Shanghai Young Sun Investment Co., Ltd.
Annual Financial Statements and Audit Report in 2014
Table of Contents
Contents Page
Audit report 1
Consolidated and company balance sheet 2-3
Consolidated and company income statement 4
Consolidated and company cash flow statement 5
Consolidated statement of changes in equity 6-7
Company statement of changes in equity 8-9
Notes to financial statements 10-100
Audit Report
ZKZ (2015) No.0299
To Shareholders of Shanghai Young Sun Investment Co., Ltd.:
We have audited the accompanying financial statements of Shanghai Young Sun Investment
Co., Ltd. (hereafter referred to as Young Sun Investment), which comprise the consolidated and
company balance sheet as at December 31, 2014, the consolidated and company income
statement and cash flow statement of 2014, consolidated statement of changes in equity and
company statement of changes in equity and notes to financial statements.
I.Management’s Responsibility for the Consolidated and Company Financial Statements
The management of Young Sun Investment is responsible for the preparation and fair
presentation of these financial statements. This responsibility includes: (1) preparing the financial
statements in accordance with the regulations of Accounting Standards for Business Enterprises,
and to realize fair presentation; (2) designing, implementing and maintaining necessary internal
control, so as to make the financial statements free from material misstatement, whether due to
fraud or error.
II.CPAs’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the regulations of Auditing Standards for CPAs of
China. These standards require that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance whether the financial statements are free of material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amount and
disclosures in the financial statements. The procedures selected depend on theCPAs’ judgment,
including the assessment to the risks of material misstatement of the financial statements,
whether due to fraud or error. In making those risk assessments, the CPAs consider internal
control relevant to theentity’s preparation and fair presentation of the financial statements in
order to design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of theentity’s internal control. An audit also
includes evaluating the appropriateness of accounting policies used and reasonableness of
accounting estimates made by management, as well as evaluating the overall presentation of the
financial statements.
Shanghai Young Sun Investment Co., Ltd.
Consolidated and company balance sheet as at December 31, 2014
(Unit: RMB Yuan)
|||||
|-|-|-|-|
|Notes|Dec. 31, 2014Consolidated|Dec. 31, 2013Consolidated|Dec. 31, 2014Company|
|5.1|221,910,942.08|129,707,732.92|16,321,073.16|
|5.2/15.1|2,726,856.78|1,386,356.98|156.78|
|5.3|538,922.52|216,026.10||
|5.4/15.2|5,985,615.77|5,466,478.98|3,449,008.80|
|5.5|505,683.40|146,763.40||
||231,668,020.55|136,923,358.38|19,770,238.74|
|15.3|||235,133,037.70|
|5.6|127,626,738.17|146,364,192.58|127,223,237.31|
|5.7|17,833,998.80|11,135,194.75|16,070,798.80|
|5.8|1,484,737,726.64|1,633,153,078.88|81,960,180.10|
|5.9|22,644,681.99|22,644,681.99||
|5.10||||
||1,652,843,145.60|1,813,297,148.20|460,387,253.91|
||1,884,511,166.15|1,950,220,506.58|480,157,492.65|

 The attached notes to the financial statements are an essential part of the financial statements.
Legal representative: Jian Yong Li Financial Head: Zheng Qi Liu Accounting Organ Head: Da Nian Chen
Shanghai Young Sun Investment Co., Ltd.
Consolidated and company balance sheet as at December 31, 2014 (continued)
(Unit: RMB Yuan)
|||||
|-|-|-|-|
|Notes|Dec. 31, 2014Consolidated|Dec. 31, 2013Consolidated|Dec. 31, 2014Company|
|5.11|50,000,000.00|59,150,000.00|50,000,000.00|
|5.12|173,286,953.26|176,303,104.34|11,217,462.25|
|5.13|2,926,694.50|2,926,694.50|1,852,389.50|
|5.14|1,591,750.62|159,015.17|415,641.23|
|5.15|15,498,662.71|20,943,370.31|277,688.69|
|5.16|1,152,098.73|1,368,408.15|91,666.57|
|5.17|7,703,751.31|6,291,082.25|3,787,637.91|
|5.18|98,960,270.93|93,380,270.93|355,053.36|
||351,120,182.06|360,521,945.65|67,997,539.51|
|5.19|513,800,000.00|607,800,000.00||
|5.20|13,636,360.00|20,827,415.00||
|5.21|60,503,577.85|61,156,662.18||
|5.22|1,666,884.87|2,081,700.80|1,153,922.86|
||589,606,822.72|691,865,777.98|1,153,922.86|
||940,727,004.78|1,052,387,723.63|69,151,462.37|
|5.23|244,596,000.00|244,596,000.00|244,596,000.00|
|5.24|143,140,855.12|143,722,534.13|62,891,426.69|
|5.25|22,576,670.40|20,366,185.76|21,579,147.83|
|5.26|196,221,338.97|157,507,816.06|81,939,455.76|
||606,534,864.49|566,192,535.95|411,006,030.28|
||337,249,296.88|331,640,247.00||
||943,784,161.37|897,832,782.95|411,006,030.28|
||1,884,511,166.15|1,950,220,506.58|480,157,492.65|

The attached notes to the financial statements are an essential part of the financial statements.
Legal representative: Jian Yong Li Financial Head: Zheng Qi Liu Accounting Organ Head: Da Nian Chen
Shanghai Young Sun Investment Co., Ltd.
Consolidated and company income statement of 2014
(Unit: RMB Yuan)
|||||
|-|-|-|-|
|Notes|Year 2014Consolidated|Year 2013Consolidated|Year 2014Company|
|5.27/15.4|464,082,366.55|451,030,876.23|68,975,677.32|
|5.27/15.4|323,822,955.86|309,635,050.94|53,884,485.51|
|5.28|142,653.93|366,948.03|52,930.47|
|5.29|34,238,669.72|31,375,781.30|17,720,866.24|
|5.30|43,288,975.58|63,294,468.96|3,542,889.30|
|5.31|-217,777.60|-131,110.24|2,000.20|
|15.5|||24,776,086.96|
||62,806,889.06|46,489,737.24|18,548,592.56|
|5.32|44,738,650.89|46,516,220.50|5,903,088.36|
|||243,980.58||
|5.33|2,529,547.59|979,921.55|2,478,045.70|
||2,484,547.59|876,893.68|2,478,045.70|
||105,015,992.36|92,026,036.19|21,973,635.22|
|5.34|5,050,000.04|21,565,197.21|-131,211.20|
||99,965,992.32|70,460,838.98|22,104,846.42|
||50,707,847.55|37,304,359.32|22,104,846.42|
||49,258,144.77|33,156,479.66||
||99,965,992.32|70,460,838.98|22,104,846.42|
||50,707,847.55|37,304,359.32|22,104,846.42|
||49,258,144.77|33,156,479.66||
||0.21|0.15||
||0.21|0.15||

In case of combination of business under the same control in the current period, the net profit of the merged enterprise before
combination is RMB 0.00 Yuan and the one of the merged enterprise in the previous period was RMB 0.00 Yuan.
The attached notes to the financial statements are an essential part of the financial statements.
Legal representative: Jian Yong Li Financial Head: Zheng Qi Liu Accounting Organ Head: Da Nian Chen
Shanghai Young Sun Investment Co., Ltd.
Consolidated and company cash flow statement of 2014
(Unit: RMB Yuan)
|||||
|-|-|-|-|
|Notes|Year 2014Consolidated|Year 2013Consolidated|Year 2014Company|
||462,755,489.63|453,126,962.69|68,975,677.32|
|||1,576,026.09||
|5.35.1|46,092,330.06|46,475,881.67|29,603,831.44|
||508,847,819.69|501,178,870.45|98,579,508.76|
||149,257,906.15|124,259,670.66|33,516,357.32|
||37,542,069.31|34,772,271.61|9,710,612.78|
||12,577,380.57|15,099,473.54|2,036,096.04|
|5.35.2|11,060,071.35|13,392,062.40|5,127,849.03|
||210,437,427.38|187,523,478.21|50,390,915.17|
||298,410,392.31|313,655,392.24|48,188,593.59|
||||24,776,086.96|
||18,500.00|1,765.00|11,950.00|
||18,500.00|1,765.00|24,788,036.96|
||6,973,752.05|14,265,340.36|6,736,485.05|
||||24,840,000.00|
||6,973,752.05|14,265,340.36|31,576,485.05|
||-6,955,252.05|-14,263,575.36|-6,788,448.09|
||2,760,000.00|||
||50,000,000.00|59,500,000.00|50,000,000.00|
||52,760,000.00|59,500,000.00|50,000,000.00|
||152,115,455.00|276,675,455.00|78,870,000.00|
||87,497,512.72|54,927,453.15|13,480,571.26|
||34,616,425.08|||
||12,374,348.82|300,000.00||
||251,987,316.54|331,902,908.15|92,350,571.26|
||-199,227,316.54|-272,402,908.15|-42,350,571.26|
||-24,614.56|-1,348.84|-24,614.56|
||92,203,209.16|26,987,559.89|-975,040.32|
||129,707,732.92|102,720,173.03|17,296,113.48|
||221,910,942.08|129,707,732.92|16,321,073.16|

 The attached notes to the financial statements are an essential part of the financial statements.
Legal representative: Jian Yong Li Financial Head: Zheng Qi Liu Accounting Organ Head: Da Nian Chen
Shanghai Young Sun Investment Co., Ltd.
Consolidated statement of changes in equity of 2014
(Unit: RMB Yuan)
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|Current Period|||||||||||||
||Owner's equity attributable to the company|||||||||||MinorityInterests|Total Owner’Equity|
||Capital stock|Other equity instruments|||Capital reserve|Subtract:treasurystock|Othercomprehensiveincome|Specialreserves|Surplusreserve|Undistributedprofits|Others|||
|||Preferredstock|Perpetual capitalsecurities|Others||||||||||
|I. Ending balance of last period|244,596,000.00||||143,722,534.13||||20,366,185.76|157,507,816.06||331,640,247.00|897,832,782.95|
|Add: Changes in accounting policies||||||||||||||
|Corrections of Prior Period Errors||||||||||||||
|Business combinations under the same control||||||||||||||
|Others||||||||||||||
|II. Beginning balance of current period|244,596,000.00||||143,722,534.13||||20,366,185.76|157,507,816.06||331,640,247.00|897,832,782.95|
|III. Increase and Decrease Amount of the Current|||||-581,679.01||||2,210,484.64|38,713,522.91||5,609,049.88|45,951,378.42|
|Pe(rIi)o dT otal comprehensive income||||||||||50,707,847.55||49,258,144.77|99,965,992.32|
|(II) Contribution and withdrawal of capital byshareholders||||||||||||-9,032,669.81|-9,032,669.81|
|1. Common stock invested by shareholders||||||||||||2,760,000.00|2,760,000.00|
|2. Capital by other equity instruments holders||||||||||||||
|3. Amounts of share-based payments recognized inshareholder's equity||||||||||||||
|4. Others||||||||||||-11,792,669.81|-11,792,669.81|
|(III) Profit Distribution|||||||||2,210,484.64|-11,994,324.64||-34,616,425.08|-44,400,265.08|
|1. Appropriation of surplus reserves|||||||||2,210,484.64|-2,210,484.64||||
|2. Profits to owners (shareholders)||||||||||-9,783,840.00||-34,616,425.08|-44,400,265.08|
|3. Others||||||||||||||
|(IV) Owner's equity carried forward internally||||||||||||||
|1. Increase of capital (or stock) by capital reserves||||||||||||||
|2. Increase of capital (or stock) by surplus||||||||||||||
|3. Surplus reserves for covering up losses||||||||||||||
|4. Others||||||||||||||
|(V) Special reserve||||||||||||||
|1. Provision in current period||||||||||||||
|2. Used in current period||||||||||||||
|(VI) Others|||||-581,679.01||||||||-581,679.01|
|IV. Ending Balance of Current Period|244,596,000.00||||143,140,855.12||||22,576,670.40|196,221,338.97||337,249,296.88|943,784,161.37|

 The attached notes to the financial statements are an essential part of the financial statements.
Legal representative: Jian Yong Li Financial Head: Zheng Qi Liu Accounting Organ Head: Da Nian Chen
Shanghai Young Sun Investment Co., Ltd.
Consolidated statement of changes in equity of 2014 (continued)
(Unit: RMB Yuan)
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|Last Period|||||||||||||
||Owner's equity attributable to the company|||||||||||MinorityInterests|Total Owner’Equity|
||Capital stock|Other equity instruments|||Capital reserve|Subtract:treasurystock|Othercomprehensiveincome|Specialreserves|Surplusreserve|Undistributedprofits|Others|||
|||Preferredstock|Perpetual capitalsecurities|Others||||||||||
|I. Ending balance of last period|244,596,000.00||||144,051,953.70||||20,257,613.25|120,312,029.25||298,454,347.77|827,671,943.97|
|Add: Changes in accounting policies||||||||||||||
|Corrections of Prior Period Errors||||||||||||||
|Business combinations under the same control||||||||||||||
|Others||||||||||||||
|II. Beginning balance of current period|244,596,000.00||||144,051,953.70||||20,257,613.25|120,312,029.25||298,454,347.77|827,671,943.97|
|III. Increase and Decrease Amount of the Current|||||-329,419.57||||108,572.51|37,195,786.81||33,185,899.23|70,160,838.98|
|Pe(rIi)o dT otal comprehensive income||||||||||37,304,359.32||33,156,479.66|70,460,838.98|
|(II) Contribution and withdrawal of capital byshareholders|||||-329,419.57|||||||29,419.57|-300,000.00|
|1. Common stock invested by shareholders||||||||||||-300,000.00|-300,000.00|
|2. Capital by other equity instruments holders||||||||||||||
|3. Amounts of share-based payments recognized inshareholder's equity||||||||||||||
|4. Others|||||-329,419.57|||||||329,419.57||
|(III) Profit Distribution|||||||||108,572.51|-108,572.51||||
|1. Appropriation of surplus reserves|||||||||108,572.51|-108,572.51||||
|2. Profits to owners (shareholders)||||||||||||||
|3. Others||||||||||||||
|(IV) Owner's equity carried forward internally||||||||||||||
|1. Increase of capital (or stock) by capital reserves||||||||||||||
|2. Increase of capital (or stock) by surplus||||||||||||||
|3. Surplus reserves for covering up losses||||||||||||||
|4. Others||||||||||||||
|(V) Special reserve||||||||||||||
|1. Provision in current period||||||||||||||
|2. Used in current period||||||||||||||
|(VI) Others||||||||||||||
|IV. Ending Balance of Current Period|244,596,000.00||||143,722,534.13||||20,366,185.76|157,507,816.06||331,640,247.00|897,832,782.95|

 The attached notes to the financial statements are an essential part of the financial statements.
Legal representative: Jian Yong Li Financial Head: Zheng Qi Liu Accounting Organ Head: Da Nian Chen
Shanghai Young Sun Investment Co., Ltd.
Company statement of changes in equity of 2014
(Unit: RMB Yuan)
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|Current Period|||||||||||
||Capital stock|Other equity instruments|||Capitalreserve|Subtract:treasurystock|Othercomprehensiveincome|Specialreserves|Surplusreserve|Undistributed profits|Total Owner’Equity|
|||Preferredstock|Perpetual capitalsecurities|Others||||||||
|I. Ending balance of last period|244,596,000.00||||62,891,426.69||||19,368,663.19|71,828,933.98|398,685,023.86|
|Add: Changes in accounting policies||||||||||||
|Corrections of Prior Period Errors||||||||||||
|Others||||||||||||
|II. Beginning balance of current period|244,596,000.00||||62,891,426.69||||19,368,663.19|71,828,933.98|398,685,023.86|
|III. Increase and Decrease Amount of the CurrentPeriod|||||||||2,210,484.64|10,110,521.78|12,321,006.42|
|(I) Total comprehensive income||||||||||22,104,846.42|22,104,846.42|
|(II) Contribution and withdrawal of capital byshareholders||||||||||||
|1. Common stock invested by shareholders||||||||||||
|2. Capital by other equity instruments holders||||||||||||
|3. Amounts of share-based payments recognized inshareholder's equity||||||||||||
|4. Others||||||||||||
|(III) Profit Distribution|||||||||2,210,484.64|-11,994,324.6|-9,783,840.00|
|1. Appropriation of surplus reserves|||||||||2,210,484.64|4-2,210,484.64||
|2. Profits to owners (shareholders)||||||||||-9,783,840.00|-9,783,840.00|
|3. Others||||||||||||
|(IV) Owner's equity carried forward internally||||||||||||
|1. Increase of capital (or stock) by capital reserves||||||||||||
|2. Increase of capital (or stock) by surplus||||||||||||
|3. Surplus reserves for covering up losses||||||||||||
|4. Others||||||||||||
|(V) Special reserve||||||||||||
|1. Provision in current period||||||||||||
|2. Used in current period||||||||||||
|(VI) Others||||||||||||
|IV. Ending Balance of Current Period|244,596,000.00||||62,891,426.69||||21,579,147.83|81,939,455.76|411,006,030.28|

 The attached notes to the financial statements are an essential part of the financial statements.
Legal representative: Jian Yong Li Financial Head: Zheng Qi Liu Accounting Organ Head: Da Nian Chen
Shanghai Young Sun Investment Co., Ltd.
Company statement of changes in equity of 2013(continued)
(Unit: RMB Yuan)
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|Last Period|||||||||||
||Capital stock|Other equity instruments|||Capitalreserve|Subtract:treasurystock|Othercomprehensiveincome|Specialreserves|Surplusreserve|Undistributedprofits|Total Owner’Equity|
|||Preferredstock|Perpetualcapitalsecurities|Others||||||||
|I. Ending balance of last period|244,596,000.00||||62,891,426.69||||19,260,090.68|70,851,781.36|397,599,298.73|
|Add: Changes in accounting policies||||||||||||
|Corrections of Prior Period Errors||||||||||||
|Others||||||||||||
|II. Beginning balance of current period|244,596,000.00||||62,891,426.69||||19,260,090.68|70,851,781.36|397,599,298.73|
|III. Increase and Decrease Amount of the Current Period|||||||||108,572.51|977,152.62|1,085,725.13|
|(I) Total comprehensive income||||||||||1,085,725.13|1,085,725.13|
|(II) Contribution and withdrawal of capital by shareholders||||||||||||
|1. Common stock invested by shareholders||||||||||||
|2. Capital by other equity instruments holders||||||||||||
|3. Amounts of share-based payments recognized inshareholder's equity||||||||||||
|4. Others||||||||||||
|(III) Profit Distribution|||||||||108,572.51|-108,572.51||
|1. Appropriation of surplus reserves|||||||||108,572.51|-108,572.51||
|2. Profits to owners (shareholders)||||||||||||
|3. Others||||||||||||
|(IV) Owner's equity carried forward internally||||||||||||
|1. Increase of capital (or stock) by capital reserves||||||||||||
|2. Increase of capital (or stock) by surplus||||||||||||
|3. Surplus reserves for covering up losses||||||||||||
|4. Others||||||||||||
|(V) Special reserve||||||||||||
|1. Provision in current period||||||||||||
|2. Used in current period||||||||||||
|(VI) Others||||||||||||
|IV. Ending Balance of Current Period|244,596,000.00||||62,891,426.69||||19,368,663.19|71,828,933.98|398,685,023.86|

