Chengde Dalu Co., Ltd. Semi-Annual Report 2011
承 德 大 路 股 份 有 限 公 司
CHENGDE DALU CO．，
Semi-Annual Report 2011
(Full Text)
(January-June, 2011)
August, 2011
China Chengde PRC
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Chengde Dalu Co., Ltd. Semi-Annual Report 2011
Contents
Section I. Important Notes and Paraphrase …………………………………………3
Section II. Company Profile…………………………………………………………...4
Section III. Changes in Share Capital and Particulars about Shares Held by Main
Shareholders …………………………………………………………………………...7
Section IV. Particulars about Directors, Supervisors and Senior Executives………8
Section V. Report of the Board ………………………………………………………..9
Section VI. Significant Events………………………………………………………..11
Section VII. Financial Report ……………………………………………………….17
Section VIII. Documents Available for Reference …………………………………55
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Chengde Dalu Co., Ltd. Semi-Annual Report 2011
Section I. Important Notes and Paraphrase
Important Notes:
The Board of Directors, Supervisory Committee of Chengde Dalu Co., Ltd. (hereinafter
referred to as the Company) and its directors, supervisors and senior executives confirm that
there are no material omissions or errors which would render any statement misleading and
individually and collectively accept responsibility for the correctness, accuracy and
completeness of the contents of this report.
The 22nd Meeting of the 4th Session of the Board examined and approved 2011 Semi-annual
Report and its summary of the Company. All the directors, supervisors and senior executive
attended the meetings of Board of Directors. 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.
Mr. Yan Qizhong, Chairman of the Board, Mr. Wang Ansheng, Chief Financial Officer, and
Mr. Liu Fengguo Person in Charge of Accounting Institution confirm that the Financial
Report of 2011 Semi-annual Report is authentic and complete.
The semi-annual financial report is not audited.
Note: The report is prepared in bilingual versions using Chinese and English respectively, in
the event of any discrepancy in understanding the two aforementioned versions, the Chinese
version shall prevail.
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Chengde Dalu Co., Ltd. Semi-Annual Report 2011
Section II. Company Profile
I. Legal Name of the Company
In Chinese: 承德大路股份有限公司
In English: CHENGDE DALU CO., LTD.
II. Legal Representative: Yan Qizhong
III. Secretary of Board of Directors: Han Zhigang
Contact Address: Xiabancheng Town, Chengde County, Hebei Province
Tel: 0314 — 3115048 3115049
Fax: 0314 —3111475
E-mail: hzg18632@126.com
IV. Registered Address: Xiabancheng Town, Chengde County, Hebei Province
Office Address: Xiabancheng Town, Chengde County, Hebei Province
Post Code: 067400
Company’s Internet Web Site: http://www.dxtex.com
E-mail: dxgs-9@heinfo.net
V. Newspapers Chosen for Disclosing the Information of the Company: Securities Times
(Domestic) and Hong Kong Commercial Daily (overseas)
Internet Web Site for Publishing the Annual Report: http://www.cninfo.com.cn
The Place Where the Annual Report is Prepared and Placed: Securities Department of the
Company
Contact Tel: (86) 314-3115048, (86) 314-3115049
VI. Stock Exchange Listed with: Shenzhen Stock Exchange
Short Form of the Stock: ST DALU B
Stock Code: 200160
VII. Other Relevant Information of the Company
Initial registered date: Nov. 3, 1999
Registered date after change: Mar. 31, 2004
Registered address: Industry and Commerce Administration Bureau of Hebei Province
(No.316, Tiyu South Street, Shijiazhuang, Hebei Province)
Registered number for business license of the Company: 1300001001372 1/1
Registered number of taxation of the Company: 130821106576876
Custodian agent of the non-circulating shares of the Company:
China Securities Depository and Clearing Corporation, Ltd. Shenzhen Branch
Name of lawyer firm engaged by the Company: Beijing Jincheng & Tongda Law Firm
Office address: 11/F, Huaxia Bank, No. 22, Jian Guo Men Nei Ave., Beijing
II. Major accounting data and financial indexes (Unit: RMB)
Increase/decrease at the
At the end of At the
end of this report period
this report period-end of
compared with that in
period last year
period-end of last year (%)
Total assets(RMB) 205,673,247.12 199,976,147.64 2.85%
Owners’ equity attributable to
shareholders of the listed -31,594,292.82 -27,525,241.03 -14.78%
company(RMB)
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Chengde Dalu Co., Ltd. Semi-Annual Report 2011
Share capital(Share) 706,320,000.00 706,320,000.00 0.00%
Net assets per share attributable to
shareholders of the listed -0.045 -0.039 -15.38%
company(RMB/Share)
This report The same Increase/decrease in this
period period of last report period year-on-year
(Jan. to Jun.) year (%)
Total operating income(RMB) 21,250.00 0.00 100.00%
Operating profit (RMB) -5,254,012.57 -4,767,355.11 -10.21%
Total profit(RMB) -4,385,273.08 -4,819,752.88 9.01%
Net profit attributable to shareholders
-4,069,051.79 -4,314,900.49 5.70%
of the listed company(RMB)
Net profit attributable to shareholders
of the listed company after deducting -4,937,791.28 -4,262,502.72 -15.84%
non-recurring gains and losses(RMB)
Basic earnings per share (RMB/Share) -0.006 -0.006 0.00%
Diluted earnings per share
-0.006 -0.006 0.00%
(RMB/Share)
Weighted average return on equity (%) - - 0.00%
Weighted average return on equity
after deducting non-recurring gains - - 0.00%
and losses (%)
Net cash flow arising from operating
-20,647,074.69 4,609.37 -448,037.02%
activities(RMB)
Net cash flow per share arising from
-0.029 0.00001 -290,100.00%
operating activities (RMB/Share)
Items of non-recurring gains and losses (Unit: RMB)
Note (If it is
Non-recurring gains and losses Amount
applicable)
Gains and loss from disposal of non-current asset 970,161.00 -
Net amount of other non-operating income and
-101,421.51 -
expense excluded the aforementioned items
Total 868,739.49 -
Statement of Provision for Devaluation of Assets
Book Decrease in this period
balance at
Increase in Book balance
Items the Switching Transferring
this period at period-end
period-begin back out
ning
I. Total of provision for bad 44,360,872.5 44,360,872.5
debts 9 9
II. Provision for falling price
of inventory
III. Provision for devaluation
of financial asset available for
sales
IV. Provision for devaluation
of held-to-maturity investment
V. Provision for devaluation 892,335,310. 892,335,310.
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Chengde Dalu Co., Ltd. Semi-Annual Report 2011
of long-term equity 93 93
investment
VI. Provision for devaluation
of investing property
VII. provision for devaluation 35,361,563.0 35,361,563.0
of fixed assets 1 1
VIII. Provision for
devaluation of engineering
materials
IX. Provision for devaluation 252,886,204. 252,886,204.
of construction in progress 04 04
X. Provision for devaluation
of productive biological asset
Including: Provision for
devaluation of mature
productive biological asset
XI. Provision for devaluation
of oil asset
XII. Provision for devaluation
of intangible asset
XIII. Provision for
devaluation of goodwill
XIV. Other
1,224,943,95 1,224,943,95
Total
0.57 0.57
Loss of assets depreciation (Unit: RMB)
Amount occurred in this Amount occurred in last
Items
period period
I. Loss of bad debts
II. Loss of inventory depreciation
III. Loss of devaluation for financial asset
available for sales
IV. Loss of devaluation of held-to-maturity
investment
V. Loss of devaluation of long-term equity
investment
VI. Loss of devaluation of investing
property
VII. Loss of devaluation of fixed assets
VIII. Loss of devaluation of engineering
materials
IX. Loss of devaluation of construction in
progress
X. Provision for devaluation of productive
biological asset
XI. Loss of devaluation of oil asset
XII. Loss of devaluation of intangible asset
XIII. Loss of devaluation of goodwill
XIV. Other
Total 0.00 0.00
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Chengde Dalu Co., Ltd. Semi-Annual Report 2011
III. Difference in CAS and IAS
There remained no differences in net profit in this period and no differences in net assets
ended as report period calculated based on the CAS and the IAS.
Section III. Changes in Share Capital and Particulars about Shares held by
Main Shareholders
I. Particulars about changes in share capital
In the report period, the Company’s total shares and share structure remained unchanged.
II. Particulars about shareholders
(I) Ended as June 30, 2011, the Company had totally 23,008 shareholders, including 5 of
sponsors’ share and 23,003 of domestically listed foreign share.
(II) Particulars about the shares held by the top ten shareholders and the top ten shareholders
of tradable share as follows:
Total number of 23,008
shareholders
Particulars about shares held by the top ten shareholders
Total Number of
Nature of Proportion Number of share
Name of shareholders number of unlisted share
shareholders of share held pledged or frozen
share held held
Domestic
Chen Rong natural 29.49% 208,324,800 208,324,800
person
GUOTAI JUNAN
Foreign
SECURITIES(HONG 8.43% 59,530,549 0
legal person
KONG)LIMITED
Domestic
Chengde North non-state-o
2.62% 18,517,651 18,517,651
Industrial Corporation wned legal
person
Circulating
Xu Jiang 2.34% 16,556,900 0
B-share
Circulating
Chen Yan 2.21% 15,613,200 0
B-share
Domestic
Wang Zhengsong natural 1.89% 13,327,891 13,327,891
person
Circulating
Zhou Haihong 1.62% 11,430,000
B-share
Circulating
Wang Wensheng 1.03% 7,258,007 0
B-share
Circulating
Peng Wei 0.42% 2,978,525 0
B-share
Circulating
Zhao Ziying 0.37% 2,600,416 0
B-share
Particulars about shares held by the top ten shareholders of tradable share
Name of shareholders Number of tradable share held Type of share
GUOTAI JUNAN 59,530,549 Domestically listed foreign
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Chengde Dalu Co., Ltd. Semi-Annual Report 2011
SECURITIES(HONGKONG)LIMIT shares
ED
Domestically listed foreign
Xu Jiang 16,556,900
shares
Domestically listed foreign
Chen Yan 15,613,200
shares
Domestically listed foreign
Zhou Haihong 11,430,000
shares
Domestically listed foreign
Wang Wensheng 7,258,007
shares
Domestically listed foreign
Peng Wei 2,978,525
shares
Domestically listed foreign
Zhao Ziying 2,600,416
shares
Shanghai Wanguo (Hong Kong) Domestically listed foreign
1,875,224
Securities Co., Ltd. shares
Domestically listed foreign
Li Siquan 1,649,633
shares
Domestically listed foreign
Qiu Hongmin 1,592,600
shares
Major shareholder had no related relationship with other shareholders, and it
didn’t belong to concerted action people ruled in Administration Method of
Explanation on
Information Disclosure about Change on Shareholding of Listed Companies.
associated relationship
The Company is unknown whether there exists associated relationship or
among the aforesaid
belongs to the consistent actor regulated by the Management Measure of
shareholders
Information Disclosure on Change of Shareholding for Listed Company
among the other shareholders.
III. In the report period, controlling shareholder and actual controller of the Company had
changed
In reporting period, no change took place on controlling shareholder of the Company. On Jun.
7 of 2011, the previous actual controller Mr. Chenrong resigned to board of directors due to
personal reason. Nominated by board of directors, Mr. Yan Qizhong was elected as director
and president of the Company, becoming the actual controller. The change had been disclosed
on Securities Times and Hong Kong Commercial Daily on July 1 of 2011.
Section IV. Particulars about Directors, Supervisors and Senior Executives
I. Alteration in shares held by directors, supervisors and senior executives of the Company:
No directors, supervisors and senior executives of the Company hold shares of the Company.
During the report period, no alteration happened to shares (non-circulating) held by major
shareholder Chen Rong.
II. Change and new engagement or dismission on directors, supervisors and senior executive
in reporting period
1. Mr. Chenrong submitted resignation to board of directors on Jun. 7 of 2011 thus resigned
posts of director and president. Based on demands of governance and production and
operation, board of directors elected Mr. Yan Qizhong as director and president of the
Company with the same office term with the 4th session board of directors.
2. On Jun. 27 of 2011 the Company received written resignation from general manager Mr.
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Chengde Dalu Co., Ltd. Semi-Annual Report 2011
Hao Bin. Mr. Hao Bin resigned post of general manager due to individual reason, and won’t
take any post in the Company. Based on relevant rules of Article of Association, Mr. Hao
Bin’s resignation took effect once it reached board of directors. For ensuring normal
operation of the Company, director Mr. Chen Jie host daily work of the Company before we
elect new general manager.
Section V. Report of the Board
I. Discussion and analysis on overall operation of the report period
In the 1st half year of 2011, hard-working board of directors and managerial led staffs to
overcome difficulties thus construction of the initial phase (Dalu Ganyuan) of commercial
and residential items of wholly-owned subsidiary Chengde County Rongyida Real Estate
Development Company started, and opened sale in Aug. of 2011, thus laid foundation for
gradual resume of production and operation of the Company. The Company realized RMB
21250.00 of operating income, RMB -4,385,273.08 of profit, RMB -4,069,051.79 of net
profit attributable to shareholders of listed companies and RMB -0.006 of earnings per share.
II. Scope and operation of main business:
1. Main business scope: knitting, weaving series, high-end suits, children's clothing line,
packaging materials, paper and paper products, production and processing of all kinds of yarn
and synthetic yarn, marketing its own products, real estate development and sales, hotel and
catering industry.
2. In the report period, the Company did neither resume production, nor conduct any
activities of production and operation, so main business of the period was still loss.
2. Main business classified according to industry and area Unit: RMB’0000
Main business classified according to industry
Increase/decr Increase/de
Increase/decr
Classified Income ease in crease in
Cost of Gross ease in gross
according to from income from cost of
operatio profit profit ratio
industries or operatio operations operations
ns ratio (%) year-on-year
products ns year-on-year year-on-yea
(%)
(%) r (%)
Costume - - - - - -
manufacture
industry
Cotton spin - - - - - -
industry
Paper-making - - - - - -
industry
Main business classified according to area Unit: RMB’0000
Increase/decrease in income from
Area Income from operations
operations year-on-year (%)
Domestic sales 0 -
Overseas sales 0 -
3. Analysis on financial condition
(1)Analysis on assets constitution Unit: RMB
Change
Item 2011-6-30 2010-12-31 Reason for change
proportion
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Chengde Dalu Co., Ltd. Semi-Annual Report 2011
（%）
Total assets 205,673,247.12 199,976,147.64 2.85% Due to borrowings
Current
86,502,484.41 79,128,550.82 9.32% Due to borrowings
assets
Due to depreciation
Non-current
119,170,762.71 120,847,596.82 -1.39% accrued and
assets
amortization
Total
234,717,923.80 224,632,050.60 4.49% Due to borrowings
liabilities
Current
217,721,923.77 207,636,050.57 4.86% Due to borrowings
liability
Owners’ Due to losses of this
-29,044,676.68 -24,655,902.96 -17.80%
equity year
Undistributed Due to losses of this
-1,265,471,286.09 -1,261,402,234.30 -0.32%
profit year
(2)Analysis on operation achievements Unit: RMB
Amount (RMB) Increase
Reason
Item Jan. to Jun of / decrease
for change
2011 ratio (%)
Operation
21,250.00 0 - -
income
Due to
depreciation
Operation -5,254,012.5 -4,767,355.1
-10.21% accrued,
profit 7 1
amortization
and tax
Net profit Due to
attributable to -4,069,051.7 -4,314,900.4 increase of
5.70%
owners of parent 9 9 non-operatin
company g income
Due to
depreciation
Administratio
5,260,118.42 4,766,244.48 10.36% accrued,
n expense
amortization
and tax
Due to
Financial 336.60 increase of
4,848.99 1,110.63
expense % banking
handling fees
4. Explanation for alteration in profit constitution, main business and its structure,
profit-making ability of main business of the Company in the report period:
In the report period, due to the un-recover production of the Company, main business, its
structures and profitability etc. remains the same.
