UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 20-F
 
 (Mark One)
 o
    
    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 o
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Date of event requiring this shell company report
 For the transition period from  to
 COMMISSION FILE NUMBER 001-33290
 JA Solar Holdings Co., Ltd.
 (Exact name of Registrant as specified in its charter)
 
 The Cayman Islands
(Jurisdiction of Incorporation or Organization)
 No. 36, Jiang Chang San Road
Zhabei, Shanghai
The Peoples Republic of China
(Address of Principal Executive Offices)
 
 Ms. Anthea Chung
JA Solar Holdings Co., Ltd.
No. 36, Jiang Chang San Road
Zhabei, Shanghai
The Peoples Republic of China
Tel: +86-21-60955999
Fax: +86-21-60955727
(Name, Telephone, E-mail and/or Facsimile and Address of Company Contact Person)
 
  Title of Each Class
    
    Name of Each Exchange
On Which RegisteredAmerican depositary shares, each representing one
    
    The NASDAQ Stock Market LLCordinary share, par value US$0.0001 per shareOrdinary shares, par value US$0.0001 per share
    
    The NASDAQ Stock Market LLC*
 *
    
    Not for trading but only in connection with the registration of American depositary shares  
  
  Ordinary shares, par value US$0.0001 per share
    
    
    169,976,270
  þ o
  o þ
  þ o
  o o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
  þ
 o
 o
  o o
  o þ




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Table of Contents
 PagePART I
    
    
    2ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
    
    
    2ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
    
    
    3ITEM 3. KEY INFORMATION
    
    
    3A. SELECTED FINANCIAL DATA
    
    
    3B. CAPITALIZATION AND INDEBTEDNESS
    
    
    5C. REASONS FOR THE OFFER AND USE OF PROCEEDS
    
    
    6D. RISK FACTORS
    
    
    6ITEM 4. INFORMATION ON THE COMPANY
    
    
    30A. HISTORY AND DEVELOPMENT OF THE COMPANY
    
    
    30B. BUSINESS OVERVIEW
    
    
    32C. ORGANIZATIONAL STRUCTURE
    
    
    43D. PROPERTY, PLANTS AND EQUIPMENT
    
    
    43ITEM 4A. UNRESOLVED STAFF COMMENTS
    
    
    44ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
    
    
    44A. OPERATING RESULTS
    
    
    44B. LIQUIDITY AND CAPITAL RESOURCES
    
    
    62C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.
    
    
    65D. TREND INFORMATION
    
    
    66E. OFF-BALANCE SHEET ARRANGEMENTS
    
    
    66F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
    
    
    66G. SAFE HARBOR
    
    
    67ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
    
    
    69A. DIRECTORS AND SENIOR MANAGEMENT
    
    
    69B. COMPENSATION
    
    
    71C. BOARD PRACTICES
    
    
    73D. EMPLOYEES
    
    
    75E. SHARE OWNERSHIP
    
    
    76ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
    
    
    77A. MAJOR SHAREHOLDERS
    
    
    77B. RELATED PARTY TRANSACTIONS
    
    
    78C. INTERESTS OF EXPERTS AND COUNSEL
    
    
    79ITEM 8. FINANCIAL INFORMATION
    
    
    79A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION
    
    
    79B. SIGNIFICANT CHANGES
    
    
    80ITEM 9. THE OFFER AND LISTING
    
    
    80A. OFFER AND LISTING DETAILS
    
    
    80B. PLAN OF DISTRIBUTION
    
    
    81C. MARKETS
    
    
    81D. SELLING SHAREHOLDERS
    
    
    81E. DILUTION
    
    
    81F. EXPENSES OF THE ISSUE
    
    
    81ITEM 10. ADDITIONAL INFORMATION
    
    
    81A. SHARE CAPITAL
    
    
    81B. MEMORANDUM AND ARTICLES OF ASSOCIATION
    
    
    82C. MATERIAL CONTRACTS
    
    
    93D. EXCHANGE CONTROLS
    
    
    93E. TAXATION
    
    
    93F. DIVIDENDS AND PAYING AGENTS
    
    
    97G. STATEMENT BY EXPERTS
    
    
    97H. DOCUMENTS ON DISPLAY
    
    
    97
  i




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PageI. SUBSIDIARY INFORMATION
    
    
    97ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    98ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
    
    
    99A. DEBT SECURITIES
    
    
    99B. WARRANTS AND RIGHTS
    
    
    99C. OTHER SECURITIES
    
    
    99D. AMERICAN DEPOSITARY SHARES
    
    
    99PART II
    
    
    100ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
    
    
    100ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
    
    
    101ITEM 15. CONTROLS AND PROCEDURES
    
    
    101ITEM 16. RESERVED
    
    
    102ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
    
    
    102ITEM 16B. CODE OF ETHICS
    
    
    102ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    103ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
    
    
    103ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
    
    
    103ITEM 16F. CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT
    
    
    104ITEM 16G. CORPORATE GOVERNANCE
    
    
    104PART III
    
    
    104ITEM 17. FINANCIAL STATEMENTS
    
    
    104ITEM 18. FINANCIAL STATEMENTS
    
    
    105ITEM 19. EXHIBITS
    
    
    105
   ii




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##### 



CERTAIN TERMS AND CONVENTIONS
  
    
    ADS are to American depositary shares, each representing one ordinary share of
JA Solar, par value US$0.0001 per share;
 
    
    China and the PRC are to the Peoples Republic of China, excluding, for the
purposes of this annual report only, Taiwan and the special administrative regions of Hong
Kong and Macau;
 
    
    conversion efficiency are to the ability of solar power products to convert
sunlight into electricity; conversion efficiency rate is commonly used in the solar power
industry to measure the percentage of light energy from the sun that is actually converted
into electricity;
 
    
    cost per watt and price per watt are to the cost and price of solar power
products, respectively, relative to the number of watts of electricity a solar power product
generates;
 
    
    Hebei Jinglong are to Hebei Jinglong Industry and Commerce Group Co., Ltd.,
which is controlled by the shareholders of Jinglong BVI;
 
    
    JA BVI are to JA Development Co., Ltd., our directly wholly-owned subsidiary, a
British Virgin Islands company;
 
    
    JA Fengxian are to Shanghai JA Solar Technology Co., Ltd., our indirectly
wholly-owned subsidiary in Shanghai, China;
 
    
    JA Hebei are to JingAo Solar Co., Ltd., our predecessor and indirectly
wholly-owned subsidiary in Hebei, China;
 
    
    JA Lianyungang are to Jing Hai Yang Semiconductor Materials (Donghai) Co.,
Ltd., our indirectly wholly-owned subsidiary in Jiangsu, China;
 
    
    JA Solar, we, us, the company, our company and our are to JA Solar
Holdings Co., Ltd. and, unless otherwise indicated or as the context may otherwise require,
its predecessor entities and its consolidated subsidiaries;
 
    
    JA Wafer R&D are to Donghai JA Solar Technology Co., Ltd., our indirectly
wholly-owned subsidiary in Jiangsu, China;
 
    
    JA Yangzhou are to JA Solar Technology Yangzhou Co., Ltd., our indirectly
wholly-owned subsidiary in Jiangsu, China;
 
    
    JA Yangzhou R&D are to Yangzhou JA Solar R&D Co., Ltd., our indirectly
wholly-owned subsidiary in Jiangsu, China;
 
    
    JA Zhabei are to Shanghai JA Solar PV Technology Co., Ltd., our indirectly
wholly-owned subsidiary in Shanghai, China;
 
    
    Jinglong BVI are to Jinglong Group Co., Ltd., a British Virgin Islands company
and our largest shareholder;
 
    
    Jinglong Group are to Hebei Jinglong and its consolidated subsidiaries;
 
    
    Lehman Entities are to include Lehman Brothers Holdings Inc. and its
subsidiaries, including Lehman Brothers Inc., Lehman Brothers International (Europe), Lehman
Brothers Treasury Co. BV and Lehman Brothers OTC Derivatives Inc.
 
    
    rated manufacturing capacity are to the total amount of solar power products
that can be made by a manufacturing line per annum operating at its maximum possible rate and
is measured in megawatts, or MW;
    
    RMB and Renminbi are to the legal currency of the PRC;
  1




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##### 




    
    US$ and U.S. dollars are to the legal currency of the United States;
 
    
    voltage or volts are to the rating of the amount of electrical pressure that
causes electricity to flow in the power line; and
 
    
    watts are to the measurement of total electrical power, where kilowatts or
KW means one thousand watts, megawatts or MW means one million watts and gigawatts or
GW means one billion watts.
 CURRENCIES AND EXCHANGE RATES
   Noon buying rateAverage(1)Period
    
    Period End
    
    
    (RMB per US$1.00)
    
    
    High
    
    
    Low2006
    
    
    7.8041
    
    
    
    7.9579
    
    
    
    8.0702
    
    
    
    7.80412007
    
    
    7.2946
    
    
    
    7.5806
    
    
    
    7.8127
    
    
    
    7.29462008
    
    
    6.8225
    
    
    
    6.9193
    
    
    
    7.2946
    
    
    
    6.78002009
    
    
    6.8259
    
    
    
    6.8295
    
    
    
    6.8470
    
    
    
    6.81762010
    
    
    6.6000
    
    
    
    6.7603
    
    
    
    6.8330
    
    
    
    6.5520November
    
    
    6.6670
    
    
    
    6.6538
    
    
    
    6.6892
    
    
    
    6.6330December
    
    
    6.6000
    
    
    
    6.6497
    
    
    
    6.6745
    
    
    
    6.60002011January
    
    
    6.6017
    
    
    
    6.5964
    
    
    
    6.6364
    
    
    
    6.5809February
    
    
    6.5749
    
    
    
    6.5777
    
    
    
    6.6017
    
    
    
    6.5520March
    
    
    6.5483
    
    
    
    6.5645
    
    
    
    6.5743
    
    
    
    6.5483April (through April 15, 2011)
    
    
    6.5317
    
    
    
    6.5382
    
    
    
    6.5477
    
    
    
    6.5310
 
 Source for 2005-2008: Federal Reserve Bank of New York.Source for 2009-2011: the H10 statistical release of the Federal Reserve Board.(1)
    
    Annual averages are calculated by averaging the noon buying rates on the last business day of
each month. Monthly averages are calculated using the average of the daily rates during the
relevant period. 
 PART I
 
 ITEM 1.
    
    IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
   2




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##### 



ITEM 2.
    
    OFFER STATISTICS AND EXPECTED TIMETABLE
  
 ITEM 3.
    
    KEY INFORMATION
 
 A. SELECTED FINANCIAL DATA
 You should read the following selected consolidated financial and operating data in
conjunction with our audited consolidated financial statements and related notes and Item 5.
Operating and Financial Review and Prospects included elsewhere in this annual report.
  Year ended December 31,2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010As adjusted
    
    
    As adjusted(in millions, except for share and per share data)RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    RMBConsolidated Statements of Operations
Data:Net revenuesSolar modules
    
    
    
    
    
    
    92.9
    
    
    
    425.6
    
    
    
    82.6
    
    
    
    2,510.6Solar cells and other products to
third parties
    
    
    565.3
    
    
    
    2,439.5
    
    
    
    4,368.4
    
    
    
    3,283.9
    
    
    
    8,023.9Solar cells and other products to
related parties
    
    
    131.2
    
    
    
    62.2
    
    
    
    508.0
    
    
    
    5.2
    
    
    
    160.4Solar products processing
    
    
    
    
    
    
    99.1
    
    
    
    156.3
    
    
    
    406.9
    
    
    
    1,065.9Total revenues
    
    
    696.5
    
    
    
    2,693.7
    
    
    
    5,458.3
    
    
    
    3,778.6
    
    
    
    11,760.8Cost of revenuesSolar modules
    
    
    
    
    
    
    (74.0
    )
    
    
    (378.5
    )
    
    
    (90.7
    )
    
    
    (2,221.5
    )Solar cells and other products
    
    
    (524.2
    )
    
    
    (1,992.6
    )
    
    
    (4,035.7
    )
    
    
    (2,985.5
    )
    
    
    (6,484.9
    )Solar products processing
    
    
    
    
    
    
    (26.2
    )
    
    
    (52.1
    )
    
    
    (220.3
    )
    
    
    (508.0
    )Total cost of revenues
    
    
    (524.2
    )
    
    
    (2,092.8
    )
    
    
    (4,466.3
    )
    
    
    (3,296.5
    )
    
    
    (9,214.4
    )Gross profit
    
    
    172.3
    
    
    
    600.9
    
    
    
    992.0
    
    
    
    482.1
    
    
    
    2,546.4Selling, general and administrative
expenses
    
    
    (39.7
    )
    
    
    (150.3
    )
    
    
    (271.5
    )
    
    
    (343.3
    )
    
    
    (505.1
    )Research and development expenses
    
    
    (1.3
    )
    
    
    (4.2
    )
    
    
    (28.5
    )
    
    
    (45.1
    )
    
    
    (63.8
    )
  3




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##### 



Year ended December 31,2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010As adjusted
    
    
    As adjusted(in millions, except for share and per share data)RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    RMBTotal operating expenses
    
    
    (41.0
    )
    
    
    (154.5
    )
    
    
    (300.0
    )
    
    
    (388.4
    )
    
    
    (568.9
    )Income from operations
    
    
    131.3
    
    
    
    446.4
    
    
    
    692.0
    
    
    
    93.7
    
    
    
    1,977.5Impairment on available-for-sale
securities
    
    
    
    
    
    
    
    
    
    
    (686.3
    )
    
    
    
    
    
    
    Change in fair value of derivatives
    
    
    
    
    
    
    
    
    
    
    564.0
    
    
    
    (49.1
    )
    
    
    74.5Convertible notes buy back
gain/(loss)
    
    
    
    
    
    
    
    
    
    
    161.3
    
    
    
    (24.1
    )
    
    
    Interest expense
    
    
    (5.1
    )
    
    
    (6.6
    )
    
    
    (172.3
    )
    
    
    (231.5
    )
    
    
    (221.2
    )Interest income
    
    
    0.8
    
    
    
    62.6
    
    
    
    42.7
    
    
    
    12.0
    
    
    
    12.8Foreign exchange gain/(loss)
    
    
    1.3
    
    
    
    (112.8
    )
    
    
    (132.2
    )
    
    
    4.6
    
    
    
    (74.4
    )Investment loss
    
    
    
    
    
    
    
    
    
    
    (28.6
    )
    
    
    (2.3
    )
    
    
    Impairment on share lending
arrangement
    
    
    
    
    
    
    
    
    
    
    (469.0
    )
    
    
    
    
    
    
    Other income
    
    
    0.1
    
    
    
    5.2
    
    
    
    3.6
    
    
    
    7.8
    
    
    
    258.7Income/ (loss) from continuing
operations before income taxes
    
    
    128.4
    
    
    
    394.8
    
    
    
    (24.8
    )
    
    
    (188.9
    )
    
    
    2,027.9Income tax benefit/ (expense)
    
    
    
    
    
    
    5.6
    
    
    
    (23.9
    )
    
    
    (8.0
    )
    
    
    (252.7
    )Income/ (loss) from continuing
operations
    
    
    128.4
    
    
    
    400.4
    
    
    
    (48.7
    )
    
    
    (196.9
    )
    
    
    1,775.2Income/(loss) from discontinued
operations, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.4
    
    
    
    (19.8
    )Net
income/(loss) available to ordinary shareholders
    
    
    128.4
    
    
    
    400.4
    
    
    
    (48.7
    )
    
    
    (193.5
    )
    
    
    1,755.4Preferred shares accretion
    
    
    (1.6
    )
    
    
    (0.5
    )
    
    
    
    
    
    
    
    
    
    
    Preferred shares beneficial
conversion charge
    
    
    (34.7
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Allocation of net income to
participating preferred shareholders
    
    
    (5.7
    )
    
    
    (1.7
    )
    
    
    
    
    
    
    
    
    
    
    Net income/ (loss) available to
ordinary shareholders
    
    
    86.4
    
    
    
    398.2
    
    
    
    (48.7
    )
    
    
    (193.5
    )
    
    
    1,755.4Net income/ (loss) per share from
continuing operations:Basic
    
    
    1.08
    
    
    
    2.96
    
    
    
    (0.31
    )
    
    
    (1.22
    )
    
    
    10.90Diluted
    
    
    1.08
    
    
    
    2.93
    
    
    
    (5.13
    )
    
    
    (1.22
    )
    
    
    10.72Net income/ (loss) per share from
discontinued operations:Basic
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.02
    )
    
    
    (0.12
    )Diluted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.02
    )
    
    
    (0.12
    )Net income/ (loss) per shareBasic
    
    
    1.08
    
    
    
    2.96
    
    
    
    (0.31
    )
    
    
    (1.20
    )
    
    
    10.78Diluted
    
    
    1.08
    
    
    
    2.93
    
    
    
    (5.13
    )
    
    
    (1.20
    )
    
    
    10.61Weighted average number of shares
outstanding:Basic
    
    
    80,000,000
    
    
    
    134,525,226
    
    
    
    156,380,060
    
    
    
    161,643,312
    
    
    
    162,900,657Diluted
    
    
    80,166,178
    
    
    
    136,721,772
    
    
    
    167,438,190
    
    
    
    161,643,312
    
    
    
    171,116,684Consolidated Statements of Cash
Flows Data:Cash flows(used in)or provided byOperating activities
    
    
    (61.8
    )
    
    
    (1,146.5
    )
    
    
    (1,289.2
    )
    
    
    1,129.1
    
    
    
    1,279.5Investing activities
    
    
    (107.6
    )
    
    
    (1,641.6
    )
    
    
    (419.4
    )
    
    
    (557.2
    )
    
    
    (1,678.9
    )Financing activities
    
    
    254.8
    
    
    
    3,519.6
    
    
    
    2,610.3
    
    
    
    (242.8
    )
    
    
    838.3Effect of exchange rate changes on
cash and cash equivalents
    
    
    (0.6
    )
    
    
    (91.3
    )
    
    
    (94.9
    )
    
    
    (4.8
    )
    
    
    (16.6
    )
  4




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##### 



As of December 31,2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010As adjusted
    
    
    As adjusted(in millions)RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    RMBConsolidated Balance Sheet Data:Cash and cash equivalents
    
    
    95.8
    
    
    
    736.0
    
    
    
    1,542.8
    
    
    
    1,867.2
    
    
    
    2,289.5Restricted cash
    
    
    
    
    
    
    409.0
    
    
    
    33.0
    
    
    
    43.6
    
    
    
    112.6Short-term investments
    
    
    
    
    
    
    803.1
    
    
    
    421.9
    
    
    
    
    
    
    
    Notes receivable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    119.8
    
    
    
    254.4Account receivable from third
party customers, net
    
    
    47.7
    
    
    
    28.9
    
    
    
    332.0
    
    
    
    339.5
    
    
    
    944.0Account receivable from related
party customers, net
    
    
    
    
    
    
    24.7
    
    
    
    23.0
    
    
    
    
    
    
    
    1.6Inventories, net
    
    
    154.7
    
    
    
    157.3
    
    
    
    592.0
    
    
    
    641.1
    
    
    
    1,349.3Advance to third party
suppliers, net
    
    
    1.6
    
    
    
    898.7
    
    
    
    264.5
    
    
    
    372.4
    
    
    
    493.9Advance to related party
suppliers, net
    
    
    39.8
    
    
    
    389.9
    
    
    
    416.0
    
    
    
    50.9
    
    
    
    111.7Other current assets
    
    
    6.7
    
    
    
    42.3
    
    
    
    191.1
    
    
    
    202.4
    
    
    
    740.8Deferred tax assets
    
    
    
    
    
    
    1.2
    
    
    
    14.1
    
    
    
    24.4
    
    
    
    44.9Assets of discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    75.5Total current assets
    
    
    346.3
    
    
    
    3,491.1
    
    
    
    3,830.4
    
    
    
    3,661.3
    
    
    
    6,418.2Property and equipment, net
    
    
    139.4
    
    
    
    532.0
    
    
    
    1,369.8
    
    
    
    1,724.5
    
    
    
    3,170.7Intangible asset, net
    
    
    7.2
    
    
    
    6.7
    
    
    
    11.8
    
    
    
    12.0
    
    
    
    14.3Deferred tax assets
    
    
    
    
    
    
    4.4
    
    
    
    14.4
    
    
    
    25.8
    
    
    
    42.0Advances to suppliers, net
    
    
    
    
    
    
    536.3
    
    
    
    1,944.9
    
    
    
    1,835.4
    
    
    
    1,653.2Prepayment for land use right
    
    
    
    
    
    
    
    
    
    
    44.4
    
    
    
    49.5
    
    
    
    195.5Derivative assets
    
    
    
    
    
    
    
    
    
    
    4.5
    
    
    
    10.5
    
    
    
    14.6Deferred issuance cost
    
    
    
    
    
    
    
    
    
    
    59.0
    
    
    
    143.2
    
    
    
    110.9Total assets
    
    
    492.9
    
    
    
    4,570.5
    
    
    
    7,279.2
    
    
    
    7,462.2
    
    
    
    11,619.4Short-term bank borrowings
    
    
    150.0
    
    
    
    200.0
    
    
    
    490.0
    
    
    
    10.0
    
    
    
    Total current liabilities
    
    
    187.1
    
    
    
    433.1
    
    
    
    870.8
    
    
    
    629.2
    
    
    
    2,043.6Long-term bank borrowings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    680.0
    
    
    
    1,520.0Convertible notes
    
    
    
    
    
    
    
    
    
    
    1,532.6
    
    
    
    1,171.4
    
    
    
    1,230.2Total liabilities
    
    
    187.1
    
    
    
    434.0
    
    
    
    2,524.3
    
    
    
    2,639.6
    
    
    
    4,939.2Preferred shares
    
    
    110.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total shareholders equity
    
    
    195.8
    
    
    
    4,136.5
    
    
    
    4,754.9
    
    
    
    4,822.6
    
    
    
    6,680.2
 
 B. CAPITALIZATION AND INDEBTEDNESS
   5




---



##### 



C. REASONS FOR THE OFFER AND USE OF PROCEEDS
  
 D. RISK FACTORS
 Our operations and financial results are subject to various risks and uncertainties, including
risks related to our business and industry, doing business in China and our ordinary shares and
ADSs. Although we believe that we have identified and discussed below the key risk factors
affecting our business, there may be additional risks and uncertainties that are not presently
known or that are not currently believed to be significant that may also adversely affect our
business, financial condition, results of operations, cash flows, and trading price of our ADSs as
well as our convertible notes.
 Risks Related to Our Business and Industry
 Our business could be adversely affected if the economic and credit market conditions weaken or if
there is a downturn in the global economy. The global financial crisis and economic downturn have
adversely affected economies and businesses around the world, including in the PRC.
    We may be adversely affected by volatile market and industry trends, in particular, the demand for
our solar power products may decline, which may reduce our revenues and earnings.
   6




---



##### 



The reduction or elimination of government subsidies and economic incentives or change in
government policies and regulations may have a material adverse effect on our business and
prospects.
    The execution of our growth strategy is dependent upon the continued availability of financing to
our customers as well as third-party financing arrangements for end-users of our products, and is
affected by general economic conditions.
   7




---



##### 



In light of our increased sales to customers outside China, we face risks associated with the
marketing, distribution and sale of our products overseas, and if we are unable to effectively
manage these risks, they could impair our ability to expand our business overall.
  
    
    fluctuations in currency exchange rates;
 
    
    difficulty in engaging and retaining distributors who are knowledgeable
about, and can function effectively in, overseas markets;
 
    
    increased costs associated with maintaining the ability to understand
local markets and follow their trends, as well as develop and maintain effective
marketing and distributing presence in various countries;
 
    
    increased costs associated with providing customer service and support in
these markets;
 
    
    difficulty and cost relating to compliance with the different commercial
and legal requirements of the overseas markets in which we offer our products;
 
    
    failure to develop appropriate risk management and internal control
structures tailored to overseas operations;
 
    
    failure to obtain or maintain certifications for our products in these
markets;
 
    
    failure to obtain, maintain or enforce intellectual property rights; and
 
    
    trade barriers such as export requirements, tariffs, taxes and other
restrictions and expenses, which could increase the prices of our products and make us
less competitive in some countries.
   8




---



##### 



We may not be able to manage the expansion of our operations effectively.
   We have only expanded our business into upstream and downstream markets for a very short period of
time and plan to continue our integration strategy. Any failure to successfully implement this
strategy could have a material adverse effect on our growth, business prospects and results of
operations.
  
    
    our short history in the new businesses;
 
    
    our possible lack of competitiveness in product quality and cost structure
in the new businesses;
 
    
    the need for additional capital to finance our new business operations,
which may not be available on reasonable terms or at all;
 
    
    the need to recruit additional skilled employees, including technicians
and managers at different levels;
 
    
    the solar module business typically has longer cash conversion cycles with
respect to our inventory and therefore results in our longer accounts receivable
turnover time;
 
    
    our expanded warranty liabilities associated with the solar module
business, with the warranty period for solar modules lasting for 10 to 25 years;
 
    
    potential conflict with our downstream customers as a result of our direct
competition with them in the solar module business; and
 
    
    new risks associated with the silicon wafer and solar module businesses
yet to be fully understood by the industry and market.
    9




---



##### 



Prepayment arrangements for procurement of silicon wafers and/or polysilicon from Jinglong Group,
GCL, M.SETEK and other suppliers expose us to the credit risks of such suppliers and may also
significantly increase our costs and expenses, either of which could in turn have a material
adverse effect on our financial condition, results of operations and liquidity.
   Our ability to adjust our raw materials costs may be limited as a result of our entering into
long-term supply agreements with many of our polysilicon and silicon wafer suppliers, and it may be
difficult for us to respond in a timely manner to rapidly changing market conditions, which could
materially and adversely affect our cost of revenues and profitability.
    10




---



##### 



We may not be able to obtain sufficient silicon raw materials in a timely manner, which could have
a material adverse effect on our results of operations and financial condition.
  
    
    suppliers under our silicon material
supply contracts may delay deliveries for a
significant period of time without
incurring penalties;
    
    there can be no assurance that our
supplies will be able to meet our
production needs consistently or on a
timely basis;
    
    some of our competitors who also
purchase polysilicon from our suppliers may
have longer and stronger relationships with
and have greater buying power and
bargaining leverage over some of our key
suppliers; and
    
    our supply of silicon raw materials is
subject to the business risk of our
suppliers, some of whom have limited
operating history and limited financial
resources, and one or more of which could
go out of business for reasons beyond our
control.
   We require a significant amount of cash to fund our future capital expenditure requirements and
working capital needs; if we cannot obtain additional sources of liquidity when we need it, our
growth prospects and future profitability may be materially and adversely affected.
   11




---



##### 




    
    our future financial condition, results of operations and cash flows;
    
    the state of global credit markets;
    
    general market conditions for financing activities by companies in our industry; and
    
    economic, political and other conditions in China and elsewhere.
  We have substantial existing indebtedness, in particular long-term indebtedness, and we may incur
substantial indebtedness in the future, which could adversely affect our financial condition and
our ability to generate sufficient cash to satisfy our outstanding and future debt obligations.
  
