山东省中鲁远洋渔业股份有限公司
SHANDONG ZHONGLU OCEANIC FISHERIES COMPANY LIMITED
Full-Text of Semi-Annual Report 2011
11 August 2011
-0-
Contents
SECTION I. IMPORTANT NOTICE--------------------------------------------------------02
SECTION II. COMPANY PROFILE--------------------------------------------------------02
SECTION III. CHANGES IN SHARE CAPITAL AND PARTICULARS ABOUT SHARES
HELD BY MAIN SHAREHOLDERS-------------------------------------------------------04
SECTION IV. PARTICULARS ABOUT DIRECTORS, SUPERVISORS AND SENIOR
EXECUTIVES-----------------------------------------------------------------------------------06
SECTION V. REPORT OF BOARD OF DIRECTORS-----------------------------------06
SECTION VI. SIGNIFICANT EVENTS----------------------------------------------------10
SECTION VII. FINANCIAL REPORT------------------------------------------------------14
SECTION VIII. DOCUMENTS AVAILABLE FOR REFERENCE---------------------69
1
Section I. Important Notice
Board of Directors and Supervisory Committee of Shandong Zhonglu Oceanic Fisheries Company
Limited (hereinafter referred to as the Company) and its directors, supervisors and senior executives
hereby confirm that there are no any important omissions, fictitious statements or serious
misleading information carried in this report, and shall take all responsibilities, individual and/or
joint, for the reality, accuracy and completion of the whole contents.
No director, supervisor and senior executive stated that he (she) couldn’t ensure the correctness,
accuracy and completeness of the contents of the Semi-annual Report or have objection to this
report.
Director Xiang Kaijin and Xi Jianbing did not attend the Meeting for business trip; Song Wenjian
and Liu Zhihui were presented the Meeting by written authorization respectively for voting.
Wang Zhao’an, Chairman of the Board of the Company; Fu Jiguang, CFO of the Company, and Wu Shuxian,
Manager of Financial Department hereby confirm that the Financial Report enclosed in the Semi-annual Report is
true and complete.
The semi-annual financial report of the Company has not been audited.
This report was prepared in both English and Chinese. Should there be any difference in
interpretation of the two versions, the Chinese version shall prevail.
Section II. Company Profile
I. Company Profile
(I) Name of the Company:
In Chinese: 山东省中鲁远洋渔业股份有限公司
In English: Shandong Zhonglu Oceanic Fisheries Company Limited
(II) Stock Exchange Listed with: Shenzhen Stock Exchange
Short Form of the Stock: Zhonglu B
Stock Code: 200992
(III) Registered Address: No. 43, Heping Road, Jinan, Shandong
Office Address: No. 43, Heping Road, Jinan, Shandong
Post Code: 250014
E-mail: zlzqb@163.com
(IV) Legal Representative: Wang Zhao’an
(V) Secretary of Board of Directors: Zhou Feng
Securities affairs Representative: Li Ying
Contact Address: No. 43, Heping Road, Jinan, Shandong
Tel: (86) 531-86553278, (86) 531-86553276
Fax: (86) 531-86982906
E-mail: zlzqb@163.com
(VI) Newspapers Chosen for Disclosing the Information of the Company:
Securities Times and Hong Kong Commercial Daily
Internet Website Designated by CSRC for Publishing the Semi-annual Report:
2
http://www.cninfo.com.cn
The Place Where the Semi-annual Report is Prepared and Placed: Office of the Board of Directors
(VII) Other information about the Company:
The initial registered date: July 23, 1999
The registered date after change: June 6, 2006
The registered place after change: Shandong Province Administrative Bureau for Industry and
Commerce
Registration code for business license of corporation: 3700001803000
Registration code of tax: 370102863043102
II. Major financial data and indexes
(I) Major accounting data in the report period
Unit: RMB
Increase/decrease at the end of
At the end of this At the period-end this report period compared
report period of last year with that in period-end of last
year (%)
Total assets(RMB) 607,156,665.33 536,828,016.78 13.10%
Owners’ equity attributable to shareholders
443,922,286.14 389,965,433.92 13.84%
of the listed company (RMB)
Share capital(Share) 266,071,320.00 266,071,320.00 0.00%
Net assets per share attributable to
shareholders of the listed 1.67 1.47 13.61%
company(RMB/Share)
Increase/decrease of this report
Reporting period The same period period compared with that in
(Jan. to Jun.) of last year the same period of last year
(%)
Total operating income(RMB) 236,312,065.44 198,750,904.41 18.90%
Operating profit (RMB) 26,412,516.76 11,526,612.76 129.14%
Total profit(RMB) 54,085,104.18 11,696,413.76 362.41%
Net profit attributable to shareholders of the
53,530,928.12 11,357,665.16 371.32%
listed company(RMB)
Net profit attributable to shareholders of the
listed company after deducting 51,087,340.70 11,187,864.16 356.63%
non-recurring gains and losses(RMB)
Basic earnings per share (RMB/Share) 0.20 0.04 400.00%
Diluted earnings per share (RMB/Share) 0.20 0.04 400.00%
Rate of return on weighted average net asset
12.85% 3.15% 9.70%
(%)
Rate of return on weighted average net asset
after deducting non-recurring losses and 12.79% 3.11% 9.68%
gains (%)
Net cash flow arising from operating
36,625,204.19 30,539,683.53 19.93%
activities(RMB)
3
Net cash flow per share arising from
0.14 0.11 27.27%
operating activities (RMB/Share)
(II) Items of non-recurring gains and losses and the relevant amount:
Unit: RMB
Notes
Items of non-recurring gains and losses Amount
(If applicable)
Gains and losses from disposal of non-current asset 2,194,307.71
Government subsidies calculated in current gains and loss
excluding the one closely related to normal operation
249,279.71
business and with constant fixed amount of offer in line with
rules of nation policy and according to certain standard
Total 2,443,587.42 -
(III) The Company had no difference between CAS and IFRS in this period.
Section III. Changes in Share Capital and Particulars about Shares held by
Main Shareholders
I. In the report period, the Company’s total shares and its structure remained unchanged.
II. Ended June 30, 2011, the Company had totally 17,034 shareholders, including 17,025
shareholders holding foreign capital shares in circulating listed domestically.
III. Particulars about shares held by main shareholders
Total shareholders 17,034
Particulars about the shares held by the top ten shareholders
Amount of
Nature of Shareholding Total amount Amount of shares
Full Name of shareholder non-circulating
shareholders proportion of shares held pledged or frozen
shares held
SHANDONG
STATE-OWNED ASSETS State-owned
33.07% 88,000,000 88,000,000 0
INVESTMENT legal person
HOLDING CO., LTD.
SHANDONG LUXIN
INVESTMENT State-owned
14.18% 37,731,320 37,731,320 0
HOLDINGS GROUP CO., legal person
LTD.
CHINA HEAVY
AUTOMOBILE GROUP State-owned
0.73% 1,950,000 1,950,000 0
JINAN TRUCK CO., legal person
LTD.
Domestic
OU YAN PING natural 0.57% 1,514,300 0 0
persons
WANXIANG
Foreign lrgal
INTERNATIONAL 0.54% 1,432,500 0 0
person
INVESTMENT
4
CORPORATION
Foreign
Wang Dongsheng natural 0.50% 1,324,100 0 0
persons
Foreign
Ou Wenqing natural 0.42% 1,127,900 0 0
persons
Foreign
Yi Ying natural 0.41% 1,078,200 0 0
persons
Foreign
He Bing natural 0.38% 1,008,799 0 0
persons
Foreign
Huang Jiayi natural 0.34% 911,487 0 0
persons
Particulars about the shares held by the top ten circulating shareholders
Full name of shareholders Circulation share held Type of shares
Ou Yanping 1,514,300 Domestically listed foreign shares
WANXIANG INTERNATIONAL
1,432,500 Domestically listed foreign shares
INVESTMENT CORPORATION
Wang Dongsheng 1,324,100 Domestically listed foreign shares
Ou Wenqing 1,127,900 Domestically listed foreign shares
Yi Ying 1,078,200 Domestically listed foreign shares
He Bing 1,008,799 Domestically listed foreign shares
Huang Jiayi 911,487 Domestically listed foreign shares
Fan Tongyang 857,300 Domestically listed foreign shares
Pan Chunyu 709,490 Domestically listed foreign shares
Qi Feng 560,100 Domestically listed foreign shares
Among the top ten shareholders, SHANDONG STATE-OWNED ASSETS
INVESTMENT HOLDING CO., LTD. and LUXIN GROUP belong to provincial
state-owned enterprise under the control of State-owned Assets Supervision and
Administration Commission of Shandong; CHINA HEAVY AUTOMOBILE GROUP
Explanation on associated
JINAN TRUCK CO., LTD. was the sponsor shareholder of the Company. The
relationship or accordant
abovementioned shareholders existing no associated relationship or belong to the
action among the top ten
concerted actors as specified in the Measures for the Administration of Information
shareholders of circulation
Disclosure of Shareholder Equity Changes of Listed Companies; other shareholders are
share
the circulation shareholders with domestic listed foreign shares. The Company is not
aware whether there exist associated relationships or belongs to the concerted actors as
specified in the Measures for the Administration of Information Disclosure of
Shareholder Equity Changes of Listed Companies.
Section IV. Particulars about Directors, Supervisors and Senior Executives
5
I. Change of shares of the Company held by directors, supervisors and senior executives
In the report period, directors, supervisors and senior executives of the Company did not hold the
Company’s shares.
II. New engagement or dismissal of directors, supervisors and senior executives of the Company
There was no new appointment or dismission about directors, supervisors and senior management
members in the Company in reporting period.
Section V. Report of Board of Directors
I. Analysis of the Management on the operating results and financial status
In the report period, the Company continued to engage in fishing in the middle and top grounds of
oceans, the processing export of aquatic products, and tenancy and management of refrigerated
cargo vessel. For the report period, the amount of oceanic fisheries reached 7720.16 tons. The
Company realized operating income of RMB 236.3121 million, with an increase rate of 18.90%
over the same period of last year; operating cost of RMB 195.2112 million, with an increase rate of
12.68% over the same period of last year; operating profit of RMB 26.4125 million, with an
increase of 129.14% over the same period of last year, and the net profit attributable to shareholders
of listed company of RMB 53.5309 million with an increase of 371.32% over the same period of
last year.
II. Main business and operation of the Company during the report period
(I)Main business scope of the Company
The Company is a comprehensive enterprise mainly engaging in oceanic fishing. The business
scope mainly includes: outer-sea and ocean fishing; breeding, processing and selling aquatic
products; import and export business for the commodity within approved range; production and sale
of mechanic ice; manufacture, installment and maintenance of refrigeration equipment; refrigeration
and cold storage; service of loading and unloading or portage; house leasing.
(II) Constitution of main business income and main business profit:
(1) Sub-industry, sub-variety
Unit: RMB’0000
Main operations classified according to industries
Increase or Increase or Increase or
decrease of decrease of decrease of
Classified
Gross profit operating operating cost gross profit
according to Operating Operating
ratio revenue over over the same ratio over the
industries or revenue cost
(%) the same period period of last same period
products
of last year year of last year
(%) (%) (%)
Fishery 23,631.21 19,521.12 17.39% 18.90% 12.68% 4.56%
Main operations classified according to products
Tunny 7,995.57 5,321.41 33.45% 15.81% -10.29% 19.37%
6
(2) Sub-region
Unit: RMB’0000
Increase or decrease of main business
Main business
Region income compared to the same time of last
income
year (%)
Mainland of China 5,505.58 80.26%
Taiwan of China 6,022.94 10.21%
Japan 7,910.98 -2.12%
Singapore 1,483.94 46.24%
Ghana 442.80 -16.86%
USA 45.88 -11.51%
Spain 54.31 -91.54%
South Korea 1,637.56 137.52%
Other 40.21 102.57%
(III) Change in main operations and profit structure and reason for the changes in the report
period
Unit: RMB
Items Jan.-Jun. of 2011 Jan.-Jun. of 2010 Increase / decrease (%)
Operating income 236,312,065.44 198,750,904.41 18.90
Operating cost 195,211,217.64 173,245,180.55 12.68
Loss of assets
-374,227.01 813,618.98 -146.00
devaluation
Operating profit 26,412,516.76 11,526,612.76 129.14
Non-operating
27,687,048.74 210,886.00 13,028.92
income
Income tax 554,176.06 338,748.60 63.60
Net profit 53,530,928.12 11,357,665.16 371.32
Statement to reason for change:
1. Losses from asset devaluation decreased by 146% over the same period of last year mainly due to
accounts receivable in this period decreased thus transferred back to bad debts but in the same
period of last year accounts receivable increased thus accrued bad debts.
2. Operating profit increased by 129.14% over the same period of last year mainly due to income of
this period increased and comprehensive gross profit improved.
3. non-operating income increased by 13028.92% over the same period of last year mainly due to
the Company received governmental fuel subsidies in this period.
4. income tax increased by 63.65 over the same period of last year mainly due to total profit of
subsidiary namely Ynatai Food Company increased.
5. net profit increased 371.32% over the same period of last year mainly due to output of item of
purse nets for tunny increased thus sales volume enlarged and price of fishes improved, and fuel
subsidies received from government increased dramatically.
(IV) Explanation on assets structure and its change in the report period
Unit: RMB
7
Increase / decrease
Item Jun 30th of 2011 Dec 31st of 2010
(%)
Prepaid accounts 38,149,521.39 19,740,405.34 93.26
Inventory 128,159,892.64 97,290,477.32 31.73
Construction in
31161024.15
process
Accounts payable 107,864,886.69 83,421,194.01 29.30
Tax payable -1,050,279.60 -2,997,135.41 64.96
Retained profit at
-126,383,255.42 -179,914,183.54 29.75
period-end
Translation
difference of
1,080,941.41 655,017.31 65.02
foreign currency
statement
Statement to reason for change:
1. Prepaid accounts at period-end increased by 93.26% over period-begin mainly due to loan for
purchasing material of tunny prepaid by subsidiary Yantai Food Company increased.
2. Period-end inventory increased by 31.73% over period-begin mainly due to quantity of stock
tunny of Haiyan Branch and Haiwei Branch increased in this period and subsidiary Yantai Food
Company purchased more material of tunny and gurnard.
3. Period-end construction in process increased over period-begin mainly due to a refrigerated
transport vessel purchased by subsidiary HIC Company was about to sail.
4. Period-end accounts payable increased by 29.3% over period-begin mainly due to accounts of
raw material subsidiary Ynatai Food Company should pay for and accounts of oil and fuel Haiyan
Branch should pay for increased.
5. Period-end tax payable increased by 64.96% over period-begin mainly due to subsidiary Ynatai
Food Company exports and sells fishes thus input tax is converted to export tax rebate.
6. Period-end retained profit increased by 29.75% over period-begin mainly due to net profit of the
Company increased substantially.
7. Period-end translation difference of foreign currency increased by 65.02% over period-begin
mainly due to exchange rate of the $US against the RMB in this period decreased quickly.
(V) Change in constitution of cash flow and reasons for the change in the report period
Unit: RMB
Increase /
Item Jan.-Jun. 2011 Jan.-Jun. 2010 decrease (%)
Net cash flows arising from operating
36,625,204.19 30,539,683.53 19.93
activities:
Including: 1.Cash received from selling
242,381,023.01 200,778,843.11 20.72
commodities and providing labor services
2.Written-back of tax received 9,642,291.67 12,110,261.80 -20.38
3.Other cash received
40,877,135.61 5,879,166.35 595.29
concerning operating activities
Minus: 1. Cash paid for purchasing
212,345,097.48 147,592,413.15 43.87
commodities and receiving labor service
2. Cash paid to/for staff and workers 27,304,069.43 18,319,490.81 49.04
3. Taxes paid 1,825,923.92 1,500,486.79 21.69
4. Other cash paid concerning
14,800,155.27 20,816,196.98 -28.90
operating activities
8
Net cash flows arising from investing
-24,661,899.64 -6,172,871.09 -299.52
activities:
Net cash received from disposal of
8,043,541.49 12,000.00 66,929.51
fixed, intangible and other long-term assets
Minus: Cash paid for purchasing
32,705,441.13 6,184,871.09 428.80
fixed, intangible and other long-term assets
Net cash flows arising from financing
-5,427,825.74 -22,968,661.22 76.37
activities:
Cash received from loans 7,595,197.24 5,390,423.27 40.90
Minus: 1.Cash paid for repaying debts 11,222,358.34 27,216,124.00 -58.77
2. Cash paid for dividend and profit
1,140,664.64 1,142,960.49 -0.20
distributing or interest paying
3. Other paid cash related to financing
660,000.00 - 100.00
activities
Net increase in cash and cash equivalent 6,449,468.64 1,398,151.22 361.29
Statement to reasons for change:
1. Net cash flow arising from operating activities increased by 19.93% over the same period of last
year mainy due to income of goods sale and governmental fuel subsidies increased.
2. Net cash flow arising from investing activities decreased by 299.52% over the same period of last
year mainly due to fixed asset investment increased.
3. Net cash flow arising from financing activities increased by 76.37% over the same period of last
year mainly due to loan cash the Company received increased while payment for bank loan
decreased.
(VI)Operation and performance of the main controlling subsidiaries of the Company
Unit: RMB
Marine HIC Yantai Grocery
Total assets 31,573,438.95 112,859,622.69 226,894,008.46
Net assets 6,491,984.14 100,957,376.87 87,336,051.08
Registered capital 22,505,600.00 12,476,146.00 75,593,300.00
Equity proportion (%) 100.00 100.00 100.00
Investing amount 22,505,600.00 12,476,146.00 75,593,300.00
Undertake to Freezing, refrigerating,
transport Self-running processing and sales of
Business character and main international business of marine products, birds
product or service shipping, refrigerated and house animals, and
refrigeration, transportation fruits and vegetables,
marine products etc.
Operating income 9,333,549.76 20,280,392.05 139,085,177.97
Operating profit 157,690.07 4,071,200.87 4,632,595.22
Net profit 462,674.24 4,805,863.20 4,063,957.84
(VII)In the report period, the Company’s investment income which influences the net profit of the
Company over 10% (10% included) existed in none of its share-join companies.
(VIII) Operation problems and difficulties
1. International price of fuel kept high and price of domestic labor improved constantly thus
operation cost of fishing, transporting, processing and other industries increased.
2. Because of rampant activities of pirates fising ships team of the Company quited from
traditional fishing seas thus production and operation was influenced dramatically.
3. The Company will continue to optimize asset distribution through ways of purchasing and
9
self-making ships thus desire for capital increased urgely. CSRC doesn’t authorize B stock listed
companies to refinance still. Therefore the Company has still a huge trouble in financing
especially the long-term capitals.
