Notes to Consolidated Financial Statements
(amounts in thousands, except per share
data)
(1) Principal Activities and Reorganization
Fuwei Films (Holdings) Co., Ltd and its
subsidiaries (the “Company” or the “Group”) are principally engaged in the production and distribution
of BOPET film, a high quality plastic film widely used in packaging, imaging, electronics, electrical and magnetic products in
the People’s Republic of China (the “PRC”). The Company is a holding company incorporated in the Cayman Islands,
established on August 9, 2004 under the Cayman Islands Companies Law as an exempted company with limited liability. The Company
was established for the purpose of acquiring shares in Fuwei (BVI) Co., Ltd (“Fuwei (BVI)”), an intermediate holding
company established for the purpose of acquiring all of the ownership interest in Fuwei Films (Shandong) Co., Ltd.
On April 23, 2009, Fuwei Films USA, LLC was set up and co-invested
by Fuwei Films (Holdings) Co., Ltd. and Newell Finance Management Co., Ltd. Fuwei Films USA, LLC has a registered capital
of US$10 and total investment amount of US$100. Fuwei Films (Holdings) Co., Ltd. and Newell Finance Management Co., Ltd. own 60%
and 40% of the total shares of Fuwei Films USA, LLC, respectively.
On May 9 and 17, 2011, the Company received
two notifications from the Weifang State-Owned Assets Operation Administration Company, a wholly-owned subsidiary of Weifang State-Owned
Asset Management and Supervision Committee (the “Administration Company”), regarding the transfer of the Company stock
previously controlled by the Company’s major shareholders. As a result of the transfer, and based on information provided
by the Administration Company, the Company believes that 65.45% of its outstanding ordinary shares are controlled indirectly by
the Administration Company and the sole director of each of the intermediate holding companies, Mr. Zheng Min.
(2) Basis of Presentation
The Group’s consolidated financial
statements are presented in accordance with accounting principles generally accepted in the United States of America (“U.S.
GAAP”).
This basis of accounting differs in certain
material respects from that used in the preparation of the books of account of Shandong Fuwei, the Company’s principal subsidiary,
which are prepared in accordance with the accounting principles and the relevant financial regulations applicable to enterprises
limited by shares as established by the Ministry of Finance of the PRC (“PRC GAAP”), the accounting standards used
in the country of its domicile. The accompanying consolidated financial statements reflect necessary adjustments not recorded in
the books of account of the Company’s subsidiaries to present them in conformity with U.S. GAAP.
(3) Summary of Significant Accounting Policies and Practices
(a) Principles of Consolidation
The consolidated financial statements include
the financial statements of the Company and its three subsidiaries. All significant intercompany balances and transactions have
been eliminated in consolidation.
(b) Foreign Currency Transactions
The Group’s reporting currency is the Chinese Yuan (“Renminbi”
or “RMB”).
The Company and Fuwei (BVI) operate in
Hong Kong as investment holding companies and their financial records are maintained in Hong Kong dollars, being the functional
currency of these two entities. Fuwei US company, the wholly owned subsidiaries of the company, their financial records are maintained
in US dollars. Assets and liabilities are translated into RMB at the exchange rates at the balance sheet date, equity accounts
are translated at historical exchange rates and income, expenses, and cash flow items are translated using the average rate for
the period. The translation adjustments are recorded in accumulated other comprehensive income in the statements of equity.
Transactions denominated in currencies
other than RMB are translated into RMB at the exchange rates quoted by the People’s Bank of China (the “PBOC”)
prevailing at the dates of transactions. Monetary assets and liabilities denominated in foreign currencies are translated into
RMB using the applicable exchange rates quoted by the PBOC at the balance sheet dates. The resulting exchange differences are recorded
in the statements of operations.
Commencing from July 21, 2005, the PRC
government moved the RMB into a managed floating exchange rate regime based on market supply and demand with reference to a basket
of currencies.
For the convenience of the readers, the
2012 RMB amounts included in the accompanying consolidated financial statements in our annual report has been translated into U.S.
dollars at the rate of US$1.00 = RMB 6.2301, being the noon buy rate for U.S. dollars in effect on December 31, 2012 in the City
of New York for cable transfer in RMB per U.S. dollar as certified for custom purposes by the Federal Reserve Bank. No representation
is made that the RMB amounts could have been, or could be, converted into U.S. dollar at that rate or at any other certain rate
on December 31, 2012, or at any other date.
RMB is not fully convertible into foreign
currencies. All foreign exchange transactions involving RMB must take place either through the PBOC or other institutions authorized
to buy and sell foreign currency. The exchange rate adopted for the foreign exchange transactions are the rates of exchange quoted
by the PBOC which are determined largely by supply and demand.
(c) Cash and Cash Equivalents and Restricted Cash
For statements of cash flow purposes, the
Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit and other
highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents.
As of December 31, 2012 and 2011, there
were cash and cash equivalents of RMB5,006 (US$804) and RMB44,172, respectively.
As of December 31, 2012 and 2011, there
were restricted cash of RMB21,457 (US$3,444) and RMB102,212, respectively, as deposit in bank for letters of credit and banker’s
acceptance bill as well as a frozen amount up to RMB770 related to a lawsuit.
(d) Trade Accounts Receivable
Trade accounts receivable are recorded
at the invoiced amount after deduction of trade discounts, value added taxes and allowances, if any, and do not bear interest.
The allowance for doubtful accounts is the Group’s best estimate of the amount of probable credit losses in the Group’s
existing accounts receivable. The Group determines the allowance based on historical write-off experience, customer specific facts
and economic conditions.
The Group reviews its allowance for doubtful
accounts monthly. Past due balances over 90 days and over a specified amount are reviewed individually for collectibility. All
other balances are reviewed on a pooled basis by aging of such balances. Account balances are charged off against the allowance
after all means of collection have been exhausted and the potential for recovery is considered remote.
(e) Inventories
Inventories are stated at the lower of
cost or market value as of balance sheet date. Inventory valuation and cost-flow is determined using Moving Weighted Average Method
basis. The Group estimates excess and slow moving inventory based upon assumptions of future demands and market conditions. If
actual market conditions are less favorable than projected by management, additional
inventory write-downs
may be required. Cost of work in progress and finished goods comprises direct material, direct production cost and an allocated
portion of production overheads based on normal operating capacity.
(f) Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated
depreciation.
Depreciation on property, plant and equipment
is calculated on the straight-line method (after taking into account their respective estimated residual values) over the estimated
useful lives of the assets as follows:
|
|
Years
|
Buildings and improvements
|
|
25 – 30
|
Plant and equipment
|
|
10 – 15
|
Computer equipment
|
|
5
|
Furniture and fixtures
|
|
5
|
Motor vehicles
|
|
5
|
Depreciation related to abnormal amounts
from idle capacity is charged to cost of goods sold for the period incurred. Total depreciations for the years ended December 31,
2012, 2011 and 2010 were RMB48,709 (US$7,818), RMB43,783 and RMB36,731 respectively, of which 86.1%, 84.6% and 90.1% was recorded
in cost of goods sold and 13.9%, 15.4% and 9.9% was recorded in administrative and selling expenses, respectively.
Construction in progress represented capital
expenditure in respect of the BOPET productions line. No depreciation is provided in respect of construction in progress.
(g) Leased Assets
An arrangement, comprising a transaction
or a series of transactions, is or contains a lease if the Group determines that the arrangement conveys a right to use a specific
asset or assets for an agreed period of time in return for a payment or a series of payments. Such a determination is made based
on an evaluation of the substance of the arrangement and is regardless of whether the arrangement takes the legal form of a lease.
Classification of assets leased to the
Group. Assets that are held by the Group under leases which transfer to the Group substantially all the risks and rewards of ownership
are classified as being held under capital leases. Leases which do not transfer substantially all the risks and rewards of ownership
to the Group are classified as operating leases.
Assets acquired under capital leases. Where
the Group acquires the use of assets under capital leases, the amounts representing the fair value of the leased asset, or, if
lower, the present value of the minimum lease payments, of such assets are included in property, plant and equipment and the corresponding
liabilities, net of finance charges, are recorded as obligations under capital leases. Depreciation is provided at rates which
write off the cost or valuation of the assets over the term of the relevant lease or, where it is likely the Group will obtain
ownership of the asset, the life of the asset. Finance charges implicit in the lease payments are charged to the consolidated income
statement over the period of the leases so as to produce an approximately constant periodic rate of charge on the remaining balance
of the obligations for each accounting period. Contingent rentals are charged to the consolidated income statement in the accounting
period in which they are incurred.
