Shenzhen International Enterprise Co., Ltd.
The Third Quarterly Report 2010
§1 Important Notice
1.1 The Board of Directors and directors of Shenzhen International Enterprise Co.,
Ltd. (hereinafter referred to as the Company) guarantee that there are no any
omissions, fictitious or serious misleading statements carried in the report and will
take all responsibilities, individual and/or joint for the authenticity, accuracy and
completeness of the whole contents.
1.2 Other than the following director, other directors attended the Board meeting in
person, at which the third quarterly report 2010 is reviewed.
Name Office title Reason Name of assignee
Sun Changxing Independent Director On official business trip Xie Ruxuan
1.3 The Financial Report in this quarterly report has not been audited by a CPA firm.
1.4 Zheng Kanghao, Person-in-charge of the Company, Chen Xiaohai,
Person-in-charge of the accounting work, and Xu Xiaoyun, Person-in-charge of the
accounting organ hereby confirm the factuality and completeness of the Financial
Report in this quarterly report.
§2 Company Profile
2.1 Main accounting data and financial indicators
Unit: (RMB) Yuan
As at 30 Sep. 2010 As at 31 Dec. 2009 Increase/decrease (%)
Total assets (RMB) 1,650,914,726.01 1,451,667,225.56 13.73%
Owners’ equity attributable to shareholders of
listed company (RMB)
152,230,545.87 225,778,093.67 -32.58%
Share capital (share) 220,901,184.00 220,901,184.00 0.00%
Net assets per share attributable to
shareholders of listed company (RMB/share)
0.69 1.02 -32.35%
Jul.-Sep. 2010
Increase/decrease
year-on-year (%)
Jan.-Sep. 2010
Increase/decrease
year-on-year (%)
Total operation income (RMB) 3,716,741.18 -3.95% 9,720,337.51 -25.83%
Net profit attributable to shareholders of listed
company (RMB)
-51,806,731.36 - -73,547,547.80 -906.98%
Net cash flows generated from operating
activities (RMB)
- - -670,424,449.31 532.00%
Net cash flows per share generated from
operating activities (RMB/share)
- - -3.03 -
Basic earnings per share (RMB/share) -0.2345 -0.33 -925.00%Diluted earnings per share (RMB/share) -0.2345 -0.33 -925.00%
Weighted average return on net assets (%) -29.08% -28.24% -38.91% -42.91%
Weighted average return on net assets after
deducting extraordinary gains and losses (%)
-22.27% -21.11% -32.20% -28.76%
Items of non-recurring gains and losses Amount from year-begin to the end of this report period Notes
Gains and losses from disposal of non-current assets 2,294,779.72
Other non-operating income and expenditure -22,042,234.19
Impact on minority interest 8,819,246.26
Total -10,928,208.21 -
2.2 Total number of shareholders at period-end and shareholding of top ten
shareholders holding tradable shares
Unit: share
Total number of shareholders at the period-end 18,620
Shareholding of top ten shareholders holding tradable shares
Full name of shareholder
Number of tradable shares
held at period-end
Type of share
Multi Profit Asia Pacific Investment Ltd 30,264,192 Domestically listed foreign shares
Shenzhen Special Economic Zone Development (Group)
Co., Ltd.
21,566,857 RMB Ordinary Shares
UOB Investment (China) Limited 15,528,941 Domestically listed foreign shares
Shenzhen Maoye Emporium Ltd 13,577,548 RMB Ordinary Shares
Zhong Zhiqiang 8,215,594 Domestically listed foreign shares
Shenzhen Taitian Industrial Development Co., Ltd. 5,651,012 RMB Ordinary Shares
Chen Qiaoling 3,109,255 RMB Ordinary Shares
Fang Ruiping 2,534,800 RMB Ordinary Shares
Chen Shaolan 2,528,341 RMB Ordinary Shares
Chen Shu 2,149,327 Domestically listed foreign shares
§ 3 Significant Events
3.1 Particulars about major changes of main accounting statement items and financial
indicators, as well as reasons for the changes
√Applicable □Inapplicable
Monetary capital at the end of report period increased 1102.10% over the year-begin,
mainly because the Company received borrowings.
