Semi-Annual Report 2010
Shenzhen Shenbao Industrial Co., Ltd.
Semi-Annual Report 2010
August, 2010Semi-Annual Report 2010
1
Contents
CHAPTERⅠ. COMPANY PROFILE---------------------------------------------------------3
CHAPTERⅡ. CHANGES IN SHARE CAPITAL AND PARTICULARS ABOUT
SHARES HELD BY MAIN SHAREHOLDERS---------------------------------------------6
CHAPTER Ⅲ. PARTICULARS ABOUT DIRECTORS, SUPERVISORS AND
SENIOR EXECUTIVES-------------------------------------------------------------------------- 9
CHAPTER Ⅳ. REPORT OF BOARD OF DIRECTORS----------------------------------9
CHAPTER Ⅴ. SIGNIFICANT EVENTS-----------------------------------------------------14
CHAPTER Ⅵ. FINANCIAL REPORT(UN-AUDITED)----------------------------------23
CHAPTER Ⅶ. DOCUMENTS AVAILABLE FOR REFERENCE----------------------99Semi-Annual Report 2010
2
Important Notice
Board of Directors and Supervisory Committee of Shenzhen Shenbao Industrial Co., Ltd.
(hereinafter referred to as the Company) and its directors, supervisors and senior executives
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.
No director, supervisor and senior executive stated that he (she) couldn’t ensure the
correctness, accuracy and completeness of the contents of the Semi-annual Report or have
objection to this report.
All the 9 directors attended the Board of Directors.
Chairman of the Board Mr. Zheng Yuxi, General Manager Mr. Peng Ying and CFO Ms.
Zeng Suyan hereby hereby confirm that the financial report of the semi-annual report 2010
is true and complete.
The 2010 semi-annual financial report of the Company has not been audited.
This report was prepared in both English and Chinese. Should be there any difference in
interpretation of the two versions, the Chinese version shall prevail.Semi-Annual Report 2010
3
CHAPTER I. COMPANY PROFILE
I. Basic information
(I). Legal Name of the Company
In Chinese: 深圳市深宝实业股份有限公司(Abbr. 深宝)
In English: SHENZHEN SHENBAO INDUSTRIAL CO., LTD. (Abbr.: SBSY)
(II). Legal Representative: Mr. Zheng Yuxi
(III). Secretary of the Board: Ms Li Yiyan
Liaison Address: Southern part of 23/F, No.26 Educational Technology Building,
Zizhuqidao, 4th Road Zhuzilin, Futian District, Shenzhen
Tel: 0755-82027522
Fax: 0755-82027522
E-mail: lyy@ sbsy.com.cn
Securities Affairs Representative: Mr. Zheng Guibo
Liaison Address: Southern part of 23/F, No.26 Educational Technology Building,
Zizhuqidao, 4th Road Zhuzilin, Futian District, Shenzhen
Tel: 0755-82027522
Fax: 0755-82027522
E-mail: zgb@ sbsy.com.cn
(IV). Registered Address of the Company: Southern part of 20/F, No.26 Turret of Education
Technology Building, Zizhuqidao, 4th Road Zhuzilin, Futian District, Shenzhen
Office Address of the Company: South layer of 20/F, No.26 Turret of Education
Technology Building, Zizhuqidao, 4th Road Zhuzilin, Futian District, Shenzhen (the sign in
the elevator shows 23/F)
Post Code: 518040
Internet Web Site: http://www.sbsy.com.cn
E-mail: sbsy@sbsy.com.cn
(V). Newspapers Chosen for Disclosing the Information of the Company:
Securities Times, China Securities and Hong Kong Commercial Daily
Internet Web Site for Publishing the Semi-annual Report Designated by CSRC:
http://www.cninfo.com.cn
Place Where the Semi-annual Report is Prepared and Placed: Secretariat of the Board of
Directors
(VI). Stock Exchange Listed with: Shenzhen Stock Exchange
Short Form of the Stock: SHENSHENBAO – A, SHENSHENBAO-B
Stock Code: 000019, 200019
(VII). Other Relevant Information of the Company
The initial registration date and place: July 30, 1981, Shenzhen
The changed registration date and place: May 25, 2010, Shenzhen
Registration code for business license of corporation: 440301103223954Semi-Annual Report 2010
4
Number of taxation registration: GSDZi 440301192180754
DSDZi 440303192180754
Organization Code Certificate: 19218075－4
■Name of the certified public accountants engaged by the Company:
Ericsson Dahua Certified Public Accountants Co., Ltd.
Address: 11/F., Tower B, United Plaza, No. 5022, Binhe Av. Futian District, Shenzhen
II. Major financial data and indexes
(I) Major financial data and indexes
Note: Items of non-recurring gains and losses and the relevant amount (Unit: RMB)
Items Unit Jun. 30, 2010 Dec. 31, 2009
Increase/decrease at the
end of this report period
compared with that in
period-end of last year
Total assets RMB 649,985,511.31 623,356,758.00 4.27%
Owners’ equity attributable to
shareholders of the listed
company
RMB 301,351,137.95 320,096,254.94 -5.86%
Share capital Share 181,923,088.00 181,923,088.00 0.00%
Net assets per share attributable
to shareholders of the listed
company(RMB/Share)
RMB/
Share
1.66 1.76 -5.68%
Items Unit
This report period
(Jan. to Jun.)
The same period
of last year
Increase/decrease in this
report period year-onyear
(%)
Total operating income RMB 98,031,142.11 91,579,440.16 7.04%
Operating profit RMB -19,960,777.66 124,138.39 -16,179.46%
Total profit RMB -17,168,300.74 1,040,315.51 -1,750.30%
Net profit attributable to
shareholders of the listed
company
RMB -18,263,527.21 -2,294,928.82 -695.82%
Net profit attributable to
shareholders of the listed
company after deducting nonrecurring
gains and losses
RMB -20,565,188.38 -3,211,105.94 -540.44%
Basic earnings per share
RMB/
Share
-0.1004 -0.0126 -696.83%
Diluted earnings per share
RMB/
Share
-0.1004 -0.0126 -696.83%
Return on equity % -6.06 -0.69 -5.37%
Net cash flow arising from
operating activities
RMB -6,132,118.35 6,133,783.89 -199.97%
Net cash flow per share arising
from operating activities
RMB/
Share
-0.0337 0.0337 -200.00%Semi-Annual Report 2010
5
In accordance with “Questions and Answers on the Standards for Information Disclosure by
Companies That Offer Securities to the Public No. 1---Non-Recurring Gains and
Losses”(revised in 2007) promulgated by CSRC, the consolidated amount of the nonrecurring
gains and profit of the Company were as followings:
(II) Differences between CAS and IAS
Unit: RMB
Item Amount
Net amount of gains and losses of disposal of non-current assets 1,093,588.75
Government subsidies included in current gains and losses 984,736.75
Gains and losses independent to the normal operating business of the
Company or arising from unexpected events 1,216,901.37
Net amount of other non-operating income and expense -4,817.00
Other gains and losses conforming to definition of non-recurring gains
and losses 4,650.98
Total non-recurring gains and losses deducting gains and losses of
minority shareholders 3,295,060.85
Less: Amount of influence from gains and losses of minority
shareholders 331,503.85
Total non-recurring gains and losses before deducting income tax 2,963,557.00
Less: Amount of influence of income tax 661,895.83
Total non-recurring gains and losses deducting income tax 2,301,661.17
Net profit attributable to
shareholders of listed company
Owners’ equity attributable to
shareholders of listed company
Amount in the report
period
Amount in last
period
Amount in the
report period
Amount in last
period
IAS -18,263,527.21 -2,294,928.82 303,758,776.63 322,503,893.62
CAS -18,263,527.21 -2,294,928.82 301,351,137.95 320,096,254.94
Sub-items and total adjusted based on IAS:
1. Amortization adjustment of
equity investment difference
—— —— 1,016,958.04 1,016,958.04
2. Cost adjustment of transferring
equity of Shenzhen Pepsi
—— —— -254,239.51 -254,239.51
3. Other accounts payable
adjustment
—— —— 1,067,000.00 1,067,000.00
4. Capitalization of interest over
land use right
—— —— 577,920.15 577,920.15
Total amount of differences
between CAS and IAS
0.00 0.00 2,407,638.68 2,407,638.68
Explanations on differences
between CAS and IAS
In the first half of year 2010, the net profit attributable to owners of the
parent company calculated based on CAS was not different with the one
calculated based on IAS; at the end of reporting period, the difference
between the shareholders’ equity attributable to parent company calculated
based on CAS wasn’t the one calculated based on IAS was listed in the
above item of adjustment.Semi-Annual Report 2010
6
CHAPTER II. CHANGES IN SHARE CAPITAL AND PARTICULARS ABOUT
SHARES HELD BY MAIN SHAREHOLDERS
I. Particular about changes on shares of the Company
(Ended June 30, 2010, amount unit: share)
II. Amount of shareholders of the Company totaled 21,235 in the end of report period,
Before the change Increase / decrease this time (+, -) After the change
Amount
Proportion
(%)
New
shares
offering
Amount
Proportion
(%)
New shares
offering
Amount Proportion (%)
New
shares
offering
I. Restricted
shares
82,465,882 45.33 -67,912,035 -67,912,035 14,553,847 8.00
1. State-owned
shares
2. State-owned
legal person's sh
ares
37,818,689 20.79 -31,034,960 -31,034,960 6,783,729 3.73
3. Other domestic
shares
44,647,193 24.54 -36,877,075 -36,877,075 7,770,118 4.27
Including:
Domestic nonstate-
owned legal
person's shares
44,647,193 24.54 -36,877,075 -36,877,075 7,770,118 4.27
Domestic natural
person's shares
4. Foreign shares
Including:
Foreign legal
person's shares
Foreign natural
person's shares
5. Executive stock
II. Unrestricted
shares
99,457,206 54.67 67,912,035 67,912,035 167,369,241 92.00
1. RMB Ordinary
shares
73,321,206 40.30 67,912,035 67,912,035 141,233,241 77.63
2. Domestically
listed foreign
shares
26,136,000 14.37 26,136,000 14.37
3. Overseas listed
foreign shares
4. Others
Total unrestricted
shares
181,923,088 100.00 181,923,088 100.00Semi-Annual Report 2010
7
including 16,918 A shares and 4,317 B shares.
III. Particulars about shares held by top ten shareholders and top ten shareholders
with unrestricted conditions (Ended Jun. 30, 2010)
Unit: Share
Total of shareholders 21,235
Particulars about shares held by the top ten shareholders
Full Name of shareholder
Nature of
shareholder
s
Proport
ion (%)
Total amount
of shares
held ( Share)
Amount of
restricted
shares held
(share)
Amount of shares
pledged or frozen
(share)
SHENZHEN AGRICULTURAL
RODUCTS CO., LTD.
Other 26.33 47,895,097 7,770,118 0
SHENZHEN INVESTMENT
HOLDING CO., LTD.
State-owned
shareholder
22.07 40,143,586 6,783,729 0
China Construction Bank - Vanguard
Morgan Growth Equity Securities
Investment Fund
Other 2.01 3,651,396 0 0
GUOTAI JUNAN SECURIES
HONG KONG LIMITED
Other 1.20 2,185,465 0 0
HANG SENG CONSUMER
SECTOR FLEXIPOWER FUND
Other 0.60 1,090,111 0 0
Du Youe Other 0.51 936,291 0 0
Ye Jingguo Other 0.49 885,489 0 0
Chen Xi Other 0.43 785,900 0 0
Shen Jianping Other 0.28 516,078 0 0
Zhang Jian Other 0.28 508,400 0 0
Particulars about the shares held by the top ten unrestricted shareholders
Full Name of shareholder Amount of shares of un-restricted held Type of shares
SHENZHEN AGRICULTURAL
RODUCTS CO., LTD.
40,124,979 A share
SHENZHEN INVESTMENT
HOLDING CO., LTD.
33,359,857 A share
China Construction Bank - Vanguard
Morgan Growth Equity Securities
Investment Fund 3,651,396
A share
GUOTAI JUNAN SECURIES
HONG KONG LIMITED 2,185,465
B share
HANG SENG CONSUMER
SECTOR FLEXIPOWER FUND 1,090,111
B share
Du Youe 936,291 A share
Ye Jingguo 885,489 A share
Chen Xi 785,900 B share
Shen Jianping 516,078 A share
Zhang Jian 508,400 A shareSemi-Annual Report 2010
8
IV.Shares held by the top ten restricted shareholders and restricted conditions (Ended
as June 30, 2010)
Unit: Share
Note 1: Agriculture Product and Shenzhen Investment Holdings will comply with laws,
regulations and rules and fulfill statutory committed obligations in process of equity
allocation reform; previous shareholders of non-current share of the Company Agriculture
Product and Shenzhen Investment will sell the holding 6%-8% shares of the total shares of
the Company to the management in three years after implementation of consideration acc
ording to the shares holding proportion after capital restructuring, thus carry out longtime
and effective motivation on the management. The above specific measures and
implementation details aiming at equity incentive of management was researched and made
by listed companies according to CSRC Measures for the Administration of Listed
Companies Equity Incentive and related rules of the country, and it will be implemented
after Shenzhen SAC exams and approves it. Circulating terms of this part shares will be
conducted conforming to related rules.
Note 2: Entrusted by shareholders of the Company Agriculture Product and Shenzhen
Investment Holdings, the Board of Directors of the Company apply to Shenzhen Stock
Exchange for cancelling the sales restriction of partial shares which can be traded on Feb
9th of 2010. The restricted shares applying for cancelling restriction of Agriculture Product
and Shenzhen Investment Holdings was respectively 36,877,075 shares and 31,034,960
shares, amounted to 67,912,035 shares, taking up 37.33% of the total shares. This part of
Explanation on associated
relationship or accordant action
among the top ten shareholders of
circulation share
STATE-OWNED ASSETS SUPERVISION & ADMINISTRATION
COMMISSION OF SHENZHEN MUNICIPALITY GOVERNMENT directly
held 21.52% equities of Agricultural Products and indirectly held 5.22%
equities of Agricultural Products, and directly held 100% equities of Shenzhen
Investment Holdings; except that, it is unknown whether there exists associated
relationship or belongs to accordant actionist regulated by Administration of the
Takeover of Listed Companies among the aforesaid listed other shareholders or
not.
Explanations on stipulated period of
rationed new shares held which were
participated by strategic investors or
general legal person
Shareholders’ names Stipulated period of shares held
Naught Naught
No. Name of the restricted
shareholders
Amount
of the
restricted
shares
held
Date to be
listed
Amount of
additional
listed shares
Restricted condition
1
SHENZHEN
AGRICULATURAL
PRODUCTS CO., LTD.
7,770,11
8 Note 2 7,770,118
Note 1
2
SHENZHEN
INVESTMENT
HOLDING CO., LTD.
6,783,72
9 Note 2 6,783,729Semi-Annual Report 2010
9
shares has been listed on Mar 26th of 2010. According to the commitment in equity
allocation reform of Agriculture Product and Shenzhen Investment Holdings, the two
shareholders respectively held restricted shares 7,770,118shares and 6,783,729 shares,
amounted to 14,553,847 shares, taking up 8％ of the total shares after the restriction was
cancelled. They were continuously locked, and will be taken as shares source of equity
incentive of the management within the scope allowed by the rules of the country. (The
details were published on Securities Times, China Securities News, Hong Kong
Commercial Daily on Mar 24th of 2010)
V. Particulars about the controlling shareholder
In the report period, the controlling shareholder of the Company remained unchanged.
CHAPTER III. PARTICULARS ABOUT DIRECTORS,
SUPERVISORS AND SENIOR EXECUTIVES
I. Particulars about the shares held by directors, supervisors, and senior executives
Ended the report period, directors, supervisors, and senior executives of the Company did
not hold the shares of the Company, and there were no changes during the report period.
II. New engagement or dismissal of directors, supervisors, and senior executives
In the report period, the Company did not newly engage or dismiss directors, supervisors,
and senior executives.
CHAPTER IV. REPORT OF BOARD OF DIRECTORS
I. Discussion and analysis of general operation of the Company during the report
period
During the report period, in front of the severe economic situation and weather, the
Company optimized sales target surrounding the strategic development target, strengthened
the goals management, deepen cost control, tried the best to advance development and sales
scale of tea industry, further promote the development of core tea industry; meanwhile, the
Company steadily developed smooth removal and stable operation of its traditional industry,
and well solved its historical-left staff problems, to clean off barriers for continuous and
healthy development.
(I)Operation income, operation profit and net profit of the Company realized in this
report period
Operation income, operation profit, net profit as well as change year-on-year of the
Company from January to June of 2010:
Unit: RMBSemi-Annual Report 2010
10
（1）Operating income increased mainly due to that the purchase of tea powder, tea juice
and related products from main clients increased so the sale income increased.
（2）Operating profit decreased mainly due to that Shenzhen Pepsi had a loss in the first
half year, net profit decreased significantly compared to the same of last year, thus the
investment income of the Company dramatically decreased; in the first half year of 2009,
the sales income of tea industry of the Company increased by 24% compared to the same
time of last year, but the rising of material price and period costs compressed profit space.
(II)Main business scope and operation status
The business scope included: producing canned food, beverage, native product; domestic
commerce, material supply and marketing; import and export business; development and
operation of real estate. The main business of the Company belongs to food & beverage
industry. Constitution of operation income and operation profit is as follows:
1. Main business classified according to industry or product:
Unit: RMB
(1) Operating income of condiments decreased mainly due to the reduced sales of products
Item The half year of
2010
The half year of
2009
Change yearon-
year
Operation income 98,031,142.11 91,579,440.16 7.04%
Operation profit -19,960,777.66 124,138.39 -16,179.46%
Net profit attributable to shareholders
of listed company -18,263,527.21 -2,294,928.82 695.82%
Classified
according to
industries
Operating
revenue Operating cost
Gross
profit
ratio
Increase/decre
ase in
operating
revenue yearon-
year
Increase/d
ecrease in
operating
cost yearon-
year
Increase/d
ecrease in
gross
profit
ratio
year-onyear
Manufacture of
condiments 8,107,447.50 5,338,677.44 34.15% -14.13% -17.13% 2.38%
Manufacture of
soft drinks 13,667,904.30 9,691,178.74 29.10% -33.33% -34.11% 0.83%
Manufacture of
teas 75,947,990.31 59,991,584.90 21.01% 24.47% 26.69% -1.38%
Classified
according to
products
Sanjing brand
condiments 8,107,447.50 5,338,677.44 34.15% -14.13% -17.13% 2.38%
Soft packing
drinks 13,667,904.30 9,691,178.74 29.10% -33.33% -34.11% 0.83%
Tea powder and
tea juice series 53,503,695.53 40,954,823.21 23.45% 20.84% 30.47% -5.65%
Tea leaf 22,444,294.78 19,036,761.69 15.18% 34.09% 19.26% 10.55%Semi-Annual Report 2010
11
arising from compressed market; operating costs decreased due to decreased production and
labor costs.
(2) Operating income of soft drink decreased mainly due to ascending products price and
fierce market competition arising from rainy days, removal of new factory and significantly
ascending products price; operating cost decreased mainly due to descending production
arising from removal.
(3) Operating income of tea powder and tea juice increased mainly due to increased
purchases of clients; operating cost increased mainly due to rising materials price and labor
cost.
(4)Operating income of tea increased mainly due to significantly ascending sales of juicy
tea; operating profiting rate increased mainly due to descending cost arising from increased
tea production and fixed assets dilution.
Operating income of tea leaf increased mainly due to significantly ascending sales of juice
tea;
2. Main business classified according to area
Unit: RMB
（1）Operating income of South China increased mainly due to tea powder and tea juicy the
clients in this region purchased increased.
（2）Export decreased mainly due to dramatically descending Mei Tea export.
（3）Operating income of other areas increased mainly due to tea powder and tea juicy
purchased by the clients in these other regions the Company explored increased.
Area Operation income
Change of operation income year-onyear
South China 31,145,354.86 1.37%
North China 5,060,539.44 -0.65%
East China 39,805,869.61 28.20%
Export 2,795,908.37 -79.95%
Other areas 19,223,469.83 78.59%
Total 98,031,142.11 7.04%Semi-Annual Report 2010
12
(III) Explanation for change in profit constitution, main business and its structure, as
well as profit-making ability of main business in the report period
(IV)There is no other operation activity which brings significant influence upon profit
in the report period.
(V)Particulars about the share-join company from which the investment income
received by the Company influences its net profit over 10%
Shenzhen Pepsi-Cola Beverage Co., Ltd.: a joint stock company of the Company and the
Company holds 30% of its equity; the registration capital of this company amount to USD
12,250,000. The company is mainly engaged in manufacturing beverage products of Pepsi
Company, soft drinks of Chinese brands, other carbonic acid and non carbonic acid beverage,
sport articles of Pepsi-cola, as well as stationery articles of Pepsi-cola. And these are almost
produced and sold in Shenzhen, Dongguan, Huizhou, Shantou, and Meizhou etc. Until the
end of this period, the total assets of the company amounted to RMB 803,322,606.10, 1.55%
up compared to the same period of last year; from Jan. to June, 2010, it realized main
Item Amount in this
period
Amount in the
last period
Increase/Decreas
e in this period
compared to last
period
Explanation
Financial expense 4,543,914.84 2,610,027.76 74.09% Increased bank
loan
Investment expense -12,052,068.30 3,942,379.64 -405.71%
Falling
performance of
Shenzhen Pepsi
Operating profit -19,960,777.66 124,138.39 -16,179.46%
Falling
performance of
Shenzhen Pepsi
Non-operating
income 2,814,041.99 916,440.97 207.06%
Government
subsidy received,
land
compensation
received from
government and
disposal of fixed
assets
Total amount of
profit -17,168,300.74 1,040,315.51 -1,750.30%
Falling
performance of
Shenzhen Pepsi
Net profit -17,221,530.88 -494,950.35 -3,379.45%
Falling
performance of
Shenzhen Pepsi
Net profit
attributable to
shareholders of
parent company
-18,263,527.21 -2,294,928.82 -695.82%
Falling
performance of
Shenzhen PepsiSemi-Annual Report 2010
13
business income of RMB 762,143,943.98 and net profit of RMB 3.27, respectively 3.27%
up and 66.20% down over the same period of last year.
(VI) Confirmation method, acquirement method, relevant estimation assumption,
model and setting for parameter of fair value
The assets of the Company confirmed by fair value only refer to the transactional financial
assets left over by history. That is: holding 150,000 shares of Hai Guo Tou Industry Share
Co., Ltd. and take the market value of the shares as their fair value. (Details could be found
in V. Security investment in Chapter V of this report)
The initial confirmation amount for transactional financial assets is confirmed according to
the fair value when they are acquired, and the relevant expense occurred in the transaction
should be recorded into current gains and losses when transaction happens.
On date of balance sheet, for transactional financial assets, subsequent measures should be
calculated according to fair value, besides, the transaction expense which could occur when
disposing the financial assets should not be deducted. Variance of fair value of transaction
financial assets should be recorded into current gains and losses.
(VII)Problems and countermeasures existed in operation of the Company
Problems existed:
（1）Problem of market pressure. The market competition became intensively, competition
with same industry and homogenization upgraded fiercely. Under the environment that lots
of brands intensified promotion and grasped market share, the retaining and expanding of
the market faces more pressure;
（2）Problem of purchase cost. The price of up-stream manufacture materials obviously went
up due to the nature disaster, the purchase cost of the Company increased, the profiting
space shrank.
（3）Problem of investment income. The investment income of the Company from Shenzhen
Pepsi largely descended, the overall profiting level of the Company faced greater pressure;
（4）Staff problem. A part of subsidiaries faced problems of difficult employment and unideal
employment quality. Besides, the shortness of marketing special talent became the core
factor which restricted sales channel of products and market expansion.
Countermeasures:
（1）Surrounding the production and operation goal made at the beginning of the year, in
accordance with market requirement, the Company adjusted products structure,
strengthened research and development of new products, optimized sales strategy, stabilized
clients group and sales channel, actively expanded market share, deepened costs control,
strived to achieve various economic goals made at the beginning of the year, improved the
profitability of the Company.
（2）Continuously activate inventory assets, and explore and utilize them, let this part of
assets create vitality and interest and income.Semi-Annual Report 2010
14
（3）Continuously pay attention on the production and operation condition of Shenzhen
Pepsi, timely adjust the investment strategy.
（4）Enhance the exploring of modern human resource policy, adjust allocation of human
resource, continuously intensify employment work, pay attention to training of internal
talent, promote the work of talents reserve.
II. Investment of the Company
(I) Application of raised proceeds
The Company has not raised proceeds in the report period, nor proceeds raised in previous
period but last to use in this report period.
(II) Investment with non-raised proceeds
In the repot period, the wholly owned subsidiary Shenzhen Bao Mitsui Food & Beverage
Development Co., Ltd. (hereinafter referred to as "deep treasure Mitsui") purchased 20%
equity of Shenzhen, Guangdong Bao Food Co., Ltd. which was held by Shanwei City, China
Agricultural Biotechnology Development Co., Ltd.. The purchase price was 1.2 million
yuan. After this purchase, Shenbao Sanjin held 100% equity of Shenzhen, Guangdong Bao
Food Co., Ltd. This equity has been through business transfer procedures.
III. The Company has not made any amend in the operation plan for 2010 which was
disclosed in the Annual Report of 2009.
IV. The Company will timely fulfill the obligation of information disclosure according
to the performance process, such as the accumulated net profit from the beginning of
the year to the next period-end may be a loss and create a huge change compared to
the same period of last year.
