深圳中华自行车（集团）股份有限公司
Shenzhen China Bicycle Company (Holdings) Limited
Semi-Annual Report 2010
August 11, 20102
Important Notice
The directors, supervisors and senior executives of Shenzhen China Bicycle Company (Holdings)
Limited (hereinafter referred to as the Company) hereby confirm that there are no important
omissions, fictitious statements or serious misleading information carried in this report, and shall
take all responsibilities, individually and jointly, for the authenticity, accuracy and completeness of
the whole contents.
The 2010semi-annual financial report of the Company has not been audited, and the investors are
suggested to read carefully.
No director declares that he or she could not assure the authenticity, accuracy and completeness of
the semi-annual report, or holds different opinions.
Director—Mr. Guan Yueyu absent the Board of Directors Meeting due to the business trip, and
Director-- Mr. Wang Cheng was authorized for attending the Meeting and exercise right of voting.
Director Mr. Yang Fenbo absent the Board of Directors Meeting due to the business trip and
authorized Director Ms. Kong Na attending the Meeting and exercise right of voting; Independent
Director Mr. Shao Liangzhi absent the Board of Directors Meeting due to the work staff and
entrusted Independent Director Ms. Zhang Xinmiao attending the Meeting and exercise right of
voting.
Person in Charge of the Company Mr. Li Gang, Person in Charge of Accounting Works Mr. Wang
Cheng and Person in Charge of Accounting Institution Mr. Sun Longlong hereby assure that the
financial report enclosed in the semi-annual report is true and complete.
CONTENTS
Section I. Company Profile……………………………………
Section II. Main Financial Data and Business Indexes…………………………
Section III. Changes in Share Capital and Particulars about Shareholders……
Section IV. Particulars about Directors, Supervisors and Senior Executives…
Section V. Report of the Board………………………………………
Section VI. Significant Events……………………………………………………
Section VII. Financial Report……………………………
Section VIII. Documents Available for Reference…………………………………3
Section I. Company Profile
(I). 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
(II). Legal Representative: Li Gang
(III). Secretary of the Board: Li Hai
Representative of Securities Affairs: Cui Hongxia
Tel.: 0755-28181666
Contact Address: Zhonghua Industrial Park, Yousong Industrial Zone, Longhua, Shenzhen,
Guangdong Province, China
Fax: 0755-28181009
E-mail: dmc@szcbc.com
(IV). Registered Address: No. 3008, Buxin Road, Shenzhen, Guangdong Province, China
Postcode: 518019
Office Address: Zhonghua Industrial Park, Yousong Industrial Zone, Longhua, Shenzhen,
Guangdong Province, China
Postcode: 518131
Internet Website: www.cbc.com.cn
E-mail: cbc@szcbc.com
(V).Newspapers Chosen for Disclosing Information: Securities Times and Hong Kong
Commercial Daily
Internet Website Designated for Publishing the Semi-annual Report: http://www.cninfo.com.cn
Place Where the Semi-annual Report Is Prepared and Placed: Secretariat of the Board of the
Company, Yousong Industrial Zone, Longhua, Shenzhen
(VI). Stock Exchange Listed with, Short Form of the Stock and Stock Code:
Stock Exchange Listed with: Shenzhen Stock Exchange
Short Form of the Stock: *ST ZHONGHUA - A, *ST ZHONGHUA - B
Stock Code: 000017/A-stock, 200017/B-stock4
VII. Other Relevant Information:
1. Date of the First Registration: August 24, 1984
2. Place: Buxin Road, Shenzhen
3. Registration No. of the Business License of Incorporated Enterprise: 440301501122085
4. Tax Registration No.: GSSZ No. 440301618830452,
SDSDZ No. 440303618830452
5. Name and office address of the Certified Public Accountants engaged by the Company:
Name: Shenzhen Pengcheng Certified Public Accountants Co., Ltd.
Office Address: 7/F, Block A, No. 5022 Union Square, Binhe Road, Futian District, Shenzhen5
Section II. Main Financial Data and Business Indexes
(I). Main accounting data and financial indexes
1. Major accounting data
Unit: RMB
At the end of this
report period
At the period-end
of last year
Increase/decrease
at the end of this
report period
compared with
that in period-end
of last year (%)
Total assets 170,137,366.18 169,696,420.47 0.26%
Owners’ equity attributable to
shareholders of the listed company
-1,889,879,682.58 -1,861,014,519.67 1.55%
Share capital 551,347,947.00 479,433,003.00 15.00%
Net assets per share attributable to
shareholders of the listed
company(RMB/Share)
-3.43 -3.88 -11.60%
This report period
(Jan. to Jun.)
The same period
of last year
Increase/decrease
in this report
period
year-on-year (%)
Total operating income 120,622,786.14 112,494,583.85 7.23%
Operating profit -52,431,969.81 -56,735,729.52 Loss 7.59%
Total profit -51,663,487.04 -56,402,631.25 Loss 8.40%
Net profit attributable to shareholders of
the listed company
-51,719,360.41 -56,332,908.69 Loss 8.19%
Net profit attributable to shareholders of
the listed company after deducting
non-recurring gains and losses
-52,487,843.18 -56,666,006.96 Loss 7.37%
Basic earnings per share (RMB/Share) -0.0938 -0.1175 Loss 20.17%
Diluted earnings per share (RMB/Share) -0.0938 -0.1175 Loss 20.17%
Return on equity (%)
Net cash flow arising from operating 5,750,731.94 753,569.02 663.13%6
activities
Net cash flow per share arising from
operating activities (RMB/Share)
0.0104 0.0016 550.00%
Note: The Company practices the capitalizing of common shares in the report period. After
capitalizing, the basic earnings per share and diluted earnings per share attributable to
common shareholders of the Company at same period of last year were respectively
calculated as RMB-0.1022 per share and RMB-0.1022 per share.
2. Items of non-recurring gains and losses:
Unit: RMB
Non-recurring gains and losses Amount Note(If applicable)
Ultra vires approval or without official approval documents
or occurrence return and exemption of tax
254,666.00
Return of many
land use tax
Other non-operating income and expense excluded the
aforementioned business
513,816.77
Total 768,482.77 -
(II). Indexes calculated in accordance with Regulations on the Information Disclosure of
Companies Publicly Issuing Shares (No. 9) are as follows:
Return on equity (%) Earnings per share (RMB)
Profit index
Fully diluted
Weighted
average
Fully
diluted
Weighted
average
Operating profit --- --- -0.0951 -0.0951
Net profit --- --- -0.0938 -0.0938
Net profit after deducting
non-recurring gains and losses
--- ---
-0.0952 -0.0952
(III). There are no differences in net assets calculated in accordance with CAS and IAS
respectively in the report period.7
Section III. Changes in Share Capital and Particulars about Shareholders
(I) Changes in share capital:
The Company practices the common share capitalizing and equity division reform plan on 18
March 2010. The share capital increases 71,914,944 shares from total shares of 479,433,003 to
551,347,947 shares.
Unit: Share
Before the change Increase/Decrease of this time (+, -) After the change
Amount
Proporti
on
Ne
w
sh
are
s
iss
ue
d
Bo
nu
s
sh
are
s
Capi
taliz
ation
of
publ
ic
reser
ve
Others Subtotal Amount
Proporti
on
I. Restricted shares 186,796,067 38.96% 42,672 42,672 186,838,739 33.89%
1. State-owned shares 0 0.00% 0 0 0 0.00%
2. State-owned legal
person’s shares
16,340,000 3.40% 0 0 16,340,000 2.96%
3. Other domestic
shares
95,267,002 19.87% 0 0 95,267,002 17.28%
Including: Domestic
non-state-owned
legal person’s shares
95,267,002 19.87% 0 0 95,267,002 17.28%
Domestic natural
person’s shares
0 0.00% 0 0 0 0.00%
4. Foreign shares 75,106,190 15.67% 0 0 75,106,190 13.62%
Including: Foreign
legal person’s shares
75,106,190 15.67% 0 0 75,106,190 13.62%
Foreign natural
person’s shares
0 0.00% 0 0 0 0.00%
5. Senior executives’
shares
82,875 0.02% 42,672 42,672 125,547 0.02%
II. Unrestricted 292,636,936 61.04% 71,872,27 71,872,27 364,509,208 66.11%8
shares 2 2
1. RMB Ordinary
shares
76,669,125 15.99%
39,477,10
1
39,477,10
1
116,146,226 21.07%
2. Domestically listed
foreign shares
215,967,811 45.05%
32,395,17
1
32,395,17
1
248,362,982 45.05%
3. Overseas listed
foreign shares
0 0.00% 0 0 0 0.00%
4. Others 0 0.00% 0 0 0 0.00%
III. Total shares 479,433,003
100.00
%
71,914,94
4
71,914,94
4
551,347,947
100.00
%
（II）Particulars about shares held by the top ten shareholders and the top ten shareholders with unrestricted conditions
Unit: Share
Total shareholders
35,338 shares in total with A-share of 20,113 and B-share of
15,225.
Particulars about shares held by the top ten shareholders
Full name of shareholders
Nature of
shareholders
Proporti
on of
shares
held
Total
amount of
shares
held
Amount of
restricted
shares held
Shares
pledged or
frozen
Shenzhen Guocheng Energy
Investment Development Co., Ltd.
Domestic
non-state-owne
d legal person
11.81%
65,098,41
2
65,098,412 0
Hong Kong Zhuorun Technology
Co., Ltd.
Foreign legal
person
8.00%
44,104,24
6
44,104,246 0
China Bicycle Company (Holdings)
Limited
Foreign legal
person
4.72%
26,000,00
0
26,000,000 26,000,000
Shenzhen Kangsheng Investment
Development Co., Ltd.
Domestic
non-state-owne
d legal person
2.17%
11,968,59
0
11,968,590 0
Xinliyi Investment Management
Co., Ltd.
Domestic
non-state-owne
d legal person
2.03%
11,200,00
0
11,200,000 0
Airline Trust and Investment Co.,
Ltd.
State-owned
legal person
1.88%
10,340,00
0
10,340,000 09
GUOTAI JUNAN
SECURITIES(HONGKONG)
LIMITED
Foreign legal
person
1.76% 9,698,016 0 0
Shenzhen New Land Tool
Consultants PTE. LTD
Domestic
non-state-owne
d legal person
1.52% 8,358,500 0 0
China Resources SZITIC Trust Co.,
Ltd.
Domestic
legal person
1.09% 6,000,000 6,000,000 0
Jingchao Investment Co., Ltd.
Foreign legal
person
0.91% 5,001,944 5,001,944 0
Particulars about the shares held by the top ten unrestricted shareholders
Full Name of shareholder
Amount of unrestricted
shares held
Type of shares
GUOTAI JUNAN SECURITIES(HONGKONG)
LIMITED
9,698,016
Domestically listed
foreign shares
Shenzhen New Land Tool Consultants PTE. LTD 8,358,500 RMB common shares
BOCI SECURITIES LIMITED 3,599,196
Domestically listed
foreign shares
TANG JING YUAN 2,213,175
Domestically listed
foreign shares
Celestial Securities Limited 2,199,990
Domestically listed
foreign shares
Zhang Huiling 2,095,186
Domestically listed
foreign shares
Lin Shaowei 1,936,752
Domestically listed
foreign shares
Dalian Mingyuan Petrochemical Co., Ltd. 1,821,269 RMB common shares
Dalian Mingyuan Holdings Group Co., Ltd. 1,655,186 RMB common shares
Xu Wanqi 1,478,787
Domestically listed
foreign shares
Explanation on associated
relationship among the top ten
shareholders or consistent action
Among the top ten unrestricted 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.10
Note: HONGKONG (LINK) BICYCLES LIMITED, the original name of China Bicycle
Company (Holdings) Limited, changed the corporate name in Hong Kong Company Registry on 28
November 2006(see more details in Announcement of Alteration on Shareholder’s Name
No.2009029 published dated 26 May 2009) and while practicing the equity division reform plan on
16 March 2010, the alteration procedure have been approved by the China Securities Depository
and Clearing Corporation Limited Shenzhen Branch.
（III）In the report period, the Company’s controlling shareholder and actual controller have no
change.