Operating lease charges. Where the Group
has the use of assets held under operating leases, payments made under the leases are charged to the consolidated income statement
in equal installments over the accounting periods covered by the lease term, except where an alternative basis is more representative
of the pattern of benefits to be derived from the leased asset. Lease incentives received are recognized in the consolidated income
statement as an integral part of the aggregate net lease payments made. Contingent rentals are charged to the consolidated income
statement in the accounting period in which they are incurred.
Sale and leaseback transactions. Gains
or losses on equipment sale and leaseback transactions which result in capital leases are deferred and amortized over the terms
of the related leases. Gains or losses on equipment sale and leaseback transactions which result in operating leases are recognized
immediately if the transactions are established at fair value. Any loss on the sale perceived to be a real economic loss is recognized
immediately. However, if a loss is compensated for by future rentals at a below-market price, then the artificial loss is deferred
and amortized over the period that the equipment is expected to be used. If the sale price is above fair value, then any gain is
deferred and amortized over the useful life of the assets.
(h) Lease Prepayments
Lease prepayments represent the costs of
land use rights in the PRC. Land use rights are carried at cost and charged to expense on a straight-line basis over the respective
periods of rights of 30 years. The current portion of lease prepayments has been included in prepayments and other receivables
in the balance sheet.
(i) Intangible Assets
The Group acquired a trademark for use
in the production and distribution of plastic flexible packaging materials. The trademark is carried at cost less accumulated amortization.
Amortization expense is recognized on the straight-line basis over the estimated useful life of 5 years of the trademark.
Given the environment in which the Group
currently operates, it is reasonably possible that the estimated economic useful life of the asset or the Group’s estimate
that it will recover its carrying amount from future operations could change in the future.
(j) Goodwill
Goodwill represents the excess of purchase
price and related costs over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. Goodwill
is not amortized but is tested for impairment annually, or when circumstances indicate a possible impairment may exist. Impairment
testing is performed at a reporting unit level. An impairment loss generally would be recognized when the carrying amount
of the reporting unit exceeds the fair value of the reporting unit, with the fair value of the reporting unit determined using
a discounted cash flow (DCF) analysis. A number of significant assumptions and estimates are involved in the application of
the DCF analysis to forecast operating cash flows, including the discount rate, the internal rate of return, and projections of
realizations and costs to produce. Management considers historical experience and all available information at the time the
fair values of its reporting units are estimated.
(k) Impairment of Long-lived Assets
The Company recognizes an impairment loss
when circumstances indicate that the carrying value of long-lived assets with finite lives may not be recoverable. Management’s
policy in determining whether an impairment indicator exists, a triggering event, comprises measurable operating performance criteria
at an asset group level as well as qualitative measures. If an analysis is necessitated by the occurrence of a triggering event,
the Company uses assumptions, which are predominately identified from the Company’s strategic long-range plans, in determining
the impairment amount. In the calculation of the fair value of long-lived assets, the Company compares the carrying amount of the
asset group with the estimated future cash flows expected to result from the use of the assets. If the carrying amount of the asset
group exceeds the estimated expected undiscounted future cash flows, the Company measures the amount of the impairment by comparing
the carrying amount of the asset group with their estimated fair value. We estimate the fair value of assets based on market prices
(i.e., the amount for which the asset could be bought by or sold to a third party), when available. When market prices are not
available, we estimate the fair value of the asset group using discounted expected future cash flows at the Company’s weighted-average
cost of capital. Management believes its policy is reasonable and is consistently applied. Future expected cash flows are based
upon estimates that, if not achieved, may result in significantly different results. No impairment was determined to exist as of
December 31, 2012 and 2011.
(l) Revenue Recognition
Sales of plastic flexible packaging materials
are reported, net of value added taxes (“VAT”), sales returns, trade discounts. The standard terms and conditions under
which the Group generally delivers allow a customer the right to return product for refund only if the product does not conform
to product specifications; the non-conforming product is initially identified by customer, and the customer notifies the Group
about the situation. After receiving the Group’s permission, the non-conforming product may be returned for replacement or
refund. The Group recognizes revenue when products are delivered and the customer takes ownership and assumes risk of loss, collection
of the relevant receivable is probable, persuasive evidence of an arrangement exists and the sale price is fixed or determinable.
In the PRC, VAT of 17% on invoice amount
is collected in respect of the sales of goods on behalf of tax authorities. The VAT collected is not revenue of the Group; instead,
the amount is recorded as a liability on the consolidated balance sheet until such VAT is paid to the authorities.
(m) Research and Development Costs
Research and development expenditures are
expensed as incurred. Research and development costs amounted to RMB9,617 (US$1,544), RMB10,159 and RMB8,058 for the year ended
December 31, 2012, 2011 and 2010 and such costs were recorded in administrative expenses.
(n) Income Taxes
Income taxes are accounted for under the
asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases
and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected
to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment
date.
(o) Earnings per Share
Basic earnings per share is computed by
dividing net earnings by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share
is calculated by dividing net earnings by the weighted average number of ordinary and dilutive potential ordinary shares outstanding
during the year. Diluted potential ordinary shares consist of shares issuable pursuant to stock option plan.
(p) Use of Estimates
The preparation of the consolidated financial
statements in accordance with U.S. GAAP requires management of the Group to make a number of estimates and assumptions relating
to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ
from those estimates. On an ongoing basis, management reviews its estimates and assumptions including those related to the recoverability
of the carrying amount and the estimated useful lives of long-lived assets, valuation allowances for accounts receivable and realizable
values for inventories. Changes in facts and circumstances may result in revised estimates.
(q) Noncontrolling interest
Non-controlling interest represents the
portion of equity that is not attributable to the Company. The net income (loss) attributable to noncontrolling interests are separately
presented in the accompanying statements of income and other comprehensive income. Losses attributable to noncontrolling interests
in a subsidiary may exceed the interest in the subsidiary’s equity. The related noncontrolling interest continues to be attributed
its share of losses even if that attribution results in a deficit of the noncontrolling interest balance.
(r) Segment Reporting
The Group uses the “management approach”
in determining reportable operating segments. The management approach considers the internal organization and reporting used by
the Group’s chief operating decision maker for making operating decisions and assessing performance as the source for determining
the Group’s reportable segments. Management, including the chief operating decision maker, reviews operating results solely
by monthly revenue of BOPET film (but not by sub-product type or geographic area) and operating results of Shandong Fuwei, the
operating subsidiary in the PRC. As such, the Group has determined that the Group has a single operating segment.
(s) Contingencies
In the normal course of business, the Group
is subject to contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of
matters, including among others, product liability. The Group recognizes a liability for such contingency if it determines it is
probable that a loss has occurred and a reasonable estimate of the loss can be made. The Group may consider many factors in making
these assessments including past history and the specifics of each matter. As of December 31, 2012 and 2011, the balance of predicted
liability was RMB830 (US$133) and RMB0, respectively, which was estimated liability related to our defective products and included
in accrued expenses and other payables as current liabilities on balance sheets.
(t)
Reclassification
Certain reclassifications have been made
to the fiscal year 2012 and 2011 consolidated financial statements to conform to the fiscal 2012 consolidated financial statement
presentation. These reclassifications had no effect on net loss or cash flows as previously reported.
(u) Going Concern
Matters
The accompanying consolidated financial
statements have been prepared in conformity with generally accepted accounting principles which contemplate continuation of the
company as a going concern. However, as of December 31, 2012, the Company had a working capital deficiency of RMB78,007 (US$12,521)
and accumulated deficit of RMB54,437 (US$8,738) from net losses incurred during the year of 2012. Confronted with the fierce competition
in the BOPET industry in China, the Company may still witness losses over the next twelve months. The ability of the Company to
operate as a going concern depends upon its ability to obtain outside sources of working capital and/or generate positive cash
flow from operations. The Company accordingly has developed an outside financing plan to meet the need of working capital for our
operation or debts. At the same time, the Company will continue implementing cost reductions on both manufacturing costs and operating
expenses to improve profit margins. The accompanying consolidated financial statements do not include any adjustments relating
to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result
should the Company be unable to continue as a going concern.