V. The Semi-Annual financial report 2010 of the Company was not audited.
CHAPTER V. SIGNIFICANT EVENTS
I. Corporate Governance
As for corporate governance, the Company persisted normal operation, costantly perfected
and consummated the governance structure of the Company and enhanced the Company's
governance level strictly in accordance with the requirements of the Company Law,
Securities Law, Administration Rule of Listed Company, Listed Rules of Shares of
Shenzhen Stock Exchange, administrative regulations and relevant standardized documents
as well as the rules of Articles of Association. In the report period, according to relevant
rules of Shenzhen Securities Authority and Shenzhen Stock Exchange and actual condition
of the Company, the Company formulated Rules for Accountability of Significanrt Mistake
Made in Annual Report Information Disclosure of the Company, revised and perfected
Articles of Association, further improved the ability of anti-risk of the Company;
comprehensively conducted special events of normal finance accounting basic work,
through making plans of special event, holding meetings for work plans, strictly selfexamination,
making restructure plan and following the implementation of it, further
standardized finance accounting basic work, progressed the calculation level of finance
accounting and disclosure quality of finance information. According to standardizedSemi-Annual Report 2010
15
documents related to listed companies governance issued by CSRC, the Board of Directors
believed that there was no abnormal operation in the Company, and the actual condition of
the Company governance basicly conformed to the requirements.
II. Implementation of profit distribution plan, common reserves capitalizing plan or
new shares issuing plan in the report period
The Company did not have profit distribution plan, common reserves capitalizing plan or
new shares issuing plan which were made in the past years and implemented in the report
period.
The Annual Shareholders' General Meeting 2009 decided that the Company neither
implements profit distribution, nor transfer capital public reserve into share capital. (Details
could be found in Resolution Notice of Annual Shareholders' Meeting 2009 published in
Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao
Website dated May 15th, 2010.)
In the first half year of 2010, the Company neither implements profit distribution, nor
transfer capital public reserve into share capital.
III. Lawsuits and Arbitrations
(I) The case concerning the joint-liability guarantee the Company provided for the RMB 7
million loan that Shenzhen China Bicycle Company (Holdings) Limited (hereinafter
referred to as Shen China) had got from China Construction Bank Shenzhen Branch
(hereinafter referred to as Construction Bank) has been closed with a reconciliation. In the
year 2003, the Company and Construction Bank reached the Agreement on Interest
Reduction and Cancellation, and according to the agreement, the Company had already paid
back the RMB 7 million in two times for Shen China and fulfilled its guarantee liability (for
details, please refer to Annual Report 2003 of the Company.); through the verdict of (1999)
YFJYZZi No. 26 Civil Judgment Document made by Guangdong High People’s Court on
the case concerning the joint-liability guarantee amounting to USD 0.8 million the
Company provided for issue of Letter of Credit Shen China had applied for at Bank of
China Shenzhen Branch, the Company should shoulder joint repayment liability. And ended
the first half year of 2004, the Company had repaid RMB 6,631,600 (amounting to USD 0.8
million) for Shen China and fulfilled the guarantee responsibility (for details, please refer to
Semi-Annual Report 2004 of the Company.). Latter, on Jul. 22, 2004, the guarantee payment,
which the Company had paid on its behalf, was enforced to conduct by Shenzhen
Intermediate People’s Court that the Company applied to.
To safeguard the rights and interests of the Company, the Company sued Shen China to
Shenzhen Intermediate People’s Court, and requested for a verdict to order Shen China to
repay RMB 7 million, which the Company had paid on its behalf, as well as to compensate
relevant loss arising from the capital occupancy in 2004. Shenzhen Intermediate People’s
Court judged and ordered Shen China to repay the RMB 7 million the Company had paid on
its behalf, and the interest arising during the period of capital occupancy [(2004)
SZFMECZi No.448]. Since Shen China had not fulfilled its repayment duty according to the
time and contents stipulated in the judgment document, the Company applied to Shenzhen
Intermediate People’s Court on Dec.20, 2004 for compulsory enforcement. Shenzhen
Intermediate People’s Court sent Shen China (2004) SZFZZi No.1382 Civil Verdict and
Mandamus, as well as (2005) SZFZZi No.208 Civil Verdict and Mandamus on Jan.14, 2005,
and ruled that the property of Shen China (RMB 14,131,575.92 as the limit) should be
sealed up and frozen, and that Shen China should fulfill the duties stipulated in effectiveSemi-Annual Report 2010
16
legal papers or regulated by law within five days from the day the Mandamus arrived.
Should Shen China defaulted beyond the time limit, Shenzhen Intermediate People’s Court
would make compulsory enforcement according to law (for details, please refer to
notifications of the Company published on Securities Times, Hong Kong Commercial Daily
and Juchao Website dated Jul.30, 2004, Nov.20, 2004, Dec.16, 2004, Dec.29, 2004 and
Jan.18, 2005.). Later, stipulated by the Higher People’s Court of Guangdong, the aforesaid
two lawsuits were conducted by Guangzhou Railway Transportation Court, and the
conductions were suspended in the report period because of discovering no property clues.
As soon as circumstances of execution suspension ended, the Company may apply to
Guangzhou Railway Transportation Court for resumption of execution. The Company will
exercise related rights by legal means.
(II) Lawsuits between the Company and Guangdong Sunrise Holdings Co., Ltd.
1. In Dec. 2002, the case concerning the joint-liability guarantee the Company provided for
the HKD 3 million loans that Guangdong Sunrise Holdings Co., Ltd. (the former Shenzhen
Lionda Holdings Co., Ltd. hereinafter referred to as Sunrise Company for short) had
obtained from Industrial and Commercial Bank of China Shenzhen Branch had been closed
through mediation. On Jan. 13, 2003, the Company repaid, on behalf of Sunrise Company,
the principal of HKD 3 million as well as the interest amounting to HKD 0.1 million, while
the rest interest was exempted. The Company would exercise relevant rights through
legitimate means.
2. The case concerning the joint-liability guarantee the Company provided for the HKD 6
million loan Sunrise Company had obtained from Shenzhen Development Bank Nantou
Subbranch (hereinafter referred to as Shenfazhan) had been closed with reconciliation.
Ended the year 2003, the Company had repaid a sum of principal HKD 2 million and the
interest arising on behalf of Sunrise Company. The remaining principal of HKD 4 million
was transferred to loan, and the Company would continue to provide guarantee (For details,
please refer to notifications of the Company published in Securities Times, Hong Kong
Commercial Daily and Juchao Website dated May 13, 2003.). In year 2004, after this loan
expired, Sunrise Company did not perform the repayment. In year 2006, the Company had
repaid another HKD 2.5 million (equaling to RMB 2.55 million) of the principal on behalf
of Sunrise Company. In the report period, the Company had repaid HKD 1,453,186.52 of
the principal as well as HKD 620,734.25 of the interest (equaling to RMB 2,055,920.22) on
behalf of Sunrise Company. The Company had fulfilled the guarantee liability.
3. The case concerning the joint-liability guarantee the Company provided for the HKD 32
million loans which Sunrise Company had obtained from Bank of China Shenzhen branch
had been reconciled (For details, please refer to notifications of the Company published on
Securities Times, Hong Kong Wen Wei Po and Juchao Website dated Jul. 29, 2006 and Dec.
13, 2006.), and on Dec.11, 2006, the Company signed the Reconciliation Agreement on
GLENMORE INVESTMENT LIMITED Releasing Shenzhen Shenbao Industrial Co., Ltd
from the Debt Guarantee Liabilities for Guangdong Sunrise Holdings Co., Ltd. with the
creditor Glenmore Investment Limited; in 2006, the Company had paid RMB 29 million
according to the aforesaid reconciliation agreement. Shenzhen Intermediate People's Court
withdrew the lawsuit against the Company ， and the Company had submitted a sue to
Shenzhen Intermediate People's Court, to apply for recourse to Sunrise Company, andSemi-Annual Report 2010
17
requested the Court to sentence the Sunrise Company to pay back the disbursement by the
Company of RMB 29 million and relevant interests. The Court had officially filed the case
with case number 2007 SZFMECZi No.123 and finished the trial in the first instance. On
Aug. 7, 2007, the Company received the civil judgment from Shenzhen Intermediate
People's Court, in which it sentenced Sunrise Company to pay back the disbursement of
RMB 29 million and its interest within ten days from the effect term of the sentence (from
Dec. 31, 2006, calculate based on bank loan rate of the same period 6.12% till paying off). If
Sunrise Company did not pay back the debt in the stipulated time limit willingly, based on
the regulations of No. 232 section of the CIVIL PROCEDURE LAW OF THE PEOPLE'S
REPUBLIC OF CHINA, Sunrise Company should double pay the interest of the delay days.
The lawsuit fee RMB 186,800 was paid by Sunrise Company. If not agree with the sentence,
Sunrise Company could appeal to the Guangdong High People’s Court within 15 days since
receiving the sentence. If Sunrise Company did not appeal within the statutory days, this
sentence be legally effective (for details, please refer to notifications of the Company
published on Securities times, Hong Kong Wen Wei Po and website of www.cninfo.com.cn
respectively on Feb. 6, 2007, Apr. 21, 2007, Aug. 8, 2007). After the legal validity, Sunrise
Company did not fulfill its repayment duty according to the time and contents stipulated in
the judgment document, the Company applied to Shenzhen Intermediate People’s Court for
compulsory enforcement. Shenzhen Intermediate People’s Court transacted the case, and
issued Notice of Case Acceptance [case number was (2008) SZFZZi No. 127]. (For details,
please refer to notifications of the Company published on Securities Times, Hong Kong Wen
Wei Po and Juchao Website dated Jan. 15, 2008.) In the report period, the Company received
the Civil Verdict Document issued by Shenzhen Intermediate People's Court [case number
was (2008) SZFZZi No. 127-3], which judged the Civil Verdict Document (2007)
SZFMECZi No. 123 being stopped implementing. After ceased execution disappeared, the
Company could apply to Shenzhen Intermediate People's Court for resuming compulsory
enforcement. (For details, please refer to notifications of the Company published on the
Securities Times, China Securities Journal, Hong Kong Wen Wei Po and website of Juchao
Website dated Aug. 1, 2008).
4. The case concerning the joint-liability guarantee the Company provided for the RMB 8
million loans which Sunrise Company had obtained from Guangdong Development Bank
Co., Ltd. Shenzhen Nanyuan Subbranch (formerly Guangdong Development Bank Co., Ltd.
Shenzhen Branch Nanyuan Subbranch) had been closed with reconciliation. Ended the year
2005, the Company had repaid a sum of interest amounting to RMB 2,369,145.58 on behalf
of Sunrise Company, while the remaining principal and interest amounting to RMB 8.58
million would continue to be provided as a loan to Guangdong Sunrise Holdings Co., Ltd.,
and the Company would continue to provide join-liability guarantee for it. The guarantee
term was from Feb. 6, 2005 to Aug. 6, 2005. Sunrise Company had not repaid this loan by
the expiration day of the loan. On Oct. 31, 2006, Guangdong Development Bank transferred
the aforesaid liability in Loan Extension Contract to Guangdong Guangdong Finance
Investment Holdings Co., Ltd. (hereinafter refer to as Guangdong Finance). After that,
Guangdong Finance required the Company to take joint guarantee liability for several times.
On Mar.20, 2009, Guangdong Finance entrusted Guangdong Zhihexing Law Firm to sent a
letter that: the debtee and our lawyer had held relevant assets clue under the name of
Shenbao, after Guangdong Finance put forward application of attachment, the court will sealSemi-Annual Report 2010
18
up and freeze the assets (including but not only the bank account, land of house and
factories, and equity), which was enough to cover the principal and interests, and this case
will be executed. The guarantee issue which caused this lawsuit was a part of the guarantee
left by history which the Company and Sunrise Company were the controlling subsidiaries
of Shenzhen Investment Management Co., Ltd. before the year of 1999. On Mar. 27, 2009,
the Company and Guangdong Finance signed Debt Repayment Agreement, which decided
to resolve the guarantee issue peacefully, that was the Company paid cash totally RMB
8,580,000 to Guangdong Finance to implement the joint guarantee liability the Company
should take. After the Company implemented the obligation as the aforesaid method,
Guangdong Finance agreed to exempt the left joint guarantee liability (that was exempting
all the interests of the loan), and would never exert any right of the liability to the Company
in any way. Guangdong Finance should deal with the pledged procedure of releasing
91.71% equities of Shenzhen Shenbao Sanjing Food & Drink Development Co., Ltd. owned
by the Company within 30 working days after the account all arrived. The Company would
pursue Sunrise Company for compensation in legal way. The Company paid the account to
Guangdong Finance on Mar. 30, 2009, and the releasing pledged procedure on the 91.71%
equities of Shenzhen Shenbao Sanjing Food & Drink Development Co., Ltd was finished on
May 20, 2009. (Details could be found in notice in Securities Times, China Securities
Journal, Hong Kong Wen Wei Po and Juchao Website dated Mar. 31, 2009.)
Sunrise Holdings has been into bankruptcy and reorganization proceedings on May 6th of
2010, the Company will eviction all the claims of Sunrise Holdings with legal means
according to the law.
IV. Equity investment
In the report period, the Company had neither shareholding the equities of financial
enterprises such as other listed company, commercial bank, Securities Company, insurance
company, entrusted company and Futures Company, nor investment situations such as
shareholding the company which plans to be listed in stock exchange.
V. There were no material purchases, sales or disposal of assets in the report period
VI. In the report period, the Company has no significant related transactions.
Stock
category
Stock
Code
Short form
of stock
Initial
investment
Amount
held
(shares)
Book
value at
the end of
period
Proportion in
total securities
investment at
end of period
(%)
Gain/loss
of the
report
period
Stock (3rd
board) 400005 Haiguoshi 272,288.09 150,000 349,500 100 139,500
Other stock investment held at the
end of report period — — — — —
Gain/loss of disposed stock
investment in the report period — — — — —
Total 272,288.09 150,000 349,500 100 139,500Semi-Annual Report 2010
19
VII. Material contracts and the implementation
(I) The Company had not kept as custody, contracted and leased assets of other
companies in the report period or happening in previous period but lasting to this
report period, or vice visa.
(II) Guarantee
Till the end of the report period, the Company totally provided guarantee of RMB 35
million for holding subsidiaries, taking up 11.61% of the net assets at the end of the report
period. Details were as follows:
Unit: RMB’ 0000
By the end of the report period, the total guarantee amount accounted for 11.61% of the
Company’s net assets athe end of the report period. The Company has not provided
guarantee for its shareholders, actual controllers and associated parties.
(III) The Company had no entrusted financing in the report period.
VIII. Commitment Issues
Commitments made by the original non-tradable shareholders in the process of Share
Merger Reform:
1. Shenzhen Agricultural Products Co., Ltd. and Shenzhen Investment Holdings Co., Ltd.
will obey the laws, statutes and regulations, and perform the statutory commitment
obligations in the process of Share Merger Reform;
2.Carrying out an effective and long-term encouragement to the management level, after the
completion of share merger reform, Shenzhen Agricultural Products Co., Ltd. and Shenzhen
Investment Holdings Co., Ltd., the original non-tradable shareholders of the Company, will
sell their possessed shares in 3 year to the management team of the Company according to
their share holding proportion after the share merger reform, which took up 6%-8% of the
Company’s total capital shares after the implementation of pricing.
The aforesaid encouragement specific measures and rules for implementation for the
management level was studied and formulated by listed company according to The
Measures Governing Equity Incentive Plans of Listed Companies of CSRC and national
relevant regulations, and were reported to the State-owned Assets Supervision and
Administration Commission of Shenzhen Municipality Government for examination and
Guarantor Name of unit
guaranteed
Relationship
with the
Company
Guarante
e amount
Starting
date Ending date Guarantee
method
Shenzhen
Shenbao
Industrial Co.,
Ltd
Shenzhen
Shenbao
Huacheng
Technology
Co., Ltd.
Holding
subsidiary 1,500 2010-06-24 2010-12-23
Joint
responsibi
lity
Shenzhen
Shenbao
Industrial Co.,
Ltd
Shenzhen
Shenbao
Huacheng
Technology
Co., Ltd.
Holding
subsidiary 2,000 2010-05-31 2011-05-30
Joint
responsibi
litySemi-Annual Report 2010
20
approval and then implementation. The circulation condition of this part of shares will be
implemented following relevant provisions.
Both of Agriculture Products Co. and Investment Holdings Co. have been fulfilling their
statutory responsibilities for their commitments.
According to Trial Provisions for Implementing Stock Option Incentive in State-owned
Controlling Listed Companies (Domestic) issued jointly by State-owned Assets
Supervisory & Administration Committee and the Ministry of Finance dated December 6,
2006, the Company should detail its stock option incentive plan for management
executives according to relevant regulations. The non-tradable share holders will push
forward the implementation of stock option incentive plan for executives within the range
allowed by relevant national laws and regulations and in appropriate market situation.
IX. Punishment and Reform of the directors, supervisors, executives as well as actual
controller of the Company in the report period
In the report, none of the directors, supervisors, executives as well as actual controller of
the Company was investigated, administrative punishment, criticized publicly by China
Securities Regulatory Commission, or publicly condemned by the Stock Exchange.
X. Special explanation and independent opinion on capital occupation of associated
parties and external guarantee of the Company issued by the independent directors:
According to Code of Corporate Governance for Listed Companies in China, Guidelines for
Independent Director of Listed Company Director of Listed Company, Notice Concerning Some
Issues on Regulating the Funds between Listed Companies and Associated Parties and Listed
Companies’ Provision of Guaranty to Other Parties and the Articles of Association, as independent
directors of the 6th Board of Shenzhen Shenbao Industrial Co., Ltd., we made careful examination
and check on the accumulative and current capital occupation of associated parties and external
guarantee as of Jun. 30, 2009, and checked the relevant content of the 2009 Semi-annual Report of
the Company. Now we present the special opinion and independent opinion as follows:
I. Special explanation
(I)During the report period, no controlling shareholder and other associated parties occupies the
capital of the Company, nor does that situation exists which happened in previous periods lasted to
this report period.
(II)Guarantee of the Company in the report period:
1 .Guarantees for holding subsidiaries
Till Jun. 30, 2010, the Company totally provided guarantee of RMB 35 million for holding
subsidiaries, taking up 11.61% of the Company’s net assets. Details were as follows:
Guarantor
Name of unit
guaranteed
Relationship
with the
Company
Guara
ntee
amou
nt
Starting
date
Ending date
Guarante
e method
Shenzhen
Shenbao
Industrial Co., Ltd.
Shenzhen
Shenbao
Huacheng
Technology Co., L
Holding
subsidiary
1,500 2010-06-24 2010-12-23
Joint
responsib
ilitySemi-Annual Report 2010
21
XI. Till the end of this report period, there was no commitment on restricted shares,
such as voluntarily postponing restricted term, setting or raising the lowest price for
decreasing holding, claimed by the shareholders holding over 5% equity of the
Company.
XII. There was no other event which had significant impact on the Company in the
reporting period
XIII. Accepting of investigations, communication and interview of the Company in the
report period
The Company and relevant obligor of information disclosure strictly accorded with the
requirements of Index of Listed Company’s Equal Information Disclosure of Shenzhen
Stock Exchange, and followed the principle of equal information disclosure, without any
behavior violating equal information disclosure.
XIV. Index of other significant events
By the end of the report period, the total guarantee amount takes up 11.61% of the Company’s net
assets of the end of the report period. The Company has not provided guarantee for its
shareholders, actual controllers and associated parties.
II. Independent opinion
(I)No controlling shareholder and other associated parties occupy the capital of the Company.
(II) Decision and approval process of external security of the Company were lawful, reasonable,
fair.
(III)The Company fulfills its obligation in time for information disclosure on external guarantee.
(IV)The guarantee the Company provided for its holding subsidiaries was a necessary and rational
measure adopted by the Company for normal operation of its production and operation activities.
It was in line with the principle of maintaining the most interest of the Company. No interest of the
Company and its shareholders, especially the middle and minor shareholders was hurt.
td.
Shenzhen
Shenbao
Industrial Co., Ltd.
Shenzhen
Shenbao
Huacheng
Technology Co.,
Ltd.
Holding
subsidiary
2,000 2010-05-31 2011-05-30
Joint
responsib
ility
Reception time Reception
place
Receptio
n method
Reception
object
Main contents discussed and
offered material
May 19th of 2010
Meeting
room of
the
Company
Field
research
Hongyuan
security
Changcheng
security
Discussed production and
operation condition and strategic
plan for the future of the
Company, the Company didn’t
disclose, reveal or leak out
undisclosed significant
information to reception objects.
No. of notice Issues of notice Name of newspaper and page DateSemi-Annual Report 2010
22
The above information were also all published in Juchao information website (http: //
www.cninfo. com. cn).
