Financial Report
I. Audit report
|||
|-|-|
||Unqualified opinions with major uncertainty paragraphs of|
|Type of audit opinion||
||continuous operations|
|Signing date of audit report|2019-04-18|
|Name of audit institute|Baker Tilly China CPA (LLP)|
|Number of audit report|Baker Tilly Zi[2019]No.: 3850|
|Name of CPA|Chen Zhigang, Zhang Lei|

Text ofauditor’s Report
To all shareholders of Shenzhen China Bicycle Company (Holdings) Limited
I. Auditing opinions
We have audited the financial statement under the name of Shenzhen China Bicycle Company (Holdings) Limited (hereinafter referred to as CBC), including the consolidated and parentCompany’s balance sheet of 31 December 2018 and profit statement, and cash flow statement, and statement on changes ofshareholders’ equity for the year ended, and notes to the financial statements for the year ended.
In our opinion, theCompany’s financial statements have been prepared in accordance with the Enterprises Accounting Standards and Enterprises Accounting System, and they fairly present the financial status of the Company and of its parent company as of 31 December 2018 and its operation results and cash flows for the year ended.
II. Basis of opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Our responsibilities under those standards are further described in the“Auditor’s Responsibilities for the Audit of the Financial Statements” section of theauditor’s report. We are independent of the Company in accordance with the Certified Public Accountants ofChina’s Code of Ethics for Professional Accountants, and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
III. Major uncertainty with continuous operation concerned
We bring to the attention of the users of the financial statements, as stated in note XV of the
financial statements under the name of CBC, China Bicycle Company has completed
implementation of the restructuring plan dated 27 December 2013 and terminate the bankruptcy proceedings, in which the condition of introduction of investors has been set out with a view to restoring its ability to continue as a going concern and its sustainable profitability through asset restructuring. Up to the reporting date of auditing, the Company has not introduced any investor, but retained the business of bicycles so as to maintain its ability to continue as a going concern before the injection of assets by investors. These events or circumstances indicate that there are significant uncertainties that may cause significant doubts about the sustainable operation ability of China Bicycle Company. This matter does not affect the published audit opinion.
IV. Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The key audit matter we identified is as follows:
|||
|-|-|
|Key audit matters|Audit address|
|1. Revenue recognized||
|CBC mainly engages in the sales of bicycles, electricvehicles and relevant materials. In 2018, the main businessincome of Shenzhen China Bicycle Company was RMB119,906,950.34, all of which were generated from domesticsales. Shenzhen China Bicycle Company took the receipt ofproducts as the time point for confirming the sales revenue.Due to the significant amount of operating income, theauthenticity of the revenue and whether it should beincluded in the appropriate accounting period had asignificant impact on the operating results of the companyin 2018, and there might be potential misstatements.Therefore, we took the recognition of income as a key auditmatter.Please refer to the accounting policies said in “23. Income”of “Note III Significant Accounting Policies andAccounting Estimate”, “20. Operation Revenue and Cost”of “Note VI Combined Financial Statement Annotation and“4. Operating Income and Costs” of “Note XVI FinancialStatement Annotation of Parent Company” of the financialstatements annotation.|1. Understand, test and evaluate the effectiveness of theinternal control design and operation related to thecompany’s sales and collections.2. Check the relevant provisions of customer contracts,and pay attention to the changes in pricing methods,acceptance methods, delivery locations and deadlines,settlement methods, etc., and assess whether the company’srecognition of income meets the requirements of theaccounting standards and whether it is consistent with thedisclosed accounting policies.3. Inquire and understand the background information ofmajor customers through open channels, such as businessregistration data, etc., confirm whether there are potentialunrecognized related party relationships between thecustomer and the company and related parties.4. Check the customer information (such as contactinformation, contact address, order time, etc.) of onlinemarketing and evaluate the authenticity and rationality ofonline marketing; examine the market price of mainmaterials and analyze the rationality of gross profit ratefluctuation.5.Inform the main customers of the current transaction|

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|-|-|
||amount and fund balance by confirmation letters, and visitimportant customers to verify the authenticity of thecompany’s revenue recognition.6. Check the contracts, warehouse receipts, delivery notesand delivery receipt records of major customers7. Check the delivery note within a certain period before andafter the balance sheet date, pay attention to the date ofreceipt, and confirm whether the revenue recognition isincluded in the correct accounting period.|
|Key audit matters|Audit address|
|2. Impairment of account receivable||
|As of December 31, 2018, the balance of accountsreceivable of Shenzhen China Bicycle Company was RMB32,337,707.54, and the balance of bad debt provisions wasRMB 2,518,500, and the bad-debt provision transferredback was RMB 3,330,198.52. As the balance of accountsreceivable was significant and the assessment of bad debtprovision involved the significant judgment of management,we regarded the impairment of accounts receivable as a keyaudit matter.Please refer to the accounting policies said in “11. AccountsReceivables” of Note III Significant Accounting Policiesand Accounting Estimate, “2. Note receivable and accountsReceivables” of “Note VI Combined Financial StatementAnnotation”, and “1. Note receivable and accountsReceivables” of “Note XVI Financial Statement Annotationof Parent Company” of the financial statements annotation.|1. Understand and test the effectiveness of the internalcontrol design and operation related to the accountsreceivable management2. Review the rationality and consistency of accountingpolicies of the bad debt provision for accounts receivable ofthe management, and review the rationality of majorstandards of single amount determined by the management.3. For the accounts receivable with separate provision forbad debts, select samples to obtain management’s basis forestimating the estimated future recoverable amount,including customer credit record, default or delayedpayment records, and actual repayment after date, andreview its rationality.For the accounts receivable with provision for bad debtsaccording to the aging analysis method, analyze therationality of the accounting estimates for the bad-debtprovision of the accounts receivable of China BicycleCompany, and select samples to test the accuracy of theageing.|

V. Other information
The management of CBC (the “Management”) is responsible for other information which includes the information covered in theCompany’s 2018 annual report excluding the financial statement and our audit report.
The audit opinion issued by us for the financial statement has not covered other information, for
which we do not issue any form of assurance opinions.
Considering our audit on financial statements, we are liable to read other information, during which, we shall consider whether other information differs materially from the financial statements or that we understand during our audit, or whether there is any material misstatement.
Based on the works executed by us, we should report the fact if we find any material misstatement in other information. In this regards, we have nothing to report.
VI. Responsibilities of management and those charged with governance for the financial statements
The management is responsible for the preparation of the financial statements in accordance with the Accounting Standards for Enterprise to secure a fair presentation, and for the design, establishment and maintenance of the internal control necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing theCompany’s ability to continue as a going concern, disclosing matters related to going concern and using the going concern assumption unless the management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing theCompany’s financial reporting process.
VII. Responsibilities of the auditor for the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an audit report that includes our audit opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the CAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
As part of an audit in accordance with the CAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for audit opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.
(4) Conclude on the appropriateness of themanagement’s use of the going concern assumption and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on theCompany’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required by the CAS to drawusers’ attention in audit report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify audit opinion. Our conclusions are based on the information obtained up to the date of audit report. However, future events or conditions may cause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express audit opinion on the financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguard measures.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in theauditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in theauditor’s report because of the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Beijing·China Chinese CPA: Chen Zhigang
18 April 2019 (Partner)
Chinese CPA: Zhang Lei
II. Financial statement
Unit in note of financial statement refers to CNY: RMB (Yuan)
1. Consolidated Balance Sheet
Prepared by Shenzhen China Bicycle Company (Holdings) Limited
2018-12-31
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|
|Current assets:|||
|Monetary fund|18,488,886.26|27,985,654.24|
|Settlement provisions|||
|Capital lent|||
|Financial assets measured by fair|||
|value and with variation reckoned into|||
|current gains/losses|||
|Derivative financial assets|||
|Note receivable and account|||
||29,007,509.02|30,507,775.21|
|receivable|||
|Including: Note receivable||1,500,000.00|
|Account receivable|29,007,509.02|29,007,775.21|
|Account paid in advance|13,799,753.60|2,482,276.54|
|Insurance receivable|||
|Reinsurance receivables|||

||||
|-|-|-|
|Contract reserve of reinsurance|||
|receivable|||
|Other account receivable|844,537.19|659,706.81|
|Including: Interest receivable|||
|Dividend receivable|||
|Buying back the sale of financial|||
|assets|||
|Inventory|2,386,603.94|2,777,174.63|
|Assets held for sale|||
|Non-current asset due within one year|||
|Other current assets|2,266,241.66|1,805,427.17|
|Total current assets|66,793,531.67|66,218,014.60|
|Non-current assets:|||
|Loans and payments on behalf|||
|Finance asset available for sales|||
|Held-to-maturity investment|||
|Long-term account receivable|||
|Long-term equity investment|||
|Investment real estate|||
|Fixed assets|3,502,807.32|3,941,117.97|
|Construction in progress|||
|Productive biological asset|||
|Oil and gas asset|||
|Intangible assets|1,506,000.00|2,259,000.00|
|Expense on Research and|||
|Development|||
|Goodwill|||
|Long-term expenses to be apportioned|||
|Deferred income tax assets|1,040,621.18|741,828.71|
|Other non-current assets|400,000.00|400,000.00|
|Total non-current asset|6,449,428.50|7,341,946.68|
|Total assets|73,242,960.17|73,559,961.28|
|Current liabilities:|||
|Short-term loans|||
|Loan from central bank|||

||||
|-|-|-|
|Absorbing deposit and interbank|||
|deposit|||
|Capital borrowed|||
|Financial liability measured by fair|||
|value and with variation reckoned into|||
|current gains/losses|||
|Derivative financial liability|||
|Note payable and account payable|11,979,010.69|12,408,197.27|
|Account received in advance|405,779.88|1,268,479.32|
|Selling financial asset of repurchase|||
|Commission charge and commission|||
|payable|||
|Wage payable|435,736.16|706,703.40|
|Taxes payable|6,297,096.28|3,807,286.87|
|Other account payable|37,144,872.42|36,508,323.90|
|Including: Interest payable|||
|Dividend payable|||
|Reinsurance payable|||
|Insurance contract reserve|||
|Security trading of agency|||
|Security sales of agency|||
|Liability held for sale|||
|Non-current liabilities due within one|||
|year|||
|Other current liabilities|||
|Total current liabilities|56,262,495.43|54,698,990.76|
|Non-current liabilities:|||
|Long-term loans|||
|Bonds payable|||
|Including: preferred stock|||
|Perpetual capital securities|||
|Long-term account payable|||
|Long-term wages payable|||
|Accrual liability|||
|Deferred income|||
|Deferred income tax liabilities|||

||||
|-|-|-|
|Other non-current liabilities|||
|Total non-current liabilities|||
|Total liabilities|56,262,495.43|54,698,990.76|
|Owner’s equity:|||
|Share capital|551,347,947.00|551,347,947.00|
|Other equity instrument|||
|Including: preferred stock|||
|Perpetual capital securities|||
|Capital public reserve|627,834,297.85|627,834,297.85|
|Less: Inventory shares|||
|Other comprehensive income|||
|Reasonable reserve|||
|Surplus public reserve|32,673,227.01|32,673,227.01|
|Provision of general risk|||
|Retained profit|-1,197,549,169.92|-1,195,957,201.01|
|Total owner’s equity attributable to parent|||
||14,306,301.94|15,898,270.85|
|company|||
|Minority interests|2,674,162.80|2,962,699.67|
|Total owner’s equity|16,980,464.74|18,860,970.52|
|Total liabilities and owner’s equity|73,242,960.17|73,559,961.28|

 Legal Representative: Li Hai
Person in charge of Accounting Works: Sun Longlong
Person in charge of Accounting Institution: Zhong Xiaojin
2. Balance Sheet of Parent Company
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|
|Current assets:|||
|Monetary fund|8,889,572.73|15,398,405.80|
|Financial assets measured by fair value|||
|and with variation reckoned into current|||
|gains/losses|||
|Derivative financial assets|||

||||
|-|-|-|
|Note receivable及Account receivable|12,827,954.16|17,980,663.16|
|Including: Note receivable||300,000.00|
|Account receivable|12,827,954.16|17,680,663.16|
|Account paid in advance|13,798,452.48|2,357,662.42|
|Other account receivable|380,925.78|280,576.37|
|Including: Interest receivable|||
|Dividend receivable|||
|Inventory|||
|Assets held for sale|||
|Non-current asset due within one year|||
|Other current assets|2,130,677.11|1,792,452.81|
|Total current assets|38,027,582.26|37,809,760.56|
|Non-current assets:|||
|Finance asset available for sales|||
|Held-to-maturity investment|||
|Long-term account receivable|||
|Long-term equity investment|10,379.73|10,379.73|
|Investment real estate|||
|Fixed assets|2,995,407.48|3,309,465.26|
|Construction in progress|||
|Productive biological asset|||
|Oil and gas asset|||
|Intangible assets|1,506,000.00|2,259,000.00|
|Expense on Research and Development|||
|Goodwill|||
|Long-term expenses to be apportioned|||
|Deferred income tax assets|||
|Other non-current assets|400,000.00|400,000.00|
|Total non-current asset|4,911,787.21|5,978,844.99|
|Total assets|42,939,369.47|43,788,605.55|
|Current liabilities:|||
|Short-term loans|||
|Financial liability measured by fair|||
|value and with variation reckoned into|||
|current gains/losses|||

||||
|-|-|-|
|Derivative financial liability|||
|Note payable and account payable|||
|Account received in advance|327,632.18|1,086,506.70|
|Wage payable|151,598.60|112,896.71|
|Taxes payable|5,416,117.27|2,806,928.48|
|Other account payable|28,967,052.96|30,786,588.98|
|Including: Interest payable|||
|Dividend payable|||
|Liability held for sale|||
|Non-current liabilities due within one|||
|year|||
|Other current liabilities|||
|Total current liabilities|34,862,401.01|34,792,920.87|
|Non-current liabilities:|||
|Long-term loans|||
|Bonds payable|||
|Including: preferred stock|||
|Perpetual capital securities|||
|Long-term account payable|||
|Long-term wages payable|||
|Accrual liability|||
|Deferred income|||
|Deferred income tax liabilities|||
|Other non-current liabilities|||
|Total non-current liabilities|||
|Total liabilities|34,862,401.01|34,792,920.87|
|Owner’s equity:|||
|Share capital|551,347,947.00|551,347,947.00|
|Other equity instrument|||
|Including: preferred stock|||
|Perpetual capital securities|||
|Capital public reserve|627,834,297.85|627,834,297.85|
|Less: Inventory shares|||
|Other comprehensive income|||

||||
|-|-|-|
|Reasonable reserve|||
|Surplus public reserve|32,673,227.01|32,673,227.01|
|Retained profit|-1,203,778,503.40|-1,202,859,787.18|
|Total owner’s equity|8,076,968.46|8,995,684.68|
|Total liabilities and owner’s equity|42,939,369.47|43,788,605.55|

 3. Consolidated Profit Statement
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|I. Total operation revenue|119,906,950.34|137,490,597.69|
|Including: Operation revenue|119,906,950.34|137,490,597.69|
|Interest income|||
|Insurance gained|||
|Commission charge and|||
|commission income|||
|II. Total operation cost|122,211,426.75|135,674,815.04|
|Including: Operation cost|108,071,430.05|124,027,332.26|
|Interest expense|||
|Commission charge and|||
|commission expense|||
|Cash surrender value|||
|Net amount of expense of|||
|compensation|||
|Net amount of withdrawal of|||
|insurance contract reserve|||
|Bonus expense of guarantee slip|||
|Reinsurance expense|||
|Tax and extras|727,636.82|197,163.09|
|Sales expenses|5,933,231.41|5,462,581.21|
|Administrative expenses|6,627,286.22|5,743,265.84|
|R&D expenses|||
|Financial expenses|-348,684.16|-209,569.66|
|Including: Interest|||
|expenses|||
|Interest income|-369,745.70|-233,170.32|

||||
|-|-|-|
|Losses of devaluation of|||
||1,200,526.41|454,042.30|
|asset|||
|Add: Other income|||
|Investment income(Loss is|||
|listed with “-”)|||
|Including: Investment income|||
|on affiliated company and joint venture|||
|Changing income of fair|||
|value(Loss is listed with “-”)|||
|Exchange income (Loss is|||
|listed with “-”)|||
|Assets disposal income (Loss|||
|||-2,464.81|
|is listed with “-”)|||
|III. Operating profit(Loss is listed with|||
||-2,304,476.41|1,813,317.84|
|“-”)|||
|Add: Non-operation revenue|4,634,304.77|4,629,029.13|
|Less: Non-operation expenditure|4,458,892.86|4,347,483.24|
|IV. Total Profit (Loss is listed with “-”)|-2,129,064.50|2,094,863.73|
|Less: Income tax expenses|-248,558.72|515,704.26|
|V. Net profit (Net loss is listed with|||
||-1,880,505.78|1,579,159.47|
|“-”)|||
|(I) Continuous operation net profit|||
||-1,880,505.78|1,579,159.47|
|(Net loss is listed with “-”)|||
|(ii) Discontinued operation net|||
|profit (Net loss is listed with “-”)|||
|Net profit attributable to owner’s|||
||-1,591,968.91|1,529,587.27|
|of parent company|||
|Minority shareholders’ gains and|||
||-288,536.87|49,572.20|
|losses|||
|VI. Net after-tax of other|||
|comprehensive income|||
|Net after-tax of other comprehensive|||
|income attributable to owners of parent|||
|company|||
|(i) Other comprehensive income|||
|items which will not be reclassified|||
|subsequently to profit of loss|||
|1.Changes as a result of|||

||||
|-|-|-|
|re-measurement of net defined benefit|||
|plan liability or asset|||
|2.Other comprehensive|||
|income unable transfer to gain/loss|||
|under equity method|||
|(ii) Other comprehensive income|||
|items which will be reclassified|||
|subsequently to profit or loss|||
|1.Other comprehensive|||
|income able to transfer to gain/loss|||
|under equity method|||
|2.Gains or losses arising|||
|from changes in fair value of|||
|available-for-sale financial assets|||
|3.Gains or losses arising|||
|from reclassification of held-to-maturity|||
|investment as available-for-sale|||
|financial assets|||
|4.The effect hedging|||
|portion of gains or losses arising from|||
|cash flow hedging instruments|||
|5.Translation differences|||
|arising on translation of foreign|||
|currency financial statements|||
|6.Other|||
|Net after-tax of other comprehensive|||
|income attributable to minority|||
|shareholders|||
|VII. Total comprehensive income|-1,880,505.78|1,579,159.47|
|Total comprehensive income|||
|attributable to owners of parent|-1,591,968.91|1,529,587.27|
|Company|||
|Total comprehensive income|||
||-288,536.87|49,572.20|
|attributable to minority shareholders|||
|VIII. Earnings per share:|||
|(i) Basic earnings per share|-0.0029|0.0028|
|(ii) Diluted earnings per share|-0.0029|0.0028|

Enterprise combine under the same control in the Period, the combined party realized net profit of 0 Yuan before
combination, and realized 0 Yuan at last period for combined party
Legal Representative: Li Hai
Person in charge of Accounting Works: Sun Longlong
Person in charge of Accounting Institution: Zhong Xiaojin
4. Profit Statement of Parent Company
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|I. Operation revenue|33,859,463.41|24,505,590.30|
|Less: Operation cost|29,856,342.44|20,012,376.09|
|Tax and extras|572,884.38|720.00|
|Sales expenses|872,164.08||
|Administrative expenses|3,801,648.55|2,833,306.05|
|R&D expenses|||
|Financial expenses|-138,128.50|-2,696.71|
|Including: Interest|||
|expenses|||
|Interest income|-146,307.16|-8,881.57|
|Losses of devaluation of asset|-14,209.76|53,202.19|
|Add: Other income|||
|Investment income(Loss is|||
|listed with “-”)|||
|Including: Investment income|||
|on affiliated company and joint venture|||
|Changing income of fair|||
|value(Loss is listed with “-”)|||
|Assets disposal income (Loss|||
|is listed with “-”)|||
|II. Operating profit(Loss is listed with|||
||-1,091,237.78|1,608,682.68|
|“-”)|||
|Add: Non-operation revenue|4,601,274.42|4,541,594.86|
|Less: Non-operation expenditure|4,428,752.86|4,332,392.64|
|III. Total Profit (Loss is listed with “-”)|-918,716.22|1,817,884.90|
|Less: Income tax expenses||403,966.10|
|IV. Net profit (Net loss is listed with|||
||-918,716.22|1,413,918.80|
|“-”)|||

||||
|-|-|-|
|(I) Continuous operation net profit|||
||-918,716.22|1,413,918.80|
|(Net loss is listed with “-”)|||
|(ii) Discontinued operation net|||
|profit (Net loss is listed with “-”)|||
|V. Net after-tax of other comprehensive|||
|income|||
|(i) Other comprehensive income|||
|items which will not be reclassified|||
|subsequently to profit of loss|||
|1.Changes as a result of|||
|re-measurement of net defined benefit|||
|plan liability or asset|||
|2.Other comprehensive|||
|income unable transfer to gain/loss|||
|under equity method|||
|(ii) Other comprehensive income|||
|items which will be reclassified|||
|subsequently to profit or loss|||
|1.Other comprehensive|||
|income able to transfer to gain/loss|||
|under equity method|||
|2.Gains or losses arising|||
|from changes in fair value of|||
|available-for-sale financial assets|||
|3.Gains or losses arising|||
|from reclassification of held-to-maturity|||
|investment as available-for-sale|||
|financial assets|||
|4.The effect hedging|||
|portion of gains or losses arising from|||
|cash flow hedging instruments|||
|5.Translation differences|||
|arising on translation of foreign|||
|currency financial statements|||
|6.Other|||
|VI. Total comprehensive income|-918,716.22|1,413,918.80|
|VII. Earnings per share:|||
|(i) Basic earnings per share|||
|(ii) Diluted earnings per share|||