    
    requiring us to use a substantial portion of our cash flow from operations
to service our indebtedness, which would reduce our cash flows available for working
capital, capital expenditures, development projects and other general corporate
purposes;
 
    
    limiting our flexibility in planning for or reacting to, and increasing
our vulnerability to, changes in our business, the industry in which we operate and the
general economy; and
 
    
    placing us at a competitive disadvantage compared to our competitors who
have less debt or are less leveraged.
   12




---



##### 



Our efforts to further develop our technology and know-how through increased research and
development of crystalline silicon technology may not yield satisfactory results, if any.
   If photovoltaic technology is not suitable for widespread adoption, or sufficient demand for solar
power products does not develop or takes longer to develop than we anticipated, our sales may not
continue to increase or may even decline, and we may be unable to sustain profitability.
  
    
    cost-effectiveness of solar power products compared to conventional and
other non-solar energy sources and products;
 
    
    performance and reliability of solar power products compared to
conventional and other non-solar energy sources and products;
 
    
    availability of government subsidies and incentives to support the
development of the solar power industry;
 
    
    success of other alternative energy generation technologies, such as fuel
cells, wind power and biomass;
 
    
    fluctuations in economic and market conditions that affect the viability
of conventional and non-solar alternative energy sources, such as increases or
decreases in the prices of oil and other fossil fuels; and
 
    
    capital expenditures by end users of solar power products, which tend to
decrease when the economy slows down.
  13




---



##### 



We depend on a limited number of customers for a significant portion of product sales; changes in
customer purchase amounts, terms or patterns may cause significant fluctuations or declines in its
revenues.
   Cancellation of customer orders could cause our operating results to fluctuate.
  Changes in international trade policies and international barriers to trade may adversely affect
our ability to export our products to certain countries.
   14




---



##### 



We compete in a highly competitive market and many of our competitors have greater resources.
   We obtain certain manufacturing equipment from sole or a limited number of suppliers and if such
equipment is damaged or otherwise unavailable, our ability to deliver products on time will suffer,
which in turn could result in order cancellations and loss of revenue.
  Problems with product quality or product performance may cause us to incur warranty expenses,
damage our market reputation and prevent us from achieving increased sales and market share, or
result in a decrease in our revenues and market share.
   15




---



##### 



If we fail to adequately protect our intellectual property rights, our business and results of
operations could be materially and adversely affected.
  We may be exposed to infringement or misappropriation claims by third parties, which, if determined
adversely to us, could cause us to lose significant rights and pay significant damage awards.
  Legal action against the Lehman Entities in connection with the Lehman Entities insolvency
proceedings could be expensive, time-consuming and ultimately unsuccessful.
   16




---



##### 



Our quarterly revenues and operating results may be difficult to predict and could fall below
investor expectations, which could cause the market price of our ADSs to decline.
  Our senior management has worked together for a relatively short period of time, which may make it
difficult for you to evaluate their effectiveness and ability to address challenges.
  The success of our business depends on the continuing efforts of our key personnel and our business
may be severely disrupted if we lose their services.
    17




---



##### 



As we have awarded and will continue to award employee share options and other share-based
compensation to certain of our directors, officers, employees and consultants, our net income will
be adversely affected.
    There are potential conflicts of interest between us and our largest shareholder, Jinglong BVI.
  We have limited insurance coverage and may incur significant losses resulting from operating
hazards, product liability claims or business interruptions.
   18




---



##### 



Compliance with environmental regulations is expensive, and noncompliance may result in adverse
publicity and potentially significant monetary damages and fines or suspension of our business
operations.
    For strategic reasons and in an effort to maximize returns on our unused capital reserves, we may,
from time to time, invest in securities purchased on the open market, which may, due to market
forces beyond our control, result in the recognition of losses that will adversely affect our
financial results.
   19




---



##### 



We may incur significant legal expenses in connection with, and allocate management time and
attention to, legal actions involving us that may take place from time to time, including the legal
actions currently filed against us, and it is possible that we will not be able to prevail in our
legal actions.
 Ellenburg v. JA Solar
Holdings Co., Ltd., et al. Zhang v.
JA Solar Holdings Co., Ltd., et al.
  Risks Related to Doing Business in China
 Adverse changes in political and economic policies of the PRC government could have a material
adverse effect on the overall economic growth of China, which could reduce the demand for our
products and materially and adversely affect our competitive position.
  
    
    the amount of government involvement;
 
    
    the level of development;
 
    
    the growth rate;
 
    
    the control of foreign exchange; and
 
    
    the allocation of resources.
   20




---



##### 



Fluctuation in the value of the Renminbi versus that of other foreign currencies may have a
material adverse effect on our business.
     21




---



##### 



Natural disasters, acts of war, political unrest and epidemics, which are beyond our control, may
cause damage, loss or disruption to our business.
  Price inflation in China could erode some of the advantages of operating in a relatively low-cost
jurisdiction such as China, which could negatively affect our competitive advantages and our
results of operations.
  Uncertainties with respect to the PRC legal system could have a material adverse effect on us.
  Our operating subsidiaries in China are subject to legal limitations in paying dividends to us.
   22




---



##### 



PRC regulations on currency exchange and foreign investment may limit our ability to receive and
use our revenues effectively and may delay or prevent us from using the proceeds from our
fundraising activities to make loans or additional capital contributions to our PRC operating
subsidiaries.
    Our business benefits from certain PRC government incentives. Expiration of, or changes to, these
incentives could have a material adverse effect on our operating results.
   23




---



##### 



Dividends we receive from our operating subsidiaries located in the PRC may be subject to PRC
withholding tax.
  We may be deemed a PRC resident enterprise under the EIT Law and be subject to the PRC taxation on
our worldwide income.
   24




---



##### 



Dividends payable by us to our foreign shareholders and gain on the sale of our ADSs or ordinary
shares may become subject to PRC taxes.
  Labor laws in the PRC may adversely affect our results of operations.
  PRC regulations relating to the establishment of offshore special purpose companies by PRC
residents may subject our PRC resident shareholders to personal liability and limit our ability to
inject capital into our PRC subsidiaries, limit our PRC subsidiaries ability to distribute profits
to us, or otherwise adversely affect us.
   25




---



##### 



PRC rules on mergers and acquisitions may subject us to sanctions, fines and other penalties and
affect our future business growth through acquisition of complementary business.
   Failure to comply with PRC regulations regarding the registration requirements for employee stock
ownership plans or share option plans may subject the PRC plan participants or us to fines and
other legal or administrative sanctions.
   26




---



##### 



Risks Related to Our Ordinary Shares and ADSs
 The market price for our ADSs has been volatile.
  
    
    announcements of technological or competitive developments;
 
    
    regulatory developments in our target markets affecting us, our customers,
our potential customers or our competitors;
 
    
    announcements regarding patent litigation or the issuance of patents to us
or our competitors;
 
    
    announcements of studies and reports relating to the conversion
efficiencies of our products or those of our competitors;
 
    
    actual or anticipated fluctuations in our quarterly operating results;
 
    
    changes in financial estimates by securities research analysts;
 
    
    changes in the economic performance or market valuations of other
photovoltaic technology companies;
 
    
    addition or departure of our executive officers and key research
personnel;
 
    
    fluctuations in the exchange rate between the U.S. dollar and Renminbi;
 
    
    release or expiry of lock-up or other transfer restrictions on our
outstanding ordinary shares or ADSs; and
 
    
    sales or perceived sales of additional ordinary shares or ADSs.
   27




---



##### 



Our most current memorandum and articles of association contain anti-takeover provisions that could
have a material adverse effect on the rights of holders of our ordinary shares and ADSs.
  Holders of ADSs have fewer rights than shareholders and must act through the depositary to exercise
those rights.
  Holders of our ADSs may be subject to limitations on transfers of our ADSs.
  ADS holders right to participate in any future rights offerings may be limited, which may cause
dilution to their holdings and they may not receive cash dividends if it is impractical to make
them available to them.
   28




---



##### 



We are a Cayman Islands company and, because judicial precedent regarding the rights of
shareholders is more limited under Cayman Islands law than that under U.S. law, our shareholders
may have less protection for their shareholder rights than they would under U.S. law.
   Our shareholders may have difficulty enforcing judgments obtained against us.
   29




---



##### 



We may be classified as a passive foreign investment company, which could result in adverse United
States federal income tax consequences to U.S. Holders.
  
 ITEM 4.
    
    INFORMATION ON THE COMPANY
 
 A. HISTORY AND DEVELOPMENT OF THE COMPANY
     
    
    JA Hebei, incorporated in May 2005 in Ningjin, Hebei Province. JA Hebei is
engaged in the manufacturing of solar cells;
 
    
    JA Yangzhou, incorporated in November 2007 in Yangzhou, Jiangsu Province.
JA Yangzhou is engaged in the manufacturing of solar cells;
 
    
    JA Yangzhou R&D, incorporated in March 2009 in Yangzhou, Jiangsu Province.
JA Yangzhou R&D is engaged in research and development of solar cell technology;
 
    
    JA Fengxian, incorporated in November 2006 in Fengxian, Shanghai. JA
Fengxian is engaged in the manufacturing of solar modules;
  30




---



##### 




    
    JA Lianyungang, incorporated in October 2008 in Lianyungang, Jiangsu
Province. JA Lianyungang is engaged in the manufacturing of silicon wafers;
 
    
    JA Wafer R&D, incorporated in November 2010 in Lianyungang, Jiangsu
Province. JA Wafer R&D is engaged in the research and development of silicon wafer
technology;
  
   31




---



##### 



www.jasolar.com
 
 B. BUSINESS OVERVIEW
 Overview
        32




---



##### 



Our Products and Services
  Solar Cells
   Solar Modules
  Silicon Wafers
  Solar product processing
  Manufacturing Capacity and Facilities
   33




---



##### 



Rated
    
    
    Ratedmanufacturing
    
    
    manufacturing capacitycapacity
    
    
    per annumFacilities
    
    per annum
    
    
    expected in 2011Product
    
    location
    
    in 2010 (in MW)
    
    
    (in MW)Solar cell
    
    Ningjin, Hebei
    
    
    900
    
    
    
    1,400Yangzhou, Jiangsu
    
    
    1,200
    
    
    
    1,600Total Rated Capacity
    
    
    2,100
    
    
    
    3,000Solar module
    
    Fengxian, Shanghai
    
    
    500
    
    
    
    800Silicon wafer
    
    Lianyungang, Jiangsu
    
    
    300
    
    
    
    600
    Manufacturing Process
 Solar Cells
  
    
    Texturing and cleaning. The solar cell manufacturing process begins with
texturing of the surface of wafers which reduces the solar cells reflection of
sunlight, followed by surface cleaning of the cells. The texturing process for
multicrystalline wafers is slightly different from that for monocrystalline wafers.
 
    
    Diffusion. Next, through a thermal process, a negatively charged coating
is applied to the positively charged raw wafers in a diffusion furnace. At the high
furnace temperature, the phosphorous atoms diffuse into the wafer surface. As a result,
the wafer now has two separate layers  a negatively charged layer on the surface and
a positively charged layer below it.
 
    
    Isolation. To achieve a clean separation of the negative and positive
layers, the edges of the wafers are isolated through etching, a process that removes a
very thin layer of silicon around the edges of the solar cell resulting from the
diffusion process.
  34




---



##### 




    
    Anti-reflection coating. We then apply an anti-reflection coating to the
front surface of the solar cell to enhance its absorption of sunlight.
 
    
    Printing. In a screen printing process, we print silver paste and
aluminum paste to the front and back surfaces of the solar cell, respectively, to act
as contacts, with the front contact in a grid pattern to allow sunlight to be absorbed.
 
    
    Co-firing. Subsequently, contacts are connected through an electrode
firing process in a conveyor belt furnace at high temperature. The high temperature
causes the silver paste to become embedded in the surface of the silicon layer forming
a reliable electrical contact. The aluminum paste on the back of the cell serves as a
mirror for particles, further enhancing the efficiency level.
 
    
    Testing and sorting. Finally, we complete the manufacturing of solar
cells by testing and sorting. The finished cells are sorted according to efficiency
levels and optical criteria. Each cell is tested and subsequently assigned to a
performance and quality class depending on the testing results.
 Solar Modules
  Silicon Wafers
  Production Equipment
  Raw Materials and Utilities
   35




---



##### 



Polysilicon and Silicon Wafers
    
    
    Hebei Jinglong, a related party of our company. The supply contract with
Hebei Jinglong is for silicon wafers and had a term of four and half years, from July
2006 to December 2010, which automatically extended for another three years until the
end of 2013.
 
    
    Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd., an
affiliate of GCL. The supply contracts with GCL are for silicon wafers and polysilicon
from 2008 to 2015. We have also agreed
with GCL in principle to enter into supply arrangements for the years 2016 to 2020,
terms of which are subject to further negotiation.
 
    
    Zhejiang Yuhui Solar Energy Source Co., Ltd., an affiliate of ReneSola.
The supply contracts with ReneSola are for both monocrystalline and multicrystalline
silicon wafers from 2008 to 2013.
 
    
    M. SETEK Co. Ltd. The supply contract with M. SETEK is for polysilicon
from 2007 to 2011.
 
    
    Wacker Chemie AG. The supply agreements with Wacker are for polysilicon
from 2009 to 2016.
 
    
    OCI Company Ltd., or OCI. The supply agreement with OCI is for polysilicon
from 2012 to 2018.
 Other Raw Materials
   36




---



##### 



Utilities
  Quality Assurance and Certifications
  Date
    
    Certification and Test Standard
    
    Relevant Product or Process8 May 2009
    
    ISO 9001: 2008
    
    JA Yangzhous quality management system in designing, manufacturing and sale of solar cells8 May 2009
    
    ISO 14001: 2004
    
    JA Yangzhous environmental management system in designing, manufacturing and sale of solar cells8 May 2009
    
    OHSAS 18001: 2007
    
    JA Yangzhous safety management system in designing, manufacturing and sale of solar cells15 November 2010
    
    ISO 9001: 2008
    
    JA Fengxians quality management system in designing, manufacturing and sale of solar modules15 November 2010
    
    ISO 14001: 2004
    
    JA Fengxians environmental management system in designing, manufacturing and sale of solar modules15 November 2010
    
    OHSAS 18001: 2007
    
    JA Fengxians  safety management system in designing, manufacturing and sale of solar modules16 November 2010
    
    ISO 9001: 2008
    
    JA Hebeis quality management system in designing, manufacturing and sale of solar cells16 November 2010
    
    ISO 14001: 2004
    
    JA Hebeis environmental management system in designing, manufacturing and sale of solar cells16 November 2010
    
    OHSAS 18001: 2007
    
    JA Hebeis safety management system in designing, manufacturing and sale of solar cells
    37




---



##### 



Markets and Customers
    Year Ended December 31,2008
    
    
    2009
    
    
    2010(as adjusted)(RMB in millions)China
    
    
    4,162.0
    
    
    
    2,789.8
    
    
    
    6,010.4Outside ChinaGermany
    
    
    144.9
    
    
    
    396.9
    
    
    
    2,127.0Spain
    
    
    613.5
    
    
    
    57.5
    
    
    
    81.6Rest of the world
    
    
    537.9
    
    
    
    534.4
    
    
    
    3,541.8Total revenues
    
    
    5,458.3
    
    
    
    3,778.6
    
    
    
    11,760.8
 Sales and Marketing
   
    
    Sales contracts with module manufacturers, systems integrators, project
developers and distributors. We sell most of our solar power products under annual or
long-term sales contracts with our customers. We deliver solar products according to
pre-agreed schedules set forth in purchase orders. We require prepayment prior to
shipping under some of our sales contracts.
 
    
    OEM/tolling manufacturing arrangements. Under these arrangements, we
purchase polysilicon or silicon wafers from customers, and then sell silicon wafer or
solar cell products back to the same customers, who then sell those products under
their own brands. In addition, we have been using our own solar cells to make modules
for a limited number of strategic customers who brand the finished solar module
products with their own labels.
  38




---



##### 



Seasonality
  Intellectual Property
   
  Competition
   39




---



##### 



Regulation
  Renewable Energy Law and Other Government Directives
        40




---



##### 



Environmental Regulations
  Restrictions on Foreign Businesses and Investments
   41




---



##### 



Taxation
  Dividend Distribution
  
    
    Wholly Foreign-Owned Enterprise Law of 2000, as amended; and
    
    Wholly Foreign-Owned Enterprise Law Implementation Rules of 2000, as amended.
  Antimonopoly Law
     42




---



##### 



Foreign Currency Exchange
  
    
    Regulation of the Peoples Republic of China on Foreign Exchange
Administration (2000), as amended; and
    
    Regulations of Settlement, Sale and Payment of Foreign Exchange (1996).
   
 C. ORGANIZATIONAL STRUCTURE
  
 D. PROPERTY, PLANTS AND EQUIPMENT
  Space
    
    
    
    
    Owned orLocation
    
    (in square meters)
    
    
    Usage of Property
    
    Leased
    
    EncumbranceNingjin, Hebei
    
    
    106,582
    
    
    Factory
    
    Leased
    
    NoneYangzhou, Jiangsu
    
    
    466,200
    
    
    Factory and R&D center
    
    Owned
    
    NoneFengxian, Shanghai
    
    
    204,262
    
    
    Factory
    
    Owned
    
    NoneLianyungang, Jiangsu
    
    
    219,909
    
    
    Factory and R&D center
    
    Owned
    
    None
   43




---



##### 



Environmental Matters
  
 ITEM 4A.
    
    UNRESOLVED STAFF COMMENTS
  
 ITEM 5.
    
    OPERATING AND FINANCIAL REVIEW AND PROSPECTS
 The following discussion and analysis of our financial condition and results of operations are
based upon and should be read in conjunction with our consolidated financial statements and the
related notes included in this annual report. This discussion contains forward-looking statements
that involve risks, uncertainties and assumptions. We caution you that our business and financial
performance are subject to substantial risks and uncertainties. Our actual results could differ
materially from those projected in the forward-looking statements as a result of various factors,
including those set forth in Item 3. Key Information  D. Risk Factors and elsewhere in this
annual report.
 
 A. OPERATING RESULTS
 Overview
     44




---



##### 



Factors Affecting our Results of Operations
  
    
    Industry Demand. Demand for solar power products is critical to our
business and revenue growth. The solar power market has grown significantly in recent
years. Although industry demand temporarily slowed down from the second half of 2008 to
the third quarter of 2009 due to unfavorable economic conditions globally, solar power
industry demand has progressively revived since the fourth quarter of 2009 and
throughout the course of 2010 in our key markets including Germany, Italy, the United
States, China, the rest of Europe, as well as other national economies. Many of our
customers who experienced difficulty in obtaining credit during the recent economic
downturn have begun to re-obtain access to capital at relatively affordable financing
cost again. Moreover, fast progress in cost reduction efforts of major solar power
product manufacturers including us have further stimulated economic incentives for
customers to install solar power systems as an alternative to traditional power
generation. However, in the near term, although continued global economic recovery is
expected, growth prospects still have a great level of uncertainty, which could
temporarily lead to fluctuations in industry demand for solar power products including
ours.
 
    
    Government Subsidies and Economic Incentives. The near-term growth of the
market for solar power products depends largely on the availability and scale of
government subsidies and economic incentives, as the current cost of solar power
substantially exceeds the cost of electricity generated from conventional or
non-renewable sources of energy. Various governments such as those of Germany, Spain,
Japan, the United States, Italy, the Czech Republic, Belgium and China have used
different policy initiatives to encourage or accelerate the development and adoption of
solar power and other renewable energy sources. However, certain early adopters of
solar power incentive policies, such as Germany, Spain and Italy announced reductions
of incentive programs in 2009 and 2010. Demand for and pricing of our products are
highly sensitive to incentive policy decisions by governments in our major markets.
Although the implementation of incentive policies for solar power significantly
stimulates demand for solar power products, including our products, reductions or
limitations on such policies, as have occurred in Germany, Spain and Italy, may reduce
demand for such products or change price expectations, causing manufacturers of solar
power products, including us, to reduce prices to adjust to demand at lower price
levels.
 
    
    Capacity Utilization. We have rapidly expanded our manufacturing capacity
recently. Our total solar cell annual production capacity increased from 800 MW in 2009
to 2,100 MW in 2010. We also added 300 MW wafer production capacity and 500 MW solar
module production capacity in 2010. We
expect our production capacity expansions will increase our revenues as our output and
sales volume increase. As a consequence of our increased investment in plant and
equipment and increased production scale, we expect that our costs of revenues,
including depreciation and amortization costs, will also increase. If we are able to
maintain satisfactory facility utilization rates and productivity, our production
capacity expansion will enable us to reduce our unit manufacturing costs through
economies of scale, as fixed costs are allocated over a larger number of units of
output. Moreover, manufacturers with greater scale are in a better position to obtain
price discounts from silicon feedstock suppliers and may therefore obtain a greater
market share of solar power products by selling at more competitive prices. Our ability
to achieve satisfactory utilization rates and economies of scale will depend upon a
variety of factors, including our ability to attract and retain sufficient customers,
the ability of our customers and suppliers to perform their obligations under our
existing contracts, our ability to secure a sufficient supply of raw materials and
production equipment for our production activities, the availability of working capital
and the selling prices for our products.
  45




---



##### 




    
    Pricing of Our Solar Power Products. The prices of our products are based
on a variety of factors, including our silicon raw materials costs, supply and demand
conditions for solar power products, product mix, product quality and the terms of our
customer contracts, including sales volumes. The average selling price of our solar
cells was approximately RMB 22.1, RMB 9.0 and RMB 8.7 per watt for the years ended
December 31, 2008, 2009 and 2010, respectively. The decline in average selling price of
our solar cells from 2008 to 2009 was mainly due to weakened macroeconomic conditions
combined with the significant decline in silicon wafer cost and increased supply of
solar power products. Although the demand for solar power products has increased since
the fourth quarter of 2009, the average selling price of our solar cells continued to
decline slightly in 2010 due to prevailing market conditions. We began selling solar
modules in 2010 and the average selling price of our solar module products was RMB 11.6
per watt in 2010. We expect the prices of solar power products, including our own
products, will continue to decline over time to due to increased supplies, reduced
manufacturing costs from improving technology and economies of scale, and industry
pursuit to grid cost parity with traditional forms of electricity.
 
    
    Changing Product Mix. We began vertically integrating our business by
expanding our production capabilities to manufacture both upstream silicon wafers and
downstream solar modules in the fourth quarter of 2009. Integrating wafer production
capability may help reduce our cost of silicon raw materials for our solar cell and
module production. As we ramp up and further expand our wafer manufacturing capacities,
we expect to capture the cost efficiencies of a more vertically integrated production
process. In addition, expansion to downstream solar module production will change our
product mix. Each of solar cells and solar modules represents a separate stage of the
solar power production chain, with each involving different production processes, costs
and selling prices. Prior to 2010, our sales consisted almost entirely of solar cells.
As we began marketing and selling solar module products in the fourth quarter of 2009,
change in our product mix may adversely affect our overall gross margin as a percentage
of our revenues because solar module products generally have lower gross margin as
compared to solar cells. We expect that our operating results for future periods will
continue to be influenced by our product mix.
 
    
    Price of Silicon Wafers and Related Raw Materials. The success of our
business and our growth strategy depends heavily on acquiring a supply of polysilicon
and silicon wafers at commercially reasonable prices and terms that is consistent with
our existing and planned production capacity. We have entered into prepaid long-term
supply contracts with suppliers like Jinglong Group, GCL and M.SETEK, where, in some
instances, these agreements provide for fixed pricing, substantial prepayment
obligations and/or firm purchase commitments that require us to pay for the supply
whether or not we accept delivery. We also purchase silicon wafer and polysilicon from
the spot market to meet our expanded production capacity. The availability and pricing
of silicon wafers and polysilicon will affect results of operations.
 
    
    Technology Improvement. The advancement of manufacturing technologies is
important in increasing the conversion efficiency of solar cells and reducing the
production costs of solar power products. Higher conversion efficiency generally leads
to higher revenues from sales of solar power products. As a result, solar power
companies, including us, are continuously developing advanced process
technologies to improve the conversion efficiency of solar cells while reducing costs to
maintain and improve profit margins.
 Critical Accounting Policies
   46




---



##### 



Revenue recognition
 Revenue recognition for solar modules, solar cells and other products (hereafter solar
products)
   
    
    Persuasive evidence that an arrangement (sales contract) exists between a
willing customer and us that outlines the terms of the sale (including customer
information, product specification, quantity of goods, purchase price and payment
terms). Customers do not have a right of return. We do provide a warranty on our solar
module products.
 
    
    Some shipping terms are EXW, at which point we deliver goods at our own
place of business and all other transportation costs and risks are assumed by the
customer. Some shipping terms are CIF destination point., under which we pay the costs
of insurance and freight necessary to bring the goods to the named port of destination,
but the title to and risk of loss of or damage of the goods is passed to the buyer
according to the contract term, which could be upon delivery no matter who bears the
transportation costs. Some shipping terms are FOB shipping point from our premises. At
this point the customer takes title to the goods and is responsible for all risks and
rewards of ownership.
 
    
    Our price to the customer is fixed and determinable as specifically
outlined in the sales contract.
 