2010-01
Notice of change of office
address, telephone and fax
Page B07 of China Securities, Page B9
of Securities Times, and Page A16 of
Hong Kong Commercial Daily
2010.1.8
2010-02
Notice of the Board of
Directors
Page A15 of China Securities, Page A12
of Securities Times, and Page A6 of
Hong Kong Commercial Daily
2010.1.25
2010-03
Notice of performance
prediction of the Company
Page C019 of China Securities, Page
B12 of Securities Times, and Page A7 of
Hong Kong Commercial Daily
2010.1.30
2010-04
Notice on Decrease in
Holding Shares by
Shareholders
Page C003 of China Securities, Page
B16 of Securities Times, and Page A6 of
Hong Kong Commercial Daily
2010.3.6
2010-05
Indicative notice of
canceling restriction of
restricted shares of the
Company
Page D018 of China Securities, Page
D20 of Securities Times, and Page A20
of Hong Kong Commercial Daily
2010.3.24
2010-06
Notice of the 2nd of the 7th
Board of Directors
Page D103 of China Securities, Page
D49 of Securities Times, and Page A29
of Hong Kong Commercial Daily
2010.4.22
2010-07
Notice of the 2nd of the 7th
Board of Supervisors
Page D103 of China Securities, Page
D49 of Securities Times, and Page A29
of Hong Kong Commercial Daily
2010.4.22
2010-08
Summary of Annual Report
2009 of the Company
Page D102 of China Securities, Page
D49 of Securities Times, and Page A26
of Hong Kong Commercial Daily
2010.4.22
2010-09
Notice of holding the 2009
Shareholders’ General
Meeting
Page BD103 of China Securities, Page
D49 of Securities Times, and Page A29
of Hong Kong Commercial Daily
2010.4.22
2010-10
Notice of 2010 the first
season report
Page D102 of China Securities, Page
D49 of Securities Times, and Page A29
of Hong Kong Commercial Daily
2010.4.22
2010-11
Notice of 2009 Annual
Shareholders’ General
Meeting
Page A19 of China Securities, Page B13
of Securities Times, and Page A6 of
Hong Kong Commercial Daily
2010.5.15Semi-Annual Report 2010
23
Chapter VI Financial Report (Unaudited)
Section I Accounting Statements
I. Balance Sheet
Prepared by Shenzhen Shenbao Industrial Co., Ltd. As at 30 June 2010 Unit: RMB
Item Balance at period-end Balance at year-begin
Merger Parent company Merger Parent company
Current assets:
Monetary funds 77,336,722.08 56,726,511.57 110,613,421.70 96,004,694.03
Settlement provision
Capital lent
Transaction finance asset 349,500.00 210,000.00
Notes receivable
Accounts receivable 33,794,211.66 77,701.00 33,079,090.43 89,648.76
Accounts paid in advance 5,683,060.82 4,508,169.03
Premium receivables
Reinsurance account receivables
Provision receivables for reinsurance co
ntract
Interest receivable
Dividend receivable
Other receivables 22,009,988.63 249,880,838.87 19,616,517.71 234,119,277.48
Return-for-sale financialassets acquired
Inventories 59,029,714.88 1,322,715.44 43,432,172.68 1,222,178.23
Non-current asset due within one year
Other current assets
Total current assets 198,203,198.07 308,007,766.88 211,459,371.55 331,435,798.50
Non-current assets:
Grant of loans and advances
Finance asset available for sales
Held-to-maturity investment
Long-term account receivable
Long-term equity investment 100,356,888.65 259,201,531.01 112,906,889.90 273,751,532.26
Investment property 25,917,222.11 26,332,664.33
Fixed assets 114,642,265.39 5,654,552.14 118,637,867.25 5,798,390.87
Construction in progress 36,451,675.18 2,795,885.72 34,463,673.23 3,956,945.72
Engineering material
Disposal of fixed asset
Productive biological asset
Oil and gas assets
Intangible assets 195,402,012.92 76,384,919.35 142,045,692.99 21,277,452.98
Expense on Research and
Development
Goodwill
Long-term expenses to be apportioned 1,470,976.42 1,202,995.81 371,683.76 70,200.03
Deferred income tax asset 3,458,494.68 2,093,388.05 3,471,579.32 2,093,388.05
Other non-current asset
Total non-current asset 451,782,313.24 373,250,494.19 411,897,386.45 333,280,574.24Semi-Annual Report 2010
24
Total assets 649,985,511.31 681,258,261.07 623,356,758.00 664,716,372.74
Current liabilities:
Short-term loans 91,000,000.00 49,000,000.00 149,000,000.00 112,000,000.00
Borrowings from central bank
Absorption of deposits and placements f
rom intra-industry institutions
Borrowing capital
Transaction financial liabilities
Notes payable
Accounts payable 27,233,840.35 199,274.02 16,236,290.90 26,000.00
Accounts received in advance 4,331,279.50 2,535,609.18
Disposal of repurchase of financial assets
Fee and commission payables
Wage payable 858,869.51 170,896.81 2,311,903.44 1,374,704.52
Taxes payable 922,851.25 -8,332.68 2,039,661.16 -24,997.04
Interest payable
Dividend payable 2,909,182.74 2,909,182.74 2,909,182.74 2,909,182.74
Other accounts payable 71,624,142.69 114,528,733.20 33,983,676.35 66,960,261.16
Reinsurance account payables
Provision for insurance contract
Place of trade securities
Place of distribution securities
Non-recurrent liabilities due within 1 year
Other current liabilities
Total current liabilities 198,880,166.04 166,799,754.09 209,016,323.77 183,245,151.38
Non-current liabilities:
Long-term loans 103,500,000.00 103,500,000.00 49,000,000.00 49,000,000.00
Bonds payable
Long-term account payable
Special accounts payable
Projected liabilities
Deferred income tax liabilities
Other non-current liabilities 660,403.25
Total non-current liabilities 104,160,403.25 103,500,000.00 49,000,000.00 49,000,000.00
Total liabilities 303,040,569.29 270,299,754.09 258,016,323.77 232,245,151.38
Owners’ equity or shareholders’ equity
Paid-up capital or share equity 181,923,088.00 181,923,088.00 181,923,088.00 181,923,088.00
Capital public reserve 80,083,319.44 80,305,894.70 80,564,909.22 80,305,894.70
Less: Inventory shares
Special reserve
Surplus public reserve 32,464,033.34 32,464,033.34 32,464,033.34 32,464,033.34
General risk provision
Retained profit 6,880,697.17 116,265,490.94 25,144,224.38 137,778,205.32
Difference from conversion of statemen
ts of foreign currency
Total owner’s equity attributable to parent
company 301,351,137.95 410,958,506.98 320,096,254.94 432,471,221.36
Minority interests 45,593,804.07 45,244,179.29
Total owners’ equity 346,944,942.02 410,958,506.98 365,340,434.23 432,471,221.36
Total liabilities and owners’ equity 649,985,511.31 681,258,261.07 623,356,758.00 664,716,372.74Semi-Annual Report 2010
25
II. Profit Statement
Prepared by Shenzhen Shenbao Industrial Co., Ltd. January-June 2010 Unit: RMB
Item Amount of this period Amount of the previous period
Merger Parent company Merger Parent company
I. Total income from operation 98,031,142.11 1,347,753.85 91,579,440.16 1,520,437.31
Including: operation income 98,031,142.11 1,347,753.85 91,579,440.16 1,520,437.31
Interest income
Premium earned
Fee and commission income
I. Total operation cost 106,079,351.47 10,062,371.67 95,601,681.41 9,876,506.58
Including: operation cost 75,106,437.05 79,866.50 68,544,547.89 69,057.25
Interest expense
Fee and commission expense
Premium returned
Net amount paid for claim
Withdrawal of deposit for insurance c
ontract
Policy bonus expense
Reinsurance expense
Business tax and extra 431,774.87 62,610.08 535,942.77 72,302.34
Sales expense 6,310,429.41 180,580.50 5,151,916.52 175,176.09
Administrative expense 19,691,446.28 6,860,925.37 18,552,219.43 9,075,877.73
Financial expense 4,543,914.84 2,878,389.22 2,610,027.76 273,043.40
Asset impairment loss -4,650.98 207,027.04 211,049.77
Add: income from change of fair value(los
s is listed with “-”) 139,500.00 204,000.00
Investment income(loss is listed with
“-”) -12,052,068.30 -14,014,997.93 3,942,379.64 3,764,083.64
Including : income from investm
ent in associate and joint venture -12,550,001.25 -12,550,001.25 3,942,379.64 3,764,083.64
Exchange income(loss is listed with “-”)
III. Operation profit(loss is listed with “-”) -19,960,777.66 -22,729,615.75 124,138.39 -4,591,985.63
Add: non-operating income 2,814,041.99 1,216,901.37 916,440.97 619,090.97
Less: non-operating expenditure 21,565.07 263.85
Including: loss from disposal of non-cur
rent assets 15,050.02
IV. Total profit( total loss is listed with “-”) -17,168,300.74 -21,512,714.38 1,040,315.51 -3,972,894.66
Less: income tax expense 53,230.14 1,535,265.86 1,482,300.00
V. Net profit( net loss is listed with “-”) -17,221,530.88 -21,512,714.38 -494,950.35 -5,455,194.66
Net profit attributable to owners of paren
t company -18,263,527.21 -21,512,714.38 -2,294,928.82 -5,455,194.66
Minority interests 1,041,996.33 1,799,978.47
VI. Earnings per share
(I)Basic earnings per share -0.10 -0.12 -0.01 -0.03
(II)Diluted earnings per share -0.10 -0.12 -0.01 -0.03
VII. Other consolidate income
VIII. Total consolidated income -17,221,530.88
0 -21,512,714.38 -494,950.350 -5,455,194.66
Total comprehensive income attributable t
o owners of parent company
-18,263,527.21
0 -21,512,714.38 -2,294,928.820 -5,455,194.66
Total comprehensive income attributabl
e to minor shareholders 1,041,996.33 0.00 1,799,978.47 0.00Semi-Annual Report 2010
26
III. Cash Flow Statement
Prepared by Shenzhen Shenbao Industrial Co., Ltd. January-June 2010 Unit: RMB
Item
Amount of this period Amount of the previous period
Merger Parent company Merger Parent company
I. Cash flows arising from
operating activities:
Cash received from selling
commodities and providing labor
services
114,460,696.41 161,000.50 104,799,652.71 25,760.00
Net increase of customers’
deposits and placement from intraindustry
institutions
Net increase of borrowing from
central bank
Net increase of capital from
other financial institutions
Cash received from premium
from original insurance contract
Net cash received from
reinsurance business
Net increase of savings and
investments of insurance customer
Net increase from disposal of
transaction financial assets
Cash received from collection
of interests, fees and commission
Net increase of borrowing
capitalNet increase of capital from
repurchase business
Write-back of tax received 188,371.62 1,716,403.23
Other cash received
concerning operating activities 9,876,986.68 26,947,390.32 6,270,493.90 1,429,473.82
Subtotal of cash inflow
concerning operating activities 124,526,054.71 27,108,390.82 112,786,549.84 1,455,233.82
Cash paid for purchasing
commodities and receiving labor
service
83,962,650.35 156,022.10 68,964,256.90
Net increase of customer loans
and advances
Net increase of accounts saved
in central bank and intra-industry
institutions
Cash paid for claim of original
insurance contract
Cash paid for interests, fees
and commission
Cash paid for policy bonus
Cash paid to/for staff and
workers 18,724,555.47 9,074,261.51 12,267,466.19 1,467,383.51
Taxes paid 6,157,716.15 477,632.30 7,831,654.36 143,372.25
Other cash paid concerning op 21,813,251.09 44,966,320.96 17,589,388.50 20,941,509.13Semi-Annual Report 2010
27
erating activities
Subtotal of cash outflow
concerning operating activities 130,658,173.06 54,674,236.87 106,652,765.95 22,552,264.89
Net cash flows arising from
operating activities -6,132,118.35 -27,565,846.05 6,133,783.89 -21,097,031.07
II. Cash flows arising from investin
g activities:
Cash received from recovering
investment
Cash received from investmen
t income 31,475,586.65
Net cash received from dispos
al of fixed, intangible and other lon
g-term assets
2,718,835.00 1,680,835.00 22,000.00
Net cash received from dispo
sal of subsidiary and other business
units
Other cash received concernin
g investing activities 20,000,000.00 20,000,000.00
Subtotal of cash inflow con
cerning investing activities 22,718,835.00 21,680,835.00 31,497,586.65
Cash paid for purchasing fixed,
intangible and other long-term asse
ts
75,269,397.26 55,930,652.51 12,260,227.65 1,462,629.19
Cash paid for investment 1,200,000.00 6,880,000.00
Net increase of pledged loans 20,000,000.00 20,000,000.00
Net cash paid for acquisition
of subsidiary and other business u
nits
Other cash paid concerning in
vesting activities 20,000,000.00
Subtotal of cash outflow con
cerning investing activities 96,469,397.26 75,930,652.51 39,140,227.65 1,462,629.19
Net cash flows arising fro
m investing activities -73,750,562.26 -54,249,817.51 -7,642,641.00 -1,462,629.19
III. Cash flows arising from financi
ng activities
Cash received from absorbing
investment
Including: Cash received by th
e subsidiaries absorbing from inves
tment of minority shareholders’ equ
ity
Cash received from loans 134,000,000.00 92,000,000.00 162,000,000.00 50,000,000.00
Cash received from issuance o
f debt bond
Other cash received concernin
g financing activities 55,756,182.00 55,756,182.00
Subtotal of cash inflow concer
ning financing activities 189,756,182.00 147,756,182.00 162,000,000.00 50,000,000.00
Cash paid for settling debts 137,500,000.00 100,500,000.00 89,080,000.00 9,580,000.00
Cash paid for dividend and pr
ofit distributing or interest paying 5,650,201.01 4,718,700.90 3,279,046.70 627,157.50
Including: Dividend and profitSemi-Annual Report 2010
28
paid for minority shareholder by t
he subsidiaries
Other cash paid concerning fin
ancing activities
Subtotal of cash outflow con
cerning financing activities 143,150,201.01 105,218,700.90 92,359,046.70 10,207,157.50
Net cash flows arising from
financing activities 46,605,980.99 42,537,481.10 69,640,953.30 39,792,842.50
IV. Influence on cash and cash equi
valent due to fluctuation in exchang
e rate
V. Net increase of cash and cash eq
uivalents -33,276,699.62 -39,278,182.46 68,132,096.19 17,233,182.24
Add: balance of cash and cash e
quivalent at period-begin 90,613,421.70 76,004,694.03 22,501,768.29 10,374,648.49
VI. balance of cash and cash equiva
lent at period-end 57,336,722.08 36,726,511.57 90,633,864.48 27,607,830.73Semi-Annual Report 2010
29
IV. Statement of Change in Owners’ Equity
Prepared by Shenzhen Shenbao Industrial Co., Ltd. half year of 2010 Unit: RMB
Items
Amount in this report period Amount in last year
Owners' equity attributable to the parent company Owners' equity attributable to the parent company
Paid-up
capital (Share
capital)
Capital
reserves
Less:
Treasury
Stock
Reaso
nable
reserv
e
Surplus
reserves
Gener
al risk
provis
ion
Retained
profit
Others
Minority’s
equity
Total owners’
equity
Paid-up capital
(Share capital)
Capital
reserves
Less:
Treasu
ry
Stock
Reasona
ble
reserve
Surplus
reserves
Gener
al risk
provis
ion
Retained
profit
Others
Minority’s
equity
Total owners’
equity
I. Balance at
the end of
last year
181,923,088.00 80,564,909.22 32,464,033.34 25,144,224.38 45,244,179.29 365,340,434.23 181,923,088.00 80,305,894.70 32,464,033.34 38,049,294.30 50,379,076.12 383,121,386.46
Add: Changes
of accounting
policy
Error
correction of
the last
period
Others
II. Balance at
the beginning
of this year
181,923,088.00 80,564,909.22 32,464,033.34 25,144,224.38 45,244,179.29 365,340,434.23 181,923,088.00 80,305,894.70 32,464,033.34 38,049,294.30 50,379,076.12 383,121,386.46
III. Increase/
Decrease in this
year (Decrease is
listed with'"-")
-481,589.78 -18,263,527.21 349,624.78 -18,395,492.21 259,014.52 -12,905,069.92 -5,134,896.83 -17,780,952.23
(I) Net profit -18,263,527.21 1,041,996.33 -17,221,530.88 -12,905,069.92 3,039,881.62 -9,865,188.30
(II) Other
consolidated
income
Subtotal of (I)and
(II) -18,263,527.21 1,041,996.33 -17,221,530.88 -12,905,069.92 3,039,881.62 -9,865,188.30
(III) Owners'
devoted and
decreased capital
-481,589.78 -692,371.55 -1,173,961.33 259,014.52 -8,174,778.45 -7,915,763.93
1. Owners'
devoted capital
2. Amount
calculated into
owners' equity paiSemi-Annual Report 2010
30
d in shares
3. Others -481,589.78 -692,371.55 -1,173,961.33 259,014.52 -8,174,778.45 -7,915,763.93
(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
1. Withdrawal in
the report period
2. Usage in the
report period
IV. Balance at
the end of this
term
181,923,088.00 80,083,319.44 32,464,033.34 6,880,697.17 45,593,804.07 346,944,942.02 181,923,088.00 80,564,909.22 32,464,033.34 25,144,224.38 45,244,179.29 365,340,434.23Semi-Annual Report 2010
31
Statement of Change in Owners’ Equity of Parent Company
Prepared by Shenzhen Shenbao Industrial Co., Ltd. half year of 2010 Unit: RMB
Items
Amount in this report period Amount in last year
Paid-up
capital
(Share
capital)
Capital
reserves
Less:
Treasur
y Stock
Reason
able
reserve
Surplus
reserves
Provisio
n of
general
risk
Retained
profit
Total owners’
equity
Paid-up capital
(Share capital)
Capital
reserves
Less:
Treasur
y Stock
Reasona
ble
reserve
Surplus
reserves
Provision
of general
risk
Retained
profit
Total
owners’
equity
I. Balance at the
end of last year
181,923,088.00 80,305,894.70 32,464,033.34 137,778,205.32 432,471,221.36 181,923,088.00 80,305,894.70 32,464,033.34 152,569,666.17 447,262,682.21
Add: Changes of
accounting policy
Error correction
of the last period
Others
II. Balance at the
beginning of this
year
181,923,088.00 80,305,894.70 32,464,033.34 137,778,205.32 432,471,221.36 181,923,088.00 80,305,894.70 32,464,033.34 152,569,666.17 447,262,682.21
III. Increase/
Decrease in this year
(Decrease is listed
with'"-")
-21,512,714.38 -21,512,714.38 -14,791,460.85 -14,791,460.85
(I) Net profit -21,512,714.38 -21,512,714.38 -14,791,460.85 -14,791,460.85
(II)Other consolidated
income
Subtotal of (I)and (II) -21,512,714.38 -21,512,714.38 -14,791,460.85 -14,791,460.85
(III) Owners'
devoted and
decreased capital
1. Owners' devoted
capital
2. Amount
calculated into
owners' equity
paid in shares
3. Others
(IV) Profit distributioSemi-Annual Report 2010
32
n
1. Providing of
surplus reserves
2. Providing of
common risk
provisions
3. Dividend to
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
reserves
4. Others
(VI) Reasonable
reserve
1. Withdrawal in the
report period
2. Usage in the report
period
IV. Balance at the end
of this term
181,923,088.00 80,305,894.70 32,464,033.34 116,265,490.94 410,958,506.98 181,923,088.00 80,305,894.70 32,464,033.34 137,778,205.32 432,471,221.36Semi-Annual Report
2010
33
Section III Notes to Accounting Statements
Unless otherwise requires, all figures shall be understood in RMB
I. Company profile
Shenzhen Shenbao Industrial Co., Ltd. (hereinafter referred to as the Company) (formerly
named Shenzhen Shenbao Canned Food Company), obtained approval (Document (1991)
No.978) from Shenzhen Municipal People’s Government to change to the present name as
at 1 August 1991. Then with the approval (Document (1991)No.126) from People’s Bank
of China, the Company began to list on Shenzhen Stock Exchange and was granted the
business license numbered Shen-Si-Zi N27358.
The Company initially issued 107,312,935 shares in the stock exchange. In 1992, one
bonus share was dispatched for each 10 shares held by its shareholders, thus totally
10,731,290 shares were increased. In 1993, one bonus share and one allotted share were
dispatched for each 10 shares held by its shareholders, thus totally 20,878,845 shares were
increased. Sequently, one bonus share was dispatched for each 10 shares held by
shareholders upon the basis of total share capital as at the end of 1996, and capitalizing of
capital reserves was carried out at one to ten basis, thus totally 27,784,614 shares were
increased. In 2001, based on the total share capital as at the end of 1999, 3 shares were
allotted for each 10 shares held by shareholders, and totally 15,215,404 shares were
alloted. The registered capital of the Company amounts to RMB181,923,088.
The Company belongs to food and beverage industry, with the following major operations:
production of food can, beverage and local products(business license of their production
base is applied additionally); domestic commerce and supply and marketing of materials
(excluding government controlled or dominated merchandises); import and export
business(transacted according to SMGSZZ No.080 document in respect of authentication
certificate for foreign trade enterprises); development and operation of property on legally
obtained land.
The Company’s main products are: Seasoning series under “Sanjing” brand include oyster
sauce, olive vegetable, and soy; beverages series under “Shenbao” brand include daisy tea,
lemon tea, and wax gourd tea; tea series under “Jindiao” brand include instant tea powder
and tea concentrate.
II. Major accounting policy, accounting estimation and prior-period errors
(1)Basis of preparation of financial statements
Taking continuing operation as basis, the Company processed confirmation and
measurements according to the actual businesses and proceedings, by reference to
regulations of Accounting Standards for Enterprises-Basic Standards and other various
accounting standards, and then prepared financial statements on such basis.
(2)Statement for observation of Accounting Standard for Enterprise
The financial statements prepared by the Company are in accordance to requirements of
Accounting Standard for Enterprise, which truly and completely reflect the information
related to financial position, operational results and cash flow of the Company.Semi-Annual Report
2010
34
(3)Accounting period
One accounting period falls to the range starting from 1 January to 31 December.
(4)Standard currency
The Company and its subsidiaries take RMB as the standard currency for bookkeeping.
(5)Accounting treatment for business combinations under the same control and
those not under the same control
1. Business combination under the same control
Assets and liabilities acquired by the Company during business combination are measured
by their carrying value recorded in the accounting book of the combined party as at the
combination date. The difference between the carrying value of the net assets acquired
through combination and the carrying value of combination consideration paid (or total
carrying value of shares in issue) shall be used to adjust capital reserve. When the capital
reserve is insufficient for offset, then the retained profit shall be adjusted.
Each direct expenses related to business combination born by the Company, among other
things, the audit fee, valuation expense and law service expense paid for business
combination shall be written into current gains and losses upon happening.
Charge and commission arising from issuance of equity securities during business
combination shall be used for offsetting premium income of such securities. When such
premium income is not enough for offset, then it shall turn to retained profit for offset.
As for the combined parties which adopt different accounting policies from the Company,
the Company shall make relevant adjustment in accordance to its own accounting policy
as at the combination date, and offer confirmation by virtue of Accounting Standard for
Enterprise on this basis.
2. Business combination not under the same control
The Company measures the assets and liabilities paid or occurred or undertaken as
consideration for business combination at their fair value as at the purchase day.
Difference between fair value and carrying value shall be recorded in current gains and
losses.
Combined cost is allocated by the Company as at the purchase date.
Combined cost less the fair value of the recognizable net assets acquired from vendor
through combination is confirmed as goodwill if the result is positive, while as current
gains and losses if it is negative.
As for other various assets (except for intangible assets and not only limited to the assets
originally recognized by vendor) obtained by business combination from vendor, the
economic benefits brought by such assets are likely to flow into the Company, besides,
their fair value could be reliably measured. Thus, they shall be recognized separately and
measured at fair value; the intangible assets whose fair value could be reliably measured
shall be separately recognized as intangible assets and measured at fair value; As for other
various liabilities (except for contingent liabilities) obtained from vendor, implementation
of relevant obligations leads to that economic benefits are likely to flow out from the
Company, besides, their fair value could be reliably measured. Thus, they shall beSemi-Annual Report
2010
35
recognized separately and measured at fair value; the contingent liabilities obtained from
vendor whose fair value could be reliably measured shall be separately recognized as
liabilities and measured at fair value.
(6)Methods for preparation of consolidated financial statements
The consolidation scope of the consolidated financial statements of the Company is fixed
on the basis of control, and all subsidiaries have been consolidated.
The accounting policies and accounting period adopted by the subsidiaries taken into
account of the consolidation scope are in line with the Company. If it is not the same as the
Company, necessary adjustments will be made when preparing consolidated financial
statements according to the accounting policy and accounting period of the Company.
Based on the financial statements of the Company and its subsidiaries, the Company
prepares the consolidated financial statements by reference to other related information
after adjustment in its long-term equity investments to subsidiaries by equity method.
When consolidating financial statements, the Company shall offset all effects upon
consolidated balance sheet, consolidated profit statement, consolidated cash flow
statement and consolidated statement of changes in equity arising from the internal
transactions between the Company and each subsidiary and between various subsidiaries.
Balance between the current losses shared by minority shareholders of subsidiaries
exceeding the proportion shared by those shareholders in beginning owners’ equity of
those subsidiaries, if minority shareholders are not required by the Articles of Association
or agreements to undertake such obligations, the balance shall be used to offset owners’
equity of the Company; while if such requirement do exists, then the balance shall be used
to offset minority shareholders’ equity.
During the report period, beginning amounts in consolidated balance sheet shall be subject
to adjustment if business combination under the same control results in additional
subsidiaries; income, expense and profit of such subsidiaries occurred during the whole
consolidation period shall be accounted into consolidated profit statement; and the cash
flow of subsidiaries occurred during the whole consolidation period shall be accounted
into consolidated cash flow statement.
During the report period, beginning amounts in consolidated balance sheet is not subject
to adjustment if business combination not under the same control results in additional
subsidiaries; income, expense and profit of such subsidiaries occurred during the period
commencing from purchase day to the end of reporting year shall be accounted into
consolidated profit statement; and the cash flow of such subsidiaries occurred during the
period commencing from purchase day to the end of reporting year shall be accounted into
consolidated cash flow statement.
During the report period, if the Company disposes subsidiaries, then the income, expense
and profit of the subsidiaries occurred during the period commencing from period-begin
to the disposal day shall be written into consolidated profit statement; and cash flow
arising during such period of such subsidiaries shall be written into consolidated cash flow
statement.Semi-Annual Report
2010
36
(7)Recognition standards for cash and cash equivalents
When preparing cash flow statement, the Company recognized the stock cash and deposits
available for payment at any time as cash, and investments featuring with the following
four characters at the same time as cash equivalents: short term (expire within 3 months
commencing from purchase day), active liquidity, easy to convert to already-known cash,
and small value change risks.
(8)Foreign currency business
When initially recognizing foreign currency business, the Company translates the foreign
currency amount to standard currency amount by virtue of spot exchange rate as at the
happening date of trade.
As at the balance sheet date, monetary items of foreign currency are translated at spot
exchange rate as at balance sheet day. Translation difference arising from difference
between the spot exchange rates respectively as at balance sheet day and initial
recognition day or previous balance sheet day, shall be written in current gains and losses.
As for non-monetary items denominated by foreign currency which are measured at
historical cost, translation is still subject to spot exchange rate as at happening day of trade,
without any change in the amount in standard currency.
(9)Financial instruments
Financial instruments include financial assets, financial liabilities and equities instruments.
1. Categories of financial instruments
According to the purposes held for financial assets and liabilities, the management
categorizes them into: financial assets or financial liabilities at fair value through current
gains and losses, including transactional financial assets or financial liabilities; held-tomaturity
investment; accounts receivable; financial assets available for sale; other
financial liabilities, etc.
2. Recognition evidence and measurement methods for financial instruments
(1) Financial assets (financial liabilities) at fair value through current gains and losses
Such assets bear initial recognition amounts at fair value (after deduction of cash
dividends declared but not granted yet or bond interests which arrives at settlement
moment but not collected yet) when being obtained, and relevant transaction expense falls
into current gains and losses.
Interests or cash dividends acquired during holding are recognized as investment income,
and movement of fair value is recorded in current gains and losses as at year end.
When disposing such assets or liabilities, the Company shall recognize the difference
between fair value and initial booking amount as investment income, and gains and losses
from movements of fair value shall be subject to adjustment at the same time.
(2)Held-to-maturity investment
Held-to-maturity investment bears initial recognition amount at aggregate of fair value
(after deduction of bond interests which arrives at settlement moment but not collected yet)
and relevant transactional expenses when being obtained.
When holding such investments, interest income is calculated and recognized according to
remaining amortized cost and effective interest rate, and then written into investmentSemi-Annual Report
2010
37
income. Effective interest rate is recognized when obtaining such investments, and not
subject to change during the expected duration period or applicable shorter period.
When disposing such investments, the Company shall treat the balance between the
payment for obtaining such investments and carrying value thereof as investment income.
(3)Financial assets available for sale
Financial assets available for sale bear initial recognition amount at aggregate of fair value
(after deduction of cash dividends declared but not granted yet or bond interests which
arrive at settlement moment but not collected yet) and relevant transactional expenses
when being obtained.
Interests or cash dividends acquired during holding are recognized as investment income.
They will be measured at fair value and movements of their fair values shall be recorded in
capital reserve (other capital reserve) at year end.
When disposing such assets, the Company shall treat the balance between the payments
for obtaining such financial assets and carrying value thereof as investment gains and
losses; meanwhile, the amounts correspondingly disposed due to accumulative
movements of fair value originally recorded in owners’ equity directly shall be reversed
out and recorded in investment gains and losses.
(4)Other financial liabilities
Other financial liabilities bear initial recognition amount at aggregate of fair value and
relevant transactional expenses. Subsequent measurement is conducted at amortized cost.
