WUHAN BOILER COMPANY LIMITED
(200770)
2011 Interim Report
Newspaper for Disclosure: Securities Times and Ta Kung Pao
Disclosure Date: August 30, 2011
1
Important Notes
The Board of Directors, the Board of Supervisors as well as directors, supervisors
and senior management of Wuhan Boiler Company Limited (hereinafter referred to
as “the Company”) hereby confirm that there are no misstatements, misleading
statements or material omissions in this Interim Report and will take individual
and/or joint and several liabilities for the authenticity, accuracy and completeness of
this Interim Report.
No director, supervisor and senior management has disagreements to the authenticity,
accuracy and completeness of this Interim Report.
Mr. YEUNG Kwok Wei Richard, Chairman of the Board of Directors, Mr. CHIN
Wee Hua, Finance Director, and Mr. SEOW Ven Sern in charge of accounting,
hereby insure that the Financial Report enclosed in this Interim Report is true and
complete.
This report is written in both Chinese and English. In case of any understanding
discrepancy between the two versions, the Chinese version shall prevail.
The Interim Financial Report of the Company has not been audited.
Contents
I. Company Profile………………………………………………….………………………3
II. Changes in Share Capital and Shares Held by Principal Shareholders………..…………6
III. Particulars about Directors, Supervisors and Senior Management…………….…..……9
IV. Management Discussion and Analysis………………………………………………..…9
V. Significant Events………………………………………………………………………13
VI. Financial Report (Unaudited)……………….…………………………………………21
VII. Documents for Reference……………………..………………………………………21
2
Section I Company Profile
I. Legal Name of the Company:
In Chinese: 司公限有份股炉锅汉武
In English: WUHAN BOILER COMPANY LIMITED
Abbr. in English: WBC
II. Legal Representative: YEUNG Kwok Wei Richard
III. Secretary of the Board of Directors: Kevin QIN
Contact Address: No.1, Liufangyuan Road, East Lake New Technology Development Zone,
Wuhan, Hubei
Tel: (027) 81994266
Fax: (027) 81994273
Email: kevin.qin@power.alstom.com
Securities Affairs Representative: XU Youlan
Tel: (027) 81993700
Fax: (027) 81993701
Email: youlan.xu@power.alstom.com
IV. Registered Address and Office Address: No.1, Liufangyuan Road, East Lake New Technology
Development Zone, Wuhan, Hubei
Post Code: 430205
Internet Website: http://www.wbcl.com.cn
Email: cnwhu.wbc @ power.alstom.com
V. Newspapers for Disclosing the Information of the Company: Securities Times (Domestic), Ta Kung
Pao (Overseas)
Internet Website Designated by CSRC for Publishing the Annual Report:
http://www.cninfo.com.cn
Place Where the Annual Report is Prepared and Placed: Securities Department of the Company
VI. Stock Exchange Listed with: Shenzhen Stock Exchange
Stock Abbreviation: *ST WUGUO-B
Stock Code: 200770
VII. Other information of the Company:
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Initial Registration Date: the Company was formally incorporated on April 8, 1998
Initial Registration Place: No. 586, Wuluo Road, Wuhan, Hubei
Registration Change Date: the Company changed its registration with Hubei Administration for
Industry and Commerce as a stock company (Sino-foreign joint venture company and listed
company) on Oct. 26, 2007.
The Changed Registration Place: No. 586, Wuluo Road, Wuhan, Hubei
The Latest Registration Date: the Company changed its registration with Hubei Administration
for Industry and Commerce as a stock company (Sino-foreign joint venture company and listed
company) on Oct. 30, 2009.
The Latest Registration Place: No.1, Liufangyuan Road, East Lake New Technology
Development Zone, Wuhan, Hubei
Business License No.: 420000400000568
Tax Registration No.: 420106271756432
VIII. Key Accounting Data and Financial Indices (The following data are listed with amounts of
consolidated statements)
Table 1 Unit: RMB
Increase/decrease during the
At the end of this end of this report period
Financial indices At the end of last year
report period compared with the beginning
of this report period (%)
Current assets 1,034,376,513.45 839,238,498.50 23.25
Current liabilities 2,905,344,603.21 2,615,907,181.59 11.06
Total assets 1,968,271,022.96 1,786,542,557.71 10.17
Shareholders’ equity
(not including the -1,003,974,399.49 -885,425,672.84 -13.39
minority equity)
Net assets per share -3.38 -2.98 -13.42
Table 2 Unit: RMB
Increase/decrease
This report period
Financial indices The same period last year from the same
(Jan.-Jun.)
period last year (%)
Operating profit -123,996,189.42 -72,751,262.49 -70.44
4
Total profit -123,936,456.89 -71,828,619.27 -72.54
Net profit attributable to
the owners of the parent -118,548,726.65 -82,367,208.64 -43.93
company
Net profit after deducting
non-recurring gains and -118,608,459.18 -83,285,961.71 -42.41
losses
Fully diluted earnings per
-0.40 -0.28 -42.86
share
Diluted earnings per share -0.40 -0.28 -42.86
Fully diluted return on net
----- ----
assets (%)
Weighted average return
on net assets after
12.56% ----
deducting non-recurring
gains and losses (%)
Net cash flow arising
-132,879,861.93 945,809,843.67 -114.05
from operating activities
Net cash flow per share
arising from operating -0.45 3.18 -114.15
activities
Note*: Items and amounts of non-recurring gains and losses deducted: Unit: RMB
Items of non-recurring gains and losses Amount
Gains and losses on disposal of non-current assets, including
-111,921.43
reversal of the impairment loss
Government grant recognized in current period, except for those
acquired in the ordinary course of business or granted continuously
138,888.00
in certain standard quota according to relevant national laws and
regulations
Other non-operating income and expense other than
32,765.96
abovementioned
Total 59,732.53
IX. In accordance with Information Disclosure Reporting Guidelines to Public Securities Companies
No.9 promulgated by China Securities Regulatory Commission, the Company’s return on net assets
and earnings per share for this report period are calculated based on fully diluted method and
weighted average method.
Note: There is no difference in the accounting standards within and outside China.
5
Return on Net Assets
In this report period The same period last year
Profit in this report period
Fully diluted Weighted average Fully diluted Weighted average
Net profit attributable to
common shareholders of the 12.55% 12.55% 8.81% 8.81%
Company
Net profit attributable to
common shareholders after
deducting non-recurring 12.56% 12.56% 8.91% 8.91%
gains and losses
Earnings Per Share Unit: RMB
In this report period The same period last year
Profit in this report period Basic earnings Diluted earnings Basic earnings Diluted earnings
per share per share per share per share
Net profit attributable to
common shareholders of the -0.40 -0.40 -0.28 -0.28
Company
Net profit attributable to
common shareholders after
-0.40 -0.40 -0.28 -0.28
deducting non-recurring
gains and losses
Section II Changes in Share Capital and Shares Held by Principal Shareholders
I. In this report period, the Company’s total shares and its structure didn’t change.
Unit: Share
Before the change Increase/decrease (+, -) After the change
Issuance Capitalization
Items Bonus
Amount Proportion of new of public Others Subtotal Amount Proportion
shares
shares reserve fund
I. Non-tradable
172,000,000 57.91% 172,000,000 57.91%
shares
1. Sponsors’ shares 172,000,000 57.91% 172,000,000 57.91%
Including: shares
held by the State
Shares held by
domestic 20,530,000 6.91% 20,530,000 6.91%
corporations
Shares held by
151,470,000 51.00% 151,470,000 51.00%
foreign corporations
6
Others
2. Raised corporate
shares
3. Employee shares
4. Preference shares
or others
II. Tradable shares 125,000,000 42.09% 125,000,000 42.09%
1. RMB ordinary
shares
2. Domestically
125,000,000 42.09% 125,000,000 42.09%
listed foreign shares
3. Overseas listed
foreign shares
4. Others
III. Total shares 297,000,000 100.00% 297,000,000 100.00%
II. Introduction about shareholders
(1) As of June 30, 2011, the Company had 9,073 shareholders, including one domestic
non-state-owned corporation shareholder, Alstom (China) Investment Co., Ltd, one state-owned
corporation shareholder, Wuhan Boiler Group Co., Ltd, and 9,071 shareholders having
domestically listed foreign shares.
(2) Shares held by the principal shareholders
As of June 30, 2011, the top ten shareholders and the top ten shareholders holding tradable shares of
the Company are as follows:
Total number of shareholders 9,073
Particulars about shares held by the top ten shareholders
Number of Shares
Nature of Proportion of Total
Name of shareholders non-tradable pledged or
shareholders shares held shares held
shares held frozen
ALSTOM (CHINA) Domestic
INVESTMENT COMPANY non-state-owned 51.00% 151,470,000 151,470,000 0
LIMITED corporation
WUHAN BOILER GROUP CO., State-owned
6.91% 20,530,000 20,530,000 0
LTD. corporation
CHINA MERCHANTS Foreign
0.48% 1,411,694 0 0
SECURITIES (HK) CO., LTD. corporation
Domestic natural
CHEN Chuyun 0.46% 1,372,450 0 0
person
HSBC BROKING SECURITIES
Foreign
(ASIA) LIMITED-CLIENTS 0.42% 1,234,114 0 0
corporation
A/C
7
Domestic natural
WU Zhenfa 0.38% 1,138,028 0 0
person
Domestic natural
ZHUANG Changxiong 0.35% 1,035,000 0 0
person
Domestic natural
TANG Juan 0.30% 887,236 0 0
person
GUOTAI JUNAN
Foreign
SECURITIES(HONGKONG) 0.29% 860,551 0 0
corporation
LIMITED
Domestic natural
ZHUANG Yaohua 0.28% 821,150 0 0
person
Particulars about tradable shares held by the top ten shareholders
Number of
Name of shareholders tradable Type of shares
shares held
CHINA MERCHANTS SECURITIES (HK) CO.,
1,411,694 Domestically listed foreign shares
LTD.
CHEN Chuyun 1,372,450 Domestically listed foreign shares
HSBC BROKING SECURITIES (ASIA)
1,234,114 Domestically listed foreign shares
LIMITED-CLIENTS A/C
WU Zhenfa 1,138,028 Domestically listed foreign shares
ZHUANG Changxiong 1,035,000 Domestically listed foreign shares
TANG Juan 887,236 Domestically listed foreign shares
GUOTAI JUNAN SECURITIES(HONGKONG)
860,551 Domestically listed foreign shares
LIMITED
ZHUANG Yaohua 821,150 Domestically listed foreign shares
LI Shuhui 808,552 Domestically listed foreign shares
ZHOU Yongyi 759,850 Domestically listed foreign shares
Among the top ten shareholders of the Company, Alstom (China) Investment Co.,
Ltd. (the first principal shareholder of the Company) and Wuhan Boiler Group Co.,
Ltd. (the second principal shareholder of the Company) hold non-tradable shares
of the Company; the other eight shareholders are public shareholders who hold
tradable B shares. During the report period, the change of shares held by the other
Explanation on eight shareholders was resulted from trading on the secondary market. Among the
affiliated relationship top ten shareholders of the Company, no affiliated relationship exists between
among the top ten Alstom (China) Investment Co., Ltd. (the first principal shareholder of the
shareholders or Company), Wuhan Boiler Group Co., Ltd. (the second principal shareholder of the
persons acting in Company) and the other shareholders, and they are not persons acting in concert as
concert defined in the Administrative Rules on Information Disclosure about Changing of
Shareholding Status. The Company is not aware of whether there is any affiliated
relationship among the top ten shareholders with tradable shares and whether there
are persons acting in concert among them. The Company is not aware of whether
there is any affiliated relationship among the top ten shareholders and the top ten
shareholders with tradable share.
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(3) The controlling shareholder of the Company
1. In this report period, the Company’s controlling shareholder and its actual controller didn’t
change.
2. Besides the controlling shareholder, Wuhan Boiler Group Co., Ltd. holds more than 5% of
the total shares of the Company.
Section III Particulars about Directors, Supervisors and Senior Management
I. In this report period, the Company’s directors, supervisors and senior management did not hold and
trade shares of the Company.
II. In this report period, no director, supervisor or senior management was newly appointed or
dismissed.
Section IV Management Discussion and Analysis
I. Management Discussion and Analysis
1. Power industry development situation in this report period
According to statistics from the power industry, the national total electricity generation from January
to June 2011 has reached 2,216.6 billion kwh, 13.5% increase comparing to the same period last year.
To be specific, thermal power remained stable, with an increase of 1.3% over the previous six months;
hydropower rose significantly by 30% over the previous six months.
2. Discussion and analysis about the Company’s operation in this report period
In this report period, the management and all employees of the Company made concerted efforts to
implement the following 6 Priorities of 2011. (1) On the basis of completion of the technology
transfer for 600 MW class Supercritical pulverized coal boilers, 350 MW class Supercritical
pulverized coal boiler technology development and design, and the improvement of the technology
for the 300MW class pulverized coal boilers, the Company is actively bidding in domestic market.
The Company shall complete the technology transfer for 1000MW class Ultra-Supercritical
pulverized coal boiler in the second quarter of 2011; (2) With the supports from Alstom, the Company
will get export orders for assemblies of boilers. Meanwhile, the Company will accumulate
manufacturing experience about Supercritical and Ultra-Supercritical boilers and demonstrate
production capacity of the new factory. Thus the Company can improve its domestic competition
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capacity and expand its domestic market share; (3) The Company will provide more training to
employees to further master new technologies and adapt to new procedures so as to meet high quality
requirements of export orders and accumulate export sales performance; (4) The Company shall
actively get continuous financing supports from Alstom (China) Investment Co., Ltd so as to meet
financing requirements of normal company operation; (5) With the supports from Alstom, the
Company will try to get advantageous payment conditions for export orders in order to improve
operating cash flow and reduce financial cost; (6) The Company will actively execute all management
systems and working procedures, tighten cost control and cash flow management, try its best to finish
more orders, deliver products and recognize project profits.
In this report period, the main business scope of the Company didn’t change. The Company is mainly
engaged in the development, production and sales of utility boilers, special boilers, desulfurization
equipments, other pressure vessels and auxiliary equipments. During the report period, the operating
revenue of the Company recorded RMB 248,332,052.00, increased 94.55% as compared to the same
period last year; operating profit was RMB -123,996,189.42, decreased 70.44% over the same period
last year; net profit attributable to owners of the parent company registered RMB -118,548,726.65,
decreased 43.93% as compared to the same period last year.
During the report period, the operating loss incurred was mainly due to fierce competition and lower
order intake compared to prior estimation in domestic market.
II. Brief analysis on operating results and financial status in this report period Unit: RMB
Increase/decrease
Items Jan.-Jun., 2011 Jan.-Jun., 2010 compared with the same
period last year (%)
Operating revenue 248,332,052.00 127,644,108.77 94.55
Operating profit -123,996,189.42 -72,751,262.49 -70.44
Net profit attributable to
owners of the parent -118,548,726.65 -82,367,208.64 -43.93
company
Net increase in cash and cash
-50,715.39 -11,001,639.23 99.54
equivalents
Note:
1. The increase in operating revenue was mainly due to the increase in recognition of revenue from
overseas projects during the report period;
01
2. The decrease in operating profit was mainly due to the increase in impairment loss and unrealized
foreign exchange loss from the hedge accounting for the unexpired forward contracts during the
report period;
3. The decrease in net profit was mainly due to the decrease in operating profit and non-operating
income during the report period;
4. The improvement in net increase in cash and cash equivalents was mainly due to decrease in
fixed asset purchase and lesser repayment of borrowings during the report period.
Unit: RMB
Increase/decrease
Items Jun. 30, 2011 Dec. 31, 2010
(+, -) %
Total assets 1,968,271,022.96 1,786,542,557.71 10.17
Shareholders’ equity (not
-1,003,974,399.49 -885,425,672.84 -13.39
including the minority equity)
Note:
1. The decrease in shareholders’ equity was due to the reduction in retained profits arising from the
net profit loss incurred during the report period.
III. Main business in this report period
1. The Company’s main business classified by industries and products
Unit: RMB Ten Thousand
Increase/decrease Increase/decrease Increase/decrease
in operating in operating cost in gross profit rate
Operating Operating Gross profit
Industries revenue compared compared with the compared with the
revenue cost rate (%)
with the same same period last same period last
period last year (%) year (%) year (%)
Machinery
23,057.54 26,363.22 -14.34 80.64 76.66 2.57
manufacturing
Increase/decrease Increase/decrease Increase/decrease
in operating in operating cost in gross profit rate
Operating Operating Gross profit
Products revenue compared compared with the compared with the
revenue cost rate (%)
with the same same period last same period last
period last year (%) year (%) year (%)
Boilers 23,057.54 26,363.22 -14.34 80.64 76.66 2.57
Of which: the total amount of related transactions resulted from the Company’s selling products to its
controlling shareholder and subsidiaries was RMB 0.00 in this report period.
11
2. The Company’s main business classified by regions Unit: RMB Ten Thousand
Increase/decrease in operating revenue
Region Operating revenue
compared with the same period last year (%)
Domestic 19,067.59 120.41
Overseas 5,765.62 40.17
3. Structure changes of main business
Proportion in operating revenue (%) Proportion in operating cost (%)
Products The same period The same period
This report period This report period
last year last year
Boilers 92.85 96.40 94.99 99.01
4. In this report period, there is no other business having significant impact on the net profit.
5. The business and performance of the Company’s holding subsidiaries during the report period
Unit: RMB Ten Thousand
Registered Assets Net
Name of company Business scope
capital scale profit
R&D, design, consultation and technology
services related to boilers, energy &
Wuhan Lanxiang environmental protection products, steel
Energy & structures, thermal energy-related products and
Environmental their auxiliary equipments; marketing of 2,000 3,632.98 -125.87
Protection products developed; energy project (non-land
Technologies Inc. construction projects) contracting and technical
service (special-purpose projects subject to
governmental approval).
Product design, manufacturing and packaging
of mechanical & electrical products; processing
Wuhan Boiler
of metal structures; design and production of
Boyu Industrial 1,911.5 692.86 6.94
mould & model; production of various high-
Co., Ltd.
and medium-pressure valve roughcast, cast
steel, cast iron and non-ferrous metal cast.
6. Main problems and risks in operating, as well as business plan, risks and solutions for the second
half of this year
In the first half of 2011, the main problems the Company met in operation were fierce competition
and lower order intake in domestic market.
In the second half year, the Company will continue to focus on the 6 Priorities decided at the
beginning of 2011 and to solve operation problems. Besides, the Company will give priority to
manufacturing of overseas orders and tendering of domestic orders. The Company will also
strengthen internal management, strictly control the cost and strive to improve its profitability.
21
IV. Investment in this report period
1. In this report period, the Company had not raised fund through share offering or the application of
fund from previous share offering.
2. In this report period, the Company did not make any other investment.
Section V Significant Events
I. Implementation of social responsibilities in this report period
The Company has a sound structure of corporate governance, has a complete internal control system,
and has an efficient communication channel with investors, which ensure in terms of mechanism that
all the shareholders can equally, openly and justly enjoy all the rights and interests as prescribed under
relevant laws, regulations and rules.
II. Particulars about researches, visits and interviews in this report period
Way of Main discussion and materials
Time Place Visitor
reception provided by the Company
3 shareholders
Why did the Company continue to
April 14, 2011 The Company By telephone with tradable
suffer loss in the first quarter?
shares
1 shareholder with Why did the Company continue to
April 15, 2011 The Company By telephone
tradable shares suffer loss in the first quarter?
2 shareholders
Why did the Company continue to
April 19, 2011 The Company By telephone with tradable
suffer loss in the first quarter?
shares
How about the Company’s business
2 shareholders
performance? How about the listing
April 20, 2011 The Company Field research with tradable
restoration progress? They also
shares
visited the factory.
1 shareholder with How about the listing restoration
May 9, 2011 The Company By telephone
tradable shares progress?
3 shareholders
How about the listing restoration
May 10, 2011 The Company By telephone with tradable
progress?
shares
2 shareholders
How about the listing restoration
May 11, 2011 The Company By telephone with tradable
progress?
shares
31
2 shareholders
How about the listing restoration
May 12, 2011 The Company By telephone with tradable
progress?
shares
How about the listing restoration
3 shareholders
progress? How about the joint
May 20, 2011 The Company By telephone with tradable
venture of Shanghai Electric and
shares
Alstom?
How about the Company’s business
2 shareholders
performance? How about the listing
May 31, 2011 The Company Field research with tradable
restoration progress? They also
shares
visited the factory.
2 shareholders
How about the listing restoration
Jun. 7, 2011 The Company By telephone with tradable
progress?
shares
2 shareholders
How about the listing restoration
Jun. 8, 2011 The Company By telephone with tradable
progress?
shares
2 shareholders
How about the listing restoration
Jun. 21, 2011 The Company By telephone with tradable
progress?
shares
How about the listing restoration
1 shareholder with progress? How about the joint
Jun. 23, 2011 The Company By telephone
tradable shares venture of Shanghai Electric and
Alstom?
III. The Company implemented neither profit distribution nor capitalization of public reserves in this
report period.
IV. Significant litigations and arbitrations occurred in this report period:
◆ Announcement on Progress of Significant Litigations and Arbitrations of Wuhan Boiler Company
Limited disclosed on Jan. 18, 2011, Announcement No. 2011-001
On Apr. 26, 2000, Shanxi Zhenxing Group Co., Ltd. (“Zhenxing Company”) signed the Contract of
2×200MW Pulverized Coal Boilers with the Company. During executing the Contract, the Company
delivered Unit 1 boiler to Zhenxing Company according to the Contract, but Zhenxing Company
defaulted on the payment of Unit 1 of RMB 47.97 million. Manufacture of Unit 2 boiler has been
suspended due to Zhenxing Company’s fault. The Company required Zhenxing Company to pay the
debt and settle the pending issues of the Contract many times through various ways (including phone,
41
fax and EMS), but didn’t get any reply. In Apr. 2010, the Company sued Zhenxing Company before
Shanxi High Court, requesting judgment against Zhenxing Company for paying overdue RMB 47.97
million and undertaking liquidated damages and bank interests RMB 22.047 million in total. The
Contract, meeting minutes, lawyer’s letters and other relevant evidences were submitted to the Court.
On Jul. 2, 2010, the first hearing of the case was held, during which the defendant Zhenxing Company
raised the challenge of jurisdiction against Shanxi High Court. The court delivered a ruling on the
jurisdiction and dismissal of the Company’s complaint. After that, within the valid period, the
Company filed an appeal to the Supreme Court against Shanxi High Court’s ruling on the jurisdiction.
The Supreme Court will, upon trial, deliver the final ruling to the Company a few days later.
◆Announcement on Significant Litigations and Arbitrations of Wuhan Boiler Company Limited
disclosed on Apr. 13, 2011, Announcement No. 2011-006
On Jun. 26, 2007, the Company signed the Supply Contract No. 2007D012 of 4×1217T/H subcritical
pulverized coal boilers with Shandong Weiqiao Aluminum & Electricity Co., Ltd. (“Weiqiao”).
According to the Contract, Weiqiao should pay a total of RMB 51.60 million to the Company as
deposit by the end of Aug. 2007. But it only paid RMB 10 million in March 2008 and hasn’t paid up
all the prescribed deposit until now. Considering Weiqiao defaulted on the deposit for over three years
and breached the Contract seriously, the Company sued Weiqiao before Shandong High Court in Mar.
2011, requesting judgement that the Company should be entitled to forfeit the deposit of RMB 10
million paid by Weiqiao and Weiqiao should compensate the Company for its economic loss of RMB
67.40 million due to non-execution of the said Contract due to Weiqiao’s fault.
◆Announcement on Significant Litigations and Arbitrations of Wuhan Boiler Company Limited
disclosed on Jun. 30, 2011, Announcement No. 2011-023
Claimant: GSE China Limited (“GSE”)
Respondent: Wuhan Boiler Company Limited (“the Company”)
GSE claimed that:
On Oct. 18, 2007, as the general contractor, GSE signed two Contracts (No. WBC 2007 003A and No.
WBC 2007 004A) with the Company for the construction of the Company’s factory and office
buildings. GSE commenced the Project and timely completed the Project according to the Contracts,
51
but the Company defaulted to pay GSE the remaining payment of RMB 24,931,319.10 in total. GSE
considered such behavior a violation to the Contracts and submitted an Application for Arbitration to
China International Economic and Trade Arbitration Commission, requesting the Company to pay the
remaining payment under the Contracts, the interest, attorney fees and other relevant fees of RMB
31,593,783.15 in total.