    
    For customers to whom credit terms are extended, we assess a number of
factors to determine whether collection from them is probable, including past
transaction history with them and their credit-worthiness. All credit extended to
customers is pre-approved by management. If we determine that collection is not
reasonably assured, we defer the recognition of revenue until collection becomes
reasonably assured, which is generally upon receipt of payment.
 Revenue recognition for solar product processing
  Fair Value of Financial Instruments
 Fair Value Measurements and Disclosures
  47




---



##### 



Allowance for doubtful accounts
 Advances to suppliers.
 Inventory Valuation .
  48




---



##### 



Impairment of long-lived assets.
 Share-based compensation . Compensation-Stock Compensation
   Grants to Employees
     49




---



##### 



Grants to Non-Employees
  Income taxes
 Product warranties.
 Short term investments.
 Investments-Debt and Equity
Securities
  50




---



##### 



Adoption of new accounting standard and discontinued operation
     51




---



##### 



Revenues
  Year ended December 31,2008
    
    
    2009
    
    
    2010As adjusted(in millions, except for percentages)RMB
    
    
    %
    
    
    RMB
    
    
    %
    
    
    RMB
    
    
    %Solar modules
    
    
    425.6
    
    
    
    7.7
    %
    
    
    82.7
    
    
    
    2.2
    %
    
    
    2,510.6
    
    
    
    21.3
    %Solar cells and other
products to third
parties
    
    
    4,368.4
    
    
    
    80.1
    %
    
    
    3,283.8
    
    
    
    86.9
    %
    
    
    8,023.9
    
    
    
    68.2
    %Solar cells and other
products to related
parties
    
    
    508.0
    
    
    
    9.3
    %
    
    
    5.2
    
    
    
    0.1
    %
    
    
    160.4
    
    
    
    1.4
    %Solar product processing
    
    
    156.3
    
    
    
    2.9
    %
    
    
    406.9
    
    
    
    10.8
    %
    
    
    1,065.9
    
    
    
    9.1
    %Total Revenues
    
    
    5,458.3
    
    
    
    100.0
    %
    
    
    3,778.6
    
    
    
    100.0
    %
    
    
    11,760.8
    
    
    
    100
    %
 % % %
     52




---



##### 



Cost of Revenues and Operating Expenses
  Year ended December 31,2008
    
    
    2009
    
    
    2010As adjusted(in millions, except for percentages)RMB
    
    
    %
    
    
    RMB
    
    
    %
    
    
    RMB
    
    
    %Silicon wafers
    
    
    3,991.4
    
    
    
    89.4
    %
    
    
    2,546.0
    
    
    
    77.2
    %
    
    
    6,424.3
    
    
    
    69.7
    %Other
    
    
    474.9
    
    
    
    10.6
    %
    
    
    750.5
    
    
    
    22.8
    %
    
    
    2,790.1
    
    
    
    30.3
    %Total cost of revenues
    
    
    4,466.3
    
    
    
    100
    %
    
    
    3,296.5
    
    
    
    100
    %
    
    
    9,214.4
    
    
    
    100
    %
 Silicon wafers %
 Other %
  Year ended December 31,2008
    
    
    2009
    
    
    2010As adjusted(in millions, except for percentages)RMB
    
    
    %
    
    
    RMB
    
    
    %
    
    
    RMB
    
    
    %Selling, general and
administrative expenses
    
    
    271.5
    
    
    
    90.5
    %
    
    
    343.3
    
    
    
    88.4
    %
    
    
    505.1
    
    
    
    88.8
    %Research and
development expenses
    
    
    28.5
    
    
    
    9.5
    %
    
    
    45.1
    
    
    
    11.6
    %
    
    
    63.8
    
    
    
    11.2
    %Total operating expenses
    
    
    300.0
    
    
    
    100
    %
    
    
    388.4
    
    
    
    100
    %
    
    
    568.9
    
    
    
    100
    %
 Selling, general and administrative expenses.
 %
  53




---



##### 



Research and development expenses
  Interest (Income) Expense, net
  Foreign Exchange Gain (Loss)
   54




---



##### 



Taxation
       55




---



##### 



Inflation
 %
 Recently Pronounced Accounting Standards
    56




---



##### 



57




---



##### 



Results of Operations
  Year ended December 31,2008
    
    
    2009
    
    
    2010As adjusted
    
    
    As adjusted(in millions, except for operating data and percentages)RMB
    
    
    %
    
    
    RMB
    
    
    %
    
    
    RMB
    
    
    %Income Statement Data:Total revenues
    
    
    5,458.3
    
    
    
    100
    %
    
    
    3,778.6
    
    
    
    100
    %
    
    
    11,760.8
    
    
    
    100
    %China
    
    
    4,162.0
    
    
    
    76.3
    %
    
    
    2,789.8
    
    
    
    73.8
    %
    
    
    6,010.4
    
    
    
    51.1
    %Outside China
    
    
    1,296.3
    
    
    
    23.7
    %
    
    
    988.8
    
    
    
    26.2
    %
    
    
    5,750.4
    
    
    
    48.9
    %Cost of revenues
    
    
    (4,466.3
    )
    
    
    (81.8
    )%
    
    
    (3,296.5
    )
    
    
    (87.2
    )%
    
    
    (9,214.4
    )
    
    
    (78.3
    )%Gross profit
    
    
    992.0
    
    
    
    18.2
    %
    
    
    482.1
    
    
    
    12.8
    %
    
    
    2,546.4
    
    
    
    21.7
    %Selling, general and
administrative expenses
    
    
    (271.5
    )
    
    
    (5.0
    )%
    
    
    (343.3
    )
    
    
    (9.1
    )%
    
    
    (505.1
    )
    
    
    (4.3
    )%Research and development
expenses
    
    
    (28.5
    )
    
    
    (0.5
    )%
    
    
    (45.1
    )
    
    
    (1.2
    )%
    
    
    (63.8
    )
    
    
    (0.5
    )%Total operating expenses
    
    
    (300.0
    )
    
    
    (5.5
    )%
    
    
    (388.4
    )
    
    
    (10.3
    )%
    
    
    (568.9
    )
    
    
    (4.8
    )%Income from operations
    
    
    692.0
    
    
    
    12.7
    %
    
    
    93.7
    
    
    
    2.5
    %
    
    
    1,977.5
    
    
    
    16.8
    %Impairment on
available-for-sale securities
    
    
    (686.3
    )
    
    
    (12.6
    %)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Change in fair value of
derivatives
    
    
    564.0
    
    
    
    10.3
    %
    
    
    (49.1
    )
    
    
    (1.3
    )%
    
    
    74.5
    
    
    
    0.6
    %Convertible notes buyback
gain/(loss)
    
    
    161.3
    
    
    
    2.9
    %
    
    
    (24.1
    )
    
    
    (0.6
    )%
    
    
    
    
    
    
    Interest expense
    
    
    (172.3
    )
    
    
    (3.2
    )%
    
    
    (231.5
    )
    
    
    (6.1
    )%
    
    
    (221.2
    )
    
    
    (1.9
    )%Interest income
    
    
    42.6
    
    
    
    0.8
    %
    
    
    12.0
    
    
    
    0.3
    %
    
    
    12.8
    
    
    
    0.1
    %Foreign exchange (loss)/gain
    
    
    (132.1
    )
    
    
    (2.4
    )%
    
    
    4.6
    
    
    
    0.1
    %
    
    
    (74.4
    )
    
    
    (0.6
    )%Investment loss
    
    
    (28.6
    )
    
    
    (0.5
    )%
    
    
    (2.3
    )
    
    
    (0.1
    )%
    
    
    
    
    
    
    Impairment on share lending
arrangement
    
    
    (469.0
    )
    
    
    (8.6
    )%
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other income
    
    
    3.6
    
    
    
    0.1
    %
    
    
    7.8
    
    
    
    0.2
    %
    
    
    258.7
    
    
    
    2.2
    %Income/(Loss) before income
taxes
    
    
    (24.8
    )
    
    
    (0.5
    )%
    
    
    (188.9
    )
    
    
    (5.0
    )%
    
    
    2,027.9
    
    
    
    17.2
    %Income tax benefit/ (expenses)
    
    
    (23.9
    )
    
    
    (0.4
    )%
    
    
    (8.0
    )
    
    
    (0.2
    )%
    
    
    (252.7
    )
    
    
    (2.1
    )%Net income/(loss)
    
    
    (48.7
    )
    
    
    (0.9
    )%
    
    
    (196.9
    )
    
    
    (5.2
    )%
    
    
    1,775.2
    
    
    
    15.1
    %Income/(loss) from
discontinued operations, net
of tax
    
    
    
    
    
    
    
    
    
    
    3.4
    
    
    
    0.1
    %
    
    
    (19.8
    )
    
    
    (0.2
    )%Net income/(loss) available
to ordinary share holders
    
    
    (48.7
    )
    
    
    (0.9
    )%
    
    
    (193.5
    )
    
    
    (5.1
    )%
    
    
    1,755.4
    
    
    
    14.9
    %Operating Data:Products sold (in MW)
    
    
    277.4
    
    
    
    
    
    
    
    508.8
    
    
    
    
    
    
    
    1,462.6
    
    
    
    Average selling price per watt
    
    
    22.1
    
    
    
    
    
    
    
    9.0
    
    
    
    
    
    
    
    8.7
    
    
    
    
  58




---



##### 



Year End December 31, 2010 compared to Year Ended December 31, 2009
 Total revenues
  Cost of Revenues
 Gross Profit and Gross Margin
 Total Operating Expenses
 
    
    Selling, General and Administrative Expenses.Our selling, general and
administrative expenses increased from RMB 343.3 million in 2009 to RMB 505.1 million
in 2010, and as the percentage of our total revenues decreased from 9.1% in 2009 to
4.3% in 2010. The increase in our selling, general and administrative expenses was due
primarily to increases in our selling expenses and marketing expenses associated with
our increased sales volume, an increased amount of salary and benefits paid to our
sales, marketing and administrative personnel as a result of increased headcount, as
well as share-based compensation expenses of RMB 71.5 million relating to our stock
options granted to
certain sales, marketing and administrative employees. The above share based
compensation expenses were net of forfeiture reversal amounts of RMB 1.7 million for the
year ended December 31, 2010.
 
    
    Research and Development Expenses.Our research and development expenses
increased from RMB 45.1 million in 2009 to RMB 63.8 million in 2010 and decreased as a
percentage of our total revenues from 1.2% in 2009 to 0.5% in 2010. The increase in
our research and development expenses was due primarily to greater research and
development activities undertaken by us. Our research and development has primarily
focused on improving and optimizing our solar manufacturing process based on certain
proprietary know-how.
 Change in fair value of derivatives
 Convertible notes buyback loss
  59




---



##### 



Interest (Income) Expense, net
 Other Income (Expense)
 Foreign Exchange Gain (Loss)
 Tax Expense
 Net Income (loss).
 Income/(loss) from discontinued operations, net of tax.
 Year Ended December 31, 2009 compared to Year Ended December 31, 2008
 Total revenues
  Cost of Revenues
  60




---



##### 



Gross Profit and Gross Margin
 Total Operating Expenses
 
    
    Selling, General and Administrative Expenses.Our selling, general and
administrative expenses increased from RMB 271.5 million in 2008 to RMB 343.3 million
in 2009, and as the percentage of our total revenues also increased from 5.0% in 2008
to 9.1% in 2009. The increase in our selling, general and administrative expenses was
due primarily to increases in our selling expenses and marketing expenses associated
with our increased sales volume, an increased amount of salary and benefits paid to our
sales, marketing and administrative personnel as a result of increased headcount, as
well as share-based compensation expenses of RMB 96.2 million relating to our stock
options granted to certain employees. The above share based compensation expenses were
net of forfeiture reversal amounts of RMB 59.6 million and RMB 49.6 million for the
years ended December 31, 2008 and 2009, respectively.
 
    
    Research and Development Expenses.Our research and development expenses
increased from RMB 28.5 million in 2008 to RMB 45.1 million in 2009 and increased as a
percentage of our total revenues from 0.5% in 2008 to 1.2% in 2009. The increase in our
research and development expenses was due primarily to greater research and development
activities undertaken by us. Our research and development has primarily focused on
improving and optimizing our solar manufacturing process based on certain proprietary
know-how.
 Impairment on available-for-sale securities.
 Change in fair value of derivatives.
 Convertible notes buyback gain
 Interest (Income) Expense, net
  61




---



##### 



Other Income (Expense)
 Foreign Exchange Gain (Loss)
 Impairment on share lending arrangement
 Tax Expense
 Net Income (loss)
 
 B. LIQUIDITY AND CAPITAL RESOURCES
 Cash Flows and Working Capital
    62




---



##### 



Year ended December 31,2008
    
    
    2009
    
    
    2010(in millions)RMB
    
    
    RMB
    
    
    RMBNet cash (used in)/provided by
operating activities
    
    
    (1,289.2
    )
    
    
    1,129.1
    
    
    
    1,279.5Net cash used in investing activities
    
    
    (419.4
    )
    
    
    (557.2
    )
    
    
    (1,678.9
    )Net cash provided by/(used in)
financing activities
    
    
    2,610.3
    
    
    
    (242.8
    )
    
    
    838.3Effect of exchange rate changes on
cash and cash equivalents
    
    
    (94.9
    )
    
    
    (4.7
    )
    
    
    (16.6
    )Net increase in cash and cash
equivalents
    
    
    806.8
    
    
    
    324.4
    
    
    
    422.3Cash and cash equivalents at the
beginning of the year
    
    
    736.0
    
    
    
    1,542.8
    
    
    
    1,867.2Cash and cash equivalents at the end
of the year
    
    
    1,542.8
    
    
    
    1,867.2
    
    
    
    2,289.5
 Operating Activities.
   63




---



##### 



Investing Activities.
  Financing Activities.
    Dividends from Subsidiaries.
  Capital Expenditures
   64




---



##### 



C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.
    
    
    Secium Technology. We have developed a novel diffusion approach to form a
selective emitter structure on the front surface of solar cells to achieve higher
conversion efficiency rates than those of conventional solar cells. This technique is
suitable for commercialization.
 
    
    Ultra-thin Wafer Industrial Manufacturing. To refine our techniques used
in the processing of ultra-thin wafers, we plan to study the stress and defect rates of
wafers in each stage of the manufacturing process in order to control wafer breakage.
 
    
    Quality Control Techniques. We intend to develop enhanced techniques to
be applied in the quality control of our products and manufacturing lines, including
characterization of product performance, in-line diagnostics, and methods to control
production yield, product durability and reliability.
 
    
    Maple Technology.Solar cells utilizing Maple technology feature silicon
crystals that are broader, flatter and have fewer grain boundaries than traditional
multicrystalline silicon cells, resulting in much improved conversion efficiency rate.
We intend to commercialize the Maple technology.
    65




---



##### 



D. TREND INFORMATION
  
 E. OFF-BALANCE SHEET ARRANGEMENTS
  
 F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
  Payments due by periodLess than
    
    
    1-3
    
    
    3-5
    
    
    More thanTotal
    
    
    1 year
    
    
    years
    
    
    years
    
    
    5 years(amounts in RMB thousands)Bank loan obligations (including interest
averaging 5.01%)
    
    
    1,677,375
    
    
    
    76,199
    
    
    
    1,601,176
    
    
    
    
    
    
    
    Operating lease obligations
    
    
    18,000
    
    
    
    12,000
    
    
    
    6,000
    
    
    
    
    
    
    
    Non-cancelable capital expenditures
    
    
    1,357,495
    
    
    
    1,294,103
    
    
    
    63,392
    
    
    
    
    
    
    
    Purchase commitments under take-or-pay
agreements
    
    
    985,503
    
    
    
    824,850
    
    
    
    160,653
    
    
    
    
    
    
    
    Purchase commitments under other
agreements(1)
    
    
    6,303,721
    
    
    
    1,810,445
    
    
    
    3,397,077
    
    
    
    641,142
    
    
    
    455,0572008 Senior Notes (including interest cost)
    
    
    1,681,029
    
    
    
    68,000
    
    
    
    1,613,029
    
    
    
    
    
    
    
    Accrued warranty cost reflected on the
companys balance sheet
    
    
    31,277
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,277Total
    
    
    12,054,400
    
    
    
    4,085,597
    
    
    
    6,841,327
    
    
    
    641,142
    
    
    
    486,334
 (1)
    
    include only purchase commitments with fixed or minimum price provisions. In addition, we have also entered
into other supply agreements with variable price provisions, under which the purchase price is based on market
prices with price adjustment terms. Bank Loan obligations
  66




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##### 



Operating lease obligations
  Non-cancelable purchase obligations
  Purchase commitments under agreements
   Take or Pay Supply Agreements
  Other Long-Term Supply Agreements
  2008 Senior Notes
 Accrued warranty cost reflected on the companys balance sheet
 
 G. SAFE HARBOR
   67




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##### 




    
    our expectations regarding the worldwide demand for electricity and the
market for solar energy;
 
    
    our beliefs regarding the inability of traditional fossil fuel-based
generation technologies to meet the demand for electricity;
 
    
    our beliefs regarding the importance of environmentally friendly power
generation;
 
    
    our expectations regarding governmental incentives for the deployment of
solar energy;
 
    
    our beliefs regarding the solar power industry revenue growth;
 
    
    our expectations with respect to advancements in our technologies;
 
    
    our beliefs regarding the low-cost advantage of solar product production
in China;
 
    
    our beliefs regarding the competitiveness of our solar power products;
 
    
    our expectations regarding the scaling of our solar power capacity;
    
    our expectations with respect to increased revenue growth and our ability
to achieve profitability resulting from increases in our production volumes;
 
    
    our expectations with respect to our ability to secure raw materials in
the future;
 
    
    our expectations with respect to our ability to develop relationships with
customers in our target markets;
 
    
    our future business development, results of operations and financial
condition; and
 
    
    competition from other manufacturers of solar power products and
conventional energy suppliers.
    68




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##### 



ITEM 6.
    
    DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
 
 A. DIRECTORS AND SENIOR MANAGEMENT
 Directors and Executive Officers
  Name
    
    Age

    
    PositionBaofang Jin
    
    
    59
    
    
    Executive Chairman of the Board of DirectorsPeng Fang
    
    
    57
    
    
    Director and Chief Executive OfficerBingyan Ren
    
    
    64
    
    
    DirectorErying Jia
    
    
    56
    
    
    DirectorJian Xie
    
    
    33
    
    
    Director and Chief Operating OfficerYong Liu
    
    
    44
    
    
    Director and Chief Technology OfficerHope Ni
    
    
    39
    
    
    Independent DirectorJiqing Huang
    
    
    74
    
    
    Independent DirectorYuwen Zhao
    
    
    72
    
    
    Independent DirectorAnthea Chung
    
    
    42
    
    
    Chief Financial OfficerMing Yang
    
    
    37
    
    
    Vice President
 Baofang Jin, Executive Chairman of the Board of Directors.
 Peng Fang, Director and Chief Executive Officer.
 Bingyan Ren, Director.
 Erying Jia, Director.
  69




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##### 



Jian Xie Director and Chief Operating Officer.
 Yong Liu, Director and Chief Technology Officer
 Hope Ni, Independent Director.
 Jiqing Huang, Independent Director.
 Yuwen Zhao, Independent Director.
  70




---



##### 



Anthea Chung, Chief Financial Officer.
 Ming Yang, Vice President.
  Employment Agreements
   Term of Directors and Officers
  
 B. COMPENSATION
 Compensation of Directors and Executive Officers
   71




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##### 



Code of Ethics
  Stock Option Plans
  Plan Administration
 Award Agreement
 Eligibility
 Option Term
 Exercise Price
  72




---



##### 



Amendment and Termination
    
 C. BOARD PRACTICES
 Board of Directors and Board Committees
    Audit Committee .
 
    
    appointment, compensation, retention and oversight of the work of the
independent registered public accounting firm;
 
    
    approving all auditing and non-auditing services permitted to be performed
by the independent registered public accounting firm;
  73




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##### 




    
    meeting separately and periodically with management and the independent
registered public accounting firm;
 
    
    oversight of annual audit and quarterly reviews, including reviewing with
independent registered public accounting firm the annual audit plans;
 
    
    oversight of financial reporting process and internal controls, including
reviewing the adequacy and effectiveness of our internal controls policies and
procedures on a regular basis;
 
    
    establishing procedures for the receipt, retention and treatment of
complaints received by us regarding accounting, internal accounting controls or
auditing matters; and
 
    
    reviewing and implementing related person transaction policies and
procedures for the committees review and approval of proposed related person
transactions, including all transactions required to be disclosed by Item 404(a) of
Regulation S-K under the Securities Act.
 Compensation Committee .
 
    
    reviewing at least annually our executive compensation plans;
 
    
    evaluating annually the performance of our chief executive officer and
other executive officers;
 
    
    determining and recommending to the board the compensation package for our
chief executive officer and other executive officers;
 
    
    evaluating annually the appropriate level of compensation for board and
board committee service by non-employee directors;
 
    
    reviewing and approving any severance or termination arrangements to be
made with any of our executive officers; and
 
    
    reviewing at least annually our general compensation plans and other
employee benefits plans.
 Nominating and Corporate Governance Committee .
 
    
    establishing procedures for evaluating the suitability of potential
director nominees;
 
    
    recommending to the board nominees for election by the stockholders or
appointment by the board;
  74




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##### 




    
    reviewing annually with the board the current composition of the board
with regards to characteristics such as knowledge, skills, experience, expertise and
diversity required for the board as a whole;
 
    
    reviewing periodically the size of the board and recommending any
appropriate changes;
 
    
    recommending to the board the size and composition of each standing
committee of the board; and
 
    
    reviewing periodically and at least annually the corporate governance
principles adopted by the board to assure that they are appropriate for us and comply
with the requirements under the rules and regulations of the SEC and the Nasdaq Stock
Market, Inc. where applicable.
 Duties of Directors
   
    
    convening shareholders annual general meetings and reporting its work to
shareholders at such meetings;
 
    
    declaring dividends and distributions;
 
    
    appointing officers and determining the term of office of officers;
 
    
    exercising the borrowing powers of our company and mortgaging the property
of our company; and
 
    
    approving the transfer of shares of our company, including the registering
of such shares in our share register.
 Term of Office and Benefits
  Interested Transactions
  
 D. EMPLOYEES
  Number of
    
    
    Percentageemployees
    
    
    of totalManufacturing and engineering
    
    
    8,975
    
    
    
    83.68
    %Quality assurance
    
    
    708
    
    
    
    6.60
    %General and administration
    
    
    296
    
    
    
    2.76
    %Purchasing and logistics
    
    
    206
    
    
    
    1.92
    %Research and development
    
    
    59
    
    
    
    0.55
    %Marketing and sales
    
    
    53
    
    
    
    0.49
    %Others
    
    
    428
    
    
    
    4.00
    %Total
    
    
    10,725
    
    
    
    100
    %
  75




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##### 



E. SHARE OWNERSHIP
  Name
    
    Shares(1)
    
    
    Percent(2)Baofang Jin(3)
    
    
    38,845,568
    
    
    
    22.72
    %Bingyan Ren(4)
    
    
    1,860,703
    
    
    
    1.09
    %Erying Jia
    
    
    
    
    
    
    Peng Fang
    
    
    
    
    
    
    Jian Xie
    
    
    *
    
    
    
    *Hope Ni
    
    
    
    
    
    
    Jiqing Huang
    
    
    
    
    
    
    Yuwen Zhao
    
    
    
    
    
    
    Yong Liu
    
    
    *
    
    
    
    *Anthea Chung
    
    
    *
    
    
    
    *Ming Yang
    
    
    *
    
    
    
    *All Directors and Executive
Officers as a group
    
    
    40,832,771
    
    
    
    23.86
    %
 
 *
    
    Upon exercise of all options and vesting of all restricted shares granted, would beneficially
own less than 1.0% of the companys outstanding ordinary shares.(1)
    
    Beneficial ownership is determined in accordance with Rule 13d-3 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended, and includes voting or
investment power with respect to the securities.(2)
    
    For each person and group included in this table, percentage ownership is calculated by
dividing the number of shares beneficially owned by such person or group by the sum of
170,999,520, being the number of ordinary shares outstanding as of March 31, 2011, and the
number of ordinary shares underlying share options held by such person or group that were
exercisable within 60 days after March 31, 2011.  76




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##### 



(3)
    
    Including 38,845,568 ordinary shares held by Jinglong BVI, of which Mr. Baofang Jin is the
sole director and has a 32.96%economic interest. Mr. Jin disclaims the beneficial ownership
of 26,042,069 ordinary shares beneficially owned by the other shareholders of Jinglong BVI.(4)
    
    Representing 4.79% of the 38,845,568 ordinary shares held by Jinglong BVI. Mr. Bingyan Ren
beneficially owns 4.79% of Jinglong BVI.  
 ITEM 7.
    
    MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
 
 A. MAJOR SHAREHOLDERS
  Name
    
    Shares(1)
    
    
    Percent(2)Jinglong Group Co., Ltd.(3)
    
    
    38,845,568
    
    
    
    22.72
    %Morgan Stanley Investment Company
    
    
    8,955,485
    
    
    
    5.24
    %Investec Assestment Management, LTD (UK)
    
    
    6,590,430
    
    
    
    3.85
    %
 
 (1)
    
    Beneficial ownership is determined in accordance with Rule 13d-3 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended, and includes voting or
investment power with respect to the securities.(2)
    
    For each person included in this table, percentage ownership is calculated by dividing the
number of shares beneficially owned by such person by the sum of 170,999,520, being the number
of ordinary shares outstanding as of March 31, 2011, and the number of ordinary shares
underlying share options held by such person that were exercisable within 60 days after March
31, 2011.(3)
    
    Jinglong Group Co., Ltd., a British Virgin Islands Company, is owned by Mr. Baofang Jin (our
executive chairman, 32.96%), Mr. Huixian Wang (9.58%), Mr. Binguo Liu (9.58%), Mr. Jicun Yan
(7.18%), Mr. Rongrui Liu (7.18%), Mr. Huiqiang Liu (7.18%), Mr. Ruiying Cao (7.18%), Mr.
Guichun Xing (4.79%), Mr. Ning Wen (4.79%), Mr. Bingyan Ren (our director, 4.79%) and Mr.
Ruchang Wen (4.79%).   77




---



##### 



B. RELATED PARTY TRANSACTIONS
 Significant Transactions with Jinglong Group
 Wafer supply
    Other transactions
   Significant Transactions with other Related Parties
  ,
  78




---



##### 



C. INTERESTS OF EXPERTS AND COUNSEL
  
 ITEM 8.
    
    FINANCIAL INFORMATION
 
 A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION
  Legal Proceedings
 Class actions.
  Lehman Entities insolvency proceedings.
  Other legal proceedings.
  Dividend Distribution Policy
    79




---



##### 



B. SIGNIFICANT CHANGES
  
 ITEM 9.
    
    THE OFFER AND LISTING
 
 A. OFFER AND LISTING DETAILS
   Closing Price Per ADSHigh
    
    
    Low(US$)
    
    
    (US$)Before our 3-for-1 ADS Split on February 7, 20082007 February 8, 2007 through December 31, 2007
    
    
    75.43
    
    
    
    40.982008 January 1, 2008 to February 7, 2008
    
    
    75.07
    
    
    
    46.45After our 3-for-1 ADS Split on February 7, 20082008 February 8, 2008 to December 31, 2008
    
    
    25.75
    
    
    
    1.802009 January 1, 2009 through March 31, 2009
    
    
    5.09
    
    
    
    1.902009 April 1, 2009 through June 30, 2009
    
    
    6.24
    
    
    
    2.912009 July 1, 2009 through September 30, 2009
    
    
    5.34
    
    
    
    3.372009 October 1, 2009 through December 31, 2009
    
    
    6.23
    
    
    
    3.672010 January 1, 2010 through March 31, 2010
    
    
    6.80
    
    
    
    4.302010 April 1, 2010 through June 30, 2010
    
    
    6.92
    
    
    
    4.252010 July 1, 2010 through September 30, 2010
    
    
    9.33
    
    
    
    4.892010 October 1, 2010 through December 31, 2010
    
    
    9.85
    
    
    
    6.672010 November
    
    
    9.43
    
    
    
    7.192010 December
    
    
    7.57
    
    
    
    6.672011 January
    
    
    7.88
    
    
    
    6.812011 February
    
    
    8.52
    
    
    
    6.932011 March
    
    
    7.20
    
    
    
    6.312011 April (through April 21, 2011)
    
    
    6.94
    
    
    
    6.15
  Source: Bloomberg
  80




---



##### 



B. PLAN OF DISTRIBUTION
  
 C. MARKETS
  
 D. SELLING SHAREHOLDERS
  
 E. DILUTION
  
 F. EXPENSES OF THE ISSUE
  
 ITEM 10.
    