5. Other operational business activities bringing significant influence on profit in the report
period
In reporting period, the Company resumed production and operation of main business. While
the construction of commercial and residential item of its wholly-owned subsidiary namely
Chengde County Rongyida Real Estate Development Co., Ltd had been started. Construction
period will last for a year.
6. In the report period, no investment income contributed by share-investing company
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Chengde Dalu Co., Ltd. Semi-Annual Report 2011
affected net profit of the Company over 10%.
7. Problems and difficulties and solution in operation
In the report period, the Company was still in shortage of capital and its production hadn’t
been resumed yet. As assets was input by Rongyida Company, it would turn to better for the
Company. The Company would continue to seek for powerful strategic investors and
cooperative partners to integrate its assets and business and inject capital to the Company, to
help the Company resume its profit-making ability of main business
III. Investment in the report period
1. In the report period, the Company neither raised proceeds, nor did it use proceeds raised in
previous periods.
2. Projects invested with non-raised proceeds.
In the report period, there was no project invested with non-raised proceeds.
IV. The Company didn’t make modification for the annual operation plan.
V. In 2010, Crowe Horwath Certified Public Accountants issued auditor’s report with an
un-qualified opinions and paragraph of emphasized matters since they audited the financial
report of the Company. The board of directors thought that, the concerned proceedings did
exist, and it was a historical issue which won’t take real impact on production and operation
of the Company. The Company attached great importance to the events the audit report
emphasized and currently is communicating with related department, discussing solutions. As
the completion of bankruptcy and restructuring of the Company ends, the Company will
gradually step into formal trace, and the above issues will be solved one by one.
Section VI. Significant Events
I. Corporation governance
In reporting period, the Company successively perfected governance structure of legal person
and internal control system based on relevant rules issued by CSRC and Shenzhen Stock
Exchange as well as requirements of promotion of governance. Key controlling activities
conformed to requirements of relevant laws, rules and supervision department, which were
not against Governance Rules of Listed Companies and relevant internal control system.
In the following working, the Company will regard governance as important basic working
for improving competitiveness and constantly complete modern corporation system of the
Company.
II. Implementation of profit distribution plan and circumstances of equity incentive
mechanism:
1. There was no profit distribution plan which was made in the previous period and
implemented in the report period, plan of converting the public reserve capital into share
capital or plan of issuing new shares.
In the semi-annual of 2011, the Company had neither profits distribution plan nor plan of
converting pubic reserve into share capital.
2. The Company did not implemented equity incentive mechanism.
III. Significant lawsuit and arbitration:
On Apr. 17 of 2011, Chengde Medium People’s Court accepted Ms. Wang Shuxian’s accuse
about creditor’s right of Chengde Dalu Co., Ltd. On Apr. 27, the Company received
documents such as Appear Notice and Civil Ruling Notice from Hebei Chengde Medium
People’s Court. The case hasn’t been put on trial, so the Company couldn’t judge the possible
influence for the moment. The Company will actively respond to the case, protect legal
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Chengde Dalu Co., Ltd. Semi-Annual Report 2011
interest of the Company and shareholders. The Company will timely disclose the above
proceedings.
IV. There was no condition of purchasing and selling assets in the Company in reporting
period.
V. Related transactions of the Company in the report period
There was no significant related transaction of the Company in the report period.
VI. Significant contract and implementation
(1) In the report period, the Company had no significant transaction, entrustment, contract or
leasing proceeding of other companies, nor vice versa matters.
(2) In the report period, the Company had no significant guarantee contract.
(3) In the report period, the Company did not entrust others to manage cash assets.
VII. Special explanation and independent opinion issued by independent directors on capital
occupancy and external guarantee of related parties of the Company
Following the spirits of Concerning Some Issues on Regulating the Funds between Listed
Companies and Associated Parties and Listed Companies’ Provision of Guaranty to Other
Parties (No. 56 [2003] promulgated by CSRS on Standardizing External Guarantee of Listed
Company, as independent directors of the Company, we made careful inspection on the
capital occupancy of related parties and external guarantee executed according to the
aforementioned regulation and presented the following explanation on relevant problems,
with an attitude of earnest and responsibility:
1. The Company standardized the capital occupancy of related parties and external guarantee
behavior and thus controlled risks of capital occupancy by related parties and external
guarantee, in strict accordance to regulation of Articles of Association.
2. Till Jun 30th of 2011, no condition that related parties of the Company occupy capital of
listed companies against rules was found.
3. Till Jun. 30, 2011, the Company has never provided guarantee for shareholder, actual
controller and its related party, any non legal person unit and individual; controlling
shareholder and other related party neither forced the Company to provide guarantee for
others.
VIII. The Company or the shareholders holding over 5% of total shares had no commitment
issues that had important influence on the operating results and financial situation of the
Company in the report period or lasting to the report period.
IX. In the report period, the present directors, supervisors, senior executives, shareholders,
actual controllers and purchaser of the Company had never be investigated by authorized
department, received compulsory measure from judicial department, be sent to judicial
department or be investigated into criminal responsibility; also never received investigation,
administrative punishment or criticism through public notice from China Securities
Regulatory Commission, nor had they been condemned by the stock exchange in public
either.
X. Particulars about the Company’s Reception of Investigations and Interviews:
In accordance with the principles of just, fair and publicity, to further regulate the behaviors
of information disclosure for the listed companies and ensure justice for information
disclosure, the Company received the research and media interviews in standardized way
according to the regulations of Guideline on Fair Information Disclosure for Listed
Companies promulgated by Shenzhen Stock Exchange. In the report period, the Company
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Chengde Dalu Co., Ltd. Semi-Annual Report 2011
received visits and telephone communication from its investors for many times; the Company
received them and replies strictly in accordance with relevant regulations; there occurred no
such situations as selectively and privately reveal or leak non-public significant information
to specific parties; and all these assure the fairness of information disclosure of the Company.
Reception Way of Reception Discussion issue and offered
Reception date
place reception person information
Security
Phone
Department Individual Particulars about shareholders’ meeting,
2011-1-13 communicati
of the investor offering notice about decision
on
Company
Security
Phone
Department Individual Performance of 2010, performance
2011-1-26 communicati
of the investor report was offered
on
Company
Security
Phone
Department Individual Current situation of the Company, no
2011-2-19 communicati
of the investor offered information
on
Company
Security
Phone
Department Individual Construction of item of the Company,
2011-3-16 communicati
of the investor offering no material
on
Company
Security
Phone
Department Individual Current situation of the Company, no
2011-4-7 communicati
of the investor offered information
on
Company
Security
Phone
Department Individual Real estate development of the
2011-4-15 communicati
of the investor Company, no offered information
on
Company
Security
Phone
Department Individual
2011-4-21 communicati Significant lawsuit, offering no material
of the investor
on
Company
Security
Phone
Department Individual Current situation of the Company, no
2011-4-27 communicati
of the investor offered information
on
Company
Security
Phone
Department Individual
2011-5-5 communicati Significant lawsuit, offering no material
of the investor
on
Company
Security
Phone
Department Individual Production restoring condition of the
2011-5-10 communicati
of the investor Company, no offered information
on
Company
Security
Phone
Department Individual Real estate development of the
2011-5-16 communicati
of the investor Company, no offered information
on
Company
Security Phone Individual Real estate development of the
2011-5-20
Department communicati investor Company, no offered information
13
Chengde Dalu Co., Ltd. Semi-Annual Report 2011
of the on
Company
Security
Phone
Department Individual Current situation of the Company, no
2011-6-8 communicati
of the investor offered information
on
Company
Security
Phone
Department Individual Construction of item of the Company,
2011-6-17 communicati
of the investor offering no material
on
Company
Security
Phone
Department Individual Current situation of the Company, no
2011-6-29 communicati
of the investor offered information
on
Company
XI. Other significant events
1. Because the subsidiaries of the Company - Chengde Dixian Fashion Co., Ltd., Hebei
Xiabancheng Knitwear Co., Ltd. and Chengde Banhe Chemical Simulation Textile Co., Ltd.
were declared bankruptcy, the aforesaid three companies were not in the range of
consolidation statement in this period.
2. In this reporting period, the Company didn’t signed significant contract ruled in No. 6
Working Guidance for Information Disclosure of Listed Companies: Significant Contract.
3. The Company had no equity of other listed companies, share participating commercial
bank, Security Company, insurance company, trust companies, futures companies and other
financial enterprises.
4. Special statement and independent opinion of independent directors over occupation of
related parties and external guarantee
Based on Notice to 2011 Semi-Annual Report of Listed Companies, as independent director
of the Company, we carefully read relevant material offered by the Company, and carefully
reviewed and supervised capital occupation of related parties and external guarantee. We are
issuing the following opinions as for relevant events: in reporting period, the Company
strictly standardized capital contact with controlling shareholders and other related parties,
controlled external guarantee risk. There existed no illegal capital occupation of controlling
shareholder and other related parties as well as external guarantee. The illegal capital
occupation was ruled by Notice to Normalizing Capital Contact between Listed Companies
and Related Parties and External Guarantee of Listed Companies (ZJF[2003] No. 56) issued
by CSRC. And there existed no ones extending from previous periods.
XII. Index to other events
In the report period, all the notices of the Company have been published on Securities Times,
Hong Kong Commercial Daily as well as Juchao Website (http://www.cninfo.com.cn).
Particulars are as follows:
Notice number Notice date Notice Events
Notice to decisions made on 2011 the 1st
2011-001 2011-01-11
extraordinary general shareholders’ meeting
Position Paper on 2011 the 1st extraordinary
2011-01-11
shareholders’ meeting
2011-002 2011-01-24 Notice to 2010 Annual Performance
14
Chengde Dalu Co., Ltd. Semi-Annual Report 2011
2011-003 2011-03-30 Reference Notice
2011-03-30 Simplified Notice to Equity Transfer
Notice to Decision Made On the 19th Meeting of
2011-004 2011-04-27 the 4th Session of Board of Directors of Chengde
Dalu Co., Ltd
Notice to decision made on the 8th meeting of the
2011-005 2011-04-27
4th session of board of supervisors
2011-006 2011-04-27 Summary of 2010 annual report
Notice to Chengde Dalu Co., Ltd holding 2010
2011-007 2011-04-27
annual shareholders’ meeting
2011-008 2011-04-27 Text of 2011 the 1st seasonal report
Notice to board of directors backward and
2011-009 2011-04-27
adjusting 2009 annual accounting statement
Special statement of board of directors on
2011-04-27 non-standardized unqualified audit opinion and
concerning events
Special statement of board of supervisors on
2011-04-27 audit opinion and concerning opinion of 2010
annual report
Report on work of 2010 annual independent
2011-04-27
directors (Liu Wei)
Report on work of 2010 annual independent
2011-04-27
directors (Li Min)
Special statement of independent directors and
2011-04-27
independent opinion
Special statement on 2010 annual financial report
2011-04-27 issued unqualified audit report with stressed
phases
Special statement on 2010 annual correction over
2011-04-27
errors in prior period of Chengde Dalu Co., Ltd
Full text of 2011 annual the 1st seasonal report
2011-04-27
(English Version)
15
Chengde Dalu Co., Ltd. Semi-Annual Report 2011
st
2011-04-27 Full text of 2011 the 1 seasonal report
2011-04-27 2010 annual report (English Version)
2011-04-27 2010 annual report
2011-04-27 Self-estimation on 2010 annual internal control
Special statement on 2010 annual capital
2011-04-27 occupation of controlling shareholder and other
related parties
2011-04-27 2010 annual audit report
Notice to openness of initial item of
2011-010 2011-04-29 wholly-owned subsidiary Chengde County
Rongyida Real Estate Development Co., Ltd
2011-011 2011-04-29 Significant lawsuit notice
Notice to website explanation meeting on 2010
2011-012 2011-05-20
annual performance
Notice to decision made on 2010 annual
2011-013 2011-05-27
shareholders’ meeting
Legal position letter to 2010 annual
2011-05-27
shareholders’ meeting
Notice to decisions made on the 20th meeting of
2011-014 2011-06-15
the 4th session of board of directors
Notice to holding 2011 the 2nd extraordinary
2011-015 2011-06-15
shareholders’ meeting
2011-016 2011-06-28 Notice to resignation of general manager
16
Chengde Dalu Co., Ltd. Semi-Annual Report 2011