III. Investment
(I)In the report period, the Company didn’t raise proceeds to invest projects and there were no
raised proceeds in last report period used till the report period.
(II) In reporting period, subsidiary HABITAT Company purchased a refrigerated cargo ship with
8300 tons of discharge capacity. The transaction price was RMB 25.7405 million. Now the project
has been completed and production and operation is in normal state.
IV. The Company has never disclosed profit forecast and annual operation plan in periodic report or
other public notice.
Section VI. Significant Events
I. Administration of the Company
In reporting period, strictly in line with the requirements of "Company Law", "Securities Law", "
Governance Rules of Listed Corporate" issued by CSRC and " Listing Rules” issued by Shenzhen
Stock Exchange", Normalized Operation Guidance for Listed Companies and other laws and
regulation all along, the Board of Directors continuously perfected corporate governance structure,
normalized operation of the Company, and prevented production and operation risks. Recently the
Company consummated many rules and regulations through serious self-exam, self-correction and
complement, thus governance level of the Company was further improved. Real condition of
governance of the Company basically kept in line with related documents of China Securities
Regulatory Commission. There existed no governance problem waiting for dealt.
Main tasks in reporting period:
1. Receiving the Notice to Conveying Meeting Spirit of Supervision on National Securities and
Futures and Working out 2011 Relevant Tasks in Shangdong issued by Shangdong SCRC, the
Company immediately organized directors, supervisors, senior management and other relevant
division and personnel, carefully communicated the spirit as well as concerning relevant contents in
the Notice. And then the Company actively formulated working plans and strictly conducted
meeting spirit in the light of requirements of Shangdong CSRC. Finally we reported the
implementation and working plan of 2011 to supervision division.
2. Based on requirements of the Supervision Letter about Building Administration System for
Internal Information of Controlling Shareholders of Listed Companies, the Company immediately
offered relevant documents for controlling shareholder namely Shandong State-owned Assets
Investment Holding Co., Ltd and made explanation and statement for relevant contents the
documents concerned such as laws and rules as well as regulation of supervision institution. Finally
we got support and understanding of controlling shareholder. We will carefully start working in the
light of requirements of Administration System for Internal Information of Controlling Shareholders.
We have filled the Registration Sheet about Insiders of Internal Information of Controlling
Shareholder, and filed it in Shangdong SRC through office of board of directors.
3. According to requirements of the Notice to Inspection on Basic Condition of Participation of
Various Listed Companies in Future Market issued by Shandong Association of Listed Companies
and the Notice to Questionnaire Survey on Implementation of Play Function of Future Market and
the Notice to Filling Questionnaire Survey on Financing of Listed Companies in Shandong issued
by Shandong SRC, the Company immediately organized relevant division and personnel to
carefully collect and sum relevant information of headquarter and branch subsidiaries over the
10
concerning contents in the Notice. Finally we reported the reason for that enterprises hadn’t carried
out future activities and the problems existing in aspect of financing as well as measures to relevant
division.
II. Implementation of 2010 Profit Distribution Plan
The Company did not distribute profits nor convert public reserve into share capital in 2010.
III. 2011 Semi-annual Distribution Preplan
The Company would neither distribute profits nor convert public reserve into share capital in the
semi-annual of 2011.
IV. Material lawsuits and arbitrations
In the report period, there was no material lawsuit and arbitration.
V. Material assets acquisitions or sell-offs
Unit: RMB’0000
Proper
Conce Related
ty of
Net profit rning relations
the
contributed Gains credit hip with
concer
to the and and transacti
Assets sold Related Pricing ning
Transaction Transaction Company losses debt on party
or placed Selling day transacti principl asset
parties price from arising have (applica
out on or no e has
year-begin from been ble for
been
to selling sales transfe related
transfe
day rred or transacti
rred or
not on)
not
MARITIM
E Tailu market
2011-03-28 617.26 96.64 73.47 No Yes Yes N/A
DELIVER Wheel value
Y INC.
Guangzhou
Huayu
Taihong market
Oceanic 2011-05-04 182.00 4.78 139.97 No Yes Yes N/A
Wheel value
Fisheries
Co., Ltd
VI. Material related transactions
There was no material related transaction in the report period.
VII. Significant contracts and contract implementation
(I) No material entrusting, contracting or leasing of assets by the Company to others or by others to
the Company happened in the report period or in the past but lasting into the period;
(II) No material cash assets management was entrusted by the Company in the report period or in
the past but lasting into the period.
VIII. Guarantees
In reporting period, particulars about external guarantee of the Company could be seen from the
Notice to Offering Guarantee for Subsidiaries (Notice No. 2011-007) dated 23rd April 2011.
11
Till the end of the report period, the Company totally provided external guarantees of RMB
52.6093 million, including, total amounts of guarantee for controlling subsidiaries were RMB
11.5716 million, taking up 11.85% of net assets of the Company till June 30, 2011.
Independent opinion issued by Independent Directors Mr. Hu Yuanmu, Mr. Xu Haifeng and Mr.
Zhong Zhigang were as follow:
The Company was available to be in strict accordance with the Articles of Association and
Management System of External Guarantee, standardizing the external guarantee and strictly
controlling risk of external guarantee.
In the report period, the Company did not provide guarantee for shareholders, actual controllers
and related parties.
The Company ever offered RMB 50 million of guarantees in July of 2002, which was changed to
external guarantee because the Company sold equity of Double Whale Pharmaceutical, for
long-term loan of previous subsidiary Qingdao Double Whale Pharmaceutical Co., Ltd.
(hereinafter referred to as Double Whale Medicine). The Company constantly attached
importance to lifting security work over left guarantee amounts of the Company, and discussed
and solved security lifting events with Double Whale Medicine and the actual controller
Shenzhen Jing Shen Investment and Development Co., Ltd (Jingshen Company). Finally we got a
certain improvement. On February of 2010, the Company and Jingshen Company signed equity
pledge agreement which ruled that Jingshen Company takes holding 45.5% equity of Qingdao
International Fashion City Property Investment Co., Ltd. (valued RMB 67.1125 million) as
counter-guarantee over the above guarantee to pledge to the Company. When Double Whale
Medicine can’t afford to repay, the Company could dispose this equity. Accounts received could
be used to pay for loan principal and interest, tax of equity auction and transfer and other related
expense arising from this pledge. Then registration proceedings of equity pledge were completed
on March 10 in Qingdao Shenyang City Industry and Commerce Branch. In reporting period, the
Company communicated with related parties for several times and timely learned about relevant
condition, and urged them to actively take measures thus strive to solve problems as soon as
possible. On Mar. 2 of 2011, Double Whale Medicine paid RMB 2 million of bank loan again
based on RMB 6.9623 million of payment in previous period. Till now, the amount of guarantee
of the Company on it has decreased to RMB 41.0377 million. And presently, we believe the
Company had no condition against the above rules on the guarantee event. We’ll constantly focus
on the next improvement and push companies to complete guarantee-cancellation.
XI. Commitment
There is no commitment of the Company in the report period.
X. In the report period, the Company, the directors, the supervisors, senior executives,
shareholders of the Company together with actual controllers haven’t received investigation from
the authorized department, forceful measure from justice and inspection department, been sent to
justice organization or asked for criminal responsibility, inspection and administrative penalty
from CSRC, or received no access to securities market, public criticism, administrative penalty
from other administration department if being recognized as inappropriate people or public
criticism by Shenzhen Stock Exchange.
XI. Other material events and its influences, and analysis explanations on its solutions
There was no other material event.
XII. Registration form for receiving research, communication and interview in the report period.
In the report period, the Company received individual investor by receiving and answering calls
12
for communications, there were no such situations as selectively or privately disclose, reveal or
leak significant information which is not yet published publicly to specific objects (organization
investors and fund).
The received Contents discussed and
Date Place Way
parties materials were supplied
2011.1.20 Phone Individual Operation of the Company,
Jinan
communication investor no material were supplied
2011.3.15 Phone Individual Operation of the Company,
Jinan
communication investor no material were supplied
2011.3.16 Phone Individual Operation of the Company,
Jinan
communication investor no material were supplied
2011.3.17 Phone Individual Operation of the Company,
Jinan
communication investor no material were supplied
2011.3.29 Phone Individual Operation of the Company,
Jinan
communication investor no material were supplied
2011.3.30 Phone Individual Operation of the Company,
Jinan
communication investor no material were supplied
2011.4.23 Phone Individual Operation of the Company,
Jinan
communication investor no material were supplied
2011.6.23 Phone Individual Operation of the Company,
Jinan
communication investor no material were supplied
XIII. Index of information on other significant events
In the report period, all the important events of the Company were published on China Securities
Journal, Hong Kong Commercial Daily and Juchao information website http://www/cninfo.com.cn.
Details are as follows:
Notice No. Content of notice Time
2011-001 Notice to 2010 Annual Performance Predict 2011.1.20
rd th
2011-002 Notice to Decision Make on the 3 Meeting of the 4 2011.3.16
Session of Board of Directors
2011-003 Notice to Decision Make on the 3rd Meeting of the 4th 2011.3.16
Session of Board of Supervisors
2011-004 Summary of 2010 Annual Report 2011.3.16
th th
2011-005 Notice to Decision Make on the 4 Meeting of the 4 2011.4.23
Session of Board of Directors
2011-006 Notice to Purchasing Asset 2011.4.23
2011-007 Notice to Offering Guarantee for Subsidiary 2011.4.23
st
2011-008 Summary of 2011 the 1 Seasonal Report 2011.4.23
th th
2011-009 Notice to Decision Make on the 5 Meeting of the 4 2011.6.8
Session of Board of Directors
2011-010 Notice to 2010 Annual Shareholders’ Meeting 2011.6.8
2011-011 Notice to Decisions Made in 2010 Annual Shareholders’ 2011.6.29
Meeting
13
Section VII. Financial Report (Un-audited)
I. Accounting Statement Balance Sheet
Prepared by Shandong Zhonglu Oceanic Fisheries Company Limited Jun. 30, 2011 Unit: RMB
Balance at period-end Balance at year-begin
Items
Consolidation Parent company Consolidation Parent company
Current assets:
Monetary funds 93,572,196.03 29,753,143.06 86,462,727.39 51,315,321.09
Settlement provisions
Capital lent
Transaction finance asset
Notes receivable
Accounts receivable 12,368,192.98 5,464,788.99 14,366,505.83 1,414,607.05
Accounts in advance 38,149,521.39 14,997,082.19 19,740,405.34 14,435,407.19
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance
Interest receivable
Dividend receivable
Other receivables 3,353,862.15 67,035,496.16 2,651,058.26 15,706,850.37
Purchase restituted finance asset
Inventories 128,159,892.64 49,455,926.47 97,290,477.32 27,059,505.04
Non-current asset due within one year
Other current assets
Total current assets 275,603,665.19 166,706,436.87 220,511,174.14 109,931,690.74
Non-current assets:
Granted loans and advances
Finance asset available sales
Held-to-maturity securities
Long-term account receivable 7,231,551.17 6,768,162.00
Long-term equity investment 90,793,844.22 90,793,844.22
Investment property 39,041,052.54 39,041,052.54 39,650,385.30 39,650,385.30
Fixed assets: 253,647,914.73 106,831,930.58 268,829,126.58 112,682,528.80
Construction in progress 31,161,024.15 372,713.60
Engineering material
Disposal of fixed asset
Productive biological asset
Oil and gas asset
Intangible assets 7,588,781.49 47,063.33 7,723,103.53 60,510.05
Expense on Research and Development
Goodwill
Long-term expenses to be apportioned
Deferred income tax asset 114,227.23 114,227.23
Other non-current asset
Total non-current asset 331,553,000.14 244,318,155.44 316,316,842.64 249,955,430.37
Total assets 607,156,665.33 411,024,592.31 536,828,016.78 359,887,121.11
14
Current liabilities:
Short-term loans 34,354,318.41 20,000,000.00 39,113,674.34 20,000,000.00
Loan from central bank
Absorbing deposit and interbank deposit
Capital borrowed
Transaction financial liabilities
Notes payable
Accounts payable 107,864,886.69 12,719,132.33 83,421,194.01 4,278,844.24
Accounts received in advance 656,326.02 656,326.02 637,946.22 599,360.72
Selling financial asset of repurchase
Commission charge and commission
Wage payable 8,474,791.70 5,686,667.93 8,753,181.82 5,422,896.36
Taxes payable -1,050,279.60 131,851.73 -2,997,135.41 8,875.99
Interest payable
Dividend payable 459,329.80 459,329.80 459,329.80 459,329.80
Other accounts payable 12,470,619.08 7,108,086.01 17,470,004.99 10,189,940.29
Reinsurance payables
Insurance contract reserve
Security trading of agency
Security sales of agency
Non-current liabilities due within 1 year
Other current liabilities
Total current liabilities 163,229,992.10 46,761,393.82 146,858,195.77 40,959,247.40
Non-current liabilities:
Long-term loans
Bonds payable
Long-term account payable
Special accounts payable
Projected liabilities
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities 163,229,992.10 46,761,393.82 146,858,195.77 40,959,247.40
Shareholders’ equity:
Share capital 266,071,320.00 266,071,320.00 266,071,320.00 266,071,320.00
Capital public reserve 281,245,215.96 279,130,089.16 281,245,215.96 279,130,089.16
Less: Inventory shares
Special reserve
Surplus reserve 21,908,064.19 19,184,672.34 21,908,064.19 19,184,672.34
General risk reserve
Retained profit -126,383,255.42 -200,122,883.01 -179,914,183.54 -245,458,207.79
Balance difference of foreign currency 1,080,941.41 655,017.31
Total owner’s equity attributable to parent 443,922,286.14 364,263,198.49 389,965,433.92 318,927,873.71
Minority interests 4,387.09 4,387.09
Total shareholder’s equity 443,926,673.23 364,263,198.49 389,969,821.01 318,927,873.71
Total liabilities and shareholder’s equity 607,156,665.33 411,024,592.31 536,828,016.78 359,887,121.11
15
Legal representative: Mr. Wang Zhao’an
Person in charge of accounting works: Mr. Fu Jiguang
Person in charge of accounting institutes: Mr. Wu Shuxian
Profit Statement
Prepared by Shandong Zhonglu Oceanic Fisheries Company Limited Jan.-Jun. of 2011 Unit: RMB
Amount of this period Amount of last period
Items
Consolidation Parent Consolidation Parent
I. Total operating income 236,312,065.44 81,152,984.30 198,750,904.41 70,641,146.76
Including: Operating income 236,312,065.44 81,152,984.30 198,750,904.41 70,641,146.76
Interest income
Insurance gained
Commission charge and commission
II. Total operating cost 209,899,548.68 62,465,061.76 187,224,291.65 67,328,122.96
Including: Operating cost 195,211,217.64 54,001,778.57 173,245,180.55 60,791,710.24
Interest expense
Commission charge and commission
Cash surrender value
Net amount of expense of
Net amount of withdrawal of
Bonus expense of guarantee slip
Reinsurance expense
Operating tax and extras 391,654.16 238,890.58 379,132.54 117,861.05
Sales expenses 1,596,476.12 435,076.78 1,320,322.80 429,350.15
Administration expenses 11,415,579.78 7,564,677.57 9,926,443.43 6,391,703.86
Financial expenses 1,658,847.99 123,378.31 -402,502.34
Losses of devaluation of asset -374,227.01 101,259.95 813,618.98
Add: Changing income of fair
Investment income (Loss is listed
Including: Investment income on
Exchange income (Loss is listed with
III. Operating profit (Loss is listed with 26,412,516.76 18,687,922.54 11,526,612.76 3,313,023.80
Add: Non-operating income 27,687,048.74 26,647,402.24 210,886.00 13,755.00
Less: Non-operating expense 14,461.32 41,085.00 442.88
Including: Disposal loss of
IV. Total Profit (Loss is listed with “-”) 54,085,104.18 45,335,324.78 11,696,413.76 3,326,335.92
Less: Income tax 554,176.06 338,748.60
V. Net profit (Net loss is listed with “-”) 53,530,928.12 45,335,324.78 11,357,665.16 3,326,335.92
Net profit attributable to owner’s 53,530,928.12 45,335,324.78 11,357,665.16 3,326,335.92
Minority shareholders’ gains and losses
VI. Earnings per share
i. Basic earnings per share 0.20 0.17 0.04 0.01
ii. Diluted earnings per share 0.20 0.17 0.04 0.01
VII. Other comprehensive income 425,924.10 53,735.42
VIII. Total comprehensive income 53,956,852.22 45,335,324.78 11,411,400.58 3,326,335.92
total comprehensive income
attributable to owners of parent company 53,956,852.22 45,335,324.78 11,411,400.58 3,326,335.92
t t
16
Total comprehensive income attributable
to minority shareholders
Legal representative: Mr. Wang Zhao’an
Person in charge of accounting works: Mr. Fu Jiguang
Person in charge of accounting institutes: Mr. Wu Shuxian
The merger under a same control realized net profit RMB 0.00 before consolidation in this period.
