深圳中华自行车（集团）股份有限公司
Shenzhen China Bicycle Company (Holdings) Limited
2011 ANNUAL REPORT
IMPORTANT NOTICES:
Directors, supervisors and senior executives of the Shenzhen China Bicycle Company (Holdings)
Limited (hereinafter referred to as the Company) hereby confirm that there are no any important
omissions, fictitious statements or serious misleading information carried in this report, and shall
take all responsibilities, individual and/or joint, for the reality, accuracy and completion of the
whole contents.
Shenzhen Pengcheng Certified Public Accountants issued auditor’s report with disclaimer of
opinions for the 2011 Financial Report of the Company. The Board of Directors of the Company
made specific explanations on the relevant matters; the Supervisory Committee of the Company
expressed definite opinions on the specific explanations by the Board of Directors. The investors
are suggested to read for details.
No director, supervisor and senior executives stated that they couldn’t ensure the correctness,
accuracy and completeness of the contents of 2011 Annual Report or have objection for this report.
Director Mr. Yao Zhengwang was absent from the board meeting due to go on business outside, but
authorized to entrust Director Mr. Zhang Zebin to attend and exert voting rights on behalf.
Person in Charge of the Company Mr. Luo Guiyon, Person in Charge of Accounting Works Mr.
Zhang Zebing and Person in Charge of Accounting Organ Mr. Sun Longlong hereby confirm that
the Financial Report of 2011 Annual Report is true and complete.
CONTENTS
Section I. Company Profile………………………………………………………... 3
Section II. Main Financial Data and Business Indexes……………………………. 4
Section III. Changes in Share Capital and Particulars about Shareholders………... 6
Section IV. Particulars about Directors, Supervisors and Senior Executives……… 11
Section V. Corporate Governance Structure………………………………………. 16
Section VI. Internal Control……………………………………………………….. 18
Section VII. Brief Introduction to the Shareholders’ General Meeting……………. 23
Section VIII. Report of the Board of Directors………………………………….. 24
Section IX. Report of Supervisory Committee………………………………….. 35
Section X. Significant Events……………………………………………………… 37
Section XI. Financial Report………………………………………………………. 40
40
Section XII. Documents Available for Reference………………………………….
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
In English: SHENZHEN CHINA BICYCLE COMPANY（HOLDINGS）LIMITED
Short form of English Name: CBC
II. Legal Representative: Luo Guiyon
III. Executor of secretary of the Board: Luo Guiyon
Securities Representative: Cui Hongxia
Tel: (86) 755-28181666
Contact Address: Zhonghua Industrial Park, Yousong Industrial Zone, Longhua, Shenzhen,
Guangdong Province, China
Fax: (86) 755-28181009
E-mail:dmc@szcbc.com
IV. Registered Address and Office Address: No. 3008, Buxin Road, Shenzhen, Guangdong
Province, PRC
Post Code: 518019
Office Address: Zhonghua Industrial Park, Yousong Industrial Zone, Longhua, Shenzhen,
Guangdong Province, China
Post Code: 518131
The Company’s Internet Website: www.cbc.com.cn
E-mail: cbc@szcbc.com
V. Newspapers Chosen for Disclosing the Information: Securities Times and Hong Kong
Commercial Daily
Internet Website Designated for Publishing the Annual Report: www.cninfo.com.cn
Place Where the Annual Report is Prepared and Placed: Secretariat of the Board of Directors
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 for A-share, 200017 for B-share
VII. Other Information about the Company
1. Initial registered date: Aug. 24, 1984
2. Initial registered place: Buxin Road, Shenzhen
3.Registration number for business license of legal person of corporation: 440301501122085
4. Registration number of tax:
State Revenue SHEN ZI No. 440301618830452,
Local Tax SHEN ZI No. 440303618830452
5. Name and office address of the Certified Public Accountants engaged by the Company:
Shenzhen Pengcheng Certified Public Accountants Co., Ltd.
Office Address: 7/F, A Building, Union Square, No. 5022, Binghe Road, Futian District, Shenzhen,
China
Section II. Summary of Accounting Highlight and Business Highlight
I. Major profit indexes as of the year 2011
1. Major profit indexes as of the year 2011 (Unit: RMB)
Operating profit -24,930,672.81
Total profit 39,720,901.46
Net profit attributable to the shareholders of the listed
39,720,901.46
company
Net profit attributable to the shareholders of the listed
-12,879,894.99
company after deducting non-recurring gains and losses
Net cash flow arising from operating activities 348,907.64
2. Items of non-recurring gains and losses (Unit: RMB)
Notes
Items of non-recurring gains and losses Amount
(If applicable)
Gains and losses from the disposal of Net gains/losses form disposal of
14,781,833.16
non-current assets fixed assets
Debt reorganization plan of
Other non-operating income and Sunrise Company was completed,
expenditure except for the aforementioned 49,869,741.11 the Company reduced the interest
items and liabilities accrued previously
in book
Other loss/profit qualified definition of Investment income of disposal of
4,560,000.00
other non recurring profit and loss Hunan Guangyang Motorcycle
Influenced amount of income tax -16,610,777.82
Total 52,600,796.45
II. Major accounting data and financial indexes over the recent three year at the end of report
year
1. Main accounting data
Unit: RMB
Increase/decrease in this year
2011 2010 compared with that of last 2009
year (%)
Total operating income 321,043,570.34 299,027,279.43 7.36 260,908,108.82
Total profit 39,720,901.46 64,477,414.44 -38.40 -106,160,775.90
Net profit attributable to
shareholders of the listed 39,720,901.46 64,477,414.44 -38.40 -105,757,549.50
company
Net profit attributable to
shareholders of the listed
company after deducting -12,879,894.99 -44,590,962.46 -71.12 -115,020,042.60
non-recurring gains and
losses
Net cash flow arising from
348,907.46 6,495,860.32 -94.63 3,920,586.97
operating activities
Increase/decrease at the end
of this year compared with
At the end of 2011 At the end of 2010 At the end of 2009
that at the end of last year
(%)
Total assets 135,746,630.93 138,158,078.89 -1.75 169,696,420.47
Owners’ equity attributable to
shareholders of the listed -1,682,839,667.48 -1,756,185,442.87 -4.18 -1,861,014,519.67
company
Share capital 551,347,947.00 551,347,947.00 0 479,433,003.00
2. Main financial indexes (Unit: RMB)
Increase/decrease this year compared
2011 2010 2009
with that last year (%)
Basic earnings per share (RMB/Share) 0.0720 0.1169 -38.40 -0.2206
Diluted earnings per share (RMB/Share) 0.0720 0.1169 -38.40 -0.2206
Basic earnings per share calculated based
0.0720 0.1169 -38.40 -0.1925
on latest share capital(RMB/Share)
Basic earnings per share after deducting
non-recurring gains and losses -0.0234 -0.0809 -71.12 -0.2399
(RMB/Share)
Weighted average return on equity (%) 0.00%
Weighted average return on equity after
deducting non-recurring gains and losses 0.00%
(%)
Net cash flow arising from operating
0.0006 0.0118 -94.63 0.01
activities per share (RMB/Share)
Increase/decrease at the end of this year
At the end At the end At the end
compared with that at the end of last
of 2011 of 2010 of 2009
year (%)
Net asset per share attributable to shareholders
-3.0522 -3.1853 -4.18 -3.8817
of listed company (RMB/Share)
3. There was no different between domestic accounting rules and foreign accounting rules.
Section III. Changes in Share Capital & Particulars about Shareholders
I. Particulars about change in share capital
(I) Change in share capital
Unit: Share
Before the change Increase/decrease of this time (+, - ) After the change
New
Bonus Capitalization of
Amount Proportion shares Others Subtotal Amount Proportion
shares public reserve
issued
I. Restricted shares 186,725,122 33.87% -77,510,892 -77,510,892 109,214,230 19.81%
1. State-owned shares 0 0.00% 0 0 0 0.00%
2. State-owned legal
16,340,000 2.96% -16,340,000 -16,340,000 0 0.00%
person’s shares
3. Other domestic
95,267,002 17.28% -30,168,590 -30,168,590 65,098,412 11.81%
shares
Including: Domestic
non-state-owned legal 88,767,002 16.10% -23,668,590 -23,668,590 65,098,412 11.81%
person’s shares
Domestic natural
6,500,000 1.18% -6,500,000 -6,500,000 0 0.00%
person’s shares
4. Foreign shares 75,106,190 13.62% -31,001,944 -31,001,944 44,104,246 8.00%
Including: Foreign
75,106,190 13.62% -31,001,944 -31,001,944 44,104,246 8.00%
legal person’s shares
Foreign natural
0 0.00% 0 0 0 0.00%
person’s shares
5. Senior executives’
11,930 0.00% -358 -358 11,572 0.00%
shares
II. Unrestricted shares 364,622,825 66.13% 77,510,892 77,510,892 442,133,717 80.19%
1. RMB Ordinary
116,259,843 21.09% 77,513,517 77,513,517 193,773,360 35.14%
shares
2. Domestically listed
248,362,982 45.05% -2,625 -2,625 248,360,357 45.05%
foreign shares
3. Overseas listed
0 0.00% 0 0 0 0.00%
foreign shares
4. Others 0 0.00% 0 0 0 0.00%
III. Total shares 551,347,947 100.00% 0 0 551,347,947 100.00%
Statement on changes of restricted shares
Unit: Share
Increased
Restricted Restricted Restricted Date for
Name of restricted Reason for
shares at shares released shares at releasing the
shareholders shares in restriction
year-begin in current year year-end restriction
current year
Restriction
commitment of
27,567,397 0 0 27,567,397 2011-9-17
share merger
reform
Shenzhen Guocheng Restriction
Energy Investment commitment of
27,567,397 0 0 27,567,397 2012-3-17
Development Co., share merger
Ltd. reform
Restriction
commitment of
9,963,618 0 0 9,963,618 2013-3-17
share merger
reform
Restriction
Hong Kong commitment of
27,567,397 0 0 27,567,397 2011-3-17
Zhuorun share merger
Technology Co., reform
Ltd. Restriction
16,536,849 0 0 16,536,849 2012-3-17
commitment of
share merger
reform
Restriction
China Bicycle
commitment of
Company 26,000,000 26,000,000 0 0 2011-3-17
share merger
(Holdings) Limited
reform
Shenzhen
Restriction
Kangsheng
commitment of
Investment 11,968,590 11,968,590 0 0 2011-3-17
share merger
Development Co.,
reform
Ltd.
Restriction
Xinliyi Investment
commitment of
Management Co., 11,200,000 11,200,000 0 0 2011-3-17
share merger
Ltd.
reform
Restriction
Airline Trust and commitment of
10,340,000 10,340,000 0 0 2011-3-17
Investment Co., Ltd. share merger
reform
Restriction
China Resources
commitment of
SZITIC Trust Co., 6,000,000 6,000,000 0 0 2011-3-17
share merger
Ltd.
reform
Restriction
Jingchao Investment commitment of
5,001,944 5,001,944 0 0 2011-3-17
Co., Ltd. share merger
reform
Restriction
commitment of
Qiu Jiguang 3,500,000 3,500,000 0 0 2011-3-17
share merger
reform
Restriction
commitment of
Gao Deming 2,700,000 2,700,000 0 0 2011-3-17
share merger
reform
Guangzhou
Restriction
Hengyong Yingfeng
commitment of
Enterprise 500,000 500,000 0 0 2011-3-17
share merger
Development Co.,
reform
Ltd.
Restriction
commitment of
Gao Deping 300,000 300,000 0 0 2011-3-17
share merger
reform
Total 186,713,192 77,510,534 0 109,202,658 － －
Note: Restricted shares of the Company 77,510,534 shares have been un-lock for trading on 28
April 2011, a 14.06% in total share capital of the Company.
(II) Issuance and listing of the share:
1. The Company has not issued new shares and derivative securities over the recent three years
ended the report period.
2. The Company issued 5.3 million inner employee’s shares which had been listed totally at the
issuance price of RMB 3.75 per share dated Dec. 28, 1991.
(II) About shareholders at the end of report period
(I) Changes of share capital:
1. No changes of share capital of the Company in report period.
2. Ended as 31 December 2011, total 38,363 shareholders of the Company with 23,944 of A-stock
shareholder and 14,419 of B-stock shareholders.
(II) Particulars about shares held by the top ten shareholders (Unit: Share)
Amount of
Amount of Amount of
Proportion shares Nature of
Full name of shareholders shares held non-circulating
(%) pledged or shareholders
at year-end shares held
frozen
Shenzhen Guocheng Energy Domestic
Investment Development Co., 65,098,412 11.81 65,098,412 0 general legal
Ltd. person
Hong Kong Zhuorun Foreign legal
44,104,246 8.00 44,104,246 30,000,000
Technology Co., Ltd. person
Shenzhen Kangsheng Domestic
Investment Development Co., 5,972,500 1.08 0 0 general legal
Ltd. person
Foreign legal
Jingchao Investment Co., Ltd. 5,001,944 0.91 0 0
person
GUOTAI JUNAN
Foreign legal
SECURITIES(HONGKONG) 0.79 0 0
4,363,989 person
LIMITED
Foreign
Zeng Yin 3,198,352 0.58 0 0
nature person
Airline Trust and Investment State-owned
2,340,000 0.42 0 0
Co., Ltd. legal person
Foreign
TANG JING YUAN 2,213,175 0.40 0 0
nature person
Domestic
Shenzhen Fuwandian
2,137,099 0.39 0 0 general legal
Investment Co., Ltd.
person
Domestic
Chen Qingtao 2,092,743 0.38 0 0
nature person
Note: Among the top ten shareholders the Company was unaware of whether there existed
associated relationship or whether there existed consistent actionist regulated in the Management
Measure of Information Disclosure on Change of Shareholding for Listed Companies; among the
other circulating shareholders, the Company was unaware of whether there existed associated
relationship or whether there existed consistent actionist regulated in the Management Measure of
Information Disclosure on Change of Shareholding for Listed Companies
(III) Introduction of the controlling shareholder or actual controller of the Company
1. Changes of controlling shareholder and actual controller of the Company in the report period:
Controlling shareholder --- Shenzhen Guomin Investment Co., Ltd. of largest shareholder of the
Company—Shenzhen Guosheng Energy Investment Development Co., ltd, entered into an equity
transfer agreement with Ji Hanfei on 3 January 2011. Guomin Investment transferred 100% equity
of Guosheng Energy to Ji Hanfei with consideration of RMB 70 million. Guosheng Energy held
65,098,412 shares of A-stock of the Company, an 11.81% in total share capital of the Company.
2. Introduction of the controlling shareholder or actual controller of the Company
(1) Introduction of controlling shareholders: Shenzhen Guocheng Energy Investment Development
Co., Ltd.
Address: 501C Pacific Commercial Town of New Asia, No. 8 Zhonghang Road, Futian District,
Shenzhen; Legal representative: Ji Hanfei; Registration capital: RMB 70 million; Operation scope:
Establishing industry (additional application for specific items); domestic commerce, industry of
supply and distribution of materials (excluded commodities which were monopolized, under special
control and sold exclusively).
(2) Profile of actual controller Mr. Ji Hanfei:
Mr. Ji Hanfei, Chinese nationality. A legal person, executive director and general manager of
Shenzhen Guocheng Energy Investment Development Co., Ltd. Mr. Ji Hanfei has no other
enterprise for investment except holding 25% equity of Shenzhen Guomin Investment Development
Co., Ltd.
3. The property relationship between the actual controller and the Company was as follows:
Ji Han Fei
100%
Shenzhen Guocheng Energy Investment Development Co., Ltd.
11.81%
Shenzhen China Bicycle Company (Holding) Limited
司
(IV) The top ten circulating shareholders of the Company
Amount of circulating
Name of shareholders shares held shareholders Types
(share)
Shenzhen Kangsheng Investment RMB ordinary
5,972,500
Development Co., Ltd. shares
RMB ordinary
Jingchao Investment Co., Ltd. 5,001,944
shares
GUOTAI JUNAN Domestically listed
4,363,989
SECURITIES(HONGKONG) LIMITED foreign shares
Domestically listed
Zeng Yin 3,198,352
foreign shares
RMB ordinary
Airline Trust and Investment Co., Ltd. 2,340,000
shares
Domestically listed
TANG JING YUAN 2,213,175
foreign shares
Shenzhen Fuwandian Investment Co., RMB ordinary
2,137,099
Ltd. shares
RMB ordinary
Chen Qingtao 2,092,743
shares
Domestically listed
Zhang Huiling 1,901,459
foreign shares
RMB ordinary
Zeng Wei 1,798,800
shares
Section IV. Particulars about Directors, Supervisors, Senior Executives &
Employees
I. Directors, supervisors and senior executives
1. Changes of shares held by directors, supervisors and senior executives:
Shares Shares
Begin date of office End date of office held at held at
Name Title Sex Age
term term year-beg year
in -end
Luo Chairman of the
M 48 2010-8-26 2013-8-25 0 0
Guiyou board
Yang
Director M 54 2010-8-26 2013-8-25 0 0
Fenbo
Director,
Li Hai M 42 2010-8-26 2013-8-25 0 0
President
Zhang
Director, CFO M 45 2010-8-26 2013-8-25 0 0
Zebing
Yao
Zhengwa Director M 36 2010-8-26 2013-8-25 0 0
ng
Kong Na Director F 35 2010-8-26 2013-8-25 0 0
Cao Fang Director M 37 2010-8-26 2013-8-25 0 0
Zhang Independent
F 43 2010-8-26 2013-8-25 0 0
Xinmiao director
Independent
Cui Jun M 47 2010-8-26 2013-8-25 0 0
director
Independent
Li Bing F 36 2010-8-26 2013-8-25 0 0
director
Chen Independent
M 43 2010-8-26 2013-8-25 0 0
Shujun director
Convener of
Xiao Yan board of M 43 2011-06-27 2014-06-26 0 0
supervisors
Zheng
Zhonghua Supervisor M 49 2011-06-27 2014-06-26 11,930 11,930
n
Tao
Supervisor M 57 2011-06-27 2014-06-26 3,500 3,500
Hualiang
Xia Bofu Vice President M 41 2010-10-26 2013-10-25 0 0
Total - - - - - 15,430 15,430
Note: Shares held by directors, supervisors and senior executives have no changes in report period.
2. Particulars about directors or supervisors holding the position in Shareholding Company
Title in
Shareholdi
Name Name of Shareholding Company Office term
ng
Company
Yao
Shenzhen Guosheng Energy Investment Since October 2006
Zhengw Supervisor
Development Co., Ltd. till recently
ang
3. Main work experiences of incumbent directors, supervisors and senior executives:
Mr. Luo Guiyou, born in 1963, graduated from Fudan University as a bachelor majoring in history.
Once he took posts of clerk and deputy director of Social Science Academy, office director as well
as manager of personnel department and manager of training department in Ping’an Life Insurance
Guangxi Branch. And he took charge of District Manager, manager of marketing department and
associate of general manager of the 3rd business district of Ping’an Life Insurance Guangxi Branch,
as well as deputy general manager of Ping’an Life Insurance Hainan Branch. Since Mar. of 2007, he
worked in Life Insurance Holding Co., Ltd, and successively took posts of general manager of
headquarter of personal insurance business, temporary committee of operation and management
commission, associate of general manager of headquarter and committee of marketing management
commission. From Mar. of 2010 to Oct. of 2010, he was committee of marketing management
commission in planning team in Guangdong Branch of Life Insurance Holding Co., Ltd and charger
of planning team of Guangdong Branch; now he takes charge of chairman of the Board and legal
representative of the Company.
Mr. Yang Fenbo, born in 1957, China senior economist with master degree of MBA and engineer,
held the position of minister of development department, concurrently minister of science and
technology department, assistant general manager, assistant to chairman, deputy chief engineer and
chief engineer at Shenzhen Lionda Group; took the chairman and concurrently general manager of
Guangdong Sunrise Holding Co., Ltd.; now, he is the chairman of Shenzhen Liona Group Co., Ltd.
Mr. Li Hai, born in 1969, graduated from Economic department of Shenzhen University in major of
accounting; he took the turns of deputy manager of finance department, chief supervisor associate
of finance department, secretary of the Board and vice president, etc. of the Company, and now is in
charge of director and vice president of the Company.
Mr. Yao Zhengwang, born in 1975, with bachelor degree of law, successively took the post of
Supervisor of Supervision Office, Deputy Manager of Sales Department, and Deputy Manager of
Legal Affairs Department of Shenzhen Guomin Investment Development Co. Ltd. and deputy
general manager of Administration Center of Compliant Risk Control, as well as director, secretary
of the Board and convener of supervisory committee of CBC; now he serves as director of the
Company.
Mr. Zhang Zebing, born in 1966, master of economy major, non-professional membership of China
Certified Accountants Association and accountant. He once taught in school of supply and sales
Jiangsu Xuzhou, and took posts of deputy director of accounting and finance department of South
Oil Group and settlement center of accounting and finance department in headquarter of China
Ping’an Insurance Company, ministry of finance department in Shenzhen Changyuan New Material
Co., Ltd, manager of accounting and finance department in Xinhua Life Insurance Company Branch
and senior manager of accounting and finance department in Hua’an Property Insurance Company.
Since Aug. of 2004, he acted as charger of finance department of planning team in Xinhua
Insurance Holding Company, associate of general manager of finance department in Sunshine
Insurance Group Company, general manager of Audit & Supervision Department in Life Insurance
Holding Co., Ltd. and now he is director and CFO of the Company.
Mr. Cao Fang, born in 1974, master degree. Once he was teacher and party branch secretary of
education group of Hunan Changsha Changjun middle school, manager of team training of Ping’an
Life Insurance in Hunan and business department, item manager of reform and development center
of Ping’an Insurance Group, associate of Manager of marketing and supervision department of
Ping’an Life Insurance in Hunan and associate of general manager of Ping’an Life Insurance branch
in Guilin Center. Since May of 2007, he took post of item manager of marketing and management
department in headquarter of Life Insurance, associate of general manager of marketing and
management headquarter as well as general manager of market and business department. From Mar.
of 2010 to Oct. of 2010, he acted as member of planning team of Life Insurance Branch in
Guangdong. And subsequently served in strategy and development center as well as item
arrangement in Life Insurance
Ms. Kong Na, born in 1976, master degree; She once acted as manager of business department in
China Life Insurance Company Branch in Shenyang, general manager of Liaoning Ruifude
Insurance Holding Co., Ltd and associates of general manager respectively of planning team and
management department of motor insurance in Yong’an Property Insurance Holding Co., Ltd.
From Sep. of 2005 to Apr. of 2010, he took post of Assistant Chief Executive in Ruifude Health
Insurance Holding Co., Ltd. From Apr. of 2010 till now, he is in charge of associate of president in
Yingkong Holding Co., Ltd.
Ms. Zhang Xinmiao, born in 1968, with bachelor degree, successively engaged legal affairs in the
First Engineering Bureau of Water Resources & Electric Power Department, Shenzhen Jinhu Law
Firm, and Guangdong Guanghe Law Firm. She obtained certification of lawyer issued by Ministry
of Justice of People’s Republic of China in 1994. From 1999 till 2008, she took the post of
partnership lawyer of Guangdong Chuangji Law Firm, and from 2008 till now, he has been the
lawyer of Guangdong Shenzhen Jinniu Certified Public Accountants Co., Ltd.
Mr. Cui Jun, born in1964, party member of CPC, doctor of engineering, master of law and a
first-grade lawyer. Once he took posts of director of the 5th session of nationwide lawyers
association, director of the 8th session of Guangdong lawyer association, vice president of the 5th
and the 6th session of Shenzhen lawyers association, committee of international business
commission of nationwide lawyers association, deputy director of law business of intellectual
property commission of Guangdong lawyers association and director of civil law business
commission of Guangdong lawyers association. And now he is director of Guangdong Xingchen
Law Firm, member of the CPPCC Shenzhen Committee, director of the 9th session of Guangdong
lawyers association, director of culture construction committee of Guangdong lawyers association,
committee of law business of intellectual property commission of nationwide lawyers association,
executive vice president of Shenzhen Patent Commission, vice president of Shenzhen promotion
commission of creative design and intellectual property, mediation expert of mediation center of
China International economy and trade arbitration commission branch in south China and arbitrator
of Shenzhen arbitration commission.
Mr. Chen Shujun, born in1968, master of the Chinese University of Hong Kong, majoring in
business administration of finance. And he is senior accountant, China Certified Accountant,
Chinese Certified Tax Agent, judicial authenticator and the first batch of senior member of
Shenzhen accountant institute. He once took post of auditor and manager of Guangzhou CPAs.
From 1998 till now he acted as executive partner of Shenzhen Guangzhou-Shenzhen CPAs, legal
representative of Guangdong Guangzhou-Shenzhen Justice and Accounting judgment institution.