 The attached notes to the financial statements are an essential part of the financial statements.
Legal representative: Jian Yong Li Financial Head: Zheng Qi Liu Accounting Organ Head: Da Nian Chen
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
1 Basic information about the company
1.1 Overview of the company
Shanghai Young Sun Investment Co., Ltd (hereinafter referred to as “This Company”), the former Shanghai Jin Tai Co., Ltd (hereinafter referred to as “Jin Tai”), was approved and incorporated on July 28, 1995 by means of issuing 80,000,000 RMB special shares namely B shares, registered in Shanghai Administration for Industry and Commerce on July 30, 1995 and became a Sino-foreign joint-stock company. In 2002, this company underwent the assets reorganization, transferred the primary service and the corresponding most assets and liabilities to Shanghai State-owned Assets Operation Co., Ltd (hereinafter referred to as “State-owned Company”) and Shanghai Jin Tai Engineering Machinery Co., Ltd (hereinafter referred to as “Jin Tai Engineering company”) respectively, and purchased the wastewater treatment service from Shanghai City Drainage Co., Ltd (hereinafter referred to as “City Drainage company”) and the fixed assets and land usage right related to the wastewater treatment of Long Hua Water Purification Plant, Chang Qiao Water Purification Plant and Min Hang Water Purification Plant under it. After assets reorganization, this company formally ran the new service as of Jan. 1, 2003 and its scope of primary service was changed into the environmental protection project such as the urban wastewater treatment, the investment, operation and management of other municipal infrastructures as well as the related consultation and financial advising and so on. After approval, this company altered the business license for enterprise as a legal person on Feb. 14, 2003 and the name of the company was changed into Shanghai Young Sun Investment Co., Ltd and the registration No. of the business license for enterprise as a legal person after alteration was 310000400119570 (municipal bureau). The registered address of this company was No. 2 Guiqing Road Shanghai City and the office address of the headquarters is Room 1602 and 1603 Floor 16 No. 130 Wusong Road Shanghai City. According to the resolutions of general meeting of shareholders in 2003, this company, with the shareholding equity of 185,300,000 shares as the reference number on Dec. 31, 2003, transferred 2 shares per 10 shares to all shareholders with the capital surplus, and totally transferred 37,060,000 shares with the amount of RMB 37,060,000 Yuan and it was implemented in 2004. According to the resolutions of general meeting of shareholders in 2006, this company, with the shareholding equity of 222,360,000 shares as the reference number on Dec. 31, 2005, transferred 1 share per 10 shares to all shareholders as the bonus share and totally transferred 22,236,000 shares with the amount of RMB 22,360,000.00 Yuan and it was implemented in 2006. After two transfers, the registered and paid-in capital stock was increased to RMB 244,596,000 Yuan.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
1 Basic information about the company (continued)
On Oct. 9, 2011, this company received The Letter of Non-remunerative Transfer of Shares Held by State-owned Shareholders Company from State-owned Assets Supervision and Administration Commission of Shanghai Municipal Government and agreed to non-remuneratively transfer56.83% of the shareholding equity of this company, namely 138,996,000 shares held by the state-owned assets company to Shanghai Urban Investment (Group) Co., Ltd (the former Shanghai Urban Construction, Investment and Development HQ, hereinafter referred to as “Shanghai Urban Investment”). On Feb. 8, 2012, Shanghai Urban Investment (Group) Co., Ltd signed Report on Acquisition of Shanghai Young Sun Investment Co., Ltd and obtained No.170 (2012) securities regulatory permit from China Securities Regulatory Commission on Feb.24, namely A Reply to Authorization of Announcement of Shanghai Urban Construction, Investment and Development HQ for Report on Acquisition of Shanghai Young Sun Investment Co., Ltd and Exemption from its Obligations for Tender Offer. After the transfer of the state-owned stock rights, the shareholding equity of this company was still 244,596,000 shares, after that, the state-owned company did not hold any share of this company and Shanghai Urban Investment Co., Ltd held 138,996,000 shares and became the holding shareholder of this company. On Aug. 17, 2012, this company completed the alteration of industry and commerce regarding the legal representative. Now the registered capital of this company is RMB 244,596,000.00 Yuan, the registered address is No.2 Guiqing Road Shanghai City, the form of organization is joint-stock company limited (Sino-foreign joint venture, listed) and the address of HQ is Room 1602 and 1603 Floor 16 No. 130 Wusong Road Shanghai City. The business scope of this company covers the environmental protection project such as the urban wastewater treatment, the investment, operation and management of other municipal infrastructures as well as the related consultation and financial advising and so on, the nature of the business is wastewater treatment. The approved reporting date of the financial statements is Mar. 26, 2015.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
1 Basic information about the company (continued)
1.2 Range of consolidated financial statements in this year (Unit of the amount: RMB 10000 Yuan)
1.2.1 The information about the company included into the range of the consolidated financial statements in this year: see Foot-note 7.1 for details.
|||||||||
|-|-|-|-|-|-|-|-|
|S/N|Name of subsidiary|Type ofsubsidiary|Registeredplace|Nature ofbusiness|Registeredcapital|Scope of business|Amount ofactuallysubscribedcapital at theend of theyear|
|1|Shanghai Young SunDrainage Operation Co.,Ltd.|Soleinvestment|Shanghai,China|Wastewatertreatment|270.00|Maintenance, installation,commissioning and operation of thewastewater treatment andreutilization facilities as well as therelated consulting service|270.00|
|2|Shanghai YounglongInvestment &Consulting Co., Ltd.|Soleinvestment|Shanghai,China|Investmentconsulting|9,752.296|Investment in the industriesencouraged and permitted by thestate and the related investmentconsulting and trade consulting|10,495.744|
|3|Chengdu WenjiangDistrict Young SunWater Purification Co.,Ltd.|Holding|Chengdu,China|Wastewatertreatment|2,860.00|Wastewater treatment and itsreutilization|2,574.00|
|4|Chengdu WenjiangDistrict New YoungSun WastewaterTreatment Co., Ltd.|Holding|Chengdu,China|Wastewatertreatment|1,480.00|Construction, maintenance,installation, commissioning andoperation of the wastewatertreatment and reutilization facilities|1,332.00|
|5|Shanghai YoulianZhuyuan No.1Wastewater TreatmentInvestmentDevelopment Co., Ltd.|Holding|Shanghai,China|Wastewatertreatment|46,000.00|Construction of wastewatertreatment project, wastewatertreatment, wastewater treatmentprocess consulting, curing andmaintenance of wastewatertreatment equipment, production ofwastewater treatment coagulant,special machinery and tools forwastewater treatment,electromechanical products, fittingsfor automobiles, metallic material,chemical and light products(excluding hazardous goods),building materials, wood,instruments and meters|20,072.069|

Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
1 Basic information about the company (continued)
1.2 Range of consolidated financial statements in this year (continued)
1.2.1 The information about the company included into the range of the consolidated financial statements in this year: see Foot-note 7.1 for details.(continued)
||||||||
|-|-|-|-|-|-|-|
|Num|Name of subsidiaries|Shareholdingratio (%)|Votingratio (%)|Consolidatedor not|Minority equity|Identify with theconsolidated statementslast year or not|
|1|Shanghai Young Sun DrainageOperation Co., Ltd.|100.00|100.00|Yes|-|Yes|
|2|Shanghai Younglong Investment &Consulting Co., Ltd.|100.00|100.00|Yes|-|Yes|
|3|Chengdu Wenjiang District Young SunWater Purification Co., Ltd.|90.00|90.00|Yes|3,678,373.47|Yes|
|4|Chengdu Wenjiang District New YoungSun Wastewater Treatment Co., Ltd.|90.00|90.00|Yes|1,336,941.08|Yes|
|5|Shanghai Youlian Zhuyuan No.1Wastewater Treatment InvestmentDevelopment Co., Ltd|25.11|51.69|Yes|332,233,982.33|Yes|

1.2.2 Range of consolidated financial statements in this year coincides to last year, no changes.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
2 Preparation basis of the financial statements
2.1 Preparation basis
TheCompany’s financial statements were prepared based on continuing operations, according to the actual transactions and matters after confirmed and measured in accordance with the provisions of Accounting Standard for Business Enterprise---Basic Standard and other accounting standards.
In accordance with the provisions of 7 notices such as Notice of Issuing and Revising Accounting Standards for Enterprises No. 2 - Long-term Equity Investments by the Ministry ofFinance（CK[2014] No.6~8,10~11, 14 and16）, this company adopted the foregoing 7 accounting standards for enterprises issued by the Ministry of Finance as of July 1, 2014, including Accounting Standards for Enterprises No. 39- Measurement of Fair Value, Accounting Standards for Enterprises No. 30- Presentation of Financial Statements, Accounting Standards for Enterprises No. 9- Employee Compensation, Accounting Standards for Enterprises No. 33-Consolidated Financial Statements, Accounting Standards for Enterprises No. 40-Arrangement for Joint Operation, Accounting Standards for Enterprises No. 2 - Long-term Equity Investments by the Ministry of Finance and Accounting Standards for Enterprises No. 41-Disclosure of Rights and Interests among Other Entities.
According to No. 76 Decree of the Ministry of Finance of P.R. China- Decision of the Ministry of Finance about Modifying Accounting Standards for Enterprises-Basic Standards, this company adopted this decision as of July 23, 2014.
In accordance with the provision of Notice of Issuing and Revising Accounting Standards for Enterprises No. 37- Representation of Financial Instruments (CK[2014] No. 23), this company has adopted this provision since 2014.
The financial statements made the retroactive adjustment of the project requiring the retroactive adjustment in the related fiscal year and defined the financial statements again in accordance with the related provisions of the foregoing accounting standards.
2.2 Sustainable operation
Through evaluation of this company, within 12 months as of the end of the report period, the sustainable operation capability of this company is good and no factor exists that may result in the major doubt about the sustainable operation capability of this company.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate
3.1 Declaration on compliance with the Accounting Standards for Enterprises
TheCompany’s financial statements meet the requirements of the Accounting Standards for Enterprises, truthfully and completely reflecting information on its financial condition, results of operations, cash flows and the change inshareholders’ equity.
3.2 Accounting period
The accounting year starts on 1 January and ends on 31 December of Gregorian calendar.
3.3 Business cycle
The business cycle of the Company is 12 months.
3.4 Reporting currency
RMB is adopted as the reporting currency.
3.5 Accounting treatment of business combination under common control and not under common control 3.5.1 Business combination under common control
A business combination under the same control is a business combination in which all of the combining enterprises are ultimately controlled by the same party or the same parties both before and after the business combination and on which the control is not temporary.
If the consideration of the merging enterprise is that it makes payment in cash, transfers non-cash assets or bears its debts, it shall, on the date of merger, regard the share of the book value of the owner's equity of the merged enterprise as the initial cost of the long-term equity investment. The difference between the initial cost of the long-term equity investment and the payment in cash, non-cash assets transferred as well as the book value of the debts borne by the merging party shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted.
If the consideration of the merging enterprise is that it issues equity securities, it shall, on the date of merger, regard the share of the book value of the owner's equity of the merged enterprise as the initial cost of the long-term equity investment. The total book value of the stocks issued shall be regarded as the capital stock, while the difference between the initial cost of the long-term equity investment and total book value of the shares issued shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted.
The agency fees such as the auditing, legal service, evaluation and consultation and other related overhead expenses occurring in the business combination of the merging enterprise shall be included in the current profit and loss upon the occurrence.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.5 Accounting treatment of business combination under common control and not under common control (continued)
3.5.2 Business combination not under common control
A business combination not under the same control is a business combination in which the combining enterprises are not ultimately controlled by the same party or the same parties both before and after the business combination.
For a business combination realized by a transaction of exchange, the combination costs shall be the fair values, on the acquisition date, of the assets paid, the liabilities incurred or assumed and the equity securities issued by the acquirer in exchange for the control on the acquiree. For a business combination realized by two or more transactions of exchange, the combination costs shall be the summation of the costs of all separate transactions. The expenses for audit, legal services, assessment consulting and other relevant administrative costs for the business combination of the combining party shall be recorded into the profits and losses at the current period. The transaction cost for equity securities or debt securities issued by the acquirer as the purchase price shall be recorded into the initial recognition amount. The combination cost of the acquirer and the identifiable net assets obtained by the acquirer in the combination can be measured as per the fair value on the date of purchase. The acquirer shall recognize the positive balance between the combination costs and the fair value of the identifiable net assets it obtains from the acquiree as business reputation. If the combination costs are less than the fair value of the identifiable net assets it obtains from the acquiree, it shall record the balance into the profits and losses of the current period.
3.5.3 In case of control over the invested enterprises not under the common control due to additional investment and other reasons
In preparing the individual financial statements, based on the sum of the book value of the equity investment held previously and the newly increased cost of investment, it is changed into the initial cost of investment calculated as per the cost method. As to the equity investment held before the date of acquisition, other comprehensive income recognized through the measurement with the equity method is subject to the accounting treatment in disposal of the investment based on the same direct disposal method for the related assets or liabilities of the invested enterprise. In case of the accounting treatment for the equity investment held before the date of acquisition in accordance with the related provisions of Accounting Standards for Enterprises No. 22 Recognition and Measurement of Financial Instruments, the variation of the accumulative fair value included into other comprehensive income previously shall be recorded as the current profit or loss as per the cost method.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.5.3 In case of control over the invested enterprises not under the common control due to additional investment and other reasons (continued)
In the consolidated financial statements, as to the stock rights of the acquiree held before the date of acquisition, it shall be re-measured as per the fair value of the stock right on the date of acquisition and the balance between the fair value and the book value shall be recorded into the current investment income; in case that the stock right of the acquiree held before the date of acquisition involves other comprehensive income under the equity method, other related comprehensive income shall be recorded as the current income on the date of acquisition.
3.6 Preparation method of the consolidated financial statements
3.6.1 Consolidated range
The consolidated range of consolidated financial statements involves the company and all its subsidiaries. The consolidated range of the consolidated financial statements shall be determined based on the control.
3.6.2 Basis of control
Where the investor owns the power over the investees, enjoys the variable return through participation in the related activities of the investees and has the capability to affect the amount of return by virtue of the power of the investees, it shall be deemed that the investor controls the investees. The related activities, shall be deemed as the ones with significant effect on the return to the investees.
3.6.3 Decision-maker and the agent
The agent only exercises the decision making power in and on behalf of the person chiefly in charge and it does not control the investees. Where the investor assigns the decision making power of the related activities of the investees to the agent, the decision-making power shall be deemed to be directly held by itself.
In determining whether the decision-maker is the agent or nor, the company shall take into full account the relationship between the decision-maker and the investees and other investors.
1) Where an individual party owns the material power to unconditionally dismiss the decision-maker, the decision-maker is the agent;
2) Except the instance stipulated in 1), the related factors, such as the scope of the decision making power of the decision-maker to the investees, the material rights of other parties, the remuneration of the decision-maker, the risks of the decision-maker of variable return assumed due to holding other equities of the investees, shall be taken into full account for judgment.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.6 Preparation method of the consolidated financial statements (continued)
3.6.4 Investment subject
The one satisfying the following conditions synchronously shall be deemed as the investment subject: 1) That company is targeted towards providing the investment management to the investor and it obtains the capital from one or more investors;
2) The sole purpose of operation of that company is to return the investors through capital appreciation, earning on investment or both of them;
3) That company measures and evaluates almost all of the investment performance as per the fair value. Generally, the investment subject conforms to all of the following characteristics:
1) Owning one or more investments;
2) Owning one or more investors;
3) The investor is not the affiliated party of this subject;
4) Its owner's equity exists in form of stock rights or similar rights and interests.
3.6.5 Consolidated process
The accounting policy or the accounting period of the subsidiary is different from which of this company, the financial statements of the subsidiaries shall be necessarily adjusted as per the accounting policy or accounting policy of this company; or it is required that the subsidiaries should additionally prepare the financial statements as per the accounting policy or accounting period.
The consolidated balance sheet, consolidated profit statement, consolidated cash flow statement and consolidated statement of changes in equity of the owners (shareholders), based on the balance sheet, profit statement, cash flow statement and statement of changes in equity of the owners (shareholders) of this company and its subsidiaries, are consolidated and prepared by this company after setting off the effects from internal transaction occurring between this company and the subsidiaries and the ones among the subsidiaries on the consolidated balance sheet, consolidated profit statement, consolidated cash flow statement and consolidated statement of changes in equity of the owners (shareholders). The unrealized profit or loss from the internal transaction arising from the sale of the assets to the subsidiaries by this company shall offset “the net profit attributable to the parent company” with full amount. The unrealized profit or loss from the internal transaction arising from the sale of the assets to this company by the subsidiaries shall be distributed and offset between “the net profit attributable to the parent company” and “profit or loss of the minority shareholders” as per the allocation proportion of this company to the subsidiaries. The unrealized profit or loss from the internal transaction arising from the sale of the assets among the subsidiaries shall be distributed and offset between “the net profit attributable to the parent company” and “profit or loss of the minority shareholders” as per the allocation proportion of this company to the subsidiaries selling the assets.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.6 Preparation method of the consolidated financial statements
3.6.5 Consolidated process (continued)
The share of the owner's equity of the subsidiaries not attributable to this company, as the rights and interests of the minority shareholders, shall be represented as “the rights and interests of the minority shareholders” under the item of “theowner’s equity” in the consolidated balance sheet. The share of the current net profit or loss of the subsidiaries attributable to the rights and interests of the minority shareholders shall be represented as “rights and interests of the minority shareholders” under the item of the net profit in the consolidated profit statement. The share of the current comprehensive income of the subsidiaries attributable to the rights and interests of the minority shareholders shall be represented as “total of the comprehensive income attributable to the minority shareholders” under the item of the total of the comprehensive income in the consolidated profit statement. In case of minority shareholders, the item of “rights and interests of the minority shareholders” shall be increased in the consolidated statement of changes in equity of the owners to reflect the changes in the equity of the minority shareholders. In case that the current loss assumed by the minority shareholders of the subsidiaries exceeds the share of the minority shareholders inowner’s equity at the beginning of the subsidiaries, the balance shall write down the rights and interests of the minority shareholders.
In the period of report, for the added subsidiary companies and business controlled by the same enterprise preparing the balance sheet, the company shall adjust the beginning balance of the consolidated financial statement. In preparing the consolidated profit statement, the income, cost and profit of the subsidiaries and the business from the beginning of the current consolidation period to the end of the report period shall be included into the consolidated profit statement; in preparing the cash flow statement, the cash flow of the subsidiaries and the business from the beginning of the current consolidation period to the end of the report period shall be included into the consolidated cash flow statement; meanwhile, the related items in the comparative statements shall be adjusted and it shall be deemed that the consolidated reporting subject exists as always from the time point of control by the final controller.
As to the subsidiaries and business increased in manner of business combination or in other manners not under the common control, in preparing the consolidated balance sheet, the beginning balance of the consolidated balance sheet shall not be adjusted; in preparing the consolidated profit statement, the income, cost and profit of the subsidiaries and the business from the date of purchase to the end of the report period shall be included into the consolidated profit statement; in preparing the consolidated cash flow statement, the cash flow of the subsidiaries from the date of the purchase to the end of the report period shall be included into the consolidated cash flow statement.
When this company disposes the subsidiaries and the business within the report period, in preparing the consolidated balance sheet, the beginning balance of the consolidated balance sheet shall not be adjusted; in preparing the consolidated profit statement, the income, cost and profit of the subsidiaries and the business from the beginning of the period to the date of disposal shall be included into the consolidated profit statement; in preparing the consolidated cash flow statement, the cash flow of the subsidiaries and the business from the beginning of the period to the date of disposal shall be included into the consolidated cash flow statement.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.6 Preparation method of the consolidated financial statements (continued)
3.6.6 Accounting treatment for special transaction
3.6.6.1 Purchase of the stock rights of the subsidiaries owned by the minority shareholders of the subsidiaries
In the consolidated financial statement, as to the balance between the long-term equity investment obtained from the purchase of the minority equity and the share of the net assets of the subsidiaries continuously calculated as of the date of purchase or combination to be enjoyed as per the newly increased shareholding proportion, the capital surplus (capital premium or share premium) shall be adjusted; in case that the capital surplus is insufficient for write-down, the earning retained shall be adjusted.
3.6.6.2 Disposal of the long-term equity investment in the subsidiaries without the loss of the control power
In the disposal of the long-term equity investment in the subsidiaries without the loss of the control power, in the consolidated financial statements, as to the balance between the disposal price and the share of the net assets of the subsidiaries continuously calculated as of the date of purchase or combination to be enjoyed due to the disposal of the long-term equity investment, the capital surplus (capital premium or share premium) shall be adjusted; in case that the capital surplus is insufficient for write-down, the earning retained shall be adjusted.
3.6.6.3 Treatment of the residual equity in the loss of control power to the investees due to the
disposal of some equity investment
In preparing the consolidated financial statements, as to the residual equity, it shall be re-measured as per the fair value on the date of the loss of the control power. The sum of the consideration obtained from the disposal of the equity and the fair value of the residual equity, minus the balance between the shares of the net assets of the former subsidiaries continuously calculated as of the date of purchase or combination to be enjoyed as per the original shareholding proportion, shall be included into the current investment income with the loss of the control power, meanwhile, it shall write down the goodwill. As to other comprehensive income related to the equity investment of the former subsidiaries, in case of loss of the control power, it shall be converted into the current investment income.
3.6.6.4 Where the enterprise disposes the equity investment in the subsidiaries step by step until it loses the control power and the multiple transactions belong to the treatment of a package deal.
Where the transactions for disposal of the equity investment in the subsidiaries until the loss of the control power belong to a package deal, the transactions shall be deemed as a transaction disposing the subsidiaries and losing the control power for the accounting treatment; however, before the loss of the control power, in case that the balance between the disposal price and the share of the net assets of the subsidiaries enjoyed corresponding to the disposal of the investment is confirmed as the other comprehensive income in the consolidated financial statements, it shall be included into the profit or loss in the current period in which the control power is lost in case of loss of the control power.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.6 Preparation method of the consolidated financial statements (continued)
3.6.6 Accounting treatment for special transaction (continued)
3.6.6.4 Where the enterprise disposes the equity investment in the subsidiaries step by step until it loses the control power and the multiple transactions belong to the treatment of a package deal (continued) The principle for judging whether the transactions for disposal of the equity step by step until the loss of the control power belong to a package deal is shown as follows:
Where the clauses, conditions and economic impacts of disposal of the equity investment in the subsidiaries conform to one or more instances, it generally indicates that the multiple transactions belong to a package deal:
(1) These transactions are concluded synchronously or with the consideration of the mutual effects; (2) Only these transactions are regarded as a whole can they achieve a complete commercial result; (3) The occurrence of one transaction depends on the one of at least one transaction;
(4) One individual transaction appears uneconomical, however, it is economical when considered with other transactions.
3.7 Classification of joint arrangement and accounting process for joint operation
3.7.1 Classification of joint arrangement
The joint arrangement is divided into the joint operation and the joint venture.
3.7.2 Accounting treatment of the joint operation participants
The joint venture party confirms the following items related to the share of its benefits in the joint operation and carries out the accounting treatment in accordance with the provisions of the related accounting standards for the enterprises:
1) Confirming the assets solely held by itself and the assets jointly held according to its share;
2) Confirming the liabilities to be assumed solely and the ones to be jointly assumed according to their shares;
3) Confirming the income arising from sale of the share in the joint operation income that they are held; 4) Confirming the income arising from the sale of the outcome of the joint operation as per the share; 5) Confirming the cost arising herefrom solely and the cost arising from the joint operation as per their shares.
In case of input of sale of the assets by the joint operation parties (except that the assets compose of the business), before the assets are sold to the third party by the joint operation, only the share in the profit or loss arising from the transaction that is attributable to other joint operation participants is confirmed. Where the assets output or sold meet with the assets impairment-related losses in accordance with the provisions of Accounting Standard for Enterprise No. 8-Assets Impairment, the joint venture party confirms the losses with full amount.
As to the assets purchased by the joint venture party from the joint operation (except the business composed of the assets), before the assets are sold to the third party, only the share in the profit or loss arising from this transaction that is attributable to other joint operation participants is confirmed. Where the assets purchased meet with the assets impairment-related losses in accordance with the provisions of Accounting Standard for Enterprise No. 8-Assets Impairment, the joint venture parties confirm the losses as per the shares undertaken by them.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.7 Classification of joint arrangement and accounting process for joint operation (continued)
As to the participants not jointly controlling the joint operation, where they enjoy the related assets of the joint operation and assume the related liabilities of the joint operation, the above-mentioned method shall be adopted for accounting treatment; otherwise, it shall adopt the provisions of the related accounting standards for enterprises for the accounting treatment.
3.8 Recognition criteria of cash and cash equivalents
The term "cash" listed in the cash flow statement refers to cash on hand and deposits that are readily available for payment. The term "cash equivalents" refers to short-term (generally, it becomes due within 3 months as of the date of purchase) and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.
3.9 Translation of foreign currency transactions and statements
3.9.1 Foreign currency transactions
For foreign currency transactions, the amount in the foreign currency is translated into USD amount at the spot exchange rate of the transaction date.
On the balance sheet date, the foreign currency monetary items are translated into USD at the spot exchange rate of that day. The balance of exchange arising from the exchange rate difference, except the exchange balance of principal and interest of foreign currency borrowings used in acquisition and construction of assets eligible for capitalization, is recorded into the profits and losses at the current period. The foreign currency non-monetary items are translated at the spot exchange rate of that day on the balance sheet date.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.9 Translation of foreign currency transactions and statements (continued)
3.9.2 Translation of foreign currency statements
The asset and liability items in the balance sheets prepared based on non-recording currency are translated at a spot exchange rate to recording currency on the balance sheet date. Among the owner's equity items, except the ones as "undistributed profits", others are translated at the spot exchange rate at the time when they are incurred. The income and expense items in the profit statements prepared based on non-recording currency are translated at the spot exchange rate of the transaction date. The balance arisen from the translation of foreign currency financial statements in compliance with the aforesaid translation methods is presented separately under the owner's equity item of the balance sheets. The cash flows in cash flow statement prepared based on non-recording currency are translated to recording currency at the spot exchange rate at the time when they are incurred. The influence of foreign rate changes on cash is presented separately in cash flow statement.
3.10 Financial instruments
3.10.1 Recognition and derecognition of financial instruments
When the Company becomes a party to a financial instrument, it recognizes a financial asset or financial liability.
Where a financial asset satisfies any of the following requirements, the recognition of it shall be terminated:
(1) Financial assets are derecognized as the rights to receive cash flows from the investments have expired;
(2) Where the said financial asset has been transferred and meets the conditions for recognizing the termination of financial assets as provided for in Accounting Standards for Enterprises No. 23 - Transfer of Financial Assets.
When all or part of the current obligation of the financial liability is discharged, the financial asset or part of it is derecognized subsequently.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.10 Financial instruments (continued)
3.10.2 Classification of financial assets
Financial assets are classified into the following categories when they are initially recognized: Financial assets which are measured at their fair values and the variation of which is recorded into the profits and losses of the current period, loans and the account receivables, and financial assets available for sale, and the investments which will be held to their maturity. The classification of the financial assets depends on the intent and ability of this company to hold the financial assets.
(1) Financial assets which are measured at their fair values and the variation of which is recorded into the profits and losses of the current period
Financial assets which are measured at their fair values and the variation of which is recorded into the profits and losses of the current period include the financial assets held for sale in the short term, which is listed as transactional financial assets in balance sheet.
(2) Account receivables
Accounts receivable refers to the non-derivative financial assets for which there is no quoted price in the active market and of which the repo-amount is fixed or determinable, including accounts receivable, other receivables and long-term receivables.
(3) Financial assets available for sale
Financial assets available for sale include the non-derivative financial assets for sale designated at the initial confirmation and the financial assets not classified into other catalogues. The financial assets for sale to be sold within 12 months as of the date of the balance sheet shall be listed as the non current assets to be due within one year in the balance sheet.
(4) Investments which will be held to their maturity
The term "held-to-maturity investment" refers to a non-derivative financial asset with a fixed date of maturity, a fixed or determinable amount of repo price and which the enterprise holds for a definite purpose or the enterprise is able to hold until its maturity. The investment to be due within 12 months as of the date of the balance sheet that is held to its due date shall be listed as the non-current assets to be due within one year in the balance sheet.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.10 Financial instruments (continued)
3.10.3 Measurement of financial assets
When the Company becomes a party to a financial instrument, it recognizes a financial asset in the balance sheet by fair value. For financial assets measured by fair value and their change is recorded in the current profit and loss, their related transaction expenses are directly recorded in current profit and loss. For financial assets of other categories, their related transaction expenses are recorded in the initially recognized amount.
The Company makes subsequent measurement on its financial assets, measured by fair value and their change recorded in the current profit and loss, and financial assets available for sale according to their fair values. The equity instrument investments for which there is no quotation in the active market and whose fair value cannot be measured reliably are measured on the basis of their costs. The loans and accounts receivable and investments held until their maturity are measured on the basis of the post-amortization costs by adopting the actual interest rate method
The change in the fair value of the financial asset or financial liability which is measured at its fair value and of which the variation is recorded into the profits and losses of the current period, are recorded into the profits and losses on the changes in fair value. The interests or cash dividends obtained during the holding of assets and the disposal profit and loss upon disposal are recorded into the profits and losses of the current period.
Except the depreciation loss and the exchange profit and loss formed by the foreign currency financial assets, the variation in the fair value of the financial assets available for sale shall be recorded into theshareholder’s equity; when the termination of the financial assets is confirmed, the progressive total of the variation in the fair value directly recorded into the equity shall be shifted to the current profit and loss. The interest of the investment in the debt instrument available for sale shall be accrued as per the method of effective interest rate and recorded into the earning on investment; the cash dividends of the sellable equity instrument investments shall be recorded into the profits and losses of the current period when the investee announces the distribution of dividends.
3.10.4 Recognition and measurement of transfer of financial assets
Where an enterprise has transferred nearly all of the risks and rewards related to the ownership of the financial asset to the transferee, it shall stop recognizing the financial asset. If it retained nearly all of the risks and rewards related to the ownership of the financial asset, it shall not stop recognizing the financial asset.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.10 Financial instruments (continued)
3.10.4 Recognition and measurement of transfer of financial assets (continued)
If the transfer of an entire financial asset satisfies the conditions for stopping recognition, the difference between the amounts of the following two items shall be recorded in the profits and losses of the current period:
1) The book value of the transferred financial asset;
2) The sum of consideration received from the transfer, and the accumulative amount of the changes of the fair value originally recorded in the owner's equities (in the event that the financial asset involved in the transfer is a financial asset available for sale).
Where an enterprise obtains a new financial asset or undertakes a new financial liability due to the transfer of a financial asset, it shall, on the date of transfer, recognize the financial asset or liability according to its fair value (including the call option, put option, guaranteed liability, future contract, interchange, etc.) , and shall treat the net amount as an integral part of the aforesaid consideration through deducting the financial liability from the financial asset.
Where an enterprise concludes a service contract with the transferee of a financial asset on providing relevant services (including receiving cash flow of the financial asset and delivering the received cash flow to the fund preservation institution as designated), it shall recognize a service asset or liability based on the service contract. The service liability shall be subject to the initial measurement according to its fair value and shall be treated as an integrate part of the aforesaid consideration.
If the transfer of partial financial asset satisfies the conditions to stop the recognition, the entire book value of the transferred financial asset shall, between the portion whose recognition has been stopped and the portion whose recognition has not been stopped (under such circumstance, the service asset retained shall be deemed as a portion of financial asset whose recognition has not been stopped), be apportioned according to their respective relative fair value, and the difference between the amounts of the following two items shall be included into the profits and losses of the current period:
1) The book value of the portion whose recognition has been stopped;
2) The sum of consideration of the portion whose recognition has been stopped, and the portion of the accumulative amount of the changes in the fair value originally recorded in the owner's equities which is corresponding to the portion whose recognition has been stopped (in the event that the financial asset involved in the transfer is a financial asset available for sale).
The portion of the accumulative amount of changes in the fair value originally recorded in the owner's equities which corresponds to the portion whose recognition has been stopped, shall be recognized after the apportionment of the accumulative amount according to the relative fair values of the portion of financial asset whose recognition has been stopped and the portion of financial asset whose recognition has not been stopped.
3.10.5 Classification of financial liabilities
Financial liabilities are classified into the following categories when they are initially recognized: Financial liabilities measured by fair value with their changes recorded in current profit and loss, and other financial liabilities. The financial liabilities measured by fair value with their changes recorded in current profit and loss include transactional financial liabilities and the financial liabilities which are measured at their fair values and of which the variation is included in the current profits and losses.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.10 Financial instruments (continued)
3.10.6 Measurement of financial liabilities
When the Company becomes a party to a financial instrument, it recognizes a financial liability in the balance sheet by fair value. For financial liabilities measured by fair value and their change is recorded in the current profit and loss, their related transaction expenses are directly recorded in current profit and loss. For financial liabilities of other categories, their related transaction expenses are recorded in the initially recognized amount.
The Company makes subsequent measurement on the financial liabilities which are measured at their fair values and of which the variation is included in the current profits and losses, and may not deduct the transaction expenses that may occur when it settles the said financial liabilities in the future.
3.10.7 Recognition method for the fair value of the financial assets and liabilities
The fair value of financial assets and liabilities in active markets is determined according to the quoted price in the market. The fair value of financial assets and liabilities not in active markets is determined by valuation techniques (including the prices adopted by the parties, who are familiar with the condition, in the latest market transaction upon their own free will, the current fair value obtained by referring to other financial instruments of the same essential nature, the cash flow capitalization method and the option pricing model, etc.).
3.10.8 Test method and accounting process for the impairment of the financial assets
The Company carries out an inspection, on the balance sheet day, on the carrying amount of the financial assets other than those measured at their fair values and of which the variation is recorded into the profits and losses of the current period. Where there is any objective evidence proving that such financial asset has been impaired, an impairment provision is made.
For any financial asset measured on the basis of post-amortization costs, the impairment-related losses are recognized according to the difference between its carrying amount and present value of estimated future cash flow (excluding future credit losses not incurred). If there is any objective evidence showing that the value of such financial asset has been recovered and is objectively related to the subsequent events that occur after the losses were recognized, the originally recognized impairment-related losses are reversed and recorded into the profits and losses of the current period.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.10 Financial instruments (continued)
Where the fair value of the sellable financial asset drops significantly or not contemporary, the accumulated losses of the fair value that have been originally recorded in owner's equity are transferred out and recorded in the impairment-related losses. As for the sellable debt instrument investment whose impairment-related losses have been recognized, if, after the accounting period, the fair value has risen and are objectively related to the subsequent events that occur after the originally impairment- related losses were recognized, the originally recognized impairment-related losses are reversed and be recorded into the profits and losses of the current period. As for the sellable equity instrument investment whose impairment-related losses have been recognized, if, after the accounting period, the fair value has risen and are objectively related to the subsequent events that occur after the originally impairment- related losses were recognized, the originally recognized impairment-related losses are reversed and be recorded into the owner's equity. As for the equity instrument investment which has no quotation in active market and of which the fair valuecan’t be reliably measured, the impairment-related losses are not reversed even if the value can be recovered in subsequent period.
3.11 Receivables and bad debt provision
3.11.1 Receivables with single bad debt provision in significant single amount:
|||
|-|-|
|Recognition criteria or amount standard ofprovision for bad debt in receivables of significantsingle amount|The sum of “the top 5 balance of the receivables”or the amount accounting for “10% of the balanceof the receivables”|
|Method of provision for single bad debt insignificant single amount|The Company takes individual impairment test forthose significant receivable accounts to determinethe impairment loss and makes provision for baddebts based on the difference between their futurecash flow value and carrying amount.|