Section IV. Particular about Directors, Supervisor, Senior Executives
and Employees
（I）Particulars about changes in shares held by directors, supervisors and senior executives
Unit: Share
Name Position
Shares
held in
year-beg
in
Shares
increasi
ngly
held in
the
report
period
Shares
decreasin
gly held
in the
report
period
Shares
held in
period-e
nd
Of which:
amount of
restricted
shares
held
Amount of
share option
held in
period-end
Reason for
change
Zheng
Zhonghua
n
Supervisor 10,500 5,407 3,977 11,930 0 0
Common
share
capitalizing
and
implementati
on of share
merger
reform plan
（II）In the report period, particulars about new engagement or dismission of the Company’s
directors, supervisors and senior executives
1. Director and Chairman of the Board Mr. Wu Jun resigned the occupation of Director and
Chairman of the 7th Board of Directors on 9 March 2010; the 2nd Temporary Shareholders General
Meeting and 19th Meeting (Temporary) of 7th Board of Director was held on 31 March 2010, Mr. Li11
Gang was elected as director of the 7th board of directors, the new chairman of the board. His term
was the same as this session of the board of directors.
2. Independent director of the Company Mr. Li Chun resigned the occupation of independent
director of 7th board of directors; the 2nd Temporary Shareholders General Meeting of 2010 was
held on 31 March 2010, Mr. Cui Jun was elected as independent director of 7th board of directors.
His term was the same as this session of the board of directors.
3. Independent director of the Company Mr. Wei Chuanyi resigned the occupation of independent
director of 7th board of directors; Director Mr. Liu Linfeng resigned the occupation of director of 7th
board of directors; the 18th (year of 2009) Shareholders General Meeting was held on 28 May 2010,
Ms. Li Bing was elected as independent director of 7th board of directors, Ms. Kong Na was elected
as Director of 7th board of directors, their term were the same as this session of the board of
directors.
Section V. Report of the Board
（I）Discussion and analysis on the general operation of the Company during the report
period
No change happened to the main business and the industry that the Company belonged to
during the report period. In the first half year of 2010, the Company still faces a fierce situation
under the complicated market environment with means of price-war in the market of bicycle and
electric vehicle. Therefore, the Company explore vigorously in the main industry of bicycle, applied
to be the rural-household products successfully in the market of Shangdong, Hebei and Shangxi,
created a condition of sales promoting. In the aspect of property rental and property management,
with the purpose of increasing income and reducing expenditure, further improved the Company’s
cash flow and economic benefit by reasonably combining the office site, increasing the areas for
renting and reducing the expenditure. From January to June of 2010, the Company realized
operation income of RMB120, 622,800, up 7.23% compared with same period of last year; net
profit amounted to RMB -51,719,400.
In the report period, Board of the Director actively promoted the process of debt reconstructing and
equity division reform in order to improve the fierce situation of failure material achievement and
standstill on the work of equity division reform. On 14 January 2010, the large shareholder and12
large debtor of the Company-- Shenzhen Guocheng Energy Investment Development Co., Ltd.
applied to the Shenzhen Intermediate People’s Court on 14 January 2010 for restructuring the
Company with the purpose of recovering and improving the ability of sustainable operations of the
Company. The court is in the process of investigation recently. The Company completed the equity
division reform on 18 March 2010, and laid out a foundation for the work of restructure. In the
aspect of debts, the large creditor-- Shenzhen Guocheng Energy Investment Development Co., Ltd
agreed to exempted the majority interest of 2010 of the Company, which have an actively influence
on the maintains the sustainable operation of he Company.
（II）Compare the financial indexes in report period with that of last period:
1. Operation achievement:
financial indexes Amount(RMB) Proportion of
increased/decreased
Jan.-Jun.2010 Jan.-Jun.2009
Operation income 120,622,786.14 112,494,583.85 7.23%
Operation profit -52,431,969.81 -56,735,729.52 -7.59%
Net profit -51,719,360.41 -56,332,908.69 -8.19%
Net increase amount of cash
and cash equivalent
3,302,438.34 9,264,271.23 -64.35%
2. Financial status:
Item Amount(RMB) Proportion of
increased/decreased
30n June 2010 31 December2009
Current assts 88,074,659.03 85,426,951.81 3.10%
Total assets 170,137,366.18 169,696,420.47 0.26%
Current liabilities 1,880,872,732.47 1,851,622,497.22 1.58%
Shareholders’ equity -1,889,823,809.21 -1,861,014,519.67 1.55%
Note: particulars and reason on the major items of accounting statements and financial indexes
with major changes
Note receivable: decreased 100.00% compared with that of period-begin, mainly caused by the
goods paid by draft from Amine;
Accounts receivable: increased 262.37% compared with that of period-begin, mainly caused
by the business operation;
Accounts paid in advance: increased38.38% compared with that of period-begin, mainly
caused by the increase of goods payment paid in advance from Amine;13
Other account receivable: decreased 22.30% compared with that of period-begin, mainly
caused by the investment accounts of Jiangxi Lihua have been paid to creditors by Hong Kong
Dahua Group in this report period;
Inventory: increased 28.82% compared with that of period-begin, mainly caused by the
increase of inventory reserve for sales busy season from Amine;
Account payable: increased 7.08% compared with that of period-begin, mainly caused by
the increased of account payable arising from the increase of inventory reserves for sale busy
season from Amine;
Account received in advance: increased 28.41% compared with that of period-begin, mainly
caused by newly added account received in advance for sale from Amine;
Wage payable: decreased 60.42% compared with that of period-begin, mainly caused by the
accruing economic compensation and wage payable;
Interest payable: increased 15.04% compared with that of period-begin, mainly caused by the
accruing debt interest;
Paid-up capital (share capital): increased 15% compared with that of period-begin, mainly
caused by the common share capitalizing after the completion of equity division reform;
Capital reserve: decreased 10.70% compared with that of period-begin, mainly caused by the
common share capitalizing after the completion of equity division reform and interest that exempted
from Guosheng Company;
Sales expense: increased 39.91% compared with that of period-begin, mainly caused by the
growth sale expenditure from Amine;
Assets depreciation loss: decreased 100.00% compared with same period of last year, mainly
caused by there no assets depreciation loss in this period;
Non-operating income: increased 130.09% compared with same period of last year, mainly
caused by the surrender tax.
3. Operation on main business:
During the report period, the main business and the industry that the Company belonged to didn’t
changed. From January to June of 2010, the Company realized main business income of RMB
112,764,500, 3.93% up over the same period of last year; and realized net profit of
RMB-51,719,400.
（1）Main business classified according to industries and products
Unit: RMB’0000
Main business classified according to industries
Classified Operating Operating Gross profit Increase/dec Increase/dec Increase/decr14
according to
industries or
products
revenue cost ratio % rease in
operating
income
year-on-year
%
rease in
operating
cost
year-on-year
%
ease in gross
profit ratio
year-on-year
%
Bicycles and
accessories and
fittings
11,161.12 10,665.04 4.44% 3.89% 4.93% -17.59%
Property
management
115.33 205.07 -77.81% 7.86% 8.17% 0.67%
Main operations classified according to products
Bicycles and
accessories and
fittings
11,161.12 10,665.04 4.44% 3.89% 4.93% -17.59%
Property
management
115.33 205.07 -77.81% 7.86% 8.17% 0.67%
（2）Particulars about main operations classified according to areas
Unit: RMB’0000
Areas
Income from
operations
Increase/decrease in income
from operations over last year
(%)
Shandong 3,797.06 17.46%
Henan 2,407.74 -12.75%
Jiangsu 1,766.68 38.33%
Hebei 1,373.42 -6.54%
Sichuan 234.12 -2.05%
（3）particular about major suppliers and clients
Purchase amount from the top five suppliers of the Company was RMB120, 636,700.00, occupied
93.26% of the total annual purchase amount; the sales amount towards top five clients was RMB
95,790,200.00, an 85.82% of the total annual sale amount.
4. Problems and difficulties in operation and relevant solving scheme:
(1) Dramatically impact on domestic consumer market from the global financial crisis, majority15
export-oriented enterprise transferred the orientation to domestic market. And the bicycle and
eclectic vehicle market faces a environment of price-war competition;
(2) The Company has the problem of facing a huge debt approximately amount to RMB 20 hundred
million. The resolving of the debt was very complicated due to the long-term debts, complexity
condition and with many debtors.
Concerning the aforesaid problems, the Company, on one hand, will put its efforts in larger the sale
of products, especially in the production and sale in higher added value electric vehicles; on the
other hand, actively promote the process of restructuring of whole the Company including the
debt restructure.
（III）particular about the investment in report period
There are no fund raising and major investment activities of the Company happened in the report
period.
（IV）working plan in 2nd half of year of the Company
1. Fully cooperated and actively promoted the work of bankruptcy restructure of the Company;
2. promoted the management reform enhanced the standard of operational management;
3. Totally explore main business and broaden the property rental for the purpose of increasing
operational benefit;
4. increased the liquidation ability on small-scale property and materials out of Shenzhen
enhance the economic benefits of the inventory assets.
（V）Prediction and explanation on the profitability from this report period-end to the end of
next report period
Performance forecast Deficit
From year-begin to end
of next report period
Same period of
last year
Change of
increased/decreased
（%）
Predicted data of accumulative net
profit（RMB ’ 0000）
-7,200.00 -7,400.89 decreased 2.71%
Basic earnings per
share(RMB/Share)
-0.1306 -0.1545 decreased 15.47%
Note of performance forecast
The accumulative net profit from 1st quarter to 3rd quarter
this year predicted approximately amounted as RMB-72,000,000
due to the withdrawal of interest.16
（VI）Explanation presented by the Board for change and treatment of the matters involved
in the Non-standard Report issued by CPAs for last year:
Shenzhen Pengcheng Certified Public Accountants Co., Ltd. issued audit report with disclaimer of
opinions for the 2009 Financial Report of the Company. Due to that the debt reorganization 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.
Explanation presented by the Board for change and treatment of the matters involved in the
Non-standard Report issued by CPAs for last year is as follows:
1. 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 amount to RMB211,
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
RMB80, 890,643.04, 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 10 financial organizations stop calculating the interest of the
Company for 3 years since January 1st of 2002 and at the same time, exempt all the interest payable
of the Company (including penalty interest and compound interest) occurred before December 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 January 1st
of 2002 to December 31st of 2004. The exempt term was due on December 31st of 2004. The
Company held it was not necessary 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 January 1st of
2002 to December 31st of 2004 was not accrued.17
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.
2. 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 RMB118, 913,018.88. Till the day of
auditing report, no reply has been received, so it was impossible for the CPAs to confirm the
influence on financial statement of the Company.
Due to the Company’s tax payable was formed in the past, which had a long time, there was no
newly-increased tax payable in the report period, 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.
3 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 complete18
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.
4. Matters on sustainable operations:
Shenzhen Pengcheng Certified Public Accountants thought that, the Company’ asset could seriously
not offset the debt; the measures on the reconciliation procedure of the bankruptcy to settle the
debts had no material progress 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. Measures from the Company and largest creditor are as followed:
Since March 2002, the promotion on debt restructuring by the former largest creditor of the Company-China Huarong Asset Management Corporation
acquired breakthrough development. Relevant department such as China Banking Regulatory Commission approved that all the interests of the
financial debts the Company owed ended December 31st, 2004 were exempted and stopped interest calculation.
The Company and International Finance Corporation signed Reconciled Agreement on March 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 December 30, 2006, China Huarong Asset Management Corporation transferred its creditor
right to Shenzhen Guosheng Energy Investment Development Co., Ltd.( Guosheng Energy
Company for short), relevant debt restructure work have been in promotion by Guosheng Energy
Company recently and obtained certain progress. Due to the change of largest shareholder of the
Company and the implementation of new Bankruptcy Law, Guosheng Energy Company applied to
the Shenzhen Intermediate People’s Court in January 2010 for restructuring the Company according
to the regulation of Bankruptcy Law, with the purpose of recovering and improving the ability of
sustainable operations of the Company. The court still in the process of investigation recently.
Shenzhen Guosheng Energy Investment Development Co., Ltd. agreed that stop calculating the
interest of majority credit under the whole year of 2010, and the stop-calculated interest will not be
collected in later years.19
In promoting the work of debt restructure, the Company realized a stable development and profits
continuity in main business. The short-term pressure of payment have been released, the ability of
sustainable operations got a certain improvement. Board of the Company considered that: as the
debt and assets restructure of the Company continuously made progress, the operation environment,
operation status and sustainable operation ability would be improved in future.