The Company considered that:
Concerning the two Contracts No. WBC 2007 003A and No. WBC 2007 004A, the conditions for
making the remaining payment were not achieved, so the Company did not breach the Contracts.
Meanwhile, GSE disregarded the Company’s requirements of defects remedy, which should be
considered as a violation to the Contracts.
The Company will prepare well for the arbitration case.
V. In this report period, the Company had no significant assets purchase, assets sales or assets
disposal.
VI. Related transactions arising from routine production and operation in this report period:
(1) Related transactions on purchasing and selling goods and offering and receiving services:
Purchase and service received Unit: RMB
Related parties Details of Rule of June 30, 2011 June 30, 2010
transaction price
setting Amount Proportion Amount Proportion
% %
ALSTOM Power Systems Raw material Market 28,305,294.72 22.13
Gmbh purchase price
ALSTOM Power Systems Raw material Market 2,837,547.00 1.70 4,113,373.66 3.22
S.A Etablissement Boilers purchase price
ALSTOM s.r.o Raw material Market 182,087.76 0.11 1,639,123.51 1.28
purchase price
ALSTOM Technical Boiler parts Market 24,600,000.00 14.77
Services (Shanghai) Co., purchase price
Ltd.
ALSTOM s.r.o Fixed asset Market 303,013.75 20.65
down payment price
Wuhan Special Boiler Technology Market 2,649,300.00 62.18
Complete Equipment service fees price
Engineering Co.,Ltd
61
Related parties Details of Rule of June 30, 2011 June 30, 2010
transaction price
setting Amount Proportion Amount Proportion
% %
ALSTOM Power Service Technical Market 4,695,444.56 49.25
Gmbh service fees price
Wuhan Boiler (Group) Transport Market 4,985,600.00 64.51 7,073,356.62 98.74
Yuntong Co., Ltd service price
Sales and service provided Unit: RMB
Rule of June 30, 2011 June 30, 2010
Details of
Related parties price
transaction Amount proportion Amount proportion
setting
ALSTOM Power Systems Market
Sales 20,826,000.00 16.32%
S.A Etablissement Boilers price
ALSTOM Power System Market
Sales 6,580,775.58 5.16%
Gmbh price
(2) Other related transactions: Unit: RMB
Related parties Transactions Amount
ALSTOM (Switzerland) Ltd Windsor lab relocation 425,275.63
ALSTOM (Switzerland) Ltd IT service fees 1,839,330.35
ALSTOM Holdings Training fees 32,156.66
ALSTOM Power Inc. PMX support fees 1,243,445.58
ALSTOM Power Inc. Foreign consultant fees 547,972.10
ALSTOM Power Systems Gmbh Training fees 91,773.63
PT ALSTOM Power Energy Systems Indonesia Material sales 989,588.57
ALSTOM (Wuhan) Engineering & Technology
Service fees 1,224,759.00
Co., Ltd.
ALSTOM (Wuhan) Engineering & Technology
Leasing & service fees 1,753,437.44
Co., Ltd.
ALSTOM (China) Investment Co., Ltd. Training fees 152,333.00
ALSTOM (China) Investment Co., Ltd. ITSSC service fees 6,971,438.02
ALSTOM Beizhong Power (Beijing) Co.,Ltd EHS line verify fees 26,532.00
ALSTOM Beizhong Power (Beijing) Co.,Ltd Technical service fees 1,205,737.60
(3) Alstom (China) Investment Co., Ltd., the controlling shareholder of the Company, entrusted China
Construction Bank to provide a shareholder loan of RMB 1,325,000,000.00 to the Company at 10%
71
discount off the benchmark interest rate. The Company paid RMB 32,103,844.25 loan interest in this
report period.
VII. In this report period, the Company did not provide any significant guarantee.
VIII. In this report period, the Company did not sign or implement any significant contract.
IX. In this report period, the Company did not entrust any party for financial management.
X. Special explanations and independent opinions on the accumulated external guarantees and the
current period external guarantees given by the independent directors of the Company
Independent directors Mr. Yang Xiongsheng, Mr. André Chieng and Mr. Shen Weixing concluded that:
according to No.2003-56 Notice of CSRC and through our careful review, it was found that by the
end of this report period, the Company didn’t provide any guarantee for its controlling shareholder,
any other related parties that the Company held less than 50% shares, any non-legal person entities or
any individuals. And the Company had not been forced by its controlling shareholder or any other
related parties to provide guarantees for other parties. The risks of external guarantees were strictly
controlled by the Company.
XI. Capital occupied by the controlling shareholder and other related parties
Independent directors Mr. Yang Xiongsheng, Mr. André Chieng and Mr. Shen Weixing concluded that:
in this report period, the cash circulation between the Company and its controlling shareholder and
other related parties were regular cash flows for daily purchases and sales of goods. The Company
neither advanced salary, employee welfare, insurance fees or other periodic expenses for its
controlling shareholder and related parties, nor undertook costs and other expenses for its controlling
shareholder or other related parties.
XII. Neither the Company nor any shareholder holding more than 5% (including 5%) shares of the
Company had made any commitments in this report period or carried the commitments in previous
periods to this report period that might bring a significant influence on the operating results and
81
financial status of the Company.
XIII. The financial report of this report period has not been audited.
XIV. In this report period, the Company, the Board of Directors and all directors didn’t receive any
investigation, punishment or judicial enforcement measures from CSRC, other administrative organs,
judicial organs etc.
XV. Other significant events, as well as analysis and explanations on their impact and solutions
◆ Due to 2007, 2008 and 2009 three years’ consecutive losses, Shenzhen Stock Exchange decided to
suspend listing of the stocks of the Company since April 9, 2010 according to Article 14.1.1 and
Article 14.1.3 of Rules Governing the Listing of Stocks on Shenzhen Stock Exchange. The relevant
announcement was disclosed on Securities Times and Ta Kung Pao on Apr. 2, 2010, Announcement
No. 2010-017.
As audited and confirmed by Zhonghuan Certified Public Accountants Co., Ltd., the Company
achieved net profit attributable to its shareholders of RMB 8,535,924.33 for the year 2010 and was
issued a standard Auditor’s Report with unqualified opinion. On May 4, 2011, the Company
submitted the Application for Listing Restoration of Wuhan Boiler Company Limited and relevant
documents to Shenzhen Stock Exchange. And the Announcement on Submitting the Application for
Listing Restoration of Wuhan Boiler Company Limited to Shenzhen Stock Exchange was disclosed on
Securities Times and Ta Kung Pao on May 5, 2011, Announcement No. 2011-017.
On May 9, 2011, the Company received the Decision on Acceptance of the Application for Listing
Restoration of Wuhan Boiler Company Limited issued by Shenzhen Stock Exchange, which requested
the Company to provide more information. The Announcement of Shenzhen Stock Exchange
Accepting the Application for Listing Restoration of Wuhan Boiler Company Limited was disclosed on
Securities Times and Ta Kung Pao on May 11, 2011, Announcement No. 2011-020.
◆ Up to Aug. 30, 2011, the Company has not implemented any stock option incentive plan.
XVI. Index for other significant information
All the public announcements of the Company have been disclosed on Securities Times and Ta Kung
91
Pao, as well as the website http://www.cninfo.com.cn. For more detailed information, investors may
visit the website and input the Company’s stock code under the item of “Search for Information of
Particular Stock”.
1. On January 18, 2011, the Company disclosed the Announcement on Progress of Significant
Litigations and Arbitrations of Wuhan Boiler Company Limited;
2. On January 25, 2011, the Company disclosed the Announcement of Business Performance Forecast
for Year 2010 of Wuhan Boiler Company Limited;
3. On February 11, 2011, the Company disclosed the Announcement on Progress of Listing
Restoration of Wuhan Boiler Company Limited;
4. On March 3, 2011, the Company disclosed the Announcement on Progress of Listing Restoration of
Wuhan Boiler Company Limited;
5. On April 7, 2011, the Company disclosed the Announcement on Progress of Listing Restoration of
Wuhan Boiler Company Limited;
6. On April 13, 2011, the Company disclosed the Announcement on Significant Litigations and
Arbitrations of Wuhan Boiler Company Limited;
7. On April 14, 2011, the Company disclosed the Brief Announcement of Business Performance
Forecast for Year 2010 of Wuhan Boiler Company Limited and the Announcement of the Business
Performance Forecast for the First Quarter of 2011 of Wuhan Boiler Company Limited;
8. On April 22, 2011, the Company disclosed the Suggestive Announcement of the Board of Directors
of Wuhan Boiler Company Limited;
9. On April 29, 2011, the Company disclosed 2010 Annual Report and its Summary Report, the
Announcement of Resolutions of the 3rd Meeting of the 5th Board of Directors, the Announcement of
Resolutions of the 3rd Meeting of the 5th Board of Supervisors, the Announcement on Daily Execution
of 2010 Related Transactions and Estimation of 2011 Related Transactions, the Announcement of
Changing Accounting Estimate, and the Notice for Convening 2010 Annual Shareholders’ Meeting of
Wuhan Boiler Company Limited;
10. On April 30, 2011, the Company disclosed 2011 Quarterly One Report of Wuhan Boiler Company
Limited;
11. On May 5, 2011, the Company disclosed the Announcement on Submitting the Application for
Listing Restoration of Wuhan Boiler Company Limited to Shenzhen Stock Exchange;
02
12. On May 7, 2011, the Company disclosed the Announcement on Change of Company Name and
Office Address of the CPAs Firm and the Announcement on Progress of Listing Restoration of Wuhan
Boiler Company Limited;
13. On May 11, 2011, the Company disclosed the Announcement of Shenzhen Stock Exchange
Accepting the Application for Listing Restoration of Wuhan Boiler Company Limited;
14. On June 1, 2011, the Company disclosed the Announcement of Resolutions of 2010 Annual
Shareholders’ Meeting of Wuhan Boiler Company Limited;
15. On June 2, 2011, the Company disclosed the Announcement on Progress of Listing Restoration of
Wuhan Boiler Company Limited;
16. On June 30, 2011, the Company disclosed the Announcement on Significant Litigations and
Arbitrations of Wuhan Boiler Company Limited;
Section VI Financial Report (Unaudited)
I. Financial Statements and Notes (Please see the attachments)
Section VII Documents for Reference
I. Original copy of 2011 Interim Report with the signature of Chairman of the Board;
II. Accounting statements with the signatures and seals of the Legal Representative, Finance Director
and the person in charge of the accounting;
III. Original copies of all documents and announcements disclosed on newspapers and website
designated by CSRC;
IV. Other relevant documents.
Wuhan Boiler Company Limited
Chairman of the Board of Directors: YEUNG Kwok Wei Richard
August 26, 2011
12
WUHAN BOILER COMPANY LIMITED
INTERIM FINANCIAL REPORT 2011
(UN-AUDITED)
22
Consolidated Balance Sheet (Assets)
Consol. No.1
Wuhan Boiler Co., Ltd Currency： RMB
Assets Notes 30/Jun/11 31/Dec/10
Current assets
Cash and cash equivalents 5.1 13,923,639.28 13,974,304.97
Settlement fund
Outgoing call loan
Trading finanical assets
Notes receivable 5.2 43,164,000.00
Accounts receivable 5.3 471,470,877.60 364,514,763.75
Prepayment 5.5 183,955,427.35 111,894,344.81
Insurance receivables
Reinsurance Receivable
Provision of reinsurance contract reserve receivable
Interests receivable
Dividend receivable
Other receivables 5.4 124,787,151.67 136,383,710.94
Financial assets purchased under agreement to resell
Inventories 5.6 240,239,417.55 169,307,374.03
Non-current assets due within 1-year
Other current assets
Total current assets 1,034,376,513.45 839,238,498.50
Non-current assets ：
Loan and payment on other's behalf disbursed
Available-for-sale financial assets
Investment held to maturity
Long-term receivables
Long-term equity investment
Investment property
Fixed assets 5.7 763,878,682.65 776,284,766.29
Construction in progess 5.8 48,519,779.04 50,952,741.50
Engieering materials
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 5.9 53,842,628.90 57,323,977.87
R&D expenses
Goodwill
Long-term deferred expenses
Deferred tax assets 5.10 67,653,418.92 62,321,677.84
Other non-current assets 5.12 420,895.71
Total non-current assets 933,894,509.51 947,304,059.21
Total assets 1,968,271,022.96 1,786,542,557.71
Legal Representative: Chief Financial Official: Chief Accountant:
32
Consolidated Balance Sheet (Liabilities and Equity)
Consol. No.1
Wuhan Boiler Co., Ltd ：
Currency RMB
Liabilities and shareholder's equity Notes 30/Jun/11 31/Dec/10
：
Current liabilities
Short-term loans 5.13 1,325,000,000.00 1,152,000,000.00
Loans from central bank
Deposits received and hold for others
Call loan received
Held-for-trading financial liabilities
Notes payable 5.14 31,968,377.00 18,704,256.28
Accounts payable 5.15 397,935,537.80 315,446,635.93
Advance from customers 5.16 1,095,290,944.37 1,059,336,631.48
Financial assets sold under agreements to repurchase
Fees and commissions payable
Payroll payable 5.17 62,340,298.90 70,602,009.08
Taxes payable 5.18 -102,058,951.31 -88,432,481.81
Interests payable 5.19 2,003,697.50 2,003,046.13
Dividend payable 5.20 562,000.00 562,000.00
Other payables 5.21 92,302,698.95 85,685,084.50
Amount due to reinsurance
Insurance contract provision
Entrusted trading of sesurities
Entrusted selling of securities
Non-current liabilities due within 1-year
Other current liabilities
：
Total current liabilities 2,905,344,603.21 2,615,907,181.59
Non-current liabilities ：
Long-term loans
Bonds payable
Long-term payables
Specific payables
Provision for liabilities 5.22 50,295,655.52 50,387,210.32
Deferred taxes liabilities
Other non-current liabilities 5.23 14,279,004.46 3,291,690.22
Total non-current liabilities： 64,574,659.98 53,678,900.54
Total liabilities 2,969,919,263.19 2,669,586,082.13
Shareholders' Equity ：
Share capital 5.24 297,000,000.00 297,000,000.00
Capital surplus 5.25 174,659,407.46 174,659,407.46
：
Less Treasury Stock
Special reserve funds
Surplus reserve 5.26 39,418,356.83 39,418,356.83
General risk provision
Retained earnings 5.27 -1,515,052,163.78 -1,396,503,437.13
Foreign exchange difference
Total shareholders' equity attributable to shareholders of the Company -1,003,974,399.49 -885,425,672.84
Minority interest 2,326,159.26 2,382,148.42
Total shareholders' equity -1,001,648,240.23 -883,043,524.42
Total liabilities & shareholders' equity 1,968,271,022.96 1,786,542,557.71
Legal Representative: Chief Financial Official: Chief Accountant:
42
Consolidated Income Statement
Consol. No.2
Wuhan Boiler Co., Ltd Currency RMB：
Items Notes Jan to June 2011 Jan to June 2010
I. Total revenue 248,332,052.00 127,644,108.77
Including: revenue 5.28 248,332,052.00 127,644,108.77
Interest income
Insurance fee income
Fee and commission income
II. Total cost of sales 360,781,143.47 199,623,917.21
Including: Cost of sales 5.28 277,531,191.13 149,229,413.16
Interest expenses
Service charge and commission income
Insurance discharge payment
Claim expenses-net
Provision for insurance contract reserve-net
Insurance policy dividend paid
Reinsurance expense
Business taxes and surcharges 5.30 126,648.93 206,343.38
Sales expenses 5.31 5,269,724.87 8,913,496.00
Administration expenses 5.32 16,311,884.19 29,214,942.15
Financial costs 5.33 31,503,275.97 44,988,222.08
Impairment loss 5.34 30,038,418.38 -32,928,499.56
Plus: gain/loss on change in fair value (“-”for loss) 5.35 -11,547,097.95 -771,454.05
gain/loss on investment(“-”for loss)
Including: income from investment on associates and jointly ventures
Gain or loss on foreign exchange difference (“-”for loss)
III. Operating profit(“-”for loss) -123,996,189.42 -72,751,262.49
Plus: non-operating income 5.36 173,611.26 1,350,258.54
Less: non-operating expense 5.37 113,878.73 427,615.32
Including: loss from disposal of non-current asset 113,878.73 69,846.84
IV. Total profit(“-”for loss) -123,936,456.89 -71,828,619.27
Less: income tax expense 5.38 -5,331,741.08 10,796,697.11
V. Net profit(“-”for loss) -118,604,715.81 -82,625,316.38
including: net profit gained by combined company before combination
Including:Attributable to equity holders of the parent company -118,548,726.65 -82,367,208.64
Minority interest -55,989.16 -258,107.74
VI. Earnings per share
￥
(I) basic earnings per share ( /share) 5.39 -0.40 -0.28
￥
(II) diluted earnings per share ( /share) 5.39 -0.40 -0.28
Ⅶ Other Comprehensive Income
Ⅷ Total Comprehensive Income -118,604,715.81 -82,625,316.38
including: parent company's total comprehensive Income -118,548,726.65 -82,367,208.64
including: Minority's total comprehensive Income -55,989.16 -258,107.74
Legal Representative: Chief Financial Official: Chief Accountant:
52
Consoliated Cashflow Statement
Consol. No. 3
Wuhan Boiler Co., Ltd ：
Currency RMB
Items Notes Jan to June 2011 Jan to June 2010
1. Cash flows from operating activities
Cash received from sales of goods or rending of services 147,700,506.03 1,348,714,022.30
Net increase of deposits received and held for others
Net increase of loans from central bank
Net increase of inter-bank loans from other financial assets
Cash received against original insurance contract
Net Cash received from reinsurance
Net increase of client deposit and investment
Cash received from disposal of held-for-trading financial assets
Cash received as Interests, fees and commissions received
Net increase of inter-bank fund received
Cash received under repurchasing, net
Tax returned 7,413,566.82
Other cash received from operating activities 5.40 32,632.99 652,292.55
Sub-total of cash inflows from operating activities 147,733,139.02 1,356,779,881.67
Cash paid for goods and services 163,374,505.77 293,779,774.52
Net increase of loans and advances
Net increase of deposit in central bank,banks and other financial institutions
Cash paid for original contract claim
Cash paid for interests, fees and commission
Cash paid for policy dividend
Cash paid to and for employees 76,022,293.85 75,127,219.55
Cash paid for all types of taxes 4,721,188.75 5,720,366.71
Other cash paid relating to operating activities 5.40 36,495,012.58 36,342,677.22
Sub-total of cash outflows from operating activities 280,613,000.95 410,970,038.00
Net cash flow from operating activities -132,879,861.93 945,809,843.67
2. Cash Flows from Investing Activities
Cash received from return on investments
Cash received from investment income
Net cash received from disposal of fixed assets, intangible assets and other long-term assets 5,660.00 1,873,243.00
Net cash received from disposal of subsidiaries and other operating units
Other cash received relating to investing activities 5.40 950,669.73 10,426,483.13
Sub-total of cash inflows from investing activities 956,329.73 12,299,726.13
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets 8,468,737.97 73,853,620.49
Cash paid for acquisition of investments
Net increase of pledged loans
Net cash paid for acquisition of subsidiaries and other operating units
Other cash paid relating to investing activities 5.40 155,198.50 388,601.66
Sub-total of cash outflows from investing activities 8,623,936.47 74,242,222.15
Net cash flow from investing activities -7,667,606.74 -61,942,496.02
3. Cash Flows from Financing Activities:
Cash received from investment
Including: Cash received from minority shareholders of subsidiaries
Cash received from borrowings 340,000,000.00 790,000,000.00
Cash received from bonds issuing
Cash received relating to financing activities
Sub-total of cash inflows from financing activities 340,000,000.00 790,000,000.00
Cash paid for repayments of borrowings 167,000,000.00 1,636,000,000.00
Cash paid for dividends, profit distribution or interest 32,103,844.25 46,468,172.50
Including: dividends or profits paid to minority shareholders by subsidiaries
Other cash paid relating to financing activities
Sub-total of cash outflows from financing activities 199,103,844.25 1,682,468,172.50
Net cash flow from financing activities 140,896,155.75 -892,468,172.50
4. Effect of foreign exchange rate changes -399,402.47 -2,400,814.38
5. Net increase in cash and cash equivalents -50,715.39 -11,001,639.23
Add : Cash and cash equivalents at the beginning of the period 5.41 10,491,275.05 27,114,305.92
6. Cash and cash equivalents at the end of the period 5.41 10,440,559.66 16,112,666.69
Legal Representative: Chief Financial Official: Chief Accountant:
62
Consolidated Statement of Change in Equity
Consol. No. 4
Wuhan Boiler Co., Ltd Currency RMB
：
2011 June 30
Shareholders' equity belonged to shareholders' of the Company
Items Less: Special General Minority
Total
Share capital Capital reserve Treasury reserve Surplus reserve Risk Retained earnings others interest
stock fund provision
I. Balance at 31 December, 2010 297,000,000.00 174,659,407.46 39,418,356.83 -1,396,503,437.13 2,382,148.42 -883,043,524.42
Change in accounting policies
Correction of errors in previous period
Others
II. Balance at 1 January, 2011 297,000,000.00 174,659,407.46 39,418,356.83 -1,396,503,437.13 2,382,148.42 -883,043,524.42
III. Increase/ decrease during the financial year (“-”for loss) -118,548,726.65 -55,989.16 -118,604,715.81
(I) Net profit -118,548,726.65 -55,989.16 -118,604,715.81
(II) Other comprehensive income
Subtotal of (I)and (II) -118,548,726.65 -55,989.16 -118,604,715.81
(III) Contributions and decrease of capital
1. Contributions by shareholders
2. Equity settled share-based payment
3. Others
(IV) Profit distribution
1. Surplus reserve accrued
2. General risk provision accrued
3. Distribution to shareholders
4. Others
(V) Transfer within shareholders' equity
1. Captial reserve transferred to capital (share capital)
2. Surplus reserve transferred to capital (share capital)
3. Surplus reserve offsetting losses
4. Others
( )special reserve fund
Ⅵ
1. Increase
2. Decrease
IV. Balance at 30 June, 2011 297,000,000.00 174,659,407.46 39,418,356.83 -1,515,052,163.78 2,326,159.26 -1,001,648,240.23
Legal Representative: Chief Financial Official: Chief Accountant:
72
Consolidated Statement of Change in Equity
Consol. No. 4
Wuhan Boiler Co., Ltd ：
Currency RMB
2010 December 31
Shareholders' equity belonged to shareholders' of the Company
Items Less: Special General Minority
Total
Share capital Capital reserve Treasury reserve Surplus reserve Risk Retained earnings others interest
stock fund provision
I. Balance at 31 December, 2009 297,000,000.00 174,659,407.46 39,418,356.83 -1,405,039,361.46 2,680,026.19 -891,281,570.98
Plus: Change in accounting policies
Correction of errors in previous period
Others
II. Balance at 1 January, 2010 297,000,000.00 174,659,407.46 39,418,356.83 -1,405,039,361.46 2,680,026.19 -891,281,570.98
III. Increase/ decrease during the financial year (“-”for loss) 8,535,924.33 -297,877.77 8,238,046.56
(I) Net profit 8,535,924.33 -297,877.77 8,238,046.56
(II) Other comprehensive income
Subtotal of (I)and (II) 8,535,924.33 -297,877.77 8,238,046.56
(III) Contributions and decrease of capital
1. Contributions by shareholders
2. Equity settled share-based payment
3. Others
(IV) Profit distribution
1. Surplus reserve accrued
2. General risk provision accrued
3. Distribution to shareholders
4. Others
(V) Transfer within shareholders' equity
1. Captial reserve transferred to capital (share capital)
2. Surplus reserve transferred to capital (share capital)
3. Surplus reserve offsetting losses
4. Others
Ⅵ
( )special reserve fund
1. Increase
2. Decrease
IV. Balance at 31 December, 2010 297,000,000.00 174,659,407.46 39,418,356.83 -1,396,503,437.13 2,382,148.42 -883,043,524.42
Legal Representative: Chief Financial Official: Chief Accountant:
82
Balance Sheet (Assets)
Company. No.1
Wuhan Boiler Co., Ltd Currency RMB
：
Assets Notes 30/Jun/11 31/Dec/10
Current assets
Cash and cash equivalents 12,500,335.40 13,310,174.46
Trading finanical assets
Notes receivable 42,164,000.00
Accounts receivable 1.11 467,926,549.17 358,592,870.99
Prepayment 183,955,427.35 111,894,344.81
Interest receivables
Dividend receivables
Other receivables 2.11 124,989,779.89 136,373,830.94
Inventories 240,239,417.55 169,307,374.03
Non-current assets due within 1-year
Other current assets
Total current assets 1,029,611,509.36 831,642,595.23
Non-current assets ：
Available-for-sale financial assets
Investment held to maturity
Long-term receivables
Long-term equity investment 3.11 39,234,287.13 39,234,287.13
Investment property
Fixed assets 764,035,659.64 776,441,743.28
Construction in progess 48,519,779.04 50,952,741.50
Engieering materials
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 53,842,628.90 57,323,977.87
R&D expenses
Goodwill
Long-term deferred expenses
Deferred tax 67,653,418.92 62,321,677.84
Other non-current assets 420,895.71
Total non-current assets 973,285,773.63 986,695,323.33
Total assets 2,002,897,282.99 1,818,337,918.56
Legal Representative: Chief Financial Official: Chief Accountant:
92
Balance Sheet (Liabilities and Equity)
Company. No.1
Wuhan Boiler Co., Ltd Currency RMB
：
Liabilities and shareholder's equity Notes 30/Jun/11 31/Dec/10
Current liabilities ：
Short-term loan 1,325,000,000.00 1,152,000,000.00
Held-for-trading financial liabilities
Notes payable 31,968,377.00 18,704,256.28
Accounts payable 402,881,201.57 320,392,299.70
Advance from customers 1,095,290,944.37 1,059,336,631.48
Payroll payable 62,139,659.36 70,401,369.54
Taxes payable -102,058,951.31 -88,432,481.81
Interests payable 2,003,697.50 2,003,046.13
Dividend payables
Other payables 129,346,225.73 119,817,611.28
Non-current liabilities due within 1-year
Other current liabilities
Total current liabilities： 2,946,571,154.22 2,654,222,732.60
Non-current liabilities ：
Long-term loans
Bonds payable
Long-term payables
Specific payables
Provision for liabilities 50,295,655.52 50,387,210.32
Deferred taxes liabilities
Other non-current liabilities 14,279,004.46 3,291,690.22
Total non-current liabilities ： 64,574,659.98 53,678,900.54
Total liabilities 3,011,145,814.20 2,707,901,633.14
Shareholders' Equity ：
Share capital 297,000,000.00 297,000,000.00
Capital surplus 174,854,304.12 174,854,304.12