3. Confirmation evidence and measurement methods for transfer of financial assets
When transfer of financial assets occurs, the Company shall stop recognition of such
financial assets if all risks and remunerations related to ownership of such financial assets
have almost been transferred to the receiver; while shall continue to recognize such
financial assets if all risks and remunerations related to ownership of such financial assets
have almost been retained.
When judging whether or not the aforesaid terminal recognition condition for financial
assets is arrived at for transfer of financial assets, the Company generally adopts the
principle that substance overweighs format. The Company divides such transfer into entire
transfer and part transfer. As for the entire transfer meeting condition for discontinued
recognition, balance between the following two items is recorded in current gains and
losses:
(1)Carrying value of financial assets in transfer;
(2)Aggregate of the consideration received from transfer and accumulative movements of
fair value originally recorded in owners’ equity directly (applicable when financial assets
involved in transfer belong to financial assets available for sale).
As for the part transfer meeting condition for discontinued recognition, entire carrying
value of financial assets in transfer is shared by discontinued recognition part and
continued recognition part, in light of their respective fair value. Balance between the
following two items is recorded in current gains and losses:
(3)Carrying value of discontinued recognition part;
(4)Aggregate of the consideration of discontinued recognition part and amount of suchSemi-Annual Report
2010
38
part attributable to accumulative movements of fair value originally recorded in owners’
equity directly (applicable when financial assets involved in transfer belong to financial
assets available for sale).
Financial assets are still subject to recognition if transfer of such assets doesn’t satisfy the
condition for discontinued recognition. And consideration received is recognized as
financial liability.
(10)Calculation of accounts receivable and bad debt reserve
Accounts receivable refer to trade receivables and other receivables. The Company
recognizes accounts receivable at their fair value when obtaining such accounts.
Subsequent measurement is conducted for accounts receivable at effective interest rate
and amortized cost.
The Company adopts allowance method to calculate bad debt reserve which is likely to
happen.
Subsequent to detailed valuation on possibility of collection for accounts receivable
comes withdrawal for bad debt reserve. The Company conducts impairment testing
respectively for accounts receivable with single significant items and non-significant
items. As for accounts receivable with single significant items, separate impairment
testing shall be made. The present value of future cash flow less its carrying value is
recognized as impairment loss, and then bad debt reserve shall be provided.
As for accounts receivable with no single significant items and accounts receivable with
single significant items which no impairment is found after separate testing, bad debt
reserve shall be provided according to the following proportions:
The Company adopts the following standards for recognition of bad debt: ○1 debts which
can not be collected by settlement with bankruptcy properties or heritage of debtors who
face revoke, bankruptcy or death, and cash flow is in serious shortage; ○2 debts which are
past due while not settled by debtors and featured with obvious characteristics indicating
that it is not able to collect. Account receivable is recognized as bad debt losses if there are
obvious evidences indicating that the accounts are not possible to collect, and the
provision of bad debt reserve shall then be offset.
(11)Inventories
Inventories of the Company mainly are: stock goods, delivered goods, product-in-process,
raw materials, packing materials, low value consumables and materials for entrust
processing, etc.
Costs of finished products and in-process products are costs of raw materials, direct labors,
Aging Provision proportion
Within one year (one year
included) 0%
One to two years(two years
included) 5%
Two to three years(three
years included) 10%
Above three years 15%Semi-Annual Report
2010
39
other direct costs, and those indirect costs amortized at an appropriate proportion at
normal productivity. Inventories are priced at costs when purchased or delivered to stock,
and by weighted average method when delivered out from stock. Perpetual inventory
system is adopted with inventories.
Inventories are measured initially at their costs. Inventories obtained from debtors in term
of non-monetary assets to makeup debts are measured at fair value. Accounting method of
inventories obtained in term of non-monetary transaction is available under the headline
of “Monetary asset transaction”. Costs of inventories input by investors are recognized at
the value setout by the investment contracts or agreements.
Installment amortization is applicable to low value consumables. Packing materials are
recorded in production cost at once when being received.
At the end of year, inventories are measured at the lower of costs and net realizable values.
If the cost of an inventory is higher than its net realizable value due to derogation,
partially or fully out of date, or selling price is lower than the cost, the difference between
the net realizable value and cost of each inventory item is provided as inventory
impairment provision. Net realizable value is determined at the estimated sell price in
normal operation less the estimated costs occurred till it is finished and necessary sales
expenses. For those inventories held for purpose of implementation of sales or service
contracts, their net realizable values are accounted on the basis of agreed values.
If the previous factors resulting in deduction of inventories values disappear, then such
deduction of value shall be reversed back from the original provision of inventory
depreciation reserve, and turns to current gains and losses.
(12) Long-term equity investment
1. Recognition of initial investment cost
(1) Long-term equity investment formed from business combination
Long-term equity investment formed from business combination under the same control:
if the Company takes cash payment, transfers non-cash assets or undertakes debts and
issues equity securities as consideration for combination, the share of carrying value of
owner's equity of the merged party on the merger date shall be taken as the initial
investment cost for such long-term equity investment. Capital reserve is subject to
adjustment at difference between the initial investment cost and combination
consideration paid for the long-term equity investment; or otherwise adjust retained profit
if the capital reserve is not enough for offset. Each direct expenses related to business
combination, among other things, the audit fee, valuation expense and law service expense
paid for business combination shall be written into current gains and losses upon
happening.
Long-term equity investment formed from business combination not under the same
control: the combination cost is the asset given, liabilities occurred or undertaken by the
Company for obtaining controlling power, and the fair value of equity securities issued
and various direct related expenses occurred for business combination. As for the kind of
business combination realized by multiple exchange transactions step by step, its
combination cost equals to aggregate of each single combination. For the future
proceedings agreed in combination contract which are likely to affect combination cost, if
such proceedings are expected to happen as at the purchase day and the affected amountSemi-Annual Report
2010
40
over combination cost could be reliably measured, it also shall be recorded in combination
cost.
(2)Long-term equity investments obtained through other ways
For long-term equity investments obtained through payment with cash, then the actual
payment shall be viewed as initial investment cost.
For long-term equity investments obtained through issuance of equity securities, then the
fair value of such securities shall be viewed as initial investment cost.
For long-term equity investments input by investors, then the value agreed in investment
contract or agreement (after deduction of cash dividend or profit declared while not
granted yet) shall be viewed as initial investment cost, while excluding the value agreed in
contract or agreement is not fair valued.
Under the precedent condition that non-monetray assets exchanges are featured with
commercial nature and fair values of exchange-in or exchange-out assets can be reliably
measured, long-term equity investment exchange-in through non-monetary assets
exchange shall be recognized with initial investment cost on the basis of the fair value of
the assets exchange-out, unless there is obvious evidence showing that fair value of
exchange-in assets is more reliable; as for non-monetray assets exchanges not satisfying
such precedent condition, initial investment cost of exchange-in long-term equity
investment falls to the carrying value of exchange-out assets and relevant taxes payable.
For long-term equity investments obtained through debt reorgnization, its initial
investment cost is recognized based on fair value.
2. Subsequent measurement and recognition of gains and losses
(1) Subsequent measurement
As for long-term equity investment made by the Company to its subsidiaries, calculation
is conducted by cost method, while equity method is adopted for adjustment when
preparing consolidated financial statements.
Cost method is used for calculation when the Company has no common control or
significant influence over the invested units. Besides, such long-term equity investments
have no quotation in an active market and their fair values can’t be reliably measured.
Equity method is used for calculation when the Company has common control or
significant influence over the invested units. When initial investment cost is higher than
the share of fair value of net realizable assets of the invested unit, then the initial
investment cost of the long-term equity investment remains with no adjustment; while if
the aforesaid former is lower than the later, then difference shall be recorded in current
gains and losses.
Disposal of other changes in owners’ equity (except for changes in net gains and losses) of
the invested units: for other changes in owners’ equity (except for changes in net gains and
losses) of the invested units, with shareholding proportion held constant, the Company
computers how much it should share or undertake according to the shareholding
proportion, adjusts carrying value of such long-term equity investment and increase or
decrease capital reserve (other capital reserve) at the same time.Semi-Annual Report
2010
41
(2) Recognition of gains and losses
Under cost method, other than payment actually paid for obtaining investment or cash
dividend or profit included in consideration which has been declared while not granted yet,
the Company recognizes investment income according to its share in the cash dividend or
profit declared for grant by the invested unit.
Under equity method, when the Company is confirmed to share losses of the invested
units, the following order shall prevail for disposal: first of all, offset carrying value of
long-term equity investment. Second, for long-term equity investment whose carrying
value is not enough for offset, investment loss should be continued to recognize within the
limit of carrying value of other long-term equity which substantially forms net investment
to invested units, to offset carrying value of long-term items receivable. At last, after the
aforesaid treatment, if enterprise still bears additional duties according to investment
contract or agreement, projected liabilities are recognized in accordance to the the
obligations which are expected to undertake, and then recorded in current gains and losses.
In the event that the invested unit realizes profit in later periods, the Company will adopt
disposal adversed to the above order after deduction the unrecognized share of loss, i.e.
write off the carrying value of the recognized projected liabilities, recover carrying value
of long-term equity which substantially forms net investment to invested unit and longterm
equity investment, and recognize investment income at the same time.
3. Evidence showing common control and significant influence with invested units
Common control over certain economic activity agreed by contract only exist when
investors who need to share control power on material financial and operation decisions
related to such economic activity make unanimous agreement, and then it is deemed as
common control implemented by other parties to invested unit; if a party has power to join
decision-making related to finance and operation of an enterprise, while no ability of
control or joint control with other parties upon establishement of such decisions, the party
is then deemed that it has significant influence upon invested unit.
4. Provision for impairment reserve
For long-term equity investment with no significant influence, no quotation in active
market and whose fair value could not be reliably measured, its impairment reserve is
recognized based on the balnce between its carrying value and present value recognized
through discounted future cash flow of similar financial assets at the prevailing market
rate of return.
For other long-term equity investments (except for goodwill) formed from business
combination where impairment signs appear, if the measurement on the recoverable
amount shows that the recoverable amount of such long-term equity investment is lower
than its fair value, then the difference is recognized as impairment loss.
As for goodwill formed from business combination, impairment testing will be made each
year, no matter whether or not there is impairment indication.
Once impairment loss is recognized for long-term equity investment, there will be no
stand for any reversal.Semi-Annual Report
2010
42
(13)Fixed assets
1. Assets held by the Company for purposes of goods production, labor service provision,
leasing or operational management and whose service lives exceed one accounting year
are recognized as fixed assets.
2. Initial measurement shall be conducted on fixed assets according to the actual cost.
Abandon expenses will be estimated if the fixed asset is expected for a greater expense at
when being abandoned, and will be accounted into fixed asset cost at its current value. If a
price paid for purchasing of fixed asset is overdue beyond the normal credit conditions,
and substantially forms financing characters, the cost of such fixed asset is determined at
the current value of the price paid. The difference between the practical price paid and the
current value of the price, except for those should be capitalized according to the
regulations, shall be accounted into current gains/losses account.
3. Depreciation of fixed assets is on age average basis. According to the categories of fixed
assets, predicted service life, and predicted residue value (5% of original value),
depreciation age and annual depreciation rates are confirmed as the followings:
At the end of the year, the predicted service life and net residue rate are reviewed item by
item. Adjustments are done on any difference from original estimation. For those fixed
assets whose recoverable amounts are lower than their carrying values due to continuing
falling of market price, out-of-date technology, and aged, damaged equipments or
equipments being idle for a long period of time, the recoverable amounts of assets shall be
estimated individually or on assets portfolio, and impairment provision shall be drawn
according to the differences with their book values. Once asset impairment losses are
recognized, they shall not be reversed in later accounting periods. If impairment provision
has been provided upon an fixed asset which is in status of disposal, and the fixe asset may
produce no financial benefit by use or disposal, depreciation and provision of impairment
shall be suspended. And estimation of net residue value shall be adjusted at the meantime.
(14) Construction in process
1. Category of construction in process
Construction in process is calculated at categorized initiated projects.
2. Standard and point of time for construction in process carrying forward to fixed
assets
Fixed asset is booked with the entire expenditures occurred in the construction in process
till it arrives at predicted state for use. For those constructions in process of fixed assets
which have already arrived at the predicted state for use, while still with absence of
completion settlement, they shall be carried forward to fixed assets at the estimated value
Fixed asset categories Service life Annual
depreciation ratio
Buildings: Consistency – Production buildings 35 years 2.71%
– Non-production buildings 40 years 2.38%
Temporary buildings 9 years 10.56%
Equipment & machinery 12 years 7.92%
Transportation tools 9 years 10.56%
Other equipment 6 years 15.83%Semi-Annual Report
2010
43
based on engineering budget, construction cost or actual cost commencing from the date
of arrival of the predicted state for use. Meanwhile, they shall be also subject to the
depreciation policies applicable to fixed assets of the Company for provision of
depreciation. Once completion settlement is made, the original temporary estimated value
shall be adjusted at the effective cost. However, the original provision of depreciation
remains unchanged.
3. Methods of impairment testing and provision of impairment reserve for
construction in process
The Company makes judgment at end of each year on whether there is indication showing
that impairment is likely to happen in construction in process.
In case of existence of impairment indication in construction in process, the recoverable
amount thereof shall be estimated. And the recoverable amount is confirmed at fair value
of construction in process less the higher of net amount after disposal expense and present
value of predicted future cash flow of such construction in process.
In the event that the recoverable amount of construction in process is lower than its
carrying value, then the carrying value shall be reduced to the recoverable amount, and the
reduced part is recognized as impairment loss of such construction in process through
current gains and losses. Meanwhile, corresponding impairment reserve for construction
in process shall be provided.
Once impairment loss is recognized in construction in process, it will not be reversed in
subsequent accounting periods.
Should be there any indication showing possible impairment of one item construction in
process, enterprise will estimate its recoverable amount based on the single construction in
process. If enterprise has difficulty in estimating recoverable amount of such single
construction in process, it shall turn to estimation of the recoverable amount of the assets
portfolio to which such single construction in process belongs.
(15) Loan expenses
Loans are initially booked at costs when obtained, and measured at amortized cost on
actual interest rate basis. Loan expenses shall be capitalized only when they are satisfying
all of the conditions that: payment of asset already happened, loan expense already
happened, and purchasing or construction activity for purpose of make the asset usable
has started. Otherwise the loan expenses shall be recognized as current expenses.
Loans borrowed particularly for purchasing or production of assets which satisfies the
conditions of capitalization, the expenses to be capitalized shall be decided by actual
interest occurred for the particular loan, less interest obtained from saving of the unused
fund saving in bank or investment gains obtained through temporary investments.
If common loans have been used in purchasing or construction of assets satisfying the
conditions of capitalization, the interest to be capitalized shall be calculated according to
the weighted average of balance of accumulated capital expense over capital expense of
the particular loan multiply the capitalization ratio of common loans used. Capitalization
ratio is calculated at the weighted average interest of common loans. Calculation is
conducted on the basis of the multiply between accumulative expenses paid for assetsSemi-Annual Report
2010
44
satisfying condition for capitalization as at the period ended at year-end and capitalization
ratio, and at an interest not exceeding the actually occurred one.
(16) Intangible assets and R&D costs
Intangible assets are booked at the amount practically paid. When the payment for
purchasing of intangible assets is delayed beyond the normal credit conditions, which has
substantially formed financing activity, the cost of intangible assets shall be decided
according to the current value of the price paid. The difference between the actual
payment and the current value shall be accounted into current gains/losses account in the
credit period, except for those shall be capitalized according regulations.
Intangible assets with limited useful life are amortized at the amount of cost after
deducting of predicted residue value upon their useful life on straight basis. Intangible
assets without limited useful life are not amortized.
1. Land use right it subject to amortization based on the actual remaining durable life upon
acquisition of the land use certificate;
2. Patent manufacture technology is subject to 20-years amortization.
Expenditures occurred before scaled production or been used, using of the research fruit
or other knowledge in particular project or design, to produce new products or materials,
facilities, or products with substantial improvement, are regarded as development
expenditures. When the following conditions are all satisfied, the development period
expenditures are recognized as intangible assets, or otherwise recognized as expenses.
1. The intangible asset is completed and technically possible to be used or sold;
2. With intention to complete the intangible asset for purpose of use or sale;
3. Evidence showing that there are markets or the products produced with using of the
intangible asset, or markets of the intangible asset itself, by which the intangible asset may
produce financial benefits. Intangible assets used inside the Company must be approved
for their usable characters;
4. Developing of the intangible assets are supported by sufficient technical, financial, and
other resources, and the intangible assets can be used or sold;
5. Expenditures occurred in developing of the intangible asset may be reliably measured.
Research expenditures are accounted into current expense account when occurred.
At end of each year, intangible assets are inspected one after another. Those intangible
assets which have been replaced by other new technologies and the financial benefit of the
Company may be influenced negatively when they are used, or significant decline in
market value and cannot restore in the retained amortizing period, they shall be estimated
individually for their retrievable amount, and impairment provision shall be provided
according to the balance of lower than their book value. Once an asset impairment loss is
recognized, it shall not be restored in successive accounting period. No impairment
provision was provided in the report period.Semi-Annual Report
2010
45
(17) Long-term deferred expenses
Long-term deferred expense is amortized at straight line method, averagely during the
beneficial period.
(18)Income recognition
Reference for recognition of sales income: enterprise has already transferred the main
risks and remunerations in respect of ownership of commodities to purchaser; enterprise
has neither kept the continuing management right generally relating to the ownership, nor
implemented effective control over the sold commodities; the amount of income could be
reliably measured; the related economic benefit is very likely to flow in the enterprise; the
relevant cost occurred or to occur could be reliably measured.
The Company recognizes income of commodity sales by reference to the payment decided
in contract or agreement amount received or receivable by the purchaser, with exception
of those payments which are not fair valued. Collection of the contracted or agreed
payment is by method of defer. For such payments essentially natured with financing,
sales income from commodities shall be decided according to the fair value of the
contracted or agreed value receivable. Difference between the contracted or agreed
payment receivable and the fair value thereof, shall be amortized at effective interest rate
and recorded in current gains and losses during the contract or agreement period.
Reference for recognition of income from service provision: income can be reliably
measured; the related economic benefit is very likely to flow in the enterprise; completion
progress of transaction could be reliably measured; cost occurred or to occur during
transaction could be reliably measured.
At the year-end, in the event that the result of service provision transaction can be reliably
measured, income from service provision shall be recognized by adoption of percentage
of completion method. Provided with progress of completion of service transaction, the
Company computers what the proportion is that the occurred cost arising from the
completed works takes in the total estimated cost, to recognize the progress of completion.
Reference for recognition of income from transmission of use right of assets: related
economic benefit is very likely to flow in the enterprise; income can be reliably measured.
The Company recognizes income from transmission of use right of assets based on the
following conditions respectively:
1. Amount of interest income is decided according to time others take for applying
monetary capital of the Company, at effective interest rate.
2. Amount of income from utilization expense is decided according to agreed time and
method in respect of payment charging as set out in related contract and agreement.
(19)Government grants
1. Type
Governments grants of the Company refer to the monetary and non-monetary assets
obtained from government for free, and are divided into those related to assets and others
related to revenues.Semi-Annual Report
2010
46
2. Accounting method
Government grants in relation to purchase of long-term assets such as fixed assets or
intangible assets shall be recognized as deferred income, and are recorded in nonoperating
income according to service life of such constructed or purchased assets by
installments;
Government grants in relation to revenues, shall be recognized as deferred income upon
acquisition and recorded in current non-operating income during the periods in which
relevant expenses are recognized when such grants are for the purposes of compensating
relevant expenses or losses of an enterprise in future periods; and shall be directly credited
to current non-operating income upon acquisition when such grants are for the purposes of
compensating occurred relevant expenses or losses of an enterprise.
(20)Deferred income tax assets and deferred income tax liabilities
1. Reference for recognition of deferred income tax assets
Under the limit of the taxable income which is very likely to be obtained by the Company
for use of offsetting deductible temporary difference, the Company recognizes the
deferred income tax assets arising from such deductible temporary difference.
2. Reference for recognition of deferred income tax liabilities
The Company recognizes taxable temporary difference of current and prior periods which
should have been taxed while not paid yet as deferred income tax liabilities, while other
than the temporary differences formed from transactions constituted by combination of
goodwill and non-enterprises, meanwhile, such transactions bring no affect on accounting
profit and taxable income when happening.
(21) Employeess’ remuneration
During accounting period, employees’ remuneration payable is recognized as liabilities
which are recorded in cost of products or services, currrent expense, or cost of fixed assets
or intangible assets in light of different beneficial parties. Subject to relevant regulations,
the Company provides insurance and public reserve according to certain proportion of
monthly salary, and pays them to labor and social security authorities month by month,
and credits relevant expenditures to current costs or expenses.
(22)Recognition of projected liabilities
The Company recognizes obligations satifying all the following conditions and in relation
to contingent proceedings as liabilities: the obligation is the one presently undertaken by
an enterprise; implementation of such obligation would lead to flow-out of economic
benefit of that enterprise in a great possibility; amount of such obligation can be reliably
mesured.
In the event that an execution contract turns to loss contract, obligations occurred from
such loss contract shall be recognized as projected liabilities when the aforesaid conditions
are satisfied.
Other obligations undertaken by the Company (such as undertaking over-loss,
reorganization obligation and discard expenses) shall be recognized as projected liabilities
when the aforesaid conditions are satisfied.
(23)Accounting method for disposal of income tax
The Company adopts balance sheet debt method to dispose income tax. Interest rate ofSemi-Annual Report
2010
47
enterprise income tax is detailed in Note 3.
(24)Change of main accounting policy and accounting estimation
There is no change in accounting policies and estimations, and correction of material
accounting errors in previous periods of the Company during the report period.
III. Taxes
Major taxes applicable to he Company: VAT, business tax, urban maintenance and
construction tax, educational surtax and surcharge, enterprise income tax, and housing
property tax as well.
Tax rates for turnover tax: 17% for VAT, 5% for business tax, 1% or 7% of turnover tax
for urban maintenance and construction tax, 3% of turnover tax for educational surtax and
surcharge.
Tax rate of enterprise income tax applicable to the Company and its holding subsidiaries
for this report period are as follows:
* Shenbao Huacheng, a controlling subsidiary of the Company, has been granted Hightech
Enterprise Certification (No. GR200844200244) jointly promulgated by Shenzhen
Technology & Information Bureau, Bureau of Finance of Shenzhen, Shenzhen Municipal
Bureau of State Taxation and Shenzhen Municipal Bureau of Local Taxation as at the
date of 2 March 2009. Such certificate was released on 16 December 2008, with a valid
Name of company Note 2010 2009
The Company 22% 20%
Shenzhen Shenbao Huacheng Science and
Technology Co.,Ltd.（Shenbao Huacheng）
* Controlling subsidiary 15% 15%
Including: Shantou Branch of Shenbao Huacheng Branch of Shenbao
Huacheng
25% 25%
Jufangyong Tea Industry Co., Ltd. in
Wuyuan County (Wuyuan Jufangyong)
Controlling subsidiary
of Shenbao Huacheng
25% 25%
Shenzhen Shenbao Sanjing Food & Beverage
Development Co., Ltd. (Shenbao Sanjing)
Wholly-owned
subsidiary
22% 20%
Including: Guangdong Shenbao Food Co., Ltd.
(Guangdong Shenbao)
Controlling subsidiary
of Shenbao Sanjing
25% 25%
Shenzhen Shenbao Industrial Trading &
Development Co., Ltd. (Shenbao Industrial
Trading & Developmen)
Wholly-owned
subsidiary
22% 20%
Shenzhen Shenbao Properties Management Co.,
Ltd. (Shenbao Properties)
Wholly-owned
subsidiary
22% 20%
Shenzhen Biological Products Co., Ltd. (Biological
Products)
Wholly-owned
subsidiary
22% 20%
Huizhou Shenbao Industrial Investment Co., Ltd.
(Huizhou Shenbao Investment)
Wholly-owned
subsidiary
25% 25%
Huizhou Shenbao Technologies Co., Ltd. (Huizhou
Shenbao Technologies)
Wholly-owned
subsidiary
25% 25%Semi-Annual Report
2010
48
term of 3 years. With relevant preferential policies adopted by the State in favor of hightech
enterprises, all qualified high-tech enterprises are able to enjoy the lower income tax
rate of 15% for collection of enterprise income tax, capable for 3 years commencing from
the year when they are deemed as qualified. Shenbao Huacheng has favored from this
preferential policy from 2008 to 2010.