Section VI. Significant Events
(I) Corporation governance
In the report period, the Company strictly conformed to regulations of standard documents such as
Company Law, Securities Law, the laws and codes of CSRC and Shenzhen Stock Exchange and
relevant regulations, perfected the corporation governance structure continuously. The works of
shareholders’ general meeting, the board of directors, supervisory committee and management
group all operated strictly according to the requests of the foresaid documents and each bylaws of
the Company. The actual conditions about corporate governance of the Company accorded with the
requests of relevant standard documents on governance of listed company promulgaged by CSRC.
In order to further standardize the operation, the Company made an overall arrangement and
revising of Articles of Association, Rules of Procedure for General Shareholders’ Meeting, and
Rules of Procedure for the Board of Directors, Rules of Procedure for the Supervisory Committee
and System of Independent Directors according to the requirement of relevant regulations
promulgaged by CSRC.
Pursuit to the requirement from CSRC, the Company formulated a Responsibility Investigation
System on Major Errors in Annual Information Disclosure under the name of Shenhzen China
Bicycl Company (Holdings) Limited in first half year of 2010. Making a further progress in
standardized the operating ability of the Company.
(II) In the report period, the execution of profit distribution and plan of transferring the
public reserve capital into share capital:
The Company completed the reform of equity division, transferring the public reserve capital into
share capital and practicing the equity division reform in this report period. At the semi-annual of
2010, the Company did not distribute profit, nor had plans of transferring the public reserve capital
into share capital.
(III) Material lawsuits and arbitrations in the report period.
In the report period, the Company had no material lawsuits and arbitrations.
(IV) No purchase and sales of significant assets in the report period.
In the report period, the Company had no purchase significant assets activity.
(V) Significant related transactions in the report period:
Non-recurring credit and debt in the report period:
Unit: RMB’0000
Funds offered to related
parties
Funds offered to the listed
Related parties company by related parties
Amount Balance Amount Balance20
occurred occurred
Shenzhen Guocheng Energy
Investment Development Co., Ltd.
0.00 0.00 -15,195.41 44,852.23
Shenzhen Jinhuan Printing Format
Co., Ltd.
0.00 0.00 0.00 261.64
Total 0.00 0.00 -15,195.41 45,113.87
Of which: in the report period, the occupied occurring amount and balance that listed company
provided capital to its shareholders and subsidiaries were respectively RMB 0.00 and RMB 0.00.
(VI) Significant contracts and its implementation
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 year, the Company had no entrusted financing.
3. In the report period, the Company had not provided guarantees for 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
Related
Announc
ement
disclosure
day and
No. of the
guarantee
amount
Amount
of
guarantee
Date of
happening
(Date of
signing
agreement)
Actual
amount
of
guarant
ee
Guarantee
type
Guarant
ee term
Complet
e
impleme
ntation
or not
Guarantee
for related
party (Yes
or no)
Guangdong
Sunrise Group
Co., Ltd.
26 July
1996
2,800.00
26 July
1996
2,800.0
0
Joint
responsibility
4
months
No No
Guangdong
Sunrise Group
Co., Ltd.
30 Sept.
1999
681.83
30 Sept.
1999
681.83
Joint
responsibility
12
months
No No
Guangdong
Sunrise Group
Co., Ltd.
30
April199
8
260.00
30
April1998
260.00
Joint
responsibility
11
months
No No
Guangdong
Sunrise Group
30
July1997
250.00
30
July1997
250.00
Joint
responsibility
7
months
No No21
Co., Ltd.
Guangdong
Sunrise Group
Co., Ltd.
4
June1997
300.00 4 June1997 300.00
Joint
responsibility
8
months
No No
Gintian Industry
(Group) Co.,
Ltd.
30
Oct.1998
5,000.00
30
Oct.1998
5,000.0
0
Joint
responsibility
6
months
No No
Shenzhen
Tianma
Cosmetics Co.,
Ltd
30
Sept.1994
800.00
30
Sept.1994
800.00
Joint
responsibility
12
months
No No
Total amount of external guarantee
approved in report period（A1）
0.00
Total actual amount of external guarantee
approved in report period（A2）
0.00
Total amount of external guarantee
approved at the end of report period
（A3）
0.00
Total actual balance of external guarantee
approved at the end of report period（A4）
10,091.83
Guarantee of the Company for the controlling subsidiaries
Name of the
Company
guaranteed
Related
Announc
ement
disclosure
day and
No. of the
guarantee
amount
Amount
of
guarantee
Date of
happening
(Date of
signing
agreement)
Actual
amount of
guarantee
Guarantee
type
Guara
ntee
term
Complet
e
impleme
ntation
or not
Guarantee
for related
party (Yes
or no)
Shangdong
Huajiaming
Economy and
Trade Co., Ltd.
3
Sept.1997
8.31
3
Sept.1997
8.31
Joint
responsibility
4
mont
hs
No No
Zoria Pte Ltd
25 March
1996
7,808.70
25 March
1996
7,808.70
Joint
responsibility
9
mont
hs
No No
Total amount of guarantee for
controlling subsidiaries in report period
（B1）
0.00
Total actual amount of guarantee for
controlling subsidiaries in report period
（B2）
0.0022
Total amount of guarantee for
controlling subsidiaries at the end of
report period（B3）
0.00
Total actual amount of guarantee for
controlling subsidiaries at the end of
report period（B4）
7,817.01
Particulars about the total guarantee of the Company( total of two abovementioned guarantee)
Total amount of guarantee in report
period（A1+B1）
0.00
Total actual amount of guarantee
in report period（A2+B2）
0.00
Total amount of guarantee at the end of
report period（A3+B3）
0.00
Total actual balance of guarantee
at the end of report period
（A4+B4）
17,908.84
The proportion of the total amount of actually guarantee
in the net assets of the Company(that is A4+ B4)
-9.48%
Including:
Amount of guarantee for shareholders, actual controller
and its associated parties(C)
0.00
The debts guarantee amount provided for the guaranteed
parties whose assets-liability ratio exceed 70% directly
or indirectly(D)
17,908.84
Proportion of total amount of guarantee in net assets of
the Company exceed 50%(E)
17,908.84
Total guarantee amount of the abovementioned
guarantees(C+D+E)
35,817.68
Explanations on possibly bearing joint and several
liquidating responsibilities for undue guarantees
N/A
4. Explanation on the external guarantees of the Company, accumulative total and the current ones,
issued by the independent directors:
According to the regulations of Concerning Some Issues on Regulating the Funds between Listed
Companies and Associated Parties and Listed Companies’ Provision of Guaranty to Other Parties
(No. 56 [2003] promulgated by CSRS) 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, here comes the detail
explanation:
During the report period, no guarantee or guarantee out of line has been provided by the Company
for its controlling shareholders and the subordinate enterprises. The guarantee or guarantee out of
line provided by the Company for its controlling shareholders and the subordinate enterprises were
those happened from 1996 to 1999, belonging to the events left in history. Due to that most
guaranteed parities were not able to repay, the Company treated most guarantees as the projected
liabilities which amounted to RMB179, 088,442.92.23
(VII) 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 disclosure. Situation that different
treatment policy is not implemented; non-public significant information is not disclosed, revealed or
leak out for appointed person.
Date Place Way
The
received
parties
Contents discussed and materials
supplied
Jan. -June,
2010
Secretary office of
Board
Phone
communicatio
n
Public
shareholder
s
Progresses of the bankrupt
reorganization and equity division
reform
(VIII) Other significant events
1. The large shareholder of the Company – Shenzhen Guosheng Energy Investment Development
Co., Ltd. applied to the Shenzhen Intermediate People’s Court on 14 January 2010 for restructuring
the Company according to the regulation of Bankruptcy Law, with the purpose of recovering and
improving the ability of sustainable operations of the Company. The court is in the process of
investigation recently.
2. The large shareholder and large creditor of the Company – Shenzhen Guosheng Energy
Investment Development Co., Ltd. owned the Company’s credit of RMB 598,270,000.00. By
signing the Transfer Agreement on Creditor’s Right on 31 May 2010, RMB 150,000,000.00 credit
has been transferred to Shenzhen Zhengda Guoli Investment Co., Ltd. Shenzhen Guosheng Energy
Investment Development Co., Ltd. promised that the partial transferring of the credit have no
influence on the restructure work of the Company.
3. The large shareholder and large creditor of the Company – Shenzhen Guosheng Energy
Investment Development Co., Ltd. received the returning letters on Letter of Application for
Stop-calculated debt interest of 2010 of the Company: Agreed to stop calculating the RMB debt
interest of RMB 9,124,618.59 and USD debt interest (Before 31 May 2010 was USD 84,797,624.57,
from 1 June 2010 was USD62, 829,259.02) of whole year of 2010. The abovementioned interest
will not be collected in the later years. The stop-calculated interest have an actively influence on
Company’s sustainable operation.
Section VII. Financial Report
(Attached)24
Section VIII. Documents Available for Reference
（I）Text of Semi-annual Report 2010 carrying the genuine signatures of legal representative.
（II）Text of financial report carrying the autograph and seals of legal representative, principal
in charge of the accounting affairs and principal in charge of the accounting institute;
（III）Original texts of all documents and announcement disclosed publicly in the newspapers
designated by China Securities Regulatory Commission in the report period;
（IV）English version of the 2010 Semi-annual Report.
