缺陷报告模版Bug Report模板

时间：2024.4.21

第二篇：IFRS report国际准则报告和附注模板

Auditor’s Report and Proforma Financial Statements prepared under PRCGAAP for Foreign Investment Enterprises (English version)

[No. of the Report]

To the Board of Directors of [Company’s Name]

We have audited the accompanying balance sheet[s] of the Company [and the Group] as of 31 December 200Y and the related statements of income and cash flows of the Company [and the Group] for the year then ended. The preparation of these financial statements is the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We planned and performed our audit in accordance with China’s Independent Auditing Standards to obtain reasonable assurance as to whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting policies used and significant accounting estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements on pages [ ] to [ ] present fairly, in all material respects, the financial position of the Company [and the Group] as of 31 December 200Y and the results of its [their] operations and cash flows for the year then ended in accordance with the requirements of the Accounting Standards for Business Enterprises and the Accounting System for Business Enterprises promulgated by the State.

Deloitte Touche Tohmatsu CPA Ltd. Chinese Certified Public Accountant Shanghai, China [Name]

[Name]

[Date]

The auditors’ report and the accompanying financial statements are English translations of the Chinese auditors’ report and statutory financial statements prepared under accounting principles and practices generally accepted in the People’s Republic of China. These financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles and practices generally accepted in other countries and jurisdictions. In case the English version does not conform to the Chinese version, the Chinese version prevails.

statements should state clearly whether they are for the Company as a single entity or for the Group

on a consolidated basis. For convenience of presentation, the financial statements and the related

notes in this Proforma are for the company only.

System for Business Enterprises and the related accounting standards” has further guidance as to the

situation where consolidated financial statements should be prepared. For guidance on whether FIE

should prepare consolidated financial statements, please refer to Technical Bulletin 03/2003.

If the Company fails to prepare consolidated financial statements when it is required to do so, our

audit report should be modified. Please refer to Technical Bulletin 08/2002 for recommended

wording. Professional Guidelines for Chinese Certified Public Accountants No.5- Audit Report (provisional)

have become effective from July 1, 2003. The above auditors’ report has been updated in accordance

with the revised auditing standard and the professional guidelines. For guidance on the revised

auditing standard and the professional guidelines, please refer to Technical Bulletin 05/2003 for

recommended wording.

Proforma Financial Statements prepared under PRCGAAP for Foreign Investment Enterprises (English version)

[NAME OF COMPANY] BALANCE SHEET

AT 31 DECEMBER 200Y

ASSETS

NOTES

200Y 200X LIABILITIES AND OWNERS’ EQUITY

200Y

200X

CURRENT ASSETS： Bank balances and cash Current investments Notes receivable Dividends receivable Interest receivable Accounts receivable Other receivables Prepayments

Subsidies receivable Inventories

Amounts due from customers for contract work Deferred expenses

Long-term debt investments due within one year

Finance lease receivables due

within one year

Total current assets

Other current assets

LONG-TERM INVESTMENTS： Long-term equity investments Long-term debt investments

Total long-term investments FIXED ASSETS： Fixed assets – cost

Less: Accumulated depreciation

Fixed assets - net

Less: Impairment Fixed assets - net book value

Materials held for construction of fixed assets Fixed assets under construction

Fixed assets to be disposed of Total fixed assets

INTANGIBLE ASSETS AND OTHER ASSETS： Intangible assets

Long-term deferred expenses Finance lease

-Unguaranteed residual values Finance lease receivables

7 8 9 10 12 13 14 16 22 15 16 17 17 17 17 17 18 19 20 21 22 [33]

Other long-term assets

Total intangible assets and other assets

[Deferred taxes：] [Deferred tax assets] TOTAL ASSETS

The accompanying notes are part of the financial statements.

CURRENT LIABILITIES： Short-term loans 23 Notes payable Accounts payable 24 Amounts due to customers for contract work 13 Advances from customers Salaries and wages payable Employee benefits payable 25 Taxes payable 26 Dividends payable 27 Other fees payable Other payables Accrued expenses Provisions 28 Deferred revenue Long-term loans due 29,31 within one year Total current liabilities LONG-TERM LIABILITIES： Long-term loans 29 Bonds payable 30 Long-term payables 31 Specific accounts payable 32 Other long-term liabilities Total long-term liabilities [Deferred taxes：] [Deferred tax liabilities] [33] TOTAL LIABILITES [MINORITY INTERESTS] OWNERS’ EQUITY: Paid-in capital 34 Less: Capital repaid Paid-in capital - net 34 Capital reserves 35 Surplus reserves 36 [Unrecognized investment losses] Profit distribution/ cash dividend proposed after balance sheet date 37* Unappropriated profits 38 Translation reserve TOTAL OWNERS’ EQUITY TOTAL LIABILITIES AND OWNERS’ EQUITY

The financial statements on pages [2] to [46] were signed by the following: [Note: should use the actual title of the individual]

Head of the Company: Chief Financial Officer: Head of Accounting Department:

* New account added according to the CAS – Events occurring after the balance sheet date (revised 2003). As the account name is not specified in

the standard, the name set out above is for current practice purpose and is subject to further amendments where the MOF releases the formal name for this account which is different from the one we proposed above.

Proforma Financial Statements prepared under PRCGAAP for Foreign Investment Enterprises (English version)

[NAME OF THE COMPANY] INCOME STATEMENT

NOTES

Revenue

Less： Cost of sales Sales tax

Gross profit

Add： Other operating profit

Less： Operating expenses General and administrative expenses Finance expenses

Profit from operations

Add： Investment income Subsidy income Non-operating income

Less： Non-operating expenses

Profit before tax

Less： Income tax [Minority interest] [Unrealized investment losses]

Net profit for the year

39 40 41 42 43 44 45 46

Year ended 31/12/200Y RMB

Year ended 31/12/200X RMB

Year ended 31/12/200Y RMB

Year ended 31/12/200X RMB

Gains on disposal of operating divisions or investments Losses from natural disaster

Increase (decrease) in profit due to changes in accounting policies

Increase (decrease) in profit due to changes in accounting estimates

Losses from debt restructuring Others

The accompanying notes are part of the financial statements.

