
deductible temporary differences, while meeting the following conditions:
1/ Investment companies can control the timing of the reversal of temporary differences;23
2/ the temporary differences is unlikely to be reversed in the foreseeable future.
23.Operating lease, Financing lease
A.The identification standard of finance lease
When the lease period is expired, the leased assets ownership is transferred to the lessee. It usually
refers that the lessor when the lease period is expired can transfer the asset ownership to the lessee,
which has been agreed, or be reasonable judged according to the related conditions in the lease
contract.
Even though assets ownership is not transferred, but leasehold is a most part of the useful time of
the leased assets. The "most" usually refers that leasehold should be more than 75% of the useful
time of the leased assets (including 75%).
The minimum present value of lease payments of the lessee from the lease beginning date is almost
equivalent to the fair value of the leased asset from the lease beginning date; the minimum present
value of lease receipts of the lessor from the lease beginning date is almost equivalent to the fair
value of the leased asset from the lease beginning date.
B.The lessor's initial confirmation of finance lease
At the beginning day of the leasehold, the lessor shall takes the lease minimum lease receipts and
the sum of the initial direct costs as recorded value of the due finance lease, and records the
unguaranteed residual value; the lessor takes the balance between the minimum lease receipts, the
Initial direct costs, the unguaranteed residual value and its present value as the profit of the
unfulfilled financing. The lessor should transfer the leased assets at the beginning day of the
leasehold according to the above provisions, if there is any balance between the fair value of the
leased asset and its book value, it should be reckoned in the present profit and loss.
C.The application of effective interest method in the financing lease;
a.The apportionment of the unrecognized financing costs.
The unrecognized financing costs should be apportioned in the leasehold. The lessee should adopt
the effective interest method to confirm the present financing costs.
When the lessee apportion the unrecognized financing costs by the effective interest method, he
should adopt different apportionment rate for the unrecognized financing costs according to the24
condition of the recorded value of leased assets from the beginning day of leasehold:
1/． Discount the Lease payments according to taking the interest rates of the lessor’s lease as
discount rate, and taking the present value as the recorded value of leased assets, and also taking the
interest rates of the lease as the apportionment rate of the unrecognized financing costs.
2/．Discount the minimum lease payments according to taking the interest rate in contract as the
discount rate, taking the present value as the recorded value of leased assets, and also taking the
interest rates in contract as the apportionment rate of the unrecognized financing costs.
3/．Discount the minimum lease payments according to taking bank loan rate at corresponding
period as the discount rate, taking the present value as the recorded value of leased assets, and also
taking the bank loan rate at corresponding period as the apportionment rate of the unrecognized
financing costs.
4/． Recalculate the apportionment rates, which take fair value of the leased asset as the recorded
value.
The apportionment rate the discount rate which makes the minimum lease payment is equipollent to
the fair value of the leased asset.
b. the distribution of unrealized financing gains
The unrealized financing gains should be distributed in each period of the leasehold. The lessor
should adopt the effective interest method to calculate the present financing income.
When the lessor distributes the unrealized financing gains adopting the effective interest method, he
should take the lease including the interest rate as the apportionment rate of the unrealized financing
gains.
D.the identification standard of the operating leases
The operating lease refers that the ownership of the Operating lease asset is not transferred, after the
expiry of the lease, the lessee has right to throw a lease or relet, but has no right of favorable
purchase.
24.the main accounting policies, changes of accounting estimates
Our company has no accounting policies, changes of accounting estimates and correction of errors
in present period.25
25.prior period correction of accounting errors
No accounting error correction is available during the period of this report
III. Taxes
1. Mai tax category and tax rate
Tax category Tax calculation evidence Tax rate
Value added tax Sales income, and income from
processing, maintenance, making repairs
and supplying replacements, and labor
service
17%
Sales tax Taxable labor income 5%
tax for maintaining and
building cities
Amount of value-added tax and sales tax
payable
1%
Educational surtax Amount of value-added tax and sales tax
payable
3%
Business income tax * Taxable income 20%
*According to the Notification on Implementing Transitional Preferable Policy about Business
Income Tax [GF (2007) No. 39] issued by the State Council on Dec. 26, 2007, the preferential
policy about business income tax enjoyed by enterprises according to original tax laws,
administrative rules, and documents with effect of administrative force shall be transited according
to the following measures: Since Jan. 1, 2008, original enterprises enjoying low tax preferential
policy shall be gradually transited to legal tax rate within 5 years after the execution of new tax law.
Where, enterprises enjoying business income tax 15% shall execute the tax rate 18%, 20%, 22%,
24%, and 25% respectively in 2008, 2009, 2010, 2011, and 2012. Therefore, the business income
tax executed by the enterprise in 2009 was actually 20%.26
IV. Business Combination and Consolidated Financial Statements
1. Subsidiaries
(1) Subsidiaries obtained by means of establishment or investment, etc.
Unit: Yuan Currency: RMB
Full name Type Registration
place
Business
nature
Registered
capital
Business
scope
Actual
amount
subscribed
at the end of
period
Balance of
other items
actually
forming the
net
investment
in the
subsidiaries
proportio
n of
shares
held
Proportion
of voting
power
Consolidat
ed report
statement
or not
Minor
shareh
olders’
equity
Amount for
offsetting the
gain and loss
of minor
shareholders
in the minor
shareholders’
equity
Balance after that the
loss of current period
shared by minor
shareholders and
offset with parent
company owner’s
equity exceeds the
shares owned by
minor shareholders in
the subsidiary at the
beginning of period
Shenzhen
Anjule Realty
Management
Co., Ltd.
Sole
subsidiary
Shenzhen Realty 2000000 self-owne
d realty
manageme
nt
2,000,00.00 - 100% 100% Yes - - -
China Bicycle
(International)
Co., Ltd.
Sole
subsidiary
Hong Kong Bicycle 20000 trade and
manufactu
ring
20,000.00 - 100% 100% Yes - - -
China Bicycle
(Hong Kong)
Co., Ltd.
Controlling
subsidiary
Hong Kong Bicycle 5350000 Bicycle
and parts
distributio
n
5,350,000.0
0
- 99% 99% Yes - - -
Shenzhen
Emmelle
Industry Co.,
Ltd.
Controlling
subsidiary
Shenzhen Bicycle 2000000 Bicycle
and parts
distributio
n
1,400,000.0
0
- 70% 70% Yes -27
(2) The Company has no subsidiary obtained from combination with enterprises under the same
control.
(3)The Company has no subsidiary obtained from combination with enterprises not under the same
control.
2. Interpretation of changes in combination scope
The Company had no change in combination scope in the report period.
V. Notes to Items in Consolidated Financial Statements
1. Monetary fund
Unit: Yuan Currency: RMB
Items Amount at the end of period Amount at the beginning of period
Amount in
foreign
currencies
Conversion
rate
Amount in
RMB
Amount in
foreign
currencies
Convers
ion rate
Amount in
RMB
Cash:
RMB 122,959.64 1.00 122,959.64 76,329.51 1.00 76,329.51
HK Dollar - - - 1,894.30 0.88 1,666.98
US Dollar - - - 1.20 6.83 8.20
Subtotal - - 122,959.64 - - 78,004.69
Bank
deposit:
RMB
21,070,648.5
7 1.00 21,070,648.57
9,651,336.6
0 1.00 9,651,336.60
HK Dollar 815,810.20 0.88 718,304.56 41,756.67 0.88 36,745.87
US Dollar 46,927.13 6.83 320,512.30 46,927.14 6.83 320,512.37
Subtotal 22,109,465.43 10,008,594.84
Total 22,232,425.07 10,086,599.5328
2. Notes receivable
(1) Classification of notes receivable
Unit: Yuan Currency: RMB
Category Amount at the end of period Amount at the beginning of
period
Bank acceptance 5,800,000.00 5,408,792.00
(2) Notes receivable without hypothecation of the Company at the end of period
(3) Notes with endorsement provided to other party but not post-dated of the Company at the end of
period:
Unit: Yuan Currency: RMB
Drawn by Date of drawal Expire date Amount Remark
Tianjin Xinhe
Technology Co., Ltd. 2009.12.15 2010.05.26
1,900,000.00
Tianjin Xinhe
Technology Co., Ltd. 2009.12.08 2010.05.26
1,400,000.00
Suzhou Benji Power
Co., Ltd. 2009.12.15 2010.05.26
700,000.00
Ningbo Xiecheng
Vehicle Industry Co.,
Ltd. 2009.12.08 2010.05.26
300,000.00
Total 4,300,000.00
3. Accounts receivable
(1) Exposure of accounts receivable by category:
Unit: Yuan Currency: RMB
Amount at the end of period
Book balance Reserve for bad and
Category doubtful account
Amount Proportio
n
Amount Proporti
on
Account receivable with single big
amount 919,324,556.40 88.49% 919,324,556.40 88.53%
Account receivable not with single
big amount but with heavy
combination risk after combination 119,133,026.05 11.47% 119,133,026.05 11.47%29
by credit risk characteristic
Other not important accounts
receivable 413,823.13 0.04% - -
Total 1,038,871,405.5
8 100.00%
1,038,457,582.4
5 100.00%
Unit: Yuan Currency: RMB
Amount at the beginning of period
Book balance Reserve for bad and doubtful
Category account
Amount Proportion Amount Proportion
Account receivable with single
big amount 904,866,318.70 86.89% 904,866,318.70 86.92%
Account receivable not with
single big amount but with
heavy combination risk after
combination by credit risk
characteristic 136,268,726.46 13.08% 136,189,842.47 13.08%
Other not important accounts
receivable 306,245.27 0.03% 95.85 -
Total 1,041,441,290.43 100.00% 1,041,056,257.02 100.00%
Interpretation to the category of accounts receivable:
According to the business scale, business nature, and customers’ settlement, etc., the account
receivable with single big amount is determined to be 5 million Yuan. The account receivable with
single big amount has no depreciation reserve, and the reserve for bad and doubtful account is
withdrawn with age analysis method.
Account receivable not with single big amount but with heavy combination risk after combination
by credit risk characteristic indicates the account receivable with closing balance of below 5 million
Yuan and an age of over 3 years. The account receivable not with single big amount but with heavy
combination risk after combination by credit risk characteristic doesn’t have the phenomenon of
depreciation, and the reserve for bad and doubtful account is withdrawn with age analysis method.
As for other not important accounts receivable, the reserve for bad and doubtful account is
withdrawn with age analysis method.