(v) Recently Issued Accounting Standards
In February 2013, the Financial Accounting
Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2013-02, which requires entities to present
information about significant items reclassified out of accumulated other comprehensive income (loss) by component either on the
face of the statement where net income is presented or as a separate disclosure in the notes to the financial statements. This
ASU is effective for the Company in the first quarter of fiscal 2014. We do not expect the adoption will have a significant impact
on our consolidated financial statements.
In July 2012, the FASB issued ASU 2012-02,
which amends how companies test for impairment of indefinite-lived intangible assets. The new guidance permits a company to assess
qualitative factors to determine whether it is more likely than not that the fair value of an indefinite-lived intangible asset
is less than its carrying amount as a basis for determining whether it is necessary to perform the annual impairment test. The
ASU is effective for the Company in the first quarter of fiscal 2014. We do not expect the adoption will have a significant impact
on our consolidated financial statements.
(4) Accounts and Bills Receivable, net
Accounts receivable consisted of the following:
|
|
December 31, 2012
|
|
|
December 31, 2011
|
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
Accounts receivable
|
|
|
11,943
|
|
|
|
1,917
|
|
|
|
16,213
|
|
Less: Allowance for doubtful accounts
|
|
|
(1,196
|
)
|
|
|
(192
|
)
|
|
|
(1,785
|
)
|
|
|
|
10,747
|
|
|
|
1,725
|
|
|
|
14,428
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bills receivable
|
|
|
10,840
|
|
|
|
1,740
|
|
|
|
38,029
|
|
|
|
|
21,587
|
|
|
|
3,465
|
|
|
|
52,457
|
|
An analysis of the allowance for doubtful accounts for 2012,
2011 and 2010 is as follows:
|
|
December 31, 2012
|
|
|
December 31, 2011
|
|
|
December 31, 2010
|
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
|
RMB
|
|
Balance at beginning of year
|
|
|
1,785
|
|
|
|
287
|
|
|
|
2,140
|
|
|
|
2,259
|
|
Bad debt (recovery) expense
|
|
|
(589
|
)
|
|
|
(95
|
)
|
|
|
(355
|
)
|
|
|
(119
|
)
|
Write-offs
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of year
|
|
|
1,196
|
|
|
|
192
|
|
|
|
1,785
|
|
|
|
2,140
|
|
The Group has a credit policy in place
and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit
over a certain amount. These receivables are due within 7 to 90 days from the date of billing. Normally, the Group does not obtain
collateral from customers.
(5) Inventories
Inventories consisted of the following:
|
|
December 31,2012
|
|
|
December 31,2011
|
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
Raw materials
|
|
|
19,081
|
|
|
|
3,063
|
|
|
|
16,174
|
|
Work-in-progress
|
|
|
3,095
|
|
|
|
497
|
|
|
|
2,727
|
|
Finished goods
|
|
|
17,507
|
|
|
|
2,810
|
|
|
|
28,150
|
|
Consumables and spare parts
|
|
|
719
|
|
|
|
115
|
|
|
|
834
|
|
Allowance for obsolescence
|
|
|
(6,111
|
)
|
|
|
(981
|
)
|
|
|
(6,111
|
)
|
|
|
|
34,291
|
|
|
|
5,504
|
|
|
|
41,774
|
|
(6) Prepayments and Other Receivables
Prepayments and other receivables consisted
of the following:
|
|
December 31,2012
|
|
|
December
31,2011
|
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
Prepayments
|
|
|
627
|
|
|
|
100
|
|
|
|
842
|
|
Other receivables
|
|
|
25,547
|
|
|
|
4,101
|
|
|
|
30,330
|
|
|
|
|
26,174
|
|
|
|
4,201
|
|
|
|
31,172
|
|
(7) Property,
Plant and Equipment
Property, plant and equipment consisted
of the following:
|
|
December 31, 2012
|
|
|
December 31,2011
|
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
Buildings
|
|
|
46,280
|
|
|
|
7,428
|
|
|
|
45,339
|
|
Plant and equipment
|
|
|
453,518
|
|
|
|
72,795
|
|
|
|
450,442
|
|
Computer equipment
|
|
|
2,056
|
|
|
|
330
|
|
|
|
2,170
|
|
Furniture and fixtures
|
|
|
9,027
|
|
|
|
1,449
|
|
|
|
8,247
|
|
Motor vehicles
|
|
|
2,094
|
|
|
|
336
|
|
|
|
2,358
|
|
|
|
|
512,975
|
|
|
|
82,338
|
|
|
|
508,556
|
|
Less: accumulated depreciation
|
|
|
(279,640
|
)
|
|
|
(44,885
|
)
|
|
|
(231,437
|
)
|
|
|
|
233,335
|
|
|
|
37,453
|
|
|
|
277,119
|
|
All of the Group’s buildings are
located in the PRC. As of December 31, 2012 and 2011, property, plant and equipment plus land use rights with carrying value totaling
RMB231,501 (US$37,158) and RMB275,373 respectively were pledged to banks as collateral for short-term bank loans and credit limits
(see Notes 12).
Construction-in-progress represents capital
expenditure in respect of the BOPET production line. Interest expense amounting to RMB11,174 (US$1,794) was capitalized to increase
carrying value of the third line project in 2012. There was no interest capitalization during the years ended December 31, 2011
and 2010, respectively.
(8) Lease Prepayments
The balance represents the lease prepayments of land use rights
of the Group as follows:
|
|
December 31,2012
|
|
|
December
31,2011
|
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
Non-current portion
|
|
|
19,523
|
|
|
|
3,134
|
|
|
|
20,047
|
|
Current portion - amount charged to expense next year
|
|
|
454
|
|
|
|
73
|
|
|
|
454
|
|
|
|
|
19,977
|
|
|
|
3,207
|
|
|
|
20,501
|
|
As of December 31, 2012, total prepaid
land use rights were pledged to banks as collateral for short-term bank loans and credit limit in bank (see Note 12).
Land use rights amortization
for the year ended December 31, 2012, 2011 and 2010 were RMB454 (US$73), RMB454 and RMB454, respectively.
As of December 31, 2012, prepaid land use
rights of the Group included certain parcels of land located in Weifang City, Shandong Province, the PRC, with a net book value
of RMB19,977 (US$3,207). The land use rights for land with area of approximately 43,878 square meters, 5,279 square meters and
25,094 square meters will expire in November 2050, May 2053 and February 2055, respectively.
(9) Advance to suppliers
Historically, we have significant working
capital commitments because suppliers of PET resin and additives -based raw materials require us to make prepayments in advance
of shipment. Besides, we may make prepayments related to some equipment purchases based on arrangement of contract. Our prepayments
to suppliers were recorded either as advances to suppliers, if they are expected to be utilized within 12 months as of balance
sheet date, or as long-term prepayments, which was included in the line item “advance to suppliers –long term”
in our consolidated balance sheet, if they represented the portion expected to be utilized after 12 months. As of December 12,
2012 and 2011, the current portion of advance to suppliers was RMB13,543 (US$2,174) and RMB8,808, respectively. The noncurrent
portion of advance to suppliers was RMB5,299 (US$851) and RMB62,799, net of allowance for bad debts of RMB1,616 (US$259) and RMB
0, respectively, as of December 31, 2012 and 2011.
(10) Goodwill
Goodwill
was generated from our acquisition of Shandong Fuwei in October 2004, which is not deductible for tax purposes but attributable
to the development potential of business acquired. We test goodwill for impairment annually on December 31 using an income approach
to measure implied fair value of goodwill. Due to the deterioration in market conditions resulting in decreased average selling
prices of our BOPET products, which was primarily experienced in 2012, our total revenue and gross margin severely decreased.
We performed a two-step goodwill impairment test as of December 31, 2012. The first step compared
the fair value of Shandong Fuwei, one of our reporting units, to its carrying amount, including goodwill. Since the result of the
first step indicated that there would be impairment, the second step was performed by comparing the implied fair value of goodwill
to the carrying value of the reporting unit’s goodwill, which applied a discounted cash flow approach. Base on the impairment
test result, we fully impaired the goodwill of RMB10,276 (US$1,649) in 2012. No impairment of goodwill was recorded in 2011. As
of December 31, 2012 and 2011, goodwill was RMB0 (US$0) and RMB10,276, respectively.