5. Consolidated Cash Flow Statement
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|I. Cash flows arising from operating|||
|activities:|||
|Cash received from selling|||
|commodities and providing labor|36,129,289.85|47,815,380.56|
|services|||
|Net increase of customer deposit|||
|and interbank deposit|||
|Net increase of loan from central|||
|bank|||
|Net increase of capital borrowed|||
|from other financial institution|||
|Cash received from original|||
|insurance contract fee|||
|Net cash received from reinsurance|||
|business|||
|Net increase of insured savings and|||
|investment|||
|Net increase of amount from|||
|disposal financial assets that measured|||
|by fair value and with variation|||
|reckoned into current gains/losses|||
|Cash received from interest,|||
|commission charge and commission|||
|Net increase of capital borrowed|||
|Net increase of returned business|||
|capital|||
|Write-back of tax received|||
|Other cash received concerning|||
||4,438,556.57|14,948,547.89|
|operating activities|||
|Subtotal of cash in-flow from operation|||
||40,567,846.42|62,763,928.45|
|activity|||
|Cash paid for purchasing|||
|commodities and receiving labor|30,870,252.63|42,234,146.49|
|service|||
|Net increase of customer loans and|||

||||
|-|-|-|
|advances|||
|Net increase of deposits in central|||
|bank and interbank|||
|Cash paid for original insurance|||
|contract compensation|||
|Cash paid for interest, commission|||
|charge and commission|||
|Cash paid for bonus of guarantee|||
|slip|||
|Cash paid to/for staff and workers|7,034,174.47|7,032,925.15|
|Taxes paid|2,508,051.27|2,108,578.13|
|Other cash paid concerning|||
||9,634,842.21|14,819,857.08|
|operating activities|||
|Subtotal of cash out-flow from|||
||50,047,320.58|66,195,506.85|
|operation activity|||
|Net cash flow from operation activities|-9,479,474.16|-3,431,578.40|
|II. Cash flows arising from|||
|investment activities:|||
|Cash received from recovering|||
|investment|||
|Cash received from investment|||
|income|||
|Net cash received from disposal of|||
|fixed, intangible and other long-term||60,000.00|
|assets|||
|Net cash received from disposal of|||
|subsidiaries and other units|||
|Other cash received concerning|||
|investment activities|||
|Subtotal of cash in-flow from|||
|||60,000.00|
|investment activity|||
|Cash paid for purchasing fixed,|||
||17,293.82|658,054.98|
|intangible and other long-term assets|||
|Cash paid for investment|||
|Net increase of mortgaged loans|||
|Net cash received from|||
|subsidiaries and other units obtained|||
|Other cash paid concerning|||

||||
|-|-|-|
|investment activities|||
|Subtotal of cash out-flow from|||
||17,293.82|658,054.98|
|investment activity|||
|Net cash flow from investment|||
||-17,293.82|-598,054.98|
|activities|||
|III. Cash flows arising from financing|||
|activities|||
|Cash received from absorbing|||
|investment|||
|Including: Cash received from|||
|absorbing minority shareholders’|||
|investment by subsidiaries|||
|Cash received from loans|||
|Cash received from issuing bonds|||
|Other cash received concerning|||
||8,808,378.06|8,000,000.00|
|financing activities|||
|Subtotal of cash in-flow from financing|||
||8,808,378.06|8,000,000.00|
|activity|||
|Cash paid for settling debts|||
|Cash paid for dividend and profit|||
|distributing or interest paying|||
|Including:Dividend and profit of|||
|minority shareholder paid by|||
|subsidiaries|||
|Other cash paid concerning|||
||2,000,000.00|8,808,378.06|
|financing activities|||
|Subtotal of cash out-flow from|||
||2,000,000.00|8,808,378.06|
|financing activity|||
|Net cash flow from financing activities|6,808,378.06|-808,378.06|
|IV. Influence on cash and cash|||
|equivalents due to fluctuation in||-0.09|
|exchange rate|||
|VI. Net increased amount of cash and|||
||-2,688,389.92|-4,838,011.53|
|cash equivalent|||
|Add: Balance of cash and cash|||
||19,177,276.18|24,015,287.71|
|equivalents at the period -begin|||
|VI. Balance of cash and cash|||
||16,488,886.26|19,177,276.18|
|equivalents at the period -end|||

6. Cash Flow Statement of Parent Company
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|I. Cash flows arising from operating|||
|activities:|||
|Cash received from selling|||
|commodities and providing labor|191,824.00|1,965,727.01|
|services|||
|Write-back of tax received|||
|Other cash received concerning|||
||5,803,118.03|18,392,380.58|
|operating activities|||
|Subtotal of cash in-flow from operation|||
||5,994,942.03|20,358,107.59|
|activity|||
|Cash paid for purchasing|||
|commodities and receiving labor|416,418.59|1,777,103.37|
|service|||
|Cash paid to/for staff and workers|2,958,657.75|2,345,272.99|
|Taxes paid|1,101,894.37|341,557.38|
|Other cash paid concerning|||
||8,014,959.57|9,620,841.25|
|operating activities|||
|Subtotal of cash out-flow from|||
||12,491,930.28|14,084,774.99|
|operation activity|||
|Net cash flow from operation activities|-6,496,988.25|6,273,332.60|
|II. Cash flows arising from|||
|investment activities:|||
|Cash received from recovering|||
|investment|||
|Cash received from investment|||
|income|||
|Net cash received from disposal of|||
|fixed, intangible and other long-term|||
|assets|||
|Net cash received from disposal of|||
|subsidiaries and other units|||
|Other cash received concerning|||
|investment activities|||
|Subtotal of cash in-flow from|||
|investment activity|||

||||
|-|-|-|
|Cash paid for purchasing fixed,|||
||11,844.82|18,345.00|
|intangible and other long-term assets|||
|Cash paid for investment|||
|Net cash received from|||
|subsidiaries and other units obtained|||
|Other cash paid concerning|||
|investment activities|||
|Subtotal of cash out-flow from|||
||11,844.82|18,345.00|
|investment activity|||
|Net cash flow from investment|||
||-11,844.82|-18,345.00|
|activities|||
|III. Cash flows arising from financing|||
|activities|||
|Cash received from absorbing|||
|investment|||
|Cash received from loans|||
|Cash received from issuing bonds|||
|Other cash received concerning|||
|||8,000,000.00|
|financing activities|||
|Subtotal of cash in-flow from financing|||
|||8,000,000.00|
|activity|||
|Cash paid for settling debts|||
|Cash paid for dividend and profit|||
|distributing or interest paying|||
|Other cash paid concerning|||
|financing activities|||
|Subtotal of cash out-flow from|||
|financing activity|||
|Net cash flow from financing activities||8,000,000.00|
|IV. Influence on cash and cash|||
|equivalents due to fluctuation in||-0.09|
|exchange rate|||
|五. Net increased amount of cash and|||
||-6,508,833.07|14,254,987.51|
|cash equivalent|||
|Add: Balance of cash and cash|||
||15,398,405.80|1,143,418.29|
|equivalents at the period -begin|||
|VI. Balance of cash and cash|||
||8,889,572.73|15,398,405.80|
|equivalents at the period -end|||

7. Statement of Changes inOwners’ Equity (Consolidated)
Current period
In RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Current period|||||||||||||
||Owners’ equity attributable to parent company|||||||||||||
|||Other equity||||||||||||
|||instrument||||||||||||
|Item|||Perpet|||Less:|Other|||Provisio||Minorit|Total|
||||||Capital|||Reason|Surplus|||||
||Share||ual|||Invento|compre|||n of|Retaine|y|owner’s|
|||prefer|||public|||able|public|||||
||capital||capita|||ry|hensive|||general|d profit|interests|equity|
|||red||Other|reserve|||reserve|reserve|||||
||||l|||shares|income|||risk||||
|||stock||||||||||||
||||securi|||||||||||
||||ties|||||||||||
||551,34||||||||||-1,195,9|||
|I. Balance at the|||||627,834||||32,673,|||2,962,6|18,860,|
||7,947.||||||||||57,201.|||
|end of the last yea|||||,297.85||||227.01|||99.67|970.52|
||00||||||||||01|||
|Add:||||||||||||||
|Changes of||||||||||||||
|accounting policy||||||||||||||
|Error||||||||||||||
|correction of the||||||||||||||
|previous period||||||||||||||
|Enterprise||||||||||||||
|combine under the||||||||||||||
|same control||||||||||||||
|Other||||||||||||||
|II. Balance at the|551,34||||||||||-1,195,9|||
||||||627,834||||32,673,|||2,962,6|18,860,|
|beginning of this|7,947.||||||||||57,201.|||
||||||,297.85||||227.01|||99.67|970.52|
|year|00||||||||||01|||
|III. Increase/||||||||||||||
|Decrease in this|||||||||||-1,591,9|-288,53|-1,880,5|
|year (Decrease is|||||||||||68.91|6.87|05.78|
|listed with “-”)||||||||||||||
|(i) Total||||||||||||||
||||||||||||-1,591,9|-288,53|-1,880,5|
|comprehensive||||||||||||||
||||||||||||68.91|6.87|05.78|
|income||||||||||||||
|(ii) Owners’||||||||||||||
|devoted and||||||||||||||

||
|-|
|decreased capital|
|1.Common shares|
|invested by|
|owners|
|2. Capital invested|
|by holders of other|
|equity instruments|
|3. Amount|
|reckoned into|
|owners equity with|
|share-based|
|payment|
|4. Other|
|(iii) Profit|
|distribution|
|1. Withdrawal of|
|surplus reserves|
|2. Withdrawal of|
|general risk|
|provisions|
|3. Distribution for|
|owners (or|
|shareholders)|
|4. Other|
|(iv) Carrying|
|forward internal|
|owners’ equity|
|1. Capital reserves|
|conversed to|
|capital (share|
|capital)|
|2. Surplus reserves|
|conversed to|
|capital (share|
|capital)|
|3. Remedying loss|
|with surplus|
|reserve|
|4. Change amount|
|of defined benefit|

||||||||
|-|-|-|-|-|-|-|
|plans that carry|||||||
|forward retained|||||||
|earnings|||||||
|5. Other|||||||
|(v) Reasonable|||||||
|reserve|||||||
|1. Withdrawal in|||||||
|the report period|||||||
|2. Usage in the|||||||
|report period|||||||
|(vi) Other|||||||
|IV. Balance at the|551,34|||-1,197,5||16,980,464.74|
|||627,834|32,673,||2,674,1||
|end of the report|7,947.|||49,169.|||
|||,297.85|227.01||62.80||
|period|00|||92|||

 Last Period
In RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Last Period|||||||||||||
||Owners’ equity attributable to parent company|||||||||||||
|||Other equity||||||||||||
|||instrument||||||||||||
|||||||||||||Minorit||
|Item|||Perpet|||Less:|Other|||Provisio|||Total|
||||||Capital|||Reason|Surplus|||y||
||Share|prefer|ual||public|Invento|compre|able|public|n of|Retaine|interest|owner’s|
||capital||capita|||ry|hensive|||general|d profit||equity|
|||red||Other|reserve|||reserve|reserve|||s||
||||l|||shares|income|||risk||||
|||stock||||||||||||
||||securi|||||||||||
||||ties|||||||||||
||551,34||||||||||-1,197,4|||
|I. Balance at the|||||627,834||||32,673,|||2,913,1|17,281,|
||7,947.||||||||||86,788.|||
|end of the last yea|||||,297.85||||227.01|||27.47|811.05|
||00||||||||||28|||
|Add:||||||||||||||
|Changes of||||||||||||||
|accounting policy||||||||||||||
|Error||||||||||||||
|correction of the||||||||||||||
|previous period||||||||||||||
|Enterprise||||||||||||||
|combine under the||||||||||||||
|same control||||||||||||||

||||||||
|-|-|-|-|-|-|-|
|Other|||||||
|II. Balance at the|551,34|||-1,197,4|||
|||627,834|32,673,||2,913,1|17,281,|
|beginning of this|7,947.|||86,788.|||
|||,297.85|227.01||27.47|811.05|
|year|00|||28|||
|III. Increase/|||||||
|Decrease in this||||1,529,5|49,572.|1,579,1|
|year (Decrease is||||87.27|20|59.47|
|listed with “-”)|||||||
|(i) Total|||||||
|||||1,529,5|49,572.|1,579,1|
|comprehensive|||||||
|||||87.27|20|59.47|
|income|||||||
|(ii) Owners’|||||||
|devoted and|||||||
|decreased capital|||||||
|1.Common shares|||||||
|invested by|||||||
|owners|||||||
|2. Capital invested|||||||
|by holders of other|||||||
|equity instruments|||||||
|3. Amount|||||||
|reckoned into|||||||
|owners equity with|||||||
|share-based|||||||
|payment|||||||
|4. Other|||||||
|(iii) Profit|||||||
|distribution|||||||
|1. Withdrawal of|||||||
|surplus reserves|||||||
|2. Withdrawal of|||||||
|general risk|||||||
|provisions|||||||
|3. Distribution for|||||||
|owners (or|||||||
|shareholders)|||||||
|4. Other|||||||
|(iv) Carrying|||||||
|forward internal|||||||
|owners’ equity|||||||

||||||||
|-|-|-|-|-|-|-|
|1. Capital reserves|||||||
|conversed to|||||||
|capital (share|||||||
|capital)|||||||
|2. Surplus reserves|||||||
|conversed to|||||||
|capital (share|||||||
|capital)|||||||
|3. Remedying loss|||||||
|with surplus|||||||
|reserve|||||||
|4. Change amount|||||||
|of defined benefit|||||||
|plans that carry|||||||
|forward retained|||||||
|earnings|||||||
|5. Other|||||||
|(v) Reasonable|||||||
|reserve|||||||
|1. Withdrawal in|||||||
|the report period|||||||
|2. Usage in the|||||||
|report period|||||||
|(vi) Other|||||||
|IV. Balance at the|551,34|||-1,195,9|||
|||627,834|32,673,||2,962,6|18,860,|
|end of the report|7,947.|||57,201.|||
|||,297.85|227.01||99.67|970.52|
|period|00|||01|||

 8. Statement of Changes inOwners’ Equity (Parent Company)
Current period
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Current period|||||||||||
|||Other equity instrument||||||||||
||||Perpetu||||Other|||||
||||||Capital|Less:|||Surplus||Total|
|Item|Share||al||||comprehe|Reasonab||Retaine||
|||preferre|||public|Inventory|||public||owner’s|
||capital||capital|Other|||nsive|le reserve||d profit||
|||d stock|||reserve|shares|||reserve||equity|
||||securiti||||income|||||
||||es|||||||||
|I. Balance at the|551,347,||||627,834,2||||32,673,22|-1,202,8|8,995,684|

|||||||
|-|-|-|-|-|-|
|end of the last yea|947.00|97.85|7.01|59,787.|.68|
|||||18||
|Add: Changes||||||
|of accounting||||||
|policy||||||
|Error||||||
|correction of the||||||
|previous period||||||
|Other||||||
|II. Balance at the||||-1,202,8||
||551,347,|627,834,2|32,673,22||8,995,684|
|beginning of this||||59,787.||
||947.00|97.85|7.01||.68|
|year||||18||
|III. Increase/||||||
|Decrease in this||||-918,71|-918,716.|
|year (Decrease is||||6.22|22|
|listed with “-”)||||||
|(i) Total||||||
|||||-918,71|-918,716.|
|comprehensive||||||
|||||6.22|22|
|income||||||
|(ii) Owners’||||||
|devoted and||||||
|decreased capital||||||
|1.Common shares||||||
|invested by||||||
|owners||||||
|2. Capital invested||||||
|by holders of other||||||
|equity instruments||||||
|3. Amount||||||
|reckoned into||||||
|owners equity with||||||
|share-based||||||
|payment||||||
|4. Other||||||
|(iii) Profit||||||
|distribution||||||
|1. Withdrawal of||||||
|surplus reserves||||||
|2. Distribution for||||||
|owners (or||||||

|||||||
|-|-|-|-|-|-|
|shareholders)||||||
|3. Other||||||
|(iv) Carrying||||||
|forward internal||||||
|owners’ equity||||||
|1. Capital reserves||||||
|conversed to||||||
|capital (share||||||
|capital)||||||
|2. Surplus reserves||||||
|conversed to||||||
|capital (share||||||
|capital)||||||
|3. Remedying loss||||||
|with surplus||||||
|reserve||||||
|4. Change amount||||||
|of defined benefit||||||
|plans that carry||||||
|forward retained||||||
|earnings||||||
|5. Other||||||
|(v) Reasonable||||||
|reserve||||||
|1. Withdrawal in||||||
|the report period||||||
|2. Usage in the||||||
|report period||||||
|(vi) Other||||||
|IV. Balance at the||||-1,203,7|8,076,968.46|
||551,347,|627,834,2|32,673,22|||
|end of the report||||78,503.||
||947.00|97.85|7.01|||
|period||||40||

 Last Period
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Last Period|||||||||||
|||Other equity instrument|||||Other|||||
||||||Capital|Less:|||Surplus||Total|
|Item|Share||Perpetu||||comprehe|Reasonab||Retaine||
|||preferre|||public|Inventory|||public||owner’s|
||capital||al|Other|||nsive|le reserve||d profit||
|||d stock|||reserve|shares|||reserve||equity|
||||capital||||income|||||

||||||||
|-|-|-|-|-|-|-|
|||securiti|||||
|||es|||||
||||||-1,204,2||
|I. Balance at the|551,347,||627,834,2|32,673,22||7,581,765|
||||||73,705.||
|end of the last yea|947.00||97.85|7.01||.88|
||||||98||
|Add: Changes|||||||
|of accounting|||||||
|policy|||||||
|Error|||||||
|correction of the|||||||
|previous period|||||||
|Other|||||||
|II. Balance at the|||||-1,204,2||
||551,347,||627,834,2|32,673,22||7,581,765|
|beginning of this|||||73,705.||
||947.00||97.85|7.01||.88|
|year|||||98||
|III. Increase/|||||||
|Decrease in this|||||1,413,9|1,413,918|
|year (Decrease is|||||18.80|.80|
|listed with “-”)|||||||
|(i) Total|||||||
||||||1,413,9|1,413,918|
|comprehensive|||||||
||||||18.80|.80|
|income|||||||
|(ii) Owners’|||||||
|devoted and|||||||
|decreased capital|||||||
|1.Common shares|||||||
|invested by|||||||
|owners|||||||
|2. Capital invested|||||||
|by holders of other|||||||
|equity instruments|||||||
|3. Amount|||||||
|reckoned into|||||||
|owners equity with|||||||
|share-based|||||||
|payment|||||||
|4. Other|||||||
|(iii) Profit|||||||
|distribution|||||||
|1. Withdrawal of|||||||

|||||||
|-|-|-|-|-|-|
|surplus reserves||||||
|2. Distribution for||||||
|owners (or||||||
|shareholders)||||||
|3. Other||||||
|(iv) Carrying||||||
|forward internal||||||
|owners’ equity||||||
|1. Capital reserves||||||
|conversed to||||||
|capital (share||||||
|capital)||||||
|2. Surplus reserves||||||
|conversed to||||||
|capital (share||||||
|capital)||||||
|3. Remedying loss||||||
|with surplus||||||
|reserve||||||
|4. Change amount||||||
|of defined benefit||||||
|plans that carry||||||
|forward retained||||||
|earnings||||||
|5. Other||||||
|(v) Reasonable||||||
|reserve||||||
|1. Withdrawal in||||||
|the report period||||||
|2. Usage in the||||||
|report period||||||
|(vi) Other||||||
|IV. Balance at the||||-1,202,8||
||551,347,|627,834,2|32,673,22||8,995,684|
|end of the report||||59,787.||
||947.00|97.85|7.01||.68|
|period||||18||