    ADDITIONAL INFORMATION
 
 A. SHARE CAPITAL
   81




---



##### 



B. MEMORANDUM AND ARTICLES OF ASSOCIATION
 .
 General
   Meetings
       82




---



##### 



Voting Rights Attaching to the Shares
      Protection of Minority Shareholders
    83




---



##### 



Pre-emption Rights
  Liquidation Rights
  Modification of Rights
     84




---



##### 



Alteration of Capital
  
    
    increase our share capital by such sum, to be divided into shares of such
amounts, as the resolution shall prescribe;
 
    
    consolidate and divide all or any of our share capital into shares of
larger amount than our existing shares;
 
    
    without prejudice to powers granted to us regarding issuing of shares,
divide our shares into several classes and without prejudice to any special rights
previously conferred on the holders of existing shares attach thereto respectively any
preferential, deferred, qualified or special rights, privileges, conditions or such
restrictions which in the absence of any such determination by us in general meeting,
as our directors may determine;
 
    
    subdivide our shares or any of them into shares of smaller amount than
that fixed by our memorandum of association and may by such resolution determine that,
as between the holders of the shares resulting from such sub-division, one or more of
the shares may have any such preferred, deferred or other rights or be subject to any
such restrictions as compared with the other or others as we have power to attach to
unissued or new shares; and
 
    
    cancel any shares which at the date of the passing of the resolution have
not been taken or agreed to be taken by any person and diminish the amount of our share
capital by the amount of the shares so cancelled.
  Transfer of Shares
     Share Repurchase
   85




---



##### 



Dividends
         86




---



##### 



Untraceable Shareholders
  
    
    all checks or warrants, not being less than three in total number, for any
sums payable in cash to the holder of such shares have remained uncashed for a period
of 12 years;
 
    
    we have not during that time or before the expiry of the three-month
period referred to in the last bullet under this section received any indication of the
existence of the shareholder or person entitled to such shares by death, bankruptcy or
operation of law; and
 
    
    upon expiration of the 12-year period, we have caused an advertisement to
be published in newspapers, giving notice of its intention to sell these shares, and a
period of three months or such shorter period has elapsed since the date of such
advertisement.
  Board of Directors
      87




---



##### 



Issuance of Additional Ordinary Shares or Preferred Shares
   
    
    the designation of such class or series;
 
    
    the number of shares of such class or series;
 
    
    the dividend rights, conversion rights, voting rights; and
 
    
    the rights and terms of redemption and liquidation preferences.
     88




---



##### 



Inspection of Books and Records
 .
 Differences in Corporate Law
  
    
    an exempted company does not have to file an annual return of its
shareholders with the Registrar of Companies;
 
    
    an exempted companys register of members is not open to inspection;
 
    
    an exempted company does not have to hold an annual general meeting;
 
    
    an exempted company may issue no par value, negotiable or bearer shares;
 
    
    an exempted company may obtain an undertaking against the imposition of
any future taxation (such undertakings are usually given for 20 years in the first
instance);
 
    
    an exempted company may register by way of continuation in another
jurisdiction and be deregistered in the Cayman Islands;
 
    
    an exempted company may register as a limited duration company; and
 
    
    an exempted company may register as a segregated portfolio company.
  Duties of Directors
  
    
    a duty to act in good faith in the best interests of the company;
 
    
    a duty not to personally profit from opportunities that arise from the
office of director;
 
    
    a duty to avoid conflicts of interest; and
 
    
    a duty to exercise powers for the purpose for which such powers were
intended.
   89




---



##### 



Interested Directors
  Voting Rights and Quorum Requirements
  Mergers and Similar Arrangements
 Schemes of arrangement
  
    
    the company is not proposing to act illegally or ultra vires and the
statutory provisions as to majority vote have been complied with;
 
    
    the shareholders have been fairly represented at the meeting in question;
 
    
    the arrangement is one that a businessman would reasonably approve; and
 
    
    the arrangement is not one that would more properly be sanctioned under
some other provision of the Companies Law or that would amount to a fraud on the
minority.
   Mergers and consolidations
   90




---



##### 




    
    the directors of each constituent company must approve a written plan of
merger or consolidation (the Plan);
 
    
    the Plan must be authorized by each constituent company by (a) a
shareholder resolution by majority in number representing 75% in value of the
shareholders voting together as one class; and (b) if the shares to be issued to each
shareholder in the consolidated or surviving company are to have the same rights and
economic value as the shares held in the constituent company, a special resolution of
the shareholders voting together as one class. A proposed merger between a Cayman
parent company and its Cayman subsidiary or subsidiaries will not require authorization
by shareholder resolution;
 
    
    the consent of each holder of a fixed or floating security interest of a
constituent company in a proposed merger or consolidation is required unless the court
(upon the application of the constituent company that has issued the security) waives
the requirement for consent;
 
    
    the Plan must be signed by a director on behalf of each constituent
company and filed with the Registrar of Companies together with the required supporting
documents;
 
    
    a certificate of merger or consolidation is issued by the Registrar of
Companies which is prima facieevidence of compliance with all statutory requirements
in respect of the merger or consolidation. All rights and property of each of the
constituent companies will then vest in the surviving or consolidated company which
will also be liable for all debts, contracts, obligations and liabilities of each
constituent company. Similarly, any existing claims, proceedings or rulings of each
constituent company will automatically be continued against the surviving or
consolidated company; and
 
    
    provision is made for a dissenting shareholder of a Cayman constituent
company to be entitled to payment of the fair value of his shares upon dissenting to
the merger or consolidation. Where the parties cannot agree on the price to be paid to
the dissenting shareholder, either party may file a petition to the court to determine
fair value of the shares. These rights are not available where an open market exists
on a recognized stock exchange for the shares of the class held by the dissenting
shareholder.
 Shareholder Suits
  
    
    a company is acting or proposing to act illegally or beyond the scope of
its authority;
 
    
    the act complained of, although not beyond the scope of its authority,
could be effected duly if authorized by more than a simple majority vote which has not
been obtained; and
 
    
    those who control the company are perpetrating a fraud on the minority.
   91




---



##### 



Corporate Governance
  Indemnification
   Shareholder Proposals
  Approval of Corporate Matters by Written Consent
  Calling of Special Shareholders Meetings
  Staggered Board of Directors
   92




---



##### 



Issuance of Preferred Stock
  Anti-takeover Provisions
  
 C. MATERIAL CONTRACTS
  
 D. EXCHANGE CONTROLS
  
    
    Foreign Currency Administration Rules (1996), as amended, or the Exchange
Rules; and
 
    
    Administration Rules of the Settlement, Sale and Payment of Foreign
Exchange (1996), or the Administration Rules.
   
 E. TAXATION
 Cayman Islands Taxation
   93




---



##### 



Peoples Republic of China Taxation
     94




---



##### 



Material U.S. Federal Tax Considerations
  General
     95




---



##### 



Dividends
   Sale or Other Disposition of ADSs or Ordinary Shares
   96




---



##### 



Information Reporting and Backup Withholding
  
 F. DIVIDENDS AND PAYING AGENTS
  
 G. STATEMENT BY EXPERTS
  
 H. DOCUMENTS ON DISPLAY
  http://www.sec.gov
 
 I. SUBSIDIARY INFORMATION
   97




---



##### 



ITEM 11.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Interest Rate Risk
  Foreign Exchange Risk
   Credit Risk
   98




---



##### 



ITEM 12.
    
    DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
 
 A. DEBT SECURITIES
  
 B. WARRANTS AND RIGHTS
  
 C. OTHER SECURITIES
  
 D. AMERICAN DEPOSITARY SHARES
 Fees paid by our ADS holders
   99




---



##### 



Persons depositing or withdrawing shares must pay:
    
    For:US$5.00 (or less) per 100 ADSs (or portion of 100
ADSs)
    
       Issuance of ADSs, including issuances
resulting from a distribution of shares or rights or
other property   Cancellation of ADSs for the purpose of
withdrawal, including if the deposit agreement
terminatesUS$0.02 (or less) per ADS
    
       Any cash distribution to ADS holdersA fee equivalent to the fee that would be payable
if securities distributed to you had been shares
and the shares had been deposited for issuance of
ADSs
    
       Distribution of securities distributed to
holders of deposited securities which are distributed
by the depositary to ADS holdersUS$0.02 (or less) per ADSs per calendar year
    
       Depositary servicesRegistration or transfer fees
    
       Transfer and registration of shares on our
share register to or from the name of the depositary or
its agent when you deposit or withdraw sharesPersons depositing or withdrawing shares must pay:
    
    For:Expenses of the depositary
    
       Cable, telex and facsimile transmissions
(when expressly provided in the deposit agreement)   converting foreign currency to U.S. dollarsTaxes and other governmental charges the
depositary or the custodian have to pay on any
ADS or share underlying an ADS, for example,
stock transfer taxes, stamp duty or withholding
taxes
    
       As necessaryAny charges incurred by the depositary or its 
agents for servicing the deposited securities
    
       As necessary
 Fees and Payments from the Depositary to Us
  
 PART II
 
 ITEM 13.
    
    DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
   100




---



##### 



ITEM 14.
    
    MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
    
 ITEM 15.
    
    CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Managements Report on Internal Control over Financial Reporting
   101




---



##### 



Changes in Internal Control Over Financial Reporting
  
 ITEM 16.
    
    RESERVED
 
 ITEM 16A.
    
    AUDIT COMMITTEE FINANCIAL EXPERT
  
 ITEM 16B.
    
    CODE OF ETHICS
   102




---



##### 



ITEM 16C.
    
    PRINCIPAL ACCOUNTANT FEES AND SERVICES
  Audit Fees(1)

    
    Tax Fees(2)2009
    
    RMB 7.3 million
    
    RMB 0.6 million2010
    
    RMB 8.0 million
    
    RMB 0.65 million
 
 (1)
    
    Audit fees means the aggregate fees billed by our principal auditor for professional
services rendered for the audit of our financial statements.(2)
    
    Tax fees means the aggregate fees billed by our principal auditor for professional services
for tax and transfer pricing consulting.  
 ITEM 16D.
    
    EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
  
 ITEM 16E.
    
    PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
   103




---



##### 



ITEM 16F.
    
    CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT
  
 ITEM 16G.
    
    CORPORATE GOVERNANCE
  
    
    We follow home country practice that permits our Board of Directors to
have less than a majority of independent directors.
 
    
    We follow home country practice that does not restrict a companys
transactions with directors, requiring only that directors exercise a duty of care and
owe a fiduciary duty to the companies for which they serve. Under our memorandum and
articles of association, subject to any separate requirement for audit committee
approval under the applicable rules of the Nasdaq Marketplace Rules or unless
disqualified by the chairman of the relevant board meeting, so long as a director
discloses the nature of his interest in any contract or arrangement in which he is
interested, such a director may vote in respect of any contract or proposed contract or
arrangement in which such director is interested and may be counted in the quorum at
such meeting.
 
    
    We follow home country practice which does not require the nominating and
corporate government committee and compensation committee of our Board of Directors to
be comprised solely of independent directors.
 
    
    We follow home country practice which does not require us to have
regularly scheduled meetings at which only independent directors are present, or
executive sessions.
 
    
    We follow home country practice which does not specifically require us to
have one or more codes of conduct applicable to all directors, officers and employees
and make those codes of conduct publicly available. There are no specific requirements
under Cayman Islands law requiring the adoption of codes of conduct.
 
 PART III
 
 ITEM 17.
    
    FINANCIAL STATEMENTS
   104




---



##### 



ITEM 18.
    
    FINANCIAL STATEMENTS
  PageReport of the Independent Registered Public Accounting Firm
    
    F-1Consolidated Balance Sheets as of December 31, 2009 and 2010
    
    F-2Consolidated Statements of Operations for the years ended December 31, 2008, 2009 and 2010
    
    F-4Statements of Shareholders Equity and Comprehensive Income/(Loss) for the years ended
December 31, 2008, 2009 and 2010
    
    F-5Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2009 and 2010
    
    F-8Notes to Consolidated Financial Statements
    
    F-10
 
 ITEM 19.
    
    EXHIBITS
 1.1
    **
    
    Second Amended and Restated Memorandum and Articles of Association of the Registrant
(incorporated by reference to Exhibit 3.1 from our registration statement on Form F-1
(File No. 333-140002), as amended, initially filed with the Security and Exchange
Commission on January 16, 2007.)2.1
    **
    
    Form of Indenture (incorporated by reference to Exhibit 4.4 from our registration
statement on Form F-3ASR, initially filed with the SEC on May 12, 2008.)2.2
    **
    
    Form of First Supplemental Indenture between The Bank of New York as trustee and JA Solar
(incorporated by reference to Exhibit 4.1 on Form 6-K initially filed with the SEC on May
20, 2008).4.1
    **
    
    Silicon Wafer Supply Agreement between JingAo Solar Co., Ltd. and Jiangsu Zhongneng
Polysilicon Technology Development Co., Ltd. dated as of April 7, 2008 (incorporated by
reference to Exhibit 4.14 from our Form 20-F, initially filed with the Security and
Exchange Commission on May 9, 2008.)4.2
    **
    
    The Polysilicon Supply Contract between JA Solar Technology Yangzhou Co., Ltd. and
Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd., dated August 17, 2008
(incorporated by reference to Exhibit 4.14 from our Form 20-F, initially filed with the
Security and Exchange Commission on June 25, 2009.)4.3
    *
    
    Investment Agreement for Solar Photovoltaic Industrial Center Project between JA Solar
Holdings Co., Ltd. and the Management Committee of Hefei High-Tech Industrial Development
Zone dated February 26, 2011.4.4
    *
    
    Supplemental Agreement of Exhibit 4.1 and 4.2 among Jiangsu Zhongneng Polysilicon
Technology Development Co., Ltd., JingAo Solar Co., Ltd., JA Solar Technology Yangzhou
Co., Ltd., Jiangsu GCL Silicon Technology Development Co., Ltd, Suzhou GCL Photovoltaic
Technology Co., Ltd., Nanjing GCL Photovoltaic Power Technology Co., Ltd. and Changzhou
GCL Photovoltaic Technology Co., Ltd. dated December 2, 2010.4.5
    *
    
    Supply Agreement between OCI Company Ltd. and JingAo Solar Co., Ltd. dated March 28, 2011.4.6
    *
    
    Supply Agreement between Wacker Chemie AG and Jing Hai Yang Semiconductor Materials (Dong
Hai) Co., Ltd. dated September 30, 2010.8.1
    *
    
    List of Subsidiaries11.1
    **
    
    Code of Business Conduct and Ethics (incorporated by reference to Exhibit 11.1 from our
2006 annual report on Form 20-F (File No. 001-33290) initially filed with the Security
and Exchange Commission on June 1, 2007.)12.1
    *
    
    Certification by the Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the
Act and Section 302 of the Sarbanes-Oxley Act of 2002
  105




---



##### 



12.2
    *
    
    Certification by the Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the
Act and Section 302 of the Sarbanes-Oxley Act of 200213.1
    *
    
    Certification by the Chief Executive Officer Pursuant to Rule 13a-14(b)/15d-14(b) of the
Act, Section 1350 of Chapter 63 of the United States Code and Section 906 of the
Sarbanes-Oxley Act of 200213.2
    *
    
    Certification by the Chief Financial Officer Pursuant to Rule 13a-14(b)/15d-14(b) of the
Act, Section 1350 of Chapter 63 of the United States Code and Section 906 of the
Sarbanes-Oxley Act of 200216.1
    *
    
    Consent of Independent Registered Public Accounting Firm101.1
    
    
    The following financial information from JA Solar Holdings Co.,
Ltd.s Annual Report on Form 20-F for the year ended December 31, 2010, filed with
the SEC on April 26, 2011, formatted in Extensible Business Reporting Language
(XBRL):(i) Consolidated Balance Sheets as of December 31, 2010 and 2009, (ii)
Consolidated Statements of Income for the years ended December 31, 2010, 2009 and
2008, (iii) Consolidated Statements of Changes in Shareholders Equity for the
years ended December 31, 2010, 2009 and 2008, (iv) the Consolidated Statements
of Cash Flows for the years ended December 31, 2010, 2009 and 2008, and (iv)
Notes to Consolidated Financial Statements.
 
 *
    
    Filed as part of this annual report**
    
    Incorporated by reference
    
    As permitted by Rule 405(a)(2) of Regulation S-T, this exhibit will be filed by
amendment to this Form 20-F within 30 days from the date of this filing.  106




---



##### 



SIGNATURE
  JA Solar Holdings Co., Ltd.By:
    /s/ Anthea ChungName:
    Anthea ChungTitle:
    Chief Financial Officer   107




---



##### 



Report of Independent Registered Public Accounting Firm
  Internal Control -
Integrated Framework
    
  F-1




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 CONSOLIDATED BALANCE SHEETS
 (In thousands, except share and per share data)
 December 31,
    
    
    December 31,Note
    
    
    2009
    
    
    2010RMB
    
    
    RMBAs adjusted(Note 2(z))ASSETSCurrent assets:Cash and cash equivalents
    
    
    3
    
    
    
    1,867,248
    
    
    
    2,289,482Restricted cash
    
    
    3
    
    
    
    43,612
    
    
    
    112,593Notes receivable
    
    
    5
    
    
    
    119,824
    
    
    
    254,422Accounts receivable from third party customers, net
    
    
    5
    
    
    
    339,524
    
    
    
    944,036Accounts receivable from related party customers, net
    
    
    5, 23
    (b)
    
    
    
    
    
    
    1,597Inventories, net
    
    
    6
    
    
    
    641,140
    
    
    
    1,349,329Advances to third party suppliers, net
    
    
    7
    
    
    
    372,394
    
    
    
    493,915Advances to related party suppliers, net
    
    
    7, 23
    (b)
    
    
    50,889
    
    
    
    111,714Other current assets
    
    
    8, 24
    
    
    
    202,221
    
    
    
    740,770Deferred tax assets
    
    
    11
    
    
    
    24,443
    
    
    
    44,892Assets of discontinued operations
    
    
    20
    
    
    
    
    
    
    
    75,478Total current assets
    
    
    
    
    
    
    3,661,295
    
    
    
    6,418,228Property and equipment, net
    
    
    9
    
    
    
    1,724,442
    
    
    
    3,170,721Intangible asset, net
    
    
    10
    
    
    
    11,957
    
    
    
    14,332Deferred tax asset
    
    
    11
    
    
    
    25,775
    
    
    
    41,975Advances to third party suppliers, net
    
    
    7
    
    
    
    1,716,699
    
    
    
    1,606,680Advances to related party suppliers, net
    
    
    7, 23
    (b)
    
    
    118,722
    
    
    
    46,498Prepayment for land use rights
    
    
    12
    
    
    
    49,517
    
    
    
    195,490Derivative assets
    
    
    14, 19
    
    
    
    10,521
    
    
    
    14,591Deferred issuance cost
    
    
    14
    
    
    
    143,242
    
    
    
    110,868Total assets
    
    
    
    
    
    
    7,462,170
    
    
    
    11,619,383
  F-2




---



##### 



JA SOLAR HOLDINGS CO., LTD.
CONSOLIDATED BALANCE SHEETS (Continued)
 (In thousands, except share and per share data)
 December 31,
    
    
    December 31,Note
    
    
    2009
    
    
    2010RMB
    
    
    RMBAs adjusted(Note 2(z))LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Short-term bank borrowings
    
    
    13
    
    
    
    10,000
    
    
    
    Accounts payable to third parties
    
    
    
    
    
    
    315,803
    
    
    
    918,079Accounts payable to related parties
    
    
    23
    (a)
    
    
    52,060
    
    
    
    118,337Tax payables
    
    
    
    
    
    
    3,992
    
    
    
    114,184Advances from third party customers
    
    
    
    
    
    
    53,860
    
    
    
    480,888Advances from related party customers
    
    
    23
    (a)
    
    
    
    
    
    
    3,570Other payables to third parties
    
    
    15
    
    
    
    80,591
    
    
    
    192,004Share-based compensation liability
    
    
    18
    
    
    
    16,264
    
    
    
    Payroll and welfare payable
    
    
    
    
    
    
    59,208
    
    
    
    115,607Accrued expenses
    
    
    16
    
    
    
    21,113
    
    
    
    61,876Interest payable
    
    
    
    
    
    
    10,129
    
    
    
    8,500Amounts due to related parties
    
    
    23
    (a)
    
    
    6,208
    
    
    
    174Other current liabilities
    
    
    24
    
    
    
    
    
    
    
    29,808Liabilities of discontinued operations
    
    
    20
    
    
    
    
    
    
    
    615Total current liabilities
    
    
    
    
    
    
    629,228
    
    
    
    2,043,642Accrued warranty cost
    
    
    17
    
    
    
    5,931
    
    
    
    31,277Other long-term liabilities
    
    
    
    
    
    
    16,383
    
    
    
    47,959Long-term bank borrowings
    
    
    13
    
    
    
    680,000
    
    
    
    1,520,000Convertible notes
    
    
    14
    
    
    
    1,171,438
    
    
    
    1,230,175Embedded derivatives
    
    
    14
    
    
    
    136,632
    
    
    
    66,174Total liabilities
    
    
    
    
    
    
    2,639,612
    
    
    
    4,939,227Commitments and Contingencies
    
    
    24
    
    
    
    
    
    
    
    Shareholders equity:Ordinary shares(US$0.0001 par value;
493,480,000 shares authorized,
169,018,420 and 169,976,270 shares issued
and outstanding as of December 31, 2009
and December 31, 2010)
    
    
    28
    
    
    
    134
    
    
    
    134Additional paid-in capital
    
    
    
    
    
    
    4,583,808
    
    
    
    4,680,133Statutory reserves
    
    
    21
    
    
    
    211,202
    
    
    
    397,486Retained earnings
    
    
    
    
    
    
    35,426
    
    
    
    1,604,493Accumulated other comprehensive loss
    
    
    
    
    
    
    (8,012
    )
    
    
    (2,090
    )Total shareholders equity
    
    
    
    
    
    
    4,822,558
    
    
    
    6,680,156Total liabilities and shareholders equity
    
    
    
    
    
    
    7,462,170
    
    
    
    11,619,383
   F-3




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Consolidated Statements of operations

(In thousands, except share and per share data)
 For the year
    
    
    For the year
    
    
    For the yearended
    
    
    ended
    
    
    endedDecember 31,
    
    
    December 31,
    
    
    December 31,Note
    
    
    2008
    
    
    2009
    
    
    2010RMB
    
    
    RMB
    
    
    RMBAs adjusted
    
    
    As adjusted(Note 2(z))
    
    
    (Note 2(z))RevenuesSolar modules
    
    
    
    
    
    
    425,610
    
    
    
    82,649
    
    
    
    2,510,563Solar cells and other products to third parties
    
    
    
    
    
    
    4,368,431
    
    
    
    3,283,806
    
    
    
    8,023,938Solar cells and other products to related parties
    
    
    
    
    
    
    508,010
    
    
    
    5,206
    
    
    
    160,413Solar products processing
    
    
    
    
    
    
    156,259
    
    
    
    406,892
    
    
    
    1,065,866Total revenues
    
    
    
    
    
    
    5,458,310
    
    
    
    3,778,553
    
    
    
    11,760,780Cost of revenuesSolar modules
    
    
    
    
    
    
    (378,490
    )
    
    
    (90,671
    )
    
    
    (2,221,536
    )Solar cells and other products to third parties
    
    
    
    
    
    
    (3,615,275
    )
    
    
    (2,980,821
    )
    
    
    (6,357,798
    )Solar cells and other products to related parties
    
    
    
    
    
    
    (420,424
    )
    
    
    (4,726
    )
    
    
    (127,104
    )Solar products processing
    
    
    
    
    
    
    (52,086
    )
    
    
    (220,284
    )
    
    
    (507,956
    )Total cost of revenues
    
    
    
    
    
    
    (4,466,275
    )
    
    
    (3,296,502
    )
    
    
    (9,214,394
    )Gross profit
    
    
    
    
    
    
    992,035
    
    
    
    482,051
    
    
    
    2,546,386Selling, general and administrative expenses
    
    
    
    
    
    
    (271,494
    )
    
    
    (343,253
    )
    
    
    (505,101
    )Research and development expenses
    
    
    
    
    
    
    (28,509
    )
    
    
    (45,101
    )
    
    
    (63,816
    )Total operating expenses
    
    
    
    
    
    
    (300,003
    )
    
    
    (388,354
    )
    
    
    (568,917
    )Income from continuing operations
    
    
    
    
    
    
    692,032
    
    
    
    93,697
    
    
    
    1,977,469Impairment on available-for-sale securities
    
    
    4
    
    
    
    (686,320
    )
    
    
    
    
    
    
    Change in fair value of derivatives
    
    
    14, 25
    
    
    
    564,006
    
    
    
    (49,071
    )
    
    
    74,528Convertible notes buyback gain/(loss)
    
    
    14
    
    
    
    161,333
    
    
    
    (24,156
    )
    
    
    Interest expense
    
    
    
    
    
    
    (172,272
    )
    
    
    (231,487
    )
    
    
    (221,209
    )Interest income
    
    
    
    
    
    
    42,648
    
    
    
    11,964
    
    
    
    12,810Foreign exchange (loss)/gain
    
    
    
    
    
    
    (132,164
    )
    
    
    4,629
    
    
    
    (74,429
    )Investment loss
    
    
    
    
    
    
    (28,594
    )
    
    
    (2,277
    )
    
    
    Impairment on share lending arrangement
    
    
    14
    
    
    
    (469,042
    )
    
    
    
    
    
    
    Other income
    
    
    4
    
    
    
    3,560
    
    
    
    7,786
    
    
    
    258,719(Loss)/income from continuing operations before income taxes
    
    
    
    
    
    
    (24,813
    )
    
    
    (188,915
    )
    
    
    2,027,888Income tax expense
    
    
    11
    
    
    
    (23,882
    )
    
    
    (7,999
    )
    
    
    (252,707
    )(Loss)/income from continuing operations
    
    
    
    
    
    
    (48,695
    )
    
    
    (196,914
    )
    
    
    1,775,181Income/(loss) from discontinued operations, net of tax
    
    
    20
    
    
    
    
    
    
    
    3,415
    
    
    
    (19,830
    )Net (loss)/income attributable to ordinary shareholders
    
    
    
    
    
    
    (48,695
    )
    
    
    (193,499
    )
    
    
    1,755,351Net (loss)/income per share from continuing operations:
    
    
    22Basic
    
    
    
    
    
    
    (0.31
    )
    
    
    (1.22
    )
    
    
    10.90Diluted
    
    
    
    
    
    
    (5.13
    )
    
    
    (1.22
    )
    
    
    10.72Net income/(loss) per share from discontinued operations:Basic
    
    
    
    
    
    
    
    
    
    
    0.02
    
    
    
    (0.12
    )Diluted
    
    
    
    
    
    
    
    
    
    
    0.02
    
    
    
    (0.12
    )Net (loss)/income per share:Basic
    
    
    
    
    
    
    (0.31
    )
    
    
    (1.20
    )
    
    
    10.78Diluted
    
    
    
    
    
    
    (5.13
    )
    
    
    (1.20
    )
    
    
    10.61Weighted average number of shares outstanding:
    
    
    22Basic
    
    
    
    
    
    
    156,380,060
    
    
    
    161,643,312
    
    
    
    162,900,657Diluted
    
    
    
    
    
    
    167,438,190
    
    
    
    161,643,312
    
    
    
    171,116,684
   F-4




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME/(LOSS)
(Continued)
(In thousands, except share and per share data)
 AccumulatedAdditional
    