(2) Withdrawal of the reserve for bad and doubtful account aiming at the account receivable with30
single big amount or not with single big amount but carried out depreciation test separately at the
end of period:
Unit: Yuan Currency: RMB
Content of accounts
receivable
Book balance Amount of bad
and doubtful
account
Proportion
of
withdrawal
Reason
Account receivable
with single big
amount
919,324,556.40 919,324,556.40 100.00%
Extremely small
possibility to take back
single test
Account receivable not with single big amount but with heavy combination risk after combination
by credit risk characteristic
Unit: Yuan Currency: RMB
Amount at the end of period Amount at the beginning of period
Book balance Book balance
Age Amount Proportion(%)
Reserve for
bad and
doubtful
account
Amount Proportion(%)
Reserve for
bad and
doubtful
account
Over
3
years 119,133,026.05 100.00 119,133,026.05 136,268,726.46 100.00 136,189,842.47
(3) Exposure of accounts receivable by credit risk characteristic (age analysis)
Unit: Yuan Currency: RMB
Amount at the end of period Amount at the beginning of period
Book balance Book balance
Age Amount Proporti
on
Reserve for
bad and
doubtful
account
Amount Proport
ion
Reserve for
bad and
doubtful
account
Within
1 year 267,076.23 0.03% - 185,726.81 0.02% -
1-2
years 146,746.90 0.01% - 120,518.46 0.01% 95.85
2-3
years - - - - - -
Over 3
years 1,038,457,582.45 99.96% 1,038,457,582.45 1,041,135,045.16 99.97% 1,041,056,161.17
Total 1,038,871,405.58 100.00% 1,038,457,582.45 1,041,441,290.43 100.00% 1,041,056,257.02
(4) No account receivable actually cancelled after verification in the report period.31
(5) The accounts receivable at the end of the report period don’t involve with the shareholder units
hodling over 5% (including 5%) voting power of the Company.
(6) Top 5 units with an amount of account receivable:
Unit: Yuan Currency: RMB
Name Relationship
with the
company
Amount Period Proportion among the
gross accounts
receivable (%)
Total of top 5 customers
of accounts receivable
Non-affiliated
customers 535,330,991.79
Over 3
years 51.53
(7) No account receivable involving with affiliated parties in the report period.
(8) No account receivable with confirmation terminated at the end of the report period.
4. Advance payment
(1) Listing of advance payment by age
Unit: Yuan Currency: RMB
Amount at the end of period Amount at the beginning of period
Age
Amount Proportion Amount Proportion
Within 1 year 81,383.55 41.67% 494,714.35 98.07%
1-2 years 113,914.54 58.33% 9,726.05 1.93%
Total 195,298.09 100.00% 504,440.40 100.00%
(2) The advance payment in the report period doesn’t involve with the shareholder units hodling
over 5% (including 5%) voting power of the Company.32
5. Accounts receivable - others
(1) Exposure of accounts receivable – others by category:
Unit: Yuan Currency: RMB
Amount at the end of period
Book balance Reserve for bad and
Category doubtful account
Amount Proportion Amount Proportion
Account receivable-others with
single big amount 499,512,704.77 88.35% 481,085,248.72 88.90%
Account receivable-others not with
single big amount but with heavy
combination risk after combination
by credit risk characteristic 60,029,889.05 10.62% 60,029,889.05 11.09%
Other not important accounts
receivable-others 5,806,471.37 1.03% 12,891.49 -
Total 565,349,065.19 100.00% 541,128,029.26 100.00%
Amount at the beginning of period
Book balance Reserve for bad and
Category doubtful account
Amount Proportion Amount Proportion
Account receivable-others with
single big amount 501,545,148.56 86.09% 471,086,344.75 87.18%
Account receivable-others not with
single big amount but with heavy
combination risk after combination
by credit risk characteristic 60,149,538.98 10.33% 60,149,538.98 11.13%
Other not important accounts
receivable-others 20,856,587.82 3.58% 9,121,453.73 1.69%
Total 582,551,275.36 100.00% 540,357,337.46 100.00%
Interpretation to the category of accounts receivable-others:
According to the business scale, business nature, and customers’ settlement, etc., the account
receivable-other with single big amount is determined to be 5 million Yuan. The account
receivable-other with single big amount has no depreciation reserve, and the reserve for bad and
doubtful account is withdrawn with age analysis method.
Account receivable-other not with single big amount but with heavy combination risk after
combination by credit risk characteristic indicates the account receivable with closing balance of
below 5 million Yuan and an age of over 3 years. The account receivable-other not with single big
amount but with heavy combination risk after combination by credit risk characteristic doesn’t have33
the phenomenon of depreciation, and the reserve for bad and doubtful account is withdrawn with
age analysis method.
As for other not important accounts receivable-other, the reserve for bad and doubtful account is
withdrawn with age analysis method.
(2)ithdrawal of the reserve for bad and doubtful account aiming at the account receivable-other with
single big amount or not with single big amount but carried out depreciation test separately at the
end of period:
Unit: Yuan Currency: RMB
Content of accounts
receivable-other Book balance
Amount of bad
and doubtful
account
Proportion
of
withdrawal
Reason
Account receivable
with single big
amount-other 499,512,704.77 481,085,248.72 96.31%
Extremely small
possibility to take back
single test
Account receivable – other not with single big amount but with heavy combination risk after
combination by credit risk characteristic
Unit: Yuan Currency: RMB
Amount at the end of period Amount at the beginning of period
Book balance Book balance
Age Amount Proportion(%)
Reserve for
bad and
doubtful
account
Amount Proportion(%)
Reserve for
bad and
doubtful
account
Over
3
years 60,029,889.05 100 60,029,889.05 60,149,538.98 100 60,149,538.98
(3)Exposure of accounts receivable – other by credit risk characteristic (age analysis)
Unit: Yuan Currency: RMB
Amount at the end of period Amount at the beginning of period
Book balance Book balance
Age Amount Proportion
Reserve for
bad and
doubtful
account
Amount Proportion
Reserve for
bad and
doubtful
account
Within
1 year 6,524,227.33 1.15% 39,741.46 34,114,247.64 5.86% 9,111,049.38
1-2
years 11,188.00 0.00% 11,154.44 3,401,632.04 0.58% 10,118.7134
2-3
years 2,437,743.66 0.43% 2,404,042.83 95,212.35 0.02% 285.64
Over 3
years 556,375,906.20 98.41% 538,673,090.53 544,940,183.33 93.54% 531,235,883.73
Total 565,349,065.19 100.00% 541,128,029.26 582,551,275.36 100.00% 540,357,337.46
(4) The account receivable from Hong Kong Dahuan Bicycle Company has had bad and doubtful
account withdrawn in a full-amount way, and the bankruptcy discharge obtained in 2009 was
770,493.95 Yuan.
(5) Account receivable – others actually cancelled after verification in the report period
Name
Nature of
accounts
receivable-others
Amount
cancelled
after
verification
Reason If there is affiliated
transaction or not
Hangzhou Zhongce
Rubber Co., Ltd. Claim for parts 244,872.20
being on
credit for
multiple
years
No
Liquidation of historical
accounts Below 100 Yuan 2,263,234.18
being on
credit for
multiple
years
No
Total 2,508,106.38
(6)The accounts receivable - others at the end of the report period don’t involve with the
shareholder units hodling over 5% (including 5%) voting power of the Company.
(7)Top 5 units with an amount of account receivable-others:
Unit: Yuan Currency: RMB
Name
Relationship
with the
company
Amount Period Proportion among
the gross accounts
receivable -
others (%)
Total of top 5 customers of
accounts receivable-others
Non-affiliated
customers 357,033,911.68
Over 3
years 63.15
(8)No account receivable involving with affiliated parties in the report period.35
(9)No account receivable-others with confirmation terminated at the end of the report period.
6. Inventory
(1) Inventory classification
Unit: Yuan Currency: RMB
Amount at the end of period Amount at the beginning of period
Items Book balance Depreciation
reserve
Book value Book balance Depreciation
reserve
Book value
Raw
materials 226,932,646.24 206,024,947.71 20,907,698.53 227,914,289.65 203,045,043.22 24,869,246.43
Low value
and easily
wornoyut
articles 1,446,868.54 1,315,419.73 131,448.81 1,445,384.54 1,315,419.73 129,964.81
Merchandise
inventory 32,378,964.93 20,853,742.68 11,525,222.25 34,974,596.20 23,776,463.51 11,198,132.69
Total 260,758,479.71 228,194,110.12 32,564,369.59 264,334,270.39 228,136,926.46 36,197,343.93
(2) Inventory depreciation reserve
Unit: Yuan Currency: RMB
decrease in the current
Inventory period
category
Opening book
balance
Amount
withdrawn in
the current
period Carry-back Trans-sale
Closing book
balance
Raw materials 203,045,043.22 2,979,904.49 - - 206,024,947.71
Low value and
easily
wornoyut
articles 1,315,419.73 - - - 1,315,419.73
Merchandise
inventory 23,776,463.51 - - 2,922,720.83 20,853,742.68
Total 228,136,926.46 2,979,904.49 - 2,922,720.83 228,194,110.12
(3) Inventory depreciation reserve
Items Evidence for
withdrawal of
inventory
depreciation reserve
Reason for carry-back of
inventory depreciation
reserve in the current
period
Proportion of carry-back amount in
the current period among the
closing balance of the inventory
Raw materials Net realizable value
is below the cost.
- -
Merchandise
inventory
Net realizable value
is below the cost.
- -36
Low value and
easily
wornoyut
articles
Net realizable value
is below the cost.
A. Evidence for determing the net realizable value of the abovementioned inventory: raw materials
execute the average unit price of such materials purchased; the materials to be reported discarded
after quality guarantee period, out-of-dated, and not suitable for transformation, etc. execut the
recoverable amount; finished products execute the recent unit sales price of such products minus the
direct expense and taxes possibly required for realization.