(11) Long-term Deposit
On January 20, 2008, Shandong Fuwei signed
a “Letter of Intent of Joyinn Capital Increase and Share Expansion” (“LOI”) with Joyinn Hotel Investment
& Management Co., Ltd. (“Joyinn”) and the Shareholder of Joyinn. Joyinn is a legal company of limited liability
that registered on May 19, 2006 in Beijing, with registered capital of RMB50,000 (US$6,236).
According to the LOI, Shandong Fuwei deposited
RMB 26,000 (half of the would-be added register capital of RMB52,000), to Joyinn as the prepayment as of June 30, 2008. The prepayment
to Joyinn will be regarded as investment payment after all parties enter into the final capital increase and shares expansion agreement
during the effective term of this LOI. A share pledging agreement was entered into subsequently on April 9, 2008 between Shandong
Fuwei and Shandong Xinmeng Investment Co., Ltd (“Pledger”), which holds 97.6% shares of Joyinn. The Pledger agreed
to pledge its 52% interest in Joyinn, as a guarantee to the prepayment on the newly increased register capital made by Shandong
Fuwei to Joyinn. Based on the mutual supplementary agreement signed in June 2008, the prepayment was decreased by RMB5,000 and
returned to the Company on June 18, 2008.
On June 23, 2009, Shandong Fuwei and the
Pledger, the major shareholder of Joyinn, agreed that the Pledger would pledge another 19% of its interest in Joyinn in addition
to the previous pledge of 52% interest in Joyinn as a guarantee to the prepayment on the newly increased register capital made
by Shandong Fuwei to Joyinn. As a result, the Pledger’s percentage of pledged interest in Joyinn increased from 52% to 71%.
In the year 2010, the Company impaired the deposit amount by RMB4,240 (US$681). The impairment was determined based on an independent
appraisal study.
On July 14, 2009, Shandong Fuwei and Joyinn
signed “Supplementary Agreement of Letter of Intent of Joyinn Capital Increase and Share Expansion” which extends the
duration of former agreement to two (2) years that is, Fuwei has the option right to determine to continue or withdraw the investment
prior to January 14, 2010, the expiration date of the agreement.
Upon the expiration of the Supplementary
Agreement on January 14, 2010, Shandong Fuwei and the Pledger entered into an agreement pursuant to which the Pledger agreed to
transfer a 71% interest in Joyinn to Shandong Fuwei. The transaction is subject to the approval of the authority body of both parties.
On March 9, 2012, Shandong Fuwei and the
Pledger agreed that prior to the approval of the foregoing share transfer, all the related agreements and share pledge terms and
conditions will remain in full force and effect.
The Pledger’s percentage of Joyinn
was transferred to Weifang State-Owned Assets Operation Administration Company (the “Administration Company”) according
to the court order. On December 10, 2012, Shandong Fuwei entered into a Share Pledge Agreement with the major shareholder of Joyinn
– the Administration Company, in which the Administration Company agreed all the terms and conditions in LOI and its Supplementary
Agreement. The Administration Company, as the new Pledger, agreed to increase the pledged interest by 16.8% to 87.8%.
As of December 31, 2012 and 2011 the total
amount of the deposit was RMB16,760 (US$2,690) and RMB16,760, respectively.
(12) Short-term and Long-term Bank Loans
|
|
Interest rate
|
|
|
December 31,2012
|
|
|
December
31,2011
|
|
Lender
|
|
per annum
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
SHORT-TERM LOANS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank of Communications Co., Ltd.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- May 25, 2011 to May 7, 2012
|
|
|
7.87
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
30,000
|
|
- May 25, 2011 to May 14, 2012
|
|
|
7.87
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
35,000
|
|
- May 25, 2011 to May 21, 2012
|
|
|
7.87
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
35,000
|
|
- May 30, 2011 to April 17, 2012
|
|
|
7.87
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
30,000
|
|
- April 26, 2011 to April 25, 2012
|
|
|
4.27
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
18,501
|
|
- May 11, 2012 to May 7, 2013
|
|
|
7.87
|
%
|
|
|
10,000
|
|
|
|
1,605
|
|
|
|
-
|
|
- May 8, 2012 to April 5, 2013
|
|
|
7.87
|
%
|
|
|
30,000
|
|
|
|
4,815
|
|
|
|
-
|
|
- May 9, 2012 to April 15, 2013
|
|
|
7.87
|
%
|
|
|
35,000
|
|
|
|
5,618
|
|
|
|
-
|
|
- May 9, 2012 to April 26, 2013
|
|
|
7.87
|
%
|
|
|
35,000
|
|
|
|
5,618
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank of Weifang
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- January 16, 2009 to January 12, 2012
|
|
|
0.00
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
10,000
|
|
- January 13, 2010 to January 12, 2012
|
|
|
0.00
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weifang Dongfang State-owned Assets Management Co., Ltd.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- October 19, 2009 to October 18, 2017
|
|
|
6.35
|
%
|
|
|
10,000
|
|
|
|
1,605
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
120,000
|
|
|
|
19,261
|
|
|
|
178,501
|
|
Less: amounts classified as short-term
|
|
|
|
|
|
|
(110,000
|
)
|
|
|
(17,656
|
)
|
|
|
(168,501
|
)
|
|
|
|
|
|
|
|
10,000
|
|
|
|
1,605
|
|
|
|
10,000
|
|
Notes:
The Company has entered into five loan
agreements with commercial banks to finance its working capital, R&D investment and construction. The weighted average interest
rate of short-term bank loans outstanding as of December 31, 2012 and 2011 was 7.66% and 5.77% per annum, respectively.
The principal amounts of the above short-term
loans are repayable at the end of the loan period.
The Company obtained five short-term loans
from Bank of Communications Co., Ltd. on May 8, 2012, May 9, 2012 and May 11, 2012, for a total amount of RMB120,000 (US$19,261),
including: (i) RMB30,000 (US$4,815) on May 8, 2012, maturing on April 5, 2013; (ii) two bank loans each for the amount of RMB35,000
(US$5,618) on May 9, 2012, maturing on April 15, 2013 and April 26, 2013, respectively; and (iii) two bank loans each for the amount
of RMB10,000 (US$1,605) on May 11, 2012, maturing on December 26, 2012 and May 7, 2013, respectively.
The annual interest
rate of the new bank loans has increased by 20% compared with the benchmark interest rate announced by the People’s Bank
of China on the date when the loan was credited to our bank account. As of December 31, 2012, the new loan annual interest rate
is 7.87%. We made two payments, each for the amount of RMB30,000 (US$4,815) and one payment of RMB18,501 (US$2,970) to Bank of
Communications Co., Ltd. in April 2012. We paid off three short-term loans to Bank of Communications Co., Ltd. in May 2012, each
for the amount of RMB30,000 (US$4,815), RMB35,000 (US$5,618) and RMB35,000 (US$5,618), respectively. We made a payment of RMB10,000
(US$1,605) to Bank of Communications Co., Ltd. in December 2012. As of December 31, 2012 and 2011, the balance of short-term loans
was RMB110,000 (US$17,656) and RMB168,501, respectively.
On November 20, 2009, we signed a long-term
loan agreement of RMB10,000 (US$1,605) with Weifang Dongfang State-owned Assets Management Co., Ltd., with an eight-year loan term,
which became effective on October 19, 2009 and will expire on October 18, 2017. From 2015 to 2016, the Company will make principal
installment payments of RMB3,350 (US$538) per year with the remaining principal balance of RMB3,300 (US$530) due in 2017.
The annual interest rate for the loan is the benchmark interest rate for over five-year loans announced by the People’s Bank
of China reduced by 10% and the applicable annual interest rate for the period ended December 31, 2012 is 6.35%. The loan is guaranteed
by Shandong Deqin Investment& Guarantee Co., Ltd. and is used for our projects.