Less Treasury Stock
：
special reserve fund
Surplus reserve 39,418,356.83 39,418,356.83
Generic Risk Reserve
Retained earning -1,519,521,192.16 -1,400,836,375.53
Total shareholders' equity: -1,008,248,531.21 -889,563,714.58
Total liabilities and shareholders' equity: 2,002,897,282.99 1,818,337,918.56
Legal Representative: Chief Financial Official: Chief Accountant:
03
Income Statement
Company. No.2
Wuhan Boiler Co., Ltd Currency RMB：
Items Notes Jan to June 2011 Jan to June 2010
I. Total revenue 11.4 248,332,052.00 127,644,108.77
Less cost of sales
： 11.4 277,531,191.13 149,229,413.16
Business taxes and surcharges 126,648.93 188,145.67
Sales expenses 5,269,724.87 8,913,496.00
Administration expenses 16,311,271.39 28,092,723.70
Financial costs 31,503,921.68 44,988,653.92
Impairment loss 30,118,486.29 -33,736,098.25
Plus: gain/loss on change in fair value (“-”for loss) -11,547,097.95 -771,454.05
gain/loss on investment(“-”for loss)
Including: income from investment on associates and jointly ventures
Ⅱ. Operating profit(“-”for loss) -124,076,290.24 -70,803,679.48
Plus: non-operating income 173,611.26 1,260,259.40
Less: non-operating expense 113,878.73 329,660.00
Including: loss from disposal of non-current asset
Ⅲ. Total profit(“-”for loss) -124,016,557.71 -69,873,080.08
Less: income tax expense -5,331,741.08 10,796,697.11
Ⅳ. Net profit(“-”for loss) -118,684,816.63 -80,669,777.19
Ⅴ. Earnings per share
(I) basic earnings per share ( /share)
￥ -0.40 -0.27
(II) diluted earnings per share ( /share)
￥ -0.40 -0.27
Other comprehensive income
Total comprehensive income -118,684,816.63 -80,669,777.19
Legal Representative: Chief Financial Official: Chief Accountant:
13
Cashflow Statement
Company. No. 3
Wuhan Boiler Co., Ltd Currency RMB
：
Items Notes Jan to June 2011 Jan to June 2010
1. Cash flows from Operating activities
Cash received from sales of goods or rending of services 147,161,671.29 1,348,714,022.30
Tax returned - 7,413,566.82
Other cash received from operating activities 443,632.99 601,863.30
Sub-total of cash inflows from operating activities 147,605,304.28 1,356,729,452.42
Cash paid for goods and services 162,962,652.97 294,958,236.92
Cash paid to and for employees 76,022,293.85 74,042,233.14
Cash paid for all types of taxes 4,721,188.75 5,389,519.06
Other cash paid relating to operating activities 37,537,318.30 36,234,188.60
Sub-total of cash outflows from operating activities 281,243,453.87 410,624,177.72
Net cash flow from operating activities -133,638,149.59 946,105,274.70
2. Cash Flows from Investing Activities
Cash received from return on investments
Cash received from investment income
Net cash received from disposal of fixed assets, intangible assets and other long-term assets 5,660.00 1,663,243.00
Net cash received from disposal of subsidiaries and other operating units
Other cash received relating to investing activities 949,601.02 10,426,295.05
Sub-total of cash inflows from investing activities 955,261.02 12,089,538.05
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets 8,468,737.97 74,019,785.49
Cash paid for acquisition of investments
Net cash paid for acquisition of subsidiaries and other operating units
Other cash paid relating to investing activities 155,015.50 387,905.16
Sub-total of cash outflows from investing activities 8,623,753.47 74,407,690.65
Net cash flow from investing activities -7,668,492.45 -62,318,152.60
3. Cash Flows from Financing Activities:
Cash received from investment
Cash received from borrowings 340,000,000.00 790,000,000.00
Cash received relating to financing activities
Sub-total of cash inflows from financing activities 340,000,000.00 790,000,000.00
Cash paid for repayments of borrowings 167,000,000.00 1,636,000,000.00
Cash paid for dividends, profit distribution or interest 32,103,844.25 46,468,172.50
Other cash payments relating to financing activities
Sub-total of cash outflows from financing activities 199,103,844.25 1,682,468,172.50
Net cash flow from financing activities 140,896,155.75 -892,468,172.50
4. Effect of foreign exchange rate changes -399,402.47 -2,400,814.38
5. Net increase in cash and cash equivalents 11.5 -809,888.76 -11,081,864.78
Add : Cash and cash equivalents at the beginning of the period 11.5 9,827,144.54 26,057,612.46
6. Cash and cash equivalents at the end of the period 11.5 9,017,255.78 14,975,747.68
Legal Representative: Chief Financial Official: Chief Accountant:
23
Statement of Change in Equity
Company. No. 4
Wuhan Boiler Co., Ltd ：
Currency RMB
2011 June 30
Items Less: Special reserve General Risk
Share capital Capital reserve Surplus reserve Retained earnings Total
Treasury stock fund provision
I. Balance at 31 December, 2010 297,000,000.00 174,854,304.12 39,418,356.83 -1,400,836,375.53 -889,563,714.58
Change in accounting policies
Correction of errors in previous period
Others
II. Balance at 1 January, 2011 297,000,000.00 174,854,304.12 39,418,356.83 -1,400,836,375.53 -889,563,714.58
III. Increase/ decrease during the financial year (“-”for loss) -118,684,816.63 -118,684,816.63
(I) Net profit -118,684,816.63 -118,684,816.63
(II) Other comprehensive income
Subtotal of (I)and (II) -118,684,816.63 -118,684,816.63
(III) Contributions and decrease of capital
1. Contributions by shareholders
2. Equity settled share-based payment
3. Others
(IV) Profit distribution
1. Surplus reserve accrued
2. General risk provision accrued
3. Distribution to shareholders
4. Others
(V) Transfer within shareholders' equity
1. Captial reserve transferred to capital (share capital)
2. Surplus reserve transferred to capital (share capital)
3. Surplus reserve offsetting losses
4. Others
Ⅵ
( )special reserve fund
1. Increase
2. Decrease
IV. Balance at 30 June, 2011 297,000,000.00 174,854,304.12 39,418,356.83 -1,519,521,192.16 -1,008,248,531.21
Legal Representative: Chief Financial Official: Chief Accountant:
33
Statement of Change in Equity
Company. No. 4
Wuhan Boiler Co., Ltd ：
Currency RMB
2010 December 31
Items Less: Special reserve General Risk
Share capital Capital reserve Surplus reserve Retained earnings Total
Treasury stock fund provision
I. Balance at 31 December, 2009 297,000,000.00 174,854,304.12 39,418,356.83 -1,411,643,073.43 -900,370,412.48
Plus: Change in accounting policies
Correction of errors in previous period
Others
II. Balance at 1 January, 2010 297,000,000.00 174,854,304.12 39,418,356.83 -1,411,643,073.43 -900,370,412.48
III. Increase/ decrease during the financial year (“-”for loss) 10,806,697.90 10,806,697.90
(I) Net profit 10,806,697.90 10,806,697.90
(II) Other comprehensive income
Subtotal of (I)and (II) 10,806,697.90 10,806,697.90
(III) Contributions and decrease of capital
1. Contributions by shareholders
2. Equity settled share-based payment
3. Others
(IV) Profit distribution
1. Surplus reserve accrued
2. General risk provision accrued
3. Distribution to shareholders
4. Others
(V) Transfer within shareholders' equity
1. Captial reserve transferred to capital (share capital)
2. Surplus reserve transferred to capital (share capital)
3. Surplus reserve offsetting losses
4. Others
Ⅵ
( )special reserve fund
1. Increase
2. Decrease
IV. Balance at 31 December, 2010 297,000,000.00 174,854,304.12 39,418,356.83 -1,400,836,375.53 -889,563,714.58
Legal Representative: Chief Financial Official: Chief Accountant:
43
NOTES TO THE FINANCIAL STATEMENTS
As of June 30, 2011
Important Notes:
This report has been prepared in Chinese version and English version respectively. In the event of
difference in interpretation between the two versions, the Chinese report shall prevail.
Note 1 Description of business
Wuhan Boiler Co., Ltd (the “Company”) was established by Wuhan Boiler (Group) Co., Ltd (the
“Group”) with the exclusive operating assets of boiler manufacturing in September 1997 and
listed in B share market in April 1998. The share capital of the Company is 297,000,000 shares.
The “Group” holds 172,000,000 shares accounting for 57.91% shareholding and the public
shareholding (Domestically listed share in foreign currency) is 125,000,000 shares accounting for
42.09% shareholding. The Company's B-shares listed in the Shenzhen Stock Exchange. The
Company obtained the corporate business license documented as Qi Gu Er Zong Fu Zi No.002591
on November 16, 1998. The Group transferred its 51% shareholding of Wuhan Boiler Co., Ltd to
Alstom (China) Investment Co., Ltd in 2007 with approval of State-owned Assets Supervision and
Administration Commission of the State Council. The share transfer procedures were completed in
August 2007. Alstom (China) Investment Co., Ltd holds 151,470,000 shares accounting for 51%
shareholding; Wuhan Boiler (Group) Co., Ltd holds 20,530,000 shares accounting for 6.91%
shareholding and public tradable shares is 125,000,000 accounting for 42.09% shareholding as at
June 30, 2011.
1. The register capital of the Company is 297,000,000.00.
2. LiuFangYuan Road Te No.1, Donghu New Technology Development Zone, Wuhan city,
Hubei Province
3. Business scope of the Company is researching, designing, developing and manufacturing of
types I, II, III pressure vessels, power station boilers, special boilers, auxiliary boilers,
desulfurization equipments and so on. The Company is a big boiler manufacturing enterprise and
the main operating activities are in China. The major customer markets of the Company are
various power plants and power stations. Certain products are auxiliary equipments and pressure
vessels target refineries and chemical enterprises. The Company produces three categories
53
products: power station boilers, special boilers and other products. Power station boils are used in
power stations. Special boilers are designed and manufactured according to customers’ profit and
loss balance combustion technology or specific requirement of fuel, which is energy saving and
environment friendly. The special boilers include alkali recovery boilers, circulating fluidized bed
boilers, bagasse-fired boilers, the stand vertical-burning boilers, liquid slag-off boilers, waste heat
boilers and so on.
4. Parent company of the Company is Alstom (China) Investment Co., Ltd. The parent company
of Alstom (China) Investment Co., Ltd.is ALSTOM Holdings.
5. These financial statements were authorised for issue in accordance with the resolution of the
5th section of the 5th Meeting of Board of Director on August 26, 2011.
Note 2 Note 2 Main accounting policies and estimates
1. Basic of preparation of financial statements
The financial statements have been prepared on the basic assumption of going concern and on the
accrual basis of accounting. The effects of evens and other transactions actually occurred and they
have been recorded and measured in accordance with the Chinese Accounting Standards (2006):
Framework and other accounting standards.
2. Declaration of following the accounting standard
The financial statements prepared by the Company are truly and completely reflect the financial
position, operation result and cash flow of the Company.
3. Fiscal year
The accounting period of the Group is from January 1 to December 31 of the Gregorian calendar.
4. Monetary unit
Renminbi (RMB) is used as the accounting standard currency.
5. Accounting method of business combination under the same control and not under the same
63
control
(1) The Company adopts equity method for business combination under same control. The assets
and liabilities that the combining party obtained in a business combination shall be measured on
their carrying amount in the combined party on the combining date. The difference between the
carrying amount of net assets acquired by the combining party and the carrying amount of the
consideration paid by it (or the total par value of the shares issued) shall be adjusted to capital
surplus. If the capital surplus is not sufficient for adjustment, retained earning is adjusted
respectively. The business combination costs that are directly attributable to the combination, such
as audit fees, valuation fees, legal service fees and so on are recognized in profit or loss during the
current period when they occurred. The bonds issued for a business combination or the handling
fees, commissions and other expenses for bearing other liabilities shall be recorded in the amount
of initial measurement of the bonds or other debts. The handling fees, commissions and other
expenses for the issuance of equity securities for the business combination shall be credited
against the surplus of equity securities; if the surplus is not sufficient, the retained earnings shall
be offset. Where a relationship between a parent company and a subsidiary company is formed
due to a business combination, the parent company shall, on the combining date, prepare
consolidated financial statements according to the accounting policy of the Company.
(2) The Company adopts acquisition method for business combination not under same control.
The acquirer shall recognize the initial cost of combination under the following principles:
a) When business combination is achieved through a single exchange transaction, the cost of a
business combination is the aggregate of the fair values, at the date of exchange, of assets given,
liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange for
control of the acquiree;
b) For the business combination involved more than one exchange transactions, equity
investment in acquiree held by acquirer before the acquisition date shall be disclosed differently in
separate and consolidated financial statements:
i. On separate financial statements, both carrying amount of equity investment in acquiree held
by acquirer before the acquisition date and the increase in the cost of equity investment on
that date, shall be included in the initial investment costs; on disposal of the equity investment,
any related other comprehensive income(e.g. available-for-sale financial assets at fair value
73
through capital reserve), shall be transferred to investment income in the period, if equity
investment in acquiree held by acquirer before the acquisition date involves other
comprehensive income.
ii. On consolidated financial statements, equity investment in acquiree held by acquirer before
the acquisition date, shall be revalued at fair value on that date, and the difference shall be
included in investment income in the period; any related other comprehensive income shall be
transferred to investment income in the period on the acquisition date, if equity investment in
acquiree held by acquirer before the acquisition date involves other comprehensive income.
Moreover, the acquirer shall disclose the fair value of this equity investment on the acquisition
date and related profit or loss recognized from the revaluation in the notes.
c) The business combination costs that are directly attributable to the combination, such as audit
fees, valuation fees, legal service fees and other administration cost should be recognized in profit
or loss during the current period when they occurred; commissions and other expenses for the
issuance of equity or debt securities for the business combination, shall be recognized as the initial
recognition amounts of equity or debt securities
d) Where a business combination contract or agreement provides for a future event which may
adjust the cost of combination, the Company shall include the amount of the adjustment in the cost
of the combination at the acquisition date if the future event leading to the adjustment is probable
and the amount of the adjustment can be measured reliably.
The acquirer shall, on the acquisition date, measure the assets given and liabilities incurred or
assumed by an enterprise for a business combination in light of their fair value, and shall record
the balances between them and their carrying amounts into the profits and losses at the current
period.
The acquirer shall distribute the combination costs on the acquisition date, and shall recognize all
identifiable assets, liabilities and contingent liabilities it obtains from the acquiree. (1) the acquirer
shall recognize the difference that the combination costs are over the fair value of the identifiable
net assets obtained from acquiree as goodwill; (2) if the combination costs are less than the fair
value of the identifiable net assets obtained from acquiree, the acquirer shall reexamine the
83
measurement of the fair values of the identifiable assets, liabilities and contingent liabilities
obtained from the acquiree as well as the combination costs; and then after the reexamination, the
result is still the same, the difference shall be recorded in the profit and loss of the current period.
Where a relationship between a parent company and a subsidiary company is formed due to a
business combination, the parent company shall prepare accounting books for future reference,
which shall record the fair value of the identifiable assets, liabilities and contingent liabilities
obtained from the subsidiary company on the acquisition date. When preparing consolidated
financial statements, it shall adjust the financial statements of the subsidiary company on the basis
of the fair values of the identifiable assets, liabilities and contingent liabilities determined on the
acquisition date according to the Company’s accounting policy of “Consolidated financial
statement”.
6. Basis of consolidation
(1) Scope of consolidation
Consolidated financial statements are included all subsidiaries of the parent.
When the parent owns, directly or indirectly through subsidiaries, more than half of the voting
power of investee company, the investee company is regarding as subsidiary and included
consolidated financial statements. If the parent owns half or less of the voting power of an entity
when there is any following condition incurred, the investee company is regarding as subsidiary
and included consolidated financial statements.
A. power over more than half of the voting rights by virtue of an agreement with other investors;
B. power to govern the financial and operating policies of the entity under a statute or an
agreement;
C. power to appoint or remove the majority of the members of the board of directors or
equivalent governing body;
D. power to cast the majority of votes at meetings of the board of directors or equivalent
governing body and control of the entity is by that board or body.
If there is evidence suggesting that no control of investee company exists, the investee company
93
cannot be included in the consolidated financial statements.
(2) Principle of consolidation
The consolidated financial statements are based on the financial statements of individual
subsidiaries which are included in the consolidation scope and prepared after adjustment of
long-term equity investment under equity method and elimination effect of intragroup transaction.
(3) Minority interests
The portion of the equity of the subsidiaries that are not owned by the parent is presented as
minority interest in the consolidated balance sheet.
The portion of the profit or loss of the subsidiaries that are not owned by the parent is presented as
minority interest in the consolidated income statement.
(4) Excess losses
In the consolidated financial statement, when the proportion of minority’s obligation for the
current subsidiaries’ losses exceeds the equity hold by theses minority shareholder, the excess
amount should still offset minority’s interest.
(5) Increase or decrease of the subsidiaries
For any subsidiary acquired by the Company through business combination under the same
control, when the consolidated balance sheet for the current period is being prepared, the
beginning balances in the consolidated balance sheet are made corresponding modification. For
addition business combination not under same control during the reporting period, the Company
makes no adjustment for the beginning balances in the consolidated balance sheet. When
disposing subsidiary during the reporting period, the Company makes no adjustment for the
beginning balances in the consolidated balance sheet.
For any subsidiary acquired by the Company through business combination under the same
control, when the consolidated income statement for the current period is being prepared, sales,
expense and profit for the period from the beginning of the consolidated period to the year end of
the reporting period are included in the consolidated income statement. For addition business
04
combination not under same control during the reporting period, revenue, expense and profit for
the period from acquisition date to the year end of the reporting period is included in the
consolidated income statement. When disposing subsidiary during the reporting period, sales,
expense and profit for the period from the beginning to the disposal date are included in the
consolidated income statement.
For any subsidiary acquired by the Company through business combination under the same
control, when the consolidated cash flow statement for the current period is being prepared,
cashflow for the period from the beginning of the consolidated period to the year end of the
reporting period is included in the consolidated cash flow statement. For addition business
combination not under same control during the reporting period, cashflow for the period from
acquisition date to the year end of the reporting period is included in the consolidated cash flow
statement. When disposing subsidiary during the reporting period, cashflow for the period from
the beginning to the disposal date is included in the consolidated cash flow statement.
7. Cash and cash equivalent
Cash equivalent is defined as the short-term (normally matured within three months after
purchased date), highly-liquid investment which is easily transferred into cash and has low risk of
change of value.
8. Foreign currency translations
Any transaction is converted into the accounting standard currency according to the approximate
exchange rate of the sight rate on the occurrence date of the transaction.
(1) Foreign currency exchange difference
On balance sheet date, the Company accounts for monetary and non-monetary items denominated
in foreign currencies as follows: a) monetary items denominated in foreign currencies are
translated at the foreign exchange rates ruling at the balance sheet date. Foreign exchange gains
and losses arising from the difference between the balance sheet date exchange rate and the
exchange rate ruling at the time of initial recognition or the exchange rate ruling at the last balance
14
sheet date are recognized in income statement; b) Non-monetary items that are measured in terms
of historical cost in a foreign currency are translated using the current exchange rates ruling at the
transaction dates. Non-monetary items denominated in foreign currencies that are stated at fair
value are translated using the current exchange rates ruling at the dates the fair value was
determined, the difference between the amount of functional currency after translation and the
original amount of functional currency is treated as part of change in fair value (including change
in exchange rate) and recognized in income statement. During the capitalization period, exchange
differences arising from foreign currency borrowings are capitalized as part of the cost of the
capitalized assets.
(2) Translations of financial statements in foreign currencies
The Company translates the financial statements of its foreign operation in accordance with the
following provisions: a) the asset and liability items in the balance sheets shall be translated at a
spot exchange rate ruling at the balance sheet date. Among the owner's equity items, except the
ones as "retained earnings", others shall be translated at the spot exchange rate ruling at the time
when they occurred;. b) The income and expense items in the income statements shall be
translated with approximate exchange rate of the sight rate on the transaction occurring date. The
foreign exchange difference arisen from the translation of foreign currency financial statements
shall be presented separately under the owner's equity in the balance sheet. The translation of
comparative financial statements shall be subject to the aforesaid provisions.
9. Recognition and measurement of financial instrument
(1) Recognition of financial instrument
The Company recognises a financial asset or financial liability on its balance sheet when, and only
when, the Company becomes a contractual party of financial instrument
(2) Classification and measurement of financial assets
① The Company classifies the financial assets into the following four categories: a) financial
assets at fair value through profit or loss; b) held-to-maturity investments; c) loans and receivables;
and d) available-for-sale financial assets.
② The financial assets are initially recognised at fair value. Gains or losses arising from a
24
change in the fair value of a financial asset at fair value through profit or loss is recognised in
profit or loss when it incurred and relevant transaction costs are recognised as expense when it
incurred. For other financial assets, the transaction costs are recognised as costs of the financial
assets.
③ Measurement of financial assets
A. A financial asset at fair value through profit or loss includes financial assets held for trading
and financial assets designated by the Company as at fair value through profit or loss. The
Company subsequently measures the financial asset at fair value through profit or loss at fair value
and recognises the gain or loss arising from a change in the fair value of a financial asset at fair
value through profit or loss as profit or loss in the current period.
B. Held-to-maturity investments are measured at amortised cost using the effective interest
method. A gain or loss is recognised in profit or loss during the current period when the financial
asset is derecognized or impaired and through the amortisation process.
C. Loans and receivables are measured at amortised cost using the effective interest method. A
gain or loss is recognised in profit or loss during the current period when the financial asset is
derecognized or impaired and through the amortisation process.