3.11.2 Receivables characterized as portfolio for bad debt provision:
|||
|-|-|
|Method of provision for bad debts made on the basis of credit risk characteristics portfolio||
|Portfolio of Age|Provision for bad debts made on the basis of ageanalysis|
|Receivables with less risk and no necessity ofprovision for bad debt|No provision for bad debts|

Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.11 Accounts receivable (continued)
3.11.2 Receivables characterized as portfolio for bad debt provision (continued):
Provision for bad debts made on the basis of ageanalysis：
||||
|-|-|-|
|Age|Proportion of provisionfor accounts receivable|Proportion of provision forother receivables|
|Within 1 year (inclusive 1 year)|0%|0%|
|1 to 2 years(inclusive 2 years)|20%|20%|
|2 to 3 years(inclusive 3 years)|40%|40%|
|Over 3 years|90%|90%|

 3.11.3 Receivables without significant single amount but with single bad debt provision
|||
|-|-|
|Reason for single bad debt provision|The receivables without significant single amountand not reflecting the risk characteristics based onthe bad debt provision as a portfolio|
|Method of bad debt provision|In case that it is expected that the prevent value offuture cash flow is lower than the balance of thebook value based on this amount, the bad debtprovision shall be made.|

3.12 Inventories
3.12.1 Classification of inventories
The inventories, including the raw materials, shall be listed as per the lower between the cost and the net realizable value
3.12.2 Valuation method of dispatched inventories
The raw materials shall be entered into the account as per the actual cost and the cost in dispatch shall be calculated with the method of weighted mean.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.12 Inventories (continued)
3.12.3 Basis for determining the net reliable value of different kinds of inventories
If the cost of inventories is higher than the net realizable value, the provision for the loss on decline in value of inventories shall be made and be included in the current profits and losses. The net realizable value refers to in the daily business activity the amount after deducting the estimated cost of completion, estimated sale expense and relevant taxes from the estimated sale price of inventories. The company shall confirm the net realizable value of inventories on the ground of reliable evidence obtained, taking into consideration of the purpose for holding inventories and the effects of events occurring after the date of the balance sheet.
The materials held for production shall be measured at cost if the net realizable value of the finished products is higher than the cost. If a decline of the value of materials shows that the net realizable value of the finished products is lower than the cost, the materials shall be measured at the net realizable value. The net realizable value of inventories held for the execution of sales contracts or labor contracts shall be calculated on the ground of the contract price. If the inventories are more than the quantities subscribed in the sales contract, the net realizable value of the excessive part of the inventories shall be calculated on the ground of the general sales price.
3.12.4 Inventory system
This company adopts the perpetual inventory system.
3.12.5 Amortization methods of low-value consumables and package materials
One-off amortization method is adopted for cost accounting of low-value consumables on requisition. One-off amortization method is adopted for cost accounting of package materials on requisition.
3.13 Assets determined to be held for sale
The assets synchronously satisfying the following conditions shall be determined as the assets to be held for sale:
1) The assets must be immediately sold in accordance with the common and conventional clauses for sale of this kind of assets under the current conditions;
2) The company has made the resolutions for disposal of the assets;
3) The company has signed the irrevocable transfer agreement with the assignee;
4) The transfer will be accomplished within one year.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.14 Long-term equity investment:
3.14.1 Recognition criterion for common control and significant impact
In case of the common control over a certain arrangement in accordance with the related provisions, only when the related activities of this arrangement must be agreed by the participants sharing the control power before the decision is made, can it be deemed as the common control. In case that two or more participant portfolios can collectively control a certain arrangement, it shall not be deemed as the common control.
In case of power of participation in the decision-making regarding the financial and operation policy of the investees, if it cannot control or jointly control with other participants the stipulation of these policies, it shall be deemed that they have significant impacts on the investees.
3.14.2 Determination of initial investment cost
For long-term equity investments formed by the merger of enterprises, the initial investment cost shall be determined according to the “3.4 Accounting treatment of business combination under common control and not under common control”. Besides the long-term equity investments formed by the merger of enterprises, the initial cost of a long-term equity investment obtained by other means shall be ascertained in accordance with the provisions as follows:
1) The initial cost of a long-term equity investment obtained by making payment in cash shall be the purchase cost which is actually paid. The initial cost consists of the expenses directly relevant to the obtainment of the long-term equity investment, taxes and other necessary expenses.
2) The initial cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fair value of the equity securities issued. The expenses directly related to issuing equity securities shall be determined in accordance with the regulations of Accounting Standards for Enterprises No. 37– Presentation of Financial Instruments.
3) In case that the transaction is commercial in nature; and the fair value of the assets received or surrendered can be measured reliably at the same time, the long-term equity investment received of the non-monetary asset shall determine the initial investment cost based on the fair value of the assets surrendered, unless it is indicated by the authentic evidences that the fair value of the assets received is more reliable; as to the exchange of the non-monetary assets not satisfying the above-mentioned preconditions, the book value of the assets received and the related taxes payable shall be regarded as the initial investment cost of the long-term equity investment;
4) The initial cost of a long-term equity investment obtained by recombination of liabilities shall be ascertained at fair value.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.14 Long-term equity investment (continued)
3.14.3 Subsequent measurement and the profit and loss determination
3.14.3.1 Subsequent measurement of cost method
The price of a long-term equity investment of the invested entity controlled by the company and measured by employing the cost method shall be included at its initial investment cost. If there are additional investments or disinvestments, the cost of the long-term equity investment shall be adjusted. The dividends or profits declared to distribute by the invested entity shall be recognized as the current investment income.
3.14.3.2 Subsequent measurement of equity method
The company shall adopt equity method for accounting the long-term equity investment of joint ventures and associated enterprises. If the initial cost of a long-term equity investment is more than the investing enterprise' attributable share of the fair value of the invested entity's identifiable net assets for the investment, the initial cost of the long-term equity investment may not be adjusted. If the initial cost of a long-term equity investment is less than the investing enterprise' attributable share of the fair value of the invested entity's identifiable net assets for the investment, the difference shall be included in the current profits and losses and the cost of the long-term equity investment shall be adjusted simultaneously.
When adopting equity method for accounting, after an investing enterprise obtains a long-term equity investment, it shall, in accordance with the attributable share of the net profits or losses of the invested entity and other comprehensive income, recognize the investment profits or losses and other comprehensive income respectively and adjust the book value of the long-term equity investment. The investing enterprise shall, in the light of the profits or cash dividends declared to distribute by the invested entity, calculate the proportion it shall obtain, and shall reduce the book value of the long-term equity investment correspondingly. Where any change is made to the owner's equity other than the net profits and losses, other comprehensive income and profit distribution of the invested entity, the book value of the long-term equity investment shall be adjusted and be included in the owner's equity. The investing enterprise shall, on the ground of the fair value of all identifiable assets of the invested entity when it obtains the investment, recognize the attributable share of the net profits and losses of the invested entity after it adjusts the net profits of the invested entity. If the accounting policies and accounting periods adopted by the invested entity are different from those adopted by the investing enterprise, an adjustment shall be made to the financial statements of the invested entity in accordance with the accounting policies and accounting periods of the investing enterprise and recognize the investment profits or losses and other comprehensive income.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.14 Long-term equity investment (continued)
An investing enterprise shall recognize the net losses of the invested enterprise until the book value of the long-term equity investment and other long-term rights and interests which substantially form the net investment made to the invested entity are reduced to zero, unless the investing enterprise has the obligation to undertake extra losses. If the invested entity realizes any net profits later, the investing enterprise shall, after the amount of its attributable share of profits offsets against its attributable share of the unrecognized losses, resume to recognize its attributable share of profits.
When the investors calculate and confirm the net profit or loss of the investees to be enjoyed or assumed, the unrealized profit or loss from the internal transaction with the affiliated business or the joint venture company shall be offset by the share attributable to the investors calculated as per the proportion and then the investment income shall be confirmed based on it. As to the unrealized loss from the internal transaction between the investors and the investees, if it belongs to the assets impairment loss in accordance with the related provisions of Accounting Standard for Enterprise No. 8-Assets Impairment, it shall be confirmed with the full amount.
As to the equity investment of the investors in the affiliated business, if one part of it is indirectly held by the venture capital institutions, common fund, trust company or the similar organs such as the Investment linked insurance fund, no matter whether the above-mentioned organs have significant impacts on the investment, the investors shall select the measurements of the investment indirectly held with the fair value and include the variation into the profit or loss and check other part of the investment with the equity method in accordance with the related provisions of the policy for Financial Instruments.
3.14.3.3 If an enterprise is able to do joint control or significant influence, which does not constitute control, over the invested entity as a result of additional investment or other reasons, it shall be treated as follows:
The sum of the fair value of the previously held equity investment determined as per Accounting Standard for Enterprises No. 22 Recognition and Measurement of Financial Instruments and the newly increased investment cost, shall be regarded as the initial investment cost to be checked with the equity method. If the previously held equity investment can be classified into the sellable financial assets, the balance between the fair value and the book value as well as the variation of the accumulative fair value previously included into other comprehensive income shall be recorded as the current profit or loss to be checked in accordance with the equity method.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.14 Long-term equity investment (continued)
3.14.3.4 Treatment for disposal of some equities
In case of loss of common control over or significant impact on the investees due to the disposal of some equities, the residual equities after disposal shall be accounted as per the policy regarding “financial instruments” in this footnote and the balance between the fair value and the book value on the date of loss of the common control or the significant impact shall be recorded into the current profit or loss. As to other comprehensive income of the previous equity investment confirmed due to accounting with the equity method, in case of termination of the accounting with the equity method, it is subject to the accounting treatment with the same basis as the direct disposal of the related assets or liabilities by the investees.
In case of loss of the control over the investees due to the disposal of some equity investment, in preparing the individual financial statements, if the residual equities after disposal have the common control over or significant impact on the investees, it shall be accounted with the equity method and it shall be deemed that the residual equities are adjusted with the accounting with equity method upon acquisition; in case that the residual equity after disposal loses the common control over or significant impact on the investees, they shall be accounted as per the policy regarding “financial instruments” in this footnote and the balance between the fair value and the book value on the date of loss of control or shall be recorded into the current profit or loss. In preparing the consolidated financial statements, it shall be in accordance with the related contents of “preparation method of the consolidated financial statements” in this footnote.
3.14.3.5 Disposal of the equity investment in the affiliated business or joint venture wholly or partially classified as the assets to be held for sale
The equity investment in the affiliated business or joint venture classified as the assets to be held for sale shall be represented as the amount of the book value and the fair value minus the disposal expenses, whichever is lower. In case that the fair value minus the disposal expenses is lower than the amount of the original book value, it shall be determined as the assets impairment loss. As to the residual equity investment not classified as the assets to be held for sale, it is subject to the accounting treatment with the equity method. As to the equity investment in the affiliated business or joint venture classified as the assets to be held for sale, if it does not conform to the classification condition of the assets to be held for sale any more, it is subject to the retroactive adjustment as of the date of classification as the assets to be held for sale. The financial statements in the period of classification as the assets to be held for sale are subject to the corresponding adjustment.
3.14.3.6 Treatment of disposal of long-term equity investment
When disposing of a long-term equity investment, the difference between its book value and the actual purchase price shall be included in the current profits and losses. As to the long-term equity investment subject to the accounting with the equity method, in disposal of the investment, it adopts the same basis as the direct disposal of the related assets or liabilities by the investees and the part previously included into other comprehensive income as per the corresponding ratio is subject to the accounting treatment.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.15 Fixed assets
3.15.1 Recognition of fixed assets
Fixed assets represent the tangible assets held for production or supply of goods or services, rental or for administrative purposes with useful life of over one accounting year. No fixed asset may be recognized unless it simultaneously meets the conditions as follows:
1) The economic benefits pertinent to the fixed asset are likely to flow into the enterprise; and
2) The cost of the fixed asset can be measured reliably.
3.15.2 Depreciation methods for different types of fixed assets
||||||
|-|-|-|-|-|
|Type|Depreciationmethod|Useful Life(Years)|Residual ValueRate (%)|AnnualDepreciation Rate(%)|
|Houses and buildings|Composite lifemethod|20-40 years|10%|2.25%-4.5%|
|Machinery andequipment|Composite lifemethod|5-10 years|10%|9%-18%|
|Transport equipment|Composite lifemethod|5-10 years|10%|9%-18%|
|Electronic equipment|Composite lifemethod|5 years|10%|18%|
|Other equipment|Composite lifemethod|5 years|10%|18%|
|Improvement of fixedassets for operation andrenting|Composite lifemethod|5 years|0%|20%|