Section VII. Financial Report (Un-audited)
Balance Sheet
Prepared by Chengde Dalu Co., Ltd. Jun. 30, 2011 Unit: RMB
Amount at period-end Amount at year-begin
Items
Consolidation Parent Company Consolidation Parent Company
Current assets:
Monetary funds 759,615.12 33,384.90 9,723,008.25 37,197.70
Settlement reserve fund
Capital lend
Transaction finance
asset
Notes receivable
Accounts receivable
Accounts paid in advance 21,049,996.25 20,084,632.25 20,084,632.25 20,084,632.25
Insurance receivable
Reinsurance receivables
Contract reserve of
reinsurance receivable
Interest receivable
Dividend receivable
Other receivables 43,240,790.54 303,956.24 30,485,301.52 278,347.22
Purchase restituted
finance asset
Inventories 20,358,555.11 17,742,081.41
Non-current asset due
within one year
Other current assets 1,093,527.39 1,093,527.39
Total current assets 86,502,484.41 20,421,973.39 79,128,550.82 20,400,177.17
Non-current assets:
Granted loans and
advances
Finance asset available
for sales
Held-to-maturity
investment
Long-term account
receivable
Long-term equity
2,215,729.65 58,925,880.26 2,215,729.65 58,925,880.26
investment
Investment property
Fixed assets 61,287,246.12 62,653,329.49
Construction in progress 6,721,818.00 6,721,818.00
Engineering material
Disposal of fixed asset
Productive biological
asset
Oil and gas asset
Intangible assets 24,513,029.99 24,823,780.73
Expense on Research
and Development
Goodwill
Long-term expenses to be
apportioned
Deferred income tax
asset
17
Chengde Dalu Co., Ltd. Semi-Annual Report 2011
Other non-current asset 24,432,938.95 24,432,938.95
Total non-current asset 119,170,762.71 58,925,880.26 120,847,596.82 58,925,880.26
Total assets 205,673,247.12 79,347,853.65 199,976,147.64 79,326,057.43
Current liabilities:
Short-term loans 422,261.91 422,261.91 422,261.91 422,261.91
Loan from central bank
Absorbing deposit and
interbank deposit
Capital borrowed
Transaction financial
liabilities
Notes payable
Accounts payable 231,075.82 218,802.27 231,075.82 218,802.27
Accounts received in
advance
Selling financial asset of
repurchase
Commission charge and
commission payable
Wage payable 6,355,286.60 257,800.00 6,395,486.60 277,000.00
Taxes payable 71,298,709.59 -79,544.47 72,070,571.83 -62,298.33
Interest payable
Dividend payable
Other accounts payable 139,414,589.85 117,885,867.41 128,516,654.41 117,654,080.62
Reinsurance payables
Insurance contract
reserve
Security trading of
agency
Security sales of agency
Non-current liabilities
due within 1 year
Other current liabilities
Total current liabilities 217,721,923.77 118,705,187.12 207,636,050.57 118,509,846.47
Non-current liabilities:
Long-term loans 6,398,000.00 6,398,000.00
Bonds payable
Long-term account
payable
Special accounts
10,598,000.03 98,000.03 10,598,000.03 98,000.03
payable
Projected liabilities
Deferred income tax
liabilities
Other non-current
liabilities
Total non-current liabilities 16,996,000.03 98,000.03 16,996,000.03 98,000.03
Total liabilities 234,717,923.80 118,803,187.15 224,632,050.60 118,607,846.50
Owner’s equity (or
shareholders’ equity):
Paid-in capital (or share
706,320,000.00 706,320,000.00 706,320,000.00 706,320,000.00
capital)
Capital public reserve 450,765,443.10 449,365,886.69 450,765,443.10 449,365,886.69
Less: Inventory shares
Reasonable reserve
18
Chengde Dalu Co., Ltd. Semi-Annual Report 2011
Surplus public reserve 76,791,550.17 76,791,550.17 76,791,550.17 76,791,550.17
Provision of general risk
-1,265,471,286.0 -1,271,932,770.3 -1,261,402,234.3
Retained profit -1,271,759,225.93
9 6 0
Balance difference of
foreign currency translation
Total owner’s equity
attributable to parent -31,594,292.82 -39,455,333.50 -27,525,241.03 -39,281,789.07
company
Minority interests 2,549,616.14 2,869,338.07
Total owner’s equity -29,044,676.68 -39,455,333.50 -24,655,902.96 -39,281,789.07
Total liabilities and owner’s
205,673,247.12 79,347,853.65 199,976,147.64 79,326,057.43
equity
Legal person: Yan Qizhong Person in charge of accounting work: Wang Ansheng
Person in charge of accounting institution: Liu Fengguo
Profit Statement
Prepared by Chengde Dalu Co., Ltd. January- June 2011 Unit: RMB
Amount in this period Amount in last period
Items Parent Parent
Consolidation Consolidation
Company Company
I. Total operating income 21,250.00 0.00 0.00
Including: Operating income 21,250.00 0.00
Interest income
Insurance gained
Commission charge and
commission income
II. Total operating cost 5,275,262.57 171,272.92 4,767,355.11 678,084.56
Including: Operating cost 0.00 0.00 0.00
Interest expense
Commission charge and
commission expense
Cash surrender value
Net amount of expense of
compensation
Net amount of withdrawal of
insurance contract reserve
Bonus expense of guarantee
slip
Reinsurance expense
Operating tax and extras 10,295.16
Sales expenses
Administration expenses 5,260,118.42 171,257.42 4,766,244.48 676,964.56
Financial expenses 4,848.99 15.50 1,110.63 1,120.00
Losses of devaluation of asset
Add: Changing income of fair
value(Loss is listed with “-”)
Investment income (Loss is listed
with “-”)
Including: Investment income on
affiliated company and joint
venture
Exchange income (Loss is listed
with “-”)
III. Operating profit (Loss is
-5,254,012.57 -171,272.92 -4,767,355.11 -678,084.56
listed with “-”)
Add: Non-operating income 1,021,011.00 -4,448.77 -4,448.77
19
Chengde Dalu Co., Ltd. Semi-Annual Report 2011
Less: Non-operating expense 152,271.51 2,271.51 47,949.00 47,949.00
Including: Disposal loss of
non-current asset
IV. Total Profit (Loss is listed
-4,385,273.08 -173,544.43 -4,819,752.88 -730,482.33
with “-”)
Less: Income tax expense 3,500.64
V. Net profit (Net loss is listed with
-4,388,773.72 -173,544.43 -4,819,752.88 -730,482.33
“-”)
Net profit attributable to
-4,069,051.79 -173,544.43 -4,314,900.49 -730,482.33
owner’s of parent company
Minority shareholders’ gains and
-319,721.93 -504,852.39
losses
VI. Earnings per share
i. Basic earnings per share -0.006 -0.006
ii. Diluted earnings per share -0.006 -0.006
VII. Other consolidated income
VIII. Total consolidated income -4,388,773.72 -173,544.43 -4,819,752.88 -730,482.33
Total consolidated income
attributable to owners of parent -4,069,051.79 -173,544.43 -4,314,900.49 -730,482.33
company
Total consolidated income
attributable to minority -319,721.93 -504,852.39
shareholders
Legal person: Yan Qizhong Person in charge of accounting work: Wang Ansheng
Person in charge of accounting institution: Liu Fengguo
Statement of Cash Flow
Prepared by Chengde Dalu Co., Ltd. January- June 2011 Unit: RMB
Amount in this period Amount in last period
Items Parent Parent
Consolidation Consolidation
Company Company
I. Cash flows arising from operating
activities:
Cash received from selling commodities
and providing labor services
Net increase of customer deposit and
interbank deposit
Net increase of loan from central bank
Net increase of capital borrowed from other
financial institution
Cash received from original insurance
contract fee
Net cash received from reinsurance
business
Insured savings and net increase of
investment
Net increase of disposal of transaction
financial asset
Cash received from interest, commission
charge and commission
Net increase of capital borrowed
Net increase of returned business capital
Write-back of tax received
Other cash received concerning operating
2,292,951.24 337,509.50 1,210,003.50 1,209,994.13
activities
20
Chengde Dalu Co., Ltd. Semi-Annual Report 2011
Subtotal of cash inflow arising from
2,292,951.24 337,509.50 1,210,003.50 1,209,994.13
operating activities
Cash paid for purchasing commodities
1,751,364.70
and receiving labor service
Net increase of customer loans and
advances
Net increase of deposits in central bank and
interbank
Cash paid for original insurance contract
compensation
Cash paid for interest, commission
charge and commission
Cash paid for bonus of guarantee slip
Cash paid to/for staff and workers 280,550.00 93,600.00 151,800.00 151,800.00
Taxes paid 3,465,899.30
Other cash paid concerning operating
17,442,211.93 247,722.30 1,053,594.13 1,053,594.13
activities
Subtotal of cash outflow arising from
22,940,025.93 341,322.30 1,205,394.13 1,205,394.13
operating activities
Net cash flows arising from operating
-20,647,074.69 -3,812.80 4,609.37 4,600.00
activities
II. Cash flows arising from investing
activities:：
Cash received from recovering
investment
Cash received from investment income
Net cash received from disposal of fixed,
967,298.00
intangible and other long-term assets
Net cash received from disposal of
subsidiaries and other units
Other cash received concerning investing
activities
Subtotal of cash inflow from investing
967,298.00
activities
Cash paid for purchasing fixed, intangible
and other long-term assets
Cash paid for investment
Net increase of mortgaged loans
Net cash received from subsidiaries
and other units
Other cash paid concerning investing
activities
Subtotal of cash outflow from investing
activities
Net cash flows arising from investing
967,298.00
activities
III. Cash flows arising from financing
activities
Cash received from absorbing investment
Including: Cash received from absorbing
minority shareholders’ investment by
subsidiaries
Cash received from loans 13,000,000.00
21
Chengde Dalu Co., Ltd. Semi-Annual Report 2011
Cash received from issuing bonds
Other cash received concerning financing
activities
Subtotal of cash inflow from financing
13,000,000.00
activities
Cash paid for settling debts 2,283,616.44
Cash paid for dividend and profit
distributing or interest paying
Including: Dividend and profit of minority
shareholder paid by subsidiaries
Other cash paid concerning financing
activities
Subtotal of cash outflow from financing
2,283,616.44
activities
Net cash flows arising from financing
10,716,383.56
activities
IV. Influence on cash and cash equivalents
due to fluctuation in exchange rate
V. Net increase of cash and cash equivalents -8,963,393.13 -3,812.80 4,609.37 4,600.00
Add: Balance of cash and cash
9,723,008.25 37,197.70 58,256.11 16,900.44
equivalents at the period -begin
VI. Balance of cash and cash equivalents at
759,615.12 33,384.90 62,865.48 21,500.44
the period -end
Legal person: Yan Qizhong Person in charge of accounting work: Wang Ansheng
Person in charge of accounting institution: Liu Fengguo
22
Chengde Dalu Co., Ltd. Semi-Annual Report 2011
Consolidated Statement on Changes of Owners' Equity
Prepared by Chengde Dalu Co., Ltd. Semi-annual 2011 Unit: RMB
Amount in this report period Amount in last year
Owners' equity attributable to the parent company Owners' equity attributable to the parent company
Less Less
Items Gene Minorit Total Paid-up Gene Minorit Total
Paid-up : Reaso : Reaso
ral y’s owners’ capital Capital Trea nable Surplus ral Retained Oth y’s owners’
capital Capital Trea nable Surplus Retained Oth
risk equity equity (Share reserves sury reserv reserves risk equity equity
(Share reserves sury reserv reserves profit ers profit ers
provi provi
capital) Stoc e capital) Stoc e
sion sion
k k
I.
Balance
at the 706,320, 450,765, 76,791, -1,261,40 2,869,3 -24,655, 706,320, 395,971, 76,791, -1,230,42 14,429,6 -36,909,
end of 000.00 443.10 550.17 2,234.30 38.07 902.96 000.00 144.37 550.17 1,633.22 36.86 301.82
last
year
Add:
Change
s of
account
ing
policy
Error
correcti
54,794,2 -32,685,5 -12,758, 9,350,62
on of
98.73 29.13 140.50 9.10
the last
period
Others
II.
Balance
at the
706,320, 450,765, 76,791, -1,261,40 2,869,3 -24,655, 706,320, 450,765, 76,791, -1,263,10 1,671,49 -27,558,
beginni
000.00 443.10 550.17 2,234.30 38.07 902.96 000.00 443.10 550.17 7,162.35 6.36 672.72
ng of
this
year
23
Chengde Dalu Co., Ltd. Semi-Annual Report 2011
III.
Increase
/
Decreas
e in this
-4,069,05 -319,7 -4,388,7 1,704,928. 1,197,84 2,902,76
year
1.79 21.93 73.72 05 1.71 9.76
(Decrea
se is
listed
with
"-")
(I) Net -4,069,05 -319,7 -4,388,7 1,704,928. 1,197,84 2,902,76
profit 1.79 21.93 73.72 05 1.71 9.76
(II)
Other
consoli
dated
income
Subtota -4,069,05 -319,7 -4,388,7 1,704,928. 1,197,84 2,902,76
l of (I) 1.79 21.93 73.72 05 1.71 9.76
and (II)
(III)
Owners'
devoted
and
decreas
ed
capital
1.
Owners'
devoted
capital
2.
Amount
calculat
ed into
24
Chengde Dalu Co., Ltd. Semi-Annual Report 2011
owners'
equity
paid in
shares
3.
Others
(IV)
Profit
distribu
tion
1.
Withdra
wal of
surplus
reserves
2.
Withdra
wal of
general
risk
provisio
ns
3.
Distribu
tion for
owners
(shareh
olders)
4.
Others
(V)
Carryin
g
forward
internal
owners'
equity
25
Chengde Dalu Co., Ltd. Semi-Annual Report 2011
1.
Capital
reserves
convers
ed to
capital
(share
capital)
2.
Surplus
reserves
convers
ed to
capital
(share
capital)
3.
Remedy
ing loss
with
surplus
reserve
4.
Others
(VI)
Reason
able
reserve
1.
Withdra
wal in
the
report
period
2.
Usage
in the
26
Chengde Dalu Co., Ltd. Semi-Annual Report 2011
report
period
(VII)
Other
IV.
Balance
at the
706,320, 450,765, 76,791, -1,265,47 2,549,6 -29,044, 706,320, 450,765, 76,791, -1,261,40 2,869,33 -24,655,
end of
000.00 443.10 550.17 1,286.09 16.14 676.68 000.00 443.10 550.17 2,234.30 8.07 902.96
the
report
period
Legal person: Yan Qizhong Person in charge of accounting work: Wang Ansheng
Person in charge of accounting institution: Liu Fengguo
Statement on Changes of Owners' Equity (Parent Company)
Prepared by Chengde Dalu Co., Ltd. Semi-annual 2011 Unit: RMB
Amount in this report period Amount in last year
Paid-up Less: Gener Paid-up Less: Gener
Items Reason Total Reason Total
capital Capital Treas Surplus al risk Retained capital Capital Treas Surplus al risk Retained
able owners’ able owners’
(Share reserves ury reserves provis profit (Share reserves ury reserves provis profit
reserve equity reserve equity
capital) Stock ion capital) Stock ion
I.
Balance
706,320,0 449,365,8 76,791,55 -1,271,759,2 -39,281,7 706,320,0 394,571,5 76,791,55 -643,003,78 534,679,35
at the end
00.00 86.69 0.17 25.93 89.07 00.00 87.96 0.17 6.62 1.51
of last
year
Add:
Changes
of
accountin
g policy
Error
correctio 54,794,29 -626,558,52 -571,764,2
n of the 8.73 5.13 26.40
last
27
Chengde Dalu Co., Ltd. Semi-Annual Report 2011
period
Others
II.
Balance
at the 706,320,0 449,365,8 76,791,55 -1,271,759,2 -39,281,7 706,320,0 449,365,8 76,791,55 -1,269,562,3 -37,084,87
beginnin 00.00 86.69 0.17 25.93 89.07 00.00 86.69 0.17 11.75 4.89
g of this
year
III.
Increase/
Decrease
in this -173,544. -2,196,914.1 -2,196,914
-173,544.43
year 43 8 .18
(Decreas
e is listed
with "-")
(I) Net -173,544. -2,196,914.1 -2,196,914
-173,544.43
profit 43 8 .18
(II)
Other
consolida
ted
income
Subtotal
-173,544. -2,196,914.1 -2,196,914
of (I) and -173,544.43
43 8 .18
(II)
(III)
Owners'
devoted
and
decreased
capital
1.
Owners'
devoted
28
Chengde Dalu Co., Ltd. Semi-Annual Report 2011
capital
2.
Amount
calculate
d into
owners'
equity
paid in
shares
3. Others
(IV)
Profit
distributi
on
1.
Withdra
wal of
surplus
reserves
2.