IV. Business combination and consolidated financial statements
1. Branch
The Company has no branch.Semi-Annual Report 2010
49
2. Holding subsidiaries:
Registered capital
Effective
investmen
ts as at
year-end
Place of
registration
Nature of
business
Operation scope Registered capital
Effective
investments as at
period-end
Combin
ed or
not
Shareholding
proportion Voting right
proportion
Direct Indirect
I. Subsidiaries not formed from
business combination
Shenbao Industrial Trading &
Developmen
Whollyowned
Shenzhen
Commercial
wholesale
Commercial wholesale RMB 5.5 million RMB 5.5 million Yes 100% --- 100%
Shenbao Properties *2
Whollyowned
Shenzhen
Property
management
Management of self-owned
properties
RMB 5 million RMB 5 million Yes 51% 49% 100%
Biological Products *3
Whollyowned
Shenzhen
Manufacturi
ng
Production and purchase & sales of
health-care foods and food
additives
RMB 2 million RMB 2 million No 100% --- 100%
Shenbao Sanjing
Whollyowned
Shenzhen
Manufacturi
ng
Production and operation of drinks,
non-staple foods and food
additives
RMB 30.15 million RMB 80,520,800 Yes 100% --- 100%
Shenbao Huacheng
Sharehold
ing
Shenzhen
Manufacturi
ng
Production and sales of
concentrated tea juice and instant
tea powder
RMB 103,451,300 RMB 53,451,300 Yes 51.67% --- 51.67%
Huizhou Shenbao Investment
Whollyowned
Huizhou,
Guangdong
Information
consultancy
Industrial investments and
consultancy of logistics
information
RMB 5 million RMB 5 million Yes 100% --- 100%
Huizhou Shenbao Technologies
Whollyowned
Huizhou,
Guangdong
Real estate
development
Real estate development and
property management
RMB 4 million RMB 4 million Yes 100% --- 100%
Shenzhen Shenbao
(Liaoyuan)Industrial Company
(Shenbao Liaoyuan) *1
Sharehold
ing
Shenzhen ---
To be launched for official
operation
RMB 2,378,000 RMB 57,600 No 53.5% --- 53.5%Semi-Annual Report
2010
50
*1.Shenzhen Shenbao (Liaoyuan)Industrial Company (Shenbao Liaoyuan)：though it
was not a short that the company had been established for, it never conducted normal
operation. Since its operation license has been revoked, the Company has made full
provision of long-term investment impairment reserve for the investment made to such
company. Financial statements of such company have not been included in the
consolidated financial statements.
*2. Shenbao Properties: its 49% equity interests were held by Shenbao Sanjing, a
wholly-owned subsidiary of the Company.
*3. Biological Products: the company has released announcement in relation to its
wounding up on Shenzhen Special Zone Daily dated 9 December 2009. During the
report period, the company has already finished all procedures relating to its deregistration.
Currently, it has been revoked; accordingly it has not been consolidated at
the period-end.
Particulars about minority interest:
V. Notes to main items of consolidated financial statements
(In case of special reference, monetary unit used below shall be RMB)
(1)Monetary fund
Subsidiaries Minority interest
Minority interest used
for offsetting minority
interest gains and
losses
Minority interest gains
and losses offset by
owners’ equity of
parent company
Shenbao Huacheng 45,593,804.07 --- ---
Total 45,593,804.07 --- ---
Item
Balance at period-end Balance at year-begin
Original
currency
Exchang
e rate RMB Original
currency
Exchan
ge rate RMB
Cash
RMB 206,137.67 1.0000 206,137.67 96,302.40 1.0000 96,302.40
HKD 5,264.02 0.8739 4,634.86 5,263.90 0.8805 4,634.86
USD 7,233.73 6.8303 49,393.36 7,233.73 6.8282 49,393.36
Sub-total 260,165.89 150,330.62
Bank deposit
RMB 56,623,349.86 1.0000 56,623,349.86 89,242,907.85 1.0000 89,242,907.85
EURO 449.66 9.7971 4,405.36 449.54 9.7971 4,404.19
HKD 13,418.93 0.8739 11,727.05 13,317.49 0.8805 11,726.00
USD 63,990.24 6.8303 437,073.92 176,341.16 6.8282 1,204,053.04
Sub-total 57,076,556.19 90,463,091.08
Other
monetary funSemi-Annual Report
2010
51
Among which, details of the restricted monetary funds are set out below:
The balance of monetary fund at year-end has decreased by RMB 33,276,699.62 as
compared to that of year-begin, representing a decrease of 30.08%, mainly due to the
payment for the construction in process (Huizhou Project) and compensation for
dismissal of labor contracts during the report period.
(2)Transaction financial assets
(3)Account receivable
1. Composition of account receivable
ds
RMB 20,000,000.00 1.0000 20,000,000.00 20,000,000.00 1.0000 20,000,000.00
Sub-total 20,000,000.00 20,000,000.00
Total 77,336,722.08 110,613,421.70
Item Balance at period-end Balance at year-begin
Term deposit used as pledge for
borrowings-Ping An Bank 20,000,000.00 20,000,000.00
Total 20,000,000.00 20,000,000.00
Item Balance at period-end
Balance at yearbegin
Basis of fair value
recognition
Transactional equity
instrument investment
349,500.00 210,000.00 Market value
Total 349,500.00 210,000.00
Ageing
Balance at period-end Balance at year-begin
Book amount
Proport
ion in
total %
Provision for bad
debt
Percenta
ge of
provisio
n for bad
debt %
Book amount
Proporti
on in
total %
Provision for
bad debt
Percenta
ge of
provisio
n for bad
debt %
Within 1 year(1 year
included) 20,955,131.09 38.42 --- --- 20,240,009.86 37.61 --- ---
1-2 years (2 years
included) 4,608,418.03 8.45 232,277.16 5.04 4,608,418.03 8.56 232,277.16 5.04
2-3 years(3 years
included) 5,271,744.50 9.67 526,993.50 10.00 5,271,744.50 9.79 526,993.50 10.00
Above 3 years 23,701,324.30 43.46 19,983,135.60 84.31 23,701,324.30 44.04 19,983,135.60 84.31
Total 54,536,617.92 100.00 20,742,406.26 38.03 53,821,496.69 100.00 20,742,406.26 38.54Semi-Annual Report
2010
52
2. Movements to bad debt reserve for account receivables are set out below:
3. Account receivables with significant amount in single item at period-end:
4．Account receivables without significant amount in single item while with great
exposure after grouped according to characteristics of credit risks：
Categories
Balance at period-end Balance at year-begin
Book amount
Proporti
on in
total %
Provision for bad
debt
Percenta
ge of
provisio
n for
bad debt
%
Book amount
Proporti
on in
total %
Provision for
bad debt
Percenta
ge of
provisio
n for bad
debt %
I. Account
receivables with
significant amount in
single item 8,360,664.00 15.33 --- --- 6,692,642.00 12.43 --- ---
II. Account
receivables without
significant amount in
single item while
with great exposure
after grouped
according to
characteristics of
credit risks 19,250,682.70 35.30 19,250,682.70 100.00 19,250,682.70 35.77 19,250,682.70 100.00
III. Other minor
account receivables 26,925,271.22 49.37 1,491,723.56 5.54 27,878,171.99 51.80 1,491,723.56 5.35
Total 54,536,617.92 100.00 20,742,406.26 38.03 53,821,496.69 100.00 20,742,406.26 38.54
Item Book balance at
year-begin
Provision during
this period
Decrease during the period Book balance at
Reversal Written-off period-end
2010(this period) 20,742,406.26 --- --- --- 20,742,406.26
Item Book balance Ratio of
provision Bad debt reserve Grounds
Customer I 8,360,664.00
0% of the balanc
e of period-end
---
Accounts with significant amount
in single item represent
10%(including 10%) of the
balance of period-end
Total 8,360,664.00 ---
Ageing
Balance at period-end Balance at year-begin
Book balance
Bad debt reserve
Book balance
Bad debt reserve
Amount Proportion% Amount Proportion%
Above 3
years 19,250,682.70 100.00 19,250,682.70 19,250,682.70 100.00 19,250,682.70
Total 19,250,682.70 100.00 19,250,682.70 19,250,682.70 100.00 19,250,682.70Semi-Annual Report
2010
53
For the purpose of account receivables without significant amount in single item while
with great exposure after grouped according to characteristics of credit risks, the
reference to confirm such group includes ageing over 3 years and bad debt reserve
have been fully provided.
5. As at the end of the period, there is no account payable by the shareholders
units holding 5% or above the voting shares of the Company in the balance of
account receivables.
6. There is no account receivable due from related parties at period-end.
7．There is no transfer of account receivables without satisfaction of the condition
for discontinued confirmation as at the end of the period.
8．There is no business arrangement for assets capitalization made with account
receivables as objectives as at the end of the period.
9. There is no financial instrument belonging to stock objectives and without
satisfaction of the condition for discontinued confirmation.
10. Top 5 debtors among the account receivables at period-end
(4)Account paid in advance
1. Ageing analysis
Ranking of debtor Relation with the
Company
Amount of
borrowings Term
Percentage to the
total account
receivables
Customer I Major customer 8,360,664.00 Within 1 year 15.33%
Customer II Major customer 2,249,883.00 2-3 years 4.13%
Customer III Major customer 1,588,500.00 Within 1 year 2.91%
Customer IV Major customer 1,473,640.00 Within 1 year 2.70%
Customer V Major customer 1,294,912.00 Within 1 year 2.37%
Ageing
Balance at period-end Balance at year-begin
Amount Ratio % Amount Ratio %
Within 1 year 4,261,908.76 74.99 3,087,016.97 68.48
1-2 years 787,759.90 13.86 787,759.90 17.47
2-3 years 620,965.66 10.93 620,965.66 13.77
Above 3 years 12,426.50 0.22 12,426.50 0.28
Total 5,683,060.82 100.00 4,508,169.03 100.00Semi-Annual Report
2010
54
2. Material account paid in advance ageing over one year
3. Account paid in advance with comparatively great balance at year-end
(1)Total of the arrears due from the top 5 debtors and their respective proportions
4. As at the end of the period, there is no account payable by the shareholders
units holding 5% or above the voting shares of the Company in the balance of
account paid in advance.
5. The balance of account paid in advance at period-end has increased by RMB
1,174,891.79 as compared to that of year-begin, representing an increase of
26.06%, mainly due to the increase of account paid in advance by the Company’s
holding subsidiary-Shenbao Huacheng for the purpose of production expansion
and purchase of materials.
Item Amount Reasons for unsettlement
Customer I 494,479.00 Account paid in advance for acquisition ofland
has not been settled yet
Customer II 238,536.78 Account paid in advance for goods has not been
settled yet
Total 733,015.78
Unit
Balance at period-end Balance at year-begin
Amount Proportion % Amount Proportion %
Customer I 817,425.53 14.38 567,258.46 12.58
Customer II 567,258.46 9.98 494,479.00 10.97
Customer III 494,479.00 8.70 353,220.00 7.84
Customer IV 376,000.00 6.62 238,536.78 5.29
Customer V 341,192.35 6.00 207,888.72 4.61
Total 2,596,355.34 45.69 1,861,382.96 41.29Semi-Annual Report
2010
55
(5)Other receivables
1. Composition of other receivables
2. Movements to bad debt reserve for other receivables are set out below:
Ageing
Balance at period-end Balance at year-begin
Amount
Proport
ion in
total %
Provision for
bad debt
Percent
age of
provisi
on for
bad
debt %
Amount
Propor
tion in
total %
Provision for
bad debt
Percentag
e of
provision
for bad
debt %
Within 1 year 7,220,741.04 17.33 --- --- 4,827,270.12 12.25 --- ---
1-2 years 4,547,811.12 10.92 224,732.57 4.94 4,547,811.12 11.54 224,732.57 4.94
2-3 years 6,321,097.79 15.17 625,035.56 9.89 6,321,097.79 16.05 625,035.56 9.89
Above 3 years 23,571,428.18 56.58 18,801,321.37 79.76 23,700,299.29 60.16 18,930,192.48 79.87
Total 41,661,078.13 100.00 19,651,089.50 47.17 39,396,478.32 100.00 19,779,960.61 50.21
Categories
Balance at period-end Balance at year-begin
Amount
Propo
rtion
in
total
%
Provision for
bad debt
Percent
age of
provisi
on for
bad
debt %
Amount
Proport
ion in
total %
Provision for
bad debt
Percent
age of
provisio
n for
bad
debt %
I.Other receivables
with significant
amount in single
item
19,493,461.29 46.79 1,418,537.77 7.28 15,607,488.56 39.61 1,418,537.77 9.09
II.Other receivables
without significant
amount in single
item while with
great exposure after
grouped according
to characteristics of
credit risks
17,987,868.98 43.18 17,987,868.98 100.00 18,116,740.09 45.99 18,116,740.09 100.00
III.Other minor
receivables 4,179,747.86 10.03 244,682.75 5.85 5,672,249.67 14.40 244,682.75 4.31
Total
41,661,078.13
100.0
0 19,651,089.50
47.17 39,396,478.32 100.00 19,779,960.61 50.21
Item Book balance
of year-begin
Provision of this
period
Decrease during the period Book balance of
Reversal Written-off period-end
2010(this period) 19,779,960.61 --- --- 128,871.11 19,651,089.50Semi-Annual Report
2010
56
3. Other receivables with significant amount in single item at period-end：
4. As at the end of the period, there is no account payable by the shareholders
units holding 5% or above the voting shares of the Company in the balance of
other receivables.
5. Details about other accounts due from related parties are set out in Note VI (II)
3.
6．There is no transfer of account receivables without satisfaction of the condition
for discontinued confirmation as at the end of the period.
7．There is no business arrangement for assets capitalization made with account
receivables as objectives as at the end of the period.
8. There is no financial instrument belonging to stock objectives and without
satisfaction of the condition for discontinued confirmation.
9. Top 3 debtors among the other receivables at period-end
10. The balance of other receivables at period-end has increased by RMB
2,264,599.81 as compared to that of year-begin, representing a increase of 5.75%.
Other receivables Book balance Ratio of provision Bad debt reserve Remarks
Changzhou Sanjing
Oil Co., Ltd.
19,493,461.29 0-15% 1,418,537.77 Related party
Total 19,493,461.29 1,418,537.77
Unit Relation with
the Company Nature or content Amount Ageing
Proportion in
total other
receivables %
Changzhou Sanjing Oil
Co., Ltd.
Related party
Borrowings and
interests
19,493,461.29
1 month - above
3 years
46.79
Shenzhen Oumingda
Investment Development
Co., Ltd.
Land purchaser Current account 1,102,278.00 1-2 years 2.65
Shenzhen Jinsailong
Equipment Corp.
Equipments
provider
Current account 1,070,000.00 2-3 years 2.57Semi-Annual Report
2010
57
(6) Inventory and provision for inventory impairment:
1.Details are as followings
2. Provision for inventory impairment
Reference or reason for provision of inventory impairment this year: book value is
lower than net realizable value.
3. There is no borrowing charge which is capitalized and recorded in inventory
cost this period.
Item
Balance at period-end Balance at year-begin
Book balance Provision for
impairment Book value Book balance Provision for
impairment Book value
Raw materials 19,530,190.69 3,586,600.03 15,943,590.66 13,533,265.84 3,591,251.01 9,942,014.83
Packaging
materials
2,841,129.75 16,394.49 2,824,735.26 2,198,015.35 16,394.49 2,181,620.86
Product in
process
11,003,462.87 --- 11,003,462.87 6,337,185.56 --- 6,337,185.56
Stock products 28,070,155.87 599,300.64 27,470,855.23 23,951,210.05 599,300.64 23,351,909.41
Goods delivered --- --- --- --- --- ---
OEM goods 6,417,120.82 5,310,050.23 1,107,070.59 6,387,101.24 5,310,050.23 1,077,051.01
Low price
consumable
680,000.27 --- 680,000.27 542,391.01 --- 542,391.01
Total 68,542,060.27 9,512,345.39 59,029,714.88 52,949,169.05 9,516,996.37 43,432,172.68
Items Book balance at
year-begin
Provision during
this period
Decrease during the period Book balance at
Reversal Written-off period-end
Raw materials 3,591,251.01 --- 4,650.98 --- 3,586,600.03
Packaging materials 16,394.49 --- --- --- 16,394.49
Stock products 599,300.64 --- --- --- 599,300.64
OEM goods 5,310,050.23 --- --- --- 5,310,050.23
Total 9,516,996.37 --- 4,650.98 --- 9,512,345.39Semi-Annual Report
2010
58
(7) Long-term equity investment
1. Information about the joint ventures and associates are as follows:
Item
Balance at period-end Balance at year-begin
Book balance
Provision for
impairment
Book value Book balance
Provision for
impairment
Book value
Investment at equity
method
103,169,388.65 2,870,000.00 100,299,388.65 115,719,389.90 2,870,000.00 112,849,389.90
Investment in
joint ventures
--- --- --- --- --- ---
Investment in
associates
103,169,388.65 2,870,000.00 100,299,388.65 115,719,389.90 2,870,000.00 112,849,389.90
Investment at cost
method
17,595,128.53 17,537,628.53 57,500.00 17,595,128.53 17,537,628.53 57,500.00
Other equity
investment
17,537,500.00 17,480,000.00 57,500.00 17,537,500.00 17,480,000.00 57,500.00
Investment in
subsidiaries
57,628.53 57,628.53 --- 57,628.53 57,628.53 ---
Total 120,764,517.18 20,407,628.53 100,356,888.65 133,314,518.43 20,407,628.53 112,906,889.90
Name of the
invested
companies
Reg. Add. Business
property
Registered
capital
Share
propro
portion
%
Total assets at this
period-end
Total of turnover
in this period
Net profit in this
period
Associates
1.ShenZhen Pepsi-
Cola Beverage Co.,
Ltd.
Shenzhen Soft drink
USD 12.5
mil.
30% 791,094,416.61 762,143,943.98 (38,414,345.36)
2.Changzhou
Sanjing Oil Co.,
Ltd.
Changzh
ou
Vegetable oil,
animal feed RMB 45 mil. 33% 34,133,323.54 985,462.90 (3,108,174.68)
3.Shenzhen
Shenbao Property
Development Co.,
Ltd.
Shenzhen Property
development RMB 9 mil. 20% 8,929,126.63 --- ---
4. Shenzhen
Shenbao(Xinmin)
Foods Co., Ltd.
Shenzhen
The business
license was
revoked.
--- 49.14% --- --- ---Semi-Annual Report
2010
59
2.Investment at equity method
i. Investment in associates at equity method:
3. Investments under cost method
i. Other equity investment under cost method-stock investment:
*: These shares were legal person shares purchased through STAQ trading system. Its
former name was Beijing Shuanghesheng Five Star Beer Sanhuan Co., Ltd. The
Company was originally holding 55,000 shares as investment, and was changed to
33,333 shares after implementation of the share exchange and renaming program.
Name of the Companies
Category
of shares
Amount
of shares
Portion in
the
registered
capital
Initial
investment cost
Balance at
year-begin
Increa
se
during
this
year
Decre
ase
during
this
year
Balance as
at year-end
Beijing Tiantan Holdings
Co., Ltd.*
Legal
person’
shares
33,333 --- 57,500.00 57,500.00 --- --- 57,500.00
Sub-total 57,500.00 57,500.00 --- --- 57,500.00
Name of the
invested
companies
Share in
registere
d capita
Initial costs
Amount
of
additional
investmen
t
Amount
of
investmen
t retrieved
Amount of
equity changed
in this period
Cash
dividend
obtained
Amount of
accumulated
change
Balance at
period-end
Shenzhen
Shenbao
(Xinmin)
Foods Co.,
Ltd.
49.14% 2,870,000.00 --- --- --- --- --- 2,870,000.00
ShenZhen
Pepsi-Cola
Beverage Co.,
Ltd.
30% 72,214,881.67 --- --- (11,524,303.61) --- 20,592,295.01 92,807,176.68
Changzhou
Sanjing Oil
Co., Ltd.
33% 13,500,000.00 --- --- (1,025,697.64) --- (7,803,508.59) 5,696,491.41
Shenzhen
Shenbao
Property
Development
Co., Ltd.
20% 1,800,000.00 --- --- --- --- (4,279.44) 1,795,720.56
Total 90,384,881.67 --- --- (12,550,001.25) --- 12,784,506.98
103,169,388.6
5Semi-Annual Report
2010
60
ii. Other equity investment and investment to subsidiaries under cost method
4．Impairment provision for long-term equity investment
*: Since this company was established, it was improperly managed and in loss
condition. Impairment provision has been provided at the balance between the
predicted retrievable amount and the book value.
**: These two companies have been established for years. At present they have been
revoked with business licenses. Due to that they haven’t been wounded up yet,
impairment provisions was provided in full upon them.
(5)As for long-term equity investment, its balance as at period-end has decreased
by RMB 12,550,001.25 as compared to that of year-begin, representing a decrease
rate of 9.41%, which was mainly due to that: Shenzhen PEPSI, an associate of the
Company, experienced a great cut in its net profit during this report period,
accordingly, investment income obtained by the Company also decreased greatly.
Name of the Companies
Invest
ment
term
Share in
registered
capital
Initial
investment costs
Balance at yearbegin
Increa
se
during
the
period
Decre
ase
during
the
period
Balance at
period-end
Shenzhen Sanjiu Weitai
Holdings Co., Ltd. --- 0.95% 2,480,000.00 2,480,000.00 --- --- 2,480,000.00
Shenzhen Taiji Optical-Electric
Technologies Co., Ltd. --- 3.77% 15,000,000.00 15,000,000.00 --- --- 15,000,000.00
Shenbao Liaoyuan
10
years
53.50% 57,628.53 57,628.53 --- --- 57,628.53
Sub-total 17,537,628.53 17,537,628.53 --- --- 17,537,628.53
Company
Balance at yearbegin
Increase
during the
period
Decrease during the period
Balance at
period-end
Carried back
for restoring
of price
Carried
out for
other
reason
Total
Shenzhen Taiji Optical-
Electric Technologies Co.,
Ltd.
* 15,000,000.00 --- --- --- --- 15,000,000.00
Shenzhen Sanjiu Weitai
Holdings Co., Ltd. 2,480,000.00 --- --- --- --- 2,480,000.00
Shenzhen Shenbao
(Xinmin) Foods Co., Ltd. ** 2,870,000.00 --- --- --- --- 2,870,000.00
Shenbao Liaoyuan ** 57,628.53 --- --- --- --- 57,628.53
Total 20,407,628.53 --- --- --- --- 20,407,628.53Semi-Annual Report
2010
61
(8)Fixed assets and accumulated depreciation
1. Original value of fixed assets
2．Accumulated depreciation
3．Impairment provision for fixed assets
4．Carrying value of fixed assets
Category Balance at year-begin Increase during the
period
Decrease during the
period
Balance at periodend
House buildings 73,179,447.70 229,369.85 --- 73,408,817.55
Machinery
equipments
156,867,900.53 278,224.00 5,143,633.26 152,002,491.27
Transportation tools 7,282,790.99 23,331.00 186,300.00 7,119,821.99
Other equipments 6,591,496.31 265,907.58 128,026.00 6,729,377.89
Total 243,921,635.53 796,832.43 5,457,959.26 239,260,508.70
Category Balance at year-begin Increase during the
period
Decrease during the
period
Balance at periodend
House buildings 6,860,569.21 879,680.94 --- 7,740,250.15
Machinery equipments 97,584,580.73 3,119,996.55 4,403,201.99 96,301,375.29
Transportation tools 4,448,262.49 239,511.60 186,300.00 4,501,474.09
Other equipments 4,402,645.09 273,604.02 104,381.31 4,571,867.80
Total 113,296,057.52 4,512,793.11 4,693,883.30 113,114,967.33
Category Balance at yearbegin
Increase during
the period
Decrease during
the period
Balance at periodend
Reason for provision
House buildings 7,250,600.00 --- --- 7,250,600.00
Depreciation existed in
ground constructions on
the land parcel jointly
developed with Moi
Group years ago
Machinery equipments 4,730,194.25 --- 477,518.27 4,252,675.98 Equipments were aging
and rusty
Transportation tools --- --- --- ---
Other equipments 6,916.51 --- 6,916.51 ---
Total 11,987,710.76 --- 484,434.78 11,503,275.98
Category Balance at year-begin Balance at period-end
House buildings 59,068,278.49 58,417,967.40
Machinery equipments 54,553,125.55 51,448,440.00
Transportation tools 2,834,528.50 2,618,347.90
Other equipments 2,181,934.71 2,157,510.09
Total 118,637,867.25 114,642,265.39Semi-Annual Report
2010
62
5. As for fixed assets, balance as at period-end has decreased by RMB
4,661,126.83 as compared to that of year-begin, representing a decrease rate of
1.91%, which was mainly due to clearance of fixed assets.
6. Increase of fixed assets for this period included RMB 278,224.00 carried
forward from construction in process.
7. Fixed assets used for mortgage or guarantee as at period-end were detailed in
Note VIII.
8. There was no fixed asset leased in through financing leasing or leased out by
operation leasing as at period -end.
9. There were no fixed assets with absence of property certificates and fixed assets
waiting for disposal as at period -end.
(9) Construction in process
Item
Balance at period-end Balance at year-begin
Book balance Provision
reserve Book value Book balance Provision
reserve Book value
Shenbao Plaza
project
3,842,333.64 3,842,333.64 --- 3,842,333.64 3,842,333.64 ---
Pre-phase project in
respect of Shenbao
Building
2,738,206.72 --- 2,738,206.72 2,738,206.72 --- 2,738,206.72
Relocation and
reform of plant
4,138,871.78 4,138,871.78 --- 4,138,871.78 4,138,871.78 ---
Huacheng
production line
project
1,879,008.10 --- 1,879,008.10 2,014,539.74 --- 2,014,539.74
Wuyuan Production
Base Project
557,111.01 --- 557,111.01 --- ---
Huizhou New Plant
Project
29,245,627.41 --- 29,245,627.41 27,531,609.41 --- 27,531,609.41
Others 3,152,802.47 1,121,080.53 2,031,721.94 3,300,397.89 1,121,080.53 2,179,317.36
Total 45,553,961.13 9,102,285.95 36,451,675.18 43,565,959.18 9,102,285.95 34,463,673.23Semi-Annual Report
2010
63
1．Movements in material construction in process
2．Impairment provision for construction in process
3. As for construction in process, balance as at period-end has increased by RMB
1,988,001.95 as compared to that of year-begin, representing an increase rate of
4.56%, which was mainly due to that more plants have been built in Huizhou New
Plant Project.