Cash Flow Statement
Prepared by Shandong Zhonglu Oceanic Fisheries Company Limited
Jan.-Jun., 2011 Unit: RMB
Amount of this period Amount of last period
Items Parent Parent
Consolidation Consolidation
company company
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor
242,381,023.01 72,677,534.95 200,778,843.11 67,825,109.28
services
Net increase of customer deposit and interbank deposit
Net increase of loan from central bank
Net increase of capital borrowed from other financial
institution
Cash received from original insurance contract fee
Net cash received from reinsurance business
Insured savings and net increase of investment
Net increase of disposal of transaction financial asset
Cash received from interest, commission charge and
commission
Net increase of capital borrowed
Net increase of returned business capital
Write-back of tax received 9,642,291.67 12,110,261.80 41,253.30
Other cash received concerning operating activities 40,877,135.61 39,608,076.47 5,879,166.35 9,828,638.44
Subtotal of cash inflow arising from operating activities 292,900,450.29 112,285,611.42 218,768,271.26 77,695,001.02
Cash paid for purchasing commodities and receiving labor 212,345,097.48 61,482,546.13 147,592,413.15 36,507,917.06
service
Net increase of customer loans and advances
Net increase of deposits in central bank and interbank
Cash paid for original insurance contract compensation
Cash paid for interest, commission charge and commission
17
Cash paid for bonus of guarantee slip
Cash paid to/for staff and workers 27,304,069.43 13,127,234.39 18,319,490.81 8,352,520.06
Taxes paid 1,825,923.92 660,099.72 1,500,486.79 423,254.86
Other cash paid concerning operating activities 14,800,155.27 58,371,092.30 20,816,196.98 3,109,761.83
Subtotal of cash outflow arising from operating activities 256,275,246.10 133,640,972.54 188,228,587.73 48,393,453.81
Net cash flows arising from operating activities 36,625,204.19 -21,355,361.12 30,539,683.53 29,301,547.21
II. Cash flows arising from investing activities:
Cash received from recovering investment
Cash received from investment income
Net cash received from disposal of fixed, intangible and other 8,043,541.49 1,820,000.00 12,000.00
Net cash received from disposal of subsidiaries and other
Other cash received concerning investing activities
Subtotal of cash inflow from investing activities 8,043,541.49 1,820,000.00 12,000.00
Cash paid for purchasing fixed, intangible and other 32,705,441.13 1,409,696.91 6,184,871.09 3,867,550.00
Cash paid for investment
Net increase of mortgaged loans
Net cash received from subsidiaries and other units
Other cash paid concerning investing activities
Subtotal of cash outflow from investing activities 32,705,441.13 1,409,696.91 6,184,871.09 3,867,550.00
Net cash flows arising from investing activities -24,661,899.64 410,303.09 -6,172,871.09 -3,867,550.00
III. Cash flows arising from financing activities
Cash received from absorbing investment
Including: Cash received from absorbing minority
Cash received from loans 7,595,197.24 5,390,423.27
Cash received from issuing bonds
Other cash received concerning financing activities
Subtotal of cash inflow from financing activities 7,595,197.24 5,390,423.27
Cash paid for settling debts 11,222,358.34 27,216,124.00 16,000,000.00
Cash paid for dividend and profit distributing or interest 1,140,664.64 617,120.00 1,142,960.49 384,680.00
Including: Dividend and profit of minority shareholder paid
Other cash paid concerning financing activities 660,000.00 660,000.00
Subtotal of cash outflow from financing activities 13,023,022.98 1,277,120.00 28,359,084.49 16,384,680.00
Net cash flows arising from financing activities -5,427,825.74 -1,277,120.00 -22,968,661.22 -16,384,680.00
IV. Influence on cash due to fluctuation in exchange rate -86,010.17
V. Net increase of cash and cash equivalents 6,449,468.64 -22,222,178.03 1,398,151.22 9,049,317.21
Add: Balance of cash and cash equivalents at the period 86,462,727.39 51,315,321.09 35,301,273.89 7,632,634.38
VI. Balance of cash and cash equivalents at the period -end 92,912,196.03 29,093,143.06 36,699,425.11 16,681,951.59
Legal representative: Mr. Wang Zhao’an
Person in charge of accounting works: Mr. Fu Jiguang
Person in charge of accounting institutes: Mr. Wu Shuxian
Consolidated Statement on Changes of Owners' Equity
Prepared by Shandong Zhonglu Oceanic Fisheries Company Limited
June. 30, 2011 Unit: RMB
Amount of this period Amount of last period
Owners' equity attributable to the parent Mino Total Owners' equity attributable to the parent Mino Total
Shar Capit Less: Spec Surp Gene Retai Shar Capit Less: Spec Surp Gene Retai
Items rity owne rity owne
e al Treas ial lus ral ned Oth rs’ e al Treas ial lus ral ned Oth
intere intere rs’
capit ury reser reser risk profit er capit ury reser reser risk profit er
st equit st equit
al reser Stock ve ve reser al reser Stock ve ve reser
I. Balance 266,071,3 281,245,2 21,908,0 -179,914,1 655,017. 4,387.09 389,969,8 266,071,3 281,245,2 21,908,0 -215,109,5 181,86 4,387.09 354,301,2
Add:
Error
Others
II. 266,071,3 281,245,2 21,908,0 -179,914,1 655,017. 4,387.09 389,969,8 266,071,3 281,245,2 21,908,0 -215,109,5 181,86 4,387.09 354,301,2
18
III. 53,530,92 425,924. 53,956,85 35,195,40 473,15 35,668,55
(1) Net 53,530,92 53,530,92 35,195,40 35,195,40
（2） 425,924. 425,924.1 473,15 473,152.9
Total of 53,530,92 425,924. 53,956,85 35,195,40 473,15 35,668,55
(III)
1.
2.
3. Others
(IV)
1.
2.
3.
4. Others
(V)
1.Capital
2. Surplus
3.
4.Others
(VI)
Special
(VII)
Other
IV. 266,071,3 281,245,2 21,908,0 -126,383,2 1,080,94 4,387.09 443,926,6 266,071,3 281,245,2 21,908,0 -179,914,1 655,01 4,387.09 389,969,8
Legal representative: Mr. Wang Zhao’an
Person in charge of accounting works: Mr. Fu Jiguang
Person in charge of accounting institutes: Mr. Wu Shuxian
Statement on Changes of Owners' Equity of Parent Company
Prepared by Shandong Zhonglu Oceanic Fisheries Company Limited
Jun. 30, 2011 Unit: RMB
Amount of this period Amount of last period
Capita Less: Speci Surplu Gener Total Capita Less: Speci Surplu Gener Total
Items l Treasu al Retain l Treasu al Retain
Share s al risk owner Share s al risk owner
capital reserv ry ed capital reserv ry ed
reser reserv reserv s’ reser reserv reserv s’
es Stock ve profit es Stock ve profit
es e equity es e equity
I. Balance at
266,071,320 279,130,089 19,184,672. -245,458,207. 318,927,873 266,071,320 279,130,089 19,184,672. -263,737,384. 300,648,696
the end of
.0 .6 34 79 .1 .0 .6 34 67 .3
the last year
Add:
Error
Others
II. Balance 266,071,320 279,130,089 19,184,672. -245,458,207. 318,927,873 266,071,320 279,130,089 19,184,672. -263,737,384. 300,648,696
III. 45,335,324.7 45,335,324. 18,279,176.8 18,279,176.
(1) Net 45,335,324.7 45,335,324. 18,279,176.8 18,279,176.
（2） Other
Total of 45,335,324.7 45,335,324. 18,279,176.8 18,279,176.
(III)
1. Owners'
19
2. Amount
3. Others
(IV) Profit
1.
2.
3.
4. Others
(V)
1.Capital
2. Surplus
3.
4.Others
(VI) Special
(VII) Other
IV. Balance 266,071,320 279,130,089 19,184,672. -200,122,883. 364,263,198 266,071,320 279,130,089 19,184,672. -245,458,207. 318,927,873
at the end of .0 .6 34 01 .9 .0 .6 34 79 .1
thi t
Legal representative: Mr. Wang Zhao’an
Person in charge of accounting works: Mr. Fu Jiguang
Person in charge of accounting institutes: Mr. Wu Shuxian
II. Notes to accounting statements
SHANDONG ZHONGLU OCEANIC FISHERIES CO., LTD
Notes to Financial Statements
1 January 2011—30 June 2011
(All amounts are listed in RMB unless otherwise stated)
I. Company profile.
Shandong Zhonglu Oceanic Fisheries Co., Ltd. (the “Company”) was incorporated as a joint stock
limited company in the People’s Republic of China on July 30, 1999 according to the
documentation of Lu Ti Gai Zi [1999] No.85 issued by Shandong Development and Reform
Commission, and the holding company of the Company is Shandong Fisheries Enterprise Group
General Corporation. On June 26, 2000, the Company issued 120 million domestic listed foreign
shares (B shares) to foreign investors with face value of one RMB Yuan per share according to the
documentation of Zheng Jian Fa Xing Zi [2000] No.82 issued by the China Securities Regulatory
Commission. The B shares have been listed on the Shenzhen Stock Exchange since July 24, 2000.
On August 22, 2000, by the Company’s authorization, lead underwriters fully exercised the 15%
over-allotment option and issued 18 million B shares to foreign investors with face value of 1 Yuan
per share, and then the Company's total issued share capital is 266,071,320.00 Yuan.
Since 2003, 125,731,320 state-owned legal person shares (occupying 47.25% of the total share
capital of the Company) held by Shandong Fisheries Enterprise Group General Corporation
(“Fisheries Group”) have been frozen by the judiciary, including: A. Fisheries Group provided
guarantee for the loan of 11,700,000 Yuan for a subordinate company, but the subordinate company
failed to repay the loan on time, so Shandong Yantai Intermediate People's Court froze 8,000,000
20
shares (occupying 3% of the total share capital). B. Fisheries Group borrowed 73,580,680 Yuan
from the Agricultural Bank of China Jinan Lixia branch, and Jinan Lixia Court froze 80,000,000
shares (occupying 30.07% of the total share capital).
On December 10, 2006, 88,000,000 shares held by Fisheries Group were auctioned publicly.
According to the auction transaction confirmation (Lu Yin Pai Cheng Zi [2006] No.96) of
Shandong Silver Star Auction Ltd., Shandong State-owned Assets Investment Holdings Ltd. bought
the shares at the price of 48,400,000 Yuan. Holding 33.07% of the total share capital, Shandong
State-owned Assets Investment Holdings Ltd. then became the largest shareholder of the Company
On June 20, 2007; relevant transfer procedures have been completed.
Fisheries Group borrowed 73,344,932 Yuan from Bank of China Jinan branch (the creditor of the
loan was changed to China Xinda Asset Management Corporation from Bank of China in 2004),
and Shandong Higher People's Court froze 37,731,320 shares (occupying 14.18% of the total share
capital). On June 7, 2005, the above 37,731,320 shares were auctioned publicly, According to the
auction transaction confirmation (Lu Rui Cheng Zi [2005] No.013) of Shandong Lu Rui Feng
Auction Ltd., Shandong Luxin Investment Holdings Ltd. bought the shares at the price of 8,760,000
Yuan. On February 2, 2007, relevant transfer procedures have been completed.
Corporate industry: overseas fishing industry.
Corporate major products: tuna and its products.
Corporate registered address: 43 Heping Road, Jinan, Shandong Province, the PRC.
Operating scope: marine and oceanic fishing; aquatic products breeding, processing and
marketing; merchandise import and export business within approved scope; ice machine
manufacture and sale; refrigeration equipment manufacturing, installation, maintenance;
refrigeration; load and unload services; housing lease.
Corporate basic organization structure: Board of shareholders, Board of directors, office of the
general manager, departments of human resources, finance, corporate operation, overseas
management, real estate, and the office of auditory supervision. Three branches are Shandong
Zhonglu Overseas Qingdao Haiwei Branch, Shandong Zhonglu Overseas Qingdao Haiyan Brsnch,
and Shandong Zhonglu Overseas Qingdao Refrigeration Branch. Three wholly-owned subsidiaries
are Shandong Zhonglu Overseas Fishery Transportation, Shandong Zhonglu Overseas (Yantan)
Food Co., Ltd., and HABITAT INTERNATIONAL CORP. The operation entity –YAW ADDO
FISHERIES COMPANY LIMITED, is controlled by operation lease.
II. Main accounting policies, estimation and previous errors
1. Preparation basis of Financial Statements
The Financial Statements of the Company are based on continual operations, in line with actual
transactions and events, and pursuant to requirements of Corporate Accounting Principles – Basic
Principles, and the No. 38 specific principle, released by the Treasury Ministry on 15th February
2006, and the application guidance, interpretation and other relevant rules released consequently
and based on the following important accounting policies and estimation.
2. Declaration of obedience to corporate accounting principles
The Financial Statements are up to requirements of corporate accounting principles and also a true
and thorough reflection to the relevant information as the Company’s financial position dated 30th
June 2011 and the operation results as well as cash flow in period of first half year of 2011.
3. Accounting period
The Company’s accounting year is Gregorian calendar year, namely from 1st January to 31st
December of every year.
21
4. Bookkeeping standard currency
The RMB is taken as the bookkeeping standard currency.
5. Accounting methods for consolidation of enterprises under the same control or otherwise
(1) Consolidation of enterprises under the same control
As for the consolidation of enterprises under the same control, the assets and liabilities received by
the consolidating party in the consolidation are measured on the book value of the consolidated
party on the consolidation day.
(2) Consolidation of enterprises not under the same control
As for the consolidation not under the same control, the consolidation cost is the fair value of the
assets paid, liabilities incurred or committed, and equity securities offered, for obtaining the control
right over the purchased party. As for the consolidation achieved by several exchange transactions,
the consolidation cost is the total of each single transaction. All expenses of the purchasing party for
and directly related to the consolidation are reckoned into the corporate consolidation cost. For
those agreements that made in consolidation contracts for future events which might have
influenced on consolidation cost, on purchased day, if the estimated future events probably going to
occurred and the influence amount on consolidation cost should be calculated reliably, than
reckoned into consolidation cost.
As for acquiree that obtained by consolidation under same control, the qualified confirmation of
identified assets, liability and contigency liabilities should calculated by fair value on day of
purchsaed. If the consolidation cost larger than the fair value amount of indentified net assts from
acquiree’s, the differences should be recognized as goodwill. If teh consoldiation cost less than
the fair value amount of indentified net assts from acquiree’s, the differences should reckoned
into current gains/losses after re-examination.
In consolidation under diferrent control, agencies charge of auditing, law service adn evaluation
consultancy and other relevant management fees that paid by purchaser, should reckoned into
current gains/losses while occurred. For those transaction charges of equity securities or debt
securities that issued by consideration in consolidation, the purchaser should recoked into the
initial recognized amount of equity securities or debt securities.
6. Preparation methods for consolidated financial statements
Included in the consolidation scope are the subsidiaries over which the Company has the control
right or the entities for which the Company has the special purpose.
As the Company’s financial statements are prepared pursuant to the No. 33 Corporate Accounting
Principles – Consolidated Financial Statements and relevant rules, all substantive inside transactions
and dealings within the consolidation scope are balanced out during the consolidation. As for the
shareholders’ equity not attributable to the Parent Company in the subsidiaries, it is specifically
listed as the minority shareholders’ equity in the shareholders’ equity.
As for the inconsistency between the subsidiaries and the Company in the accounting policies and
periods, the necessary adjustment is made on the subsidiaries’ financial statements in the
preparation of the consolidated financial statements according to the Company’s accounting policies
and periods.
As for the subsidiaries obtained in the consolidation of enterprises not under the same control, the
adjustment is made on the individual financial statements on the basis the fair value of the
identifiable assets on the purchase day. As for the subsidiaries obtained under the same control, the
consolidation is regarded as starting at the Year-beginning of the consolidation period, and the
assets, liabilities, operation results and the cash flow are reckoned into the consolidated financial
statements from the year-beginning in the consolidation period.
7. Determination criteria of cash equivalent in cash flow statements
The cash recognized in the preparation of the cash flow statements, is the Company’s storage cash
22
and deposits available for payment anytime.
The cash equivalents recognized in the preparation of the cash flow statements, are investment of
short-term (due in three months from the purchase day), strong mobility and easy transfer to known
sum cash, and slight risk of value vibration, held by the Company.
8. Foreign currency exchange and the conversion of the foreign currency statements
(1) Conversion of business with foreign currency
The foreign currency exchange is booked on the current exchange rate on the transaction day and
converted in the bookkeeping standard currency.
On the balance sheet day, the monetary items are converted on the current rate on the balance sheet
day, concerning the exchange differences between teh spot exchange rate on that date and initial
confirmation or the sport exchange rate on previously balance sheet date, should reckoned in to
current gains/losses except the capitalizing on exchange differences for foreign specific loans,
which was reckoned into cost for capitalizing.
The non-monetary items measured on the historic cost are still measured by the original
bookkeeping rate with the sum of the bookkeeping standard currency unchanged. Items of
non-monetary foreign currency which was calculated by fair value, should converted by spot
exchange rate on the confirmation day of fair value, difference betweent the converted amount of
bookkeeping currency and original amount of bookkepping currency, was treated as changes of fair
value (including exchange rate changed) reckoned into current gains/losses or recognized as other
consolidated income and reckoned into capital public reserve.
(2) Conversion of foreign currency financial statements
Upon the conversion of the foreign currency financial statements of the controlling subsidiaries,
joint enterprises, and the affiliated enterprises on the bookkeeping standard currency different from
the Company’s, the accounting check and preparation of the consolidated financial statements are
made.
Assets and liabilities items in the balance sheet, are converted on the current rate on the balance
sheet day; owners’ equity items besides the “un-distributed profit” item, the other items are
converted on the actual rate. Incomes and expenses items in the profit statement are converted on
the current rate. The conversion difference of the foreign currency financial statements is listed
specifically in the owners’ equity in the balance sheet.
The foreign currency cash flow is converted on the current rate on the cash flow actual day. The
cash influenced by the rate fluctuation is listed specifically in the cash flow statement.
As for the foreign operation, the conversion difference of the foreign currency statement related to
the foreign operation is transferred in proportion into the disposal of the current loss/gain.
9. Financial instruments
(1) Categories, recognition and measurement of financial instruments
The financial instruments are classified as the financial assets and liabilities.
In the initial recognition, the financial assets are classified as, the financial assets measured on fair
value and with its changes reckoned into the current loss/gain (including tradable ones and ones
designated to be measured on fair value and with its changes reckoned into the current loss/gain),
long-term invest-bonds, account receivables, and financial assets available for sale. Categories of
the financial assets besides account receivables are dependent on the holding intention and purpose
of the Company and its subsidiaries for the financial assets.
In the initial recognition, the financial liabilities are classified as the financial liabilities measured
on the fair value and with its changes reckoned into the current loss/gain (including tradable ones
and ones designated to be measured on fair value and with its changes reckoned into the current
loss/gain), other financial liabilities.
23
As the Company becomes one party of the financial instrument contract, the instrument is
recognized as one financial asset or liability.
In the initial recognition, the financial assets or liabilities are measured on fair value; and the
follow-up measurements are: financial assets and financial assets available for sale that measured
by fair value and with alteration reckoned into current gains/losses together with teh financial
liabilities that measured by fair value with alteration reckoned into current gains/losses should
meausred by fair value; financial guarantee contract and loan committments, loan by the rates lower
than market rates, should conducted follow-up measurement by the higher ones between confirmed
amount recognized by”No,13 Accounting Rules for Enterprises—Contingency” after initial
confirmation and balance of initial confirmed amount deducting the accumulated amortization
amount, based on “No. 14 Account Rules for Enterprises—Income”; investment held to maturity,
loans, account receivable and other financial liabilities should measured by amortized cost.
The loss/gain from the fair value changes in the follow-up measurement of the financial assets and
liabilities, besides one related to the hedge, is dealt with in the following methods: ①The financial
assets or liabilities measured on the fair value and with its changes reckoned into the current
loss/gain, are reckoned into the fair value loss/gain; the interest or cash dividend obtained in the
assets holding period, is recognized as the investment return; in disposal, the difference between the
sum actually received and the one booked initially, is recognized as the investment return with the
loss/gain of the fair value change adjusted. ②The fair value change of the financial assets available
for sale, is reckoned into the reserve; the interest on the actual rate in the holding period, is
reckoned into the investment return; the cash dividend of the stock instrument available for sale is
reckoned into the investment return when the invested unit announces to pay the dividend, is
reckoned into the investment return; in dividend, the difference between the sum actually received
and the book value in deduction of the accumulative fair value change originally booked into the
capital reserve.