B. The trans-sale of merchandise inventory in the current period is for that merchandise has been
sold.37
7. Long-term equity investment
(1) Listing of long-term investment
Unit: Yuan Currency: RMB
Invested unit
Accounti
ng
method
Initial
investment
cost
Opening
balance
Increase
or
decrease
Closing
balance
Proportion
of shares
held in
invested
units (%)
Proportion
of voting
power in
invested
units (%)
Interpretation
to discrepancy
between the
proportion of
shares and
voting power
in invested
units
depreciation
reserve at the
end of period
depreci
ation
reserve
withdra
wn at
the
current
period
本期现
金红利
Hunan Guangnan
Motorcycle Co., Ltd.
cost
method 5,679,300.00 5,679,300.00 - 5,679,300.00 5.50 5.50 - 5,679,300.00 - -
Shenzhen Jinhuan
Printing Co., Ltd.
equity
method 14,883,560.00 14,883,560.00 - 14,883,560.00 38.00 38.00 - 12,263,719.50 - -
Chengdu Emmelle
Technology Co.,
Ltd.
equity
method 180,000.00 - - - 30.00 30.00 - - -
Total
20,742,860.00 20,562,860.00 - 20,562,860.00 - - - 17,943,019.50 - -
The industrial and commercial registration information of Shenzhen Jinhuan Printing Co., Ltd. has been cancelled as displayed. Hong Kong Dahuan
Bicycle Co., Ltd., one of the original shareholders of the company, holds the company’s shares under our entrustment, and the actual holder is our
company.38
8. Investment real estate
Unit: Yuan Currency: RMB
Items
Opening book
balance
Increase in the
current period
Decrease in the
current period
Closing book
balance
I. Total original book value 14,346,102.94 115,525,960.38 - 129,872,063.32
1. Houses and buildings 14,346,102.94 115,525,960.38 - 129,872,063.32
2. Land use right - - - -
II. Total accumulated depreciation
and accumulated amortization 4,034,841.54 94,437,706.98 - 98,472,548.52
1. Houses and buildings 4,034,841.54 94,437,706.98 - 98,472,548.52
2. Land use right - - - -
III. Total net book value of
investment real estate 10,311,261.40 - - 31,399,514.80
1. Houses and buildings 10,311,261.40 - - 31,399,514.80
2. Land use right - - - -
IV. Total depreciation reserve of
investment real estate - - - -
1. Houses and buildings - - - -
2. Land use right - - - -
V. Total book value of investment
real estate 10,311,261.40 - - 31,399,514.80
1. Houses and buildings 10,311,261.40 - - 31,399,514.80
2. Land use right - - - -
(1) The amount increased in the current year is the factory building transferred from fixed assets
and used for lease purpose.
(2) The actually withdrawn deprecision in the current period is 5,844,242.90 Yuan.
9. Fixed assets
(1) Fixed assets
Unit: Yuan Currency: RMB
Items Opening book
balance
Increase in the
current period
Decrease in the
current period
Closing book
balance
I. Total original book value 233,033,684.20 1,781,471.92 121,492,011.74 113,323,144.38
Where: Houses and buildings 229,081,577.90 - 120,026,566.64 109,055,011.2639
Items Opening book
balance
Increase in the
current period
Decrease in the
current period
Closing book
balance
Machinery and equipment 1,655,533.13 30,475.81 1,286,246.10 399,762.84
Means of transport 671,800.00 420,678.06 169,000.00 923,478.06
Other equipment 1,624,773.17 1,330,318.05 10,199.00 2,944,892.22
II. Total accumulated
depreciation 174,938,504.85 7,353,299.96 94,986,358.72 87,305,446.09
Where: Houses and buildings 172,288,265.97 6,504,977.62 94,007,901.51 84,785,342.08
Machinery and equipment 975,157.19 20,059.99 816,688.11 178,529.07
Means of transport 613,295.11 182,424.67 152,100.00 643,619.78
Other equipment 1,061,786.58 645,837.68 9,669.10 1,697,955.16
III. Total net book value of
fixed assets 58,095,179.35 - - 26,017,698.29
Where: Houses and buildings 56,793,311.93 - - 24,269,669.18
Machinery and equipment 680,375.94 - - 221,233.77
Means of transport 58,504.89 - - 279,858.28
Other equipment 562,986.59 - - 1,246,937.06
IV. Total depreciation reserve 2,084,874.23 2,084,874.23
Where: Houses and buildings 1,580,000.00 - - 1,580,000.00
Machinery and equipment 120,000.00 - - 120,000.00
Means of transport 0.00 - - -
Other equipment 384,874.23 - - 384,874.23
V. Total book value of fixed
assets 56,010,305.12 - - 23,932,824.06
Where: Houses and buildings 55,213,311.93 - - 22,689,669.18
Machinery and equipment 560,375.94 - - 101,233.77
Means of transport 58,504.89 - - 279,858.28
Other equipment 178,112.36 - - 862,062.83
The depreciation in the current period is 6,159,073.54 Yuan. Among the decreased amount of this
year, the original book value 115,525,960.38 Yuan and accumulated depreciation 93,792,132.30
Yuan are originated from the factory building transferred out for lease and investment real estate
items.
(2) Fixed assets left idle temporarily at the end of period
Unit: Yuan Currency: RMB
Items Original book
value
Accumulated
depreciation
Depreciation
reserve
Net book
value Remark
Houses and
buildings 34,505,947.26 26,526,446.96 - 7,979,500.30
Machinery and
equipment 252,098.00 111,274.10 - 140,823.90
Total 34,758,045.26 26,637,721.06 - 8,120,324.20
(3) No fixed assets rent by means of financing lease at the end of period.40
(4) No fixed assets held for sale at the end of period.
(5) No fixed assets without handling certificate of title at the end of period.
Items
Reason for failing to
handle the certificate
of title
Estimated time for handling
the certificate of title
Employees’ dining hall (building 10 in
Shuibei Factory Area)
Formalities not
completed Unpredictable
Ice room of dining hall (building 11 in
Shuibei Factory Area)
Formalities not
completed Unpredictable
Employees’ residence (1)(building 8 in
Shuibei Factory Area)
Formalities not
completed Unpredictable
Employees’ residence (2) (building 9 in
Shuibei Factory Area)
Formalities not
completed Unpredictable
Employees’ residence (3) (building 14
in Shuibei Factory Area)
Formalities not
completed Unpredictable
Employees’ residence (4) (building 19
in Beili Garden)
Formalities not
completed Unpredictable
Factory building 1 Formalities not
completed Unpredictable
Factory building 2 Formalities not
completed Unpredictable
Factory building 3 Formalities not
completed Unpredictable
Factory building 4 Formalities not
completed Unpredictable
Factory building 5 Formalities not
completed Unpredictable
Administration building Formalities not
completed Unpredictable
Complex building Formalities not
completed Unpredictable
Residence building 1 Formalities not
completed Unpredictable
Residence building 2 Formalities not
completed Unpredictable
Residence building 3 Formalities not
completed Unpredictable
Residence building 4 Formalities not
completed Unpredictable
Residence building 5 Formalities not
completed Unpredictable
7 Guang’ancheng, West Section,
Guohuo Road, Taijiang District, Fuzhou
Formalities not
completed Unpredictable
No. 2, A, 54 Liuquan Road, Zhangdian
District, Zibo
Formalities not
completed Unpredictable41
Items
Reason for failing to
handle the certificate
of title
Estimated time for handling
the certificate of title
Saige Garden, Huaqiang South Road,
Shenzhen
Formalities not
completed Unpredictable
Interpretation of fixed assets
1. Among the Company’s houses and buildings, except for Zhonghua Garden (originally worthy of
7,226,043.16 Yuan) with certificate of title handled, others have not had the ownership certificate
handled.
2. Assets with limited ownership
(1) The Company has provided guarantee for the subsidiary Hong Kong Zhonghua for the loan o
USD7.5 million from China Merchants Bank. Hong Kong Zhonghua failed to pay the debt on
schedule, and China Merchants Bank brought a suit against the subsidiary to Shenzhen Intermediate
People’s Court. This court sealed up the Company’s 127,333m2 land located at Yousong Village
Longhua Town, Bao’an District and buildings on the land.
(2) The Company owed the imprest money for L/C USD500,000 and related interest, and was sued
to Shenzhen Luohu People’s Court. The court plans to auction the Company’s real estate at Saige
Garden, Huaqiang South Road, Shenzhen for repayment of debt.
10. Intangible assets
(1) Intangible assets
Unit: Yuan Currency: RMB
Items Opening book
balance
Increase in the
current period
Decrease in the
current period
Closing book
balance
I. Original book valueTotal 43,143,099.08 - - 43,143,099.08
Land use right 43,143,099.08 - - 43,143,099.08
II. Total accumulated
amortization 15,962,947.74 862,862.04
-
16,825,809.78
Land use right 15,962,947.74 862,862.04 - 16,825,809.78
III. Total net book value of
intangible assets 27,180,151.34
- -
26,317,289.30
Land use right 27,180,151.34 - - 26,317,289.30
IV. Total depreciation reserve - - - -
Land use right - - - -
Total book value of intangible
assets 27,180,151.34
- -
26,317,289.30
Land use right 27,180,151.34 - - 26,317,289.3042
(1) The land use right is the 127,333m2 land located at Yousong Village, Longhua Town, Baoan
District, and the service life is from July 1, 1990 to June 30, 2040. The limitation on the ownership
is as shown in the annotation 9.
(2) Amount amortized in the current period is 862,862.04 Yuan.
11. Details of asset depreciation reserve
Unit: Yuan Currency: RMB
Decrease in the current
Items Opening book period
balance
Increase in
the current
period Carry-back Trans-sale
Closing book
balance
I. Reserve for bad and
doubtful account 1,581,413,594.48 1,450,617.56 770,493.95 2,508,106.38 1,579,585,611.71
II. Inventory
depreciation reserve 228,136,926.46 2,979,904.49 2,922,720.83 228,194,110.12
III. Depreciation reserve
of salable financial
assets
- - - - -
IV. Depreciation reserve
of held-to-maturity
investment
- - - - -
V. Depreciation reserve
of long-term equity
investment 17,943,019.50
- - -
17,943,019.50
VI. Depreciation reserve
of investment real estate -
- - -
-
VII. Depreciation
reserve of fixed assets 2,084,874.23
- - -
2,084,874.23
VIII. Depreciation
reserve of engineering
materials
- - - - -
IX. Depreciation reserve
of engineering under
construction
- - - - -
X. Depreciation reserve
of productive biological
assets
- - - - -
Where:Depreciation
reserve of mature
productive biological
assets
- - - - -
XI. Depreciation reserve
of oil-gas assets
- - - - -
XII. Depreciation
reserve of intangible
assets
- - - - -
XIII. Depreciation
reserve of business
credit
- - - - -
XIV. Others - - - - -43
Decrease in the current
Items Opening book period
balance
Increase in
the current
period Carry-back Trans-sale
Closing book
balance
Total 1,829,578,414.67 4,430,522.05 770,493.95 5,430,827.21 1,827,807,615.56
The carry-back of reserve for bad and doubtful account is that the account of Hong Kong Dahuan
Bicycle Company has had the bad and doubtful account of previous year withdrawn in a
full-amount way. The bankruptacy liquidation amount received in the current year is 770,493.95
Yuan; the account receivable-other actually cancelled after verification in the current year is
2,508,106.38 Yuan; and the trans-sale of inventory depreciation reserve is that the merchandise has
realized sale.