Withdra
wal of
general
risk
provision
s
3.
Distributi
on for
owners
(sharehol
ders)
4. Others
29
Chengde Dalu Co., Ltd. Semi-Annual Report 2011
(V)
Carrying
forward
internal
owners'
equity
1. Capital
reserves
converse
d to
capital
(share
capital)
2.
Surplus
reserves
converse
d to
capital
(share
capital)
3.
Remedyi
ng loss
with
surplus
reserves
4. Others
(VI)
Reasonab
le reserve
1.
Withdra
wal in the
report
period
30
Chengde Dalu Co., Ltd. Semi-Annual Report 2011
2. Usage
in the
report
period
(VII)
Other
IV.
Balance
at the end 706,320,0 449,365,8 76,791,55 -1,271,932,7 -39,455,3 706,320,0 449,365,8 76,791,55 -1,271,759,2 -39,281,78
of the 00.00 86.69 0.17 70.36 33.50 00.00 86.69 0.17 25.93 9.07
report
period
Legal person: Yan Qizhong Person in charge of accounting work: Wang Ansheng
Person in charge of accounting institution: Liu Fengguo
31
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
CHENGDE DALU COMPANY LIMITED
NOTES OF FINANCIAL STATEMENT
FOR THE SEMI-ANNUAL 2011
I. Brief introduction of the Company
1. History evolution
The former of Chengde Dalu Company Limited (hereinafter referred to as “the
Company”) is Chengde Dixian Textile Company Limited (hereinafter referred to as
“Dixian Company”), which was established in the People’s Republic of China as a
joint stock Company approved by People’s Government of Hebei Province (JI GU
BAN(1999) No. 36) dated on 3 November 1999. There are five promoters of the
Company, which are Mr. Shuxian Wang, North Industry Co., Ltd., Longfeng
Cosmetic Co., Ltd., Red Star Plastic Product Co., Ltd. and Mr. Zhengsong Wang
respectively. The initial registered capital of the Company is RMB 100,000,000
representing 100,000,000 shares with a par value of RMB 1 each, in which Mr.
Shuxian Wang holds 85,100,000 shares. On 13 November 2009, the company was
changed into the name of Chengde Dalu company Limited upon agreement of the
board.
Upon the approval document No. [2000]121 issued by the China Securities
Regulatory Commission (CSRC for short) on 29 August 2000, the Company issued
100,000,000 domestically listed foreign shares (B share for short) with a par value of
RMB1.00 each on 29 September 2000. In addition, the Company increased issuance
of 15,000,000 foreign capital shares (B share) with a par value of RMB1.00 each
between 29 September and 29 October 2000. The Company’s B shares listed in
Shenzhen Stock Exchange. The registered capital of the Company after the issue of B
shares was increased to RMB 215,000,000 with par value of RMB 1.00 each
amounting to 215,000,000 shares.
According to the resolution of general meeting of shareholders on 12 March 2002, the
Company distributed share bonus 43,000,000 shares to all shareholders at the rate of
two shares given per ten shares and used capital reserves to into capital as
107,500,000 shares to all shareholders at the rate of five shares given per ten shares.
The registered capital of the Company was increased to RMB 365,500,000 after share
bonus distribution and turning.
According to the resolution of general meeting of shareholders on 22 July 2003, the
Company distributed share bonus 73,100,000 shares to all shareholders at the rate of
two shares given per ten shares. The registered capital of the Company was increased
to RMB 438,600,000 after share bonus distribution.
On 11 March 2004, being approved by Ministry of Commerce of the state, the
Company changed its nature as limited company for foreign investment.
Upon the approval document No.[2004]101 issued by the China Securities Regulatory
Commission in July 2004, the Company increases of its capital by issuing
150,000,000 B shares, in which 91,300,000 shares were issued for Hong Kong dollars
and 58,700,000 shares were issued for Renminbi Yuan (RMB).
According to the resolution of general meeting of shareholders on 8 June 2006, the
11
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
Company distributed share bonus 117,720,000 shares to all shareholders at the rate of
two shares given per ten shares.
On 4 August 2008, the Intermediate People's Court of Shenzhen determined that
promoter share of 112,324,800 shares held by Shuxian Wang should be compensate
for Chen Rong in the price of RMB 45,491,544. And in the same year, Intermediate
People's Court of Dalian determined that promoter share of 96,000,000 shares held by
Shuxian Wang should be compensate for Rong Chen in the price of RMB 38,880,000
on August 15.
On November 11, 2009, Hebei provincial department of commerce issued ‘the reply
of the approval on the capital increase, the change of shareholders and the Company’s
name of Chengde Di Xian knitting Co., Ltd.’ with JZSWZZ (2009) No. 143, which
approved the Company to reissue 150,000,000 foreign shares listed within the P.R.C
in the year of 2004, and distribute share’s dividends by 2 shares per 10 shares in the
year of 2006, and change the shareholder of 208,324,800 shares from Wang Shuxian
to Chen Rong, and change the Company’s name as Chengde Dalu Co., Ltd.
After increase of the shares and distribution, the Company's equity amounted to
706.32 million shares and the registered capital is RMB 706.32 million which was
verified by Zhong Lei accounting firm as Zhong Lei Yan Zi (2010) No.10009 issued
on June 24, 2010.
On June 28, 2010, the Company renewed the Legal Representative’s Operating
License issued by Hebei Industrial and Commercial Administrative Bureau as No.
130000400001225; residence as Chengde County, Hebei Province town; Chen
becomes the legal representative; registered capital as well as paid-in capital of
706.32 million Yuan; the type of company is limited liability company(Sino-foreign
joint venture and listed).
2.Significant event
In October 2008, Chengde Xingcheng Building Project Co., Ltd, the creditor of the
Company, submitted its restructuring plan to Chengde Intermediate People's Court
(“Court”) of Hebei province, the court accepted the application on 10 December 2008
and approved on 10 November 2008. On 30 December 2008, the Court approved the
company’s Restructuring Program and terminated restructuring procedures. On 27
April 2009 Chengde Intermediate People’s Court of Hebei Province confirmed the
restructuring planning had been finished
3.Scope of operation
The company mainly engaged in producing, processing and selling knitwear series,
woven fabric series, superior quality suits, children's garments series, packaging
materials, paper and paper products, all kinds of yarn paper and synthetic fiber. The
company and its subsidiaries import raw materials of knitwear, woven fabric, and
other raw materials and ancillary materials needed for production, as well as
equipments and spare parts used for production.
Chengde Rongyida Real Estate Development Co., Ltd, subsidiary of the Company,
mainly engaged in the development of real estate.
II. Major accounting policy, accounting estimation and previously errors of the Company
1. Preparation basis for financial statement
On the basis of sustainable operation, the Company recognized, measured and
prepared the financial statement by actually transaction and events that in accordance
12
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
with Accounting Standard for Enterprises.
2. Statement on Implementation of Accounting Standard for Business Enterprises
The financial statement prepared by the Company was stratified the requirement of
Accounting Standard for Enterprises and presented real and completed information of
financial status, performance results, changes of shareholders’ equity and cash flow of
the Company.
3. Accounting period
The company adopts Gregorian calendar, namely each 1 January to 31 December
should be one fiscal year. This period refer to January 1, 2011 to June 30, 2011.
4. Standard Accounting Currency
Renminbi (RMB) is the currency for book keeping of the Company.
5. Preparation for consolidated financial statement
Consolidation scope of the Company was based on the controlling, all subsidiary
were consolidated into the consolidation financial statement of the Company.
The accounting policy and accounting period that adopted by subsidiaries, that in
consolidation scope, should be in accordance with the Company. If there has
difference between the subsidiary and the Company in aspect of accounting policy
and period, necessary adjustment should be carry out while consolidated the financial
statement.
Consolidation financial statement was base on the financial statement of the Company
and subsidiaries respectively. The Company prepared the financial statement by other
relevant information and adjusted the long-term equity investment for subsidiaries.
The influences on consolidated balance sheet, consolidated profit statement,
consolidated cash flow statement and consolidated changes on owners’ equity from
internal transaction between the Company and its subsidiaries/subsidiaries should be
off-set while consolidated the financial statement.
Balance between the current deficit shared by minority shareholders of the subsidiary
and quotation shared by minority shareholders in owners’ equity of period-begin,
write off the equity of minority shareholders’.
6. Confirmation Standard for Cash and Cash Equivalent
While preparing cash flow statement of the Company, investment that qualified the
followed conditions at same time should be recognized as cash equivalent:
short-term (undue within three months since purchased day); highly liquidation;
easily convert to known amount of cash and minor risk of value fluctuation.
Equity investment was not recognized as cash equivalent.
7. Foreign Currency Transactions and Foreign Currency Statement Translation
(1) Confirmation of the exchange rate for foreign transaction and its accounting
treatment
The foreign currency transaction should used the spot rate on the day in which the
transaction took place when initially recognized by book keeping currency
conversion; Foreign currency investment that received by investors should be
converted by spot rate of transaction day. On balance sheet day, treatment should be
took by followed situations:
①Item of foreign currency monetary: Converted by spot rate of the balance sheet
date. Exchange differences between the spot rate on balance sheet dated and initially
13
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
confirmation or previously spot rate of the balance sheet dated, should reckoned into
financial expenses.
②Item of non-monetary foreign currency measured by historic cost: calculated by
spot rate of the dated transaction occurred, changed no book keeping currency on
balance sheet date.
③Item of non-monetary foreign currency measured by fair value: calculated by spot
rate of the dated fair value confirmed. The amount difference between the converted
book keeping currency and original book keeping currency should reckoned into
current gains/losses for treatment of changes in fair value. If the exchange difference
was formed by item of non-monetary foreign currency available for sale, then
reckoned into capital reserve.
(2) Converted method of the foreign currency at balance sheet date and accounting
treatment of statement conversion for foreign currency
Item of asset and liability that contained in balance sheet should be converted by spot
rate of the balance sheet date. Among owners’ equity, except item of “Retained
profit”, others should converted by spot rate while occurred. The income and cost
items in the profit statement should be converted by spot rate of the date transaction
occurred.
(3) As for conversion differences of foreign currency statement, should be listed
independently as “conversion differences of foreign currency statement” contained in
“Owners’ equity” of Consolidated balance sheet while prepared the consolidated
financial statement.
8. Financial Instruments
(1) Classification, reorganization basis and measurement of financial instruments
①Classification: Financial instrument is the contract which forming an
enterprise's financial assets and other units' financial liability or equity instrument,
including: financial assets, financial liabilities and equity instrument.
The Company's financial assets and financial liabilities comprise financial assets or
liabilities measured with fair value and their changes calculated into the current gains
and losses, held-to-maturity investment, account receivables and financial assets
available for sale.
②Reorganization basis and measurement
A. Financial assets or liabilities measured with fair value and their changes
calculated into the current gains and losses
Reorganization basis: this kind of financial assets or liabilities comprise transaction
financial assets or liability, directly designated financial assets or liabilities measured
with fair value and their changes calculated into the current profits and losses.
Transactional financial assets or liability mainly refers to stocks, bonds, funds held
for sale recently and derivatives instrument not as effective hedging instruments or
financial liabilities beared by repurchased recently; Directly designated financial
assets or liabilities measured with fair value and their changes calculated into the
current gains and losses, mainly refers to designation based on risk management and
strategic investment needs.
Measurement: Financial assets or liabilities measured with fair value and their
changes calculated into the current gains and losses when acquiring recognize fair
value as the initial amount (deducting declared but unpaid cash dividends or to pay
interest on the bonds but not yet received). During the holding period, interest or cash
dividends will be recognized as investment income, fair value's changes are directly
calculated into the current gains and losses at the balance sheet date. When such
financial assets will be disposed in the future, the difference between fair value and
initial amount will be recognized as investment income, at the same time adjusting
14
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
changes in fair value.
B. Held-to-maturity investment
Reorganization basis: Fixed rate bonds, floating rate corporate bonds and other
non-derivative financial assets the Company has the positive intention and ability to
hold to maturity which has fixed dates, fixed and determinable payments.
Measurement: Fair value and the relevant transaction expenses are recognized as the
initial amount when acquiring (deducting interest on the bonds but not yet received).
The Company adopts amortized costs for subsequent measurement and calculates
interest income recorded in investment income according to actual interest rate (If
there is no big difference between the actual interest rate and coupon rate, according
to coupon rate). Actual interest rate is determined when Obtaining, it will keep
unchanged in the expected duration or a shorter period. When disposing or
recovering, the difference of acquiring amount and book value will be recognized as
investment income.
C. Accounts receivables
Reorganization basis: Accounts receivables formed by companies selling goods or
providing services recognize the initial amount according to the buyer's contract or
agreement.
Measurement: The Company adopts amortized costs for subsequent measurement
according to actual interest rate method. The difference of acquiring amount and book
value of accounts receivables will be recognized as current gains and losses while
recovered or disposed the account receivables.
D. Financial assets available for sale
Reorganization basis: The financial assets not classified as financial assets measured
with fair value and their changes calculated into the current gains and losses,
held-to-maturity investment, account receivable and financial assets.
Measurement: Fair value and the relevant transaction expenses are recognized as the
initial amount when acquiring (deducting declared but unpaid cash dividends or to
pay interest on the bonds but not yet received). During the holding period, interest
or cash dividends will be recognized as investment income, fair value's changes are
directly calculated into capital reserve (other capital reserves) at the balance sheet
date. When such financial assets will be disposed in the future, the difference between
book value and acquiring amount will be recognized as investment income,
meanwhile, accumulated amounts from fair value change with corresponding
disposing part will be transferred out to investment income.
(2) Reorganization basis and measurement of switching financial assets
Recognition of the financial assets should be terminated when the Company converts
out nearly all related risks and rewards, or the company neither converts nor keeps all
related risks and rewards but loses control. If barely all risk and rewards of the
ownership of financial assets have been transferred to the party of turn-in while
switching the financial assets, financial assets should terminated recognizing; if
barely all risk and rewards of the ownership of financial assets were contained by
then not to terminate the recognizing.
As for abovementioned termination conditions qualified, judgment should base on the
principle of material superior to form. Switching financial assets classified to wholly
assets transfer and partial assets transfer. For financial assets that totally conversed,
if it meets the requirements of termination recognition, then the difference of the two
items below should be calculated into current gains and losses:
(1) Book value of the conversed financial assets;
(2) Sum of the consideration value received and accumulated amount (for financial
assets switch as the financial assets available for sale) of fair value changes that
15
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
reckoned into owners’ equity directly originally.
For financial assets that partially conversed, if it meets the requirements of
termination recognition, then book value of the conversed financial assets should be
allocated between the terminated recognition parts and the rest in light with fair value
of their own respectively, and the difference of the two amounts below should be
calculated into current gains and losses.
(1) Book value of the parts that terminated recognition;
(2) Sum of the consideration value of the parts that terminated received and
accumulated amount (for financial assets switch as the financial assets available for
sale) of fair value changes on the parts that terminated, reckoned into owners’ equity
directly originally.
As for switch financial assts met no qualification of termination, recognized financial
assets continuously and recognized the consideration as financial liability.