(2) Recognition basis of and measurement method for the financial assets transfer
The Company’s recognition basis of the financial assets transfer: As for the financial assets with all
risks and compensations on their patent transferred, or all risks and compensations neither
maintained nor transferred but the control over the assets given up, the recognition of the financial
asset may terminate.
The Company’s measurement of the financial assets transfer: For the financial assets are qualified
for the recognition termination conditions, the measurement may be taken on the financial assets
transfer, namely the difference is reckoned into the current loss/gain, between the book value of the
transferred financial assets and, the total of the consideration value received from the transfer and
the fair value change accumulative sum originally booked into the capital reserve.
As for the partly transfer of the financial assets qualified for the recognition termination conditions,
the whole book value of the transferred financial assets is diluted on the respective relative fair
value between the part of recognition termination and the part of no recognition termination, and the
difference is reckoned into the current loss/gain, between the book value of the part of recognition
termination and, the total of the consideration value of the part of recognition termination and the
fair value change accumulative sum originally booked into the capital reserve.
(3) Recognition termination conditions of the financial liabilities
The Company’s recognition termination conditions of the financial liabilities: For the current
obligation of the financial liabilities is relieved whole or partly, the recognition of the financial
liabilities or part may be terminated.
(4) Recognition methods of the fair values of the financial assets and liabilities
The Company’s recognition methods of the fair values of the financial assets and liabilities: as for
the financial instrument in the active market, its fair value is recognized on the quotation in the
active market; as for the financial instrument in the active market, its fair value is recognized by the
24
evaluation method.
The evaluation method consists of as the references to the familiar situation and the price in the
latest market transaction between the two voluntary parties, and the references to the current fair
value of other substantially same financial assets, and the conversion method of the cash flow. In
the evaluation method, the market index is the preferential and uttermost use, and the index
specifically related to the Company and its subsidiaries is in less use.
(5) Impairment of financial assets
On the balance sheet day, the impairment check is taken on the book value of the financial assets
besides the ones measured on fair value and with changes reckoned into the current loss/gain, and
as there is objective evidence to the financial assets impairment, the impairment test may be taken
on the financial assets, and the impairment provision is accrued according to the test result.
The Company exercise impairment test on financial assets with single major amount
independently; for those financial assets with minor single amount, impairment test was exercised
or performing test in combination of fianncial assets that with similar charateristic of credit risk. If
no impairment found in independent test for those financial assets( including financial assets with
single major and minor amount), consolidated into the combination of fianncial assets with
similar charateristic of credit risk found for impairment testing again. If impairment found in
those fianncial assets, then not goting to consolidated into the combination of fianncial assets with
similar charateristic of credit risk found for impairment testing.
If impairment found in investment held to maturity, loans and account receivable, calculated their
book value to the current value of predicted future cash flow, the less reckoned amount was
recognized as impairment losses and reckoned into curren gains/losses. If impairment found in
financial assets available for sale, transfer-out the accumulated losses, reckoned into capital public
reserve before, for fair value decreased, and reckoned into current gains/losses, the accumulated
losses transfer-out was the balance of initial obtained cost deducting the principal received,
amortized amount, current fair value and original impairment losses that reckoned into
gains/losses.
(6) Re-classification of financial assets
Main judgment basis of the re-classification of the undue long-term investment as financial assets
available for sale
1) For there are no financial resources available for the continual capital support for the financial
assets, the financial assets has to be due;
2) There is no intention for holding due in the management;
3) Due to the restrictions of the law and the executive rules, or other reasons, it is impossible for
holding the financial assets due;
4) And other indications to the Company’s incapability for holding due.
The re-classification of the undue long-term investment as financial assets available for sale may be
decided by the approval of the Board of Directors.
10. Account receivable
The account receivables in the Company mainly consist of the bill receivable, long-term account
receivable, and other account receivable. On the balance sheet day, if there is objective evidence to
the actual impairment, the impairment loss is recognized on the difference between the book value
and the current value of the estimative future cash flow.
(1) Account receivable with single major amount and with bad debt provision withdrawal
singly
Judging basis or amount
standards for major single Account receivable with over 1 million yuan(including 1 million yuan)
amount
25
Judging basis or amount
standards for major single Account receivable with over 1 million yuan(including 1 million yuan)
amount
While practicing impairment test independently, withdrawal bad debt provision
on the balance of predicted future cash flows and its book value, which was
Withdrawal method for major
higher than predicted future cash flow, reckoned into current gains/losses.
single amount and withdrwal
If no impairment found in account receivable, consolidated into the combination
bad debt provision singly
of related parties or account age combination for withdrawing bad debt
provision.
(2) Account receivable of bad debt provision withdrawal by combinations
Combination basis
recognized
Combination of related
Classified by related parties
parties
Exept for the account receivable that consolidated into the consolidation statement
Account age
range and those with major single amount and withdrawal bad debt provision single,
combination
rests of the account receivable were classified the combination by account age
Accrued method for bad
debt provision
withdrawal by
combinations
Name of combinations Accrued method
Combination of related
Conducting impairment test independently
parties
Account age
Bsae on age analysis
combination
In combination, withdrawing bad debt provision by age analysis :
Category Risk characteristic combine Accured proportion
Account receivable undue regulated by
Credit period 5%
contract
Within one year(I year included) Account age 10%
1－2years(2years included) Account age 30%
2－3years(3years included) Account age 50%
Over 3 years Account age 100%
(3) Account receivable with single minor amount but withdrawal bad debt privision singly
Resons for withdrawal bad
Owes a long account age and has objective evidence shows impairment occurred
debt privision singly
Accrued method for bad debt Recginzed impairment losses by balancen of the predicted future cash flow and
provision its book values, withdrawal bad debt provision
11. Inventory
(1) Categories of inventory
The inventory is goods or manufactured products held for sale, products in process, and materials
and matters utilized in the production or supply of labor. It mainly consists of the raw material,
turnover material, consumable low-value product, product in process, self-made semi-finished
product, and manufactured product (storage goods).
(2) Pricing method for inventory delivery
26
In inventory delivery, the actual cost is recognized on the weighted average.
(3) Recognition principle on net recognizable value and accrual method for preparation for
inventory price fall-down
On the balance sheet day, the inventory is measured on the lower one between the cost and the net
recognizable value, and the provision for the price fall-down is accrued on each inventory item;
however, as for the inventory of large quantity and low price, the provision is accrued on the
inventory category.
Recognition principle on net recognizable value of inventory: ① net recognizable value as the
estimative sale price less the relevant tax expenses. ② as for the materials held for production, if
the net recognizable value of the manufactured product in use of the materials, is higher than the
cost, the net recognizable value is measured on cost; as the fall-down of the material price shows
that the net recognizable value of the manufactured product is lower than the cost, recognizable
value is recognized on the estimative sale price less the estimative will-be actual cost, estimative
sale expenses, and relevant tax expenses.③ As for the materials held on sale, the net recognizable
value is the market sale price.
(4) Inventory system
The Company’s inventory system is the perpetual one.
(5) Dilution method for the consumable low-value product and packaging material
As for the consumable low-value product and the turn-over material, they are diluted in five-five
method.
12. Long-term stock investment
(1) Recognition of the initial investment cost
① initial investment cost of long-term stock investment obtained by corporate consolidation: in the
case of the consolidation of enterprises under the same control, recognized as the initial cost is the
book value of the owners’ equity obtained from the consolidated party; in the case of the
consolidation of enterprises not under the same control, recognized as the initial cost is the
recognized consolidation cost on the purchase day.
② As for the long-term stock investment obtained by cash payment, the initial investment cost is
the actual purchase payment.
③ As for the long-term stock investment obtained by the equity securities offering, the initial
investment cost is the fair value of the equity securities.
④ As for the long-term stock investment invested in by the investors, the initial investment cost is
the value in the contract agreement.
⑤ As for the long-term stock investment obtained by the exchange of the non-monetary assets and
the debts restructuring, the initial investment cost is recognized on the relevant rules in the
Principles.
(2) Follow-up measurement and loss/gain recognition method
The follow-up measurement of the long-term stock is on equity or cost. As for the long-term stock
investment on equity, the investment return is recognized on the share of the net loss/gain deserved
or distributed; upon the calculation of the deserved share of the profit and cash dividend announced
to be distributed, the book value of the long-term stock investment is decreased correspondingly.
As for the long-term stock investment on equity, the book value remains unchanged, besides the
investment added or withdrawn. Upon the calculation of the deserved share of the profit or cash
dividend announced to be distributed, the investment return is recognized.
As for the long-term stock investment of common control and significant influence, it is checked on
equity; and others are checked on cost.
(3) Recognition principle on common control over and significant influence on invested unit
① Recognition principle on common control over invested units: the common control is agreed in
the contract or agreement by the two or more joint parties that the accounting and operation policy
must be decided commonly by the two or several investment parties.
② Recognition principle on the significant influence on invested unit: As above 20% to 50% vote
27
capital is held in the invested unit, the significant influence is recognized; or as 20% below is held,
the significant influence is recognized if the following conditions are matched up to:
①there is representative in the invested unit’s board of directors or similar authority organs;
②there is participation in the policy-making of the invested unit;
③there is management person dispatch into the invested unit;
④there is dependence on the invested company’s technology or technologic materials;
⑤and other situations which can prove fully the significant influence on the invested unit
(4) Test method for impairment test and accrual method for impairment provision
On the balance sheet day, the check is taken on the long-term stock investment to make sure
whether there is the indication to the impairment; once there is, the impairment test is taken to
recognize the recoverable, and then the provision for the impairment is accrued on the lower one
between the book value and the recoverable; once the impairment loss is accrued, it may not be
transferred in the future accounting periods.
As for the net fair value sold in the long-term stock investment, if there is the agreement price of the
fair transaction, it is on the agreement price less the relevant tax expense; or there is no fair
transaction agreement but the active market for similar assets, it is on the market price less relevant
tax expense.
13. Investment real estate
(1) Category of and measurement method for real estate
Category of the Company’s investment real estate: rented land use rights, rented buildings and land
use rights held for transfer after appreciation.
Investment real estate of the Company is initially measured by cost and conducting follow-up
measures by cost mode.
(2) Principle of check on cost
Accrued on the year averaging is the depreciation of the lease buildings in the Company’s
investment property. The detailed check principle is same as that of the capital assets.
The rented land use rights and land use rights held for transfer after appreciation owned by the
Company were adopted line amortization method. Detail calculation policy was similar to
intangible assets.
On balance sheet day, examing impairment evidence on investment real estate, if found evidence
of impairement, than conducted impairment test and confirmed its recovered amount. Withdrawal
impairment provision by lower amount between its book value and recovered amount, the
impairment losses should be transfer-back in subsequent accounting period while been accrued.
14. Capital assets
(1) Recognition conditions of capital assets
The capital assets are tangible assets held for the goods production, labor supply, lease or operation
& management, and with above one-accounting-year service life; meanwhile as up to the following
conditions, they are recognized:
①The economic interest related to the capital assets probably flow into the Company;
②The cost of the capital assets can be measured reliably.
(2) Category of and accrual method for capital assets
The Company’s capital assets are mainly divided as: house buildings, ships & machines & fishing
equipment, furniture & office equipment, transportation equipment; the depreciation is in year
averaging method. The service life and the net estimative remnant are recognized on the nature and
utilization of the capital assets; and at the year-end, the service life, net estimative remnant, and the
depreciation method, of the capital assets, are checked, and the corresponding adjustment is made if
there is inconsistency between the checked ones and the previous ones. The depreciation of all of
the Company’s capital assets is accrued, besides the ones sufficiently accrued and in continuous use,
and the land booked specifically.
28
Net estimative Annual depreciation rate
Category of assets Estimative service life (year)
remnant rate (%) (%)
House building 20—40 3—5 2—5
Ship 15—20 3—5 5—6
Machine & Fishing 8—20
equipment 3—5 5—12
Furniture & Office 5
equipment 3—5 19
Transportation equipment 5 3—5 19
(3) Test method for impairment of capital assets, and accrual method for provision of
impairment
At balance sheet day, fixed assets have been examined by the Company whether there exist
evidence of impairment probably, while impairment evidence be found than impairment test shall
be performed and recognized its recoverable amount. Take the lower one between the book value
and recoverable amount for impairment provision withdrawal, the withdrawal impairment losses
shall not be switch back in subsequent fiscal year.
The recoverable amount of fixed assets was recognized as the higher one between the net amount
resuled from faire value of assets minor disposal charges and current value of predicted future
cash flows. If there exis sales agrement price within fair transaction, net amount resulted from
faire value of assets minor disposal charges should recognized as the amount resulted from sales
agreement price minor disposal charge directly attributable to this asses; if exits no sales agrement
price within fair transaction but exits active market or similar transaction price in assets, then
recognized by the amount resulted from market price minor disposal charge.
(4) Recognized basis and valuation method for fixed assets that rent-in by financing
Recognized basis for fixed assets that rent-in by financing: rents that transfer all risks and
remuneration relted to assets ownership actually. Detail recognition for follow one item or more
item been qualified: ① while the tenacy expired, ownership of the rented assets transfer to lessee;
② lessee has the right of choice for purchasing rented assets, the purchased price setted was far
lower than the fair value of rented assets that exercise option rights by prediction, the option
rights was reaonably recognized on date of renting for lessee; ③thought no ownership transfer,
rent period takes majority time of the useful life of rented assets; ④ current value of the minimun
rented amount payment on date of renting is almost equals to the fair value of rented assets on
starting day of purchasing; ⑤ rented assets owes special natures, lessee should not be used this
rented asstes if no major changes on this assets.
Valuation method for fixed assets that rent-in by financing: initial valuation for the fixed assets
rent-in by financing was used the lower ones between faire value of rented assets on starting day of
purchasing and minimum rented payment for bookkeeping value;
Follow-up valuation for fixed assets that rent-in by financing was used the similar depreciation
policies of self-owned fixed assets withdrawal depreciation and impairment provision.
15. Projects under construction
(1) Category of projects under construction
The Company’s projects under construction are divided as the self-support and contract-out
construction.
(2) Principle and time point of transfer of projects under construction to capital assets
Principle and time point of transfer of projects under construction to capital assets: as the project
completion reaches the expectant availability, the capital assets is transferred. Judgment principle
on expectant availability: if following cases is matched up to:
① The substance construction (installation included) of the capital assets has completed all or
29
basically;
② As the projects have been in test production or operation, and the results show that the assets
can operate properly and produce the qualified products stably, or the test operation result shows
the assets can operate or open properly.
③ The expenditure of the capital assets on the construction, is a little or little.
④ The capital assets of the project constructed have been up to the requirements of the design or
contract, or basically up to.
(3) Test method and provision accrual method, for impairment of projects under construction
On the balance sheet day, the check is taken on the projects under construction for the indication to
the impairment, and if there is the indication, the impairment test is taken to recognize the
recoverable, and the impairment provision is accrued on the lower one between the book value and
the recoverable; once the impairment loss is accrued, it cannot be transferred back in the future
accounting periods.
The recoverable is recognized on the higher one between the net of the assets fair value less the
disposal expenses, and the current value of the assets estimative future cash flow.
16. Borrowing expenses
(1) Recognition principle on capitalization of borrowing expenses
As for the Company’s actual borrowing expenses directly attributable to the assets construction or
production, it is capitalized and reckoned into the relevant assets cost; as for other borrowing
expenses, it is recognized on the actual sum and reckoned into the current loss/gain. The assets up
to the capitalization are assets as the capital assets, investment real estate, and inventory reaching
the expectant availability or sale ability.
(2) Recognition method for capitalization
Capitalization period: the period from the time point of starting to that of ending, of the
capitalization of the borrowing expenses. The temporary capitalization cease period is not included.
Temporary capitalization cease period: the capitalization of the borrowing expenses may be stopped
temporarily if there is incidence of the irregular interruption and above 3 months.
Calculation of capitalization sum: ① As for the borrowing of the specific borrowing, the
capitalization sum is recognized on the current actual interest expenses less the interest income of
the borrowing capital not utilized but deposited in the bank or the return of the temporary
investment; ② As for the appropriation of the general borrowing, the capitalization sum is
recognized on the weighted average of, the accumulative assets expenditure above the specific
borrowing, and times the capitalization rate of the appropriation; ③ As for the discount or premium
of the borrowing, the discount or premium to be diluted in every accounting period is recognized in
the actual rate method.
The actual rate method is the method for the measurement of the diluted discount or premium or
interest expenses on the actual interest rate; and the actual interest rate is the interest rate used in the
discount of the future cash flow in the expectant duration period as the current book value of the
borrowing.
17. Intangible assets
(1) Pricing method for intangible assets
The Company’s intangible assets are measured initially on cost. The intangible assets purchased in
are taken as the actual cost on the actual payment and relevant expenditure. As for the intangible
assets invested in by the investors, the actual cost is recognized on the value stipulated in the
contract or agreement; however, if what is stipulated in the contract or agreement is not fair value,
the actual cost is recognized on fair value. As for the self-developed intangible assets, their cost is
the actual total expenditure before reaching the expectant purpose.
The follow-up measurements of the Company’s intangible assets respectively are: ①the linear
dilution is taken on the intangible assets of finite service life, and at the yea-end, the check is taken
30
on the service life and dilution of the intangible assets, and the corresponding adjustment is made if
there is inconsistency with the previous estimative ones. ② As for the intangible assets of uncertain
service life, it is not diluted, however, the service life is checked at year-end; If there is solid
evidence to its finite service life, its service life is estimated and diluted in linear method.
(2) Estimation of service life of intangible assets of finite service life
As the service life of the intangible assets of finite service life is estimated, the following factors are
considered usually: ① the ordinary service life period of products produced by the assets, and the
available information of the service life of the similar assets; ② the present situation of the
technology, craftsmanship, etc. ③ the market demand for the products produced by the assets and
the labor supply; ④ the expectable actions taken by the present or potential competitor; ⑤
expectant maintenance expenditure for the assets’ ability to bring forth the economic interest; ⑥
relevant law rules or similar restrictions on control period of the assets; ⑦ relevancy with the
service life of other assets held by the Company.
(3) Recognition principle of uncertain service life
Recognized as the intangible assets of uncertain service life is refers to those intangible assets of
un-expectable period of economic benefits brought into the Company, or of the uncertain service
period.