12. Short loan
(1) Classification of short loan:
Unit: Yuan Currency: RMB
Items Amount at the end of period Amount at the beginning of
period
Loan on security 250,703,094.15 254,999,915.58
Credit loan 144,623,478.67 144,661,439.77
Total 395,326,572.82 399,661,355.35
(2) Short loan at term but not repaid:
Unit: Yuan Currency: RMB
Borrower Amount Purpose Reason for not
repayment
Estimated
date of
repayment
Oriental Assets
Management Company
45,684,839.98 Loan for
production
turnover
Capital
shortage Unpredictable
Dongfu Assets
Management Company
50,052,992.35 Loan for
production
turnover
Capital
shortage Unpredictable
China Everbright Bank
10,595,770.94 Loan for
production
turnover
Capital
shortage Unpredictable
Huizhou Oriental United
Industry Co., Ltd.
37,145,789.13 Loan for
production
turnover
Capital
shortage Unpredictable
XindaAssets Management
Company
61,439,038.84 Loan for
production
turnover
Capital
shortage Unpredictable44
China Merchants Bank,
Luohu Subbranch
18,410,689.74 Loan for
production
turnover
Capital
shortage Unpredictable
China Import Export Bank
114,558,000.00 Loan for
production
turnover
Capital
shortage Unpredictable
China Construction Bank,
Sichuan Mianyang
Subbranch
620,000.00 Loan for
production
turnover
Capital
shortage Unpredictable
Head Office of China
Merchants Bank
56,819,451.84 Loan for
production
turnover
Capital
shortage Unpredictable
Total
395,326,572.82
The abovementioned loans have been over due for many years.45
13. Accounts payable
(1) Age of accounts payable
Unit: Yuan Currency:
RMB
Items Amount at the end of period Amount at the beginning of
period
Within 1 year 14,648,872.39 15,302,146.76
1-2 Years 122,501.80 76,063.22
Over 3 years 111,102,997.17 115,336,674.88
Total 125,874,371.36 130,714,884.86
(1) Accounts payable of over 1 year are mainly because that the Company is insolvent and has
delayed the replayment for many years.
(2)The accounts payable in the report period don’t involve with the shareholder units hodling over
5% (including 5%) voting power of the Company.
14. Items received in advance
(1) Age of items received in advance:
Unit: Yuan Currency:
RMB
Items Amount at the end of period Amount at the beginning of
period
Within 1 year 12,419,388.74 6,563,327.01
1-2 years - 1,061.61
2-3 years - -
Over 3 years 10,664,592.85 14,768,647.04
Total 23,083,981.59 21,333,035.66
(1) Big-amount items received in advance with an age of over 1 year are mainly formed
accumulatively in historical business communication.
(2) The items received in advance in the report period don’t involve with the shareholder units
hodling over 5% (including 5%) voting power of the Company.
15. Employees’ remuneration payable
Unit: Yuan Currency: RMB46
Items Opening
book balance
Increase in
the current
period
Decrease in
the current
period
Closing book
balance
I. Salary, bonus, allowance, and
subsidy 606,482.30 13,769,113.63 12,313,771.21 2,061,824.72
II. Employee benefit - 150,408.56 150,408.56 -
III. Social insurance - 776,267.00 776,267.00 -
IV. Public accumulation fund
for housing construction - 192,258.52 74,834.44 117,424.08
V. Dismiss welfare 178,037.76 2,979,582.76 1,282,917.01 1,874,703.51
VI. Trade union outlays and
personnel education outlay 901,777.77 608,676.44 178,200.64 1,332,253.57
VII. Others - - - -
Total 1,686,297.83 18,284,048.39 14,701,564.42 5,268,781.80
(1) No remuneration in arrear among the employees’ remuneration payable.
(2) The trade union outlays and personnel education outlay in the current year is 608,676.44 Yuan;
and the compensation for cancellation of labor relationship is 2,979,582.76 Yuan.
16. Expense of taxation payable
Unit: Yuan Currency: RMB
Items Amount at the end of period Amount at the beginning of
period
VAT 54,717,084.10 53,948,342.26
Sales tax 399,742.32 399,505.63
Business income tax 33,750,963.42 33,753,125.02
Individual income tax -21,156.15 -21,125.19
Tax for maintaining and
building cities -30,700.27 -10,992.63
Housing property tax 7,305,817.27 7,303,655.67
Others 27,259.19 26,518.32
Total 96,149,009.88 95,399,029.08
The Company has owed taxes for long time, and there is the probability to make supplementary
payment of forfeit money and late fee.47
17. Interest in red
Items Amount at the end of period Amount at the beginning of
period
Loan interest 165,838,645.23 118,881,087.74
18. Accounts payable - others
(1) Age of accounts payable –others:
Unit: Yuan Currency: RMB
Items Amount at the end of period Amount at the beginning of
period
Within 1 year 13,449,141.79 3,082,971.07
1-2 years 2,069,975.95 2,114,514.45
2-3 years 1,996,635.22 6,791,074.29
Over 3 years 151,320,687.35 156,616,204.69
Total 168,836,440.31 168,604,764.50
(2) The accounts payable-others in the report period don’t involve with the shareholder units
hodling over 5% (including 5%) voting power of the Company.
(3) Bit-amount accounts payable of over 1 year are accounts unable to pay by the Company.
19. Noncurent liabilities coming due within one year
(1)
Unit: Yuan Currency: RMB
Items
Amount at the end of period Amount at the beginning of
period
Long-term credit loan coming
due within 1 year
870,518,082.14 873,090,594.28
(2) Top five long-term loans coming due within 1 year
Unit: Yuan Currency: RMB
Amount at the end of period
Borrower Curency Amount in
foreign currencies Amount in RMB
Shenzhen Guosheng Energy Investment and
Development Co., Ltd. USD 84,797,624.57 579,015,140.07
Guangdong Shengrun Group Co., Ltd. RMB - 232,607,520.8448
Amount at the end of period
Borrower Curency Amount in
foreign currencies Amount in RMB
Shenzhen Guosheng Energy Investment and
Development Co., Ltd. RMB - 19,300,058.59
China Xinda Assets Management Co., Ltd. USD 2,157,395.94 14,731,130.94
Great Wall Assets Management Co., Ltd. USD 2,000,000.00 13,656,400.00
Total 859,310,250.44
(3) Overdue loans among the long-term loans coming due within 1 year
Unit: Yuan Currency: RMB
Borrowers Amount Term exceeded
Guangdong Shengrun Group Co., Ltd. 232,607,520.84 Overdue for multiple
years
Shenzhen Guosheng Energy Investment and
Development Co., Ltd. 598,315,198.66 Overdue for multiple
years
Li Han 6,413,850.00 Overdue for multiple
years
Shenzhen Lionda Group Co., Ltd. 1,793,731.70 Overdue for multiple
years
China Great Wall Assets Management Co.,
Ltd. 13,656,650.00 Overdue for multiple
years
China Oriental Assets Management Co.,
Ltd. 3,000,000.00 Overdue for multiple
years
China Xinda Assets Management Co., Ltd. 14,731,130.94 Overdue for multiple
years
Total
870,518,082.14
20. Other current liabilities
Unit: Yuan Currency:
RMB
Items Closing book balance Opening book balance
Rent 521,639.87 -
Decoration fee 188,853.82 -
Others 16,118.40 48,826.30
Total 726,612.09 48,826.3049
21. Estimated liabilities
Unit: Yuan Currency: RMB
Items
Amount at the
beginning of
period
Increase in
the current
period
Decrease in
the current
period
Amount at the
end of period
Loan guarantee for ZoriaPteLTd 78,087,000.00 - - 78,087,000.00
Loan guarantee for Jintian Industry
(Group) Co., Ltd. 50,000,000.00
- - 50,000,000.00
Loan guarantee forGuangdong
Shengrun Group Co., Ltd. 47,963,842.00
-
5,045,542.00 42,918,300.00
Loan guarantee for Shenzhen Tianma
Cosmetics Co., Ltd. 8,000,000.00
- -
8,000,000.00
Loan guarantee for Shandong
Huajiaming Economic Trading Co.,
Ltd. 83,142.92
- -
83,142.92
Total 184,133,984.92 - - 179,088,442.92
(1) The guaranteed companies have been in serious insolvency or gone bankrupt.
(2) The Company has ever provided guarantee for the loan of USD740,000 to Shenzhen
Non-ferrous Metals Financial Affairs Company under Guangdong Shengrun Group Co., Ltd. In
1999, Shenzhen Intermediate People’s Court judged that the Company shall undertake joint and
several liquidation liability by the paper of civil judgment [(1999)SZFJTCZ No. 727]. For reason
of the financial state of Guangdong Shengrun, the Company has treated the abovementioned
external guaranteed loan USD740,000 as estimated liability in a full-amount way in previous year.
In September 2009, the board of directors of Guangdong Shengrun Group Co., Ltd. issued a
pronunciamento to publicize that the Court has executed the principal debtor’s assets for this case,
and has judged that the abovementioned paper from Shenzhen Intermediate People’s Court has
been completely executed. Based on the abovementioned, the Company will offset non-business
income with the USD740,000 (RMB5,045,542 Yuan) wholly regarded as estimated liability.50
22. Share capital
Unit: Yuan Currency: RMB
Amount at the beginning of
period Increase/ decrease (+, -) Amount at the end of period
Items
Amount Proportion
New
shares
issued
Shares
presented
Shares
transferred
for public
reserve
Others Subtotal Amount Proportion
I. Circulating shares
with limited sales
conditions
- - - - - - - - -
1. Shares held by
domestic natural
person sponsors - - - - - - - - -
2.Shares held by
domestic corporate
sponsors 111,607,000.00 23.28%
- - - - -
111,607,000.00 23.28%
3. Shares held by
overseas corporates 75,106,203.00 15.67%
- - - - -
75,106,203.00 15.67%
II. Circulating shares
without limited sales
conditions - -
- - - - -
- -
1. Common RMB
shares listed at home 76,752,000.00 16.01%
- - - - -
76,752,000.00 16.01%
2. Foreign-funded
shares listed at home 215,967,800.00 45.05%
- - - - -
215,967,800.00 45.05%
Total 479,433,003.00 100.00% - - - - - 479,433,003.00 100.00%
The Company’s share capital has been verified by Shenzhen Certified Accountants Office by [(96) YZZ No. 076].51
23. Capital reserve
Unit: Yuan Currency: RMB
Items Amount at the
beginning of
period
Increase in the
current period
Decrease in the
current period
Amount at the
end of period
Capital premium - - - -
Other capital reserve 410,893,564.33 47,802,411.22 - 458,695,975.55
Where:Benefit from
liability recombination
406,884,939.36 47,802,411.22 - 454,687,350.58
Accounts unnecessary
to pay
690,624.97 - - 690,624.97
price difference of
affiliated transactions 3,318,000.00
- - 3,318,000.00
Total 410,893,564.33 47,802,411.22 - 458,695,975.55
Interpretation of capital reserve:
According to the Notification on Getting Done with the Annual Report of Enterprises Executing
Accounting Rules in 2008 [CKH (2008) No. 60] of the Ministry of Finance, the Company’s holding
shareholder Shenzhen Guosheng Energy Investment and Development Co., Ltd. exempted the
Company’s loan interest 47,802,411.22 Yuan in 2009, which will be charged into the capital reserve
as capital investment.