And now he is in charge of director of Guangdong Certified Accountants Association and expert of
purchase center of Shenzhen Government.
Ms. Li Bing, born in 1975, bachelor of law major and lawyer; From Jul. of 1998 to Jan. of 2002 she
taught in Guizhou University; from Jan. of 2002 to Jan. of 2006 she acted as lawyer in Guangdong
Yunsheng Law Firm; from Jan. of 2006 till now, she had been in charge of lawyer of Beijing
Deheng Law Firm Branch in Shenzhen.
Mr. Xiao Yan, born in Sep. of 1968, bachelor of Hunan finance Academy, majoring in Economy. He
once held an office in China Agriculture Bank Branch in Hunan Yiyang, marketing and
management, human resource management, supervision and audit and group training in China
Ping’an Life Insurance Company Branch in Guangxi, as well as manager of Business department.
And he took posts of general manager in Xinhua Life Insurance Branch in Guangxi and Liuzhou
center of branch, manager of personnel in branch and general manager in branch of Yulin center. He
took charge in manager of advanced office of planning and supervision in marketing management
department in Life Insurance headquarter, and associate of general manager in Life Insurance
Branch in Henan. From Apr. of 2010 till now, he acted as deputy general manager of business
management department in Shenzhen Nation People Investment and Development Co., Ltd.
Mr. Zheng Zhonghuan, engineer with bachelor degree, successively took the post in Shenzhen
Light Texile Industry Company and Shenzhen Light Industry Company; since Oct. 1985, entered
Shenzhen China Bicycle (Group) Holdings Co. Ltd. and successively took the post of Deputy
Manager, Manager of Planning Department and Manager of Material Department; now is director
and Manager of Manufacture Department of the Company.
Mr. Tao Hualiang, graduated from Northwestern Polytechnic University, an engineer. He
successively served as dispatcher of welding plant of the Company, deputy director of pipe
workshop, director of general assembly shop, committee of party committee of Longhua 2# plant,
manager assistant of enterprise management department, deputy GM of financial & accounting dept.
of bicycle division, deputy director of office and director of comprehensive office of the Group;
now he serves as commissioner of the party group, deputy secretary of party committee and person
in charge of works for the Group.
Mr. Xia Bofu, graduated from the Central Party School with bachelor degree of law. He
successively took the post of Manager of Business Department of Shenzhen Jiabeinianhua Industry
Co. Ltd., Office Director of Shenzhen Lionda Technology Co. Ltd. and Chairman of the Board of
Shenzhen Taiyang PCCP Co. Ltd. Since Oct. 2007, he has taken the post of Vice Present of the
Company.
II. Particulars about the annual salary of directors, supervisors and senior executives
Referring to the standard of the same industry and local salary situation, the Company decided the
annual salary of the above personnel integrated the operating achievements of the Company. The
total annual remunerations of present directors, supervisors and senior executives received from the
Company were RMB 3,197,900 in 2011.
1. The Company has 4 independent directors and paid the allowance of independent director of
RMB 40,000 respectively. The Company reimbursed the expenses for business trips according to
the actual situation, which independent directors attended the Board meeting and shareholders’
general meeting.
2. Particulars about the annual salary of directors, supervisors and senior executives
Serial Name Total annual remuneration
(RMB ‘0000)
1 Li Hai 81.90
2 Xia Bofu 63.75
3 Zhang Zebing 63.75
4 Yao Zhengwang 58.73
5 Zhang Xinmiao 4.00
6 Cui Jun 4.00
7 Li Bing 4.00
8 Chen Shujun 4.00
9 Zheng Zhonghuan 17.83
10 Tao Hualiang 17.83
3. Remuneration of supervisors who leave office in report period:
Serial Name Total annual remuneration (RMB ‘0000)
1 Lan Qihua 0
III. Engagement and office-leaving of directors, supervisors and senior executives in report
period:
1. Office leaving of directors, supervisors and senior executives:
Name Position served previously Reasons for leaving
Yao Zhengwang Secretary of the Board Resignation
Lan Qihua Supervisor Retired
2. Particulars about engagement of directors, supervisors and senior managerial:
(1) The 4th Meeting (extraordinary) of 8th Session of the Board was held on 13 January 2011. Mr.
Yao Zhengwang was engaged as secretary 8th Session of the Board with office term same as 8th
Session of the Board.
(2) Employees Representative Meeting was held on 7 June 2011 by the Company, Mr. Tao Hualiang
was elected as 7th Session of staff representative supervisor with office term of 3 years; on 28 June,
the first extraordinary shareholders meeting of 2011 was held by the Company, Mr. Xiao Yan and
Mr. Zheng Zhonghuan were elected as supervisor of 7th Session of Supervisory Committee with
office term of 3 years.
(3) The first meeting of 7th Session of supervisory committee was held on 28 June 2011; Mr.
XiaoYan was elected as convener of 7th session of supervisory committee with same office term as
7th session of supervisory committee.
(4) Mr. Yao Zhengwang resigned secretary of the Board on 22 November 2011; according to
relevant regulations of “listing rules for shares in Shenzhen stock exchange”, Chairman Mr. Luo
Guiyou was appointed served as secretary of the board.
IV. About staff
1. The Company has totally 84 employees at present, including:
(1) Classified according to professional/occupational composition: 8 production personnel; 12
salespersons; 32 technicians; 11 financial personnel and 21 administrative personnel.
(2) Classified according to the educational background: master degree or above: 2 persons of
Master degree, 24 persons of bachelor degree; 19 persons of junior college graduates. Proportion of
the personnel with education background of junior college or above in the whole staff: 53.57%.
2. The Company did not need to bear the expenses of retirees.
3. Other personnel: 43 persons
Section V. Corporate Governance Structure
I. Corporate Governance
1. Status of corporate governance:
During the report period, the Company strictly compared its actual conditions with regulations of
Company Law, Securities Law, and Code of Corporate Governance for Listed Companies and
relevant laws and rules and regulatory documents, constantly perfected its legal person
administration structure and strived to establish modern enterprise system. Convening, holding and
operating of shareholders’ general meetings, Board meetings and meetings of Supervisory
Committee were all in strict accordance with relevant regulations of Articles of Association, etc.,
safeguarding the integrated interest of the Company. Realities of legal person administration
structure were in line with provisions of regulatory documents with respect to administration of
listed companies issued by CSRC.
During report period, in line with relevant regulations of Company Law, Securities Law,
Accounting Law and Article of Association of the Company, the Company formulated the
“Management Mechanism of Financial Principal of Shenzhen China Bicycle Company (Holdings)
Limited” with purpose of normalized behavior of financial principal, strengthen finance supervision
and perfected internal supervision mechanism within the Company, which was deliberated and
approved in 4th Meeting (interim) of 8th Session of the Board held on 13 January 2011. Perfected
construction of mechanism furtherly and guarantee standardized operation and healthy development
of the Company.
2. No un-revealed information is provided to largest shareholder and actual control non-standard by
the Company within report period.
II. Particulars about performance of independent directors
In the report period, required by relevant laws and regulations, independent directors of the
Company earnestly fulfill their responsibility, exercise rights bestowed by the Company cautious,
seriously and diligently, took part in work of special committees of the board of directors, meeting
of the board of directors and general shareholders’ meeting proactively, and expressed independent
and objective opinions on significant events based on their own professional knowledge, which
contributed a lot in development of the Company.
In 2011, particulars about independent directors attending the Board Meeting are as follows:
Name of Attendance by
Attendance On-site Entrusted Absence
independent communicatio
required present presence (times)
director n
Zhang Xinmiao 5 2 3 0 0
Cui Jun 5 2 3 0 0
Li Bing 5 1 3 1 0
Chen Shujun 5 2 3 0 0
In the report period, independent directors of the Company had no different opinions on various
proposals approved by the Board of Directors of the Company or other significant events.
III. Separation from the Controlling Company in respect of Business, Personnel, Organization
and Finance etc.
The Company totally separated its Business, Personnel, Organization and Finance etc. with majority
shareholders and related parties, and had independent and complete operation ability.
IV. Establishment and implementation of appraisal and incentive mechanism as well as
relevant award mechanism by senior managers
The Company preliminary formulated a publicly and transparency performance appraisal standards
and incentive & restraint mechanism for directors, supervisors and managers. Engagement of senior
managers is publicly and transparency with regulations of laws required.
On 20 May 2011, the “Interim Measures of Annual Performance Appraisal for Senior Managers of
Shenzhen China Bicycle Company (Holdings) Limited” and “Proposal of Award of Management
Team for year of 2010 of CBC” were deliberated and approved in 20th Meeting of Shareholder’s
Genial Meeting (for year of 2010).
Section VI. Internal Control
I. Internal control of the Company
1. The organizational structure of the internal control of the Company
According to the Corporation Law, the Company establishes the general meeting of stockholders,
the board of directors, the board of supervisors, and operating and management team. The board of
directors establishes remuneration and assessment committee, and the audit committee; the
management of the Company has one office and eight departments, there into, the Group sets up
general affairs office, management department, human resource department, financial department
and audit department. The secondary company includes Shenzhen Emmelle Industry Co., Ltd.
(hereinafter referred to as Emmelle company), Shenzhen An Jule Property Management Co., Ltd.
(hereinafter referred to as An Jule company), the four departments of Emmelle company are directly
managed by the Group company, including product department, quality control department, sales
department, manufacturing department and financial department, An Jule company sets up general
manager office, financial department, operating and management department, and three
administrative offices for Zhonghua Garden, Shuibei, and Zhonghua industrial park.
Shareholders’ General Meeting
Supervisory Committee
Board of Directors
Auditing Committee Remuneration and Evaluation Committee
Management
Chart of the Group and EMMELLE
Management
Comprehensive Management H & R Financial Auditing EMMELLE Anjule Co.,
o f f i c e d i v i s i o n
Dept. Dept. C o . ,
2. General description of internal control
The Company strictly follows the Securities Law, the Corporation Law and the laws and regulations
of China Securities Regulatory Commission related to governance of listed companies, constantly
improves and standardize the organizational structure of the internal control of the Company,
insures the standardized operations of the general meeting of stockholders, the board of directors
and the board of supervisors, and maintains the interests for both Company and investor. According
to the rules of the basic norms of enterprise internal control, the fundamental systems of internal
control of the Company and the internal auditing system, the Company establishes and implements
effective internal control, including:
(1) Internal environment: According to relevant laws and regulations of the Country and articles of
association, the Company establishes normative corporate governance structure and rules of
procedure, defines the duty and limits of authority about decision, implementation and supervision,
and forms a scientific and effective assignment of responsibility and counterbalance mechanism.
(2) Risk assessment: Achieve business compliance, assets security, authenticity and completeness of
financial report, and improve business efficiency and promote the enterprise to realize the goal of
development strategy.
(3) Control activity: Sets up separation control for incompatible positions, formulates authorization
and approval control system, accounting system control, property protection control, operation
analysis control, performance assessment control, budget control, internal report control, and
information system control so as to process internal control to daily financial activity and business
operation.
(4) Information and communication: Control by confirming information communication channel,
completing information transfer procedure, and insuring the operational security of information
system.
(5) Internal supervision: The audit department of the Company regularly carries out annual
operational audit to the secondary companies at the end of each year, inspects the implementation of
financial system of the subordinates, the compliance of financial accounting, the security of assets
management, management efficiency and business performance, puts forward auditing suggestions,
points out the existing problems and risks, and supervise and urge the rectification and reformation.
Test and evaluate the implementation of internal control to day-to-day business procedures,
supervise and track the implementation of internal control system and relevant procedures, process
special audit according to the arrangement of leadership of the Company at any time, and safeguard
against the operational risks.
3. Main control activities of the Company
(1) The internal control and management to the holding subsidiaries: The subsidiaries include
Emmelle company and An Jule company, Emmelle company undertakes the operating activities for
main business of Shenzhen China Bicycle Co., Ltd., whose business and personnel is directly
managed and controlled by the Group headquarter, An Jule company who undertakes the property
management responsibilities for Zhonghua Garden, Shuibei industrial park, and Zhonghua
industrial park possesses independent and complete organizational structure for internal control,
independent management and independent accounting, independently processes day-to-day
business within budget according to authorized power of examination and approval, reports the
major items and extra budgetary business to functional departments of the Group and vice president
in charge and implements after approved by the president, the general manager and finance
manager are appointed by the Group, and other personnel is selected and engaged as needed by An
Jule company and reported to the Group.
(2) Related transactions: The Company has formulated decision-making system for related
transactions and special system for preventing controlling shareholder and related party from using
funds, manages related transactions according to relevant rules, and did not have any related
transactions with the related party in 2011.
(3) External guarantee: The Company has managed guarantee issues in accordance with the
provisions of the loan guarantee management system, and did not have any guarantee business in
2011.
(4) Utilization management of raised funds: The Company has not raised funds in any way in recent
years; the initial funds raised for going public have been used correspondingly and approved
according to the limits of authority regulated by the Articles of Association.
(5) Management of investments abroad: The Company has taken back investment money of 4.56
million yuan from Hunan Guangyang and has disclosed according to the rules. The Company does
not have any investments abroad for the recent years, and the Articles of Association and provisions
of approval and expense reimbursement for financial activities have made specific norms for the
approval authority of funds utilization.
(6) Sales and collection management: The Company sells products by authorizing the dealership,
issues authorization certificate of Emmelle dealers to the dealers, and both sides sign the
distribution agreement of Emmelle products and define the payment. The Company adopts the
marketing principle of payment before delivery for the common medium and small dealers, and the
financial department chops and informs the delivery based on the bank payment documentations,
meanwhile, gives limits of deferred payment for main dealers in Shandong Henan, Jiangsu and
Hebei and support dealers in Shanxi, Xinjiang. The limit of deferred payment slightly differs
because of rush and off season, the Company adjusts the limit every year according to the delivery
of goods to the dealers, deadline of deferred payment is normally within two weeks, the latest
collection date for the dealers shall not be later than the payment date for the OEM factories so as to
control the collection risks.
The dealers apply for the deferred payment; the Company examines and approves the order one
by one based on the approval process; the finance manager of the Group examines and approves the
orders within the limit, and only the president of the Group can approve the application for deferred
payment beyond the limit.
The sales accountant works out the statement and report of deferred payment (delivery) every week
and track and hint the due date, and the documents making personnel in sales department takes
charge of the overdue receivables. In 2011, all deferred payments have been taken back, and there is
no loss on bad debts.
(7) Purchase and payment management: the products researched and developed by the Company are
produced in subcontracting (OEM operation) way, the Company issues authorization certificate of
Emmelle OEM manufacturer, and sign the manufacturing consignment agreement with OEM
factory, and define the payment and deadline, the deadline of the payment is always three weeks to
one month after delivery. Both sides negotiate and re-sign the agreement for next year at the end of
each year.
The sales department fills in the payment application form according to the actual shipped quantity
and agreed price, the finance department examines and verifies the original payment documents and
makes payment by strictly following the approval process. There is no abnormal payment in 2011.
(8) Production and quality management: The quality control department of the Company appoints
quality inspectors to the OEM factory, who live in the factory and supervise the overall process of
producing Emmelle products, take charge of quality inspection and quantity verification, arrange
special warehouse to manage Emmelle trademark, regularly submit purchasing, sales and inventory
reports to the Company and report quality abnormality at any time. The representative in the OEM
factory plays an important role in guaranteeing the quality of the bicycles of our Company. There is
no significant quality event in 2011.
(9) Asset operation and management: The Company formulates property management manual, the
enterprise management department is responsible for the lease of idle plants and dormitories of the
Company, and An Jule Company takes charge of the daily management of property. In 2011, the
occupancy rate reaches to 99.13%, and rent collection rate is 98.65%, the daily property
management is appropriate and effective except special factors.
(10)Information disclosure management: The Company formulates management system of
information disclosure, management system for inside information and insiders and the
accountability system about significant errors in the Company's annual report disclosure, which
clears the fixed and temporary disclosures, disclosure contents, verification and disclosure process,
inside information and insiders, and the Company strictly carries out above systems according to
the supervision rules.
4. The existing problems and reformation plan of internal control of the Company:
In 2011, the Company has carefully arranged 46 key business sub-processes of internal control, and
identified 237 risk control points, found 39 control defects, the rectification for business risk defects
has been almost completed by the end of the year, and the revise for relevant business management
system is still in further improvement.
5. Overall assessment of internal control of the Company
(1) The current internal control management system meets the demand of laws and regulations and
supervisions of the Country.
(2) The internal control system is basically complete and effectively executed, and has played a
favorable role in management and control to each department, operation process, and sales and
collection so as to effectively guarantee the authenticity and completeness of financial information
and security of assets and prevent fraud.
(3) The internal control system of the Company can effectively assure the sustainable and stable
development of the Company’s operation and protect the interests of shareholders.
II. The statement of the board of directors about internal control responsibility of the
Company
The board of directors of the Company thinks that the self-evaluation report of internal control of
this year truthfully reflects the facts of internal control, the board of directors shall undertake the
responsibility for establishing and completing the internal control system and its effective operation,
and is responsible for development and effective implementation of internal control system. The
Company shall constantly complete the internal control system, perfect the corporate governance
structure, reduce the production and operation risks and promote standard operation level according
to the requirements of Basic norms of enterprise internal control and Guidelines of enterprise
internal control
III. Opinions of independent director on self-evaluation report of internal control
The internal control system established is complete and meets the demand of laws and regulations
of the Country and requirements of the supervision department, the internal control system has
covered each operation link of the Company, all operating activities of the Company are carried out
by strictly following relevant systems; the internal control of the Company to management, related
transactions, external guarantee, significant investments and information disclosure of the
subsidiaries is strict, sufficient and effective and fits the physical truth of the Company so as to
ensure the operation and management of the Company on the rails. The self-evaluation report of
internal control of the Company can truthfully, objectively and completely reflect the actual
situation of current development, operation and supervision about internal control system
IV. The establishment and implementation of accountability system about significant errors
in the Company's annual report disclosure
According to laws, regulations and normative documents of the Corporation Law, the Accounting
Law, Information disclosure management methods of listed company, the Company has formulated
the accountability system about significant errors in the annual report information disclosure,
annual report working system of independent director, working regulation of annual audit of audit
committee of the board of directors and registration system for insiders of the Company, strictly
specified the principles, contents and processes of information disclosure, increased accountability
force to the person in charge of information disclosure for annual report, and improved the
authenticity, accuracy, completeness and timeliness of information disclosure.
During the reporting period, there was no correction for significant accounting errors or significant
information omissions.
Section VII. Brief Introduction to the Shareholders’ General Meeting
In the report period, the Company held one Annual Shareholders’ General Meeting and one
Extraordinary Shareholders’ General Meeting. Basic information is as follows:
1. The 20th Meeting of Shareholders’ General Meeting (year of 2010) was held on 20 May 2011,
meeting resolution released on appointed newspapers and media at same day.
2. The First Extraordinary Shareholders’ General Meeting was held on 28 June 2011, meeting
resolution released on appointed newspapers and media at same day.
Section VIII. Report of the Board of Directors
I. Discussion and analysis of whole operation in the report period
1. Overall operation of main business in the report period
In 2011, the European and American debt crisis continued to worsen and spread, the international
economic situation was complicated and changing, the macroeconomic regulatory measures at
home were in rapid succession, prices kept going up resulting in large amount of increase in prices
of raw materials, the market competition of whole bicycles and electric bicycles industry became
even more violent, and law cases were constantly carries out. Even though the operating
environment was harsh, under the correct leadership of the board of directors, the management of
the Company united all personnel to work together, kept forging ahead, positively adjusted
management tactics, seriously coped with the action at law and push solving for debt problems, and
increased the business and annual profits. Operation income RMB 321.0436 million and net profit
RMB 39.7209 was realized by the Company for year of 2011.
(1) Electric car and bicycle are main business. In 2011, facing the industry dilemma and actual
market situation, the Company positively adjusted management tactics in main business and
strengthened the development of selling network terminal, researched and developed products by
market-oriented strategy and actively pushed the investment in new products, positively advanced
the adjustment for new operation mode, adjusted internal management mechanism, popularized the
bicycles, and enhanced the quality control and after-sale service so as to realize the stable
development of electric bicycle and bicycle and achieve annual sales revenue of 296.007 million
yuan.
(2) Property lease and property management business: strengthened property lease business, further
used the current inventory property, adopted various ways to enlarge the rentable area, increased the
rental income, and improved the cash flow and economic benefits so that the income of property
management reached 2.459 million yuan and the income of leasing and other business reached
22,577.8 thousand yuan; there was no safety accident after strengthened the property management
business, put the safety management in the first place, realized the normalization for safety
management of leasing business, arranged safety training to the lessees and provided safety
publicity materials.
2. Analysis on main business and operation of the Company
The Company is mainly engaged in the production and sales of bicycles, electric bicycles and
accessories and fittings. In the report period, the Company realized revenue from main operation
amounting to RMB 298,465,700, and profit from main operation amounting to RMB 12,092,400.
(1) Statement of main operations classified according to products
Unit: RMB’0000
Main operations classified according to industries
Increase/de
Increase/decr Increase/decr
crease in
Classified according ease in ease in
Operating Operating Gross profit gross profit
to industries or operating operating cost
income cost ratio (%) ratio over
products income over over last year
last year
last year (%) (%)
(%)
Bicycles manufacture
and sales of
29600.67 28205.26 4.71 8.94 8.46 0.42
accessories and
fittings
Lease Management 245.90 432.07 -75.71 8.18 13.25 -7.86
Main operations classified according to products
Electric vehicle 23649.71 22612.08 4.39 6.66 6.27 0.35
Bicycles 5285.93 4945.05 6.45 7.84 6.93 0.79
Others 665.03 648.13 2.54 581.88 523.38 9.14
Lease Management 245.90 432.07 -75.71 8.18 13.25 -7.86
(2)Particulars about main operations classified according to areas
Unit: RMB’0000
Increase/decrease in
Areas Operating income operating income over last
year (%)
Shandong 10267.49 2.68
Henan 6438.39 18.62
Jiangsu 4633.84 16.23
Hebei 3100.31 21.85
Shanghai 676.53 42.84
(3)Major suppliers and customers: in the report period, the purchasing amount of top five suppliers
amounted to RMB 247,669,100, taking 91.40% of annual purchasing amount; the sales amount to
top five suppliers amounted to RMB 251,165,400, taking 78.23% of annual sales amount.
3. Change on formation of asset and expenses of the Company in the report period.
Unit: RMB
2011 2010
Increase/ decrease
Proportion Proportion ratio in proportion
Amount in total Amount in total in total asset (%)
asset（%） asset（%）
Monetary fund 24,546,601.39 18.08 17,756,773.58 12.85 5.23
Account
3,869,919.58 2.85 1,732,822.98 1.25 1.60
receivable
Other account
25,193,546.89 18.56 18,085,772.89 13.09 5.47
receivable
Inventory 14,310,428.28 10.54 21,692,678.29 15.70 -5.16
Long-term equity
2,619,840.50 1.93 2,619,840.50 1.90 0.03
investment
Investment real
22,763,296.78 16.77 26,434,648.24 19.13 -2.36
estate
Net values of
15,262,689.21 11.24 21,547,992.74 15.60 -4.36
fixed asset
359,993,573.2 384,217,648.0
Short-term loan 265.20 278.10 -12.90
9 9
Other account 394,804,850.7 165,837,025.4
290.84 120.03 170.81
payable 8 0
Long-term loans
452,026,831.8 706,645,180.8
due within one 332.99 511.48 -178.49
8 6
year
2011 2010 +/- (%)
Operating expense 7,297,537.55 7,394,867.85 -1.32
Administrative
21,836,655.24 23,792,819.05 -8.22
expense
Financial expense 23,619,043.30 64,515,016.00 -63.39
Income tax 0.00 0.00 0.00
Note: Financial expenses decrease 63.39% over same period of last year, mainly because: interest
debt are reduce due to debt composition last year, the interest expense correspondingly decreased;
and RMB has an obvious appreciation in this year, which generate a major exchange income in
book for foreign debt of the Company.
4. Changes on cash flow of the Company
Unit: RMB
Increase/de
Increase/decreas crease
Items 2011 2010
e amount proportion
(%)
Net cash flow arising from
348,907.64 6,495,860.32 -6,146,952.68 -94.63%
operating activities
Net cash flow arising from
6,440,920.17 -3,471,511.81 9,912,431.98 -
investing activities
Net cash flow arising from
0.00 -7,500,000.00 7,500,000.00 -
financing activities
Note: (1) Cash in-flow and out-flow arising from operating activities show a balance in this report
period.
(2) Net cash flow arising from investing activities in this period increased RMB 9.9124 million over
same period of last year, mainly because disposal of equity of Huannan Guangnan Motorcycle and
real estate outside the City in this period while RMB 3.4 million was paid for power equipment in
CB Industry Park last same period.