    
    
    
    
    
    
    
    
    
    other
    
    
    Total
    
    
    TotalOrdinary shares
    
    
    paid-in
    
    
    Statutory
    
    
    Retained
    
    
    comprehensive
    
    
    shareholders
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    capital
    
    
    reserves
    
    
    earnings
    
    
    loss
    
    
    equity
    
    
    Income/(loss)RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    RMBBalance at December 31, 2007
    
    
    154,058,500
    
    
    
    123
    
    
    
    3,655,194
    
    
    
    71,619
    
    
    
    417,203
    
    
    
    (7,641
    )
    
    
    4,136,498Share based compensation
    
    
    
    
    
    
    
    
    
    
    113,192
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    113,192
    
    
    
    Exercise of stock options
    
    
    798,000
    
    
    
    1
    
    
    
    18,876
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,877
    
    
    
    Issuance of ordinary shares pursuant
to ADS
Lending Agreement
    
    
    13,125,520
    
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9
    
    
    
    Recognition of fair value of
own-share lending arrangements issued
in contemplation of convertible notes
issuance(Note 14)
    
    
    
    
    
    
    
    
    
    
    230,729
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    230,729
    
    
    
    Impairment on share lending
arrangement (Note 14)
    
    
    
    
    
    
    
    
    
    
    469,042
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    469,042
    
    
    
    Statutory reserves
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    97,957
    
    
    
    (97,957
    )
    
    
    
    
    
    
    
    
    
    
    Net loss (As adjusted (Note 2(z)))
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (48,695
    )
    
    
    
    
    
    
    (48,695
    )
    
    
    (48,695
    )Other comprehensive
loss for foreign
currency translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (383
    )
    
    
    (383
    )
    
    
    (383
    )Other comprehensive income
for available-for-sale securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,641
    
    
    
    7,641
    
    
    
    7,641Balance at December 31, 2008 (As
adjusted (Note 2(z)))
    
    
    167,982,020
    
    
    
    133
    
    
    
    4,487,033
    
    
    
    169,576
    
    
    
    270,551
    
    
    
    (383
    )
    
    
    4,926,910
    
    
    
    (41,437
    )
  F-5




---



##### 



JA SOLAR HOLDINGS CO., LTD.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME/(LOSS) (Continued)
(In thousands, except share and per share data)
 TotalOrdinary shares
    
    
    Additional
    
    
    Statutory
    
    
    Retained
    
    
    Accumulated other
    
    
    Total shareholders
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    paid-in capital
    
    
    reserves
    
    
    earnings
    
    
    comprehensive loss
    
    
    equity
    
    
    Income/(loss)RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    RMBBalance at December 31, 2008
(As adjusted (Note 2(z)))
    
    
    167,982,020
    
    
    
    133
    
    
    
    4,487,033
    
    
    
    169,576
    
    
    
    270,551
    
    
    
    (383
    )
    
    
    4,926,910Share based compensation
    
    
    
    
    
    
    
    
    
    
    79,935
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    79,935
    
    
    
    Exercise of stock options
    
    
    1,036,400
    
    
    
    1
    
    
    
    16,840
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,841
    
    
    
    Statutory reserves
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,626
    
    
    
    (41,626
    )
    
    
    
    
    
    
    
    
    
    
    Net loss (As adjusted (Note 2))
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (193,499
    )
    
    
    
    
    
    
    (193,499
    )
    
    
    (193,499
    )Other comprehensive
loss for foreign
currency translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,798
    )
    
    
    (6,798
    )
    
    
    (6,798
    )Other comprehensive loss for
forward
contract (Note 19)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (831
    )
    
    
    (831
    )
    
    
    (831
    )Balance at December 31, 2009
(As adjusted (Note 2(z)))
    
    
    169,018,420
    
    
    
    134
    
    
    
    4,583,808
    
    
    
    211,202
    
    
    
    35,426
    
    
    
    (8,012
    )
    
    
    4,822,558
    
    
    
    (201,128
    )
  F-6




---



##### 



JA SOLAR HOLDINGS CO., LTD.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME/(LOSS) (Continued)
(In thousands, except share and per share data)
 AccumulatedAdditional
    
    
    
    
    
    
    
    
    
    
    other
    
    
    Total
    
    
    TotalOrdinary shares
    
    
    paid-in
    
    
    Statutory
    
    
    Retained
    
    
    comprehensive
    
    
    shareholders
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    capital
    
    
    reserves
    
    
    earnings
    
    
    loss
    
    
    equity
    
    
    Income/(loss)RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    RMB
    
    
    RMBBalance at December 31, 2009
    
    
    169,018,420
    
    
    
    134
    
    
    
    4,583,808
    
    
    
    211,202
    
    
    
    35,426
    
    
    
    (8,012
    )
    
    
    4,822,558Share based compensation
    
    
    
    
    
    
    
    
    
    
    88,049
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    88,049
    
    
    
    Exercise of stock options
    
    
    957,850
    
    
    
    
    
    
    
    8,276
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,276
    
    
    
    Statutory reserves
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    186,284
    
    
    
    (186,284
    )
    
    
    
    
    
    
    
    
    
    
    Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,755,351
    
    
    
    
    
    
    
    1,755,351
    
    
    
    1,755,351Other comprehensive
loss for foreign
currency translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,596
    
    
    
    3,596
    
    
    
    3,596Other comprehensive income
for forward contract
(Note 19)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,326
    
    
    
    2,326
    
    
    
    2,326Balance at December 31, 2010
    
    
    169,976,270
    
    
    
    134
    
    
    
    4,680,133
    
    
    
    397,486
    
    
    
    1,604,493
    
    
    
    (2,090
    )
    
    
    6,680,156
    
    
    
    1,761,273
   F-7




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 For the year
    
    
    For the year
    
    
    For the yearended
    
    
    ended
    
    
    endedDecember 31,
    
    
    December 31,
    
    
    December 31,2008
    
    
    2009
    
    
    2010RMB
    
    
    RMB
    
    
    RMBAs adjusted
    
    
    As adjusted(note 2(z))
    
    
    (note 2(z))Cash flows from operating activities:Net (loss)/income
    
    
    (48,695
    )
    
    
    (193,499
    )
    
    
    1,755,351Adjustments to reconcile net (loss)/income to net cash (used in)/provided by operating activities:Share based compensation
    
    
    113,192
    
    
    
    96,199
    
    
    
    71,785Depreciation and amortization
    
    
    88,191
    
    
    
    178,765
    
    
    
    297,509Allowance for doubtful accounts
    
    
    24,708
    
    
    
    20,892
    
    
    
    1,645Inventory provisions
    
    
    77,980
    
    
    
    44,229
    
    
    
    10,949Allowance for advance to third party suppliers
    
    
    18,592
    
    
    
    33,368
    
    
    
    35,909Amortization of deferred issuance cost and accretion of convertible notes
    
    
    100,119
    
    
    
    127,949
    
    
    
    123,915Change in fair value of derivatives
    
    
    (564,006
    )
    
    
    49,071
    
    
    
    (74,528
    )Impairment on share lending arrangement
    
    
    469,042
    
    
    
    
    
    
    
    Exchange loss/(gain)
    
    
    61,969
    
    
    
    (2,138
    )
    
    
    (18,044
    )Investment loss from short-term investments
    
    
    39,043
    
    
    
    2,277
    
    
    
    Loss from disposal of fixed assets
    
    
    362
    
    
    
    782
    
    
    
    1,198Impairment on property plant and equipment
    
    
    
    
    
    
    18,010
    
    
    
    47,286Deferred income taxes
    
    
    (22,977
    )
    
    
    (21,672
    )
    
    
    (36,815
    )(Gain)/loss from convertible notes buyback
    
    
    (161,333
    )
    
    
    24,156
    
    
    
    Impairment on available-for-sale securities
    
    
    686,320
    
    
    
    
    
    
    
    Proceeds from sale of available-for-sale securities
    
    
    
    
    
    
    
    
    
    
    (231,163
    )Loss on disposal of discontinued operation
    
    
    
    
    
    
    
    
    
    
    21,967Changes in operating assets and liabilities:Increase in notes receivables
    
    
    
    
    
    
    (119,824
    )
    
    
    (134,598
    )Increase in accounts receivables from third party customers
    
    
    (327,930
    )
    
    
    (23,895
    )
    
    
    (597,696
    )Decrease/(increase) in accounts receivables from related party customers
    
    
    1,722
    
    
    
    23,009
    
    
    
    (1,597
    )(Acquisition)/disposal of trading securities
    
    
    (353,588
    )
    
    
    353,588
    
    
    
    Increase in inventories
    
    
    (512,635
    )
    
    
    (93,379
    )
    
    
    (719,084
    )(Increase)/decrease in advance to third party suppliers
    
    
    (777,891
    )
    
    
    71,893
    
    
    
    (46,411
    )(Increase)/decrease in advance to related party suppliers
    
    
    (41,133
    )
    
    
    261,394
    
    
    
    11,399Increase in other current assets
    
    
    (148,766
    )
    
    
    (23,144
    )
    
    
    (342,296
    )Increase in prepayment for land use rights
    
    
    (44,399
    )
    
    
    (6,222
    )
    
    
    (57,509
    )Increase in accounts payable
    
    
    107,863
    
    
    
    249,881
    
    
    
    655,577Increase/(decrease) in tax payable
    
    
    4,826
    
    
    
    10,035
    
    
    
    (85,542
    )(Decrease)/increase in advance from customers
    
    
    (5,235
    )
    
    
    (11,268
    )
    
    
    430,598(Decrease)/increase in other payables
    
    
    (3,040
    )
    
    
    4,640
    
    
    
    (16,558
    )Increase in payroll and welfare payable
    
    
    7,834
    
    
    
    45,009
    
    
    
    56,399Increase/(decrease) in accrued expenses
    
    
    7,486
    
    
    
    (1,652
    )
    
    
    40,790Increase/(decrease) in interest payable
    
    
    13,458
    
    
    
    (3,328
    )
    
    
    (1,629
    )Decrease in amounts due to related parties
    
    
    (104,483
    )
    
    
    (3,123
    )
    
    
    (6,034
    )Increase in other current liabilities
    
    
    
    
    
    
    
    
    
    
    29,802Increase in accrued warranty cost
    
    
    4,256
    
    
    
    746
    
    
    
    25,346Increase in other long-term liability
    
    
    
    
    
    
    16,383
    
    
    
    31,593Net cash (used in)/provided by operating activities
    
    
    (1,289,148
    )
    
    
    1,129,132
    
    
    
    1,279,514
  F-8




---



##### 



JA SOLAR HOLDINGS CO., LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(In thousands)
 For the year
    
    
    For the year
    
    
    For the yearended
    
    
    ended
    
    
    endedDecember 31,
    
    
    December 31,
    
    
    December 31,2008
    
    
    2009
    
    
    2010RMB
    
    
    RMB
    
    
    RMBCash flows from investing activities:Purchase of property and equipment
    
    
    (806,058
    )
    
    
    (610,600
    )
    
    
    (1,646,446
    )Cash received from disposal of property and equipment
    
    
    46
    
    
    
    275
    
    
    
    7,427Purchase of intangible assets
    
    
    (6,462
    )
    
    
    (2,277
    )
    
    
    (6,020
    )Acquisition of short-term investments
    
    
    (2,156,187
    )
    
    
    
    
    
    
    Proceeds from sale of available-for-sale securities
    
    
    2,173,241
    
    
    
    66,000
    
    
    
    231,163Asset acquisition
    
    
    
    
    
    
    
    
    
    
    (196,037
    )Decrease/(increase) in restricted cash
    
    
    375,997
    
    
    
    (10,551
    )
    
    
    (68,981
    )Net cash used in investing activities
    
    
    (419,423
    )
    
    
    (557,153
    )
    
    
    (1,678,894
    )Cash flows from financing activities:Net proceeds from convertible notes offerings
    
    
    2,709,538
    
    
    
    
    
    
    
    Proceeds from short-term bank borrowings
    
    
    490,000
    
    
    
    40,000
    
    
    
    Proceeds from long-term bank borrowings
    
    
    
    
    
    
    680,000
    
    
    
    1,600,000Payment of capped call up-front premiums
    
    
    (226,088
    )
    
    
    
    
    
    
    Repurchase of convertible notes
    
    
    (182,019
    )
    
    
    (459,601
    )
    
    
    Repayment of short-term borrowings
    
    
    (200,000
    )
    
    
    (520,000
    )
    
    
    (10,000
    )Repayment of long-term bank borrowings
    
    
    
    
    
    
    
    
    
    
    (760,000
    )Proceeds from exercise of stock options
    
    
    18,877
    
    
    
    16,841
    
    
    
    8,276Net cash provided by/(used in) financing activities
    
    
    2,610,308
    
    
    
    (242,760
    )
    
    
    838,276Effect of exchange rate changes on cash and cash equivalents
    
    
    (94,928
    )
    
    
    (4,755
    )
    
    
    (16,662
    )Net increase in cash and cash equivalents
    
    
    806,809
    
    
    
    324,464
    
    
    
    422,234Cash and cash equivalents at the beginning of the year
    
    
    735,975
    
    
    
    1,542,784
    
    
    
    1,867,248Cash and cash equivalents at the end of the year
    
    
    1,542,784
    
    
    
    1,867,248
    
    
    
    2,289,482Supplemental disclosure of cash flow information:Cash paid for interest (net of amounts capitalized)
    
    
    59,669
    
    
    
    98,259
    
    
    
    114,819Cash paid for income tax
    
    
    41,696
    
    
    
    30,028
    
    
    
    179,658Supplemental schedule of non-cash investing and financing activities:Purchases of property and equipment included in other payables
    
    
    127,120
    
    
    
    69,444
    
    
    
    151,791
   F-9




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 1.
    
    ORGANIZATION AND PRINCIPAL ACTIVITIES
 The accompanying consolidated financial statements include the financial statements of JA Solar
Holdings Co., Ltd. (the Company), and its subsidiaries, collectively referred to as the
Group.
 JA Solar Holdings Co., Ltd. was incorporated in the Cayman Islands on July 6, 2006. In February
2007, the Companys ADS became listed on the NASDAQ Global Market in the United States. The
Group is primarily engaged in the development, production and marketing of high-performance
photovoltaic (PV) solar cells and solar power products, which convert sunlight into
electricity, in the PRC.
 Majority of the Groups business is conducted through the operating subsidiaries established in
the PRC, JingAo Solar Co., Ltd. (JA Hebei), Shanghai JA Solar Technology Co., Ltd. (JA
Fengxian), Shanghai JA Solar PV Technology Co., Ltd. (JA Zhabei), JA Solar Technology
Yangzhou Co., Ltd. (JA Yangzhou) and Jing Hai Yang Semiconductor Materials (Donghai) Co., Ltd.
(JA Lianyungang), in which the Company indirectly holds a 100% interest.
 As of December 31, 2010, the Companys subsidiaries include the following entities:
 Place of
    
    
    PercentageDate of Incorporation/Acquisition
    
    
    Incorporation
    
    
    of OwnershipJingAo Solar Co., Ltd. (JA Hebei)
    
    May 18, 2005
    
    PRC
    
    
    100
    %JA Development Co., Ltd. (JA BVI)
    
    July 6, 2006
    
    BVI
    
    
    100
    %Shanghai JA Solar Technology Co., Ltd. (JA Fengxian)
    
    November 16, 2006
    
    PRC
    
    
    100
    %JA Solar USA Inc. (JA USA)
    
    April 13, 2007
    
    USA
    
    
    100
    %Shanghai JA Solar PV Technology Co., Ltd. (JA Zhabei)
    
    June 22, 2007
    
    PRC
    
    
    100
    %JA Solar Technology Yangzhou Co., Ltd. (JA Yangzhou)
    
    November 19, 2007
    
    PRC
    
    
    100
    %JA Solar Hong Kong Limited (JA Hong Kong)
    
    December 10, 2007
    
    Hong Kong
    
    
    100
    %Jing Hai Yang Semiconductor Materials (Donghai) Co., Ltd.
(JA Lianyungang)
    
    October 11, 2008
    
    PRC
    
    
    100
    %JA Solar Yangzhou R&D Co., Ltd. (JA Yangzhou R&D)
    
    March 12, 2009
    
    PRC
    
    
    100
    %Jindosun Park.,Inc. (JA Korea)
    
    June 5, 2009
    
    Korea
    
    
    100
    %JA Luxembourg S.ò.r.l. (JA Lux)
    
    June 26, 2009
    
    Luxembourg
    
    
    100
    %JA Yangzhou PV Technology Co., Ltd. (JA Yangzhou PV)
    
    November 23, 2009
    
    PRC
    
    
    100
    %JA Solar GmbH (JA GmbH)
    
    February 17, 2010
    
    Germany
    
    
    100
    %JA Solar International Co., Limited (JA International)
    
    May 28, 2010
    
    Hong Kong
    
    
    100
    %Shanghai Jinglong Solar Technology Co., Ltd. (JA Jinglong)
    
    July 5, 2010
    
    PRC
    
    
    100
    %Donghai JA Solar Technology Co., Ltd. (JA Donghai)
    
    November 4, 2010
    
    PRC
    
    
    100
    %
  F-10




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 2.
    
    Summary of significant accounting policies
 a)
    
    Basis of presentation and consolidation
  b)
    
    Use of estimates
  c)
    
    Fair value of financial instruments
 Fair Value Measurements and Disclosure
  d)
    
    Cash, cash equivalents and restricted cash
   F-11




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 e)
    
    Short-term investments
 Investments-Debt
and Equity Securities
  f)
    
    Allowance for doubtful accounts
  g)
    
    Inventories
  h)
    
    Short-term and long-term advances to suppliers
   F-12




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 i)
    
    Prepayment for land use rights
  j)
    
    Property and equipment, net
  Buildings
    
    20 yearsLeasehold improvements
    
    Shorter of the lease term or useful livesMachinery and equipment
    
    5-15 yearsFurniture and fixtures
    
    5 yearsMotor vehicles
    
    5 yearsLand
    
    Indefinite
 Capitalization of Interest
  k)
    
    Operating leases
  l)
    
    Intangible asset, net
    m)
    
    Impairment of long-lived assets
   F-13




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 n)
    
    Income taxes
  o)
    
    Revenue recognition
 (i)
    
    Revenue recognition for solar modules, solar cells and other products (hereafter solar products)
   
    
    Persuasive evidence that an arrangement (sales contract) exists between a willing
customer and the Group that outlines the terms of the sale (including customer information,
product specification, quantity of goods, purchase price and payment terms). Customers do not have
a right of return. The Group does provide a warranty on its solar module products.
 
    
    Some shipping terms are EXW, at which point the Group delivers goods at its own
place of business and all other transportation costs and risks are assumed by the customer. Some
shipping terms are CIF destination point, under which the Group pays the costs of insurance and
freight necessary to bring the goods to the named port of destination, but the title to and risk
of loss of or damage of the goods is passed to the buyer according to the contract term, which
could be upon delivery no matter who bears the transportation costs. Some shipping terms are FOB
shipping point from the Groups premises. At this point the customer takes title to the goods and
is responsible for all risks and rewards of ownership.
 
    
    The Groups price to the customer is fixed and determinable as specifically outlined in the sales contract.
 
    
    For customers to whom credit terms are extended, the Group assesses a number of
factors to determine whether collection from the customers is probable, including past transaction
history with these customers and their credit-worthiness. All credit extended to customers is
pre-approved by management. If the Group determines that collection is not reasonably assured, it
defers the recognition of revenue until collection becomes reasonably assured, which is generally
upon receipt of payment.
 (ii)
    
    Revenue recognition for solar products processing
   F-14




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 p)
    
    Cost of revenue
  q)
    
    Share based compensation
 Compensation-Stock Compensation
   r)
    
    Research and development
  s)
    
    Advertising expenses
  t)
    
    Warranty cost
   F-15




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 u)
    
    Foreign currencies translation
   v)
    
    Segment reporting
 Segment Reporting,
 w)
    
    Net income/ (loss) per share
 Earnings Per Share
 x)
    
    Comprehensive income/(loss)
 Comprehensive Income
 y)
    
    Derivative Financial Instruments  Embedded Foreign Currency Derivatives
 derivatives and
hedging
 z)
    
    Adoption of new accounting standard and discontinued operation
  Presentation of
Financial Statements
  F-16




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
  Consolidated Balance Sheets
 At December 31, 2009As Previously
    
    
    Adjustments forReported
    
    
    Share Lending
    
    
    As AdjustedRMB
    
    
    RMB
    
    
    RMBDeferred issuance cost
    
    
    36,070
    
    
    
    107,172
    
    
    
    143,242Total assets
    
    
    7,354,998
    
    
    
    107,172
    
    
    
    7,462,170Additional paid-in capital
    
    
    3,884,037
    
    
    
    699,771
    
    
    
    4,583,808Retained earnings
    
    
    628,025
    
    
    
    (592,599
    )
    
    
    35,426Total shareholders equity
    
    
    4,715,386
    
    
    
    107,172
    
    
    
    4,822,558Total liabilities and shareholders equity
    
    
    7,354,998
    
    
    
    107,172
    
    
    
    7,462,170
 Consolidated Statements of Operations
 For the year ended December 31, 2008As Previously
    
    
    Adjustments forReported
    
    
    Share Lending
    
    
    As AdjustedRMB
    
    
    RMB
    
    
    RMBConvertible notes buyback gain
    
    
    203,514
    
    
    
    (42,181
    )
    
    
    161,333Interest expense
    
    
    (160,542
    )
    
    
    (11,730
    )
    
    
    (172,272
    )Foreign exchange (loss)/gain
    
    
    (127,356
    )
    
    
    (4,808
    )
    
    
    (132,164
    )Impairment on share lending arrangement
    
    
    
    
    
    
    (469,042
    )
    
    
    (469,042
    )Income/(loss) before income taxes
    
    
    502,948
    
    
    
    (527,761
    )
    
    
    (24,813
    )Net income/(loss) attributable to ordinary shareholders
    
    
    479,066
    
    
    
    (527,761
    )
    
    
    (48,695
    )Net income/(loss) attributable to ordinary shareholders per
basic share
    
    
    3.06
    
    
    
    (3.37
    )
    
    
    (0.31
    )Net loss attributable to ordinary shareholders per diluted share
    
    
    (2.31
    )
    
    
    (2.82
    )
    
    
    (5.13
    )
 For the year ended December 31, 2009AdjustmentsAs Previously
    
    
    Adjustments for
    
    
    For DiscontinuedReported
    
    
    Share Lending
    
    
    Operations
    
    
    As AdjustedRMB
    
    
    RMB
    
    
    RMB
    
    
    RMBTotal revenues
    
    
    3,779,178
    
    
    
    
    
    
    
    (625
    )
    
    
    3,778,553Total cost of revenues
    
    
    (3,299,292
    )
    
    
    
    
    
    
    2,790
    
    
    
    (3,296,502
    )Gross profit
    
    
    479,886
    
    
    
    
    
    
    
    2,165
    
    
    
    482,051Selling, general and administrative expenses
    
    
    (343,284
    )
    
    
    
    
    
    
    31
    
    
    
    (343,253
    )Total operating expenses
    
    
    (388,385
    )
    
    
    
    
    
    
    31
    
    
    
    (388,354
    )Income from continuing operations
    
    
    91,501
    
    
    
    
    
    
    
    2,196
    
    
    
    93,697Convertible notes buyback gain/(loss)
    
    
    22,904
    
    
    
    (47,060
    )
    
    
    
    
    
    
    (24,156
    )Interest expense
    
    
    (213,627
    )
    
    
    (17,873
    )
    
    
    13
    
    
    
    (231,487
    )Interest income
    
    
    11,965
    
    
    
    
    
    
    
    (1
    )
    
    
    11,964Foreign exchange gain
    
    
    10,147
    
    
    
    95
    
    
    
    (5,613
    )
    
    
    4,629Other income
    
    
    7,796
    
    
    
    
    
    
    
    (10
    )
    
    
    7,786Loss from continuing operations before income taxes
    
    
    (120,662
    )
    
    
    (64,838
    )
    
    
    (3,415
    )
    
    
    (188,915
    )Loss from continuing operations
    
    
    (128,661
    )
    
    
    (64,838
    )
    
    
    (3,415
    )
    
    
    (196,914
    )Income from discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    3,415
    
    
    
    3,415Net loss attributable to ordinary shareholders
    
    
    (128,661
    )
    
    
    (64,838
    )
    
    
    
    
    
    
    (193,499
    )Basic net loss per share  continuing operations
    
    
    (0.80
    )
    
    
    (0.40
    )
    
    
    (0.02
    )
    
    
    (1.22
    )Diluted net loss per share  continuing operations
    
    
    (0.80
    )
    
    
    (0.40
    )
    
    
    (0.02
    )
    
    
    (1.22
    )Basic net loss per share  discontinued operations
    
    
    
    
    
    
    
    
    
    
    0.02
    
    
    
    0.02Diluted net
loss per share  discontinued operations
    
    
    
    
    
    
    
    
    
    
    0.02
    
    
    
    0.02
  F-17




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 Consolidated Statements of Cashflows
 For the year ended December 31, 2008As Previously
    
    
    Adjustments forReported
    
    
    Share Lending
    
    
    As AdjustedRMB
    
    
    RMB
    
    
    RMBNet income/(loss)
    
    
    479,066
    
    
    
    (527,761
    )
    
    
    (48,695
    )Amortization of deferred issuance cost and accretion of
convertible notes
    
    
    88,389
    
    
    
    11,730
    
    
    
    100,119Impairment on share lending arrangement
    
    
    
    
    
    
    469,042
    
    
    
    469,042Exchange loss
    
    
    57,161
    
    
    
    4,808
    
    
    
    61,969Gain from convertible notes buyback
    
    
    (203,514
    )
    
    
    42,181
    
    
    
    (161,333
    )Net cash used in operating activities
    
    
    (1,289,148
    )
    
    
    
    
    
    
    (1,289,148
    )Net cash used in investing activities
    
    
    (419,423
    )
    
    
    
    
    
    
    (419,423
    )Net cash provided by financing activities
    
    
    2,610,308
    
    
    
    
    
    
    
    2,610,308
 For the year ended December 31, 2009As Previously
    
    
    Adjustments forReported
    
    
    Share Lending
    
    
    As AdjustedRMB
    
    
    RMB
    
    
    RMBNet loss
    
    
    (128,661
    )
    
    
    (64,838
    )
    
    
    (193,499
    )Amortization of deferred issuance cost and accretion of
convertible notes
    
    
    110,076
    
    
    
    17,873
    
    
    
    127,949Exchange gain
    
    
    (2,043
    )
    
    
    (95
    )
    
    
    (2,138
    )(Gain)/loss from convertible notes buyback
    
    
    (22,904
    )
    
    
    47,060
    
    
    
    24,156Net cash provided by operating activities
    
    
    1,129,132
    
    
    
    
    
    
    
    1,129,132Net cash used in investing activities
    
    
    (557,153
    )
    
    
    
    
    
    
    (557,153
    )Net cash used in financing activities
    
    
    (242,760
    )
    
    
    
    
    
    
    (242,760
    )
 aa)
    
    Recent accounting pronouncements
   F-18




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
     ab)
    
    Reclassifications
   F-19




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 3.
    