Bank loans outstanding, which are all denominated
in Renminbi, are secured and guaranteed as follows:
|
|
December 31,2012
|
|
|
December 31,2011
|
|
|
December 31,2010
|
|
Secured by:
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
|
RMB
|
|
Property plant and equipment, Land use right
|
|
|
110,000
|
|
|
|
17,656
|
|
|
|
150,000
|
|
|
|
162,000
|
|
Bills receivable
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Guarantee company
|
|
|
10,000
|
|
|
|
1,605
|
|
|
|
10,000
|
|
|
|
10,000
|
|
Restricted cash
|
|
|
-
|
|
|
|
-
|
|
|
|
18,501
|
|
|
|
-
|
|
|
|
|
120,000
|
|
|
|
19,261
|
|
|
|
178,501
|
|
|
|
172,000
|
|
Long-term bank loans maturity for the next five years after
December 31, 2012 are as follows:
|
|
RMB
|
|
|
US$
|
|
Fiscal 2013
|
|
|
-
|
|
|
|
-
|
|
Fiscal 2014
|
|
|
-
|
|
|
|
-
|
|
Fiscal 2015
|
|
|
3,350
|
|
|
|
538
|
|
Fiscal 2016
|
|
|
3,350
|
|
|
|
538
|
|
Fiscal 2017
|
|
|
3,300
|
|
|
|
530
|
|
(13) Notes Payable
As of December 31, 2012, Shandong Fuwei
had banker’s acceptances opened with a maturity from three to six months totaling RMB38,299 (US$6,147) for payment in connection
with raw materials on a total deposits of RMB19,146 (US$2,592) at SPD Bank.
Notes payable consisted of the following:
Issuing bank
|
|
December 31, 2012
|
|
|
December 31, 2011
|
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
SPD Bank
|
|
|
38,299
|
|
|
|
6,147
|
|
|
|
-
|
|
|
|
|
38,299
|
|
|
|
6,147
|
|
|
|
-
|
|
(14) Accrued Expenses and Other Payables
Accrued expenses and other payables consisted of the following:
|
|
December 31,2012
|
|
|
December
31,2011
|
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
Other payables
|
|
|
6,001
|
|
|
|
963
|
|
|
|
5,798
|
|
Predicted liability
|
|
|
830
|
|
|
|
133
|
|
|
|
-
|
|
|
|
|
6,831
|
|
|
|
1,096
|
|
|
|
5,798
|
|
As of December 31, 2012 and 2011, the balance
of predicted liability was RMB830 (US$133) and RMB0, respectively, which was estimated liability related to our defective products.
(15) Obligations under capital leases
The Group has commitments under capital
lease agreements as for a part of new third production line and associated equipment. The lease has terms of 3 years expiring by
the end of December, 2015. As of December 31, 2012, future payments under these capital leases are as follows:
|
|
December 31,2012
|
|
|
December 31,2011
|
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
|
RMB
|
|
|
RMB
|
|
|
|
Present value of
the minimum
lease payments
|
|
|
Total
minimum
lease payments
|
|
|
Interest
|
|
|
Present value
of the
minimum
lease
payments
|
|
|
Total
minimum
lease
payments
|
|
|
Interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Within 1 year
|
|
|
6,282
|
|
|
|
1,008
|
|
|
|
7,287
|
|
|
|
1,170
|
|
|
|
1,005
|
|
|
|
161
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
After 1 year but within 2 years
|
|
|
6,637
|
|
|
|
1,065
|
|
|
|
7,333
|
|
|
|
1,177
|
|
|
|
696
|
|
|
|
112
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
After 2 years but within 3 years
|
|
|
7,081
|
|
|
|
1,137
|
|
|
|
7,332
|
|
|
|
1,177
|
|
|
|
251
|
|
|
|
40
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
After 3 years
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
20,000
|
|
|
|
3,210
|
|
|
|
21,952
|
|
|
|
3,524
|
|
|
|
1,952
|
|
|
|
313
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: balance due within one year classified
as current liabilities
|
|
|
(6,282
|
)
|
|
|
(1,008
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
13,718
|
|
|
|
2,202
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Details of obligations under capital leases are as follows:
|
|
December 31,2012
|
|
|
December 31,2011
|
|
|
|
RMB
|
|
|
RMB
|
|
|
|
|
|
|
|
|
RMB denominated obligations
|
|
|
|
|
|
|
|
|
Fixed interest rate of 6.49% per annum as of December 31, 2012
|
|
|
20,000
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
-
|
|
Guarantee deposit of RMB640 (US$103) over the capital leased
assets concerned and relevant insurance policies were provided to the lessors as collateral and security. In addition, as is customary
in the case of capital leases, the Group’s obligations are secured by four related parties (see Notes 21).
(16) Revenues
The Company’s revenue is primarily
derived from the manufacture and sale of plastic flexible packaging materials.
During the fiscal year ended December 31,
2012, net revenues were RMB372,866 (US$59,849), compared to RMB537,645 during the same period in 2011, representing a decrease
of RMB164,779 or 30.6%, mainly due to the reduction of average sales price by 30.6% and total sales volumes by 0.7%. For further
analysis of the factors causing revenue decrease, the reduction of average sales price caused a decrease of RMB160,782 and sales
volume factor made a decrease of RMB3,997.
The following table shows the distribution
of the Company’s revenue by the geographical location of customers, whereas all the Company’s assets are located in
the PRC:
|
|
December 31, 2012
|
|
|
December
31, 2011
|
|
|
December
31, 2010
|
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
|
RMB
|
|
Sales in China
|
|
|
302,290
|
|
|
|
48,521
|
|
|
|
392,195
|
|
|
|
397,781
|
|
Sales in other countries (principally Europe, Asia and North America)
|
|
|
70,576
|
|
|
|
11,328
|
|
|
|
145,450
|
|
|
|
103,677
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
372,866
|
|
|
|
59,849
|
|
|
|
537,645
|
|
|
|
501,458
|
|
Overseas sales were RMB70,576 (US$11,328,)
or 18.9% of total revenues, compared with RMB145,450 or 27.1% of total revenues in 2011. The decrease in overseas sales was mainly
due to the slow increase in demand from international market and enhanced competition as well as anti-dumping measures taken by
the USA and South Korea, which led to decrease in orders from the overseas market and the large decrease of the sales prices compared
to the same period of 2011.
The Company’s revenue by significant types of films for
2012, 2011 and 2010 was as follows:
|
|
December 31,2012
|
|
|
|
|
|
December
31,2011
|
|
|
|
|
|
December
31,2010
|
|
|
|
|
|
|
RMB
|
|
|
US$
|
|
|
% of Total
|
|
|
RMB
|
|
|
% of Total
|
|
|
RMB
|
|
|
% of Total
|
|
Stamping and transfer film
|
|
|
202,029
|
|
|
|
32,428
|
|
|
|
54.2
|
%
|
|
|
293,768
|
|
|
|
54.6
|
%
|
|
|
282,033
|
|
|
|
56.2
|
%
|
Printing film
|
|
|
42,449
|
|
|
|
6,814
|
|
|
|
11.4
|
%
|
|
|
55,218
|
|
|
|
10.3
|
%
|
|
|
76,720
|
|
|
|
15.3
|
%
|
Metallized film
|
|
|
18,886
|
|
|
|
3,031
|
|
|
|
5.1
|
%
|
|
|
28,205
|
|
|
|
5.3
|
%
|
|
|
28,108
|
|
|
|
5.6
|
%
|
Specialty film
|
|
|
92,536
|
|
|
|
14,853
|
|
|
|
24.8
|
%
|
|
|
140,491
|
|
|
|
26.1
|
%
|
|
|
87,956
|
|
|
|
17.5
|
%
|
Base film for other applications
|
|
|
16,966
|
|
|
|
2,723
|
|
|
|
4.5
|
%
|
|
|
19,963
|
|
|
|
3.7
|
%
|
|
|
26,641
|
|
|
|
5.4
|
%
|
|
|
|
372,866
|
|
|
|
59,849
|
|
|
|
100.0
|
%
|
|
|
537,645
|
|
|
|
100.0
|
%
|
|
|
501,458
|
|
|
|
100.0
|
%
|
In 2012, sales of specialty films were
RMB92,536 (US$14,853) and 24.8% of our total revenues as compared to RMB140,491 and 26.1% in 2011, which was a decrease of RMB47,955,
or 34.1%, as compared to the same period in 2011. The decrease was largely attributable to the decrease in demand and sales prices
for films in electronics and high-end packaging.