Recognition principle of uncertain service life: ① from contract right or other legal rights, the
uncertain service period is stipulated in the contract or law; ② After the integration of the
situations and relevant expertise argumentation in the same trade, the period of the economic
interest brought into the Company by the intangible assets still cannot be recognized.
At every year-end, the check is taken on the intangible assets of uncertain service life, mainly in
bottom-up way, namely the basic check is taken by the department relevant to the assets
utilization, to assess whether there is change in the recognition principle of the uncertain service
life.
(4) Test method for and provision accrual method for impairment of intangible assets
On balance sheet day, the check is made on the intangible assets for the indication to the impairment;
as there is the indication, the recoverable is recognized, and the impairment provision is accrued on
the lower one between the book value and the recoverable; once the impairment loss is accrued, it
may not be transferred back in future accounting periods.
The recoverable amount on intangible assets shall recognized as the higher one between the fair
value of assets less net amount which have been disposal and current value of future predicted cash
flow.
18. Long-term unamortized expense
The Company’s long-term unamortized expenses are expenses paid out and with one year above
(1-year included) benefit period, mainly consisting of the house decoration expenses and the like.
The long-term unamortized expenses are diluted by periods according to the benefit period. As the
long-term unamortized expenses cannot enable the accounting period’s beneficiary, all dilution
values of the project undiluted yet, are transferred into the current loss/gain.
19. Projected liabilities
(1) Recognition principle on projected liabilities
The liabilities are the Company’s actual liabilities, and its fulfillment probably causes the outflow of
the economic interest; as the sum of the liabilities can be measured reliably, the liabilities are
recognized as the projected liabilities.
(2) Measurement method for projected liabilities
The initial measurement is taken according to the best estimator of the expenditure necessary for
the fulfillment of the relevant current liabilities; if the necessary expenditure is of a continual
scope and of a same chance of all results within the scope, the intermediate value is recognized as
31
the best estimator; if several items are involved in, the best estimator is recognized according to
all likely results and relevant possibilities.
On the balance sheet day, the check is taken on the book value of the estimative liabilities, and the
adjustment is made on the book value according to the current best estimator if there is solid
evidence to the inability of the book value for the true reflection to the current best estimator.
20. Stock payment and stock instrument
(1) The stock payment is the transaction, of the grant of the stock instrument liabilities for obtaining
the service supply from the staff or other parties, or of assumption of liabilities recognized on the
basis of the stock instrument, including two ways as equity and cash settlement.
(2) As for the payment on equity settlement and for the service supply from the staff, it is measured
on the fair value of the stock instrument granted to the staff; as for the payment for the service
supply from other parties, it is measured on the fair value of the service from other parties on the
obtaining day, and on the fair value of the stock instrument on the obtaining day if the fair value of
the service cannot be measured reliably.
(3) The fair value of the stock instrument is recognized in the following methods:
As there is the active market, it is recognized on the quotation in the active market;
As there is no active market, it is recognized by the rational evaluation technology including the
reference to the price used in the latest market transaction between the parties familiar to situations
and voluntary to the transaction, and the reference to the current value of other financial instruments
substantially same, discount of cash flow and the option pricing model.
(4) As for the cash payment, it is measured on the fair value of the liabilities recognized on the
measurement based on the shares or other stock instrument.
(5) The best estimator of the practicability right is estimated and recognized on the latest follow-up
information as the change in the staff of practicability right.
21. Income
(1) Sales goods
The income of the sales goods is recognized on the sum of the contract or agreement price
received or deserved by the purchaser, as the Company’s sales goods are up to all of the following
conditions: ① All major risks and compensations on the goods ownership have been transferred
to the purchase party; ② There is neither the maintaining of the continuous management right
related to the ownership nor the effective control over the goods sold out; ③ The income can be
measured reliably; ④ Relevant economic interests probably flow into the corporation; ⑤ The
relevant actual or will-be-actual cost can be measured reliably.
The take-in of the contract or agreement price is deferred; as for the financing one, the income of
the sales good is recognized on the fair value of the contract or agreement price.
(2) Labor supply
As the result of the transaction of the labor supply can be measured reliably on the balance sheet
day, the income of labor supply is recognized on the percentage of the work completion. The
Company will provide pgress of the construction of labor transaction(percentage of the
implementation) based on finished measurements.
As the result of the transaction of the labor supply cannot be measured reliably on the balance sheet
day, the income of the labor supply is dealt with respectively in the following cases: ① As the
actual cost of the labor service is expected to be compensated for, the income of labor supply is
recognized on the actual cost of the labor service, and the cost of the labor service is settled and
transferred on the same sum. ② As the actual cost of the labor service is not expected to be
compensated for, the actual labor cost is reckoned into the current loss/gain, without the recognition
of the income of the labor supply.
(3)Relinquishment of assets access
32
The relinquishment of the assets access is recognized as the inflow and income of the economic
interest related to the relinquishment can be measured reliably.
22. Government subsidy
(1) Category of government subsidy
The categories of the government subsidy mainly consist of the two ones respectively related to
the assets and the income.
(2) Accounting dealing with government subsidy
The government subsidy related to the assets is recognized as the deferred income and shared
averagely in the service life of the relevant assets, and reckoned into the current loss/gain. The
government subsidy measured on token sum is directly reckoned into the current los/gain. The
government subsidy related to the income, is dealt with respectively in the following cases: ① As
for the one for the compensation for the future corporate relevant expenses or loss, it is
recognized as the deferred income, and reckoned into the current loss/gain. ② As for the one for
the compensation for the actual relevant corporate expenses or loss, it is directly reckoned into the
current loss/gain
23. Assets and liabilities of deferred income tax
The Company’s assets and liabilities of deferred income tax are recognized as follows:
(1) They are recognized on the difference between the book value of the assets or liabilities and
the taxation basis (as for the items not as the assets or liabilities and with the taxation basis able to
recognized on tax rules, the taxation basis is recognized as the difference), the assets or liabilities
of deferred income tax is recognized on the applicable rate in the estimative period of recovering
the assets or paying off the liabilities.
(2) The assets of deferred income tax are recognized with the limit of taxable income probably
obtained and used for the deduction of deductible temporary difference. On the balance sheet day,
the unrecognized assets of deferred income tax in the previous accounting period are recognized if
there is solid evidence for probably obtaining in the future accounting period sufficient taxable
income for deducting the deducible temporary difference. The book value of the assets of the
deferred income tax is deducted if there is solid evidence for probably not obtaining in the future
accounting period sufficient taxable income for deducting the book value of the assets of deferred
income tax.
(3) As for the taxable temporary difference related to the investment in the subsidiary or affiliated
corporation, it is recognized as the deferred liabilities, unless the transfer-back time of the
temporary difference can be controlled and the difference probably cannot be transferred in the
expectable future. As for the taxable temporary difference related to the investment in the
subsidiary or affiliated corporation, it is recognized as the assets of deferred income tax as the
temporary difference is probably transferred back in the expectable future and the taxable income
for deducting the deducible temporary difference is probably obtained.
24. Lease
If all risks and compensations related to the ownership of the lease assets are transformed into the
lessee substantially in the lease terms, the lease is financing lease; and others are operation lease.
The Company as the lessee is in the business of office house lease on monthly rental reckoned
into the current loss/gain.
25. Holding of assets on sale
(1) Recognition principle on holding of assets on sale
The following conditions are all matched up to: the resolution on the disposal of the assets has
been made; the un-relievable transfer agreement is singed between the Company and the transfer
party; and the transfer is to be accomplished within a year.
33
(2) Accounting dealing with the holding of assets on sale
As for the capital assets held, the net estimative remnant of the capital assets may be adjusted for
the reflection of the remnant to the sum of the fair value less the disposal expenses, without above
the limit of the previous book value of the capital assets as up to the conditions of holding
assets on sale; And the difference of the previous book value above the net estimative remnant
adjusted is reckoned into the current loss/gain.
As for the holding of other non-current assets on saleable, they are dealt with on the above
principles; they consist of the single assets and the disposal group; the disposal group is a group
of assets which is sold as a whole or disposed together.
26. Explanation on changes in accounting policies and estimation
(1) Explanations on changes in accounting policies Nil.
(2) Explanations on changes in accounting estimation Nil.
27. Correction of previous accounting errors Nil.
III. Taxes
(I) Major tax and tax rate:
Taxes Tax basis Tax rate
VAT Output tax less deductable input tax 17%,13%
Business tax Leasing income 3%,5%
City maintenance tax Payable turn-over tax 7%
Educational surtax Payable turn-over tax 4%,5%
Enterprise income tax Payable income tax 25%
Pursuit to the Provisional Regulations of the People’s Republic of China on Enterprise Income
Tax, the Company and its China-founded subsidiaries withdrawal the enterprise income tax based
on the 25% of taxable amount.
(II) Tax preference and approval document
(1) Tax preference of added value tax
Pursuant to the Treasury Tax (1997) No. 64 Notice on Taxation on Import of Fishery Equipment and
Transport-back of Self-fished Fishery Products of Overseas Fishery Industry Corporation, the
self-fished fishery products transported home, is regarded as the non-import domestic products,
without taxation of tariff or added-value taxation in the import link. The corresponding domestic
sales are attributable to the primary agricultural products sales, and free from added-value tax
according to the specific rules of added value tax.
(2) Income tax preference:
Pursuant to rules of Treasury Tax [1994] No. 001 , Treasury Tax [1997] No. 114 , Treasury Agriculture [2010] No. 104 , President Order of
People’s Republic of China [2007] No. 63 < Corporate Income Tax Law of People’s Republic of
China>, the Company’s income from the overseas fishing business is corporate income tax free.
The Company’s income besides one from the overseas fishing business is taxed on 25% for the
corporate income tax.
The subsidiary – Shandong Zhonglu Overseas (Yantan) Food Co., Ltd—is a foreign investment
corporation, is implemented the tax preference policies of “Two-free, Three-reduction” on
34
according to the original , but has not
enjoyed the preference yet because of no profit, according to the rules of tax preference policies in
the transitory period of new , with the preference period starting from
2008. Applicable tax rate for 2010 was 22%, 24% for 2011 and 25% for 2012. The rate for
enterprise income tax of 2011 was executed by 12% actually.
IV. Corporate consolidation and consolidated financial statements
The subsidiary of the actual control over and the entity of the special purpose for, are included into
the scope of consolidated financial statements.
The Company’s consolidated financial statements are prepared on the , and all substantive inside transactions and
dealings within the consolidation scope are balanced out in consolidation. As for the part of the
shareholders’ equity of the subsidiaries not attributable to the parent company, it is listed as
minority shareholders’ equity in the shareholders’ equity in the consolidated financial statement.
As for the inconsistency in the accounting policies or periods between the subsidiary and the
Company, the necessary adjustment is made the subsidiary’s financial statement according to the
Company’s accounting policies or periods in the preparation of the consolidated financial statement.
As for the subsidiary obtained from the consolidation of enterprises under the same control, the
adjustment is made on the individual financial statement, based on the fair value of the net
recognizable assets on the purchase day in the preparation of the consolidated financial statement;
as for the subsidiary obtained from the consolidation of enterprises not under the same control, the
consolidation is regarded as actual at the year-beginning of the consolidation period, and the assets,
liabilities, operation result, and cash flow are all included in the consolidated financial statement
from the year-beginning of the consolidation period.
1. Particular about subsidiary
(1) Subsidiary obtained from set-up or investment
Balance
of
Balan owners’
ce of equity of
parent
other
company
items Balance
for
of
Actu substa deducting
Share minorit
Regi Regi al ntiall Vote loss in
y
Type Natur holdin Consol Minorit Period
stere stere Operat sum y prop shareho
Full name of of e of g idated y diluted by
lders’
subsid d d ion at consis ortio stateme shareho minority
subsidiary busine propor equity
iary addr capit scope Perio ting n nt or lders’ sharehold
for
ss tion not equity ers of
ess al d-en of net (%) deducti
(%)) subsidiary
d invest ng
above
loss/gai
ment share
n
enjoyed
in
in
subsi owners’
diary equity at
Period-be
ginning
Shandong Qingd Internati
Zhonglu Co., ao, Cooling 22,505 onal sea 22,505
100% 100% Yes
Overseas Ltd. Shand transpor ,600 transpor ,600
Fishery Sea ong tation tation,
35
Transportation transpor
Company tation of
cooling
fishery
product
Self-sup
port
Cooling
HabitatInternati Co., Panam 12,476 cooling 12,476
transpor 100% 100% Yes
onalCorporation Ltd. a ,146 transpor ,146
tation
tation
business
Freezing,
cooling,
processin
Shandong Yant Food g and sale
Zhonglu Co., ai, 75,593 75,593
Shan processi of fishery 100% 100% Yes
Overseas(Yantai Ltd. ,300 ,300
dong ng product,
) Food Co., Ltd.
foul, fruit
&
vegetable
2. Subject of special purpose for or operation entity of control over by trust operation or lease
Balance of major Balance of major
assets recognized in liabilities recognized
Major business dealing consolidated in consolidated
Name
with Company statement at statement at
Period-end Period-end
YAW ADDO
FISHERIES COMPANY Lease operation
LIMITED 8,157,515.87 14,708,136.95
3. Conversion rate of main statement items of overseas operation entity
(1) Conversion method for statement of overseas subsidiary with foreign currency as bookkeeping
standard currency
a. The balance item in the balance sheet is converted on the current rate on the balance sheet day;
all equity items besides the un-distributed profit item, all are converted on the actual rate.
b. The income and expense item in the profit statement are converted on the current rate on the
actual transaction day.
c. The conversion difference in the foreign currency financial start is listed specifically as “foreign
currency statement conversion difference” in the owners’ equity in the consolidated balance sheet in
the preparation of the financial statement.
(2) Rate of conversion of foreign currency statement in Period
a. The current exchange rate of US$ : RMB = 1: 6.4716 on the balance sheet day is used for the
balance sheet item in the balance sheet.
b. The current rate on the actual transaction day is used for the income and expense item in the
profit statement.
V. Notes to important item in consolidated financial statement
1. Monetary capital
36
Balance at Period-end Balance at Year-beginning
Item Foreign Conversion Foreign Conversion
RMB sum RMB sum
currency sum rate currency sum rate
Cash: —— —— 398,471.29 —— —— 483,782.06
Among: RMB —— —— 230,244.83 —— —— 295,539.59
USD 22,956.91 6.4716 148,567.94 25,631.36 6.6227 169,748.82
Euro 2,100.00 9.3612 19,658.52 2,100.00 8.8065 18,493.65
Bank deposit: —— —— 89,027,320.39 —— —— 85,061,774.90
Among: RMB —— —— 82,262,674.40 —— —— 77,144,244.39
USD 532,606.42 6.4716 3,446,825.74 1,195,456.25 6.6227 7,917,148.10
JPY 39,480,220.00 0.0802 3,168,011.09 4,706.00 0.08126 382.41
Euro 16,003.20 9.3612 149,809.16
Other monetary
capital —— —— 4,146,404.35 —— —— 917,170.43
Among: RMB —— —— 4,146,404.35 —— —— 917,170.43
Total —— —— 93,572,196.03 —— —— 86,462,727.39
Note: 1. Other currency balance at Period-end is RMB 4,146,404.35, among: credit guarantee sum
RMB 3,405,655.31 while guarantee margin RMB 660,000.00.
2. Account receivable
(1) Category of account receivable as follows:
Balance at Period-end Balance at Year-beginning
Category Book balance Provision for bad debts Book balance Provision for bad debts
Proportion Proportion Proportion Proportion
Sum Sum Sum Sum
(%) (%) (%) (%)
Account
receivable
with single
major
amount and
with single
item bad
debt
provision
withdrawal
Account
receivable of
bad debt
provision
withdrawal
by
combinations
(1)
Combination
of age
analysis 19,024,971.87 100.00 6,656,778.89 34.99 21,459,891.01 100.00 7,093,385.18 33.05
Subtotal 19,024,971.87 100.00 6,656,778.89 34.99 21,459,891.01 100.00 7,093,385.18 33.05
Account
receivable
with minor
amount but
with single
37
Balance at Period-end Balance at Year-beginning
Category Book balance Provision for bad debts Book balance Provision for bad debts
Proportion Proportion Proportion Proportion
Sum Sum Sum Sum
(%) (%) (%) (%)
item bad
debt
provision
withdrawal
Total 19,024,971.87 100.00 6,656,778.89 34.99 21,459,891.01 100.00 7,093,385.18 33.05
Explanation to category of account receivable:
No account receivable with single major amount and with bad debt provision withdrawal and
account receivable with minor amount but with bad debt provision withdrawal in period-end.
In combinations, account receivable with bad debt provision withdrawal by method of age
analysis:
Balance at period-end Balance at year-begin
Accoun Book balance Bad debt provision Book balance Bad debt provision
t age Proportio Proportio Proportio Proportio
Amount n Amount n Amount n Amount n
(%) (%) (%) (%)
Within
12,599,106.0 14,561,230.1
6 66.22 629,955.30 5.00 67.85 701,630.33 5.00
1 5
months
6
montho
420,044.50 2.21 21,002.23 10.00 10.00
s to 1
year
1-2year
30.00 302,431.30 1.41 90,729.39 30.00
s
2-3
50.00 590,408.20 2.75 295,204.10 50.00
years
Over 3 6,005,821.3 6,005,821.3
6,005,821.36 31.57 100.00 6,005,821.36 27.99 100.00
years 6 6
19,024,971.8 6,656,778.8 21,459,891.0 7,093,385.1
Total 100.00 —— 100.00 ——
7 9 1 8
(2)No owning of shareholding unit of 5% (including 5%) above vote stock in the Company at
balance of period-end
(3) Top-five organization of account receivable
Proportion
in total
Relations with
Name of unit Sum Aging account
Company receivable
(%0
3-year
1.PANDA Non-related party 3,600,962.12 above 18.93
Within
2.Nikko Fishery Co., Non-related party 2,296,550.22 6-month 12.07
38
Proportion
in total
Relations with
Name of unit Sum Aging account
Company receivable
(%0
Within
3.Japan Tenghe Co., Ltd. Non-related party 1,423,430.38 6-month 7.48
Within
4.Japan Weekly Fishery Co., Non-related party 850,298.61 6-month 4.47
Within
5.COFC Non-related party 703,151.30 6-month 3.70
Total —— 8,874,392.63 —— 46.65
3. Payment in advance
(1) Payment in advance on aging as follows
Balance at Period-end Balance at Year-beginning
Aging Proportion Proportion
Amount Amount
(%) (%)
Within 1-year 38,149,521.39 100.00 19,657,430.79 99.58
1-2 years 82,974.55 0.42
Total 38,149,521.39 100.00 19,740,405.34 100.00
Note: Balance of payment in advance at period-end has a 93.26% up over that of
period-beginning. Mainly because teh payment in advance increase for teh tuna raw materials that
purchased by Yantai Food Company, subsidiary of the Company, in this period.