Proforma Financial Statements prepared under PRCGAAP for Foreign Investment Enterprises (English version)

[NAME OF THE COMPANY] CASH FLOW STATEMENT

1. Cash Flow from Operating Activities:

Cash received from sales of goods or rendering services Refunds of taxes

Other cash received relating to operating activities Sub-total of cash inflows

Cash paid for goods and services

Cash paid to and on behalf of employees Tax payments

Cash paid relating to other operating activities Sub-total of cash outflows

Net Cash Flow from Operating Activities

2. Cash Flow from Investing Activities:

Cash received from disposal of investments

Cash received from disposal of subsidiary or other operating business divisions

Cash received from return on investments

Net cash receipts from disposal of fixed assets, intangible assets and other long-term assets

Cash receipts relating to other investing activities Sub-total of cash inflows

Cash paid to acquire fixed assets, intangible assets and other long-term assets

Cash paid to acquire investments

Cash payments for acquisition of subsidiary or other operating business divisions

Cash payments relating to other investing activities Sub-total of cash outflows

Net Cash Flow from Investing Activities

3. Cash Flow from Financing Activities:

Cash received from investors Cash received from borrowings

Cash receipts relating to other financing activities Sub-total of cash inflows

Repayments of borrowings

Dividends paid, profit distributed or interest paid Cash payments relating to other financing activities Sub-total of cash outflows

Net Cash Flow from Financing Activities

4. Effect of Foreign Exchange Rate Changes on Cash and Cash

Equivalents

5. Net Increase (Decrease) in Cash and Cash Equivalents

NOTES

47 48

Year ended 31/12/200Y RMB

(Continued)

Year ended 31/12/200X RMB

Proforma Financial Statements prepared under PRCGAAP for Foreign Investment Enterprises (English version)

[NAME OF THE COMPANY] CASH FLOW STATEMENT

NOTES

1. Reconciliation of Net Profit to Cash Flow from Operating Activities: Net Profit

Add: Impairment losses on assets

Depreciation of fixed assets

Amortization of intangible assets

Decrease (increase) in deferred expenses Amortization of long-term deferred expenses

Increase (decrease) in accrued expenses

Losses (gains) on disposal of fixed assets, intangible assets and other long-term assets

Losses on retirement of fixed assets Financial expenses (income)

Losses (gains) arising from investments Deferred tax credit (debit)

Decrease (increase) in inventories

Decrease (increase) in receivables under operating activities Increase (decrease) in payables under operating activities Others

Net cash flow from operating activities

2. Investing and Financing Activities that do not Involve Cash Receipts and Payments:

Conversion of debt into capital

Reclassification of convertible bonds expiring within one year as current liability

Fixed assets acquired under finance leases

3. Net Increase in Cash and Cash Equivalents: Cash at the end of the year Less: Cash at the beginning of the year

Plus: Cash equivalents at the end of the year Less: Cash equivalents at the beginning of the year

Net increase in cash and cash equivalents

49 49 49 49

Year ended 31/12/200Y RMB

Year ended 31/12/200X RMB

The accompanying notes are part of the financial statements.

Proforma Financial Statements prepared under PRCGAAP for Foreign Investment Enterprises (English version)

[NAME OF THE COMPANY]

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1: If the Company also prepares consolidated financial statements, the notes to the

financial statements should state clearly whether they are for the Company as a single entity or for the Group on a consolidation basis.

NOTE 2: Significant items (including accounting policies) where there are no mandatory

disclosure requirements should be disclosed in the notes for the purpose of ensuring that the users of the financial statements have a proper understanding of the financial position and operating results of the Company or the Group. For example, in respect of significant subsidies receivable, the nature, recognition criteria and approval documents should be disclosed.

GENERAL

[Company’s Name] (the “Company”) was established in [the place of establishment], the People’s Republic of China (the “PRC”) by [the investor’s name] (“Party A”) and [the investor’s name] (“Party B”) as a [Sino-foreign equity joint venture/ Sino-foreign co-operative joint venture/ wholly foreign owned enterprise] on [date of establishment] with an operating period of [ ] years. The Company principally engages in [Business Scope]. The registered capital of the Company is RMB [amount]. Details of the capital contributions [required for and] paid by the investing parties are set out in Note [34].

[The Company has not yet commenced operations up to the date of issue of these financial statements. / The Company commenced operations on [Date].]

[BASIS OF PREPARATION]

[At 31 December 200Y, {the Company’s accumulated losses were RMB[ ] and total

liabilities exceeded its total assets by RMB[ ] because of continuous operating losses / The Company’s current liabilities exceeded its current assets by RMB[ ]}. The Company’s investor, [Name], has undertaken to provide the necessary financial support to enable the Company to continue operations, including an undertaking to provide financial support to the Company [and its subsidiaries] when [its/their] debts fall due, and not to demand repayment of debts owed by the Company [and its subsidiaries] in the foreseeable future. Accordingly, the financial statements have been prepared on a going concern basis.]

NOTE: If the Company has other methods to improve its operating condition, these methods

and corresponding effects should be disclosed. Please refer to Technical Bulletin

5/2003 for guidance. We may need to modify our audit opinion depending on the

specific situation.

Please delete this paragraph if there are no indications that the going concern

assumption is no longer appropriate, as listed in chapter 2 of the Specific Independent

Auditing Standard No. 17 (revised 2003).

Proforma Financial Statements prepared under PRCGAAP for Foreign Investment Enterprises (English version)

[NAME OF THE COMPANY]

NOTES TO THE FINANCIAL STATEMENTS

3. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES possible ones when adopting the “Accounting System for Business Enterprises”, the “Accounting Standard for Business Enterprises” and the supplementary regulations thereto. Appropriate selection of these accounting policies and accounting estimates should be made in practice based on materiality considerations and by taking into account the specific circumstances of the enterprise’s business. Simply copying all the accounting policies and accounting estimates without consideration of the enterprise’s specific circumstances is not appropriate. The Company has adopted the “Accounting Standards for Business Enterprises”, the “Accounting System for Business Enterprises” and the supplementary regulations thereto.