3.16 Construction-in-progress
The construction-in-progress shall be measured as per the actual cost. The actual cost includes the construction cost, other necessary expenditure for guaranteeing the construction-in-progress up to the scheduled available state and borrowing costs satisfying the capitalization conditions occurring before the assets reach up to the scheduled available state. When the construction-in-progress reaches up to the scheduled available state, it shall be transformed to the fixed assets and the accrual of depreciation shall be carried out as of the next month.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.17 Borrowing costs:
As to the borrowing costs occurring for purchasing and building the fixed assets to guarantee it up to the scheduled available state over a long term, when the expenditure to acquire and borrowing costs have occurred and the necessary purchase and building activities to guarantee the assets up to the scheduled available state have initiated, the capitalization shall be initiated and shall be included into the cost of the assets. When the purchased and built assets reach up to the scheduled available state, the capitalization shall be terminated and the borrowing costs occurring after that shall be recorded into the current profit and loss. Capitalization of borrowing costs should be suspended when abnormal interruption has occurred in asset acquisition and construction activities and lasted for more than three month until asset acquisition and construction activities resume.
For specific borrowings (used to acquire, construct or produce assets qualified for capitalization), the amount of interest costs actually incurred on such borrowings for the period shall be capitalized after deducting any interest earned from depositing the unused borrowings in the bank or any investment income arising from the temporary investment of those borrowings during the capitalization period. The capitalized amount of interests on general borrowings shall be determined on the basis that the weighted average of the excess of cumulative assets expenditures over the specific borrowings times capitalization rate of used general borrowings. The capitalization rate is calculated and determined according to the weighted average interest rate of general borrowings.
Where there is any discount or premium, the amount of discounts or premiums that shall be amortized during each accounting period shall be determined by the real interest rate method, and an adjustment shall be made to the amount of interests in each period.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.18 Intangible asset:
3.18.1 Valuation method, service life and depreciation test
The intangible assets include the land use right, patent right, financial software and the assets obtained by means of building, operation and transfer (BOT) and so on. The intangible assets shall be measures with the actual cost. The intangible assets input by the state-owned shareholders in the corporate system reforming shall be recorded as the booking-in value in accordance with the evaluation value conformed by the state-owned administration.
Estimation of service life of the intangible assets with the limited service life:
||||
|-|-|-|
|Item|Expected service life|Basis|
|Land use right|50 year|Period of validity stipulated by theownership of the real estate|
|Franchise rights (BOT)|20-25 year|Period of operation stipulated by the relatedagreement|
|Returned cost of franchise rights|20-25 year|Period of operation stipulated by the relatedagreement|
|Patent right|16 year|Serviceable life stipulated by the relatedcertificate of title.|
|Financial software|5 year|Serviceable period|

An enterprise shall, at least at the end of each year, check the service life and the amortization method of intangible assets with limited service life and adjust accordingly.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.18.2 Accounting policy for internal research, development expenditures
Based on whether the intangible assets finally formed has great uncertainty or not according to the nature of the expenditure for the internal research and development projects and theR&D activities, it can be divided into the research expenditures and the development expenditures.
The research expenditures shall be recorded into the profit or loss for the current period. The development expenditures may be confirmed as intangible assets when they satisfy the following conditions simultaneously:
(1) It is feasible technically to finish intangible assets for use or sale;
(2) The management intend to finish and use or sell the intangible assets;
(3) It is able prove how intangible assets to generate economic benefits shall be proved;
(4) It is able to finish the development of the intangible assets, and able to use or sell the intangible assets, with the support of sufficient technologies, financial resources and other resources; and
(5) The development expenditures of the intangible assets can be reliably measured.
The development expenditures not satisfying the above conditions shall be recorded into the profit or loss for the current period. The development expenditures recorded into the previous profit and loss shall not be confirmed as the assets in the following period. The capitalized development expenditures shall be listed as the development expenditure on the balance sheet and shall be transformed into the intangible assets as of the date on which the project reaches up to the available state.
When the amount recoverable of the development expenditure is lower than its book value, the book value shall be reduced to the amount recoverable.
3.19 Long-term assets depreciation
As to the goodwill and the intangible assets with uncertain service life that are separately listed in the financial statements, no matter whether it shows the depreciation or not, they shall be annually tested for depreciation. As to the fixed assets, intangible assets, investment in the real estate measures in the mode of cost and the long-term equity investment, if they shows the depreciation, the depreciation test shall be carried out. In case that the depreciation test results show the amount recoverable of the assets is lower than the book value, The provision for impairment shall be accrued as per the balance and be recorded into the depreciation loss. The recoverable amount shall be determined in light of the higher one of the net amount of the fair value of the assets minus the disposal expenses and the current value of the expected future cash flow of the assets. The provision for impairment of the assets shall be calculated and confirmed based on the single asset; if it is difficult to estimate the amount recoverable of a single asset, the assets group in which the asset is located shall be used to determine the amount recoverable of the assets group. The assets group is the min. assets combination that can separately produce the cash in-flow. Once any loss of asset impairment is recognized, it shall not be switched back in the future accounting periods.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.20 Long-term prepaid expenses
The long-term prepaid expenses, including the betterment in operation and renting and other expenses to be born in this year and the coming periods with the apportionment period of over one year, shall be apportioned on average in installments of the expected benefit period and shall be listed as the net amount of the actual expenses minus the accumulative apportionment.
3.21 Employee compensation
3.21.1 Short-term compensation
In the accounting period of the employee providing the service to the company, the short-term compensation actually occurring herefrom shall be determined as the liabilities and included into the current profit or loss or the assets-related cost. As to the welfare for workers and staff, when it actually occurs, it shall be recorded in the current profit or loss or the assets-related cost according to the actual amount occurring. In case that the welfare for workers and staff is the non-monetary welfare, it shall be measured as per the fair value. As to the social insurance and public accumulation fund for housing construction, such as the medical insurance, industrial injury insurance and birth insurance paid for the workers and staff, as well as the trade union outlays and staff training expense withdrawn as per the provisions, in the accounting period of the employee providing the service to the company, according to the defined withdrawing basis and ratio, the corresponding employee compensation shall be calculated and determined as the corresponding employee compensation, the corresponding liabilities shall be determined and recorded into the current profit or loss or the assets-related cost.
When the employees provide the service, resulting in the increase in the right of absence from duty with salary, the employee compensation related to the accumulative absence from duty with salary shall be confirmed and measured with the expected payment amount increased due to the accumulative non-performance of the rights. In the accounting period in which the employee is actually absent from the duty, the employee compensation related to the non-accumulative absence from the duty with salage shall be confirmed.
When the profit sharing plan synchronously satisfies the following conditions, the company shall conform the related employee compensation payable:
1) Legal obligation or illative obligation for payment to the employee compensation at present due to the previous matters;
2) The obligatory amount of the employee compensation payable due to the profit sharing plan can be reliably estimated.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.21 Employee compensation (continued)
3.21.2 Welfare after demission
3.21.2.1 Defined drawing plan
In the accounting period in which the employee provides the service to the company, the company shall confirm the liabilities according to the amount payable calculated based on the drawing plan and record it into the current profit or loss or the assets-related cost. According to the set drawing plan, if it is expected all of the amount payable is paid within 12 months after the completion of the annual report period in which the employee provides the related service, the company shall measure the employee compensation payable as per the discounted amount of the payable amount.
3.21.2.2 Defined benefit plan
The accounting treatment of the set benefit plan by the company includes the following four steps: 1) According to the projected unit credit method, the unbiased actuarial assumption of mutual consistency is adopted to estimate the related population statistics variable and financial variables, measure the obligations arising from the defined benefit plan and determine the ascription period of the related obligations. The company shall discount the obligations arising from the defined benefit plan so as to determine the present value and the current service cost of the defined benefit plan.
2) In case of assets in the defined benefit plan, the company shall determine the deficit or surplus from the present value of the defined benefit plan minus the fair value of the assets of the defined benefit plan as the net liabilities or net assets of a defined benefit plan. In case of surplus in the defined benefit plan, the company shall measure the net assets of the defined benefit plan based on the surplus or the defined benefit plan and the upper limit of the assets, whichever is lower.
3) Determining the amount to be recorded into the current profit or loss.
4) Determining the amount to be recorded into other comprehensive income.
Based on the formula determined with the projected unit credit method, the company shall attribute the welfare obligation arising from the defined benefit plan to the period in which the employee provides the service and record it into the current profit or loss or the assets-related cost. When the service of the employee in the subsequent years may cause the welfare level of the defined benefit plan to be enjoyed to be higher than the one in the previous years, according to the line method, the apportionment of the accumulative obligations of the defined benefit plan shall be confirmed in the period when the employee provides the service, resulting in the welfare obligation of the enterprise under the defined benefit plan firstly, until the service provided by the employee does not result in the significant increase in the welfare obligations.
At the end of the report period, the company determines the cost for employee compensation arising from the defined benefit plan as: service cost, net amount of the interest of the net liabilities or net assets of the defined benefit plan as well as the changes in the net liabilities or net assets re-measured under the defined benefit plan.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.21 Employee compensation (continued)
3.21.2.2 Defined benefit plan (continued)
Under the defined benefit plan, the company shall confirm the previous service cost as the current expenses on the following dates, whichever is earlier:
1) Modifying the defined benefit plan;
2) When the enterprise confirms the related reorganization expenses or demission welfare.
The company confirms the settlement profit or loss in the settlement of the defined benefit plan.
3.21.3 Demission welfare
In case the company provides the demission welfare to the employee, the liabilities for the employee compensation arising from the demission welfare shall be determined on the following date and recorded into the current profit or loss, whichever is earlier:
1) When the company cannot withdraw the demission welfare provided due to the cancellation of the labor relation plan or job displacement suggestion unilaterally;
2) When the company confirms the cost or expenses related to the reorganization involving the payment of the demission welfare.
The company shall reasonably forecast and confirm the employee compensation payable arising from the demission welfare in accordance with the provisions of the job displacement plan.
3.21.4 Other long-term employee welfare
When the company provides other long-term employee benefit to the employees, if it conforms to the conditions of the defined drawing plan, it is subject to the treatment in accordance with the related policy of the defined drawing plan.
Besides the above-mentioned instances, the company shall confirm and measure the net liabilities or net assets of other long-term employee welfare in accordance with the related policy of the defined benefit plan. At the end of the report period, the cost of the employee compensation arising from other long-term employee welfare shall be confirmed as the following constituent parts:
(I) Service cost.
(II) Net amount of interest arising from the net liabilities or net assets of other long-term employee welfare;
(III) The changes in the net liabilities or net assets of other long-term employee welfare measured again; In order to simplify the related accounting treatment, the total net amount of the above-mentioned items shall be recorded into the current profit or loss or the assets-related cost.
If the long-term disability welfare level depends on the service life of the employees, the company shall confirm the long-term disability welfare obligations payable in the period of service provided by the employee; If the long-term disability welfare is not related to the service life of the employee, the company shall confirm the long-term disability welfare obligations payable in the current period in which the employee meets with the long-term disability.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.22 Estimated liabilities
Estimated liabilities are recognized when the Company has a present obligation as a result of contingencies such as provision of quality warranty and onerous contract, and it is probable that an outflow of economic benefits will be required to settle the obligation and the amount of the obligation expenditure can be reliably measured. For future operating losses, estimated liabilities are not recognized.
In accordance with the related provisions of Clause 5: Accounting Treatment for Participation of Enterprises in Construction of Infrastructure in Manner of BOT (building, operation and transfer) in No. 2 Interpretation of Accounting Standards for Enterprises: the engineering price paid in the process of building , with the consideration of the provisions of the contract and the conditions for confirming the income, shall be determined as the financial assets or intangible assets (the infrastructure built in manner of BOT shall not be deemed as the fixed assets of the project company) respectively. In accordance with the provisions of the contract, in order to keep the related infrastructure at a certain service ability or keep it at a certain use state before transfer to the contract awarding party, it is expected that some disbursements will be occur in the enterprise, it is subject to the treatment in accordance with Accounting Standards for Enterprises No. 13--- Miscellaneous and is determined as the expected liabilities.
Estimated liabilities are initially measured at the best estimate of the expenditure required to settle the present obligation and comprehensive consideration of contingency-related risk, uncertainty and time value of money. If the time value of money is of great significance, the best estimate shall be determined after discounting the relevant future outflow of cash. As to the increased amount of the book value of the expected liabilities arising from the discounting and recovery carried out with time going on shall be confirmed as the interest charges.
Carrying amounts of all estimated liabilities are reviewed and adjusted appropriately at each balance sheet date, to reflect the current best estimate.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.23 Share-based payments and equity instruments
3.23.1 Types of share-based payments
It includes equity-settled share-based payment and cash-settled share-based payment.
3.23.2 Accounting for implementation, amendment and termination of share-based payments
For equity-settled share-based payment made in return for the rendering of employee services 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 and capital reserve. 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 capital reserves at the fair value of such instruments on the date of the grant.
For the cash-settled share-based payment made in return for the rendering of employee services that may be exercised immediately after the grant, 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 corresponding liabilities. 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 the 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.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.24 Revenue recognition
The amount received shall be determined as per the fair value of the contracted price received or receivable in selling the commodities or providing labor service by this company in the routine operation activities. The income shall be listed as the net amount after deduction of the VAT, commercial discount, sales allowance and sales return.
When the economic benefit related to the transaction can flow into this company and the related revenue can be measured reliably and satisfies the following specific income identification criteria for the operation activities, the related revenue shall be confirmed.
3.24.1 Sales of goods
The operating revenue is recognized when the significant risks and rewards of product ownership have been transferred to the buyer, the Company maintains neither managerial right usually associated with ownership nor effective control over products sold, it is probable that the economic benefits will flow to the Company, and relevant revenue and costs can be measured reliably.
3.24.2 Rendering of services
As to the labor service initiated and accomplished in the same accounting year, when the labor service is provided, the purchase price is received or the evidence for collecting the purchase price is obtained, the realization of the business income is confirmed; if the rendering of services starts and completes in different fiscal years, when the gross income of service contract and the completion schedule can be identified reliably, related economic benefits will flow to the Company, and related costs incurred or to be incurred can be measured reliably, it will be recognized upon completion percentage method. When the contract results of the long-term contract works can be reasonably predicted, the realization of the business income shall be confirmed as per the percentage of the project schedule in settlement.
The specific judgment criterion of recognition standard and income recognition time to be confirmed by the company in providing the service income for the wastewater treatment:
This company shall confirm the service income from the wastewater treatment in accordance with the displacement of related confirmed wastewater treatment service and the unit price of the wastewater treatment service.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.24 Revenue recognition (continued)
3.24.3 Transfer of asset use rights
The interest income and use fee income from transfer of asset use rights is recognized when the relevant economic benefits will probably flow to the Company, and the amount of revenue can be measured reliably.
3.24.4 BOT business related revenue recognition
3.24.4.1 Principles of BOT business related revenue recognition
During construction, the project company shall recognize related income and cost of the construction services provided in accordance with the Accounting Standards for Business Enterprise No. 15– Construction Contract. After the completion of infrastructures, the project company shall recognize related income and cost of follow-up operations and services in accordance with Accounting Standards for Business Enterprise No. 14– Revenues. The construction contract shall be measured as per the fair value of consideration received or receivable, and the financial assets and intangible assets shall be recognized respectively at the time of recognizing revenues depending on the following situations:
1) Where the contract stipulates that within certain period after the completion of infrastructures, the project company may unconditionally collect certain amount of monetary fund or financial assets from the contract awarding party, or the fees of operating services provided by project company are lower than certain limited amount, and the awarding party shall make price difference compensation for project company as stipulated in the contract, the financial assets formed shall be treated according to the provisions in Accounting Standards for Business Enterprise No. 22– Recognition and Measurement of Financial Instruments. The project company shall, based on the fair value received or receivable, debit the subjects of “bank deposit” and “accounts receivable” and credit “engineering settlement”.
2) Where the contract stipulates that after the completion of infrastructures, the project company has the right to charge from the objects getting services but the charge amount is uncertain, such right shall not constitute an unconditional right to collect cash and the project company shall recognize intangible assets at the time of recognizing revenue. In case of any loan interest in construction process, it shall be treated according to the regulations of Accounting Standards for Business Enterprise No. 17–Borrowing Costs. The project company shall, based on the fair value of receivable consideration, debit the subject of “intangible assets” and credit the subject of “engineering settlement”.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.24 Revenue recognition (continued)
3.24.4 BOT business related revenue recognition (continued)
3.24.4.1 Principles of BOT business related revenue recognition (continued)
If the project company had not provided actual construction services but contracted the infrastructure construction out to other parties, construction service revenue shall not be recognized but shall be recognized as financial assets or intangible assets according to the projects costs paid in construction process and considering the contract provisions.
3.24.4.2 Recognition principle of revenue relating to BOT business of the company
When the construction of infrastructures has been completed, project company shall be engaged in wastewater treatment services and charge fees from the objects getting services. The revenue from wastewater treatment services shall be determined according to related confirmed displacement and unit price of wastewater treatment services.
3.25 Government grants
3.25.1 Judgment and accounting treatment methods of asset-related government grants
Long-term assets used for construction and production or formed in other ways are recognized as asset-related government grants. Asset-related government grants are recognized as a deferred income and allocated to current profit or loss over the expected useful life of the relevant asset by equal annual installments. But the government grand measured at the nominal value is directly recognized in current profit and loss.
3.25.2 Judgment and accounting treatment methods of income-related government grants
The government grants other than asset-related government grants are income-related government grants. Income-related government grants are applied to reimbursement of related costs or losses in subsequent periods are recognized as deferred income and taken to current profit or loss for the period when the related costs are recognized. Government grants applied to reimbursement of related costs or losses already incurred are directly recognized in current profit or loss.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.26 D eferred tax assets and deferred tax liabilities
Deferred tax assets or deferred tax liabilities are calculated based on the difference between the carrying amounts of the assets or liabilities and their tax bases (including taxable temporary differences and deductible temporary differences). As to the deductible losses that can be used to deduct the taxable income in the following years in accordance with the provisions of the tax law, it shall be deemed as the deductible temporary differences. As to the temporary differences occurring in the initial confirmation of the goodwill, the corresponding deferred income tax liability shall not be confirmed. As to the temporary differences formed in the initial confirmation of the assets or liability occurring in the non-business combination transaction not affecting the accounting profit or the taxable income (or deductible loss), the corresponding deferred income tax assets and the deferred income tax liability shall not be confirmed. On the balance sheet day, the deferred income tax assets and deferred income tax liabilities shall be measured at the tax rate applicable to the period during which the assets are expected to be recovered or the liabilities are expected to be settled.
Deferred income tax assets are recognized for all deductible temporary differences if it is probable that taxable income will be available against which the deductible temporary differences and deductible loss and the taxable income can be utilized.
The deferred income tax assets and the deferred income tax liability occurring from the temporary differences related to the subsidiaries, jointly-run business and the joint venture, shall be confirmed. The deferred income tax liabilities arising from the taxable temporary differences related to the investments of subsidiary companies, associated enterprises and contractual enterprises shall be recognized. If the investing enterprise can control the time of the reverse of temporary differences and the temporary differences are unlikely to be reversed in the excepted future, it shall not be recognized
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.27 Lease
The "finance lease" shall refer to a lease that has transferred in substance all the risks and rewards related to the ownership of an asset. Others shall be operating lease
3.27.1 Operating lease
The rent expenditure for operational leasing shall be recorded into the related assets cost or the current profit and loss in the leasing period as per the method of lines.
3.27.2 Financing leases
A lessee shall record the lower one of the fair value of the leased asset and the present value of the minimum lease payments on the lease beginning date as the entering value in an account, recognize the balance between the entering value in an account and the amount of the minimum lease payments as unrecognized financing charges which shall be amortize at actual interest rate over the lease term. The balance after deducting unrecognized financing charges from the amount of the minimum lease payments shall be listed in long-term payables.
3.28 Goodwill
The goodwill refers to the balance between the equity investment cost and the fair value quota of the invested unit to be enjoyed on the investment acquisition date or the balance between the business combination cost not under common control and the fair value quota of the identifiable net assets of the acquiree on the acquisition date obtained in the business combination.
The goodwill formed in the business combination shall be separately listed on the consolidated financial statements. The balance between the equity investment cost of the jointly-run business and the joint venture and the fair value quote of the invested unit to be enjoyed shall be included into the long-term equity investment.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
3 Important Accounting Policy and Accounting Estimate (continued)
3.29 Changes in significant amounting policies and accounting estimates
3.29.1 Changes in accounting policies
||||
|-|-|-|
|Reasons and details of changes in accountingpolicies|Review/Approval Process|Notes|
|In compliance with the revised AccountingStandards for Business Enterprises No.30 –Presentation of Financial Statements, differedincome will be listed separately and a statementof differed income will be prepared.|The 28th meeting of the sixth term board ofdirectors reviewed and passed Resolutionsregarding the implementation of relevantaccounting standards newly issued oramended by the ministry of finance in 2014.||