D. Available-for-sale financial assets are measured at fair value and the gain or loss arising from a
change in the fair value of available-for-sale financial assets is recognised as capital reserve which
is transferred into profit or loss when it is impaired or derecognised. Interests or cash dividends
during the holding period are recognised in profit or loss for the current period.
④ Impairment of financial assets
A. The Company assesses the carrying amount of the financial assets except the financial asset
at fair value through profit or loss at each balance sheet date, if there is any objective evidence that
a financial asset or group of financial assets is impaired, the Company shall recognize impairment
loss.
B. The objective evidences that the Company uses to determine the impairment are as follows:
）
a significant financial difficulty of the issuer or obligor;
b） a breach of contract, such as a default or delinquency in interest or principal payments;
）
c the lender, for economic or legal reasons relating to the borrower's financial difficulty, granting
34
to the borrower a concession that the lender would not otherwise consider;
）
d it becoming probable that the borrower will enter bankruptcy or other financial reorganisation;
）
e the disappearance of an active market for that financial asset because of financial difficulties;
）
f observable data indicating that there is a measurable decrease in the estimated future cash flows
from a group of financial assets since the initial recognition of those assets, although the decrease
cannot yet be identified with the individual financial assets in the group, including: (i) Adverse
changes in the payment status of borrowers in the group or (ii) an increase in the unemployment
rate in the geographical area of the borrowers, a decrease in property prices for mortgages in the
relevant area, or adverse changes in industry conditions that affect the borrowers.
g ）significant changes with an adverse effect that have taken place in the technological, market,
economic or legal environment in which the borrower operates, and indicates that the cost of the
investment in the equity instrument may not be recovered;
）
h a significant or non-temporary decrease in fair value of equity investment instruments;
）
i other objective evidences showing the impairment of the financial assets.
C. Measurement of impairment loss of financial assets
）
a held-to-maturity investments, loans and receivables
If there is objective evidence that an impairment loss on loans and receivables or held-to-maturity
investments carried at amortised cost has been incurred, the amount of the loss is measured as the
difference between the asset's carrying amount and the present value of estimated future cash
flows. The amount of the loss is recognised in profit or loss of the current period.
The Company assesses whether objective evidence of impairment exists individually for financial
assets that are individually significant, and individually or collectively for financial assets that are
not individually significant. If the Company determines that no objective evidence of impairment
exists for an individually assessed financial asset, whether significant or not, it includes the asset
in a group of financial assets with similar credit risk characteristics and collectively assesses them
for impairment. Assets that are individually assessed for impairment and for which an impairment
loss is or continues to be recognised are not included in a collective assessment of impairment.
44
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment was recognised, the previously
recognised impairment loss of financial asset measured at amortised cost is be reversed. The
amount of the reversal is recognised in profit or loss of the current period.
）
b Available-for-sale financial assets
When a decline in the fair value of an available-for-sale financial asset has been recognised
directly in equity, the cumulative loss that had been recognised directly in equity is removed from
equity and recognised in profit or loss even though the financial asset has not been derecognised.
If there is objective evidence that an impairment loss has been incurred on an unquoted equity
instrument that is not carried at fair value because its fair value cannot be reliably measured, or on
a derivative asset that is linked to and must be settled by delivery of such an unquoted equity
instrument, the amount of the impairment loss is measured as the difference between the carrying
amount of the financial asset and the present value of estimated future cash flows discounted at the
current market rate of return for a similar financial asset. Such impairment losses are recognised in
the profit or loss of the current period.
If, in a subsequent period, the fair value of a debt instrument classified as available for sale
increases and the increase can be objectively related to an event occurring after the impairment
loss was recognised in profit or loss, the impairment loss is reversed, with the amount of the
reversal recognised in profit or loss of the current period.
Impairment losses recognised in profit or loss for an investment in an equity instrument classified
as available for sale is not reversed through profit or loss. For impairment loss has been incurred
on an unquoted equity instrument that is not carried at fair value because its fair value cannot be
reliably measured, or on a derivative asset that is linked to and must be settled by delivery of such
an unquoted equity instrument, the impairment loss is not reversed through profit or loss.
(3) Classification and measurement of financial liabilities
54
①The Company's financial liabilities are classified as financial liabilities at fair value through
profit or loss, and other financial liabilities.
②Financial liabilities are initially measured at fair value. For the financial liability at fair value
through profit or loss at its fair value, relevant transaction costs are recognised as expense when it
incurred. For the other financial liabilities, relevant transaction costs are recongnised as costs.
③Subsequent measurement of financial liabilities
A. Financial liabilities at fair value through profit or loss include financial liabilities held for
trading and financial assets designated by the Company as at fair value through profit or loss. The
Company recognises a financial liability at fair value through profit or loss at its fair value. A gain
or loss of change in fair value is recognised in the profit or loss of the current period.
B. Other financial liabilities are measured by amortised cost using effective interest rate.
(4) Recognisation of fair value of financial instrument
If there is an active market for the financial instrument, the fair value is quoted prices in the active
market.
If the market for a financial instrument is not active, the Company establishes fair value by using a
valuation technique.
(5) Recognition and measurement of financial assets transfer
The Company derecognises financial assets when the Company transfers substantially all the risks
and rewards of ownership of the financial assets. On derecognition of a financial asset in its
entirety, the difference between the follows is recognised in profit or loss of the current period.
①the carrying amount of transferring financial assets;
②the sum of the consideration received and any cumulative gain or loss that had been recognised
directly in equity (including financial assets transferred to available for sale category).
If the transferred asset is part of a larger financial asset and the part transferred qualifies for
derecognition in its entirety, the previous carrying amount of the larger financial asset is allocated
between the part that continues to be recognised and the part that is derecognised, based on the
relative fair values of those parts on the date of the transfer. The difference between the follows is
recognised in profit or loss of the current period.
①the carrying amount allocated to the part derecognised;
②the sum of the consideration received for the part derecognised and any cumulative gain or loss
64
allocated to it that had been recognised directly in equity (including financial assets transferred to
available for sale category).
A cumulative gain or loss that had been recognised in equity is allocated between the part that
continues to be recognised and the part that is derecognised, based on the relative fair values of
those parts.
If a transfer does not qualify for derecognition, the Company continues to recognise the
transferred asset in its entirety and shall recognize a financial liability for the consideration
received.
When the Company continues to recognise a financial asset to the extent of its continuing
involvement, the Company also recognises an associated liability. The transferred asset and the
associated liability are measured on a basis that reflects the rights and obligations that the
Company has retained.
10. Recognition and measurement of bad debt provision for accounts receivables
(1) Recognition and measurement of bad debt provision for the individually significant receivables
Judgement basis or monetary standards of Top 5 of account receivables at year end.
provision for bad debts of the individually
significant receivables
Method of provision for bad debts of the The impairment test is carried on individually
individually significant receivables for each individually significant receivable.
A. If there are substantive evidences shown
that a receivable has been impaired, it should
make a provision for bad debts.
B. If a receivable is found not to be
individually impaired, it should be included in
a group of similar credit risk characteristics
receivables and make a collective assessment
of impairment.
(2) Recognition and measurement of bad debt provision for groups of receivables
74
Recognition of groups of receivables
Names of group Basis of recognition
Besides the receivables which are individually impaired, the Company
determines measurement of bad debt provision for groups of receivables on
Group A the basis of analyzing actual situation, and assessing the same or similar
actual impairment rate of groups of receivables with similar credit risk
characteristics, which divided by aging analysis in previous periods.
Receivables with confirmed letter credit or guarantee from the bank and
Group B provision for sales tax which is to be paid as stipulated in contract are not
classified as provision for bad debts.
Measurement of bad debt provision for groups of receivables
Names of group Measurement
Group A Aging analysis method
Group B No bad debt provision
The aging analysis method for groups of receivables
Proportion of Accounts Proportion of Other
Aging of receivables
receivables (%) receivables (%)
Within 1 year (including 1 year) 3 3
1-2 years 3 3
2-3 years 6 6
3-4 years 20 20
4-5 years 20 20
Over 5 years 100 100
(3) Receivables which are not significant, but still need individually recognition of bad debt
provision.
Reason If there are substantive evidences shown there
is a special impairment of insignificant
receivables, then they need individually
impairment tests.
84
Method Measurement of the percentage of bad debts
provision is based on current situation.
11. Inventory
(1) Inventories are asset items held for sale in the ordinary course of business or goods that will
be used or consumed in the production of goods to be sold. They are divided into the following
categories: goods purchased raw materials, finished goods, work-in-progress, and goods for
processing on consignment.
(2) Recognition of inventory ： The Company recognizes inventories when the following
conditions are satisfied:
①It is probable that future economic benefits associated with the inventories will flow to the
Company entity;
②The cost of the inventories can be measured reliably.
(3) The method of measuring inventories: Raw materials and circulating materials are measured
at actual cost method, and it shall employ the moving weighted average method when sending out
these materials. Finished goods and work-in-progress are measured at actual cost which is
allocated according to the job reference.
(4) Amortisation method of low-value consumption goods and packages: Low-value
consumption goods and packages are fully amortised when they are required and delivered.
(5) Inventories shall be measured at the lower of cost and net realisable value at the balance sheet
date. Where the net realizable value is lower than the cost, the difference shall be recognized as
provision for impairment of inventories and charged to profit or loss.
①Estimation of net realizable value
Estimates of net realisable value are based on the most reliable evidence available. These
estimates take into consideration the purpose for which the inventory is held and the influence the
events after balance sheet date.
94
Materials and other supplies held for use in the production are measured at cost if the net
realizable value of the finished goods in which they will be incorporated is higher than their cost.
However, when a decline in the price of materials indicates that the cost of the finished products
will exceed their net realisable value, the materials are measured at net realisable value.
The net realisable value of inventories held to satisfy sales or service contracts is generally based
on the contract price.
If the quantity specified in sales contracts is less than the inventory quantities held by the
Company, the net realisable value of the excess shall be based on general selling prices.
②The Company generally provides provision for impairment of inventory individually. For large
quantity and low value items of inventories, cost and net realisable value are determined based on
categories of inventories.
Where certain items of inventory have similar purposes or end uses and relate to the same product
line produced and marketed in the same geographical area, and therefore cannot be practicably
evaluated separately from other items in that product line, costs and net realisable values of those
items may be determined on an aggregate basis.
(6)The Company adopts perpetual inventory system for its inventory taking.
12. Measurement of construction contracts
Construction contracts are measured at the actual cost, including the direct and indirect costs
incurred and attributable to a contract for the period from the date the contract is signed to the
final completion of the contract. The construction contract in progress should be presented in the
balance sheet at the net amount of payment amount after deducting the sum of the accumulated
costs occurred and the accumulated margin profit (loss) recognized. The excess of the sum of the
accumulated costs occurred and the accumulated margin profit (loss) recognized over the payment
amount should be presented as inventory. The excess of the payment amount over the sum of the
accumulated costs occurred and the accumulated margin profit (loss) should be presented as
advanced from customers.
Costs such as travelling expenses and tender charges incurred relating to the signing of the
contract should be included as contract costs when the contract is acquired, where the costs could
05
be recognized individually and measured reliably and the contract is probably signed; otherwise it
should be charged into the profit and loss for the period.
13. Long-term equity investment
(1) Initial measurement
The Company initially measures long-term equity investments under two conditions:
① For long-term equity investment arising from business combination, the initial cost is
recognized under the following principles.
A. If the business combination is under the same control and the acquirer obtains long-term equity
investment in the consideration of cash, non-monetary asset exchange or bearing acquiree’s
liabilities, the initial cost is the carrying amount of the proportion of the acquiree’s owner’s equity
at the acquisition date. The difference between cash paid, the carrying amount of the
non-monetary asset exchanged and the acquiree’s liabilities beard and the initial cost of the
long-term equity investment should be adjusted to capital surplus. If the capital surplus is not
sufficient for adjustment, retained earning is adjusted respectively. The business combination costs
that are directly attributable to the combination, such as audit fees, valuation fees, legal service
fees and so on are recognized in profit or loss during the current period when they occurred.
If the acquirer issuing equity securities as consideration, the initial cost is the carrying amount of
the proportion of the acquiree’s owner’s equity at the acquisition date. Amount of share capital
equal to the par value of the shares issued. The difference between initial cost of the long-term
equity investment and the par value of shares issued is adjusted to capital surplus. If the capital
surplus is not sufficient for adjustment, retained earning is adjusted respectively. The costs of
issuing equity securities occurred in business combination such as charges of security issuing and
commissions are deducted from the premium of equity securities. If the premium is not sufficient
for deducting, retained earning is adjusted respectively.
B. If the business combination is not under the same control, the acquirer recognizes the initial
cost of combination under the following principles.
a) When business combination is achieved through a single exchange transaction, the cost of a
15
business combination is the aggregate of the fair values, at the date of exchange, of assets given,
liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange for
control of the acquiree;
b) For the business combination involved more than one exchange transaction, the cost of the
combination is the aggregate cost of the individual transactions;
c) The business combination costs that are directly attributable to the combination, such as audit
fees, valuation fees, legal service fees and so on are recognized in profit or loss during the current
period when they occurred; commissions and other expenses for the issuance of equity or debt
securities for the business combination, shall be recognized as the initial recognition amounts of
equity or debt securities.
d) Where a business combination contract or agreement provides for a future event which may
adjust the cost of combination, the Company shall include the amount of the adjustment in the cost
of the combination at the acquisition date if the future event leading to the adjustment is probable
and the amount of the adjustment can be measured reliably.
② For long-term equity investment obtained in any method other than business combination, the
initial cost is recognized under the following principles.
A. If the long-term equity investment is acquired in cash consideration, the initial cost is the
actual payment which includes direct expenses paid to acquire the long-term equity investment,
taxes and other necessary expense.
B. If the long-term equity investment is acquired by issuing equity securities, the initial cost is
the fair value of the equity securities issued. However, cash dividends or profits that are declared
but unpaid shall not be included in the initial cost. Direct costs attributed to issue equity securities
such as handling charges and commissions paid to securities underwriting agencies are deducted
from premium of equity securities. If the premium is not sufficient for deduction, reserved fund
and retained earnings is adjusted respectively.
C. For the long-term equity investment invested by investors, the initial cost is the agreed value
prescribed in the investment contract or agreement unless the agreed value is not fair.
D. For the long-term equity investment acquired through non-monetary asset exchange, the
initial cost is recognized according to “Accounting Standards for Business Enterprises No.
25
7-Non-monetary transactions”.
E. For the long-term equity investment acquired through debt restructuring, the initial cost is
recognized according to “Accounting Standards for Business Enterprises No. 12-Debt
restructuring”.
③ If there are cash dividends or profits that are declared but unpaid included in the consideration
paid, the cash dividends or profits declared but unpaid shall be recognized as receivables
separately rather than as part of initial cost of long-term equity instruments no matter through
which method the long-term equity investment is acquired.
(2) Subsequent measurement
The Company adopts either cost method or equity method for the long-term equity investment
according to the extent of influence, existence of active market and availability of fair value. The
equity method is used when the Company has joint control or significant influence over the
investee enterprise. The cost method is used when the Company has control or does not have joint
control or significant influence over the investee enterprise and there is no quoted price in active
market or there is no reliable fair value.
① For the long-term equity investment under cost method, and except from cash dividends or
profits distributed are declared but unpaid included in the consideration paid, the other declared
cash dividends or profits are normally recognized as investment income for the current period
when it incurred. The net profits are no longer divided into the pre-investment profits and
after-investment profits.
The Company recognizes the receivable cash dividends or profits according to above regulations,
and the impairment test is needed to be concerned. To indicate the evidence of impairments, it
should be concerned about whether the carrying amount of the long-term equity investments is
greater than the book value of net assets that have been acquired (including the related goodwill)
or other similar situations. When these situations occur, the impairment test of long-term equity
investments should be performed according to “Chinese Accounting Standard No.8 - Impairment
of assets”, Where the carrying amount of long-term equity investment exceeds the recoverable
amount, the difference shall be recognized as impairment loss, and a provision for impairment loss
35
should be made.
② For long-term equity investment under equity method, the Company adjusts carrying amount
of the long-term equity investment and recognises investment income according to the proportion
of net profit or loss after acquisition. The Company reduces carrying amount of the long-term
investment regarding to declared cash dividend or profit distribution.
For long-term equity investment under equity method, the Company recognises net losses incurred
by the investee enterprise to the extent that the carrying amount and the substantial net investment
of the long-term equity investment is reduced to zero except there is further obligation of the
excess losses. If the investee enterprise realises net profits in subsequent periods, the Company
increase the carrying amount of the investment above zero at the amount at which its share of
profits exceeds its share of previously unrecognized losses.
③ The Company adopts the same manner of financial instrument for the impairment of
long-term equity investment which is measured under cost method and there is no quoted price in
active market or there is no reliable fair value. Impairment of long-term equity investments other
than above refers to accounting policy “Impairment of assets” of the Company.
④ On disposal of an equity investment, the difference between the carrying amount of the
investment and the sale proceeds actually received is recognised as an investment gain or loss for
the current period. When the equity method is adopted, change in equity of the investee other than
profit or loss is recorded in equity. On disposal of the equity investment, amount of change which
is recorded in equity previously is transferred to profit or loss for the current period regarding to
the proportion of disposal.
）（
3 Recognition of common control and significant influence:
If the investment satisfies the following conditions, the company has common control to the
investee: (1) None part of the joint venture can control the joint business activities individually; (2)
Any decision of the joint venture business must be approved by all parts of the joint venture. (3)
One part of the joint venture can be offered to manage daily business activities by using contract
or agreement. However, the right is restricted by financial and management policies allowed by all
45
parties of the joint venture.
If the investment satisfies the following conditions, the company has significant influence to the
investee: (1) there is commissary in the directorate or similar right organization of investee. (2)
Participate decision-making process, including the process of dividend distribution. (3) There is
significant transaction between investor and investee. (4) Appoint manager to investee. (5) Supply
key technology materials to investee. Investor holds more than 20% but less than 50% shares of
investee directly or indirectly.
(4) Impairment test and method of provision for impairment loss
The Company adopts the same manner of financial instrument for the impairment of long-term
equity investment which is measured under cost method and there is no quoted price in active
market or there is no reliable fair value. Impairment of long-term equity investments other than
above refers to accounting policy “Impairment of assets” of the Company.
14. Recognition and measurement of fixed assets
Fixed assets are tangible assets that: 1) are held for use in the production or supply of goods or
services, for rental to others, or for administrative purposes; and 2) have useful life more than one
year.
(1) A fixed asset shall be initially recognized at cost when the following condition are satisfied:
① It is probable that future economic benefits associated with the assets will flow to the
Company;
② The cost of the assets can be measured reliably.
(2) Depreciation
Subsequent expenditure relating to a fixed asset shall be added to the carrying amount of the asset
when the expenditure qualifies for capitalization. Subsequent expenditure that does not qualify for
capitalization shall be recognized as an expense for the current period.
The depreciation method adopted by the Company is straight-line method.
The estimated useful lives, residual value and annual depreciation rate of fixed assets are shown as
follows:
55
Estimated Useful Lives Residual value Annual Depreciation Rate
The categories
(years) (%) (%)
Property and buildings 40 0 2.50
Machineries 7-20 0 14.29-5.00
Vehicles 6 0 16.67
Electronic equipment 3-18 0 33.33-5.56
The Company reviews the useful life, estimated residual value and depreciation method of a fixed
asset at the end of each financial year. If expectations are significantly different from previous
estimates, the useful life shall be revised accordingly. If expectations are significantly different
from previous estimates, the estimated residual value also shall be revised accordingly. If there has
been a significant change in the expected realization pattern of economic benefits from those
assets, the depreciation method shall be changed accordingly. The changes in useful life, estimated
residual value and depreciation method shall be treated as change in accounting estimates.
(3) Fixed assets acquired under finance lease
The Company identifies a lease of asset as finance lease when substantially all the risks and
rewards incidental to legal ownership of the asset are transferred.
A fixed asset acquired under finance lease shall be valued at the lower of the fair value of the
leased asset and the present value of the minimum lease payments at the inception of lease.
The depreciation method of fixed assets acquired under finance lease is consistent with that for
depreciable assets owned by the Company. If the Company can reasonably confirm that it will
obtain the ownership of leased asset at the end of lease term, the leased asset shall be depreciated
during the useful life of the leased asset. If the Company cannot reasonably confirm that it will
obtain the ownership of leased asset at the end of lease term, the leased asset shall be depreciated
during shorter of the useful life of the leased asset and the lease term.
(4) Impairment of fixed asset refers to accounting policy “Impairment of assets” of the
Company.
65
15. Construction in progress
(1) Construction in progress of the Company includes constructing property, building installation,
equipments installation, prepaid expenses, as well as individual projects.
(2) Construction in progress is recorded at actual costs incurred. It also includes borrowing costs
eligible for capitalization and gain or loss of exchange difference.
(3) The Company transfers construction in progress to fixed assets when the project is completed
or the project is available for use. For the construction in progress which is capable of operating in
the manner intended by management without the final account for completed project, an estimated
value is recognised as its cost and the depreciation amount is based on the estimated value. When
the final account for completed project is obtained, cost of the asset should be adjusted to the
actual cost. However, there is no need to adjust depreciation of the asset in prior period.
(4) Impairment of construction in progress refers to accounting policy “Impairment of assets” of
the Company.
16. Recognition and measurement of borrowing cost
(1) Capitalization and capitalization period of borrowing costs
The costs of borrowings designated for acquisition or construction of qualifying assets should be
capitalized as part of the cost of the assets. Capitalisation of borrowing costs starts when
① The capital expenditures have incurred;
② The borrowing costs have incurred;
③ The acquisition and construction activities that are necessary to bring the asset to its
expected usable condition have commenced.
Other borrowing costs that do not qualify for capitalization should be expensed off during current
period.
Capitalization of borrowing costs should be suspended during periods in which the acquisition or
construction is interrupted abnormally, and the interruption period is three months or longer.
These borrowing costs should be recognized directly in profit or loss during the current period.
However, capitalization of borrowing costs during the suspended periods should continue when
the interruption is a necessary part of the process of bringing the asset to working condition for its
intended use.
75
Capitalization of borrowing costs ceases when the qualifying asset being acquired or constructed
is substantially ready for its intended use. Subsequent borrowing costs should be expensed off
during the period in which they are incurred.
(2) Calculation method of capitalization for borrowing costs
To the extent that funds are borrowed specifically for the purpose of acquiring or constructing a
qualifying asset, the amount of borrowing costs eligible for capitalization on that asset is
determined as the actual borrowing costs incurred on that borrowing during the period less any
investment income on the temporary investment of the borrowing.
To the extent that funds are borrowed generally and used for the purpose of acquiring or
constructing a qualifying asset, the amount of borrowing costs eligible for capitalization shall be
determined by applying a capitalization rate to the weighted average of excess of accumulated
expenditures on qualifying asset over that on specific purpose borrowing. The capitalization rate is
the weighted average of the borrowing costs applicable to the borrowings of the Company that are
outstanding during the period, other than borrowings made specifically for the purpose of
acquiring or constructing a qualifying asset.
17. Recognition and measurement of intangible assets
Intangible assets are identifiable non-monetary asset that are owned or controlled by the Company
and are without physical substance.
(1) Recognition of intangible assets
The Company recognizes an intangible asset when that intangible asset fulfills both of the
following conditions:
①It is probable that the economic benefits associated with that asset will flow to the Company
and,
②The cost of that asset can be measured reliably.
Expenditures incurred during the research phase of an internal project shall be recognized as
expenses in the period in which they are incurred. Expenditures incurred during the development
phase of an internal project shall be recognized as an intangible asset if, and only if, the Company
85
can demonstrate all of the following:
①The technical feasibility of completing the intangible asset so that it will be available for use or
sale;
②Its intention to complete the intangible asset and use or sell it;
③The method that the intangible asset will generate probable future economic benefits. Among
other things, the Company can demonstrate the existence of a market for the output of the
intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the
intangible asset;
④ The availability of adequate technical, financial and other resources to complete the
development and to use or sell the intangible asset;
⑤Its ability to measure reliably the expenditure attributable to the intangible asset during its
development.
(2) Measurement of intangible assets
①An intangible asset is measured initially at its cost.