 III. Company Profile
According to the Approval Document SFBF (1991) No. 888 issued by thePeople’s Government of Shenzhen, Shenzhen China Bicycle Company (Holdings) Limited (hereinafter referred to as the Company) was reincorporated as the company limited by shares in November 1991. On 28 December 1991, upon the Approval Document SRYFZ(1991) No. 119 issued by Shenzhen Special Economic Zone Branch of thePeople’s Bank of China, the Company got listed on Shenzhen Stock Exchange,Registered capital of the Company amounted as 551,347,947.00 Yuan.
Legal representative: Li Hai
Location: No. 3008, Buxin Road, Luohu District, Shenzhen
Certificate for Uniform Social Credit Code: 914403006188304524
2. Business nature and main operation activities
The Company's industry: machinery manufacturing industry
Main operation activities: The production and assembly of various bicycles and spare parts, components, parts, mechanical product, sport machinery, fine chemicals, carbon fiber composites material, household electrical appliance and affiliated components (products management by license excluded).
The majority of its products were previously exported, however, the sales volume sharply declined in recent years because of the antidumping litigation. Hence, the Company commences on the debt reorganization and the reorganization plan was completed on 27 December 2013 with bankruptcy proceedings terminated. Meanwhile, makes greater efforts to develop and research the new products, and creates a range of electrical bicycles to occupy the domestic market.
Main products and services provided so far: EMMELLE bicycles, electrical bicycles and lithium battery material
3. Release of the financial report
The Financial Report released on 18 April 2019 after approved by
11th
session of
10th
BOD of the Company
One subsidiary included in consolidate scope in the period, found more in Note IX- equity in other entity and Note VIII Change of consolidate scope
IV. Compilation Basis of Financial Statement
1. Compilation Basis
The financial statement is prepared based on continuing operation assumptions, and according to actual occurrence, in line with relevant accounting rules and follow important accounting policy and estimation.
2. Going concern
On 11 May 2012, the largest shareholder and biggest creditor of the Company, Shenzhen Guosheng Energy Investment Development Co., Ltd. applied to Shenzhen Municipal Intermediate People's Court for reforming the Company as the Companycouldn’t pay off the matured debts and was seriously insolvent. On 12 October 2012, Shenzhen Municipal Intermediate People's Court ruled to accept the application proposed by Guosheng Energy according to (2012) Shenzhen Intermediate Court Po Zi No. 30 civil ruling. On the last ten-day of October 2012, Shenzhen Municipal Intermediate People's Court ruled to reform the Company since 25 October 2012 according to (2012) Shenzhen Intermediate Court Po Zi No. 30-1 civil ruling, appointed King& Wood (Shenzhen) Mallesons and Shenzhen ZhengYuan Liquidation Affairs Co., Ltd. as the custodians of the Company. On the same day, Shenzhen Municipal Intermediate People's Court made (2012) Shenzhen Intermediate Court Po Zi No. 30-1 written decision, and approved the Company to manage property and business affairs by itself under the supervision of custodians according to the law. On 5 November 2013, the Shenzhen IntermediatePeople’s Court (2012) Shen Zhong Fa Po Zi No. 30-6 Civil Ruling Paper judged that approved the reorganization plan of the Company. On 27 December 2013, the Civil Ruling Paper Shenzhen IntermediatePeople’s Court (2012) Shen Zhong Fa Po Zi No. 30-10 ruled that the reorganization plan of CBC was completed and bankruptcy procedures of the Company closed down.
The Company has solved the debt problem by reforming, realized the net assets with positive value, the main business of bicycle is able to be maintained and realizes the stable development. The Company has set up the conditions for introducing the recombination party in the reforming plan, and expects to restore the abilities of sustainable operation and sustained profitability by reorganization. The conditions of introducing the recombination party includes: the assessed value of net assets should be no less than 2 billion Yuan, the net assets in the same year for implementing the major reorganization should be no less than 200 million Yuan. The Companydoesn’t have the recombination party at the moment.
V. Main accounting policy and Accounting Estimate
Whether the company needs to comply with the disclosure requirements of the particular industry No
Tips for specific accounting policy and estimate:
Nil
1. Declaration on compliance with accounting standards
The financial statement prepared by the Company, based on follow compilation basis, is comply with the requirement of new accounting standards for business enterprise issued by Ministry of Finance and its application guide, commentate as well as other regulations (collectively referred to
as Accounting Standards for Business Enterprise), which is reflect a real and truth financial status of the Company, as well as operation results and cash flow situations.
Furthermore, the statement has reference to the listing and disclosure requirement from “Rules Governing the Disclosure of Information for Enterprise with Stock Listed No.15-general regulation of financial report” (2014 Revised) and “Notice on Implementation of New Accounting Standards for Listed Companies” (KJBH (2018) No. 453)
2. Accounting period
Calendar year is the accounting period for the Company, which is starting from 1 January to 31 December.
3. Business cycles
The business period for the Company, which is the Gregorian calendar starting from 1 January to 31 December
4. Recording currency
The Company and its subsidiaries take RMB as the standard currency for bookkeeping.
5. Accounting treatment for business combinations under the same control and those not under the same control
(1) Accounting treatment for business combinations under the same control and those not under the same control
For a business merger that is under the same control and is achieved by the Company through one single transaction or multiple transactions, assets and liabilities obtained from that business combination shall be measured at their book value at the combination date as recorded by the party being absorbed in the consolidated financial statement of ultimate controlling party. Capital reserve shall be adjusted as per the difference between the book value of obtained net assets and the book value of paid consolidated consideration (or the nominal value of the issued shares) of the Company; retained earnings shall be adjusted if the capital reserve is not sufficient for offset.
(2) Accounting treatment for Enterprise combine not under the same control
The Company will validate the difference that the combined cost is more than the fair value of the net identifiable assets gained from the acquiree on the acquisition date as goodwill; where the combined cost is less than the fair value of net identifiable assets gained from the acquiree during business combination, the fair value and combined cost of various identifiable assets, liabilities
and contingent liabilities from the acquiree must be rechecked. Where the combined cost is, after the recheck, still less than the fair value of net identifiable assets gained from the acquiree during business combination, the difference shall be charged to current profits and losses.
As for business combination not under common control and realized through multiple transactions and by steps, the Company shall make accounting treatment as follows:
1) Adjust the initial investment cost of long-term equity investments. As for stock equities held before the acquisition date accounted according to the equity method, re-measurement is carried out according to the fair value of the equity on the acquisition date. The balance between the fair value and the book value is included in the current investment income. If theacquiree’s stock equities held before the acquisition date involves changes of other comprehensive incomes and other owner's equities under accounting with the equity method, the balance between the fair value and the book value is included in the current investment income on the acquisition date, excluding other comprehensive incomes incurred by changes due to re-measurement of net liabilities or net assets of the defined benefit plan.
2) Confirm the goodwill (or include the amount in the profits and losses). The initial investment cost of long-term equity investments adjusted in step 1 is compared with the fair value of net identifiable assets of the subsidiary shared on the acquisition date. If the former is greater than the latter, the balance is confirmed as goodwill; if the former is less than the latter, the balance is included in the current profits and losses.
Loss of control of a subsidiary in multiple transactions in which it disposes equity interests of its subsidiary in stages
(1)In determining whether to account for the multiple transactions as a single transaction
A parent shall consider all the terms and conditions of the transactions and their economic effects. One or more of the following may indicate that the parent should account for the multiple arrangements as a single transaction:
1) Arrangements are entered into at the same time or in contemplation of each other;
2) Arrangements work together to achieve an overall commercial effect;
3) The occurrence of one arrangement is dependent on the occurrence of at least one other arrangement;
4)One arrangement considered on its own is not economically justified, but it is economically justified when considered together with other arrangements.
(2)Accounting treatment for each of the multiple transactions forming part of a bundled transactions which eventually results in loss of control the subsidiary during disposal of its subsidiary in stages
If each of the multiple transactions forms part of a bundled transactions which eventually results in loss of control the subsidiary, these multiple transactions should be accounted for as a single
transaction. In the consolidated financial statements, the difference between the consideration received and the corresponding percentage of thesubsidiary’s net assets in each transaction prior to the loss of control shall be recognized in other comprehensive income and transferred to the profit or loss when the parent eventually loses control of the subsidiary.
The remaining equity investment shall be re-measured at its fair value in the consolidated financial statements at the date when control is lost. The difference between the total amount of consideration received from the transaction that resulted in the loss of control and the fair value of the remaining equity investment and the share of net assets of the former subsidiary calculated continuously from the acquisition date or combination date based on the previous shareholding proportion, shall be recognized as investment income for the current period when control is lost. The amount previously recognized in other comprehensive income in relation to the formersubsidiary’s equity investment should be transferred to investment income for the current period when control is lost
③Accounting treatment for each of the multiple transactions NOT forming part of a bundled transactions which eventually results in loss of control the subsidiary during disposal of its subsidiary in stages
If the Company doesn't lose control of investee, the difference between the amount of the consideration received and the corresponding portion of net assets of the subsidiary shall be adjusted to the capital reserve (capital /equity premium) in the consolidated financial statements.
If the Company loses control of investee, the remaining equity investment shall be re-measured at its fair value in the consolidated financial statements at the date when control is lost. The difference between the total amount of consideration received from the transaction that resulted in the loss of control and the fair value of the remaining equity investment and the share of net assets of the former subsidiary calculated continuously from the acquisition date or combination date based on the previous shareholding percentage, shall be recognized as investment income for the current period when control is lost. The amount previously recognized in other comprehensive income in relation to the formersubsidiary’s equity investment should be transferred to investment income for the current period when control is lost.
6. Compilation method of consolidated financial statement
Consolidated financial statements are prepared by the Company in accordance with Accounting Standard for Business Enterprise No. 33-Consolidated Financial Statements and based on financial statements of parent company and its subsidiaries and other related information.
When consolidating the financial statements, the following items are eliminated: internal equity
investment andowners’ equity of subsidiaries, proceeds on internal investments and profit distribution of subsidiaries, internal transactions, internal debts and claim. The accounting policies adopted by subsidiaries are the same as parent company.
7. Classification of joint venture arrangement and accounting treatment for joint control
(1) Affirmation and classification of joint venture arrangement
Joint arrangement refers to an arrangement controlled by two or more than two participants. Joint venture arrangement has the following characteristics: 1) Each participant is bound by the arrangement; 2) Two or more participants carry out joint control on implementation of the arrangement. Any participant cannot control the arrangement independently. Any participant for joint control can stop other participants or participant combinations to independently control the arrangement.
Joint control refers to the sharing of control over certain arrangement under related agreements, and related activities of the arrangement must be determined only when obtaining the unanimous consent of the parties sharing control.
Joint venture arrangement is classified in to joint operation and joint venture. Joint operation refers to an arrangement that a joint party enjoys assets related to the arrangement and bears liabilities related to the arrangement. Joint venture refers to an arrangement that a joint party only has the power governing net assets of the arrangement.
(2) Accounting treatment of joint venture arrangement
Joint venture participants should confirm the following items related to interest shares in joint venture and carry out accounting settlement according to relevant provisions of the Accounting Standards for Business Enterprises: 1) confirm the assets held separately and confirm the assets held jointly based on shares; 2) confirm the liabilities borne separately and confirm the liabilities borne jointly based on shares; 3) confirm the income incurred after selling its shares in joint venture output; 4) confirm the income after selling the joint venture outputs based on shares; 5) confirm the expenses incurred separately and confirm the expenses incurred in joint venture based on shares.
Joint venture participants should carry out accounting settlement for investments of the joint venture according to provisions of Accounting Standards for Business EnterprisesNo.2–Long-term Equity Investments.
8. Recognition of cash and cash equivalents
Cash in cash flow statement means the inventory cash and savings available for use anytime. Cash
equivalents refer to the short-term (generally due within three months since the date of purchase) highly liquid investments that are readily convertible into known amounts of cash and that are subject to an insignificant risk of change in value.
9. Foreign currency transaction and financial statement conversion
(1)Conversion for foreign currency transaction
When initially recognized, the foreign currency for the transaction shall be converted into CNY amount according to the spot exchange rate on the date of transaction. For the foreign currency monetary items, conversion must be based on the spot exchange rate on the balance sheet date and the exchange difference incurred from different exchange rates, except for the exchange difference of principal and interest incurred due to foreign currency loan related to acquisition or construction of assets that qualify for capitalization, shall be charged to current profits and losses; foreign currency non-monetary items measured with historical cost are still converted as per the spot exchange rate on the transaction date and keep the RMB amount unchanged; foreign currency non-monetary items measured with fair value shall be converted as per the spot exchange rate on the date of determining the fair value and the difference shall be charged to current profits and losses or other comprehensive income.
(2)Conversion of financial statements presented in foreign currencies
The asset and liability items in the balance sheet shall be converted at the spot exchange rate on the balance sheet date; theowner’s equity items, except for the items of “undistributed profit”, shall be converted at the spot exchange rate on the transaction date; the income and expenditure items in the profit statement shall be converted at the spot exchange rate on the transaction date. The translation difference of foreign financial statements conducted as above is recognized as other comprehensive incomes.
10. Financial instruments
Financial instrument including the financial assets, financial liability and equity instrument
(1) Classification of financial assets and financial liability
Financial assets can be divided into four types while initially recognized: financial assets at fair value through profit or loss (including transactional financial assets and those financial assets designated as at fair value through profit or loss), held-to-maturity investments; loans& receivables; available-for-sale financial assets.
Financial liability can be divided into two types while initially recognized: financial liability at fair
value through profit or loss (including transactional financial liability and those financial liabilities
designated as at fair value through profit or loss) and other financial liability
(2)Recognition, measurement and derecognition of financial assets and financial liabilities
Financial assets or financial liabilities are recognized when the Group becomes a party to the contractual provisions of the instrument. Financial assets or financial liabilities are initially measured at fair value. For financial assets and financial liabilities at fair value through profit or loss, transaction costs are immediately recognized to profit or loss. For other financial assets or financial liabilities, transaction costs are included in their initial recognized amounts.
Financial assets are subsequently measured at fair value without considering of the possible transaction costs upon the disposal thereof in the future, except that: (1) Held-to-maturity investments and loans and receivables are subsequently measured at amortised cost using the effective interest method; and (2) Investments in equity instruments that do not have a quoted price in an active market and whose fair value cannot be reliably measured, and derivative financial assets that are linked to and must be settled by delivery of such unquoted equity instruments, they are measured at cost.
Financial liabilities are subsequently measured at amortised cost using the effective interest method, except that: (1) Financial liabilities at fair value through profit are subsequently measured at fair value without considering of the possible transaction costs upon the settlement thereof in the future; (2) Derivative financial liabilities that are linked to and must be settled by delivery of an unquoted equity instrument without a quoted price in an active market whose fair value cannot be reliably measured, they are subsequently measured at cost; and (3) Financial guarantee contracts that are not designated as financial liabilities at fair value through profit or loss, or loan commitments to provide a loan at a below-market interest rate, which are not designated at fair value through profit or loss, subsequent to initial recognition, they are measured at the higher of: (1) the amount determined in accordance with ASBE No. 13 “Contingencies”; and (2) the amount initially recognized less cumulative amortisation recognized in accordance with the principles set out in ASBE No. 14 “Revenue”.
Any gains or losses arising from changes in the fair value on financial assets or financial liabilities, other than those hedging instrument, are accounted for as follows: (1) Gains or losses arising from the change in fair value on financial assets or financial liabilities at fair value through profit or loss are recorded as gains or losses from change in fair value; Any interest or dividend income earned during the holding on such financial assets are recognized to profit or loss. On disposal, the differences between the consideration received and initial recognized amount are recognized as investment income and adjust to the gains or losses from change in fair value accordingly; and (2) Changes in fair value of available-for-sale financial assets are recorded in the other comprehensive income. Interest calculated using the effective interest method for the periods, in which the assets
are held, are recognized as investment income. Cash dividends from available-for-sale equity investments are recognized as investment income when the dividends are declared by the investee. On disposal, the differences between the considerations received and the carrying amounts of financial assets after deducting the accumulated fair values adjustments previously recorded in the other comprehensive income are recognized as investment income.
A financial asset is derecognized when the contractual rights to the cash flows from the financial asset terminate, or when it transfers substantially all the risks and rewards of ownership of the asset to another entity. A financial liability (or part of it) is derecognized only when the underlying present obligations (or part of it) are discharged.
(3)Recognition and measurement on transfer of financial assets
If the Group has transferred substantially all the risks and rewards of ownership of the financial asset to the transferee, the financial asset should be derecognized; If the Group retains substantially all the risks and rewards of ownership of a financial asset, the transferred financial asset should be recognized and the consideration received should be recognized as a financial liability; If the Group neither transfers nor retains substantially all the risks and rewards of ownership of a financial asset, it shall be accounted for as follows: (1)the financial asset should be derecognized if the Group waives control over the asset; (2)it recognises the financial asset to the extent of its continuing involvement in the transferred financial asset and recognises an associated liability if the Group does not waives control over the asset.
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, the difference of the following is recognized to profit or loss: (1) The carrying amount of the financial asset transferred; and (2) The sum of the consideration received from the transfer and any cumulative change of fair value that has been previously recognized in other comprehensive income directly. If a part of the transferred financial asset qualifies for derecognition, the carrying amount of the transferred financial asset is allocated between the part that continues to be recognized and the part that is derecognized, based on the respective fair values of those parts. The difference of the following is recognized to profit or loss: (i) The carrying amount allocated to the part derecognized; and (ii) The sum of the consideration received for the part derecognized and any cumulative change of fair value allocated to the part derecognized which has been previously recognized in other comprehensive income directly.
(4)Determination of fair value of financial assets and financial liabilities
For a financial asset or financial liability which has an active market, the Group considers the quoted price in the active market to determine its fair value. For a financial assets or financial liability which has no active market, the Group uses a valuation technique (valuation techniques
include using recentarm’s length market transactions between knowledgeable, willing parties, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models) to determine its fair value. For a financial asset acquired or a financial liability assumed initially, its fair value is based on the price of market transactions.
(5) Provision for impairment on financial assets other than account receivables
At each balance sheet date, the Group assesses the carrying amounts of its financial assets other than those financial assets at fair value through profit or loss. If there is objective evidence that a financial asset is impaired, the Group determines the amount of any impairment loss.
For a financial asset that is individually significant, the Company assesses the asset individually for impairment. For a financial asset that is not individually significant, the Company assesses the asset individually for impairment or includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. If the Company determines that no objective evidence of impairment exists for an individually assessed financial asset (whether significant or not), it includes the asset in a group of financial assets with similar credit risk characteristics and collectively reassesses them for impairment.
At the end of the reporting period, if there is objective evidence that an impairment loss on a financial asset carried at amortized cost has occurred, an impairment loss is recognized as the excess of the carrying amount of the financial asset over its present value of estimated future cash flows to profit or loss. If an impairment loss has been incurred on an investment in unquoted equity instrument without a quoted price in an active market whose fair value cannot be reliably measured, or on a derivative financial asset that is linked to and must be settled by delivery of such equity instrument, an impairment loss is recognized as the excess of the carrying amount of the unquoted equity investment or a derivative financial asset over its present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset to profit or loss.
An impairment is recognized where there is a significant decrease in the fair value of available for sale financial assets, or taken into account all factors, the decrease trend is not temporary to profit or loss. The cumulative loss arising from decline in fair value previously recognized directly in the other comprehensive income is reclassified from the capital reserve to profit or loss.
(6)There is no reclassification of held-to-maturity investment which is not due into financial assets available for sale during the period.
11. Note receivable and account receivable
(1) Account receivable with single significant amount and withdrawal single item bad debt provision
|||
|-|-|
||Single significant account: the single receivable has over 5|
|Account with single significant amount||
||million yuan at end of the period|
||At the end of the period, the receivables with significant single|
||amount are tested separately for impairment. If there is objective|
||evidence that they have been impaired, the impairment loss will|
|Withdrawal method for bad debt provision of account receivable||
||be recognized and the provision for bad debts will be made based|
|with single significant amount||
||on the balance between the present value of future cash flows|
||and its book value.|

(2) Accounts receivable whose bad debts provision was accrued by combination based on credit risk characteristics portfolio
|||
|-|-|
|Combination|Bad debt provision accrual|
|Credit risk portfolio|Age analysis method|

Accrual bad debt provision by age analysis in combination:
√ Applicable□ Not applicable
||||
|-|-|-|
|Account age|Accrual ratio|Accrual ratio for other receivable|
|Within one year(one year included)|0.30%|0.30%|
|1－2 years|0.30%|0.30%|
|2－3 years|0.30%|0.30%|
|Over 3 years|100.00%|100.00%|

 In combination, withdrawal proportion of bad debt provision based on balance proportion
□ Applicable√ Not applicable
In combination, withdrawal proportion of bad debt provision based on other methods:
□ Applicable√ Not applicable
(3) Account receivable with minor single amount but with withdrawal bad debt provision for single item
|||
|-|-|
||The Company conducts impairment test separately for|
||receivables that are not significant in single amount but have the|
||following characteristics, if there is objective evidence that they|
|Reasons for provision of bad debt reserve|have been impaired, the impairment loss will be recognized and|
||the provision for bad debts will be made based on the balance|
||between the present value of future cash flows and its book|
||value; receivables that are in dispute with the other party or|

|||
|-|-|
||involving litigation or arbitration; there are clear signs indicating|
||that the debtor is likely to be unable to fulfill the repayment|
||obligations of the receivables.|
||If the impairment test is carried out separately and there is|
||objective evidence that it has been impaired, the impairment loss|
||will be recognized and the provision for bad debts will be made|
|Provision method of bad debt reserve||
||based on the balance between the present value of future cash|
||flows and its book value.|

12. Inventory
Whether the company needs to comply with the disclosure requirements of the particular industry
No
(1) Classification of inventory
The inventory of the Company refers to such seven classifications as the raw materials, product in process, goods on hand, wrap page, low value consumables, materials for consigned processing and goods sold.
(2) Valuation of inventories
Inventories are initially measured at cost upon acquisition, which includes procurement costs, processing costs and other costs. The prices of inventories are calculated using weighted average method when they are delivered.
(3) Provision for inventory impairment
When a comprehensive count of inventories is done at the end of the period, provision for inventory impairment is allocated or adjusted using the lower of the cost of inventory and the net realizable value. The net realizable value of stock in inventory (including finished products, inventory merchandize and materials for sale) that can be sold directly is determined using the estimated saleable price of such inventory deducted by the cost of sales and relevant taxation over the course of ordinary production and operation. The net realizable value of material in inventory that requires processing is determined using the estimated saleable price of the finished product deducted by the cost to completion, estimated cost of sales and relevant taxation over the course of ordinary production and operation. The net realizable value of inventory held for performance of sales contract or labor service contract is determined based on the contractual price; in case the
amount of inventory held exceeds the contractual amount, the net realizable value of the excess
portion of inventory is calculated using the normal saleable price.
Provision for impairment is made according to individual items of inventories at the end of the period; however, for inventories with large quantity and low unit price, the provision is made by categories; inventories of products that are produced and sold in the same region or with the same or similar purpose or usage and are difficult to be measured separately are combined for provision for impairment.
If the factors causing a previous write-off of inventory value has disappeared, the amount written-off is reversed and the amount provided for inventory impairment is reversed and recognized in profit or loss for the period.
(4)Inventory system
Perpetual inventory system is adopted.
13. Assets held for sale
The Company classifies such corporate components (or non-current assets) that meet the following criteria as held-for-sale: (1) Disposable immediately under current conditions based on similar transactions for disposals of such assets or practices for the disposal group; (2) Probable disposal; that is, a decision has been made on a plan for disposal and an undertaking to purchase has been obtained (the undertaking to purchase means a binding purchase agreement entered into by the Company and other parties, which contains transaction price, time and adequately strict punishments for breach of contract provisions, which renders the possibility of material adjustment or revocation of the agreement is extremely minor), and the disposal is expected to be completed within a year. Besides, approval from relevant competent authorities or regulatory authorities has been obtained as required by relevant rules.
The expected net residual value of asset held for sale is adjusted by the Company to reflect its fair value less selling expense, provided that the net amount shall not exceed the original carrying value of the asset. In case that the original value is higher than the adjusted expected net residual value, the difference shall be recorded in profit or loss for the period as asset impairment loss, and allowance of impairment for the asset shall be provided. Impairment loss recognized in respect of the disposal group held for sale shall be used to offset the carrying value of the goodwill in the disposal group, and then offset the carrying value of the non-current assets within the disposal group based on their respective proportion of their carrying value.
In respect of the non-current assets held for sale, if the net amount after their fair value less the selling expenses increased as at the subsequent balance date, the reduced amount before will be recovered and reversed in the assets impairment loss amount recognized after being classified as held for sale, and the reversed amount will be recorded in the current profits or loss. The impairment loss on assets recognized before being classified as held for sale will not be reversed. In respect of the disposal group held for sale, if the net amount after their fair value less the selling
expenses increased as at the subsequent balance date, the reduced amount before will be recovered and reversed in the assets impairment loss amount recognized in non-current assets after being classified as held for sale, and the reversed amount will be recorded in the current profits or loss. The reduced book value of the goodwill as well as the impairment loss on assets recognized before the non-current assets are classified as held for sale will not be reversed. The subsequent reversed amount in respect of the impairment loss on assets recognized in the disposal group held for sale will increase the book value in proportion of the book value of each non-current assets (other than goodwill) in the disposal group.
In respect of loss of control in a subsidiary arising from disposal of the investment in such subsidiary, the investment in a subsidiary shall be classified as held for sale in its entirety in the individual financial statement of the parent company, and all the assets and liabilities of the subsidiary shall be classified as held for sale in the consolidated financial statement subject to that the proposed disposal of investment in the subsidiary satisfies such conditions as required for being classified as held for sale notwithstanding part equity investment will be retained by the Company after such disposal.
14. Long-term equity investment
(1)Determination of investment costs
1) If it is formed by the business combination under the common control, and that the combining party takes cash payment, transfer of non-cash assets, assumption of debts or issuance of equity securities as the consolidation consideration, the shares of the book value of theowner’s equity obtained from the combined party on the date of combination in the ultimate controllingparty’s consolidated financial statements shall be recognized as its initial investment cost. Capital reserves shall be adjusted according to the balance between the initial investment cost for long-term equity investment and the book value of paid consolidation consideration or the total face value of issued shares (capital premium or equity premium). If capital reserves are insufficient for offset, retained earnings shall be adjusted.
As for business combination under the common control realized by the Company through several transactions, the initial investment cost of the investment shall be determined based on the share of the carrying value of theowners’ equity of the consolidated party as calculated according to the shareholding proportion on the consolidation date. Difference between initial investment cost and the carrying value of long-term equity investment before combination and the sum of carrying value of newly paid consideration for additional shares acquired on the date of combination is to adjust capital reserve (capital premium or equity premium). If the balance of capital reserve is insufficient, any excess is adjusted to retained earnings.
2) As for long-term equity investment formed from business combination not under common
control, the fair value of the consolidated consideration paid shall be deemed as the initial
investment cost on the acquisition date.
3) Except those ones formed by the business combination, for all items obtained by means of cash payment, actually paid acquisition costs shall be taken as the initial investment cost. For those ones obtained by the issuance of equity securities, the fair value of the issued equity securities shall be taken as the initial investment cost. For those ones invested by investors, the value agreed in the investment contract or agreement shall be taken as the initial investment cost, provided that the value agreed in the contract or agreement shall be fair.
(2)Subsequent measurement and profit or loss recognition
For a long-term equity investment where the Company can exercise control over the investee, the long-term investment is accounted for using the cost method in theCompany’s financial statements. The equity method is adopted when the Group has joint control, or exercises significant influence on the investee.
Under cost method, long term equity investment is measured at initial investment cost. Except for the price actually paid for obtaining the investment or the cash dividends or profits declared but not yet distributed which is included in the consideration, the Company recognizes cash dividends or profits declared by the investee as current investment gains, and determine whether there is impairment on long term investment according to relevant assets impairment policies.
Under equity method, when the initial investment cost of the long-term equity investment exceeds the share of fair value in the net identifiable assets in the investee, the difference shall be included in initial investment cost of the long-term equity investment. When the initial investment cost is lower than the share of fair value in the net identifiable asset in the investee, such difference is recognized in profit or loss for the period with adjustment of cost of the long-term equity investment.
Under equity method, after the Company acquires a long-term equity investment, it shall, in accordance with its attributable share of the net profit or loss realized by the investee, recognize the investment profit or loss and adjust carrying value of the investment. The Group recognizes its share of theinvestee’s net profits or losses after making appropriate adjustments to theinvestee’s net profits and losses based on the fair value of theinvestee’s identifiable assets at the acquisition date, using theGroup’s accounting policies and periods, and eliminating the portion of the profits or losses arising from internal transactions with its joint ventures and associates, attributable to the investing entity according to its shareholding proportion (but impairment losses for assets arising from internal transactions shall be recognized in full). The carrying amount of the investment is reduced based on theGroup’s share of any profit distributions or cash dividends declared by the investee. TheGroup’s share of net losses of the investee is recognized to the extent the carrying amount of the investment together with any long-term interests that in substance form part of its net investment in the investee is reduced to zero, except that the Group has the obligations to
assume additional losses. The Group adjusts the carrying amount of the long-term equity investment for any changes inowners’ equity of the investee (other than net profits or losses) and includes the corresponding adjustments in theowners’ equity of the Group.
(3) Determination of control and significant influence on investee
Control is the power over an investee. An investor must have exposure or rights to variable returns from its involvement with the investee, and the ability to use its power over the investee to affect the amount of theinvestor’s returns. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control with other parties over those policies
(4)Disposal of long-term equity investment
1) Partial disposal of long term investment in which control is retained
When long term investment is been partially disposed but control is retained by the company, the difference between disposal proceeds and carrying amount of the proportion being disposed is accounted for through profit or loss.
2) Partial disposal of long term investment in which control is lost
When long term investment is partially disposed and control is lost as a result, the carrying value of the long term invest on the stock right, the difference between carrying amount of the part being disposed and disposal proceeds should be recognized as profit or loss. The residual part should be treated as long term investment or other financial assets according to their carrying amount. After partial disposal, if the company is able to exert significant influence or common control over the investee, the investment should be measured according to cost method or equity method, in compliance with relevant accounting standards and regulations.
(5)Impairment test and provision for impairment
If there is objective evidence on the balance sheet date showing investment in subsidiaries, associates and joint ventures is impaired, provision of impairment shall be made against the difference between the carrying amount and the recoverable amount of the investment.
15. Investment real estate
Measurement mode
Measured by cost method
Depreciation or amortization method
(1) Investment property including land use right which has been rented out, land use right which is held for transfer upon appreciation and buildings which has been rented out.
(2) Investment properties are initially measured at cost and subsequently measured as per the cost
pattern, and relevant withdrawal of provision for depreciation or amortization is carried out by the same method for fixed assets and intangible assets. As of the balance sheet date, where there is any indication that an investment property experiences impairment, the relevant impairment provision shall be provided for based on the difference between the carrying value and the recoverable amount.
16. Fixed assets
(1) Confirmation conditions
Fixed assets refer to the tangible assets for production of products, provision of labor, lease or operation, and with
a service life in excess of 1 financial year. Fixed assets may be recognized unless it simultaneously meets the
conditions as follows:①The economic benefits pertinent to the fixed asset are likely to flow into the enterprise;
and②The cost of the fixed assets can be measured reliably.
(2) Depreciation methods
||||||
|-|-|-|-|-|
|Category|Method|Years of depreciation|Scrap value rate|Yearly depreciation rate|
|Housing buildings|Straight-line depreciation|20|10%|4.5%|
|Machinery equipment|Straight-line depreciation|10|10%|9%|
|Office equipment|Straight-line depreciation|5|10%|18%|
|Electronic equipment|Straight-line depreciation|5|10%|18%|
|Means of transportation|Straight-line depreciation|5|10%|18%|
|Other equipment|Straight-line depreciation|5|10%|18%|