The Company has adopted the accrual basis of accounting and uses the historical cost convention as the principle of measurement.

The Company has adopted the calendar year as its accounting year, i.e. from 1 January to 31 December.

The recording currency of the Company is [ Renminbi / Foreign Currency].

Transactions denominated in foreign currencies (currencies other than the recording currency) are translated into [Renminbi/ Foreign Currency (recording currency)] at the applicable rate of exchange (“market exchange rate”) prevailing at [the date of the transaction / the beginning of the month in which the transaction occurs]. Monetary assets and liabilities denominated in foreign currencies are translated into [Renminbi/ Foreign Currency (recording currency)] at the market exchange rate prevailing at the balance sheet date. Exchange gains or losses incurred on specific borrowing for the acquisition or construction of a fixed asset before the fixed assets are ready for use are capitalized as part of the cost of fixed asset; exchange gains or losses arising in the pre-operating period are recorded as long term deferred expenses; other exchange gains or losses are dealt with as finance expenses.

Proforma Financial Statements prepared under PRCGAAP for Foreign Investment Enterprises (English version) [NAME OF THE COMPANY] NOTES TO THE FINANCIAL STATEMENTS 3. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES -

continued NOTE: For consolidated financial statements only. 1) Scope of consolidation

The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries [and joint venture enterprises] made up to 31 December each year. A subsidiary is an enterprise in which the Company, directly or indirectly, holds more than 50% of the equity, or whose operating activities are controlled by the Company through other mechanisms. [A joint venture refers to an enterprise whose operating activities are, as contractually agreed, jointly controlled by the Company and other investing parties.]

2) Accounting for consolidation The accounting policies used by the subsidiaries conform to those used by the Company.

The accounting policies used by the subsidiaries are different from those used by the Company. Where necessary, adjustments are made on consolidating the financial statements of subsidiaries to bring these accounting policies into line with those used by the Company.

The operating results and cash flows of subsidiaries acquired [or disposed of] during the year are included in the consolidated income statement and consolidated cash flow statement respectively from the effective dates of acquisition [or up to the effective dates of disposal, as appropriate].

All significant intercompany transactions and balances between group enterprises are eliminated on consolidation.

[The assets, liabilities, income, expenses and profits of joint venture enterprises are consolidated using the proportionate consolidation method. All significant intercompany transactions and balances between the joint venture and the Company or its subsidiaries are eliminated on consolidation. ]

continued

Foreign currency financial statements are translated into RMB financial statements for consolidation as follows:

The assets and liabilities are translated at the exchange rate prevailing on the balance sheet date. Except for unappropriated profits, owners’ equity items are reported at the market exchange rates at the dates of the transactions. Income statement items and profit appropriations in the year are translated at the [average market exchange rates for the year / exchange rate prevailing on the balance sheet date]. The unappropriated profits (or accumulated losses) brought forward are reported at the prior year’s closing balance. The unappropriated profits (or accumulated losses) carried forward are calculated, based on the translated amounts of net income and other profit appropriation items. All exchange differences resulting from the translation are recognized as “translation reserve” in the balance sheet.

Cash flows of a foreign subsidiary are translated [at the exchange rates at the dates of the cash flows / at average exchange rates for the year]. The effect of changes in exchange rates on cash and cash equivalents is presented separately as a reconciling item in the cash flow statement.

The opening balances and prior year’s figures are presented according to the translated amounts of the prior year.

Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.

1) Criteria for recognition of bad debts

Bad debts are recognized in the following circumstances:

The irrecoverable amount of a bankrupt debtor after pursuing the statutory procedures.

The irrecoverable amount of a debtor who has deceased and has insufficient estate to repay. The amount owed by a debtor who is unable to repay the obligations after the debts fall due, and the amount is irrecoverable or unlikely to be recovered as demonstrated by sufficient evidence.

continued

2) Accounting treatment for bad debt losses

Bad debt is accounted for using the allowance method and provided according to the recoverability of receivables at year-end. The appropriate percentages of provision for bad debts relating to significant receivable accounts are determined based on relevant information such as past experience, actual financial position and cash flows of the debtors, as well as other relevant information. General provision for the remaining receivables is estimated, based on aging analysis, as follows:

Within 1 year %

1-2 years

2-3 years

Over 3 years

% % % NOTE: Where for some receivables, there are special settlement arrangements; or all / most

part of the receivables are settled after the balance sheet date, appropriate amendments should be made to the above accounting policies according to the relevant circumstances.

[for manufacturing companies]

Inventories are initially recorded at cost. The cost of inventories comprises all costs of purchase, costs of conversion, and other costs incurred to bring inventories to their present location and condition. Inventories mainly include raw materials, work in progress, and finished goods.

Inventories are accounted for using the actual costing method. In determining the cost of inventories transferred out or issued for use, the actual costs are determined by the [first-in first-out / weighted average / moving average / specific identification / last-in first-out] method.

Alt Where the enterprise adopts the standard costing method to account for inventories:

Inventories are accounted for using the standard costing method. Cost variances are computed periodically to adjust standard costs to actual costs.

continued

[for real estate companies]

Inventories are initially recorded at actual costs on acquisition. Inventories mainly include construction materials, property under construction, completed projects, property under installment sale and property for lease. Cost of construction materials comprises purchase costs together with freight, insurance, tax and other related expenses. In determining the cost of inventories transferred out or issued for use, the actual costs are determined by the [first-in first-out / weighted average / last-in first-out / moving average / specific identification] method. The cost of property development comprises land acquisition fees, expenditure on infrastructure development, expenditure on construction and installation, borrowing costs incurred before the completion of construction, and other related expenses. Property development is accounted for on an individual basis.

Low-value consumables are [written-off in full when issued for use / amortized based on the number of times that they are expected to be used]. Packaging materials leased out or lent out are amortized using the [equal-split amortization method/net value amortization method].