Short-term borrowings at the end of report period increased RMB 1,294,000,000.00
over the year-begin, mainly because the Company received borrowings.
Accounts payable at the end of report period decreased 91.42% over the year-begin,
which was mainly due to reception of payment for Fanhua and IA Mall Project.
Other payables at the end of report period decreased 23.93% over the year-begin, due
to return the borrowings.
Long-term borrowings at the end of report period decreased 86.22% over theyear-begin, which was mainly due to return the loan.
Administrative expenses from the year-begin to the end of report period increased
83.37% year-on-year, mainly because rent and wage increased, and expense stop
capitalizing.
Financial expenses from the year-begin to the end of report period increased RMB
78,423,455.32 year-on-year, which was mainly because borrowings increased, interest
for arrearage has been paid and interest for capitalization was paid.
Non-operating income from the year-begin to the end of report period decreased 82%
year-on-year, mainly because the assets activating decreased in this year.
Net cash flow from financing activities from the year-begin to the end of report period
increased RMB 872,581,619.18 year-on-year, mainly due to receival of borrowings.
3.2 Progress and influence of significant events, as well as the analysis on solutions
□Applicable √Inapplicable
3.2.1 About non-standard opinion
√Applicable □Inapplicable
In the 2009 Annual Audit Report, Reanda Certified Public Accountants Co., Ltd.
issued the Statement on Issuing Unqualified Audit Opinion with Pinpointed Matters
for 2009 Annual Financial Report to Shenzhen International Enterprise Co., Ltd.,
pointing out that the Company’s ability to pay was weak and its going-concern
capability for the future was uncertain.
In order to solve the aforesaid problems, the Company focused on pushing forward
financing in the first half of this year. In Jul. 2010, Rongfa Company obtained a
financing of RMB 1.3 billion from Bohai International Trust Co., Ltd.. (For more
details, please refer to the public notice published on Securities Times, Ta Kung Pao
(HK) and http://www.cninfo.com.cn dated 3 Jul. 2010.) Such a move greatly eased
the Company’s short-term liability pressure.
3.2.2 The Company offer capital to the controlling shareholder or other related parties
and provide external guarantees in violation of the prescribed procedures.
□Applicable √Inapplicable
3.2.3 Signing contract and execution of contract on routine operation
□Applicable √Inapplicable
3.2.4 Others
√Applicable □Inapplicable
No new significant lawsuit or arbitration occurred during the report period, and the
progress in the report period of significant lawsuits and arbitrations of previous years
was as follows:
(I) The case on house-leasing dispute between subsidiary of the Company-Shenzhen
Rongfa Investment Co., Ltd. (hereinafter called “Rongfa Investment”) and Shenzhen
Baotian Investment Co., Ltd. (hereinafter called “Baotian Investment”)
On 31 Jan. 2007, Rongfa Investment entered into the Contract on Transfer of Use
Right of Housing with Baotian Investment. Due to dispute in the execution of the
contract, Baotian Investment has not yet paid the fees for use right of housing to
Rongfa Investment by now.Shenzhen Municipal Intermediate People’s Court of Guangdong Province made the
civil ruling paper with (2008) SZFMWZ Zi No. 2867, which has took effect on 11
Sep. 2009. (For details, please refer to the public notice with serial number 2009-39
disclosed in Securities Times, Ta Kung Pao and http://www.cninfo.com.cn on 29 Oct.
2009).
Up till now, Baotian Investment failed to pay the fees for use right of housing to
Rongfa Investment according to the clauses of the ruling. Presently, the case is being
executed.
(II)The case on Construction Contract for Construction Project between Rongfa
Investment and Shenzhen Fanhua Engineering Group Co., Ltd. (hereinafter called
“Fanhua Company”)
Rongfa Investment entered into the Construction Contract for Construction Project
with Fanhua Company on 12 Jan. 2005, in which Fanhua Company contracted to
build the IA Mall Project developed by Rongfa Investment. Rongfa Investment paid
the part of construction costs, and the rest costs failed to be paid to Fanhua Company.
In Dec. 2009, Fanhua Company brought an action against Rongfa Investment to ask
for paying unpaid construction costs, overdue interests and other expenses. In Feb.