    Cash, cash equivalents and restricted cash
  As of December
    
    
    As of December31,
    
    
    31,2009
    
    
    2010RMB
    
    
    RMBCash
    
    
    1,851,881
    
    
    
    2,289,482Cash equivalents
    
    
    15,367
    
    
    
    Total cash and cash equivalents
    
    
    1,867,248
    
    
    
    2,289,482Restricted cash
    
    
    43,612
    
    
    
    112,593
 4.
    
    Short term investments
 Trading securities
  Available-for-sale securities
   5.
    
    Notes and Accounts Receivables
  As of December
    
    
    As of December31,
    
    
    31,2009
    
    
    2010RMB
    
    
    RMBBalance at beginning of the year
    
    
    24,708
    
    
    
    41,121Allowance made during the year
    
    
    16,413
    
    
    
    1,645Recoveries
    
    
    
    
    
    
    Amount written off against the allowance
    
    
    
    
    
    
    (35,791
    )Balance at end of the year
    
    
    41,121
    
    
    
    6,975
   F-20




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 6.
    
    Inventories
  As of December
    
    
    As of December31,
    
    
    31,2009
    
    
    2010RMB
    
    
    RMBRaw materials
    
    
    365,115
    
    
    
    645,517Work-in-progress
    
    
    41,948
    
    
    
    143,724Finished goods
    
    
    234,077
    
    
    
    560,088Total
    
    
    641,140
    
    
    
    1,349,329
  7.
    
    Advances to suppliers
     As of December
    
    
    As of December31,
    
    
    31,2009
    
    
    2010RMB
    
    
    RMBSupplier A (third party)
    
    
    1,113,430
    
    
    
    1,180,445Supplier B (third party)
    
    
    607,518
    
    
    
    481,177
  F-21




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
  As of December
    
    
    As of December31,
    
    
    31,2009
    
    
    2010RMB
    
    
    RMBBalance at beginning of the year
    
    
    18,592
    
    
    
    51,960Allowance made during the year
    
    
    37,368
    
    
    
    65,366Recoveries
    
    
    (4,000
    )
    
    
    (29,457
    )Amount written off against the allowance
    
    
    
    
    
    
    Balance at end of the year
    
    
    51,960
    
    
    
    87,869
 8.
    
    Other current assets
  As of December
    
    
    As of December31,
    
    
    31,2009
    
    
    2010RMB
    
    
    RMBInput value-added tax recoverable
    
    
    138,187
    
    
    
    379,162Value-added tax refund from export sales
    
    
    41,826
    
    
    
    135,112Prepaid input VAT & customs duty for import machinery and materials
    
    
    
    
    
    
    106,664Prepaid expenses
    
    
    13,300
    
    
    
    12,361Insurance recovery asset
    
    
    
    
    
    
    29,802Prepayment for application of land use right
    
    
    
    
    
    
    45,927Others
    
    
    8,908
    
    
    
    31,742202,221
    
    
    
    740,770
 9.
    
    Property and equipment, net
  As of December
    
    
    As of December31,
    
    
    31,2009
    
    
    2010RMB
    
    
    RMBBuildings
    
    
    235,960
    
    
    
    520,359Furniture, fixtures and office equipment
    
    
    27,901
    
    
    
    45,197Motor vehicles
    
    
    8,770
    
    
    
    15,305Machinery and equipment
    
    
    1,286,232
    
    
    
    2,427,277Leasehold improvements
    
    
    35,133
    
    
    
    50,098Land
    
    
    6,723
    
    
    
    Total
    
    
    1,600,719
    
    
    
    3,058,236Less: accumulated depreciation
    
    
    (290,201
    )
    
    
    (562,836
    )Subtotal
    
    
    1,310,518
    
    
    
    2,495,400Construction-in-progress
    
    
    413,924
    
    
    
    675,321Property and equipment, net
    
    
    1,724,442
    
    
    
    3,170,721
   F-22




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
     10.
    
    Intangible assets, net
  AccumulatedGross
    
    
    Amortization
    
    
    NetRMB
    
    
    RMB
    
    
    RMBAs of December 31, 2009Technical know-how
    
    
    9,000
    
    
    
    (5,250
    )
    
    
    3,750Purchased software and others
    
    
    9,462
    
    
    
    (1,255
    )
    
    
    8,20718,462
    
    
    
    (6,505
    )
    
    
    11,957As of December 31, 2010Technical know-how
    
    
    9,000
    
    
    
    (6,375
    )
    
    
    2,625Purchased software and others
    
    
    15,482
    
    
    
    (3,775
    )
    
    
    11,70724,482
    
    
    
    (10,150
    )
    
    
    14,332
   11.
    
    Income taxes
    F-23




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
     For the year
    
    
    For the year
    
    
    For the yearended
    
    
    ended
    
    
    endedDecember 31,
    
    
    December 31,
    
    
    December 31,2008
    
    
    2009
    
    
    2010Current tax
    
    
    (46,859
    )
    
    
    (29,671
    )
    
    
    (289,522
    )Deferred tax
    
    
    22,977
    
    
    
    21,672
    
    
    
    36,815(23,882
    )
    
    
    (7,999
    )
    
    
    (252,707
    )
  As of December
    
    
    As of December31,
    
    
    31,2009
    
    
    2010RMB
    
    
    RMBDeferred tax assets:Temporary differences:Pre-operating expenses
    
    
    9,848
    
    
    
    12,200Amortization of intangible assets
    
    
    385
    
    
    
    413Accrued warranty cost
    
    
    1,483
    
    
    
    4,655Accrued expenses
    
    
    
    
    
    
    24,992Net loss carried forward
    
    
    33,522
    
    
    
    40,700Depreciation of property and equipment
    
    
    22,322
    
    
    
    45,754Inventory provision and idle capacity charges
    
    
    14,630
    
    
    
    18,995Impairment provision for doubtful debtors
    
    
    9,602
    
    
    
    1,008Impairment provision for advance to suppliers
    
    
    6,495
    
    
    
    13,180Impairment provision for property and equipment
    
    
    2,135
    
    
    
    10,368Capitalized interest
    
    
    (1,214
    )
    
    
    (11,914
    )Others
    
    
    
    
    
    
    2,690Deferred tax assets
    
    
    99,208
    
    
    
    163,041Less: valuation allowance
    
    
    (48,990
    )
    
    
    (76,174
    )Deferred tax assets-net
    
    
    50,218
    
    
    
    86,867
  F-24




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 Deferred tax assets are analyzed as:Current
    
    
    24,607
    
    
    
    45,890Non-Current
    
    
    26,825
    
    
    
    50,07351,432
    
    
    
    95,963Deferred tax liability are analyzed as:Current
    
    
    (164
    )
    
    
    (998
    )Non-Current
    
    
    (1,050
    )
    
    
    (8,098
    )(1,214
    )
    
    
    (9,096
    )50,218
    
    
    
    86,867
 The following table presents the movement of the valuation allowance for deferred tax assets:
 As of December
    
    
    As of December31,
    
    
    31,2009
    
    
    2010RMB
    
    
    RMBBalance at beginning of the year
    
    
    13,417
    
    
    
    48,990Allowance made during the year
    
    
    35,573
    
    
    
    27,184Reversals
    
    
    
    
    
    
    Balance at end of the year
    
    
    48,990
    
    
    
    76,174
 The Group has made some portion of valuation allowance against its net deferred tax assets. The
Group evaluates a variety of factors in determining the amount of the valuation allowance,
including that the Group exited the development stage, its limited earnings history, the tax
holiday period, the existence of taxable temporary differences, and near-term earnings
expectations. Future reversal of the valuation allowance will be recognized upon the earlier of
when the benefit is realized or when it has been determined that it is more likely than not that
the benefit will be realized through future earnings.
 Reconciliation between the provision for income tax computed by applying the statutory FEIT/CIT
and the Groups effective tax rate:
 For the year
    
    
    For the year
    
    
    For the yearended
    
    
    ended
    
    
    endedDecember 31,
    
    
    December 31,
    
    
    December 31,2008
    
    
    2009
    
    
    2010PRC enterprise income tax
    
    
    25
    %
    
    
    (25
    )%
    
    
    25
    %Effect of permanent differences:Share based compensation and other permanent difference
    
    
    (95.4
    )%
    
    
    13.1
    %
    
    
    1.2
    %Tax credit associated with domestic fixed asset purchases
    
    
    
    
    
    
    (6.7
    )%
    
    
    0
    %Effect of tax holiday and tax differential of certain subsidiaries
    
    
    (31.3
    )%
    
    
    (22.6
    )%
    
    
    (11.5
    )%Effect of tax rate change
    
    
    3.5
    %
    
    
    13.3
    %
    
    
    (0.4
    )%Valuation allowance
    
    
    1.9
    %
    
    
    32.1
    %
    
    
    (1.8
    )%(96.3
    )%
    
    
    4.2
    %
    
    
    12.5
    %
  F-25




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 The aggregate amount and per share effect of the tax holiday are as follows:
 For the year
    
    
    For the year
    
    
    For the yearended
    
    
    ended
    
    
    endedDecember 31,
    
    
    December 31,
    
    
    December 31,2008
    
    
    2009
    
    
    2010The aggregate dollar effect
    
    
    209,844
    
    
    
    86,710
    
    
    
    274,886Per share effect-basic
    
    
    1.34
    
    
    
    0.54
    
    
    
    1.69Per share effect-diluted
    
    
    1.25
    
    
    
    0.54
    
    
    
    1.61
 The Group adopted the provisions of ASC 740, Income Taxes. The Group has performed assessment
on its tax positions related to ASC 740, and concluded that the adoption of ASC 740 did not have
any material impact on the Groups financial position as of December 31, 2009 and 2010.
 12.
    
    Prepayment for land use rights
 The prepayment for land use rights of the Group represented prepaid operating lease payments in
obtaining land use rights in the PRC for a period of 50 years.
 As of December
    
    
    As of December31,
    
    
    31,2009
    
    
    2010RMB
    
    
    RMBCost
    
    
    52,076
    
    
    
    208,916Less: accumulated amortization
    
    
    (1,517
    )
    
    
    (9,248
    )Net book value
    
    
    50,559
    
    
    
    199,668Current portion of prepayment for land use rights (recorded in other current assets)
    
    
    1,042
    
    
    
    4,178Non-current portion of prepayment for land use rights
    
    
    49,517
    
    
    
    195,490Total
    
    
    50,559
    
    
    
    199,668
 13.
    
    Bank borrowings
 Principal
    
    
    
    
    
    
    InterestAmount ( in
    
    
    
    
    
    
    PaymentLender
    
    Date of Borrowing
    
    
    Due Date
    
    
    RMB)
    
    
    Interest rate
    
    
    PeriodsAs of December 31, 2009Short term:Agriculture Bank of China
    
    September 2009
    
    March 2010
    
    
    10,000
    
    
    
    4.37
    %
    
    MonthlyLong term:Agriculture Bank of China
    
    June 2009
    
    June 2012
    
    
    20,000
    
    
    
    5.4
    %
    
    MonthlyChina Construction Bank
    
    June 2009
    
    June 2011
    
    
    40,000
    
    
    
    5.4
    %
    
    MonthlyExport-Import Bank of China
    
    June 2009
    
    June 2012
    
    
    500,000
    
    
    
    3.51
    %
    
    QuarterlyExport-Import Bank of China
    
    June 2009
    
    June 2012
    
    
    120,000
    
    
    
    3.51
    %
    
    QuarterlySubtotal
    
    
    
    
    
    
    
    
    
    
    680,000Total bank borrowings
    
    
    
    
    
    
    
    
    
    
    690,000As of December 31, 2010Export-Import Bank of China
    
    June 2009
    
    June 2012
    
    
    120,000
    
    
    
    3.51
    %
    
    QuarterlyBank of China
    
    July 2010
    
    July 2013
    
    
    100,000
    
    
    
    5.13
    %
    
    QuarterlyBank of China
    
    October 2010
    
    October 2013
    
    
    100,000
    
    
    
    5.13
    %
    
    QuarterlyBank of China
    
    November 2010
    
    May 2012
    
    
    300,000
    
    
    
    5.04
    %
    
    QuarterlyBank of China
    
    November 2010
    
    November 2013
    
    
    100,000
    
    
    
    5.32
    %
    
    QuarterlyAgriculture Bank of China
    
    April 2010
    
    April 2013
    
    
    80,000
    
    
    
    5.264
    %
    
    MonthlyAgriculture Bank of China
    
    May 2010
    
    November 2012
    
    
    100,000
    
    
    
    5.13
    %
    
    MonthlyAgriculture Bank of China
    
    October 2010
    
    April 2013
    
    
    20,000
    
    
    
    5.04
    %
    
    MonthlyAgriculture Bank of China
    
    November 2010
    
    May 2013
    
    
    40,000
    
    
    
    5.04
    %
    
    MonthlyAgriculture Bank of China
    
    December 2010
    
    June 2013
    
    
    40,000
    
    
    
    5.04
    %
    
    MonthlyAgriculture Bank of China
    
    December 2010
    
    December 2013
    
    
    120,000
    
    
    
    5.264
    %
    
    MonthlyChina Construction Bank
    
    May 2010
    
    May 2012
    
    
    160,000
    
    
    
    5.238
    %
    
    MonthlyChina Construction Bank
    
    November 2010
    
    November 2012
    
    
    40,000
    
    
    
    5.32
    %
    
    MonthlyBank of Communications
    
    October 2010
    
    April 2013
    
    
    200,000
    
    
    
    5.04
    %
    
    QuarterlyTotal bank borrowings
    
    
    
    
    
    
    
    
    
    
    1,520,000
  F-26




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 The bank borrowings outstanding as of December 31, 2009 and 2010 bore an average interest
rate of 3.69% and 5.01% per annum, respectively. These loans are borrowed from various financial
institutions. The borrowings have six month to 3 years terms and expire at various times. The
unused lines of credit were RMB 1,254,000 as of December 31, 2010. These facilities contain no
specific renewal terms and require no collateral.
 The long-term bank borrowing from Export-Import Bank of China due June 2012 of RMB 120,000 as of
December 31, 2010 was guaranteed by Shanghai Rural Commercial Bank, who charged an annual
guarantee fee of 0.3% of the principal. JA Zhabei provided counter-guarantee to Shanghai Rural
Commercial Bank with a cash deposit of RMB 20,000 and the remaining RMB 100,000 was pledged by a
building with a net book value of RMB 115,869 (Note 9).
 During the year ended December 31, 2010, the Group repaid the long-term bank borrowing from
Export-Import Bank of China which was originally due in June 2012 with the amount of RMB
500,000.
 Interest incurred for bank borrowings for the year ended December 31, 2008, 2009 and 2010
amounted to RMB 3,082, RMB 30,275 and RMB 58,045 respectively, of which RMB 1,404, RMB 6,696 and
RMB 14,355 was capitalized in the cost of property and equipment.
 14.
    
    Senior Convertible Notes
 On May 13, 2008, the Company entered into an underwriting agreement for the sale by the Company
to the public of $350,000 aggregate principal amount of 4.5% Senior Convertible Notes due 2013
(the Senior Notes). The Company granted to the underwriters a 30-day option to purchase up to
an additional $50,000 aggregate principal amount of Senior Notes. On May 19, 2008, the Company
completed its public offering of $400,000 aggregate principal amount of its Senior Notes which
includes the underwriters exercise of their option. Net proceeds to the Company from the
offering were approximately RMB 2,709,538. The Companys financing costs associated with the
Senior Notes are amortized through interest expense over the life of the Senior Notes from May
2008 to the first put date, or May 2013 using the effective interest rate method. The amount
amortized to interest expense for the year ended December 31, 2008, 2009 and 2010 was RMB 4,900,
RMB 7,084 and RMB 7,552 respectively. This change in the balance of deferred issuance cost
includes the pro-rate reduction of deferred issuance cost that is a component of the
extinguished gain from convertible notes bought back by the Group.
 The Senior Notes bear interest at the rate of 4.5% per year, payable semi-annually in arrears on
May 15 and November 15 of each year, beginning on November 15, 2008. The Senior Notes will
mature on May 15, 2013 unless previously repurchased by the Company or converted in accordance
with their terms prior to such date. On or after May 15, 2011, the Company has the option to
redeem for cash all or part of the Notes at principal if the closing sale price of the Companys
ADS exceeds 130% of the then effective conversion price for at least 20 trading days during the
period of the 30 consecutive trading days ending on the last trading day on which notice of
redemption is provided. If certain fundamental changes occur at any time prior to maturity,
holders of the Senior Notes may require the Company to repurchase their Senior Notes in whole or
in part for cash equal to 100% of the principal amount of the Senior Notes to be repurchased,
plus accrued and
unpaid interest to, but excluding, the date of repurchase. The interest expense recognized for
interest payable to the Senior Notes holders was RMB 75,381, RMB 88,731 and RMB 67,876 for the
year ended December 31, 2008, 2009 and 2010 respectively.
 Each $1,000 principal amount of the Senior Notes will initially be convertible into 32.8138
American Depository Shares, or ADSs, par value $.0001 per share at a conversion price of
$30.475, subject to adjustment. The Senior Notes are convertible at maturity and upon certain
other events, including when the trading price of the Companys ADS exceeds 130% of the then
effective conversion price for at least 20 trading days during the period of the 30 consecutive
trading days ending on the last trading day of the previous fiscal quarter.
 The Company used the proceeds from the issuance of the convertible notes for the purchase and
construction of manufacturing equipment and facilities, the purchase and prepayment of raw
materials, working capital and other general corporate purposes.
  F-27




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##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 The Companys functional currency is different from the denomination of the Senior Notes and the
Companys early redemption option is contingent upon its ADS price. Therefore, in accordance
with ASC 815, Derivatives and Hedging, the Company accounted for the conversion feature, early
redemption option and conversion rate adjustment feature (together, Embedded Derivatives) as a
freestanding instrument separately in the balance sheet. The Notes were recorded with a discount
equal to the value of the Embedded Derivatives at the transaction date and will be accreted to
the redemption value of the Notes over the life of the Notes. The change in fair value of the
Embedded Derivatives of RMB 785,608, RMB (55,106) and RMB 70,458 was recorded in Consolidated
Statements of Operations for the year ended December 31, 2008, 2009 and 2010 respectively. This
change in fair value excludes the pro-rata reduction of the Embedded Derivatives that are a
component of the extinguishment gain from convertible notes bought back by the Group. The
interest expense recognized for accretion to the redemption value of the Senior Notes was RMB
81,808, RMB 104,226 and RMB 95,547 for the year ended December 31, 2008, 2009 and 2010
respectively.
 During the years ended December 31, 2008 and 2009, the Company bought back US$78,526 and
US$93,301(par value) of the Notes at prices ranging from 28.19% to 40.46% and 39.36% to 79.25%,
respectively. The Company did not make any repurchase of the Notes during the year ended
December 31, 2010. During the years ended December 31, 2008, 2009 and 2010, the gain/(loss) from
convertible notes buyback was RMB 161,333, RMB (24,156) and RMB nil respectively. As of December
31, 2010, the notional outstanding amount of the Senior Notes was RMB 1,511,121 (US$228,173).
The estimated fair value of the Senior Notes as of December 31, 2010 was RMB 1,488,452
(US$224,750).
 Capped Call
 Concurrent with the Companys issuance of the Senior Notes on May 12, 2008, it entered into
capped call option transactions with two financial institutions (the counterparties) that are
affiliates of two of the underwriters of the Senior Notes. The capped call transactions was
designed to reduce the dilution that would otherwise occur as a result of new common stock
issuances upon conversion of the Senior Notes, and effectively increase the conversion price of
the Senior Notes for the Company to $37.375 per ADS from the actual conversion price to the
Senior Notes holders of $30.475 per ADS. The total premium paid by the Company for the capped
call transactions was RMB 226,087.
 The Companys functional currency is different from the denomination of the capped call.
Therefore, in accordance with ASC 815, Derivatives and Hedging, the Company accounted for the
capped call transactions as freestanding derivative assets in the Consolidated Balance Sheet.
The derivative is marked to market each reporting period utilizing the Black-Scholes option
pricing model.
 On September 15, 2008 and October 3, 2008, respectively, one of the underwriters and its
affiliate filed for protection under Chapter 11 of the federal Bankruptcy Code, an event of
default under the agreement. As a result of the default, the counterparty is not expected to
perform its obligations if such obligations were to be triggered. The Company has written down
the fair value of the derivative in relation to this counterparty to nil given the counterparty
is in bankruptcy and lacks the ability and intent to settle the contract as of period end. The
fair value of the derivative asset purchased from the other counterparty was RMB 4,033 and RMB
9,127 as of December 31, 2009 and 2010 respectively. The change in fair value of this derivative
recorded in the income statement was RMB (221,602), RMB (453) and RMB 5,094 for the year ended
December 31, 2008, 2009 and 2010 respectively.
 ADS Lending Agreement
 Concurrent with the offering and sale of the Senior Notes on May 12, 2008, the Company entered
into a share lending agreement (the ADS Lending Agreement) with certain financial institutions
(the ADS Borrower (s)), pursuant to which the Company loaned 13,125,520 shares of its common
stock (the Borrowed Shares) to the ADS Borrowers. The ADS Borrowers will receive all of the
proceeds from the sale of the borrowed ADSs. The Company will not receive any proceeds from the
sale of the borrowed ADSs pursuant to the ADS Lending Agreement, but the Company will receive
from the ADS Borrowers a nominal lending fee of $0.0001 per ADS for each ADS that the Company
loan pursuant to the ADS Lending Agreements. The nominal lending fee is reported as increases
to additional paid in capital. These borrowed shares must be returned to the Company no later
than May 15, 2013, or sooner if certain conditions are met.
 These shares were considered issued and outstanding for corporate law purposes at the time they
were loaned; however, at the time of the loan they were not considered outstanding for the
purpose of computing and reporting earnings per share because these shares were to be returned
to the Company no later than May 15, 2013, the maturity date of the Senior Notes. On September
15, 2008, one of the ADS borrowers, who the Company had loaned 6,562,760 shares of its common
stock, filed for protection under Chapter 11 of the federal Bankruptcy Code and was placed into
administration proceeding in the United Kingdom.
  F-28




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##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 As a result of the bankruptcy filing and the administration proceeding, the ADS Lending
Agreement automatically terminated and the ADS Borrower was contractually required to return the
shares to the Company. The Company has since demanded the immediate return of all outstanding
borrowed shares, however, the shares have not yet been returned. Also under the agreement, the
ADS borrower was supposed to transfer collateral to an affiliate equal to the fair value of the
shares loaned after it received a credit downgrade on September 15, 2008. Such collateral was to
be held in a collateral account for the Company. No collateral transfer was made and the Company
is not aware of any collateral account existing. While the Company believes it is exercising all
of its legal remedies, it has included these shares in its per share calculation on a weighted
average basis due to the uncertainty regarding the recovery of the borrowed shares.
 On January 1, 2010, the Company adopted the FASBs update to the Debt topic of the FASB
codification which requires an entity that enters into an equity-classified share lending
agreement, utilizing its own shares, in contemplation of a convertible debt issuance or other
financing to initially measure the share lending arrangement at fair value and treat it as a
cost of the financing. The Company estimated that the fair value of the share lending
arrangement at issuance was RMB 230,729. In addition, if it becomes probable that the
counterparty to the arrangement will default, the issuer shall recognize an expense for the fair
value of the unreturned shares, net of probable recoveries. Due to the bankruptcy of one of the
ADS borrowers, the Company recognized an expense of RMB 469,042 for the year ended 31 December
2008 and no subsequent changes in the amount of the probable recoveries were recognized in 2010.
The unamortized amount of the issuance costs associated with the share-lending arrangement
included in the deferred issuance cost in the balance sheet were RMB 107,080 and RMB 83,367 as
of 31 December 2009 and 2010 respectively. The fair value of the outstanding loaned shares was
RMB 601,533 (USD 90,829) as of 31 December 2010. The amount of interest cost recognized
relating to the amortization of the issuance cost associated with the share-lending arrangement
were RMB 11,730, RMB 17,873 and RMB 20,815 for the year ended 31 December 2008, 2009 and 2010
respectively.
 These rules require revision of prior periods to conform to current accounting. As a result of
retrospectively adopting the new guidance related to the Companys offering of senior
convertible notes in May 2008, certain line items in the consolidated balance sheet and
statement of operations for 2008 and 2009 have been revised. (Note 2(z))
 15.
    
    Other payables to third parties
 Other payables consisted of the following:
 As of December
    
    
    As of December31,
    
    
    31,2009
    
    
    2010RMB
    
    
    RMBPurchases of property and equipment
    
    
    69,444
    
    
    
    151,791Professional service fees
    
    
    1,392
    
    
    
    71Miscellaneous tax payables
    
    
    3,907
    
    
    
    13,190Others
    
    
    5,848
    
    
    
    26,952Total other payables
    
    
    80,591
    
    
    
    192,004
 16.
    
    Accrued expenses
 Accrued expenses consisted of the following:
 As of December
    
    
    As of December31,
    
    
    31,2009
    
    
    2010RMB
    
    
    RMBProfessional service fees
    
    
    12,773
    
    
    
    18,956Interest
    
    
    764
    
    
    
    2,680Utilities
    
    
    3,750
    
    
    
    7,337Customs clearing charges
    
    
    33
    
    
    
    19,721Others
    
    
    3,793
    
    
    
    13,182Total accrued expenses
    
    
    21,113
    
    
    
    61,876
  F-29




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##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 17.
    
    Accrued warranty cost
 The movement of Groups accrued warranty costs for solar module is summarized below:
 As of December
    
    
    As of December31,
    
    
    31,2009
    
    
    2010RMB
    
    
    RMBBeginning balance
    
    
    5,185
    
    
    
    5,931Warranty provision
    
    
    746
    
    
    
    25,346Warranty cost incurred
    
    
    
    
    
    
    Ending balance
    
    
    5,931
    
    
    
    31,277
 18.
    