Board of Directors of
Shenzhen China Bicycle Company (Holdings) Limited
11 August 201025
Shenzhen China Bicycle Company (Holdings) Limited
Semi-Annual Financial Report for Year 2010
(Un-audited)
Content Pages
I. Accounting statement
Consolidation and Balance Sheet of Parent
Company
Consolidation and Profit Statement of
Parent Company
Consolidation and Cash Flow Statement of
Parent Company
Consolidation and Statement on Changes
of Owners’ Equity of Parent Company
II. Notes to accounting statementShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
26
Balance Sheet
June 30, 2010
Prepared by Shenzhen China Bicycle Company (Holdings) Limited Unit: RMB
Amount at period-end Amount at year-begin
Items
Merger Parent Company Merger Parent Company
Current assets:
Monetary funds 25,534,863.41 434,361.44 22,232,425.07 365,121.06
Settlement provisions
Capital lent
Transaction finance asset
Notes receivable 5,800,000.00
Accounts receivable 1,499,575.20 4,938,846.08 413,823.13 4,840,655.31
Accounts paid in advance 270,249.08 195,298.09
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance
receivable
Interest receivable
Dividend receivable
Other receivables 18,820,462.84 34,975,449.13 24,221,035.93 44,469,377.15
Purchase restituted finance
asset
Inventories 41,949,508.50 20,194,448.44 32,564,369.59 20,240,562.11
Non-current asset due within
one year
Other current assets
Total current assets 88,074,659.03 60,543,105.09 85,426,951.81 69,915,715.63
Non-current assets:
Granted loans and advances
Finance asset available for
sales
Held-to-maturity securities
Long-term account receivable
Long-term equity investment 2,619,840.50 2,619,840.50 2,619,840.50 2,619,840.50
Investment property 28,917,081.52 28,917,081.52 31,399,514.80 31,399,514.80
Fixed assets: 24,639,926.85 23,921,802.17 23,932,824.06 23,131,963.21
Construction in progress
Engineering material
Disposal of fixed asset
Productive biological asset
Oil and gas asset
Intangible assets 25,885,858.28 25,885,858.28 26,317,289.30 26,317,289.30
Expense on Research and
Development
GoodwillShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
27
Long-term expenses to be
apportioned
Deferred income tax asset
Other non-current asset
Total non-current asset 82,062,707.15 81,344,582.47 84,269,468.66 83,468,607.81
Total assets 170,137,366.18 141,887,687.56 169,696,420.47 153,384,323.44
Current liabilities:
Short-term loans 391,126,796.60 337,307,344.76 395,326,572.82 338,507,120.98
Loan from central bank
Absorbing deposit and
interbank deposit
Capital borrowed
Transaction financial liabilities
Notes payable
Accounts payable 134,791,453.84 152,602,052.52 125,874,371.36 155,610,619.08
Accounts received in advance 29,641,556.18 10,664,592.85 23,083,981.59 10,664,592.85
Selling financial asset of
repurchase
Commission charge and
commission payable
Wage payable 2,085,250.61 1,409,267.32 5,268,781.80 4,099,102.35
Taxes payable 95,162,604.16 94,512,853.93 96,149,009.88 94,821,236.83
Interest payable 190,778,373.56 190,753,323.56 165,838,645.23 165,838,645.23
Dividend payable
Other accounts payable 169,285,425.56 129,244,392.62 168,836,440.31 126,959,911.53
Reinsurance payables
Insurance contract reserve
Security trading of agency
Security sales of agency
Non-current liabilities due
within 1 year
867,274,659.87 867,274,659.87 870,518,082.14 870,518,082.14
Other current liabilities 726,612.09 726,612.09 726,612.09 726,612.09
Total current liabilities 1,880,872,732.47 1,784,495,099.52 1,851,622,497.22 1,767,745,923.08
Non-current liabilities:
Long-term loans
Bonds payable
Long-term account payable
Special accounts payable
Projected liabilities 179,088,442.92 179,088,442.92 179,088,442.92 179,088,442.92
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 179,088,442.92 179,088,442.92 179,088,442.92 179,088,442.92
Total liabilities 2,059,961,175.39 1,963,583,542.44 2,030,710,940.14 1,946,834,366.00
Shareholders’ equity):
Paid-in capital (or share
capital)
551,347,947.00 551,347,947.00 479,433,003.00 479,433,003.00Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
28
Capital public reserve 409,635,229.05 409,635,229.05 458,695,975.55 458,695,975.55
Less: Inventory shares
Reasonable reserve
Surplus public reserve 32,673,227.01 32,673,227.01 32,673,227.01 32,673,227.01
Provision of general risk
Retained profit -2,883,536,085.64 -2,815,352,257.94 -2,831,816,725.23 -2,764,252,248.12
Balance difference of foreign
currency translation
Total owners’ equity attributable to
parent company
-1,889,879,682.58 -1,821,695,854.88 -1,861,014,519.67 -1,793,450,042.56
Minority interests 55,873.37
Total owners’ equity -1,889,823,809.21 -1,821,695,854.88 -1,861,014,519.67 -1,793,450,042.56
Total liabilities and owners’ equity 170,137,366.18 141,887,687.56 169,696,420.47 153,384,323.44
Profit Statement
January-June, 2010
Prepared by Shenzhen China Bicycle Company (Holdings) Limited Unit: RMB
Amount in this period Amount in last period
Items
Merger
Parent
Company
Merger
Parent
Company
I. Total operating income 120,622,786.14 8,026,148.29 112,494,583.85 6,937,308.60
Including: Operating income 120,622,786.14 8,026,148.29 112,494,583.85 6,937,308.60
Interest income
Insurance gained
Commission charge and
commission income
II. Total operating cost 173,054,755.95 59,902,420.88 169,230,313.37 62,033,616.75
Including: Operating cost 114,045,625.35 5,650,837.29 106,593,086.70 3,974,352.73
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 81,198.29 71,335.20 0.00
Sales expenses 3,756,001.70 2,684,550.07 242,795.77
Administration expenses 11,959,630.53 11,012,931.71 13,170,221.92 11,078,381.49
Financial expenses 43,212,300.08 43,238,651.88 47,481,613.43 47,508,580.71
Losses of devaluation of asset -770,493.95 -770,493.95
Add: Changing income of fair
value(Loss is listed with “-”)Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
29
Investment income (Loss is listed
with “-”)
Including: Investment income on
affiliated company and joint venture
Exchange income (Loss is listed
with “-”)
III. Operating profit (Loss is listed
with “-”)
-52,431,969.81 -51,876,272.59 -56,735,729.52 -55,096,308.15
Add: Non-operating income 799,162.77 793,262.77 347,319.93 347,319.93
Less: Non-operating expense 30,680.00 17,000.00 14,221.66 14,221.66
Including: Disposal loss of
non-current asset
IV. Total Profit (Loss is listed with
“-”)
-51,663,487.04 -51,100,009.82 -56,402,631.25 -54,763,209.88
Less: Income tax expense 0.00 0.00
V. Net profit (Net loss is listed with
“-”)
-51,663,487.04 -51,100,009.82 -56,402,631.25 -54,763,209.88
Net profit attributable to owners
of parent company
-51,719,360.41 -51,100,009.82 -56,332,908.69 -54,763,209.88
Minority shareholders’ gains and
losses
55,873.37 -69,722.56 0.00
VI. Earnings per share
i. Basic earnings per share -0.0938 -0.0927 -0.1175 -0.1142
ii. Diluted earnings per share -0.0938 -0.0927 -0.1175 -0.1142
VII. Other consolidated income
VIII. Total consolidated income -51,663,487.04 -51,100,009.82 -56,402,631.25 -54,763,209.88
Total consolidated income attributable
to owners of parent company
-51,719,360.41 -51,100,009.82 -56,332,908.69 -54,763,209.88
Total consolidated income attributable
to minority shareholders
55,873.37 -69,722.56Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
30
Cash Flow Statement
January-June, 2010
Prepared by Shenzhen China Bicycle Company (Holdings) Limited Unit: RMB
Amount in this period Amount in last period
Items
Merger Parent Company Merger
Parent
Company
I. Cash flows arising from operating
activities:
Cash received from selling commodities
and providing labor services
80,784,747.61 71,289,969.34 0.00
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 254,666.00 254,666.00
Other cash received concerning
operating activities
9,731,065.31 14,114,777.36 5,979,012.67 8,803,805.33
Subtotal of cash inflow arising from
operating activities
90,770,478.92 14,369,443.36 77,268,982.01 8,803,805.33
Cash paid for purchasing commodities
and receiving labor service
63,111,200.56 60,326,101.39 0.00
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 9,407,539.21 826,113.68 7,809,094.78 886,540.42
Taxes paid 2,652,249.80 1,512,535.65 2,363,221.09 1,410,843.29Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
31
Other cash paid concerning operating
activities
9,848,757.41 9,522,837.40 6,016,995.73 6,496,280.63
Subtotal of cash outflow arising from
operating activities
85,019,746.98 11,861,486.73 76,515,412.99 8,793,664.34
Net cash flows arising from operating
activities
5,750,731.94 2,507,956.63 753,569.02 10,140.99
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
550,000.00
Net cash received from disposal of
subsidiaries and other units
Other cash received concerning
investing activities
8,000,000.00
Subtotal of cash inflow from investing
activities
8,550,000.00
Cash paid for purchasing fixed,
intangible and other long-term assets
2,448,293.60 2,438,716.25 39,287.43 13,931.62
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
2,448,293.60 2,438,716.25 39,287.43 13,931.62
Net cash flows arising from investing
activities
-2,448,293.60 -2,438,716.25 8,510,712.57 -13,931.62
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 payingShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
32
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
-10.36
V. Net increase of cash and cash equivalents 3,302,438.34 69,240.38 9,264,271.23 -3,790.63
Add: Balance of cash and cash
equivalents at the period -begin
22,232,425.07 365,121.06 10,086,599.53 417,444.51
VI. Balance of cash and cash equivalents at
the period -end
25,534,863.41 434,361.44 19,350,870.76 413,653.88Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
33
Consolidated Statement on Changes of Owners' Equity
For semi-annual 2010
Prepared by Shenzhen China Bicycle Company (Holdings) Limited Unit: RMB
Amount in this report period Amount last year
Owners’ equity attributable to the parent company Owners’ equity attributable to the parent company
Items Paid-up
capital
(Share
capital)
Capital
reserves
Le
ss:
Tr
ea
su
ry
St
oc
k
Sp
ec
ial
re
se
rv
e
Surplus
reserves
Gen
eral
risk
pro
visi
on
Retained
profit
Oth
ers
Minori
ty’s
equity
Total
owners’
equity
Paid-up
capital
(Share
capital)
Capital
reserves
Le
ss:
Tr
ea
su
ry
St
oc
k
Sp
ec
ial
re
se
rv
e
Surplus
reserves
G
en
er
al
ris
k
pr
ov
isi
on
Retained
profit
Ot
he
rs
Minorit
y’s
equity
Total owners
equity
I. Balance at
the end of
the last year
479,433,003.00 458,695,975.55 32,673,227.01 -2,831,816,725.23 -1,861,014,519.67 479,433,003.00 410,893,564.33 32,673,227.01 -2,726,059,175.73 403,226.40 -1,802,656,154.9
Add:
Changes of
accounting
policy
Error
correction
of the last
period
Others
II. Balance
at the
beginning of
this year
479,433,003.00 458,695,975.55 32,673,227.01 -2,831,816,725.23 -1,861,014,519.67 479,433,003.00 410,893,564.33 32,673,227.01 -2,726,059,175.73 403,226.40 -1,802,656,154.9
III. Increase/
Decrease in
this year
71,914,944.00 -49,060,746.50 -51,719,360.41 55,873.37 -28,809,289.54 47,802,411.22 -105,757,549.50 -403,226.40 -58,358,364.6Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
34
(Decrease is
listed with
“-”)
(I) Net
profit -51,719,360.41 55,873.37 -51,663,487.04 -105,757,549.50 -403,226.40 -106,160,775.9
(II) Other
consolidated
income
Subtotal of
(I) and (II) -51,719,360.41 55,873.37 -51,663,487.04 -105,757,549.50 -403,226.40 -106,160,775.9
(III)
Owners’
devoted and
decreased
capital
22,854,197.50 22,854,197.50 47,802,411.22 47,802,411.2
1. Owners’
devoted
capital
2. Amount
calculated
into owners’
equity paid
in shares
3. Others 22,854,197.50 22,854,197.50 47,802,411.22 47,802,411.2
(IV) Profit
distribution
1.
Withdrawal
of surplus
reserves
2.
Withdrawal
of general
risk
provisions
3.Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
35
Distribution
for owners
(shareholder
s)
4. Others
(V)
Carrying
forward
internal
owners’
equity
71,914,944.00 -71,914,944.00
1. Capital
reserves
conversed to
capital
(share
capital)
71,914,944.00 -71,914,944.00
2. Surplus
reserves
conversed to
capital
(share
capital)
3.
Remedying
loss with
surplus
reserve
4. Others
(VI)
Reasonable
reserve
1.
Withdrawal
in the report
periodShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
36
2. Usage in
the report
period
IV. Balance
at the end of
the report
period
551,347,947.00 409,635,229.05 32,673,227.01 -2,883,536,085.64 55,873.37 -1,889,823,809.21 479,433,003.00 458,695,975.55 32,673,227.01 -2,831,816,725.23 -1,861,014,519.6
Statement on Changes of Owners' Equity of Parent Company
For semi-annual 2010
Prepared by Shenzhen China Bicycle Company (Holdings) Limited Unit: RMB
Amount in this report period Amount last year
Items
Paid-up
capital
(Share
capital)
Capital
reserves
Less:
Treasury
Stock
Specific
reserves
Surplus
reserves
General
risk
provision
Retained
profit
Total
owners’
equity
Paid-up
capital
(Share
capital)
Capital
reserves
Less:
Treasury
Stock
Specific
reserves
Surplus
reserves
General
risk
provision
Retained
profit
Tot
own
equ
I. Balance at
the end of the
last year
479,433,003.00 458,695,975.55 32,673,227.01 -2,764,252,248.12 -1,793,450,042.56 479,433,003.00 410,893,564.33 32,673,227.01 -2,661,268,533.01 -1,738,26
Add: Changes
of accounting
policy
Error
correction of
the last period
Others
II. Balance at
the beginning
of this year
479,433,003.00 458,695,975.55 32,673,227.01 -2,764,252,248.12 -1,793,450,042.56 479,433,003.00 410,893,564.33 32,673,227.01 -2,661,268,533.01 -1,738,26
III. Increase/
Decrease in
this year
(Decrease is
listed with
71,914,944.00 -49,060,746.50 -51,100,009.82 -28,245,812.32 47,802,411.22 -102,983,715.11 -55,18Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
37
“-”)
(I) Net profit -51,100,009.82 -51,100,009.82 -102,983,715.11 -102,98
(II) Other
consolidated
income
Subtotal of (I)
and (II) -51,100,009.82 -51,100,009.82 -102,983,715.11 -102,98
(III) Owners’
devoted and
decreased
capital
22,854,197.50 22,854,197.50 47,802,411.22 47,80
1. Owners’
devoted
capital
2. Amount
calculated
into owners’
equity paid in
shares
3. Others 22,854,197.50 22,854,197.50 47,802,411.22 47,80
(IV) Profit
distribution
1. Withdrawal
of surplus
reserves
2. Withdrawal
of general
risk
provisions
3.