(3) Net cash flow arising from financing activities in this period amounting to 00.00, while RMB 14
million paid for debt compromise at same period of last year and RMB 6.5 million loans received
by EMMELLE, subordinate of the Company.
5. The operation and analysis to the operation and achievements of the main holding company and
shareholding companies of the Company:
(1) Shenzhen Emmelle Industry Co., Ltd.: Its registered capital is RMB 2 million, with its main
business scope in establishing industry. The asset scale of the Company at year-end of 2011
amounted to RMB 33,699,800 and the net profit in 20101 amounted to RMB777, 800.
(2) Shenzhen Anjule Property Management Co., Ltd.: Its registered capital is RMB 2 million, with
its main business scope in property management. The asset scale of the Company at year-end of
2011 amounted to RMB 1,233,800 and the net profit in 2011 amounted to RMB -3,858,300.
(3) China Bicycles (Hong Kong) Co., Ltd.: Its registered capital is HKD 5 million and its place of
registration is Hong Kong, with its main business scope in bicycle trading. The Company hasn’t any
trading business in recent years.
II. Prospect for the future development of the Company
1. The development trend in the industry of the Company and the market competitive pattern the
Company faces
The Company has entered into electric bicycle operation field since 2002. After the rapid expansion,
the electric bicycle industry has stagnated since 2007. In 2011, strengthening management in rare
earth industry and battery industry resulted in short supply for motor battery of the main parts so
that the production of electric bicycle was subject to certain restrictions, and the uncertainty of the
new standards and its practicing time for electric bicycle industry had a negative impact on the sales
of electric bicycle. At the same time, the prices of raw material substantially kept going up at home
and abroad which cause the production cost and application cost of electric bicycle rise high so as to
influence the tendency of market demand and even the development potential of the whole electric
bicycle industry and make the industry competition more violent.
2. The challenges for future and operation plan of the Company for the next year
(1) Continuously actively coordinate shareholders and the board of directors to vigorously conduct
debts restructure, striving to realize a substantive improvement of debts restructure of CBC;
(2) Complete establishment of internal control system, improve operation efficiency and
performance;
(3) Ensure stable growth in main business, strengthen property lease and assets management, and
thus improve overall operation earnings of the Company;
(4) Reinforced team construction, integrity human resources and activated personnel’s enthusiasm.
3. The unfavorable risk factors for the development of the Company
(1) The global financial crisis fiercely clashed domestic consumption market; lots of export-based
manufacturing enterprises of the Company transferred to domestic market, bicycle and electric
vehicle market took price as main competition method. All these factors led a complicated market
environment.
(2) Huge debt approximately approaching to RMB 2 billion is still the biggest problem for the
Company. Due to that the debts have been made for a long time, situation is complicated, and
creditors are various, it is rather difficult to deal with the debts.
Faced with the above said issues, on one hand, the Company striving to exploit main business,
guarantee sustainable steady development of main business, especially in aspect of the production
and sales of electric bicycle and high end bicycles; on the other hand, the Company actively
promotes the integrated restructuring of the Company, including the debts restructuring.
III. Investment of the Company
During the report period, the Company has not raised proceeds and significant investment.
IV. Auditor’s opinion and accounting policy
1. Auditor’s opinion offered by Shenzhen Pengcheng Certified Public Accountants Co., Ltd.:
Shenzhen Pengcheng Certified Public Accountants Co., Ltd. offered 2011 Financial Report with the
disclaimer of opinion.
2. Explanations of the Board of Directors about 2011 Financial Report of the Company with the
disclaimer of opinions issued by Shenzhen Pengcheng Certified Public Accountants Co., Ltd.:
The Board of Directors agreed the 2011 Auditor’s Report offered by Shenzhen Pengcheng Certified
Public Accountants Co., Ltd. Due to that the debt reorganization work of the Company had not been
completely finished in 2011, so risk of bearing huge debt still remained with many significant
uncertainties. The CPAs was not able to offer opinion on the financial debt, tax payable, contingent
proceedings, lawsuits and sustainable operation.
In light of that, the Board of the Company made the following explanations:
(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 RMB
181,975,338.48, and principal of loans which haven’t been replied totaled to RMB 226,142,959.88, 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.
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) Tax payable:
Shenzhen Pengcheng Certified Public Accountants Co., Ltd. thought that: in the audit process, the
CPAs implemented audit procedures including inspection and inquiry, inquiring book tax amount
payable, custom guarantee and penalty balance totaling to RMB 119,102，157.65. 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 complete
contingent events and lawsuits, and impacts on its financial statement.
The historically formed loan and guarantee lawsuit had existed rather long time; in the report period,
there was no newly-added undisclosed guarantee events and lawsuits; part courts in charge of those
lawsuits changed, and specific responsible people also altered; the court needs time to check details
and amount of the case, so the court didn’t write back for confirmation. The Company will continue
follow up the check work by certified public accountants with related courts, and checks clear the
contingent events and lawsuits as soon as possible. If there is any progress, information disclosure
will be made according to requirements of relevant regulations.
(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 2011 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 Oct. 15 of 2010, the Company signed the Debts Reconcile Term with Shenzhen Chengxingtai
Investment Co., Ltd which agreed the Company should pay the compensation to Chengxingtai
Company with RMB 14 million thus settled up all the creditor’s right and debts (about RMB 150
million). The above RMB 14 million has been settled up on Nov. 30 of 2010 totally.
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. On Dec. 28 of 2010, Shenzhen Intermediate People’s Court
believed that applicants didn’t submit materials such as solution plan both parties accepted which
was formed from settlement of tax income and creditor’s right with tax department, and then ruled
that they didn’t accept application of bankruptcy restructure Shenzhen Guosheng Energy
Investment and Development Co., Ltd raised up. Besides, Guosheng Energy Company agreed to
stop accounting RMB 33.6249 million of loan interests in 2011. This item of interests won’t be
received in future years. Previously, Guosheng Energy Company agrees to stop calculating loan
interest from 2007 to 2010. In March 2012, Guosheng Energy Company reply a letter to state that
agrees to stop calculating loan interest for year of 2012 (approximately as RMB 33 million), the
interest will no received in later years.
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.
V. Routine Works of Board of Directors
(I) Routine works of the Board:
Board of Directors of the Company held 5 meetings in total during the report period, and particulars
about meetings as follows:
1. On 13 January 2011, the Company held the 4th meeting (interim) of 8th session of the board by
means of communication voting. Resolutions were published on appointed newspapers and media.
2. On 25 April 2011, the Company held the 5th meeting of 8th session of the board by means of
on-site voting. Resolutions were published on appointed newspapers and media.
3. On 10 June 2011, the Company held the 6th meeting (interim) of 8th session of the board by
means of communication voting. Resolutions were published on appointed newspapers and media.
4. On 17 August 2011, the Company held the 7th meeting of 8th session of the board by means of
on-site voting. Resolutions were published on appointed newspapers and media.
5. On 24 October 2011, the Company held the 8th meeting (interim) of 8th session of the board by
means of communication voting. Resolutions were published on appointed newspapers and media.
(II) Implementation of resolutions of Shareholders’ General Meeting by the board of directors:
1. The Board of Directors strictly implemented all resolutions of Shareholders’ General Meeting in
the report period with no material warps or errors.
2. In the report period, the Company had no profit distribution plan, plan of converting public
reserve into share capital, rights offering as well as additionally equity offerings.
3. Performance of the special committee of the board:
The Audit Committee of the Board consists of 3 directors, 2 of which are independent directors and
independent director takes the post of convener. In the report period, according to regulations of
Working Rules of Audit Committee of the Board and Working Procedure of Audit Committee for
Annual Report, the Committee periodically checked the internal audit report, financial statement
and internal control system of the Company, and earnestly performed its obligation.
In the report period, with professional knowledge and experience, the members of the Committee
examined the annual financial statement prepared by the Company. According to relevant
regulations and demands of CSRC, the Audit Committee presented two examination opinions for
the annual financial statement.
Before the certified public accountants enter for annual audit, the Audit Committee issued the first
written opinion on the un-audited financial statements: according to the 38 detailed principles of
Accounting Standard for Enterprise-Basic Standard, Accounting Standard for Enterprise
No.1-Inventory and the relevant regulation in the Company’s financial system, the Audit Committee
takes close eye on the reality and completeness of the financial statements, and on the preparation
of the statements whether they were prepared in strict accordance to the new Accounting Standard
for Enterprise and relevant regulation in the Company’s financial system. With inquiry and analysis
on the financial files, the Audit Committee holds that: the Company stipulated its rational
accounting policy and adequate accounting estimation, according to the relevant request of the new
Accounting Standard for Enterprise and taking the actual status of the Company into consideration;
the transaction records were real and complete; and the financial accounting statements prepared by
the Company really reflected the financial status of the Company till Dec 31st of 2011, and the
operation achievement and cash flow of the Company in 2011. It is agreed to take these financial
statements as basis to carry out the financial audit work of 2011.
After the CPA issued the initial audit opinion, the Audit Committee read the first audit report in time
and negotiated with the CPA. The Audit Committee and the CPA had no disputation on the
important issues concerned by the annual financial report of the Company. The financial report of
the Company complies with the Accounting Standard for Enterprise and regulations of relevant
laws. The Audit Committee agreed to take these financial statements as basis to prepare the 2011
Annual Report and its Summary, which made it available for the Company to disclose the 2011
Annual Report in time.
4. Performance of the Remuneration and Examination Committee of the Board:
During the report period, the Remuneration and Examination Committee of the Board examined the
remuneration policy and scheme of the directors and senior executives of the Company. It is
believed that the remuneration of the directors, supervisors and senior executives of the Company
disclosed in the IV. of this report is real and accurate.
VI. Implementation of management of inside information and insiders
To guarantee fairness and justice of the information disclosure of the Company, reinforced
supervision on privately information, the “Registration System of Insiders” was formulated by the
Company in line with relevant laws, regulations and requirement of “Management System of
Information Disclosure”. Relevant regulations of inside information, registration filing for insiders,
confidential, punishment and accountability were well-defined in the System.
No regulatory and administrative penalty from supervision department in report period.
VII. Profit distribution preplan or preplan of capitalization
1. As audited by Shenzhen Pengcheng Certified Public Accountants, the profit of the Company
amounted to RMB 39.7209 million in 2011. The Company has neither dividend distribution nor
share capital conversion from capital public reserve.
2. Particulars about the cash bonus of the Company in previous three years
Unit: RMB
Net profit attributable to Ratio of net profit attributable
Amount of cash
shareholders of listed to shareholders of listed
bonus
company in consolidated company in consolidated
(tax included)
statement of bonus year statement
2010 0.00 64,477,414.44 0.00%
2009 0.00 -105,757,549.50 0.00%
2008 0.00 -44,893,006.40 0.00%
VIII. Working plan and implementation program for establishing a complete the internal
control system
To carry out the Basic norms of enterprise internal control (Accounting No.[2008] 7) and
Guidelines for enterprise internal control (Accounting No. [2010] 11) published jointly by five
ministries and commissions, including Ministry of Finance, Auditing Administration, China
Insurance Regulatory Commission, China Banking Regulatory Commission and China Security
Regulatory Commission, further strengthen and standardize the internal control of the Company,
improve the corporate governance and risk control capability and promote long-term and
sustainable development, the Company has developed internal control according to the
requirements of notification about completing standard pilot project of internal control for listed
companies in Shenzhen (SSRB No.[2011] 31) of Shenzhen Securities Regulatory Bureau, the
internal control conditions of the Company in 2011 are as follows:
1. The Company has established a special working group of internal control. At the end of March,
2011, the Company has established a leading group for standard implementation of internal control
with three administrative levels; appointed chairman of the board, Mr. Luo Guiyou as the group
leader, formulated work responsibilities, divided the work by the post, and developed relevant
prophase work, and arranged personnel to take part in the training class for developing internal
control of listed companies at the same time. In the first half year of 2011, the Company has
arranged personnel to take part in the training class for developing internal control and special
training for internal control consultant organized by the supervision department, strengthened the
study and publicity of theoretical knowledge and ideology for internal control development.
2. Formulate the work program of standard implementation for internal control. The Company
convoked the fifth meeting of the eighth board of directors on 25th, Apr., 2011 and passed the work
program of standard implementation for internal control of Shenzhen China Bicycle (Group) Co.,
Ltd. and disclosed.
3. Work out the development plan of internal control of the Company. Complete the process
arrangement of main business and recognize and evaluate the risks before the end of July, 2011;
confirm the rectification and reformation program of internal control defects before the end of Aug.,
2011; complete the rectification and reformation for internal control defects before the end of Dec.,
2011; finish checking the rectification and reformation effects before Dec., 2011.
4. Complete the work plan of self-evaluation of internal control. Seek, rectify and reform the defects
of internal control, constantly replenish and perfect internal control system, finish the formulation
of work plan for self-evaluation of internal control before 31st, Dec., 2011, arrange and implement
the self-evaluation before disclosure of 2011 annual report, and disclose the self-evaluation report
of annual internal control.
IX. Other items
(I) The statement of independent director to accumulative and current external guarantee
According to the provision of notice about standardizing the fund transfer between listed companies
and related parties and external guarantee of list companies of No. [2003]56 document issued by
China Securities Regulatory Commission, and as the independent director of Shenzhen China
Bicycle (Group) Co., Ltd., according to special explanation about funds occupation of controlling
shareholders and related parties of Shenzhen China Bicycle (Group) Co., Ltd. of Pengcheng No.
[2012] 0390 issued by Shenzhen Pengcheng Certified Public Accountants Co., Ltd. and other
related data, the accumulative and current external guarantee and illegal guarantee of the Company
have been checked, and the explanation of related conditions are as follows:
During the reporting period, the Company has not provided guarantee or illegal guarantee for the
controlling shareholders or it subordinate enterprises. The guarantee and illegal guarantee provided
from 1996 to 1999 belong to problems left over by history, as most part of them can not be repaid
by the secured party, the Company has disposed most of the guarantee as estimated liabilities, and
the estimated liabilities amount was 179,088,442.92 yuan at the end of last year. During the
reporting period, Shenzhen Intermediate People’s Court has ruled that Guangdong Sunrise Holdings
Co., Ltd. has completed its reforming plan (common creditor's rights is 30.05%), the Company shall
charge off the estimated liabilities of Sunrise Company in the same proportion, the amount was
12,875,490.00 yuan, the estimated liabilities amount of the Company was 166,212,952.92 yuan in
the end of 2011 after charging off.
(II) Other significant events in report period:
1. Change of actual controller: on Jan. 3 of 2011, Shenzhen Guomin Investment Development Co.,
Ltd which is controlling shareholder of our major shareholder Shenzhen Guosheng Energy
Investment Development Co., Ltd, signed equity transfer agreement, Guomin Investment
transferred 100% equity of Guosheng Energy to Mr. Ji Hanfei with price of RMB 70 million. Thus
legal representative of Guosheng Energy became Mr. Ji Hanfei instead of Mr. Shang Shijun. This
equity transfer belonged to change of actual controller of the Company. In accordance with rules of
Administration Method of Purchase of Listed Companies, on Apr. 11 of 2011, we fulfilled
disclosure of Detailed Report of Changes in Equity and Simplified Report of Changes in Equity.
2. Creditor’ right transfer: previous creditor Guangdong Shengrun Group Co., Ltd entrusted
Shenzhen Run Eastern Auction Co., Ltd to auction RMB 232,801,657.06 of creditor’s right of the
Company during bankruptcy and restructure period. On Dec. 13 of 2010 Shenzhen Dongtaixing
Technology Co., Ltd bid the above creditor’ right legally; on Jan. 27 of 2011 Shenzhen Medium
People’s Court issued civil ruling letter (2010) SZFMQZZi No. 5-12, confirmed barging of buyer
Shenzhen Dongtaixing Technology Co., Ltd over the above creditor’ right of Shengrun Company.
This transfer didn’t take impact on finance of the Company presently.
3. Particular about reorganization application of the Company from second largest creditor of the
Company and withdrawal of an application from the Court: second largest creditor of the Company
Shenzhen Dongtaixing Technology Co., Ltd applied bankruptcy reorganization of the Company to
Shenzhen Intermediate People’s Court legally in March 2011. The application was not accepted by
Shenzhen Intermediate People’s Court due to hindrance of materials of resolution plan, recognized
by application and taxation bureau, concerning taxation creditors. In October 2011, the Company
received notice from case filing chamber from Shenzhen Intermediate with followed items informed:
concerning the reorganization application from Shenzhen Dongtaixing Technology Co., Ltd, in line
with “approval regulations for filing of bankruptcy case”, the application consider as withdrawal of
an application due to no requirement filing material submitted and no supplementation and
correction overdue.
4. Free of interest calculation: On 7 June 2011, the Company received Reply to Letter about
Applying for Stopping Calculating 2011 Annual Debt Interest of the Company from major
shareholder and largest creditor namely Shenzhen Guosheng Energy Investment Development Co.,
Ltd (hereinafter referred to as Guosheng Energy): Guosheng Energy agreed to dismiss 2011 annual
interests on RMB 9,124,638.59 and USD 62,829,259.02 of debts held from the Company. Interests
which were stopped to be calculated above won’t be charged again. The stopping-calculation of
interests on debts could put a positive impact on sustainable operation of the Company.
Stopped-calculated interests amounted to about RMB 34 million. The Company will deal this
account in accordance with relevant accounting policy and relevant rules, and include them in
capital reserve, which will not affect gains and losses of the Company.
Section IX. Report of Supervisory Committee
In the spirit of being responsible to shareholders and strictly according to regulations in PRC
Company Law, Securities Law and Articles of Association of the Company, the Supervisory
Committee has dutifully performed its obligations endowed by relevant laws and legislations,
carried out work positively and hard, and safeguarded the legal rights and interests of the Company
and shareholders in 2011. It has also put forward its opinions and suggestions promptly towards
significant decisions made for productions, management and investment, and supervised the
behaviors of directors and senior executives in terms of implementation of their obligations.
I. Work of the Supervisory Committee in the report period
In the report period, the Supervisory Committee of the Company held altogether 5 meetings.
1. Proposal of “Annual Report of 2010” and others are deliberated and approved in 10th Meeting of
6th Session of Supervisory Committee held on 25 April 2011;
2. “Proposal of expiration of 6th Session of Supervisory Committee and candidate election for 7th
Session of Supervisory Committee” was deliberated and approved in 11th Meeting of 6th Session of
Supervisory Committee held on 10 June 2011;
3. Mr. Xiao Yan elected as convener of 7th session of supervisory committee on 1st meeting of 7th
session of supervisory committee held on 28 June 2011;
4. The “Semi-annual Report of 2011” was deliberated and approved in 2nd Meeting of 7th Session of
Supervisory Committee held on 17 August 2011;
5. The “Third Quarterly Report of 2011” was deliberated and approved in 3rd Meeting of 7th Session
of Supervisory Committee held on 24 October 2011.
II. Opinions on relevant issues in 2011 expressed by the Supervisory Committee
1. Operation according to law:
In accordance with relevant national laws and regulations, the Supervisory Committee has carried
out supervision work on the holding procedures of Shareholders’ General Meetings and Board
meetings, resolution, implementation of resolutions of Shareholders’ General Meetings by the
Board of Directors, performance of duties of senior executives as well as the Company’s
administration system etc.; it believes that, in 2011, the Board of Directors strictly complied with
PRC Company Law, Securities Law, Rules for Stock Listing, Articles of Association and other
relevant regulations and systems, operated in a standardized manner, worked conscientiously,
conducted business and made decisions in a scientific and reasonable way, and further improved
internal administration and internal control system; the directors and managers haven’t violated any
laws, regulations, the Articles of Association or done harm to the interests of the Company and
shareholders when performing duties.
2. Financial Inspection
In the report period, Shenzhen Pengcheng Certified Public Accountants issued auditor’s report with
disclaimer of opinion for the Financial Statement 2011 of the Company. The Financial Report of the
Company objectively and truly reflected the financial status and operation achievements of the
Company this year.
3. Use of raised funds:
The Company has not raised funds in the report period.
4. Purchases and sales of assets:
In the report period, the Company has no initiative to purchases assets: they thought the sales of
assets conformed to the laws and regulations and relevant provisions of the Company.
5. Opinions towards related transactions
Related transactions conducted by the Company are fair and square, and haven’t done harm to the
interests of the Listed Company, and there was no insider dealing.
6. Implementation on resolution of shareholders’ general meeting by the Board
Supervisors of the Company attended shareholders’ general meeting and presented each meeting of
the Board without voting rights. The Supervisory of the Company supervised implementation on
resolution of shareholders’ general meeting, and it thought that the Board earnestly implemented the
various resolutions of shareholders’ general meeting.
7. Opinions on self-assessment of internal control:
Pursuit to relevant regulations of CSRC and Shenzhen Stock Exchange, in line with basic principle
of internal control, the Company continuous to established and perfected internal control by self
actual condition, guarantee normal operation of business activities of the Company and safety and
integrity of Company’s assets. No violation of “Guideline of Internal Control for Listed Company”,
issued by Shenzhen Stock Exchange, occurred in year of 2011. Self-assessment presents a full, real
and accuracy situation of the Company in aspect of internal control.
8. Opinion issued by the Board on the auditor’s report with disclaimer of opinion issued by
Shenzhen Pengcheng Certified Public Accountants
Shenzhen Pengcheng CPAs issued the audit report with disclaimer of opinion for 2011. The Board
had made special explanation on the events concerned by the report. The Supervisory Committee
believed that: the audit report issued by Shenzhen Pengcheng CPAs truthfully reflected the financial
condition and operation achievement of the Company; the explanation presented by the Board of
the Company on the events concerned by the audit opinion complied with the actual condition of
the Company. The Supervisory Committee would actively cooperate with the Board to carry out its
works, supervise and urge the Board to intensify power in debt restructure and try to improve the
persistent operating ability of the Company.
9. Supervision of implementation of registration mechanism for insider:
In report period, after carefully approval of the establishment of “management mechanism of
insiders” and execution of registration mechanism for insiders, the supervisory committee takes
opinions as: in line with relevant regulations, the Company formulated a “management mechanism
of insiders”, strictly implemented information submission and registration procedures; executed
management of inside information rigorously, keep insiders from violating regulations for inside
dealing by abuse the right to know and inside information leakage, protected majority investors’
legal interest.
Section X. Significant Events
I. Material lawsuits and arbitrations in the report period:
The details about the material lawsuits or arbitrations that occurred in the previous years are in the
Notes VII of the Financial Statement.
II. Purchases and sales of assets of the Company in the report period
The Company had no active purchase of assets in the report period. And the sales of assets are in
item Note V(7) and (9) of the Financial Statement.
III. Significant related transactions in the report period
In the report period, there was no new significant related transaction; details about the significant
related transactions and related parties found in the Notes VI of Financial Statement.
IV. Significant Contracts and Implementation of Contracts
1. In the report period, the Company had not entrusted, contracted or leased the assets of other
companies, nor had other companies entrusted, contracted or leased the assets of listed companies.
2. In the report period, the Company had not entrusted financing events.
3. In the report period, the Company did not have the situations of guarantees on controlling
subsidiary, the guaranteed occurred in previous years were as follows:
Unit: RMB’0000
Particulars about the external guarantee of the Company (Barring the guarantee for the controlling subsidiaries)
Disclosure
Actual date Comp
date and
of lete Guarantee
Name of the number of Actual
Guarant happening Guarantee Imple for related
Company related line of Guarantee type
ee limit (Date of term menta party (Yes
guaranteed notices of credit
signing tion or not)
guarantee
agreement) or not
amount
Guangdong Sunrise Joint
1996.07.26 1,960.00 1996-07-26 1,960.00 4 months No No
Group Co., Ltd. responsibility
Guangdong Sunrise Joint
1999.09.30 477.28 1999-09-30 477.29 12 months No No
Group Co., Ltd. responsibility
Guangdong Sunrise Joint
1998.04.30 182.00 1998-04-30 182.00 11 months No No
Group Co., Ltd. responsibility
Guangdong Sunrise Joint
1997.07.30 175.00 1997-07-30 175.00 7 months No No
Group Co., Ltd. responsibility
Guangdong Sunrise Joint
1997.06.04 210.00 1997-06-04 210.00 8 months No No
Group Co., Ltd. responsibility
Gintian Industry Joint
1998.10.30 5,000.00 1998-10-30 5,000.00 6 months No No
(Group) Co., Ltd. responsibility
Shenzhen Tianma Joint
1994.09.30 800.00 1994-09-30 800.00 12 months No No
Cosmetics Co., Ltd. responsibility
Total external guarantee amount approved in Total actual external guarantee amount approved in
0.00 0.00
reporting period(A1) reporting period(A2)
Total external guarantee amount approved at the end Total actual balance of external guarantee amount
0.00 8,804.29
of reporting period(A3) approved at the end of reporting period(A4)
Guarantee of the Company for the controlling subsidiaries
Disclosure
date and Actual date
Complete Guarantee
Name of the number of of happening
Guarantee Actual line Guarantee Guarantee Implemen for related
Company related (Date of
limit of credit type term tation or party (Yes
guaranteed notices of signing
not or no)
guarantee agreement)
amount
Shandong
Joint
Huajiaming
1997.09.03 8.31 1997-09-03 8.31 responsibil 4 months No No
Economic and
ity
Trade Co., Ltd.