    Share-based compensation
 As of December 31, 2010, the Company had one share-based compensation plan, which is described
below.
 On August 18, 2006, the shareholders of the Company approved the 2006 Stock Incentive Plan (the
Plan), which permits the grant of share options and shares to its eligible recipients for up
to 8,656,000 ordinary shares plus a number of ordinary shares equal to 10% of any additional
share capital of the Company issued following the effective date of the Plan. The Group believes
that such awards better align the interests of its employees with those of its shareholders.
 a)
    
    OptionsDuring the year ended December 31, 2010, the Company granted 1,650,000 ordinary share options
to certain of its employees. The exercise price of these options is $4.88 per option.The batch of options granted in year 2010 was granted with the exercise price equal to the
market price of the equity stock at the date of grant and has 10-year contractual terms. The
Company has various vesting schedules but generally in the range of 2 to 4 years.The Company adopted the fair value recognition provision of ASC 718 on January 1, 2006. ASC
718 requires that compensation cost relating to share-based payment transactions be
recognized in the Groups statement of operations over the service period (generally the
vesting period). That cost is measured based upon the fair value of the option issued as
calculated under the Black Scholes option pricing model. The Groups share-based compensation
cost is measured at the grant date, based on the fair value of the award, and is recognized
as an expense in correlation with the vesting percentages.The Group recognized a pre-tax charge of RMB 93,432, RMB 79,030 and RMB 28,559 (included in
selling, general, and administrative expenses and manufacturing overhead, of which RMB 4,694,
RMB 88 and RMB 249 was capitalized in the cost of inventory as of December 31, 2008, 2009 and
2010, respectively), for the year ended December 31, 2008, 2009 and 2010 associated with the
expensing of stock options, respectively.
  F-30




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##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 The weighted-average grant-date fair value of options granted during the year ended December
31, 2008, 2009 and 2010 were US$5.149, US$3.11 and US$4.88, respectively. The compensation
that has been charged for the plan, net of the amounts reversed for options forfeited in
excess of amounts estimated at the grant date, was RMB 88,738, RMB 79,067 and RMB 28,310 for
the year ended December 31, 2008, 2009 and 2010, respectively. The amounts reversed
associated with options forfeited were 59,586, 49,634 and 1,737 for the year ended December
31, 2008, 2009 and 2010, respectively. The total income tax benefit recognized in the income
statement for share-based compensation arrangements was nil for the periods.The Group used the forfeiture rate of 0%, 0% and 7.7% respectively for the year ended 2008,
2009 and 2010.As of December 31, 2008, 2009 and 2010, there was RMB 447,602, RMB 28,073 and RMB 25,316 of
total unrecognized compensation cost related to non-vested share-based employees arrangements
granted under the Plan, respectively. The cost is expected to be recognized over a remaining
weighted-average period of 23 months.The Company expects to issue new shares to satisfy share option exercises.These options will become fully vested upon a change in control or on any date at the
discretion of the plan administrator. The fair value of ordinary shares granted prior to IPO
was determined retrospectively to the time at grant and at each reporting date. The fair
value of option grant is estimated on the date of grant using the Black-Scholes-Merton model
with the following assumptions for options granted to employees and non-employees during the
year ended December 31, 2008, 2009 and 2010 respectively:
  F-31




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##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 For the year
    
    
    For the year
    
    
    For the yearended
    
    
    ended
    
    
    endedDecember 31,
    
    
    December 31,
    
    
    December 31,2008
    
    
    2009
    
    
    2010Average risk-free rate
    
    
    1.99-3.82
    %
    
    
    1.59%-3.03
    %
    
    
    2.74
    %Weighted average expected option life
    
    5.75-6.33 years
    
    
    6.33 years
    
    
    6 yearsVolatility rate
    
    
    55-75
    %
    
    
    75
    %
    
    
    70
    %Dividend
    
    
    
    
    
    
    
    
    
    
    
 (1)
    
    The risk-free interest rate is based on the U.S. Treasury yield for a
term consistent with the expected life of the awards in effect at the
time of grant.(2)
    
    The average expected option life is based on the contractual term of
the option and expected employee exercise and post-vesting employment
termination behavior. Currently, it is based on the simplified
approach.(3)
    
    The Company has no history or expectation of paying dividends on its ordinary shares.(4)
    
    The Company chose to use the historical volatility and implied
volatility of a basket of comparable publicly-traded companies for a
period equal to the expected term preceding the grant date. The following table summarizes information with respect to share options outstanding on December
31, 2010:
 WeightedWeighted
    
    
    AverageAverage
    
    
    Remaining
    
    
    IntrinsicExercise
    
    
    Contractual Life
    
    
    Value (US$,Shares
    
    
    Price (US$)
    
    
    (Year)
    
    
    in thousands)Outstanding at December 31, 2008
    
    
    9,550,000
    
    
    
    8.7
    
    
    
    9.26
    
    
    
    (41,378
    )Granted
    
    
    1,013,000
    
    
    
    3.11
    
    
    
    
    
    
    
    Forfeited
    
    
    (6,399,600
    )
    
    
    10.18
    
    
    
    
    
    
    
    Exercised
    
    
    (1,036,400
    )
    
    
    2.38
    
    
    
    
    
    
    
    Outstanding at December 31, 2009
    
    
    3,127,000
    
    
    
    5.96
    
    
    
    7.19
    
    
    
    (800
    )Granted
    
    
    1,650,000
    
    
    
    4.88
    
    
    
    
    
    
    
    Forfeited
    
    
    (560,000
    )
    
    
    3.99
    
    
    
    
    
    
    
    Exercised
    
    
    (381,350
    )
    
    
    3.20
    
    
    
    
    
    
    
    Outstanding at December 31, 2010
    
    
    3,835,650
    
    
    
    6.05
    
    
    
    8.28
    
    
    
    3,337Exercisable at December 31, 2010
    
    
    734,200
    
    
    
    9.45
    
    
    
    7.11
    
    
    
    (1,858
    )
 The total intrinsic value of options exercised during the years ended December 31, 2008,
2009, and 2010 was $7,948, $2,016 and $1,166 respectively.
 b)
    
    Restricted share units (RSU)RSUs are commitments made to issue ordinary shares at the time that each underlying RSU vests.
The RSUs are not legally issued ordinary shares nor do they comprise outstanding ordinary shares
and therefore, do not give their holders voting or dividend rights.During 2010, the Company granted 1,100,000 restricted share units to certain employees, which
vest over 3 to 4 years.Upon vesting, the shares will be issued by the Company.
  F-32




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##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 The following table summarizes information with respect to RSUs outstanding on December 31,
2010:
 Weighted AverageShares
    
    
    Fair Value (US$)Nonvested at December 31, 2008
    
    
    15,000
    
    
    
    12.41Granted
    
    
    2,242,000
    
    
    
    5.00Vested
    
    
    (15,000
    )
    
    
    12.41Forfeited
    
    
    
    
    
    
    Nonvested at December 31, 2009
    
    
    2,242,000
    
    
    
    5.00Granted
    
    
    1,100,000
    
    
    
    5.19Vested
    
    
    (576,500
    )
    
    
    4.66Forfeited
    
    
    (337,500
    )
    
    
    4.66Nonvested at December 31, 2010
    
    
    2,428,000
    
    
    
    4.90
 For RSUs, the Company recognized a pre-tax charge of RMB 19,760, RMB 17,169 and RMB 43,226
(included in selling, general, and administrative expenses) for the years ended December 31,
2008, 2009 and 2010, respectively. Unrecognized compensation expense related to the RSUs for the
years ended December 31, 2008, 2009 and 2010 were RMB 905, RMB 10,065 and RMB 38,778,
respectively. The cost is expected to be recognized over a remaining weighted average period of
30 months. The fair value of shares vested during the year ended December 31, 2008, 2009 and
2010 was RMB 43,057, RMB 468 and RMB 23,022, respectively.
 Some of the RSUs are classified as liabilities as of December 31, 2009, as these RSUs can be
settled through a cash payment upon vesting at the Employees option and subject to applicable
laws and regulations and the memorandum of association and articles of the Company. In 2010,
the Company modified these cash-settled RSU awards and the RSUs were classified out of
liabilities. As required by ASC718 the Company used the fair value at amendment date to
calculate the share based compensation cost for the equity classified RSUs.
 19.
    
    Foreign currency forward contracts
 The Group, as a result of its global operating and financing activities, is exposed to changes
in foreign currency exchange rates which may adversely affect its results of operations and
financial position. The Group uses foreign currency forward exchange contracts to hedge the
exposure to foreign currency risk, primarily the Euro and US dollar. The purpose of the Groups
foreign currency derivative activities is to protect the Group from the risk that the Renminbi
net cash flows resulting from forecasted foreign currency-denominated transactions will be
negatively affected by changes in exchange rates. The Group uses foreign currency forward
exchange contracts to offset changes in the amount of future cash flows associated with certain
third-party sales expected to occur within the next 12 months.
 The Group accounts for derivative instruments pursuant to ASC 815, Derivatives and Hedging, as
amended and interpreted, and recognizes all derivative instruments as either assets or
liabilities at fair value in other assets or other liabilities in the consolidated balance
sheets. The Group has evaluated various factors and determined that there is no ineffectiveness
to be recorded for the foreign-currency forward contracts entered in 2010, and the foreign
currency forward exchange contracts qualified for foreign currency cash flow hedge accounting.
When hedging relationships are highly effective, the effective portion of the gain or loss on
the derivative cash flow hedges is recorded in accumulated other comprehensive income, net of
tax, until the underlying hedged transaction is recognized in the consolidated income
statements. The ineffective portion of cash flow hedges, if any, is recognized in income
immediately. The effectiveness of designated hedging relationships is tested and documented on
quarterly basis. During the year ended December 31, 2010, the Group entered into foreign
exchange forward contracts with a notional amount of Euro 186,593 and US Dollar 335,976. As of
December 31, 2010, the Group had outstanding foreign currency forward exchange contracts with
notional amounts of Euro 12,807 and US Dollar 67,136, and the fair value of the open contracts,
net of tax, was a gain of RMB 2,326, which was recorded in accumulated other comprehensive loss.
  F-33




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##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 The following table displays the outstanding notional balances and the estimated fair value of
the Groups foreign-currency forward exchange contracts and embedded derivatives as of December
31, 2009 and 2010:
 As of December 31,
    
    
    As of December 31,
    
    
    As of December 31,
    
    
    As of December 31,2009
    
    
    2009
    
    
    2010
    
    
    2010RMB
    
    
    RMB
    
    
    RMB
    
    
    RMBNotional Amount
    
    
    Estimate fair value
    
    
    Notional Amount
    
    
    Estimate fair valueForeign exchange forward contracts under cash
flow hedge, recorded in other current assets /
(other payables to third parties)
    
    
    10,716
    
    
    
    (831
    )
    
    
    557,407
    
    
    
    2,493Embedded foreign currency derivatives recorded
in derivative assets
    
    
    491,630
    
    
    
    6,488
    
    
    
    238,417
    
    
    
    5,464Capped call options recorded in derivative assets
    
    
    
    
    
    
    4,033
    
    
    
    
    
    
    
    9,127Embedded derivatives underlying convertible
notes recorded in embedded derivatives
    
    
    
    
    
    
    (136,632
    )
    
    
    
    
    
    
    (66,174
    )
 20.
    
    Discontinued operations
 Due to the Groups decision to focus its future efforts on the solar cells and solar power
products business, the Group discontinued the PV power plant business, which was begun in 2009
and previously represented a component of the Group. In December 2010, the Group entered into a
contract to sell JA Korea for a total price of RMB 82,268 to a third party unrelated to the
Group. The sales price represents the fair value of the subsidiary and was approved by the audit
committee and all the independent directors.
 The carrying amount of net assets in this disposal group of RMB 104,235 was written down to its
fair value less cost to sell of RMB 82,268. This loss of RMB 21,967 from disposal of net assets
of discontinued operations has been included results from discontinued operations for the year
ended December 31, 2010. Assets and liabilities from the discontinued operations after this write
down, excluding currency translation adjustments of RMB 7,405 are summarized below.
 Cash flows from the PV power plant business have not been separately classified on the
consolidated statement of cash flows as they are not material for periods presented. The
transaction was subsequently completed in March 2011 with no adjustments to the previously
estimated fair value.
 Summarized operating results from discontinued operations in the Companys consolidated
statements of operations were as follows:
 For the year
    
    
    For the yearended
    
    
    endedDecember 31,
    
    
    December 31,2009
    
    
    2010Income from operations of a discontinued component, net of tax
    
    
    3,415
    
    
    
    2,137Loss from disposal of a discontinued component
    
    
    
    
    
    
    (21,967
    )Income/(loss) from discontinued operations, net of tax
    
    
    3,415
    
    
    
    (19,830
    )
 Summarized assets and liabilities from the discontinued operations included in the Companys
consolidated balance sheets were as follows:
 As of December31,2010RMBAssets of discontinued operationsOther current assets
    
    
    841Property and equipment, net
    
    
    74,637Total assets of discontinued operations
    
    
    75,478Liabilities of discontinued operationsTax payables
    
    
    339Payroll and welfare payable
    
    
    19Other payables to third parties
    
    
    229Accrued expenses
    
    
    28Total liabilities of discontinued operations
    
    
    615
  F-34




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##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 21.
    
    Mainland China contribution plan and profit appropriation
 a)
    
    China contribution planFull-time employees of the Group in the PRC participate in a government-mandated
multi-employer defined contribution plan pursuant to which certain pension benefits, medical
care, unemployment insurance, employee housing fund and other welfare benefits are provided
to employees. PRC labor regulations require the Group to accrue for these benefits based on
certain percentage of the employees salaries. The total contribution for such employee
benefits was RMB 16,203 and RMB 27,759 and RMB 39,069 for the year ended December 31, 2008,
2009 and 2010, respectively.b)
    
    Statutory reservesPursuant to laws applicable to entities incorporated in the PRC, the subsidiaries in the PRC
should make appropriations from after-tax profit to non-distributable reserve funds. These
reserve funds include the following: (i) a general reserve, (ii) an enterprise expansion fund
and (iii) a staff bonus and welfare fund. The subsidiaries in the PRC are required to
transfer at least 10% of their profit after taxation (as determined under accounting
principles generally accepted in the PRC at each year-end) to the general reserve fund until
the reserve balance reaches 50% of their respective registered capital. The appropriations to
other funds are at the PRC subsidiaries discretion. These reserve funds can only be used
for specific purposes of enterprises expansion, staff bonus, and welfare and not
distributable as cash dividends.JA Hebei made RMB 97,957, RMB 24,359 and RMB 93,818 for the general Statutory Reserves in the
year ended December 31, 2008, 2009 and 2010, respectively.JA Yangzhou made RMB nil, RMB 17,267 and RMB 89,527 for the general Statutory Reserves in the
year ended December 31, 2008, 2009 and 2010, respectively.JA Lianyungang made RMB nil, RMB nil and RMB 2,939 for the general Statutory Reserves in the
year ended December 31, 2008, 2009 and 2010, respectively.
  F-35




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 c)
    
    Restricted capitalThe following paid-in-capital amounts are unavailable for distribution as nominal dividends to the
Company:
 Paid-in CapitalLegal Entity
    
    restrictedJingAo Solar Co., Ltd.
    
    RMB
    1,000,000Shanghai JA Solar Technology Co., Ltd.
    
    US$
    20,000Shanghai JA Solar PV Technology Co., Ltd.
    
    US$
    20,000JA Solar Technology Yangzhou Co., Ltd.
    
    US$
    230,000Jing Hai Yang Semiconductor Materials (Donghai) Co., Ltd.
    
    US$
    73,000JA Solar Yangzhou R&D Co., Ltd.
    
    RMB
    50,000JA Yangzhou PV technology Co., Ltd.
    
    US$
    10,000Shanghai Jinglong Solar Technology Co., Ltd.
    
    RMB
    180,000Donghai JA Solar Technology Co., Ltd.
    
    RMB
    50,000
 22.
    
    Net (loss)/income per share
 Basic and diluted net (loss)/income per share for the year ended December 31, 2008, 2009 and
2010 are calculated as follows:
 December 31,
    
    
    December 31,
    
    
    December 31,2008
    
    
    2009
    
    
    2010As adjusted
    
    
    As adjusted(Note 2(z))
    
    
    (Note 2(z))Numerator:Numerator for basic (loss)/earnings per share from continuing
operations
    
    
    (48,695
    )
    
    
    (196,914
    )
    
    
    1,775,181Dilutive effect of:Change in fair value of embedded derivatives underlying convertible
notes
    
    
    (785,608
    )
    
    
    
    
    
    
    (70,458
    )Gain on buyback of convertible notes
    
    
    (161,333
    )
    
    
    
    
    
    
    Foreign exchange gain on convertible notes
    
    
    (32,646
    )
    
    
    
    
    
    
    (33,021
    )Accretion of non-cash interest charge on convertible notes
    
    
    81,808
    
    
    
    
    
    
    
    95,547Amortization of deferred issuance cost in relation to convertible notes
    
    
    16,631
    
    
    
    
    
    
    
    28,368Interest expense of convertible notes
    
    
    75,650
    
    
    
    
    
    
    
    67,876Capitalized interest
    
    
    (4,630
    )
    
    
    
    
    
    
    (28,626
    )Numerator for diluted (loss)/earnings per share from continuing
operations
    
    
    (858,823
    )
    
    
    (196,914
    )
    
    
    1,834,867Denominator:Denominator for basic earnings per share  weighted average ordinary
shares outstanding*
    
    
    156,380,060
    
    
    
    161,643,312
    
    
    
    162,900,657Dilutive effect of share options**
    
    
    
    
    
    
    
    
    
    
    728,804Dilutive effect of convertible notes**
    
    
    11,058,130
    
    
    
    
    
    
    
    7,487,223Denominator for diluted earnings per share
    
    
    167,438,190
    
    
    
    161,643,312
    
    
    
    171,116,684Basic (loss)/earnings per share from continuing operations
    
    
    (0.31
    )
    
    
    (1.22
    )
    
    
    10.90Diluted (loss)/earnings per share from continuing operations
    
    
    (5.13
    )
    
    
    (1.22
    )
    
    
    10.72
 *
    
    6,562,760 shares loaned pursuant to the ADS Lending Agreement that were to be returned to us have been included in the per share calculation on a weighted average basis due
to the uncertainty regarding the recovery of the borrowed shares (see Note 14).**
    
    These potentially dilutive securities totalling 1,347,053 and 9,400,229 in 2008 and 2009, respectively, were not included in the calculation of dilutive earnings per share
in 2008 and 2009 because of their anti-dilutive effect.  F-36




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 23.
    
    Related party transactions
 a)
    
    Amounts due to related parties consisted of the following:
 As of December
    
    
    As of December31,
    
    
    31,2009
    
    
    2010RMB
    
    
    RMBPayables to Hebei Jinglong Industry and
Commerce Group Co., Ltd. (Hebei Jinglong)-short term
    
    
    18,772
    
    
    
    75,263Payables to Solar Silicon Valley Electronic
Science and Technology Co., Ltd. (Silicon
Valley)-short term
    
    
    27,978
    
    
    
    Others-short term
    
    
    11,518
    
    
    
    46,818Total amounts due to related parties-short term
    
    
    58,268
    
    
    
    122,081
 b)
    
    Amounts due from related parties consisted of the following:
 As of December
    
    
    As of December31,
    
    
    31,2009
    
    
    2010RMB
    
    
    RMBAdvances to Hebei Jinglong-short term
    
    
    50,889
    
    
    
    54,300Advances to Hebei Jinglong-long term
    
    
    118,722
    
    
    
    46,498Advances to Silicon Valley-short term
    
    
    
    
    
    
    41,755Others-short term
    
    
    
    
    
    
    17,256Total amounts due from related parties
    
    
    169,611
    
    
    
    159,809
 c)
    
    Transactions with Hebei Jinglong and Silicon ValleyHebei Jinglong is 100% owned by the Groups largest shareholder, Jinglong
Group Co., Ltd. (Jinglong BVI), and thus, is a related party of the Group. Mr. Baofang Jin, the Groups executive
chairman, owns 32.96% equity interests in each of Hebei Jinglong and Jinglong BVI, and Mr.
Bingyan Ren, the Groups director, owns 4.79% equity interests in each of Hebei Jinglong and Jinglong
BVI. Silicon Valley is a
subsidiary of Hebei Jinglong and its consolidated subsidiaries (Jinglong Group), and thus, is also a related
party of the Group.Wafer supplyIn July 2006, the Group entered into a long-term supply contract (the Jinglong 2006
Contract) with Hebei Jinglong for the supply of silicon wafers. The Jinglong 2006 Contract
had an initial term of four and half years, from July 2006 to December 2010, which
automatically extended for another three years until the end of 2013. The Group has also
entered into various short-term supply contracts with Hebei Jinglong and Silicon Valley for
the supply of silicon wafers (together with the Jinglong 2006 Contract, the Jinglong Supply
Contracts). Under the Jinglong Supply Contracts, Jinglong Group has agreed to supply the
Group with silicon wafers at prevailing market prices with a reasonable discount and under
prepayment arrangements. The Group has entered into various supplemental agreements to the
Jinglong Supply Contracts to specify certain performance terms, including amendment of
prepayment amounts and their utilization.
  F-37




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 In August 2007, the Group revised the monthly prepayment terms under the existing contract
with Hebei Jinglong and Silicon Valley and made a prepayment of RMB 300,000 in August
2007 for wafers to be delivered in 2008. The prepayment will be used to offset subsequent
purchases of wafers.On September 24, 2008, the Group entered into a long-term silicon wafer supply contract with
Silicon Valley. Pursuant to the contract, the Group made a prepayment of RMB 200,000 to
Silicon Valley in September 2008 for wafers to be delivered in 2009. The prepayment will be
used to offset subsequent purchases of wafers.In February 2009, the Group revised the delivery terms in the original contracts signed in
July 2006 and September 2008 with Hebei Jinglong and Silicon Valley. The unutilized
prepayment balance was carried forward and to be used to offset future purchases.The Group reviewed the contracts under ASC 815, Derivatives and Hedging, and ASC 810,
Consolidation, and determined that it doesnt contain an embedded derivative nor would the
supplier contract cause the supplier to be a variable interest entity.For the year ended 31 December 2008, 2009 and 2010, the Group purchased RMB 1,448,150,
RMB 696,638 and RMB 1,629,433, respectively, of silicon waters from
Hebei Jinglong and Silicon Valley. The Group will continue to purchase silicon wafers from
Hebei Jinglong and Silicon Valley.Unused prepayments were RMB 169,611 and RMB 142,553 at December 31, 2009 and 2010,
respectively, and were recorded in advances to related party suppliers in the consolidated
balance sheet.Outsourcing serviceThe Group outsourced wafer processing services to Hebei Jinglong and Silicon Valley, where
they helped the Group to turn polysilicon into wafers. The outsourcing service fee was RMB
3,198, RMB 17,422 and RMB 2,275 for Hebei Jinglong, RMB5,412, RMB nil and RMB 4,138 for
Silicon Valley for the year ended December 31, 2008, 2009 and 2010, respectively.Management fees and leasingThe Group leases properties from Hebei Jinglong and another related party under operating
lease agreements. The Group incurred rental expenses under operating lease agreements to
Hebei Jinglong in the amounts of RMB 8,754, RMB 16,644 and RMB 12,180 for the year ended
December 31, 2008, 2009 and 2010, respectively. Outstanding accrual for the management fees
due to Hebei Jinglong was RMB 40, RMB 20 and RMB 33 as of December 31, 2008, 2009 and 2010,
and was recorded in amounts due to related parties in the consolidated balance sheet.
  F-38




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 d)
    
    Transactions with other related partiesThe Group sold solar cells and modules and provided solar cells processing services to
related companies that are subsidiaries of Hebei Jinglong except for Silicon Valley with the
amount of RMB 5,168, RMB 5,206 and RMB 162,499 for the year ended December 31, 2008, 2009 and
2010, respectively. The Group also sold solar cells to a related company. Its chairman is
also the chairman of the Group. The Group sold solar cells to the related company amounted to
RMB 506,498 and RMB nil and RMB nil for the year ended December 31, 2008, 2009 and 2010,
respectively. The Group also sold solar cells to a related company, whose independent
director is also the independent director of the Group. The sales to the related company
amounted to RMB nil, RMB nil, and RMB 2,379 for the year ended December 31, 2008, 2009 and
2010, respectively.The Group provided solar cell processing service to a related company. Its chairman is also
the chairman of the Group. The solar cell processing service fee amounted to RMB 9,521, RMB
nil and RMB nil for the year ended December 31, 2008, 2009 and 2010, respectively.The Group outsourced wafer processing services to three related companies where they helped
the Group to turn polysilicon into wafers. The chairman of the two companies is also the
chairman of the Group. The outsourcing service fee was RMB 80,314, RMB 38,875 and RMB 232,163
for the year ended December 31, 2008, 2009 and 2010, respectively.The Group outsourced module processing service to a related company. Its chairman is also the
chairman of the Group. The module processing service fee amounted to RMB 28,952, RMB nil and
RMB nil for the year ended December 31, 2008, 2009 and 2010 respectively.The Group purchased RMB 60,851, RMB 172,705 and RMB 875,192 of silicon wafers from several
related companies for the year ended December 31, 2008, 2009 and 2010, respectively. Their
chairman is also the chairman of the Group.The Group acquired RMB nil, RMB 113,229 and RMB 10 of certain equipment from several related
companies for the year ended December 31, 2008, 2009 and 2010, respectively. The chairman of
these companies is also the chairman of the Group.During the year ended December 31, 2010, the Group acquired 100 percent of the shares of
Shanghai Jinglong Solar Technology Co., Ltd. from Ningjin Jinglong PV Investment Co., Ltd., a
subsidiary of Hebei Jinglong, for a cash consideration of RMB 198,960, representing the fair
value of the company based on an independent third party valuation. Shanghai Jinglong Solar
Technology Co., Ltd. owns the land, building and facility previously leased by the Group for
its module production operation in Fengxian, Shanghai. Shanghai Jinglong Solar Technology
Co., Ltd. is not a business and this transaction was accounted for as an asset acquisition.The Group considers that these transactions were carried out at arms length with prices
comparable to other similar transactions with unrelated third parties.
 24.
    