4. There was no capitalization interest credited to engineering cost as for the
construction in process of this period.
5. At period-end, the Company predicted that the recoverable amount of projects
under normal construction would be higher than carrying value, thus no
impairment provision for construction in process was provided.
Project Budget Balance at
year-begin
Increase during
the period
Decrease during the period
Balance at
period-end
Progre
ss
Fund
source
Share
of
project
input in
budget
Transferred to
fixed assets Other decrease
Huacheng
production line
project
--- 2,014,539.74 696,059.38 278,224.00 553,367.02 1,879,008.10
Selffunded
---
Wuyuan
Production Base
Project
--- --- 557,111.01 --- --- 557,111.01 100%
Selffunded
---
Huizhou New
Plant Project
RMB
40.25
million
27,531,609.41 1,714,018.00 --- --- 29,245,627.41 70%
Selffunded
68%
Others --- 2,179,317.36 689,364.58 --- 836,960.00 2,031,721.94
Selffunded
---
Total 31,725,466.51 3,656,552.97 278,224.00 1,390,327.02 33,713,468.46 ---
Project Balance at yearbegin
Increase
during the
period
Decrease during
the period
Balance at
period-end Reason for provision
Shenbao Plaza project 3,842,333.64 --- --- 3,842,333.64
Impairment was
arising from
discontinued
construction of
projects
Relocation and reform of
plant 4,138,871.78 --- --- 4,138,871.78
Impairment was
arising from absence
of utilization value
due to relocation
Others 1,121,080.53 --- --- 1,121,080.53
Total 9,102,285.95 --- --- 9,102,285.95Semi-Annual Report
2010
64
(10)Intangible assets
As indicated by the item-by-item inspection of the Company conducted at year-end,
there was no such event that the recoverable amount of intangible assets were lower
than carrying value, thus no impairment provision for construction in process was
provided.
Intangible assets used for mortgage or guarantee as at year-end were detailed in Note
VIII.
Among which, the followings were included in land use right:
Item Balance at year-begin Increase during the
period
Decrease during the
period Balance at period-end
I. Total of original value 154,432,358.71 55,756,182.00 734,238.92 209,454,301.79
1．Land use right 129,057,665.46 55,756,182.00 734,238.92 184,079,608.54
2．Patent technologies 23,506,503.60 --- --- 23,506,503.60
3．Use right of forest 1,868,189.65 --- --- 1,868,189.65
II. Total accumulated amortization 12,386,665.72 1,941,928.44 276,305.29 14,052,288.87
1．Land use right 4,249,552.76 1,282,458.96 276,305.29 5,255,706.43
2．Patent technologies 8,068,612.67 640,787.58 --- 8,709,400.25
3．Use right of forest 68,500.29 18,681.90 --- 87,182.19
III. Total of intangible asset
impairment provisions --- --- --- ---
1．Land use right --- --- --- ---
2．Patent technologies --- --- --- ---
3．Use right of forest --- --- --- ---
IV. Total of intangible asset book
value 142,045,692.99 --- --- 195,402,012.92
1．Land use right 124,808,112.70 --- --- 178,823,902.11
2．Patent technologies 15,437,890.93 --- --- 14,797,103.35
3．Use right of forest 1,799,689.36 --- --- 1,781,007.46
Location
Area of land
(Squre meter)
Original value of
land using right
Accumulated
amortization
Balance at
period-end
Remaining
amortization
period
Shenzhen Henggang
Industry City
2,361.76 --- --- --- ---
Shenzhen Tianbei 2,776.80 61,214,094.00 474,601.19 60,739,492.81 441 months
Huizhou Ruhu Town 14,073.00 5,662,217.31 341,440.21 5,320,777.10 561 months
Huizhou Ruhu Town 15,856.00 8,720,800.00 290,693.38 8,430,106.62 580 months
Huizhou Ruhu Town 11,282.90 4,539,631.33 273,746.56 4,265,884.77 561 months
Huizhou Ruhu Town 7,856.00 3,160,831.32 190,602.77 2,970,228.55 561 months
Huizhou Ruhu Town 17,860.00 7,185,902.17 433,320.80 6,752,581.37 561 months
Huizhou Ruhu Town 32,882.00 16,029,945.97 963,402.47 15,066,543.50 563 months
Huizhou Ruhu Town 50,038.00 27,520,900.00 1,175,269.69 26,345,630.31 538 monthsSemi-Annual Report
2010
65
(11)Long-term deferred expense
(12)Deferred income tax assets
1. Recognized deferred income tax assets
2. Due to that there is uncertainty in whether sufficient taxable income could be
obtained or not, deferred income tax assets are not recognized for the following
deductible temporary difference:
3. The Company had no deductible losses in respect of unrecognized deferred
income tax assets.
(13)Asset impairment provision
Huizhou Ruhu Town 44,995.00 24,747,250.00 494,945.02 24,252,304.98 588 months
Huizhou Ruhu Town 5,157.00 2,836,350.00 56,727.00 2,779,623.00 588 months
Wuyuan County Ziyang
Town Industry Zone
115,605.00 8,459,701.00 423,390.98 8,036,310.02 558 months
Wuyuan County Ziyang
Town Industry Zone
40,000.00 9,588,531.38 92,531.10 9,496,000.28 821 months
Wuyuan County Ziyang
Town Dazhangshan Road
4,176.00 4,413,454.06 45,035.26 4,368,418.80 776 months
Total 184,079,608.54 5,255,706.43 178,823,902.11
Item Balance at yearbegin
Increase
during the
period
Amortization
during this period
Other
decrease
Balance at
period-end
Reasons for
other
decrease
Office decoration fee 251,200.00 1,270,604.80 154,874.76 --- 1,366,930.04 ---
3 years term of
comprehensive property
insurance
70,200.03 --- 12,034.26 --- 58,165.77 ---
Others 50,283.73 --- 4,403.12 --- 45,880.61 ---
Total 371,683.76 1,270,604.80 171,312.14 --- 1,470,976.42
Item
Deductible
temporary
difference as at
period-end
Deferred income
tax assets as at
period -end
Deductible
temporary difference
as at year-begin
Deferred income tax
assets as at yearbegin
Assets impairment
provision 15,602,731.01 3,458,494.68 15,689,961.92 3,471,579.32
Subtotal 15,602,731.01 3,458,494.68 15,689,961.92 3,471,579.32
Item Balance at period-end Balance at year-begin
Deductible temporary
difference 75,316,300.60 75,847,026.56
Total 75,316,300.60 75,847,026.56
Item Balance at yearbegin
Increase during
the period
Decrease during the
period
Balance at
period-end
Reversal Written-off
Bad debt reserve 40,522,366.87 --- --- 128,871.11 40,393,495.76
Inventory
impairment provision 9,516,996.37 --- 4,650.98 --- 9,512,345.39Semi-Annual Report
2010
66
(14) Short-term loans
All above loans were not past due.
As for short-term loans, balance as at period-end decreased by RMB 58,000,000.00 as
compared to that of year-begin, representing an decrease rate of 38.93%, which was
mainly due to repayment of relevant bank loans which were matured.
(15) Account payables
1. No account payable to shareholders units holding over 5% (5% included)
voting shares of the Company was included in the balance as at period-end.
2. No account payable to related parties was included in the balance as at periodend.
3. Account payable in great amount ageing over one year:
Other explanations for account payable in great amount aging over one year: because it
was still uncertain whether payments were required for the above goods payment, the
Long-term equity
investment
impairment provision
20,407,628.53 --- --- --- 20,407,628.53
Fixed asset
impairment provision 11,987,710.76 --- --- 484,434.78 11,503,275.98
Construction-inprocess
impairment
provision
9,102,285.95 --- --- --- 9,102,285.95
Total 91,536,988.48 --- 4,650.98 613,305.89 90,919,031.61
Condition for borrowings Balance at period-end Balance at year-begin
Guarantee loans 65,000,000.00 62,000,000.00
Mortgage loans 19,000,000.00 42,000,000.00
Charge loans 7,000,000.00 45,000,000.00
Total 91,000,000.00 149,000,000.00
Item Balance at period-end Balance at year-begin
within 1 year 24,138,821.60 13,141,272.15
1 to 2 years 248,969.33 248,969.33
2 to 3 years 307,565.49 307,565.49
Over 3 years 2,538,483.93 2,538,483.93
Total 27,233,840.35 16,236,290.90
Creditor Amount Reason for unsettlement Notes
Customer I 518,655.52
Unable to get in touch with
such customer Over 3 years
Customer II 515,892.30
Unable to get in touch with
such customer Over 3 yearsSemi-Annual Report
2010
67
Company has not conducted relevant accounting treatment yet.
4. As for account payables, balance as at period-end increased by RMB
10,997,549.45 as compared to that of year-begin, representing an increase rate of
67.73%, which was mainly due to its subsidiary - Shenbao Huacheng stored raw
materials-tea.
(16)Account received in advance
1. No account received in advance from shareholders units holding over 5% (5%
included) voting shares of the Company was included in the balance as at periodend.
2. No account received in advance from related parties was included in the
balance as at period-end.
3. The Company had no account received in advance in great amount ageing over
one year.
(17)Wages payable
1. Wages payable
2.As for wages payables, balance as at period-end decreased by RMB 1,453,033.93 as
compared to that of year-begin, representing decrease rate of 62.85%, which was
mainly due to that payment for the performance-related returns of staff for 2009 was
settled in the first half year of 2010.
Item Balance at period-end Balance at year-begin
Payment for goods received in
advance 4,331,279.50 2,535,609.18
Total 4,331,279.50 2,535,609.18
Item Balance at yearbegin
Increase during the
period
Decrease during
the period
Balance at periodend
I. Wage, bonus, allowance and
subsidy 1,000,128.33 9,865,071.47 10,634,310.30 230,889.50
II. Employees’ welfare --- 1,391,511.58 1,391,511.58 ---
III. Social security 29,689.52 1,528,123.25 1,490,196.08 67,616.69
IV. Trade union fee and education
fee 729,551.86 315,162.69 484,351.23 560,363.32
V. Compensation for dismissal of
labor contract 552,533.73 --- 552,533.73 ---
Total 2,311,903.44 13,099,868.99 14,552,902.92 858,869.51Semi-Annual Report
2010
68
(18)Tax payable
(19) Dividend payable
(20) Other payables
1. Others payable due to shareholders units holding over 5% (5% included)
voting shares of the Company were RMB 3,510,297.20 as included in the balance
as at period-end. Details were available in Note VI (2) 3.
2. Others payable due to related parties was RMB 5,209,967.20 as included in the
balance as at period -end. Details were available in Note VI (2) 3.
Taxation Balance at period-end Balance at year-begin
VAT (109,132.71) 858,511.52
Business tax 204,525.25 221,090.25
City construction tax 26,703.16 31,179.29
Enterprise income tax 651,364.33 804,741.30
Personal income tax 62,665.72 48,905.23
Property tax 25,200.00 1,295.00
Stamp tax 11,643.56 1,337.20
Embankment fee (712.50) 5,731.43
Education surtax 25,619.44 38,947.44
Other tax 24,975.00 27,922.50
Total 922,851.25 2,039,661.16
Item Balance at periodend
Balance at year-begin eason for payment delaying over one
year
Shares not consigned 218,212.60 218,212.60 ---
Shenzhen Investment
Holdings Co., Ltd.
2,690,970.14 2,690,970.14 the 2nd largest shareholder, formed
from left-over of historical guarantee
Total 2,909,182.74 2,909,182.74 ---
Aging analysis Balance at period-end Balance at year-begin
Within 1 year 60,955,641.21 23,315,174.87
Over 1 year but within 2 years 1,311,867.19 1,311,867.19
Over 2 years but within 3 years 2,831,142.90 2,831,142.90
Over 3 years 6,525,491.39 6,525,491.39
Total 71,624,142.69 33,983,676.35Semi-Annual Report
2010
69
3. Explanation for others payable in great amount aging over one year:
4. Others payable in great amount
5.As for other payables, balance as at period-end increased by RMB 37,640,466.34 as
compared to that of year-begin, representing an increase rate of 110.76%, which was
mainly due to receival of the advance paid for Shenbao Building Project for its land
cost.
(21) Long-term loan
None of the above loans were past due.
As for long-term loan, balance as at period-end increased by RMB 54,500,000.00 as
compared to that of year-begin, representing an increase rate of 111.22%, which was
mainly due to the Company’s requirement for reserve of current capital.
Unit Relation with
the Company
Nature or
content Amount Aging
Portion taken in
total other
payable %
Shenzhen Investment
Holdings Co., Ltd.
The 2nd largest
shareholder
Current account 3,510,297.20 Over 3 years 4.90
Shenbao Property
Development Co., Ltd.
Associate Current account 1,699,670.00 2 to 3 years 2.37
Total 5,209,967.20
Unit Relation with
the Company
Nature or
content Amount Aging
Portion taken in
total other
payable %
Shenzhen Jitai Industrial
Development Co., Ltd.
Projects
construction
Construction 56,041,182.00 Within 1 year 78.24
Shenzhen Luohu Office of
Reconstruction of Old city
Business
Compensatio
n for
relocation
5,278,067.00 Within 1 year 7.37
Huizhou Shengli Property
Investment Co., Ltd.
Business Business 4,837,155.20 Within 1 year 6.75
Shenzhen Investment Holdings
Co., Ltd.
The 2nd largest
shareholder
Current
account
3,510,297.20 Over 3 years 4.90
Shenbao Property Development
Co., Ltd.
Associate
Current
account
1,699,670.00 2 to 3 years 2.37
Total 71,366,371.40
Type of loans Balance at period-end Balance at year-begin
Charge loans 103,500,000.00 49,000,000.00
Total 103,500,000.00 49,000,000.00Semi-Annual Report
2010
70
(22) Other non-current liabilities
On Jan 29th of 2010, the subsidiary Shenbao Huacheng and Shenzhen Bureau of
Science and Technology (hereinafter referred to as "Party A") signed a project contract
of technology plan in Longgang Zone. Party A financed 0.25 million yuan for free to
the key technology of rich fragrance oolong tea extraction processing of Shenbao
Huacheng along with the industrialization project. The execution period lasted from
Jan 1st of 2009 to Oct 30th of 2010. The contract required that the project could apply
for acceptance of Party A within 3 months after it completes tasks in required time.
This project is still in execution, and Shenbao Huacheng has received 0.25 million
yuan of disbursements from Shenzhen Bureau of Science and Technology on Feb 5th of
2010.
On Jan 29th of 2010, the subsidiary Shenbao Huaceng and Shenzhen Bureau of
Science and Technology (hereinafter referred to as "Party A") signed planning contract
of cultivate funding for self-innovation new business. Party A financed 0.5 million
yuan for free to the Shenbao Huacheng. The execution period lasted from Jan 1st of
2010 to Dec 31st of 2014. The contract required that the project could apply for
acceptance of Party A within 3 months after it completes tasks in required time. The
following terms must be embodied if the item wants to pass the check: the amount of
self-knowledge right (excluding trademark), such as owned patents (excluding design
patent of simply changing the shape and icon of products), software copyright,
exclusive design right of IC distribution picture and new varieties of plants, must be
newly increased above 6 or above 1 invention patent. This project is still in execution,
and Shenbao Huacheng has received 0.1 million yuan of disbursements from Shenzhen
Bureau of Science and Technology on Apr 30th of 2010.
On Mar 31st of 2010, Shenbao Huacheng and Shenzhen Municipal Science and
Technology Trade and Industry and Information Technology Commission (hereinafter
referred to as "Party A") signed contract of key technology of ARS natural Gaoxiang
oolong tea extraction processing. Party A financed 0.5 million yuan for free to the
Shenbao Huacheng. The execution period lasted from Mar 31st of 2010 to Mar 29th of
2012. The contract required that the project could apply for acceptance of Party A
within 6 months after it completes tasks in required time and submit related acceptance
information in accordance with rules. Shenbao Huacheng has received 0.5 million
Item Balance at period-end Balance at year-begin
Assistant fund of the key technology for extraction
process of rich fragrance type tea and items of
industrialization
250,000.00 ---
Assistant fund of
cultivation for self-innovation enterprise 100,000.00 ---
Research fund of the key technology for extraction
process of ARS natural rich fragrance type tea and
items of industrialization
310,403.25 ---
Total 660,403.25 ---Semi-Annual Report
2010
71
yuan of disbursements from Shenzhen Bureau of Finance till May 18th of 2010.
Reserves in this period worth 189,596.75 yuan have been included in non-operating
income, which refers to government subsidies.
(23) Share capital
The registered share capital in issue and paid-up share capital of the Company are
listed as follows:
Item
Balance at period-end Balance at year-begin
Shares Amount Shares Amount
A share (carrying value of RMB 1
per share) 155,787,088.00 155,787,088.00 155,787,088.00 155,787,088.00
B share (carrying value of RMB 1
per share) 26,136,000.00 26,136,000.00 26,136,000.00 26,136,000.00
Total 181,923,088.00 181,923,088.00 181,923,088.00 181,923,088.00Semi-Annual Report 2010
72
Change in share capital of the Company during this year:
1. Share capital and change thereof of the Company has been verified by Shenzhen Zhongtianqin CPAs with Verification Report [2001] No. B-005.
2. As at 26 March 2010, 67,912,035 restricted shares of the Company began to trade. Ended the audit date, the total share capital of the Company amounted to
181,923,088 shares, among which, 14,553,847 shares were restricted shares and 167,369,241 were shares without restriction for trading.
Item
Balance at year-begin Increased (decreased) in this year Balance as at year-end
Amount Portion New shares
issued
Bonus
shares
Shares
converted
from public
reserve
Others Sub-total Amount Portion
I. Shares with selling
restriction condition
(1)State-owned shares --- --- --- --- --- --- --- --- ---
(2)State-owned legal person
shares 37,818,689.00 20.79% --- --- --- -31,034,960.00 -31,034,960.00 6,783,729.00 3.73%
(3)Other domestic shares 44,647,193.00 24.54% --- --- --- -36,877,075.00 -36,877,075.00 7,770,118.00 4.27%
Including:
Domestic legal person
shares 44,647,193.00 24.54% --- --- --- -36,877,075.00 -36,877,075.00 7,770,118.00 4.27%
Domestic natural
person shares --- --- --- --- --- --- --- --- ---
(4) Foreign shares --- --- --- --- --- --- --- --- ---
Total of shares with selling
restriction condition 82,465,882.00 45.33% --- --- --- -67,912,035.00 -67,912,035.00 14,553,847.00 8.00%
II. Tradable shares without
selling restriction condition
(1) RMB common shares 73,321,206.00 40.30% --- --- --- 67,912,035.00 67,912,035.00 141,233,241.00 77.63%
(2)Domestic-listed foreign
shares 26,136,000.00 14.37% --- --- --- --- --- 26,136,000.00 14.37%
Total of tradable shares
without selling restriction
condition
99,457,206.00 54.67% --- --- --- 67,912,035.00 67,912,035.00 167,369,241.00 92.00%
Total 181,923,088.00 100.00% --- --- --- --- --- 181,923,088.00 100.00%Semi-Annual Report 2010
73
(24) Capital reserves
As for capital reserve, balance as at period-end decreased by 481,589.78 as compared to that
of year-begin, which was mainly due to that Shenbao Sanjing, a subsidiary of the Company,
acquired minority equities of its subsidiary Guangdong Shenbao in March 2010.
(25) Surplus reserves
(26) Retained profit
(27)Operating income and costs
Item Balance at year-begin Increase during the
period
Decrease during
the period Balance at period-end
Share capital premium 79,064,690.51 --- 481,589.78 78,583,100.73
Other capital reserve 1,500,218.71 --- --- 1,500,218.71
Total 80,564,909.22 --- 481,589.78 80,083,319.44
Item Balance at year-begin Increase during the
period
Decrease during
the period Balance at period-end
Statutory surplus
reserves 32,464,033.34 --- --- 32,464,033.34
Total 32,464,033.34 --- --- 32,464,033.34
Item Amount
Balance as at end of last year 25,144,224.38
Add: adjustment to amount as at year-begin ---
Balance as at year-begin of this period 25,144,224.38
Add: net profit attributable to parent company for this period (18,263,527.21)
Less: provision of statutory surplus reserve ---
provision of discretionary surplus reserve ---
Dividend payable for ordinary shares ---
Dividend of ordinary shares converted to share capital ---
Add: other transfer-in ---
Add: losses made up by surplus reserve ---
Balance as at period-end of this period 6,880,697.17
Item
Amount of this period Amount of the previous period
Operating income Operating cost Operating income Operating cost
Main business 98,031,142.11 75,021,441.08 91,579,440.16 68,544,547.89
Other business --- 84,995.97 --- ---
Total 98,031,142.11 75,106,437.05 91,579,440.16 68,544,547.89Semi-Annual Report 2010
74
1. Main business income and main business cost classified according to products
2. Main business income and main business cost classified according to areas
3. Main business income from the top 5 customers
Item
Amount of this period Amount of the previous period
Main business income Main business cost Main business
income Main business cost
Beverage 13,667,904.30 9,691,178.74 20,501,746.71 14,707,355.55
Seasoning 8,107,447.50 5,338,677.44 9,441,708.17 6,442,453.97
Further processing of tea 75,947,990.31 59,991,584.90 61,088,763.28 47,394,738.37
Lease service business 307,800.00 --- 359,100.00 ---
Real Estate --- --- 188,122.00 ---
Total 98,031,142.11 75,021,441.08 91,579,440.16 68,544,547.89
Amount of this period Amount of the previous period
Classification of main
business
Main business
income
Main business cost
Main business
income
Main business cost
Export 2,795,908.37 2,205,942.26 13,947,189.38 13,044,785.38
Subtotal of overseas 2,795,908.37 2,205,942.26 13,947,189.38 13,044,785.38
South of China 31,145,354.86 21,404,733.84 30,724,668.33 21,017,962.77
North of China 5,060,539.44 3,549,388.65 5,093,440.29 3,181,570.92
East of China 39,805,869.61 31,832,091.46 31,050,408.93 23,106,400.33
Other regions 19,223,469.83 16,029,284.87 10,763,733.23 8,193,828.49
Subtotal of domestic 95,235,233.74 72,815,498.82 77,632,250.78 55,499,762.51
Total 98,031,142.11 75,021,441.08 91,579,440.16 68,544,547.89
Customers or ranking thereof Total of main business income Portion taken in all main business
income of the Company
Customer I 21,636,287.80 22.07%
Customer II 19,369,416.85 19.76%
Customer III 13,177,530.35 13.44%
Customer IV 13,136,782.87 13.40%
Customer V 4,853,696.09 4.95%
Total 72,173,713.96 73.62%Semi-Annual Report 2010
75
(28) Operating tax and surcharges
(29)Sales expense, administration expense and financial expenses
1. Financial expenses
As for financial expenses, its balance as at this period has increased by RMB 1,933,887.08
as compared to last period, representing an increase rate of 74.09%, which was mainly due
to corresponding increase of interest expense resulted from great increase of long-term bank
loans during this period.
2. Administration expenses
As for administration expenses, its balance as at this period is approximate to that of last
period.
3. Sales expenses
As for sales expenses, its balance as at this period is approximate to that of last period.
Item Standard for taxation Amount of this period Amount of the previous
period
Business tax
Income from normal labor service,
transportation and other income *
5%
138,390.00 162,098.19
City maintenance and
construction tax
Business tax and VAT paid * 1%
or 7%
136,794.91 167,497.96
Education surtax Business tax and VAT paid * 3% 134,551.74 192,876.02
Embankment and
enclosure maintenance fee
22,038.22 13,470.60
Total 431,774.87 535,942.77
Categories Amount of this period Amount of the previous period
Interest expense 5,093,421.78 2,627,792.86
Less: interests income 597,361.52 104,091.51
Exchange loss 1,174.51 21,700.52
Less: Exchange gain --- ---
Others 46,680.07 64,625.89
Total 4,543,914.84 2,610,027.76
Item Amount of this period Amount of the previous period
Administration expenses 19,691,446.28 18,552,219.43
Item Amount of this period Amount of the previous period
Sales expenses 6,310,429.41 5,151,916.52Semi-Annual Report 2010
76
(30) Asset impairment loss
(31)Gains from change of fair value
(32)Investment gains
Among which, long-term equity investment income at equity method mainly refers to:
No material restriction will appear in recovery of investment income of the Company.
(33)Non-operating income
Item Amount of this period Amount of the previous period
Bad debt loss --- 207,027.04
Inventory impairment provision (4,650.98) ---
Fixed asset impairment provision --- ---
Total (4,650.98) 207,027.04
Source of gains from change of fair
value Amount of this period Amount of the previous period
Transaction financial assets 139,500.00 204,000.00
Total 139,500.00 204,000.00
Item or invested unit
Amount of this
period
Amount of the previous
period
Long-term equity investment income
（1）Long-term equity investment income at cost method --- ---
（2）Long-term equity investment income at equity method(2
units in aggregate)
(12,550,001.25) 3,942,379.64
（3）Investment income arising from disposal of long-term
equity investment
497,932.95 ---
Total ( 12,052,068.30) 3,942,379.64
Invested unit Amount of this
period
Amount of the
previous period Reason for change
Shenzhen Pepsi-Cola Beverage Co.,
Ltd.