24. Surplus reserve
Unit: Yuan Currency: RMB
Items Amount at the
beginning of
period
Increase in the
current period
Decrease in the
current period
Amount at the end
of period
Legal surplus
reserve 32,673,227.01
- -
32,673,227.01
25. Undistributed profit
Unit: Yuan Currency: RMB
Items Amount Proportion of
withdrawal or
distribution
Undistributed profit of the previous year before
adjustment -2,726,059,175.73
Total undistributed profit at the beginning of year
adjusted (+, -) -
Undistributed profit at the beginning of year after
adjustment -2,726,059,175.7352
Items Amount Proportion of
withdrawal or
distribution
Add: Net profit classed under the parent company in
the current period -105,757,549.50
Less: Withdrawal of legal surplus reserve -
Withdrawal of free surplus reserve -
Withdrawal of average risk reserve -
Common stock dividend payable -
Common stock dividend transferred into share capital -
Undistributed profit at the end of period -2,831,816,725.23 -
26. Business income and business cost
(1) Business income and business cost
Unit: Yuan Currency: RMB
Items Amount incurred in the current
period
Amount incurred in the last
period
Major business income 250,514,769.94 264,600,683.98
Other business income 10,393,338.88 9,602,156.50
Business cost 248,699,643.75 262,279,584.11
(2) Major businesses (by industry)
Unit: Yuan Currency: RMB
Product name ABmusoiunnest si nincucorrmede in theB cuusirnreensst pceorsito d BAumsionuesnst iinnccuormreed in tBhue slianset spse croiosdt
Bicycle and parts
distribution 248,357,399.41 236,123,723.38 262,378,494.39 252,383,154.36
Lease management 2,157,370.53 3,405,100.30 2,222,189.59 3,281,707.26
Total
250,514,769.94 239,528,823.68 264,600,683.98 255,664,861.62
(3)Major businesses (by variety)
Unit: Yuan Currency: RMB
Product name ABmusoiunnest si nincucorrmede in theB cuusirnreensst pceorsito d BAumsionuesnst iinnccuormreed in tBhue slianset spse croiosdt
OEM motor vehicle 198,949,497.55 188,026,049.40 196,380,097.08 184,866,310.30
OEM Bicycle 47,587,484.63 45,589,280.50 58,404,470.99 59,958,067.92
CBC motor vehicle 1,397,440.99 2,061,588.24 2,993,883.75 2,940,862.7653
Product name ABmusoiunnest si nincucorrmede in theB cuusirnreensst pceorsito d BAumsionuesnst iinnccuormreed in tBhue slianset spse croiosdt
CBC Bicycle 246,066.63 263,884.87 297,750.45 287,971.61
Others 176,909.61 182,920.37 4,302,292.12 4,329,941.77
Lease management 2,157,370.53 3,405,100.30 2,222,189.59 3,281,707.26
Total 250,514,769.94 239,528,823.68 264,600,683.98 255,664,861.62
(4) Business income of the Company’s top five customers
Unit: Yuan Currency: RMB
Customer name Business income Proportion among the
Company’s total business
income
Jinan Yuxintai Sales Co., Ltd. 83,291,643.16 31.92%
Zhengzhou Daming Technological Trade
Co., Ltd. 56,978,182.48 21.84%
Shenzhen Huaqiang Supply Chain
Management Co., Ltd. 29,589,209.40 11.34%
Suzhou Jiaxin Economic Trade Co., Ltd. 29,072,196.58 11.14%
Sichuan Wanling Electric Technology Co.,
Ltd. 5,602,568.38 2.15%
Total 204,533,800.00 78.39%
27. Sales tax and surcharge
Unit: Yuan Currency: RMB
Items Amount incurred in
the current period
Amount incurred in
the last period Collection standard
Sales tax 107,868.53 110,013.98 5%
Tax for maintaining and
building cities 13,860.70 25,916.58 1%
Educational surtax 42,585.75 74,789.10 3%
Total 164,314.97 210,719.66 -
28. Asset depreciation loss
Unit: Yuan Currency: RMB
Items Amount incurred in the current
period
Amount incurred in the last
period
I. Loss from doubtful accounts 1,450,617.56 526,361.94
II. Loss from inventory
depreciation 2,979,904.49 6,024,359.56
III. Depreciation loss of salable - -54
financial assets
IV. Depreciation loss of
held-to-maturity investment
- -
V. Depreciation loss of
long-term equity investment
-
2,273,242.13
VI. Depreciation loss of
investment real estate
- -
VII. Depreciation loss of fixed
assets
- -
VIII. Depreciation loss of
engineering materials
- -
IX. Depreciation loss of
engineering under construction
- -
X. Depreciation loss of
productive biological assets
- -
XI. Depreciation loss of oil-gas
assets
- -
XII. Depreciation loss of
intangible assets
- -
XIII. Depreciation loss of
business credit
- -
XIV. Others - -
Total 4,430,522.05 8,823,963.63
29. Investment yield
(1) Details of investment yield
Unit: Yuan Currency: RMB
Items Amount incurred in the
current period
Amount incurred in the last
period
Long-term equity investment
yield calculated with cost
method
- -
Long-term equity investment
yield calculated with equity
method
-
-874,997.07
Investment yield from disposing
long-term equity investment
- -
Total - -874,997.07
(2)Long-term equity investment yield calculated with equity method:
Unit: Yuan Currency: RMB
Invested unit Amount
incurred in the
current period
Amount incurred
in the last period
Reason for increase/ decrease
compared between the current
period and last period
Jiangxi Lihua Industry Co., - -874,997.07 The Company cancelled the55
Ltd. original joint operation
agreement for this item at the
beginning of this year, and
planned to take back the
original investment by
installments.
30. Nonbusiness income
(1) Unit: Yuan Currency: RMB
Items Amount incurred in
the current period
Amount incurred in
the last period
Total amount obtained from disposing noncurrent
assets 5,457,626.30 8,728,698.80
Where: Benefit from disposal of fixed assets 5,457,626.30 8,728,698.80
Benefit from disposal of intangible assets - -
Benefit from liability recombination - 17,360,832.24
Others 7,271,848.86 1,502,394.51
Total 12,729,475.16 27,591,925.55
The nonbusiness income in the current period is mainly originated from the cancellation of
estimated liability USD7470,000, the net income from disposal of fixed assets, and the disposal of
account payable unavailable to be paid for long-term arreage.
31. Nonbusiness expenditure
Unit: Yuan Currency: RMB
Items Amount incurred in
the current period
Amount incurred in
the last period
Total loss from disposal of noncurrent assets 966,300.00 62,150.00
Where: Loss from disposal of fixed assets 966,300.00 62,150.00
Loss from disposal of intangible assets - -
Others 185,058.79 290,634.86
Total 1,151,358.79 372,564.56
The nonbusiness expenditure in the current period is mainly the net loss from disposal of fixed
assets.