2010, through mediation of Higher People’s Court of Guangdong Province, the both
parties negotiated a settlement, and the Higher People’s Court of Guangdong Province
issued the paper of civil mediation with (2009) YGFMYC Zi No. 7 (For more details,
please refer to public notice published on Securities Times, Hong Kong Ta Kung Pao
and www.cninfo.com.cn on 12 Feb. 2010).
Since the paper of civil mediation became effective, Rongfa Investment actively
raised money to repay the debt. Up until 26 Aug. 2010, Rongfa Investment had paid
off all the payables as agreed upon in the civil mediation and the execution of all
clauses in the civil mediation had been accomplished.
3.3 Fulfillment of commitments made by the Company, shareholders and the actual
controller
√Applicable □Inapplicable
Commitment Commitment maker Contents of commitment Execution
Commitments concerning the
share merger reform
－ －
All relevant shareholders have
fulfilled their commitments
concerning the share merger
reform.
Commitments made in the
Acquisition Report or the Report
on Equity Changes
Zheng Kanghao
The information disclosure obligor shall not
reduce the shares of Multi Profit Asia Pacific
Investment Ltd. held by the obligor through
the relevant acquisition or reduce the shares of
SZIEC directly held by the obligor through
the said acquisition within the coming 60
months.
The execution of the
commitment continued.
Commitments made in significant
asset reorganization
－ － －
Commitments made when issuing － － －shares
Other commitments (including
supplementary commitments)
－ － －
3.4 Warnings of possible losses or major changes of the accumulative net profit
achieved during the period from year-begin to the end of the next report period
compared with the same period of last year, as well as explanation on reasons
□Applicable √Inapplicable
3.5 Other significant events that need to be explained
3.5.1 Securities investment
□Applicable √Inapplicable
3.5.2 Researches, interviews and visits received in the report period
No field researches, phone calls or written inquiries from investors were received in
the report period.
3.6 Investments into derivatives
□Applicable √Inapplicable
3.6.1 Positions of derivatives investments held at period-end
□Applicable √Inapplicable
§4 Appendix
4.1 Balance sheet
Prepared by Shenzhen International Enterprise Co., Ltd 30 Sep. 2010 Unit: RMB Yuan
Closing balance Opening balance
Items
Consolidation Parent company Consolidation Parent company
Current assets:
Monetary funds 224,473,452.55 472,624.01 18,673,470.06 252,948.06
Settlement funds
Dismantle
Transaction financial assets
Notes receivable
Account receivable 821,338.70 1,399,439.55
Account paid in advance 977,258.80 180,000.00 381,095.00 180,000.00
Insurance receivable
Receivables from reinsurers
Reinsurance contract reserve
receivables
Interest receivable
Dividend receivable
Other receivables 5,701,508.94 37,259,126.81 8,271,682.45 175,779,689.75
Financial assets purchased
under agreements to resell
Inventories 1,357,697,312.69 1,347,795,365.80
Non-current assets due within 1
yearOther current assets
Total current assets 1,589,670,871.68 37,911,750.82 1,376,521,052.86 176,212,637.81
Non-current assets:
Loans and advance
Available for sale financial
assets
Held to maturity investments
Long-term account receivable
Long-term equity investment 6,570,262.84 65,944,253.87 6,570,262.84 65,944,253.87
Investing property 1,186,699.60 850,553.78 1,445,567.83 1,084,763.51
Fixed asset 53,351,891.89 4,907,975.99 66,950,342.03 16,311,714.31
Project in construction
Engineering material
Fixed asset disposal
Bearer biological asset
Oil assets
Intangible assets
Development expense
Goodwill
Long-term expense to be
apportioned
135,000.00 135,000.00 180,000.00 180,000.00
Deferred tax assets
Other non-current assets