(11,524,303.61) 5,065,091.35
A substantial drop in
operation benefit
Changzhou Sanjing Oil Co., Ltd. (1,025,697.64) (1,122,711.71)
Total (12,550,001.25) 3,942,379.64Semi-Annual Report 2010
77
As for non-operating income, its balance as at this period has increased by RMB 1,897,601.02
as compared to last period, representing an increase rate of 207.06%, which were mainly due
to the receival of government subsidy, government compensation and increase of fixed
assets disposals in this report period.
(34)Government grant
*According to Financial Farmers 【2001】No. 231 Management Means for Agricultural
Technology Promotion and Specific Capital of Service from Ministry of Finance, Wuyuan
County Ju FangWing Tea Co., Ltd who was subsidiary of Shenbao Huacheng who was the
subsidiary of the Company applied administrative subsidies 0.8 million yuan via
Construction Project of Ecological Demonstration Garden on Wuyuan County Sustainable
Development. These accounts were mainly used in 500 acres of construction project of
ecological demonstration garden on Wuyuan County sustainable development, fertilization
Item Amount of this period Amount of the previous period
Gains from disposal of non-current assets 611,353.87 22,000.00
Including: Gains from disposal of fixed
assets 611,353.87 22,000.00
Gains from disposal of construction
in process --- ---
Government grant 984,736.75 296,800.00
Government compensation income 1,216,901.37 ---
Others 1,050.00 597,640.97
Total 2,814,041.99 916,440.97
Type and projects of government grant Amount of this period Amount of the previous
period Notes
1. Government grants received in
relation to assets --- ---
Subtotal --- ---
2 ． Government grants received in
relation to income
Encouragement Assistance Account
issued by Administration Committee of
Industry Park of Wuyuan County
--- 296,800.00
Administration
Committee of Industry
Park
Capital of industry technology and
service--integration capital of tea
industry *
700,000.00 ---
Finance Bureau of
Wuyuan County
National treasury subsidy from Jiangxi
Finance Bureau
94,140.00 --- Jiangxi Finance Bureau
Awards from Wuyuan Government 1,000.00 --- People's Government of
Wuyuan County
Assistant fund of the key technology for
extraction process of ARS natural rich
fragrance type tea **
189,596.75 --- Shenzhen Finance
Bureau
Subtotal 984,736.75 296,800.00
Total 984,736.75 296,800.00Semi-Annual Report 2010
78
of garden soil, EU organic tea, as well as promotion and certification of some international
standardized production technology such as EU GAP, ISO etc. On Jan 22nd of 2010 Wuyuan
Ju Fangwing received 0.7 million yuan of integration capital for tea industry from Wuyuan
County Finance Bureau. This account was included in non-operating income, which refers
to government subsidies.
**Details could be found in Note 5 (22)
(35) Non-operating expenses
(36) Income tax expense
Explanation in respect of relation between income tax expense and accounting profit:
Item Amount of this period Amount of the previous period
Losses from disposal of non-current assets 15,698.07 ---
Including: Losses from disposal of
fixed assets 15,698.07 ---
Losses from disposal of
intangible assets --- ---
External donation expenditure --- ---
Including: Welfare donation --- ---
expenditure of fines and overdue fine --- ---
Others 5,867.00 263.85
Total 21,565.07 263.85
Item Amount of this period Amount of the previous period
Income tax expense for current period 53,230.14 1,535,265.86
Including: income tax expense occurred in
current year
53,230.14 52,965.86
Adjustment to previous income tax
made in this report period
--- 1,482,300.00
Deferred income tax expense --- ---
Including: deferred income tax occurred in
current period
--- ---
Adjustment to affect of interest rate
movement over previous income tax
made in this report period
--- ---
Total 53,230.14 1,535,265.86
Item Amount of this period Amount of the previous period
Total profit (18,469,665.97) 1,040,315.51Semi-Annual Report 2010
79
(37)Calculation of basic earnings per share and diluted earnings per share
Computer of basic earnings per share:
Basic earnings per share=PO/S
S= S0＋S1＋Si*Mi/M0– Sj*Mj/M0-Sk
Among which: PO represents net profit attributable to shareholders of ordinary shares of the
Company or net profit (net of non-current gains and losses) attributable to shareholders of
ordinary shares of the Company; S represents the weighted average number of ordinary
shares in issue; SO represents aggregate of shares as at period-begin; S1 represents share
added due to conversion of public reserve to share capital or allocation of share dividends
during the report period; Si represents share added due to new issuance of shares or shares
converted from debts during the report period; Sj represents shares decreased due to
purchase-back of its own shares during the period; Sk represents shares diluted during the
period; MO represents number of months for the period; Mi represents the accumulated
months commencing from the month subsequent upon shares addition to year-end of the
period; Mj represents the accumulated months commencing from the month subsequent
upon shares deduction to year-end of the period.
Computer of diluted earnings per share:
Diluted earnings per share= P1/(S0 ＋ S1 ＋ Si*Mi/M0–Sj*Mj/M0–Sk+weighted average
number of ordinary shares increased from (warrant+option+convertible bonds)
Among which: P1 represents net profit attributable to shareholders of ordinary shares of the
Company or net profit (net of non-current gains and losses) attributable to shareholders of
ordinary shares of the Company, and is subject to adjustment under relevant regulations of
Accounting Standard for Enterprises in light of the affect of diluted potential ordinary
shares. When computering diluted earnings per share, the Company shall take into account
the affects conducted by all diluted potential ordinary shares upon net profit attributable to
shareholders of ordinary shares of the Company or net profit (net of non-current gains and
losses) attributable to shareholders of ordinary shares of the Company and weighted average
shares. According to dilution degree (in order from big to small), dilution shall be accounted
in diluted earnings per share until which arrives at its minimized amount.
1. Net profit attributable to shareholders of ordinary shares of the Company:
Basic earnings per share=-18,263,527.21/181,923,088.00=-0.10
Diluted earnings per share=-18,263,527.21/181,923,088.00=-0.10
Taxes calculated under statutory tax rate --- ---
Affect of taxes of other subsidiaries 43,394.39 52,965.86
Affect of taxes due to liquidation of previous EIT 9,835.75 1,482,300.00
Affect of investment income under equity
method --- ---
Affect of deferred income tax assets --- 1,952,251.65
Affect of deferred income tax liabilities --- ---
Income tax expense 53,230.14 1,535,265.86Semi-Annual Report 2010
80
1. Net profit (net of non-current gains and losses) attributable to shareholders of
ordinary shares of the Company:
Basic earnings per share =-20,565,188.38/181,923,088.00=-0.11
Diluted earnings per share =-20,565,188.38/181,923,088.00=-0.11
(38) Notes to statement of cash flow
1. Other cash received in relation to operation activities
2. Other cash paid in relation to operation activities
Item Amount of this period Amount of the previous
period
Liuzhou, the court shall receive --- 805,162.55
Land payment of Oudaming Company --- 100,000.00
Incomings and outgoings of Guangdong Huacheng
Food Co., Ltd.
--- 3,000,000.00
Government grant received 1,645,140.00 296,800.00
Transformation of old towns and villages in Luohu
District Office
5,278,067.00 ---
Rental 307,800.00 ---
Other incomings and outgoings 2,645,979.68 2,068,531.35
Total 9,876,986.68 6,270,493.90
Item Amount of this period Amount of the previous
period
Aggregate of incomings and outgoings of external
units with small amount
1,570,156.85 ---
Incomings and outgoings of Changzhou Sanjing Oil
Co., Ltd.
3,400.000.00 480,000.00
Corporate sales and administration expense 13,311,597.74 14,540,677.90
Rental 491,400.00 ---
Others 3,040,096.50 2,568,710.60
Total 21,813,251.09 17,589,388.50Semi-Annual Report 2010
81
3. Net increase of pledged loans
4. Supplementary information to statement of cash flow
Item Amount of this period Amount of the previous
period
Pledge with term deposits 20,000,000.00 20,000,000.00
Total 20,000,000.00 20,000,000.00
Item Amount of this period
Amount of the previous
period
I.Net profit adjusted to cash flow of operation activities
Net profit (17,221,530.88) (494,950.35)
Add: assets impairment provision (4,650.98) 207,027.04
Depreciation of fixed assets, consumption of oil assets and depreciation
of productive biology assets 4,512,793.11 4,087,332.95
Amortization of intangible assets 1,941,928.44 1,461,707.05
Amortization of long-term deferred expenses 171,312.14 201,286.97
Loss from disposal of fixed assets, intangible assets and other long-term
assets(gain is listed with “-”) (1,819,205.22) (22,000.00)
Loss of disposing fixed assets(gain is listed with “-”) --- ---
Loss from change of fair value(gain is listed with “-”) (139,500.00) (204,000.00)
Financial expenses (gain is listed with “-”) 4,543,914.84 2,610,027.76
Investment loss (gain is listed with “-”) 12,052,068.30 (3,942,379.64)
Decrease of deferred income tax asset( (increase is listed with “-”) --- ---
Increase of deferred income tax liability (decrease is listed with “-”) --- ---
Decrease of inventory (increase is listed with “-”) (15,665,283.92) 1,968,837.30
Decrease of operating receivable accounts (increase is listed with “-”) (18,906,825.47) (8,374,049.79)
Increase of operating payable accounts (decrease is listed with “-”) 24,402,861.29 8,634,944.60
Others --- ---
Net cash flow arising from operating activities (6,132,118.35) 6,133,783.89
II. Material investment and financing not involved in cash flow
Liabilities converted to capital --- ---
Convertible bond expire in 1 year --- ---
Fixed assets leased through financing --- ---
III.Net change of cash and cash equivalents
Balance of cash at period end 57,336,722.08 90,633,864.48
Less: Initial balance of cash 90,613,421.70 22,501,768.29
Plus: Balance of cash equivalents at the period end --- ---
Less: Initial balance of cash equivalents --- ---
Net increasing of cash and cash equivalents (33,276,699.62) 68,132,096.19Semi-Annual Report 2010
82
5. Constitution of cash and cash equivalent:
VI. Related Parties and Transactions
(I) Related Parties
1.Controlling shareholders of the Company
(1)Parent company of the Company
(2) Controlling shareholders:
2. Information related to subsidiaries of the Company is provided in Note IV.2.
Shenbao Biological Products Co., Ltd., a subsidiary of the Company, has been revoked in
this report period, while there is no change in registered capital of other subsidiaries of the
Company during the report period.
3. Information related to joint ventures and associates of the Company are provided in
Note V(7).1.
Item Balance at period-end Balance at year-begin
1. Cash 57,336,722.08 90,613,421.70
Including: stock cash 260,165.89 150,330.62
Bank deposit available for payment at any time 57,076,556.19 90,463,091.08
Other monetary fund available for payment at any
time --- ---
2. Cash equivalent --- ---
Including: bond investment matured within 3 months --- ---
3. Balance of cash and cash equivalent at period-end 57,336,722.08 90,613,421.70
Parent company
Organization
code
Registration place Business nature
Registered
capital
Shareholdi
ng portion
Voting right
portion
Shenzhen
Agricultural
Products Co.,
Ltd.
192179163
22 floor, Tianle
Building, No.1021
Buji Road,
Shenzhen
Development,
construction, operation
and management of
agricultural products
retail market, operation
of market leasing
RMB
768,507,900 26.33% 26.33%
Related party Relation with the Company
Shenzhen Agricultural Products Co., Ltd. Controlling shareholder
Shenzhen State-owned Assets Supervision and Administration
Bureau(Shenzhen State-owned Assets Bureau)
Actual controllerSemi-Annual Report 2010
83
4. Particulars about other related parties
(II)Related transaction
1. As for subsidiaries where controlling exist and which have been consolidated to
consolidation scope of the Company, transactions among them and transactions
occurred between parent company and subsidiaries have been all offset.
2. Related guarantee
(1)Guarantee provided by related parties for the Company:
*The Company reached loan contract with Shenzhen Branch of Shanghai Bank dated 24
December 2009, with term being one year and amount being RMB 17 million. And on 25
June 2010, the Company reached another loan contract with Shenzhen Branch of Shanghai
Bank, with term being half year and amount being RMB 17 million. Shenbao Huacheng, the
controlling subsidiary of the Company, provided guarantee for the comprehensive credit
facility of RMB 30 million. Up to 31 June 2010, the Company obtained short-term loans of
RMB 30 million.
(2)Guarantee provided by the Company for subsidiaries:
** Shenbao Huacheng reached current capital loan contract with Shenzhen Branch of Ping
An Bank Co., Ltd. dated 24 June 2010 to obtain loan of RMB 15 million, with joint
responsibility guarantee provided by the Company.
*** Shenbao Huacheng reached current capital loan contract with Shenzhen Branch of
Shanghai Pudong Development Bank dated 31 May 2010 to obtain loan of RMB 20 million,
with joint responsibility guarantee provided by the Company.
Other related parties Relation with the Company Organization code
Shenzhen Investment Holdings Co., Ltd. The 2nd largest shareholder of the
Company 767566421
Zheng Yuxi, Peng Ying, Li Fang, Guan Lihua, Zeng
Suyan, Li Yiyan, Lin Hong, etc.
Key administrators of the
Company
---
Guarantor
Relation with the
Company
Guarantee
amount
Start date of
guarantee
Due date of
guarantee
Whether implemented
completely or not
Shenbao Huacheng* Controlling subsidiary
17,000,000.00 2009-12-24 2010-12-30 No
13,000,000.00 2010-06-25 2010-12-24 No
Guaranteed party
Relation with the
Company
Guarantee
amount
Start date of
guarantee
Due date of
guarantee
Whether implemented
completely or not
Shenbao Huacheng** Controlling subsidiary 15,000,000.00 2010-06-24 2010-12-23 No
Shenbao
Huacheng***
Controlling subsidiary 20,000,000.00 2010-05-31 2011-05-30 NoSemi-Annual Report 2010
84
3. Incomings and outgoings between related parties
VII. Contingent events
1. The case concerning the joint-liability guarantee the Company provided for the RMB 7
million loan that Shenzhen China Bicycle Company (Holdings) Limited (hereinafter
referred to as Shen China) had got from China Construction Bank Shenzhen Branch
(hereinafter referred to as Construction Bank) has been closed with a reconciliation. In the
year 2003, the Company and Construction Bank reached the Agreement on Interest
Reduction and Cancellation, and according to the agreement, the Company had already paid
back the RMB 7 million in two times for Shen China and fulfilled its guarantee liability;
through the verdict of (1999) YFJYZZi No. 26 Civil Judgment Document made by
Guangdong High People’s Court on the case concerning the joint-liability guarantee
amounting to USD 0.8 million the Company provided for issue of Letter of Credit Shen
China had applied for at Bank of China Shenzhen Branch, the Company should shoulder
joint repayment liability. And ended 30 June 2004, the Company had repaid RMB
6,631,600 (amounting to USD 0.8 million) for Shen China and fulfilled the guarantee
responsibility. Later, on 22 July 2004, the guarantee payment, which the Company had paid
on its behalf, was enforced to conduct by Shenzhen Intermediate People’s Court that the
Company applied to. To safeguard the rights and interests of the Company, the Company
sued Shen China to Shenzhen Intermediate People’s Court, and requested for a verdict to
order Shen China to repay RMB 7 million, which the Company had paid on its behalf, as
well as to compensate relevant loss arising from the capital occupancy in 2004. Shenzhen
Intermediate People’s Court judged and ordered Shen China to repay the RMB 7 million the
Company had paid on its behalf, and the interest arising during the period of capital
occupancy [(2004) SZFMECZi No.448]. Since Shen China had not fulfilled its repayment
duty according to the time and contents stipulated in the judgment document, the Company
applied to Shenzhen Intermediate People’s Court on Dec.20, 2004 for compulsory
enforcement. Shenzhen Intermediate People’s Court sent Shen China (2004) SZFZZi
No.1382 Civil Verdict and Mandamus, as well as (2005) SZFZZi No.208 Civil Verdict and
Mandamus on Jan.14, 2005, and ruled that the property of Shen China (RMB 14,131,575.92
as the limit) should be sealed up and frozen, and that Shen China should fulfill the duties
stipulated in effective legal papers or regulated by law within five days from the day the
Mandamus arrived. Should Shen China defaulted beyond the time limit, Shenzhen
Incomings and
outgoings
Related party Economy nature
Balance at periodend
Balance at yearbegin
Other receivables Changzhou Sanjing Oil Co., Ltd. Loans and interests 19,493,461.29 15,607,488.56
Subtotal 19,493,461.29 15,607,488.56
Other payables
Shenzhen Investment Holdings
Co., Ltd.
Incomings and
outgoings
3,510,297.20 3,510,297.20
Shenbao Property
Development Co., Ltd.
Incomings and
outgoings
1,699,670.00 1,699,670.00
Subtotal 5,209,967.20 5,209,967.20
Dividend payable
Shenzhen Investment Holdings
Co., Ltd.
Previous annual
dividend
2,690,970.14 2,690,970.14
Subtotal 2,690,970.14 2,690,970.14Semi-Annual Report 2010
85
Intermediate People’s Court would make compulsory enforcement according to law. Later,
stipulated by the Higher People’s Court of Guangdong, the aforesaid two lawsuits were
conducted by Guangzhou Railway Transportation Court, and the conductions were
suspended in the report period because of discovering no property clues. As soon as
circumstances of execution suspension end, the Company may apply to Guangzhou
Railway Transportation Court for resumption of execution. The Company will exercise
relevant rights by virtue of legal channels.
2. Lawsuits involved with Guangdong Sunrise Holdings Co., Ltd.
(1)In December 2002, the case concerning the joint-liability guarantee the Company
provided for the loans (principal and interests being HKD 3 million and HKD 100,000
respectively) that Guangdong Sunrise Holdings Co., Ltd. (the former Shenzhen Lionda
Holdings Co., Ltd. hereinafter referred to as “Sunrise Company” for short) had obtained
from Industrial and Commercial Bank of China Shenzhen Branch has been closed through
mediation. On Jan.13, 2003, the Company repaid, on behalf of Sunrise Company, the
principal of HKD 3 million as well as the interest amounting to HKD 100 thousand, while
remaining interest was exempted. The Company has already accounted in previous gains
and losses.
(2)The case concerning the joint-liability guarantee the Company provided for the HKD 6
million loan Sunrise Company had obtained from Shenzhen Development Bank Co., Ltd.
Nantou Subbranch (hereinafter referred to as “Shenfazhan”) had been closed with
reconciliation. Ended the year 2003, the Company had repaid a sum of principal HKD 2
million and the interest arising on behalf of Sunrise Company. The remaining principal of
HKD 4 million was made on-lending, and the Company would continue to provide
guarantee. In year 2004, after this loan was expired, Sunrise Company did not perform the
repayment. In 2006, the Company had repaid another HKD 2,500,000 (equaling to RMB
2,550,000) of the principal on behalf of Sunrise Company. In 2007, the Company had repaid
HKD 1,453,186.52 of the principal as well as HKD 620,734.25 of the interest (equaling to
RMB 2,055,920.22) on behalf of Sunrise Company again. The Company had fulfilled the
guarantee liability, and accounted in previous gains and losses.
(3)The case concerning the joint-liability guarantee the Company provided for the HKD 32
million loans which Sunrise Company had obtained from Bank of China Shenzhen branch
had been reconciled, and on Dec.11, 2006, the Company signed the Reconciliation
Agreement on GLENMORE INVESTMENT LIMITED Releasing Shenzhen Shenbao
Industrial Co., Ltd from the Debt Guarantee Liabilities for Guangdong Sunrise Holdings Co.,
Ltd. with the creditor Glenmore Investment Limited; in 2006, the Company had paid RMB
29,000,000 according to the aforesaid reconciliation agreement. Shenzhen Intermediate
People’s Court cancelled lawsuit against the Company. Besides, the Company also appealed
to Shenzhen Intermediate People’s Court, asking for execution of the right of recourse in
Sunrise Company and appealing the Court to make the sentence that Sunrise Company shall
pay back the RMB 29 million paid by the Company for Sunrise and relevant interest thereof.
An official case has already been set by Shenzhen Intermediate People’s Court, with case
No. of SZFMECZ No.123 (2007). Court was open for such case and judgment was
presented as the final judgment in this first round court. On Aug. 7, 2007, the Company
received the Civil Order from Shenzhen Intermediate People’s Court in which judged that
Sunrise Company paid back the principal RMB29, 000,000 and relevant interests(sinceSemi-Annual Report 2010
86
Dec.31, 2006, calculated base on current bank loan rate 6.12% till the day of paying off)
paid by Company on behalf of Sunrise Company within ten days commencing from the date
of the effect of such order; After the verdict got legal validity, Sunrise Company had not
fulfilled its repayment duty according to the time and contents stipulated in the judgment
document, the Company appealed to Shenzhen Intermediate People’s Court for compulsory
enforcement. Shenzhen Intermediate People’s Court received such appeal and released
Notice of Case Transaction (case No. SZFZZ No.127 (2008)), to declare that the Court has
already received such case. Later, the court released Civil Verdict (SZFZZ No.127-3(2008))
to declare discontinued execution of No. of SZFMECZ No.123 (2007) verdict. Upon
disappear of discontinued execution; it is possible for the Company to apply for resume of
compulsory enforcement from the court.
(4) The case concerning the joint-liability guarantee the Company provided for the RMB 8
million loans which Sunrise Company had obtained from Guangdong Development Bank
Co., Ltd. Shenzhen Nanyuan Subbranch (formerly Guangdong Development Bank Co., Ltd.
Shenzhen Branch Nanyuan Subbranch) has been closed with reconciliation. Ended the year
2005, the Company had repaid a sum of interest amounting to RMB 2,369,145.58 on behalf
of Sunrise Company, while the remaining principal amounting to RMB 8.58 million
(including interest transferred to principal amounting to RMB 580,000) would continue to
be provided as a loan to Guangdong Sunrise Holdings Co., Ltd., and the Company would
continue to provide joint-liability guarantee for it. Guarantee term was from 6 February
2005 to 6 August 2005. Sunrise Company had not repaid this loan by the expiration day of
the loan. On October 31st, 2006，Guangdong Development Bank Co., Ltd. transferred the
credit claim under the Contract for Loan Extension above to Guangdong Finance
Investment Holding Co., Ltd. (hereinafter refers as Guangdong Finance Company). Since
then, Guangdong Finance Company presented several time asking the Company to
undertake the joint guarantee liability. On 20 March 2009, Guangdong Zhihehang Lawyer
Firm authorized by Guangdong Finance Company delivered a lawyer letter, stating that
“creditor and the lawyer firm have already found relevant property glue under the name of
the Company. Subsequent to the application of attachment addressed by Guangdong
Finance Company to the court, the court will seal up and freeze properties under the name of
the Company (included but not limited to bank accounts, houses, plants, land, and
equities,etc) ” which are much enough to cover the principal interest, such that the case will
be definitely executed”. Guarantee, the source for this case, represented part of historical
remaining guarantees formed when the Company and Sunrise Company were all controlling
subsidiaries of Shenzhen Investment Management Company 1999 ago. On 27 March 2009,
the Company entered into Debt Refund Agreement with Guangdong Finance Company in
light of dealing with the historical guarantee through a reconciled way, i.e., the Company
made cash payment of RMB 8.58 million to Guangdong Finance Company, so as to
implement the joint guarantee responsibility arising from the above historical guarantee.
Upon completion of such responsibility by the aforementioned way, Guangdong Finance
Company agreed to exempt the Company from the joint guarantee responsibility for the
residual creditors’ right (i.e exemption of all interests of such creditor’s right), and will not
declare any power in respect of such creditor’s right in the Company by any way. The
Company made such payment to Guangdong Finance Company on 30 March 2009, and
released mortgage in 91.71% equities of Shenzhen Shenbao Sanjing Food & Beverage
Development Co., Ltd. dated 20 May 2009.Semi-Annual Report 2010
87
Sunrise Company has already entered into bankruptcy and reorganization procedure, and
the Company will make claim against Sunrise Company in respect of all the debtors through
legal procedures.
VIII.Assets with restricted ownership
1. On 31 May 2009, the Company entered into current capital loan contract with Shenzhen
Branch of Shanghai Pudong Development Bank, with term being 3 years and amount being
RMB 30 million, under which, it was agreed to repay principal of RMB 500,000 every 3
months and the remaining was going to be one-off repaid upon expiration. The Company
took Huacheng 1# and 2# plants located in He’ao villige, Henggang town, Longgang
district, Shenzhen as pledge. As at period end, balance of loan was RMB 28 million.
2. On 29 December 2009, the Company entered into current capital loan contract with
Shenzhen Dongmen Branch of Communications Bank, with term being 2 years and amount
being RMB 20 million, under which, it was agreed to settle the loan by one-off payment
upon expiration. The Company took WGY(2009) No.1382 land and constructions,
WGY(2009) No.1383 land and constructions, and land use right of HFGY (2009) No.
13021120005 and No. 13021120004 lands owned by Huizhou Technologies, the whollyowned
subsidiary of the Company, as pledges. As at period end, balance of loan was RMB
20 million.