(3) Termination condition for financial liability
When all or partial current obligations of the financial liability terminated, the
company should terminate confirming all or partial of the financial liability.
(4) Reorganization of fair value for financial assets and financial liability
①If it exists the active market about financial assets and liabilities, then using the
quotation in active market to determine the fair value;
②If it does not have active market, the company uses value estimation to confirm the
fair value.
9. Account receivable
(1) Account receivable of single major amount and withdrawal bad debt provision singly:
Recognized basis or
amount standard for Over one million yuan (including one million yuan)
single major amount
Impairment test was conducting on account receivable with
Accrual method for single major amount by the Company. If there has objective
single major amount evidence of impairment occurred, recognized impairment
and withdrawal bad losses based on difference between the current value of future
debt provision singly cash flow and its book value, and accrual bad debt provision
correspondingly.
(2) Account receivable with bad debt provision withdrawal by combination:
Except for those account receivable that withdrawal bad debt provision independently
and within the consolidated scope, account age was recognized as the characteristic of
portfolio credit risk by the Company. On the basis of actual loss rate of account
receivable listed in the category by age, determined proportion of bad bet provision
withdrawal by current situation, and accrual bad debt provision.
Detail withdrawal proportion for bad debt provision by varies age;
Withdrawal proportion Withdrawal proportion
Age for account receivable for other account
(%) receivable (%)
Within one year (one year 1.00-5.00 1.00-5.00
included)
1－2 years 20.00 20.00
2－3 years 50.00 20.00
Over 3 years 100.00 100.00
16
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
(3) Account receivable of single minor amount but withdrawal bad debt provision singly
As for those account receivables that have objective evidence of
Reasons for impairment and with minor single amount but with obviously
withdrawal characteristic in portfolio credit, bad debt provision withdrawal by
age analysis e reflected no actual situation.
Impairment testing was conducted by the Company, recognized
Withdrawal impairment losses by the differences between current value of
method for bad future cash flow and its book value, and supplemented accrual
debt provision relevant bad debt provision base on the bad debt provision that
withdrawal by age.
10. Inventory
(1) Classification of inventory
Inventories mainly include raw material, auxiliary materials, repair parts, low cost
consumables, packing material, goods in stock, and goods in process, finished goods,
development cost, and products to be developed and so on. Development costs
include land cost, construction cost and other cost, which cost in the construction of
real estate development projects. Products to be developed are land to be purchased
and prepared for real estate development projects.
(2) The measurement of sending inventories
Weighted average accounting method is used when issued in the end of each month.
(3) Recognized basis for net realizable value of inventory and withdrawal method for inventory
devalue provision
Provision for inventories should be accrued and adjusted according to the lower of cost
and net realizable value after checking thoroughly at balance sheet date.
The net realizable value of the finished goods, merchandise and hold for sell materials
which will be sold directly is the estimated selling price in the ordinary course of
business less the estimated selling expenses and the taxes necessary to make the sale.
The net realizable value of the processing material is the estimated selling price in the
ordinary course of business less the estimated costs before finished and the estimated
selling expenses and the taxes necessary to make the sale.
As for inventories holding for selling contract and service contract, its net realizable
value should be measured according the contract price. If the holding quantity is over
the contract needed, the surplus should be measured based on selling price instead of
contract; If no selling contract (not including the materials for sale), the net realizable
value of inventories should be measured based on ordinary selling price (that is market
sales price); materials for sales, usually, measured based on market price.
On balance sheet date, withdrawal inventory devalue provision on single inventory
items; as for those inventory with major quantity and lower unit price, withdrawal
inventory devalue provision by category; as for those inventory that related with the
serials products produced and sales in same areas and owes same or similar ultimate
usage means or purpose, hard to measured by separated with other items, then
consolidated for inventory devalue provision withdrawal.
If the influence resulted in provision for impairment disappeared, the write-down
amount should be reversed and profit recognized accordingly.
The inventory system
Perpetual inventory system is applied to inventories.
17
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
(4) Amortization method for low-value easily consumption products and package materials
Low-value easily consumption products are recorded using immediately write-off
method when issued.
Package materials are recorded using immediately write-off method when issued.
11. Long-term equity investment
1. Recognition of investment cost
(1) Long-term equity investment acquired by enterprise consolidation under same
control
Equity combination method was adopted for recognized the consolidation cost while
enterprise consolidated under same control.
If the consideration of the merging enterprise is that it makes payment in cash,
transfers non-cash assets or bear its debts, it shall, on the date of merger, regard the
share of the book value of the owner's equity of the merged enterprise as the initial
cost of the long-term equity investment.
(2) Long-term equity investment acquired by enterprise consolidation under different
control
Purchased method was adopted for recognized the consolidation cost while enterprise
consolidated under different control. And recognized consolidated cost as initial
investment cost for long-term equity investment. The costs for business combination
include the fair values on the acquisition date of cash or non-cash assets, issued or
assumed debts, issued equity securities, as well as the summation directly related
expenses incurred during business combination, but exclude agent’s expenses of
audit, legal service and valuation consulting, etc. and other related management
expenses incurred as acquirer for business combination.
2. Follow-up measurement and recognition for gains/losses
(1) Follow-up measurement
The Company shall be accounted by the cost method, and shall make an adjustment
by the equity method when it works out consolidated financial statements.
(2) Recognition for gains/losses
On basis of cost method, except for the amount actually paid while acquired
investment or cash bonus or profit announced without paid that contained in
consideration, the Company recognized investment income by the cash bonus or
profit that shared in invested units announced with paid.
3. Method of impairment test and accrual method for impairment provision
Except for goodwill that formed by enterprise consolidation, other long-term equity
investment with impairment evidence been found, if the recovable amount lower its
book value, then the difference will recognized as impairment losses.
Once the impairment loss of the long-term equity investment is recognized, it cannot
be transferred back.
13. Fixed assets
(1) Recognition conditions of fixed assets
Fixed assets refer to the tangible assets for production of products, provision of labor,
lease or operation, and with a service life in excess of one financial year. Fixed assets
should recognized while qualified the followed conditions:
1)Fixed assets’ related financial benefits shall flow into the enterprise; ；
2) The cost of the fixed assets can be measured reliably.
As for repair charges of fixed assets, reckoned into cost of fixed assts while qualified
recognition condition; as for those failure qualification of recognition conditions,
reckoned into current cost and expenses while occurred.
18
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
(2) Depreciation method for all fixed assets
Depreciation of fixed asset should withdrawal by category of average service life method. In
according to the category of fixed assets, predicted the service life and net scrap value rate for
determined the depreciation rate for fixed assets. Withdrawal depreciation in later month while
acquired the fixed assets (excluding the fixed assts that fully withdrawal but used continuously and
lands accounted in book independently). Details of depreciation terms and yearly depreciation rate:
Yearly
Depreciation Scrap value rate
Categories depreciation rate
term(Year) (%)
(%)
Houses and buildings 25.00 5.00 3.80
Papermaking equipment 20.00 10.00 4.50
Other machinery 7.00-15.00 6.33-13.57
5.00
equipment
Transport equipment 5.00-10.00 5.00 9.50-19.00
Office equipments 5.00-10.00 5.00 9.50-19.00
(3) Impairment test methods for fixed assets and accrual methods for its impairment provision
On balance sheet date, the Company makes a judgment on whether there is any sign
of possible assets impairment and an estimate of the recoverable amount of assets to
estimate the recoverable amount. If the recoverable amount is less than the fair value,
the net amount of the fair value of an asset minus the recoverable amount shall be
recorded into the current profits and losses and confirm the impairment loss
simultaneously. The recoverable amount shall be determined in light of the higher one
of the net amount of the fair value of the assets minus the disposal expenses and the
current value of the expected future cash flow of the assets. Where there is any
evidence indicating a possible impairment of assets, the enterprise shall, on the basis
of single item assets, estimate the recoverable amount. Where it is difficult to do so, it
shall determine the recoverable amount of the group assets on the basis of the asset
group to which the asset belongs. Impairment losses can not be reversed in
subsequent periods once been withdrawal.
13. Construction in progress
(1) Calculation method for construction in progress
Construction in progress was measured by actual cost and calculated by categories of
projects.
(2) Time to transfer to fixed asset
All expenditures that actually occurred should be transfer in fixed assts for calculation
while the construction in progress reached its predicted service condition. As for those
construction in progress with predicted service condition approached without
acceptance settlement handle, transfer in fixed assets by estimated value in according
to project budget, project cost or actual cost of the projects etc., Withdrawal
depreciation for fixed assets by depreciation policy of the Company. After project
acceptance for settlement, adjusted original estimated value by actual cost but
adjusted no original withdrawal depreciation amount.
(3) Depreciation provision of construction in progress
On balance sheet date, the Company makes a judgment on whether there is any sign
of possible assets impairment and an estimate of the recoverable amount of assets to
estimate the recoverable amount. If the recoverable amount is less than the fair value,
the net amount of the fair value of an asset minus the recoverable amount shall be
19
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
recorded into the current profits and losses and confirm the impairment loss
simultaneously. The recoverable amount shall be determined in light of the higher one
of the net amount of the fair value of the assets minus the disposal expenses and the
current value of the expected future cash flow of the assets. Impairment losses can not
be reversed in subsequent periods once accrual.
14. Borrowing costs
(1) Recognition principles on the capitalization of borrowing costs
Assets up to the capitalization conditions are assets such as the capital assets,
investment property and inventory assets as can reach the planned availability or
marketability only after the long-term construction or production.
The borrowing costs shall include interest on borrowings, amortization of discounts
or premiums on borrowings, ancillary expenses, and exchange balance on foreign
currency borrowings. Where the borrowing costs incurred to an enterprise can be
directly attributable to the acquisition and construction or production of assets eligible
for capitalization, it shall be capitalized and recorded into the costs of relevant assets.
Other borrowing costs shall be recognized as expenses on the basis of the actual
amount incurred, and shall be recorded into the current gains and losses.
As the borrowing expenses are up to all of the following conditions, the capitalization
starts:
1) There is the actual assets expenditure, which includes the expenditure in the form
of cash payment, transfer of non-cash assets or interested debt assumption for the
construction or production of the assets up to the capitalization conditions;
2) There are the actual borrowing expenses;
3) There has been the starting of the construction or production activities necessary
for the planned availability or marketability of the assets.
Where the acquisition and construction or production of a qualified asset is
interrupted abnormally and the interruption period lasts for more than 3 months, the
capitalization of the borrowing costs shall be suspended. When the qualified asset
under acquisition and construction or production is ready for the intended use or sale,
the capitalization of the borrowing costs shall be ceased.
(2) Capitalization period of borrowing costs
For the ancillary expense incurred to a specifically borrowed loan, those incurred
before a qualified asset under acquisition, construction or production is ready for the
intended use or sale shall be capitalized at the incurred amount when they are
incurred, and shall be recorded into the costs of the asset eligible for capitalization;
those incurred after a qualified asset under acquisition and construction or production
is ready for the intended use or sale shall be recognized as expenses on the basis of
the incurred amount when they are incurred, and shall be recorded into the gains and
losses of the current period. Where the acquisition and construction or production of a
qualified asset is interrupted abnormally and the interruption period lasts for more
than 3 months, the capitalization of the borrowing costs shall be suspended. When
partial of the qualified asset under acquisition and construction or production is ready
for the intended use or sale independently, the capitalization of the borrowing costs
shall be ceased.
(3) Confirmation methods for the capitalization of borrowing costs
The Company calculates the amount of the capitalized borrowing costs every season.
Capitalized are the interest expenses of the specific borrowings (deducting the interest
income from the borrowing un-utilized but deposited in the bank or the investment
return from the temporary investment) and its auxiliary expenses, before the planned
availability or marketability of the assets constructed and produced up to the
capitalization conditions.
20
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
Interest amount of ordinary borrowings that should capitalized was recognized by the
result of weighted average amount of assets expenditure (part of the accumulated
assets expenditure exceeded specific borrowings) multiple by capitalization rate of
ordinary borrowings that occupied. Capitalization rate will calculated by average
rate of the ordinary borrowings.
15. Intangible assets
(1) Initial measurement of intangible assets
The intangible assets are initially measured at actual cost by the Company.
If price of intangible assets beyond the normal conditions of payment credit,
essentially it is financing. The cost of the intangible assets is the present value of the
purchase price.
(2) Subsequent measurement of intangible assets
1) Service life of intangible assets
The Company analysis its service life when intangible assets obtained, if the service
life has a limit, the Company estimates the service life or the measurement like the
production which consist of the service life of the assets. If the service life is
unexpected, the Company defines it as indefinite useful life intangible assets.
2) Amortization of intangible assets
For intangible assets with a limited service life, we amortize in the straight-line
method within the expected service life since the month it acquired. For those
uncertain service life intangible assets, we will perform the impairment test in the end
of the term.
The Company reviews the life service time and method of amortization in the end of
the year, and adjusts when needed.
3) Impairment of intangible assets
If there is strong evidence show any sign of possible assets impairment, we perform
impairment test on balance sheet date and estimate the recoverable amount. If
recoverable amount is less than book value, the carrying value of intangible assets
will be reduced to recoverable amount .The reduced amount will be calculated in the
current profits and losses, meanwhile, accrual the provision for impairment of
corresponding intangible assets. For intangible assets of uncertain service life, we will
perform the impairment test every year whether it shows any sign of assets
impairment.
16. Long-term expenses to be amortized
Long-term expenses to be amortized refers to the vary expenses that have been
occurred but should be beared in this period and subsequent period with over one
year. Long-term expenses to be amortized will average amortized within the benefit
period.
17. Projected liability
Recognized projected liability while amount of obligation should measured liable,
formed by pending action, guarantee for product’s quality, deficit contract and dispose
obligation of assets of oil & gas, its economy benefit probably out-flow.
Initially measured projected liability in accordance with the favorable estimated
amount that expenses for relevant reality obligations. Meanwhile, take consideration
of the risks of contingency, uncertainty and time value of the currency. For those
major influences of time value of currency, confirmed the favorable estimate amount
by converted relevant cash out-flows.
21
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
18. Revenue
(1) revenue should recognized for qualified the followed conditions at one time for
revenue of goods selling
Main risk and rewards of the ownership of the goods have been transfer to purchaser;
neither sustainable management rights retained that related with the ownership nor
effective control on good that sales out; relevant economy benefits probably flow into
the Company; relevant revenue and cost should be measure reliable.
(2) recognized the revenue of labor provided externally
On balance sheet date, if the performance of labor provided transaction can estimated
reliable, then recognized revenue by method of percentage-of-completion.
Completion progress confirmed by followed actual conditions:
① The measurement of the work completed;
② The proportion of the labor services provided against the total labor services to be
provided;
③ The proportion of the costs incurred against the estimated total costs.
The Company shall ascertain the total revenue from the providing of labor services in
accordance with the received or to-be-received price of the party that receives the
labor services as stipulated in the contract or agreement, unless the received or
to-be-received price as stipulated in the contract or agreement is unfair. The Company
shall, on the date of the balance sheet, ascertain the current revenue from providing
labor services in accordance with the amount of multiplying the total amount of
revenues from providing labor services by the schedule of completion then deducting
the accumulative revenues from the providing of labor services that have been
recognized in the previous accounting periods.