Nil
(3) Recognization basis, valuation and depreciation method for financial lease assets
Finance lease is determined when one or a combination of the following conditions are satisfied: (1) the ownership has been transferred to the lessee when the leasing term is due; (2) the lessee has the option to purchase the leasing asset at a price that is much lower than its fair value, so it can be reasonably determined that the lessee will take the option at the very beginning of the lease; (3) the leasing term accounts for most time of the useful life (ordinarily accounting for75% or higher) even if the ownership does not transfer to the lessee; (4) the present value of the minimum amount of rent that the lessee has to pay at the first day of the lease amounts to90% or higher of its fair value at the same date; or the present value of the minimum amount of rent that the lessor collects at the first day of the lease amounts to90% or higher of its fair value at the same date; and/or (5) the leased assets are of such a specialized nature that only the lessee can use them without major
modifications. Fixed assets rented-in under finance lease are recorded at the lower of fair value
and the present value of the minimum lease payment at the inception of the lease, and are
depreciated following the depreciation policy for self-owned fixed assets.
17. Construction in progress
Whether the company needs to comply with the disclosure requirements of the particular industry
No
(1)When the construction in progress has reached the intended condition for use, it will be treated as fixed assets as per the actual construction cost. If the construction in progress has reached the intended condition for use but completion accounting is not carried out, the construction in progress should be first treated as fixed assets as per the estimated value. After completion accounting is carried out, the original estimated value should be adjusted as per the actual cost, but the provision for depreciation withdrawn should not be adjusted.
(2)As of the balance sheet date, where there is any indication that a construction in process experiences impairment, the relevant impairment provision shall be provided for based on the difference between the carrying value and the recoverable amount.
18. Borrowing expenses
(1)Principles of recognizing capitalization of borrowing expenses
The borrowing expenses of the Company directly attributable to the construction or production of an asset meeting capitalization conditions are capitalized and recognized in relevant asset costs; other borrowing expenses are recognized as expenses based on the amount incurred and recognized in profit or loss for the period.
An asset that meets the capitalization conditions refers to fixed assets, real estate investments and inventories that require a considerable amount of time for construction or production to reach the expected usable or saleable condition.
Borrowing expenses are capitalized when all of the following conditions are met:
①the asset expense has occurred, which includes expenses in the form of cash paid, nonmonetary asset transferred or interest-bearing obligations assumed for the construction or product of an asset that meets capitalization conditions;
②the borrowing expenses have occurred;
③the necessary construction or production activities for bringing the asset to the expected usable or saleable conditions have started.
Capitalization of borrowing expenses is suspended when any abnormal interruption continues for over three months during the construction or production of an asset that meets capitalization conditions.
When the construction or production of an asset meeting capitalization conditions has reached expected useful or saleable conditions, the capitalization of borrowing expenses is stopped.
When the a portion of the construction or production of an asset meeting capitalization conditions has completed and can be used individually, the capitalization of borrowing expenses of such portion of asset is stopped.
(2)Capitalization period of borrowing expenses
Capitalization period refers to the time starting from the borrowing expenses are capitalized to the time capitalization is stopped, except for the period which capitalization of borrowing expenses is suspended.
(3) Calculation of capitalized amount of borrowing expenses
Interest expenses of special loans (net of interest income from unutilized loans deposited in bank or investment gain earned from temporary investment) and supplementary expenses incurred for the construction or production of asset that meets capitalization conditions before the asset reaches expected useable or saleable condition are capitalized.
The interest amount that should be capitalized on normal borrowings is calculated based on the weighted average of expenses of the aggregate asset exceeding the expenses of the portion of special loan multiplied by the capitalization ratio of the normal borrowings utilized. Capitalization ratio is calculated based on normal weighted average interest rate.
19. Biological assets
Nil
20. Oil and gas asset
Nil
21. Intangible assets
(1) Valuation method, service life and impairment test
(1) Intangible assets include land use right, patent right and non-patent technology, which should be initially measured at cost.
(2) Intangible assets with limited service life should be amortized systematically and reasonably in their service lives as per the expected form of realization economic benefits relating to the said intangible assets. If the form of realization cannot be reliably determined, the intangible assets should be amortized on a straight-line basis.
(3)At the balance sheet date, when there is any indication that the intangible assets with finite
useful lives may be impaired, a provision for impairment loss is recognized on the excess of the carrying amounts of the assets over their recoverable amounts. Intangible assets with infinite useful lives and intangible assets not satisfying the condition for use yet are subject to impairment test each year notwithstanding whether the assets are impaired.
(2) Internal accounting policies relating to research and development expenditures
Expenditure incurred in the research phase of internalR&D shall be included in current gain/loss at the time of occurrence.
Intangible assets recognized for expenditure in exploitation stage by satisfying the followed at same time:
①it is technically feasible that the intangible asset can be used or sold upon completion;
②there is intention to complete the intangible asset for use or sale;
③the intangible asset can produce economic benefits, including there is evidence that the products produced using the intangible asset has a market or the intangible asset itself has a market; if the intangible asset is for internal use, there is evidence that there exists usage for the intangible asset;④there is sufficient support in terms of technology, financial resources and other resources in order to complete the development of the intangible asset, and there is capability to use or sell the intangible asset;
⑤the expenses attributable to the development phase of the intangible asset can be measured reliably.
22. Impairment of long-term assets
The Company makes a judgment on whether there is any sign of possible long-term assets impairment on the balance sheet date. Where there is a sign indicating potential impairment, the Company will estimate the recoverable amount. And if the recoverable amount of an asset is less than its carrying value, the carrying value shall be written down to the recoverable amount, and the amount written down shall be recognized as impairment loss and included in current profit or loss. Meanwhile, the Company shall make impairment provision for the asset accordingly.
No matter whether there is any sign of possible assets impairment, the goodwill formed by the merger of enterprises and intangible assets with uncertain service lives shall be subject to impairment test every year.
The estimate of the recoverable amount of the assets are determined at the higher of the net amount of the fair value less the disposal expenses and the present value of the estimated future cash flows.
The Group estimates the recoverable amount on an individual basis. If it is not possible to estimate
the recoverable amount of the individual asset, the Group determines the recoverable amount of the asset group to which the asset belongs.
Once the asset impairment loss is recognized, it will not be reversed in the subsequent periods
After the loss of asset impairment has been recognized, the depreciation or amortization expenses of the impaired asset shall be adjusted accordingly in the future periods so as to amortize the post-adjustment carrying value of the asset systematically (deducting the expected net residual value) within the residual service life of the asset.
23. Long-term expenses to be apportioned
Long-term expenses to be apportioned are booked by actual amount occurred, and apportioned evenly during the benefit period or regulated period.In case that the long-term deferred expenses are not likely to benefit the subsequent accounting periods, the outstanding value of the item to be amortized shall be included in current profit or loss in full.
24. Employee compensation
(1) Accounting treatment for short-term compensation
During the accounting period when staff providing service to the Company, the actual short-term compensation occurred shall recognized as liabilities and reckoned into current gains/losses or relevant assets costs. The non-monetary welfare is measured by fair value.
(2) Accounting treatment for post-employment benefit
The post-employment benefit including the defined contribution plans. And defined contribution plans including basic endowment insurance, unemployment insurance and annuity, corresponding payable amount will reckoned into relevant assets costs or current gains/losses while occurred.
(3) Accounting for retirement benefits
When the Company terminates the employment relationship with employees before the end of the employment contracts or provides compensation as an offer to encourage employees to accept voluntary redundancy, the Company shall recognize employee compensation liabilities arising from compensation for staff dismissal and included in profit or loss for the current period, when the Company cannot revoke unilaterally compensation for dismissal due to the cancellation of labor relationship plans and employee redundant proposals; and the Company recognize cost and expenses related to payment of compensation for dismissal and restructuring, whichever is earlier.
(4) Accounting for other long-term employee benefits
The employees of the Company have participated in the basic social endowment insurance organized and implemented by the local labor and social security department. The Company pays the endowment insurance premium to the local basic social endowment insurance agency on a monthly basis based on the base and ratio of the local basic social endowment insurance payment. After the retirement of employees, the local labor and social security department has the responsibility to pay the social basic pension to the retired employees. During the accounting period in which employees provide services, the Company recognizes the amount payable calculated according to the above social security insurance regulations as the liabilities and includes them in the current profit and loss or related asset costs.
25. Accrual liability
(1)When the obligations arising from provision of external guarantee, lawsuits, product quality guarantee and contract loss and other contingent issues become the present obligations of the company, the performance of which is likely to result in outflow of benefit from the company and the amount of which can be measured reliably, the company shall recognize such obligations as projected liabilities.
(2)Projected liabilities are initially measured at the best estimate on the expenses required to perform the relevant present obligation by the Company, and the carrying value of project liabilities are reviewed on each balance sheet date.
26. Share-based payment
(1)Types of share-based payment
Share-based payment comprises of equity-settled share-based payment and cash-settled share-based payment.
(2)Determination of fair value of equity instruments
1)determined based on the price quoted in an active market if there exists active market for the instrument.
2)determined by adoption of valuation technology if there exists no active market, including by reference to the recentarm’s length market transactions between knowledgeable, willing parties, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models.
(3)Basis for determination of the best estimate of exercisable equity instruments
To be determined based on the subsequent information relating to latest change of exercisable employees.
(4)Accounting relating to implementation, amendment and termination of share-based payment schemes
1)Equity-settled share-based payment
For equity instruments that may be exercised immediately after the grant, the fair value of such instrument shall, on the date of the grant, be recognized in relevant costs or expenses with the increase in the capital reserve accordingly. For equity-settled share-based payment made in return for the rendering of employee services that cannot be exercised until the services are fully rendered during vesting period or specified performance targets are met, on each balance sheet date within the vesting period, the services acquired in the current period shall, based on the best estimate of the number of exercisable instruments, be recognized in relevant costs or expenses and the capital reserves at the fair value of such instruments on the date of the grant.
For equity-settled share-based payment made in exchange for service from other parties, such payment shall be measured at the fair value of the service as of the acquisition date is the fair value can be measured reliably. And if the fair value of the service cannot be measured reliably while the fair value of the equity instrument can be measured reliably, it shall be measure at the fair value of the instrument as of the date on which the service is acquired, which shall be recorded in relevant cost or expense with increase inowners’ equity accordingly.
2)Cash-settled share-based payment
For the cash-settled share-based payment that may be exercised immediately after the grant in exchange for render of service by employees, the fair value of the liability incurred by the Company shall, on the date of the grant, be recognized in relevant costs or expenses and the liabilities shall be increased accordingly. For cash-settled share-based payment made in return for the rendering of employee services that cannot be exercised until the services are fully provided during vesting period or specified performance targets are met, on each balance sheet date within the vesting period, the services acquired in the current period shall, based on the best estimate of the number of exercisable instruments, be recognized in relevant costs or expenses and the corresponding liabilities at the fair value of the liability incurred by the Company.
3)Revision and termination of share-based payment schemes
If the revision results in an increase in the fair value of the equity instruments granted, the Company shall recognize the increase in the services rendered accordingly at the increased fair value of the equity instruments. If the revision results in an increase in the number of equity instruments granted, the Company will recognize the increase in the services rendered accordingly at the fair value of the increased number of equity instruments. If the Company revises the vesting conditions on terms favorable to the employees, the Company will take into consideration of the revised vesting conditions when dealing with the vesting conditions.
If the revision results in a decrease in the fair value of the equity instruments granted, the Company shall continue recognize the amount of services rendered accordingly at the fair value of the equity instruments on the date of grant without considering the decrease in the fair value of the equity instruments. If the revision results in a decrease in the number of equity instruments granted, the Company will account for such decrease by reducing part of the cancellation of equity instruments granted. If the Company revises the vesting conditions on terms not favorable to the employees, the Company will not take into consideration of the revised vesting conditions when dealing with the vesting conditions.
If the Company cancels the equity instruments granted or settles the equity instruments granted during the vesting period (other than cancellation as a result of failure to satisfy the vesting conditions), such cancellation or settlement will be treated as accelerated exercisable rights and the original amount in the remaining vesting period will be recognized immediately.
27. Other financial instruments including senior shares and perpetual bonds
(1) Distinguish of senior shares and perpetual bonds
The perpetual bonds and senior shares issued by the Company are treated as equity instruments subject to satisfaction of all the below conditions:
①the financial instrument excludes delivery of cash or other financial assets to others, or exchange for contractual obligations on financial assets or financial liabilities with others under potential negative conditions;
②if its own equity instruments are required or may be used to settle the financial instruments, it excludes the contractual obligation to deliver varied numbers of own equity instruments for settlement provided that the financial instruments are non-derivatives; if the financial instruments are derivatives, the Company can only settle the financial instruments by fixed number of own equity instruments for exchange for fixed amount of cash or other financial assets.
Other than the financial instruments which can be classified as equity instruments under the above conditions, other financial instruments issued by the Company shall be classified as financial liabilities.
In case that financial instruments issued by the Company are compound financial instruments, they shall be recognized as liabilities at the fair value of liabilities portion. The actual amount received less fair value of the liabilities portion shall be recognized as other equity instrument. Transaction expenses occurred in issuance of compound financial instruments are allocated to the portions of liabilities and equities according to their respective proportion to the total issuance
price.
(2) Accounting for perpetual bonds and senior shares
For perpetual bonds and senior shares classified into financial liabilities, their relevant interest, dividends, gains or losses and gains or losses arising from redemption or refinancing are all included in current profit or loss other than those borrowing expenses which meet condition for capitalization (please refer to Note V-18 “borrowing expenses”).
For perpetual bonds and senior shares classified into equity instruments, their issuance (including refinancing), repurchase, sale or cancel are treated as change of equity, and relevant transaction fees are also deducted from equity. The Company accounts for allocation of holders of equity instruments as profit distribution.
The Company dose not recognizes change of fair value of equity instruments.
28. Revenue
Whether the company needs to comply with the disclosure requirements of the particular industry
No
(1) Sales of goods
Income from sale of goods is recognized when the following conditions are met: 1)the Company has transferred the key risks and return on the ownership of the merchandize to the buyer; 2)the Company has not retained continued management rights associated with ownership and no longer exercises effective control on the merchandize sold; 3)the amount of income can be reliably measured; 4)the relevant economic benefits are very likely to flow to the enterprise; 5)the costs incurred or to be incurred can be reliably measured.
Timing for recognition of revenue of the Company from products sales: revenue is recognized upon delivery of products to and confirmed by purchaser with signature.
(2)Rendering of services
When the outcome of the transaction can be estimated reliably, revenue from rendering of services is recognized using the percentage of completion method. When the outcome of the transaction cannot be estimated reliably at the balance sheet date, revenue is recognized based on the amount of the costs incurred and the costs incurred are charged off at the same amount when the costs incurred are expected to be recoverable; and no revenue is recognized and the costs incurred are charged off as an expense of the period when the costs incurred are not expected to be recovered.
(3)Transfer of asset use right revenue
When the economic benefits related to the transaction is likely to flow to the Company and the income amount can be reliably calculated, the Company shall recognize income arising from transfer of asset use right. The income of interests is determined on basis of the time and real
interest rate of theCompany’s cash funds which is utilized by other persons. The income of royalties is determined on basis of the chargeable time and method fixed under relevant agreement or contract.
29. Government Grants
(1) Government grants including those relating to assets and relating to income
(2)government grant, if granted as monetary assets, are measured at the amount received or receivable, and measured at fair value if granted as non-monetary assets. If the fair value can not be determined reliably, they shall be measured at nominal value.
(3) Aggregate method for government grants:
1)government grants relating to assets are recognized as deferred income, which shall be recorded in profit or loss by installment reasonably and systematically within the useful life of the assets. If assets are sold, transferred, discarded as useless or damaged prior to expiration of the useful life, the remaining deferred income undistributed shall be transferred to profit or loss for the period in which the assets are disposed.
2)If government grants relating to income are used to compensate for relevant costs or loss for the subsequent periods, they shall be recognized as deferred income, and recorded in profit or loss for the period in which the relevant costs are recognized. If government grants relating to income are used to compensate for the relevant costs or loss occurred, they shall be recorded in profit or loss for the period directly.
(4)Net method for government grants
1) Government grants relating to assets are used to write off the carrying value of the relevant assets;
2) If government grants relating to income are used to compensate for relevant costs or loss for the subsequent periods, they shall be recognized as deferred income, and recorded in profit or loss for the period in which offset against the relevant costs. If government grants relating to income are used to compensate for the relevant costs or loss occurred, they shall be offset against the relevant costs for the period directly.
(5)The Company adopts aggregated accounting method for the government grants received.
(6)As for the government grants comprising both portions relating to assets and income, separate accounting shall be made for different portion; in case it is hard to differentiate the portions, the grants will be recorded as related to income in general.
(7)The Company realizes government grants relating to its normal activities as other income based on the substance of economic business, and if not related to its normal activities, realized as non-operating income and expenditure.
(8)Subsidized loans from preferential policy obtained by the Company are classified based on whether subsidy funds are paid to the loaning bank or directly to the Company by the competent
financial authorities and are treated based on the following principles:
1)Where subsidy funds are paid to the loaning bank by the competent financial authorities and the bank then provides loans to the Company at a preferential policy rate, accounting shall be made by the Company as follows:
a. Recognizes the actual borrowing amount received as the carrying value of the loan, and calculates the relevant borrowing costs based on the principal and the preferential policy rate.
b.Recognizes the fair value of the loan as the carrying value and calculates the borrowing cost under effective interest method, and recognizes the difference between the actual amount received and the fair value of the loan as deferred income. Deferred income is amortized over the term of the loan under effective interest method and offset against the relevant borrowing costs.
2)Where subsidy funds are paid directly to the Company, the Company will offset the corresponding subsidy against the relevant borrowing expenses.
30. Deferred income tax assets/Deferred income tax liabilities
(1) Deferred tax assets or deferred tax liabilities are calculated and recognized based on the difference between the carrying amount and tax base of assets and liabilities (and the difference of the carrying amount and tax base of items not recognized as assets and liabilities but with their tax base being able to be determined according to tax laws) and in accordance with the tax rate applicable to the period during which the assets are expected to be recovered or the liabilities are expected to be settled.
(2)A deferred tax asset is recognized to the extent of the amount of the taxable income, which it is most likely to obtain and which can be deducted from the deductible temporary difference. At the balance sheet date, if there is any exact evidence that it is probable that future taxable profits will be available against which deductible temporary differences can be utilized, the deferred tax assets unrecognized in prior periods are recognized.
(3)At the balance sheet date, the carrying amount of deferred tax assets is reviewed. The carrying amount of a deferred tax asset is reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the benefit of the deferred tax asset to be utilized. Such reduction is subsequently reversed to the extent that it becomes probable that sufficient taxable income will be available.
(4)The income tax and deferred tax for the period are treated as income tax expenses or income through profit or loss, excluding those arising from the following circumstances:① business combination; and② the transactions or items directly recognized in equity.
31. Lease
(1)Accounting for operating lease
When the Company is the lessee, lease payments are recognized as cost or profit or loss with straight-line method over the lease term. Initial expenses are recognized directly into profit or loss. Contingent rents are charged as profit or loss in the periods in which they are incurred.
When the Company is the lessor, lease income is recognized as profit or loss with straight-line method over the lease term. Initial expenses, other than those with material amount and eligible for capitalization which are recognized as profit or loss by installments, are recognized directly as profit or loss. Contingent rents are charged into profit or loss in the periods in which they are incurred.
(2)Accounting for financing lease
When the company acts as lessee, at the inception of lease, the lower of fair value of leased assets at the inception of lease and the present value of minimum lease payment is recognized as the value of leased assets. The minimum lease payment is recognized as the value of long-term payable. Their difference is recorded as unrecognized finance costs with any initial direct expense incurred recorded in the value of leased assets. For each period of the lease term, current finance cost is calculated using effective interest method.
When the company acts as lessor, at the inception of lease, the sum of minimum lease income at the inception of lease and the initial direct expense is recognized as the value of finance lease payment receivable, with unsecured balance also recorded. The difference between the sum of minimum lease income, initial direct expense and unsecured balance and the sum of their present values is recognized as unrealized finance income. For each period of the lease term, current finance income is calculated using effective interest method.
32. Other important accounting policy and estimation
Discontinued operation refers to the operation disposed or classified as held-for-sale by the Company and presented separately under operation segments and financial statements, which has fulfilled one of the following criteria:
(1) it represents an independent key operation or key operating region;
(2) it is part of the proposed disposal plan on an independent key operation or proposed disposal in key operating region; or
(3) it only establishes for acquisition of subsidiary through disposal.
Accounting for discontinued operation is set out in note V-13 “classified as assets held for sale”.
33. Major accounting policy and changes
(1) Main accounting policy changes
√ Applicable□ Not applicable
||||
|-|-|-|
|The contents and reasons of accounting|||
||Examination and approval procedures|Note|
|policy changes|||
|||In consolidate balance sheet, the Note|
|Account receivable and Note receivable||receivable and Account receivable has|
|are merged into “Note receivable and||ending amount of 29,007,509.02 yuan,|
|account receivable”||while amount at beginning of the period|
|||was 30,507,775.21 yuan.|
|||In consolidate balance sheet, the Note|
|Note payable and Account payable are||payable and account payable has ending|
|merged into “Note payable and account||amount of 11,979,010.69 yuan, while|
|payable”||amount at beginning of the period was|
|||12,408,197.27 yuan|