(17) Depreciation
and Amortization
Depreciation of property, plant and equipment and amortization
of intangible asset is included in the following captions:
|
|
December 31,2012
|
|
|
December 31,2011
|
|
|
December 31,2010
|
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
|
RMB
|
|
Cost of goods sold
|
|
|
41,918
|
|
|
|
6,728
|
|
|
|
36,988
|
|
|
|
33,154
|
|
Selling expenses
|
|
|
59
|
|
|
|
9
|
|
|
|
53
|
|
|
|
51
|
|
Administrative expenses
|
|
|
6,732
|
|
|
|
1,081
|
|
|
|
6,742
|
|
|
|
3,526
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
48,709
|
|
|
|
7,818
|
|
|
|
43,783
|
|
|
|
36,731
|
|
(18) Freight Costs
The Group records freight costs related
to the transporting of the raw materials to the Group’s warehouse in cost of raw materials and all other outbound freight
costs in selling expenses. For the year ended December 31, 2012, 2011 and 2010, freight costs included in cost of goods sold were
RMB2,527 (US$406), RMB2,147 and RMB1,985, respectively, and RMB10,534 (US$1,691), RMB9,771 and RMB10,186, respectively, were included
in selling expenses.
(19) Interest Expense
The Group capitalizes interest expense
as a component of the cost of construction in progress. The following is a summary of interest cost incurred during the year ended
December 31, 2012, 2011 and 2010:
|
|
December 31,2012
|
|
|
December 31,2011
|
|
|
December 31,2010
|
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
|
RMB
|
|
Interest cost capitalized
|
|
|
11,174
|
|
|
|
1,793
|
|
|
|
-
|
|
|
|
-
|
|
Interest cost charged to expense
|
|
|
-
|
|
|
|
-
|
|
|
|
10,227
|
|
|
|
8,846
|
|
|
|
|
11,174
|
|
|
|
1,793
|
|
|
|
10,227
|
|
|
|
8,846
|
|
(20) Income
Taxes
Cayman Islands Tax
Under the current Cayman Island laws, the
Company is not subject to tax on income or capital gain. In addition, upon payments of dividends by the Company to its shareholders,
no Cayman Islands withholding tax is imposed.
PRC Tax
Shandong Fuwei, being a Hi-Tech Enterprise
in the Weifang Hi-Tech Industrial Zone in Shandong, the PRC, has been granted preferential tax treatments by the Tax Bureau of
the PRC. According to the PRC Income Tax Law and various approval documents issued by the Tax Bureau, Shandong Fuwei’s profit
was taxed at a rate of 15%.
If our subsidiary Shandong Fuwei was not
entitled to a reduced enterprise income tax, or EIT, rate of 15% for the year ended December 31, 2012, 2011 and 2010, it would
have had an EIT rate of 25%, net income and basic and diluted earnings per share would be reduced by the following amounts:
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
|
RMB
|
|
Net income
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,499
|
)
|
|
|
(5,075
|
)
|
Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Basic
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.19
|
)
|
|
|
(0.39
|
)
|
- Diluted
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.19
|
)
|
|
|
(0.39
|
)
|
The Group had minimal operations in jurisdictions
other than the PRC. Net income (loss) before income taxes consists of:
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
|
RMB
|
|
Cayman Islands
|
|
|
(2,482
|
)
|
|
|
(398
|
)
|
|
|
(2,183
|
)
|
|
|
(14,423
|
)
|
British Virgin Islands
|
|
|
(3
|
)
|
|
|
(1
|
)
|
|
|
(2
|
)
|
|
|
(2
|
)
|
PRC
|
|
|
(59,655
|
)
|
|
|
(9,575
|
)
|
|
|
27,285
|
|
|
|
67,900
|
|
U.S.A
|
|
|
(25
|
)
|
|
|
(4
|
)
|
|
|
(107
|
)
|
|
|
(2,721
|
)
|
|
|
|
(62,164
|
)
|
|
|
(9,978
|
)
|
|
|
24,993
|
|
|
|
50,754
|
|
The Company has no material unrecognized
tax benefit which would favorably affect the income taxes in future periods and does not believe there will be any significant
increases or decreases within the next twelve months. No interest or penalties have been accrued at the date of adoption.
Shandong Fuwei was designated as a High-and-New
Tech Enterprise in December 2008 and will retain its status as a high-tech enterprise for three years commencing from 2011 enjoying
a favorable corporate tax rate during the term from January 1, 2011 to December 31, 2013 pursuant to the Enterprise Income Tax
Law. Accordingly, the deferred taxes as of December 31, 2012 have been calculated employing the statutory rate of Shandong Fuwei
of 15%.
Income tax benefit (expense) consists of:
|
|
Current
|
|
|
Deferred
|
|
|
Total
|
|
PRC Income tax
|
|
RMB
|
|
|
RMB
|
|
|
RMB
|
|
Year ended December 31, 2010
|
|
|
(8,427
|
)
|
|
|
(2,632
|
)
|
|
|
(11,059
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2011
|
|
|
(3,790
|
)
|
|
|
(165
|
)
|
|
|
(3,955
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2012
|
|
|
-
|
|
|
|
7,727
|
|
|
|
7,727
|
|
Year ended December 31, 2012 (US$)
|
|
|
-
|
|
|
|
1,240
|
|
|
|
1,240
|
|
Income tax expenses reported in the consolidated
statements of income differs from the income tax expense amount computed by applying the PRC income tax rate of 15% (the statutory
tax rate of the Company’s principal subsidiary) for the year ended December 31, 2012, 2011 and 2010 for the following reasons:
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
|
RMB
|
|
Income (loss) before income taxes
|
|
|
(62,164
|
)
|
|
|
(9,978
|
)
|
|
|
24,993
|
|
|
|
50,754
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Computed “expected” tax expense
|
|
|
-
|
|
|
|
-
|
|
|
|
(6,604
|
)
|
|
|
(13,275
|
)
|
Non-deductible expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
(767
|
)
|
|
|
4,425
|
|
Non-taxable income
|
|
|
-
|
|
|
|
-
|
|
|
|
940
|
|
|
|
(1,965
|
)
|
Tax holiday
|
|
|
-
|
|
|
|
-
|
|
|
|
2,641
|
|
|
|
8,850
|
|
Tax effect of deferred tax and tax rates differential
|
|
|
7,727
|
|
|
|
1,240
|
|
|
|
(165
|
)
|
|
|
(9,094
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual income tax benefit (expense)
|
|
|
7,727
|
|
|
|
1,240
|
|
|
|
(3,955
|
)
|
|
|
(11,059
|
)
|
Tax effects of temporary differences that
give rise to significant portions of the deferred tax assets (liabilities) as of December 31, 2012 and 2011 are presented below.
|
|
December 31,2012
|
|
|
December 31,2011
|
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
179
|
|
|
|
29
|
|
|
|
268
|
|
Other receivables
|
|
|
636
|
|
|
|
102
|
|
|
|
-
|
|
Inventory impairment
|
|
|
917
|
|
|
|
147
|
|
|
|
917
|
|
Estimated Loss due to Product Warranty
|
|
|
125
|
|
|
|
20
|
|
|
|
124
|
|
|
|
|
1,857
|
|
|
|
298
|
|
|
|
1,309
|
|
Non-current
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, principally due to differences in depreciation
|
|
|
1,481
|
|
|
|
238
|
|
|
|
1,622
|
|
Construction in progress, principally due to capitalized interest
|
|
|
(3,093
|
)
|
|
|
(497
|
)
|
|
|
(1,417
|
)
|
Lease prepayments, principally due to differences in charges
|
|
|
(383
|
)
|
|
|
(61
|
)
|
|
|
(394
|
)
|
Allowance for advanced to supplier-long term
|
|
|
242
|
|
|
|
39
|
|
|
|
-
|
|
Net loss carryforward
|
|
|
8,743
|
|
|
|
1,403
|
|
|
|
-
|
|
|
|
|
6,990
|
|
|
|
1,122
|
|
|
|
(189
|
)
|
Net deferred income tax assets
|
|
|
8,847
|
|
|
|
1,420
|
|
|
|
1,120
|
|
In assessing the realizability of deferred
tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not
be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities,
projected future taxable income, and tax planning strategies in making this assessment. Considering the level of historical performance
of Shandong Fuwei, management believes the deferred tax assets are realizable.