Zoria Pte Ltd 1996.03.25 7,808.70 1996-03-25 7,808.70 Joint 9 months No No
responsibil
ity
Total guarantee amount for subsidiaries approved in Total actual guarantee amount for subsidiaries
0.00 0.00
reporting period(B1) approved in reporting period(B2)
Total actual balance of guarantee amount for
Total guarantee amount for subsidiaries approved at
0.00 subsidiaries approved at the end of reporting 7,817.01
the end of reporting period(B3)
period(B4)
Total guarantee of the Company（Total the former two items））
Total guarantee amount actually occurred in
Total guarantee limit approved in period (A1+B1) 0.00 0.00
period (A2+B2)
Total guarantee limit approved at period-end Total guarantee amount actually occurred at
0.00 16,621.30
(A3+B3) period-end (A4+B4)
Proportion of the total actual guarantee amount (A4+B4)in net assets of the Company -9.88%
Including:
Line of credit for shareholders, actual controller and its related parties (C) 0.00
The debts guarantee amount provided for the guaranteed parties whose assets-liability ratio exceed 70% directly or
16,621.30
indirectly(D)
Proportion of total line of credit in net assets of the Company exceed 50%(E) 0.00
Total amount of the aforesaid three guarantees(C+D+E) 16,621.30
Explanations on possibly bearing joint and several liquidating responsibilities for undue guarantees Naught
Note: Guangdong Sunrise Group Co., Ltd. was the shareholder of the Company, its equity was
auctioned by the court and now it is not the shareholder of the Company.
V. Commitments of the Company and the shareholders holding more than 5% equity in the
report period or lasting to the report period
The Company or the shareholders holding more than 5% equity had no commitments made in the
report period or made in previous period but carried forward to the report period that were likely to
produce significant influence on the operation achievements and financial status of the Company.
VI. Engagement and Disengagement of Certified Public Accountants of the Company
In the report period, the Company engaged Shenzhen Pengcheng Certified Public Accountants as
the auditing organ in this year with term of one year. In 2011, the Company paid auditing fee
amounting to RMB 0.5 million to Shenzhen Pengcheng Certified Public Accountants.
VII. Particulars about punishment received by the Company, the Board of Directors of the
Company and the directors from supervisory department
In the report period, the Company, the Board of Directors of the Company and the directors have
not been inspected, given administrative punishment or public criticism by CSRC, or publicly
condemned by Shenzhen Stock Exchange.
VIII. Particulars about the Company’s Reception of Investigation and Interview
In accordance with the requirements of Guidance for Fair Information Disclosure for Listed
Companies of Shenzhen Stock Exchange, the Company earnestly implements the System of
Reception and Popularization. The Company and relevant personnel in charge of information
disclosure strictly follow the principle of fair information disclosure. Situation that different treaty
policy is implemented, information is disclosed for appointed person or non-public significant
information is disclosed or leaked out has never happened.
Reception Main content of talk and
Reception place Reception way Person receipted
date information provided
Office of the Phone Shareholders of Progress of debt restructure
2011
Company communication circulating shares of the Company
Section XI. Financial Report (see attachment)
Shenzhen China Bicycle Company (Holdings)
Limited
2011 Financial Statement
Auditors’ Report
Content
Content Pages
I. Auditor’s Report 3-4
II. Audited Financial Statements
Consolidation and Balance Sheet of Parent 5-9
Company
Consolidation and Profit Statement of Parent 9-10
Company
Consolidation and Cash Flow Statement of 11-13
Parent Company
Consolidation and Changes of Shareholders' 14-21
Equity of Parent Company
III. Notes to Financial Statement 22-73
Shenzhen Pengcheng CPA Co., Ltd. Tel:(0755)8373 2888
7/F, Tower A, Union Square, No. 5022, Binhe Avenue, Futian District,
Fax:((0755）8223 7549
Shenzhen, China
Auditors’ Report
Shenzhen Pengcheng GSZi [2012] No.0131
To shareholders of Shenzhen China Bicycle Company (Holdings) Limited:
We accepted a commission of auditing the accompanying financial statements of Shenzhen China
Bicycle Company (Holdings) Limited (“CBC” or “the Company”), including balance sheet as of
31st December 2011 of consolidated and parent company, profit statement of parent company 2011
and related consolidated profit statement, consolidated cash flow statement and parent company’s
cash flow statement, consolidated statement on changes of shareholders’ equity and parent
company’s statement on changes of shareholders’ equity and other explanatory notes.
I. Management's responsibility for the financial statements
Management of Shenzhen China Bicycle Company (Holdings) Limited is responsible for the
preparation of these financial statements in a fair presentation. This responsibility includes: (1)
preparing financial statements in accordance with the Accounting Standards for Business
Enterprises; (2) designing, performing and maintaining internal control related to the preparation
and fair presentation of the financial statements that are free from material misstatements, whether
due to frauds or errors
II. Auditor's responsibility
Our responsibility is to express an audit opinion on the financial statement based on auditing
regulated in Auditing Rules for Chinese CPA. However, concerning the items described in “III.
Disclaimer of Opinion Items”, we obtained no auditing evidence, totally and appropriated, for
expressing the audit opinions.
III. Disclaimer of Opinion Items
1. During the audit, we have specially implemented the audit procedures such as visit for inspection
and inquiry, focusing on the financial debts of CBC which have expired for long time till the end of
Dec 31st of 2011. Until the audit report day, the replied letters told that a balance in interest of RMB
156,065,116.2 has been omitted by CBC; besides, some letters were replied to show interest on
borrowing principal converting to RMB 346,367,189.44. As to the aforesaid omitted interest
balance, the Company provided explanation in Note 10.4 that when implementing the document
(YJBT (2004) No.6) released by China Committee on Bank Supervision for offering a reference of
the loan interest restructure of Shenzhen China Bicycle Company (Holdings) Limited, the Company
and some creditors had different understanding on this document, which brought the aforesaid
omission. Since the accounts had not been adjusted, we are not able to ensure the influence of this
balance to the financial statements of the Company.
2. During the audit, we have specially implemented the audit procedures such as visit for inspection
and inquiry, focusing on the tax payable of Shenzhen China Bicycle Company (Holdings) Limited
which have expired for long time till the end of Dec 31st of 2011, in want of verification that
whether the unpaid tax, tariff bond and penalty balance was totaling up to RMB 119,102,157.65 as
the Company’s book said. While until the audit report day, nothing got replied. Thus, it was
impossible for us to ensure the influence on the financial statements of the Company brought by the
uncertainty.
38
3. In the process of audit, the information of credit card which we received from the account bank
of the Company is not able to be checked whether contingency such as related guarantee
information accord with disclosure, for it did not be annually inspected and credit card system did
not upgrade related information. Therefore, we implement substitutive audit procedure of field
checking the related courts to the claims of the Company caused by external guarantee and overdue
loan. However, related courts all only make some oral explanations or provide some information
which could only be used as reference. Otherwise, we are not able to implement other efficient audit
procedure, so that we are not able to judge the integrity of the contingency and the lawsuits
disclosed in Note 7 of the Company and possible effects of the issues on the Company’s financial
report.
4. Refer to statement in Note 10, until Dec. 31, 2011, total asset of Shenzhen China Bicycle
Company (Holdings) Limited was RMB 135,746,630.93; total liability was RMB 1,818,586,298.41;
net asset was RMB -1,682,839,667.48 with debts beyond assets. Net profit earned for 2011
amounting to RMB 39,720,901.46 mainly generated from, that debt restructuring plan of
Guangdong Sunrise Holdings Co., Ltd., a second largest creditor of the Company, was completed
ruling from Shenzhen Intermediate People’s Court, the debt accrued in previously and accrued
liability, as an unpaid account, reckoned into non-operation income; and disposal income from
auction of real estate located in Huaqiang South by the Court. Though CBC disclosed improving
methods in Note 10.3 of financial statement, however, the second largest creditor Shenzhen
Dongtaixing Technology Co., Ltd. applied to Shenzhen Intermediate People’s Court for restructure
of CBC according to Bankruptcy Law in March 2011. Due to the un-completed filing materials
required for submitted on time and other reasons, the application was withdrawal notify by
Shenzhen Intermediate People’s Court in October 2011, that we obtained no complete-ness and
properly auditing evidence to guarantee whether it can improved the sustainable operational ability
for China Bicycle. Therefore, concerning the appropriate-ness of the financial statement 2011 of
China Bicycle that prepared under the sustainable hypothesis, we fail to judge.
IV. Declaimer of Opinion
Concerning the importance of presentation in “III. Disclaimer of Opinion Items”, we obtained no
auditing evidence, totally and appropriated, for expressing the audit opinions. Thus, we express no
auditing opinion on financial statement under the name of Shenzhen China Bicycle Company
(Holdings) Limited.
Shenzhen Pengcheng Certified Public Chinese CPA
Accountants
Shenzhen P. R. C
April 2012
Lv Yali
Chinese CPA
Yang Shengqiao
39
Shenzhen China Bicycle Company (Holdings) Limited
Financial Statement
Consolidated Balance Sheet
2011-12-31
Prepared by Shenzhen China Bicycle Company (Holdings) Limited Unit: RMB Currency: CNY
Items Notes Amount at period-end Amount at year-begin
Current assets:
Monetary funds V.1 24,546,601.39 17,756,773.58
Settlement provisions -
Capital lent -
Transaction finance asset -
Notes receivable V.2 1,000,000.00 2,619,699.00
Accounts receivable V.3 3,869,919.58 1,732,822.98
Accounts paid in advance V.4 1,588,743.08 213,423.41
Insurance receivable -
Reinsurance receivables -
Contract reserve of
-
reinsurance receivable
Interest receivable -
Dividend receivable -
Other receivables V.5 25,193,546.89 18,085,772.89
Purchase restituted finance
asset
Inventories V.6 14,310,428.28 21,692,678.29
Non-current asset due within
-
one year
Other current assets - -
Total current assets 70,509,239.22 62,101,170.15
Non-current assets:
Granted loans and advances -
Finance asset available for
-
sales
Held-to-maturity securities -
Long-term account receivable -
Long-term equity investment V.7 2,619,840.50 2,619,840.50
Investment property V.8 22,763,296.78 26,434,648.24
Fixed assets: V.9 15,262,689.21 21,547,992.74
Construction in progress -
Engineering material -
Disposal of fixed asset -
Productive biological asset -
Oil and gas asset -
Intangible assets V.10 24,591,565.22 25,454,427.26
Expense on Research and
-
Development
Goodwill - -
Long-term expenses to be
- -
apportioned
Deferred income tax asset - -
Other non-current asset - -
Total non-current asset 65,237,391.71 76,056,908.74
Total assets 135,746,630.93 138,158,078.89
40
Consolidated Balance Sheet (Contd)
2011-12-31
Prepared by Shenzhen China Bicycle Company (Holdings) Limited Unit: RMB Currency: CNY
Items Notes Amount at period-end Amount at year-begin
Current liabilities:
Short-term loans V.12 359,993,573.29 384,217,648.09
Loan from central bank -
Absorbing deposit and interbank
-
deposit
Capital borrowed -
Transaction financial liabilities -
Notes payable -
Accounts payable V.13 116,792,484.21 125,628,122.72
Accounts received in advance V.14 15,817,538.51 16,661,602.20
Selling financial asset of repurchase -
Commission charge and
-
commission payable
Wage payable V.15 4,093,942.70 3,802,240.39
Taxes payable V.16 98,407,104.67 98,218,863.73
Interest payable V.17 207,999,625.50 213,488,233.36
Dividend payable -
Other accounts payable V.18 394,804,850.78 165,837,025.40
Reinsurance payables -
Insurance contract reserve -
Security trading of agency -
Security sales of agency -
Non-current liabilities due within 1
452,026,831.88 706,645,180.86
year V.19
Other current liabilities V.20 2,437,393.95 756,162.09
Total current liabilities 1,652,373,345.49 1,715,255,078.84
Non-current liabilities: -
Long-term loans -
Bonds payable -
Long-term account payable -
Special accounts payable -
Accrual liabilities V.21 166,212,952.92 179,088,442.92
Deferred income tax liabilities -
Other non-current liabilities -
Total non-current liabilities 166,212,952.92 179,088,442.92
Total liabilities 1,818,586,298.41 1,894,343,521.76
Shareholders’ equity):
Paid-in capital (or share capital) V.22 551,347,947.00 551,347,947.00
Capital public reserve V.23 460,757,567.84 427,132,693.91
Less: Inventory shares -
Reasonable reserve -
Surplus public reserve V.24 32,673,227.01 32,673,227.01
Provision of general risk -
Retained profit V.25 -2,727,618,409.33 -2,767,339,310.79
Balance difference of foreign
-
currency translation
Total shareholders’ equity attributable to
-1,682,839,667.48 -1,756,185,442.87
parent company
Minority interests -
Total shareholders’ equity -1,682,839,667.48 -1,756,185,442.87
Total liabilities and shareholders’ equity 135,746,630.93 138,158,078.89
41
Balance Sheet of Parent Company
2011-12-31
Prepared by Shenzhen China Bicycle Company (Holdings) Limited Unit: RMB Currency: CNY
Item Notes Amount at period-end Amount at year-begin
Current assets:
Monetary funds 561,283.08 498,624.71
Transaction finance asset -
Notes receivable -
Accounts receivable XI.1 1,014,896.60 1,384,353.23
Accounts paid in advance -
Interest receivable -
Dividend receivable -
Other receivables XI.2 46,917,137.01 30,529,810.28
Inventories 9,943,662.01 14,965,196.51
Non-current asset due within
one year -
Other current assets -
Total current assets 58,436,978.70 47,377,984.73
Non-current assets:
Finance asset available for
sales -
Held-to-maturity securities -
Long-term account receivable -
Long-term equity investment XI.3 2,619,840.50 2,619,840.50
Investment property 22,763,296.78 26,434,648.24
Fixed assets: 14,905,640.82 21,221,962.11
Construction in progress -
Engineering material -
Disposal of fixed asset -
Productive biological asset -
Oil and gas asset -
Intangible assets 24,591,565.22 25,454,427.26
Expense on Research and
Development -
Goodwill -
Long-term expenses to be
apportioned -
Deferred income tax asset -
Other non-current asset -
Total non-current asset 64,880,343.32 75,730,878.11
Total assets 123,317,322.02 123,108,862.84
42
Balance Sheet of Parent Company (Contd)
2011-12-31
Prepared by Shenzhen China Bicycle Company (Holdings) Limited Unit: RMB Currency: CNY
Items Notes Amount at period-end Amount at year-begin
Current liabilities:
Short-term loans 321,902,898.37 332,017,261.07
Transaction financial liabilities -
Notes payable -
Accounts payable 126,706,858.84 148,454,726.88
Accounts received in advance 10,664,592.85 10,664,592.85
Wage payable 2,418,776.27 2,372,320.02
Taxes payable 95,009,521.54 95,784,336.55
Interest payable 207,999,625.50 213,488,233.36
Dividend payable -
Other accounts payable 351,172,801.22 120,844,911.76
Non-current liabilities due within 1
year 452,026,831.88 706,645,180.86
Other current liabilities 2,320,660.19 726,612.09
Total current liabilities 1,570,222,566.66 1,630,998,175.44
Non-current liabilities:
Long-term loans -
Bonds payable -
Long-term account payable -
Special accounts payable -
Accrual liabilities 166,212,952.92 179,088,442.92
Deferred income tax liabilities -
Other non-current liabilities -
Total non-current liabilities 166,212,952.92 179,088,442.92
Total liabilities 1,736,435,519.58 1,810,086,618.36
Owner’s equity (or shareholders’ equity):
Paid-in capital (or share capital) 551,347,947.00 551,347,947.00
Capital public reserve 460,757,567.84 427,132,693.91
Less: Inventory shares -
Reasonable reserve -
Surplus public reserve 32,673,227.01 32,673,227.01
Provision of general risk -
Retained profit -2,657,896,939.41 -2,698,131,623.44
Total owner’s equity(or shareholders’
equity) attributable to parent company -1,613,118,197.56 -1,686,977,755.52
Total liabilities and owner’s equity(or
shareholders’ equity) 123,317,322.02 123,108,862.84
43
Consolidated Profit Statement
Year of 2011
Prepared by Shenzhen China Bicycle Company (Holdings) Limited Unit: RMB Currency: CNY
Amount in this Amount in last
Items Notes
period period
I. Total operating income 321,043,570.34 299,027,279.43
Including: Operating income V.26 321,043,570.34 299,027,279.43
Interest income -
Insurance gained -
Commission charge and commission income -
II. Total operating cost 350,534,243.15 374,381,117.43
Including: Operating cost V.26 297,448,254.06 280,127,985.48
Interest expense -
Commission charge and commission expense -
Cash surrender value -
Net amount of expense of compensation -
Net amount of withdrawal of
insurance contract reserve -
Bonus expense of guarantee slip -
Reinsurance expense -
Operating tax and extras V.27 603,970.92 311,455.58
Sales expenses V.28 7,297,537.55 7,394,867.85
Administration expenses V.29 21,836,655.24 23,792,819.05
Financial expenses V.30 23,619,043.30 64,515,016.00
Losses of devaluation of asset V.31 -271,217.92 -1,761,026.53
Add: Changing income of fair value
(Loss is listed with “-”) -
Investment income (Loss is listed with “-”) 4,560,000.00 -
Including: Investment income on
affiliated company and joint venture -
Exchange income (Loss is listed with “-”)
III. Operating profit (Loss is listed with “-”) -24,930,672.81 -75,353,838.00
Add: Non-operating income V.32 64,921,817.27 139,887,804.23
Less: Non-operating expense V.33 270,243.00 56,551.79
Including: Disposal loss of non-current asset -
IV. Total Profit (Loss is listed with “-”) 39,720,901.46 64,477,414.44
Less: Income tax -
V. Net profit (Net loss is listed with “-”) 39,720,901.46 64,477,414.44
Net profit attributable to shareholders
of parent company 39,720,901.46 64,477,414.44
Minority shareholders’ gains and losses
VI. Earnings per share
i. Basic earnings per share V.34 0.072 0.1169
ii. Diluted earnings per share V.34 0.072 0.1169
VII. Other consolidated income -
VIII. Total consolidated income 39,720,901.46 64,477,414.44
Total consolidated income attributable to owners
of parent company 39,720,901.46 64,477,414.44
Total consolidated income attributable to minority
shareholders - -
44
Profit Statement of Parent Company
Year of 2011
Prepared by Shenzhen China Bicycle Company (Holdings) Limited Unit: RMB Currency: CNY
Items Notes Amount in this period Amount in last period
I. Operating income XI.4 28,577,538.32 28,532,157.84
Less: Operating cost XI.4 13,822,797.20 16,520,738.87
Business taxes and surtax -
Sales expenses -
Administration expenses 19,353,562.21 21,709,094.88
Financial expenses 26,267,688.54 66,242,149.40
Losses of devaluation of asset -1,926,719.39 -2,197,612.45
Add: Changing income of fair
value(Loss is listed with “-”) -
Investment income (Loss is listed with
“-”) 4,560,000.00 -
Including: Investment income on
affiliated company and joint venture -
II. Operating profit (Loss is listed with “-”) -24,379,790.24 -73,742,212.86
Add: Non-operating income 64,884,717.27 139,881,904.23
Less: Non-operating expense 270,243.00 19,066.69
Including: Disposal loss of non-current
asset -
III. Total Profit (Loss is listed with “-”) 40,234,684.03 66,120,624.68
Less: Income tax -
IV. Net profit (Net loss is listed with “-”) 40,234,684.03 66,120,624.68
Legal representative: _____________
Person in charge of accounting works: _____________
Person in charge of accounting organ: _____________
Consolidated Cash Flow Statement
Year of 2011
Prepared by Shenzhen China Bicycle Company (Holdings) Limited Unit: RMB Currency: CNY
Amount in this Amount in last
Items Notes
period period
I. Cash flows arising from operating activities:
Cash received from selling commodities and 192,678,564.98 178,552,968.97
providing labor services
Net increase of customer deposit and interbank
deposit -
Net increase of loan from central bank -
Net increase of capital borrowed from other
financial institution -
Cash received from original insurance contract fee -
Net cash received from reinsurance business -
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
Other cash received concerning operating activities V. 35(1) 27,021,621.81 22,290,096.28
45
Subtotal of cash inflow arising from operating 219,700,186.79 201,097,731.25
activities
Cash paid for purchasing commodities and receiving 178,176,217.18 156,229,830.72
labor service
Net increase of customer loans and advances -
Net increase of deposits in central bank and
interbank -
Cash paid for original insurance contract
compensation -
Cash paid for interest, commission charge and
commission -
Cash paid for bonus of guarantee slip -
Cash paid to/for staff and workers 14,107,936.61 15,747,757.29
Taxes paid 8,623,563.12 4,849,679.50
Other cash paid concerning operating activities V. 35(2) 18,443,562.24 17,774,603.42
Subtotal of cash outflow arising from operating
activities 219,351,279.15 194,601,870.93
Net cash flows arising from operating activities 348,907.64 6,495,860.32
II. Cash flows arising from investing activities:
Cash received from recovering investment 4,560,000.00 -
Cash received from investment income - -
Net cash received from disposal of fixed, intangible
and other long-term assets 2,017,500.00 -
Net cash received from disposal of subsidiaries and
other units -
Other cash received concerning investing activities -
Subtotal of cash inflow from investing activities 6,577,500.00 -
Cash paid for purchasing fixed, intangible and other 136,579.83 3,471,511.81
long-term assets
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 136,579.83 3,471,511.81
Net cash flows arising from investing activities 6,440,920.17 -3,471,511.81
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 V. 35(3) 6,500,000.00
Subtotal of cash inflow from financing activities 6,500,000.00
Cash paid for settling debts 14,000,000.00
Cash paid for dividend and profit distributing or
interest paying -
Including: Dividend and profit of minority
shareholder paid by subsidiaries -
Other cash paid concerning financing activities -
Subtotal of cash outflow from financing activities 14,000,000.00
Net cash flows arising from financing activities -7,500,000.00
IV. Influence on cash due to fluctuation in exchange rate -
V. Net increase of cash and cash equivalents 6,789,827.81 -4,475,651.49
Add: Balance of cash and cash equivalents at the 17,756,773.58 22,232,425.07
period -begin
VI. Balance of cash and cash equivalents at the period 24,546,601.39 17,756,773.58
-end
46
Cash Flow Statement of Parent Company
Year of 2011
Prepared by Shenzhen China Bicycle Company (Holdings) Limited Unit: RMB Currency: CNY
Amount in this Amount in last
Items Notes
period period
I. Cash flows arising from operating activities:
Cash received from selling commodities and
providing labor services 9,450.00 -
Write-back of tax received 254,666.00
Other cash received concerning operating activities 22,442,656.09 38,601,004.58
Subtotal of cash inflow arising from operating
activities 22,452,106.09 38,855,670.58
Cash paid for purchasing commodities and receiving
labor service 160,000.00 -
Cash paid to/for staff and workers 6,510,771.79 1,646,015.22
Taxes paid 4,668,195.69 2,716,046.50
Other cash paid concerning operating activities 11,026,378.53 16,909,478.19
Subtotal of cash outflow arising from operating
activities 22,365,346.01 21,271,539.91
Net cash flows arising from operating activities 86,760.08 17,584,130.67
II. Cash flows arising from investing activities:
Cash received from recovering investment -
Cash received from investment income -
Net cash received from disposal of fixed,
intangible and other long-term assets -
Net cash received from disposal of subsidiaries and
other units -
Other cash received concerning investing activities -
Subtotal of cash inflow from investing activities -
Cash paid for purchasing fixed, intangible
and other long-term assets 24,101.71 3,450,627.02
Cash paid for investment -
Net cash paid for subsidiaries and other units -
Other cash paid concerning investing activities -
Subtotal of cash outflow from investing activities 24,101.71 3,450,627.02
Net cash flows arising from investing activities -24,101.71 -3,450,627.02
III. Cash flows arising from financing activities -
Cash received from absorbing investment -
Cash received from loans -
Other cash received concerning financing activities -
Subtotal of cash inflow from financing activities -
Cash paid for settling debts 14,000,000.00
Cash paid for dividend and profit distributing or
interest paying -
Other cash paid concerning financing activities -
Subtotal of cash outflow from financing activities 14,000,000.00
Net cash flows arising from financing activities -14,000,000.00
IV. Influence on cash due to fluctuation in exchange rate -
V. Net increase of cash and cash equivalents 62,658.37 133,503.65
47
Add: Balance of cash and cash equivalents at the
period -begin 498,624.71 365,121.06
VI. Balance of cash and cash equivalents at the
period–end 561,283.08 498,624.71
48
Consolidated Statement on Changes of Shareholders' Equity
Year of 2011
Prepared by Shenzhen China Bicycle Company (Holdings) Limited Unit: RMB Currency: CNY
Amount in this report period
Owners’ equity attributable to the parent company
Items Less: Reasona Minority’s Total owners’
Paid-up capital Capital Surplus General risk equity equity
Treasury ble Retained profit Others
(Share capital) reserves reserves provision
Stock reserve
427,132,693.9 -2,767,339,310. -1,756,185,442.