(3) Use right of assets transfer
Confirmed revenue amount of use right of assets transfer by followed conditions
when the relevant economic benefits are likely to flow into the Company and the
amount of revenues can be measured in reliable way:
① The amount of interest revenue should be measured and confirmed in accordance
with the length of time for which the enterprise's cash is used by others and the actual
interest rate;
② The amount of royalty revenue should be measured and confirmed in accordance
with the period and method of charging as stipulated in the relevant contract or
agreement.
19. Deferred income tax assets/ deferred income tax liabilities
Calculation of the income tax should adopt the Liability Law of balance sheet.
Taxation basis should recognized while acquired the assets and liability by the
Company; On balance sheet date, based on balance sheet statement, if there shows
difference between the book value of relevant assets /liabilities and taxation basis
regulated by tax law, calculated deferred income tax assets or deferred income tax
liability and reckoned its influences amount into current income tax expenses.
Recognized deferred income tax assets arising from deductible temporary differences
with limit of taxable income tax that deducted by deductible temporary differences,
which was probably required by the Company.
Except for those conditions without deferred income tax liability recognized regulated
in income tax rules, all taxable temporary difference should be recognized as relevant
deferred income tax liability by the Company.
20. Changes of Main Accounting Policies, Accounting Estimates
No changes of main accounting policies and accounting estimation in this period.
22
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
III. Taxes
1. Taxes and tax rates
Tax category Tax calculation evidence Tax rate %
Taxable VAT;
original value of the 17
VAT
transferred fixed assets Half of 4%
Business tax Taxable business tax 5
City maintenance Taxable turn-over tax
5
construction tax
Taxable amount; 15% of
Enterprise income tax 25
the taxable income
2. Other explanation
Enterprise income tax of Chengde Rongyida Real Estate Development Co., Ltd.,
subsidiary of the Company, was collected by appraisal with 15% of the taxable
income for collection.
IV. Business Combination and Consolidated Financial Statements
1. Subsidiaries
(1) Subsidiaries obtained by means of establishment or investment, etc.
Actual
Regi
Busine Registere Business investment
Full name Type stration
ss nature d capital scope amount at
place
period-end
Chengd Manufacture and
Controlli
Chengde Xingye e City, Productio selling high-class
ng US$ 250 US$ 75
Papermaking Hebei n of paper coated board and
subsidiar million million
Co., Ltd. Provinc industry serials of Kraft
y
e paperboard
Wholly-o
Gold Axe British Investment and
wned
Investment Virgin Export US$ 1 liaison of export US$ 1
subsidiar
Group Limited Islands business
y
Chengd
Hebei Wholly-o
e City, Manufact Manufacture and
Xiabancheng wned US$ 4
Hebei ure of export of various US$ 4 million
Knitwear Co., subsidiar million
Provinc clothing knitwear
Ltd. y
e
Chengd
Wholly-o Manufacture and
e City, Manufact
Chengde Dixian wned US$ 24 selling high-class US$ 24
Hebei ure of
Fashion Co., Ltd. subsidiar million chemical fabric million
Provinc clothing
y fashion and cloth
e
Recycle
Chengd
Controlli processing and
Chengde Huaxin e City, Recycle
ng RMB one selling of various RMB 0.9
Waste Paper Hebei of discard
subsidiar million wasted paper and million
Recycle Co., ltd. Provinc paper
y paper-made
e
products
Continue
23
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
Balance of Amount for
Prop Cons
other items Prop offsetting the gain
ortion of olidated Minor
actually ortion of and loss of minor
Full name voting report shareholders’
forming the net shares shareholders in the
power statemen equity
investment in held (%) minor shareholders’
(%) t or not
the subsidiaries equity
Chengde Xingye
Papermaking 75.00 75.00 Yes 2,549,609.40
Co., Ltd.
Gold Axe
Investment 100.00 100.00 Yes
Group Limited
Hebei
Xiabancheng
100.00 Not
Knitwear Co.,
Ltd.
Chengde Dixian
100.00 Not
Fashion Co., Ltd.
Chengde Huaxin
Waste Paper 90.00 90.00 Yes 6.74
Recycle Co., ltd.
Explanation on subsidiaries:
①Hebei Xiabancheng Knitwear Co., Ltd. went bankrupt according to the Cheng Min Po Zi
(2008)No.12-1 court ruling issued by Chengde intermediate people's court in Hebei province dated
2nd August 2009;
②Chengde Dixian Fashion Co., Ltd. went bankrupt according to the Cheng Min Po Zi (2008) No.
11-1court ruling issued by Chengde intermediate people's court in Hebei province dated 8th
February 2009;
③Chengde Xingye Papermaking Co., Ltd., a joint venture that invested by the Company and
Zhanxi International (Hong Kong) Holding Co., Ltd. (“Hong Kong Zhanxi”). The registered capital
is US$ 250 million, and the paid-in capital is US$ 100 million by the end of the report period. 40%
of the paid-in capital came from shareholders’ contribution, in which US$ 75 million (75% of the
equity) from the Company and US$ 25 million (25% of the equity) from Hong Kong Zhanxi.
According to the article of “Approval about the capital increase of Chengde Dexing Paper Industrial
Co., Ltd” WaiJingZi Er Han [2001] No.969 issued by the People's Republic of China on foreign
trade and economic cooperation on 28th Oct. 2002, it stipulated that the registered capital raised
from US$ 0.1 billion to US$ 0.25 billion and the new registered capital should be paid within 3
years since the change of the business license which agreed in the agreement & the company
articles. Chengde Xingye Papermaking Co., Ltd. failed to pay the above registered capital within
the stipulated time.
Affected by the smuggling case of the major shareholder WANG SHU XIAN and senior executives,
Chengde Xingye Paper Industrial Co., Ltd had been stopped operating since Dec. 2006, so that the
company suffered very hard operational losses. The Chengde intermediate people's court in Hebei
province acknowledged the receipt of the bankruptcy request from the said company on 11th Mar
2009 via the court ruling of（2008）Cheng Min Po Zi No.13 and the mediation request was approved
by the Court via （2008）Min Po Zi No. 13-2 on 11th Mar. 2009. On 10th May 2009, the Chengde
intermediate people's court in Hebei province ended the mediation program by acknowledging the
agreement between the creditors and Chende paper manufacturing co, Ltd which was signed on 8th
May 2009 via （2008）Min Po Zi No. 13-3. According to the ruling of Hebei senior People's Court
(2009) Ji Xing Er Zhong Zi 44 of 23 April 2009, Chengde Xingye Papermaking Co., Ltd was
adjudicated a deceptive foreign- invested enterprise which was established by the original
shareholder of the Company Wangsuxian in the name of Century Win International Holding Co.,
Ltd.
24
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
④Chengde Industrial and Commercial Bureau withdrawn the license of Chengde Huaxin waste
paper collection Co., Ltd on 28 April 2009 according to the ChengGongShang (2009) No.73
Document, which due to not submitting the annual inspection material of 2007. Till end of 30 June
2011, liquidation procedures have not been completed.
(2) Subsidiaries obtained by the consolidation of enterprises not under the same control
Registe
Type Regi Actual capital
Full name of Nature red
of stered Business scope invested at
subsidiary of business capital(RM
subsidiary place Period-end
B’0000)
Property
Chengde
Chengd development;
Rongyida Wholly-o
e City, Property production of
Property wned
Hebei Developm 1,000 textile and 1.00
Development subsidiar
Provinc ent clothing, import &
Co., Ltd. in y
e export of clothing;
Chengde County
lease service
Continue
Other item Amount for
Cons
surplus Prop offsetting the gain
Prop olidated Minor
Full name of actually ortion of and loss of minor
ortion of report shareholders’
subsidiary composing the sharehol shareholders in the
vote (%) statemen equity
net investment ding (%) minor shareholders’
t or not
in subsidiaries equity
Chengde
Rongyida
Property
100.00 100.00 Yes
Development
Co., Ltd. in
Chengde County
2. Consolidation scope of the Company has no changes in this report period.
V. Notes to the consolidated financial statements
(The Beginning balance is the balance on the date of 1st Jan. 2011, the closing balance is the balance
on the date of 30 Jun. 2011; the current period is from Jan. to Jun. of the year of 2011, the preceding
period is from Jan. to Jun. the year of 2010)
1. Monetary funds
Amount at the end of period Amount at the beginning of period
Items Amount Amount
in foreign Conversion Amount in foreign Conversion Amount
currencies rate in RMB currencies rate in RMB
Cash: 146,057.01 61,415.17
RMB 146,057.01 61,415.17
Bank
613,558.11 9,661,593.08
deposit
RMB 575,144.36 9,622,371.45
USD 5,314.53 6.4716 34,393.51 5,314.53 6.6227 35,196.54
EUR 105.82 9.3612 990.60 105.82 8.8065 931.90
HKD 2,862.32 0.8316 2,380.31 2,862.32 0.85093 2,435.63
JPY 8,092.00 0.080243 649.33 8,092.00 0.08126 657.56
Total 759,615.12 9,723,008.25
25
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
2. Other accounts receivable
(1) Exposure of other accounts receivable by category:
Amount at the end of period
Category Book balance Provision for bad debts
Amount Proportion Amount Proportion
(%) (%)
OR with individual significant
amount and individual accrual 44,196,901.26 50.45% 44,196,901.26 100.00%
for bad debt provision
OR with accrual for bad debt
43,404,761.87 49.55% 163,971.33 0.38%
provision in combination
OR with no individual
significant amount but requires - - - -
accrual for bad debt provision
Total 87,601,663.13 - 44,360,872.59 -
Table continued
Amount at the begin of period
Book balance Provision for bad debts
Category
Amount Proportion Amount Proportion
(%) (%)
OR with individual significant
amount and individual accrual 71,950,477.96 96.13 44,210,063.38 61.45
for bad debt provision
OR with accrual for bad debt
2,895,696.15 3.87 150,809.21 5.21
provision in combination
OR with no individual
significant amount but requires - - - -
accrual for bad debt provision
Total 74,846,174.11 - 44,360,872.59 -
In the combination, OR with accrual for bad debt provision using aging analysis method:
Closing balance Beginning balance
Book balance Book balance
Duration of the
accounts Bad debt Rate in Bad debt
Rate in provision provision
Amount Amount total
total (%)
(%)
Less than one
43,370,714.72 99.92 156,244.57 2,861,649.00 98.82 143,082.45
year
1-2 years 30,989.40 0.07 6,197.88 30,989.40 1.07 6,197.88
2-3 years 3,057.75 0.01 1,528.88 3,057.75 0.11 1,528.88
Over 3 years - - - - - -
3-4 years - - - - - -
4-5 years - - - - - -
Over 5 years - - - - - -
Total 43,404,761.87 100.00 163,971.33 2,895,696.15 100.00 150,809.21
(2) there are no other account receivable held in shareholders with 5 %( including5%) voting rights
in the period.
(3) Top 5 units with an amount of other account receivable:
Relationship Proportion
Name Amount Period among the total
with the company
other accounts
26
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
receivable (%)
Affiliated
44,196,901.26 Over 3 years 50.45
1 company
Within 1
2 Un-related party 27,490,334.30 31.38
year
Within 1
3 Un-related party 12,600,000.00 14.38
year
Within 1
4 Un-related party 2,859,600.00 3.26
year
5 Affiliated company 15,361.00 1-2 years 0.02
Total 87,162,196.56 99.50
(4) Account receivable of related parties
Proportion among the
Relationship
Name total other accounts
with the company
Amount receivable (%)
Chengde Dahua Paper Co., Ltd Affiliated company 44,196,901.26 50.45
Suning Banhe Chemical Fiber Affiliated
15,361.00 0.02
Facsimile Fabric company
Total -- 44,212,262.26 50.47
3. Prepaid accounts
(1) Prepaid accounts listed on aging basis
Closing balance Beginning balance
Duration
Amount Rate in total (%) Amount Rate in total (%)
Less than one year 965,364.00 4.59 - -
1-2 years - - - -
2-3 years - - - -
Over 3 years 20,084,632.25 95.41 20,084,632.25 100.00
Total 21,049,996.25 100.00 20,084,632.25 100.00
(2) Top five of prepayments
Name of the Relationship with Reason of not
Amount Duration
company the Company clearing
Accounts for
purchasing land
1 non-affiliated party 20,084,632.25 Over 3 years
(license had not
been handled)
2 non-affiliated party 505,700.00 Within 1 year Prepaid project fees
3 non-affiliated party 356,364.00 Within 1 year Prepaid project fees
4 non-affiliated party 103,300.00 Within 1 year Prepaid project fees
Total 21,049,996.25
(3) There is no such amount belongs to shareholders who hold 5% or more than 5% voting rights.
27
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
4. Inventory
Amount at the end of period Amount at the beginning of period
Items
Book Depreciation Book Book Depreciation Book
balance reserve value balance reserve value
Development
9,390,562.26 - 9,390,562.26 6,774,088.56 - 6,774,088.56
cost
Planning
developed 10,967,992.85 - 10,967,992.85 10,967,992.85 - 10,967,992.85
products
Total 20,358,555.11 - 20,358,555.11 17,742,081.41 - 17,742,081.41
5. Other current assts
Items Amount at period-end Amount at period-begin
Credit purchased 1,093,527.39 1,093,527.39
Total 1,093,527.39 1,093,527.39
Notes to other current assets:
Other current asset is the auction right of credit purchased by Rongyida Co., Ltd. when Ronyida did not become the
subsidiary the Company.
6. Investment to affiliated companies
Tot
al
Proportio operatin Ne
Proporti Total
n of voting Total assts at Total net assts g t profit
Invested company on of share liabilities at
rights held period-end at period-end income at this
holding (%) period-end
(%) at period
period-e
nd
Suning Banhe
Chemical Fiber
20.00 20.00 - - - - -
Facsimile Fabric Co.,
Ltd
Chengde Dahua
Paper Industry Co., 45.00 45.00 266,969,909.27 624,579.62 266,345,329.65 - -
Ltd.
Note to the investment to the associates:
The Company accrual provision for long-term investment to Suning Banhe Fiber
Textile Co., Ltd. wholly in year 2006 for Suning Banhe Fiber Textile has stopped
operation for several years due to the key involved in the crime. The Company did not
obtain the 2011 financial statements of Suning Banhe Fiber Co., Ltd.
Chengde Dahua Paper Industry Co., Ltd. (“Dahua Paper”) was invested by the
Company and Japan paper industry Co., Ltd. (“Japan Paper”) with original registered
capital of USD 500million. After equity transferring and capital increasing, Dahua
Paper has registered capital of JPY 6,364.00million，including JPY 2,864.00million
from Chengde Xingye paper producing Co., Ltd. and JPY 3,500.00million from Japan
new century Co., Ltd. However, the above new capital is unverified and the
procedure on changes of shareholder hasn’t been finished. Chengde Industrial and
Commercial Bureau withdrew the license of Dahua Paper Industry Co., Ltd on 28
April 2009 according to the ChengGongShang (2009) No.75 Document, which due to
not submitting the annual inspection material of 2007.