Starting from July 1st, 2014, the company adapts to following accounting standards newly issued by the Ministry of Finance in 2014: Accounting Standards for Business Enterprises No.39– Fair Value Measurement, Accounting Standards for Business Enterprises No.40 - Joint Arrangements, Accounting Standards for Business Enterprises No.41 - Disclosure of Interests in Other Entities, and to following accounting standards newly revised by the Ministry of Finance in 2014: Accounting Standards for Business Enterprise No.2 - Long-term Equity Investments, Accounting Standards for Business Enterprise No.9 - Employee Compensation, Accounting Standards for Business Enterprise No.30 - Presentation of FinancialStatements，Accounting Standards for Business Enterprise No.33 - Consolidated Financial Statements, and also adapts to the newly revised Accounting Standards for Business Enterprise No.37– Presentation of Financial Instruments in the preparation of financial statements for the fiscal year 2014. In accordance with the revised Accounting Standards for Business Enterprise No.30– Presentation of Financial Statements, deferred income will be listed as a separate statement. In compliance with the revised policy, the differed income items with the total amount of 414,815.93 yuan reported on the statement of other non-current liabilities has been relisted onto the statement of non-current liabilities due within one year; the deferred income items with the total amount of 2,081,700.80 reported on the statement of other non-current liabilities has been relisted onto the statement of deferred income.
Such changes will not affect total revenue, total liabilities, totalshareholders’ equality and total net income attributable to shareholders listed on consolidated financial statements of 2013.
3.29.2Changes in accounting estimates
No changes in significant accounting estimates occurred during this fiscal year.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
4 Taxation
4.1 Main tax types and tax rates
||||
|-|-|-|
|Tax type|Basis of taxation|Tax rate|
|Business tax|Taxable turnover|5%|
|Urban maintenance andconstruction tax|Turnover tax payables|7%|
|Enterprise income tax|Taxable income|25%|

Entity with different tax rate of income tax ,
|||
|-|-|
|Name of subject of taxation|Tax rate of enterprise income tax|
|Shanghai Young Sun Investment Co., Ltd|15%|
|Shanghai Youlian Zhuyuan No.1 Wastewater Treatment InvestmentDevelopment Co., Ltd|15%|
|Chengdu Wenjiang District Young Sun Water Purification Co., Ltd.|15%|