Distribution
for owners
(shareholders)
4. Others
(V) Carrying
forward 71,914,944.00 -71,914,944.00Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
38
internal
owners’
equity
1. Capital
reserves
conversed to
capital (share
capital)
71,914,944.00 -71,914,944.00
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
551,347,947.00 409,635,229.05 32,673,227.01 -2,815,352,257.94 -1,821,695,854.88 479,433,003.00 458,695,975.55 32,673,227.01 -2,764,252,248.12 -1,793,45Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
39
Shenzhen China Bicycle Company （Holding） Limited
Notes to Financial Statement
For Semi-annual 2010
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 RMB551,347,947.00.
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 24th meeting of the 7th Board
Meeting held on 9 August 2010.
II. Main Accounting Policy, Accounting Estimate and Prior 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 30 June 2010,
operation achievement and cash flows of the Company for semi-annual 2010.
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.Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
40
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 a 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.
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 currentShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
41
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.
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.
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 and
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 wasShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
42
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;
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 equity
instrument unable to take back its investment;
h. Where the fair value of the equity instrument investment drops significantly or not
contemporarily; andShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
43
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 Amount
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 yearsShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
44
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.
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 inventory
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 perpetualShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
45
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 units 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
value 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 initialShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
46
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.
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 amount 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 beShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
47
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
equipment 10 years 10 9%
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 actualShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
48
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, 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;
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, areShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
49
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 the 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.
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 sameShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
50
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. 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;
2/ the temporary differences is unlikely to be reversed in the foreseeable future.Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
51
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 the 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.Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
52
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.Prior period correction of accounting errors
No prior 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 22%
*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 2010
was actually 22%.Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
53
IV. Business Combination and Consolidated Financial Statements
1. Subsidiaries
(1) Subsidiaries obtained by means of establishment or investment, etc.
Unit: 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
proportion
of shares
held
Proportion
of voting
power
Consolidated
report
statement or
not
Minor
shareholders’
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-owned
realty
management
2,000,00.00 - 100% 100% Yes - - -
China Bicycle
(International)
Co., Ltd.
Sole
subsidiary Hong Kong Bicycle 20000 Trade and
manufacturing 20,000.00 - 100% 100% Yes - - -
China Bicycle
(Hong Kong)
Co., Ltd.
Controlling
subsidiary Hong Kong Bicycle 5350000
Bicycle and
parts
distribution
5,350,000.00 - 99% 99% Yes - - -
Shenzhen
Emmelle
Industry Co.,
Ltd.
Controlling
subsidiary Shenzhen Bicycle 2000000
Bicycle and
parts
distribution
1,400,000.00 - 70% 70% Yes 55,873.37
(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.Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
54
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: RMB
Amount at the end of period Amount Items at the beginning of period
Amount in foreign
currencies
Conversion
rate Amount in RMB Amount in foreign
currencies
Conversion
rate Amount in RMB
Cash:
RMB 142,617.09 1.00 142.617.09 122,959.64 1.00 122,959.64
HK Dollar 1,894.27 0.9364 1,773.76 - - -
US Dollar 1.25 7.3040 9.13 - - -
Subtotal - - 144.399.98 - - 122,959.64
Bank deposit:
RMB 24,351,127.46 1.00 24.351.646.57 21,070,648.57 1.00 21,070,648.57
HK Dollar 815,810.20 0.88 718,304.56 815,810.20 0.88 718,304.56
US Dollar 46,927.13 6.83 320,512.30 46,927.13 6.83 320,512.30
Subtotal 25.390.463.43 22,109,465.43
Total 25,534,863.41 22,232,425.07
2. Notes receivable
(1) Classification of notes receivable
Unit: RMB
Category Amount at the end of period Amount at the beginning of period
Bank acceptance bill 0.00 5,800,000.00
(2) The bank acceptance bill of the Company ended the report period has accomplished payment with endorsement in the report period.
3. Accounts receivable
(1) Exposure of accounts receivable by category:
Unit: RMBShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
55
Amount at the end of period Amount at the begin of period
Book balance Provision for bad debts Book balance Provision for bad debts
Category Amount Proportio
n (%)
Amount Withdrawal
Proportion
(%)
Amount Proportio
n (%)
Amount Withdrawal
Proportion
(%)
Account receivable with single
big amount 919,324,556.40 88.42% 919,324,556.40 100.00% 919,324,556.40 88.49% 919,324,556.40 100.00%
Account receivable not with
single big amount but with
heavy combination risk after
combination by credit risk
characteristic
119,978,263.12 11.54% 118,892,511.05 99.10% 119,133,026.05 11.47% 119,133,026.05 100.00%
Other not important accounts
receivable 413,823.13 0.04% 413,823.13 0.04%
Total 1,039,716,642.65 100.00% 1,038,217,067.45 99.86% 1,038,871,405.58 100.00% 1,038,457,582.45 99.96%Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
56
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) Age structure of accounts receivable
Unit: RMB
Amount at the end of period Amount at the begin of period
Age AmBoouonkt balancPer oportio Book balance
n (%)
Provision for bad
debts Amount Proporti
on (%)
Provision fo
debts
Within 1 year 1,352,828.30 0.13% 267,076.23 0.03%
1-2 years 146,746.90 0.01% 146,746.90 0.01%
2-3 years
Over 3 years 1,038,217,067.45 99.86% 1,038,217,067.45 1,038,457,582.45 99.96% 1,038,457,5
Including: 3 -4 years
4-5 years
Over 5 years 1,038,217,067.45 99.86% 1,038,217,067.45 1,038,457,582.45 99.96% 1,038,457,5
Including: amount receivable of
shareholder with holding over 5
percent shares
Total 1,039,716,642.65 100.00% 1,038,217,067.45 1,038,871,405.58 100.00
% 1,038,457,5
(3) Withdrawal of the reserve for bad and doubtful account aiming at the account receivable
with single big amount or not with single big amount but carried out depreciation test
separately at the end of period:
Unit: 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
Total 919,324,556.40 919,324,556.40 - -
Interpretation to account receivable not with single big amount but with heavy combination
risk after combination by credit risk characteristic:
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.Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
57
(4) Top 5 units with an amount of account receivable:
Unit: RMB
Name
Relationship
with the
company
Amount Period
Proportion among
the gross accounts
receivable (%)
DB(HK) Non-affiliated
customers 174,219,907.69 Over 3 years 16.76%
REGAL Non-affiliated
customers 140,887,132.85 Over 3 years 13.55%
STARWAY Non-affiliated
customers 97,930,571.16 Over 3 years 9.42%
DIAMOND BACK Non-affiliated
customers 69,887,060.40 Over 3 years 6.72%
Shenzhne Jinfeng Industry
Development Company
Non-affiliated
customers 52,406,319.69 Over 3 years 5.04%
Total - 535,330,991.79 - 51.49%
(5) Actual write-off of account receivable in the report period
In the report period, the Company received final verdict for Scheme for Bankruptcy and
Property Distribution of Shenzhen Qin Chi Bicycle Co., Ltd. According to the verdict, the
Company wrote off account receivable of Shenzhen Qin Chi Bicycle Co., Ltd. amounting to
RMB240,515.00 in the report period and the full amount was withdrawn provision for bad
debts.
(6) The accounts receivable at the end of the report period don’t involve with the shareholder
units holding over 5% (including 5%) voting power of the Company.
(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: RMB
Amount at the end of period Amount at Age Amount Proportion (%) Amoun tth e begiPnrnoipnogr otifo pne (r%io)d
Within 1 year 160,445.55 59.37% 81,383.55 41.67%
1-2 years 109,803.53 40.63% 113,914.54 58.33%
2-3 year
Over 3 years
Total 270,249.08 100.00% 195,298.09 100.00%
Interpretation to advance payment:
Those were all advance payment for suppliers by Emmelle Company in recent 2 years.
(2) Top 5 units with an amount of advance payment:
Unit: RMB
Name Relationship with
the company Amount Period Reasons
Tianjin Xinbao Supplier of the
Company 104,188.48 Within 1 year Advance payment
Shenzhen Weihai Supplier of the 69,700.00 1-2 years Advance paymentShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
58
Company
Shenzhen Juzhi
Advertisement
Company
Supplier of the
Company 45,000.00 Within 1 year Advance payment
Jiangsu Jiancheng Supplier of the
Company 34,062.00 Within 1 year Advance payment
Huaian Golden
Hengtai
Technology Co.,
Ltd.
Supplier of the
Company 5,720.00 Within 1 year Advance payment
Total - 258,670.48 - -
Interpretation to main units of advance paymnt:
The advance payment in the report period doesn’t involve with the shareholder units holding over 5%
(including 5%) voting power of the Company.
(3) Interpretation to advance payment:
Emmelle Company made advance payment to suppliers for the reserve inventory of upcoming sales
midseason.
(4) The advance payment in the report period doesn’t involve with the shareholder units
holding over 5% (including 5%) voting power of the Company.
5. Accounts receivable - others
(1) Exposure of accounts receivable – others by category:
Unit: RMB
Amount at the end of period Amount at the begin of period
Book balance Provision for bad debts Book balance Provision for bad deb
Category Amount Proport
ion (%)
Amount Withdrawal
Proportion
(%)
Amount Proport
ion (%)
Amount Withd
al
Propo
n (%
Account
receivable-others
with single big
amount
496,512,704.77 88.67% 481,085,248.72 96.89% 499,512,704.77 88.35% 481,085,248.72 96.3
Account
receivable-others
not with single big
amount but with
heavy combination
risk after
combination by
credit risk
characteristic
60,029,889.06 10.72% 60,029,889.05 100.00% 60,029,889.05 10.62% 60,029,889.05 100.0
Other not important
accounts
receivable-others
3,405,898.27 0.61% 12,891.49 5,806,471.37 1.03% 12,891.49
Total 559,948,492.10 100.00
% 541,128,029.26 96.64% 565,349,065.19 100.00
% 541,128,029.26 95.7
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 andShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
59
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 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) Age structure of other account receivable
Unit: RMB
Amount at the end of period Amount at the beginning of period
Book balance Book balance
Age Amount Proportion
(%)
Provision for
bad debts Amount Proportion
(%)
Provision for
bad debts
Within 1 year 1,123,654.24 0.20% 39,741.46 6,524,227.33 1.15% 39,741.46
1-2 years 11,188.00 0.00% 11,154.44 11,188.00 0.00% 11,154.44
2-3 years 2,437,743.66 0.44% 2,404,042.83 2,437,743.66 0.43% 2,404,042.83
Over 3 years 556,375,906.20 99.36% 538,673,090.53 556,375,906.20 98.41% 538,673,090.53
Including: 3 -4
years
4-5 years
Over 5 years 556,375,906.20 99.36% 538,673,090.53 556,375,906.20 98.41% 538,673,090.53
Including:
amount
receivable of
shareholder with
holding over 5
percent shares
Total 559,948,492.10 100.00% 541,128,029.26 565,349,065.19 100.00% 541,128,029.26
(3) Withdrawal of the reserve for bad and doubtful account aiming at the other account
receivable with single big amount or not with single big amount but carried out depreciation
test separately at the end of period:
Unit:RMB
Content of accounts
receivable Book balance
Amount of bad
and doubtful
account
Proportion of
withdrawal Reason
Other account receivable
with single big amount 496,512,704.77 481,085,248.72 96.89%
Extremely small
possibility to
take back single
test
Total 496,512,704.77 481,085,248.72 - -
Interpretation to other account receivable not with single big amount but with heavy
combination risk after combination by credit risk characteristic:
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 have
the phenomenon of depreciation, and the reserve for bad and doubtful account is withdrawn with ageShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
60
analysis method.
(4) Top 5 units with an amount of other account receivable:
Unit: RMB
Name
Relationship
with the
company
Amount Period
Proportion among the
gross accounts
receivable (%)
STARWAY Non-affiliated
customers 220,038,935.10 Over 3 years 39.30%
Composite materials Non-affiliated
customers 60,359,041.39 Over 3 years 10.78%
MORE-LARGE Non-affiliated
customers 30,059,193.03 Over 3 years 5.37%
Huajiaming Non-affiliated
customers 26,044,962.08 Over 3 years 4.65%
ZORIA Non-affiliated
customers 20,531,780.08 Over 3 years 3.67%
Total - 357,033,911.68 - 63.76%
(5) Other accounts receivable at the end of the report period don’t involve with the
shareholder units holding over 5% (including 5%) voting power of the Company.
(6) No account receivable involving with affiliated parties in the report period.
(7) No other account receivable with confirmation terminated at the end of the report period.