32. Calculation process of basic earning per share and diluted earning per share (eps)56
Unit: Yuan Currency: RMB
Items Calculation
process
Amount
incurred in
the current
period
Amount
incurred in
the last
period
Net profit classed under the Company’s common
shareholders P0
-105,757,549.50 -44,893,006.40
Non-frequent gain and loss classed under the
Company’s common shareholders F
9,262,493.10 15,767,135.66
Net profit classed under the Company’s common
shareholders after deduction of non-frequent gain and
loss
P0'=P0-F
-115,020,042.60 -60,660,142.06
Influences of diluted items on the net profit classed
under the Company’s common shareholders V
- -
Net profit classed under the Company’s common
shareholders, considering the influences of diluting
potential common shares, and making adjustments
according to Enterprise Accounting Standards and
related regulations
P1=P0+V
-115,020,042.60 -60,660,142.06
Influences of diluted items on the net profit classed
under the Company’s common shareholders after
deducation of non-frequent gains and losses
V'
- -
Net profit classed under the Company’s common
shareholders, considering the influences of diluting
potential common shares, and making adjustments
according to Enterprise Accounting Standards and
related regulations
P1'=P0'+V'
-115,020,042.60 -60,660,142.06
Total shares at the beginning of period S0 479,433,003.00 479,433,003.00
Shares increased for increase of shares transferred from
public reserve or for share dividend distribution in the
report period
S1
- -
Shares increased for issuance of new shares or shares
transferred from liabilities in report period Si
- -
Shares decreased for buyback, etc. in report period Sj - -
Shares shortened in report period Sk - -
Number of months in report period M0 12 12
Accumulated number of months from the next month
of share increase to the end of report period Mi
- -
Accumulated number of months from the next month
of share decrease to the end of report period Mj
- -
Weighted average number of common shares issued
externally
S=S0 ＋ S1 ＋
Si×Mi
÷M0–Sj×Mj÷M
0-Sk 479,433,003.00 479,433,003.00
Add: Weighted average number of common shares
increased in condition that the diluted potential
common shares are supposed transferred into issued
common shares
X1
- -57
Items Calculation
process
Amount
incurred in
the current
period
Amount
incurred in
the last
period
Weighted average number of common shares with
diluted eps calculated X2=S+X1
479,433,003.00 479,433,003.00
Where: Weighted average number of common shares
increased from transfer of conversible corporate bonds
- -
Weighted average number of common shares increased
from equity warrant/ stock equity implementation right
- -
Weighted average number of common shares increased
from buyback promise implementation
- -
Basic eps classed under the Company’s common
shareholders EPS0=P0÷S
-0.2206 -0.0936
Basic eps classed under the Company’s common
shareholders after deducation of non-frequent gains
and losses
EPS0'=P0'÷S
-0.2399 -0.1265
Diluted eps classed under the Company’s common
shareholders EPS1=P1÷X2
-0.2206 -0.0936
Diluted eps classed under the Company’s common
shareholders after deducation of non-frequent gains
and losses
EPS1'=P1'÷X2
-0.2399 -0.1265
33. Notes to items in cash flow statement
(1) Other cash received related with business activities
Unit: Yuan Currency: RMB
Items Amount
Rent, electric rate and water rate 9,650,000.00
Parts disposal money 6,500,000.00
Other current accounts 4,218,255.24
Total
20,368,255.24
(2)Other cash paid related with business activities
Unit: Yuan Currency: RMB
Items Amount
Advertising propagation and promotion, and
brand maintainance expenses 1,260,000.00
Other expenses in sales section 1,670,000.00
Water and electricity expense 2,300,000.0058
Items Amount
Property repair, equipment maintenance and
repair fees 1,100,000.00
Listing fee, board of directors’ expense, and
expenses for office work, business traveling,
communication, and social intercourse 3,160,000.00
Consulting fee 1,740,000.00
Other fees in management section 700,000.00
Other current accounts 2,182,767.75
Total
14,112,767.7559
34. Supplementary data of cash flow statement
(1)Supplementary data of cash flow statement
Unit: Yuan Currency: RMB
Supplementary data Amount of the
current period
Amount of
last period
1．Cash flow for business activities transferred from net
profit:
Net profit -106,160,775.90 -44,489,780.00
Add: Asset depreciation reserve 4,430,522.05 8,823,963.63
Fixed asset depreciation, oil-gas asset depletion, and
productive biological asset depreciation 6,805,739.26 10,480,430.37
Amortization of intangible assets 862,862.04 862,862.04
Amortization of long-term fees to be apportioned - -
Loss from disposal of fixed assets, intangible assets and other
long-term assets (filled with “－” for benefit) -4,491,326.30 -8,666,548.80
Loss from fixed assets reported discarded (filled with “－”
for benefit) - -
Loss from change of fair value (filled with “－” for benefit) - -
Fincial cost (filled with “－” for benefit) 93,466,133.10 32,083,564.27
Investment loss (filled with “－” for benefit)) - 874,997.07
Decrease of deferred income tax asset (filled with “－” for
increase) - -
Increase of deferred income tax liability (filled with “－”
fordecrease) - -
Decrease of inventory (filled with “－” for increase) 3,632,974.34 4,919,451.58
Decrease of operating items receivable (filled with “－” for
increase) -19,094,626.44 -196,006.76
Increase of operating items payable (filled with “－” for
decrease) 24,469,084.82 -1,135,042.87
Others - -17,950,317.78
Net cash flow from business activities 3,920,586.97 -14,392,427.25
2 ． Important investment and financing activities not
involving with cash income and expenditure
Capital transferred from liability - -
Conversible corporate bonds coming due within one year - -
Fixed assets rented by financing - -
3．Net change of cash and cash equivalent: -
Closing balance of cash 22,232,425.07 10,086,599.53
Less: Opening balance of cash 10,086,599.53 14,062,198.43
Add: Closing balance of cash equivalent - -
Less: Opening balance of cash equivalent - -
Net increase of cash and cash equivalent 12,145,825.54 -3,975,598.90
(2) Composition of cash and cash equivalent60
Unit: Yuan Currency: RMB
Items Amount at the end of
period
Amount at the
beginning of period
I. Cash 22,232,425.07 10,086,599.53
Where: Cash on hand 122,959.64 78,004.69
Bank deposit available for payment
anytime 22,109,465.43 10,008,594.84
Other monteray fund available for payment
anytime
- -
Due from China Central Bank for payment - -
Due from banks - -
Call loans to banks - -
II. Cash equivalent - -
Where: Bond investment coming due within 3
months
- -
III. Closing balance of cash and cash equivalent 22,232,425.07 10,086,599.5361
VI. Affiliated Parties and Affiliated Transactions
1. Shareholders controlled by the enterprise
Unit: 10,000 Yuan Currency: RMB
2. Detailed information about the Company’s subsidiaries is as shown in 1 of Annotation IV of the report.
3. Joint management and joint-ownership enterprises of the Company
Unit: Yuan Currency: RMB
Invested unit Accounting
method
Initial
investment
cost
Opening
balance
Increase/
decrease
Closing
balance
Proportion of
shares in the
invested unit
(%)
Proportion of
voting power
in the invested
unit (%)
Depreciation
reserve at the
end of period
Shenzhen
Jinhuan
Printing Co.,
Ltd. *
Equity method 14,883,560.00 14,883,560.00 - 14,883,560.00 38.00 38.00 12,263,719.50
controlling
shareholder
Affiliated
relationship
Enterprise
type
Registration
place
Legal
representative Business nature Registered
capital
Proportion
of shares
held in the
enterprise
(%)
Proportion
of voting
power in
the
enterprise
(%)
ultimate
controller of
the
enterprise
Organization
code
Shenzhen
Guosheng
Energy
Investment and
Development
Co., Ltd.
Controlling
shareholder
Limited
liability
company
(solely
funded by
the
corporate)
Shenzhen Shang Shijun
Industry, domestic
commerce, materials
supply and sale (excluding
specially run, controlled
and sold merchandises)
7000 13.58 13.58
Shenzhen
National
Investment
and
Development
Co., Ltd.
77411579-262
The industrial and commercial registration information of Shenzhen Jinhuan Printing Co., Ltd. has
been cancelled as displayed. Hong Kong Dahuan Bicycle Co., Ltd., one of the original
shareholders of the company, holds the company’s shares under our entrustment, and the actual
holder is our company.
4. Accounts receivable/ accounts payable and exemption items of affiliated parties
(1) Current accounts
Unit: Yuan Currency: RMB
Items Affiliated parties Amount at the end of
period
Amount at the
beginning of period
Accounts payable
-others
Shenzhen Jinhuan Printing Board
Co., Ltd. 2,616,430.50 2,769,840.50
Long-term liability
coming due within
1 year
Shenzhen Guosheng Energy
Investment and Development Co.,
Ltd. 598,315,198.66 598,857,903.46
Interest in red
Shenzhen Guosheng Energy
Investment and Development Co.,
Ltd. 2,161,259.22 1,373,681.70
(2) Exempted items
Unit: Yuan Currency: RMB
Items Affiliated parties Amount incurred in
the current period
Amount incrrued in
last period
Financial cost
Shenzhen Guosheng Energy
Investment and Development Co.,
Ltd. 47,802,411.22 48,865,927.69
According to the Notification on Getting Done with the Annual Report of Enterprises Executing
Accounting Rules in 2008 [CKH (2008) No. 60] of the Ministry of Finance, the Company’s holding
shareholder Shenzhen Guosheng Energy Investment and Development Co., Ltd. exempted the
Company’s loan interest 47,802,411.22 Yuan in 2009, which will be charged into the capital reserve
as capital investment.
VII. Contingent Items63
1. Contingent liabilities formed from pending lawsuit and arbitration, and financial influences
(1) As of Dec. 31, 2009, the Company had been prosecuted by 17 financial instutions, involving
total loan principal and interest of RMB 425460600 Yuan, USD76852000 and HKD 8261600. The
abovementioned lawsuits have mostly been resulted in the Company’s failure or been mediated.
After lawsuits, partial debtors have transferred the creditor’s right, and the principals involved in the
cases are changed accordingly.
(2) As of Dec. 31, 2009, the Company had been prosecuted by 34 goods suppliers, involving total
loan principal and interest of RMB 60045500 Yuan, HKD24534100 and USD3261700. The
abovementioned lawsuits have mostly been resulted in the Company’s failure or been mediated.
2. Contingent liabilities formed from providing liability guaranty for other units, and
financial influences
Items Amount involved
Influences on the
Company’s financial
state, business result
and cash flow in the
current period and
future periods
Nature
Loan guarantee for Guangdong
Shengrun Group Co., Ltd.
RMB36,100,000.00
USD1,000,000.00 (1) Guaranty
Loan guaranty for Gintian Industry
(Group) Co., Ltd.
RMB50,000,000.00 (2) Guaranty
Loan guaranty for Shenzhen Tianma
Cosmetics Co., Ltd.
RMB8,000,000.00 (3) Guaranty
ZoriaPteLtdc USD10,000,000.00 (4) Guaranty
Shandong Huajiaming Economic Trade
Co., Ltd. RMB83,142.92 (5) Guaranty
Total RMB94,183,142.92
USD11,000,000.00
(1) The company estimated the loss based on 100% guaranteed amount.
(2) The company is a listed company limited, and has been in serious insolvency. The loss is
estimated as per 100% guaranteed amount.
(3) The company has gone bankrupt. The loss is estimated as per 100% guaranteed amount.
(4) The company has been in serious solvency, and is being liquidated. The loss is estimated as per
100% guaranteed amount.
(5)The company has been in serious solvency. The loss is estimated as per 100% guaranteed amount.64
VIII. Promised Items
The Company had no important promised items in the report period.
IX．Afterward Items of Balance Sheet
1. Credit’s applying for Bankcrupcy Reorganization
In the mid of January 2010, China Huarong Asset Management Corporation, the largest
sharehoulder and creditor of this Company, applies for reorganization to Shenzhen Intermediate
People's Court in accordance to Law of the People's Republic of China on Enterprise Bankruptcy,
on the grounds of serious insolvency and inability to repay the debts at maturity.
2 .Non-tradable shares reform of capital reserves transferred for share increase
In accordance with the capital reserves program transferred for share increase and non-tradable
shares reform program agreed by voting on the Shareholder Meeting on Feb. 1st, 2007, the
Company increased its share capital of 39,519,800 stocks by the shareholder of tradable share A,
which facilitated the non-tradable shares to otain the listing tradable right; transferred and increased
its share capital of 1.5 stocks every 10 to all the shareholders of share B, totaled 32,395,200 stocks
transferred herein. Shareholders of tradable share A
The equity division reform has been received the approval of [2007]No.1343 from China
International Business and the agreement of [2007]No.2257 from Shenzhen Trade and Industry
Bureau for " Reply on agreement of Shenzhen China Bycicle Co. Ltd increasing the whole capital",
agreeing to pass the equity division reform in accordance with it adopted on Feb. 1st, 2007.
On Mar. 18th, 2010, the company carried on the equity division reform and orienting Rotate
Increasing Share Capital from Capital Accumulation Fund. The whole capital turned 479.433
million into 551.3479 million, and at the same time, A share resumed trading.