(2) Top-five organization of payment in advance
Proportion in
Relations with Time of
Name of organization Sum payment in Nature
Company prepayment
advance (%)
Non-related Within Fishing
1. Qingdao Furui Fishery party 23,000,000.00 60.29 1-year prepayment
Oil and
Non-related Within equipment
2.Fenqun Fisheries Co., Ltd. party 9,489,792.56 24.88 1-year payments
Fishing
3. Fishing access expense of Non-related Within access
Baxin party 1,752,602.21 4.59 1-year expense
Fishing
4. Fishing access Non-related Within access
expense(Pakistan) party 923,271.74 2.42 1-year expense
Ship
5.Trip of Taiwan Yuxin Non-related Within maintainance
project party 683,803.74 1.79 1-year fee
35,849,470.25 93.97
(3)No owning of shareholding unit of 5% (including 5%) above vote stock in the Company at
balance of period-end
4. Other account receivables
(1) Other account receivables disclosed on category
39
Balance at Period-end Balance at Year-beginning
Book balance Provision for bad debts Book balance Provision for bad debts
Category
Proportion Proportion Proportion Proportion
Sum (%) Sum (%) Sum (%) Sum (%)
Other
account
receivable
with single
major
amount and
with single
item bad
debt
provision
withdrawal
Other
account
receivable of
bad debt
provision
withdrawal
by
combinations
(1)
Combination
of age
analysis 12,149,922.10 100.00 8,796,059.95 72.40 11,384,738.93 100.00 8,733,680.67 76.71
Subtotal 12,149,922.10 100.00 8,796,059.95 72.40 11,384,738.93 100.00 8,733,680.67 76.71
Other account
receivable
with minor
amount but
with single
item bad
debt
provision
withdrawal
Total 12,149,922.10 100.00 8,796,059.95 72.40 11,384,738.93 100.00 8,733,680.67 76.71
No other account receivable with single major amount and with bad debt provision withdrawal and
other account receivable with minor amount but with bad debt provision withdrawal in period-end.
In combinations, other account receivable with bad debt provision withdrawal by method of age
analysis:
Balance at Year-beginning
Balance at Period-end
Book balance Provision for bad debts Book balance Provision for bad debts
Age
Proportion Proportion Proportion Proportion
Sum (%) Sum (%) Sum (%) Sum (%)
Within 6
2,977,307.08 24.50 148,865.35 5.00 2,710,012.45 23.80 87,782.39 5.00
months
6
months- 568,608.58 4.68 56,860.86 10.00 21,955.00 0.19 1,645.50 10.00
1 year
40
Balance at Year-beginning
Balance at Period-end
Book balance Provision for bad debts Book balance Provision for bad debts
Age
Proportion Proportion Proportion Proportion
Sum (%) Sum (%) Sum (%) Sum (%)
1-2years 3,050.00 0.03 915.00 30.00 4,286.65 0.04 954.85 30.00
2-3years 23,075.41 0.19 11,537.71 50.00 10,373.80 0.09 5,186.90 50.00
Over 3
8,577,881.03 70.60 8,577,881.03 100.00 8,638,111.03 75.88 8,638,111.03 100.00
years
Total 12,149,922.10 100.00 8,796,059.95 —— 11,384,738.93 100.00 8,733,680.67 ——
(2)No owning of shareholding unit of 5% (including 5%) above vote stock in the Company at
balance of period-end
(3) Top-five organization of other account receivables
Proportion in
Relations with total of other
Name of organization Sum Year period
Company account
receivables (%)
1. Zhongchanjing Investment Co.,
Ltd. Non-related enterprise 4,281,620.00 3-year-above 35.24
Within 6
2.Financial Bureau of Yantai Non-related enterprise 1,728,170.66 months 14.22
3. Japan Daihatsu Non-related enterprise 288,896.39 3-year-above 2.38
4.Wang Yanle from Business
division Non-related enterprise 200,865.64 3-year-above 1.65
5. Wende Ship-repair Company Non-related party 200,000.00 3-year-above 1.65
6,699,552.69 55.14
5. Inventory
(1) Category of inventory as follows
Amount at Period-end Amount at Year-beginning
Item of Provision Provision
inventory Book balance for price Book value Book balance for price Book value
fall-down fall-down
Raw
materials 69,097,172.18 650,206.41 68,446,965.77 55,390,033.62 650,206.41 54,739,827.21
Low-value
consumable
products 1,003,142.16 1,003,142.16 973,504.20 973,504.20
Inventory 58,709,784.71 58,709,784.71 41,264,572.01 41,264,572.01
Packaging 312,573.90 312,573.90
Total 128,810,099.05 650,206.41 128,159,892.64 97,940,683.73 650,206.41 97,290,477.32
41
Change in provision for depreciation of each inventory as follows:
Item of Balance at Accrual in Decrease in Period Balance at
inventory Year-beginning Period Switching-back Transferring-put Period-end
Raw materials 650,206.41 650,206.41
Low-value and
easily-worn
products
Storage goods
Packaging
Total 650,206.41 650,206.41
Note: Net amount of inventory at period-end has a 31.73% up over that of period-beginning.
Mainly because the inventory of tuna from Haiyan Branch and Haiwei Branch was increased in
quantity in the period and the tuna and red herring purchased from Yantai Food Company in the
period was increased.
6. Long-term stock investment
(1) Long-term stock investment
Explanat
Accrua
Incre ion on Cash
Sharehol Voting inconsist l of
Chec ase/ Balance ding proporti ency in Provision divid
Invested Balance at provisi
decre proporti on in proportio for end
k Invstmen at
organiz Year-begi on in invested n on for
t cost ase depreciat in
meth Period-en invested organiz between
nning impair
ation chang organiza ation the ion Perio
od d tion (%) (%) sharehol ment in
e ding and d
Period
voting
South
Cost
Securiti 33,000,0 33,000,00 33,000,0 33,000,0
es Co., meth 0.87 0.87
00.00 0.00 00.00 00.00
Ltd. od
33,000,0 33,000,00 33,000,0 33,000,0
Total —— —— ——
00.00 0.00 00.00 00.00
(2) Explanation on long-term stock investment
Concerning South Securities Co., Ltd. had been canceled the license for securities business and
charged to close down as the administrative punishment by the CSRC on 29 April 2005, it was
announced to be bankrupt by Shenzhen Intermediate Court, and the proportion for the impairment
of the long-term investment has been accrued on the book value in full sum on the stock in the
South Securities Company.
7. Investment real estate on cost
Balance at Increase in Decrease in Balance at
Item
Year-beginning Period Period Period-end
I. Total of original price 47,120,794.80 47,120,794.80
House building 47,120,794.80 47,120,794.80
II. Total of accumulative depreciation 6,583,897.44 609,332.76 7,193,230.20
42
Balance at Increase in Decrease in Balance at
Item
Year-beginning Period Period Period-end
and dilution
House building 6,583,897.44 609,332.76 7,193,230.20
III. Total of accumulative sum of
provision for impairment of
investment real estate 886,512.06 886,512.06
House building 886,512.06 886,512.06
IV. Total of book value of investment
real estate 39,650,385.30 39,041,052.54
House building 39,650,385.30 39,041,052.54
Note: 1. The plant locating on No. 3 Heze Road, Qingdao City, Shandong Province, has been leased
to Qingdao Sea Transport Professional School.
2. The office buildings locating in No. 43 Heping Road, Jinan City, Shandong Province, is leased
out (original value RMB 44,630,697.79, accumulative depreciation RMB 5,811,897.98, net amount
of RMB 38,818,799.81, lease acreage 6,088.07m2).
8. Fixed assets
Balance at Decrease in Balance at
Item Increase in Period
Year-beginning Period Period-end
I. Total original book value 438,496,017.09 1,933,355.26 18,560,291.58 421,869,080.77
House and building 63,638,771.10 63,638,771.10
Ship 337,917,163.18 843,883.84 18,046,916.48 320,714,130.54
Machine and fishing
equipment 24,620,834.59 840,325.94 25,461,160.53
Transportation vehicle 3,584,941.09 114,348.05 497,375.10 3,201,914.04
Furniture and office
appliances 8,734,307.13 134,797.43 16,000.00 8,853,104.56
II. Total of accumulative
depreciation 162,095,310.51 11,812,335.42 13,258,059.89 160,649,586.04
House and building 9,605,073.86 786,636.18 10,391,710.04
Ship 136,821,226.92 9,089,029.83 12,779,146.11 133,131,110.64
Machine and fishing
equipment 7,568,852.77 1,292,998.43 8,861,851.20
Transportation vehicle 2,042,486.19 197,010.90 462,913.78 1,776,583.31
Furniture and office
appliances 6,057,670.77 446,660.08 16,000.00 6,488,330.85
III. Total net book value of
fixed assets 276,400,706.58 261,219,494.73
House and building 54,033,697.24 53,247,061.06
Ship 201,095,936.26 187,583,019.90
Machine and fishing 17,051,981.82 16,599,309.33
43
Balance at Decrease in Balance at
Item Increase in Period
Year-beginning Period Period-end
equipment
Transportation vehicle 1,542,454.90 1,425,330.73
Furniture and office
appliances 2,676,636.36 2,364,773.71
IV. Total depreciation
provision 7,571,580.00 7,571,580.00
House and building
Ship 7,571,580.00 7,571,580.00
Machine and fishing
equipment
Transportation vehicle
Furniture and office
appliances
V. Total of book value of
capital assets 268,829,126.58 253,647,914.73
House and building 54,033,697.24 53,247,061.06
Ship 193,524,356.26 180,011,439.90
Machine and fishing
equipment 17,051,981.82 16,599,309.33
Transportation vehicle 1,542,454.90 1,425,330.73
Furniture and office
appliances 2,676,636.36 2,364,773.71
Note: 1. Fixed assets of this period increase 1,933,355.26 yuan, mainly due to the wheel gyro and radar of “Taifu
101” purchased by branch Haiwei Co., and taping machine and sealing machine purchased by Zhonglu Oceanic
(Yantai) Food Co., Ltd.
2. In this period, fixed assets and accumulated depreciation decrease 18,560,291.58 yuan and 13,258,059.89 yuan
respectively. Mainly because branch Haiyan Comoany disposal shipping of “Taihong” with original amount
8,405,355.00 yuan, accumulated depreciation amount of 7,985,087.36 yuan and net value of 420,267.76 yuan;
subsidiary HIC International Company disposal refrigerate shipping “Tailu” with original amount 9,641,561.36
yuan, accumulated depreciation amount of 4,794,058.75 and net value of 4,847,502.61 yuan. The aforeside fixed
assets disposals refer to the non-performing assets, and no effects on normal operating of the Company.
3. Mortgage of fixed assets
As ending at 30 June 2011, the comprehensive grant of credit of RMB 50 million is obtained with the fixed assets
as the mortgage, among that the original book value of RMB 48，125,290.76 of ship “Taifu 101”, the original
book value of RMB 65,633,153.65 of ship “Taifu102”, the original book value of RMB 13,739,445.64 of ship
“Taihong1”, the original book value of RMB11,335,381.12 of ship “Taihong2”, the original book value of RMB
22,604,205.17 of ship “Taihong7”. Comprehensive credit of 27 million yuan was obtained by mortgage of
production plant, original value of 22,651,704.00 yuan and land use right of area of 33,333.30 m2 from subsidiary,
Zhonglu Oceanic (Yantai) Food Co., Ltd.; short-tem loan of 34,354,318.41 yuan was obtained.
4. Pursuant to the signed between the Company and Shandong Fishery Parent Company
in April 2006, and Li Execution No. 1299 of Jinan City Lixia District People’s Court (2005),
as locates on No. 43 Road, Lixia District, Jinan City, the office complex of the original book value of RMB
54,221,197.05 is owned by the Company for offsetting the debts. The certificate of the above housing property has
not handled; the Company’s management is coordinating actively with all concerned parties to solve the above
issue of the housing property certificate.
5. Balance of the impairment provision for fixed assets refers to balance of impairment provision accured with
ships by buranch, Haiyan Company.
44
9. Construction in progress
Balance at Increase in this Decrease in this Balance at
Item
year-beginning period period period-end
Ships 31,161,024.15 31,161,024.15
Note: Construction in progress increase RMB 31,161,024.15 in this period. Mainly because a refrigerated
transport vessel purchased by HIC International Company, subsidiary of the Company, is ready for shipping.
10. Intangible assets
Balance at Increase in the Decrease in the Balance at
Items
year-begin period period period-end
I. Total original book
value 10,132,557.00 10,132,557.00
Land use right of Yantai
Food 9,929,529.00 9,929,529.00
Other 203,028.00 203,028.00
II. Total amount of
accumulated amortization 2,409,453.47 134,322.04 2,543,775.51
Land use right of Yantai
Food 2,269,602.32 118,208.52 2,387,810.84
Other 139,851.15 16,113.52 155,964.67
III. Total net book value
of intangible assets 7,723,103.53 7,588,781.49
Land use right of Yantai
Food 7,659,926.68 7,541,718.16
Other 63,176.85 47,063.33
IV. Total impairment
provision
Land use right of Yantai
Food
Other
V. Total book value of
intangible assets 7,723,103.53 7,588,781.49
Land use right of Yantai
Food 7,659,926.68 7,541,718.16
Other 63,176.85 47,063.33
Note: Till end of 30 June 2011, Comprehensive credit of 27 million yuan was obtained by mortgage of
production plant, original value of 22,651,704.00 yuan and land use right of area of 33,333.30 m2 from
subsidiary, Zhonglu Oceanic (Yantai) Food Co., Ltd.
45
11. Deferred income tax assets
Balance at
Item Balance at period-end year-beginning
Impairment of assets 114,227.23 114,227.23
Total 114,227.23 114,227.23
12. Provision for impairment of assets
Accrual Decreased in this period
Balance at Balance at
Item amount Switching Transferring period-end
year-begin
this period back out
I. Bad debt provision 15,827,065.85 71,936.48 446,163.49 15,452,838.84
II.Provision for depreciation
650,206.41
of inventory 650,206.41
III. Impairment provision of
financial assets available for
sale
IV. Impairment provision of
held-to-maturity investment
V. Impairment provision of
33,000,000.00
long-term equity investment 33,000,000.00
VI. Impairment provision of
886,512.06
investment property 886,512.06
VII. Impairment provision
7,571,580.00
of fixed assets 7,571,580.00
VIII. Impairment provision of
project material
IX. Impairment provision of
construction in process
X. Impairment provision of
production biological material
asset
Incl. Impairment provision of
mature production biological
material asset
XI. Impairment provision of
gas & oil asset
XII. Impairment provision of
intangible asset
XIII. Impairment provision of
46
Accrual Decreased in this period
Balance at Balance at
Item amount Switching Transferring period-end
year-begin
this period back out
goodwill
XIV. Other
Total 57,935,364.32 71,936.48 446,163.49 57,561,137.31
13. Short-term loans
(1) Short-term loans list according to categories:
Amount in
Term of loans Amount in year-begin
period-end
Mortgage loan 34,354,318.41 39,113,674.34
Credit loan
Total 34,354,318.41 39,113,674.34
Note: 1. particular about mortgage loans see details in No. 8 and 10 in V contained in Notes to Financial
Statement.
(2) Explanation on short-term loans
There are no overdue loans in period-end.
14. Accounts payable
Balance in period-end Balance in year-begin
Items Proportion
Amount Amount Proportion (%)
(%)
Within 1 year 103,606,853.32 96.05 79,163,160.64 94.9
1-2 years 4,438.53 0.01
2-3 years 4,438.53 0.01
Over 3 years 4,253,594.84 3.94 4,253,594.84 5.09
Total 107,864,886.69 100.00 83,421,194.01 100.00
Note: 1. The balance did not contain account that should be paid to any major shareholders who own more than
5% (including 5%) of the Company’s share capital.
2. The balance has no major account payable with over 1 year.
3. Account payable at period-end has a 29.30 percent up over that of period-beginning. Mainly because the
increase of payable raw materials from Yantai Food Co. and the payable feul account increased from Haiyan
Branch.
15. Accounts received in advance
Balance in period-end Balance in year-begin
Items Proportion
Amount Amount Proportion (%)
(%)
47
Balance in period-end Balance in year-begin
Items Proportion
Amount Amount Proportion (%)
(%)
Within 1 year 306,462.30 46.69 288,082.50 45.16
1-2 years
2-3 years
Over 3 years 349,863.72 53.31 349,863.72 54.84
Total 656,326.02 100.00 637,946.22 100.00
Note: 1. The balance did not contain account that should be paid to any major shareholders who own more than
5% (including 5%) of the Company’s share capital.
2. The balance has no major account receivable in advance with over 1 year.
16. Wage payable
Increase Decrease
Balance in Balance in
Items amount this amount this
year-begin period-end
period period
I. Salary, bonus, allowance
and subsidy 7,572,942.37 20,676,556.59 20,826,074.47 7,423,424.49
II. Employee Welfare
expenses 1,035,661.59 1,035,661.59
III. Social insurance 148,111.46 3,616,665.04 3,763,234.50 1,542.00
Including: Medical
insurance 20,860.65 925,156.89 945,721.80 295.74
Basic pension
insurance 116,647.17 2,175,661.08 2,291,135.30 1,172.95
Unemployment
insurance 6,234.62 226,907.23 233,068.54 73.31
Injury insurance 2,317.68 96,413.71 98,731.39
Maternity insurance 2,051.34 101,460.59 103,511.93
IV. Housing accumulation
fund 1,617.33 802,499.16 805,711.60 -1,595.11
V. Labor union outlay and
employee education outlay 996,830.66 170,887.98 149,978.32 1,017,740.32
VI. Compensation for
dismissal of relationship of
labor force 33,680.00 33,680.00
VII. Other
Total 8,753,181.82 26,302,270.36 26,580,660.48 8,474,791.70
Note: The balance of wage payable is due to unpaid staff’s wages and bonus of June of 2011 but withdrawn.
17. Tax payable
Taxes Balance in period-end Balance in year-begin Notes
Value-added tax -1,925,451.35 -3,695,662.19
Business tax 14,119.25 22,176.66
City planning tax 1,134.04 1,902.01
48
Taxes Balance in period-end Balance in year-begin Notes
Enterprise
income tax 331,810.60 252,566.59
Educational
surtax 810.03 920.23
Other 527,297.83 420,961.29
Total -1,050,279.60 -2,997,135.41
Note: balance of payable taxes at period-end has a 64.96 percent up over that of period-beginning. Mainly
because the input tax of exportation for fish sales was transfer to export refund tax from Yantai Food Company.