6. Inventory
(1) Inventory classification
Unit: 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 225,845,903.62 204,934,758.58 20,911,145.04 226,932,646.24 206,024,947.71 20,907,698.53
Products in
process
Merchandise
inventory 41,496,846.43 20,588,431.78 20,908,414.65 32,378,964.93 20,853,742.68 11,525,222.25
Turnover
materials 1,445,368.54 1,315,419.73 129,948.81 1,446,868.54 1,315,419.73 131,448.8
Consumable
biological
assets
Total 268,788,118.59 226,838,610.09 41,949,508.50 260,758,479.71 228,194,110.12 32,564,369.59
(2) Inventory depreciation reserve
Unit: RMB
Decrease in the current period
Inventory category Opening book
balance
Amount
withdrawn in
the current
period
Switch-back Write-off
Closing book
balance
Raw materials 206,024,947.71 1,090,189.13 204,934,758.58
Products in processShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
61
Merchandise
inventory 20,853,742.68 265,310.90 20,588,431.78
Turnover materials 1,315,419.73 1,315,419.73
Consumable
biological assets
Total 228,194,110.12 0.00 0.00 1,355,500.03 226,838,610.09
(3) Inventory depreciation reserve
Items
Evidence for
withdrawal of
inventory depreciation
reserve
Reason for switch-back
of inventory
depreciation reserve in
the current period
Proportion of switch-back
amount in the current period
among the closing balance of
the inventory
Raw materials Net realizable value is
below the cost. 0.00%
Merchandise
inventory
Net realizable value is
below the cost. 0.00%
Products in process Net realizable value is
below the cost.
Turnover materials Net realizable value is
below the cost. 0.00%
Consumable
biological assets
Net realizable value is
below the cost.
Interpretation to inventories:
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 switch and write-off of raw materials and merchandise inventory in the current period has
been sold.Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
62
7. Long-term equity investment
(1) Listing of long-term investment
Unit: RMB
Invested unit
Accoun
ting
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 (%)
Interpretatio
n to
discrepancy
between the
proportion
of shares
and voting
power in
invested
units
Depreciati
on reserve
at the end
of period
Depreciati
on reserve
withdrawn
at the
current
period
Cash
bonus
in the
report
period
Hunan Guangnan
Motorcycle Co.,
Ltd.
Cost
method
5,679,300.0
0
5,679,300.0
0 - 5,679,300.0
0 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 - 12,263,71
9.50 - -
Total 20,742,860.
00
20,562,860.
00 - 20,562,860.
00 - - - 17,943,01
9.50 - -
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.
批注 [微软用户1]: 下面表格
反映不清楚Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
63
8. Investment real estate
(1) Investment real estate measured basing on cost
Unit: RMB
Items Opening book
balance
Increase in the
current period
Decrease in the
current period
Closing book
balance
1. Total original price 129,872,063.32 129,872,063.32
1) Houses, buildings 129,872,063.32 129,872,063.32
2) Land-use right
2. Total accumulative
depreciation and
accumulative amortization
98,472,548.52 2,482,433.28 100,954,981.80
1) Houses, buildings 98,472,548.52 2,482,433.28 100,954,981.80
2) Land-use right
3. Total devaluation
provision amount 31,399,514.80 -2,482,433.28 28,917,081.52
1) Houses, buildings 31,399,514.80 -2,482,433.28 28,917,081.52
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 31,399,514.80 -2,482,433.28 28,917,081.52
1. Houses and buildings 31,399,514.80 -2,482,433.28 28,917,081.52
2. Land use right
(2) Amount of depreciation and amortization in the report period was RMB 2,482,433.28.
(3) Withdrawal amount for provision of depreciation of investment real estate in the report
period was RMB0.00.
9. Fixed assets
(1) Fixed assets
Unit: RMB
Items Opening book
balance
Increase in the
current period
Decrease in the
current period
Closing book
balance
I. Total original book
value 113,323,144.38 3,450,856.85 116,774,001.23
Where: Houses and
buildings 109,055,011.26 109,055,011.26
Machinery and
equipment 399,762.84 3,400,000.00 3,799,762.84
Means of
transport 923,478.06 923,478.06
Other equipment 2,944,892.22 50,856.85 2,995,749.07
II. Total accumulated
depreciation 87,305,446.09 2,743,754.06 90,049,200.15
Where: Houses and
buildings 84,785,342.08 2,428,466.64 87,213,808.72
Machinery and
equipment 178,529.07 115,444.44 293,973.51Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
64
Items Opening book
balance
Increase in the
current period
Decrease in the
current period
Closing book
balance
Means of
transport 643,619.78 22,651.02 666,270.80
Other equipment 1,697,955.16 177,191.96 1,875,147.12
III. Total net book value
of fixed assets 26,017,698.29 - - 26,724,801.08
Where: Houses and
buildings 24,269,669.18 - - 21,841,202.54
Machinery and
equipment 221,233.77 - - 3,505,789.33
Means of
transport 279,858.28 - - 257,207.26
Other equipment 1,246,937.06 - - 1,120,601.95
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 - - -
Other equipment 384,874.23 - - 384,874.23
V. Total book value of
fixed assets 23,932,824.06 - - 24,639,926.85
Where: Houses and
buildings 22,689,669.18 - - 20,261,202.54
Machinery and
equipment 101,233.77 - - 3,385,789.33
Means of
transport 279,858.28 - - 257,207.26
Other equipment 862,062.83 - - 735,727.72
The depreciation in the report period was RMB2,743,754.06.
(2) Fixed assets left idle temporarily at the end of period
Unit: 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.
(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.Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
65
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 Unpredictable
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 ownershipShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
66
(1) The Company has provided guarantee for the subsidiary Hong Kong Zhonghua for the
loan of 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: 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 0.00 0.00 43,143,099.08
Land use right 43,143,099.08 0.00 0.00 43,143,099.08
II. Total
accumulated
amortization
16,825,809.78 431,431.02 0.00 17,257,240.80
Land use right 16,825,809.78 431,431.02 0.00 17,257,240.80
III. Total net book
value of intangible
assets
26,317,289.30 -431,431.02 0.00 25,885,858.28
Land use right 26,317,289.30 -431,431.02 0.00 25,885,858.28
IV. Total
depreciation reserve 0.00 0.00 0.00 0.00
Land use right 0.00 0.00 0.00 0.00
Total book value of
intangible assets 26,317,289.30 -431,431.02 0.00 25,885,858.28
Land use right 26,317,289.30 -431,431.02 0.00 25,885,858.28
Interpretation of intangible assets:
(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 report period was RMB 431,431.02.
11. Details of asset depreciation reserve
Unit: RMB
Decrease in the current
Items Opening book period
balance
Increase
in the
current
period Switch-back Write-off
Closing book
balance
I. Reserve for bad debts 1,579,585,611.71 240,515.00 1,579,345,096.71
II. Inventory depreciation
reserve 228,194,110.12 1,355,500.03 226,838,610.09
III. Depreciation reserve of
salable financial assets
IV. Depreciation reserve of
held-to-maturity investmentShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
67
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
goodwill
XIV. Others
Total 1,827,807,615.56 1,596,015.03 1,826,211,600.53
12. Short-term loan
(1) Classification of short-term loan:
Unit: RMB
Items Amount at the end of period Amount at the beginning of
period
Loan on security 247,289,957.13 250,703,094.15
Credit loan 143,836,839.47 144,623,478.67
Total 391,126,796.60 395,326,572.82
(2) Short-term loan at term but not repaid:
Unit: RMB
Borrower Amount Purpose Reason for
not repayment
Estimated
date of
repayment
Oriental Assets
Management Company 45,433,620.00
Loan for
production
turnover
Capital
shortage Unpredictable
Dongfu Assets
Management Company* 49,779,570.87
Loan for
production
turnover
Capital
shortage Unpredictable
China Everbright Bank* 10,537,890.05
Loan for
production
turnover
Capital
shortage Unpredictable
Huizhou Oriental United
Industry Co., Ltd. * 36,964,725.61
Loan for
production
turnover
Capital
shortage UnpredictableShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
68
XindaAssets
Management Company 61,103,419.47
Loan for
production
turnover
Capital
shortage Unpredictable
China Merchants Bank,
Luohu Subbranch* 18,310,118.76
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* 53,819,451.84
Loan for
production
turnover
Capital
shortage Unpredictable
Total 391,126,796.60
The abovementioned loans have been over due for many years.
13. Accounts payable
(1) Age of accounts payable
Unit: RMB
Items Amount at the end of period Amount at the beginning of
period
Within 1 year 23,565,954.87 14,648,872.39
1-2 Years 122,501.80 122,501.80
Over 3 years 111,102,997.17 111,102,997.17
Total 134,791,453.84 125,874,371.36
(2) Accounts payable of over 1 year are mainly because that the Company is insolvent and
has delayed the replayment for many years.
(3)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: RMB
Items Amount at the end of period Amount at the beginning of
period
Within 1 year 18,976,963.33 12,419,388.74
1-2 years - -
2-3 years - -
Over 3 years 10,664,592.85 10,664,592.85
Total 29,641,556.18 23,083,981.59
(2) Big-amount items received in advance with an age of over 1 year are mainly formed
accumulatively in historical business communication.
(3) 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.Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
69
15. Employees’ remuneration payable
Unit: RMB
Items
Opening
book
balance
Increase in
the current
period
Decrease in
the current
period
Closing
book
balance
I. Salary, bonus, allowance,
and subsidy 2,061,824.72 6,153,874.75 7,534,101.39 681,598.08
II. Employee benefit - 0.00
III. Social insurance - 0.00
IV. Public accumulation fund
for housing construction 117,424.08 117,424.08
V. Dismiss welfare 1,874,703.51 37,300.00 1,873,437.82 38,565.69
VI. Trade union outlays and
personnel education outlay 1,332,253.57 32,833.27 1,365,086.84
VII. Others - 0.00
Total 5,268,781.80 6,224,008.02 9,407,539.21 2,085,250.61
(1) No remuneration in arrear among the employees’ remuneration payable.
(2) The trade union outlays was RMB32,833.27; and the compensation for cancellation of
labor relationship was RMB37,300.00 and the compensation payment withdrawn was RMB
1,873,437.82.
16. Expense of taxation payable
Unit: RMB
Items Amount at the end of period Amount at the beginning of
period
VAT 54,011,503.87 54,717,084.10
Sales tax 394,551.63 399,742.32
Business income tax 33,750,963.42 33,750,963.42
Individual income tax -21,156.15 -21,156.15
Tax for maintaining and
building cities -33,838.34 -30,700.27
Housing property tax 7,033,390.76 7,305,817.27
Others 27,188.97 27,259.19
Total 95,162,604.16 96,149,009.88
The Company has owed taxes for long time, and there is the probability to make
supplementary payment of forfeit money and late fee.
17. Interest payable
Items Amount at the end of period Amount at the beginning of
period
Loan interest 190,778,373.56 165,838,645.23Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
70
18. Accounts payable - others
(1) Age of accounts payable –others:
Unit: RMB
Items Amount at the end of period Amount at the beginning of
period
Within 1 year 13,898,127.04 13,449,141.79
1-2 years 2,069,975.95 2,069,975.95
2-3 years 1,996,635.22 1,996,635.22
Over 3 years 151,320,687.35 151,320,687.35
Total 169,285,425.56 168,836,440.31
(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 due within one year
(1)
Unit: RMB
Items Amount at the end of period Amount at the beginning of
period
Long-term credit loan coming
due within 1 year 867,274,659.87 870,518,082.14
(2) Top five long-term loans coming due within 1 year
Unit: RMB
Amount at the end of period
Borrower Curency Amount in
foreign currencies Amount in RMB
Shenzhen Guocheng Energy Investment
Development Co., Ltd. USD 62,829,259.02 426,667,215.04
Guangdong Sunrise Group Co., Ltd. RMB - 232,607,520.84
Shenzhen Zhengda Guoli Investment Co.,
Ltd. USD 21,968,365.55 149,184,973.64
Shenzhen Guocheng Energy Investment
Development Co., Ltd. RMB - 19,300,058.59
China Xinda Assets Management Co., Ltd. USD 2,157,395.94 14,650,660.06
Great Wall Assets Management Co., Ltd. USD 2,000,000.00 13,582,050.00
Total 855,992,478.17
(3) Overdue loans among the long-term loans coming due within 1 year
Unit: RMB
Borrowers Amount Term exceeded
Guangdong Sunrise Group Co., Ltd. 232,607,520.84 Overdue for multiple
years
Shenzhen Guocheng Energy Investment
Development Co., Ltd. 445,967,273.63 Overdue for multiple
years
Shenzhen Zhengda Guoli Investment Co.,
Ltd. 149,184,973.64 Overdue for multiple
yearsShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
71
Xie Lingling 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. 14,650,660.06 Overdue for multiple
years
Total 867,274,659.87
20. Other current liabilities
Unit: RMB
Items Closing book balance Opening book balance
Rent 521,639.87 521,639.87
Decoration fee 188,853.82 188,853.82
Others 16,118.40 16,118.40
Total 726,612.09 726,612.09
21. Projected liabilities
Unit: 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 for Guangdong
Sunrise Group Co., Ltd.