    Contingencies and Commitments
 a)
    
    Legal contingenciesIn December 2008, the Company were named as defendant in two putative securities class
actions filed in the Unite States District Court for the Southern District of New York:
Ellenburg v. JA Solar Holdings Co., Ltd., et al., Civil Action No. 08 CV 10475 (filed on
December 3, 2008) and Zhang v. JA Solar Holdings Co., Ltd., et al., Civil Action No. 08 CV
11366 (filed on December 31, 2008). The complaints in the two actions, which are
substantially identical, also name as defendants Mr. Huaijin Yang, our former chief executive
officer, and Mr. Daniel Lui, our former chief financial officer and chief strategy officer,
and allege that the defendants committed securities fraud in violation of Section 10(b) of
the United States Securities and Exchange Act. The Court consolidated the two cases in April
2009. In February 2011, the Company reached an agreement in principle to settle these
securities class action lawsuits. Under the terms of the proposed settlement, a sum of US$4.5
million (less any award of attorneys fees and costs to counsel for the class that may be
approved by the Court) will be made available to shareholders who may qualify for a
distribution under the settlement. As part of the settlement, the plaintiff agreed to dismiss
the action and drop all claims against the Company and the individual defendants. The
settlement is subject to the Court granting final approval of the settlement terms, which is
set to be heard on June 24, 2011.
  F-39




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 b)
    
    Supplier contractIn order to better manage the Groups unit costs and to secure adequate and timely supply of
polysilicon and silicon wafers during the periods of shortages of polysilicon and silicon
wafer supplies, the Group entered into a number of multi-year supply agreements from 2006
through 2008 in amounts that were expected to meet the Groups anticipated production needs.
As a condition to its receiving the raw materials under those agreements, and in line with
industry practice, the Group was required to, and has made prepayments for all, or a portion,
of the total contract price to the suppliers, which are then offset against future purchases.
The Group has completed re-negotiating certain of its supplier arrangements and is currently
in the process of re-negotiating the remaining prepayment obligations with its suppliers.Set out below are the Groups fixed obligations under these multi-year contracts including
take or pay arrangements.Obligations under Multi-year Supply Agreements, including Take or Pay Supply AgreementsThe Groups multi-year supply agreements with some suppliers are structured as fixed price
and quantity take or pay arrangements which allow the supplier to invoice the Group for the
full stated purchase price of polysilicon or silicon wafers the Group is obligated to
purchase each year, whether or not the Group actually purchases the contractual volume. In
addition to the take or pay supply agreements, the Group has also entered into other
multi-year supply agreements to purchase fixed volumes of polysilicon or silicon wafers from
certain suppliers. Under these agreements, the purchase price is to be periodically adjusted
based on prevailing market price or relevant energy price index. Purchases made under take
or pay agreements amounted to RMB 1,025,894, RMB 415,201 and RMB 1,315,832 for the year
ended December 31, 2008, 2009 and 2010, respectively. The Groups future obligations under
multi-year supply agreements, including take or pay supply agreements are as follows:
 OtherTake or pay
    
    
    Multi-yearsupply
    
    
    supplyagreements
    
    
    agreements*
    
    
    Total(in RMB)
    
    
    (in RMB)
    
    
    (in RMB)Twelve Months Ending December 312011
    
    
    824,850
    
    
    
    1,810,445
    
    
    
    2,635,2952012
    
    
    160,653
    
    
    
    2,186,495
    
    
    
    2,347,1482013
    
    
    
    
    
    
    1,210,582
    
    
    
    1,210,5822014
    
    
    
    
    
    
    285,357
    
    
    
    285,3572015
    
    
    
    
    
    
    355,785
    
    
    
    355,785Thereafter
    
    
    
    
    
    
    455,057
    
    
    
    455,057Total
    
    
    985,503
    
    
    
    6,303,721
    
    
    
    7,289,224
 *
    
    includes only purchase commitments with fixed or minimum price provisions. In addition, the Group has also entered into other supply agreements with variable price
provisions, under which the purchase price is based on market prices with price adjustment
terms. The Group has committed to purchase polysilicon and silicon wafers with the quantity
of 4,260 MT and 2,131 million pieces respectively during 2011 to 2015, which are with
variable price provisions and not included in the above table.Outstanding supplier advances made to suppliers with whom the Group has entered into take or
pay arrangements amounted to RMB 1,171,621 and RMB 1,220,403 as of December 31, 2009 and
2010, respectively.If the Group fails to meet the obligations, including purchase quantity commitments, under
the amended agreements and are unable to further renegotiate the terms of these multi-year
supply agreements, the Group may be forced to forfeit certain prepayment amounts and be
subject to claims or other disputes which could materially and adversely affect the Groups
results of operations, and financial position.
  F-40




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 c)
    
    Operating lease commitmentsAs of December 31, 2010, the Group has one operating lease agreement with the Jinglong Group
to lease certain assets, including offices, dormitory and land. This non-cancelable operating
lease expires in June 2012 and the annual rental fee is RMB 12,000, which approximates market
rents.Future minimum obligations for operating leases are as follows:
 (in RMB)2011
    
    
    12,0002012
    
    
    6,0002013
    
    
    2014
    
    
    2015
    
    
    Thereafter
    
    
    Total
    
    
    18,000
 Rent expense under all operating leases was RMB 9,865, RMB 17,203 and RMB 17,786, for the
year ended December 31, 2008, 2009 and 2010, respectively.
  F-41




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 d)
    
    Capital expenditureAs of December 31, 2010, the Group had contracted for capital expenditure on machinery and
equipment of RMB 1,357,495.
 25.
    
    Fair value measurements
 The Group adopted the provisions of ASC 820, Fair Value Measurements and Disclosures, which
defines fair value as the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. Before
January 1, 2009, the adoption of ASC 820 was limited to the Groups financial assets and
financial liabilities only. The Group does not have any nonfinancial assets or nonfinancial
liabilities recognized or disclosed at fair value in its financial statements on a recurring
basis.
 In October 2008, the FASB issued FSP 157-3 Determining Fair Value of a Financial Asset in a
Market That Is Not Active (FSP 157-3). FSP 157-3 clarified the application of ASC 820 in an
inactive market. It demonstrated how the fair value of a financial asset is determined when the
market for that financial asset is inactive. FSP 157-3 was effective upon issuance, including
prior periods for which financial statements had not been issued. The implementation of this
standard did not have a material impact on the Companys consolidated financial position and
results of operations.
 ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use
of observable inputs and minimizes the use of unobservable inputs by requiring that the
observable inputs be used when available. Observable inputs are inputs that market participants
would use in pricing the asset or liability developed based on market data obtained from sources
independent of the Group. Unobservable inputs are inputs that reflect the Groups assumptions
about the assumptions market participants would use in pricing the asset or liability developed
based on the best information available in the circumstances. As such, fair value is a
market-based measure considered from the perspective of a market participant who holds the asset
or owes the liability rather than an entity-specific measure. The hierarchy is broken down into
three levels based on the reliability of inputs as follows:
 
    
    Level 1Valuations based on quoted prices in active markets for identical assets or liabilities that the Group
have the ability to access.
    
    Level 2 Valuations based on quoted prices in markets that are not active or for which all significant inputs
are observable, directly or indirectly.
    
    Level 3Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
 When available, the Group uses quoted market prices to determine the fair value of an asset or
liability. If quoted market prices are not available, the Group will measure fair value using
valuation techniques that use, when possible, current market-based or independently sourced
market parameters, such as interest rates and currency rates. Following is a description of the
valuation techniques that the Group uses to measure the fair value of assets and liabilities
that the Group measures and reports on its balance sheet at fair value on a recurring basis.
 Cash Equivalents.As of December 31, 2009 and 2010, the Groups cash equivalents consisted of
call deposits and money market funds. The Group values its cash equivalents using observable
inputs that reflect quoted prices for securities with identical characteristics, and
accordingly, the Group classifies the valuation techniques that use these inputs as Level 1.
  F-42




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 Derivative assets and liabilities.The Groups derivative assets and liabilities consist of
embedded foreign currency derivatives in the Groups sales and purchase contracts denominated in
currencies other than Renminbi or the functional currency of the counterparty, the capped call
transactions denominated in USD, embedded derivatives underlying convertible notes and foreign
currency forward contract instruments. Since its capped call transactions and embedded
derivatives underlying convertible notes are not traded on an exchange, they are valued using
valuation models. Management is responsible for determining these fair values and considered a
number of factors including valuations. The capped call transactions are valued using the Black
Scholes Option Pricing Model. The embedded derivatives underlying convertible notes are
bifurcated using the with or without approach. As there are interrelationships among the
embedded derivatives, they are valued using a Monte Carlo simulation. Interest rate yield
curves, foreign exchange rates, stock price, volatility, expected term, risk-free rate and
fundamental change event probabilities are the significant inputs into these valuation models.
The inputs used in the valuation of the capped call transactions are observable in active
markets over the terms of the instruments the Group holds, and accordingly, the Group classifies
these valuation techniques as Level 2 in the hierarchy. In regards to the embedded derivatives
underlying convertible notes, fair value was determined using a with and without approach
which was based on both Level 2 and Level 3 inputs. The Group determined that the Level 3 input,
that is the fundamental change event probabilities, is significant to the overall fair value
measurement. The Group considered the effect of its own credit standing and that of its
counterparties in its valuations of its derivative financial instruments. The Group entered into
foreign currency forward contracts that are designated as cash flow hedges of exchange rate risk
related to forecasted foreign currency denominated sales. The Groups financial instrument
counterparties are high-quality commercial banks with significant experience with such
instruments. Fair values of the Groups forward contracts are determined using significant
other observable inputs (Level 2 fair value measurements), and are based on the present value of
expected future cash flows considering the risks involved and using discount rates appropriate
for the duration of the contracts.
 Recurring change in fair value
 As of December 31, 2009, information about inputs into the fair value measurements of the
Groups assets and liabilities that are measured at fair value on a recurring basis in periods
subsequent to their initial recognition is as follows:
 Fair Value Measurements at Reporting Date UsingQuoted Prices in
    
    
    
    
    
    
    SignificantBalance as of
    
    
    Active Markets
    
    
    Significant Other
    
    
    Unobservable31 December
    
    
    for Identical
    
    
    Observable Inputs
    
    
    InputsDescription
    
    2009
    
    
    Assets (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Assets:Cash equivalents
    
    
    15,367
    
    
    
    15,367
    
    
    
    
    
    
    
    Capped call options
    
    
    4,033
    
    
    
    
    
    
    
    4,033
    
    
    
    Embedded foreign currency derivatives
    
    
    6,488
    
    
    
    
    
    
    
    6,488
    
    
    
    Liabilities:Embedded derivatives
underlying convertible notes
    
    
    (136,632
    )
    
    
    
    
    
    
    
    
    
    
    (136,632
    )Foreign exchange forward contract
instruments
    
    
    (831
    )
    
    
    
    
    
    
    (831
    )
    
    
    
  F-43




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 As of December 31, 2010, information about inputs into the fair value measurements of the
Groups assets and liabilities that are measured at fair value on a recurring basis in periods
subsequent to their initial recognition is as follows:
 Fair Value Measurements at Reporting Date UsingQuoted Prices in
    
    
    
    
    
    
    SignificantBalance as of
    
    
    Active Markets
    
    
    Significant Other
    
    
    Unobservable31 December
    
    
    for Identical
    
    
    Observable Inputs
    
    
    InputsDescription
    
    2010
    
    
    Assets (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Assets:Capped call options
    
    
    9,127
    
    
    
    
    
    
    
    9,127
    
    
    
    Embedded foreign currency derivatives
    
    
    5,464
    
    
    
    
    
    
    
    5,464
    
    
    
    Foreign exchange forward contract
instruments
    
    
    2,493
    
    
    
    
    
    
    
    2,493
    
    
    
    Liabilities:Embedded derivatives
underlying convertible notes
    
    
    (66,174
    )
    
    
    
    
    
    
    
    
    
    
    (66,174
    )
 Assets and liabilities measured at fair value on a recurring basis using significant
unobservable inputs (Level 3 valuation)
 A summary of changes in Level 3 embedded derivatives underlying convertible notes for the year
ended December 31, 2010 was as follows:
 Balance at December 31, 2009
    
    
    136,632Unrealized gains included in Change in fair value of derivatives
    
    
    (70,458
    )Balance at December 31, 2010
    
    
    66,174
 Change in fair value of derivatives
 The Change in fair value of derivatives recognized in earnings, excluding embedded derivatives
underlying convertible notes repurchased which are recognized in buyback gain, was as follows:
 For the year ended
    
    
    For the year ended
    
    
    For the year endedDecember 31, 2008
    
    
    December 31, 2009
    
    
    December 31, 2010(As adjusted
    
    
    (As adjusted(Note 2(z)))
    
    
    (Note 2(z)))Embedded derivatives underlying convertible notes (see note 14)
    
    
    785,608
    
    
    
    (55,106
    )
    
    
    70,458Capped call options (see note 14)
    
    
    (221,602
    )
    
    
    (453
    )
    
    
    5,094Embedded foreign exchange derivatives
    
    
    
    
    
    
    6,488
    
    
    
    (1,024
    )564,006
    
    
    
    (49,071
    )
    
    
    74,528
  F-44




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 26.
    
    Segment information
 The Group operates in a single business segment that includes the design, development, and
manufacture of PV products. The following table summarizes the Groups net revenues generated
from different geographic locations:
 Year Ended December 31,2009(Asadjusted2008
    
    
    (Note 2(z)))
    
    
    2010RMB
    
    
    RMB
    
    
    RMBChina
    
    
    4,162,037
    
    
    
    2,789,798
    
    
    
    6,010,415Outside China:Spain
    
    
    613,483
    
    
    
    57,516
    
    
    
    81,597Germany
    
    
    144,936
    
    
    
    396,922
    
    
    
    2,126,975Rest of the world
    
    
    537,854
    
    
    
    534,317
    
    
    
    3,541,793Total outside China
    
    
    1,296,273
    
    
    
    988,755
    
    
    
    5,750,365Total net revenue
    
    
    5,458,310
    
    
    
    3,778,553
    
    
    
    11,760,780
 The following table summarizes the Groups long-lived fixed assets by geographic locations:
 Year Ended December 31,2008
    
    
    2009
    
    
    2010RMB
    
    
    RMB
    
    
    RMBChina
    
    
    1,369,807
    
    
    
    1,626,247
    
    
    
    3,170,721Korea*
    
    
    
    
    
    
    98,195
    
    
    
    Total long-lived fixed assets
    
    
    1,369,807
    
    
    
    1,724,442
    
    
    
    3,170,721
 *
    
    Korea assets consist of 3MW solar power plant, the amount of which is included in assets of
discontinued operations in 2010 (Note 20). 27.
    
    Certain risks and uncertainties
 a)
    
    Major customersThere is no individual customer accounting for 10% or more of total revenues for the year
ended December 31, 2010. Details of the customers accounting for 10% or more of total
revenues for the year ended December 31, 2008 and 2009 were as follows:
 Year ended
    
    
    Year ended
    
    
    Year endedMajor customers
    
    December 31, 2008
    
    
    December 31, 2009
    
    
    December 31, 2010Customer A (third party)
    
    
    
    
    
    
    11.4
    %
    
    
    2.4
    %Customer B (third party)
    
    
    13.4
    %
    
    
    8.4
    %
    
    
    4.7
    %
 Accounts receivable from the 3 customers with the largest receivable balances represents 57%
and 44% of the balance of accounts receivable at December 31, 2009 and 2010, respectively.
The Group performs ongoing credit evaluations of its customers financial condition whenever
deemed necessary and generally does not require collateral. The Group maintains an allowance
for doubtful accounts based upon the expected collectability of all accounts receivable,
which takes into consideration an analysis of historical bad debts, specific customer
creditworthiness and current economic trends.b)
    
    Concentrations of credit riskFinancial instruments that potentially subject the Group to significant concentrations of
credit risk consist principally of cash and cash equivalent, accounts receivables and
advances to suppliers.The Group places its cash and cash equivalents with high quality financial institutions in
the PRC, US, Hong Kong and Singapore and limits the amount of credit risk from any single
institution.
  F-45




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 c)
    
    Foreign currency riskThe RMB is not a freely convertible currency. The PRC State Administration for Foreign
Exchange, under the authority of the Peoples Bank of China, controls the conversion of RMB
into foreign currencies. The value of the RMB is subject to changes in central government
policies and to international economic and political developments affecting supply and demand
in the PRC foreign exchange trading system market.
 28.
    
    Ordinary sharesThe holders of ordinary shares in the Company are entitled to one vote per
share and to receive ratably such dividends, if any, as may be declared by the
board of directors of the Company. In the event of liquidation, the holders of
ordinary shares are entitled to share ratably in all assets remaining after
payment of liabilities. The ordinary shares have no preemptive, conversion, or
other subscription rights.
 29.
    
    Subsequent eventsOther than the transactions occurring in 2010 already described above, the following events have taken place in 2011:
 a)
    
    Joint venture with MEMCIn March 2011, the Company announced a joint venture agreement with MEMC Singapore, to build
and operate a solar cell production facility in China. In Phase One of the project, the
joint venture will build a production facility with a capacity of 250 MW of PV cells. The
Phase One production facility will be located at JA Solars Yangzhou site, and is expected
to begin commercial production in the second half of 2011. In later phases, total production
capacity may be expanded up to 1GW. The joint venture will be a 50/50 partnership between
the Groups subsidiary and MEMC Singapore.b)
    
    Investment Agreement With City of HefeiIn March 2011, the Company announced that it has signed a strategic investment agreement
with the city of Hefei, in Chinas Anhui province, to set up a new state-of-the-art PV
production facility for solar cells and PV products. The facility is expected to be located
in the Hefei High-Tech Industrial Development Zone in the City of Hefei. Construction will
take place over a multi-year period and, when fully completed, the facility is expected to
have a manufacturing capacity of 3GW of solar cells and PV products. The first phase of
construction is expected to begin in 2011, with production expected to commence in 2012.
Under the terms of the agreement, the Hefei High-Tech Construction and Investment Group, a
government-affiliated investment company, and a number of domestic Chinese banks, are
expected to provide financing of up to RMB 13.5 billion over a four-year period at
competitive commercial loan rates for the construction of the new solar cell and PV product
manufacturing facility.c)
    
    New supply agreementIn March 2011, the Group entered into a long-term supply agreement with OCI Company Ltd. to
purchase polysilicon with a total quantity of 20,000 MT from 2012 to 2018.d)
    
    Sale of discontinued operationsIn March 2011, the Group completed the sale of JA Korea, the PV power plant business
discontinued in 2010. (Note 20)e)
    
    Loan borrowingDuring January to March 2011, the Group borrowed long term loan of RMB 585,000 from various
financial institutions in the PRC. The borrowings have 18 months to 3 years terms and
expire at various times. The average interest rate is 6.39% per annum.f)
    
    Restricted share unitsIn April 2011, the Company granted 530,000 restricted share units to its employees.
  F-46




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 30.
    
    Restricted net assets
 Relevant PRC laws and regulations permit PRC companies to pay dividends only out of their
retained earnings, if any, as determined in accordance with PRC accounting standards and
regulations. Additionally, the Companys subsidiaries can only distribute dividends upon
approval of the shareholders after they have met the PRC requirements for appropriation to
statutory reserve. The statutory general reserve fund requires annual appropriations of 10% of
net after-tax income should be set aside prior to payment of any dividends. As a result of these
and other restrictions under PRC laws and regulations, the PRC subsidiaries and affiliates are
restricted in their ability to transfer a portion of their net assets to the Company either in
the form of dividends, loans or advances, which restricted portion amounted to approximately RMB
4,130,066 or 61.8% of the Company total consolidated net assets as of December 31, 2010. Even
though the Company currently does not require any such dividends, loans or advances from the PRC
subsidiaries and affiliates for working capital and other funding purposes, the Company may in
the future require additional cash resources from its PRC subsidiaries and affiliates due to
changes in business conditions, to fund future acquisitions and developments, or merely declare
and pay dividends to or distributions to the Company shareholders.
 31.
    
    Additional information  condensed financial statements of the Company
 The separate condensed financial statements of JA Solar Holdings Co., Ltd. as presented below
have been prepared in accordance with Securities and Exchange Commission Regulation S-X Rule
5-04 and Rule 12-04 and present the Companys investments in its subsidiaries under the equity
method of accounting as prescribed in ASC 323. Such investment is presented on the separate
condensed balance sheets of the Company as Investments in subsidiaries. The condensed
financial information of JA Solar Holdings Co., Ltd. has been presented for the period from
January 1, 2008 to December 31, 2010.
   F-47




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 Except as disclosed in the consolidated financial statements as presented above, the Company did
not have any significant contingency, commitment, long term obligation, or guarantee as of
December 31, 2010.
 For the year
    
    
    For the year
    
    
    For the yearended
    
    
    ended
    
    
    endedDecember 31,
    
    
    December 31,
    
    
    December 31,2008
    
    
    2009
    
    
    2010RMB
    
    
    RMB
    
    
    RMBAs adjusted
    
    
    As adjusted(Note 2(z))
    
    
    (Note 2(z))Revenues
    
    
    
    
    
    
    
    
    
    
    Total operating expenses
    
    
    (35,315
    )
    
    
    (19,829
    )
    
    
    (21,883
    )Loss from operations
    
    
    (35,315
    )
    
    
    (19,829
    )
    
    
    (21,883
    )Interest expense
    
    
    (173,820
    )
    
    
    (216,691
    )
    
    
    (191,791
    )Impairment on share lending arrangement
    
    
    (469,042
    )
    
    
    
    
    
    
    Change in fair value of derivatives
    
    
    564,006
    
    
    
    (55,559
    )
    
    
    75,552Share of income from subsidiaries
    
    
    767,682
    
    
    
    118,797
    
    
    
    1,724,291Convertible bond buyback gain
    
    
    161,333
    
    
    
    (24,156
    )
    
    
    Other (expenses)/income
    
    
    (177,219
    )
    
    
    3,939
    
    
    
    169,182Impairment on available-for-sale securities
    
    
    (686,320
    )
    
    
    
    
    
    
    (Loss)/income before income taxes
    
    
    (48,695
    )
    
    
    (193,499
    )
    
    
    1,755,351Income tax benefit/(expense)
    
    
    
    
    
    
    
    
    
    
    Net (loss)/income attributable to ordinary shareholders
    
    
    (48,695
    )
    
    
    (193,499
    )
    
    
    1,755,351
  F-48




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 December 31,
    
    
    December 31,2009
    
    
    2010RMB
    
    
    RMBAs adjusted(Note 2(z))ASSETSCurrent assets:Cash and cash equivalents
    
    
    40,912
    
    
    
    28,024Other receivable from subsidiaries
    
    
    274,064
    
    
    
    265,833Other current assets
    
    
    5,772
    
    
    
    31,480Total current assets
    
    
    320,748
    
    
    
    325,337Investments in subsidiaries
    
    
    2,651,997
    
    
    
    4,469,983Derivative asset-capped call options
    
    
    4,033
    
    
    
    9,127Deferred issuance cost
    
    
    143,243
    
    
    
    110,868Amount due from subsidiaries
    
    
    3,247,833
    
    
    
    3,133,174Total assets
    
    
    6,367,854
    
    
    
    8,048,489LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Other payables to subsidiaries and employees
    
    
    1,401
    
    
    
    Accrued and other liabilities
    
    
    20,850
    
    
    
    63,484Interest payable
    
    
    10,129
    
    
    
    8,500Total current liabilities
    
    
    32,380
    
    
    
    71,984Long-term debt payable
    
    
    204,846
    
    
    
    Convertible notes
    
    
    1,171,438
    
    
    
    1,230,175Embedded derivatives
    
    
    136,632
    
    
    
    66,174Total liabilities
    
    
    1,545,296
    
    
    
    1,368,333Commitments and Contingencies
    
    
    
    
    
    
    Shareholders equity:Ordinary shares (US$0.0001 par value;
493,480,000 shares authorized, 169,018,420
and 169,976,270 shares issued and
outstanding as of December 31, 2009 and
December 31, 2010)
    
    
    134
    
    
    
    134Additional paid-in capital
    
    
    4,583,808
    
    
    
    4,680,133Retained earnings
    
    
    246,628
    
    
    
    2,001,979Accumulated other comprehensive loss
    
    
    (8,012
    )
    
    
    (2,090
    )Total shareholders equity
    
    
    4,822,558
    
    
    
    6,680,156Total liabilities and shareholders equity
    
    
    6,367,854
    
    
    
    8,048,489
  F-49




---



##### 



JA SOLAR HOLDINGS CO., LTD.
 Notes to Consolidated Financial Statements
(In thousands, except share and per share data)
 For the year
    
    
    For the year
    
    
    For the yearended December
    
    
    ended December
    
    
    ended December31, 2008
    
    
    31, 2009
    
    
    31, 2010RMB
    
    
    RMB
    
    
    RMBAs adjusted
    
    
    As adjusted(Note 2(z))
    
    
    (Note 2(z))Cash flows from operating activities:Net (loss)/income
    
    
    (48,695
    )
    
    
    (193,499
    )
    
    
    1,755,351Adjustments to reconcile net income to net cash used in operating activities:Share based compensation expense
    
    
    8,301
    
    
    
    (1,094
    )
    
    
    (602
    )Share of income from subsidiaries
    
    
    (767,682
    )
    
    
    (118,797
    )
    
    
    (1,724,291
    )Amortization of deferred issuance cost and increase in accretion of
convertible notes
    
    
    99,721
    
    
    
    122,648
    
    
    
    123,915Change in the value of derivatives
    
    
    (564,006
    )
    
    
    55,559
    
    
    
    (75,552
    )Impairment on share lending arrangement
    
    
    469,041
    
    
    
    
    
    
    
    Exchange loss
    
    
    31,096
    
    
    
    7,162
    
    
    
    66,309(Loss)/gain from senior convertible notes buyback
    
    
    (161,333
    )
    
    
    24,156
    
    
    
    Impairment on available-for-sale security
    
    
    686,320
    
    
    
    
    
    
    
    Investment loss/(income) from available-for-sale securities
    
    
    39,893
    
    
    
    
    
    
    
    (231,163
    )Changes in operating assets and liabilities:Acquisition of trading securities
    
    
    (353,588
    )
    
    
    353,588
    
    
    
    Decrease/(increase)/ in receivables from subsidiaries
    
    
    18,800
    
    
    
    (122
    )
    
    
    8,231(Increase)/decrease in other current assets
    
    
    (1,224
    )
    
    
    (4,315
    )
    
    
    (25,708
    )(Decrease)/increase in other payables to subsidiaries and employees
    
    
    (112,093
    )
    
    
    1,401
    
    
    
    (1,401
    )Increase in accrued and other liabilities
    
    
    120
    
    
    
    28
    
    
    
    42,634Increase/(decrease) in interest payable
    
    
    13,458
    
    
    
    (3,328
    )
    
    
    (1,629
    )Net cash used in operating activities
    
    
    (641,871
    )
    
    
    243,387
    
    
    
    (63,906
    )Cash flows from investing activities:Loans granted to subsidiaries
    
    
    (1,670,089
    )
    
    
    (249,269
    )
    
    
    (31,697
    )Loans repayment by subsidiaries
    
    
    
    
    
    
    173,715
    
    
    
    49,769Proceeds from sale of available-for-sale securities
    
    
    
    
    
    
    
    
    
    
    231,163Capital injection to subsidiaries
    
    
    (682,790
    )
    
    
    
    
    
    
    Acquisition of short term investments
    
    
    (1,060,836
    )
    
    
    
    
    
    
    Proceeds from sale of short term investments
    
    
    1,145,385
    
    
    
    
    
    
    
    Decrease in restricted cash
    
    
    409,058
    
    
    
    
    
    
    
    Net cash (used in)/provided by investing activities
    
    
    (1,859,272
    )
    
    
    (75,554
    )
    
    
    249,235Cash flows from financing activities:Net proceeds from convertible notes offerings
    
    
    2,709,538
    
    
    
    
    
    
    
    Payment of capped call up-front premiums
    
    
    (226,087
    )
    
    
    
    
    
    
    Proceeds from long-term loan from subsidiaries
    
    
    
    
    
    
    204,846
    
    
    
    Repurchase of senior convertible notes
    
    
    (182,019
    )
    
    
    (459,601
    )
    
    
    Repayment of long-term loan from subsidiaries
    
    
    
    
    
    
    
    
    
    
    (204,846
    )Proceeds from exercise of stock options
    
    
    18,876
    
    
    
    16,841
    
    
    
    8,276Net cash provided by/(used in) financing activities
    
    
    2,320,308
    
    
    
    (237,914
    )
    
    
    (196,570
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (63,342
    )
    
    
    (1,956
    )
    
    
    (1,647
    )Net decrease in cash and cash equivalents
    
    
    (244,177
    )
    
    
    (72,037
    )
    
    
    (12,888
    )Cash and cash equivalents at the beginning of the year
    
    
    357,126
    
    
    
    112,949
    
    
    
    40,912Cash and cash equivalents at the end of the year
    
    
    112,949
    
    
    
    40,912
    
    
    
    28,024
  F-50