I. Balance at the end of the last year 551,347,947.00 32,673,227.01
1 - - - 79 - - 87
Add: Changes of accounting policy - - - - - - - - - -
Error correction of the last period - - - - - - - - - -
Others - - - - - - - - - -
427,132,693.9 -2,767,339,310. -1,756,185,442.
II. Balance at the beginning of this year 551,347,947.00 32,673,227.01
1 - - - 79 - - 87
III. Increase/ Decrease in this year
33,624,873.93 39,720,901.46 73,345,775.39
(Decrease is listed with “-”)
(I) Net profit 39,720,901.46 39,720,901.46
(II) Other consolidated income
Subtotal of (I) and (II) 39,720,901.46
(III) Owners’ devoted and decreased
33,624,873.93 33,624,873.93
capital
1. Owners’ devoted capital
2. Amount calculated into owners’
equity paid in shares
3. Others 33,624,873.93 33,624,873.93
(IV) Profit distribution
1. Withdrawal of surplus reserves - - - - - - - - - -
2. Withdrawal of general risk
provisions - - - - - - - - - -
3. Distribution for owners
(shareholders) - - - - - - - - - -
4. Others - - - - - - - - - -
(V) Carrying forward internal owners’
equity - - - - - - -
1. Capital reserves conversed to capital
(share capital) - - - - - - -
2. Surplus reserves conversed to capital
(share capital) - - - - - - - - - -
3. Remedying loss with surplus reserve - - - - - - - - - -
4. Others - - - - - - - - - -
(VI) Reasonable reserve - - - - - - - - - -
49
Amount in this report period
Owners’ equity attributable to the parent company
Items Less: Reasona Minority’s Total owners’
Paid-up capital Capital Surplus General risk equity equity
Treasury ble Retained profit Others
(Share capital) reserves reserves provision
Stock reserve
1. Withdrawal in the report period - - - - - - - - - -
2. Usage in the report period - - - - - - - - - -
(VII) Other - - - - - - - - - -
460,757,567.8 -2,727,618,409. -1,682,839,667.
IV. Balance at end of the period 551,347,947.00 32,673,227.01
4 33 48
50
Consolidated Statement on Changes of Shareholders' Equity
Year of 2011
Prepared by Shenzhen China Bicycle Company (Holdings) Limited Unit: RMB Currency: CNY
Amount in same period of last year
Owners’ equity attributable to the parent company
Items Less: Reason Minority’s Total owners’
Paid-up capital Capital Surplus General risk equity equity
Treasury able Retained profit Others
(Share capital) reserves reserves provision
Stock reserve
458,695,975.5 -2,831,816,725.
I. Balance at the end of the last year
479,433,003.00 5 - - 32,673,227.01 - 23 - - -1,861,014,519.67
Add: Changes of accounting policy - - - - - - - - - -
Error correction of the last period - - - - - - - - - -
Others - - - - - - - - - -
458,695,975.5 -2,831,816,725.
II. Balance at the beginning of this year
479,433,003.00 5 - - 32,673,227.01 - 23 - - -1,861,014,519.67
III. Increase/ Decrease in this year -31,563,281.6
71,914,944.00 64,477,414.44 104,829,076.80
(Decrease is listed with “-”) 4 - - - - - -
(I) Net profit - - - - - - 64,477,414.44 - - 64,477,414.44
(II) Other consolidated income - - - - - - - - - -
Subtotal of (I) and (II) - - - - - - 64,477,414.44 - - 64,477,414.44
(III) Owners’ devoted and decreased
40,351,662.36 40,351,662.36
capital - - - - - - - -
1. Owners’ devoted capital - - - - - - - - - -
2. Amount calculated into owners’
-
equity paid in shares - - - - - - - - -
3. Others - 40,351,662.36 - - - - - - - 40,351,662.36
(IV) Profit distribution - - - - - - - - - -
1. Withdrawal of surplus reserves - - - - - - - - - -
2. Withdrawal of general risk
provisions - - - - - - - - - -
3. Distribution for owners
(shareholders) - - - - - - - - - -
4. Others - - - - - - - - - -
(V) Carrying forward internal owners’ -71,914,944.0
71,914,944.00
equity 0 - - - - - - - -
1. Capital reserves conversed to capital -71,914,944.0
71,914,944.00
(share capital) 0 - - - - - - - -
2. Surplus reserves conversed to capital
(share capital) - - - - - - - - - -
3. Remedying loss with surplus reserve - - - - - - - - - -
51
Amount in same period of last year
Owners’ equity attributable to the parent company
Items Less: Reason Minority’s Total owners’
Paid-up capital Capital Surplus General risk equity equity
Treasury able Retained profit Others
(Share capital) reserves reserves provision
Stock reserve
4. Others - - - - - - - - - -
(VI) Reasonable reserve - - - - - - - - - -
1. Withdrawal in the report period - - - - - - - - - -
2. Usage in the report period - - - - - - - - - -
(VII) Other - - - - - - - - - -
427,132,693.9 -2,767,339,310.
IV. Balance at end of the period 551,347,947.00 32,673,227.01 -1,756,185,442.87
1 - - - 79 - -
Legal representative: _____________ Person in charge of accounting works: _____________ Person in charge of accounting organ: ___
52
Statement on Changes of Shareholders’ Equity of Parent Company
Year of 2011
Prepared by Shenzhen China Bicycle Company (Holdings) Limited Unit: RMB Currency: CNY
Amount in this report period
Items Paid-up capital Less: Treasury Reasonable General risk Total owners’
Capital reserves Surplus reserves Retained profit
(Share capital) Stock reserve provision equity
-2,698,131,623. -1,686,977,755.
I. Balance at the end of the last year 551,347,947.00 427,132,693.91 32,673,227.01 -
- - 44 52
Add: Changes of accounting policy - - - - - - - -
Error correction of the last period - - - - - - - -
Others - - - - - - - -
-2,698,131,623. -1,686,977,755.
II. Balance at the beginning of this year 551,347,947.00 427,132,693.91 32,673,227.01 -
- - 44 52
III. Increase/ Decrease in this year
33,624,873.93 - 40,234,684.03 73,859,557.96
(Decrease is listed with “-”)
(I) Net profit 40,234,684.03 40,234,684.03
(II) Other consolidated income
Subtotal of (I) and (II) - 40,234,684.03 40,234,684.03
(III) Owners’ devoted and decreased
33,624,873.93 33,624,873.93
capital
1. Owners’ devoted capital
2. Amount calculated into owners’ equity
paid in shares
3. Others 33,624,873.93 33,624,873.93
(IV) Profit distribution
1. Withdrawal of surplus reserves
2. Withdrawal of general risk provisions
3. Distribution for owners (shareholders)
4. Others
(V) Carrying forward internal owners’
equity
1. Capital reserves conversed to capital
(share capital)
2. Surplus reserves conversed to capital
(share capital)
3. Remedying loss with profit surplus
4. Others
(VI) Reasonable reserve
1. Withdrawal in the report period
2. Usage in the report period
(VII) Other
IV. Balance at period end 551,347,947.00 460,757,567.84 32,673,227.01 -2,657,896,939. -1,613,118,197.
53
Amount in this report period
Items Paid-up capital Less: Treasury Reasonable General risk Total owners’
Capital reserves Surplus reserves Retained profit
(Share capital) Stock reserve provision equity
41 56
Legal representative: _____________ Person in charge of accounting works: _____________ Person in charge of accounting organ: _____________
54
Statement on Changes of Shareholders’ Equity of Parent Company
Year of 2011
Prepared by Shenzhen China Bicycle Company (Holdings) Limited Unit: RMB Currency: CNY
Amount in same period of last year
Item Paid-up capital Less: Treasury Reasonable General risk Total owners’
Capital reserves Surplus reserves Retained profit
(Share capital) Stock reserve provision equity
-2,764,252,248. -1,793,450,042.
I. Balance at the end of the last year 479,433,003.00 458,695,975.55 - - 32,673,227.01 -
12 56
Add: Changes of accounting policy - - - - - - - -
Error correction of the last period - - - - - - - -
Others - - - - - - - -
-2,764,252,248. -1,793,450,042.
II. Balance at the beginning of this year
479,433,003.00 458,695,975.55 - - 32,673,227.01 - 12 56
III. Increase/ Decrease in this year
(Decrease is listed with “-”) 71,914,944.00 -31,563,281.64 - - - - 66,120,624.68 106,472,287.04
(I) Net profit - - - - - - 66,120,624.68 66,120,624.68
(II) Other consolidated income - - - - - - - -
Subtotal of (I) and (II) - - - - - - 66,120,624.68 66,120,624.68
(III) Owners’ devoted and decreased
capital - 40,351,662.36 - - - - - 40,351,662.36
1. Owners’ devoted capital - - - - - - - -
2. Amount calculated into owners’ equity
paid in shares - - - - - - - -
3. Others - 40,351,662.36 - - - - - 40,351,662.36
(IV) Profit distribution - - - - - - - -
1. Withdrawal of surplus reserves - - - - - - - -
2. Withdrawal of general risk provisions - - - - - - - -
3. Distribution for owners (shareholders) - - - - - - - -
4. Others - - - - - - - -
(V) Carrying forward internal owners’
equity 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 profit surplus - - - - - - - -
4. Others - - - - - - - -
(VI) Reasonable reserve - - - - - - - -
55
Amount in same period of last year
Item Paid-up capital Less: Treasury Reasonable General risk Total owners’
Capital reserves Surplus reserves Retained profit
(Share capital) Stock reserve provision equity
1. Withdrawal in the report period - - - - - - - -
2. Usage in the report period - - - - - - - -
(VII) Other - - - - - - - -
-2,698,131,623. -1,686,977,755.
IV. Balance at period end 551,347,947.00 427,132,693.91 32,673,227.01 -
- - 44 52
Legal representative: _____________ Person in charge of accounting works: _____________ Person in charge of accounting organ: _____________
56
Shenzhen China Bicycle Company (Holdings) Limited
Notes to Financial Statement
Year of 2011
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 (products management by license excluded).
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 10th meeting of the 8th Session of the
Board held on 19 April 2012.
II. Main Accounting Policy, Accounting Estimate and Errors
1. Compilation Basis of Financial Statement
The financial statement has been prepared under the Accounting Standard for Enterprise—Basic
issued on 15 February 2006 together with “Item 38”-Details of Accounting Standard, and
Application Guide of Accounting Standard for Enterprise issued subsequently, the Accounting
Standard for Enterprise—Explanation and other relevant regulations(together short for “Accounting
Standard for Enterprise”), and the regulation of Rules of Preparation on Information Disclosures for
Enterprise with Shares Listing No. 15- General Provision of Financial Report (Revised 2010) from
CSRC.
Ended as 31 December 2011, total assets of the Company amounting to RMB 135,746,630.93, the
liability were RMB 1,818,586,298.41 in total, net assets amounting to RMB
-1,682,839,667.48which seriously insolvency. Management of the Company adopts the measures
listed in Note 10.3 carried in this report, along with the continuously development for debt and
assets restructuring, the business environment, business status and sustainable ability in business
achieved a further improvement, the financial statement 2011 prepared based on the sustainable
business was appropriated.
2. Announcement for Following the Enterprise Accounting Standards
The financial statement complied by the Company pursuant to the foresaid compilation basis truly
and fully reflects such related information as financial status as of 31 December 2011, operation
achievement and cash flows of the Company and parent company for 2011.
57
3. Accounting Period
The company adopts Gregorian calendar, namely each 1 January to 31 December should be one
fiscal year.
4. Standard Accounting Currency
The Company adopts Renminbi as the standard accounting currency.
5. Accounting Treatment Method for Business Combinations under the Same Control and not
under the Same Control
(1) 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.
(2) 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.
58
6. Compilation of Consolidated Financial Statements
(1) A. The scope for the consolidated financial statements shall be confirmed based on the principle
of control. The consolidated financial statements shall be compiled based on the financial
statements of the Company and all related subsidiaries incorporated into the scope of consolidated
financial statements. The long-term equity investment to the subsidiary shall be adjusted according
to the equity method, and then all related investments and transaction between the Company and
related subsidiaries in the scope of the consolidated financial statement are offset, besides, the
minority interest income and rights are consolidated.
B. In case of any inconsistency of the accounting policy between the subsidiary and the head office,
the accounting policy adopted by the head office shall prevail.
C. The consolidation for the subsidiary acquiring from the enterprise acquisition under the same
control shall be deemed that such consolidation has been occurred at the early stage of the current
period, which assets, liabilities, operation achievement and cash flow shall be incorporated into the
consolidated financial statement.
D. As for the consolidation under the same control, the net profits and loss suffered by the
reorganized party shall be recorded as the on-recurring profit and loss and independently itemized in
the financial statements.
E. As for the reorganization of non-enterprise consolidation under the same controller, the reference
profit statement shall be compiled from the beginning of the consolidation period in case that total
assets at the end of previous fiscal year, or the operating income or the total profit of the
reorganized party for the previous fiscal year reaches or exceeds 20% of the reorganizing party
before the reorganization.
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.
(2) Concerning the equity of same subsidiary buy than sell or sale than buy in successively two
fiscal years, relevant accounting treatment should be disclosed.
7. Confirmation Standard for Cash and Cash Equivalent
Cash refers to in-stock cash and bank savings which are available for payment whenever needed.
Cash equivalent refers to the investment held by the Company with short term (due within three
months since the date of purchased generally), strong liquidity and low risk of value fluctuation that
is easy to be converted into cash of known amount.
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.
c. 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.
59
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 assets
The financial assets covers the financial assets measured at the fair value and its changes was
recorded into the profits and losses at the current period (including the tradable financial assets and
its changes recording into the profits and losses at the current period), held-to-maturity investment,
loan and account receivables, saleable financial assets.
B. Measurement of Financial Assets
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;
2) 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:
60
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. 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;
g. 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, ;
h. Where the fair value of the equity instrument investment drops significantly or not
contemporarily; and
i. Other objective evidences showing the impairment of the financial asset.
F. Measurement of impairment of financial assets
a. The impairment test is not required for the financial assets measured at the fair value and its
changes recording into the profits and losses of current period;
b. Measurement of the impairment of held-to-maturity investment: the impairment provision shall
be made according to the balance that the future cash flow shall be lower than the ending book
value;
c. Confirmation standards and provisions for bad debt of accounts receivables: An impairment test
shall be made on the financial assets with significant single amounts. If any objective evidence
shows that the accounts receivable has been impaired, the impairment-related losses shall be
recognized to prepare the provisions for bad debts according to the balance between the future
present value and the book value. With regard to the financial assets with insignificant single
amounts, if any objective evidence shows that the accounts receivable suffers no impairment, the
account age analysis method shall be adopted, and withdraw and confirm the impairment loss
according to the account age and specified ratio; With regard to the financial assets with
insignificant single amounts, an independent impairment test may be carried out, or they may be
included in a combination of financial assets with similar credit risk features so as to carry out an
impairment-related test. As for the account receivable without any impairment, after the
independent impairment test, the impairment loss shall be made according to the account age and
the ratio as stipulated.
d. Judgment of impairment of saleable financial assets: Provided that the fair value of saleable
financial asset has great depreciation, or takes into any related factors account, it shows that such
depreciation is permanent, it shall be recognized the impairment.
10. Account Receivable
(1) Confirmation and Method for Provisions for Bad Debts of Single Significant Amount
Standards for the determination on account receivable
with single significant amount based on business scale,
Determine basis or amount standards for Single
business nature and settlement status of the clients:
Significant Amount
The account receivable over RMB 5 million(including
RMB 5 million) at period-end
An impairment test shall be made on the financial
Withdrawal method on single significant amount and assets with significant single amounts. The
with bad debt provision accrued for single item impairment-related losses shall be recognized to
prepare the provisions for bad debts according to the
61
balance between the future present value and the book
value.
(2) Bad debt provision for account receivable withdrawal by combination:
Basis for combination determine: characteristic of credit risk
Item Accrued method
Age analysis method: determined the impairment losses
Age group—account receivable with same book age
and bad debt provision accrued by age and regulated
owns similar characteristic in credit risk
withdrawal proportion of the account receivable
Adopt age analysis method for bad debt provision withdrawal in combination:
Accrued ratio for account receivable Accrued ratio for other account
Age
(%) receivable (%)
Within I year (1 year included) 0.3 0.3
1-2 years 0.3 0.3
2-3 years 0.3 0.3
Over 3 years 100 100
(3) Account receivable with minor single amount but with withdrawal bad debt provision for single
item:
Reasons of withdrawal bad debt
Clearly evidence shows that the account hard to recover
provision for single item
Withdrawal method for bad debt Recognized impairment loss and accrued the bad debt provision according to
provision the balance between future cash flow on account receivable and its book value
11. Inventory
(1) 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.
(2)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.
(3) 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.
(4)Rake inventory
In addition to the periodic inventory system for the products, the Company adopts the perpetual inventory system
for other inventories.
(5) 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
Wrappage
The Company adopts one-off amortization method to amortize the wrappage at the time of receipt.
62
12. Long-term equity investment
Determination of investment cost
A. Recognized investment cost by followed for the long-term equity investment formed by enterprise merger:
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 equity 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 face 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:
①In case the merger is effected through one-time swap, the merger cost is the assets, debts or equity securities
paid by the purchaser on the date of merger.
②In case of a merger effected through a series of transactions, the merger cost is the total of all the separate
transactions.
③The related costs incurred by the purchaser for the merger is all charged to the current gains and losses.
④In 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, taxes 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 equity 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. Long-term equity investment obtained through debt reorganization, recognized investment cost based on fair
value and relevant 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 can’t co-control nor has no material influence on the unit and there is no quotation
on the market or the fair value is reliable.
The long-term equity 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 equity 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 long-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
63
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 loss. 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 profits 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 influence on the invested unit
Co-control refers to a contract-based joint control over a certain economic 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 be transferred back in the subsequent period of time.
13. Investment real estate
Investment real estate refers to the real properties for the purpose of rental or value increase or both.
1. Investment real estate is measured according to the initial cost.
(1) Cost of investment real estate from purchasing, including the price of purchase, relevant taxes and other
expenditures attributable to this assets.
(2) Cost of investment real estate from self-construction, consist of the necessary expenditures that occurred
before the useful statues that predicted.
(3) Cost of investment real estate obtained from other means, recognized cost according to relevant accounting
standards.
2. Follow-up measurement
The follow-up expenses that are related to investment real estate, if the economic interests related to the assets are
is likely to inflow cost and its costs can be reliably measured, shall be included in the cost of investment real
estate; or else, reckoned into current gains and losses while occurred.
The Company adopts cost model to have follow-up measurements on the investment real estate at balance sheet
date.
3. Depreciation and impairment provision
Found in the “Execution of depreciation and impairment provision for fixed assets” under Note (9) carried in this
report.
14. Fixed assets
(1) 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 financial 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.
(2) Depreciation methods for various fixed assets
years of Yearly depreciation rate
Categories Scrap value rate (%)
depreciation(years) (%)
Housing buildings 20 10 4.5
Machines and equipment 10 10 9
Office equipment 5 10 18
64
Electronic equipment 5 10 18
Transportation equipment 5 10 18
Other equipment 5 10 18
(3) 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 than 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.
(4) 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 are the book value of the long-term
accounts payable, their difference is being regarded as financing costs. The unconfirmed financing
costs are amortized in the leasing term with the actual interest rate method. The depreciation and
depreciation rate shall be determined on the basis of the leasing term and the estimated scrap value.
15. Project under Construction
A. Calculation Method of Project under Construction
The project under construction includes the preparation before execution, construction engineering,
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:
65
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 have 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
(1) 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.
(2) The intangible assets are valuated according to the actual costs during the acquirement.
(3) The intangible assets, of which the service life has been defined, can be amortized with
straight-line method during the period since the usable time, and counted into the loss or gain of the
current period; the intangible assets, of which the service life has been not defined, are not
amortized. The company shall check the service life and amortization method of the intangible
assets at the end of the year. If the service life and amortization are not the same as before, then they
shall be changed.
(4) 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. Accrued Liabilities
A. The duty or the duty relevant with the matter shall be confirmed as the accrued liability,
66
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 accrued 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 same accounting year,
the relevant revenue shall be confirmed according to the percentage of the completion under the
condition that the result to provide labor trade can be reliably estimated.
C. Revenue from abalienating the right to use assets
The revenue from abalienating the right to use assets includes interest revenue and operating cost
revenue. The former is calculated and defined according to the time when others use the monetary
fund of the company and the actual interest rate; while the latter is calculated and defined according
to the charging time and method negotiated according to the relevant contract or agreement.
21. Government Grants
Government grants include financial allocation, financial discount, tax rebate and free assignment of
non-currency assets. The government grants received by the company and relevant with the assets
are confirmed as the deferred income, which is counted into the loss or gain of each period within
the service life of the asset since it reaches the scheduled usable stats. And the deferred income
balance shall be transferred into the loss or gain of asset disposal of the current period if it is sold,
transferred, rejected or destroyed before the service life ends. The government grants received
relevant with the income and used to compensate the relevant cost or loss afterwards are confirmed
as the deferred income, which shall be counted into the loss or gain of the current period when
confirming the relevant costs; and those used to compensate the incurred relevant cost or loss shall
be directly counted into the loss or gain of the current period.
22. 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;
67
2/ the taxable income used for deductible temporary differences are 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 are unlikely to be reversed in the foreseeable future.
23. the main accounting policies, changes of accounting estimates
No changes on accounting policies and estimation in the period.
24. Prior period correction of accounting errors
No accounting error correction is available during the period of this report
25. Other preparation method on main accounting policies, accounting estimation and finial
statement
No other preparation for accounting policies, accounting estimation and finial statement of the
Company.
III. Taxes
1. Mai tax category and tax rate
Tax category Tax calculation evidence Tax rate
Sales income, and income from processing, 17%
Value added tax maintenance, making repairs and supplying
replacements, and labor service
Sales tax Taxable labor income 5%
tax for maintaining and Amount of value-added tax and sales tax 1%, 7%
building cities payable
Amount of value-added tax and sales tax 3%
Educational surtax
payable
Business income tax * Taxable income 24%
*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 2011 was actually 24%.
68
IV. Business Combination and Consolidated Financial Statements
1. Subsidiaries
(1) Subsidiaries obtained by means of establishment or investment, etc.
Unit: RMB
Balance after that the
Cons
Balance of Amount for loss of current period
olida
other items offsetting the shared by minor
propo Propo ted
Busi Actual amount actually gain and loss of shareholders and offset
Registra rtion rtion repor Minor
ness Registered Business subscribed at forming the minor with parent company
Full name Type tion of of t shareholders
natur capital scope the end of net shareholders in owner’s equity exceeds
place shares voting state ’ equity
e period investment the minor the shares owned by
held power ment
in the shareholders’ minor shareholders in
or
subsidiaries equity the subsidiary at the
not
beginning of period
Shenzhen
Anjule Wholly-o Self-owned
Shenzhe Prop RMB 2 RMB2,000,00.
Realty wned realty - 100% 100% Yes - - -
n erty million 00
Manageme subsidiary management
nt Co., Ltd.
China
Bicycle Wholly-o Trade and
Hong Bicy HK$ 0.02
(Internatio wned manufacturin HKD20,000.00 - 100% 100% Yes - - -
Kong cle million
nal) Co., subsidiary g
Ltd.
China
Bicycle Controllin Bicycle and
Hong Bicy HK$ 5 HKD5,000,000 -
(Hong g parts - 99% 99% Yes - -
Kong cle million .00
Kong) Co., subsidiary distribution
Ltd.
Shenzhen
Controllin Bicycle and
Emmelle Shenzhe Bicy RMB 2 RMB1,400,000
g parts - 70% 70% Yes -
Industry n cle million .00
subsidiary distribution
Co., Ltd.