4.2 Tax preference and approvals
4.2.1 As stipulated in the Notice of Ministry of Finance and State Administration of Taxation on Comprehensive Utilization and OtherProducts’ Value-added Tax Policy (CS (2008) No. 156) released by the Ministry of Finance and State Administration of Taxation that “Wastewater treatment service shall be exempted from value-added tax. Wastewater treatment refers to the business that make the wastewater met with the water quality standards specified in GB18918-2002 after treatment.”, Shanghai Xuhui Office, SAT issued the Tax Reduction and Exemption Notice on Jan. 30, 2013 and agreed that the company shall be exempted from value-added tax for wastewater treatment income during the exemption term from Jan. 1, 2013 to Sept. 16, 2015.
4.2.2 This Company obtained No. GF201231000359 High-tech Enterprise Certificate issued by Science and Technology Commission of Shanghai Municipality, Shanghai Municipal Finance Bureau, Shanghai Municipal Office, SAT and Shanghai Municipal Bureau of Local Taxation on Nov. 18, 2011, with the term of validity of 3 years.
From Jan. 1, 2012 to Dec. 31, 2014, the corporate income tax of the Company shall be levied at a reduced rate of15% for high-tech enterprises.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
4 Taxation (continued)
4.2 Tax preference and approvals (continued)
4.2.3 Shanghai Youlian Zhuyuan No.1 Wastewater Treatment Investment Development Co., Ltd, a subsidiary of this Company, obtained No. GR201331000572 High-tech Enterprise Certificate issued by Science and Technology Commission of Shanghai Municipality, Shanghai Municipal Finance Bureau, Shanghai Municipal Office, SAT and Shanghai Municipal Bureau of Local Taxation on Nov. 19, 2013, with the term of validity of 3 years. From Jan. 1, 2013 to Dec. 31, 2015, the corporate income tax of the subsidiary shall be levied at a reduced rate of15% for high-tech enterprises.
4.2.4 Shanghai Youlian Zhuyuan No.1 Wastewater Treatment Investment Development Co., Ltd, a subsidiary of this Company, was identified as a general taxpayer on Dec. 1, 2012 according to the qualification certificate No. HGSPEE[2002] 000073 of Shanghai Pudong New Area Office, SAT, and the income shall be declared as value-added tax. On Dec. 20, 2012, the company obtained the Tax Preference Notice of No. HSPHZ (2012) No. 444 under the Notice of Ministry of Finance and State Administration of Taxation on Comprehensive Utilization and OtherProducts’ Value-added Tax Policy (CS (2008) No. 156), the wastewater treatment service revenue belongs to comprehensive utilization of resources and shall exempt from value-added tax, with the exemption term from Dec. 1, 2012 to Nov., 30, 2014. According to the notices of such files as the Notice of Ministry of Finance and State Administration of Taxation on Comprehensive Utilization and OtherProducts’ Value-added Tax Policy (CS (2008) No. 156), Notice of Ministry of Finance and State Administration of Taxation on Adjustment and Improvement of Value-added Tax Policy for Products and Services from Comprehensive Utilization of Resources (CS (2011) No. 115) and Notice of Ministry of Finance and State Administration of Taxation on the Problems Relating to Observation of Pollutants Discharge Standards by Taxpayers Enjoying Value-added Tax Preference Policy for Comprehensive Utilization of Resources (CS (2013) No. 23), the company obtained the Tax Preference Notice of No. HSPHZ (2014) No. 11004763 on Dec. 19, 2014, the wastewater treatment service revenue belongs to comprehensive utilization of resources and shall exempt from value-added tax, with the exemption term from Dec. 1, 2014 to Nov., 30, 2016. 4.2.5 Shanghai Young Sun Drainage Operation Co., Ltd., a subsidiary of this Company, according to relevant regulations of GSH[2004] No. 1366 “Approval of State Administration of Taxation about Levying No Business Tax on Wastewater Treatment Fee” released on Dec. 24, 2004 by State Administration of Taxation, i.e. “The wastewater treatment service provided by entity or individual does not belong to the taxable services of business tax, and no business tax shall be imposed to the wastewater treatment fee received from wastewater treatment.”, is in compliance with relevant regulations, so no business tax shall be imposed.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
4 Taxation (continued)
4.2 Tax preference and approvals (continued)
4.2.6 Chengdu Wenjiang District Young Sun Water Purification Co., Ltd., a subsidiary of this Company, was registered in Sichuan Province. As stipulated in the Notice on Taxation Policy Issues Concerning In-depth Implementation of the Western Development Strategy (CS (2011) No. 58), the corporate income tax of encouraged industries and enterprise in western China shall be levied at a reduced tax rate of15% from Jan. 1, 2011 to Dec. 31, 2020. The company meets relevant requirements, and the corporate income tax rate applicable in 2014 was15%.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements
5.1 Cash on hand and in bank
Items Dec. 31, 2014 Dec. 31, 2013 Cash 135,513.85 238,317.76 Cash in bank 221,775,428.23 129,469,415.16 Total 221,910,942.08 129,707,732.92 Including: total amount deposited abroad - - 5.1.1 Compared with the beginning balance, the ending balance of cash on hand and in bank increased by RMB 92,203,209.16 Yuan, with the increase percentage of71.09%, which is mainly caused that the company is not necessary to pay large cost of assets intangible, refer to notes 5.36.1 for details.
5.2 Accounts receivable
5.2.1 Disclosure of accounts receivable on classification:
Dec. 31, 2014 Dec. 31, 2013
Classification
Book balance
Provi as ci co on
u
f no tr bad
Book value
Book balance
Provi as ci co on u f no tr bad Book value Amount
Proportion
Amount
Proportion
Amount
Proportion
Amount
Proportion(%) (%) (%) (%) Accounts receivable
with significant single
amount and provision - - - - - - - - - - for bad debts
individually
Accounts receivable
with provision for bad
debts as per the 2,728,267.76 100.00 1,410.98 0.05 2,726,856.78 1,387,267.76 100.00 910.78 0.07 1,386,356.98 portfolio of credit risk
characteristics
Accounts receivable
with no significant
single amount but with - - - - - - - - - - provision for bad debts
individually
Total 2,728,267.76 100.00 1,410.98 2,726,856.78 1,387,267.76 100.00 910.78 1,386,356.98 The accounts receivable accrued for provision of bad debt by age analysis method inportfolio： Dec. 31, 2014
Age Accounts receivable Provision for bad debt Proportion(%) Within 1 year 2,726,700.00 - - 1-2 years - - - 2-3 years - - - Over 3 years 1,567.76 1,410.98 90.00 Total 2,728,267.76 1,410.98
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.2 Accounts receivable (continued)
5.2.2 Bad debt recovery and bad debt allowance
This year, the total amount of bad debt allowance is RMB 500.20 yuan, and the total amount of bad debt recovery is 0.00 yuan
5.2.3 No write-off of bad debts occurred during this fiscal year.
5.2.4 Top 5 account receivables sorted by ending balance of debtors
Proportion in total Ending balance Ending
Nature of accounts of provision for Name of company balance Age
account receivable(%) bad debts Sichuan Province
Wastewater
Chengdu Wenjiang Within
treatment 2,726,700.00 99.94 - District Water Affairs 1 year
charge
Bureau
5.2.5 Compared with the beginning balance, the ending balance of accounts receivable increased by RMB 1,340,499.80 Yuan, with the increase percentage of96.69%, which is mainly caused by the increase in wastewater treatment charge receivable
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.3 Advance payment
5.3.1 Sorted by age:
Dec. 31, 2014 Dec. 31, 2013
Age Amount Proportion Amount Proportion(%) (%) Within 1 year 514,576.42 95.48 62,205.50 28.801~2 years 18,225.50 3.38 40,020.60 18.532~3 years 6,120.60 1.14 113,800.00 52.67 Over 3 years 538,922.52 100.00 216,026.10 100.00 5.3.2 Top 5 sorted by the objects of advance payment
Relationship
Reason of Unit name with the Amount Age
outstanding company
Sichuan Datong Mechanical and Pending Suppliers 325,000.00 Within 1 year
Electrical Equipment Co., Ltd acceptance Suppliers Pending Sichuan kaishibifa Sales Center 69,360.60 Within 1 year
acceptance Chinese Southwest Municipal Suppliers
Pending Engineering Design& Research 50,000.00 Within 1 year
acceptance Institute Co., Ltd.
Chengdu Enhao Technology Suppliers Pending 31,200.00 Within 1 year
Co., Ltd acceptance Chengdu Muqing Suppliers
Pending Environmental Protection 23,800.00 Within 1 year
acceptanceScience&Technology Co., Ltd
Total 499,360.60
5.3.3 Compared with the beginning balance, the ending balance of advance payment increased by RMB 322,896.42 Yuan, with an increment of 1.49 times, which was caused by the increase in prepayment for materials and equipments.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.4 Other receivables
5.4.1 Analysis of other receivables on classification:
Dec. 31, 2014 Dec. 31, 2013 Classification
Book balance Provision for bad debt Book balance Provision for bad debt Amount
Prop(%or )t io n
Amount
Prop(%or )t io n Book value
Amount
Prop(%or )t io n
Amount
Prop(%or )t io n Book value Other receivables
with significant
single amount and - - - - - - - - - - provision for bad
debts individually
Other receivables
with provision for
bad debts as per the 6,114,315.77 99.95 128,700.00 2.10 5,985,615.77 5,575,278.98 99.95 108,800.00 1.95 5,466,478.98 portfolio of credit
risk characteristics
Other receivables
with no significant
single amount but
3,000.00 0.05 3,000.00 100.00 - 3,000.00 0.05 3,000.00 100.00 - with provision for
bad debts
individually
Total 6,117,315.77 100.00 131,700.00 5,985,615.77 5,578,278.98 100.00 111,800.00 5,466,478.98 The other receivables accrued for provision of bad debt by age analysis method inportfolio：
Dec. 31, 2014
Age Other receivables Provision for bad account Proportion(%) Within 1 year 5,474,468.27 - -1~2 years - - -2~3 years - - - Over 3 years 143,000.00 128,700.00 90.00 Total 5,617,468.27 128,700.00
Details for confirmation of this portfolio: Method of provision for bad debts made on the basis of credit risk characteristics portfolio
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.4 Other receivables (continued)
In portfolio, other receivables with less risk and no necessity of provision for bad debts
Dec. 31, 2014
Provision for bad
Age Other receivables Proportion debts
1-2 years 496,847.50 - - Details for confirmation of this portfolio: Method of provision for bad debts made on the basis of credit risk characteristics portfolio
5.4.2 Bad debt recovery and bad debt allowance
This year, the amount of bad debt allowance is RMB 26,500.00 yuan, and the amount of bad debt recovery is RMB 6600.00 yuan
5.4.3 No write-off of bad debts occurred during this fiscal year.
5.4.4 Classification of other receivables on nature
Name of Money Payable Ending Book Balance Beginning Book Balance Electric charge 4,676,600.00 4,235,000.00 Deposits 564,973.00 562,973.00 Interenterprise current funds 496,847.50 521,947.00 Advance money for another 378,593.18 254,342.58 Others 302.09 4,016.40 Total 6,117,315.77 5,578,278.98 5.4.5 Top 5 other receivables sorted by ending balance of debtors
Proportion in total Ending Nature of money Ending ending balance of balance of Unit name Age
payable balance accounts receivable provision for(%) bad debts Shanghai Municipal Electric Prepay electric
4,536,600.00 Within 1 year 74.16 - Power Company charge
Shanghai Chenghong Real
Rental deposit 558,473.00 Within 1 year 9.13 - Estate Co., Ltd.
Sichuan Young Sun
Investment Environment Interenterprise
470,000.00 1-2 years 7.68 - Engineering Investment Co., current funds
Ltd.
Chengdu Electric Power
Prepay electric
Bureau Wenjiang power 140,000.00 Over 3 years 2.29 126,000.00 charge
Supply Bureau
Shanghai Dingren Industrial Fee for technical
40,000.00 Within 1 year 0.65 - Co., Ltd. service
Total 5,745,073.00 93.91 126,000.00
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.5 Inventories
5.5.1 Classification of inventories
Dec. 31, 2014 Dec. 31, 2013
Item Book balance
P dr eo pv ri es ci io an
ti
f oo nr
Book value Book balance
P dr eo pv ri es ci io an
ti
f oo nr
Book value Raw materials 505,683.40 - 505,683.40 384,941.20 238,177.80 146,763.40 Total 505,683.40 - 505,683.40 384,941.20 238,177.80 146,763.40 5.5.2 Inventory depreciation reserve
Provision in 2014 Decrease in 2014
Classification Begning Book Ending Book of inventories Balance Pvovision Other
Reversal or
Other Balance write-off
-
Raw materials 238,177.80 - - 238,177.80
-
Total 238,177.80 - - 238,177.80
Write-off provision for depreciation in 2014 is caused by receiving raw materials.
5.5.3 Compared with the beginning balance, the ending balance of inventory increased by RMB 358,920.00 Yuan, with an increment of 2.45 times, which was caused by the increase in reserve of raw materials for waster water treatment and write-off depreciation reserve.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.6 Fixed assets
5.6.1 Information for fixed assets
Improvement of Buildings and Machinery Transportation Transportation Other fixed assets for Item Total constructions equipment equipment equipment equipment operation and renting
I. Original book value
1. Beginning balance 128,181,848.83 110,363,421.81 1,443,650.59 1,276,964.58 897,805.00 2,340,000.00 244,503,690.81 2. Increased amount in
- - 108,968.00 165,980.00 - - 274,948.00 current period
(1) Purchase
- - 108,968.00 165,980.00 - - 274,948.00 (2) Transferred from
- - - - - - - construction in progress
3. Decreased amount in
- 5,333,903.64 74,928.00 161,053.41 - - 5,569,885.05 current period
(1)Disposal or
- 5,333,903.64 74,928.00 161,053.41 - - 5,569,885.05 obsolescence
4.Ending balance
128,181,848.83 105,029,518.17 1,477,690.59 1,281,891.17 897,805.00 2,340,000.00 239,208,753.76 II. Accumulated
depreciation
1. Beginning balance 60,252,741.23 35,716,126.55 1,062,417.14 752,108.34 161,604.96 194,500.01 98,139,498.23 2. Increased amount in
5,952,550.89 9,892,876.68 107,461.51 120,105.49 161,604.96 467,999.99 16,702,599.52 current period
(1)Provision 5,952,550.89 9,892,876.68 107,461.51 120,105.49 161,604.96 467,999.99 16,702,599.52 3. Decreased amount in
- 3,048,094.97 68,482.00 143,505.19 - - 3,260,082.16 current period
(1)Disposal or
- 3,048,094.97 68,482.00 143,505.19 - - 3,260,082.16 obsolescence
4. Ending balance 66,205,292.12 42,560,908.26 1,101,396.65 728,708.64 323,209.92 662,500.00 111,582,015.59 III. Impairment provision
1. Beginning balance - - - - - - - 2. Increased amount in
- - - - - - - current period
(1)Provision - - - - - - - 3. Decreased amount in
- - - - - - - current period
(1) Disposal or
- - - - - - - obsolescence
4. Ending balance - - - - - - - IV. Book value
1.Ending book value 61,976,556.71 62,468,609.91 376,293.94 553,182.53 574,595.08 1,677,500.00 127,626,738.17 2.Beginning book value 67,929,107.60 74,647,295.26 381,233.45 524,856.24 736,200.04 2,145,499.99 146,364,192.58 5.6.2 The company has no temporarily idle fixed assets
5.6.3 The company has no fixed assets acquired by financial leasing
5.6.4 The company has no fixed assets acquired by financial leasing
5.6.5 The company does not fixed assets without proper ownership certificate.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.7 Construction in progress
5.7.1 Information for construction in progress
Dec. 31, 2014 Dec. 31, 2013 Item
Impairment Impairment Book balance Book value Book balance Book value provision provision
Renovation project of Longhua, Changqiao and
16,070,798.80 - 16,070,798.80 9,371,994.75 - 9,371,994.75 Minhang Waste Water Treatment Factories
On-line monitoring system 1,038,000.00 - 1,038,000.00 1,038,000.00 - 1,038,000.00 Equipment of central control technology reform 725,200.00 - 725,200.00 725,200.00 - 725,200.00 Total 17,833,998.80 - 17,833,998.80 11,135,194.75 - 11,135,194.75 5.7.2 Schedule in major constructions in progress
Proportion of Accumulated Including: Transfer to Other Ending Capitalization Beginning book Increase project Schedule capitalization capitalization Name of project Budget fixed assets decrease book rate of interest Fund balance in 2014 investment in of project amount of amount of in 2014 in 2014 balance in 2014(%) source budger(%) interest interest in 2014 Renovation project of Longhua, Changqiao and Self-fin 29,180,000.00 9,371,994.75 6,698,804.05 - - 16,070,798.80 55.08% 90% - - - Minhang Waste Water Treatment Factories ancing Total 9,371,994.75 6,698,804.05 - - 16,070,798.80 - - - 5.7.3 The company's board of directors considered, constructions in progress as at December 31, 2013 no occured situation of recoverable amounts is lower than its book value, in order to unnecessary to accrue provision for bad debts.
5.7.4 Compared with the beginning balance, the ending balance of construction in progress increased by RMB 6,698,804.05 Yuan, with the increase percentage of60.16%, which was caused by the increase in renovation project of Longhua, Changqiao and Minhang Waste Water Treatment Factories.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.8 Intangible assets
5.8.1 Information for intangible assets
Item Land use right
Franchise right Return cost of
Patent right Others Total（BOT） Franchise right
I. Original book value
1. Beginning balance 106,088,970.00 2,179,568,537.42 28,731,342.25 200,000.00 29,120.00 2,314,617,969.67 2. Increased amount in current period - - - - - - (1) Purchase
- - - - - - 3. Decreased amount in current period - 2,397,546.00 - - - 2,397,546.00 (2) Other - 2,397,546.00 - - - 2,397,546.00 4. Ending balance 106,088,970.00 2,177,170,991.42 28,731,342.25 200,000.00 29,120.00 2,312,220,423.67 II. Accumulated amortization
1. Beginning balance 22,081,312.59 654,858,402.55 4,379,886.58 126,288.46 19,000.61 681,464,890.79 2. Increased amount in current period 2,122,298.76 142,099,032.72 1,787,465.28 6,185.52 2,823.96 146,017,806.24 1)Provision 2,122,298.76 142,099,032.72 1,787,465.28 6,185.52 2,823.96 146,017,806.24 3. Dereased amount in current period - - - - - - (1) Disposal - - - - - - 4. Ending balance 24,203,611.35 796,957,435.27 6,167,351.86 132,473.98 21,824.57 827,482,697.03 III. Impairment provision
1. Beginning balance - - - - - - 2. Increased amount in current period - - - - - - (1) Provision - - - - - - 2. Decreased amount in current period - - - - - - (1) Disposal - - - - - - 4. Ending balance - - - - - - IV. Book value
1.Ending book value 81,885,358.65 1,380,213,556.15 22,563,990.39 67,526.02 7,295.43 1,484,737,726.64 2.Beginning book value 84,007,657.41 1,524,710,134.87 24,351,455.67 73,711.54 10,119.39 1,633,153,078.88 Year-end intangible assets generated by internal research and development accounts for0.00% of total intangible assets.
5.8.2 The company does not possess right to use land without proper ownership certificate.
5.8.3 The Board of Directors of the Company held that: the situation that the recoverable amount is lower than the book value has not occurred in intangible assets at the end of year, so it is not necessary to make the provision for impairment.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.9 Goodwill
5.9.1 Original book value of goodwill
Name of invested entity or Beginning balance Increase of Decrease of Ending balance of the event forming goodwill of the year the year the year the year Shanghai Zhu Yuan No. 1
Wastewater Treatment
22,644,681.99 - - 22,644,681.99 Investment Development
Co., Ltd
Total 22,644,681.99 - - 22,644,681.99 5.9.2 Provision for impairment of goodwill
Name of invested entity or Beginning balance Increase of Decrease of Ending balance of the event forming goodwill of the year the year the year the year Shanghai Youlian Zhuyuan
No. 1 Wastewater
- - - - Treatment Investment
Development Co., Ltd
Total - - - - 5.9.3 Goodwill impairment test process, parameters and determination of goodwill impairment loss: The recoverable amount of infrastructure assets group shall be determined according to the expected future cash flow of the asset group, and the company shall determine according to the cash flow forecasts based on the discharge capacity and water rate stipulated in the franchise contract of Shanghai Youlian Zhuyuan No. 1 Wastewater Treatment Investment Development Co., Ltd. The discount rate of cash flow forecast is3.99% the 10-year treasury rate published in 2014. The age limit of future cash inflow shall be the remaining time of franchise stipulated in franchise contract, and the remaining time is 10 years up to the end of the report period. Test result: there is no impairment in recognized goodwill amount during the reporting period.
5.9.4 Calculation process of goodwill
This company and its subsidiary Shanghai Yang Long Investment Consulting Co., Ltd paid RMB 156,711,577.82Yuan combined cost and acquired100% equity of Shanghai Zhu Yuan No. 1 Wastewater Treatment Investment Development Co., Ltd in 2006. The difference of RMB 134,066,895.83 Yuan that between the combined cost exceeding and the fair value of identifiable assets and liabilities of Shanghai Youlian Zhuyuan No. 1 Wastewater Treatment Investment Development Co., Ltd acquired in proportion shall be determined as the goodwill related to Shanghai Youlian Zhuyuan No. 1 Wastewater Treatment Investment Development Co., Ltd.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.10 Deferred tax assets
5.10.1 Details of unrecognized deferred income tax assets
Item Dec. 31, 2014 Dec. 31, 2013 Deductible temporary
1,395,481.60 388,847.78 differences
Deductible loss 3,266,415.33 861,837.58 Total 4,661,896.93 1,250,685.36 5.10.2 Matured deductible losses of unrecognized deferred income tax assets in next period
Year Dec. 31, 2014 Dec. 31, 2013 Annex Year 2014 - 30,141.43
Year 2017 558,275.03 831,696.15
Year 2019 2,708,140.30 -
Total 3,266,415.33 861,837.58
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.11 Short-term loans
5.11.1 Classification of short-term loan
Type Dec. 31, 2014 Dec. 31, 2013 Credit loan 50,000,000.00 59,150,000.00 Total 50,000,000.00 59,150,000.00 5.11.2 Overdue for short-term loan
Overdue for short-term loan in current period is RMB 0.00 yuan.
5.12 Accounts payable
5.12.1 Accounts payable is following:
Item Dec. 31, 2014 Dec. 31, 2013 Estimated project funds 165,671,355.29 168,354,044.12 Equipment amount 5,255,476.90 6,722,763.92 Electric charge 1,248,586.94 1,184,179.25 Others 1,111,534.13 42,117.05 Total 173,286,953.26 176,303,104.34 5.12.2 Accounts payable with significant amount and aging of over one year
Name of creditor Dec. 31, 2014 Reason of outstanding To be settled after the price Shanghai Meili Yuan City Environmental
4,000,000.00 of the phase II project of Protection Engineering Co., Ltd.
Zhuyuan is audited
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.13 Accounts received in advance
5.13.1 Accounts received in advance is following:
Item Dec. 31, 2014 Dec. 31, 2013 Accounts received in advance
2,926,694.50 2,926,694.50 waste water treatment cost
5.14 Employee benefits payable
5.14.1 Changes in employee benefits payable
Increase in current Decrease in current
Item Dec. 31, 2013 Dec. 31, 2014 period period
I. Short-term compensation 101,879.87 33,816,540.33 32,389,056.78 1,529,363.42 II. Defined benefit plan 57,135.30 4,962,390.09 4,957,138.19 62,387.20 III. Dismissal welfare - - - - IV. Other long-term employee benefits - - - - Total 159,015.17 38,778,930.42 37,346,194.97 1,591,750.62 5.14.2 Presentation of short-term compensation
Increase in Decrease in
Item Dec. 31, 2013 Dec. 31, 2014 current period current period
I. Wages, Bonuses, Allowances and
40,959.20 22,175,560.36 20,774,875.94 1,441,643.62 Subsidies
II. Employee Welfare Fund - 2,958,509.54 2,958,509.54 - III. Social Security Charges 31,741.90 2,047,048.56 2,044,130.76 34,659.70 Including:1.Medical Insurance
27,932.80 1,713,055.98 1,710,488.28 30,500.50 Premium
2. Premium on Work Injury 1,269.70 82,551.76 82,435.06 1,386.40 3. Premium on Maternity 2,539.40 148,136.82 147,903.42 2,772.80 4. Disabled security fund - 102,332.00 102,332.00 - 5. Protection of Wages fund - 972.00 972.00 - IV. Housing Fund - 2,205,837.00 2,205,837.00 - V. Labor union expenditures and
29,178.77 555,527.05 531,645.72 53,060.10 employee education expenses
VI. Short-term paid absence - - - - VII.Short-term profit-sharing plan - - - - VIII.Other - 3,874,057.82 3,874,057.82 - Total 101,879.87 33,816,540.33 32,389,056.78 1,529,363.42
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.14 Employee benefits payable (continued)
5.14.3 Defined drawing plan
Increase in Decrease in
Item Dec. 31, 2013 Dec. 31, 2014 2014 2014
1. Basic
endowment 53,326.20 3,463,835.96 3,458,934.16 58,228.00 insurance expenses
2. Unemployment
3,809.10 232,668.38 232,318.28 4,159.20 insurance expenses
3. Annuity - 1,265,885.75 1,265,885.75 - Total 57,135.30 4,962,390.09 4,957,138.19 62,387.20 5.14.3 Compared with the beginning balance, the ending balance of employee benefits payable increased by RMB 1,432,735.45 Yuan, with an increasement of 9.01 times, because the company and the subsidiaries accrued the payroll for year 2014 which will be payed in the year 2015.
5.15 Taxes and expenses payables
Tax type Dec. 31, 2014 Dec. 31, 2013 Business tax 7,484.73 80,255.84 Urban maintenance and construction tax 524.31 5,617.91 Enterprise income tax 14,958,480.30 20,342,590.68 Individual income tax 531,724.28 510,090.52 Educational surtax 339.06 4,012.80 River management expenses 110.03 802.56 Total 15,498,662.71 20,943,370.31 5.16 Interests payable
Item Dec. 31, 2014 Dec. 31, 2013 Interest of long-term borrowings with
interest paid in installment and principal 1,060,432.16 1,259,966.48 repaid upon maturity
Interest payable of short-term loan 91,666.57 108,441.67 Total 1,152,098.73 1,368,408.15
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.17 Other payables
5.17.1 Sorted by nature of funds
Item Dec. 31, 2014 Dec. 31, 2013 Social insurance charges 79,065.68 66,375.80 Electric charge 4,943,089.07 3,630,065.43 Labor union expenditures 59,847.18 72,021.18 Intermediary organs 819,433.13 750,000.00 Guarantee funds 531,800.00 432,800.00 Deposits 376,400.00 336,400.00 Other 894,116.25 1,003,419.84 Total 7,703,751.31 6,291,082.25 5.17.2 Details of other payables over 1 year with large amount
Item Amount Reason of unsettlement Shanghai Jinshan Municipal Quality warranty deposit, to be returned 422,800.00
Construction (Group)Co., Ltd. after completion of settlement
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.18 Non-current liabilities maturing within 1 year
Item Dec. 31, 2014 Dec. 31, 2013 Long-term loans maturing within 1 year 94,000,000.00 88,420,000.00 Long-term payable maturing within 1 year 4,545,455.00 4,545,455.00 Long-term deferred income 414,815.93 414,815.93 Total 98,960,270.93 93,380,270.93 5.19 Long-term loans
5.19.1Classification of Long-term loans
Item Dec. 31, 2014 Dec. 31, 2013 Pledged loan 510,000,000.00 600,000,000.00 Guaranteed loan 3,800,000.00 7,800,000.00 Total 513,800,000.00 607,800,000.00 5.19.2 Interest rate and term of long-term loans and term
Currency
Starting date Ending date Dec. 31, 2014 Dec. 31, 2013 Name of creditor type Interestrate（%）
ICBC Shanghai Branch Float on the basis
Waigaoqiao Bonded Dec. 16, 2008 Dec. 15, 2020 RMB of benchmark 510,000,000.00 600,000,000.00 Zone Sub-branch interest rate
Float on the basis
Bank of Communications
Feb. 26, 2009 Dec. 30, 2016 RMB of benchmark 3,800,000.00 7,800,000.00 Chengdu Branch
interest rate
Total 513,800,000.00 607,800,000.00
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.20 Long-term payables
5.20.1 Sorted by nature of funds
Item Dec. 31, 2014 Dec. 31, 2013 Pledged loan by Shanghai
13,636,360.00 20,827,415.00 Municipal Oceanic Bureau
5.20.2 Information for long-term payables
Ending book Loan Initial Interest Accrued
Name of creditor Term value requirement amount rate(%) interest
Shanghai Municipal
2003.12.16– 2018-12-15 50,000,000.00 2.28 - 13,636,360.00 Pledged Oceanic Bureau
5.20.3 Compared with the beginning balance, the ending balance of construction in progress decreased by RMB 7,191,055.00 Yuan, with the decrease percentage of34.53%, which was caused by Shanghai Youlian Zhuyuan No.1 Wastewater Treatment Investment Development Co., Ltd, this subsidiary returned the loan by Shanghai Municipal Oceanic Burea and Chengdu Wenjiang District Young Sun Water Purification Co., Ltd., this subsidiary returned long-term payables to minatory shareholders.
5.21 Estimated liabilities
Item Dec. 31, 2014 Dec. 31, 2013 Reason of Formation Returned cost of
Estimated overhaul and change 60,503,577.85 61,156,662.18 expenditure relating to BOT franchise franchise rights
rights
Total 60,503,577.85 61,156,662.18
5.21.1 Notes to important assumption and estimates relating to estimated liabilities:
As stipulated in Notice on Issuing Interpretations to Accounting Standards for Business Enterprises No. 2 by Ministry of Finance (CK[2008] No. 11), when the enterprise adopts build-operate-transfer mode (BOT) to engage in public infrastructure construction business, the estimated expenditures for keeping certain service capacity of related infrastructures or keeping certain service state before transferring to contract awarding party shall be treated according to the provisions of Accounting Standards for Business Enterprises No. 13– Contingencies. Returned cost of franchise rights is the obligation bearable by the enterprise as specified in the contract, is the present value of future cash flow to be spent for keeping certain service capacity of related infrastructure or keeping certain service state before transferring to contract awarding party, constitutes part of the original value of intangible assets, and shall be adjusted accordingly according to the changes in replacement value of related infrastructures.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.22 Deferred income
Increase of Decrease of Reason of Item Dec. 31, 2013 this period this period Dec. 31, 2014 formation Online monitoring Government 2,081,700.80 - 414,815.93 1,666,884.87
system subsidies grants 5.22.1 Items relating to government grants
Newly Amount
increased included in Balance at
Balance at Other Relating to subsidy non-operating the end of
Item the beginning changes assets/revenue amount of income of this the year
of the year
this year year
Online monitoring Relating to 2,081,700.80 - 414,815.93 - 1,666,884.87
system subsidies assets
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.23 Paid-in capital
Increase/Decrease in 2014
Dec. 31, 2013 New issue Share transfered Dec. 31, 2014 Dividend Other Subtotal
of shares from Reserves
The sum of
244,596,000.00 - - - - - 244,596,000.00 share
5.23.1 TheCompany’s registered capital consistent with share capital, all amounted to RMB 244,596,000.00 yuan, consistent with the business license, the articles of association or other legal documents,etc.
5.23.2 The company's controlling shareholder is Shanghai Chentou (Group) Co., Ltd., the ratio of shareholding is56.83%.
5.24 Capital reserves
Increase in Decrease in
Item Dec. 31, 2013 current period current period Dec. 31, 2014 Capital premium (equity
89,923,737.20 - - 89,923,737.20 premium)
Other capital reserves 53,798,796.93 - 581,679.01 53,217,117.92 Total 143,722,534.13 - 581,679.01 143,140,855.12 5.24.1 Compared with the beginning balance, the ending balance of Capital reserve decreased by RMB 581,679.01 Yuan, with the decrease percentage of0.04%, which was caused by the subsidiary Shanghai Younglong Investment& Consulting Co., Ltd., the minority shareholders of Yanglong decreased the paid-in-capital in accordance with the appraised net assets value and its corresponding investment. In the end of year, the part of thecompany’s investment cost in Yanglong more than net assets, write-off other capital reserves.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.25 Surplus reserves
Appropriate in Decrease
Item Dec. 31, 2013 2014 in 2014 Dec. 31, 2014 Statutory surplus
20,366,185.76 2,210,484.64 - 22,576,670.40 reserves
Total 20,366,185.76 2,210,484.64 - 22,576,670.40 5.26 Undistributed profits
Item Current period Previous period Undistributed profit at the end of previous period
157,507,816.06 120,312,029.25 before adjustment
Undistributed Profit after Adjustment at the
- - Beginning of This Period (increase+, decrease -)
Undistributed Profit after Adjustment at the
157,507,816.06 120,312,029.25 Beginning of This Period
Add: Net profit attributable to the owners of the
50,707,847.55 37,304,359.32 company for the period
Subtract: Statutory surplus reserve 2,210,484.64 108,572.51 Withdrawal of free surplus reserve - - Common stock dividends payable 9,783,840.00 - Common stock dividends converted to
- - capital stock
Undistributed Profit at the end of period 196,221,338.97 157,507,816.06
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.27 Operating income and cost
Year 2014 Year 2013
Item
Income Cost Income Cost
Main business 461,494,936.70 322,165,012.68 444,499,918.37 308,508,303.28 Other business 2,587,429.85 1,657,943.18 6,530,957.86 1,126,747.66 Total 464,082,366.55 323,822,955.86 451,030,876.23 309,635,050.94 5.28 Business tax and surcharges
Item Year 2013 Year 2012 Tax rate Business tax 124,617.65 324,607.38 5% Urban maintenance and construction tax 9,711.86 22,798.80 7% Education surcharge 6,901.85 16,284.87 5% River expenses 1,422.57 3,256.98 1% Total 142,653.93 366,948.03
5.28.1 Compared with the beginning balance, the ending balance of business tax and surcharges decreased by RMB 224,294.10 Yuan, with the decrease percentage of61.12%, which was caused by the subsidiary Shanghai Young Sun Drainage Operation Co., Ltd., this subsidiary decreased rental income in current period.
5.29 Administrative expense
Item Year 2014 Year 2013 Wages 10,469,066.27 8,276,865.79 Welfares 1,753,892.55 1,588,421.96 Social insurance expenses, housing provident funds 4,744,104.29 4,838,750.78 Amortization of intangible assets 4,152,295.08 4,152,295.08 Depreciation of fixed assets 609,869.16 382,678.60 Business entertainments 570,758.48 819,090.43 Labor charges 4,132,300.02 2,879,101.79 Rental fees 2,231,892.00 2,184,290.00 Costs for hiring agency 1,633,703.00 1,508,300.00 Office expenses 458,794.31 667,917.44 Fees for using vehicle 442,870.74 564,461.61 Travelling expenses 292,957.00 497,784.36 Disclosure expenses 558,675.00 479,040.00 Conference expenses 82,000.00 417,350.50 Insurance expenses 139,661.14 145,750.56 Others 1,965,830.68 1,973,682.40 Total 34,238,669.72 31,375,781.30
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.30 Financial cost
Item Year 2014 Year 2013 Interest expense 43,847,310.68 63,803,643.29 Subtract: interest income 613,548.41 540,140.50 Net interest expense/ (net income) 43,233,762.27 63,263,502.79 Add: Net exchange loss (net benefit) 24,614.56 1,348.84 Commission charges and others 30,598.75 29,617.33 Total 43,288,975.58 63,294,468.96 5.30.1 Compared with the beginning balance, the ending balance of financial cost decreased by RMB 20,005,493.38 Yuan, with the decrease percentage of31.61%, which was caused return short-term loan and long-term loan, decreased interest expenses in the current period.
5.31 Losses from asset impairment
Item Year 2014 Year 2013 1. Losses from bad debt 20,400.20 -105,272.74 2. Losses from inventory depreciation -238,177.80 -25,837.50 3. Losses from available-for-sale financial assets - - impairment
4. Losses from held-to-maturity investments impairment - - 5. Losses from long-term equity investments impairment - - 6. Losses from investment property impairment - - 7. Losses from fixed asset impairment - - 8. Losses from project materials impairment - - 9. Losses from construction in progress impairment - - 10. Losses from productive biological assets impairment - - 11. Losses from oil and gas assets impairment - - 12. Losses from intangible assets impairment - - 13. Losses from goodwill impairment - - 14. Others - - Total -217,777.60 -131,110.24 5.31.1 Compared with the beginning balance, the ending balance of Losses from asset impairment decreased by RMB 86,667.36 Yuan, with the decrease percentage of66.10%, which was caused move back the loss on decline in value of inventories.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.32 Non-operating income
5.32.1 Non-operating income
Amount included in the current non-recurring Item Year 2014 Year 2013 profit and loss Total gains on disposal of
189,280.96 243,980.58 189,280.96 non-current assets
Including: gain on disposal of
189,280.96 243,980.58 189,280.96 fixed assets
Government subsidies 44,549,369.93 46,157,278.93 44,549,369.93 Others - 114,960.99 - Total 44,738,650.89 46,516,220.50 44,738,650.89 5.32.2 Breakdown of government subsidies
Associated with
asset/ Associated
Item Year 2013 Year 2012 with earning Note Subsidies for reducing main pollutants Associated with Fiscal 42,678,293.00 44,361,396.00
excess earning allocation Supporting subsidies for Pudong
Associated with Fiscal District Jin-qiao Economic 1,270,261.00 1,108,542.00
earning allocation Development& Promotion Center
Subsidies for constructing on-line Associated with Fiscal 489,815.93 414,815.93
monitoring facilities of sewage plant earning allocation Special appropriation of environmental Associated with Fiscal - 111,000.00
protection earning allocation Associated with Fiscal Cleaner Production Audit in 2012 - 100,000.00
earning allocation Special subsidies for reduction of Associated with Fiscal - 40,000.00
pollutant emissions earning allocation Special funds for pollution discharge Associated with Fiscal - 15,000.00
fees earning allocation Associated with Fiscal Special subsidies for technology - 6,525.00
earning allocation Associated with Fiscal Other subsidies 111,000.00 -
earning allocation Total 44,549,369.93 46,157,278.93
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.33 Non-operating expenses
Amount included in the current Item Year 2014 Year 2013
non-recurring profit and loss Total Loss on Disposal of
2,484,547.59 876,893.68 2,484,547.59 Non-Current Assets
Including: Loss on Disposal of
2,484,547.59 876,893.68 2,484,547.59 Fixed Assets
Penalty and fine for delaying
35,000.00 - 35,000.00 payment
External donation 10,000.00 - 10,000.00 Others - 103,027.87 - Total 2,529,547.59 979,921.55 2,529,547.59 5.33.1 Compared with previous period, the non-operating expenses of current period increased by RMB 1,549,626.04 Yuan, with an increment of 1.58, which was caused by the company increased loss on disposal of fixed assets.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.34 Income tax expenses
5.34.1 Table of income tax expenses
Item Year 2014 Year 2013 Income tax expenses of current
5,050,000.04 21,565,197.21 period
Adjustment of deferred income
- - tax
Total 5,050,000.04 21,565,197.21 5.34.2 Adjustment process of accounting profit and income tax expenses
Item Year 2014
Total profit 105,015,992.36 Income tax expenses calculated as per statutory/applicable tax
26,253,998.10 rate
Influence of different tax rate applicable to subsidiary -338,722.37 Influence of income tax adjustment of previous period -14,777,607.93 Influence of non-taxable income -10,216,359.57 Influence of nondeductible costs, expenses and losses 3,114,492.03 Influence of deductible losses using unrecognized deferred
-162,695.73 income tax assets in previous period
Influence of deductible and temporary difference or deductible
losses of unrecognized deferred income tax assets in current 1,176,895.51 period
Income tax expenses 5,050,000.04 5.34.3 Compared with previous period, income tax expenses of current period decreased by RMB 16,515,197.17 Yuan, with the decrease percentage of76.58%, which was caused by Shanghai Youlian Zhuyuan No.1 Wastewater Treatment Investment Development Co., Ltd., this subsidiary was awarded with High-tech Enterprise, the corporate income tax of the subsidiary shall be levied at a reduced rate of15%, write-off the provision of income tax in accordance with income tax final settlement in year 2013, and income tax was levied at a reduced rate of15%.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.35 Notes to Cash Flow Statement
5.35.1 Other cash received relating to operating activities
Item Year 2014 Year 2013 Special subsidies and grants 44,134,554.00 45,743,558.00 Amount reactivated by the court 1,344,227.65 192,183.17 Recovery of current funds and
613,548.41 540,140.50 advance money for another
Total 46,092,330.06 46,475,881.67 5.35.2 Other cash paid relating to operating activities
Item Year 2014 Year 2013 Cost and expenses 8,087,961.41 11,102,520.11 Interenterprise current amount 2,972,109.94 2,289,542.29 Total 11,060,071.35 13,392,062.40 5.35.3 Other cash received relating to investment activities
Item Year 2014 Year 2013 Payment of reduction capital of
12,374,348.82 300,000.00 shareholders
Total 12,374,348.82 300,000.00
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.36 Supplementary information on cash flow statements
5.36.1 Supplementary information on cash flow statements
Item Year 2014 Year 2013 1. To Adjust the Net-profit as Cash Flow of Operating Activities:
Net profit 99,965,992.32 70,460,838.98 Add: Provision for asset impairment -217,777.60 -131,110.24 Fixed assets depreciation, oil and gas assets depreciation, productive
16,509,354.82 16,500,029.60 biological assets depreciation
Amortization of intangible assets 146,017,806.24 161,226,311.07 Amortization of long-term deferred expenses - - Losses on Disposal of Fixed Assets, Intangible Assets and Other
2,484,547.59 632,913.10 Long-term Assets (Income marked “-”)
Fixed Asset Abandoned Losses (Income marked “-”) - - Loss from Fair Value Change (Income marked “-”) - - Financing Expense (Income marked “-”) 43,871,925.24 63,804,992.13 Investment Loss (Income marked “-”) - - Decrease in Deferred Income Tax Assets (Increase marked “-”) - - Increase in Deferred Income Tax Liabilities (Decrease marked “-”) - -7,133,797.16 Decrease in inventory (Increase marked “-”) -120,742.20 545,073.00 Decrease in Operating Items Receivable (Increase marked “-”) 18,712,482.92 -23,385,600.93 Increase of Operating Payables (Decrease marked “-”) -28,813,197.02 31,135,742.69 Others - - Net cash flow from operating activities 298,410,392.31 313,655,392.24 2. Significant investment and financing activities without cash
receipts and payments:
Conversion of Debt into Capital - - Convertible Bonds Due within One Year - - Fixed Assets under Finance leases - - 3. Change in Cash and Cash Equivalents:
Cash balance at the end of the Period 221,910,942.08 129,707,732.92 Subtract: amount at the beginning period 129,707,732.92 102,720,173.03 Add: amount of cash equivalents at the end of period - - Subtract: amount of cash equivalents at the beginning period - - Net Increase in cash and cash equivalents 92,203,209.16 26,987,559.89
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
5 Notes to the Items in the Consolidated Financial Statements (continued)
5.36 Supplementary information on cash flow statements (continued)
5.36.2 Composition of cash and cash equivalents
Item Dec. 31, 2014 Dec. 31, 2013 I. Cash 221,910,942.08 129,707,732.92 Including: Cash in Stock 135,513.85 238,317.76 Bank deposit available for 221,775,428.23 129,469,415.16 immediate payment
Other currency available for - - immediate payment
II. Cash equivalents - - III. Balance of cash and cash equivalents
221,910,942.08 129,707,732.92 at the end of the period
Including: restricted cash and cash
equivalents used by parent company or - - subsidiaries of the group
5.37 Foreign currency monetary items
5.37.1 Foreign currency monetary items
Ending foreign Ending book value Item Translation rate
monetary book value represented in RMB Monetary fund
Including：USD 7,159.78 6.1190 43,810.70 6 Change of Range of consolidated financial statements
The range of consolidated financial statements of the company not changed in current period.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
7 Disclosure of Equity in Other Entities
7.1 Equity in subsidiary
7.1.1 Composition of enterprise group
||||||||
|-|-|-|-|-|-|-|
|Name of subsidiary|Main businesslocation|Registrationplace|Nature ofbusiness|Shareholdingproportion (%)||Form ofachievement|
|||||Direct|Indirect||
|Shanghai Young Sun DrainageOperation Co., Ltd.|Shanghai, China|Shanghai,China|WastewaterTreatment|100.00|-|Establish|
|Shanghai YounglongInvestment & Consulting Co.,Ltd.|Shanghai, China|Shanghai,China|WastewaterTreatment|100.00|-|Obtain by businesscombination undercommon controland not undercommon control|
|Chengdu Wenjiang DistrictYoung Sun Water PurificationCo., Ltd.|Chengdu, China|Chengdu,China|WastewaterTreatment|90.00|-|Establish|
|Chengdu Wenjiang DistrictNew Young Sun WastewaterTreatment Co., Ltd.|Chengdu, China|Chengdu,China|WastewaterTreatment|90.00|-|Establish|
|Shanghai Youlian ZhuyuanNo.1 Wastewater TreatmentInvestment Development Co.,Ltd.|Shanghai, China|Shanghai,China|InvestmentConsulting|25.11|26.58|Obtain by businesscombination notunder commoncontrol|