②Subsequent measurement of intangible assets
A. For an intangible asset with finite useful life, the Company estimates its useful life at the time
of acquisition and amortizes it during its useful life in a reasonable and systematic way. The
amount of amortization is allocated to relevant costs and expenses according to the nature of
beneficial items. The Company does not amortize intangible asset with infinite useful life.
B. Impairment of intangible assets refers to accounting policy “Impairment of assets” of the
Company.
18. Recognition and measurement of contingent liabilities
(1) Recognition of contingent liabilities
The company should recognize the related obligation as a provision for liability when the
obligation meets the following conditions:
①That obligation is a present obligation of the enterprise;
②It is probable that an outflow of economic benefits from the enterprise will be required to settle
the obligation;
95
③ A reliable estimate can be made of the amount of the obligation.
(2) Measurement of contingent liabilities
To fulfill the present obligations, which initially measured by the best estimate of the expenditure
required to settle the liability. Where there is a continuous range of possible amounts of the
expenditure required to settle the liability, as all kinds of possibilities are at same level, the best
estimate should be determined according to the average of the lower and upper limit of the range.
In other cases, the best estimate should be determined in accordance with the following methods:
① Where the contingency involves a single item, the best estimate involves a singe item, the best
estimate should be determined according to the most likely outcome;
② Where the contingency involves several items, the best estimate should be determined by
weighting all possible outcomes by their associated probabilities of occurrence.
To determine the best estimate, it should be considered with factors such as: related contingency
risks, uncertain matters and time value of currency. If time value of currency has a significant
impact, the best estimate should be measured at its converted present value through the relevant
future cash outflows.
Where some or all of the expenditures are expected to be reimbursed by a third party, the
reimbursement should be separately recognized as an asset only when it is virtually received. The
amount of the reimbursement should not exceed the carrying amount of the liability recognized.
At balance sheet date, the Company should review book value of provision for liabilities. If there
is strong evidence that the book value does not truly indicate the current best estimate, it should be
adjusted in accordance with the current best estimate.
19. Revenue
(1) Construction contract revenue
a) When the outcome of a construction contract can be estimated reliably, contract revenue and
contract costs associated with the construction contract is recognised as revenue and expenses
respectively by reference to the stage of completion of the contract activity at the balance sheet
date. The outcome of a construction contract can be estimated reliably when all the following
conditions are satisfied: 1 ）
Total contract revenue can be measured reliably; 2 ） It is probable that
06
the economic benefits associated with the contract will flow to the entity; 3 ）Both the contract
costs to complete the contract and the stage of contract completion at the balance sheet date can be
measured reliably; and 4 ）
The contract costs attributable to the contract can be clearly identified
and measured reliably.
b) When the outcome of a construction contract cannot be estimated reliably and contract costs
are expected to be recoverable, revenue is recognised only to the extent of contract costs incurred
that it is probable will be recoverable. Contract costs are recognised as an expense in the period in
which they are incurred. Contract costs that are not probable of being recovered are recognised as
an expense immediately and no revenue is recognised.
c) If the construction contract is interrupted, the Company does not recognise any revenue and
gross profit for the current period. If the contract does not recommence in 3 years, gross profit
recognized is written off and the 50% of the contract costs is recognized in the third and the other
50% of the contract costs is recognized in the fourth year evenly.
d) If the accumulative estimated contract costs exceed the contract revenue, an estimated loss
should be recognized as an expense during the current financial period.
(2) Sale of goods
The Company recognises revenue from sale of goods when all the following conditions have been
satisfied:
a) The Company has transferred to the buyer the significant risks and rewards of ownership of
the goods;
b) The Company retains neither continuing managerial involvement to the degree usually
associated with ownership nor effective control over the goods sold;
c) The relevant amount of revenue and costs can be measured reliably; and
d) The economic benefits associated with the transaction will flow to the Company
16
(3) Rendering of services:
① Revenue associated with the transaction is recognised by reference to the stage of completion
of the transaction at the balance sheet date. The service revenue is recognised at the balance sheet
date according to the percentage of completion of the services when (i) the total revenue and total
cost can be reliably measured, (ii) the economic benefit pertaining to the service will flow to the
Company; (iii) the percentage of completion can be determined reliably.
② When the outcome of the transaction involving the rendering of services cannot be estimated
reliably at the balance sheet date, revenue is recognised according to the following:
A. When it is probable that the Company will recover the transaction costs incurred, revenue is
recognised only to the extent of the expenses recognised that are recoverable. and the costs
incurred are recognised as an expense.
B. When it is not probable that the costs incurred will be recovered, revenue is not recognised
and the costs incurred are recognised as an expense.
(4) Revenue arising from the use by others of the Company’s assets
Revenue arising from the use by others of the Company’s assets includes interest revenue and
royalty revenue. The Company recognised revenue arising from the use by others of the
Company’s assets when (a) it is probable that the economic benefits associated with the
transaction will flow to the Company and (b) the amount of the revenue can be measured reliably.
20. Accrued costs
The Company accrues the warranty cost at 0.5% of total actual revenue of completed projects, and
is allocated over the first 12 months warranty period evenly. If warranty period exceeds 12 months
as stipulated in contract, warranty cost is accrued at 0.25% of total actual revenue from 13th
month onwards and is allocated over 12 months evenly. The warranty cost is charged to cost of
goods sold in the current accounting period.
21. Government Subsidies
(1) Recognition of Government subsidies
No government subsidy may be recognized unless the following conditions are met
26
simultaneously as follows:
① The enterprise can meet the conditions for the government subsidies; and
② The enterprise can obtain the government subsidies.
(2) Measurement of Government subsidies
① If a government subsidy is a monetary asset, it shall be measured in the light of the received
or receivable amount; if a government subsidy is a non-monetary asset, it shall be measured at its
fair value. If its fair value cannot be obtained in a reliable way, it shall be measured at its nominal
amount.
② The government subsidies pertinent to assets shall be recognized as deferred income, equally
distributed within the useful lives of the relevant assets, and included in the current profits and
losses. If the relevant assets are sold, transferred, obsolete or destroyed before useful lives end,
undistributed deferred income shall be recognized as the current profits and losses of disposal of
assets.
The government subsidies pertinent to incomes shall be treated respectively in accordance
with the circumstances as follows:
A. Those subsidies used for compensating the related future expenses or losses of the enterprise
shall be recognized as deferred income and shall included in the current profits and losses during
the period when the relevant expenses are recognized; or
B. Those subsidies used for compensating the related expenses or losses incurred to the
enterprise shall be directly included in the current profits and losses.
③ If it is necessary to refund any government subsidy which has been recognized, it shall be
treated respectively in accordance with the circumstances as follows:
A. If there is the deferred income concerned, the book balance of the deferred income shall be
offset against, but the excessive part shall be included in the current profits and losses; and
B. If there is no deferred income concerned to the government subsidy, it shall be directly
included in the current profits and losses.
22. Income tax
The Company adopts the balance sheet liability method for corporate income taxes.
36
(1) Deferred tax asset
① Where there are deductible temporary differences between the carrying amount of assets or
liabilities in the balance sheet and their tax bases, a deferred tax asset shall be recognised for all
those deductible temporary differences to the extent that it is probable that taxable profit will be
available against which the deductible temporary difference can be utilized. Deferred tax assets
should be measured at the tax rates that are expected to apply to the period when the asset is
realised or the liability is settled.
② At the balance sheet date, where there is strong evidence showing that sufficient taxable
profit will be available against which the deductible temporary difference can be utilized, the
deferred tax asset unrecognized in prior period shall be recognized.
③ The Company assesses the carrying amount of deferred tax asset at the balance sheet date. If
it’s probable that sufficient taxable profit will not be available against which the deductible
temporary difference can be utilized, the Company shall write down the carrying amount of
deferred tax asset, or reverse the amount written down later when it’s probable that sufficient
taxable profit will be available.
(2) Deferred tax liability
A deferred tax liability shall be recognized for all taxable temporary differences, which are
differences between the carrying amount of an asset or liability in the balance sheet and its tax
base, and measured at the tax rates that are expected to apply to the period when the asset is
realised or the liability is settled.
23. Operating lease and financial lease
）（
1 Operating leases
Lessee in an operating lease shall treat the lease payment under an operating lease as a relevant
asset cost or the current profit or loss on a straight-line basis over the lease term. The initial direct
costs incurred shall be recognized as the current profit or loss; Contingent rents shall be charged as
expenses in the periods in which they are incurred. .
46
Lessors in an operating lease shall present the assets subject to operating leases in the relevant
items of their balance sheet according to the nature of the asset. Lease income from operating
leases shall be recognized as the current profit or loss on a straight-line basis over the lease term;
Initial direct costs incurred by lessors shall be recognized as the current profit or loss; Lessors
shall apply the depreciation policy for the similar assets to depreciate the fixed assets in the
operating lease; For other assets in the operating lease , lessors shall adopt a reasonable
systematical method to amortize; Contingent rents shall be charged as expenses in the periods in
which they are incurred.
）（
2 Finance lease
For the lessee, a fixed asset acquired under finance lease shall be valued at the lower of the fair
value of the leased asset and the present value of the minimum lease payments at the inception of
lease. The minimum lease payments as the entering value in long-term account payable, the
difference as unrecognized financing charges; The initial direct costs identified as directly
attributable to activities performed by the lessee during the negotiation and signing of the finance
lease such as handling fees, legal fees, travel expenses, stamp tax shall be counted as lease asset
value; the unrecognized financing charges shall be apportioned at each period during the lease
term and adopt the effective interest rate method to calculate and confirm the current financing
charge; Contingent rents shall be charged as expenses in the periods in which they are incurred.
When the lessee calculates the present value of the minimum lease payments, for that lessee who
can obtain the interest rate implicit in the lease, the discount rate shall be the interest rate implicit
in the lease; otherwise the discount rate shall adopt the interest rate specified in the lease
agreement. If the lessee can not get the interest rate implicit in the lease and there is no specified
interest rate in the lease agreement, the discount rate shall adopt the current bank loan interest rate.
Lessees shall depreciate the leased assets with the depreciation policy which is consistent with the
normal depreciation policy for similar assets. If there is reasonable certainty that the lessee will
obtain ownership by the end of the lease term, the depreciation shall be allocated to the useful life
of the asset. If there is no reasonably certainty that the lessee will obtain ownership by the end of
the lease term, the asset shall be depreciated over the shorter of the lease term and its useful life.
On the initial date of financial lease, lessee of the financial lease shall record the sum of the
56
minimum lease payments and initial direct costs as the financing lease accounts receivable, and
also record the unguaranteed residual value; recognize the difference between the total minimum
lease payments , initial direct costs ,unguaranteed residual value and sum of the present value as
the unrealized financing income; the unrealized financing income shall be distributed to each
period over the lease term; adopt the actual interest rate to calculate the current financial income;
Contingent rents shall be charged as expenses in the periods in which they are incurred.
24. Assets held for sales:
(1) Recognition criteria of the assets held for sale
The Non-Current Assets which meet the following conditions will be classified as assets held for
sales by the company:
①The entity has made the resolution in disposing the non-current assets.
②The entity has signed the irrevocable transfer agreement with the assignee.
③The sale transaction is highly probable to be completed within one year.
(2) Accounting treatments of assets held for sales
For the fixed assets held for sales, the entity shall adjust the predicted net residual value of this
fixed asset to make the predicted net residual value of this fixed asset to reflect the amount of its
fair value less costs to sell, but it shall not exceed the original book value of fixed assets at the
time when it meets the conditions of held for sales. The difference between the original book
value and the adjusted predicted net residual value shall be treated as loss in assets and presented
in profit or loss of current period. The fixed assets held for sales shall not count the depreciation
but shall be measured at the lower of its carrying amount and the fair value less costs to sell.
The other non-current assets such as impairment assets which meet the conditions of held for sales
shall be treated in accordance to the above principles.
25. Hedging:
The company uses fair value hedging for its hedging.
(1) For derivative instruments as the hedging instrument, the profit or loss resulted from the
changes of fair value is included in the profit/loss of the current period; for non-derivative
instruments as the hedging instrument, the profit or loss resulted from the change of book
66
value due to foreign exchange rate is included in the profit/loss of the current period.
(2) The profit or loss resulted from the hedged risk of the hedged items is included in the
profit/loss of the current period. The book value of the hedged items is adjusted at the same
time.
(3) In a fair value hedging of a firm commitment of a purchased asset or assumed liability, the
accumulated amount in the change of fair value (profit or loss being confirmed) caused by the
hedging risk of this firm commitment should be used to adjust the initial confirmed amount of
the purchased assets of assumed liability of the firm commitment.
(4) When the following conditions are satisfied, the company stop using the fair value hedging:
A. Hedging instruments expired, sold, contract terminated or executed.
B. The hedge can no longer satisfy the conditions in using the method of hedging
accounting.
C. Cancellation of the designation of the hedging.
26. Changes in accounting policies and estimates:
(1) Changes in accounting estimate
In accordance with the resolution of the 3rd meeting of the 5th Session of Board of Director on
April 27, 2011, the accounting estimate on the method and rate used in calculation of warranty
provision was authorized for change.
Previous accounting estimate: The Company accrued warranty cost at 2.5% of actual total
production costs for its finished product and charged it into cost of sales for the period.
Current accounting estimate: The Company accrues warranty cost at 0.5% of total contract
revenue pro-rate for the first 12-month warranty period and additional 0.25% pro-rate for each
subsequent 12-month period and charges it into cost of sales for the period.
(2) Impact of changes in accounting estimate
Impact to net income of the periodic reports shall be less than 50%;
Impact to owners’ equity of the periodic reports shall be less than 50%;
Impact to the periodic reports shall not change the Company’s profitability status.
27. Correction of the accounting errors from previous term
76
There is no correction of the accounting error from previous term in this report period.
28. Impairment of assets
It suggests that an asset may be impaired if there is any of the following indication:
(1) during the period, an asset's market value has declined significantly more than it would be
expected as a result of the passage of time or normal use during the current period;
(2) significant changes with an adverse effect on the Company have taken place during the
period, or will take place in the near future, in the technological, market, economic or legal
environment in which the Company operates or in the market to which an asset is dedicated;
(3) market interest rates or other market rates of return on investments have increases during the
period, and those increases are likely to affect the discount rate used in calculating an asset's value
in use and decrease the asset's recoverable amount materially;
(4) evidence is available of obsolescence or physical damage of an asset;
(5) the asset becomes idle, or the Company plans to discontinue or to dispose of an asset before
the previously expected date;
(6) evidence is available from internal reporting that indicates that the economic performance of
an asset is, or will be, worse than expected, for example, the net cash flow generated from assets
or the operating profit (or loss) realized by assets is lower (higher) than the excepted amount, etc.;
and
(7) Other evidence indicates that assets may be impaired.
The Company assesses long-term equity investment, fixed assets, construction materials,
constructions in progress and intangible assets (except for those with uncertain useful life) that
apply Accounting Standard for Business Enterprises No. 8 - Impairment of assets at the balance
sheet date. If there is any indication that an asset may be impaired, the Company should assess the
asset for impairment and estimate the recoverable amount of the impaired asset.
Recoverable amount is measured as the higher of an asset's fair value less costs to sell and the
present value of estimated future cash flows from continuing use of the asset. If carrying amount
of an asset is higher than its recoverable amount, the carrying amount of this asset should be
written down to its recoverable amount with the difference recognized as impairment loss and
charged to profit or loss accordingly. Simultaneously a provision for impairment loss should be
86
made.
There is any indication that an asset may be impaired, the Company usually estimates its
recoverable amount on an individual item basis. However if it’s not possible to estimate
recoverable amount of the individual asset, the Company should determine the recoverable
amount of the cash-generating unit to which the asset belongs.
An asset's cash-generating unit is the smallest group of assets that includes the asset and generates
cash inflows that are largely independent of the cash inflows from other assets or groups of assets.
Identification of cash-generating unit is based on whether the cash inflows generated by the
cash-generating unit are largely independent of the cash inflows from other assets or groups of
assets.
The Company assesses goodwill acquired in a business combination and intangible assets with
uncertain useful life for impairment each year no matter whether indication that an asset may be
impaired exists or not. Impairment assessment of goodwill is carried together with the impairment
assessment of related cash-generating unit or group of cash-generating units.
Once impairment loss is recognized, it cannot be reversed in subsequent financial period.
29. Notes of corporation pension plan changes
There is still no corporation pension plan in this fiscal year.
Note 3 Taxation
1. The value-added output tax rates are 17% and paid by deducting value added input tax.
2. The business tax rate is 5% of revenue.
3. Urban maintenance and construction tax is 7% of turnover tax payable.
4. Education surtax is 3% of turnover tax payable.
5. Local education surtax is 2% of turnover tax payable.
6. Levee fee 1% of turnover tax payable.
7. Corporate income tax: the corporate income tax rate of the Company is 25%.
Note 4 Business combination and consolidated financial statements
1. Subsidiaries
(1) The subsidiaries obtained through the establishment of or investment subsidiary
96
Catego Registered Registered
Subsidiaries Business nature Business scope
ries address capital
Wuhan Lan timiL 586 Wuluo Manufacturing 20,000,000.00 Boiler, energy environmental protection
Xiang de Rd., products, Steel structures, technology
Power ibail Wuhan research of heat energy products and its
Environment yt i l accessorial equipment, design, technical
al Protection apmoC Consultancy, technical service, sales of
Technology yn developed products, energy project
Company (non-construction project)
Limited
Gas-steam Combined Cycle Heat Recovery
Boiler, Circulating fluidized bed Boiler,
Production and sale of the boiler’s
components and the energy saving
Investment Other essential investment Sharehol Voting Consolid
Subsidiaries
（ RMB ） ding% right% ated
Wuhan Lan Xiang Power 24,984,500.00 95 95 Yes
Environmental Protection
Technology Company Limited
Minority Amount of minority interest in income
Subsidiaries
interest statement deducted from minority interest
Wuhan Lan Xiang Power Environmental Protection 1,758,818.56
Technology Company Limited
）（ 2 Obtained by business combination under same control
Registered Business Registered
Subsidiaries Categories Business scope
address nature capital
Wuhan d et im i L 586 Wuluo Manufacturing 19,115,250.00 Packaging, design, and manufacturing
Boiler BoYu ytilibail
Industrial Rd., Wuhan of Mechanical and Electrical products;
y na pm o C
Co., Ltd processing of metal components;
design and manufacturing of model
and mold ； Manufacturing of valve
rough casting, steel casting, iron
casting, nonferrous metal casting.
Investment Other
Shareholding Voting
Subsidiaries essential Consolidated
（ RMB ） % right%
investment
Wuhan Boiler BoYu Industrial Co., Ltd 14,249,787.13 90 90 Yes
07
Minority Amount of minority interest in income statement
Subsidiaries
interest deducted from minority interest
Wuhan Boiler BoYu Industrial Co., Ltd 567,340.70
2. The changes of consolidated scope
(1) No new issue included in the scope of consolidated subsidiaries
(2) The current scope of non-consolidated subsidiaries not included in
Note5 Notes to the consolidated financial statements
(Except for especially indicated, the closing balance and the opening balance refer to the balance
at Jun 30, 2011 and Dec 31, 2010 respectively; all amounts are presented in RMB).
1. Cash and cash equivalent
Item Closing balance Opening balance
Cash
Bank deposit 10,311,214.66 10,361,930.05
Other cash and cash equivalent 3,612,424.62 3,612,374.92
Total 13,923,639.28 13,974,304.97
Closing balance
Item
Currency Original currency Exchange rate RMB
Cash RMB
EUR
Subtotal —— ——
Bank deposit RMB 4,749,044.91 1 4,749,044.91
USD 45.19 6.4716 292.45
EUR 594,141.48 9.3612 5,561,877.22
JPY 1 0.08 0.08
Subtotal —— —— 10,311,214.66
Other cash and cash equivalents RMB 3,612,424.62 1.00 3,612,424.62
Subtotal —— —— 3,612,424.62
Total 13,923,639.28
17
Opening balance
Item
Currency Original currency Exchange rate RMB
Cash RMB
EUR
Subtotal —— —— ——
Bank deposit RMB 10,028,948.53 1.0000 10,028,948.53
USD 67.30 6.6227 445.71
EUR 37,760.27 8.8065 332,535.81
JPY
Subtotal —— —— 10,361,930.05
Other cash and cash equivalents RMB 3,612,374.92 1.0000 3,612,374.92
Subtotal —— —— 3,612,374.92
Total 13,974,304.97
Note: The closing balance of the cash and cash equivalent decreased 0.36% as compared to the
opening balance.
2. Notes receivable
(1) Category of Notes receivable:
Category Closing balance Opening balance
Bank acceptance - 43,164,000.00
Total - 43,164,000.00
(2) The top five receivable endorsed but not matured as of Jun 30, 2011
Expiration
Company Issued date Amount Notes
date
Yujiaguan Jujing Mining Industry Co.,Ltd 2011/01/26 2011/07/25 3,200,000.00
Henan Lianchuang Chemical Industry Co.,Ltd 2011/01/18 2011/07/18 2,000,000.00
Inner Mongolia Huishilong Steel Co.,Ltd 2011/06/14 2011/12/02 2,000,000.00
Inner Mongolia Huishilong Steel Co.,Ltd 2011/06/14 2011/12/02 2,000,000.00
Inner Mongolia Huishilong Steel Co.,Ltd 2011/06/14 2011/12/02 2,000,000.00
(3)The Notes receivable decreased 100% as compared to the opening balance due to endorsement
to settle vendor payments.
3. Accounts receivable
(1) Accounts receivable by categories are as follows:
27
Closing balance
Balance Provision for doubtful debts
Category
Proportion Proportion
Amount Amount
(%) (%)
Individually significant receivables
Group A (using aging analysis) 539,873,551.22 81.96 108,228,179.55 20.05
Group B (No bad debt provision for 15,554,705.93 2.36
account receivables) -
Other insignificant receivables but still are 103,273,124.83 15.68 79,002,324.83 76.50
impaired individually
Total 658,701,381.98 100.00 187,230,504.38 28.42
Opening balance
Balance Provision for doubtful debt
Category
Proportion Proportion
Amount Amount
(%) (%)
Individually significant receivables
Group A (using aging analysis) 400,417,419.70 76.97 90,042,423.27 22.49
Group B (No bad debt provision for account 15,549,187.32 2.99
receivables)
Other insignificant receivables but still are 104,273,124.83 20.04 65,682,544.83 62.99
impaired individually
Total 520,239,731.85 100.00 155,724,968.10 29.93
Notes for Group A (Recognition provision for doubtful debt of groups of receivables is based on
aging analysis):
Closing balance
Aging of receivables Balance Provision for doubtful
Amount Proportion (%) debts
Within 1 year (including 1 year) 208,681,466.19 38.66 6,260,443.99
1-2 years(including 2 year) 2,703,289.00 0.50 81,098.67
2-3 years(including 3 year) 167,978,396.38 31.11 10,078,703.78
3-4 years(including 4 year) 49,303,491.97 9.13 9,860,698.41
4-5 years(including 5 year) 36,574,591.22 6.78 7,314,918.24
Over 5 years 74,632,316.46 13.82 74,632,316.46
Total 539,873,551.22 100.00 108,228,179.55
37
Opening balance
Aging of receivables Balance Provision for doubtful
Amount Proportion (%) debts
Within 1 year (including 1 year) 41,301,700.11 10.31 1,239,051.00
1-2 years(including 2 year) 134,391,314.04 33.57 4,031,739.43
2-3 years(including 3 year) 77,837,009.86 19.44 4,670,220.59
3-4 years(including 4 year) 30,967,385.66 7.73 6,193,477.13
4-5 years(including 5 year) 52,515,093.64 13.12 10,503,018.73
Over 5 years 63,404,916.39 15.83 63,404,916.39
Total 400,417,419.70 100.00 90,042,423.27
Notes for Other insignificant receivables (Receivables which are not significant, but still need
individually recognition of bad debt provision) ：
Item Closing balance Bad debt provision Note
Product payment and 103,273,124.83 79,002,324.83 Details are tabulated
retention below
Details ：
Company Reason for provision
Datang Shuangyashan Thermal Power Co., Ltd. The Company is required to bear part of the subsequent costs
and thus the receivable amount is not expected to be fully
recoverable
Dongfang Xiwang Baotou Xitu Aluminium The Company is required to bear part of the subsequent costs
and thus the receivable amount is not expected to be fully
recoverable
Shanxi Hongdong HuaShi Thermoelectric Co., Age more than 3 years and deemed irrecoverable
Ltd.