(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.
69
2. No business entity of control right formed by special purpose subject or by means of
trusted business or leasing etc.
3. No changes in the consolidation scope in the period.
4. No enterprise mergered under same control occurred in the period.
5. No enterprise mergered under different control occurred in the period.
6. No subsidiary losses in period by means of equity for sale without control rights held.
7. No reverse purchase occurred in the period.
8. No absorption merger occurred in the period.
V. Notes to Items in Consolidated Financial Statements
1. Monetary fund
Unit: RMB Currency: CNY
Items Amount at the end of period Amount at the beginning of period
Amount in Amount in
Conversi Amount in Conversion
foreign foreign Amount in RMB
on rate RMB rate
currencies currencies
Cash:
RMB 69,024.09 1.00 69,024.09 164,956.42 1.00 164,956.42
HK Dollar 1,894.27 0.8107 1,535.68 1,894.30 - 1,773.76
US Dollar 1.25 6.3009 7.88 1.25 - 9.13
Subtotal 70,567.65 - - 166,739.31
Bank deposit:
RMB 23,876,073.90 1.00 23,876,073.90 16,611,335.30 1.00 16,611,335.30
HK Dollar 740,051.61 0.8107 599,959.84 773,490.97 0.85 658,186.67
US Dollar 46,927.13 6.83 320,512.30
Subtotal 24,476,033.74 17,590,034.27
Total 24,546,601.39 17,756,773.58
2. Notes receivable
(1) Classification of notes receivable
Unit: RMB Currency: CNY
Category Amount at the end of period Amount at the beginning of period
Bank acceptance bill 1,000,000.00 2,619,699.00
(2) Notes receivable without hypothecation of the Company at the end of period
(3) Notes with endorsement provided to other party but not post-dated of the Company of five top
clients at the end of period:
Unit: RMB Currency: CNY
Drawn by Date of drawl Expire date Amount Remark
Jinan YUSIGN Sales Co., Ltd. 2011-07-25 2012-01-25 5,200,000.00
Jinan YUSIGN Sales Co., Ltd. 2011-07-21 2012-01-21 3,200,000.00
Jinan YUSIGN Sales Co., Ltd. 2011-11-30 2012-05-29 3,000,000.00
Henan Daming Electric Bicycle
Sales Co., Ltd. 2011-09-22 2012-03-22 2,913,781.50
Jinan YUSIGN Sales Co., Ltd. 2011-09-01 2012-03-01 2,430,000.00
Total 16,743,781.50
70
3. Accounts receivable
(1) Exposure of accounts receivable by category:
Unit: RMB Currency: CNY
Amount at the end of period
Book balance Bad debt provision
Category
Proportion Proportion
Amount Amount
(%) (%)
Account receivable with single major
amount but withdrawal bed debt provision - - - -
for single item
Account receivable withdrawal bad debt
1,040,566,658.76 100.00% 1,036,696,739.18 99.63%
provision by age combination
Account receivable with single minor
amount but withdrawal bed debt provision
for single item
Total 1,040,566,658.76 100.00% 1,036,696,739.18 99.63%
Unit: RMB Currency: CNY
Amount at the beginning of period
Book balance Bad debt provision
Category
Proporti Proporti
Amount Amount
on (%) on (%)
Account receivable with single major amount
and withdrawal bed debt provision for single - - - -
item
Account receivable withdrawal bad debt
1,038,181,894.70 100.00 1,036,449,071.72 99.83
provision by age combination
Account receivable with single minor amount
but withdrawal bed debt provision for single - - - -
item
Total 1,038,181,894.70 100.00 1,036,449,071.72 99.83
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 RMB 5 million. 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.
(2) In combination, account receivable withdrawal bed debt provision by age analysis method:
Unit: RMB Currency: CNY
Amount at period-end Amount at period-begin
Book balance Book balance
Age Bad debt Bad debt
Ratio Ratio
Amount provision Amount provision
(%) (%)
Within
3,728,460.55 0.36% 11,185.38 1,035,032.17 0.10 -
1year
1-2
151,262.72 0.01% 453.79 98,211.62 0.01 -
years
2-3
1,841.00 0.00% 5.52
years
Over
1,036,685,094.49 99.63% 1,036,685,094.49 1,037,048,650.91 99.89 1,036,449,071.72
3years
Total 100.00% 1,038,181,894.70 100.00 1,036,449,071.72
71
Amount at period-end Amount at period-begin
Book balance Book balance
1,040,566,658.76 1,036,696,739.18
(3) No account receivable actually cancelled after verification in the report period.
(4) 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.
(5) Top 5 units with an amount of account receivable:
Unit: RMB Currency: CNY
Relationship
Proportion among the gross
Name with the Amount Period
accounts receivable (%)
company
Total of top 5 customers of Non-affiliated
accounts receivable customers 535,330,991.79 Over 3 years 51.45
(6) No account receivable involving with affiliated parties in the report period.
(7) 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 Currency: CNY
Amount at the end of period Amount at the beginning of period
Age
Amount Proportion (%) Amount Proportion (%)
Within 1 year 1,398,866.67 88.05% 23,547.00 11.03
1-2 years 75,961.88 35.59
2-3 years 189,876.41 11.95% 113,914.53 53.38
Total 1,588,743.08 100.00% 213,423.41 100.00
(2) 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. Other accounts receivable
(1) Exposure of other accounts receivable by category:
Unit: RMB Currency: CNY
Amount at the end of period
Book balance Bad debt provision
Category
Amount Proporti Amount Proporti
on (%) on (%)
Other account receivable with single major amount - -
and withdrawal bed debt provision for single item - -
Other account receivable withdrawal bad debt
provision by age combination
558,308,659.77 100.00% 533,115,112.88 95.49%
Other account receivable with single minor amount
but withdrawal bed debt provision for single item
Total
558,308,659.77 100.00% 533,115,112.88 95.49%
Amount at the beginning of period
Book balance Bad debt provision
Category
Amount Proporti Amount Proporti
on (%) on (%)
Other account receivable with single major amount
and withdrawal bed debt provision for single item - - - -
72
Other account receivable withdrawal bad debt
provision by age combination 558,537,283.06 100.00 540,451,510.17 96.76
Other account receivable with single minor amount - -
but withdrawal bed debt provision for single item - -
Total 558,537,283.06 100.00% 540,451,510.17 96.76
Interpretation to the category of other accounts receivable:
According to the business scale, business nature, and customers’ settlement, etc., the other account
receivable with single big amount is determined to be RMB 5 million. The other account receivable
with single big amount has no depreciation reserve, and the reserve for bad and doubtful account is
withdrawn with age analysis method.
(2) In combination, other account receivable withdrawal bed debt provision by age analysis method:
Unit: RMB Currency: CNY
Amount at period-end Amount at period-begin
Book balance Book balance
Age Bad debt Bad debt
Amount Proportio Amount Proportio
provision provision
n (%) n (%)
Within
1year 25,077,859.27 4.49% 75,226.82 4,709,642.47 0.84 6,375.74
1-2years 146,244.00 0.03% 438.73 4,545,244.91 0.81 135.73
2-3years 45,244.91 0.01% 135.73 2,258.00 - -
Over
3years 533,039,311.58 95.47% 533,039,311.59 549,280,137.68 98.35 540,444,998.69
Total
558,308,659.77 100.00 533,115,112.88 558,537,283.06 100.00 540,451,510.17
(3) No other account receivable actually cancelled after verification in the report period.
(4) The 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.
(5) Top 5 units with an amount of other account receivable:
Unit: RMB Currency: CNY
Proportion
Relationship among the
Name with the Amount Period gross accounts
company receivable -
others (%)
Total of top 5 customers of other Non-affiliated
357,001,411.68 Over 3 years 63.94
accounts receivable customers
(6)No other account receivable involving with affiliated parties in the report period.
(7)No other account receivable-others with confirmation terminated at the end of the report period.
6. Inventory
(1) Inventory classification
Unit: RMB Currency: CNY
Amount at the end of period Amount at the beginning of period
Items Book balance Depreciation Book value Book balance Depreciation Book value
reserve reserve
41,891,048.28 35,572,510.46 6,318,537.82 54,845,278.28 43,902,968.40 10,942,309.88
Raw materials
Low value
and easily
432,240.25 0.00 432,240.25 1,456,362.06 1,152,485.26 303,876.80
worn-out
articles
Merchandise
21,279,324.73 13,719,674.52 7,559,650.21 26,448,790.52 16,002,298.91 10,446,491.61
inventory
73
Amount at the end of period Amount at the beginning of period
Items Book balance Depreciation Book value Book balance Depreciation Book value
reserve reserve
63,602,613.26 49,292,184.98 14,310,428.28 82,750,430.86 61,057,752.57 21,692,678.29
Total
(2) Inventory depreciation reserve
Unit: RMB Currency: CNY
Amount decrease in the current period
Inventory Opening book Closing book
withdrawn in the
category balance Carry-back Trans-sale balance
current period
Raw materials 43,902,968.40 4,169,828.88 - 12,500,286.82 35,572,510.46
Low value and
easily worn-out 1,152,485.26 - - 1,152,485.26 0.00
articles
Merchandise
16,002,298.91 - - 2,282,624.39 13,719,674.52
inventory
Total 61,057,752.57 - - 15,935,396.47 49,292,184.98
(3) Inventory depreciation reserve
Evidence for withdrawal Reason for carry-back of Proportion of carry-back amount in the
Items of inventory inventory depreciation current period among the closing
depreciation reserve reserve in the current period balance of the inventory
Net realizable value is
Raw materials
below the cost. - -
Merchandise Net realizable value is
inventory below the cost. - -
Low value and
Net realizable value is
easily worn-out - -
below the cost.
articles
A. Evidence for determine 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. execute the recoverable amount; finished products
execute the recent unit sales price of such products minus the direct expense and taxes possibly required for
realization.
B. The trans-sale of raw materials and merchandise inventory in the current period is for that the abovementioned
merchandise has been sold.
74
7. Long-term equity investment
Unit: RMB Currency: CNY
Interpretation to
Proportion Proportion discrepancy depreciation
Cash
Initial of shares of voting between the depreciation reserve
Accounting Opening Increase or Closing dividend
Invested unit investment held in power in proportion of reserve at the withdrawn at
method balance decrease balance for this
cost invested invested shares and voting end of period the current
period
units (%) units (%) power in invested period
units
Hunan
Guangnan Cost
5,679,300.00 5,679,300.00 -5,679,300.00 0 5.50 5.50 - - -
Motorcycle method
Co., Ltd.
Shenzhen
Jinhuan Equity
14,883,560.00 14,883,560.00 - 14,883,560.00 38.00 38.00 - 12,263,719.50 - -
Printing Co., method
Ltd. *
Total 20,562,860.00 20,562,860.00 -5,679,300.00 14,883,560.00 - - - 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.
In October 2011, 5.5% equity of Hunan Guangyang Motocycle Co., Ltd. Held by the Company was transferred to Changzhou Guangyang Company, original equity
investment (RMB 5.68 million) was accrual impairment provision (RMB 5.68) totally in book of the Company due to long-term insolvency of Hunan Guangyang. Equity
transfer amount RMB 4.56 million was received by the Company in reprot period.
75
8. Investment real estate
Unit: RMB Currency: CNY
Opening book Increase in the Decrease in the Closing book
Items balance current period current period balance
I. Total original book value 129,872,063.32 - - 129,872,063.32
1. Houses and buildings 129,872,063.32 - - 129,872,063.32
2. Land use right - - - -
II. Total accumulated depreciation
103,437,415.08 3,671,351.46 107,108,766.54
and accumulated amortization
1. Houses and buildings 103,437,415.08 3,671,351.46 107,108,766.54
2. Land use right -
III. Total net book value of
26,434,648.24 - - 22,763,296.78
investment real estate
1. Houses and buildings 26,434,648.24 - - 22,763,296.78
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
26,434,648.24 - - 22,763,296.78
real estate
1. Houses and buildings 26,434,648.24 - - 22,763,296.78
2. Land use right - - - -
(1) The depreciation amount actually accrued in the period amounting to RMB 3,671,351.46.
(2) The limit of the ownership for abovementioned investment real estate found in Note9 (6).
9. Fixed assets
(1) Fixed assets
Unit: RMB Currency: CNY
Items Opening book Increase in the current period Decrease in the Closing book
balance current period balance
I. Total original book value 116,647,611.13 136,579.83
6,931,311.82 109,852,879.14
Including: Houses and
109,055,011.26 0.00 6,000,431.82
buildings 103,054,579.44
Machinery and equipment 4,242,098.00 0.00 0.00
4,242,098.00
Means of transport 923,478.06 0.00 0.00
923,478.06
Other equipment 2,427,023.81 136,579.83 930,880.00
1,632,723.64
Newly Accrued this
added period
II. Total accumulated
92,707,944.16
depreciation - 4,829,783.62 5,339,212.08 92,198,515.70
Including: Houses and
89,636,132.88 4,241,232.46 4,606,007.08
buildings - 89,271,358.26
Machinery and equipment 621,162.98 - 328,688.88 0.00
76
949,851.86
Means of transport 688,922.72 45,302.04 0.00
- 734,224.76
Other equipment 1,761,725.58 214,560.24 733,205.00
- 1,243,080.82
III. Total net book value of
23,939,666.97
fixed assets 17,654,363.44
Including: Houses and
19,418,878.38
buildings 13,783,221.18
Machinery and equipment 3,620,935.02
3,292,246.14
Means of transport 234,555.34
189,253.30
Other equipment 665,298.23
389,642.82
IV. Total depreciation
2,391,674.23 2,391,674.23
reserve
Including: Houses and
1,580,000.00 1,580,000.00
buildings
Machinery and equipment 426,800.00 426,800.00
Means of transport - -
Other equipment 384,874.23 384,874.23
V. Total book value of fixed
21,547,992.74
assets 15,262,689.21
Including: Houses and
17,838,878.38
buildings 12,203,221.18
Machinery and equipment 3,194,135.02
2,865,446.14
Means of transport 234,555.34
189,253.30
Other equipment 280,424.00
4,768.59
Depreciation amount in this period was RMB 4,829,783.62.
(2) Fixed assets left idle temporarily at the end of period
Unit: RMB Currency: CNY
Original book Accumulated Depreciation
Items Net book value Remark
value depreciation reserve
Houses and
34,505,947.26 29,631,982.21 0.00 4,873,965.05 -
buildings
Machinery and
252,098.00 156,651.74 0.00 95,446.27 -
equipment
34,758,045.26 29,788,633.94 0.00 4,969,411.32
Total
(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.
Among the Company’s houses and buildings, except for Zhonghua Garden (originally worthy of
RMB 7,226,043.16) with certificate of title handled, others have not had the ownership certificate
handled. Details are:
Reason for failing to
Estimated time for handling the
Items handle the certificate of
certificate of title
title
Employees’ dining hall (building 10 in Formalities not
Unpredictable
Shuibei Factory Area) completed
Ice room of dining hall (building 11 in Formalities not
Unpredictable
Shuibei Factory Area) completed
77
Reason for failing to
Estimated time for handling the
Items handle the certificate of
certificate of title
title
Employees’ residence (1)(building 8 in Formalities not
Unpredictable
Shuibei Factory Area) completed
Employees’ residence (2) (building 9 in Formalities not
Unpredictable
Shuibei Factory Area) completed
Employees’ residence (3) (building 14 in Formalities not
Unpredictable
Shuibei Factory Area) completed
Employees’ residence (4) (building 19 in Beili Formalities not
Unpredictable
Garden) completed
Formalities not
Factory building 1 Unpredictable
completed
Formalities not
Factory building 2 Unpredictable
completed
Formalities not
Factory building 3 Unpredictable
completed
Formalities not
Factory building 4 Unpredictable
completed
Formalities not
Factory building 5 Unpredictable
completed
Formalities not
Administration building Unpredictable
completed
Formalities not
Complex building Unpredictable
completed
Formalities not
Residence building 1 Unpredictable
completed
Formalities not
Residence building 2 Unpredictable
completed
Formalities not
Residence building 3 Unpredictable
completed
Formalities not
Residence building 4 Unpredictable
completed
Formalities not
Residence building 5 Unpredictable
completed
No. 7 Guang’ancheng, West Section, Guohuo Formalities not
Unpredictable
Road, Taijiang District, Fuzhou completed
(6) Assets with limited ownership
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 lands located at Yousong Village,
Longhua Town, Bao’an District and buildings on the land.
10. Intangible assets
(1) Intangible assets
Unit: RMB Currency: CNY
Opening book Increase in the Decrease in the Closing book
Items
balance current period current period balance
I. Original book value Total 43,143,099.08 - - 43,143,099.08
Land use right 43,143,099.08 - - 43,143,099.08
II. Total accumulated
17,688,671.82 862,862.04 18,551,533.86
amortization
Land use right 17,688,671.82 862,862.04 18,551,533.86
III. Total net book value of
25,454,427.26 - - 24,591,565.22
intangible assets
Land use right 25,454,427.26 - - 24,591,565.22
78
Opening book Increase in the Decrease in the Closing book
Items
balance current period current period balance
IV. Total depreciation reserve - - - 0.00
Land use right - - - 0.00
Total book value of intangible
25,454,427.26 - - 24,591,565.22
assets
Land use right 25,454,427.26 - - 24,591,565.22
(1) The land use right is the 127,333m2 land located at Yousong Village, Longhua Town, Bao’an
District, and the service life is from July 1, 1990 to 30 June 2040. The limitation on the ownership
is as shown in the annotation 9(6).
(2) Amount amortized in the current period is RMB 862,862.04.
11. Details of asset depreciation reserve
Unit: RMB Currency: CNY
Opening book Increase in the Decrease in the current period Closing book
Items
balance current period Carry-back Trans-sale balance
I. Reserve for bad and doubtful
1,576,900,581.89 1,655,501.47 6,096,548.27 2,647,683.03 1,569,811,852.06
account
II. Inventory depreciation reserve 61,057,752.57 4,169,828.88 15,935,396.47 49,292,184.98
III. Depreciation reserve of
-
salable financial assets
IV. Depreciation reserve of
-
held-to-maturity investment
V. Depreciation reserve of
17,943,019.50 5,679,300.00 12,263,719.50
long-term equity investment
VI. Depreciation reserve of
-
investment real estate
VII. Depreciation reserve of fixed
2,391,674.23 2,391,674.23
assets
VIII. Depreciation reserve of
-
engineering materials
IX. Depreciation reserve of
-
engineering under construction
X. Depreciation reserve of
- - - - -
productive biological assets
Including: Depreciation reserve of
mature productive biological - - - - -
assets
XI. Depreciation reserve of
- - - - -
oil-gas assets
XII. Depreciation reserve of
- - - - -
intangible assets
XIII. Depreciation reserve of
- - - - -
business credit
XIV. Others - - - - -
Total 1,658,293,028.19 5,825,330.35 6,096,548.27 24,262,379.50 1,633,759,430.77
Trans-sale of bad debt provision refers to the part amount receivable from Guangtie Medial Court;
the trans-sale amount for depreciation provision of inventory resulted by the sales realized;
impairment provision of long-term equity investment refers to the disposal of investment of Hunan
Guangyang Motorcycle.
12. Short-term loan
(1) Classification of short –term loan:
Unit: RMB Currency: CNY
Items Amount at the end of period Amount at the beginning of period
Loan on security 226,490,599.93 243,928,066.33
Credit loan 133,502,973.36 140,289,581.76
Total 359,993,573.29 384,217,648.09
(2) Short-term loan at term but not repaid:
Unit: RMB Currency: CNY
79
Reason for not Estimated date
Borrower Amount Purpose
repayment of repayment
Loan for
China Import and Export Bank
114,558,000.00 production Capital shortage Unpredictable
of China
turnover
Loan for
China Cinda Assets Management
56,694,478.75 production Capital shortage Unpredictable
Company
turnover
Loan for
Head Office of China Merchants
38,090,674.92 production Capital shortage Unpredictable
Bank
turnover
Loan for
Oriental Assets Management
88,677,806.82 production Capital shortage Unpredictable
Company
turnover
Loan for
Huizhou Oriental United
34,586,143.16 production Capital shortage Unpredictable
Industry Co., Ltd.
turnover
Loan for
China Merchants Bank, Luohu
16,988,945.10 production Capital shortage Unpredictable
Sub branch
turnover
Loan for
China Everbright Bank 9,777,524.54 production Capital shortage Unpredictable
turnover
Loan for
China Construction Bank,
620,000.00 production Capital shortage Unpredictable
Sichuan Mianyang Sub branch
turnover
Total 359,993,573.29
The abovementioned loans have been over due for many years.
13. Accounts payable
(1) Age of accounts payable
Unit: RMB Currency: CNY
Items Amount at the end of period Amount at the beginning of period
Within 1 year 10,937,978.14 12,901,430.02
1-2 years 168,382.59 163,405.06
2-3 years 122,501.80
Over 3 years 105,686,123.48 112,440,785.84
Total 116,792,484.21 125,628,122.72
(1) Accounts payable of over 1 year is mainly because that the Company is insolvent and has
delayed the repayment for many years.
(2)The accounts payable in the report period don’t involve with the shareholder units holding over
5% (including 5%) voting power of the Company.
14. Account received in advance
(1) Age of account received in advance:
Unit: RMB Currency: CNY
Items Amount at the end of period Amount at the beginning of period
Within 1 year 5,005,965.77 5,910,048.99
1-2 years 60,019.53 86,960.36
2-3 years 86,960.36 -
Over 3 years 10,664,592.85 10,664,592.85
Total 15,817,538.51 16,661,602.20
(1) Big-amount items received in advance with an age of over 1 year are mainly formed
accumulatively in historical business communication.
(2) The items received in advance in the report period don’t involve with the shareholder units
holding over 5% (including 5%) voting power of the Company.
80
15. Wages payable
Unit: RMB Currency: CNY
Opening book Increase in the Decrease in the Closing book
Items
balance current period current period balance
I. Salary, bonus, allowance, and
subsidy 2,251,298.50 11,910,554.71 11,684,637.77 2,477,215.44
II. Employee benefit 25,906.94 465,896.34 491,803.28 0.00
III. Social insurance - 960,969.32 960,969.32 0.00
IV. Public accumulation fund for
housing construction 60,000.00 694,589.16 754,589.16 0.00
V. Dismiss welfare 38,565.69 0.00 0.00 38,565.69
VI. Trade union outlays and
personnel education outlay 1,426,469.26 198,986.31 47,294.00 1,578,161.57
VII. Others - 0.00 0.00 0.00
Total 3,802,240.39 14,230,995.84 13,939,293.53 4,093,942.70
(1) No remuneration in arrear among the employees’ remuneration payable.
(2) The trade union outlays and personnel education outlay in the current year is RMB 198,986.31;
and the compensation for cancellation of labor relationship is RMB00.00.
16. Taxes payable
Unit: RMB Currency: CNY
Items Amount at the end of period Amount at the beginning of period
VAT 56,549,886.85 56,554,659.77
Sales tax 445,392.77 440,900.28
Business income tax 33,753,125.02 33,753,125.02
Individual income tax 72,539.08 -21,156.15
Tax for maintaining and building
160,272.72 141,302.23
cities
Housing property tax 7,303,655.67 7,303,655.67
Others 122,232.56 46,376.91
Total 98,407,104.67 98,218,863.73
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
Unit: RMB Currency: CNY
Items Amount at the end of period Amount at the beginning of period
Loan interest 207,999,625.50 213,488,233.36
18. Other account payable
(1) Age of other accounts payable:
Unit: RMB Currency: CNY
Items Amount at the end of period Amount at the beginning of period
Within 1 year 9,063,330.27 11,730,547.74
1-2 years 10,682,662.94 2,468,597.75
2-3 years 2,344,854.69 572,084.12
81
Over 3 years 372,714,002.88 151,065,795.79
Total 394,804,850.78 165,837,025.40
(2) Loan without interest RMB 6.5 million payable to shareholder Guosheng Energy Co., Ltd., a
unit holding over 5% (including 5%) voting power of the Company.
(3) Major amount accounts payable of over 1 year is accounts unable to pay by the Company.
19. Non-current liability due within one year
(1)
Unit: RMB Currency: CNY
Items Amount at the end of period Amount at the beginning of period
Long-term loans due within one
452,026,831.88 706,645,180.86
year
(2) Top five long-term loans due within 1 year
Unit: RMB Currency: CNY
Amount at the end of period
Borrower Currency Amount in foreign
Amount in RMB
currencies
Shenzhen Guosheng Energy Investment
USD 62,829,259.02 395,880,878.11
and Development Co., Ltd.
Shenzhen Guosheng Energy Investment
RMB - 19,300,058.59
and Development Co., Ltd.