(2) Changes of important accounting estimate
□ Applicable√ Not applicable
34. Other
Nil
VI. Taxes
1. Main tax category and tax rate
||||
|-|-|-|
|Tax category|Tax calculation evidence|Tax rate|
||Sales of goods, taxable labor service||
|Value added tax|revenue, taxable income, intangible assets|5%. 6%. 16%. 17%|
||income and income from property leasing||
|Tax for maintaining and building cities|Turnover tax payable|7%|
|Enterprise income tax|Taxable income|25%|
|Educational surtax|Turnover tax payable|3%|
|Local educational surtax|Turnover tax payable|2%|

||||
|-|-|-|
|Property tax|70% of the original value for property|1.2%|
||Amount of the contract for purchasing and||
|Stamp tax||0.03%|
||sales||

Disclose reasons for different taxpaying body
|||
|-|-|
|Taxpaying body|Income tax rate|

2. Tax preference
Nil
3. Other
According to the Notice of the Ministry of Finance and the State Administration of Taxation on Adjusting the Value-Added Tax Rate “CS[2018] No. 32”, from May 1, 2018, taxpayers having VAT taxable sales or importing goods, which was originally applicable to17% and11% tax rate, the tax rate is adjusted to16% and10%. The rate of value-added tax of the Company and its subsidiaries has been adjusted to16% since May 1, 2018.
VII. Notes to Items in Consolidated Financial Statements
1. Monetary fund
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|
|Cash on hand|126,486.63|100,034.87|
|Cash in bank|16,305,989.07|18,837,402.11|
|OtherMonetary fund|2,056,410.56|9,048,217.26|
|Total|18,488,886.26|27,985,654.24|
|Including: total payments deposited|||
||0.00|0.00|
|abroad|||

Other explanation
Other monetary fund with restricted application purposes at period-end amounted as 2,000,000.00 Yuan, refers to the cash deposit for bank acceptance.
2. Financial assets measured by fair value and with variation reckoned into current gains/losses
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|

Other explanation:
Nil
3. Derivative financial assets
□ Applicable√ Not applicable
4. Note receivable and account receivable
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|
|Note receivable||1,500,000.00|
|Account receivable|29,007,509.02|29,007,775.21|
|Total|29,007,509.02|30,507,775.21|

 (1) Note receivable
1) Category of note receivable
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|
|Bank acceptance||1,500,000.00|
|Total||1,500,000.00|

 2)Notes receivable already pledged by the Company at the end of the period
In RMB
|||
|-|-|
|Item|Amount pledge at period-end|
|Bank acceptance|0.00|
|Bank acceptance bill|0.00|
|Total|0.00|

 3)Notes endorsement or discount and undue on balance sheet date
In RMB
||||
|-|-|-|
|Item|Amount derecognition at period-end|Amount not derecognition at period-end|
|Bank acceptance|46,548,529.37||
|Total|46,548,529.37|0.00|

 4)Notes transfer to account receivable due for failure implementation by drawer at period-end
In RMB
|||
|-|-|
|Item|Amount transfer to receivable at period-end|
|Total|0.00|

 Other explanation
Nil
(2) Account receivable
1)Category of account receivable
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Balance at period-end|||||Balance at period-begin|||||
||Book balance||Bad debts provision|||Book balance||Bad debts provision|||
|Category|||||Book||||||
|||||Accrualratio|||||Accrual|Book value|
||Amount|Ratio|Amount||value|Amount|Ratio|Amount|||
||||||||||ratio||
|Account receivable|||||||||||
|withdrawal bad debt|||||||||||
||29,860,2||1,230,83||28,629,38|30,247,||1,240,186||29,007,775.|
|provision by group of||92.34%||4.12%|||95.95%||4.10%||
||22.34||7.51||4.83|962.05||.84||21|
|credit risk|||||||||||
|characteristics|||||||||||
|Accounts with single|||||||||||
|minor amount but|||||||||||
||2,477,48||2,099,36||378,124.1|1,278,2||1,278,283|||
|with bad debts||7.66%||84.74%|||4.05%||100.00%||
||5.20||1.01||9|83.50||.50|||
|provision accrued|||||||||||
|individually|||||||||||
||32,337,7||3,330,19||29,007,509.02|31,526,||2,518,470||29,007,775.21|
|Total||100.00%||10.30%|||100.00%||7.99%||
||07.54||8.52|||245.55||.34|||

 Receivable with single significant amount and withdrawal bad debt provision separately at end of period:
□ Applicable√ Not applicable
In combination, accounts receivable whose bad debts provision was accrued by age analysis:
√ Applicable□ Not applicable
In RMB
|||||
|-|-|-|-|
||Balance at period-end|||
|Account age||||
||Account receivable|Bad debts provision|Accrual ratio|
|Within one year||||
|Within one year|28,226,004.53|84,678.01|0.30%|
|Subtotal within one year|28,226,004.53|84,678.01|0.30%|
|1-2 years|488,301.90|1,464.91|0.30%|
|2-3 years|1,225.00|3.68|0.30%|
|Over 5 years|1,144,690.91|1,144,690.91|100.00%|
|Total|29,860,222.34|1,230,837.51|4.12%|

 Explanations on combination determine:
Nil
In combination, withdrawal proportion of bad debt provision based on balance proportion for account receivable:
□ Applicable√ Not applicable
In combination, withdrawal proportion of bad debt provision based on other methods for account receivable:
Nil
2) Bad debt provision accrual collected or switch back
Bad debt provision accrual was 1,030,846.18 Yuan; the amount collected or switches back amounting to 219,118.00 Yuan
Important bad debt provision collected or switch back:
In RMB
||||
|-|-|-|
|Enterprise|Collected or switch back amount|Collection way|
|Shijiazhuang Dasong Tech. Co., Ltd|219,118.00|Returned money|
|Total|219,118.00|--|

3)Account receivable actual charge off in the Period
In RMB
|||
|-|-|
|Item|Amount written off|
|实际核销的Account receivable|8,210.75|

 Written-off for the major receivable:
In RMB
|||||||
|-|-|-|-|-|-|
||Nature of account|||Verification|Arising from related|
|Enterprise||Amount written off|Reason for write-off|||
||receivable|||procedures|transaction (Y/N)|
|Total|--|0.00|--|--|--|

 Explanation for write-off of receivables:
Nil
4)Top 5 receivables at ending balance by arrears party
Enterprise Relationship Amount Account age Bad debts Ratio in total Nature with the provision receivables company (%) Shenzhen Weiterui New Energy Non-related 5,772,755.17 Within one 17,318.27 17.85 Paymen Technology Co., Ltd. party year t for goods Zhengzhou Guiguan Tech. Trade. Co., Non-related 5,333,141.05 Within one 15,999.42 16.49 Paymen Ltd party year t for goods Jinan Yuxintai Sales Co., Ltd. Non-related 5,280,959.55 Within one 15,842.88 16.33 Paymen party year t for goods Shenzhen Jiahaosong Technology Co., Non-related 4,056,480.65 Within one 12,169.44 12.54 Paymen Ltd. party year t for
goods
Fu Qi Non-related 2,457,269.40 Within two 7,371.81 7.60 Paymen
party years t for goods Total 22,900,605.82 68,701.82 70.81 5)Receivable derecognition due to transfer of financial assets
Nil
6)Assets and liability resulted by receivable transfer and continuous involvement
Nil
Other explanation:
Nil
5. Account paid in advance
(1) Listed by account age
In RMB
||||||
|-|-|-|-|-|
||Balance at period-end||Balance at period-begin||
|Account age|||||
||Amount|Ratio|Amount|Ratio|
|Within one year|13,799,753.60|100.00%|2,482,276.54|100.00%|
|Total|13,799,753.60|--|2,482,276.54|--|

 Explanation on un-settlement in time for advance payment with over one year account age and major amounts:
Nil
(2) Top 5 advance payment at ending balance by prepayment object
Relationship Ratio in total Enterprise with the Amount Account age Nature advance e company payment(%) Zhaoqing Kaisite Battery Material Non-related 13,798,452.48 Within one Prepayments for 99.99 Co., Ltd. party year raw materials
Shenzhen JFM Package Material Co., Non-related 1,301.12 Within one Prepayments for 0.01 Ltd. party year raw materials
Total 13,799,753.60 100.00 Other explanation:
Nil
6. Other account receivable
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|

||||
|-|-|-|
|Other account receivable|844,537.19|659,706.81|
|Total|844,537.19|659,706.81|

 (1) Interest receivable
1)Category of interest receivable
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|

 2)2)Major overdue interest
In RMB
||||||
|-|-|-|-|-|
|||||Whether the impairment|
|Borrower|Balance at period-end|Overdue time|Overdue cause|occurs and its judgment|
|||||basis|
|Total|0.00|--|--|--|

 Other explanation:
Nil
(2) Dividend receivable
1)Dividend receivable
In RMB
||||
|-|-|-|
|Item(或The invested enterprise)|Balance at period-end|Balance at period-begin|

 2)Important dividends payable with account age over one year
In RMB
||||||
|-|-|-|-|-|
|||||Whether the impairment|
|Item(或The invested|||||
||Balance at period-end|Account age|Un-recovered reasons|occurs and its judgment|
|enterprise)|||||
|||||basis|
|Total|0.00|--|--|--|

 Other explanation:
Nil
(3) Other account receivable
1)Other accounts receivable by category
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Balance at period-end|||||Balance at period-begin|||||
||Book balance||Bad debts provision|||Book balance||Bad debts provision|||
|Category|||||Book||||||
|||||Accrualratio|||||Accrualratio|Book value|
||Amount|Ratio|Amount||value|Amount|Ratio|Amount|||

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Other receivables||||36.59%|||||||
|with bad debt|1,331,92||487,383.||844,537.1|1,130,5||470,884.5|||
|||100.00%|||||100.00%||41.65%|659,706.81|
|provision accrual by|0.95||76||9|91.40||9|||
|credit portfolio|||||||||||
||1,331,92||487,383.|36.59%|844,537.19|1,130,5||470,884.5||659,706.81|
|Total||100.00%|||||100.00%||41.65%||
||0.95||76|||91.40||9|||

Other receivable with single significant amount and withdrawal bad debt provision separately at end of period
□ Applicable√ Not applicable
In combination, other accounts receivable whose bad debts provision was accrued by age analysis
√ Applicable□ Not applicable
In RMB
|||||
|-|-|-|-|
||Balance at period-end|||
|Account age||||
||Other account receivable|Bad debts provision|Accrual ratio|
|Within one year||||
|Within one year|624,378.43|1,873.14|0.30%|
|Subtotal within one year|624,378.43|1,873.14|0.30%|
|1-2 years|181,000.00|543.00|0.30%|
|2-3 years|41,700.00|125.10|0.30%|
|Over 3 years|484,842.52|484,842.52|100.00%|
|3-4 years|15,943.00|15,943.00|100.00%|
|4-5 years|20,164.00|20,164.00|100.00%|
|Over 5 years|448,735.52|448,735.52|100.00%|
|Total|1,331,920.95|487,383.76|36.59%|

 Explanations on combination determine:
Nil
In combination, withdrawal proportion of bad debt provision based on balance proportion for other account
receivable:
□ Applicable√ Not applicable
In combination, withdrawal proportion of bad debt provision based on other methods for other account receivable:□ Applicable√ Not applicable
2) Bad debt provision accrual collected or switch back
Bad debt provision accrual was 16,499.17 Yuan; the amount collected or switches back amounting to 0.00 Yuan
Important bad debt provision collected or switch back:
In RMB
||||
|-|-|-|
|Enterprise|Amount reversal or collected|Collection way|
|Total|0.00|--|

Nil
3) Other receivables actually written-off during the reporting period
In RMB
|||
|-|-|
|Item|Amount written off|

Written-off for the major other receivable:
In RMB
|||||||
|-|-|-|-|-|-|
||Nature of other|||Verification|Arising from related|
|Enterprise||Amount written off|Reason for write-off|||
||receivables|||procedures|transaction (Y/N)|
|Total|--|0.00|--|--|--|

 Explanation for write-off of other receivables:
Nil
4)Other receivables by nature
In RMB
||||
|-|-|-|
|Nature|Ending book balance|Opening book balance|
|Deposit or margin|783,672.00|628,997.24|
|Equipment fund|311,400.00|311,400.00|
|Staff personal loans|31,098.50|49,098.50|
|Other|205,750.45|141,095.66|
|Total|1,331,920.95|1,130,591.40|

 5)Top 5 other receivables at ending balance by arrears party
In RMB
|||||||
|-|-|-|-|-|-|
|||||Ratio in total ending||
|||Balance at|||Ending balance of|
|Enterprise|Nature||Account age|balance of other||
|||period-end|||bad bet provision|
|||||receivables||
|Shenzhen Luwei||||||
|Mechatronic|Equipment fund|300,000.00|Over 5 years|22.52%|300,000.00|
|Equipment Co., Ltd.||||||
|Shenzhen||||||
|Anjingheng|Deposit and margin|266,000.00|Within one year|19.97%|798.00|
|Industrial Co., Ltd.||||||
|Shenzhen Material||||||
||Deposit and margin|181,918.00|Within one year|13.66%|545.75|
|Group Co., Ltd.||||||
|Alipay (China)||||||
|Network Technology|Deposit and margin|170,000.00|Within two years|12.76%|510.00|
|Co., Ltd.||||||
|Tianjin Lvchi||||||
||Service charge|79,850.93|Within one year|6.00%|239.55|
|E-Business Co., Ltd.||||||
|Total|--|997,768.93|--|74.91%|302,093.30|

6)Account receivable with government grants involved
In RMB
||||||
|-|-|-|-|-|
|||||Time, amount and basis|
|Enterprise|Government grants|Balance at period-end|Ending account age|of amount collection|
|||||estimated|

 Nil
7)Other account receivable derecognition due to financial assets transfer
Nil
8)Assets and liability resulted by other account receivable transfer and continuous involvement
Nil
Other explanation:
Nil
7. Inventory
Whether the company needs to comply with the disclosure requirements of the particular industry
No
(1) Category of inventory
In RMB
||||||||
|-|-|-|-|-|-|-|
||Balance at period-end|||Balance at period-begin|||
|Item||Depreciation|||Depreciation||
||Book balance||Book value|Book balance||Book value|
|||reserve|||reserve||
|Raw materials|388,818.51|23,015.17|365,803.34|566,193.56|27,465.37|538,728.19|
|Finished goods|2,382,433.75|361,633.15|2,020,800.60|2,233,386.81|4,450.20|2,228,936.61|
|Goods shipped in|||||||
|||||9,509.83||9,509.83|
|transit|||||||
|Total|2,771,252.26|384,648.32|2,386,603.94|2,809,090.20|31,915.57|2,777,174.63|

 Does the Company comply with the disclosure requirement of “Information Disclosure Guidelines of Shenzhen Stock Exchange No.4– Listed Companies Engaged in Seed Industry and Planting Business” or not
No
Does the Company comply with the disclosure requirement of “Information Disclosure Guidelines of Shenzhen Stock Exchange No.11– Listed Companies Engaged in Jewelry Related Business” or not
No
(2) Inventory depreciation reserve
In RMB
||||||||
|-|-|-|-|-|-|-|
|||Current period increased Amount||Current period decreased Amount|||
||Balance at|||||Balance at|
|Item||||Switch back or|||
||period-begin|Accrual|Other||Other|period-end|
|||||write-off|||
|Raw materials|27,465.37|||4,450.20||23,015.17|
|Finished goods|4,450.20|364,088.31||6,905.36||361,633.15|
|Total|31,915.57|364,088.31||11,355.56||384,648.32|

 During normal production, the cash realizable value of inventories directly for sale, such as merchants and materials for sale is accounted according to the estimated price less the estimated sales expenses and taxes. During normal production, the cash realizable value of materials to be processed is accounted according to the estimated price of finished product less the estimated cost, sales expenses and taxes. For inventories with purpose of implementing sales contract or labor contract, the cash realizable value is based on the contract price; if the inventories held exceed the ordered amount specified in the contract, the cash realizable value of surplus part is accounted based on the market price.
(3) Explanation on capitalization of borrowing costs at ending balance of inventory
Nil
(4) Assets that completed without settlement from construction contract
In RMB
|||
|-|-|
|Item|Amount|

Other explanation:
Nil
8. Assets held for sale
In RMB
||||||
|-|-|-|-|-|
||||Expected disposal||
|Item|Ending book value|Fair value||Expected disposal time|
||||expenses||
|Total|0.00|0.00|0.00|--|

 Other explanation:
Nil
9. Non-current asset due within one year
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|

Other explanation:
Nil
10. Other current assets
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|
|Prepaid intermediary fee|1,792,452.81|1,792,452.81|
|Prepaid tax|473,788.85|12,974.36|
|Total|2,266,241.66|1,805,427.17|

 Other explanation:
Prepaid intermediary fee refers to the prepaid, which paid to the intermediary organ as securities, auditing and
evaluation (according to the service contract), for preparation of privately placement, and the money is not
included in current gains/losses yet.
11. Finance asset available for sales
(1) Finance asset available for sales
In RMB
||||||||
|-|-|-|-|-|-|-|
||Balance at period-endBook balance Impairment Book value|||Balance at period-begin|||
|Item|||||||
|||Impairment|Book value|Book balance|Impairment|Book value|
|Total|0.00|0.00||0.00|0.00||

(2) Financial assets available for sale measured by fair value at period-end
In RMB
|||||
|-|-|-|-|
|Finance asset available|Equity instrument|Debt instrument||
||||Total|
|for sales|available for sale|available for sale||
|Cost /liability of equity||||
|instrument/ amortization|||0.00|
|cost of debt instrument||||
|Fair value|||0.00|
|Amount of fair value||||
|changes that||||
|accumulatively reckoned|||0.00|
|in other comprehensive||||
|gains||||
|Amount with impairment||||
||||0.00|
|accrual||||

(3) Financial assets available for sale measured by cost at period-end
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Book balance||||Impairment||||Ratio of||
|The|||||||||share-holdi|Current|
|||Current|Current|||Current|Current||||
|invested|Period-beg||||Period-beg||||ng in|cash|
|||period|period|Period-end||period|period|Period-end|||
|enterprise|inning||||inning||||invested|dividend|
|||increased|decreased|||increased|decreased||||
||||||||||entity||
|Total|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|--|0.00|

 (4) Changes of impairment in Period
In RMB
|||||
|-|-|-|-|
|Finance asset available|Equity instrument|Debt instrument||
||||Total|
|for sales|available for sale|available for sale||
|Balance of impairment||||
||||0.00|
|accrual at period-begin||||
|Current accrual|||0.00|
|Including: transfer-in||||
|from other|||0.00|
|comprehensive income||||
|Current period decreased|||0.00|
|Including: switch back||||
|due to fair value rebound|||0.00|
|at period-end||||
|Balance of impairment||||
||||0.00|
|accrual at period-end||||

(5) Fair value of equity instrument available for sale sharply declined or other-than-temporary declined at period-end without depreciation reserves accrual
In RMB
||||||||
|-|-|-|-|-|-|-|
||||Fair value|Time of drops|Amount with||
|Equity instrument||||||Reasons for|
||Investment cost|Ending fair value|declined relative|persistently|impairment||
|available for sale||||||un-accrual|
||||to cost|(month)|accrual||
|Total|0.00|0.00|--|--|0.00|--|

 Other explanation
Nil
12. Held-to-maturity investment
(1) Held-to-maturity investment
In RMB
||||||||
|-|-|-|-|-|-|-|
||Balance at period-end|||Balance at period-begin|||
|Item|||||||
||Book balance|Impairment|Book value|Book balance|Impairment|Book value|
|Total|0.00|0.00||0.00|0.00||

(2) Important held-to-maturity investment at period-end
In RMB
||||||
|-|-|-|-|-|
|Bond|Face value|Coupon value|Actual rate|Maturity date|
|Total|0.00|--|--|--|

 (3) Held-to-maturity investment reclassify in the Period
Nil
Other explanation
Nil
13. Long-term account receivable
(1) Long-term account receivable
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
||Balance at period-end|||Balance at period-begin||||
||||||||Discount rate|
|Item||Bad debtsprovision|||Bad debts|||
||Book balance||Book value|Book balance||Book value|section|
||||||provision|||
|Total|0.00|0.00||0.00|0.00||--|

 (2) Long-term account receivable derecognition due to transfer of financial assets
Nil
(3) Assets and liability resulted by long-term account receivable transfer and continuous involvement
Nil
Other explanation
Nil
14. Long-term equity investment
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Current period changes +,-||||||||||
||||||||||||Ending|
||||||Other||Cash|||||
||Balance|||Investme||||||Balance|balance|
|The||Additiona|||comprehe||dividend|||||
||at|||nt gains||Other||||at|of|
|invested||l|Capital||nsive||or profit|Impairme||||
||period-be|||recognize||equity|||Other|period-en|impairme|
|enterprise||investmen|reduction||income||announce|nt accrual||||
||gin|||d under||change||||d|nt|
|||t|||adjustmen||d to|||||
|||||equity|||||||provision|
||||||t||issued|||||
|I. Joint venture||||||||||||
|Subtotal|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|
|II. Affiliated enterprise||||||||||||
|Subtotal|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|
|Total|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|

 Other explanation
Nil
15. Investment real estate
(1) Investment real estate measured at cost
□ Applicable√ Not applicable
(2) Investment real estate measured at fair value
□ Applicable√ Not applicable
(3) Investment real estate without property rights certificate
In RMB
||||
|-|-|-|
|||Reasons for failing to complete the|
|Item|Book value||
|||property rights certificate|