X .Other important items
1. Financial debt reconstructing
In accordance with YJBT [2004] No.6 Document issued by the Office of China Banking Regulatory
Commission on Jan. 7th, 2004, the Bank of China, totally 11 financial institutes agreed to stop
calculating the interests as of Jan. 1st, 2002 for three years, and exempt all and any interests
paypable prior to Dec. 31st, 2001, including the default interests and compound interests. The65
Company will transfer all the interests payable (including the default interests and compound
interests) of RMB 357,993,665.24 prior to Dec. 31st, 2001 to “public accumulated capital”, and the
interests will be not calculated temporarily from Jan. 1st, 2002 to Dec. 31st, 2004. This term of
interests exemption shall be valid before Dec. 31st, 2004.
In 2005, China Huarong Asset Management Corporation Shenzhen Office, China Orient Asset
Management Corp. Shenzhen Office, China Cinda Asset Management Corporation Shenzhen Office
and China Great Wall Asset Management Corporation Shenzhen Office will continuous to stop
calculating the interests of 2005 loans.
Whereas the term of “Stop Calculating Inerests” may cause discrepancy and General Terms on the
Loan did not interprate its meaning either, China Huarong Asset Management Corporation
Shenzhen Office, China Orient Asset Management Corp. Shenzhen Office, China Cinda Asset
Management Corporation Shenzhen Office and China Great Wall Asset Management Corporation
Shenzhen Office all agree not to claim the Company to repay all the interests stopped calculating
herein. However, Shenzhen Development Bank requied the Company to repay all the interests and
compound interests which was stopped calculating from Jan.1st, 2002 to Dec.31, 2004. The
Company argued that the interests which were stopped calculating shall not be repaid; therefore,
after the period during which the interests is stopped calculating, the interests to be repaid shall be
calculated as the normal loans, but not the interests and compound interests stopped calculating
from Jan.1st, 2002 to Dec. 31, 2004. As of Dec. 31st, 2009, the sum of interests confirmed by
creditor bank is RMB 211,053,921.33 more than the interests payable of book value, and some
institutes have no reply to the confirmation of debts. In such a case, the Company thought that we
cannot decide if this part of interests can be withdrawn or repaid, thus no any financial adjustment is
done till now.
2 .Instructions to Continous Operation
As of Dec.31st, 2009, China Bicycle Company Limited has a gross asset of RMB 169,696,420.47,
the total debt of RMB 2,030,710,940.14, with its net asset up to RMB -1,861,014,519.67, in the
state of insolvency, which thus may cause this Company liquidate its assests and pay off the debts in
the normal operations. In such a case, this Company and its largets creditor will take the following66
measures:
Since March 2003 when China Huarong Asset Management Corporation, the former largest creditor
of this Company, launched the debt reconstructing and made the progress to a certain extent, China
Banking Regulatory Commission and the relevant authorities approved on the exemption and stop
calculating all the interests of financial debts incurred as of Dec. 31st, 2004.
Whereas the Company signed Settlement Agreement with International Finance Corportation on
March 29th, 2007, it is hereby agreed to settle all and any creditor’s rights and debts incurred
therefore by an equivolant US dollars for RMB 2 million, with the prinical of debts approx. USD
3.87 million and the interests payable of approx. RMB 42.78 million.
China Huarong Asset Management Corporation, on Dec. 30th, 2006, transferred its creditor’s rights
to Shenzhen Guocheng Engergy Investment & Development Corporation (hereinafter referred to as
“Guocheng Energy Corporation”) which is now performing actively the matters concerning debt
reconstructing and has made the progress to a certain extent. Whereas the largest shareholder and
creditor of this Company have changed, in January 2010, in accordance with newly-issued Law of
the People's Republic of China on Enterprise Bankruptcy, Guocheng Energy Corporation
consequently claims and applys for new reconstructing of this Company to Shenzhen Intermediate
People's Court, with a view to recover and improve the ongoing operations. Currently, it is under
investigation in the Court. Guocheng Energy Corporation agreed to stop calculate the interests for
2009 loan of RMB 47.8024 million, which shall not be charged henceforth anymore.
The main business of this Company may develop stably and realize benefits continuously while
launching the debt reconstructing. In a short term, it reduced the paying pressure greatly, and ability
to continous operations has been improved to a certain degree. The Board of the Directors thought
that along with the continuous progress of the Company debts and asset reconstructing, the
operating environment, business situation and ability to continuous operations will be bound to
further improvement.
Ⅺ. Note of main item of financial statement of parent company67
1)Receivable account
(1)Receivable account
unit：yuan currency：RMB
End of period
Category Book balance Provision for bad debts
Amount Proportion Amount Proportion
Accounts receivable which single amount is
significant 919,163,966.00 88.40% 918,149,069.40 88.72%
Accounts receivable which single amount is
not significant but have much risk after being
merged based on credit risk characteristic 116,770,032.07 11.23% 116,770,032.07 11.28%
Other insignificant receivables 3,825,758.71 0.37% - -
Total up 1,039,759,756.78 100.00% 1,034,919,101.47 100.00%
Beginning of period
Category Book balance Provision for bad debts
Amount Proportion Amount Proportion
Accounts receivable which single amount is
significant 904,866,318.70 77.12% 904,866,318.70 87.24%
Accounts receivable which single amount is
not significant but have much risk after being
merged based on credit risk characteristic 268,132,144.80 22.85% 132,318,161.62 12.76%
Other insignificant receivables 306,245.27 0.03% - -
Total up 1,173,304,708.77 100.00% 1,037,184,480.32 100.00%
About the categories of the accounts receivable:
Based on the size, business nature and customer settlement condition of the company, the company decides that 5
million Yuan of accounts receivable is important single sum of payment. For an account receivable without
depreciation at the end of the period, the bad debt allowance is accrued on the basis of account aging analysis
method.
The accounts receivable without grave single sum but whose combined credit risks as a whole is grave refer to
those less than 5 million Yuan and with an account aging of more than 3 years. If there’s no depreciation with the
accounts receivable without grave single sum but whose combined credit risks as a whole is grave, the bad debts
allowance is accrued on the basis of accounting aging analysis method.
For other accounts receivable that is not grave, bad debts allowance is accrued on the basis of accounting aging
analysis method.
(2)Withdrawal of bad debts provision of other receivables which single amount is significant or not significant but68
need to do depreciation test:
Unit：yuan currency:RMB
Content of account
receivables
Book balance Amount for bad
debts
Proportion of
withdrawal
Reason
Accounts receivable
which single
amount is
significant 919,163,966.00 918,149,069.40 99.89%
Little possibility to
withdraw from
singe test
Accounts receivable which single amount is not significant but have much risk after being merged based on credit
risk characteristic
Unit：yuan currency：RMB
End of period Beginning of period
Account Book balance Book balance
receivable
age Amount Proportion
(%)
Provision for
bad debts Amount Proportion
(%)
Provision for
bad debts
Over
three
years 116,770,032.07 100.00 116,770,032.07 268,132,144.80 49.35 132,318,161.62
(3)Disclosure of other receivable is based on credit risk characteristic(analysis of accounts receivable aging)
Unit：yuan currency：RMB
End of period Beginning of period
Account Book balance Book balance
receivable
age Amount Proportio
n
Provision for bad
debts Amount Proportion Provision for
bad debts
Within
one year 3,329,011.81 0.32% - 496,746.90 0.04% -
One year
to two
years 496,746.90 0.05% - 31,95 - 95.85
Over three
years 1,035,933,998.07 99.63% 1,034,919,101.47 1,172,776,011.87 99.96% 1,037,184,384.47
Total up 1,039,759,756.78 100% 1,034,919,101.47 1,173,304,708.77 100% 1,037,184,480.32
(4)There is no writing-off of any accounts receivable in the term of the report.
(5)There are not shareholder units who has 5% or more than 5% of voting rights in the company at the end of the
term of the report.
(6)The top 5 units in terms of accounts receivable:69
Unit：yuan currency：RMB
Name of company Relations to the
company
Amount Number of year percentage of the
total accounts
receivable(%)
The total accounts receivable
by the top five customers Non-related party 535,330,991.79 Over three years 51.49
(7)No accounts receivable from affiliated parties in the report period.
(8)No account receivable with confirmation terminated at the end of the report period.
2. Other receivables
(1)Other receivables
Unit：yuan currency:RMB
End of period
Category Book balance Provision for bad debts
Amount Proportion Amount Proportion
Other receivables which single amount is
significant 518,814,385.48 90.72% 476,218,547.14 90.30%
Other receivables which single amount is not
significant but have much risk after being
merged based on credit risk characteristic 51,168,974.44 8.95% 51,168,974.44 9.70%
Other insignificant receivables 1,876,468.21 0.33% 2,929.40 -
Total up 571,859,828.13 100.00% 527,390,450.98 100.00%
Beginning of period
Category Book balance Provision for bad debts
Amount Proportion Amount Proportion
Other receivables which single amount is
significant 559,866,702.00 91.33% 475,443,015.00 90.50%
Other receivables which single amount is not
significant but have much risk after being
merged based on credit risk characteristic 49,916,967.08 8.14% 49,916,967.08 9.50%
Other insignificant receivables 3,245,998.74 0.53% 9,962.25 -
Total up 613,029,667.82 100.00% 525,369,944.33 100.00%
Interpretation to the category of accounts receivable-others:
According to the business scale, business nature, and customers’ settlement, etc., the account receivable-other with
single big amount is determined to be 5 million Yuan. The account receivable-other with single big amount has no
depreciation reserve, and the reserve for bad and doubtful account is withdrawn with age analysis method.
Account receivable-other not with single big amount but with heavy combination risk after combination by credit70
risk characteristic indicates the account receivable with closing balance of below 5 million Yuan and an age of
over 3 years. The account receivable-other not with single big amount but with heavy combination risk after
combination by credit risk characteristic doesn’t have the phenomenon of depreciation, and the reserve for bad
and doubtful account is withdrawn with age analysis method.
As for other not important accounts receivable-other, the reserve for bad and doubtful account is withdrawn with
age analysis method.