China Cinda Assets Management Co., Ltd. USD 2,157,395.94 13,593,536.05
Great Wall Assets Management Co., Ltd. USD 2,000,000.00 12,601,800.00
Xie Linging USD 500,000.00 3,150,450.00
Total 444,526,722.75
(3) Overdue loans among the long-term loans coming due within 1 year
Unit: RMB Currency: CNY
Borrowers Amount Term overdue
Guosheng Energy Investment Co., 415,180,936.70 Overdue for multiple years
China Cinda Assets Management
13,593,536.05 Overdue for multiple years
Co.,
China Great Wall Assets
12,602,050.00 Overdue for multiple years
Management Co.,
Xie Lingling 6,150,200.00 Overdue for multiple years
China Oriental Assets Management
3,000,000.00 Overdue for multiple years
Co.,
Shenzhen Lionda Group Co., Ltd. 1,500,109.13 Overdue for multiple years
Total 452,026,831.88
20. Other current liabilities
Unit: RMB Currency: CNY
Items Closing book balance Opening book balance
Rent 521,639.87 521,639.87
Decoration fee 188,853.82 188,853.82
Others 1,726,900.26 45,668.40
Total 2,437,393.95 756,162.09
82
21. Accrued liabilities
Unit: RMB Currency: CNY
Amount at the Increase in
Decrease in the Amount at the
Items beginning of the current
current period end of period
period period
Loan guarantee for Zoria Pte LTD 78,087,000.00 - - 78,087,000.00
Loan guarantee for Jintian Industry (Group)
50,000,000.00 - - 50,000,000.00
Co., Ltd.
Loan guarantee for Guangdong Shengrun
42,918,300.00 - 12,875,490.00 30,042,810.00
Group Co., Ltd.
Loan guarantee for Shenzhen Tianma
8,000,000.00 - - 8,000,000.00
Cosmetics Co., Ltd.
Loan guarantee for Shandong Huajiaming
83,142.92 - - 83,142.92
Economic Trading Co., Ltd.
Total 179,088,442.92 - 12,875,490.00- 166,212,952.92
Explanation of decrease in the current period: Pursuit to Bankruptcy Law, Shenzhen Intermediate People’s Court
rulling reorganization for Guangdong Sunrise Holdings Co., Ltd.[(2010) Shenzhen Intermediate Law Civil Qi
Reorganization Zi. No. 5-2”Civil Order”] in May 2010, teh “Reorganizaiton Plan of Guangdong Sunrise
Holdings Co., Ltd.” Was approved in October 2010, teh [(2010) Shenzhen Intermediate Law Civil Qi
Reorganization Zi. No. 5-5”Civil Order”] was terminated and entered into period of reorganizaiton plan. In April
2011, reorganization plan of Sunrise Company was rulled completed by Shenzhen Intermediate [(2010) Shenzhen
Intermediate Law Civil Qi Reorganization Zi. No. 5-16”Civil Order”] . According to the statement carried in
reorganizaiton plan of Sunrise Company, page 12, which approved by Shenzhen Intermediate “......based on the
above said discount method for calculation, ordinary creditor should earned 27.89% liquidation rate in case of
share settlement, 2.16% liquidation rate obtained plus monetary liquidation and ordinary creditor obtained 30.05%
liquidation rate in totall......”. In this report period, liquidated obtained by creditors in part of the accurel liability,
which withdrwal due to jointly loan guarantee undertake from Guangdong Sunrise Holdings CO., Ltd., has been
wirtten-off.
The abovementioned guarantee for other companies have been in serious insolvency or gone bankrupt.
83
22. Share capital
Unit: RMB Currency: CNY
Amount at the beginning of
Increase/ decrease (+, -) Amount at the end of period
period
Items Shares
New Shares
Proportion transferred Proportion
Amount shares presente Others Subtotal Amount
(%) for public (%)
issued d
reserve
I. Circulating shares with limited
-77,510,892.00 -77,510,892.00 109,214,230.00 19.81%
sales conditions 186,725,122,00 33.87 - -
1. Shares held by state-owned legal -16,340,000.00 -16,340,000.00 0.00%
person 16,340,000.00 2.96 - -
2.Shares held by domestic corporate -23,668,590.00 -23,668,590.00 65,098,412.00 11.81%
sponsors 88,767,002.00 16.10 -
3. Shares held by domestic natural -6,500,000.00 -6,500,000.00 0.00%
person sponsors 6,500,000.00 1.18 - -
-31,001,944.00 -31,001,944.00 44,104,246.00 8.00%
4. Shares held by overseas corporate 75,106,190.00 13.62 - -
5. Shares held by senior executives -358.00 -358.00 11,572.00 0.0021%
11,930.00 0.01
II. Circulating shares without limited
77,510,892.00 77,510,892.00 442,133,717.00 80.19%
sales conditions 364,622,825.00 66.13 - -
1. Common RMB shares listed at 77,513,517.00 77,513,517.00 193,773,360.00 35.14%
home (A-share) 116,259,843.00 21.08 - -
2. Foreign-funded shares listed at -2,625.00 -2,625.00 248,360,357.00 45.05%
home (B-share) 248,362,982.00 45.05 - -
0.00 0.00 551,347,947.00 100.00%
Total 551,347,947.00 100.00 - -
Changes in this period mainly due to the restricted shares of share merger reform have un-lock for trading in this period.
84
23. Capital reserve
Unit: RMB Currency: CNY
Amount at the Increase in the Decrease in the Amount at the end of
Items
beginning of period current period current period period
Capital premium - - - -
Other capital reserve 427,132,693.91 33,624,873.93 460,757,567.84
Including: Benefit from
423,124,068.94 33,624,873.93 456,748,942.87
liability recombination
Accounts unnecessary to pay 690,624.97 0.00 690,624.97
price difference of affiliated
3,318,000.00 0.00 3,318,000.00
transactions
Total 427,132,693.91 33,624,873.93 460,757,567.84
Interpretation of capital reserve:
The amount increased in the period refers to that 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 RMB 33,624,873.93 in 2011, which will be charged into the capital reserve as capital
investment.
24. Surplus reserve
Unit: RMB Currency: CNY
Amount at the Increase in the current Decrease in the Amount at the end of
Items
beginning of period period current period period
Statutory surplus
32,673,227.01 - - 32,673,227.01
reserve
25. Retained profit
Unit: RMB Currency: CNY
Proportion of
Items Amount withdrawal or
distribution
Undistributed profit of the previous year before adjustment -2,767,339,310.79 -
Total undistributed profit at the beginning of year adjusted (+, -
-) -
Undistributed profit at the beginning of year after adjustment -2,767,339,310.79 -
Add: Net profit classed under the parent company in the -
current period 39,716,821.46
Less: Withdrawal of legal surplus reserve - 10%
Withdrawal of free surplus reserve - -
Withdrawal of general risk reserve - -
Common stock dividend payable - -
Common stock dividend transferred into share capital - -
Undistributed profit at the end of period -2,727,622,489.33 -
26. Business income and business cost
(1) Business income and business cost
Unit: RMB Currency: CNY
Amount incurred in the current
Items Amount incurred in the last period
period
Major business income 298,465,730.36 274,000,080.33
Other business income 22,577,839.98 25,027,199.10
Business cost 297,448,254.06 280,127,985.48
(2) Major businesses (by industry)
Unit: RMB Currency: CNY
85
Amount incurred in the current period Amount incurred in the last period
Product name
Business income Business cost Business income Business cost
Bicycle and parts
296,006,720.56 282,052,578.77 271,727,101.17 260,057,821.52
distribution
Lease management 2,459,009.80 4,320,717.13 2,272,979.16 3,815,279.81
Total 298,465,730.36 286,373,295.90 274,000,080.33 263,873,101.33
(3)Major businesses (by variety)
Unit: RMB Currency: CNY
Amount incurred in the current period Amount incurred in the last period
Product name
Business income Business cost Business income Business cost
OEM motor vehicle 236,496,027.77 226,119,813.08 221,509,693.52 212,377,298.84
OEM Bicycle 52,742,757.72 49,331,916.01 48,922,678.62 46,044,796.38
CBC motor vehicle 1,076.92 1,009.04 224,576.06 396,858.20
CBC Bicycle 116,491.48 118,576.45 94,835.90 199,131.28
Others 6,650,366.67 6,481,264.19 975,317.07 1,039,736.82
Lease management 2,459,009.80 4,320,717.13 2,272,979.16 3,815,279.81
Total 298,465,730.36 286,373,295.90 274,000,080.33 263,873,101.33
(4) Business income of the Company’s top five customers in 2011
Unit: RMB Currency: CNY
Proportion among the Company’s
Customer name Business income
total business income
Customer 1 102,674,852.11 31.98%
Customer 2 64,383,854.73 20.05%
Customer 3 46,338,356.82 14.43%
Customer 4 31,003,052.71 9.66%
Customer 5 6,765,314.43 2.11%
Total 251,165,430.80 78.23%
27. Business tax and surcharge
Unit: RMB Currency: CNY
Amount incurred in the Amount incurred in the
Items Collection standard
current period last period
Sales tax 122,950.51 113,648.98 5%
Tax for maintaining and
building cities 287,638.23 114,865.88 7%
Educational surtax 193,382.18 82,940.72 3%
Total 603,970.92 311,455.58 -
86
28. Sales expenses
Unit: RMB Currency: CNY
Amount incurred in the current Amount incurred in the last period
Items
period
Remuneration for staff 4,633,393.71 3,727,910.51
AD charge 285,456.00 1,476,632.56
Business travel 510,002.40 557,156.10
Transportation and loading charge 275,208.26 329,680.00
Sales charge 142,911.30 150,685.92
Exhibition charge 142,980.00 139,976.60
Vehicle transport 135,553.80 132,979.50
Entertainment charge 60,644.00 86,462.00
Communication charge 73,635.42 76,729.90
Market promotion 300,000.00 60,400.00
Other 737,752.66 656,254.76
Total 7,297,537.55 7,394,867.85
29. Management expenses
Unit: RMB Currency: CNY
Amount incurred in the current Amount incurred in the last period
Items
period
Salary 7,297,489.22 6,534,907.23
Charge of depreciation amortized 5,688,356.86 6,405,494.37
Maintenance charge 256,743.20 2,114,662.10
Taxes 1,926,995.45 1,829,076.74
Consultant lawyers charge 278,500.00 1,186,600.00
Entertainment charge 1,046,061.96 897,921.28
Auditing charge 754,053.50 674,254.65
Vehicle transport 623,743.38 649,604.04
Office charge 496,372.86 538,296.50
Charges for staff on vocation 508,729.23 485,082.16
Charge for Board of the Meeting 811,255.11 483,600.40
Utilities 12,350.65 320,068.46
Social insurance 241,248.94 309,862.40
Business travel charge 172,259.76 299,992.95
Consultancy charge 339,700.00 222,450.00
welfare 232,414.06 201,419.29
leasing charge 200,000.00
Charge for share listing 596,423.50 177,576.04
Communication charge 153,740.83 146,870.93
Compensation for dismiss 37,300.00
Housing public reserve 409,394.80
Other -9,178.07 77,779.51
Total 21,836,655.24 23,792,819.05
30. Financial expenses
Unit: RMB Currency: CNY
Amount incurred in the current Amount incurred in the last period
Items
period
Interest expenditure 62,931,696.95 94,020,835.02
Less: interest income 89,639.63 78,334.37
Gains/losses from exchange -39,266,007.07 -29,464,021.40
Other 42,993.05 36,536.75
Total 64,515,016.00
23,619,043.30
31. Asset depreciation loss
87
Unit: RMB Currency: CNY
Amount incurred in the current
Items Amount incurred in the last period
period
I. Loss from doubtful accounts -4,441,046.80 -2,067,826.53
II. Loss from inventory
4,169,828.88 -
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
306,800.00
assets
VIII. Depreciation loss of
-
engineering materials
IX. Depreciation loss of
-
engineering under construction
X. Depreciation loss of productive
-
biological assets
XI. Depreciation loss of oil-gas
-
assets
XII. Depreciation loss of
-
intangible assets
XIII. Depreciation loss of business
-
credit
XIV. Others -
Total -271,217.92 -1,761,026.53
32. Non-operating income
Unit: RMB Currency: CNY
Items Amount incurred in the current Amount incurred in the last period
period
Total amount obtained from
disposing noncurrent assets 14,979,508.16 -
Including: Benefit from disposal
of fixed assets 14,979,508.16 -
Benefit from disposal of intangible
assets -
Benefit from debt recombination 138,684,786.64
Others 49,942,309.11 1,203,017.59
Total 64,921,817.27 139,887,804.23
Non-operation income—mainly because debt restruring of Guangdong Sunrise Holdings Co., Ltd., second largest
creditor of the Company, was completed ruling by Shenzhen Intermediate People’s Court in this year; debt
withdrawal previously from book RMB 34,894,917.23 and accrued liability RMB 12,875,490.00, as an unpaid
account, transferred into non-operation income and income from auction for 10 trademark pattern RMB
1,830,000.00 in this year, more details found in Note 10.1
33. Non-operating expenditure
Unit: RMB Currency: CNY
Amount incurred in the current
Items Amount incurred in the last period
period
Total loss from disposal of
1,479.48
non-current assets
Including: Loss from disposal of
197,675.00 1,479.48
fixed assets
88
Loss from disposal of intangible
-
assets
Others 72,568.00 55,072.31
Total 270,243.00 56,551.79
34. Calculation process of basic earning per share and diluted earning per share (eps)
Unit: RMB Currency: CNY
Amount incurred Amount
Calculation
Items in the current incurred in the
process
period last period
Net profit classed under the Company’s common shareholders P0 64,477,414.44
39,720,901.45
Non-frequent gain and loss classed under the Company’s 52,600,796.45
F 109,068,376.90
common shareholders
Net profit classed under the Company’s common shareholders
P0'=P0-F -44,590,962.46
after deduction of non-frequent gain and loss -12,879,895.00
Influences of diluted items on the net profit classed under the
V -
Company’s common shareholders
Net profit classed under the Company’s common shareholders,
considering the influences of diluting potential common shares,
P1=P0+V 39,720,901.45 64,477,414.44
and making adjustments according to Enterprise Accounting
Standards and related regulations
Influences of diluted items on the net profit classed under the
Company’s common shareholders after deduction of V' -
non-frequent gains and losses
Net profit classed under the Company’s common shareholders,
considering the influences of diluting potential common shares,
P1'=P0'+V' -44,590,962.46
and making adjustments according to Enterprise Accounting
-12,879,895.00
Standards and related regulations
Total shares at the beginning of period S0 551,347,947.00 479,433,003.00
Shares increased for increase of shares transferred from public
S1 71,914,944.00
reserve or for share dividend distribution in the report period
Shares increased for issuance of new shares or shares
Si -
transferred from liabilities in report period
Shares decreased for buyback, etc. in report period Sj -
Shares shortened in report period Sk -
Number of months in report period M0 12 12
Accumulated number of months from the next month of share
Mi 9
increase to the end of report period
Accumulated number of months from the next month of share
Mj -
decrease to the end of report period
S=S0＋S1＋
Si×Mi
Weighted average number of common shares issued externally 551,347,947.00 551,347,947.00
÷M0–Sj×Mj÷
M0-Sk
Add: Weighted average number of common shares increased in
condition that the diluted potential common shares are X1 -
supposed transferred into issued common shares
Weighted average number of common shares with diluted eps
X2=S+X1 551,347,947.00 551,347,947.00
calculated
Including: Weighted average number of common shares
-
increased from transfer of convertible corporate bonds
Weighted average number of common shares increased from
-
equity warrant/ stock equity implementation right
Weighted average number of common shares increased from -
89
Amount incurred Amount
Calculation
Items in the current incurred in the
process
period last period
buyback promise implementation
Basic eps classed under the Company’s common shareholders EPS0=P0÷S 0.0720 0.1169
Basic eps classed under the Company’s common shareholders
EPS0'=P0'÷S -0.0809
after deduction of non-frequent gains and losses -0.0234
Diluted eps classed under the Company’s common
EPS1=P1÷X2 0.1169
shareholders 0.0720
Diluted eps classed under the Company’s common
EPS1'=P1'÷X2 -0.0809
shareholders after deduction of non-frequent gains and losses -0.0234
35. Notes to items in cash flow statement
(1) Other cash received related with business activities
Unit: RMB Currency: CNY
Items Amount incurred in the current period Amount incurred in the last period
Rent, electric rate and water rate 22,673,502.55 17,628,981.38
Allocated claims from Qingchi 1,090,944.00
Parts disposal money 62,500.00
Other current accounts 4,348,119.26 3,507,670.90
Total 27,021,621.81 22,290,096.28
(2)Other cash paid related with business activities
Unit: RMB Currency: CNY
Amount incurred in the
Items Amount incurred in the last period
current period
Advertising propagation and promotion, and
1,247,668.23 1,787,801.37
brand maintenance expenses
Other expenses in sales section 1,764,205.00 1,511,282.46
Water and electricity expense 5,176,121.00 3,876,102.31
Property repair, equipment maintenance and
461,885.52 1,800,000.00
repair fees
Listing fee, board of directors’ expense, and
expenses for office work, business traveling, 3,968,211.06 3,193,862.14
communication, and social intercourse
Consulting auditing fee 1,368,200.00 1,183,304.65
Other fees in management section 41,967.72 600,000.00
Other current accounts 4,415,303.71 3,822,250.49
Total 18,443,562.24 17,774,603.42
(3) Cash received from other financing activities
Unit: RMB Currency: CNY
Amount incurred in the
Items Amount incurred in the last period
current period
Loan from Shenzhen Guosheng Energy
6,500,000.00
Investment Development Co., ltd.
36. Supplementary data of cash flow statement
(1)Supplementary data of cash flow statement
Unit: RMB Currency: CNY
Amount of the Amount of last
Supplementary data
current period period
1．Cash flow for business activities transferred from net profit:
Net profit 39,720,901.45 64,477,414.44
Add: Asset depreciation reserve -271,217.92 -1,761,026.53
Fixed asset depreciation, oil-gas asset depletion, and productive 8,501,135.08 10,512,930.21
90
Amount of the Amount of last
Supplementary data
current period period
biological asset depreciation
Amortization of intangible assets 862,862.04 862,862.04
Amortization of long-term fees to be apportioned -
Loss from disposal of fixed assets, intangible assets and other
-14,781,833.16 1,479.48
long-term assets (filled with “－” for benefit)
Loss from fixed assets reported discarded (filled with “－” for benefit) -
Loss from change of fair value (filled with “－” for benefit) -
Finical cost (filled with “－” for benefit) 23,665,689.88 64,369,590.56
Investment loss (filled with “－” for benefit)) -4,560,000.00 -
Decrease of deferred income tax asset (filled with “－” for increase) -
Increase of deferred income tax liability (filled with “－” for decrease) -
Decrease of inventory (filled with “－” for increase) 35,083,214.07 10,871,691.30
Decrease of operating items receivable (filled with “－” for increase) 1,267,177.57 -17,890,583.71
Increase of operating items payable (filled with “－” for decrease) -41,368,614.14 -124,948,497.47
Others -47,770,407.23 -
Net cash flow from business activities 348,907.64 6,495,860.32
2．Important investment and financing activities not involving with
cash income and expenditure
Capital transferred from liability -
Convertible corporate bonds coming due within one year -
Fixed assets rented by financing -
3．Net change of cash and cash equivalent:
Closing balance of cash 17,756,773.58
24,546,601.39
Less: Opening balance of cash 17,756,773.58 22,232,425.07
Add: Closing balance of cash equivalent -
Less: Opening balance of cash equivalent -
Net increase of cash and cash equivalent -4,475,651.49
6,789,827.81
(2) Composition of cash and cash equivalent
Unit: RMB Currency: CNY
Amount at the end of Amount at the beginning
Items
period of period
I. Cash 17,756,773.58
24,546,601.39
Including: Cash on hand 70,567.65 166,739.31
Bank deposit available for payment anytime 24,476,033.74 17,590,034.27
Other monetary fund available for payment anytime - -
Due from China Central Bank for payment - -
Due from banks - -
Call loans to banks - -
II. Cash equivalent - -
Including: Bond investment coming due within 3
- -
months
III. Closing balance of cash and cash equivalent 17,756,773.58
24,546,601.39
VI. Affiliated Parties and Affiliated Transactions
1. Shareholders controlled by the enterprise
Unit: RMB Currency: CNY
controllin Affiliate Legal Register Proporti Proporti ultimat
Enterpr Registrat Business Organizat
g d representat ed on of on of e
ise type ion place nature ion code
sharehold relations ive capital shares voting controll
91
er hip held in power er of
the in the the
enterpri enterpri enterpri
se (%) se (%) se
Limited Industry,
liability domestic
Shenzhen compan commerce,
Guosheng y materials
Energy Controlli (solely supply and
Investmen ng funded sale
t and sharehol Shenzhe Ji
by the Ji Hanfei (excluding 7000 11.81 11.81 77411579-2
Developm der n Hanfei
corpora specially
ent Co., te) run,
Ltd. controlled
and sold
merchandi
ses)
On 3 January 2011, controlling shareholder of largest shareholder and creditor of the Company—Shenzhen
Guosheng Energy Investment Development Co., ltd.(“Guosheng Energy”), Shenzhen National Investment Co.,
Ltd. (“National Investment”) entered into an equity transfer agreement with Ji Hanfei. National Investment
transferred 100% equity of Guosheng Energy to Ji Hanfei with consideration of RMB 70 million, and changes of
industry and commerce has completed. The above said equity transfer changes the actual controller of the
Company. After changes 65,098,412 shares of A-stock were indirectly held by Ji Hanfei, an 11.81% in total share
capital of the Company.
2. Detailed information about the Company’s subsidiaries is as shown in 1 of Annotation IV of the report.
92
3. Joint management and joint-ownership enterprises of the Company
Unit: RMB Currency: CNY
Proporti
Proporti
on of
Increas on of Depreciatio
Accounti Initial voting
Investe Opening e/ Closing shares in n reserve at
ng investment power in
d unit balance decreas balance the the end of
method cost the
e invested period
invested
unit (%)
unit (%)
Shenzh
en
Jinhuan Equity 14,883,560. 14,883,560. 14,883,560. 12,263,719.
Printing method - 38.00 38.00
Co., 00 00 00 50
Ltd. *
The industrial and commercial registration information of Shenzhen Jinhuan Printing Co., Ltd. has been cancelled
as displayed. Hong Kong Dahuan Bicycle Co., Ltd., one of the original shareholders of the company, holds the
company’s shares under our entrustment, and the actual holder is our company.
4. Related transactions
(1) Auction of exclusive right to use trademark
Auction Notification was received by the Company 1 March 2011 from Shenhzen Intermediate
People’s Court (“Shenzhen Intermediate”). Concerning the loan guarantee between the Luohu
Branch of China Merchants Bank and the Company as well as Guangdong Sunrise Holdings Co.,
Ltd., Shenzhen Intermediate entrust Shenzhen Huirong Auction Co., Ltd. to put 10 exclusive right
of trademark using owned by the Company up for auction. The above said exclusive right of
trademark used was auction off on 14 March 2011 with buyer of Shenzhen Guosheng Energy
Investment Development Co., Ltd. The above said exclusive right to use trademark was transferred
to Shenzhen Guosheng Energy Investment Development Co., Ltd, ruled by Shenzhen Intermediate
dated 31 March 2011.
(2) Interest exemption
Unit: RMB Currency: CNY
Items Affiliated parties Amount in this period Amount in last period
Shenzhen Guosheng Energy
Financial expenses 33,624,873.93 40,351,662.36
Investment and Development Co., Ltd.
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 RMB 33,624,873.93 in
2011, which will be charged into the capital reserve as capital investment.
93
5. Accounts receivable/ accounts payable of affiliated parties
Unit: RMB Currency: CNY
Amount at the end of Amount at the beginning of
Item Affiliated parties
period period
Shenzhen Jinhuan Printing Board
Other accounts payable 2,616,430.50 2,616,430.50
Co., Ltd.
Long-term liability Shenzhen Guosheng Energy
coming due within 1 Investment and Development Co., 415,180,936.70 435,399,392.26
year Ltd.
Shenzhen Guosheng Energy
Interest in red Investment and Development Co., 3,736,414.26 2,948,836.74
Ltd.
Shenzhen Guosheng Energy
Other account payable
Investment and Development Co., 6,500,000.00 6,500,000.00
*
Ltd.
VII. Contingent Items
1. Contingent liabilities formed from pending lawsuit and arbitration, and financial influences
(1) As of Dec. 31, 2011, the Company had been prosecuted by 17 financial organs, involving total
loan principal and interest of RMB 411.6367 million, USD76.9355 million and HKD 8.2616
million. The abovementioned lawsuits have mostly been resulted in the Company’s failure or been
mediated. After lawsuits, partial debtors have transferred the creditor’s right, and the principals
involved in the cases are changed accordingly.