Inventories are measured at the lower of cost and net realizable value at the end of a period. Where the net realizable value is lower than the cost, the difference is recognized as a provision for decline in value. Provision for decline in value of inventories is made by comparing cost with net realizable value on [an individual item basis / a product line basis / classes of inventories].

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs to complete, as well as the estimated expenses and related taxes necessary to complete the sale.

Construction contracts are accounted for at actual cost, which includes direct and indirect costs incurred and attributable to the contract for the period from the date the contract was signed to the final completion of the contract. The aggregate amount of accumulated costs incurred and accumulated gross profit (loss) recognized for the construction contract is presented in the balance sheet, net of progress billings. An excess of the aggregate amount of accumulated costs incurred and accumulated gross profit (loss) recognized over the progress billing is presented as “Amounts due from customers for contract work” under current assets. An excess of the progress billing over the aggregate amount of accumulated costs incurred and accumulated gross profit (loss) recognized is presented as “Amounts due to customers on contract work” under current liabilities.

continued

A current investment is initially recorded at its cost of acquisition. The initial cost of an investment is the total price paid on acquisition, including incidental expenses such as tax payments and handling charges. However, cash dividends declared but unpaid or bond interest due but unpaid that are included in the acquisition cost are accounted for separately as receivables.

Cash dividends or interest on current investments, other than those recorded as receivables as noted in the preceding paragraph, are off-set against the carrying amount of investments upon receipt.

Current investments are carried at the lower of cost and market value at the end of each period. Where the market value is lower than cost, the difference is recognized as a provision for decline in value of current investments, which is calculated on the basis of [individual investment / all investments in aggregate / individual classes of investments]. If the value of a current investment is significant (that is, it accounts for 10% or more of total current investments), the provision for decline in value of that current investment is determined and recognized separately.

On disposal of a current investment, the difference between the carrying amount of the investment and the sales proceeds actually received is recognized as an investment gain or loss in the current period.

Indirect loans to others via an authorized lending institution are accounted for at the actual amount lent out. Interest income from such loans is accrued at the interest rate specified in the loan agreement and recognized in the income statement on a periodic basis. Accruing interest is stopped, and any interest that has previously been accrued is reversed if that interest cannot be collected on its due date. Indirect loans are carried at the lower of cost and market value at the end of each period. Where the recoverable amount is lower than the principal amount of an indirect loan, the difference is recognized as a provision for impairment loss.

Recoverable amount is the higher of an asset’s net selling price, and the present value of estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life.

continued

(1) Accounting treatment for long-term investments

A long-term investment is initially recorded at its acquisition cost .

The cost method is used to account for a long-term equity investment when the Company does not have control, joint control or significant influence over the investee enterprise. The equity method is used when the Company can control, jointly control or has significant influence over the investee enterprise.

When the cost method is adopted, the amount of investment income recognized is limited to the amount distributed from the accumulated net profits of the investee enterprise that has arisen after the investment was made. The amount of profits or cash dividends declared by the investee enterprise in excess of the above threshold is treated as return of investment cost, and the carrying amount of the investment is reduced accordingly.

When the equity method is adopted, the investment income for the current period is recognized according to the attributable share of the net profit or loss of the investee enterprises. The attributable share of net losses incurred by the investee enterprise is recognized to the extent that the carrying amount of the investment is reduced to zero. If the investee enterprise realizes net profits in subsequent periods, the carrying amount of the investment is resumed by the excess of the Company’s attributable share of profits over the share of unrecognized losses.

When a long-term equity investment is accounted for using the equity method, the difference between the initial investment cost of the Company and its share of owners’ equity of the investee enterprise is accounted for as “equity investment difference.” An excess of the initial investment cost over the Company’s share of owners’ equity of the investee enterprise is debited to “long-term equity investment – equity investment difference” and amortized on a straight-line basis and charged to the income statement accordingly. The amortization period is the investing period if it is stipulated in the investment contract. Otherwise, it is amortized over a period of not more than 10 years. A shortfall of the initial investment cost below the Company’s share of owners’ equity of the investee enterprise [arising before the issuance of Caikuai [2003] 10], is credited to “long-term equity investment – equity investment difference,” and amortized on a straight-line basis and charged to the income statement accordingly. The amortization period is the investing period if it is stipulated in the investment contract. Otherwise, it is amortized over a period of not less than 10 years. The shortfall of the initial investment cost below the Company’s share of owners’ equity of the investee enterprise arising after the issuance of Caikuai [2003] 10 is credited to “capital surplus – provision for equity investment.”

continued

(2) Accounting treatment for long-term debt investments

A long-term debt investment is initially recorded at its investment cost which is the actual total price paid less any interest receivable due but unpaid. The difference between the actual cost of a long-term bond investment (as reduced by any bond interest due but unpaid and accrued bond interest and any related taxes included therein) and the par value of the bond is treated as investment premium or discount. The premium or discount is amortized using [the straight-line method / the effective interest method] over the period between the acquisition date and the maturity date, and charged to the income statement in the period when the relevant bond interest is recognized as income.

Interest income on long-term debt investments is calculated periodically. Interest income on long-term bond investments is calculated according to the par value and the coupon rate and recognized as income after adjusting for the amortization of the premium or discount.

(3) Impairment of long-term investments

At the end of each period, the Company determines whether an impairment loss should be recognized for a long-term investment by considering the indications that such a loss may have occurred. Where the recoverable amount of any long-term investment is lower than its carrying amount, an impairment loss on the long-term investment is recognized for the difference. [For an investment with credit equity investment difference included in the [capital reserve / the carrying value of the investment], the loss is recognized in the income statement to the extent that the relevant [capital reserve / unamortized credit investment difference] is inadequate to offset such a loss; for an investment with debit equity investment difference, the loss is recognized as a current period expense while offsetting the unamortized difference, and crediting the impairment loss provision (if the difference is inadequate to offset the loss).

If there is an indication that there has been a change in the conditions based on which an impairment loss was recognized in prior periods, and as such the recoverable amount is in excess of the carrying amount, the impairment loss is reversed. The reversal is recognized in the current period to the extent that the loss was previously charged to the income statement. Any excess amount is credited to capital reserve to the extent it was previously debited to capital reserve.]