(2)Withdrawal of bad debts provision of other receivables which single amount is significant or not significant but
need to do depreciation test:
Unit：yuan currency：RMB
Content of other receivables Book balance
Amount of bad
debt
Proportion
of
withdrawal
Reason
Other receivables which single
amount is significant 518,814,385.48 476,218,547.14 91.79%
Little possibility to
withdraw from singe test
Percentage of other receivables whish single amount is not significant, but the portfolio risk is significant after
grouped by credit risk feature
Unit：yuan Currency：RMB
End of period Beginning of period
Book balance Book balance
Account
receivable
age
Amount Proportion
(%)
Provision for
bad debts
Amount Proportion(%)
Provision for
bad debts
over 3 years 51,168,974.44 100 51,168,974.44 49,916,967.08 100 49,916,967.08
(3)Disclosure of other receivables is based on credit risk characteristic(analysis of accounts receivable aging)
Unit：yuan currency：RMB
End of period Beginning of period
Book balance Book balance
Account
receivable
age Amount Proportion
Provision for
bad debts Amount Proportion
Provision for
bad debts71
Within
one year 6,376,468.21 1.12% 2,929.40 40,722,758.73 6.64% 9,110,223.51
One year
to two
years - - - 1,175,870.02 0.19% 3,527.61
Two years
to three
years - - - - - -
Over three
years 565,483,359.92 98.88% 527,387,521.58 571,131,039.07 93.17% 516,256,193.21
Total up 571,859,828.13 100.00% 527,390,450.98 613,029,667.82 100.00% 525,369,944.33
(4)No accounts receivable –others actually cancelled after verification in the report period.
(5)The accounts receivable – others in the report period don’t involve with the shareholder units holding over 5%
(including 5%) voting power of the Company.
(6)Top 5 units with an amount of accounts receivable –others:
Unit：yuan currency：RMB
Name of company
Relations to the
company
Amount Number of year
Precentage in
total amount of
other receivables
(%)
Add up to the amount of the first
five other receivables
Non-related
party 357,033,911.68
Over three
years 58.24
(7)No receivables for related-party at the end of period in this report
(8)No terminated other receivables at the end of period in this report72
3. Long-term equity investment
Unit：yuan currency:RMB
Invested company
Examina
tion and
calculati
ng
method
Initial
investment
cost
Opening bala
nce
Increas
es and
decreas
es
Closing balan
ce
Share
proporti
on in
invested
company
Percenta
ge of
voting
rights in
invested
company
Explanatio
n on
discrepanc
y between
share
proportion
in invested
company
and
percentage
of voting
rights in
invested
company
Depreciatio
n reserve
Provisi
on for
(asset)
depreci
ation
of
current
period
Cash
divid
end
Shenzhen EMMELLE
Industry Co.Ltd
Cost
method 1,400,000.00 1,400,000.00 - 1,400,000.00 70% 70% - 1,400,000.00 - -
Shenzhen Anju property
management co.,ltd
Cost
method 2,000,000.00 2,000,000.00 - 2,000,000.00 100% 100% - 2,000,000.00 - -
China Bicycle(Hong Kong)
Co.,Ltd
Cost
method 5,350,000.00 5,350,000.00 - 5,350,000.00 99% 99% - 5,350,000.00 - -
China Bicycle(International)
Co.,Ltd
Cost
method 18,727.60 18,727.60 - 18,727.60 100% 100% - 18,727.60 - -
Hunan Guangnan
Motorcycle Co.,Ltd
Cost
method 5,679,300.00 5,679,300.00 - 5,679,300.00 5.50% 5.50% - 5,679,300.00 - -
Shenzhen Jinhuan Printing
Co.,Ltd
Equity
method 14,883,560.00 14,883,560.00 - 14,883,560.00 38.00% 38.00% - 12,263,719.50 - -
Total up -- 29,331,587.60 29,331,587.60 - 29,331,587.60 -- -- - 26,711,747.10 - -73
4. Operating revenue and operating costs
(1)Operating revenue
Unit ：yuan currency:RMB
Item Amount incurred of current
period
Amount incurred of last period
Income from main business 2,528,791.93 4,342,078.22
Income from other business 14,956,851.56 14,456,637.92
Operating cost 11,699,612.00 16,118,210.88
5. Investment income
(1)Details of investment income
Unit：yuan currency：RMB
Item Amount incurred of
current period
Amount incurred of
last period
Investment income of long - term equity investments by
cost method
- -
Investment income of long - term equity investments by
equity method
-
-874,997.07
Investment income on disposal of long-term equity
investment
- -
Investment income from held-for-trading securities - -
Investment income from held-to-maturity investment
income
- -
Investment income acquired during the period of holding
financial assets to sales
- -
Investment income on disposal of transaction financial
assets
- -
Investment income from held-to-maturity investment - -
Investment income from available-for-sale financial assets - -
Others - -
Total up - -874,997.0774
6. Supplemental Information of cash flow statement
Unit：yuan currency：RMB
Supplemental Information Amount of this pe
riod
Amount of last pe
riod
1． Reconciliation of net profit/(loss) to cash
flows from operating activities:
Net profit -102,983,715.11 -48,399,301.24
plus: provision for assets 4,430,522.05 8,698,064.11
Depreciation of fixed assets, oil/gas asset depletion and
depreciation of productive biological assets 6,641,391.45 10,209,845.90
Amortization of intangible assets 862,862.04 862,862.04
Amortization of long-term prepaid
expenses - -
Loss on disposal of fixed assets, intangible assets and others (
deduct: gains)
-4,491,326.30 -8,160,889.46
Losses on disposal of fixed assets (deduct: gains)
- -
Losses on the changes in fair value
(deduct :gains) - - -
Financial expenses (deduct :gains) - 94,449,263.86 35,722,902.67
Losses arising from
investments(deduct: gains) - - 874,997.07
Decrease of deferred income tax assets
(deduct : increase) - -
Increase of deferred income tax
liabilities (deduct : decrease) - - -
Decrease in inventories(deduct: increase)
6,682,348.83 6,969,798.96
Decrease in operating payables (deduct:
increase) 8,015,477.05 8,289,077.51
Increase in operating payables (deduct: -13,640,816.70 2,241,323.9975
Supplemental Information Amount of this pe
riod
Amount of last pe
riod
decrease)
Others -- -17,358,404.06
Net cash flows from operating activities -33,992.83 -49,722.51
2． Investing and financing activities that do not
concerning cash receipts and payment:
Conversion of debt into capital - -
Reclassification of convertible bonds
expiring within one year as current liability
- -
Financial leasing of fixed assets - -
3． Net change of cash and cash equivalents:
Closing balance of cash 365,121.06 417,444.51
Minus: opening balance of cash 417,444.51 477,660.27
Plus: closing balance of cash
equivalents - -
Minus: opening balance of cash
equivalents - -
Net increase of cash and cash
equivalents -52,323.45 -60,215.76
Ⅻ. Supplement information
1. List of non-recurring profit and loss
unit：yuan currency：RMB
Item Amount Explanation
Loss and profit on disposal of non-current assets
4,491,326.30
Net income on
disposal of fixed assets
Tax return or exemption from override approval or with no official
approval document -
-
The amount of the government subsidies which are included in the - -76
Item Amount Explanation
current profits( which is related to enterprise business, except for
government subsidies according to national stand quota or quantum)
Paid or received payment for use of state funds recorded in current
profit and Losss -
Profits and losses arising from business combination when the
combined cost is less than the recognized fair value of net assets of
the merged company -
Loss and profit of exchange of non-monetary assets -
Loss and profit by entrusting others to invest and manage the asset -
Allotted asset depreciation reserves incurred by occasional cause
such as natural calamities -
Loss on arrangement
5,045,542.00
Relief of guarantee for
Guangdong Shengrun
Company
Expense for enterprise reconstruction, employee arrangement and
other integration costs -
Profit and loss from transactions with obvious unfair transaction price -
Subsidiaries' year-to-date net profit/loss arising from business
combination of entities controlled by a same company -
Profits contributed by the sold assets to the listed company from The
beginning of the year To the sale date -
Except for effective hedging business related to normal business,
held-for-trading financial asset, profit and losses on the changes in
fair value generated by transaction financial liabilities, investment
income achieved by disposing transaction financial assets, transaction
financial liabilities and hold-to-sale financial assets -
Reversals of depreciation reserves of receivables done depreciation
test solely -
Loss and profit achieved by entrusting loans -
Profit and loss on the changes in fair value of invested real estate
after being subsequently measured with fair value mode -
According to laws and regulations of tax and accounting, impact of
One-off adjustment of current loss and profit on current loss and
profit -
Trustee fee income generated from entrusted operation -
Other non-operating income and expenses 2,041,248.0777
Item Amount Explanation
Other loss/profit generated by definition of other non recurring profit
and loss -
Amount influenced by income tax -2,315,623.27
Amount influenced by few shareholders’ equity(after-tax) -
Total 9,262,493.10
2. Net assets income rate and earnings per share
Earnings per share
Profit during the period of
report
Average weight net asset
income rate (%)
Basic earnings per
share
Dilute earnings per
share
Net income attributed to
shareholders - -0.2206 -0.2206
Net income attributed to
shareholders after deducting
net profit of recurring loss and
profit - -0.2399 -0.2399
3. Reason and explanation of unusual circumstance of items of financial statement of the company
Unit ： yuan
currency:RMB
Items
Change of
amount at the
beginning of
period and at the
end of period
Proportion of
change in the
beginning of
period and at
the end of
period
Explanation
Monetary fund
12,145,825.54 120.42%
Mainly the receipt of repayment for bicycle business
and the investment project of Jiangxi Lihua
Advance payment -309,142.32 -61.28% Mainly the decrease of advance payment
Accounts
receivable -others -17,972,901.97 -42.60%
Mainly the money repaid for the investment project
of Jiangxi Lihua78
Employees’
remuneration
payable 3,582,483.97 212.45%
Mainly the remuneration payable and economic
compensation for employees fired are not paid.
Other current
liabilities 47,635,343.28 40.05% Mainly loan interest withdrawn in advance this year
Financial cost 61,382,567.07 191.32%
Exchange profit was produced from RMB
upvaluation last year, but this income was not
obvious this year.
Asset depreciation
loss -4,393,441.58 -49.79%
Decrease of various assets depreciation in the current
period
Investment yield 874,997.07 -100.00% Investment project of Jiangxi Lihua is transferred.
Nonbusiness
income -14,862,450.39 -53.87%
Decrease of interest exempted in the current period
compares with last year
Nonbusiness
expenditure 778,794.23 209.04% Increased loss from disposal of fixed assets
XI. Documents Available For Reference
1. Accounting statements carrying the personal signatures and seals of legal representative,
person in charge of the accounting affairs and person in charge of the accounting department.
2. Original of Auditors’ Report carrying the seal of the Certified Public Accountants as well as
personal signatures and seals of certified public accountants.
3. Originals of all documents and public notices disclosed publicly on the newspapers as
designated by China Securities Regulatory Commission in the report period.
4. English version of the 2009 Annual Report.
The Board of Directors of
Shenzhen China Bicycle Company (Holdings) Limited
April 27, 2010