Total of non-current assets 61,243,854.33 71,837,783.64 75,146,172.70 83,520,731.69
Total assets 1,650,914,726.01 109,749,534.46 1,451,667,225.56 259,733,369.50
Current liabilities:
Short-term loans 1,300,000,000.00 6,000,000.00
Loans from central bank
Deposits received and hold for
others
Placements From Banks Other
Financial Institutions
Transaction financial liabilities
Notes payable
Account payable 48,941,581.66 570,599,631.60
Account received in advance 47,126,971.75 80,000.00 46,073,971.75 80,000.00
Financial assets sold under
agreements to repurchase
Handling charges and
commission payable
Employee’s compensation
payable
3,619,610.71 1,425,680.63 4,034,257.43 1,385,993.95
Tax payable -454,384.61 2,401,153.71 4,782.62 2,497,675.52Interest payable 3,315,000.00 768,248.25
Dividend payable 5,127,701.36 5,127,701.36 5,127,701.36 5,127,701.36
Other account payable 181,761,019.23 46,545,533.14 238,935,399.95 68,613,377.28
Due to reinsurers
Insurance contract reserve
Customer deposits
Amount payables under
security underwriting
Non-current liabilities due
within 1 year
16,590,000.00 184,000,000.00
Other current liabilities
Total current liabilities 1,606,027,500.10 55,580,068.84 1,055,543,992.96 77,704,748.11
Non-current liabilities:
Long-term borrowings 35,000,000.00 254,000,000.00
Bonds payable
Long-term payables
Specific purpose account
payables
Provisions for contingent
liabilities
6,000,000.00 6,000,000.00
Deferred tax liabilities
Other non-current liabilities
Deferred income 720,497.48 1,029,282.11
Total non-current liabilities 35,720,497.48 261,029,282.11 6,000,000.00
Total liabilities 1,641,747,997.58 55,580,068.84 1,316,573,275.07 83,704,748.11
Owner’s equity (or shareholders’
equity)
Paid-in capital (or share capital) 220,901,184.00 220,901,184.00 220,901,184.00 220,901,184.00
Capital surplus 72,315,347.06 64,951,444.59 72,315,347.06 64,951,444.59
Less: Treasury Stock
Special reserves
Surplus reserve 125,929,834.48 96,841,026.39 125,929,834.48 96,841,026.39
General risk provision
Retained earnings -266,915,819.67 -328,524,189.36 -193,368,271.87 -206,665,033.59
Foreign exchange difference
Total owners' equity attributable
to holding company
152,230,545.87 54,169,465.62 225,778,093.67 176,028,621.39
Minority interest -143,063,817.44 -90,684,143.18
Total owner’s equity 9,166,728.43 54,169,465.62 135,093,950.49 176,028,621.39
Total liabilities and owner’s
equity
1,650,914,726.01 109,749,534.46 1,451,667,225.56 259,733,369.50
4.2 Income statement during the reporting periodPrepared by Shenzhen International Enterprise Co., Ltd Jul.-Sep. 2010 Unit: RMB Yuan
Amount of this period Amount of last period
Items
Consolidation Parent company Consolidation Parent company
I. Total operating income 3,716,741.18 24,100.00 3,869,779.07 25,450.00
Including: Operating income 3,716,741.18 24,100.00 3,869,779.07 25,450.00
Interest income
Premium income
Handling charges and
commissions income
II. Total operating cost 72,370,852.34 83,410,636.15 8,306,045.67 2,997,626.47
Including: Operating 2,883,585.84 1,249.61 3,843,221.33 1,922.96
Interest cost
Handling charges and
commissions cost
Cash surrender value
Net claim cost
Provision for insurance contract
reserves-net
Insurance policy dividend paid
Reinsurance expense
Business taxes and surcharges 182,849.63 156,774.21
Distribution expenses 317,621.43
Administrative expenses 12,190,797.62 3,936,021.66 4,908,728.18 2,520,537.06
Financial costs 56,788,197.17 -4,184,538.01 247,969.53 -3,656,250.28
Impairment loss 7,800.65 83,657,902.89 -850,647.58 4,131,416.73
Add: gain/(loss) from change in
fair value (“-” means loss)
Gain/(loss) from investment (“-”
means loss)
Including: income form
investment on affiliated enterprise
and jointly enterprise
Foreign exchange difference
(“-” means loss)