42,918,300.00 - - 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 179,088,442.92 - - 179,088,442.92
(1) The guaranteed companies have been in serious insolvency or gone bankruptcy
(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 theShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
72
abovementioned, the Company will offset non-business income with the USD740,000
(RMB5,045,542) wholly regarded as estimated liability in 2009.
22. Share capital
Unit: RMB
Amount at the beginning
of period Increase/ decrease (+, -) Amount at the end of
period
Amount Proportion
Ne
w
sha
res
iss
ued
Bo
nus
ssh
are
Bonus
shares
from
capital
reserve
Others Subtotal Amount Proportion
I. Restricted shares 186,796,067 38.96% 0 42,672 42,672 186,838,739 33.89%
1. State-owned shares 0 0.00% 0 0 0 0.00%
2. State-owned legal
person’s shares 16,340,000 3.41% 0 0 16,340,000 2.96%
3. Other domestic shares 95,267,002 19.87% 0 0 95,267,002 17.28%
Including: Domestic
non-state-ownedd legal
person’s shares
95,267,002 19.87% 0 0 95,267,002 17.28%
Domestic natural person’s
shares 0 0.00% 0 0 0 0.00%
4. Foreign shares 75,106,190 15.67% 0 0 75,106,190 13.62%
Including: Foreign legal
person’s shares 75,106,190 15.67% 0 0 75,106,190 13.62%
Foreign natural person’s
shares 0 0.00% 0 0 0 0.00%
5. Senior executive’s
shares 82,875 0.02% 0 42,672 42,672 125,547 0.02%
II. Unrestricted shares 292,636,936 61.04% 0 71,872,272 71,872,272 364,509,208 66.11%
1. RMB Ordinary shares 76,669,125 15.99% 0 39,477,101 39,477,101 116,146,226 21.07%
2. Domestically listed
foreign shares 215,967,811 45.05% 0 32,395,171 32,395,171 248,362,982 45.05%
3. Overseas listed foreign
shares 0 0.00% 0 0 0 0.00%
4. Others 0 0.00% 0 0 0 0.00%
III. Total shares 479,433,003 100.00% 0 71,914,944 71,914,944 551,347,947 100.00%
The Company’s share capital has been verified by Shenzhen Certified Accountants Office by
[(96) YZZ No. 076].
23. Capital reserve
Unit: 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 458,695,975.55 22,854,197.50 71,914,944.00- 409,635,229.05
Where: enefit from debts
restructuring 454,687,350.58 22,854,197.50 - 477,541,548.08
Accounts unnecessary to
pay 690,624.97 - - 690,624.97
Price difference of
affiliated transactions 3,318,000.00 - - 3,318,000.00
Bonus shares 71,914,944.00 -71,914,944.00Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
73
Total 458,695,975.55 22,854,197.50 71,914,944.00 409,635,229.05
Interpretation of capital reserve:
1. 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 RMB22,854,197.50 in first half year, which
will be charged into the capital reserve as capital investment.
2. The Company accomplished share merger reform in the report period, RMB71,914,944.00
was used for bonus shares from capital reserve.
24. Surplus reserve
Unit: RMB
Items
Amount at the
beginning of
period
Increase in the
current period
Decrease in the
current period
Amount at the
end of period
Statutory surplus
reserve 32,673,227.01 - - 32,673,227.01
25. Retained profit
Unit: RMB
Items Amount
Proportion of
withdrawal or
distribution
Retained profit of the previous year before
adjustment -2,831,816,725.23
Total retained profit at the beginning of year
adjusted (+, -) -
Retained profit at the beginning of year after
adjustment -2,831,816,725.23
Add: Net profit attributable to owners of parent
company in the current period -51,719,360.41
Less: Withdrawal of satutory surplus reserve -
Withdrawal of arbitrary surplus reserve -
Withdrawal of general risk reserve -
Common stock dividend payable -
Common stock dividend transferred into share
capital -
Retained profit at the end of period
-2,883,536,085.64 -
26. Business income and business cost
(1) Business income and business cost
Unit: RMB
Items Amount incurred in the
current period
Amount incurred in the last
period
Major business income 112,764,460.92 108,502,463.85Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
74
Other business income 7,858,325.22 3,992,120.00
Business cost 114,045,625.35 106,593,086.70
(2) Major businesses (by industry)
Unit: RMB
Jan.-June, 2010 The same period of last year
Kinds Business
income Business cost Business
income Business cost
Main
business:
Bicycle and
parts
distribution
111,611,190.57 106,650,381.83 107,433,173.33 101,638,588.94
Property
management 1,153,270.35 2,050,742.13 1,069,290.52 1,895,757.49
Subtotal 112,764,460.92 108,701,123.96 108,502,463.85 103,534,346.43
Other
business:
Rent for
leasing fixed
assets
6,695,702.13 4,135,804.08 3,007,739.45 2,268,834.30
Expense for
electricity
and water
970,691.46 1,146,032.63 512,790.07 358,187.78
Materials
sales 53,418.80 41,091.38 356,036.63 323,389.13
Other 138,512.83 21,573.30 115,553.85 108,329.06
Subtotal 7,858,325.22 5,344,501.39 3,992,120.00 3,058,740.27
Total 120,622,786.14 114,045,625.35 112,494,583.85 106,593,086.70
(3)Major businesses (by variety)
Unit: RMB
Product name Amount incurred in the current
period Amount incurred in the last period
Business income Business cost Business income Business cost
OEM motor
vehicle 92,467,792.44 88,627,357.94 83,530,331.50 78,772,588.53
OEM Bicycle 18,760,441.30 17,555,520.98 23,476,801.21 22,418,424.92
CBC motor
vehicle 173,294.01 302,840.72 336,793.14 351,398.78
CBC Bicycle 22,374.35 24,261.46 158,822.20 161,013.78
Others 187,288.47 140,400.73 94,759.87 99,497.52
Lease
management 1,153,270.35 2,050,742.13 904,955.93 1,731,422.90
Total 112,764,460.92 108,701,123.96 108,502,463.85 103,534,346.43Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
75
(4) Business income of the Company’s top five customers
Unit: RMB
Customer name Business income
Proportion among the
Company’s total business
income
Jinan Yuxintai Sales Co., Ltd. 37,970,590.24 31.48%
Zhengzhou Daming Technological
Trade Co., Ltd. 24,077,444.46 19.96%
Suzhou Jiaxin Economic Trade Co.,
Ltd. 17,666,750.86 14.65%
Shijiazhuang Dasong Technology Co.,
Ltd. 13,734,184.39 11.39%
Sichuan Wanling Electric Technology
Co., Ltd. 2,341,212.82 1.94%
Total 95,790,182.77 79.41%
27. Sales tax and surcharge
Unit: RMB
Items Amount incurred in
the current period
Amount incurred in
the last period Collection standard
Sales tax 57,663.55 53,464.53 5%
Tax for maintaining and
building cities 5,883.69 4,467.67 Turnover tax 1%
Educational surtax 17,651.05 13,403.00 Turnover tax 3%
Total 81,198.29 71,335.20 -
28. Asset depreciation loss
Unit: RMB
Items Amount incurred in the
current period
Amount incurred in the last
period
I. Loss from bad debts - -770,493.95
II. Loss from inventory
depreciation - -
III. Depreciation loss of
salable financial assets - -
IV. Depreciation loss of
held-to-maturity investment - -
V. Depreciation loss of
long-term equity investment - -
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 - -Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
76
XI. Depreciation loss of
oil-gas assets - -
XII. Depreciation loss of
intangible assets - -
XIII. Depreciation loss of
goodwill - -
XIV. Others - -
Total 0.00 -770,493.95
29. Investment income
(1) Details of investment income
Unit: RMB
Items Amount incurred in the
current period
Amount incurred in the
last period
Long-term equity investment
income calculated with cost
method
- -
Long-term equity investment
income calculated with equity
method
- -
Investment income from
disposing long-term equity
investment
- -
Total 0.00 0.00
30. Non-operating income
(1) Unit: RMB
Items Amount incurred in
the current period
Amount incurred in
the last period
Total amount obtained from disposing
noncurrent assets - 218,726.57
Where: Benefit from disposal of fixed assets - 218,726.57
Benefit from disposal of intangible
assets - -
Taxes return 254,666.00
Benefit from debts restructuring - -
Others 544,496.77 128,593.36
Total 799,162.77 347,319.93
The non-operating income in the current period wasmainly originated from more payment for
land use tax to Shenzhen Local Tax Bureau amounting to RMB 254,666.00.
31. Non-operating expenditure
Unit: RMB
Items Amount incurred in
the current period
Amount incurred in
the last period
Total loss from disposal of noncurrent assets - -
Where: Loss from disposal of fixed assets - -
Loss from disposal of intangible assets - -
Penalty expense 200.00
Others 30,680.00 14,021.66
Total 30,680.00 14,221.66Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
77
32. Calculation process of basic earning per share and diluted earning per share (EPS)
Unit: 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 -56,332,908.69
Non-frequent gain and loss classed under the
Company’s common shareholders F 333,098.27
Net profit classed under the Company’s common
shareholders after deduction of non-frequent gain and
loss
P0'=P0-F -56,666,006.96
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 -56,666,006.96
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' -56,666,006.96
Total shares at the beginning of period S0 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 6 6
Accumulated number of months from the next month
of share increase to the end of report period Mi 3 3
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÷M0-
Sk
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
X1Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
78
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
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 -0.1175
Basic EPS classed under the Company’s common
shareholders after deducation of non-frequent gains
and losses
EPS0'=P0'÷S -0.1182
Diluted EPS classed under the Company’s common
shareholders EPS1=P1÷X2 -0.1175
Diluted EPS classed under the Company’s common
shareholders after deducation of non-frequent gains
and losses
EPS1'=P1'÷X2 -0.1182
(1) In the report period, the Company conducted bonus shares from capital reserve, if
calculating based on the shares after conversion, the basic EPS and diluted EPS attributable
to common shareholders of listed companies in the same period of last year was respectively
RMB-0.1022 and RMB-0.1022 each share, the basic EPS and diluted EPS attributable to
common shareholders of listed companies after deducting non-recurring gains and losses in
the same period of last year was respectively RMB-0.1028 and RMB-0.1028 each share.
33. Notes to items in cash flow statement
(1) Other cash received related with business activities
Unit: RMB
Items Amount
Rent, electric rate and water rate 7,666,393.59
Parts disposal money 62,500.00
Other current accounts 2,002,171.72
Total 9,731,065.31
(2)Other cash paid related with business activities
Periodic expenses were all paid in cash.
VI. Affiliated Parties and Affiliated Transactions
1. Shareholders controlled by the enterprise
Unit: RMB’0000Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
79
2. Detailed information about the Company’s subsidiaries is as shown in 1 of Annotation IV
of the report.
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
Guocheng
Energy
Investment
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.
77411579-2Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
80
3. Joint management and joint-ownership enterprises of the Company
Unit: 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
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.Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
81
4. Accounts receivable/ accounts payable and exemption items of affiliated parties
(1) Current accounts
Unit: 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 2,616,430.50
Long-term liability
coming due within 1
year
Shenzhen Guocheng Energy
Investment Development Co., Ltd. 445,967,273.63 598,315,198.66
Interest payable Shenzhen Guocheng Energy
Investment Development Co., Ltd. 2,161,259.22 2,555,047.98
(2) Exempted items
Unit: RMB
Items Affiliated parties
Amount
incurred in the
current period
Amount
incrrued in last
period
Financial cost Shenzhen Guocheng Energy
Investment Development Co., Ltd. 22,854,197.50 23,908,415.63
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 for whole year 2010, the occurring amount in
the first half of 2010 was RMB 22,854,197.5, which will be charged into the capital reserve
as capital investment.