Fixed assets are tangible assets that, (a) are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; (b) have a useful life of more than one year; and (c) have a relatively high unit price.

Fixed assets are recorded at actual cost on acquisition. Depreciation is provided to expense the cost of each category of fixed assets over their estimated useful lives from the month after they are ready for use, using the [straight-line method / unit of production method / sum-of-years’-digits method / double-declining-balance method].

The estimated residual value, useful life and annual depreciation rate of each category of fixed assets are as follows:

Residual Useful Annual

Buildings % % Plant and machinery % % Electronic equipment, furniture and fixtures % % Transportation equipment % %

[Fixed assets acquired under a finance lease are recorded at an amount equal to the lower of the original carrying amount of the leased asset as recorded in the books of the lessor and the present value of the minimum lease payments at the inception of a lease. [Where the total value of fixed assets leased under finance leases is not significant (that is, it accounts for not more than 30% of the total assets of the Company), leased assets are recorded at the minimum lease payments at the inception of the lease].

Fixed assets held under a finance lease are depreciated on the same basis as owned assets. If it is reasonably certain that the ownership of the leased asset will be transferred at the end of the lease term, depreciation is provided over the useful life of the leased asset. If it is not reasonably certain that the ownership of the leased asset at the end of the lease term will be transferred, depreciation is provided over the shorter of the lease term and the estimated useful life of the leased asset.

At the end of each period, the Company determines whether an impairment loss should be recognized for a fixed asset by considering the indications that such a loss may have occurred. Where the recoverable amount of any fixed asset is lower than its carrying amount, an impairment loss on fixed asset is recognized for the difference.

Alternative in Chinese: If there is an indication that there has been a change in the conditions based on which an impairment loss was recognized in prior periods, and as such the recoverable amount is in excess of the carrying amount, the impairment loss is reversed.

Fixed assets under construction are recorded at the actual cost incurred for the construction. Cost includes all expenditures incurred for construction projects, [capitalized borrowing costs incurred on a specific borrowing for the construction of fixed assets before it has reached the working condition for its intended use,] and other related expenses. A fixed asset under construction is transferred to fixed assets when it has reached the working condition for its intended use. No depreciation is provided for fixed assets under construction.

continued

Where the work on a fixed asset under construction has been suspended for a long period of

time and is not expected to re-commence within three years; or where the fixed asset is technically and physically obsolete and its economic benefits to the Company is uncertain; or there is other evidence indicating a decline in value of the fixed asset under construction, an impairment loss is recognized for the shortfall of the recoverable amount of the fixed asset under construction below its carrying amount.

Intangible assets are recorded at the actual cost of acquisition. For an intangible asset received as a capital contribution by an investor, the actual cost is the value agreed by all investing parties. For a self-developed intangible asset that is obtained by legal application, the actual cost capitalized is the amount of expenditure incurred for the legal application for obtaining the asset, such as registration fees and legal fees. Other costs incurred in the research and development process are expensed in the current period. For a purchased intangible asset, the actual cost is the purchase price.

Land use rights purchased or acquired by payment of land transfer fees before the adoption of the “Accounting System for Business Enterprises,” are accounted for as intangible assets and are amortized over the periods as stated below. Land use rights purchased or acquired after the adoption of the “Accounting System for Business Enterprises,” are accounted for as intangible assets before construction work for own-use purposes or development commences and are amortized over the periods as stated below. Upon using the land to construct fixed assets for own use, the carrying amount of the land use right is transferred to the cost of fixed assets under construction.

NOTE: Where the Company’s land use rights are all purchased or acquired after the

adoption of “Accounting System for Business Enterprises”:

Land use rights purchased or acquired by payment of land transfer fees are

accounted for as intangible assets before construction work for own-use purpose or development commences and are amortized over the periods as stated below. Upon using the land to construct fixed assets for own use, the carrying amount of the land use right is transferred to the cost of fixed assets under construction.

[for real estate companies]

Land use rights purchased, or those acquired by payment of land transfer fees, are accounted for as intangible assets before construction work or development commences, and are amortized over the periods as stated below. Upon using the land to develop properties held for sale, the carrying amounts of the relevant land use rights are transferred to property development costs.

continued

The cost of an intangible asset is amortized evenly over its expected useful life from the month in which it is obtained. If the expected useful life exceeds the beneficial period prescribed in the relevant contract or the effective period stipulated by law, the amortization period is limited to the shorter of the beneficial period and the effective period. If the relevant contract does not prescribe the beneficial period and the law does not stipulate the effective period, the amortization period is 10 years [XX years (if less than 10 years)].

At the end of each period, the Company determines whether an impairment loss should be recognized for an intangible asset by considering the indications that such a loss may have occurred. Where the recoverable amount of any intangible asset is lower than its carrying amount, an impairment loss is recognized for the difference.

Unless related to the acquisition or construction of fixed assets, all expenditure incurred during the pre-operating period is recognized as an expense in the month in which the enterprise commences operation.

The obligation related to a contingency is recognized as a liability when it meets the following conditions:

（1） the obligation is a present obligation of the Company;

（2） it is probable that an outflow of economic benefits from the Company will be

required to settle the obligation; and

（3） a reliable estimate can be made of the amount of the obligation.

Where some or all of the expenditure required to settle a liability that meets the above recognition criteria is expected to be reimbursed by or other parties, the reimbursement is separately recognized as an asset when, and only when, it is virtually certain that the reimbursement will be received. The amount recognized for the reimbursement is limited to the carrying amount of the liability recognized.

continued

Borrowing costs comprise interest incurred on borrowings, amortization of discounts or premiums, ancillary costs incurred in connection with the arrangement of borrowings, and exchange differences arising from foreign currency borrowings. Borrowing costs incurred on a specific borrowing for the acquisition or construction of a fixed asset, are capitalized as the cost of the fixed asset to the extent that they are incurred before the fixed asset has reached the working condition for its intended use if the conditions for capitalization are met. Other borrowing costs [incurred during the pre-operating period are accounted for as long-term deferred expenses and are recognized as expenses in the month in which the Company commences operation / are recognized as expenses and included as finance costs in the period in which they are incurred] .