(21) Related Party Transactions
Name of party
|
|
Relationship
|
|
|
|
Shandong Baorui Investment Co., Ltd (“Shandong Baorui”)
|
|
Former shareholder (10%) of Shandong Fuwei. Shandong Baorui is 22.1% owned by the Group Founders.
|
|
|
|
Shenghong Group Co., Ltd (“Shenghong Group”)
|
|
Former shareholder (90%) of Shandong Fuwei.
|
|
|
|
Shandong Neo-Luck Plastic Co., Ltd (“Shandong Neo-Luck”)
|
|
The Group Founders’ former employer previously engaged in the business of BOPET film production.
|
|
|
|
Weifang Neo-Luck (Group) Co., Ltd (“Weifang Neo-Luck Group”)
|
|
Major shareholder (59%) of Shandong Neo-Luck. One of the directors of the Company was the general manager of Weifang Neo-Luck Group prior to joining the Company in April 2005.
|
|
|
|
Weifang State-Owned Assets Operation Administration Company (the “Administration Company”)
|
|
Shareholder of the Company (65.45%)
|
|
|
|
Everise Investment Management Co., Ltd.
|
|
Owned by the Management of the Company
|
|
|
|
Beijing Shiweitong Technology Development Co., Ltd.
|
|
Subsidiary of Weifang State-Owned Assets Operation Administration Company
|
|
|
|
Joyinn Hotel Investment & Management Co., Ltd.
|
|
Subsidiary of Weifang State-Owned Assets Operation Administration Company
|
As of December 31, 2012, the balance due from Joyinn Hotel Investment
& Management Co., Ltd. was RMB21,000 (US$3,371). The background of the long term deposit is disclosed in Notes 11.
Obligations under sale-leaseback transaction
amounting to RMB20,000 (US$3,210) were guaranteed by Weifang State-Owned Assets Operation Administration Company, Beijing Shiweitong
Technology Development Co., Ltd., Fuwei Films (Holdings) Co., Ltd., and Fuwei Films (BVI) Co., Ltd., respectively.
(22) Pension Plan
Pursuant to the relevant PRC regulations,
the Group is required to make contributions at a rate of 20% of employees’ salaries and wages to a defined contribution retirement
scheme organized by the local Social Bureau in respect of the retirement benefits for the Group’s employees in the PRC. The
total amount of contributions of RMB949(US$152), RMB1,003 and RMB1,057 for the year ended December 31, 2012, 2011 and 2010 respectively,
was charged to administrative expenses in the accompanying consolidated statements of income. The Group has no other obligation
to make payments in respect of retirement benefits of the employees.
(23) Fair Value of Financial Instruments
Our accounting for Fair Value Measurement
and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an
exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants
on the measurement date. This topic also establishes a fair value hierarchy which requires classification based on observable and
unobservable inputs when measuring fair value. The fair value hierarchy distinguishes between assumptions based on market data
(observable inputs) and an entity’s own assumptions (unobservable inputs). The hierarchy consists of three levels:
Level one — Quoted market prices
in active markets for identical assets or liabilities;
Level two — Inputs other than level
one inputs that are either directly or indirectly observable; and
Level three — Unobservable inputs
developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market
participant would use.
Determining which category an asset or
liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter.
The measurement basis used in the preparation of the consolidated financial statements is the historical cost basis except that
the following assets and liabilities are stated at their fair value, such as derivative financial instruments and available-for-sale
equity securities. The Company had no assets and liabilities measured at fair value on December 31, 2012.
The carrying amount of cash and cash equivalents,
trade accounts receivable, prepayments and other receivables, amounts due from related parties, amounts due to related parties,
and accrued liabilities and other payables, approximate their fair values because of the short maturity of these instruments.
The carrying amount of bank loans approximate
the fair value based on the borrowing rates currently available for bank loans with similar terms and maturity.
(24) Business and Credit Concentrations
(a) Almost all of the Group’s customers
are located in the PRC. There is no individual customer with gross revenue more than 10% of total gross revenue during the year
ended December 31, 2012, 2011 and 2010.
Each amount due from the following customers
represented more than 10% of the outstanding accounts receivable on December 31, 2012 and 2011.
|
|
Percentage of accounts receivable outstanding (%)
|
|
|
|
December 31, 2012
|
|
Eternal Electronic Material (Guangzhou) Co., Ltd.
|
|
|
29.5
|
%
|
Kurz Production (M) SDN BHD MY
|
|
|
11.7
|
%
|
Celplast Metallized Products Limited
|
|
|
10.6
|
%
|
Leonhard Kurz Stiftung & Co. KG
|
|
|
10.4
|
%
|
|
|
Percentage of accounts receivable outstanding (%)
|
|
|
|
December 31, 2011
|
|
Eternal Electronic Material (Guangzhou) Co., Ltd.
|
|
|
24.4
|
%
|
Eternal Photoelectronic Materials (Guangzhou) Co., Ltd.
|
|
|
12.6
|
%
|
Celplast Metallized Products Limited
|
|
|
11.9
|
%
|
(b) The Group purchased a significant portion
of PET resin required for the production of BOPET film from Sinopec Yizheng Chemical Fibre Company Limited (“Sinopec Yizheng”)
during the year ended December 31, 2012, 2011 and 2010. The Group believes that there are a limited number of suppliers in the
PRC with the ability to consistently supply PET resin that meets the Group’s quality standards and requirements. Currently,
the Group has an annual supply agreement with Sinopec Yizheng pursuant to which Sinopec Yizheng has agreed to supply fixed quantities
of PET resin to the Group on a monthly basis at the prevailing market prices. The terms of such supply agreement are reviewed annually.
Although the Group believes that it maintains a good relationship with its major suppliers, there can be no assurance that Sinopec
Yizheng will continue to sell to the Group under normal commercial terms as and when needed.
The following are the vendors that supplied10% or more of our
raw materials for each of the year ended December 31, 2012, 2011 and 2010:
|
|
|
|
Percentage of total purchases (%)
|
|
Supplier
|
|
Item
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
Sinopec Yizheng Chemical Fibre Company Limited
|
|
PET resin and Additives
|
|
|
36.4
|
|
|
|
43.8
|
|
|
|
42.4
|
|
Mahongany Joy Investment Ltd
|
|
PET resin
|
|
|
9.5
|
|
|
|
11.1
|
|
|
|
11.1
|
|
Jiangyin Huaxing Compound Co., Ltd.
|
|
PET resin
|
|
|
16.5
|
|
|
|
11.1
|
|
|
|
11.6
|
|
Note: To our knowledge, Mahogany Joy Investments and Jiangying
Huaxing Compound are related companies.
(25) Commitments and Contingencies
(a) Operating lease commitments
Future minimum lease payments under non-cancelable
operating leases as of December 31, 2012 are as follows:
|
|
December 31, 2012
|
|
|
|
RMB
|
|
|
US$
|
|
Operating lease commitments
|
|
|
355
|
|
|
$
|
57
|
|
The Company leases warehouses, staff quarters
and offices under operating leases. The leases duration is typically for one to three years, with an option to renew. None of the
leases includes contingent rentals.
For the year ended December 31, 2012, 2011
and 2010, total rental expenses for non-cancelable operating leases were RMB383 (US$61), RMB606 and RMB728, respectively.
(b) Capital commitments
Capital commitments for purchase of property,
plant and equipment as of December 31, 2012 were RMB23,816 (US$3,823).
(c) Outstanding bills receivable discounted
As of December 31, 2012, the Company had
not retained any recourse obligation in respect of bills receivable discounted with and sold to banks.
(d) Legal Proceedings
Shandong Fuwei is currently a party to
three legal proceedings in China. From time to time, we may be subject to legal actions and other claims arising in the ordinary
course of business.
On June 20, 2012, Shandong Fuwei (the “Plaintiff”)
filed a lawsuit against one of its clients (the “Defendant”) in China over the execution of the Procurement Contract
between them in Weifang Kuiwen District People’s Court. The first verdict of the lawsuit was announced on October 15, 2012,
according to which, the Defendant was determined to pay the Plaintiff an amount of RMB686,190.4 and its interest (for a term from
June 20, 2012 to the issuance date of the verdict based on the loan interest rate of the People’s Bank of China) as the costs
of procurement of goods. The Defendant then filed an appeal in Weifang Intermediate People’s Court which was heard on March
5, 2013 and the Court has not announced the verdict yet.
On July 9, 2012, the client filed a lawsuit
against Shandong Fuwei over the execution of the Procurement Contract between them in Beijing Daxing District People’s Court.
Shandong Fuwei raised a jurisdictional objection when filing the pleading and Beijing Daxing District People’s Court overruled
the objection. Shandong Fuwei filed an appeal against the judgment in the First Intermediate People’s Court of Beijing. The
appeal was then dismissed on January 23, 2013 and the lawsuit will be heard by Beijing Daxing District People’s Court with
a claim at RMB953,113 and its interest.