18. Others account payable
Balance in period-end Balance in year-begin
Items Proportion Proportion
Amount Amount
(%) (%)
Within 1 year 6,356,192.05 50.97 11,424,416.14 65.39
1-2 years 4,855,704.51 38.94 4,899,551.52 28.05
2-3 years 112,685.19 0.90 568,476.39 3.25
Over 3 years 1,146,037.33 9.19 577,560.94 3.31
Total 12,470,619.08 100.00 17,470,004.99 100.00
Note: 1. the balance did not contain account that should be paid to any major shareholders who own more than
5 %( including 5%) of the Company’s share capital.
19. Share capital
Balance in year-begin Increase/Decrease of this time (+, -) Balance in period-end
Items New Capitalizatio
Proportio bonus othe subtota Proportio
Shares shares n of public Shares
n (%) share r l n (%)
issued reserve
Restricted
I 128,071,320.0 128,071,320.0
shares 48.13 48.13
0 0
State-owned
shares
State-owned 127,811,320.0 127,811,320.0
legal person’s 48.03 48.03
shares 0 0
Other domestic
shares
Domestic
non-state-owne
d legal
person’s shares
Domestic
natural
260,000.00 0.10 260,000.00 0.10
person’s shares
Foreign shares
Foreign legal
person’s shares
49
Balance in year-begin Increase/Decrease of this time (+, -) Balance in period-end
Items New Capitalizatio
Proportio bonus othe subtota Proportio
Shares shares n of public Shares
n (%) share r l n (%)
issued reserve
Foreign natural
person’s shares
Unrestricted
II 138,000,000.0 138,000,000.0
shares 51.87 51.87
0 0
RMB Ordinary
shares
Domestically
listed foreign 138,000,000.0 138,000,000.0
51.87 51.87
shares 0 0
Overseas listed
foreign shares
Others
II
Total shares 266,071,320.0 266,071,320.0
I 100.00 100.00
0 0
20. Capital reserves
Increase Decrease
Balance in Balance in
Items amount this amount this
year-begin period-end
period period
Capital premium 186,283,711.00 186,283,711.00
Other capital reserve 94,961,504.96 94,961,504.96
Total 281,245,215.96 281,245,215.96
21. Surplus reserves
Balance in Increase amount Decrease amount Balance in
Items
year-begin this period this period period-end
Statutory surplus
21,908,064.19 21,908,064.19
reserve
Total 21,908,064.19 21,908,064.19
22. Retained profits
Proportion of
Items Amount withdrawal and
distribution
Retained profit in last year-end before
——
adjustment -179,914,183.54
Total adjustment of retained profit at year-begin
——
(increase+, decrease -)
Retained profit in year-end after adjustment -179,914,183.54 ——
50
Proportion of
Items Amount withdrawal and
distribution
Add: net profit attributable to owner of the
——
parent company in this period 53,530,928.12
Less: Withdrawal of statutory surplus reserve
Withdrawal of arbitrary surplus reserve
Withdrawal of general risk provision
Common shares’ dividend payable
Dividend of common shares transfer to
shares
Retained profit at period-end -126,383,255.42
23. Operating income and operating cost
(1) Details of operating income:
Amount occurred this Amount at same period of
Items
period last year
Main operating income 234,823,156.55 197,804,359.53
Other operating income 1,488,908.89 946,544.88
Total operating income 236,312,065.44 198,750,904.41
(2) Details of operating cost:
Amount occurred this Amount occurred at last
Items
period period
Main operating cost 194,423,557.11 172,517,115.41
Other operating cost 787,660.53 728,065.14
Total operating cost 195,211,217.64 173,245,180.55
(3) Main operations classified according to industries:
Amount occurred this period Amount occurred at last period
Industries Main operating Main operating Main operating Main operating
income cost income cost
Oceanic fishing and 57,906,988.75
re-processing 84,383,747.88 73,535,170.79 64,226,799.54
Retting of refrigerated 23,375,612.76
vessel and vessel 29,613,941.81 33,681,834.03 24,146,274.60
management
Seafood processing, 113,140,955.60
cold storage and
others 120,825,466.86 90,587,354.71 84,144,041.27
Total 234,823,156.55 194,423,557.11 197,804,359.53 172,517,115.41
(4) Main operations classified according to areas:
51
Amount occurred this period Amount occurred at last period
Areas Main operating Main operating Main operating Main operating
income cost income cost
Mainland of China
55,055,802.54 36,898,160.10 30,541,829.18 15,652,116.64
Taiwan of China 60,229,405.34 43,150,764.13 54,651,085.71 48,254,887.27
USA 458,788.60 433,387.08 518,537.68 493549.59
Japan 79,109,827.94 75,674,843.76 80,825,364.84 77,771,091.23
Spain 543,100.40 513,030.83 6,422,854.52 6,113,340.19
Singapore 14,839,381.23 14,017,776.57 10,146,959.69 9,657,982.49
Germany 720,415.83 685,699.33
Ghana 4,428,001.58 4,692,870.71 5,326,204.20 5,654,233.60
Israel 1,558,110.80 1,483,026.18
South Korea 16,375,555.25 15,468,898.00 6,894,517.87 6,562,274.30
Vietnam 3,381,151.50 3,193,948.96
Others 402,142.17 379,876.97 198,479.21 188,914.59
Total 234,823,156.55 194,423,557.11 197,804,359.53 172,517,115.41
(5) Particular about operation income from top 5 clients of the Company:
Proportion in total operating
Items Operating income
income of the Company (%)
1. Taiwan Fengqun Fishery Co., 59,214,726.95 25.06
2. Japan Weekly Co., Ltd. 31,174,021.61 13.18
3. Nikko Fishery Co., 14,038,778.44 5.94
4. Ningbo Fengsheng Food Co., Ltd. 20,195,293.28 8.55
5. Japan Shimizu Co., 25,632,567.40 10.85
Total 150,255,387.68 63.58
24. Operating taxes and extras
Amount occurred
Items Calculation standards Amount occurred at last period
this period
Business tax 3% or 5% of leasing income 114,559.99 269,743.64
City planning tax 7% of paid turnover tax 52,588.99 16,267.42
4% or 5% of paid turnover
37,563.55 7,215.39
Educational surtax tax
House property tax 131,400.00 65,671.24
House area
Other 55,541.63 20,234.85
Total 391,654.16 379,132.54
25. Sales expenses
Items Amount occurred this period Amount occurred at last period
Salary paid for employees 151,561.00 154,991.00
Deprecistion charge 12,572.72 2,972.40
Business trip charge 131,651.07 128,535.80
52
Items Amount occurred this period Amount occurred at last period
Entertainment charge 50,858.00
Transportation charges 328,536.00 252,064.60
Export sundry charge 503,401.00 235,759.41
Communication charge 17,760.44 10,110.89
Agency charge 27,398.81 78,414.03
Port sundry charge 297,234.33 267,268.27
Business publication charge 27,000.00 3,800.00
custom inspection charge 81,791.00 79,423.00
Other 17,569.75 56,125.40
Total 1,596,476.12 1,320,322.80
26. Management expenses
Items Amount occurred this period Amount occurred at last period
Salary paid for employees 5,963,972.55 5,059,729.91
Deprecistion charge 720,110.83 702,375.61
Business trip charge 338,103.79 307,626.33
Entertainment charge 680,047.43 478,563.94
Office charge 208,277.59 243,150.51
Maintainance charge 63,047.97 53,926.00
Meeting charge 121,754.00 10,432.00
Amortization of low-value and
34,217.14 14,904.00
easily-worn products
Taxes for expenses 442,049.72 377,511.90
Agency charge 587,167.60 565,515.50
Vehicle charge 141,571.72 175,726.12
Information disclosure charge 183,010.60 178,000.00
Water and electricity charge 110,253.88 71,918.21
Amortization of intangible assets 134,322.04 134,321.88
Communication charge 195,929.77 186,378.05
Labor products 14,500.00
Charges for abroad 113,611.10 13,530.00
Operating charge 131,839.95 211,210.38
Charge for house leasing 262,944.51 357,790.89
Insurance charge 693,369.99 602,484.95
Other s 289,977.60 166,847.25
Total 11,415,579.78 9,926,443.43
53
27. Financial expenses
Amount occurred at last
Items Amount occurred this period
period
Interest expenses 1,406,077.94 1,230,427.87
Less: Interest income 451,807.71 479,296.79
Exchange losses 929,362.89 710,966.78
Less: exchange gains 397,360.04 54,992.21
Other expenses 172,574.91 132,487.71
Total 1,658,847.99 1,539,593.35
28. Loss of devaluation of assets
Amount occurred this Amount occurred at last
Items
period period
I. Bad debt losses -374,227.01 813,618.98
II. Inventory impairment losses
Total -374,227.01 813,618.98
29. Non-operating income
(1) Details of non-operating income:
Amount occurred this period Amount occurred at last period
Amount Amount
reckoned into reckoned into
Items
Amount current Amount current
non-recurring non-recurring
gains/losses gains/losses
Gains on disposal of
2,208,769.03
non-current assets 2,208,769.03 12,000.00 12,000.00
Including: gains
from disposal of fixed 2,208,769.03
assets 2,208,769.03 12,000.00 12,000.00
gains from
disposal of intangible
assets
Gains from debt
restructuring
Gains from exchange
of non-monetary assets
Donation received
Government subsidy 25,478,279.71 249,279.71 155,700.00 155,700.00
Other 43,186.00 43,186.00
Total 27,687,048.74 2,458,048.74 210,886.00 210,886.00
54
(2) Details of government subsidy:
Amount occurred Amount occurred at
Items Explanation
this period last period
Fuel subsidies 25,229,000.00
Finance rebate 209,064.71
Subsidy of position
40,215.00
stability 35,700.00
Subsidy for project of
financial technology 120,000.00
Total 25,478,279.71 155,700.00
30. Non-operating expense
Amount occurred this period Amount occurred at last period
Amount Amount
reckoned into reckoned into
Items
Amount current Amount current
non-recurring non-recurring
gains/losses gains/losses
Total loss on disposal of
14,461.32 14,461.32
non-current assets 4,036.58 4,036.58
Including: loss from
14,461.32 14,461.32
disposal of fixed assets 4,036.58 4,036.58
Loss from
disposal of intangible
assets
Loss from debt
reorganization
Losses from exchange of
non-monetary assets 非
External donation
Other 37,048.42 37,048.42
Total 14,461.32 14,461.32 41,085.00 41,085.00
31. Expense of income taxes
Amount occurred this Amount occurred at last
Items
period period
Current income taxes that reculated based on
taxation laws and relevant regulations 554,176.06 338,748.60
Total 554,176.06 338,748.60
32. Calculation procedure for basic earnings per share and diluted earnings per share
According to the calculation requirement on earnings per share from No.9 Preparation Rule of
55
Information Disclosure on Publicly Securities Issuing Enterprises—Calculation and Disclosure of
Return on Equity and Earning Per Share (2010 Amended) (“CSRC [2010] No.2”) and No.1
Explanation Announcement of Information Disclosure on Publicly Securities Issuing
Enterprises—Non-recurring Gains and Losses (2008)(“CSRC[2008] No.43”) issued by CSRC:
Amount occurred Amount occurred at
Item Code
this period last period
Net profit attributable to common shareholders of the Company
P0 53,530,928.12 11,357,665.16
(Ⅰ)
Net profit attributable to common shareholders of the Company
P0 51,087,340.70 11,187,864.16
after deducting non-recurring gains and losses (Ⅱ)
Total shares at period-begin S0 266,071,320.00 266,071,320.00
Amount of shares increase from public reserve capitalizing or
S1
share dividend distribution
Amount of shares increase from newly issuing shares or shares
Si
transfer from debt
Amount of shares decrease from repurchased in report period Sj
Reducing shares in report period Sk
Amount of months in report period M0 6 6
Accumulated months from next month of share increased to
Mi
period-end
Accumulated months from next month of share decreased to
Mj
period-end
Weighted average of common shares issuing outside S 266,071,320.00 266,071,320.00
Basic earnings per share (Ⅰ) 0.20 0.04
Basic earnings per share (Ⅱ) 0.19 0.04
Current net profit attributable to common shareholders after
P1 53,530,928.12 11,357,665.16
adjustment (Ⅰ)
Current net profit attributable to common shareholders after
P1 51,087,340.70 11,187,864.16
adjustment without non-recurring gains and losses (Ⅱ)
Weighted average of common shares increased by warrants, stock
option and convertible bonds etc.
Diluted weighted average of common shares issuing outside 266,071,320.00 266,071,320.00
Diluted earnings per share (Ⅰ) 0.20 0.04
Diluted earnings per share (Ⅱ) 0.19 0.04
(1)Basic earnings per share
Basic earnings per share = P0÷ S
S= S0＋S1＋Si×Mi÷M0– Sj×Mj÷M0-Sk
Among which: po refer to net profit attributable to common shareholders of the Company or net profit attributable
to common shareholders of the Company after deducting non-recurring gains and losses; S refer to weighted
average of common shares issuing outside; S0 refer to total shares at period-begin; S1 refer to amount of shares
increase from public reserve capitalizing or share dividend distribution; Si refer to Amount of shares increase from
newly issuing shares or shares transfer from debt; Sj refer to amount of shares decrease from repurchased in
report period; Sk refer to reducing shares in report period; M0 refer to amount of months in report period; Mi refer
to accumulated months from next month of share increased to period-end; Mj refer to accumulated months from
next month of share decreased to period-end
(2)Diluted earnings per share
Diluted earnings per share= P1/(S0＋S1＋Si×Mi÷M0–Sj×Mj÷M0–Sk+ Weighted average of common shares
increased by warrants, stock option and convertible bonds etc.)
Among which: P1 refer to net profit attributable to common shareholders of the Company or net profit
attributable to common shareholders of the Company after deducting non-recurring gains and losses, and took
the influence from diluted potential common share into consideration, made adjustment according to
Accounting Rule of Enterprise and relevant regulations. While calculating the diluted earnings per share, the
Company took the following into consideration: all influence from diluted potential common shares towards net
profit attributable to common shareholders of the Company or net profit attributable to common shareholders of
the Company after deducting non-recurring gains and losses and weighted average share, according to the
dilution based on the order of major to minor calculated diluted earnings per share until reached the minimum
56
amount of diluted earnings per share.
33. Other consolidated income
Amount of this Amount of last
Item
period period
1. Amount of gains (loss) arising from financial assets available for sale
Less: tax influence arising from financial assets available for sale
Net amount calculated in other comprehensive income in early
period and transferred to gains and loss in current period
Subtotal
2. Shares of other comprehensive income in invested units calculated in
equity method
Less: income tax influence arising from shares of other comprehensive
income in invested units calculated in equity method
Net amount calculated in other comprehensive income in early
period and transferred to gains and loss in current period
Subtotal
3. Amount of gains (loss) arising from hedging instrument of cash flow
Less: income tax influence arising from hedging instrument of cash
flow
Net amount calculated in other comprehensive income in early
period and transferred to gains and loss in current period
Adjustment of original confirmation amounts transferred to
hedged items
Subtotal
4. Translation differences of foreign financial sheet 425,924.10 53,735.42
Less: net amount from disposal of foreign operation included in gains
and loss currently
Subtotal 425,924.10 53,735.42
5. Other
Less: influence of other income tax included in other comprehensive
income
Net amount calculated in other comprehensive income in early
period and transferred to gains and loss in current period
Subtotal
Total 425,924.10 53,735.42
34. Notes to items of cash flow statement
(1)Other received cash related to operating activities
Item Amount of this period Amount of last period
Interest income 451,807.71 479,296.79
Government subsidies 25,478,279.71 155,700.00
Compensation from insurance company 172,177.02 7,660.00
Current account 14,774,871.17 5,236,509.56
Total 40,877,135.61 5,879,166.35
(2) Other paid cash related to operating activities
Item Amount of this period Amount of last period
Including: current accounts paid 6,411,600.41 15,563,531.80
Sales expenses paid in cash 1,247,488.39 964,681.53
57
Item Amount of this period Amount of last period
Management expenses paid in cash 7,141,066.47 4,287,983.65
Total 14,800,155.27 20,816,196.98
(3) Other paid cash related to financing activities
Item Amount of this period Amount of last period
Margin of guarantee L/C 660,000.00
Total 660,000.00
35. Supplementary information of cash flow statement
(1) Supplementary information of cash flow statement
Amount of this Amount of last
Item
period period
1．Reconciliation of net profit to cash flows from operating
activities:
Net profit 53,530,928.12 11,357,665.16
Add: Provision for impairment of assets -374,227.01 813,618.98
Depreciation of fixed assets, oil assets and productive biological
assets 12,421,668.18 11,314,281.71
Amortization of intangible assets 134,322.04 134,321.88
Amortization of long-term prepayments
Losses on disposal of fixed assets, intangible assets and other
long-term assets (income is listed with “- ”) -2,193,907.71 4,036.58
Losses on scrapping of fixed assets(income is listed with “- ”) -400.00
Losses on fair value change(income is listed with “- ”)
Financial expenses(income is listed with “- ”) 1,140,664.64 1,539,593.35
Investment losses(income is listed with “- ”)
Decrease in deferred income tax assets (increase is listed with
“-”)
Increase in deferred income tax liabilities (decrease is listed
with “- ”)
Decrease in inventories(increase is listed with “-”) -30,869,415.32 -35,013,620.31
Decrease in operating receivables(increase is listed with “-”) -17,107,607.09 -15,618,338.58
Increase in operating payables(decrease is listed with “- ”) 19,943,178.34 56,008,124.76
Others
Net cash flows from operating activities 36,625,204.19 30,539,683.53
2 ． Significant investing and financing activities that do not
involve cash receipts and payments
Conversion of debt into capital
Convertible bonds to be expired within one year
Fixed assets under finance lease
3．Net increase in cash and cash equivalents
Cash at the end of the year 92,912,196.03 36,699,425.11
Less: Cash at the beginning of the period 86,462,727.39 35,301,273.89
Add: Cash equivalents at the end of the period
Less: Cash equivalents at the beginning of the period
58
Amount of this Amount of last
Item
period period
Net increase in cash and cash equivalents 6,449,468.64 1,398,151.22
(2) Cash and cash equivalents
Amount of this Amount of last
Item
period period
1. Cash 92,912,196.03 36,699,425.11
Including: Cash on hand 398,471.29 610,110.89
Bank deposit paid at any time 89,027,320.39 30,979,938.37
Other monetary funds paid at any time 3,486,404.35 5,109,375.85
Accounts placed in central bank available for payment
Deposit from other banks
Loan at call from other banks
II. Cash equivalents
Including: Bonds investment expired within three months
III. Cash and cash equivalents at the end of year 92,912,196.03 36,699,425.11
Note: The margin deposits of the Company can’t be used for payment after 3 months of balance sheet date, so it is
deducted from cash when preparing cash flow statement; RMB 0.00 and RMB 0.66 million respectively at
period-begin and at period-end.