[for real estate companies]

[Borrowing costs incurred on borrowing for a property development are capitalized as cost of the property to the extent they are incurred before the development is completed. Borrowing costs incurred after the completion of the development are recognized directly as finance costs in the period in which they are incurred.] Revenue from Sales of goods:

Revenue is recognized when the Company has transferred to the buyer the significant risks and rewards of ownership of the goods, retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold, will receive the economic benefits associated with the transaction, and can reliably measure the relevant amount of revenue and costs. Revenue from Rendering Services: When the provision of services is started and completed within the same accounting year, revenue is recognized at the time of completion of the services. When the provision of services is started and completed in different accounting years and the outcome of a transaction involving the rendering of services can be estimated reliably, revenue is recognized at the balance sheet date by the use of the percentage of completion method. Revenue is otherwise recognized at the balance sheet date only to the extent of the costs incurred that are recoverable and service costs are recognized as expenses in the period in which they are incurred. If the service costs incurred are not expected to be recovered, revenue is not recognized.

continued Construction Contract Revenue: Contract revenue of a construction contract that is to be completed within an accounting year is recognized at the time of completion. For construction contracts that are to be started and completed in different accounting years, when the outcome of a construction contract can be estimated reliably, contract revenue and contract costs are recognized as revenue and expenses respectively by reference to the percentage of completion at the balance sheet date. The stage of completion of a contract is determined by [the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs / the proportion that completed contract work bears to the estimated total contract work / surveys of the work performed].

When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognized only to the extent of the contract costs incurred that are recoverable, and contract costs are recognized as expenses in the period in which they are incurred. If the contract costs are not recoverable, they are recognized as expenses immediately when incurred, and contract revenue is not recognized.

If expected aggregate contract costs exceed the expected aggregate contract revenue, the expected loss is recognized as an expense in the current period. Interest Income: Interest income is measured based on the length of time for which the enterprise's cash is used by others and the applicable interest rate.

Royalty Income:

Royalty income is measured according to the period and method of payment as stipulated in the relevant agreement or contract.

[Revenue from Sale of Real Estate:] [Revenue is recognized when the Company has transferred to the buyer the significant risks and rewards of ownership of the property, retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the property sold, will receive the economic benefits associated with the transaction, and can reliably measure the relevant amount of revenue and costs.]

[NOTE: Revenue from the sale of property by a property developer should be recognized in accordance with the revenue recognition principles of sale of goods by taking into account the specific circumstances of the transaction.]

continued Subsidy Income:

[NOTE: According to the “Accounting System for Business Enterprises,” subsidy income is normally recognized when actually received, except for subsidy amounts determined based on volume of sales or work performed and paid to the Company periodically, which is accrued for at the end of each accounting period. In this regard, the accounting policy for subsidy income should be disclosed according to the client’s specific circumstances]

A non-monetary transaction is an exchange of non-monetary assets between the Company and other companies, which involves little or no monetary assets (the monetary assets being referred to as “boot”).

If no boot is involved in a non-monetary transaction, the asset received is recorded at an amount equal to the carrying amount of the asset surrendered, plus any related tax payments. For a non-monetary transaction that the Company pays boot, the asset received is recorded at an amount equal to the aggregate of the carrying amount of the asset surrendered and the boot paid, plus any related tax payments. For a non-monetary transaction that the Company receives boot, the asset received is recorded at the amount equal to the carrying amount of the asset surrendered less the boot received, plus the amount of gain that should be recognized and any related tax payments. The amount of gain recognized is in accordance with the following formula: Gain to be recognized = [1-(carrying amount of the assets surrendered ÷fair value of asset surrendered)]×boot received.

If several assets are received at the same time in a non-monetary transaction, each asset received is recorded at an amount determined by applying that asset’s proportion of the total fair value of all assets received to the aggregate of the carrying amounts of all assets surrendered and any related tax payments.

A finance lease is a lease that transfers substantially all the risks and rewards incident to ownership of an asset. All other leases are classified as operating leases.

the Company has the relevant business transactions and the significance of the transactions. Simply copying all the lease accounting policies in the Company’s notes to the financial statements is not appropriate. For example, if the Company only has operating lease transactions, all the following accounting policies on finance lease will not be necessary.

continued

At the inception of a lease, the finance lease payable is recorded as a long-term liability at an amount equal to the gross amount of the minimum lease payments. The difference between the recorded amount of the leased asset and the liability is recorded as unrecognized finance charges and allocated to each period during the lease term using the [effective interest method/ straight-line method/ sum-of-years’-digits method].

is, it accounts for 30% or less of the total assets of the Company

As the proportion of the total amount of the assets leased under finance leases is not significant (that is, it accounts for 30% or less of the total assets of the Company), the finance lease payable is recorded as a long-term liability at an amount equal to the gross amount of the minimum lease payments at the inception of the lease.

At the inception of a lease, the minimum lease receipts are recognized as a finance lease receivable and the unguaranteed residual value is recorded at the same time. The difference between (a) the aggregate of the minimum lease receipts and the unguaranteed residual value, and (b) their present value, is recognized as unrealized finance income, and allocated to each period during the lease term using the [effective interest] method.

Lease payments under operating leases are recognized as an expense in the income statement

[on a straight-line basis] over the lease term.

Lease income from operating leases is recognized as income [using the straight-line method] over the lease term.

[If a sale and leaseback transaction results in a finance lease, any difference between the sales proceeds and the carrying amount is deferred and amortized as an adjustment to depreciation according to the depreciation pattern of the leased asset.]

[If a sale and leaseback transaction results in an operating lease, any difference between the sales proceeds and the carrying amount is deferred and amortized according to the proportion of the lease payments during the lease term.]