Xuzhou Cha City Electric Co., Ltd. Age more than 3 years and deemed irrecoverable
Hubei Shuanghuan Technology Co., Ltd. The company have sent many dunning letters but to no avail
China Power Engineering Consulting Group, The customer has disputes over the contract settlement and
Zhongnan Power Design Institute the receivable amount is not expected to be fully recoverable
SINOPEC Hubei Chemical Fertilizer Plant Dispute on retention settlement, deemed irrecoverable
Ningxia Western PVC Co., Ltd. Equipment rework charges
Shanxi Zhengxin Group Co., Ltd. Customers did not receive special funding and the receivable
amount not expected to be fully recoverable
PT INDAH KIAT PULP&PAPER ， TBK The portion covered by letter of credit received was not
subjected to general provision for doubtful debt
(2) As of June 30, 2011, receivables with age more than 5 years amounting RMB 5,474,831.69
was recovered during the period, representing 8.63% recovery from total opening balance of
47
accounts receivable with age more than 5 years.
(3) There was no write-off of accounts receivable during the period.
(4) There was no accounts receivable that was due from shareholders with more than 5%
(including 5%) of the voting shares of the Company during the period.
(5) Information of top 5 receivables:
The relationship Proportion
Company Amount Age
with the Company (%)
Shandong Weiqiao Aluminum and Non-affiliated 135,002,999.99 1-4 years 20.50
Electricity Co., Ltd.
Shandong Nuneng Material Group Co., Non-affiliated 78,580,000.00 Within 1 year 11.93
Ltd.
Shanxi Zhengxin Group Co., Ltd Non-affiliated 47,970,000.00 Over 5 years 7.28
Guodian Xian Thermoelectric Project Non-affiliated 30,854,300.00 Within 1 year 4.68
Praparatory Office
Guizhou Chitianhua Paper Co., Ltd Non-affiliated 28,028,000.00 4-5 years 4.26
Total 320,435,299.99 48.65
(6) The amounts due from related parties
Company The relationship with the Company Amount Proportion
(%)
ALSTOM Power System Gmbh A subsidiary of the ultimate 138,169.81 0.02
holding company
ALSTOM Sizhou Electric Power Equipment A subsidiary of the ultimate 40,000.00 0.01
(Qingdao) Co. Ltd holding company
Wuhan Boiler (Group) Special Boiler A subsidiary of the second 9,954,995.28 1.52
Engineering Co., Ltd. largest shareholder
Total 10,133,165.09 1.55
(7) The accounts receivable increased 26.61% mainly due to new billings raised during the period
on projects under execution.
4. Other receivables
(1) Other receivables disclosed by type:
Closing balance
Balance Provision for doubtful debts
Categories
Proportion Proportion
Amount Amount
(%) (%)
Individually significant receivables 5,538,447.44 3.56 5,538,447.44 100
Group A (using aging analysis) 77,062,436.09 49.54 3,228,552.62 4.19
Group B (No bad debt provision for account 50,953,268.20 32.76
receivables)
57
Closing balance
Balance Provision for doubtful debts
Categories
Proportion Proportion
Amount Amount
(%) (%)
Other insignificant receivables but still are 21,991,604.78 14.14 21,991,604.78 100
impaired individually
Total 155,545,756.51 100.00 30,758,604.84 19.77
Opening balance
Balance Provision for doubtful debts
Categories
Proportion Proportion
Amount Amount
(%) (%)
Individually significant receivables 5,538,447.44 3.29 5,538,447.44 100.00
Group A (using aging analysis) 76,977,864.46 45.65 3,101,768.66 4.03
Group B (No bad debt provision for account 62,507,615.14 37.07
receivables)
Other insignificant receivables but still are 23,596,656.07 13.99 23,596,656.07 100.00
impaired individually
Total 168,620,583.11 100.00 32,236,872.17 19.12
Notes for Group A (Recognition provision for doubtful debt of groups of receivables is based on
aging analysis):
Closing balance
Aging of receivables Balance Provision for doubtful
Amount Proportion (%) debts
Within 1 year (including 1 year) 5,879,740.18 7.63 182,767.45
1-2 years(including 2 year) 54,295,360.38 70.46 1,628,860.81
2-3 years(including 3 year) 16,342,560.53 21.21 880,149.36
3-4 years(including 4 year) 10,000.00 0.01 2,000.00
Over 5 years 534,775.00 0.69 534,775.00
Total 77,062,436.09 100.00 3,228,552.62
67
Opening balance
Aging of receivables Balance Provision for doubtful
Amount Proportion (%) debts
Within 1 year (including 1 year) 6,610,079.55 8.59 198,302.39
1-2 years(including 2 year) 60,756,310.82 78.93 1,822,689.32
2-3 years(including 3 year) 9,066,699.09 11.78 544,001.95
3-4 years(including 4 year) 10,000.00 0.01 2,000.00
Over 5 years 534,775.00 0.69 534,775.00
Total 76,977,864.46 100.00 3,101,768.66
Notes for individually significant receivables or insignificant receivables requiring impairment test,
and providing provision for doubtful debt ：
Bad debt Accrual
Item Balance Reason
provision percentage
3RC Company Limited 336,604.05 336,604.05 100.00% Bankruptcy
Value Added Tax paid for 27,193,448.17 27,193,448.17 100.00% Projects were suspended
suspended projects and the amount is not
expected to be recoverable
Total 27,530,052.22 27,530,052.22
(2) Accounts receivable was due from shareholders with more than 5% (including 5%) of the
voting shares of the Company.
Closing balance Opening balance
Name of company provision for bad Provision for
Amount Amount
debt doubtful debts
ALSTOM (China) Investment Co., Ltd. 3,521,197.20 105,635.92 3,159,900.37 94,797.01
Wuhan Boiler Group Co., Ltd. 64,030,488.11 1,912,128.05 64,030,488.11 1,796,641.13
Total 67,551,685.31 2,017,763.97 67,190,388.48 1,891,438.14
Note: Account receivable of RMB 64,030,488.11 from the second largest shareholder, Wuhan
Boiler Group Co., Ltd., was the compensation for the relocation of the old factory.
(3) Details of top 5 other receivables ：
Company The relationship with the Amount Aging Proportion of the
Company total (%)
Wuhan Boiler Group Co., Ltd. The company's 64,030,488.11 2-3 years 41.17
second-largest shareholder
77
Company The relationship with the Amount Aging Proportion of the
Company total (%)
Donghu Development Zone Non-affiliated 10,774,265.00 2-3 years 6.93
Committee
Shandong Weiqiao Aluminum
Non-affiliated 7,644,548.38 2-3 years 4.91
and Electricty Co., Ltd.
Shandong Nuneng Material Non-affiliated 5,708,803.42 Within 1 year 3.67
Group Co., Ltd
Shanxi Zhengxin Group Co., Non-affiliated 5,538,447.44 2-3 years 3.56
Ltd
Total 93,696,552.35 60.24
(4) The amounts due from related parties
Name of company The relationship with the Amount Proportion of the total
Company (%)
ALSTOM (Switzerland) Ltd A subsidiary of the 474,189.96 0.31
ultimate holding company
ALSTOM Power Systems Gmbh A subsidiary of the 35,836.70 0.02
ultimate holding company
Wuhan Boiler Group YunTong Co., Ltd. Subsidiary of Second 25,499.73 0.02
largest shareholder
Wuhan Boiler Group Valve Co., Ltd Subsidiary of Second 240,571.49 0.15
largest shareholder
-- 776,097.88 0.50
Total
．
5 Prepayment
(1) Aging analysis:
Closing balance Opening balance
Aging
Amount Proportion (%) Amount Proportion (%)
Less than 1 year (including 1 year) 149,305,631.89 81.16 94,391,475.66 84.36
1 year to 2 years (including 2 years) 26,434,966.37 14.37 17,498,669.15 15.64
2 years to 3 years (including 3 years) 8,214,829.09 4.47 4,200.00 0.004
Total 183,955,427.35 100.00 111,894,344.81 100.00
Note: Prepayment increased by 64.04% mainly due to increase in the volume of materials
purchase for export projects.
(2) Details of top 5 prepayments:
87
Name of company The relationship Amount Year Reasons
with the Company
ALSTOM Power System Gmbh A subsidiary of the 74,800,403.17 2010 Project has not
ultimate holding yet completed
company
Sumitomo Deutschland Non-affiliated 39,074,856.28 2011 Project has not
Gmbh yet completed
Non-affiliated 37,402,922.51 2011 Project has not
V&M Deutschland Gmbh
yet completed
Igawara Industrial Service Non-affiliated 7,722,841.06 2011 Project has not
and Trading Co.,Ltd yet completed
Howden Hua Engineering Co., Non-affiliated 7,400,000.00 2009 Project has not
Ltd. yet completed
Total 166,401,023.02 --
(3)There was no amount due from shareholders with more than 5% (including 5%) of the voting
shares of the Company in prepayment during the period.
(4)The prepayment aged more than 1 year was for the contract purchase which had yet to settle.
6. Inventory
(1) Categories:
Closing balance Opening balance
Provision for Provision for
Categories
Book balance impairment of Book value Book balance impairment of Book value
inventories inventories
Raw materials 215,474,050.11 41,970,305.27 173,503,744.84 185,535,520.38 100,609,111.64 84,926,408.74
Construction 156,462,893.76 89,727,221.05 66,735,672.71 174,998,729.88 90,877,317.30 84,121,412.58
contract assets
Finished 259,552.71 259,552.71
products
Total 371,936,943.87 131,697,526.32 240,239,417.55 360,793,802.97 191,486,428.94 169,307,374.03
Note 1: 1.Raw material inventory increased 16.09% mainly due to the commencement of new
projects production which resulted in the increase in the volume of raw materials purchased.
Note 2: Construction contract assets decreased 10.55% mainly due to new progress billings raised
during the period on projects under execution.
(2) Provision for impairment of inventories
Decrease
Categories Opening balance Increase Closing balance
Reversal Written off
Raw materials 100,609,111.64 58,638,806.37 41,970,305.27
97
Decrease
Categories Opening balance Increase Closing balance
Reversal Written off
Construction contract 90,877,317.30 11,149.43 1,161,245.68 89,727,221.05
assets
Total 191,486,428.94 11,149.43 59,800,052.05 131,697,526.32
Note 1: The impairment of the raw materials was written off because of the disposal of obsolete
raw materials and realization of project costs.
Note 2: Write-off of the provision for asset impairment from Construction contract was according
to the Accounting Standard on [Construction Contract] to release the loss provision based on
completion progress.
(3) Details of provision for impairment of inventories
The bases of provision Proportion of reversal of
Reasons for
Item for impairment of provision for impairment of
reversal
inventories inventories to closing balance
1.Raw materials According to the net
realizable value
2.Construction contract Expected loss from
assets contract loss
7. Fixed assets
(1) Fixed assets details:
Closing
Item Opening balance Increase Decrease
balance
Cost 909,335,865.37 7,608,166.37 510,413.29 916,433,618.45
Including: Property and buildings 518,751,485.23 518,751,485.23
Machineries 361,440,070.80 5,596,707.20 367,036,778.00
Vehicles 1,421,315.64 1,421,315.64
Electronic equipments and office 27,722,993.70 2,011,459.17 510,413.29 29,224,039.58
equipment
2.Accumulated depreciation 130,577,821.04 19,936,384.19 427,353.95 150,086,851.28
Including: Property and buildings 15,676,163.33 6,491,258.16 22,167,421.49
Machineries 104,515,837.73 9,730,827.36 114,246,665.09
Vehicles 635,659.99 79,007.78 714,667.77
Electronic equipments and office 9,750,159.99 3,635,290.89 427,353.95 12,958,096.93
equipment
3.The net book value of fixed assets 778,758,044.33 -12,328,217.82 83,059.34 766,346,767.17
Including: Property and buildings 503,075,321.90 -6,491,258.16 496,584,063.74
Machineries 256,924,233.07 -4,134,120.16 252,790,112.91
08
Closing
Item Opening balance Increase Decrease
balance
Vehicles 785,655.65 -79,007.78 706,647.87
Electronic equipments and office
equipment 17,972,833.71 -1,623,831.72 83,059.34 16,265,942.65
4. Provision for impairment loss 2,473,278.04 5,193.52 2,468,084.52
Including: Property and buildings -
Machineries 2,313,136.08 5,193.52 2,307,942.56
Vehicles 102,424.14 102,424.14
Electronic equipments and office 57,717.82 57,717.82
equipment
5.Carrying amount 776,284,766.29 -12,328,217.82 77,865.82 763,878,682.65
Including: Property and buildings 503,075,321.90 -6,491,258.16 496,584,063.74
Machineries 254,611,096.99 -4,134,120.16 -5,193.52 250,482,170.35
Vehicles 683,231.51 -79,007.78 604,223.73
Electronic equipments and office 17,915,115.89 -1,623,831.72 83,059.34 16,208,224.83
equipment
Note 1: Amount of depreciation charge for current period was RMB 19,936,384.19.
Note 2: The original cost of construction in progress capitalized as fixed assets during the period
was RMB 4,366,744.02.
(2) Fixed assets without certification
Item The reasons Expected time
New plant and office building Applying for certificate 2011
8. Construction in progress
(1) Details
Closing balance Opening balance
Item
Closing balance Impairment Net book value Book balance Impairment Net book value
1.Newly 8,046,194.55 8,046,194.55 8,683,448.40 8,683,448.40
established base
of the company
2. Equipment 13,584,634.89 13,584,634.89 15,380,343.50 15,380,343.50
for New base of
the Company
3. Purchased 26,888,949.60 26,888,949.60 26,888,949.60 26,888,949.60
technology
Total 48,519,779.04 48,519,779.04 50,952,741.50 50,952,741.50
(2) Significant changes in construction in progress, a
Capitalised
Transferred to
Project Opening balance Increase Other decrease Closing balance interest rate
fixed assets
(%)
1.Newly 8,683,448.40 296,840.17 934,094.02 8,046,194.55
established base
of the company:
Including:
Capitalized
amount of
borrowing costs
2.Equipment 15,380,343.50 1,654,933.71 3,432,650.00 17,992.32 13,584,634.89
for New base of
the Company
Including: 410,108.37 410,108.37
Capitalized
18
Capitalised
Transferred to
Project Opening balance Increase Other decrease Closing balance interest rate
fixed assets
(%)
amount of
borrowing costs
3.Purchased 26,888,949.60 26,888,949.60
technology
Total 50,952,741.50 1,951,773.88 4,366,744.02 17,992.32 48,519,779.04
Including
： 410,108.37 410,108.37
Capitalized
amount of
borrowing costs
Significant changes in construction in progress b Unit: Ten thousand RMB
Project Budget Financial source % of Accumulated amount of Including: Interest
budget interest capitalized capitalized this year
1.Newly established 50,070.00 Self-financing, 100% 19,649,371.90
base of the company: loan
2.Equipment for new 40,000.00 Self-financing, 72% 8,999,350.34
base of the company loan
Total 90,070.00 28,648,722.24
Note 1: The construction in progress decreased 4.77% due to capitalization into fixed assets upon
acceptance and handing over of the assets.
Note 2: As of June 30, 2011, the construction in progress did not have indication of impairment,
so no provision for impairment in construction in progress.
(3) Major construction in progress
Project Progress Notes
Primary structure is completed Ancillary facilities under
New base construction
and in use construction
Several equipment under testing
Equipment purchased for new base Primary equipment is in use
and commissioning
9. Intangibles assets
(1) Details of intangible assets are as following:
Category Opening Increase Decrease Closing
balance balance
Cost 114,050,055.97 3,560.01 114,053,615.98
1.Land use right 41,666,503.00 41,666,503.00
2.Proprietary technology 56,900,206.41 56,900,206.41
3.Software 15,483,346.56 3,560.01 15,486,906.57
Accumulated amortization 56,726,078.10 3,484,908.98 60,210,987.08
1.Land use right 2,222,213.46 416,665.03 2,638,878.49
2.Proprietary technology 44,899,280.82 1,145,088.43 46,044,369.25
28
Category Opening Increase Decrease Closing
balance balance
3.Software 9,604,583.82 1,923,155.52 11,527,739.34
Carrying amount of intangible assets 57,323,977.87 -3,481,348.97 53,842,628.90
1.Land 39,444,289.54 -416,665.03 39,027,624.51
2.Proprietary technology 12,000,925.59 -1,145,088.43 10,855,837.16
3.Software 5,878,762.74 -1,919,595.51 3,959,167.23
Accumulative impairment of intangible
assets
1.Land use right
2.Proprietary technology
3.Software
Total book value of intangible assets 57,323,977.87 -3,481,348.97 53,842,628.90
1.Land use right 39,444,289.54 -416,665.03 39,027,624.51
2.Proprietary technology 12,000,925.59 -1,145,088.43 10,855,837.16
3.Software 5,878,762.74 -1,919,595.51 3,959,167.23
Note: The amortization of the intangible assets during the period was RMB3,484,908.98 during
the period.
10. Deferred tax assets and liabilities
(A) Deferred tax assets and liabilities are not listed as the net value after offset.
(1) Recognized deferred tax assets
Item Closing balance Opening balance
Item
Deferred tax assets:
Provision for asset impairment 67,653,418.92 62,321,677.84
Total 67,653,418.92 62,321,677.84
(2) Unrecognized deferred income tax assets
Item Closing balance Opening balance
Deductible temporary differences 188,622,101.37 241,267,862.35
38
Item Closing balance Opening balance
Tax losses 1,179,067,415.52 1,125,392,951.71
Total 1,367,689,516.89 1,366,660,814.06
(3) The unrecognized deferred income tax assets deductible losses due in the following years
respectively:
Year Closing balance Opening balance Notes
2012 322,036,470.99 322,036,470.99
2013 300,367,116.96 300,367,116.96
2014 364,372,073.45 364,372,073.45
2015 192,291,754.12 138,617,290.31
Total 1,179,067,415.52 1,125,392,951.71
(4)Temporary difference
Temporary difference
Item
Closing balance Opening balance
1. Deductable temporary difference
① Provision for bad debt 178,418,370.06 155,936,116.01
② Provision for loss of inventories impairment 89,727,221.05 90,877,317.30
③ Provision for loss of fixed assets impairment 2,468,084.52 2,473,278.04
Total 270,613,675.63 249,286,711.35
11. Provision for impairment of assets
Decrease Closing
Categories Opening balance Increase balance
Reversal Written off
1.Provision for bad debt 187,961,840.27 30,027,268.95 217,989,109.22
Including: Provision for bad
① 155,724,968.10 31,505,536.28 187,230,504.38
debt of accounts receivable
② Provision for bad debt of 32,236,872.17 -1,478,267.33 30,758,604.84
other receivables
2.Provision for loss of 191,486,428.94 11,149.43 59,800,052.05 131,697,526.32
inventories impairment
3.Provision for loss of fixed 2,473,278.04 5,193.52 2,468,084.52
assets impairment
Total 381,921,547.25 30,038,418.38 59,805,245.57 352,154,720.06
48
Note 1:Write-off of provision for inventories impairment refers to Note5 .6 (2).
Note 2: Write-off of the provision for impairment of fixed assets was caused by the disposal of the
previously impaired fixed assets.
12. Other non-current assets
Item Closing balance Opening balance
Hedge 420,895.71
Total 420,895.71
Note: The hedge decreased 100% as compared to the opening balance mainly due to the
settlement of the forward contracts during the period.
13. Short-term loan
Category Closing balance Opening balance
Credit borrowings
Entrust borrowings 1,325,000,000.00 1,152,000,000.00
Total 1,325,000,000.00 1,152,000,000.00
Note 1: The entrust borrowings are supplied by Alstom (China) Investment Co., Ltd, and the
maximum amount is RMB 1,800,000,000.00,
Note 2: The closing balance of short-term loan increased 15.02% as compared to the opening
balance mainly due to the decrease in the cash received from operating activities during the
period.
14. Notes payable
Category Closing balance Opening balance Amount due in next accounting period
Bank Acceptance 31,968,377.00 18,704,256.28 31,968,377.00
Total 31,968,377.00 18,704,256.28 31,968,377.00
Note 1: The notes payable increased 70.91% mainly due to increase in issuance of banker
acceptance notes to settle vendors’ payments.
Note 2: There was no notes payable due from shareholders with more than 5% (including 5%) of
the voting shares of the Company.
15. Accounts Payable
Item Closing balance Opening balance
Amount 397,935,537.80 315,446,635.93
The accounts payable to shareholders with more than 5% (including 5%) of the voting shares of
the Company or related parties:
58
Company Closing Opening
balance balance
ALSTOM Power Service Gmbh 4,695,444.56
ALSTOM Technical Services (Shanghai) Co., Ltd 4,767,000.00 2,307,000.00
ALSTOM Power INC 1,036,759.24 488,787.14
ALSTOM Power System Gmbh 680,865.02 16,577,651.22
ALSTOM Power Systems S.A Etablissement Boilers 2,262,100.63 2,857,805.54
ALSTOM (Switzerland) Ltd 87,702.72
ALSTOM s.r.o 11,759.71 412,125.94
Wuhan Boiler (Group) Special Boiler Engineering Co., Ltd. 15,903,704.17 24,225,755.73
Wuhan Boiler (Group) Valve Co., Ltd 1,351,613.60 1,690,329.14
Wuhan Boiler Group Yuntong Co. Ltd. 17,440.01 3,123,121.06
Total 30,814,389.66 51,682,575.77
Note 1: The accounts payable increased 26.15% mainly due to the commencement of production
for new projects resulted in increase in the volume of raw materials purchased.
Note 2: The accounts payable aged more than 1 year is mainly for retrofit processing fees. As the
projects have yet to complete, it can’t be settled until the warranty period of the boiler is expired.
16. Advance from customers
Item Closing balance Opening balance
Amount 1,095,290,944.37 1,059,336,631.48
Advanced from customers from shareholders with more than 5% (including 5%) of the voting
shares of the Company or related parties:
company Closing balance Opening balance
ALSTOM Power System Gmbh 916,079,268.72 976,283,726.72
Note1: Advanced from customers, including amount of RMB 720,401,138.99 with age over 1 year
being unsettled contract payments of projects under execution. According to the Company’s
accounting method on construction contract in progress, the account shall be carried forward
before the settlement of contract payments on construction contract in progress.
Note 2: The advanced from the customers at the end of the period increased 3.39%.
68
17. Payroll payable:
(1)Details:
Item Opening Increase Decrease Closing
balance balance
1.Salary,bonus, allowance, 9,395,562.87 59,596,889.26 65,962,277.61 3,030,174.52
subsidy
2. Employee welfare 31,043.56 111,541.00 111,541.00 31,043.56
3.Social insurance 11,849,632.10 11,849,632.10
including ①： Medical insurance 2,960,833.52 2,960,833.52
②Retirement pension 7,278,831.09 7,278,831.09
③Unemployment insurance 1,099,553.09 1,099,553.09
④injury insurance premium 257,455.42 257,455.42
⑤Pregnancy insurance 252,958.98 252,958.98
4. Housing fund 2,823,123.00 2,823,123.00
5. Labour union fee and 2,929,586.47 2,929,203.65 2,620,881.76 3,237,908.36
employee education fee
6.Redemption for terminations
of labor contract
7.Other 58,245,816.18 2,204,643.72 56,041,172.46
：
including Share payment in
cash
Total 70,602,009.08 77,310,389.01 85,572,099.19 62,340,298.90
(2)The balance of salary, bonus, allowances & subsidy decreased 67.75% mainly due to the
payment of annual bonus which was previously accrued.
(3)The decrease in balance of the payroll payable-other mainly due to payment for the employees’
retirement benefits made during the period.