III. Business profit (“-” means
loss)
-68,654,111.16 -83,386,536.15 -4,436,266.60 -2,972,176.47
Add: non-business income 2,300.00 749,283.80 593,535.60
Less: non-business expense 17,500,866.35 2,066.34
Including: loss from non-current
asset disposal
IV. Total profit (“-” means loss) -86,152,677.51 -83,386,536.15 -3,689,049.14 -2,378,640.87
Less: Tax expense
V. Net profit (“-” means loss) -86,152,677.51 -83,386,536.15 -3,689,049.14 -2,378,640.87-Attributable to parent company -51,806,731.36 -83,386,536.15 -1,908,255.04 -2,378,640.87
-Minority interest -34,345,946.15 -1,780,794.10
VI. Earnings per share
(I) Basic earnings per share -0.2345 -0.0086
(II) Diluted earnings per share -0.2345 -0.0086
VII. Other comprehensive income
VIII. Total comprehensive income -86,152,677.51 -83,386,536.15 -3,689,049.14 -2,378,640.87
Total comprehensive income
attributable to owner of parent
company
-51,806,731.36 -83,386,536.15 -1,908,255.04 -2,378,640.87
Minority interest -34,345,946.15 -1,780,794.10
4.3 Income statement from the year-begin to the end of reporting period
Prepared by Shenzhen International Enterprise Co., Ltd Jan.-Sep. 2010 Unit: RMB Yuan
Amount of current period Amount of last period
Items
Consolidation Parent company Consolidation Parent company
I. Total sales 9,720,337.51 195,900.00 13,105,582.18 992,460.00
Including: Sales 9,720,337.51 195,900.00 13,105,582.18 992,460.00
Interests income
Premium income
Handling charges and
commission income
II. Total cost of sales 115,980,149.88 124,959,109.52 27,770,854.27 -974,828.28
Including: Cost of sales 8,539,310.05 203,993.19 11,830,885.33 225,203.38
Interests expenses
Service charge and commission
income
Cash surrender value
Claim expenses-net
Provision for insurance contract
reserves-net
Insurance policy dividend paid
Reinsurance expense
Business taxes and surcharges 563,493.28 555,338.42
Distribution expenses 978,631.60 661,010.65
Administrative expenses 25,894,186.07 9,688,525.94 14,121,549.55 6,730,075.08
Financial costs 80,017,106.39 -12,597,295.08 1,593,651.07 -10,656,140.88
Impairment loss -12,577.51 127,663,885.47 -991,580.75 2,726,034.14
Add: gain/(loss) from change in
fair value (“-” means loss)
Gain/(loss) from investment
(“-” means loss)
750,000.00 750,000.00
Including: income forminvestment on affiliated enterprise
and jointly enterprise
Foreign exchange difference (“-”
means loss)
III. Business profit (“-” means
loss)
-106,259,812.37 -124,763,209.52 -13,915,272.09 2,717,288.28
Add: non-business income 3,001,552.66 2,910,912.64 16,427,891.35 16,183,174.89
Less: non-business expense 22,668,962.35 6,858.89 69,247.54 4,235.95
Including: loss from non-current
asset disposal
IV. Total profit (“-” means loss) -125,927,222.06 -121,859,155.77 2,443,371.72 18,896,227.22
Less: Tax expense -9,427.98
V. Net profit (“-” means loss) -125,927,222.06 -121,859,155.77 2,452,799.70 18,896,227.22
-Attributable to parent company -73,547,547.80 -121,859,155.77 9,113,934.35 18,896,227.22
-Minority interest -52,379,674.26 -6,661,134.65
VI. Earnings per share
(I) Basic earnings per share -0.33 0.04
(II) Diluted earnings per share -0.33 0.04
VII. Other comprehensive income
VIII. Total comprehensive income -125,927,222.06 -121,859,155.77 2,452,799.70 18,896,227.22
Total comprehensive income
attributable to owner of parent
company
-73,547,547.80 -121,859,155.77 9,113,934.35 18,896,227.22
Minority interest -52,379,674.26 -6,661,134.65
4.4 Cash flow statement from the year-begin to the end of reporting period
Prepared by Shenzhen International Enterprise Co., Ltd Jan.-Sep. 2010 Unit: RMB Yuan
Amount of this period Amount of last period
Items
Consolidation Parent company Consolidation Parent company
I. Cash flows from operating
activities
Cash received from sales of
goods or rending of services