Income tax is provided under the tax payable method. The income tax provision is calculated based on the accounting profit for the [year/period] as adjusted in accordance with the relevant tax laws.

continued

Alt. Income tax is provided under the tax effect accounting method

Income tax is provided under the tax effect accounting method. The income tax provision is calculated based on the accounting results for the [year/period] as adjusted in accordance with the relevant tax laws. Due to different recognition periods for revenue, expenses and losses under the tax rules and accounting requirements, there are timing differences between accounting profit before tax and taxable income. The tax effect of timing differences, computed under the [deferred method / liability method], is recognized as deferred tax in the financial statements. However, a deferred tax debit resulting from timing differences is recognized and presented as a deferred tax debit only if sufficient taxable income is expected during the period of their reversal. Otherwise, the differences are treated as if they were permanent differences.

4. CHANGES IN ACCOUNTING POLICIES, ACCOUNTING ESTIMATES AND

CORRECTION OF SIGNIFICANT ACCOUNTING ERRORS

The Company changed the following accounting policies this year:

[According to the Ministry of Finance (“MOF”) Caikuai [2004] 3, change of depreciation method is treated as change of accounting estimates. This requirement applies prospectively.]

[According to the MOF Caikuai [2004] 3, discounted notes with recourse arrangements are regarded as borrowings with the note used as security. Therefore, instead of disclosing a contingent liability in the notes to the financial statements, the discounted amount is presented as bank borrowings. This change in accounting policy is adopted retrospectively.]

Proforma Financial Statements prepared under PRCGAAP for Foreign Investment Enterprises (English version) [NAME OF THE COMPANY] NOTES TO THE FINANCIAL STATEMENTS

4. CHANGES IN ACCOUNTING POLICIES, ACCOUNTING ESTIMATES AND

CORRECTION OF SIGNIFICANT ACCOUNTING ERRORS - continued

[According to the MOF Caikuai [2004] 3, self-developed property is classified as “other long-term assets” rather than inventory. This classification is applied retrospectively.]

made according to the “CAS – Changes in Accounting Policies, Accounting Estimates and Correction of Significant Accounting Errors”.

Unless an enterprise changes its policy in accordance with the requirements of administrative rules or regulations such as laws or accounting standards/system, and the change is disclosed in accordance with the relevant accounting rules promulgated by the State, it must have sufficient and reasonable evidence to prove that the policy after change can provide more reliable and relevant accounting information about its financial position, operating performance and cash flows. Change in accounting policy should be authorized by the meeting of shareholders, board of directors or similar body. Where the change in accounting policy is made without sufficient and reasonable evidence showing its reasonableness thereof, or the change in accounting policy is not authorized by the meeting of shareholders, board of directors or the similar body, or the accounting policy is changed repeatedly and arbitrarily, it should be regarded as abuse of accounting policy and should be treated as correction of significant accounting errors.

[The above changes in accounting policies have no effect on the opening retained earnings and net income of the current period.]

Proforma Financial Statements prepared under PRCGAAP for Foreign Investment Enterprises (English version)

[NAME OF THE COMPANY] NOTES TO THE FINANCIAL STATEMENTS

4. CHANGES IN ACCOUNTING POLICIES, ACCOUNTING ESTIMATES AND

CORRECTION OF SIGNIFICANT ACCOUNTING ERRORS – continued

Alt.: If the company has changed accounting policies and the changes have material effect on the opening retained earnings and net profit of current period, please refer to the disclosure format as follows:

The cumulative effect of the above changes in accounting policies is RMB[ ], and the effects on the financial statements are summarized below:

Reserves Increase (decrease) Unappropriated Surplus profits reserves

At 1 January 200X Before retrospective adjustments [list specific adjustments…]

At 1 January 200X After retrospective adjustments

------- -------

At 31 December 200X Before retrospective adjustments [list specific adjustments, …]

-------

------- The effects of the above changes in accounting policies on the net profit for the year 200X and

200Y are summarized below:

[list specific adjustments, such as: Depreciation for fixed assets not yet put into use or that are redundant Amortization of the equity investment difference credit balance Fixed assets major overhauls costs …] -------------- --------------

Total _ Year ended 31/12/200Y Year ended 31/12/200X At 31 December 200X After retrospective adjustments

[NAME OF THE COMPANY] NOTES TO THE FINANCIAL STATEMENTS Proforma Financial Statements prepared under PRCGAAP for Foreign Investment Enterprises (English version) TAXATION

[Value added tax (“VAT”) on sales is calculated at 17% on revenue from principal operations and paid after deducting input VAT on purchases.]

NOTE: Appropriate amendments should be made on the following disclosure according to the specific circumstances of the client, to explain the relevant tax relief policy, approval

authority, approval document and effective period.

[The income tax rate is 33%.]

[The Company [XX subsidiary] is a [ new technology enterprise / enterprise with advanced technology / production enterprise] located in [new technology development park / coastal economic development zone / special economic zone]. According to [name of the documents regarding income tax relief issued by the relevant authorities], and as approved by [name of the tax authority][name and number of the approval document], [describe the tax relief policy and effective period]. The applicable income tax rates during the tax incentive period are as follows:

XXX

……

Business tax is levied at [ ].

City construction tax is levied at [ ].

[NAME OF THE COMPANY]

NOTES TO THE FINANCIAL STATEMENTS Proforma Financial Statements prepared under PRCGAAP for Foreign Investment Enterprises (English version)

NOTE: For preparation of consolidated financial statements only.

6． SCOPE OF CONSOLIDATION AND SUBSIDIARIES

Name of Subsidiary

Subsidiary A Subsidiary B

Place of Registration

Equity directly held by the Company Principal and /or its Business Subsidiaries Activities %

Type of Enterprises

Legal Consolidated or Representative not

No Yes

All the above subsidiaries are included in the consolidated financial statements except for subsidiary A.

Because [describe the reasons that subsidiary A is not included in the scope of consolidation], subsidiary A is not included in the current year’s scope of consolidation. However, the investment has been accounted for using the equity method in the consolidated financial statements. The financial position and operating result of the subsidiary are as follows:

[Disclose the financial position and operating result of subsidiary A]

The scope of consolidation in the current year is the same as that in the preceding year.