(2) As of Dec. 31, 2011, the Company had been prosecuted by 34 goods suppliers, involving total
amount of RMB 71.1824 million, HKD24.534 million and USD 2.8006 million. 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
Influences on the
Company’s financial state,
Items Amount involved business result and cash Nature
flow in the current period
and future periods
Loan guarantee for Guangdong Shengrun RMB25,270,000.00
(1) Guaranty
Group Co., Ltd. USD700,000.00
Loan guaranty for Gintian Industry
RMB50,000,000.00 (2) Guaranty
(Group) Co., Ltd.
Loan guaranty for Shenzhen Tianma
RMB8,000,000.00 (3) Guaranty
Cosmetics Co., Ltd.
ZoriaPteLtdc USD10,000,000.00 (4) Guaranty
Shandong Huajiaming Economic Trade
RMB83,142.92 (5) Guaranty
Co., Ltd.
RMB83,353,142.92
Total
USD10,700,000.00
(1) In April 2011, reorganization plan of Sunrise Company was rulled completed by Shenzhen
Intermediate [(2010) Shenzhen Intermediate Law Civil Qi Reorganization Zi. No. 5-16”Civil
Order”] . According to the statement carried in reorganizaiton plan of Sunrise Company, page 12,
which approved by Shenzhen Intermediate “......based on the above said discount method for
calculation, ordinary creditor should earned 27.89% liquidation rate in case of share settlement,
2.16% liquidation rate obtained plus monetary liquidation and ordinary creditor obtained 30.05%
liquidation rate in totall......”. According to the reorganization plan, 30% of the predicted losses in
guarantee amount for Sunrise was withtten off. 70% of teh guarantee amount at period-end was
accured for losses.
94
(2) The company is a listed company limited, and has been in serious insolvency. The loss is
estimated as per 100% guaranteed amount.
(3) The company has gone bankrupt. The loss is estimated as per 100% guaranteed amount.
(4) The company has been in serious solvency, and is being liquidated. The loss is estimated as per
100% guaranteed amount.
(5)The company has been in serious solvency. The loss is estimated as per 100% guaranteed amount.
VIII. Commitment Items
The Company had no important committment items in the report period.
IX．Events occurring after the Balance Sheet date
Agrees to stop calculating interest for year of 2012 from Guosheng Energy Company
The “Reply of ‘application of stop calculating debt interest for year of 2012’” was received by the
Compay from largest shareholder and largest creditor of the Company Shenzhen Guosheng Energy
Investment Development Co., Ltd. (“Guosheng Energy”) dated 9 March 2012:”Guosheng Energy”
agrees to discharge of an interest for whole year of 2012 on creditor’s right of RMB 9,124,638.59
and USD 62,829,259.02 of the Company, and the above said interest should not be recover in later
years. The interest stop calculating amounting as RMB 33 million. The un-calculted interest is
reckoned into capital reserve in line with relevant accounting rules and regulations without
influence of gains/losses on the Company.
X .Other important items
1. Completion of bankruptcy reorganization plan of Guangdong Sunrise Holdings Co.,
Ltd.(“Sunrise Company”), the second largest creditor of the Company
Pursuit to Bankruptcy Law, Shenzhen Intermediate People’s Court rulling reorganization for
Guangdong Sunrise Holdings Co., Ltd.[(2010) Shenzhen Intermediate Law Civil Qi Reorganization
Zi. No. 5-2”Civil Order”] in May 2010, teh “Reorganizaiton Plan of Guangdong Sunrise Holdings
Co., Ltd.” Was approved in October 2010, the [(2010) Shenzhen Intermediate Law Civil Qi
Reorganization Zi. No. 5-5”Civil Order”] was terminated and entered into period of reorganizaiton
plan. In April 2011, reorganization plan of Sunrise Company was rulled completed by Shenzhen
Intermediate [(2010) Shenzhen Intermediate Law Civil Qi Reorganization Zi. No. 5-16”Civil
Order”] .
The “Notice of Equity Transfer” was received by the Company dated 23 March 2011 from creditor
of the Company Sunrise Company. During bankruptcy reorganization, creditor right RMB
232,801,657.06 of the Company was auctioned by Shenzhen Oriental Auction Co., Ltd., entrusted
from Sunrise Company. On 13 December 2010, Shenzhen Dongtaixing Technology Co., Ltd.
(“Dongtaixing”) wins the above said auction legally. Shenzhen Intermediate People’s Court ruled
out the (2011) Shenzhen Intermediate Law Civil Qi Reorganization Zi No. 5-12 Civil Order for
confirmed the above said auction dated 27 January 2011. Therefore, interest payable to Sunrise in
book RMB 34.7954 million was reckoned into non-operation income as unpaid account by the
Company.
According to the statement carried in reorganizaiton plan of Sunrise Company, page 12, which
approved by Shenzhen Intermediate “......based on the above said discount method for calculation,
ordinary creditor should earned 27.89% liquidation rate in case of share settlement, 2.16%
liquidation rate obtained plus monetary liquidation and ordinary creditor obtained 30.05%
liquidation rate in totall......”. In this report period, RMB 12.88 million liquidated obtained by
creditors in part of the accurel liability RMB 42.92 million, which withdrwal due to jointly loan
guarantee undertake from Sunrise Company, has reckoned into non-operation income.
95
2. Financial debt reconstructing
In accordance with YJBT [2004] No.6 Document issued by the Office of China Banking Regulatory
Commission on Jan. 7th, 2004, the Bank of China, totally 11 financial institutes agreed to stop
calculating the interests as of Jan. 1st, 2002 for three years, and exempt all and any interests payable
prior to Dec. 31st, 2001, including the default interests and compound interests. The Company will
transfer all the interests payable (including the default interests and compound interests) of RMB
357,993,665.24 prior to Dec. 31st, 2001 to “public accumulated capital”, and the interests will be
not calculated temporarily from Jan. 1st, 2002 to Dec. 31st, 2004. This term of interest’s exemption
shall be valid before Dec. 31st, 2004.
In 2005, China Huarong Asset Management Corporation Shenzhen Office, China Orient Asset
Management Corp. Shenzhen Office, China Cinda Asset Management Corporation Shenzhen Office
and China Great Wall Asset Management Corporation Shenzhen Office will continuous to stop
calculating the interests of 2005 loans.
Whereas the term of “Stop Calculating Inerests” may cause discrepancy and General Terms on the
Loan did not interprate its meaning either, China Huarong Asset Management Corporation Shenzhen
Office, China Orient Asset Management Corp. Shenzhen Office, China Cinda Asset Management
Corporation Shenzhen Office and China Great Wall Asset Management Corporation Shenzhen
Office all agree not to claim the Company to repay all the interests stopped calculating herein.
However, Shenzhen Development Bank requied the Company to repay all the interests and
compound interests which was stopped calculating from Jan.1st, 2002 to Dec.31, 2004. The Company
argued that the interests which were stopped calculating shall not be repaid; therefore, after the period
during which the interests is stopped calculating, the interests to be repaid shall be calculated as the
normal loans, but not the interests and compound interests stopped calculating from Jan.1st, 2002 to
Dec. 31, 2004. The Company takes opinions as teh un-calculated interest are not return, therefor,
when teh un-calculated period expired, payable interest should calculate on normal lans, and the
intestest and compound interest stop calculated from 1 Janury 2002 to 31 December 2004 are not
accured. Ended as 31 December 2011, recoginzed by creditor bank, interst amount has RMB
181,975,338.48 over that of payable interest in book, and still have some institution reply no
confirmed owe interest. Concerning the condition, the interest abve said, the Company cannot be
identified whether accural or return, than without fiancnial adjsutment occurred.
3 .Instructions to Continuous Operation
As of Dec.31st, 2011, the Company has a total asset of RMB 135,742,550.93, the total debt of
RMB1,818,586,298.41, with its net asset up to RMB-1,682,843,747.48, in the state of seriously
insolvency, which thus may cause this Company liquidate its assets and pay off the debts in the
normal operations. In such a case, this Company and its largest 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 Corporation on
March 29th, 2007, it is hereby agreed to settle all and any creditor’s rights and debts incurred
therefore by an equivalent US dollars for RMB 2 million, with the principal of debts approx. USD
3.87 million and the interests payable of approx. RMB 42.78 million.
On 15 October 2010, the Company entered into the Debt Settlement Agreement with Shenzhen
96
Chengxingtai Investment Co., Ltd. for RMB 14 million payments as compensation to Chengxingtai
Co., from the Company for settled the all debt and liabilities of two parties (approximately RMB
150 million). The RMB 14 million have been paid on 30 Nov. 2010 in full.
China Huarong Asset Management Corporation, on Dec. 30th, 2006, transferred its creditor’s rights
to Shenzhen Guocheng Energy Investment & Development Corporation (hereinafter referred to as
“Guocheng Energy Corporation”) which is now performing actively the matters concerning debt
reconstructing and has made the progress to a certain extent. Whereas the largest shareholder and
creditor of this Company have changed, in January 2010, in accordance with newly-issued Law of
the People's Republic of China on Enterprise Bankruptcy, Guocheng Energy Corporation
consequently claims and applies for new reconstructing of this Company to Shenzhen Intermediate
People's Court, with a view to recover and improve the ongoing operations. On 28 Dec. 2010, Shenzhen
Intermediate People’s Court considered that the applicant provided no materials that recognized by
two parties with taxation dept. from tax and debt. According to the regulation of Clause VIII, Rule 1
of Clause XII under Law of the People's Republic of China on Enterprise Bankruptcy, the court
judged no application of the bankruptcy restructuring on the Company from Shenzhen Guosheng
Energy Investment Development Co., Ltd.
On 17 March 2011, Shenzhen Dongtaixing Technology Co., ltd., second largest creditor of the
Company, applying for bankruptcy reorganization of the Company to Shenzhen Intermediate
People’s Court legally. The application was not accepted by Shenzhen Intermediate People’s Court
due to hindrance of materials of resolution plan, recognized by application and taxation bureau,
concerning taxation credits.
Furthermore, payable owe interest from 2007- 2011 was stop calculated by Guosheng Energy,
largest shareholder and creditor of the Company. The company delivery a reply in March 2012 for
agrees to stop calculating owes interest (approximately RMB 33 million) for year of 2012
continuously, the un-calculated interest should not return in later years.
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 continuous operations has been improved to a certain degree. The Board of the Directors thought
that along with the continuous progress of the Company debts and asset reconstructing, the
operating environment, business situation and ability to continuous operations will be bound to
further improvement.
XI. Note of main item of financial statement of parent company
1. Receivable account
(1) Disclosed by category
Unit: RMB Currency: CNY
Amount at the end of period
Book balance Bad debt provision
Category
Proportion Proportion
Amount Amount
(%) (%)
Account receivable with single major amount - - -
but withdrawal bed debt provision for single
item
Account receivable withdrawal bad debt 1,034,297,021. 1,033,282,124.
provision by age combination 50 100.00% 90 99.90%
Account receivable with single minor amount
but withdrawal bed debt provision for single
item
1,034,297,021. 1,033,282,124.
Total
50 100.00% 90 99.90%
97
Amount at the beginning of period
Book balance Bad debt provision
Category
Proportion Proportion
Amount Amount
(%) (%)
Account receivable with single major amount
but withdrawal bed debt provision for single - - - -
item
Account receivable withdrawal bad debt
provision by age combination 1,034,374,248.98 100.00 1,032,989,895.75 99.87
Account receivable with single minor amount
but withdrawal bed debt provision for single
item - - - -
Total
1,034,374,248.98 100.00 1,032,989,895.75 99.87
Explanation of categories of the accounts receivable:
Based on the size, business nature and customer settlement condition of the company, the company decides that
RMB 5 million of accounts receivable is important single sum of payment. For an account receivable without
depreciation at the end of the period, the bad debt allowance is accrued on the basis of account aging analysis
method.
(2) In combination, account receivable withdrawal bed debt provision by age analysis method:
Unit: RMB Currency: CNY
Amount at period-end Amount at period-begin
Age Book balance Bad debt Book balance Bad debt
Amount Ratio (%) provision Amount Ratio (%) provision
Within 1year 77,227.48 0.01 -
1-2 years - - -
Over 3years 1,034,297,021.50 100.00% 1,033,282,124.90 1,034,297,021.50 99.99 1,032,989,895.75
Total 100.00% 1,034,374,248.98 100.00 1,032,989,895.75
1,034,297,021.50 1,033,282,124.90
(3) No account receivable actually cancelled after verification in the report period.
(4) The accounts receivable at the end of the report period don’t involve with the shareholder unit’s
holding over 5% (including 5%) voting power of the Company.
(5) Top 5 units with an amount of account receivable:
Unit: RMB Currency: CNY
Relationship Proportion among the gross
Name with the Amount Period accounts receivable - others
company (%)
Total of top 5 customers of Non-affiliated Over 3
53.04
other accounts receivable customers 548,585,403.18 years
(6)No other account receivable involving with affiliated parties in the report period.
(7)No other account receivable-others with confirmation terminated at the end of the report period.
2. Other receivables
(1) Disclosed by categories
Unit: RMB Currency: CNY
Amount at period-end
Book balance Provision for bad debts
Category
Amount Proporti Amount Proporti
on on
Other account receivable with single major amount - -
- -
and withdrawal bed debt provision for single item
Other account receivable withdrawal bad debt
565,275,037.27 100.00% 91.70%
provision by age combination
98
518,357,900.26
Other account receivable with single minor amount
but withdrawal bed debt provision for single item
Total 565,275,037.27 100.00% 91.70%
518,357,900.26
Unit: RMB Currency: CNY
Amount at period-begin
Book balance Provision for bad debts
Category
Amount Proporti Amount Proporti
on on
Other account receivable with single major amount
- - - -
and withdrawal bed debt provision for single item
Other account receivable withdrawal bad debt
557,411,339.53 100.00 526,881,529.25 94.52
provision by age combination
Other account receivable with single minor amount
- - - -
but withdrawal bed debt provision for single item
Total 557,411,339.53 100.00 526,881,529.25 94.52
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 RMB 5 million. 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.
(2) In combination, other account receivable withdrawal bed debt provision by age analysis method:
Unit: RMB Currency: CNY
Amount at period-end Amount at period-begin
Book balance Book balance
Age Bad debt Bad debt
Amount Proportio Amount Proportio
provision provision
n (%) n (%)
Within
36,632,067.72 6.48% 74,688.47 2,092,207.67 0.38 6,276.62
1year
1-2 years 431,331.22 0.08% 432.43 4,545,244.91 0.82 135.73
2-3 years 45,244.91 0.01% 135.73 - - -
Over
528,166,393.42 93.44% 518,282,643.62 550,773,886.95 98.80 526,875,116.90
3years
Total 100.00% 557,411,339.53 100.00 526,881,529.25
565,275,037.27 518,357,900.26
(3) No account receivable actually cancelled after verification in the report period.
(4) 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.
(5) Top 5 units with an amount of other account receivable:
Unit: RMB Currency: CNY
Proportion among
Relationship
the total other
Name with the Amount Period
accounts receivable
company
- others (%)
Total of top 5 customers of other Non-affiliated Over 3
357,001,411.68 63.16
accounts receivable customers years
(6)No other account receivable involving with affiliated parties in the report period.
(7)No other account receivable-others with confirmation terminated at the end of the report period.
99
3. Long-term equity investment
Unit: RMB Currency: CNY
Expla
nation
on
discre
pancy
betwe
en
Perce
share
ntage Provis
Share propor
Exami of ion for
propo tion in
nation votin (asset)
rtion invest Cas
and Initial g Depreci deprec
Invested com Opening Increases and Closing in ed h
calcula investm rights ation iation
pany balance decreases balance inves compa divi
ting ent cost in reserve of
ted ny and dend
metho invest curren
comp percen
d ed t
any tage
comp period
of
any
voting
rights
in
invest
ed
compa
ny
Shenzhen
EMMELLE Cost 1,400,0 1,400,00 1,400,00 1,400,0
Industry meth
Co.,Ltd od 00.00 0.00 - 0.00 70% 70% - 00.00 - -
Shenzhen
Anju
property Cost 2,000,0 2,000,00 2,000,00 2,000,0
managemen meth
t Co.,Ltd od 00.00 0.00 - 0.00 100% 100% - 00.00 - -
China
Bicycle(Ho Cost 5,350,0 5,350,00 5,350,00 5,350,0
ng Kong) meth
Co.,Ltd od 00.00 0.00 - 0.00 99% 99% - 00.00 - -
China
Bicycle(Inte Cost 18,727. 18,727.6 18,727.6 18,727.
rnational) meth
Co.,Ltd od 60 0 - 0 100% 100% - 60 - -
Hunan
Guangnan Cost 5,679,3 5,679,30 -5,679,300.0 5.50 5.50
Motorcycl meth
e Co.,Ltd od 00.00 0.00 0- % % - - -
Shenzhen Equit
Jinhuan y 14,883, 14,883,5 14,883,5 38.00 38.00 12,263,
Printing meth
Co.,Ltd od 560.00 60.00 - 60.00 % % - 719.50 - -
29,331, 29,331,5 -5,679,300.0 23,652,2 21,032,
-- -
Total 587.60 87.60 0- 87.60 -- -- - 447.10 -
100
4. Operating revenue and operating costs
(1) Operating revenue and operating costs
Unit: RMB Currency: CNY
Item Amount incurred of current period Amount incurred of last period
Income from main business 2,913,427.30 363,669.25
Income from other business 25,664,111.02 28,168,488.59
Operating cost 13,822,797.20 16,520,738.87
(2) Main business (by industry)
Unit: RMB Currency: CNY
Amount incurred of current period Amount incurred of last period
Products
Business income Business cost Business income Business cost
Sales of bicycle and
2,913,427.30 2,827,957.15 363,669.25 363,669.25
spare parts
(3) Main business (by category)
Unit: RMB Currency: CNY
Amount incurred of current period Amount incurred of last period
Products
Business income Business cost Business income Business cost
CBC electric 254,102.56 254,102.56
CBC bicycle 135,649.58 135,649.58 109,566.69 109,566.69
OEM bicycle 2,777,777.72 2,692,307.57
Total 2,913,427.30 2,827,957.15 363,669.25 363,669.25
5. Supplemental Information of cash flow statement
Unit: RMB Currency: CNY
Amount of this p Amount of last p
Supplemental Information
eriod eriod
1． Reconciliation of net profit/(loss) to cash
flows from operating activities:
Net profit 66,120,624.68
40,234,684.03
plus: provision for assets -2,197,612.45
-1,926,719.39
Depreciation of fixed assets, oil/gas asset depletion and depreciation of
10,325,494.68
productive biological assets 8,419,674.72
Amortization of intangible assets 862,862.04
862,862.04
Amortization of long-term prepaid expenses -
-
Loss on disposal of fixed assets, intangible assets and others (deduct
-
: gains) -14,781,833.16
Losses on disposal of fixed assets (deduct: gains) -
Losses on the changes in fair value (deduct :gains) - -
-
Financial expenses (deduct :gains) - 66,237,810.49
26,259,541.82
1
Amount of this p Amount of last p
Supplemental Information
eriod eriod
Losses arising from investments(deduct: gains) - -
-4,560,000.00
Decrease of deferred income tax assets (deduct : increase) -
-
Increase of deferred income tax liabilities (deduct : decrease) - -
-
Decrease in inventories(deduct: increase) 5,275,365.60
32,722,498.56
Decrease in operating payables (deduct: increase) 15,999,407.38
-4,000,102.22
Increase in operating payables (deduct: decrease) -145,039,821.75
-35,373,439.09
Others -
-47,770,407.23
Net cash flows from operating activities 17,584,130.67
86,760.08
2． Investing and financing activities that do not
concerning cash receipts and payment:
Conversion of debt into capital -
Reclassification of convertible bonds
-
expiring within one year as current liability
Financial leasing of fixed assets -
3． Net change of cash and cash equivalents:
Closing balance of cash 498,624.71
Minus: opening balance of cash 365,121.06
Plus: closing balance of cash equivalents - -
Minus: opening balance of cash equivalents - -
Net increase of cash and cash equivalents 133,503.65
XII. Supplement information
1. List of non-recurring profit and loss
Unit: RMB Currency: CNY
Item Amount of this year Explanation
Net income on disposal of
Loss and profit on disposal of non-current assets
14,781,833.16 fixed assets
Tax return or exemption from override approval or with no
- -
official approval document
The amount of the government subsidies which are
included in the 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 Loss
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
Gains and losses from debt restructuring
2
Item Amount of this year Explanation
Expense for enterprise reconstruction, employee
-
arrangement and other integration costs
Profit and loss from transactions with obvious unfair
-
transaction price
Subsidiaries' year-to-date net profit/loss arising from
business combination of entities controlled by a same -
company
Profits contributed by the sold assets to the listed company
from The beginning of the year To the sale date
Except for effective hedging business related to normal
business, held-for-trading financial asset, profit and losses
on the changes in fair value generated by transaction
-
financial liabilities, investment income achieved by
disposing transaction financial assets, transaction financial
liabilities and hold-to-sale financial assets
Reversals of depreciation reserves of receivables done
-
depreciation test solely
Loss and profit achieved by entrusting loans -
Profit and loss on the changes in fair value of invested real
estate after being subsequently measured with fair value -
mode
According to laws and regulations of tax and accounting,
impact of One-off adjustment of current loss and profit on -
current loss and profit
Trustee fee income generated from entrusted operation -
Debt reorganization plan
of Sunrise Company was
completed, the Company
Other non-operating income and expenses 49,869,741.11
reduced the interest and
liabilities accrued
previously in book
Investment income of
Other loss/profit qualified definition of other non recurring
disposal of Hunan
profit and loss
4,560,000.00 - Guangyang Motorcycle
Amount influenced by income tax -16,610,777.82
Amount influenced by few shareholders’ equity(after-tax)
Total 52,600,796.45
2. Return on Equity and earnings per share
Earnings per share
Average weight ROE
Profit during the period of report Basic earnings per Dilute earnings per
(%)
share share
Net income attributed to shareholders - 0.0720 0.0720
Net income attributed to shareholders
after deducting net profit of recurring - -0.0234 -0.0234
loss and profit
3. Reason and explanation of unusual circumstance of items of financial statement of
the company
Unit: RMB Currency:
CNY
Change of Proportion of
Items Explanation
amount at the change in the
3
beginning of beginning of
period and at the period and at
end of period the end of
period
Emmelle, subsidiary of the Company, expanded its
Monetary capital 38.24% sales and realization of disposal of assets of the
6,789,827.81
Company
Note receivable -61.83% Note receivable decreased
-1,619,699.00
Net account
123.33% Emmelle enlarge its sales
receivable 2,137,096.60
Account paid in
644.41% Business growth in Emmelle
advance 1,375,319.67
Other account Amount of auction of real estate in Huangqiang
39.28%
receivable 7,103,694.00 South by the Court has not been funded
Disposal of inventory and increasing accrual of
Net inventory -34.03%
-7,382,250.01 depreciation provision
Creditor’s right of Sunrise Company was transferred
Other account
138.07% to Dongtaixing, accounting item adjusted
payable 228,967,825.38
correspondingly for calculation
Non-current Creditor’s right of Sunrise Company was transferred
liability due -36.03% to Dongtaixing, accounting item adjusted
-254,618,348.98
within one year correspondingly for calculation
Relevant taxes of real estate in Huangqiang South
Other current
222.34% auctioned by Jieyang Rongcheng Court has been
liability 1,681,231.86
accrued
Gains/losses from exchange show less than last year,
Financial expense -63.39%
-40,895,972.69 and debt with interest calculated reduced
Asset depreciation
-84.60% Withdrawal of depreciation provision increased
loss 1,489,808.61
Investment Investment income of disposal of Hunan Guangyang
income 4,560,000.00 Motorcycle Co., Ltd.
In this year, debt reorganization plan of Sunrise
Company was completed ruled by the Court, the debt
and liability accrued previously has been adjusted for
Non-operation
-53.59% reduced; non-operation income from auction of real
income -74,965,986.96
estate in Huaqiang South by the Court; income from
debt reorganization in last year amount to RMB 139
million
Legal representative: Date:
Principal in charge of accounting: Date:
Principal of accounting organ: Date:
4
Section XII. Documents Available For Reference
I. Accounting statements carrying the personal signatures and seals of legal representative,
person in charge of the accounting affairs and person in charge of the accounting department.
II. Original of Auditors’ Report carrying the seal of the Certified Public Accountants as well
as personal signatures and seals of certified public accountants.
III. Originals of all documents and public notices disclosed publicly on the newspapers as
designated by China Securities Regulatory Commission in the report period.
IV. English version of the 2011 Annual Report.
Board of Directors of
Shenzhen China Bicycle Company (Holdings) Limited
April 21, 2012
5