 Other explanation
Nil
16. Fixed assets
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|
|Fixed assets|3,502,807.32|3,941,117.97|

||||
|-|-|-|
|Total|3,502,807.32|3,941,117.97|

 (1) Fixed assets
In RMB
|||||||
|-|-|-|-|-|-|
|||Machinery|Means of|Electronic||
|Item|Housing buildings||||Total|
|||equipment|transportation|equipment and other||
|I. original book||||||
|value:||||||
|1.Balance at||||||
||2,959,824.00|416,629.06|958,593.21|684,394.50|5,019,440.77|
|period-begin||||||
|2.Current period||||||
|||||17,293.82|17,293.82|
|increased Amount||||||
|(1) Purchase||||17,293.82|17,293.82|
|(2) construction||||||
|in process transfer-in||||||
|(3) the||||||
|increase in business||||||
|combination||||||
|3.Current period||||||
|||||475,800.00|475,800.00|
|decreased Amount||||||
|(1)Disposal or||||||
|||||475,800.00|475,800.00|
|scrap||||||
|4.Balance at||||||
||2,959,824.00|416,629.06|958,593.21|225,888.32|4,560,934.59|
|period-end||||||
|II. accumulated||||||
|depreciation||||||
|1.Balance at||||||
||199,788.12|109,246.12|269,780.13|499,508.43|1,078,322.80|
|period-begin||||||
|2.Current period||||||
||133,192.08|37,496.64|172,546.80|26,638.90|369,874.42|
|increased Amount||||||
|(1) provision|133,192.08|37,496.64|172,546.80|26,638.90|369,874.42|
|3.Current period||||||
|||||390,069.95|390,069.95|
|decreased Amount||||||
|(1)Disposal or||||390,069.95|390,069.95|

|||||||
|-|-|-|-|-|-|
|scrap||||||
|4.Balance at||||||
||332,980.20|146,742.76|442,326.93|136,077.38|1,058,127.27|
|period-end||||||
|III. Impairment||||||
|1.Balance at||||||
|period-begin||||||
|2.Current period||||||
|increased Amount||||||
|(1) provision||||||
|3.Current period||||||
|decreased Amount||||||
|(1)Disposal or||||||
|scrap||||||
|4.Balance at||||||
|period-end||||||
|IV. Book value||||||
|1.Ending book||||||
||2,626,843.80|269,886.30|516,266.28|89,810.94|3,502,807.32|
|value||||||
|2.Opening book||||||
||2,760,035.88|307,382.94|688,813.08|184,886.07|3,941,117.97|
|value||||||

(2) Fixed assets temporary idle
In RMB
|||||||
|-|-|-|-|-|-|
|||Accumulated||||
|Item|original book value:||Impairment|Book value|Note|
|||depreciation||||

(3) Fixed assets leased through operating lease
In RMB
||||||
|-|-|-|-|-|
|||Accumulated|||
|Item|original book value:||Impairment|Book value|
|||depreciation|||

(4) Fixed assets leased through operating lease
In RMB
|||
|-|-|
|Item|Ending book value|

(5) Fixed assets without property rights certificate
In RMB
||||
|-|-|-|
|||Reasons for failing to complete the|
|Item|Book value||
|||property rights certificate|
|||The six properties of Lianxin Garden|
|||with original value of 2,959,824.00 Yuan.|
|||The property purchasing refers to the|
|||indemnificatory housing for enterprise|
|||talent buying from Shenzhen Housing and|
|||Construction Bureau of Luohu District.|
|Six properties in Lianxin Garden|2,626,843.80||
|||According to the agreement, the enterprise|
|||shall not carrying any kind of property|
|||trading with any units or individuals except|
|||the government, and the company has no|
|||property certification on the above|
|||mentioned properties.|

Other explanation
No accrual for impairment provision due to there was no evidence of impairment being found in
fixed assets at period-end
(6) Fixed assets disposal
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|

 Other explanation
Nil
17. Construction in progress
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|

 (1) Construction in progress
In RMB
||||||||
|-|-|-|-|-|-|-|
||Balance at period-end|||Balance at period-begin|||
|Item|||||||
||Book balance|Impairment|Book value|Book balance|Impairment|Book value|

|||||||
|-|-|-|-|-|-|
|Total|0.00|0.00|0.00|0.0|0|

(2) Changes in significant construction in progress
In RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||Accumul|including|||
||||||||Proportion ofprojectinvestment inbudget||||||
|||||Fixed|||||ated|: interest|Interest||
||||||Other||||||||
||||increasedin thePeriod|assets|||||amount|capitaliz|capitaliz||
|||Opening|||decrease|Ending||||||Source of|
|Item|Budget|||transfer-i||||Progress|of|ed|ation rate||
|||balance|||d in the|balance||||||funds|
|||||n in the|||||interest|amount|of the||
||||||Period||||||||
|||||Period|||||capitaliz|of the|year||
||||||||||ation|year|||
|Total|0.00|0.00|0.00|0.00|0.00|0.00|--|--|0.00|0.00|0.00%|--|

 (3) Depreciation reserves accrual
In RMB
||||
|-|-|-|
|Item|Current accrual amount|Reasons for accrual|
|Total|0.00|--|

Other explanation
Nil
(4) Engineering materials
In RMB
||||||||
|-|-|-|-|-|-|-|
||Balance at period-end|||Balance at period-begin|||
|Item|||||||
||Book balance|Impairment|Book value|Book balance|Impairment|Book value|
|Total|0.00|0.00||0.00|0.00||

 Other explanation:
Nil
18. Productive biological asset
(1) Productive biological assets measured by cost
□ Applicable√ Not applicable
(2) Productive biological assets measured by fair value
□ Applicable√ Not applicable
19. Oil and gas asset
□ Applicable√ Not applicable
20. Intangible assets
(1) Intangible assets
In RMB
|||||||
|-|-|-|-|-|-|
||||Non-patent|||
|Item|Land use right|Patent||Trademark|Total|
||||technology|||
|I. original book||||||
|value:||||||
|1.Balance at||||||
|||||5,271,000.00|5,271,000.00|
|period-begin||||||
|2.Current||||||
|period increased||||||
|Amount||||||
|(1) Purchase||||||
|(2) internal||||||
|R & D||||||
|(3) the||||||
|increase in business||||||
|combination||||||
|3.Current period||||||
|decreased Amount||||||
|(1) Disposal||||||
|4.Balance at||||||
|||||5,271,000.00|5,271,000.00|
|period-end||||||
|II. accumulated||||||
|depreciation||||||
|1.Balance at||||||
|||||3,012,000.00|3,012,000.00|
|period-begin||||||
|2.Current||||||
|period increased||||753,000.00|753,000.00|
|Amount||||||
|(1) provision||||753,000.00|753,000.00|

||||
|-|-|-|
|3.Current|||
|period decreased|||
|Amount|||
|(1) Disposal|||
|4.Balance at|||
||3,765,000.00|3,765,000.00|
|period-end|||
|III. Impairment|||
|1.Balance at|||
|period-begin|||
|2.Current|||
|period increased|||
|Amount|||
|(1) provision|||
|3.Current|||
|period decreased|||
|Amount|||
|(1) Disposal|||
|4.Balance at|||
|period-end|||
|IV. Book value|||
|1.Ending book|||
||1,506,000.00|1,506,000.00|
|value|||
|2. Opening book|||
||2,259,000.00|2,259,000.00|
|value|||

Ratio of intangible assets resulted from internalR&D in balance of intangible assets at period-end
(2) Land use right without certificate of title completed
In RMB
||||
|-|-|-|
|||Reasons for failing to complete the|
|Item|Book value||
|||property rights certificate|

 Other explanation:
Nil
21. Expense on Research and Development
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||Balance at|||||||Balance at|
|Item||Current period increased Amount|||Current period decreased Amount||||
||period-begin|||||||period-end|
|Total|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|

 Other explanation
Nil
22. Goodwill
(1) Original book value of goodwill
In RMB
||||||||
|-|-|-|-|-|-|-|
|The invested|Balance at|||||Balance at|
|||Current period increased||Current period decreased|||
|entity or items|period-begin|||||period-end|
|Total|0.00|0.00|0.00|0.00|0.00|0.00|

 (2) Goodwill Impairment
In RMB
||||||||
|-|-|-|-|-|-|-|
|The invested|Balance at|||||Balance at|
|||Current period increased||Current period decreased|||
|entity or items|period-begin|||||period-end|
|Total|0.00|0.00|0.00|0.00|0.00|0.00|

 Information about the asset group or asset group combination in which the goodwill is located
Nil
Explain the method of confirming the goodwill impairment test process, key parameters (such as the forecast period growth rate, stable period growth rate, profit rate, discount rate, forecast period, etc. when estimating the present value of future cash flow), and the impairment loss of goodwill :
Nil
Impact of impairment test for goodwill
Nil
Other explanation
Nil
23. Long-term expenses to be apportioned
In RMB
|||||||
|-|-|-|-|-|-|
||Balance at|Current period|Amortized in the||Balance at|
|Item||||Other decrease||
||period-begin|increased Amount|Period||period-end|
|Total||0.00|0.00|0.00||

Other explanation
Nil
24. Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets un-offset
In RMB
||||||
|-|-|-|-|-|
||Balance at period-end||Balance at period-begin||
|Item|Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||difference|assets|difference|assets|
|Bad debts provision|944,459.10|3,777,836.40|733,849.82|2,935,399.29|
|Inventory falling price|||||
||96,162.08|384,648.32|7,978.89|31,915.57|
|reserves|||||
|Total|1,040,621.18|4,162,484.72|741,828.71|2,967,314.86|

 (2) Deferred income tax liabilities un-offset
In RMB
||||||
|-|-|-|-|-|
||Balance at period-end||Balance at period-begin||
|Item|Taxable temporary|Deferred income tax|Taxable temporary|Deferred income tax|
||differences|liabilities|differences|liabilities|
|Total|0.00|0.00|0.00|0.00|

 (3) Deferred income tax assets and deferred income tax liabilities listed after off-set
In RMB
||||||
|-|-|-|-|-|
|||Ending balance of|Trade-off between the|Opening balance of|
||Trade-off between the||||
|||deferred income tax|deferred income tax|deferred income tax|
|Item|deferred income tax||||
|||assets or liabilities after|assets and liabilities at|assets or liabilities after|
||assets and liabilities||||
|||off-set|period-begin|off-set|
|Deferred income tax||1,040,621.18||741,828.71|
|assets|||||

(4) Details of unrecognized deferred income tax assets
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|
|Total|0.00|0.00|

(5) Deductible losses of un-recognized deferred income tax assets expired on the followed year
In RMB
|||||
|-|-|-|-|
|Year|Ending amount|Opening amount|Note|
|Total|0.00|0.00|--|

 Other explanation:
As stated under article 17 of the Enterprise Accounting Standards No.18-Income Tax, deferred income tax assets and deferred income tax liabilities shall be measured at the tax rate applicable in the period in which the assets are expected to be recovered or liabilities are expected to be settled according to relevant tax laws on the balance sheet date. The tax rate adopted by the Company in calculating deferred income tax assets is25% for both parent company and subsidiaries.
25. Other non-current assets
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|
|Advance payment for house|400,000.00|400,000.00|
|Total|400,000.00|400,000.00|

 Other explanation:
In 2016, the Company paid the four houses in advance for enterprise talent, located in Yinhu Lanshan, to Shenzhen Housing and Construction Bureau of Luohu District, up to 31st December 2018, payment are not paid by Shenzhen Housing and Construction Bureau of Luohu District yet
26. Short-term loans
(1) Short-term loans
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|

 Explanation on short-term loans category:
Nil
(2) Overdue outstanding short-term loans
Total 0.00 Yuan overdue outstanding short-term loans at period-end, including the followed significant amount:
In RMB
||||||
|-|-|-|-|-|
|Borrower|Balance at period-end|Lending rate|Overdue time|Overdue rate|

||||||
|-|-|-|-|-|
|Total|0.00|--|--|--|

 Other explanation:
Nil
27. Financial liability measured by fair value and with variation reckoned into current gains/losses
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|

 Other explanation:
Nil
28. Derivative financial liability
□ Applicable√ Not applicable
29. Note payable and account payable
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|
|Note payable|2,000,000.00|8,480,000.00|
|Account payable|9,979,010.69|3,928,197.27|
|Total|11,979,010.69|12,408,197.27|

 (1) Category of note payable
In RMB
||||
|-|-|-|
|Category|Balance at period-end|Balance at period-begin|
|Bank acceptance|2,000,000.00|8,480,000.00|
|Total|2,000,000.00|8,480,000.00|

 Notes expired at period-end without paid was Yuan.
(2) Account payable
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|
|Within one year(one year included)|9,713,137.52|3,638,705.30|
|1-2 years(2 years included)|7,099.50|137,423.41|
|2-3 years (3 years included)|137,423.41|3,084.95|

||||
|-|-|-|
|3-4 years (4 years included)|2,366.00||
|Over 5 years|118,984.26|148,983.61|
|Total|9,979,010.69|3,928,197.27|

 (3) Important account payable with account age over one year
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Reasons of un-paid or carry-over|
|Total|0.00|--|

Other explanation:
No important account payable with account age over one year at end of the Period
30. Account received in advance
(1) Account received in advance
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|
|Within one year(one year included)|371,039.28|1,211,804.44|
|1-2 years(2 years included)|3,469.60|19,777.88|
|2-3 years (3 years included)|2,080.00|36,897.00|
|Over 3 years|29,191.00||
|Total|405,779.88|1,268,479.32|

 (2) Account received in advance with over one year book age
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Reasons of un-paid or carry-over|
|Total|0.00|--|

(3) Projects that settle without completed from construction contract at period-end
In RMB
|||
|-|-|
|Item|Amount|

Other explanation:
Nil
31. Wage payable
(1) Wage payable
In RMB
||||||
|-|-|-|-|-|
|Item|Balance at period-begin|Current period increased|Current period decreased|Balance at period-end|
|I. Short-term|||||
||706,703.40|6,292,582.05|6,563,549.29|435,736.16|
|compensation|||||
|II. Post-employment|||||
|benefit – defined||410,459.99|410,459.99||
|contribution plan|||||
|Total|706,703.40|6,703,042.04|6,974,009.28|435,736.16|

 (2) Short-term compensation
In RMB
||||||
|-|-|-|-|-|
|Item|Balance at period-begin|Current period increased|Current period decreased|Balance at period-end|
|1. Wages , bonuses, allowances|||||
||699,994.68|5,425,458.24|5,696,710.60|428,742.32|
|and subsidies|||||
|2. Welfare for workers|||||
|||230,198.50|230,198.50||
|and staff|||||
|3. Social insurance||186,647.70|186,647.70||
|Including: Medical|||||
|||162,830.82|162,830.82||
|insurance|||||
|Work injury|||||
|||10,749.72|10,749.72||
|insurance|||||
|Maternity|||||
|||13,067.16|13,067.16||
|insurance|||||
|4. Housing accumulation|||||
|||360,199.04|360,199.04||
|fund|||||
|5. Labor union|||||
|expenditure and|||||
||6,708.72|78,333.33|78,048.21|6,993.84|
|personnel education|||||
|expense|||||
|Other short term pay|||||
|||11,745.24|11,745.24||
|absenteeism|||||
|Total|706,703.40|6,292,582.05|6,563,549.29|435,736.16|

(3) Defined contribution plans
In RMB
||||||
|-|-|-|-|-|
|Item|Balance at period-begin|Current period increased|Current period decreased|Balance at period-end|
|1. Basic endowment|||||
|||399,118.96|399,118.96||
|insurance|||||
|2. Unemployment|||||
|||11,341.03|11,341.03||
|insurance|||||
|Total||410,459.99|410,459.99||

Other explanation:
Nil
32. Taxes payable
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|
|Value-added tax|5,716,531.88|3,391,621.62|
|Enterprise income tax||339,193.85|
|Individual income tax|25,288.27|23,164.05|
|Urban maintenance and construction tax|325,396.78|7,615.81|
|House property tax||45,070.60|
|Educational surtax|227,569.65|620.94|
|Stamp tax|2,309.70||
|Total|6,297,096.28|3,807,286.87|

 Other explanation:
Nil
33. Other account payable
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|
|Other account payable|37,144,872.42|36,508,323.90|
|Total|37,144,872.42|36,508,323.90|

 (1) Interest payable
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|

Interest overdue without paid:
In RMB
||||
|-|-|-|
|Borrower|Amount overdue|Overdue cause|
|Total|0.00|--|

Other explanation:
Nil
(2) Dividend payable
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|

 Other explanation, including dividends payable with over one year age and disclosure un-payment reasons:
Nil
(3) Other account payable
1)Classification of other payable according to nature of account
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|
|Custodian and common benefit debts|18,853,692.84|18,919,942.85|
|Intercourse funds|6,500,000.00|6,500,000.00|
|Warranty and guarantee money|9,767,553.26|9,615,020.00|
|Other payable service charge (intermediary|||
||801,237.74|707,252.91|
|services included)|||
|Other|1,222,388.58|766,108.14|
|Total|37,144,872.42|36,508,323.90|

 2)Significant other payable with over one year age
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Reasons of un-paid or carry-over|
|Custodian and common benefit debts|18,853,692.84||
|Margin and quality deposit|8,000,000.00|Performance bond|
|Shenzhen Guosheng Energy Investment|||
||6,500,000.00|Interest-free loans|
|Development Co., Ltd.|||
|Total|33,353,692.84|--|

Other explanation
Top 5 other receivables at period-end
Enterprise Relationship Amount Ratio in total othe
Nature
with the r receivables(%)
company
Custodian and common benefit debts Non-related party 18,853,692.84 50.76 Obligatory right of common benefit
Shenzhen Guosheng Energy Investment Related party 6,500,000.00 17.50 Interest-free Development Co., Ltd. loans
Shenzhen Ruian Information Technology Non-related party 2,500,000.00 6.73 Cash deposit Enterprise (LP)
Wansheng Industrial Holdings (Shenzhen) Non-related party 2,000,000.00 5.38 Cash deposit Co., Ltd.
Shenzhen Zhisheng Hi-Tech Enterprise Non-related party 2,000,000.00 5.38 Cash deposit (LP)
Total 31,853,692.84 85.75
34. Liability held for sale
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|

 Other explanation:
Nil
35. Non-current liabilities due within one year
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|

 Other explanation:
Nil
36. Other current liabilities
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|

 Changes of short-term bond payable:
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||||||Accrual|Premium/|||
||Face|Release|Bond|Issuing|Opening|Issued in|interest|discount|Paid in|Ending|
|Bond|||||||||||
||value|date|period|amount|balance|the Period|by face|amortizati|the Period|balance|
||||||||value|on|||
|Total|--|--|--|0.00|0.00|0.00|0.00|0.00|0.00|0.00|

Other explanation:
Nil
37. Long-term loans
(1) Classification of long-term loans
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|

 Explanation:
Nil
Other explanation, including interest rate section:
Nil
38. Bonds payable
(1) Bonds payable
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|

 (2) Changes of bonds payable (not including the other financial instrument of preferred stock and perpetual capital securities that classify as financial liability)
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Total|--|--|--|0.00|0.00|0.00|0.00|0.00|0.00|0.00|

 (3) Convertible conditions and time for shares transfer for the convertible bonds
Nil
(4) Other financial instruments classify as financial liability
Basic information of the outstanding preferred stock and perpetual capital securities at period-end
Nil
Changes of outstanding preferred stock and perpetual capital securities at period-end
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|Outstanding|Period-begin||Current period increased||Current period decreased||Period-end||
|financial|||||||||
||Amount|Book value|Amount|Book value|Amount|Book value|Amount|Book value|
|instrument|||||||||
|Total|0|0.00|0|0.00|0|0.00|0|0.00|

Basis for financial liability classification for other financial instrument
Nil
Other explanation
Nil
39. Long-term account payable
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|

 (1) Nature of long-term account payable
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|

 Other explanation:
Nil
(2) Special payments
In RMB
|||||||
|-|-|-|-|-|-|
||Balance at|Current period|Current period|Balance at||
|Item|||||Causes of formation|
||period-begin|increased|decreased|period-end||
|Total||0.00|0.00||--|

 Other explanation:
Nil
40. Long-term wages payable
(1) Long-term wages payable
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|

 (2) Changes of defined benefit plans
Present value of the defined benefit plans:
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|

 Scheme assets:
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|

Net liability (assets) of the defined benefit plans
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|

 Content of defined benefit plans and relevant risks, impact on future cash flow of the Company as well as times
and uncertainty:
Nil
Major actuarial assumption and sensitivity analysis:
Nil
Other explanation:
Nil
41. Accrual liability
In RMB
|||||
|-|-|-|-|
|Item|Balance at period-end|Balance at period-begin|Causes of formation|

 Other explanation, including relevant important assumptions and estimation:
Nil
42. Deferred income
In RMB
|||||||
|-|-|-|-|-|-|
||Balance at|Current period|Current period|Balance at||
|Item|||||Causes of formation|
||period-begin|increased|decreased|period-end||
|Total||0.00|0.00||--|

 Item with government grants involved:
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||||Amount||||||
|||||Amount|Cost|||Assets-relate|
||Opening|New grants|reckoned in|||Other|Ending||
|Item||||reckoned in|reduction in|||d/income|
||balance|in the Period|non-operatio|||changes|balance||
|||||other income|the period|||related|
||||n revenue||||||

Other explanation:
Nil
43. Other non-current liabilities
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|

 Other explanation:
Nil
44. Share capital
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Change during the year(+,-)||||||
|||||Shares||||
||Balance at||||||Balance at|
|||New shares||transferred||||
||period-begin||Bonus share||Other|Subtotal|period-end|
|||issued||from capital||||
|||||reserve||||
|Total shares|551,347,947.00||||||551,347,947.00|

 Other explanation:
Nil
45. Other equity instrument
(1) Basic information of the outstanding preferred stock and perpetual capital securities at period-end
Nil
(2) Changes of outstanding preferred stock and perpetual capital securities at period-end
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|Outstanding|Period-begin||Current period increased||Current period decreased||Period-end||
|financial|||||||||
||Amount|Book value|Amount|Book value|Amount|Book value|Amount|Book value|
|instrument|||||||||
|Total|0||0|0.00|0|0.00|0||

 Changes of other equity instrument, change reasons and relevant accounting treatment basis:
Nil
Other explanation:
Nil
46. Capital public reserve
In RMB
||||||
|-|-|-|-|-|
|Item|Balance at period-begin|Current period increased|Current period decreased|Balance at period-end|
|Other capital reserve|627,834,297.85|||627,834,297.85|
|1.Debt restructuring|||||
||482,580,588.23|||482,580,588.23|
|income|||||
|2.Other|145,253,709.62|||145,253,709.62|
|Total|627,834,297.85|||627,834,297.85|

Other explanation, including changes and reasons for changes:
Among the other capital reserves, 135,840,297.18 Yuan refers to the payment for creditor from shares assignment by whole shareholders; majority shareholder Guosheng Energy donated 5,390,399.74 Yuan.
47. Treasury stock
In RMB
||||||
|-|-|-|-|-|
|Item|Balance at period-begin|Current period increased|Current period decreased|Balance at period-end|
|Total||0.00|0.00||