VII. Contingency
1. Contingent liabilities formed from pending lawsuit and arbitration, and financial
influences
(1) As of 30 June 2010, the Company had been prosecuted by 17 financial instutions,
involving total loan principal and interest of RMB425460600, 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 30 June 2010, the Company had been prosecuted by 34 goods suppliers, involving total
loan principal and interest of RMB60045500, 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 Sunrise
Group Co., Ltd.
RMB36,100,000.00
USD1,000,000.00 (1) GuarantyShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
82
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 bankruptcy. 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.
VIII.Committed Items
The Company had no important committed items in the report period.
IX. Other significant events
1. Financial Debt Restructuring Issues
In accordance with the document YJBT[2004] No.6 issued by China Banking Regulatory
Commission, General Offices on Jan.7, 2004, 11 financial organs including BOC stopped
collecting interest of load of the Company for 3 years since Jan.1, 2002 and exempted from
all interest in red (including default interest and Compound Interest) made by the Company
before Dec.31, 2001. The Company has made all interest payable (including default interest
and Compound Interest), namely, RMB 357,993,665.24 into "capital reserve" and stopped to
deduct interest for the period between Jan.1, 2002 and Dec.31, 2004. The exemption expires
on Dec.31, 2004.
In 2005, China Huarong Asset Management Corporation, Shenzhen office, China Orient
Asset Management Corporation, Shenzhen office, China Xinda Asset Management
Corporation, Shenzhen office, China Great Wall Asset management Corporation, Shenzhen
office gave up the annual interest for 2005.
For the ambiguity made by “stop to collect interest”, General Rules on Loan has not
interpreted it. For this reason, China Huarong Asset Management Corporation, Shenzhen
office, China Orient Asset Management Corporation, Shenzhen office, China Xinda Asset
Management, Shenzhen office and Great Wall Asset management corporation, Shenzhen
office did not claimed for the interest. Yet, Shenzhen Development Bank Claimed for the
interest and compound interest for the period between Jan.1, 2002 and Dec.31, 2004. The
Company holds the idea that it needs not to pay the interest stopped to calculate and has not
deducts the interest and compound interest during the period between Jan.1, 2002 and Dec.
31, 2004. Till Dec. 31, 2008, the interest amount confirmed by debtor bank was more than the
book interest payable of the Company with the amount of RMB 265,875,786.92, and there
were some other institutions who did not confirm the loan interests. The Company thought
the differences between the interests withdrew or not, returned or not; thus, no financial
adjustment was made.
2. Instructions to Continous Operation
As of 30 June 2010, China Bicycle Company Limited has a gross asset of RMB
170,137,366.18, the total debt of RMB 2,059,961,175.39, with its net asset up to RMBShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
83
-1,889,823,809.21, 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 following 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 Energy Investment Development Co., Ltd. (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 large sum of interests for 2010
loan, 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.
X. Note of main item of financial statement of parent company
1. Accounts receivable
(1) Accounts receivable
Unit: RMB
Amount at the end of period
Book Category balance Provision for bad debts
Amount Proportion Amount Proportion
Account receivable with
single big amount 919,021,641.77 88.40% 917,908,554.40 88.71%
Account receivable not
with single big amount but
with heavy combination
risk after combination by
credit risk characteristic
116,770,032.07 11.23% 116,770,032.07 11.29%
Other not important
accounts receivable 3,825,758.71 0.37% - -
Total 1,039,617,432.55 100.00% 1,034,678,586.47 100.00%
Amount at the begin of period
Category Book balance Provision for bad debts
Amount Proportion Amount ProportionShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
84
Account receivable with
single big amount 919,163,966.00 88.40% 918,149,069.40 88.72%
Account receivable not
with single big amount but
with heavy combination
risk after combination by
credit risk characteristic 116,770,032.07 11.23% 116,770,032.07 11.28%
Other not important
accounts receivable 3,825,758.71 0.37% - -
Total 1,039,759,756.78 100.00% 1,034,919,101.47 100.00%
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
with single big amount or not with single big amount but carried out depreciation test
separately at the end of period:
Unit: RMB
Content of
accounts
receivable
Book balance
Amount of bad
and doubtful
account
Proportion of
withdrawal Reason
Account
receivable with
single big
amount
919,021,641.77 917,908,554.40 99.88%
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: RMB
Amount at the end of period Age Book balance ABmoooukn tb aatl atnhcee b eginning of period
Amount Proportion(%)
Provision for
bad debts Amount Proportion(%)
Provision for
bad debts
Over
3
years
116,770,032.07 100.00 116,770,032.07 116,770,032.07 100.00 116,770,032.0
3) Exposure of accounts receivable by credit risk characteristic (age analysis)
Unit: RMB
Age Amount at the end of period Amount at the beginning of period
Book balance Provision for Book balance Provision forShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
85
Amount Proport
ion
bad debts Amount Proport
ion
bad debts
Within 1
year 3,329,011.81 0.32% - 3,329,011.81 0.32% -
1-2 years 496,746.90 0.05% - 496,746.90 0.05% -
2-3 years 1,035,791,673.
84 99.63% 1,034,678,586.
47
1,035,933,998.
07
99.63
%
1,034,919,10
1.47
Over 3
years
1,039,617,432.
55 100% 1,034,678,586.
47
1,039,759,756.
78 100% 1,034,919,10
1.47
(4) Actual write-off of account receivable in the report period
In the report period, the Company received final verdict for Scheme for Bankruptcy and
Property Distribution of Shenzhen Qin Chi Bicycle Co., Ltd. According to the verdict, the
Company wrote off account receivable of Shenzhen Qin Chi Bicycle Co., Ltd. amounting to
RMB240,515.00 in the report period and the full amount was withdrawn provision for bad
debts.
(5) The accounts receivable at the end of 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 account receivable:
Unit: RMB
Name
Relationship
with the
company
Amount Period
Proportion among
the gross accounts
receivable (%)
DB(HK) Non-affiliated
customers 174,219,907.69 Over 3 years 16.76%
REGAL Non-affiliated
customers 140,887,132.85 Over 3 years 13.55%
STARWAY Non-affiliated
customers 97,930,571.16 Over 3 years 9.42%
DIAMOND BACK Non-affiliated
customers 69,887,060.40 Over 3 years 6.72%
Shenzhne Jinfeng Industry
Development Company
Non-affiliated
customers 52,406,319.69 Over 3 years 5.04%
Total - 535,330,991.79 - 51.49%
(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.
2. Accounts receivable – others
(1) Accounts receivable - others
Unit: RMB
Amount at the end of period
Book Category balance Provision for bad debts
Amount Proportion Amount Proportion
Account receivable-others
with single big amount 511,193,996.27 90.90% 476,218,547.14 90.30%
Account receivable-others not 51,168,974.44 9.10% 51,168,974.44 9.70%Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
86
with single big amount but
with heavy combination risk
after combination by credit
risk characteristic
Other not important accounts
receivable-others 2,929.40 - 2,929.40 -
Total 562,365,900.11 100.00% 527,390,450.98 100.00%
Amount at the beginning of period
Book Category balance Provision for bad debts
Amount Proportion Amount Proportion
Account receivable-others
with single big amount 518,814,385.48 90.72% 476,218,547.14 90.30%
Account receivable-others not
with single big amount but
with heavy combination risk
after combination by credit
risk characteristic
51,168,974.44 8.95% 51,168,974.44 9.70%
Other not important accounts
receivable-others 1,876,468.21 0.33% 2,929.40 -
Total 571,859,828.13 100.00% 527,390,450.98 100.00%
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 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 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: 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
511,193,996.27 476,218,547.14 93.16%
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: RMB
Age Amount at the end of period Amount at the beginning of periodShenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
87
Book balance Book balance
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)Exposure of accounts receivable – other by credit risk characteristic (age analysis)
Unit: RMB
Amount at the end of period Amount at the beginning of period
Age Book balance Book balance
Amount Proportio
n
Provision for
bad debts Amount Proport
ion
Provision for
bad debts
Within 1
year 4,502,929.40 0.08% 2,929.40 6,376,468.21 1.12% 2,929.40
1-2 years - - - - - -
2-3 years - - - - - -
Over 3
years 557,862,970.71 99.20% 527,387,521.58 565,483,359.92 98.88% 527,387,521.
58
Total 562,365,900.11 100.00% 527,390,450.98 571,859,828.13 100.00
%
527,390,450.
98
(4) No account receivable – others actually cancelled after verification in the report period
(5)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.
(6)Top 5 units with an amount of account receivable-others:
Unit: RMB
Name
Relationship
with the
company
Amount Period
Proportion among the
gross accounts
receivable - others (%)
STARWAY Non-affiliated
customers 220,038,935.10 Over 3 years 39.13%
Composite materials Non-affiliated
customers 60,359,041.39 Over 3 years 10.73%
MORE-LARGE Non-affiliated
customers 30,059,193.03 Over 3 years 5.35%
Huajiaming Non-affiliated
customers 26,044,962.08 Over 3 years 4.63%
ZORIA Non-affiliated
customers 20,531,780.08 Over 3 years 3.65%
Total - 357,033,911.68 - 63.49%
(7) No account receivable involving with affiliated parties in the report period.
(8) No other account receivable with confirmation terminated at the end of the report period.Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
88
3. Long-term equity investment
Unit: RMB
Invested unit
Accounti
ng
method
Initial
investment
cost
Opening
balance
Increase
or
decrease
Closing
balance
Proporti
on of
shares
held in
invested
units (%)
Proporti
on of
voting
power in
invested
units (%)
Interpretat
ion to
discrepanc
y between
the
proportion
of shares
and voting
power in
invested
units
Depreciatio
n reserve at
the end of
period
Deprecia
tion
reserve
withdra
wn at the
current
period
Cash
bonus in
the
report
period
Shenzhen Emmelle Industry
Co., Ltd.
Cost
method 1,400,000.00 1,400,000.00 - 1,400,000.0
0 70% 70% - 1,400,000.0
0 - -
Shenzhen Anjule Property
Management Co., Ltd.
Cost
method 2,000,000.00 2,000,000.00 - 2,000,000.0
0 100% 100% - 2,000,000.0
0 - -
China Bicycle (Hong Kong)
Co., Ltd.
Cost
method 5,350,000.00 5,350,000.00 - 5,350,000.0
0 99% 99% - 5,350,000.0
0 - -
China Bicycle (International)
Co., Ltd.
Cost
method 18,727.60 18,727.60 - 18,727.60 100% 100% - 18,727.60 - -
Hunan KN Motorcycle Co.,
Ltd.
Cost
method 5,679,300.00 5,679,300.00 - 5,679,300.0
0 5.50% 5.50% - 5,679,300.0
0 - -
Shenzhen Golden Ring
Printing Co., Ltd.
Equity
method
14,883,560.0
0
14,883,560.0
0 - 14,883,560.
00 38.00% 38.00% - 12,263,719.
50 - -
Total -- 29,331,587.6
0
29,331,587.6
0 - 29,331,587.
60 -- -- - 26,711,747.
10 - -Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
89
4. Operating revenue and operating costs
(1)Operating revenue
Unit: RMB
Item Amount incurred of current
period
Amount incurred of last
period
Income from main business
306,335.90 915,612.46
Income from other business
7,719,812.39 6,021,696.14
Operating cost
5,650,837.29 3,974,352.73
XI. Supplementary information
1. Detailed statement of non-recurring profit and loss items in the report period
Unit: RMB
Items Amount Remarks
Loss and profit on disposal of non-current assets
Tax return or exemption from override approval or with no
official approval document 254,666.00
Returned more
payment for land
use tax
The amount of the government subsidies which are included
in the 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 -
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 -Shenzhen China Bicycle Company (Holdings) Limited Financial Report for Semi-annual 2010
90
Items Amount Remarks
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 513,816.77
Other loss/profit generated by definition of other non
recurring profit and loss -
Amount influenced by income tax -
Amount influenced by few shareholders’ equity(after-tax) -
Total 768,482.77
2. ROE and EPS
Profit during the period of Earnings per share
report Weighted average EPS (%) Basic earnings
per share
Basic earnings
per share
Net profit attributable to
common shareholder of
listed companies
-
-0.0938 -0.0938
Net profit attributable to
common shareholder of
listed companies after
deducting non-recurring
gains and losses
-
-0.0952 -0.0952
Legal Representative: LI GANG Date: 9 AUGUST 2010
Principal In Charge Of Accounting Works: WANG CHENG Date: 9 AUGUST 2010
Principal Of Accounting Institution: SUN LONG LONG Date: 9 AUGUST 2010