10,285,237.31 75,900.00 13,052,541.04 992,460.00
Net increase of deposits
received from customers and held
for others
Net increase of loans from
central bank
Net increase of inter-bank loans
from other financial assets
Cash received against original
insurance contract
Net Cash received fromreinsurance
Net increase of client deposit
and investment
Net increase of disposal of
tradable financial assets
Cash received as Interests,
fees and commissions received
Net increase of inter-bank
fund received
Cash received under
repurchasing, net
Tax returned
Other cash received from
operating activities
29,343,876.55 7,186,006.95 19,826,000.95 5,036,374.74
Sub-total of cash inflow from
operating activities
39,629,113.86 7,261,906.95 32,878,541.99 6,028,834.74
Cash paid for purchase of
goods and acceptation of services
522,783,653.05 40,919,091.15
Net increase of loans and
advances
Net increase of deposit in
central bank, banks and other
financial institutions
Cash paid for original contract
claim
Cash paid for interests, fees
and commission
Cash paid for policy dividend
Cash paid to and for
employees
13,925,129.86 4,748,292.51 11,067,966.16 3,355,466.57
Cash paid for various taxes 1,401,111.36 203,646.62 3,214,031.79 1,218,307.30
Other cash paid relating to
operating activities
171,943,668.90 15,876,902.87 21,415,789.55 34,913,498.60
Sub-total of cash outflows 710,053,563.17 20,828,842.00 76,616,878.65 39,487,272.47
Net cash outflow in
operating activities
-670,424,449.31 -13,566,935.05 -43,738,336.66 -33,458,437.73
II. Cash Flows from Investing
Activities
Cash received from return of
investments
20,000.00 20,000.00
Cash received from
investment income
Net cash received from 13,846,125.00 13,843,825.00 8,339,798.60 8,339,798.60disposal of fixed assets, intangible
assets and other long-term assets
Net cash received from
disposal of subsidiaries and other
operating units
Other cash received relating to
investing activities
Sub-total of cash inflows of
investing activities
13,846,125.00 13,843,825.00 8,359,798.60 8,359,798.60
Cash paid for acquisition of
fixed assets, intangible assets and
other long-term assets
117,777.00 57,214.00 78,319.00 9,750.00
Cash paid for investments
Net increase of pledge loans
Net cash paid for acquisition
of subsidiaries and other operating
units
Other cash paid relating to
investing activities
Sub-total of cash outflows of
investing activities
117,777.00 57,214.00 78,319.00 9,750.00
Net cash inflow from
investing activities
13,728,348.00 13,786,611.00 8,281,479.60 8,350,048.60
III. Cash Flows from Financing
Activities:
Cash received from
investment
Including: Cash received from
minority shareholders of
subsidiaries
Cash received from
borrowings
1,335,000,000.00 5,000,000.00 26,000,000.00
Cash received from bonds
issuing
Cash received relating to
financing activities
270,000.00
Sub-total of cash inflows of
financing activities
1,335,270,000.00 5,000,000.00 26,000,000.00
Cash paid for repayments of
borrowings
427,410,000.00 5,000,000.00 8,000,000.00
Cash paid for dividends, profit
distribution or interest
45,363,916.20 24,325,535.38 668,940.53
Including: dividends or profits
paid to minority shareholders bysubsidiaries
Other cash paid relating to
financing activities
3,760,000.00
Sub-total of cash outflows of
financing activities
472,773,916.20 5,000,000.00 36,085,535.38 668,940.53
Net cash inflow from
financing activities
862,496,083.80 -10,085,535.38 -668,940.53
IV. Effect of foreign exchange
rate changes
V. Net decrease in cash and cash
equivalents
205,799,982.49 219,675.95 -45,542,392.44 -25,777,329.66
Add : Opening amount of cash
and cash equivalents
18,673,470.06 252,948.06 68,414,884.06 26,129,141.95
Cash paid for investments 224,473,452.55 472,624.01 22,872,491.62 351,812.29
4.5 Auditor’s report
Audit opinion: Un-audited