Other explanation, including changes and reasons for changes:
Nil
48. Other comprehensive income
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Current Period||||||
||||Less: written in|||||
||||||||Balance|
||||other|||||
|||Account||||||
|Item|Balance at||comprehensive||Belong to|Belong to|at|
|||before|income in|||||
||period-begin|||Less : income|parent|minority|period-en|
||||previous period|||||
|||income tax in||tax expense|company after|shareholders||
||||and carried||tax|after tax|d|
|||the year|forward to gains|||||
||||and losses in|||||
||||current period|||||
|Total other comprehensive income||0.00|0.00|0.00||||

Other explanation, including the active part of the hedging gains/losses of cash flow transfer to initial
recognization adjustment for the arbitraged items:
Nil
49. Reasonable reserve
In RMB
||||||
|-|-|-|-|-|
|Item|Balance at period-begin|Current period increased|Current period decreased|Balance at period-end|
|Total||0.00|0.00||

Other explanation, including changes and reasons for changes:
Nil
50. Surplus public reserve
In RMB
||||||
|-|-|-|-|-|
|Item|Balance at period-begin|Current period increased|Current period decreased|Balance at period-end|

||||
|-|-|-|
|法定Surplus public|||
||32,673,227.01|32,673,227.01|
|reserve|||
|Total|32,673,227.01|32,673,227.01|

 Other explanation, including changes and reasons for changes:
Nil
51. Retained profit
In RMB
||||
|-|-|-|
|Item|Current period|Last Period|
|Retained profit at period-end before adjustment|-1,195,957,201.01|-1,197,486,788.28|
|Retained profit at period-begin after adjustment|-1,195,957,201.01|-1,197,486,788.28|
|Add: net profit attributable to shareholders ofparent company for this year|||
||-1,591,968.91|1,529,587.27|
|Retained profit at period-end|-1,197,549,169.92|-1,195,957,201.01|

 Adjustment for retained profit at period-begin:
1). Retroactive adjustment due to the Accounting Standards for Business Enterprise and relevant new regulations, retained profit at period-begin has 0.00 Yuan affected;
2) Due to the accounting policy changes, retained profit at period-begin has 0.00 Yuan affected;
3) Due to the major accounting errors correction, retained profit at period-begin has 0.00 Yuan affected;
4) Consolidation range changed due to the same control, retained profit at period-begin has 0.00 Yuan affected;
5) Total other adjustment impacts 0.00 Yuan retained profit at period-begin
52. Operationrevenue和Operation cost
In RMB
||||||
|-|-|-|-|-|
||Current Period||Last Period||
|Item|||||
||Revenue|Cost|Revenue|Cost|
|Main business|115,698,679.57|107,318,430.05|134,756,413.50|123,273,702.49|
|Other business|4,208,270.77|753,000.00|2,734,184.19|753,629.77|
|Total|119,906,950.34|108,071,430.05|137,490,597.69|124,027,332.26|

 53. Tax and extras
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|Urban maintenance and construction tax|391,013.39|57,572.84|
|Educational surtax|279,295.29|41,123.44|

||||
|-|-|-|
|Stamp tax|54,238.30|95,767.77|
|Other|3,089.84|2,699.04|
|Total|727,636.82|197,163.09|

 Other explanation:
Nil
54. Sales expenses
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|Employee compensation|2,954,021.25|2,658,168.80|
|Market promotion costs|1,052,618.98|1,328,116.44|
|Business travel expenses|812,392.85|664,419.38|
|Lease fee|441,316.59|365,319.95|
|Business entertainment|336,219.12|161,991.56|
|Other|336,662.62|284,565.08|
|Total|5,933,231.41|5,462,581.21|

 Other explanation:
Nil
55. Administrative expenses
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|Salary|3,298,560.81|3,766,752.91|
|Intermediary services charge|1,102,426.83|1,081,232.97|
|Daily management cost|1,856,424.16|592,685.47|
|Depreciation and amortization charges|369,874.42|302,594.49|
|Total|6,627,286.22|5,743,265.84|

 Other explanation:
Nil
56.R&D expenses
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|

Other explanation:
Nil
57. Financial expenses
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|Interest income|-369,745.70|-233,170.32|
|Exchange loss||0.09|
|Commission charge etc.|21,061.54|23,600.57|
|Total|-348,684.16|-209,569.66|

 Other explanation:
Nil
58. Losses of devaluation of asset
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|I. Bad debt losses|836,438.10|454,042.30|
|II. Inventory falling price loss|364,088.31||
|Total|1,200,526.41|454,042.30|

 Other explanation:
Nil
59. Other income
In RMB
||||
|-|-|-|
|Income sources|Current Period|Last Period|

 60. Investment income
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|

 Other explanation:
Nil
61. Changing income of fair value
In RMB
||||
|-|-|-|
|Changes resources|Current Period|Last Period|

Other explanation:
Nil
62. Assets disposal income
In RMB
||||
|-|-|-|
|Sources of assets disposal income|Current Period|Last Period|
|Income from disposal of fixed assets||-2,464.81|

 63. Non-operation revenue
In RMB
|||||
|-|-|-|-|
||||Amount reckoned into|
|Item|Current Period|Last Period|non-recurring gains/losses in|
||||the Year|
|Other|4,634,304.77|4,629,029.13|4,634,304.77|
|Total|4,634,304.77|4,629,029.13|4,634,304.77|

 Government grants reckoned into current gains/losses:
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||Impact||||Assets|
||Granting|Cause of|||Special|Amount in|Amount last||
|Item|||Nature|current profit||||related/incom|
||subject|distribution|||benefit (Y/N)|the period|period||
|||||(Y/N)||||e related|

 Other explanation:
1. Non-operation revenue last period mainly due to the rental revenue settle with the custodian, that is 2,866,994.16 Yuan and compensation of 1,086,507.70 Yuan;
Non-operation revenue in current period mainly due to the rental revenue settle with the custodian, that is 3,256,516.11 Yuan and compensation of 1,086,507.70 Yuan;
64. Non-operation expenditure
In RMB
|||||
|-|-|-|-|
||||Amount reckoned into|
|Item|Current Period|Last Period|non-recurring gains/losses in|
||||the Year|
|Amercement outlay||800.00|0|
|Damage and scrap loss for||||
||85,730.05||85,730.05|
|non-current assets||||
|Other|4,373,162.81|4,346,683.24|4,373,162.81|
|Total|4,458,892.86|4,347,483.24|4,458,892.86|

Other explanation:
In the period and last period, the operation assets for assets to be disposed are not allocated by management,
relevant maintenance and management costs are paid by the revenue and loss compensation income from assets leasing (the assets to be disposed), reckoned into non-operating expenditure
65. Income tax expenses
(1) Income tax expenses
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|Current income tax expenses|50,233.75|612,336.68|
|Deferred income tax expenses|-298,792.47|-96,632.42|
|Total|-248,558.72|515,704.26|

 (2) Adjustment on accounting profit and income tax expenses
In RMB
|||
|-|-|
|Item|Current Period|
|Total Profit|-2,129,064.50|
|Income tax measured by statutory/applicable tax rate|-532,266.13|
|Impact on cost, expenses and losses that unable to deducted|80,637.96|
|Impact on deductible temporary differences or losses deductible||
||203,069.45|
|which was un-recognized as deferred income tax assets||
|Income tax expenses|-248,558.72|

 Other explanation
Nil
66. Other comprehensive income
Found more in Note 48
67. Items of cash flow statement
(1) Other cash received in relation to operation activities
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|Interest and Rent and utilities etc.|4,406,556.57|4,994,903.73|
|Restitution of judicial auction||9,444,737.00|
|Other intercourse funds|32,000.00|508,907.16|
|Total|4,438,556.57|14,948,547.89|

Explanation on other cash received in relation to operation activities:
Nil
(2) Other cash paid in relation to operation activities
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|Expense in management for cash payment|2,496,549.86|7,955,537.16|
|Rent and property fee and maintenance fee|3,394,536.88|4,122,077.60|
|Expense in sales for cash payment|2,775,796.71|1,886,340.09|
|Deposit and Margin paid|285,712.13|219,550.24|
|Utilities|652,106.63|636,351.99|
|Non-operation expenditure- compensation|30,140.00||
|Total|9,634,842.21|14,819,857.08|

 Explanation on other cash paid in relation to operation activities:
Nil
(3) Cash received from other investment activities
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|

 Explanation on cash received from other investment activities:
Nil
(4) Cash paid related with investment activities
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|

 Explanation on cash paid related with investment activities
Nil
(5) Other cash received in relation to financing activities
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|Performance bond for privately placement||8,000,000.00|
|Bill margin received|8,808,378.06||
|Total|8,808,378.06|8,000,000.00|

Explanation on other cash received in relation to financing activities:
Nil
(6) Cash paid related with financing activities
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|Payment of bill margin|2,000,000.00|8,808,378.06|
|Total|2,000,000.00|8,808,378.06|

 Explanation on cash paid related with financing activities:
Nil
68. Supplementary information to statement of cash flow
(1) Supplementary information to statement of cash flow
In RMB
||||
|-|-|-|
|Supplementary information|Current period|Last Period|
|1． Net profit adjusted to cash flow of|||
||--|--|
|operation activities:|||
|Net profit|-1,880,505.78|1,579,159.47|
|Add: Assets impairment provision|1,200,526.41|454,042.30|
|Depreciation of fixed assets, consumption of|||
|oil assets and depreciation of productive|369,874.42|302,594.49|
|biology assets|||
|Amortization of intangible assets|753,000.00|753,000.00|
|Loss from disposal of fixed assets, intangible|||
|assets and other long-term assets(gain is|85,730.05|2,464.81|
|listed with “-”)|||
|Financial expense(gain listed with “-”)||0.09|
|Decrease of deferred income tax|||
||-298,792.47|-96,632.42|
|asset( (increase is listed with “-”)|||
|Decrease of inventory (increase is listed with|||
||26,482.38|341,265.63|
|“-”)|||
|Decrease of operating receivable accounts|||
||-11,299,293.84|-16,740,831.68|
|(increase is listed with “-”)|||
|Increase of operating payable accounts|||
||1,563,504.67|9,973,358.91|
|(decrease is listed with “-”)|||
|Net cash flow from operation activities|-9,479,474.16|-3,431,578.40|
|2. Material investment and financing not|--|--|

||||
|-|-|-|
|involved in cash flow|||
|3. Net change of cash and cash equivalents:|--|--|
|Add: Balance of cash equivalent at|||
||16,488,886.26|19,177,276.18|
|period-end|||
|Less: Balance of cash equivalent Balance at|||
||19,177,276.18|24,015,287.71|
|period-begin|||
|Net increased amount of cash and cash|-2,688,389.92|-4,838,011.53|
|equivalent|||

(2) Net cash paid for obtaining subsidiary in the Period
In RMB
|||
|-|-|
||Amount|
|Including:|--|
|Including:|--|
|Including:|--|

Other explanation:
Nil
(3) Net cash received by disposing subsidiary in the Period
In RMB
|||
|-|-|
||Amount|
|Including:|--|
|Including:|--|
|Including:|--|

Other explanation:
Nil
(4) Constitution of cash and cash equivalent
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|
|Including: Cash on hand|126,486.63|100,034.87|
|Bank deposit available for payment at|||
||16,305,989.07|18,837,402.11|
|any time|||
|Other monetary fund available for|||
||56,410.56|239,839.20|
|payment at any time|||

||||
|-|-|-|
|II. Cash equivalent|16,488,886.26|19,177,276.18|
|Ⅲ. Balance of cash and cash equivalent at|16,488,886.26|19,177,276.18|
|period-end|||

Other explanation:
Nil
69. Notes of changes ofowners’ equity
Explain the name and adjusted amount in “Other” at end of last period:
Nil
70. Assets with ownership or use right restricted
In RMB
||||
|-|-|-|
|Item|Closing book value|Restriction reasons|
|||Margin of 2,000,000.00 yuan for bank|
|Monetary fund|2,000,000.00||
|||acceptance bill|
|Total|2,000,000.00|--|

Other explanation:
Nil
71. Foreign currency monetary items
(1) Foreign currency monetary items
In RMB
|||||
|-|-|-|-|
||Ending foreign currency|||
|Item||Convert rate|Ending RMB balance converted|
||balance|||
|Monetary fund|--|--||
|Including: USD||||
|EURO||||
|HKD||||
|Account receivable|--|--||
|Including: USD||||
|EURO||||
|HKD||||
|Long-term loans|--|--||

||
|-|
|Including: USD|
|EURO|
|HKD|

Other explanation:
Nil
(2) Explanation on foreign operational entity, including as for the major foreign operational entity, disclosed main operation place, book-keeping currency and basis for selection; if the book-keeping currency changed, explain reasons
□ Applicable√ Not applicable
72. Hedging
Disclosed hedging items and relevant hedging instrument based onhedging’s category, disclosed qualitative and quantitative information for the arbitrage risks:
Nil
73. Government grants
(1) Government grants
In RMB
|||||
|-|-|-|-|
||||Amount booked in current|
|Category|Amount|Item||
||||gain/loss|

 (2) Government grants rebate
□ Applicable√ Not applicable
Other explanation:
Nil
74. Other
Nil
VIII. Changes of consolidation range
1. Enterprise combined under different control
(1) Enterprise combined under different control in the Period
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||||||||Income of|Net profit of|
|||||||Standard to|||
||Time point|Cost of|Ratio of|Acquired|||acquiree from|acquiree from|
||||||Purchasing|determine the|||
|Acquiree|for equity|equity|equity|way Equity|||purchasing|purchasing|
||||||date|purchasing|||
||obtained|obtained|obtained|obtained way|||date to|date to|
|||||||date|||
||||||||period-end|period-end|

 Other explanation:
(2) Combination cost and goodwill
In RMB
||
|-|
|Combination cost|

Determination method for fair value of the combination cost and contingent consideration and changes:
Nil
Main reasons for large goodwill resulted:
Nil
Other explanation:
Nil
(3) Identifiable assets and liability on purchasing date under the acquiree
In RMB
|||
|-|-|
|Fair value on purchasing date|Book value on purchasing date|

 Determination method for fair value of the identifiable assets and liabilities:
Nil
Contingent liability of the acquiree bear during combination:
Nil
Other explanation:
Nil
(4) Gains or losses arising from re-measured by fair value for the equity held before purchasing date
Whether it is a business combination realized by two or more transactions of exchange and a transaction of
obtained control rights in the Period or not
□Yes√No
(5) On purchasing date or period-end of the combination, combination consideration or fair value of identifiable assets and liability for the acquiree are un-able to confirm rationally
Nil
(6) Other explanation
Nil
2. Enterprise combine under the same control
(1) Enterprise combined under the same control in the Period
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||||||Income of the|Net profit of|||
||||||combined|the combined|||
||||||||Income of the|Net profit of|
||||||party from|party from|||
|||Basis of||Standard to|||combined|the combined|
||Equity ratio||||period-begin|period-begin|||
|||combined|Combination|determine the|||party during|party during|
|Acquiree|obtained in||||of|of|||
|||under the|date|combination|||the|the|
||combination||||combination|combination|||
|||same control||date|||comparison|comparison|
||||||to the|to the|||
||||||||period|period|
||||||combination|combination|||
||||||date|date|||

Other explanation:
Nil
(2) Combination cost
In RMB
||
|-|
|Combination cost|

Explanation on contingent consideration and its changes:
Nil
Other explanation:
Nil
(3) Assets and liability of the combined party on combination date
In RMB
|||
|-|-|
|On purchasing date|At end of last period|

Contingent liability of the combined party bear during combination:
Nil
Other explanation:
Nil
3. Counter purchase
Basic transaction information, basis of counter purchase, whether making up business due to the assets and liability reserved by listed company and basis, determination of combination cost, amount and calculation on adjusted equity by equity transaction
Nil
4. Subsidiary disposal
Whether lost controlling rights while dispose subsidiary on one time or not
□ Yes√ No
Whether lost controlling rights in the Period while dispose subsidiary on two or more steps or not
□ Yes√ No
5. Other reasons for consolidation range changed
Reasons for changed on consolidation range (such as new subsidiary established, subsidiary liquidated etc.)And relevant information
Nil
6. Other
Nil
IX. Equity in other entity
1. Equity in subsidiary
(1) Constitute of enterprise group
||||||||
|-|-|-|-|-|-|-|
||Main operation|||Share-holding ratio|||
|Subsidiary||Registered place|Business nature|||Acquired way|
||place|||Directly|Indirectly||
|Shenzhen|||||||
||||Sales of bicycles||||
|Emmelle Industry|Shenzhen|Shenzhen||70.00%||Investment|
||||and spare parts||||
|Co., Ltd.|||||||

Explanation on share-holding ratio in subsidiary different from ratio of voting right:
Nil
Basis for controlling the invested entity with half or below voting rights held and without controlling invested entity but with over half and over voting rights
Nil
Controlling basis for the structuring entity included in consolidated range
Nil
Basis on determining to be an agent or consignor:
Nil
Other explanation:
Nil
(2)Important non-wholly-owned subsidiary
In RMB
||||||
|-|-|-|-|-|
||||Dividend announced to||
||Share-holding ratio of|Gains/losses attributable||Ending equity of|
|Subsidiary|||distribute for minority in||
||minority|to minority in the Period||minority|
||||the Period||
|Shenzhen Emmelle|||||
||30.00%|-288,536.87||2,674,162.80|
|Industry Co., Ltd.|||||

Explanation on share-holding ratio of minority different from ratio of voting right:
Nil
Other explanation:
Nil
(3) Main finance of the important non-wholly-owned subsidiary
In RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Balance at period-end||||||Balance at period-begin||||||
|Subsidia||Non-curr|||Non-curr|||Non-curr|||Non-curr||
||Current||Total|Current||Total|Current||Total|Current||Total|
|ry||ent|||ent|||ent|||ent||
||assets||assets|liability||liabilities|assets||assets|liability||liabilities|
|||assets|||liability|||assets|||liability||
|Shenzhe|||||||||||||
|n|||||||||||||
||29,791,5|1,548,02|31,339,5|22,425,6||22,425,6|31,672,2|1,373,48|33,045,7|23,170,0||23,170,0|
|Emmelle|||||0.00||||||0.00||
||25.49|1.02|46.51|70.50||70.50|52.96|1.42|34.38|68.81||68.81|
|Industry|||||||||||||
|Co., Ltd.|||||||||||||

In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||Current Period||||Last Period||||
||Operationrevenue||Total|Cash flow|||Total|Cash flow|
|Subsidiary|||||Operation||||
|||Net profit|comprehensi|from||Net profit|comprehensi|from|
||||||revenue||||
||||ve income|operation|||ve income|operation|

||||||||||
|-|-|-|-|-|-|-|-|-|
|||||activity||||activity|
|Shenzhen|||||||||
|Emmelle|88,175,813.9||||116,393,660.||||
|||-961,789.56|-961,789.56|-2,982,485.91||165,240.67|165,240.67|-9,704,911.00|
|Industry Co.,|0||||87||||
|Ltd.|||||||||

Other explanation:
Nil
(4) Major restriction on using corporate assets and liquidate corporate debts
Nil
(5) Financial or other supporting provided to structuring entity that included in consolidated financial statement
Nil
Other explanation:
Nil
2. Transaction that has owners equity shares changed in subsidiary but still with controlling rights
(1) Owners equity shares changed in subsidiary
Nil
(2) Impact onminority’s interest andowners’ equity attributable to parent company
In RMB
 Other explanation
Nil
3. Equity in joint venture and cooperative enterprise
(1) Important joint venture and cooperative enterprise
||||||||
|-|-|-|-|-|-|-|
|||||Share-holding ratio||Accounting|
|||||||treatment on|
||Main operation|||||investment for|
|Name||Registered place|Business nature||||
||place|||Directly|Indirectly|joint venture and|
|||||||cooperative|
|||||||enterprise|

Share-holding ratio or shares enjoyed different from voting right ratio:
Nil
Basis of the voting rights with20% below but with major influence, or without major influence but with over20%(20% included) voting rights hold:
Nil
(2) Main financial information of the important joint venture
In RMB
|||
|-|-|
|Balance at period-end/Current Period|Balance at period-begin/Last Period|

 Other explanation
Nil
(3) Main financial information of the important cooperative enterprise
In RMB
|||
|-|-|
|Balance at period-end/Current Period|Balance at period-begin/Last Period|

 Other explanation
Nil
(4) Financial summary for un-important joint venture or cooperative enterprise
In RMB
||||
|-|-|-|
||Balance at period-end/Current Period|Balance at period-begin/Last Period|
|Joint venture：|--|--|
|Total numbers measured by share-holding|||
||--|--|
|ratio|||
|Cooperative enterprise|--|--|
|Total numbers measured by share-holding|||
||--|--|
|ratio|||

Other explanation
Nil
(5)Assets transfer ability has major restriction from joint venture or cooperative enterprise
Nil
(6) Excess losses from joint venture or cooperative enterprise
In RMB
|||||
|-|-|-|-|
|||Un-confirmed losses not||
||Cumulative un-confirmed||Cumulative un-confirmed|
|Name||recognized in the Period (or net||
||losses||losses at period-end|
|||profit enjoyed in the Period)||

Other explanation
Nil
(7) Un-confirmed commitment with investment concerned with joint venture
Nil
(8) Contingent liability with investment concerned with joint venture or cooperative enterprise
Nil
4. Co-runs operation
|||||||
|-|-|-|-|-|-|
|||||Share-holding ratio/ share enjoyed||
|Name|Main operation place|Registered place|Business nature|||
|||||Directly|Indirectly|

 Share-holding ratio or shares enjoyed different from voting right ratio:
Nil
If the co-runs entity is the separate entity, basis of the co-runs classification
Nil
Other explanation
Nil
5. Equity in structuring entity that excluding in the consolidated financial statement
Relevant explanation
Nil
6. Other
Nil
X. Risk related with financial instrument
The major financial instruments of the Company consist of monetary fund, account receivable,
other account receivable, account payable and other account payable, etc. details of these financial
instruments are disclosed in the relevant notes. Risks relating to these financial instruments and risk management policies adopted by the Company to minimize these risks are detailed as follows. Management of the Company manages and monitors the risk exposures, to make sure they are under control.
1. Risk management targets and policies
The objectives of theCompany’s risk management is to balance the risk and income, reduce the negative risk impact of operating performance to the lowest level, maximize the interests of shareholders and other equity investors. Based on these objectives, the Company has established risk management policies to identify and analyze the risks faced by the Company, set adequate risk acceptable level and designed relevant internal control system to monitor the level of risks. The Company regularly reviews these policies and related internal control system to adapt to market development and change of operating activities of the Company. The major risks arising from theCompany’s financial instruments are credit risk and liquidity risk.
(1)Credit risk
Credit risk represents the risk of financial loss suffered by a party to a financial instrument due to failure of performance obligation of another party.
Credit risk of the Company is managed by category. Credit risk mainly arises from bank deposits and trade receivables. Since the bank deposits of the Company are mainly placed with those banks of high credit rating, the Company expects no significant credit risk on bank deposits.
As for trade receivables, the Company establishes relevant policies to control credit risk exposure. The Company, based on financial position of debtors, their credit records, market conditions and other factors, makes assessment ondebtors’ credit quality and sets relevant limit on amount of debt and credit term. The maximum credit risk exposure assumed by the Company equals to the sum of carrying value of every financial asset in the balance sheet. The Company provides no guarantee that may lead it to be exposed to credit risks.
(2)Liquidity risk
Liquidity risk refers to the risk of capital shortage of the Company when performing settlement obligation via delivery of cash or other financial assets.
When managing liquidity risk, the Company maintains and monitors such cash and cash equivalents as deemed adequate by the management, so as to satisfy its operation needs and minimize influence of fluctuation of cash flow. Management of the Company monitors application of bank borrowings to make sure it complies with relevant borrowing agreements.
The capital management policy of the Company is designed to ensure sustainable operation Of the Company so as to bring shareholders return and benefit other stakeholders, and to minimize capital cost by maintaining optimal capital structure.
In order to maintain and adjust capital structure, the Company may adjust share dividend paid to shareholders or issue new shares.
The Company monitors capital structure based on gearing ratio (total liabilities divided by total assets). As at 31 December 2018, the gearing ratio of the Company was76.82% (31 December 2017:74.36%)
XI. Disclosure of fair value
1. Ending fair value of the assets and liabilities measured by fair value
In RMB
||||||
|-|-|-|-|-|
||Ending fair value||||
|Item|||||
||First-order|Second-order|Third-order|Total|
|I. Sustaining measured by|||||
||--|--|--|--|
|fair value|||||
|II. Non-sustaining|||||
||--|--|--|--|
|measured by fair value|||||