Note: For subsidiary B, although the voting shares held by the Company are less than 50%, the

Company does in substance have control over the investee company [describe the specific circumstances]. Accordingly, it is included in the scope of consolidation.

Alt . Where the scope of consolidation in the current year is different from that in the preceding

year, disclosure should be made according to the relevant circumstances:

Due to the disposal of the equity investment in subsidiary C on [date] [month] 200Y (the “effective date of disposal”), it is not included in the consolidated balance sheet at 31 December 200Y. However, its operating result and cash flow up to the effective date of disposal have been included in the consolidated income statement and cash flow statement respectively. See note 47 for the financial position of subsidiary C at the effective date of disposal and at 31 December 200X, and its operating results for the period from 1 January 200Y to the effective date of disposal and for the year of 200X.

Company B is a new subsidiary acquired and included in the scope of consolidation this year. Its operating result and cash flow from the effective date of acquisition have been included in the consolidated income statement and cash flow statement, respectively. See note 48 for the financial position of subsidiary B at the effective date of acquisition, and its operating results for the period from the effective date of acquisition to 31 December 200Y.

As the Company increased its equity investment in Company XX [or specify other relevant reasons], it is included in the current year’s scope of consolidation whereas it was not consolidated in the preceding years.

7．BANK BALANCES AND CASH

[NAME OF THE COMPANY]

NOTES TO THE FINANCIAL STATEMENTS Proforma Financial Statements prepared under PRCGAAP for Foreign Investment Enterprises (English version)

[Need to disclose the amount of cash and bank balances that is pledged as collateral, and the circumstances in which the Company’s use of bank balances and cash is restricted.]

8．CURRENT INVESTMENTS

Equity investments: Share investments Other equity investments Debt investments: State bonds Other bonds Others

31/12/200Y RMB 31/12/200X RMB

Total

Less：Provision for decline in value _______ ________ Current investments - Net

________ ________

Movement of the provision for decline in value of current investments are as follows：

Provision for decline in value

of current investments: Share investments Other equity investments Debt investments

RMB

Other RMB

RMB

________

________ ________ ________ ________

The aggregate market value of current investments that have available market prices amounted to RMB [ ] as at 31 December 200Y (200X: [ ]). NOTE: If there are significant restrictions on realization of current investments or remittance

of investment gains, disclosure should be made accordingly.

9．ACCOUNTS RECEIVABLE

The aging analysis of accounts receivable is as follows： Gross Bad debt Net book

RMB RMB RMB

Within 1 year 1 to 2 years 2 to 3 years

Over 3 years _____ _____ _____ _____

Total

[NAME OF THE COMPANY]

NOTES TO THE FINANCIAL STATEMENTS Proforma Financial Statements prepared under PRCGAAP for Foreign Investment Enterprises (English version)

Gross Bad debt Net book RMB RMB RMB

_____ _____ _____ _____

1. If provision for bad debts is made at the full amount of accounts receivable or the percentage of bad debts provision is significant to the balance of accounts receivable (i.e. ?40%, thereafter the same)，the percentage and the reason should be specifically disclosed.

2. If in prior years, a full provision for bad debts was made or the percentage of provision is significant, whereas the receivable has been fully or partly collected or collected through debt restructuring or other ways in the current year, disclosure should be made in respect of the reason for and the reasonableness of the previous estimates of provision.

3. For significant accounts receivable with relatively long aging, explain the reason for no provision or low provision (i.e.? 5%) for bad debts

4. Disclose the write-off of accounts receivable and explain the reasons. The write-off of balances due from related companies should be separately disclosed.

10．OTHER RECEIVABLES

The aging analysis of other receivables is as follows： Gross Bad debt Net book (%) RMB RMB RMB Within 1 year 1 to 2 years 2 to 3 years

Over 3 years _____ _____ _____ _____ Total

Gross Bad debt Net book (%) RMB RMB RMB

_____ _____ _____ _____ NOTE: Refer to the “NOTE”

[NAME OF THE COMPANY]

NOTES TO THE FINANCIAL STATEMENTS Proforma Financial Statements prepared under PRCGAAP for Foreign Investment Enterprises (English version)

11．PROVISION FOR BAD DEBTS

RMB Provision for bad debts: Accounts receivable

Other receivables

Total

RMB RMB Other RMB

RMB 12．INVENTORIES RMB RMB Raw materials [Low-value consumables] [Packaging materials] [Materials on consignment for further processing] Work-in-progress Finished goods Total ———— ———— Less: Provision for decline in value ———— ———— Inventories - Net Including：Pledged inventories Movements of the provision for decline in value of inventories are as follows：

Other

RMB RMB RMB RMB RMB

Provision for decline

in value

Raw materials Finished goods

Others

Total

[NOTE: If the Company uses the last-in-first-out method in determining the cost of inventories

transferred out or issued for use, it should disclose the difference between the cost of inventories transferred out determined using the last-in-first-out method and the amount determined using the first-in-first-out, weighted average or moving average cost methods.]

13．CONSTRUCTION CONTRACTS

NOTE: The “Accounting System for Business Enterprises” does not specify the

disclosure requirements for construction contracts. If the Company has significant projects under construction contracts, disclosure should be made in accordance with “CAS-Construction Contracts” as follows:

[NAME OF THE COMPANY]

NOTES TO THE FINANCIAL STATEMENTS Proforma Financial Statements prepared under PRCGAAP for Foreign Investment Enterprises (English version)

Contracts in progress at balance sheet date:

Amounts due from customers for contract work included in current assets

Amounts due to customers for contract work included in current liabilities

Analysis of contracts in progress:

Accumulated contract costs incurred plus recognized gross profit Less: Progress billings

Progress billings included in accounts receivable

31/12/200Y RMB

31/12/200X RMB

31/12/200Y RMB

31/12/200X

RMB

[NOTE: The total amount of gross contract sums, the amount of any estimated loss (if any)

and reasons therefore should also be disclosed]

14．[DEFERRED EXPENSES]