Assets with restricted
ownership
Area (㎡) Original carrying value Net carrying value
Balance as at yearend
1.No.1-2 plants of Shenzhen
Henggang Huacheng
10,394.01 30,129,419.75 25,917,222.11 28,000,000.00
2.Old plant of Jiangxi Wuyuan
Jufangyong
--- 1,026,350.23 918,128.34
20,000,000.00
2.Land in Dazhangshan
road,Ziyang Town, Wuyuan
4,176.00 4,413,454.06 4,368,418.80
2．Land in Industry Park,Ziyang
Town, Wuyuan
40,000.00 9,588,531.38 9,496,000.28
2．Land in Huizhou Ruhu Town 44,995.00 24,747,250.00 24,252,304.98
2．Land in Huizhou Ruhu Town 5,157.00 2,836,350.00 2,779,623.00
3．Land in Huizhou Ruhu Town 14,073.00 5,662,217.31 5,320,777.10
55,500,000.00
3．Land in Huizhou Ruhu Town 15,856.00 8,720,800.00 8,430,106.62
3．Land in Huizhou Ruhu Town 11,282.90 4,539,631.33 4,265,884.77
3．Land in Huizhou Ruhu Town 7,856.00 3,160,831.32 2,970,228.55
3．Land in Huizhou Ruhu Town 17,860.00 7,185,902.17 6,752,581.37
3．Land in Huizhou Ruhu Town 32,882.00 16,029,945.97 15,066,543.50
3．Land in Huizhou Ruhu Town 50,038.00 27,520,900.00 26,345,630.31
4.Land in Industry Park,Ziyang
Town, Wuyuan
115,605.00 8,459,701.00 8,036,310.02 7,000,000.00
5．Time deposit bill with term
of one year
--- 20,000,000.00 20,000,000.00 19,000,000.00
Total 174,021,284.52 164,919,759.75 129,500,000.00Semi-Annual Report 2010
88
3. On 3 March 2010, the Company entered into current capital loan contract with Business
Division of Ping An Bank, with amount being RMB 60 million, under which, it was agreed
to repay RMB 1.5 million each month and the remaining was going to be one-off repaid
upon expiration which will fall on 25 August 2011. The Company took the land use right of
land covering an area of 149,847.90 square meters, with No. WFGY (2007) 13021120006,
13021120007, 13021120008, 1302112009, 1302112010 and WFGY (2008) 13021120002,
13021120009, owned by Huizhou Technologies, the wholly-owned subsidiary of the
Company, as pledge. As at period end, balance of loan was RMB 55.5 million.
4. On 30 May 2010, Wuyuan Jufangyong, a subsidiary of Suenbao Huacheng which in turn
was an underlying company of the Company, entered into current capital loan contract with
Wuyuan Agriculture Development Bank, with term being 1 year and amount being RMB 7
million, under which, it was agreed to settle the loan by one-off payment upon expiration.
Wuyuan Jufangyong took the land use right of land covering an area of 115,605 square
meters with No. WGY (2009)529 owned by it, as pledge. As at period end, balance of loan
was RMB 7 million.
5. On 10 June 2010, the Company entered into current capital loan contract with Business
Division of Ping An Bank, with with term being 1 year and amount being RMB 19 million,
under which, it was agreed to settle the loan by one-off payment upon expiration. The
Company took the Time deposit bill with term of one year and amount of RMB 20 million
as pledge. As at period end, balance of loan was RMB 19 million.
IX. Commitment
As at the date ended 30 June 2010, the Company has no material commitment required for
disclosure.
X. Notes to main items in financial statements of parent company
(I)Account receivable
1. Constitution of account receivable
Ageing
Balance at period-end Balance at year-begin
Carrying value
Portion
in total
%
Bad debt
provision
Portion of
bad debt
provision
%
Carrying
value
Portion
in total
%
Bad debt
provision
Portion of
bad debt
provision
%
Within 1 year (1 year
included) 77,701.00 73.20 --- --- 89,648.76 75.91 --- ---
Over 1 year but within
2 years(2 years
included)
--- --- --- --- --- --- --- ---
Over 2 years but
within 3 years(3 years
included)
--- --- --- --- --- --- --- ---
Over 3 years 28,453.08 26.80 28,453.08 100.00 28,453.08 24.09 28,453.08 100.00
Total 106,154.08 100.00 28,453.08 26.80 118,101.84 100.00 28,453.08 24.09
Categories
Balance at period-end Balance at year-begin
Book amount Proporti
on in tot
Provision for
bad debt
Percenta
ge of pr Book amount Proporti
on in tot
Provision for
bad debt
Percentage
of provisionSemi-Annual Report 2010
89
2. Movements in bad debt reserve for account receivable:
3．There is no account receivable with significant amount in single item at period-end.
4 ． Account receivables without significant amount in single item while with great
exposure after grouped according to characteristics of credit risks：
5. As at the end of the period, there is no account payable by the shareholders units
holding 5% or above the voting shares of the Company in the balance of account
receivables.
6. As at the end of the period, there is no account due from related parties.
7．There is no transfer of account receivables without satisfaction of the condition for
discontinued confirmation as at the end of the period.
8 ． There is no business arrangement for assets capitalization made with account
receivables as objectives as at the end of the period.
9. There is no financial instrument belonging to stock objectives and without
al %
ovision
for bad
debt %
al % for bad debt
%
I. Account
receivables with
significant amount in
single item
--- --- --- --- --- --- --- ---
II. Account
receivables without
significant amount in
single item while
with great exposure
after grouped
according to
characteristics of
credit risks
28,453.08 26.80 28,453.08 100.00 28,453.08 24.09 28,453.08 100.00
III. Other minor
account receivables
77,701.00 73.20 --- --- 89,648.76 75.91 --- ---
Total 106,154.08 100.00 28,453.08 26.80 118,101.84 100.00 28,453.08 4.87
Item Book balance at
year-begin
Provision during this
period
Decrease during the period Book balance at
Reversal Written-off period-end
2010(this period) 28,453.08 --- --- --- 28,453.08
Book age
Balance at period-end Balance at year-begin
Book balance Bad debt
provision
Book balance Bad debt
Amount Ratio% Amount Ratio% provision
Over 3 years 28,453.08 100.00 28,453.08 28,453.08 100.00 28,453.08
Total 28,453.08 100.00 28,453.08 28,453.08 100.00 28,453.08Semi-Annual Report 2010
90
satisfaction of the condition for discontinued confirmation.
(II)Other receivables
1. Constitution of other receivables
Book age
Balance at period-end Balance at year-begin
Amount
Portion
in total
%
Bad debt
provision
Portion of
bad debt
provision
%
Amount
Portion
in total
%
Bad debt
provision
Portion of
bad debt
provision
%
Within 1
year 164,611,201.31 64.06 --- --- 148,344,063.45 61.50 --- ---
Over 1 year
but within 2
years
74,696,556.44 29.07 217,430.62 0.29 74,696,556.44 30.97 217,430.62 0.29
Over 2 years
but within 3
years
6,951,498.91 2.71 511,150.56 7.35 6,951,498.91 2.88 511,150.56 7.35
Over 3 years 10,699,554.59 4.16 6,349,391.20 59.34 11,205,131.06 4.65 6,349,391.20 56.67
Total 256,958,811.25 100.00 7,077,972.38 2.75 241,197,249.86 100.00 7,077,972.38 2.93
Categories
Balance at period-end Balance at year-begin
Amount
Portion
in total
%
Bad debt
provision
Portion of
bad debt
provision
%
Amount
Portion
in total
%
Bad debt
provision
Portion
of bad
debt
provision
%
I.Other receivables
with significant
amount in single item
251,229,234.23 97.77 1,418,537.77 0.56 233,173,722.36 96.67 1,418,537.77 0.61
II.Other receivables
without significant
amount in single item
while with great
exposure after
grouped according to
characteristics of
credit risks
5,543,777.57 2.16 5,543,777.57 100.00 5,543,777.57 2.30 5,543,777.57 100.00
III. Other minor
receivables
185,799.45 0.07 115,657.04 62.25 2,479,749.93 1.03 115,657.04 4.66
Total 256,958,811.25 100.00 7,077,972.38 2.75 241,197,249.86 100.00 7,077,972.38 2.93Semi-Annual Report 2010
91
2．Movements to the bad debt reserve of other receivables are set below:
3．Other receivables with significant amount in single item at period-end:
4. As at the end of the period, there is no account payable by the shareholders units
holding 5% or above the voting shares of the Company in the balance of other
payables.
5. As at the end of the period, the other receivables due from related parties was RMB
251,759,823.42, representing 97.77% of the balance of other receivables of year-end.
6．There is no transfer of account receivables without satisfaction of the condition for
discontinued confirmation as at the end of the period.
7 ． There is no business arrangement for assets capitalization made with account
Item Book balance at
year-begin
Provision during the
period
Decrease during the period Book balance at
Reversal Written-off period-end
2010(this period) 7,077,972.38 --- --- --- 7,077,972.38
Other receivables Balance of book
value
Ratio for
provision Bad debt reserve Remarks
Huizhou Shenbao
Technologies Co., Ltd.
128,117,635.47 0.00% ---
Wholly-owned subsidiary, within
the consolidation scope
Shenbao Sanjing 62,800,000.00 0.00% ---
Wholly-owned subsidiary, within
the consolidation scope
Wuyuan Jufangyong 24,034,431.97 0.00% ---
Subsidiary of Shenbao Huacheng,
within the consolidation scope
Changzhou Sanjing Oil Co.,
Ltd.
19,493,461.29 0-15% 1,418,537.77 Associate
Shenbao Huacheng 16,783,705.50 0.00% ---
Holding subsidiary, within the
consolidation scope
Total 251,229,234.23 1,418,537.77
Unit Relation with the
Company Amount of borrowings Percentage to total other account
receivables
Huizhou Shenbao Technologies
Co., Ltd.
Wholly-owned subsidiary 128,117,635.47 49.86%
Shenbao Sanjing Wholly-owned subsidiary 62,800,000.00 24.44%
Wuyuan Jufangyong
Subsidiary of Shenbao
Huacheng
24,034,431.97 9.35%
Changzhou Sanjing Oil Co., Ltd. Associate 19,493,461.29 7.59%
Shenbao Huacheng Holding subsidiary 16,783,705.50 6.53%
Shenbao Industry & Trade Wholly-owned subsidiary 530,589.19 0.21%
Total 251,759,823.42 97.78%Semi-Annual Report 2010
92
receivables as objectives as at the end of the period.
8. There is no financial instrument belonging to stock objectives and without
satisfaction of the condition for discontinued confirmation.
9. The top 5 among the other receivables as at the end of the period
(III)Long-term equity investment
1. Details of joint ventures and associates are set out in Note V (7) 1.
2. Details of investments at equity method are set out in Note V (7) 2.
3. Investment at cost method
I. Other equity investments at cost method：
Ranking of debtors Relation with the
company
Nature or
content
Amount of
borrowings Ageing
Percentage to
total other
account
receivables
Huizhou Shenbao
Technologies Co., Ltd.
Wholly-owned
subsidiary
Current account 128,117,635.47 1 month-2 years 49.86%
Shenbao Sanjing
Wholly-owned
subsidiary
Current account 62,800,000.00 1 month -above 3
years 24.44%
Wuyuan Jufangyong
Subsidiary of
Shenbao Huacheng
Current account 24,034,431.97 Within 1year 9.35%
Changzhou Sanjing Oil
Co., Ltd.
Associate Current account 19,493,461.29
1 month -above 3
years
7.59%
Shenbao Huacheng Holding subsidiary Current account 16,783,705.50 Above 1 year 6.53%
Item
Balance at period-end Balance at year-begin
Balance of book
value
Impairment
provision
Book value
Balance of book
value
Impairment
provision
Book value
Investment at equity
method
103,169,388.65 2,870,000.00 100,299,388.65 115,719,389.90 2,870,000.00 112,849,389.90
Investment in
Joint ventures
--- --- --- --- --- ---
Investment in
associates
103,169,388.65 2,870,000.00 100,299,388.65 115,719,389.90 2,870,000.00 112,849,389.90
Investment at cost
method
176,439,770.89 17,537,628.53 158,902,142.36 178,439,770.89 17,537,628.53 160,902,142.36
Other equity
investment
25,360,000.00 17,480,000.00 7,880,000.00 25,360,000.00 17,480,000.00 7,880,000.00
Investment in
subsidiaries
151,079,770.89 57,628.53 151,022,142.36 153,079,770.89 57,628.53 153,022,142.36
Total 279,609,159.54 20,407,628.53 259,201,531.01 294,159,160.79 20,407,628.53 273,751,532.26Semi-Annual Report 2010
93
II. Investments in subsidiaries at cost method
4．Details of impairment provision for long-term equity investment are set out in Note
Invested unit
Term of
investment
Percentage
to the
registered
capital of
the
invested
unit
Initial
investment cost
Balance at
year-begin
Increase during
the period
Decre
ase
during
the
period
Balance at
period-end
Shenzhen Sanjiu Weitai
Holdings Co., Ltd.
--- 0.95% 2,480,000.00 2,480,000.00 --- --- 2,480,000.00
Shenzhen Tianji Optical-
Electric Technologies Co.,
Ltd.
--- 3.77% 15,000,000.00 15,000,000.00 --- --- 15,000,000.00
Wuyuan Jufangyong 30years 38% 7,880,000.00 7,880,000.00 --- --- 7,880,000.00
Subtotal 25,360,000.00 25,360,000.00 --- --- 25,360,000.00
Invested unit
Term of
investment
Percentage
to the
registered
capital of
the
invested
unit
Initial investment
cost
Balance at yearbegin
Increa
se
during
the
period
Decrease during
the period
Balance at periodend
Shenbao Sanjing 20years 100% 80,520,842.36 80,520,842.36 --- --- 80,520,842.36
Shenbao
Industry &
Trade
30 years 100% 5,500,000.00 5,500,000.00 --- --- 5,500,000.00
Shenzhen
Shenbao
Biological
Products Co.,
Ltd.
10 years 100% 2,000,000.00 2,000,000.00 --- 2,000,000.00 ---
Shenbao
Property
25 years 51% 2,550,000.00 2,550,000.00 --- --- 2,550,000.00
Shenbao
Huacheng
30 years 51.67% 53,451,300.00 53,451,300.00 --- --- 53,451,300.00
Huizhou
Shenbao
Investment
50 years 100% 5,000,000.00 5,000,000.00 --- --- 5,000,000.00
Huizhou
Shenbao
Technologies
Co., Ltd.
50 years 100% 4,000,000.00 4,000,000.00 --- --- 4,000,000.00
Shenbao
Liaoyuan
10 years 53.50% 57,628.53 57,628.53 --- --- 57,628.53
Subtotal 153,079,770.89 153,079,770.89 --- 2,000,000.00 151,079,770.89Semi-Annual Report 2010
94
V(7).4.
5．The balance of long-term equity investment at period-end has decreased by RMB
14,550,001.25 as compared to that of year-begin, representing a decrease rate of
4.95%, mainly due to the substantial decline of net profit during the period received
by Shenzhen Pepsi, one of the Company’s associates, which directly cut down the
investment income of the Company greatly.
(IV)Business income and business cost
1. Presentation of main operating income and main operating cost on the basis of
products
2. Presentation of main operating income and main operating cost on the basis of
regions
All income of the Company arises in Shenzhen.
(V)Investment income
Among which, long-term equity investment income at equity method mainly refers to:
Item
Amount of this period Amount of the previous period
Business income Business cost Business income Business cost
Main business 147,753.85 79,866.50 320,437.31 69,057.25
Other businesses 1,200,000.00 --- 1,200,000.00 ---
Total 1,347,753.85 79,866.50 1,520,437.31 69,057.25
Item
Amount of this period Amount of the previous period
Main operating income Main operating cost Main operating income Main operating
cost
Others 147,753.85 79,866.50 320,437.31 69,057.25
Total 147,753.85 79,866.50 320,437.31 69,057.25
Item or the invested unit
Amount of this
period
Amount of the previous
period
Long-term equity investment income
(1) Long-term equity investment income at cost method --- ---
(2) Long-term equity investment income at equity method(2 units in
aggregate)
(12,550,001.25) 3,942,379.64
(3)Disposal of investment income received from long-term equity investment (1,464,996.68）* ---
Total ( 14,014,997.93) 3,942,379.64
Invested unit Amount of this perio Amount of the previo Reason for changeSemi-Annual Report 2010
95
*Investment income received from disposal of long-term equity investment represents
the income from de-registration of its whole-owned subsidiary- Shenzhen Shenbao
Biological Products Co., Ltd.in the report period.
(VI)Additional information about cash flow statement
d us period
ShenZhen Pepsi-Cola Beverage Co.,
Ltd.
(11,524,303.61) 5,065,091.35
A substantial drop in
operation benefit
Changzhou Sanjing Oil Co., Ltd. (1,025,697.64) (1,122,711.71)
Total (12,550,001.25) 3,942,379.64
Item Amount of this
period
Amount of the
previous period
I. Net profit adjusted to be cash flow of operating activities
Net profit (21,512,714.38) (5,455,194.66)
Add: assets impairment provision --- 211,049.77
Depreciation of fixed assets, consumption of oil & gas assets, and
depreciation of productive biological assets 652,719.48 704,844.34
Amortization of intangible assets 190,782.00 96,575.70
Amortization of long-term deferred expenses 137,809.02 2,005.71
Losses from disposal of fixed assets, intangible assets and other long-term
assets(income is listed with "-") (1,222,901.37) (22,000.00)
Losses from confirmation as useless of fixed assets(income is listed with "-") --- ---
Losses from movements to fair values (income is listed with "-") --- ---
Finance expense(income is listed with "-") 4,718,700.90 1,960,932.14
Investment losses(income is listed with "-") 14,014,997.93 (3,764,083.64)
Decrease of deferred income tax assets (increase is listed with "-") --- ---
Increase of deferred income tax liabilities (decrease is listed with "-") --- ---
Decrease of inventories(increase is listed with "-") (100,537.21) (192,311.72)
Decrease of operational account receivables (increase is listed with "-") (25,361,401.41) (38,558,286.40)
Increase of operational account payables (decrease is listed with "-") 916,698.99 18,962,556.57
Others --- ---
Net cash flow arising from operating activities (27,565,846.05) (26,053,912.19)
II. Material investment and financing activities with no reference to income
and expenditure in cash
Debt converted to capital --- ---
Convertible bond due within one year --- ---
Fixed assets leased through financing --- ---
III. Net movements to cash and cash equivalents
Balance of cash at year-end 36,726,511.57 74,809,861.62Semi-Annual Report 2010
96
XI. Additional information
(I) Non-current gains and losses attributable to shareholders of ordinary shares during
the year is listed as follows(gains are listed with “+” and losses are listed with “-") :
Less: balance of cash at year-begin 76,004,694.03 10,374,648.49
Add: balance of cash equivalents at year-end --- ---
Less: balance of cash equivalents at year-begin --- ---
Net increase of cash and cash equivalents (39,278,182.46) 64,435,213.13
Sub-division items Amount of this period
1．Gains and losses from disposal of non-current assets;
(1)Gains from disposal of long-term assets 497,932.95
Including: Gains from disposal of fixed assets 611,353.87
Subtotal 1,109,286.82
(2) Expenditure from disposal of long-term assets
Including: Net losses from disposal of fixed assets 15,698.07
Subtotal 15,698.07
Net gains and losses form disposal of non-current assets 1,093,588.75
2. Tax return and deduction arising from non-effective approval, absence of official approval
document or occasional matters; ---
3 ． Government grant recorded in current gains and losses(excluding those closely related to
company business and granted in fixed amount according to the unified standards of the
country)；
984,736.75
4．Capital occupancy fee collected from non-financial enterprises recorded incurrent gains and
losses; ---
5．Income arising from difference between the investment cost for acquisition of subsidiaries,
associates and joint ventures and fair value of the recognizable net assets of the entities
invested through those acquisition attributable to the investor;
---
6．Gains and losses from exchange of non-monetary assets; ---
7．Gains and losses from entrusted investment and assets management; ---
8 ． Various assets impairment reserve provided due to factors of force majeure, such as
suffering from natural disasters; ---
9．Gains and losses from debt reorganization; ---
10．Expenses for corporate reorganization, such as expenditure for staff arrangement and fee for
integration, etc; ---
11．Gains and losses from excess between the transaction made at such price which is obviously
not fair over its fair value; ---
12 ． Current net gains and losses arising from subsidiaries originated from combination of
enterprises under the same control; ---
13．Gains and losses from contingent matters without relation to the normal operation of the
company; 1,216,901.37
14 ． Gains and losses from change of fair values of financial assets held-for-transaction and
transactional financial assets, and investment income received from disposal of transactional
financial assets, transactional financial liabilities and financial assets available-for-sale,
excluding the effective hedge business related to normal operation of the company;
---
15．Reversal of impairment provision of account receivables which have separate impairment
tests； ---
16．Gains and losses acquired from external entrusted loans; ---
17．Gains and losses arising from change of fair value of investment property which is measured
at fair value； ---
18．Affects upon current gains and losses from one-off adjustment to current gains and losses acc ---Semi-Annual Report 2010
97
(II)Return on equity and earnings per share:
1. Return on equity
(1) Refers to the potential ordinary shares which have no dilutive nature this year
while likely to have for the following periods.
(2)During the period commencing from the balance sheet date to approval for
publication of the financial report, there is no material change in numbers of ordinary
shares or potential ordinary shares outstanding of the Company.
2. Earnings per share
Profit during the period
Return on equity Earnings per share
Fully diluted Weighted
average
Basic earnings per
share
Diluted earnings
per share
Net profit attributable to shareholders of
ordinary shares of the Company -6.06% -5.87% -0.10 -0.10
Net profit attributable to shareholders of
ordinary shares of the Company, net of
non-current gains and losses
-6.82% -6.61% -0.11 -0.11
Item Amount of this period
Amount of the
previous period
Calculation of basic and diluted earnings per share
(I) Molecule:
Net profit after taxation (18,263,527.21) （2,294,928.82）
Adjustment: affects from senior share dividend and other
instruments --- ---
Gains and losses attributable to shareholders of ordinary
shares of the parent company among the calculation of basic
earnings per share (18,263,527.21)
（2,294,928.82）
Adjustment: dividend and interests related to dilutive potential
ordinary share --- ---
ording to requirements of laws and rules in relation of taxation or accounting;
19．Income received from custody operation; ---
20．Other non-operating income and expenditure except for the above items;
(2)Non-operating income:
Including: penalty income ---
Others 1,050.00
Subtotal 1,050.00
(2)Non-operating expenditure:
Including: penalty expenditure ---
Donation expenditure ---
Others 5,867.00
Subtotal 5,867.00
Non-operating income and expenditure, net -4,817.00
21. Other gains and losses items meeting definition of non-current gains and losses; 4,650.98
22．Affects of minority interests; 331,503.85
23．Total non-current gains and losses before income tax 2,963,557.00
Less: affects of income tax; 661,895.83
24． Total non-current gains and losses after income tax 2,301,661.17Semi-Annual Report 2010
98
XII. Adjustments to the differences between financial statements as
prepared by domestic and overseas accounting principles respectively
Due to its issuance of B-share, the Company shall prepare its financial report under
International Finance Reporting Standards while preparing the financial report by
Accounting Standards of Enterprises. No overseas accounting firm has been engaged by the
Company. The differences in terms of net assets and net profit arising from different
accounting standards used when preparing financial report are listed as follows:
Movements to charges and fees arising from conversion of
dilutive potential ordinary share --- ---
Gains and losses attributable to shareholders of ordinary shares
of the parent company among the calculation of earnings per
dilutive share (18,263,527.21)
（2,294,928.82）
(I)Denominator:
Weighted average number of additional ordinary shares issued
during the current period among the calculation of basic
earnings per share
181,923,088.00 181,923,088.00
Add: Weighted average number of ordinary shares converted
from all dilutive potential ordinary shares
--- ---
Weighted average number of additional ordinary shares issued
during the current period among the calculation of diluted
earnings per share
181,923,088.00 181,923,088.00
(III)Earnings per share
Basic earnings per share --- ---
Net profit attributable to shareholders of ordinary shares of the
Company
(0.10) (0.01)
Net profit attributable to shareholders of ordinary shares of the
Company, net of non-current gains and losses
(0.11) (0.02)
Diluted earnings per share --- ---
Net profit attributable to shareholders of ordinary shares of the
Company
(0.10) (0.01)
Net profit attributable to shareholders of ordinary shares of the
Company, net of non-current gains and losses
(0.11) (0.02)
Net assets Net profit
At International Finance Reporting Standards 303,758,776.63 (18,263,527.21)
1. Adjustment to amortization of equity
investment difference (1,016,958.04) ---
2. Adjustment to cost for transferring equities of
Shenzhen Pepsi 254,239.51 ---
3. Adjustment to other payables in respect of
stock-market adjustment funds (1,067,000.00) ---
4. Capitalization of interests arising from land
use right (577,920.15) ---
At Accounting Standards of Enterprises 301,351,137.95 (18,263,527.21)Semi-Annual Report 2010
99
XIII. Grant of approval for financial statements
The Board of the Company has granted the approval for the publication of the financial
statements on 11 August 2010.
Chapter VII. Documents Available for Reference
The office of Board of Directors of the Company has maintained the complete documents
available for inquiries by CSRC, Shenzhen Stock Exchange and shareholders of the
Company, including:
1. The text of 2010 Semi-annual Report and Summary thereof carrying the signature of
Chairman of the Board of the Company;
2. The text of Financial Report carrying the signatures and seals of legal representative,
principal in charge of accounting and principal in charge of accounting institution;
3. The original texts of all documents and original manuscript of public notices of the
Company ever disclosed on Securities Times, China Securities Journal and Hong Kong
Commercial Daily through the report period.
Chairman of the Board: Zheng Yuxi
Shenzhen Shenbao Industrial Co., Ltd.
August 11, 2010