2.Recognized basis for the market price sustaining and non-persistent measured by fair value on first-order
Nil
3. Valuation technique and qualitative and quantitative information on major parameters for the fair value measure sustaining and non-persistent on second-order
Nil
4. Valuation technique and qualitative and quantitative information on major parameters for the fair value measure sustaining and non-persistent on third-order
Nil
5.Adjustment information and sensitivity analysis of unobservable parameters for the fair
value measure sustaining and non-persistent on third-order
Nil
6. Sustaining items measured by fair value, as for the conversion between at all levels, reasons for conversion and policy for conversion time point
Nil
7. Changes of valuation technique in the Period
Nil
8. Financial assets and liability not measured by fair value
Nil
9. Other
Nil
XII. Related party and related transactions
1. Parent company of the enterprise
|||||||
|-|-|-|-|-|-|
|||||Share-holding ratio||
||||||Voting right ratio on|
|Parent company|Registration place|Business nature|Registered capital|on the enterprise for||
||||||the enterprise|
|||||parent company||

Explanation on parent company of the enterprise
The Company has no parent company so far
Ultimate controller of the Company: nil
Other explanation:
Controlling shareholder and actual controller of the Company have changed on 20 February 2017. Before changed, the first majority shareholder of the Company was Shenzhen Guosheng Energy Investment Development Co., Ltd., actual controller was Mr. Ji Hanfei; the Company has no actual controller and controlling shareholder after changed. Found more in the Annual Report 2016 released on 27 April 2017 and “Reply on Surveillance Attention Letter on CBC from Shenzhen Stock Exchange” released on 26 May 2017
2. Subsidiary of the Enterprise
Found more in Note IX-1
3. Cooperative enterprise and joint venture
Found more in Note IX-3
Other cooperative enterprise and joint venture that have related transaction with the Company in the Period or
occurred in pervious period
|||
|-|-|
|Name|Relationship|

Other explanation
Nil
4. Other related party
|||
|-|-|
|Other related party|Relationship with the Enterprise|
||Supervisor of the Company Li Jialin is the legal person of the|
|Shenzhen Huahui Tongda Industrial Co., Ltd.||
||enterprise|
|Shenzhen Guosheng Energy Investment Development Co., Ltd.|The first majority shareholder|

Other explanation
11.52 percent shares of the Company are held by Shenzhen Guosheng Energy Investment Development Co., Ltd.
5. Related transaction
(1) Goods purchasing, labor service providing and receiving
Goods purchasing/labor service receiving
In RMB
|||||||
|-|-|-|-|-|-|
||Transaction||Approved transaction|Whether more than||
|Related party||Current Period|||Last amount|
||content||amount|the transaction amount||

Goods sold/labor service providing
In RMB
|||||
|-|-|-|-|
|Related party|Transaction content|Current Period|Last Period|
|Shenzhen Huahui Tongda||||
||Sales of goods|234,790.09|0.00|
|Industrial Co., Ltd.||||

Explanation on goods purchasing, labor service providing and receiving
Nil
(2) Related trusteeship/contract and delegated administration/outsourcing
Trusteeship/contract
In RMB
||||||||
|-|-|-|-|-|-|-|
|||||||Income from|
|Client/|Entrusting party/||||Yield pricing||
|||Assets type|Starting date|Maturity date||trusteeship/contra|
|contract-out party|contractor||||basis||
|||||||ct|

Explanation on related trusteeship/contract
Nil
Delegated administration/outsourcing
In RMB
||||||||
|-|-|-|-|-|-|-|
||||||Pricing basis of|trustee|
|Client/|Entrusting party/||||trustee|fee/outsourcing|
|||Assets type|Starting date|Maturity date|||
|contract-out party|contractor||||fee/outsourcing|fee recognized in|
||||||fee|the Period|

 Explanation on related administration/outsourcing
Nil
(3) Related lease
As a lessor for the Company:
In RMB
|||||
|-|-|-|-|
|||Lease income in recognized in|Lease income in recognized last|
|Lessee|Assets type|||
|||the Period|the Period|

 As a lessee for the Company:
In RMB
|||||
|-|-|-|-|
|||Lease income in recognized in|Lease income in recognized last|
|Lessor|Assets type|||
|||the Period|the Period|

 Explanation on related lease
Nil
(4) Related guarantee
As a guarantor for the Company
In RMB
||||||
|-|-|-|-|-|
|||||Guarantee completed|
|Secured party|Amount guarantee|Starting date|Maturity date||
|||||(Y/N)|

 As a secured party for the Company
In RMB
||||||
|-|-|-|-|-|
|||||Guarantee completed|
|Guarantor|Amount guarantee|Starting date|Maturity date||
|||||(Y/N)|

 Explanation on related guarantee
(5) Borrowed funds of related party
In RMB
||||||
|-|-|-|-|-|
|Related party|Borrowed funds|Starting date|Maturity date|Note|
|Borrowing|||||
|Lending|||||

(6) Assets transfer and debt restructuring of related party
In RMB
|||||
|-|-|-|-|
|Related party|Transaction content|Current Period|Last Period|

 (7) Remuneration of key manager
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|Remuneration of key manager|1,950,178.00|1,880,143.00|

 (8) Other related transactions
Nil
6. Receivable/payable items of related parties
(1) Receivable item
In RMB
|||||||
|-|-|-|-|-|-|
|||Balance at period-end||Balance at period-begin||
|Item|Related party|||||
|||Book balance|Bad debts provision|Book balance|Bad debts provision|

 (2) Payable item
In RMB
|||||
|-|-|-|-|
|Item|Related party|Ending book balance|Opening book balance|
||Shenzhen Huahui Tongda|||
|Account received in advance||5,439.00|0.00|
||Industrial Co., Ltd.|||
||Shenzhen Guosheng Energy|||
|Other account payable|Investment Development Co.,|6,500,000.00|6,500,000.00|
||Ltd.|||

7. Commitments of related party
Nil
8. Other
Nil
XIII. Share-based payment
1. General share-based payment
□ Applicable√ Not applicable
2. Share-based payment settled by equity
□ Applicable√ Not applicable
3. Share-based payment settled by cash
□ Applicable√ Not applicable
4. Revised and termination on share-based payment
Nil
5. Other
Nil
XIV. Commitment or contingency
1. Important commitments
Important commitments in balance sheet date
Nil
2. Contingency
(1) Contingency on balance sheet date
Nil
(2) For the important contingency not necessary to disclosed by the Company, explained reasons
The Company has no important contingency that need to disclosed
3. Other
Nil
XV. Events after balance sheet date
1. Important non-adjustment items
In RMB
|||||
|-|-|-|-|
|||Impact on financial status and|Reasons on un-able to estimated|
|Item|Content|||
|||operation results|the impact number|

 2. Profit distribution
In RMB 3. Sales return
Nil
4. Other events after balance sheet date
Nil
XVI. Other important events
1. Previous accounting errors collection
(1) Retrospective restatement
In RMB
|||||
|-|-|-|-|
|||Impact items of statement||
|Correction content|Treatment procedures||Cumulative impacted number|
|||during a comparison||

(2) Prospective application
||||
|-|-|-|
|||Reasons for prospective application|
|Correction content|Approval procedures||
|||adopted|

 2. Debt restructuring
Nil
3. Assets replacement
(1) Non-monetary assets change
Nil
(2) Other assets replacement
Nil
4. Pension plan
Nil
5. Discontinued operations
In RMB
||||||||
|-|-|-|-|-|-|-|
|||||||Discontinued|
|||||||operations profit|
|||||Income tax|||
|Item|Revenue|Expenses|Total Profit||Net profit|attributable to|
|||||expenses|||
|||||||owners of parent|
|||||||company|

 Other explanation
Nil
6. Segment
(1) Recognition basis and accounting policy for reportable segment
Nil
(2) Financial information for reportable segment
In RMB
||||
|-|-|-|
|Item|Offset between segments|Total|

 (3)The Company has no reportable segments, or unable to disclose total assts and total liability for reportable segments, explain reasons
Nil
(4) Other explanation
Nil
7. Major transaction and events makes influence oninvestor’s decision
Nil
8. Other
XVII. Principle notes of financial statements of parent company
1. Note receivable and account receivable
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|
|Note receivable||300,000.00|
|Account receivable|12,827,954.16|17,680,663.16|
|Total|12,827,954.16|17,980,663.16|

 (1) Note receivable
1)Classification
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|
|Bank acceptance||300,000.00|
|Total||300,000.00|

 2)Notes receivable already pledged by the Company at the end of the period
In RMB
|||
|-|-|
|Item|Amount pledge at period-end|
|Total|0.00|

 3)Notes endorsement or discount and undue on balance sheet date
In RMB
||||
|-|-|-|
|Item|Amount derecognition at period-end|Amount not derecognition at period-end|
|Bank acceptance|15,498,304.72||
|Total|15,498,304.72||

4)Notes transfer to account receivable due for failure implementation by drawer at period-end
In RMB
|||
|-|-|
|Item|Amount transfer to receivable at period-end|
|Total|0.00|

 Other explanation
Nil
(2) Account receivable
1)Category of account receivable
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Balance at period-end|||||Balance at period-begin|||||
||Book balance||Bad debts provision|||Book balance||Bad debts provision|||
|Category|||||Book||||||
|||||Accrualratio|||||Accrual|Book value|
||Amount|Ratio|Amount||value|Amount|Ratio|Amount|||
||||||||||ratio||
|Account receivable|||||||||||
|withdrawal bad debt|||||||||||
||12,866,553.82||38,599.6||12,827,95|17,733,||||17,680,663.|
|provision by group of||100.00%||0.30%|||100.00%|53,201.59|0.30%||
||||6||4.16|864.75||||16|
|credit risk|||||||||||
|characteristics|||||||||||
||12,866,553.82||38,599.6||12,827,954.16|17,733,||||17,680,663.16|
|Total||100.00%||0.30%|||100.00%|53,201.59|0.30%||
||||6|||864.75|||||

 Receivable with single significant amount and withdrawal bad debt provision separately at end of period:
□ Applicable√ Not applicable
In combination, accounts receivable whose bad debts provision was accrued by age analysis:
√ Applicable□ Not applicable
In RMB
|||||
|-|-|-|-|
||Balance at period-end|||
|Account age||||
||Account receivable|Bad debts provision|Accrual ratio|
|Within one year||||
|Within one year(one year||||
||12,866,553.82|38,599.66|0.30%|
|included)||||
|Subtotal within one year|12,866,553.82|38,599.66|0.30%|
|Total|12,866,553.82|38,599.66|0.30%|

 Explanations on combination determine:
Nil
In combination, withdrawal proportion of bad debt provision based on balance proportion for account receivable:
□ Applicable√ Not applicable
In combination, withdrawal proportion of bad debt provision based on other methods for account receivable:
Nil
2) Bad debt provision accrual collected or switch back
Bad debt provision accrual was -14,601.93 Yuan; the amount collected or switches back amounting to 0.00 Yuan.
Important bad debt provision collected or switch back:
In RMB
||||
|-|-|-|
|Enterprise|Collected or switch back amount|Collection way|
|Total|0.00|--|

Nil
3)Account receivable actual charge off in the Period
In RMB
|||
|-|-|
|Item|Amount written off|

Written-off for the major receivable:
In RMB
|||||||
|-|-|-|-|-|-|
||Nature of account|||Verification|Arising from related|
|Enterprise||Amount written off|Reason for write-off|||
||receivable|||procedures|transaction (Y/N)|
|Total|--|0.00|--|--|--|

 Explanation for write-off of receivables:
Nil
4)Top 5 receivables at ending balance by arrears party
Enterprise Relationship Amount Account Bad debts Ratio in total Nature with the age provision receivables(%) company
Shenzhen Boyineng Technology Co., Non-related 5,772,755.17 Within one 17,318.27 44.86 Paymen Ltd. party year t for goods Shenzhen Weiterui New Energy Non-related 4,056,480.65 Within one 12,169.44 31.53 Paymen Technology Co., Ltd. party year t for goods Guangdong Xinlingjia New Energy Non-related 1,953,000.00 Within one 5,859.00 15.18 Paymen Co., Ltd. party year t for goods Shenzhen Jiahaosong Technology Co., Non-related 1,084,318.00 Within one 3,252.95 8.43 Paymen Ltd. party year t for goods Total 12,866,553.82 38,599.66 100.00 5)Receivable derecognition due to transfer of financial assets
Nil
6)Assets and liability resulted by receivable transfer and continuous involvement
Nil
Other explanation:
Nil
2. Other account receivable
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|
|Other account receivable|380,925.78|280,576.37|
|Total|380,925.78|280,576.37|

 (1) Interest receivable
1)Category of interest receivable
In RMB
||||
|-|-|-|
|Item|Balance at period-end|Balance at period-begin|

 2)2)Major overdue interest
In RMB
||||||
|-|-|-|-|-|
|||||Whether the impairment|
|Borrower|Balance at period-end|Overdue time|Overdue cause|occurs and its judgment|
|||||basis|
|Total|0.00|--|--|--|

 Other explanation:
Nil
(2) Dividend receivable
1)Dividend receivable
In RMB
||||
|-|-|-|
|Item(或The invested enterprise)|Balance at period-end|Balance at period-begin|

 2)Important dividends payable with account age over one year
In RMB
||||||
|-|-|-|-|-|
|||||Whether the impairment|
|Item( or The invested|||||
||Balance at period-end|Account age|Un-recovered reasons|occurs and its judgment|
|enterprise)|||||
|||||basis|
|Total|0.00|--|--|--|

 Other explanation:
Nil
(3) Other account receivable
1)Other accounts receivable by category
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Balance at period-end|||||Balance at period-begin|||||
||Book balance||Bad debts provision|||Book balance||Bad debts provision|||
|Category|||||Book||||||
|||||Accrualratio|||||Accrual|Book value|
||Amount|Ratio|Amount||value|Amount|Ratio|Amount|||
||||||||||ratio||
|Other receivables|||||||||||
|with bad debt|382,072.00||||380,925.7|251,350|||||
|||100.00%|1,146.22|0.30%|||89.34%|754.05|0.30%|250,595.95|
|provision accrual by|||||8|.00|||||
|credit portfolio|||||||||||
|Other account|||||||||||
|receivable with|||||||||||
|individual minor|||||||||||
|||||||29,980.|||||
|amount but|||||||10.66%|||29,980.42|
|||||||42|||||
|withdrawal bad debt|||||||||||
|provision|||||||||||
|independently|||||||||||
||382,072.00||||380,925.78|281,330||||280,576.37|
|Total||100.00%|1,146.22|0.30%|||100.00%|754.05|0.27%||
|||||||.42|||||

Other receivable with single significant amount and withdrawal bad debt provision separately at end of period
□ Applicable√ Not applicable
In combination, other accounts receivable whose bad debts provision was accrued by age analysis
√ Applicable□ Not applicable
In RMB
|||||
|-|-|-|-|
||Balance at period-end|||
|Account age||||
||Other account receivable|Bad debts provision|Accrual ratio|
|Within one year||||
|Within one year(one year||||
||370,172.00|1,110.52|0.30%|
|included)||||
|Subtotal within one year|370,172.00|1,110.52|0.30%|
|1-2 years|200.00|0.60|0.30%|
|2-3 years|11,700.00|35.10|0.30%|
|Total|382,072.00|1,146.22|0.30%|

 Explanations on combination determine:
Nil
In combination, withdrawal proportion of bad debt provision based on balance proportion for other account
receivable:
□ Applicable√ Not applicable
In combination, withdrawal proportion of bad debt provision based on other methods for other account receivable:
□ Applicable√ Not applicable
Bad debt provision accrual was 392.17 Yuan; the amount collected or switches back amounting to 0.00 Yuan.
Important bad debt provision collected or switch back:
In RMB
||||
|-|-|-|
|Enterprise|Amount reversal or collected|Collection way|
|Total|0.00|--|

Nil
3) Other receivables actually written-off during the reporting period
In RMB
|||
|-|-|
|Item|Amount written off|

Written-off for the major other receivable:
In RMB
|||||||
|-|-|-|-|-|-|
||Nature of other|||Verification|Arising from related|
|Enterprise||Amount written off|Reason for write-off|||
||receivables|||procedures|transaction (Y/N)|
|Total|--|0.00|--|--|--|

 Explanation for write-off of other receivables:
Nil
4)Other receivables by nature
In RMB
||||
|-|-|-|
|Nature|Ending book balance|Opening book balance|
|Intercourse funds||29,980.42|
|Deposit or margin|370,672.00|239,950.00|
|Equipment fund|11,400.00|11,400.00|
|Total|382,072.00|281,330.42|

 5)Top 5 other receivables at ending balance by arrears party
In RMB
|||||||
|-|-|-|-|-|-|
|||||Ratio in total ending||
|||Balance at|||Ending balance of|
|Enterprise|Nature||Account age|balance of other||
|||period-end|||bad bet provision|
|||||receivables||
|Shenzhen Material||||||
||Deposit or margin|181,918.00|Within one year|47.61%|545.75|
|Group Co., Ltd.||||||
|Shenzhen Anjingheng||||||
||Deposit or margin|161,000.00|Within one year|42.14%|483.00|
|Industrial Co., Ltd.||||||
|Shenzhen Jintaiyuan||||||
|Investment|Deposit or margin|27,254.00|Within one year|7.13%|81.76|
|Management Co., Ltd.||||||
|Shenzhen Hongkang||||||
|Instrument|Equipment fund|11,400.00|2-3 years|2.98%|34.20|
|Technology Co., Ltd.||||||

|||||||
|-|-|-|-|-|-|
|Lianxin Jiayuan||||||
|Branch of Shenzhen||||||
||Deposit and margin|300.00|2-3 years|0.08%|0.90|
|Color Life Property||||||
|Management Co., Ltd.||||||
|Total|--|381,872.00|--|99.94%|1,145.61|

 6)Account receivable with government grants involved
In RMB
||||||
|-|-|-|-|-|
|||||Time, amount and basis|
|Enterprise|Government grants|Balance at period-end|Ending account age|of amount collection|
|||||estimated|

 Nil
7)Other account receivable derecognition due to financial assets transfer
Nil
8)Assets and liability resulted by other account receivable transfer and continuous involvement
Nil
Other explanation:
Nil
3. Long-term equity investment
In RMB
||||||||
|-|-|-|-|-|-|-|
||Balance at period-end|||Balance at period-begin|||
|Item|||||||
||Book balance|Impairment|Book value|Book balance|Impairment|Book value|
|Investment forsubsidiary|||||||
||1,400,000.00|1,389,620.27|10,379.73|1,400,000.00|1,389,620.27|10,379.73|
|Total|1,400,000.00|1,389,620.27|10,379.73|1,400,000.00|1,389,620.27|10,379.73|

 (1) Investment for subsidiary
In RMB
||||||||
|-|-|-|-|-|-|-|
||||||Current|Ending balance of|
|The invested|Balance at|Current period|Current period|Balance at|||
||||||impairment|impairment|
|enterprise|period-begin|increased|decreased|period-end|||
||||||accrual|provision|
|Shenzhen|||||||
|Emmelle Industry|1,400,000.00|||1,400,000.00||1,389,620.27|
|Co., Ltd.|||||||
|Total|1,400,000.00|0.00|0.00|1,400,000.00|0.00|1,389,620.27|

(2) Investment for associates and joint venture
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Current period changes +,-||||||||||
||||||||||||Ending|
||||||Other||Cash|||||
||Balance|||Investme||||||Balance|balance|
|||Additiona|||comprehe||dividend|||||
|Funded|at|||nt gains||Other||||at|of|
|||l|Capital||nsive||or profit|Impairme||||
|enterprise|period-be|||recognize||equity|||Other|period-en|impairme|
|||investmen|reduction||income||announce|nt accrual||||
||gin|||d under||change||||d|nt|
|||t|||adjustmen||d to|||||
|||||equity|||||||provision|
||||||t||issued|||||
|I. Joint venture||||||||||||
|Subtotal|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|
|II. Affiliated enterprise||||||||||||
|Subtotal|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|
|Total||0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|||

(3) Other explanation
Nil
4. Operation revenue and operation cost
In RMB
||||||
|-|-|-|-|-|
||Current Period||Last Period||
|Item|||||
||Revenue|Cost|Revenue|Cost|
|Main business|31,732,088.16|29,103,342.44|22,338,842.47|19,253,017.11|
|Other business|2,127,375.25|753,000.00|2,166,747.83|759,358.98|
|Total|33,859,463.41|29,856,342.44|24,505,590.30|20,012,376.09|

 Other explanation:
Nil
5. Investment income
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|

 6. Other
Nil
XVIII. Supplementary Information
1. Current non-recurring gains/losses
√ Applicable□ Not applicable
In RMB
||||
|-|-|-|
|Item|Amount|Note|
|Gains/losses from the disposal of|||
||-85,730.05||
|non-current asset|||
|Switch-back of the impairment for|||
|receivables which have impairment test|219,118.00||
|independently|||
|Other non-operating income and expenditure|||
||261,141.96||
|except for the aforementioned items|||
|Less: Impact on income tax|98,632.48||
|Impact on minority shareholders’ equity|49,951.88||
|Total|245,945.55|--|

Concerning the extraordinary profit (gain)/loss defined byQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss inQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable√ Not applicable
2.净资产收益率及每股收益
|||||
|-|-|-|-|
|||Earnings per share||
|Profits during report period|Weighted average ROE|Basic earnings per|Diluted earnings per|
|||share(RMB/Share)|share(RMB/Share)|
|Net profits belong to common stock||-0.0029|-0.0029|
||-10.54%|||
|stockholders of the Company||||
|Net profits belong to common stock||||
|stockholders of the Company after||||
||-12.17%|-0.0033|-0.0033|
|deducting nonrecurring gains and||||
|losses||||

3. Difference of the accounting data under accounting rules in and out of China
(1) Difference of the net profit and net assets disclosed in financial report, under both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable√ Not applicable
(2) Difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable√ Not applicable
(3) Explain accounting difference over the accounting rules in and out of China; as for the difference adjustment for data audited by foreign auditing organ, noted the name of such foreign organ
Nil
4. Other
Nil