18. Taxes payable
Taxes Closing balance Opening balance
1.Value-added tax: -103,168,819.01 -89,309,204.79
2.Business tax 175,178.17
3.Levee fee 1,751.78
4.Personal income tax 396,694.21 75,537.63
78
Taxes Closing balance Opening balance
5.Education surtax 5,255.35
6.Local education development fee 521.81
7.Urban maintenance and construction tax 12,262.47
8.Property Tax 400,093.03
9.Non staple food price restraining fund
10.stamp duty 19,746.44 312,881.76
11.Land Use Tax 293,334.02 293,334.01
Total -102,058,951.31 -88,432,481.81
19. Interest payable
Item Closing balance Opening balance
Interest payable on short-term borrowings 2,003,697.50 2,003,046.13
Total 2,003,697.50 2,003,046.13
20. Dividends payable
Opening Reason of failure payment
Main investor Closing balance
balance more than 1 year
HIT East Power Electric Co., 108,000.00 108,000.00 The company is in liquidation
Ltd.
West Jiaotong University Star 166,000.00 166,000.00 The company is in liquidation
Source Dynamics
Shanghai Power Equipment 144,000.00 144,000.00 The company is in liquidation
Research Institute
Wuhan Urban Environmental 144,000.00 144,000.00 The company is in liquidation
Engineering Company
Total 562,000.00 562,000.00
Note: dividends payable is due to unpaid dividend by Wuhan Lan Xiang Energy Environmental
Protection Technology Co., Ltd.
．
21 Other payables
Item Closing balance Opening balance
Amount 92,302,698.95 85,685,084.50
Note 1: Other payables from shareholders with more than 5% (including 5%) of the voting shares
of the Company or related parties:
88
Company Closing balance Opening balance
ALSTOM Technology Ltd (Switzerland) 26,837,424.60 26,623,254.00
ALSTOM (Switzerland) Ltd. 1,940,039.69 192,289.93
ALSTOM Power INC 228,849.19 838,869.33
ALSTOM (Wuhan) Engineering & Technology Co., Ltd. 219,718.00
ALSTOM (China) Investment Co., Ltd. 7,218,845.84 3,489,547.49
ALSTOM Beizhong Power (Beijing) Co.,Ltd. 1,205,737.60 26,532.30
Wuhan Boiler Group Co.,Ltd. 974,056.13 974,056.13
Total 38,404,953.05 32,364,267.18
Note 2: The other large amount accounts payable aged more than 1 year is mainly the amount
collected from employees on behalf to purchase ALSTOM stocks.
Note 3: The significant amount of other payables details:
Item Amount The nature or content
ALSTOM Technology Ltd (Switzerland) 26,837,424.60 TOT technology transfer fee
ALSTOM (China) Investment Co., Ltd. 7,218,845.84 ITSSC service fee
Stock deductions 6,092,636.21 Collected and remit on behalf of
employee
China Ping An Property & Casualty 2,757,391.59 Property insurance
Insurance Co., Ltd. Shenzhen Branch
ALSTOM (Switzerland) Ltd. 1,940,039.69 PMX user license fee
Total 44,846,337.93
Note 4: The other accounts payable increased 7.72% mainly due to ITSSC service fee of RMB
7,218,845.84.
22. Provision for contingent liabilities
Item Opening balance Increase Decrease Closing balance
Product quality guarantee 50,387,210.32 91,554.80 50,295,655.52
Total 50,387,210.32 91,554.80 50,295,655.52
Note: The Company delivered an alkaline recovery boiler to a customer in 2008. The boiler was
put into operation. Due to various reasons, the boiler was unable to continue operating at full load
and required some technical modification. The modification work is expected to continue in year
2011. The Company provided RMB 50,295,655.52 in the Book for this modification costs.
．
23 Other non-current liabilities
Item Closing balance Opening balance
1. Deferred income 13,009,176.00 13,148,064.00
2. Hedged items 825,589.60 281,951.85
98
Item Closing balance Opening balance
3. Hedge items 10,482,332.30
4. Unrecognized finance cost -10,038,093.44 -10,138,325.63
Total 14,279,004.46 3,291,690.22
Note1: The unrecognized finance cost is the discount fees of employee retirement benefits in
accordance with the regulations stipulated in “Employee Benefits” Accounting Standards.
Note 2: The closing balance of hedged item showed credit balance mainly due to the unrealized
foreign currency exchange loss resulted from hedge accounting for the unexpired forward
contracts during the period.
24. Paid-in capital
Changes in Paid-in capital information sheet 10,000 shares
Opening balance Increase/Decrease (+/-) Closing balance
Bon Reserves
Issuin
Item us transferr othe subtota Amoun
Amount % g new %
shar ed to rs l t
shares
es shares
1. limited shares 17,200 57.91 17,200 57.91
①National
holdings
②state-owned
corporation
Holdings
③other non 2,053 6.91 2,053 6.91
state-owned
corporation
Holdings
Including:
i. Domestic 2,053 6.91 2,053 6.91
corporation
holdings
ii. Domestic
09
Opening balance Increase/Decrease (+/-) Closing balance
Bon Reserves
Issuin
Item us transferr othe subtota Amoun
Amount % g new %
shar ed to rs l t
shares
es shares
natural person
holdings
④International 15,147 51.00 15,147 51.00
holdings
Including:
i. International 15,147 51.00 15,147 51.00
corporation
holdings
ii. International
natural person
holdings
2. Unlimited 12,500 42.09 12,500 42.09
shares
①stock A
②stock B 12,500 42.09 12,500 42.09
③stock H
④others
3.Total shares 29,700 100.00 29,700 100.00
25. Capital surplus
Item Opening balance Increase Decrease Closing balance
Capital premium 144,909,718.58 144,909,718.58
Other capital surplus 29,749,688.88 29,749,688.88
Including: Transfer from items 29,749,688.88 29,749,688.88
under previous
accounting standard
19
Item Opening balance Increase Decrease Closing balance
Total 174,659,407.46 174,659,407.46
26. Surplus reserve
item Opening balance Increase Decrease Closing Balance
Legal surplus 39,418,356.83 39,418,356.83
Total 39,418,356.83 39,418,356.83
．
27 Retained earnings
Item Amount Extraction or allocation
proportion
Opening balance of retained earnings before -1,396,503,437.13
adjustments
Add: Adjustments on opening balance of
retained earning
Opening balance of retained earnings after -1,396,503,437.13
adjustments
Plus: net profit for the year -118,548,726.65
Retained earnings at the end of the year -1,515,052,163.78
28. Revenue and Cost of Sales
(1)Revenue
Item Jun 30, 2011 Jun 30, 2010
Sales 230,575,383.58 123,049,870.19
Other operating income 17,756,668.42 4,594,238.58
Cost of sales 263,632,226.95 147,754,669.23
Other operating expenses 13,898,964.18 1,474,743.93
Note 1: Sales increased 87.38% mainly due to the increase in recognition of revenue from
overseas projects during the period.
Note 2: Other operating income increased 286.50% mainly due to income from shot peening
process support and increase in disposal of obsolete materials.
(2)Listed by the categories of production or business
Jun 30, 2011 Jun 30, 2010
Categories
Revenue Cost of sales Revenue Cost of sales
Boilers and associated 230,575,383.58 263,632,226.95 123,049,870.19 147,754,669.23
product sales
Technical Services
29
Jun 30, 2011 Jun 30, 2010
Categories
Revenue Cost of sales Revenue Cost of sales
Total 230,575,383.58 263,632,226.95 123,049,870.19 147,754,669.23
(3)Top five customers
company Revenue Proportion of total
revenue (%)
Chiping Source Aluminum Co., Ltd. 85,075,348.41 36.90
Shangdong Luneng Material Group Co., Ltd. 60,164,974.61 26.09
ALSTOM Power Sysems Gmbh 51,784,486.83 22.46
Guodian Xian Thermoelectric Project Praparatory Office 26,635,038.36 11.55
PT INDAH KIAT PULP &PAPER ,TBK 3,357,163.39 1.46
Total 227,017,011.60 98.46
29. Revenue from the construction contracts
Recognised profits to
Accumulated
date (recognised
Project Total amount Construction costs Progress billings
losses as negative
incurred to date
figure)
Fixed price 3,626,082,369.79 1,750,479,886.98 -105,104,411.21 1,488,912,582.01
construction contract
including:
Alstom Power 826,945,208.73 98,982,715.20 31,493,394.74
System Gmbh
Chiping Source 239,965,811.97 220,973,795.03 3,563,514.82 209,970,085.48
Aluminum Co., Ltd.
Guodian Xian 267,418,803.42 27,742,272.90 897,767.69 39,556,795.00
Thermoelectric
Project Praparatory
Office
Shangdong Luneng 335,811,965.81 237,964,658.18 65,384,551.78 302,230,770.08
Material Group Co.,
Ltd.
Note: The current period impairment loss of the construction contracts is estimated to be RMB
39
11,149.53 mainly due to the change in estimates for raw material cost and labour cost for onerous
contracts.
30. Business tax and surcharges
Item Jun 30, 2011 Jun 30, 2010 Base of payment
Business tax 112,009.76 149,127.05
Urban maintenance and construction tax 1,197.98
Education surtax 3,360.30 516.11
Note 3
Levee fee 7,840.69 3,704.22
Non staple food price restraining fund
Local education surtax 2,240.20 52,996.00
Total 126,648.93 206,343.38
Note: The business tax and tax surcharges decreased 38.62% mainly due to decrease in relevant
tax added income resulted in the reduction in the corresponding tax charges.
31. Selling expenses
Selling expenses for the period was RMB 5,269,724.87, decreased RMB 3,643,771.13 or 40.88%
as compared to the same period last year mainly due to the reduction in headcount for sales
function and accordingly the payroll and benefits.
32. Administration expenses
Administration expense for the period was RMB 16,311,884.19, decreased 44.17% as compared
to the same period last year mainly due to: 1. decrease in leasing expenses; 2. changes in
accounting estimate where the residual rate of fixed assets was changed from 3% of cost to 0%,
the depreciation of fixed asset was adjusted according to the new accounting estimate, resulted in
more depreciation charged to administration expenses in the same period last year.
33. Financial expenses
Financial expenses for the period were RMB 31,503,275.97, decreased 29.97% as compared to the
same period last year mainly due to less amount of loans outstanding which reduced the interest
expenses for the period.
49
34. Impairment losses
Item Jun 30, 2011 Jun 30, 2010
1. Provision for Impairment loss of bad debts 30,027,268.95 -32,351,949.91
2. Impairment loss of inventories 11,149.43 -576,549.65
3. Impairment loss of fixed assets
Total 30,038,418.38 -32,928,499.56
Note: Impairment loss increased RMB191.22% as compared to the same period last year mainly
due to: 1. increase in the accounts receivable age in current period; 2.huge collection in the same
period last year contributed to reversal of impairment for that period.
35. Fair value changes
Item Jun 30, 2011 Jun 30, 2010
Hedging-trade -11,547,097.95 -771,454.05
total -11,547,097.95 -771,454.05
Notes: Hedging loss increased 1396.08% as compared to the same period last year mainly due to
unrealized loss incurred by hedge accounting for the unexpired forward contracts during the
period.
36. Non-operating gains
Item Jun 30, 2011 Jun 30, 2010
1. Gain on disposal of non-current assets 1,957.30 877,104.96
：
including Gain on disposal of fixed assets 1,957.30 877,104.96
2. The government subsidies 138,888.00 138,888.00
3. Penalty claimed
4. Indemnity or fine claimed 26,632.99 282,216.00
5.Others 6,132.97 52,049.58
Total 173,611.26 1,350,258.54
Note 1: The government grant is allocation of deferred revenue relating to the land-use right of
new factory.
Note 2: Non-operating income decreases 87.14% as compared to same period last year mainly due
to reduction in disposal of fixed asset and default penalty received.
59
37. Non-operating losses
Item Jun 30, 2011 Jun 30, 2010
1.Loss on disposal of non-current assets 113,878.73 69,846.84
Including: Loss on disposal of fixed assets 113,878.73 69,846.84
2. Default penalty
3. Breach Penalty 329,660.00
4.Loss on theft and relocation
5.Project deduction of subsidiary
6. Others 28,108.48
Total 113,878.73 427,615.32
Note: The non-operating expenses decreased 73.37% as compared to same period last year mainly
due to decrease in breach penalty.
38. Income tax expense
Item Jun 30, 2011 Jun 30, 2010
Current income tax expense
Add: Deferred income tax -5,331,741.08 10,796,697.11
Income tax expense -5,331,741.08 10,796,697.11
39. Earnings per share
Item Jun 30, 2011 Jun 30, 2010
Basic earning per share -0.40 -0.28
Diluted earning per share -0.40 -0.28
Notes: Basic earnings per share and diluted earnings per share calculation process ：
(A) Basic earnings per share = P÷S= 118,548,726.65 ÷297,000,000.00=0.40
S = S0 + S1 + Si × Mi ÷ M0-Sj × Mj ÷ M0-Sk
In the equation above, P represents the net profit or profit after deducting extraordinary gain or
loss attributable to ordinary share holders. S represents the weighted average number of ordinary
shares during the period. S0 represents the number of ordinary shares at the beginning of the
period. S1 represents the number of additional ordinary shares issued on capital surplus transfer or
share dividends appropriation; Si represents the number of ordinary shares issued in exchange for
69
cash or issued as a result of the conversion of a debt instrument to ordinary shares during the
period. Sj represents reduced number of ordinary shares such as shares buy back. Sk represents the
number of a reverse share split. Mo represents the months during the period. Mi represents the
months from the following month after issuing incremental shares to the end of the period. Mj
represents the months from the following month after reducing shares to the end of the period.
(B) Diluted Earnings Per Share =[P+(Diluted potential common stock dividends-convert cost)
/(S0 ＋ ＋
S1 Si×Mi÷M0–Sj×Mj÷M0–Sk+ The weighted average number of incremental ordinary
shares on warrants, options, convertible debt and so on ）
In the equation above, P represents the net profit or profit after deducting extraordinary gain or
loss attributable to ordinary share holders. When calculating the diluted Earnings per Share,
company considered in sequence from dilutive potential ordinary shares to get the lowest earnings
per share.
For business combination under the same control during the reporting period and the combing
party issue new shares as consideration, when calculating the EPS at the end of reporting period,
company should treat these shares as they are normal outstanding shares at the beginning of
combining date (Weighting coefficient is 1). When calculation the EPS during the comparing
period, should treat these shares as they are normal outstanding shares at the beginning of
comparing period. When calculation the EPS after deducting extraordinary gain or loss at the end
of reporting period, should treat these new shares as they are issued one month after the combing
date. When calculation the EPS after deducting extraordinary gain or loss during the comparing
period should ignore these new shares (Weighting coefficient is 0).
For business combination under the same control at the accounting period and the combing party
issue new shares as consideration, when calculating the EPS at the accounting period or the
comparing period, company should use the basic EPS method to treat these new shares.
Unlisted company purchase listed company by issue share to become a listed company indirectly,
when calculating the EPR during the reporting period:
Weighted average number of ordinary shares during the period = (Weighted average number of
shares from the beginning of reporting period to the end of the month which combination
happened) + (Weighted average number of shares from the next month of the combination to the
79
end of the reporting period)
Weighted average number of shares from the beginning of reporting period to the end of the
month which combination happened = Weighted average number of share of the acquirer
(subsidiary in law) × Share exchange rate in the acquisition agreement ×number of months from
the beginning to the month which acquisition happens ÷ number of months during the period.
Weighted average number of shares from the next month of the combination to the end of the
reporting period = Weighted average number of share of the acquiree (parent in law) ×number of
months from the next month to the end of period ÷ number of months during the period.
Unlisted company purchase listed company by issue share to become a listed company indirectly,
when calculating the EPR during the comparing period:
Weighted average number of ordinary shares during the period = Weighted average number of
share of the acquirer (subsidiary in law) × Share exchange rate in the acquisition agreement.
41. Relevant information about cash flow statement
(1) Other cash received from operating activities
Item Amount
Other cash received from operating activities 32,632.99
including: 2010 Small & Median Size Enterprises Growing 6,000.00
Project Money Award from Statistic Bureau
Insurance indemnity 26,632.99
(2) Other cash paid from operating activities
Item Amount
Other cash paid relating to operating activities 36,495,012.58
Including: Staff training
Maintenance expenses 3,006,136.21
Food expenses 2,704,261.90
Utility expenses 6,430,476.40
Audit expenses 750,000.00
89
Item Amount
Travel expenses 3,225,019.32
Business entertainment expenses 977,760.22
Training expenses 1,412,399.14
Security expenses 781,286.41
Cleaning expenses 723,764.18
Consultancy expenses 3,750,352.48
Business Management expenses 2,199,846.72
Leasing expenses 2,167,143.91
Vehicle leasing expenses 3,272,859.42
Listing disclosure 800,000.00
Office expenses 2,358,076.32
(3) Other cash received from investing activities
Item Amount
Cash received relating to financing activities 950,669.73
Including: Interest received 950,669.73
(4)Other cash paid from financing activities
Item Amount
Other cash payments relating to financing activities 155,198.50
Including: bank charges 155,198.50
42. Supplementary information of cash flow statement
Supplementary information Jun 30, 2011 Jun 30, 2010
1. Reconciliation of net profit to net cash flows generated from
operations：
Net profit -118,604,715.81 -82,625,316.38
99
Supplementary information Jun 30, 2011 Jun 30, 2010
Provision for impairments of assets. 29,761,633.67 -82,577,820.93
Depreciation of fixed assets, oil-gas assets and productive
biological assets 19,936,384.19 18,320,154.06
Amortization of intangible assets 3,484,908.98 3,763,587.56
Amortization of long-term deferred expense
Losses/gains on disposal of property, plant and equipment, 111,921.43 -807,258.12
intangible asset and other long-term assets (gains: negative)
Losses/gains on scrapped of fixed assets (gains: negative)
Losses/gains from variation of fair value (gains: negative) 11,547,097.95 771,454.05
Finance cost (income: negative) 31,503,275.97 44,988,222.08
Investment loss (gains: negative)
Decrease in deferred tax assets (increase: negative) -5,331,741.08 10,796,697.11
Increase in deferred tax liabilities (decrease: negative)
Decrease in inventory (increase: negative) -70,932,043.52 24,839,071.01
Decrease in accounts receivable from operating activities (increase:
negative) -116,266,476.06 351,193,739.47
Increase in payables from operating activities (decrease: negative) 81,909,892.35 657,147,313.76
Others
Net cash flows generated from operating activities -132,879,861.93 945,809,843.67
2. Significant investing and financing activities without
involvement of cash receipts and payments
Debt converted to capital
Finance leased fixed assets
3. Movement of Cash and cash equivalent:
Closing balance of Cash 10,440,559.66 16,112,666.69
Less: opening balance of cash 10,491,275.05 27,114,305.92
Plus: closing balance of cash equivalent
Less: opening balance of cash equivalents
The net increase in cash and cash equivalents -50,715.39 -11,001,639.23
001
(2) Cash and cash equivalents:
Item Jun 30, 2011 Jun 30, 2010
1. Cash
Including: Cash on hand 5,037.38
Bank deposit on demand 10,311,214.66 15,676,479.31
Other cash and cash equivalent on demand 129,345 431,150.00
Central Bank deposit on demand
Due from banks
Call loan to banks
2. Cash equivalent
Including: bond investments due in three months
3. Closing balance of cash and cash equivalents 10,440,559.66 16,112,666.69
Note6.Related Party Relationships and Transactions
1. The company's related party identification criteria:
The company's corporate accounting standards and in accordance with the relevant provisions of
China Securities Regulatory Commission to determine the identification criteria related parties as
follows: one control, joint control the other party or exercise significant influence on the other side,
as well as two or more than two parties are of the same party to control, joint control or significant
influence, and constitute a related party.
2. The parent company of the relevant information:
Parent Relationship Business Type Registration Legal Nature of the Registered Capital
company Representative business
Alstom Shareholder Foreign-owned Fifth floor. Dominique Lawfully USD60,964,400.0
(China) enterprises Pouliquen investing in 0
Investment QianKun fields in which
Co., Ltd. building ,No. foreign
6 , West No 6 investment is
street, permitted by
Sanlitun, the State
chaoyang
district,
Beijing
101
Parent company The parent The parent The ultimate Organization
company's company's voting controlling party of Code
shareholding (%) right (%) the Company
Alstom (China) 51 51 ALSTOM Holdings 71092378-2
Investment Co.,
Ltd.
3.Subsidiary of the Company relating to information disclosure:
Subsidiary eretsigeR Type Nature Principal Legal representative Registered Percentage Percentage Organization
sserdda d activities capital(RMB) of of voting Code
Shareholdi right %
ng %
586
Wuhan Boiler Control Control Chong Packaging, design, and 19,115,250.00 90% 90% 71456410-7
Wuluo
Rd.,
Bo Yu shareholder shareholder Wuhan Bao qian manufacturing of
Industrial Co., Mechanical and
Ltd. Electrical products;
processing of metal
components; design
and manufacturing of
model and mold ；
Manufacturing of valve
rough casting, steel
casting, iron casting,
nonferrous metal
casting.
586
Wuhan Lan Control Control Guowei Boiler, energy 20,000,000.00 95% 95% 73753132-4
Wuluo
Rd.,
Xiang Power shareholder shareholder Wuhan Yang environmental
Environmental protection products,
Protection Steel structures,
Technology technology research of
Company heat energy products
Limited and its accessorial
equipment, design,
technical Consultancy,
technical service, sales
of developed products,
energy project
(non-construction
project)
4.Other related parties
Company Relationship Organization
Code
ALSTOM Power INC. A subsidiary of ultimate holding
201
Company Relationship Organization
Code
company
ALSTOM Projects India Limited A subsidiary of ultimate holding
company
ALSTOM Power Systems S.A Etablissement A subsidiary of ultimate holding
Boilers company
ALSTOM Power System Gmbh A subsidiary of ultimate holding
company
ALSTOM Technology Ltd (Switzerland) A subsidiary of ultimate holding
company
A subsidiary of ultimate holding
ALSTOM s.r.o company
ALSTOM Holdings Ultimate holding company
ALSTOM (Switzerland) Ltd A subsidiary of ultimate holding
company
A subsidiary of ultimate holding
ALSTOM Sizhou Electric Power Equipment company
70649461-2
(Qingdao) Co. Ltd
A subsidiary of ultimate holding
ALSTOM Beizhong Power(beijing)Co.,Ltd company 76935519-3
ALSTOM (Wuhan) Engineering & Technology A subsidiary of ultimate holding 77459437-5
Co., Ltd. company
ALSTOM (China) Investment Co., Ltd. The company's largest shareholder 71092378-2
ALSTOM Technical Services (Shanghai) Co., A subsidiary of ultimate holding 60742241-0
Ltd. company
Wuhan Boiler Group Co., Ltd. The second largest shareholder 17771651-4
Wuhan Boiler Group Valve Co., Ltd. Subsidiary of the second largest 30024542-1
shareholder
Wuhan Boiler (Group) Special Boiler Subsidiary of the second largest 87769907-3
Engineering Co., Ltd. shareholder
Subsidiary of the second largest 30024726-7
Wuhan Boiler (Group) Yuntong Co., Ltd shareholder
5. Related party transactions
）（
1 Purchase and service received
Related parties Details of Rule of June 30, 2011 June 30, 2010
transaction price
setting Amount Proportion Amount Proportion
% %
ALSTOM Power Systems Raw material Market 28,305,294.72 22.13
Gmbh purchase price
ALSTOM Power Systems Raw material Market 2,837,547.00 1.70 4,113,373.66 3.22
S.A Etablissement Boilers purchase price
ALSTOM s.r.o Raw material Market 182,087.76 0.11 1,639,123.51 1.28
purchase price
ALSTOM Technical Boiler parts Market 24,600,000.00 14.77
Services (Shanghai) Co., purchase price
Ltd.
ALSTOM s.r.o Fixed asset Market 303,013.75 20.65
301
Related parties Details of Rule of June 30, 2011 June 30, 2010
transaction price
setting Amount Proportion Amount Proportion
% %
downpayment price
Wuhan Special Boiler Technology Market 2,649,300.00 62.18
Complete Equipment service fees price
Engineering Co.,Ltd
ALSTOM Power Service Technical Market 4,695,444.56 49.25
Gmbh service fees price
Wuhan Boiler (Group) Transport Market 4,985,600.00 64.51 7,073,356.62 98.74
Yuntong Co., Ltd service price
Sales and service provided
Related parties Details of Rule of June 30, 2011 June 30, 2010
transaction price
setting Amount proportion Amount proportion
ALSTOM Power Sales Market 20,826,000.00 16.32%
Systems S.A price
Etablissement Boilers
ALSTOM Power Sales Market
System Gmbh price 6,580,775.58 5.16%
）（
2 Other related party transactions:
Related parties Transactions Amount
ALSTOM (Switzerland) Ltd Windsor lab relocation 425,275.63
ALSTOM (Switzerland) Ltd IT service fees 1,839,330.35
ALSTOM Holdings Training fees 32,156.66
ALSTOM Power Inc. PMX support fees 1,243,445.58
ALSTOM Power Inc. Foreign consultant fees 547,972.10
ALSTOM Power Systems Gmbh Training fees 91,773.63
PT ALSTOM Power Energy Systems Indonesia Material sales 989,588.57
ALSTOM (Wuhan) Engineering & Technology Service fees 1,224,759.00
Co., Ltd.