VI. Related parties relationship and their transaction
1. Particualr about the parent company of the enterprise
Voting
Shareho right
lding propor Ultimat
proporti tion of e Code of
Parent Related Type of Registr Legal Nature Registr on of parent controll organiz
compa relation enterpri ation represen of ation parent compa er of ation
ny ship se place tative business capital compan ny in the instituti
y in the the Compa on
Compan Comp ny
y (%) any
(%)
Investm
Sate-o ent and State-o
wned manage wned
Assets ment, Assets
of manage of
Shando ment Shando
State-o
ng Parent Shando Liu and RMB1 ng
wned 163073
Provin Compa ng Changsu operatio 600 33.07 33.07 Provinc
enterpri 16-7
ce ny Jinan o n of million e
se
Invest assets, Investm
ment manage ent
Holdin d Holdin
gs Co., operatio gs Co.,
Ltd ns, Ltd
investm
59
Voting
Shareho right
lding propor Ultimat
proporti tion of e Code of
Parent Related Type of Registr Legal Nature Registr on of parent controll organiz
compa relation enterpri ation represen of ation parent compa er of ation
ny ship se place tative business capital compan ny in the instituti
y in the the Compa on
Compan Comp ny
y (%) any
(%)
ent
advisory
2.Subsidiary of the Company
Details of subsidiaries condition are listed on Note 4
3. Condition of other related parties of the Company
Relationship between other
Code of organization
Other related parties related parties and the
institution
Company
Shandong Luxin Investment Holding Shareholders with 5%
73577367-X
Group Co., Ltd. share holding
4. Condition related transaction
The Company has no transactions between related parties which should be disclosed but hadn’t
been disclosed.
VII. Contingency
Till the end of June 30, 2011, the Company had following contingencies:
Balance
Guaranteed party Terms of borrowing Guaranteed by
RMB 0’000
Qingdao Double Wale Shandong Zhonglu Oceanic
41,037,681.65 2002.2-2006.7
Pharmaceutical Co., Ltd. Fisheries Co., Ltd.
Note: In the report period, original subsidiary—Qingdao Double Wale Pharmaceutical Co., Ltd. has paid
8,962,318.35 yuan in totaled 50 million yuan loans to Qingdao Bei’er Branch of Agricultural Bank of China,
guarantee principal decreased to 41,037,681.65 yuan for the Company. On 26 Feburary 2010, Equity Pledge
Agreement was entered into betweem the Company and Shenzhen Jingshen Investment Development Co., Ltd.
with counter-gurantee provided to 50 million yuan loans (the loans owing principal of 410,376,816,500 yuan)
from Qingdao Bei’er Branch of Agricultural Bank of China that offered by the Company for Qingdao Double
Wale Pharmaceutical Co., Ltd. with 45.5 percent equity of Qingdao International Fashion Investment Co, Ltd.
held by Shenzhen Jingshen. Pledge tems will terminate after the releasement for guarantee responsibility of the
Company. The aforesaid equity pledge was registered with (Qingcheng) GZRegisterSZi[2010] No. 0004 in
Industrial and Commercial Bureau of Qingdao City dated 10th of March 2010; Pladge registeration No.:
3702141003100004.
No influence on normal operating of the Company from this guarantee by prediction.
VIII. Commitment
The Company had no commitment events which need to be disclosed.
IX. The events after the balance sheet date
The Company paid loans of 20 million yuan to bank dated 8th July 2011. On 19th of July, the Company obtained a
comprehensive credit of 30 million yuan by mortgage with ship “Taifu 101” –fixed assets with book original value
60
48，125,290.76 yuan and ship “Taifu 102”—original book value of 65,633,153.65 yuan. The mortgage for ship
“Taihong 1” –original book value of 13,739,445.64 yuan and ship “Taihong 2”—original book values of
22,604,205.17 yuan were cancelled.
X. Other important events
The Company did not have other important event that needed for disclosure.
XI. Notes to main items of parent company’s financial statements
1. Accounts receivable
(1) Account receivable classified according to category:
Balance at period-end Balance at year-begin
Categories Book balance Provision for bad debts Book balance Provision for bad debts
Proportion Proportion Proportion Proportion
Amount Amount Amount Amount
(%) (%) (%) (%)
Account
receivable
with single
major
amount and
with single
item bad
debt
provision
withdrawal
Account
receivable of
bad debt
provision
withdrawal
by
combinations
(1)
Combination
of related
parties 272,680.52 2.32 296,000.00 3.92
(2)
Combination
of age
analysis 11,489,626,.16 97.68 6,297,517.69 54.81 7,262,889.65 96.08 6,144,282.60 84.60
Subtotal 11,762,306.68 100.00 6,297,517.69 53.54 7,558,889.65 100.00 6,144,282.60 81.29
Account
receivable
with minor
amount but
with single
item bad
debt
provision
withdrawal
Total 11,762,306.68 100.00 6,297,517.69 53.54 7,558,889.65 100.00 6,144,282.60 81.29
Explanation to category of account receivable:
No account receivable with single major amount and with bad debt provision withdrawal and account receivable
with minor amount but with bad debt provision withdrawal in period-end.
In combinations, account receivable with bad debt provision withdrawal by method of age
analysis:
Age Balance at period-end Balance at year-begin
61
Proportion Bad debt Proportion Bad debt
Book balance Book balance
(%) provision (%) provision
Within 6
256,684.16 47,731.85
months 5,133,683.09 44.68 954,636.99 13.14
6 months -1
35,012.17
year 350,121.71 3.05
1-2 years 302,431.30 4.16 90,729.39
2-3 years
Over 3 years 6,005,821.36 52.27 6,005,821.36 6,005,821.36 82.70 6,005,821.36
Total 11,489,626.16 100.00 6,297,517.69 7,262,889.65 100.00 6,144,282.60
(2) Top-five organization of account receivables
Proportion
in total of
Relations with
Name of organization Sum Account age account
Company receivables
(%)
Non-related
1.PANDA enterprise 3,600,962.12 3-year-above 30.61
Non-related Within 6
2.Japan Tenghe Co., Ltd. enterprise 1,423,430.38 months 12.10
Non-related
3.Haifeng Co., enterprise 430,625.10 3-year-above 3.66
Non-related
4.Deng Zhimin enterprise 349,509.93 3-year-above 2.97
5.Shandong Zhonglu Oceanic Within 6
(Yantai)Food Co., Related enterprise 272,,680.52 months 2.32
Total —— 6,077,208.05 —— 51.66
2. Other accounts receivable
(1) Other accounts receivable classified according to category:
Balance at period-end Balance at year-begin
Provision for bad Provision for bad
Book balance Book balance
Category debts debts
Proporti Proporti Proporti Proporti
Amount on Amount on Amount on Amount on
(%) (%) (%) (%)
Other
account
receivable
with single
major
amount
and with
single item
bad debt
provision
withdrawal
Other
account
receivable
62
Balance at period-end Balance at year-begin
Provision for bad Provision for bad
Book balance Book balance
Category debts debts
Proporti Proporti Proporti Proporti
Amount on Amount on Amount on Amount on
(%) (%) (%) (%)
of bad debt
provision
withdrawal
by
combinatio
ns
(1)
Combinati
on of
related 66,236,270. 14,314,338.
parties 94 88.56 95 60.87
(2)
Combinati
8,558,029.3 7,758,804. 9,203,290.7 7,810,779.
on of age
analysis 8 11.44 16 90.66 1 39.13 29 84.87
74,794,300. 7,758,804. 23,517,629. 7,810,779.
Subtotal
32 100.00 16 10.37 66 100.00 29 33.21
Other
account
receivable
with minor
amount but
with single
item bad
debt
provision
withdrawal
74,794,300. 7,758,804. 23,517,629. 7,810,779.
Total 32 100.00 16 10.37 66 100.00 29 33.21
(2) In combinations, ohter account receivable with bad debt provision withdrawal based on
age analysis
Balance at period-end Balance at year-begin
Account age Proportion Provision for bad Proportion Provision for
Book balance Book balance
(%) debts (%) bad debts
Within 6
384,500.30 4.49 19,225.02 1,449,193.17 15.75 58,909.74
months
6 months to 1
479,794.38 5.61 47,979.44
year
1 to 2 years 3,050.00 0.04 915.00 3,182.84 0.03 954.85
2 to 3 years
Over 3 years 7,690,684.70 89.86 7,690,684.70 7,750,914.70 84.22 7,750,914.70
Total 8,558,029.38 100.00 7,758,804.16 9,203,290.71 100 7,810,779.29
(3) Top 5 units with other accounts receivable:
63
Proportion in
Relationship with the total other
Units Amount
Company accounts
receivable (%)
1. Shandong Zhonglu Oceanic
(Yantai) Foods Co., Ltd. Related party 26,500,000.00 35.43
2. Shandong Zhonglu Fisheries
Shipping Company Related party 26,326,655.09 35.20
3.HABITAT International Co., Related party 8,494,200.00 11.36
4. Zhongchanjing Investment Co.,
Ltd. Non-related parties 4,281,620.00 5.72
5.YAWADDO FISHERIES
COMPANY LIMITED Related party 4,025,715.73 5.38
Total —— 69,628,190.82 93.09
3. Long-term equity investment
(1) Particualr about long-term equity investment
Explana
tion of
differen
Voting ce Accrui
Shareho Cash
right betwee ng
Incre lding divid
Calcul Balance Balance propor n Devaluat devalu
Investme ase proporti end
Invested ation at at tion in shareho ion ation
nt or on in in
units metho year-begi period-en invest lding provisio provisi
cost decre invested this
d n d ed proporti n on in
ase units perio
units on and this
(%) d
(%) voting period
right
proporti
on
China
Southern Cost 33,000,0 33,000,00 33,000,00 33,000,0
Securities metho 0.87 0.87
Co., Ltd. d 00.00 0.00 0.00 00.00
HABITAT
INTERNAT Cost 12,476,1 12,476,14 12,476,14 100.0
IONAL metho 100.00
CORP. d 45.60 5.60 5.60 0
Shandong
Province
Zhonglu 21,380,3 22,869,51 22,869,51 100.0
Fisheries Cost 100.00
Shipping metho 20.00 3.38 3.38 0
Company d
Shandong
Province
Zhonglu
32,280,0 55,448,18 55,448,18
Ocean 74.23 74.23
(Yantai) Cost 00.00 5.24 5.24
Foods metho
Company d
99,136,4 123,793,8 123,793,8 33,000,0
Total —— —— —— ——
65.60 44.22 44.22 00.00
4. Operating income and operating cost
(1) Particulars about operating income:
64
Item Amount of this period Amount of last period
Main business income 79,955,746.30 69,866,647.85
Other business income 1,197,238.00 774,498.91
Total business income 81,152,984.30 70,641,146.76
(2) Particulars about operating cost:
Item Amount of this period Amount of last period
Main business cost 53,214,118.04 60,063,645.10
Other business cost 787,660.53 728,065.14
Total business cost 54,001,778.57 60,791,710.24
(3) Main business classified according to industry:
Amount of this period Amount of last period
Industry Main business Main business
Main business cost Main business cost
income income
Offshore fishing and
re-processing 79,955,746.30 53,214,118.04 69,037,807.22 59,318,105.52
Fish processing, cold
storage and other 828,840.63 745,539.58
Total 79,955,746.30 53,214,118.04 69,866,647.85 60,063,645.10
(4) Operating income of top 5 clients of the Company in this period:
Proportion in total operating income
Item Operating income
of the Company (%)
1. Taiwan Fengqun Fisheries Company 29,600,785.14 36.48
2. Ningbo Fengsheng Food Co., Ltd. 20,195,293.28 24.88
3. Shandong Province Zhonglu Ocean (Yantai)
22.41
Foods Co., Ltd. 18,186,917.22
4.Japan Tenghe Co., Ltd . 8,264,460.49 10.18
5.Zhoushan Xinhexin Food Co., Ltd. 3,708,290.17 4.57
Total 79,955,746.30 98.52
5. Supplementary information of cash flow statement
Amount of this Amount of last
Item
period period
1．Reconciliation of net profit to cash flows from operating
activities:
Net profit 45,335,324.78 3,326,335.92
Add: Provision for impairment of assets 101,259.95
Depreciation of fixed assets, oil assets and productive biological
assets 7,300,147.22 6,583,632.43
Amortization of intangible assets 13,446.72 13,446.72
Amortization of long-term prepayments
Losses on disposal of fixed assets, intangible assets and other
long-term assets (income is listed with “- ”) -1,399,732.24
Losses on scrapping of fixed assets(income is listed with “- ”) -400.00 442.88
Losses on fair value change(income is listed with “- ”)
Financial expenses(income is listed with “- ”) 617,120.00 -411,637.28
65
Amount of this Amount of last
Item
period period
Investment losses(income is listed with “- ”)
Decrease in deferred income tax assets (increase is listed with “-”)
Increase in deferred income tax liabilities (decrease is listed with
“- ”)
Decrease in inventories(increase is listed with “-”) -22,396,421.43 -3,161,797.02
Decrease in operating receivables(increase is listed with “-”) -55,941,505.23 9,986,713.13
Increase in operating payables(decrease is listed with “- ”) 5,015,399.11 12,964,410.43
Others
Net cash flows from operating activities -21,355,361.12 29,301,547.21
2 ． Significant investing and financing activities that do not
involve cash receipts and payments
Conversion of debt into capital
Convertible bonds to be expired within one year
Fixed assets under finance lease
3．Net increase in cash and cash equivalents
Cash at the end of the year 29,093,143.06 16,681,951.59
Less: Cash at the beginning of the period 51,315,321.09 7,632,634.38
Add: Cash equivalents at the end of the period
Less: Cash equivalents at the beginning of the period
Net increase in cash and cash equivalents -22,222,178.03 9,049,317.21
XII. Supplementary Information to the Financial Statements
1. Non-recurring gains and loss
(1). In accordance with "public Offering of Securities Companies to Disclose Information
Explanatory Notice No. 1 - Non-Recurring Gains And Losses (2008)” [Commission Notice (2008)
43] promulgated by CSRC, the occurring amount of the non-recurring gains and profit were as
followings:
Item Amount Note
1 ． Gains and loss from disposal of non-current assets, including
write-off part of the accrued provision for asset impairment 2,194,307.71
2 ． Ultra vires approval, or none formal approval documents, or
accidental tax return and relief
3 ． Government subsidy recorded into the current gains and
losses(closely relevant to enterprise business, except for the ones
enjoyed in accordance with the general ration or quota of the state) 249,279.71
4．Capital occupation received from non- financial enterprises and
recorded into the current gains and losses
5 ． The investment cost of subsidiaries, affiliated enterprise and
combined enterprise obtained by the enterprise is less than the obtained
investment, then gains resulting from recognizable fair value of net
asset of investee units should be enjoyed
6．Profit and loss on exchange of non-monetary assets
7．Profit and loss on entrusted investment or manage asset
8．Assets devalue provisions withdrawn for force majeure, such as
natural disaster
9．Gains and losses from debt restructuring
66
Item Amount Note
10. Enterprise restructuring expense such as expense on allocation of
employee and integrated expense
11 Profit and loss exceeding fair value, resulting from unfair
transactions
12. Net profit and loss of the current period from the beginning of the
subsidiary to combination date, resulting from enterprise combination
under the common control
13. Profit and loss on predicted liabilities unrelated to main business of
the Company
14. Held transaction financial asset, gains/losses of changes of fair
values from transaction financial liabilities, and investment gains from
disposal of transaction financial asset, transaction financial liabilities
and financial asset available for sales, exclude the effective hedging
business relevant with normal operations of the Company
15. Reversal of provisions for asset impairment of account receivable
which is made singly impairment test
16. Gains/losses obtained from external entrusted loan
17. Losses/gains from the change of fair values of investing property of
subsequent measurement adopted by method of fair value
18. Influences on current losses/gains for one adjustment of current
losses/gains in accordance with the requirements of laws and
regulations such taxation and accountings.
19. Income of trustee fee from entrusted operation
20. Net amount of other non-operating income and expense except the
above items
21. Other losses/gains items conforming the definitions of non-recurring
gains/losses
22．Influenced amount of minority shareholders’ equity
23．Impact on income tax
Total 2,443,587.42
2. ROE and EPS
Pursuit to the requirement of “No. 9 Preparation Rules on Information Disclosure by Companies
Publicly Issuing Securities—Calculation and Disclusure for ROE and EPS (2010 Revised)”
(CSRC Notice [2010] No.2) and “No. 1 Explanation Notice of Information Disclosure by
Companies Publicly Issuing Securities— Non-Recurring Gains & Losses” (CSRC Notice [2008]
No.43) promulgated by CSRC, ROE and EPS were calculated as:
(1)For period of this term
Weighted average EPS
Profit of this period
ROE (%) Basic EPS Diluted EPS
Net profit attributable to common shareholders of the
12.85 0.20 0.20
Company
Net profit attributable to common shareholders of the
12.79 0.19 0.19
Company after deducting non-recurring gains/losses
(2)For period the year before
Profit of this period Weighted average EPS
67
ROE (%) Basic EPS Basic EPS
Net profit attributable to common shareholders of the
Company 3.15 0.04 0.04
Net profit attributable to common shareholders of the
Company after deducting non-recurring gains/losses 3.11 0.04 0.04
XIII. Approval of financial statement
The Financial Statement was deliberated and vertified by Board of the Company dated 9th August
2011.
Shandong Zhonglu Oceanic Fisheries Company Limited
August 9, 2011
Notes of financial statement page 18 to page 60 were signed by the followed persons in charger:
Person in charge of Person in charge of
Legal Representative: accounting works: accounting institution:
Signature: Signature: Signature:
Date: Date: Date:
68
Section VIII. Documents Available for References
(I) Text of Semi-annual Report carried with the personal signature of Chairman of the Board;
(II) Text of financial report carried with the signature and seals of legal representative,
principal of accounting work, and principal in charge of accounting organization;
(III) Text of all documents that have been publicly disclosed on newspapers and periodicals
designated by CSRC during the report period;
(IV) Text of Articles of Association of the Company;
(V) Other relevant documents.
Shandong Zhonglu Oceanic Fisheries Company Limited
Chairman of the Board: Wang Zhao’an
August 11, 2011
69