On October 29, 2012, another client of
Shandong Fuwei (the “Plaintiff”) filed a lawsuit against Shandong Fuwei over the execution of the Procurement Contract
between them in Zhejiang Haining People’s Court. Shandong Fuwei raised a jurisdictional objection when filing the pleading
and Zhejiang Haining People’s Court sustained the objection and decided that the lawsuit be heard by Weifang High-Tech District
People’s Court. The Plaintiff filed an appeal against the judgment in Zhejiang Jiaxing People’s Court, The appeal was
then dismissed and the plaintiff withdrew its charges against Shandong Fuwei on March 5, 2013. Soon afterwards, on March 20, 2013,
the court unfroze an amount of RMB770,000 of Shandong Fuwei’s savings, which had been frozen during the hearing of the lawsuit.
(26) Earnings (Loss) Per Share
Basic and diluted earnings per share for
the period/year ended December 31, 2012, 2011 and 2010 have been calculated as follows:
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
|
RMB
|
|
Net income (loss) available to ordinary shareholders
|
|
|
(54,427
|
)
|
|
|
(8,736
|
)
|
|
|
21,081
|
|
|
|
40,783
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares outstanding
|
|
|
13,062,500
|
|
|
|
13,062,500
|
|
|
|
13,062,500
|
|
|
|
13,062,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dilutive effect of share options
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average number of ordinary shares outstanding
|
|
|
13,062,500
|
|
|
|
13,062,500
|
|
|
|
13,062,500
|
|
|
|
13,062,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings (loss) per share
|
|
|
(4.17
|
)
|
|
|
(0.67
|
)
|
|
|
1.61
|
|
|
|
3.12
|
|
(27) Fuwei Films (Holdings) Co., Ltd. (Parent Company)
Under PRC regulations, the Company’s
operating subsidiary, Shandong Fuwei may pay dividends only out of its accumulated profits, if any, determined in accordance with
the accounting standards and regulations prevailing in the PRC (“PRC GAAP”). In addition, Shandong Fuwei is required
to set aside at least 10% of its accumulated profits each year, if any, to fund the statutory general reserve until the balance
of the reserve reaches 50% of its registered capital. The statutory general reserve is not distributable in the form of cash dividends
to the Company and can be used to make up cumulative prior year losses, if any, and may be converted into share capital by the
issue of new shares to shareholders in proportion to their existing shareholdings, or by increasing the par value of the shares
currently held by them, provided that the reserve balance after such issue is not less than 25% of the registered capital. Further,
Shandong Fuwei is also required to allocate 5% of the profit after tax, determined in accordance with PRC GAAP, to the statutory
public welfare fund which is restricted to be used for capital expenditures for staff welfare facilities owned by the Company.
The statutory public welfare fund is not available for distribution to equity owners (except in liquidation) and may not be transferred
in the form of loans, advances, or cash dividends. As of December 31, 2012, an aggregate amount of RMB37,441 (US$6,010) has been
appropriated from retained earnings and set aside for statutory general reserve and public welfare fund, by Shandong Fuwei.
As of December 31, 2012, the amount of
restricted net assets of Shandong Fuwei, which may not be transferred to the Company in the form of loans, advances or cash dividends
by the subsidiaries without the consent of a third party, was approximately 54% of the Company’s consolidated net assets
as discussed above. In addition, the current foreign exchange control policies applicable in the PRC also restrict the transfer
of assets or dividends outside the PRC.
The following presents condensed unaudited
unconsolidated financial information of the Parent Company only.
Condensed unaudited Balance Sheet as of December 31, 2012
and 2011
|
|
2012
|
|
|
2011
|
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
65
|
|
|
|
10
|
|
|
|
121
|
|
Other current assets
|
|
|
271,006
|
|
|
|
43,499
|
|
|
|
272,537
|
|
Investments in subsidiaries
|
|
|
378
|
|
|
|
61
|
|
|
|
381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
271,450
|
|
|
|
43,571
|
|
|
|
273,039
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
51,842
|
|
|
|
8,321
|
|
|
|
49,693
|
|
Total shareholders’ equity
|
|
|
219,608
|
|
|
|
35,250
|
|
|
|
223,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity
|
|
|
271,450
|
|
|
|
43,571
|
|
|
|
273,039
|
|
Condensed unaudited Statements of Operations (For the years
ended December 31, 2012, 2011 and 2010)
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
|
RMB
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income (expenses)
|
|
|
(13
|
)
|
|
|
(2
|
)
|
|
|
(18
|
)
|
|
|
(12
|
)
|
General and administrative expenses
|
|
|
(2,468
|
)
|
|
|
(396
|
)
|
|
|
(3,281
|
)
|
|
|
(14,411
|
)
|
Other income
|
|
|
-
|
|
|
|
-
|
|
|
|
1,116
|
|
|
|
-
|
|
Loss before equity in undistributed earnings of subsidiaries
|
|
|
(2,482
|
)
|
|
|
(398
|
)
|
|
|
(2,183
|
)
|
|
|
(14,423
|
)
|
Equity in earnings of subsidiaries
|
|
|
(51,956
|
)
|
|
|
(8,339
|
)
|
|
|
22,515
|
|
|
|
58,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
(54,437
|
)
|
|
|
(8,738
|
)
|
|
|
20,332
|
|
|
|
44,055
|
|
Condensed unaudited Statement of Cash Flows (For the year
ended December 31, 2012, 2011 and 2010)
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
|
RMB
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
(54,437
|
)
|
|
|
(8,738
|
)
|
|
|
20,332
|
|
|
|
44,055
|
|
Adjustment to reconcile net income (loss) to net cash from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Equity in earnings of subsidiaries
|
|
|
51,956
|
|
|
|
8,339
|
|
|
|
(22,515
|
)
|
|
|
(58,478
|
)
|
- Foreign exchange gain
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Other current assets
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
- Other current liabilities
|
|
|
61
|
|
|
|
10
|
|
|
|
(7,277
|
)
|
|
|
6,139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
(2,420
|
)
|
|
|
(389
|
)
|
|
|
(9,460
|
)
|
|
|
(8,284
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments to related parties
|
|
|
2,365
|
|
|
|
380
|
|
|
|
9,493
|
|
|
|
8,321
|
|
Proceeds from related parties
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(10
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
(4
|
)
|
|
|
38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
2,364
|
|
|
|
380
|
|
|
|
9,489
|
|
|
|
8,348
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
|
|
|
(56
|
)
|
|
|
(9
|
)
|
|
|
29
|
|
|
|
64
|
|
Cash:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At beginning of year
|
|
|
121
|
|
|
|
19
|
|
|
|
92
|
|
|
|
28
|
|
At end of year
|
|
|
65
|
|
|
|
10
|
|
|
|
121
|
|
|
|
92
|
|
(28) Unaudited Quarterly Data
Quarter
Ended
|
|
March 31
|
|
|
June 30
|
|
|
September 30
|
|
|
December 31
|
|
|
Total
|
|
Fiscal
year 2012
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
91,011
|
|
|
|
14,452
|
|
|
|
92,424
|
|
|
|
14,548
|
|
|
|
88,761
|
|
|
|
14,123
|
|
|
|
100,670
|
|
|
|
16,159
|
|
|
|
372,866
|
|
|
|
59,849
|
|
Gross profit
|
|
|
(3,026
|
)
|
|
|
(480
|
)
|
|
|
1,881
|
|
|
|
296
|
|
|
|
866
|
|
|
|
138
|
|
|
|
(2,828
|
)
|
|
|
(454
|
)
|
|
|
(3,107
|
)
|
|
|
(499
|
)
|
Net income
|
|
|
(15,128
|
)
|
|
|
(2,403
|
)
|
|
|
(11,916
|
)
|
|
|
(1,875
|
)
|
|
|
(14,856
|
)
|
|
|
(2,364
|
)
|
|
|
(12,527
|
)
|
|
|
(2,009
|
)
|
|
|
(54,427
|
)
|
|
|
(8,736
|
)
|
Basic and diluted earnings per share
|
|
|
(1.16
|
)
|
|
|
(0.18
|
)
|
|
|
(0.91
|
)
|
|
|
(0.14
|
)
|
|
|
(1.14
|
)
|
|
|
(0.18
|
)
|
|
|
(0.96
|
)
|
|
|
(0.15
|
)
|
|
|
(4.17
|
)
|
|
|
(0.67
|
)
|