28
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
7. Long-term equity investment
Chang
Calculat e of
Balance at Balance at
Invested company ion Investment cost increa
period-begin period-end
method se/dec
rease
Suning Banhe Cost 46,980,000.00 46,980,000.00 46,980,000.00
Da Hua Paper Industry Equity 206,215,729.65 206,215,729.65 206,215,729.65
Hebei Province Xiaban Cost
441,303,759.82 441,303,759.82 441,303,759.82
City Fabric method
Chengde Dixian Fashion Cost
200,051,551.11 200,051,551.11 200,051,551.11
Company method
Total 894,551,040.58 894,551,040.58
Table continued
Cas
explanation of Accru h
Proporti Proportion non-coincidence al bon
on of of voting between the proportion Provision of provisi us
Invested company
share right held of share held and depreciation on n in in
held (%) (%) proportion of voting this this
held period peri
od
Suning Banhe Fiber 20.00 20.00 46,980,000.00
Chengde Dahua Paper
45.00 45.00 204,000,000.00
Industry Co., Ltd.
Hebei Province Xiaban Bankrupt but within
100.00 441,303,759.82
City Fabric liquidation
Chengde Dixian Bankrupt but within
75.00 200,051,551.11
Fashion Company liquidation
Total 892,335,310.93
8. Fixed assts
Particular about fixed assts
Book Book
balance at Accruing Decrease balance at
Items period-begin in this period in this period period-end
I. Total original book value: 122,328,400.59 - - 122,328,400.59
Including: House and buildings 111,296,195.05 - - 111,296,195.05
Machinery equipment - - -
Transportation instrument 10,823,271.25 - - 10,823,271.25
Office equipment 208,934.29 - - 208,934.29
II. Total accumulated
24,313,508.09 1,366,083.37 - 25,679,591.46
depreciation:
Including: House and buildings 15,623,357.96 1,352,172.31 - 16,975,530.27
Machinery equipment - - - -
Transportation instrument 8,627,001.72 10,270.58 - 8,637,272.30
Office equipment 63,148.41 3,640.48 - 66,788.89
III. Total net book value of
98,014,892.50 - 96,648,809.13
fixed assets -
29
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
Including: House and buildings 95,672,837.09 - - 94,320,664.78
Machinery equipment - - - -
Transportation instrument 2,196,269.53 - - 2,185,998.95
Office equipment 145,785.88 - - 142,145.40
IV. Total of depreciation
35,361,563.01 - - 35,361,563.01
provision
Including: House and buildings 33,129,463.59 - - 33,129,463.59
Machinery equipment - - - -
Transportation instrument 2,117,353.38 - - 2,117,353.38
Office equipment 114,746.04 - - 114,746.04
V. Total book value of fixed
62,653,329.49 - 61,287,246.12
assts -
Including: House and buildings 62,543,373.50 - - 61,191,201.19
Machinery equipment - - - -
Transportation instrument 78,916.15 - - 68,645.57
Office equipment 31,039.84 - - 27,399.36
The depreciation accrued is RMB 1,366,083.37 for the current period
9. Projects under construction
(1) Particular about projects under construction
Amount at period-end Amount at period-begin
Items
Depreciation Net value of Depreciation Net value of
Book balance Book balance
provision book provision book
Paper-making
242,855,959.62 238,027,341.62 4,828,618.00 242,855,959.62 238,027,341.62 4,828,618.00
projects
Thermal power
16,752,062.42 14,858,862.42 1,893,200.00 16,752,062.42 14,858,862.42 1,893,200.00
plant
Total 259,608,022.04 252,886,204.04 6,721,818.00 259,608,022.04 252,886,204.04 6,721,818.00
(2) Change on items of projects in construction
No change on projects in construction occurred in this year.
(3) Provision of project under construction
Increased in Decreased in
Amount at period-end
Items Amount at period-end this period this period
Paper-making projects 238,027,341.62 - - 238,027,341.62
Thermal power
14,858,862.42 - - 14,858,862.42
stations
Total 252,886,204.04 - - 252,886,204.04
10. Intangible assts
Book balance at Increased Decreased Book balance
Items
period-begin in this period in this period at period-end
I. Total original book value 31,075,075.63 - - 31,075,075.63
Land-use right 31,075,075.63 - - 31,075,075.63
II.total accumulated amortized 6,251,294.90 310,750.74 - 6,562,045.64
30
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
Book balance at Increased Decreased Book balance
Items
period-begin in this period in this period at period-end
Land-use right 6,251,294.90 310,750.74 - 6,562,045.64
III. Total net book value of intangible
24,823,780.73 - 310,750.74 24,513,029.99
assts
Land-use right 24,823,780.73 - 310,750.74 24,513,029.99
IV. Total depreciation provision - - - -
Land-use right - - - -
V. Total book value of intangible
24,823,780.73 - - 24,513,029.99
assts
Land-use right 24,823,780.73 - - 24,513,029.99
The amortization for the current period is RMB 310,750.74.
11. Details of depreciation provision of assets
Book Decrease this period
Increase Book balance at
Items balance at
this period period-end
period-begin Switch-back Charge-off
I. Bad debit
44,360,872.59 - - - 44,360,872.59
provision
II.
Impairment
provision
for 892,335,310.93 - - - 892,335,310.93
long-term
equity
investment
III.
Impairment
provision 35,361,563.01 - - - 35,361,563.01
for fixed
assets
IV.
Impairment
provision
252,886,204.04 - - - 252,886,204.04
for
construction
in progress
Total 1,224,943,950.57 - - - 1,224,943,950.57
12. Other non-current assets
Items Amount at period-end Amount at period-begin
House and buildings 779,288.19 779,288.19
Land-use right 23,653,650.76 23,653,650.76
Total 24,432,938.95 24,432,938.95
13. Short-term loans
(1) Classification of short-term loans
Items Amount at period-end Amount at period-begin
31
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
Credit loans 422,261.91 422,261.91
Total 422,261.91 422,261.91
(2) Notes to short-term loans:
The Company borrowed several loan from Chengde County Treasure Bureau which was
exceeded the time limit for many years. The original principal is the amount of 21,113,095.50,
the loan now need to be refunded is the amount of 422,261.91 according to the confirmed
ratio of proportion of liquidity of 2%
14. Accounts payable
(1) Particular about accounts payable
Item Amount at period-end Amount at period-begin
Within 1 year
Over 1 year 231,075.82 231,075.82
Total 231,075.82 231,075.82
(2) There is no such amount in period-end belongs to shareholders or related parties who hold 5%
or more than 5% voting rights.
15. Employee salaries payable
Amount in Amount in
Items Increases Decreases
period-begin period-end
I. Wages, bonuses, allowances and
298,000.00 - 40,200.00 257,800.00
subsidies
II. Social insurances 6,097,486.60 - - 6,097,486.60
Total 6,395,486.60 - 40,200.00 6,355,286.60
16. Taxes payable
Items Amount in period-end Amount in period-begin
Value added tax -108,454.22 -52,298.55
Business tax 2,593,200.25 4,133,293.90
Enterprise income tax 55,498,566.41 56,842,147.94
Urban maintenance and construction tax - 225,914.67
Housing property tax 2,373,740.13 1,913,935.91
Land-use tax 10,929,481.11 8,753,776.49
Others 12,175.91 253,801.47
Total 71,298,709.59 72,070,571.83
17. Other payables
(1) Particular about other payables
Amount in
Item Amount in period-end
period-begin
32
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
Within 1 year 42,917,668.29 30,019,732.85
Over 1 year 96,496,921.56 98,496,921.56
Total 139,414,589.85 128,516,654.41
(2) Principle amount of other receivables with age over one year
Name of the company Closing balance Reason for not being paid
Trustee in Bankruptcy of Fashion Company 26,410,000.00 Not due
Trustee in Bankruptcy of Banhe Fiber 19,750,000.00 Not due
Li Yan 14,090,000.00 Loan not due
Shanghai mineral energy electric 12,000,000.00 Loan not due
Trustee in Bankruptcy of Xiaban City Fiber 8,760,000.00 Not due
Zhang Xiao Ming 6,500,000.00 Loan not due
Chen Li Ping 5,000,000.00 Loan not due
Tan Liang 1,000,000.00 Loan not due
(3) Other account payable with major amounts
Name of company Closing balance Nature or Content
Chengde county Bureau social insurance 17,897,697.28 Incomings and outgoings
Qian Zhenlin 13,000,000.00 Incomings and outgoings
Chengde county treasury payment center 6,000,000.00 Incomings and outgoings
18. Long term loan
Item Closing balance Beginning balance
Credit loan 6,398,000.00 6,398,000.00
Total 6,398,000.00 6,398,000.00
19. Special account payable
Amount in Increase Decrease Amount
Item Notes
period-begin this period this period in period-end
Project of paper
producing , water
saving and resource 7,500,000.00 - - 7,500,000.00 JCJ[2005] No. 280
utilization
comprehensively
Resource utilization
comprehensively
demonstration project
3,000,000.00 - - 3,000,000.00 CCJ[2004] No. 134
of waste paper
recycling industry
chain
Financial Bureau of
98,000.03 - - 98,000.03
Chengde County
Total 10,598,000.03 - - 10,598,000.03
33
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
20. Share capital
Change of increase/decrease(+,-)
Amount at Shares Amount at
Newly
period-begin Bonus from period-end
issued Other Subtotal
shares public
shares
reserve
Total
706,320,000.00 - - - - - 706,320,000.00
shares
21. Capital reserve
Amount at Increase this Decrease this Amount at
Item
period-begin period period period-end
Share premium 391,996,587.96 - - 391,996,587.96
Other capital surplus 58,768,855.14 - - 58,768,855.14
Total 450,765,443.10 - - 450,765,443.10
22. Surplus reserve
Amount at Increase this Decrease this Amount at
Item
period-begin period period period-end
76,791,550.17 - - 76,791,550.17
Mandatory surplus reserve fund
76,791,550.17 - - 76,791,550.17
Total
23. Retained profit
Proportion of withdrawal or
Item Amount
distribution
Retained profit at year-begin -1,261,402,234.30
Add: net profit attributable to owners of parent company -4,069,051.79
Less: withdrawal of legal surplus capital reserve -
withdrawal of any surplus capital reserve -
Retained profit at period-end -1,265,471,286.09
24. Operating Revenue
(1) Operating revenue
Item Current period Preceding period
Main business income - -
Other business income 21,250.00 -
operating cost - -
Total 21,250.00 -
25. Business tax and surcharges
Item Current period Preceding period Project payment standard
Business tax 8,261.25 - 5% of the taxable turnover
Urban maintenance and construction 1,016.95 - 5% of the business tax
34
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
tax
Education surtax 610.18 - 3% of the business tax
Local Education surtax 406.78 - 2% of the business tax
Total 10,295.16 -
26. Administrative expenses
Item Current period Last period
Staff wages and salaries 251,850.00 172,800.00
Tax 2,697,487.30 2,697,174.00
Depreciation expense 1,676,593.78 1,012,267.18
Service fee for agent 4,000.00 520,000.00
Amortization of intangible assets 310,750.74 310,750.74
Business entertainment 24,165.47 -
Others 295,271.13 53,252.56
Total 5,260,118.42 4,766,244.48
27. Financial expense
Category Current period Last period
Interest expense 5,716.37 0.00
Less: interest income 1,706.01 9.37
Others 838.63 1,120.00
Total 4,848.99 1,110.63
28. Non-operating income and expenses
(1) Non-operating income
Item Current period Last period
Gains and losses from disposal of non-current assets 970,161.00 -
Others 50,850.00 -4,448.77
Total 1,021,011.00 -4,448.77
(2) Non-operating expenses
Item Current period Last period
losses on disposal of non-current assets - -
Others 152,271.51 47,949.00
Total 152,271.51 47,949.00
29. Income tax
Item Current period Preceding period
Tax calculated for the current period 3,500.64 -
35
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
Deferred taxes - -
Total 3,500.64 -
30. Calculation about basic earnings per share and diluted earnings per shares
(1) Basic earnings per share =P0÷S
S= S0＋S1＋Si×Mi÷M0– Sj×Mj÷M0-Sk
Among which: P0: Net profit attributable to common shareholder of the Company or net profit attributable to
common shareholder of the Company after deducting non-recurring gains/losses; S: Weighted average number of
common shares that issued; S0: total shares of period-begin; S1: Amount of shares increase from public reserve or
dividend distribution; Si: Amount of shares increase from newly issued shares or liabilities etc.; Sj: Amount of
shares decrease from repurchase in period; Sk: Amount of decrease shares in period; M0: Amount of month in
period; Mi: Number of months from the next month to the end of the reporting period for increase of shares; Mj:
Number of months from the next month to the end of the reporting period for decrease of shares.
(2) Diluted earnings per share =P1/(S0＋S1＋Si×Mi÷M0–Sj×Mj÷M0–Sk+The weighted average amount of
ordinary shares increased due to warrant, share option, convertible bonds)
Among which: P1: Net profit attributable to common shareholder of the Company or net profit attributable to
common shareholder of the Company after deducting non-recurring gains/losses. Take the influence of diluted
potential shares into consideration and adjusted by relevant regulation of “Accounting Rules for Enterprise”;
Concerning the calculation of diluted EPS, effects from all diluted potential shares on net profit attributable to
common shareholder of the Company/ net profit attributable to common shareholder of the Company after
deducting non-recurring gains/losses and weighted average numbers should take into consideration. Reckoned the
diluted EPS in order by dilute level until the diluted EPS reached its minimum number.
(3) Calculating method
code Item Current period Last period
Net profit attributable to common shareholders of the
P0 -4,069,051.79 -4,314,900.49
Company
Net profit attributable to common shareholders of the
P0 Company after deduction of the non-recurring losses -4,937,791.28 -4,262,502.72
and gains
S0 Total shares at period-begin 706,320,000.00 706,320,000.00
Amount of shares increase from public reserve or
S1 - -
dividend distribution
Amount of shares increase from newly issued shares
Si -
or liabilities etc.