ALSTOM (Wuhan) Engineering & Technology Leasing & service fees 1,753,437.44
Co., Ltd.
ALSTOM (China) Investment Co., Ltd. Training fees 152,333.00
ALSTOM (China) Investment Co., Ltd. ITSSC service fees 6,971,438.02
ALSTOM Beizhong Power(Beijing)Co.,Ltd EHS line verify fees 26,532.00
ALSTOM Beizhong Power(Beijing)Co.,Ltd Technical service fees 1,205,737.60
401
(3) ALSTOM (China) Investment Co., Ltd entrust China Construction Bank to provide a
shareholder’s entrusted loan to Wuhan Boiler Co., Ltd. The amount was RMB 1,325,000,000.00
with a floating downward 10% of PBOC benchmark interest rate. The cumulative interest expense
paid during the period was RMB 32,103,844.25.
．
6 Amounts due from/to related parties
Amount due from related parties
Item Related parties Closing balance Opening balance
Balance Provision for Balance Provision for
doubtful debts doubtful debts
Accounts ALSTOM Power Systems Gmbh 138,169.81 4,145.09 135,170.61 4,055.12
Receivable
ALSTOM Sizhou Electric Power 40,000.00 1,200.00 680,000.00 20,400.00
Equipment (Qingdao) Co. Ltd
Wuhan Boiler (Group) Special 9,954,995.28 597,299.72 9,954,995.28 597,299.72
Boiler Engineering Co., Ltd.
Prepayment ALSTOM Technical Services 9,840,000.00
(Shanghai) Co., Ltd.
ALSTOM Power Systems S.A 2,711,519.75
Etablissement Boilers
ALSTOM Power System Gmbh 74,800,403.17 74,800,403.17
ALSTOM s.r.o 303,013.75
Other ALSTOM Power Systems Gmbh 35,836.70 1,075.10 863.87 25.92
Receivables
ALSTOM (Switzerland) Ltd 474,189.96 14,225.70
ALSTOM (China) Investment 3,521,197.20 105,635.92 3,159,900.37 94,797.01
Co.,Ltd.
Wuhan Boiler Group Co., Ltd. 64,030,488.11 1,912,128.05 64,030,488.11 1,796,641.13
Wuhan Boiler Group Valve Co., 240,571.49 9,583.81 240,571.49 7,217.14
Ltd.
Wuhan Boiler (Group) Yuntong 25,499.73 764.99 25,499.73 764.99
Co., Ltd
Amount due to related parties
Item Related parties Closing balance Opening balance
Accounts Payable ALSTOM Power Service Gmbh 4,695,444.56
ALSTOM Technical Services (Shanghai) Co., Ltd. 4,767,000.00 2,307,000.00
501
Item Related parties Closing balance Opening balance
ALSTOM Power System Gmbh 680,865.05 16,577,651.22
ALSTOM Power Systems S.A Etablissement Boilers 2,262,100.63 2,857,805.54
ALSTOM Power INC 1,036,759.24 488,787.14
ALSTOM s.r.o 11,759.71 412,125.94
ALSTOM (Switzerland) Ltd 87,702.72
Wuhan Boiler (Group) Yuntong Co., Ltd 17,440.01 3,123,121.06
Wuhan Boiler Group Valve Co., Ltd. 1,351,613.60 1,690,329.14
Wuhan Boiler (Group) Special Boiler Engineering Co., 15,903,704.17 24,225,755.73
Ltd.
Advance from
ALSTOM Power System Gmbh 916,079,268.72 976,283,726.72
Customers
Other Payables ALSTOM (China) Investment Co., Ltd. 7,218,845.84 3,489,547.49
ALSTOM (Wuhan) Engineering & Technology Co., Ltd. 219,718.00
ALSTOM Power INC 228,849.19 838,869.33
ALSTOM Beizhong Power(Beijing)Co.,Ltd 1,205,737.60 26,532.30
ALSTOM (Switzerland) Ltd 1,940,039.69 192,289.93
ALSTOM Technology Ltd (Switzerland) 26,837,424.60 26,623,254.00
Wuhan Boiler Group Co., Ltd. 974,056.13 974,056.13
Note7.Contingency
Besides the note5.22 statement, there is no other event to disclose during this report period.
Note.8 Commitments
1. Significant commitments
(1)Capital commitments
Up to 30 June 2011, the commitment related to purchases of long-term assets which the contract
were signed but not reflected in the financial statements amounted to RMB36,078,329.45,
USD462,387.50, EUR100,571.00.
(2)Other commitments
Up to 30 June 2011, the performance bond, tender bond and warranty bond issued by the
Company remain unexpired amounted to RMB109,568,360.00 and USD3,126,923.00.
601
2. The executions of previous commitments and new commitment issued
(1)The executions of previous year's capital commitments: the amount of prior year's capital
commitments fulfilled during the period was RMB9,124,728.25, EUR32,500.00. The new capital
commitments issued were RMB2,072,379.69 and USD34,421.50 during the period.
(2)The performance of previous year's other commitments: The amount of bond expired during
the period were: performance bond RMB 13,500,000.00, tender bond RMB 1,600,000.00. The
performance bond newly issued during the period was RMB15,150,000.00.
Note9.Events after the Balance Sheet Date
There was no significant event after the balance sheet date that the Company needs to disclose.
Note10.Other significant events
Former parent company, Wuhan Boiler (Group) Co., Ltd, entered into a share transfer agreement
with Alstom (China) Investment Co., Ltd on 14 April, 2006. The transaction was completed on 24
August , 2007 after approval from relevant authorities. At present Alstom (China) Investment Co.,
Ltd is the parent company of the Company with 51% shareholdings.
The transaction includes the following key elements according to the Share Transfer Agreement
(hereinafter as the “SPA”) signed on 14 April, 2006:
(1)License, Technical Transfer and Assistance Agreement between Alstom Technology Ltd and
the Company about Steam Generator;
(2)Relocation and Relocation Team Agreement, Relocation Compensation Agreement;
(3)Statements and guarantee about related assets and liabilities, and further compensation
guarantee, with the Company as the beneficiary under SPA.
To the extent applicable, the value of the elements described above has been included in the
preparation of 2011 interim financial statements. The full execution of above Agreement is critical
to the future financial viability of the Company.
Note11.Notes of financial statements of parent company
1. Accounts receivable
(1)Accounts receivable by categories are as follows:
701
Closing balance
Balance Provision for doubtful debts
Category
Proportion Proportion
Amount Amount
(%) (%)
Individually significant receivables
Group A (using aging analysis) 534,585,517.22 81.81 106,484,473.98 19.92
Group B (No bad debt provision for 15,554,705.93 2.38
account receivables)
Other insignificant receivables but still are 103,273,124.83 15.81 79,002,324.83 76.50
impaired individually
Total 653,413,347.98 100.00 185,486,798.81 28.39
Opening balance
Balance Provision for doubtful debt
Category
Proportion Proportion (%)
Amount Amount
(%)
Individually significant receivables
Group A (using aging analysis) 392,671,753.45 76.62 88,218,649.78 22.47
Group B (No bad debt provision for account 15,549,187.32 3.03
receivables)
Other insignificant receivables but still are 104,273,124.83 20.35 65,682,544.83 62.99
impaired individually
Total 512,494,065.60 100.00 153,901,194.61 30.03
Notes for Group A (Recognition provision for doubtful debt of groups of receivables is based on aging analysis):
Closing balance
Aging of receivables Balance Provision for doubtful
Amount Proportion (%) debts
Within 1 year (including 1 year) 208,681,466.19 39.04 6,260,443.99
1-2 years(including 2 year) 2,703,289.00 0.51 81,098.67
2-3 years(including 3 year) 166,038,396.38 31.05 9,962,303.78
3-4 years(including 4 year) 47,492,384.64 8.88 9,498,476.93
801
Closing balance
Aging of receivables Balance Provision for doubtful
Amount Proportion (%) debts
4-5 years(including 5 year) 36,234,788.00 6.78 7,246,957.60
Over 5 years 73,435,193.01 13.74 73,435,193.01
Total 534,585,517.22 100.00 106,484,473.98
Opening balance
Aging of receivables Balance Provision for doubtful
Amount Proportion (%) debts
Within 1 year (including 1 year) 41,301,700.11 10.52 1,239,051.00
1-2 years(including 2 year) 132,931,314.04 33.85 3,987,939.42
2-3 years(including 3 year) 75,145,590.28 19.14 4,508,735.42
3-4 years(including 4 year) 29,200,124.33 7.44 5,840,024.87
4-5 years(including 5 year) 51,812,657.02 13.19 10,362,531.40
Over 5 years 62,280,367.67 15.86 62,280,367.67
Total 392,671,753.45 100.00 88,218,649.78
Notes for Other insignificant receivables (Receivables which are not significant, but still need
individually recognition of bad debt provision) ：
Item Closing balance Bad debt provision Note
Product payment and retention 103,273,124.83 79,002,324.83 Details are tabulated below
Details ：
Company Reason for provision
Datang Shuangyashan Thermal Power Co., Ltd. The Company is required to bear part of the subsequent costs
and thus the receivable amount is not expected to be fully
recoverable
Dongfang Xiwang Baotou Xitu Aluminium The Company is required to bear part of the subsequent costs
and thus the receivable amount is not expected to be fully
recoverable
Shanxi Hongdong HuaShi Thermoelectric Co., Age more than 3 years and deemed irrecoverable
Ltd.
Xuzhou Cha City Electric Co., Ltd. Age more than 3 years and deemed irrecoverable
Hubei Shuanghuan Technology Co., Ltd. The company have sent many dunning letters but to no avail
China Power Engineering Consulting Group, The customer has disputes over the contract settlement and
Zhongnan Power Design Institute the receivable amount is not expected to be fully recoverable
SINOPEC Hubei Chemical Fertilizer Plant Retention money difficult to recover
901
Company Reason for provision
Ningxia Western PVC Co., Ltd. Equipment rework charges
Shanxi Zhengxin Group Co., Ltd. Customers did not receive special funding and the receivable
amount not expected to be fully recoverable
PT INDAH KIAT PULP&PAPER ， TBK The portion covered by letter of credit received was not
subjected to general provision for doubtful debt
(2) As of June 30, 2011, receivables with age more than 5 years amounting RMB 5,474,831.69
was recovered during the period, representing 8.79% recovery from total opening balance of
accounts receivable with age more than 5 years.
(3) There was no write-off of accounts receivable during the period.
(4) There was no accounts receivable that is due from shareholders with more than 5% (including
5%) of the voting shares of the Company during the period.
(5) Information of top 5 receivables:
Company The relationship Amount Age Proportion
with the Company
Shandong Weiqiao Aluminum and Non-affiliated 135,002,999.99 1-4 years 20.66
Electricity Co., Ltd.
Shandong Nuneng Material Group Co., Non-affiliated 78,580,000.00 Within 1 year 12.03
Ltd.
Shanxi Zhengxin Group Co., Ltd Non-affiliated 47,970,000.00 Over 5 years 7.34
Guodian Xian Thermoelectric Project Non-affiliated 30,854,300.00 Within 1 year 4.72
Praparatory Office
Guizhou Chitianhua Paper Co., Ltd Non-affiliated 28,028,000.00 4-5 years 4.29
Total 320,435,299.99 49.04
(6)The amounts due from related parties
Company The relationship with the Amount Proportion
Company
Wuhan Boiler (Group) Special Boiler A subsidiary of the second 9,954,995.28 1.52
Engineering Co., Ltd. largest shareholder
ALSTOM Power System Gmbh A subsidiary of the ultimate 138,169.81 0.02
holding company
ALSTOM Sizhou Electric Power Equipment A subsidiary of the ultimate 40,000.00 0.01
(Qingdao) Co. Ltd holding company
Total 10,133,165.09 1.55
(7) The accounts receivable increased 27.50% mainly due to new billings raised during the period
on projects under execution.
2. Other receivables
(1)Other receivables disclosed by type:
011
Closing balance
Balance Provision for doubtful debts
Categories
Proportion Proportion
Amount Amount
(%) (%)
Individually significant receivables 5,538,447.44 3.57 5,538,447.44 100
Group A (using aging analysis) 76,728,169.31 49.43 2,691,657.62 3.51
Group B (No bad debt provision for account 50,953,268.20 32.83
receivables)
Other insignificant receivables but still are 21,991,604.78 14.17 21,991,604.78 100
impaired individually
Total 155,211,489.73 100.00 30,221,709.84 19.47
Opening balance
Categories Balance Provision for doubtful debts
Amount Proportion (%) Amount Proportion (%)
Individually significant receivables 5,538,447.44 3.30 5,538,447.44 100
Group A (using aging analysis) 76,431,089.46 45.47 2,564,873.66 3.36
Group B (No bad debt provision for account 62,507,615.14 37.19
receivables)
Other insignificant receivables but still are 23,596,656.07 14.04 23,596,656.07 100
impaired individually
Total 168,073,808.11 100.00 31,699,977.17 18.86
Notes for Group A (Recognition provision for doubtful debt of groups of receivables is based on
aging analysis):
Closing balance
Aging of receivables Balance Provision for doubtful
Amount Proportion (%) debts
Within 1 year (including 1 year) 6,092,248.40 7.94 182,767.45
1-2 years(including 2 year) 54,295,360.38 70.76 1,628,860.81
111
Closing balance
Aging of receivables Balance Provision for doubtful
Amount Proportion (%) debts
2-3 years(including 3 year) 16,340,560.53 21.30 880,029.36
Total 76,728,169.31 100.00 2,691,657.62
Opening balance
Aging of receivables Balance Provision for doubtful
Amount Proportion (%) debts
Within 1 year (including 1 year) 6,610,079.55 8.65 198,302.39
1-2 years(including 2 year) 60,756,310.82 79.49 1,822,689.32
2-3 years(including 3 year) 9,064,699.09 11.86 543,881.95
Total 76,431,089.46 100.00 2,564,873.66
(2)Individually significant receivables or insignificant receivables requiring impairment test, and
providing provision for doubtful debt ：
Bad debt Accrual
Item Balance Reason
provision percentage
3RC Company Limited 336,604.05 336,604.05 100.00% Bankruptcy
Value Added Tax paid for 27,193,448.17 27,193,448.17 100.00% Projects were suspended and the
suspended projects amount is not expected to be
recoverable
Total 27,530,052.22 27,530,052.22
(2)Accounts receivable is due from shareholders with more than 5% (including 5%) of the voting
shares of the Company.
Closing balance Opening balance
Name of company Amount provision for bad Amount Provision for doubtful
debt debts
Wuhan Boiler Group Co., Ltd. 64,030,488.11 1,912,128.05 64,030,488.11 1,796,641.13
ALSTOM (China) Investment Co., 3,521,197.20 105,635.92 3,159,900.37 94,797.01
Ltd.
Total 67,551,685.31 2,017,763.97 67,190,388.48 1,891,438.14
Note: Account receivable of RMB 64,030,488.11 from the second largest shareholder, Wuhan
211
Boiler Group Co., Ltd., was the compensation for the relocation of the old factory
(3)Details of top 5 other receivables ：
The relationship with the Proportion of
Company Amount Aging
Company the total (%)
Wuhan Boiler Group Co., The company's second-largest 64,030,488.11 2-3 years 41.25
Ltd. shareholder
Donghu Development Non-affiliated 10,774,265.00 2-3 years 6.94
Zone Committee
Shandong Weiqiao
Non-affiliated 7,644,548.38 2-3 years 4.93
Aluminum and Electricty
Co., Ltd.
Shandong Nuneng Material Non-affiliated 5,708,803.42 Within 1 3.68
Group Co., Ltd year
Shanxi Zhengxin Group Non-affiliated 5,538,447.44 2-3 years 3.57
Co., Ltd
Total 93,696,552.35 60.37
(4)The amounts due from related parties
Name of company The relationship with the Amount Proportion of the total
Company (%)
ALSTOM (Switzerland) Ltd A subsidiary of the 474,189.96 0.31
ultimate holding company
ALSTOM Power Systems Gmbh A subsidiary of the 35,836.70 0.02
ultimate holding company
Wuhan Boiler Group YunTong Co., Ltd. Subsidiary of Second 25,499.73 0.02
largest shareholder
Wuhan Boiler Group Valve Co., Ltd Subsidiary of Second 240,571.49 0.15
largest shareholder
Total -- 776,097.88 0.50
3.Long-term equity investments
Original
Opening Increase/ Closing Shareholding Voting right
Company investment
balance decrease balance Proportion Proportion
amount
Long-term equity
investment under cost
method
Wuhan Lan Xiang 14,000,000.00 24,984,500.00 24,984,500.00 95% 95%
Energy
Environmental
Protection
Technology Co., Ltd.
311
Original
Opening Increase/ Closing Shareholding Voting right
Company investment
balance decrease balance Proportion Proportion
amount
Wuhan Boiler Bo Yu 14,249,787.13 14,249,787.13 14,249,787.13 90% 90%
Industrial Co., Ltd.
Total 28,249,787.13 39,234,287.13 39,234,287.13
Note: The above two subsidiaries companies are under liquidation as of June 30, 2011 , there are
no other business activities, but liquidation is still in progress.
4. Revenue and Cost of Sales
(1)Revenue
Item June 30, 2011 June 30, 2010
Sales 230,575,383.58 123,049,870.19
Other operating income 17,756,668.42 4,594,238.58
Cost of sales 263,632,226.95 147,754,669.23
Other operating expenses 13,898,964.18 1,474,743.93
Sales increased 87.38% mainly due to the increase in recognition of revenue from overseas
projects during the period.
Note 2: Other operating income increased 286.50% mainly due to income from shot peening
process support and increase in disposal of obsolete materials.
(2)Listed by the categories of production or business
June 30, 2011 June 30, 2010
Categories
Revenue Cost of sales Revenue Cost of sales
Boilers and associated
product sales 230,575,383.58 263,632,226.95 123,049,870.19 147,754,669.23
Total 230,575,383.58 263,632,226.95 123,049,870.19 147,754,669.23
(3)Top five customers
company Revenue Proportion of total
revenue (%)
Chiping Source Aluminum Co., Ltd. 85,075,348.41 36.90
Shangdong Luneng Material Group Co., Ltd. 60,164,974.61 26.09
ALSTOM Power Sysems Gmbh 51,784,486.83 22.46
Guodian Xian Thermoelectric Project Praparatory Office 26,635,038.36 11.55
411
company Revenue Proportion of total
revenue (%)
PT INDAH KIAT PULP &PAPER ,TBK 3,357,163.39 1.46
Total 227,017,011.60 98.46
5. Supplementary Cash Flow Information
Supplementary information June 30, 2011 June 30, 2010
1. Reconciliation of net profit to net cash flows generated from
operations ：
Net profit -118,684,816.63 -80,669,777.19
Provision for impairments of assets. 29,841,701.58 -33,736,098.25
Depreciation of fixed assets, oil-gas assets and productive 19,936,384.19 18,320,154.06
biological assets
Amortization of intangible assets 3,484,908.98 3,763,587.56
Amortization of long-term deferred expense
Losses/gains on disposal of property, plant and equipment, 111,921.43 -807,258.12
intangible asset and other long-term assets (gains: negative)
Losses/gains on scrapped of fixed assets (gains: negative)
Losses/gains from variation of fair value (gains: negative) 11,547,097.95 -771,454.05
Finance cost (income: negative) 31,503,921.68 44,988,222.08
Investment loss (gains: negative)
Decrease in deferred tax assets (increase: negative) -5,331,741.08 10,796,697.11
Increase in deferred tax liabilities (decrease: negative)
Decrease in inventory (increase: negative) -70,932,043.52 -47,217,525.47
Decrease in accounts receivable from operating activities -120,908,433.07 314,313,040.50
(increase: negative)
Increase in payables from operating activities (decrease: 85,792,948.90 717,125,686.47
negative)
Other
Net cash flows generated from operating activities -133,638,149.59 946,105,274.70
2. Significant investing and financing activities without
involvement of cash receipts and payments
511
Supplementary information June 30, 2011 June 30, 2010
Debt converted to capital
Convertible corporate bonds within one year
Finance leased fixed assets
3. Movement of Cash and cash equivalent:
Closing balance of Cash 9,017,255.78 14,975,747.68
Less: opening balance of cash 9,827,144.54 26,057,612.46
Plus: closing balance of cash equivalent
Less: opening balance of cash equivalents
The net increase in cash and cash equivalents -809,888.76 -11,081,864.78
Note12.Supplementary information
1. Extraordinary gains or losses
(1)According to the China Securities Regulatory Commission Announcement [2008] No. 43,
extraordinary gains or losses are calculated and disclosed according to “Regulation on the
Preparation of Information Disclosures of Companies Issuing Public Shares No.1.”
(Positive figure represents gain/negative figure represents loss)
Item June 30, 2011
Gains on disposal of non-current assets including reversal of the impairment loss -111,921.43
Unauthorised approval, with or without formal approval documents, or occasional tax
return, relief
Government grant recognized in current year, except for those acquired in the 138,888.00
ordinary course of business or granted continuously in certain standard quota
according to relevant national laws and regulations
Included in current profit and loss against the non-financial enterprises occupation fee
funds collected
The investment cost of subsidiaries obtained by the enterprise, joint ventures and
partnership enterprise is less than the revenues generated from the fair value of
identifiable net assets of the unvested units.
Exchange gains and losses of non-monetary assets
Gains and loss through entrust others to invest or manage assets,
Gains and loss for the provision of impairment of assets due to force majeure factors,
such as victims of natural disaster
Debt restructuring gains and losses
611
Item June 30, 2011
Company restructuring expenses such as employee placement and integration costs
Significant loss of fair trading price over the fair value of transactions generated part
of the profit and loss
Current net profit or loss from the beginning to the date of merge for the subsidiary
resulted from the merge of the enterprise under the control of the same company.
Profit or loss generated from the matters which is not related to the company’s normal
operation or contingency.
In addition to the normal operations associated with the company effective hedging
business, holders of tradable financial assets, trading financial liabilities resulting
from changes in fair value gains and losses, as well as the disposal of trading financial
assets, trading financial liabilities and financial assets available for sale achieved an
investment return
Separately tested for impairment of receivables impairment reversal
Entrusted to the profit and loss made foreign loans
Fair value model with subsequent measurement of investment real estate gains and
losses arising from changes in fair value
According to tax, accounting and other laws and regulations require a one-time
adjustment of current profit and loss impact on the current profit and loss
Entrusting fee incomes from entrust operation.
Other non-operating income and expense other than abovementioned 32,665.96
Other non-recurring gains and losses in line with the definition of profit and loss
items
subtotal 59,732.53
Less: non-recurring income tax effect of gains and losses
Minority interest share of non-recurring gains and losses
Total 59,732.53
2. According to China Securities Regulatory Commission, "the public issuance of securities of
companies prepare an Information Disclosure Rule 9 - return on equity and earnings per share
calculation and disclosure" (2010 Amendment) the requirements of the calculation of net capital
gains rate, earnings per share:
The EPS
June 30,2011 weighted
Basic Diluted
average
EPS EPS
ROE (%)
Net profit attributable to the Company's common stock 12.55 -0.40 -0.40
shareholders of net profit
Net profit after deducting non-recurring gains and losses 12.56 -0.40 -0.40
attributable to shareholders of the Company's common stock
711
The EPS
weighted
June 30,2010
average Basic Diluted
ROE(%) EPS EPS
Net profit attributable to the Company's common stock 8.81 -0.28 -0.28
shareholders of net profit
Net profit after deducting non-recurring gains and losses 8.91 -0.28 -0.28
attributable to shareholders of the Company's common stock
Legal Representative: Chief Financial Official: Chief Accountant:
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