Number of months from the next month to the end of
Mi - -
the reporting period for increase of shares
Sj Amount of shares decrease from repurchase in period - -
Number of months from the next month to the end of
Mj - -
the reporting period for decrease of shares
Sk Amount of decrease shares in period - -
M0 Amount of month in period 6 6
The weighted average amount of ordinary shares
S 706,320,000.00 706,320,000.00
outstanding
Basic earnings per share - 0.006 - 0.006
Basic earnings per share after deduction of the
- 0.007 - 0.006
non-recurring losses and gains
Net profit attributable to common shareholders after
P1 considering the influence of diluted potential common - -
stock
The weighted average amount of influence of diluted
S1 - -
potential common stock
36
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
Diluted earnings per share - 0.006 - 0.006
Diluted earnings per share after deduction of the
- 0.007 - 0.006
non-recurring losses and gains
31. Notes to items of cash flows statement
(1) Other cash received from operating activities
Items Amount
Received contact accounts 1,296,858.24
Income from lease and scraps 988,548.00
Interest income 7,545.00
total 2,292,951.24
(2) Other cash paid to operating-related activities
Items Amount
Payment for contact accounts 17,118,775.33
Expenses 323,436.60
Total 17,442,211.93
32. Supplemental Information for Cash Flow Statement
(1) Supplemental Information for Cash Flow Statement:
Supplemental information Current period Last period
1. Adjustments to reconcile net income to net cash provided by
operating activities:
Net profit -4,388,773.72 -4,819,752.88
Add: Impairment provision for assets - -
Depreciation of fixed assets, consumption & depreciation of fuel and
1,366,083.37 1,012,267.18
gas, depreciation of production materials
Amortization for intangible assets 310,750.74 310,750.74
Amortization for long-term prepayment - -
Loss on disposal of fixed assets, intangible assets and others long-term
- 967,298.00 -
assets(Income is listed with “-“)
Loss upon rejection of fixed assets(Income is listed with “-“) - -
Loss on variance of fair value (Income is listed with “-“) - -
Finance cost (Income is listed with “-“) - -
Loss in investment(Income is listed with “-“) - -
Decrease of deferred tax assets(Increase is listed with “-“) - -
Liability increase of deferred tax(Decrease is listed with “-“) - -
Decrease of inventories(Increase is listed with “-“) - 2,616,473.70 -
Decrease of operating receivable account items(Increase is listed with
- 13,720,853.02 29,788.86
“-“)
37
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
Supplemental information Current period Last period
Increase of operating payable account items (Decrease is listed with
- 630,510.36 3,471,555.47
“-“)
Others - -
Net cash flow from operating activities - 20,647,074.69 4,609.37
2. Significant investing and financing activities for non cash items:
Liabilities capitalized - -
Convertible bonds payable mature in one year - -
Financing leased fixed assets - -
3. Net increase (decrease) for cash and cash equivalents:
Ending balance for cash 759,615.12 62,865.48
Less: beginning balance for cash 9,723,008.25 58,256.11
Add: ending balance for cash equivalents - -
Less: beginning balance for cash equivalents - -
Net increase in cash and cash equivalents - 8,963,393.13 4,609.37
(2) Constitution of cash and cash equivalent
Item Current period Last period
I. Cash 759,615.12 9,723,008.25
Including: Inventory cash 146,057.01 61,415.17
Bank deposit payable at any time 613,558.11 9,661,593.08
Other monetary fund payable at any time - -
II. cash equivalent - -
Including: Bond investment due within 3 months - -
III. Balance of cash and cash equivalent at period-end 759,615.12 9,723,008.25
VI. Related parties and related transaction
1. Parent company of the Company
The Company has no directly controlling parent company. The related parties with controlling
relationship of the Company refer to Mr. Chen Rong who held 29.49% equity of the Company.
2. Subsidiaries of the Company
Nature of
Type of Register Legal Business
Name the
subsidiaries place representative nature
subsidiaries
Chengde
Rongyida Real Wholly Limited Chengde city Real Estate
Rong Chen
Estate owned liability Hebei province development
development
Chengde Xingye Chengde Paper
Limited
Holding country Hebei Shuxian Wang
Paper Industry liability producing
province
38
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
Nature of
Type of Register Legal Business
Name the
subsidiaries place representative nature
subsidiaries
Gold Axe Wholly Limited British Virgin
Investment Group Export
owned liability Island
Limited
Wholly Chengde
Hebei Xiaban City Limited Clothing
country Hebei Shuxian
Textile owned liability producing
province
Wholly Chengde
Chengde Dixian Limited Clothes
country Hebei Shuxian
fashion owned liability producing
province
Chengde Huaxin Chengde Waste paper
Limited
waste paper Holding country Hebei Sulian Xu
liability recycling
collection province
Table continued
Proportion
Register Proportion Organization
Name of voting right
capital of share held (%) code
held (%)
Chengde Rongyida
RMB
Real Estate 68434235-0
10,000,000.00
development
Chengde Xingye
US$250,000,000.00 75.00 75.00 60125211-5
Paper Industry
Gold Axe
Investment Group US$ 1 100.00 100.00
Limited
Hebei Xiaban City
US$ 4,000,000.00 100.00 60126026-2
Textile
Chengde Dixian
US$ 24,000,000.00 100.00 60126040-6
fashion
Chengde Huaxin
RMB 1,000,000.00 90.00 90.00 74544580-5
waste paper collection
3. Particular about joint venture and affiliated company
Proport
Legal ion of
Type of Register Company Register Proportion of
Invested company representati share
companies place nature capital voting held (%)
ves held
(%)
Suning Banhe Limited
Suning Wang Clothes US$
Simulation Textile C., Liability 20.00 20.00
Hebei Zhengsong manufacture 29,000,000.00
Ltd. Company
Limited
Chengde Dahua paper Paper JPY6,364,000,
Liability Chengde Shi Bainian 45.00 45.00
Industry Co., ltd. manufacture 000.00
Company
Table Continued
Total Relate
Total Net
Total asset at Total net asst at operating d Organizatio
Company invested liabilities at profit this
period-end period-end income this relatio n code
period-end period
peiod nship
Affilia
Suning Banhe Fiber ted
Co., Ltd. Comp
any
Chengde Dahua Affilia 76033882-1
266,969,909.27 624,579.62 266,345,329.65
Paper Co., Ltd. ted
39
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
Comp
any
4. Account of receivable and payable fro related parties
(1) Receivables from related parties
Amount at Amount at
Item Related party
period-end period-begin
Other account
Chengde Dahua Paper Co., Ltd. 44,196,901.26 44,196,901.26
receivable
Other account
Suning Banhe Fiber Co., Ltd. 15,361.00 15,361.00
receivable
Total 44,212,262.26 44,212,262.26
(2) Payables of listed companies from related parties
Item Related parties Closing balance Opening balance
Other payables Rong Chen - 481,980.00
VII. Contingency
As of December 31, 2011，the company has no other major contingency which need to be disclosed.
VIII. Commitments
Chengde Xingye Papermaking Co., Ltd. has the registered capital of USD 250,000,000.00,
within which USD 187500000.00 (75%) committed by the Company. According to the article
of “Approval about the capital increase of Chengde Dexing Paper Industrial Co., Ltd” with
WaiJingZi Er Han [2001] No.969 issued by the ministry of foreign trade and economic
cooperation of the People's Republic of China on 28th Oct 2002, the Company should pay the
increased capital within 3 years since the change of the business license which agreed in the
agreement & the company articles. As of the date of the report , the paid-in capital is the
amount of RMB 622,500,000.00（US$75,000,000.00），which accounts for 40% of the
registered capital。
Except the matter stated above，there is no other major commitment need to be disclosed.
IX. Item after date of balance sheet
There exist no items after date of balance sheet for disclosure.
X. Other significant event s
Since the bankrupt reorganization in April 2009, except for the subsidiary Chengde Rongyida Real
Estate Development Co., Ltd, other company which undertakes the business of textile and fashion
has not yet started the business. Currently the focus of the company is real estate development and
the first project for Chengde Rongyida Real Estate Development Co., Ltd is real estate development
for Neighborhood of DaLuQianYuan. The acreage which was used for this project was 30.7443
units. Till Jun. 30 of 2011, the construction had been started.
XI. Notes to Parent Company’s financial statement
1. Other account receivable
(1) Other account receivable classified according to categories:
category Amount at period-end
Book balance Bad debt provision
40
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
Proportion Proportion
Amount Amount
%) %)
OR with individual significant
amount and individual accrual for - - - -
bad debt provision
OR with accrual for bad debt
324,947.57 100.00 20,991.33 0.065
provision in combination
OR with no individual significant
amount but requires - - - -
accrual for bad debt provision
Total 324,947.57 100.00 20,991.33 0.065
Table Continued
Amount at period-begin
Book balance Bad debt provision
category
Proportion Proportion
Amount Amount
%) %)
OR with individual significant
amount and individual accrual for - - - -
bad debt provision
OR with accrual for bad debt
299,338.55 100.00 20,991.33 7.01
provision in combination
OR with no individual significant
amount but requires - - - -
accrual for bad debt provision
Total 299,338.55 100.00 20,991.33 7.01
In the combination, OR with accrual for bad debt provision using aging analysis method:
Closing balance Opening balance
Book balance Book balance
Duration of the
accounts Amount Bad debt Amount Rate in Bad debt
Rate in provision provision
total
total (%)
(%)
Less than one year 290,900.42 89.52 13,264.57 265,291.40 88.63 13,264.57
1-2 years 30,989.40 9.54 6,197.88 30,989.40 10.35 6,197.88
2-3 years 3,057.75 0.94 1,528.88 3,057.75 1.02 1,528.88
Over 3 years - - - - - -
3-4 years - - - - - -
4-5 years - - - - - -
Over 5 years - - - - - -
Total 324,947.57 100 20,991.33 299,338.55 100 20,991.33
(2) There are no other account receivables held in the shareholders with 5 %( Including 5%) voting
rights held in the report period.
2. Long-term equity investment
Calculat Chan
Initial investment Balance at
Invested ion ge Balance at period-end
cost period-begin
method (=,-)
Chengde Rongyida
real estate Cost
53,114,299.73 53,114,299.73 53,114,299.73
development Co., method
Ltd
41
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
Calculat Chan
Initial investment Balance at
Invested ion ge Balance at period-end
cost period-begin
method (=,-)
Chengde Xingye Cost
622,500,000.00 622,500,000.00 622,500,000.00
paper Co., Ltd method
Gold Axe
Cost
Investment Group 8,300,000.00 8,300,000.00 8,300,000.00
method
Limited
Hebei Province
Cost
Xiaban City Fabric 431,604,203.41 431,604,203.41 431,604,203.41
method
Co., Ltd.
Chengde Dixian Cost
149,408,230.11 149,408,230.11 149,408,230.11
fashion Co., Ltd method
Suning Banhe Fiber Equity
46,980,000.00 46,980,000.00 46,980,000.00
Co., Ltd. method
Total 1,311,906,733.25 1,311,906,733.25
Table Continued
explanation on
un-coincidence Ca
Accru
Proportio Proportion between sh
al
Invested n of share of voting proportion of Provision div
provisi
held (%) held (%) share held and ide
on
proportion of nd
voting held
Chengde Rongyida real
estate development Co., 100.00 100.00
Ltd
Chengde Xingye paper
75.00 75.00 616,688,419.47
Co., Ltd
Gold Axe Investment
100.00 100.00 8,300,000.00
Group Limited
Hebei Province Xiaban
100.00 Bankrupt 431,604,203.41
City Fabric Co., Ltd.
Chengde Dixian fashion
75.00 Bankrupt 149,408,230.11
Co., Ltd
Suning Banhe Fiber
20.00 20.00 46,980,000.00
Co., Ltd.
Total 1,252,980,852.99
3. Supplementary information of cash flow statement
Supplemental information Current period Last period
1. Adjustments to reconcile net income to net cash provided by
operating activities:
Net profit -173,544.43 -730,482.33
Add: Impairment provision for assets - -
Depreciation of fixed assets, consumption & depreciation of fuel and gas,
- -
depreciation of production materials
Amortization for intangible assets - -
Amortization for long-term prepayment - -
Loss on disposal of fixed assets, intangible assets and others long-term
- -
assets(Income is listed with “-“)
Loss upon rejection of fixed assets(Income is listed with “-“) - -
42
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
Supplemental information Current period Last period
Loss on variance of fair value (Income is listed with “-“) - -
Finance cost (Income is listed with “-“) - -
Loss in investment(Income is listed with “-“) - -
Decrease of deferred tax assets(Increase is listed with “-“) - -
Liability increase of deferred tax(Decrease is listed with “-“) - -
Decrease of inventories(Increase is listed with “-“) - -
Decrease of operating receivable account items(Increase is listed with “-“) -25,609.02 29,788.86
Increase of operating payable account items (Decrease is listed with “-“) 195,340.65 705,293.47
Others - -
Net cash flow from operating activities -3,812.80 4,600.00
2. Significant investing and financing activities for non cash items:
Liabilities capitalized - -
Convertible bonds payable mature in one year - -
Financing leased fixed assets - -
3. Net increase (decrease) for cash and cash equivalents:
Ending balance for cash 33,384.90 21,500.44
Less: beginning balance for cash 37,197.70 16,900.44
Add: ending balance for cash equivalents - -
Less: beginning balance for cash equivalents - -
Net increase in cash and cash equivalents -3,812.80 4,600.00
XII. Supplementary information
1. Details of current non-recurring gains and losses
Items Amount
Disposal gains and losses of non-current assets 970,161.00
Other non-operating income and expense excluding the -101,421.51
abovementioned items
Total 868,739.49
2. Return on equity and earnings per share
Weighted earnings per share
average of
Profit in report period Basic
Return on equity Diluted
earnings per
（%） earnings per share
share
Net profit attributable to common
- -0.006 -0.006
shareholders of the Company
Net profit attributable to common
shareholders of the Company after deducting - -0.007 -0.007
non-recurring gains and losses
43
Chengde Dalu Company Limited Financial Report of Semi-Annual 2011
3. The explanation of abnormal circumstance and reasons of items in major accounting report
(1) Monetary capital: the one of Jun. of 2011 decreased by RMB - 8,963,393.13 over
period-begin with 92.19 percents, mainly due to subsidiary Chengde County Rongyida Real
Estate Development Co., Ltd paid projects fees for development items.
(2) Prepaid accounts: the one of Jun. of 2011 increased by RMB 965,364.00 over period-begin
with 4.81 percents, mainly due to subsidiary Chengde County Rongyida Real Estate
Development Co., Ltd paid part of projects fees for development items.
(3) Other receivables: the one of Jun. of 2011 increased by RMB 12,755,489.02 over
period-begin, mainly due to subsidiary Chengde County Rongyida Real Estate Development
Co., Ltd paid deposit for development items.
(4) Inventory: the one of Jun. of 2011 increased by RMB 2,616,473.70 over period-begin with
14.75 percents, mainly due to subsidiary Chengde County Rongyida Real Estate Development
Co., Ltd paid projects fees for development items.
(5) Other payables: the one of Jun. of 2011 increased by RMB 10,897,935.44 with 8.48
percents, mainly due to the Company newly increased part of loan.
XIII .Approval for issuance of financial statements
These financial statements have been approved by all directors (the board of directors) of the
Company to be issued on August 28, 2011.
Section VIII. Documents available for reference
I. Text of Semi-annual Report 2011 carrying the genuine signatures of legal representative;
II. Text of financial report carrying the autograph and seals of legal representative, principal
in charge of the accounting affairs and principal in charge of the accounting institute;
III. Original texts of all documents and announcement disclosed publicly in the Securities Times
and Hong Kong Commercial Daily in the report period;
IV. Article of Association
The abovementioned documents will provide under the requirement from China Securities
Regulatory Commission and Stock Exchange if necessary.
Board of Directors of
Chengde Dalu Company Limited
28 August 2011
44