Not existed thesubsidiaries’s shareholding proportion is different than voting proportion.
7.1.2 Significant non-wholly-owned subsidiaries
||||||
|-|-|-|-|-|
|Name of subsidiaries|Minorityshreholder’sShareholdingproportion (%)|Profits and lossattributable tothe minorityshareholders in2014|The dividendsdeclared to distributeto the minorityshareholders in 2014|Ending Bookvalue of MinorityInterests|
|Chengdu Wenjiang DistrictYoung Sun Water PurificationCo., Ltd.|10.00%|163,764.69|-|3,678,373.47|
|Chengdu Wenjiang District NewYoung Sun WastewaterTreatment Co., Ltd.|10.00%|65,603.86|-|1,336,941.08|
|Shanghai Youlian Zhuyuan No.1Wastewater TreatmentInvestment Development Co.,Ltd|48.31%|49,028,776.22|-|332,233,982.33|

Not exist thesubsidiaries’s shareholding proportion is different than voting proportion.
The subsidiary Chengdu Wenjiang District Young Sun Water Purification Co., Ltd. increased capital
RMB 2,760,000.00 Yuan, the paid-in-capital increased from 1,000,000.00 yuan to RMB 28,600,000.00
yuan. The Shareholding proportion still contains90%.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
7 Disclosure of Equity in Other Entities (continued)
7.1.3 Main financial information for significant non-wholly-owned subsidiaries
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Name of subsidiaries|Dec. 31, 2014||||||Dec. 31, 2013||||||
||Current assets|Non-current Assets|Total assets|Currentliabilities|Non-currentLiabilities|Total liabilities|Current assets|Non-current Assets|Total assets|Currentliabilities|Non-currentLiabilities|Totalliabilities|
|Chengdu WenjiangDistrict Young SunWater Purification Co.,Ltd.|24,032,628.46|24,621,209.36|48,653,837.82|620,952.09|11,249,151.07|11,870,103.16|27,240,369.46|26,136,547.52|53,376,916.98|556,674.29|37,274,154.85|37,830,829.14|
|Chengdu WenjiangDistrict New YoungSun WastewaterTreatment Co., Ltd.|3,712,017.25|43,662,729.61|47,374,746.86|17,825,352.52|16,179,983.57|34,005,336.09|3,531,185.44|46,373,477.61|49,904,663.05|13,846,683.52|23,344,607.33|37,191,290.85|
|Shanghai YoulianZhuyuan No.1Wastewater TreatmentInvestmentDevelopment Co., Ltd|190,061,562.23|1,333,596,690.50|1,523,658,252.73|277,736,971.47|561,023,765.22|838,760,736.69|97,258,954.18|1,475,419,904.66|1,572,678,858.84|262,298,833.46|657,248,439.58|919,547,273.04|

||||||||||
|-|-|-|-|-|-|-|-|-|
|Name of subsidiaries|Dec. 31, 2014||||Dec. 31, 2013||||
||Operating income|Net profit|Total comprehensiveincome|Cash flows fromoperating activities|Operating income|Net profit|Total comprehensiveincome|Cash flows from operatingactivities|
|Chengdu Wenjiang District Young Sun WaterPurification Co., Ltd.|7,117,500.00|1,637,646.82|1,637,646.82|-23,012,462.50|7,117,500.00|421,529.73|421,529.73|2,862,703.10|
|Chengdu Wenjiang District New Young SunWastewater Treatment Co., Ltd.|9,198,000.00|656,038.57|656,038.57|3,529,762.10|8,702,400.00|1,144,261.73|1,144,261.73|6,649,658.65|
|Shanghai Youlian Zhuyuan No.1 WastewaterTreatment Investment Development Co., Ltd|358,800,020.22|101,765,930.24|101,765,930.24|270,115,512.05|344,015,662.63|66,172,126.29|66,172,126.29|277,702,290.54|

Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
8 Risks Related to Financial Instruments
Main financial instruments of the company include cash on hand and in bank, accounts receivable, advance payment, other receivables, accounts payable, advance from customers and other payables, which are held mainly for the routine operation of the company. This company generates financial assets and liabilities directly from operating its own games or games for which it acts, such as accounts receivable and accounts payable. Refer to Note V for details of all kinds of financial instruments. The risks related to these financial instruments and the risk management policies adopted by the company for reducing these risks are described below. The management of the company shall manage and control these risk exposures, so as to control above risks within limited scope.
8.1 Risk management objectives and policies
The risk management objective of the company is to achieve proper balance between risks and benefits, to minimize the negative influence of risk on operating performance of the company, and to maximize the interests of investors. Based on this risk management objective, the basic strategy of risk management of the company is to determine and analyze all kinds of risks the company faces, set up appropriate acceptable risk baseline and carry out risk management, and monitor all risks timely and reliably, to control the risks in a limited range.
8.1.1 Market risk
8.1.1.1 Foreign exchange risk
Foreign exchange risk is the possible loss caused by changes in foreign exchange rates. When the company does business in currencies other than yuan, fluctuations in othercurrencies’ exchange rates against yuan may impact thecompany’s financial and business performance. Such risk will arise when business entities make purchases or sales in currencies other than its base currency. Since the company has no foreign subsidiary and mainly deal with domestic business, the company management believes fluctuations of currency exchange rates against yuan will not have material impact oncompany’s financial performance.
8.1.1.2 Interest rate risk
The management of the company holds that interest rate risk has no significant influence on financial statements, so the sensitivity analysis of interest rate risk has not been disclosed.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
8 Risks Related to Financial Instruments (continued)
8.1.2 Liquidity risk
When manage liquidity risk, the management of the company holds that the company should have sufficient cash and cash equivalents and manage them, to meet the operation needs of the company and to reduce the influence of fluctuation of cash flow.
Thecompany’s financial assets mainly consist of cash or cash equivalent, notes receivables, accounts receivables and other receivables. As of December 31st, 2014, the company believes its financial assets have no significant realizable limit.
Thecompany’s sources of financing include cash platform and other financing channels. Thecompany’s financial liabilities mainly consist of notes receivables, accounts receivables and other receivables due within 3 months, all generated from operating activities. The year-end recoverable amount of each financial liability is equal to its year-end carrying amount. The company believes by ways of financing mentioned above and timely management of its financial liabilities, enough funds will be raised to repay all financial liabilities due, no significant liquidity risk exists.
9 Disclosure of fair value
Not existed assets and liabilities measured at fair value in reporting period.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
10 Associated Party and Their Transactions
10.1 The parent company of the Company
Voting ratio
Shareholding in the
ratio in the Name of the parent Registration Registered Company
Business nature Company(%) company place capital (%)
Urban construction
and public service
investment,
Shanghai Chentou Shanghai, Marketing, project RMB 56.83 56.83 (Group) Co., Ltd China investment and 50,000,000,000.00
assets management, Yuan
industrial
investment, stock
investment
The parent company of the company was named Shanghai Urban Construction Investment and Development Corporation. As of Nov. 26, 2014, the parent company officially changed its name to Shanghai Chentou (Group) Co., Ltd. The parent company changed its share capital from RMB 2,040,593.90 yuan to RMB 5,000,000 yuan, and the enterprise nature of the parent company changed from enterprise owned by the whole people to limited liability company (solely state-owned)
Final controller of the company: Shanghai Chentou (Group) Co., Ltd.
10.2 Subsidiaries of the Company
Refer to Notes 7.1 for details of the subsidiaries of the company.
10.3 Other associated parties
Name of Other Associated Parties Relationship between Other Associated Parties and the Company
Shanghai Urban Drainage Co., Ltd Under common control Shanghai Chenghong Real Estate Co., Ltd. Under common control Shanghai SMI Environmental Industry Co., Ltd. Under common control Shanghai Water Assets Development Co., Ltd. Under common control
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
10 Associated Party and Their Transactions (continued)
10.4 Associated transactions
10.4.1 Associated transactions of merchandise purchase/receiving labor services
10.4.1.1 Table of merchandise purchase/receiving labor services
Content of Associated
Year 2014 Year 2013 Associated transactions Transactions
Shanghai SMI
Wastewater treatment
Environmental Industry 7,840,386.66 8,368,112.01 settlement
Co., Ltd.
10.4.1.2 Table of selling goods/rendering service
Content of Associated
Year 2014 Year 2013 Associated transactions Transactions
Shanghai Urban Drainage Wastewater treatment
445,179,436.70 428,680,018.37 Co., Ltd settlement
10.4.2 Leasing of associated transactions
10.4.2.1 The company is as Lessee
Rental
expenses in Rental expenses in Name of the lessor Leased asset types 2014 2013 Room 1602 and 1603 Floor
Shanghai Chenghong Real
16 No. 130 Wusong Road 2,231,892.00 1,539,454.00 Estate Co., Ltd.
Shanghai City
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
10 Associated Party and Their Transactions (continued)
10.4 Associated transactions (continued)
10.4.3 Guarantee of associated transactions
10.4.3.1 The company is Guarantor
Amount of the guarantee is Guarantee Starting date Ending date
Guarantee completed or not Chengdu Wenjiang District New Young
7,800,000.00 2009-02-26 2016-12-30 not Sun Wastewater Treatment Co., Ltd.
10.4.4 Remuneration of key management
Item Year 2014 Year 2013 Remuneration of key
2,630,000.00 2,628,600.00 management
10.5 Accounts receivable and payable of associated parties
10.5.1 Receivables
Dec 31, 2014 Dec 31, 2013 Book Provison for Book Provison for Item Associated party balance bad debts balance bad debts Other Shanghai Chenghong Real
558,473.00 - 558,473.00 - receivables Estate Co., Ltd.
10.5.2 Payables
Dec 31, 2014 Dec 31, 2013 Item Associated party Book balance Book balance Accounts payable Shanghai SMI Environmental Industry Co., Ltd. 695,802.80 390,559.80 Accounts payable Shanghai Water Assets Development Co., Ltd. 178.00 178.00 Accounts received
Shanghai Urban Drainage Co., Ltd 2,926,694.50 2,926,694.50 in advance
10.6 Commitments of Associated transactions
There are not commitments of associated transactions in current period
11 Share-based payment
There are not share-based payments in current period.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
12 Commitments and contingencies
12.1 Significant commitment issues
12.1.1 Significant commitments , natures and amounts as at December 31, 2014
12.1.1.1 The Company pledged the charging right for its sewage discharge services to secure a
fixed-asset loan of RMB 840,000,000.00 from ICBC Shanghai Branch Waigaoqiao Bonded sub-branch, the loan term is from Jan. 16, 2008 to Dec. 15, 2020, the loan balance is RMB 600,000,000.00 as at Dec. 31, 2014.
12.1.1.2 The Company pledged the charging right for its sewage discharge services to secure
treasury-bond funds of RMB 50,000,000.00 from Shanghai Municipal Oceanic Bureau, the loan term is from Dec. 16, 2003 to Dec. 15, 2018, the loan balance is RMB 18,181,815.00 as at Dec. 31, 2013. Save as disclosed above, as at December 31, 2014, no occurred other significant commitments, which impacted to read and understand this financial statement by the Company.
12.2 Contingencies
As of Dec. 31, 2014, the company had no contingency to be disclosed.
13 Events after the balance sheet date
13.1 Information for Profit distribution
The 28th meeting of the sixth term board of directors reviewed and passed pre-arranged planning of profit distribution, decided to donate to all shareholders RMB 0.65 yuan dividends for each 10 shares on the basis of share capital as at December 31, 2014.
Save as disclosed above, by the date of issuance of the financial statements on Mar. 26, 2015, the company had no other events after the balance sheet date to be disclosed.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
14 Other significant issues
14.1 Annuity plan
In accordance with Trial Measures for Enterprise Annuity, Trial Measures for Enterprise Annuity Fund Management and Notice on Certain Issues Related to Implementation of Enterprise Annuity of Shanghai City, the company shall set up an enterprise annuity payment plan with voluntary fixed amount contribution. The contents of the plan include: I. The annual annuity payment of the company shall be one-twelfth of total staff wages of last year, and the individual contribution of the staff shall defer to their own willingness as arranged of RMB 1,000 Yuan per person per year. II. The company shall adopt trust model to operate the enterprise annuity.
14.2 Segment information
14.2.1 Basis for determining and accounting policies of reportable segments
14.2.1.1 Basis for determining of reportable segments
The company shall determine the reportable segments according to business segment or geographic segment.
If most of the revenue of the business segment or geographic segment is foreign trade revenue and satisfies any of the following conditions, it shall be identified as a reportable segment:
1) The income of the segment accounts for10% or more of total income of all segments;
2) The absolute profit (loss) of the segment accounts for10% or more of the absolute total profits of all profitable segments or absolute total losses of all loss-making segments, whichever is larger;
3) The assets of the segment accounts for10% or more of the total assets of all segments.
If any business segment or geographic segment fails to satisfy above conditions, treat it according to the following provisions:
1） Directly specify it as a reportable segment regardless of its size.
2）Don’t specify such segment as a reportable segment, but merge it and one or more similar and unsatisfactory segment(s) into a reportable segment;
3） The segment shall neither be specified as a reportable segment nor be merged with other segment(s), and shall be disclosed separately as other items during disclosing segment information.
The company shall divide the reportable segment according to operating region, and the reportable segments shall be divided into eastern China and southwestern China region.
14.2.1.2 Accounting policies of reportable segment
The company shall divide the reportable segment according to operating region, and shall implement unified accounting policies within the scope of combination.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
14 Other significant issues (continued)
14.2 Segment information (continued)
14.2.2 Financial information of reportable segment
Southwestern Offset among
Item Eastern China Total China Divisions
I. Operating income 447,766,866.55 16,315,500.00 - 464,082,366.55 Including: prime
445,179,436.70 16,315,500.00 - 461,494,936.70 operating income
II. Operating cost 313,847,034.74 9,975,921.12 - 323,822,955.86 Including: Prime
312,189,091.56 9,975,921.12 - 322,165,012.68 operating cost
III. Total profit (loss) 101,866,141.73 3,149,850.63 - 105,015,992.36 IV. Income tax
4,193,834.80 856,165.24 - 5,050,000.04 expenses
V. Net profit (loss) 97,672,306.93 2,293,685.39 - 99,965,992.32 VI. Total assets 1,788,482,581.47 96,028,584.68 - 1,884,511,166.15 VII. Total liabilities 894,851,565.53 45,875,439.25 - 940,727,004.78 14.3 Other significant transactions and issues impactinginvestors’ decision-making
The company received the notice from its controlling shareholder Shanghai Chengtou (Group) Co., Ltd (hereafter referred to as Shanghai Chengtou) on Oct. 31, 2014 that Shanghai Chentou was planning major assets reconstructing issues involving this company. In order to ensure fair information disclosure, protect the interests of the investors and avoid abnormal fluctuation of stock price of the company, the stock of the company has been suspended from Nov. 3, 2014 on application by this company.
As of the reporting date of the company, the company and its associated parities are actively promoting the work of major assets reconstructing. Considering that such major assets reconstructing involves B-shares reform and other significant issues and may be an unprecedented significant issue with great uncertainty, the stock of the company will continue to be suspended on application at Shanghai Stock Exchange in accordance with the provisions of Rules Governing the Listing of Stocks on Shanghai Stock Exchange. The company will pay close attention to the progress of aforesaid issues during the suspension period and timely perform its information disclosure obligations according to relevant provisions.
In addition to the above-mentioned matters, as of the date of issue of the report, Mar. 26, 2015, there is no other significant issue to be disclosed by the company.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
15 Notes to Main Items in the company Financial Statements
15.1 Accounts receivable
15.1.1 Disclosure of accounts receivable on classification:
Dec. 31, 2014 Dec. 31, 2013
Classification
Book balance Provision for bad account
Book
Book balance Provision for bad account Book Amount Proportion(%) Amount Proportion(%) value Amount Proportion(%) Amount Proportion(%) value Accounts receivable
with significant single
amount and provision - - - - - - - - - - for bad debts
individually
Accounts receivable
with provision for bad
debts as per the 1,567.76 100.00 1,410.98 90.00 156.78 1,567.76 100.00 910.78 58.09 656.98 portfolio of credit risk
characteristics
Accounts receivable
with no significant
single amount but with - - - - - - - - - - provision for bad debts
individually
Total 1,567.76 100.00 1,410.98 156.78 1,567.76 100.00 910.78 656.98 The accounts receivable accrued for provision of bad debt by age analysis method inportfolio： Dec. 31, 2014
Accounts receivable Provision for bad Proportion(%) Age
debt
Within 1 year - - - 1-2 years - - - 2-3 years - - - Over 3 years 1,567.76 1,410.98 90.00 Total 1,567.76 1,410.98
15.1.2 Bad debt recovery and bad debt allowance
This year, the total amount of bad debt allowance is RMB 500.20 yuan, and the total amount of bad debt recovery is 0.00 yuan
15.1.3 No write-off of bad debts occurred during this fiscal year.
15.1.4 Compared with the beginning balance, the ending balance of accounts receivable decreased by RMB 500.20 Yuan, with the increase percentage of76.14%, which is mainly caused by the increase in provision for bad debt.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
15 Notes to Main Items in the company Financial Statements (continued)
15.2 Other receivables
15.2.1 Analysis of other receivables on classification:
Dec. 31, 2014 Dec. 31, 2013 Classification
Book balance Provision for bad debt
Book value
Book balance
Provisi do en b tf or bad Book value Amount
Proportion
Amount
Proportion
Amount
Proportion
Amount
Proportion(%) (%) (%) (%) Other receivables
with significant
single amount and - - - - -
provision for bad
debts individually
Other receivables
with provision for
bad debts as per the 3,451,708.80 100.00 2,700.00 0.078 3,449,008.80 27,096,695.20 100.00 1,200.00 0.004 27,095,495.20 portfolio of credit
risk characteristics
Other receivables
with no significant
single amount but
- - - - -
with provision for
bad debts
individually
Total 3,451,708.80 100.00 2,700.00 3,449,008.80 27,096,695.20 100.00 1,200.00 27,095,495.20 The other receivables accrued for provision of bad debt by age analysis method inportfolio：
Dec. 31, 2014
Provision for bad
Age Other receivables Proportion(%) account
Within 1 year 3,448,708.80 - -1~2 years - - -2~3 years - - - Over 3 years 3,000.00 2,700.00 90.00 Total 3,451,708.80 2,700.00
Details for confirmation of this portfolio: Method of provision for bad debts made on the basis of credit risk characteristics portfolio
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
15 Notes to Main Items in the company Financial Statements (continued)
15.2 Other receivables (continued)
15.2.2 Bad debt recovery and bad debt allowance
This year, the amount of bad debt allowance is RMB 1,500.00 yuan, and the amount of bad debt recovery is RMB 0.00 yuan.
15.2.3 No write-off of bad debts occurred during this fiscal year.
15.2.4 Classification of other receivables on nature
Name of Money Payable Ending Book Balance Beginning Book Balance Advance money for another 49,620.00 3,000.00 Interenterprise current funds 2,838,615.80 26,530,575.80 Deposits 563,473.00 561,473.00 Others - 1,646.40 Total 3,451,708.80 27,096,695.20 15.2.5 Top 5 other receivables sorted by ending balance of debtors
Proportion in total
Ending balance Nature of money Ending ending balance of
Unit name Age of provision for payable balance accounts receivable
bad debts(%)
Shanghai Young Sun Interenterprise
2,838,615.80 Within 1 year 82.24 - Drainage Operation Co., Ltd. current funds
Shanghai Chenghong Real
Rental Deposits 558,473.00 Within 1 year 16.18 - Estate Co., Ltd.
Advance money
Personal 45,100.00 Within 1 year 1.31 - for another
Shanghai operator talent 2,000.00 Within 1 year
Deposits 0.14 2,700.00 Company 3,000.00 Over 3 year
Public utilities environmental Advance money
4,520.00 Within 1 year 0.13 - detection cost for another
Total 3,451,708.80 100.00 2,700.00
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
15 Notes to Main Items in the company Financial Statements (continued)
15.3 Long-term equity investment
15.3.1 Table of long-term equity investment
Dec. 31, 2014 Dec. 31, 2013 Item Book balance Provision for Book value Book balance Provision for Book value impairment impairment Investment in
235,133,037.70 - 235,133,037.70 210,293,037.70 - 210,293,037.70 subsidiaries
Total 235,133,037.70 - 235,133,037.70 210,293,037.70 - 210,293,037.70 15.3.2 Investment in subsidiaries
Decrease in
Provision for Ending Increase in impairment balance of Name of invested entity Dec. 31, 2013 current Dec. 31, 2014
current period of current provision for period
period impairment Shanghai Youlian Zhuyuan No.1
Wastewater Treatment 88,415,597.70 - - 88,415,597.70 - - Investment Development Co., Ltd
Shanghai Younglong Investment
104,957,440.00 - - 104,957,440.00 - -& Consulting Co., Ltd.
Shanghai Young Sun Drainage
2,700,000.00 - - 2,700,000.00 - - Operation Co., Ltd.
Chengdu Wenjiang District
Young Sun Water Purification 900,000.00 24,840,000.00 - 25,740,000.00 - - Co., Ltd.
Chengdu Wenjiang District New
Young Sun Wastewater 13,320,000.00 - - 13,320,000.00 - - Treatment Co., Ltd.
Total 210,293,037.70 24,840,000.00 - 235,133,037.70 - -
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
15 Notes to Main Items in the company Financial Statements (continued)
15.4 Operating income and cost
Year 2014 Year 2013
Item
Income Cost Income Cost Main business 68,038,854.39 53,117,657.75 67,008,178.11 48,215,556.17 Other business 936,822.93 766,827.76 1,924,847.61 923,650.42 Total 68,975,677.32 53,884,485.51 68,933,025.72 49,139,206.59 15.5 Investment income
Item Year 2014 Year 2013 Long-term equity investment income accounted
24,776,086.96 - for under the cost method
Long-term equity investment income accounted
- - for under the equity method
Gain from the disposition of properly held for
- - long-term equity investments
Investment incomes measured at fair market
value and recorded in profits and losses in the - - current period
Gain from the disposition of properly held for
long-term equity investments, measured at fair
- - market value and recorded in profits and losses in
the current period
Investment income generated from
held-to-maturity investment during holding - - period
Investment income generated from financial
- - assets available for sale during holding period
Gain from disposition of financial assets
- - available for sale
Gain from remaining equity measured at fair
- - market value after loses control of subsidiaries.
Tota 24,776,086.96 - 15.5.1 Compared with the beginning balance, the ending balance of Investmnt income increased by RMB 24,776,086.96 Yuan, with an increasement of 9.01 times, which was caused by the increase in Shanghai Youlian Zhuyuan No.1 Wastewater Treatment Investment Development Co., Ltd and Chengdu Wenjiang District Young Sun Water Purification Co., Ltd., these subsidiaries distributed dividends in current year.
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
16 Supplementary information
16.1 Details of non-recurring profit and loss of current period
Item Year 2014 Notes Profit or loss from disposal of illiquid assets, including the write-off part of the
-2,484,547.59
provision for assets impairment
Unauthorized approval, or without formal approval document, or accidental tax
-
returns and deductions and exemptions
The government subsidies included in the current profits and losses. The
government subsidiary is closely related with normal business of the company, it
31,782,201.23
keeps with the state industrial policy, but it does not include the government
subsidiaries which based on standard quota or quantitative continuous enjoyment.
Fund possession cost collected from non-financial enterprise and included in
-
current profits or losses
Income from sharing the fair value of identifiable net assets of the invested entity
when the investment costs for acquiring subsidiaries, associated enterprise and -
joint ventures are less than the investment obtained
Profit or loss of non-monetary assets transaction -
Profit or loss from entrusting others to invest or manage assets -
Provision for the impairment of each asset due to force majeure, such as natural
-
disasters
Profit or loss of debt reconstructing -
Corporate reconstructing charges, such as the expenditures for staffing and
-
integration cost
The part of profit or loss exceeding the fair value and generating from transactions
-
with unreasonable transaction price
Net profit or loss of subsidiaries from the beginning of the period to combining
-
date due to business combination under the same control
Profit or loss of contingencies unrelated to the normal operations of the company -
In addition to effective hedging business relating to the normal operations of the
company, profit or loss of fair value change arising from holding trading financial
-
assets and liabilities, and investment profit or loss from disposal of trading
financial assets and liabilities and available-for-sale financial assets
Returns of provision for impairment of accounts receivable for separate
-
impairment test
Profit or loss made from foreign entrusted loans -
Profit or loss of fair value change of investment real restate subsequently
-
measured with fair value model
Influence of one-time adjustment on current profit or loss according to the
-
requirements of tax and accounting laws and regulations
Trustee fee income from entrusted operation -
Other operating income and expenditure except the items mentioned above 219,280.96
Other Profit or loss items in accordance with the definition of non-recurring profits
-
and losses
Amount affected by income tax -4,423,390.00
The influence amount of the minority interests (after tax) -10,669,649.67
Total 14,423,894.93
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
16 Supplementary information (continued)
16.2 Net return on assets and earnings per share
Weighted Earnings per share
Net profit in reporting period average net Basic earnings per Diluted earnings return on assets share per share Net profit attributable to common
8.57% 0.21 0.21 stockholder of the company
Net profit attributable to common
stockholder of the company after
6.13% 0.15 0.15 deducting non-recurring Profit or
loss
16.3 Supplementary information on changes in accounting policies
The company has changed relevant accounting policies and made retroactive restatement of comparative financial statements according to the eight accounting standards released by the Ministry of Finance in 2014, such as Accounting Standards for Business Enterprise No. 2– Long-term Equity Investment. The restated consolidated balance sheets on Jan. 1, 2013 and Dec. 31, 2013 are as follows:
Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
16 Supplementary information (continued)
16.3 Supplementary information on changes in accounting policies (continued)
|||||
|-|-|-|-|
|Item|Jan. 1, 2013|Dec. 31, 2013|Dec. 31, 2014|
|Current Asset||||
|Monetary fund|102,720,173.03|129,707,732.92|221,910,942.08|
|Financial assets measured at fair value andof which the changes are recorded intocurrent profits and loss||||
|Derivative financial assets||||
|Notes receivable||||
|Account receivable|4,172,927.20|1,386,356.98|2,726,856.78|
|Advance payment|347,711.05|216,026.10|538,922.52|
|Interest receivables||||
|Dividend receivables||||
|Other receivables|3,861,436.94|5,466,478.98|5,985,615.77|
|Inventories|665,998.90|146,763.40|505,683.40|
|Assets holding for sale||||
|Non-current assets due within one year||||
|Other current assets||||
|Total current assets|111,768,247.12|136,923,358.38|231,668,020.55|
|Non-current Assets||||
|Financial assets available for sale||||
|Held to maturity investments||||
|Long-term receivables||||
|Long-term equity investments||||
|Investment properties||||
|Fixed assets|160,663,197.86|146,364,192.58|127,626,738.17|
|Construction in progress|4,726,865.50|11,135,194.75|17,833,998.80|
|Engineering materials and equipment||||
|Liquidation of fixed assets||||
|Productive biological asset||||
|Oil-and-gas assets||||
|Intangible assets|1,738,056,555.27|1,633,153,078.88|1,484,737,726.64|
|Development expenditures||||
|Goodwill|22,644,681.99|22,644,681.99|22,644,681.99|
|Long-term unamortized assets||||
|Deferred income tax assets||||
|Other non-current assets||||
|Total non-current assets|1,926,091,300.62|1,813,297,148.20|1,652,843,145.60|
|Total assets|2,037,859,547.74|1,950,220,506.58|1,884,511,166.15|

Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
16 Supplementary information (continued)
16.3 Supplementary information on changes in accounting policies (continued)
|||||
|-|-|-|-|
|Item|Jan. 1, 2013|Dec. 31, 2013|Dec. 31, 2014|
|Current liabilities||||
|Short-term loans|62,000,000.00|59,150,000.00|50,000,000.00|
|Financial liabilities measured at fair value and of whichthe changes are recorded into current profits and loss||||
|Derivative financial liabilities||||
|Note payables||||
|Account payables|18,094,385.70|176,303,104.34|173,286,953.26|
|Advances from customers|2,926,694.50|2,926,694.50|2,926,694.50|
|Employee benefits payable|1,430,285.31|159,015.17|1,591,750.62|
|Taxes and expenses payable|3,947,905.68|20,943,370.31|15,498,662.71|
|Interest payable|1,778,767.02|1,368,408.15|1,152,098.73|
|Dividend payable||||
|Other payables|7,497,749.40|6,291,082.25|7,703,751.31|
|Liabilities holding for sale||||
|Non-current liabilities due within one year|134,960,270.93|93,380,270.93|98,960,270.93|
|Other current liabilities||||
|Total current liabilities|232,636,058.54|360,521,945.65|351,120,182.06|
|Non-current Liabilities||||
|Long-term loans|776,000,000.00|607,800,000.00|513,800,000.00|
|Bond payables||||
|Including: Preferred stock||||
|Perpetual capital securities||||
|Long-term payables|25,372,870.00|20,827,415.00|13,636,360.00|
|Long-term employee compensation payable||||
|Special payables||||
|Estimated liabilities|166,548,361.34|61,156,662.18|60,503,577.85|
|Deferred income|2,496,516.73|2,081,700.80|1,666,884.87|
|Deferred tax liabilities|7,133,797.16|||
|Other non-current liabilities||||
|Total non-current liabilities|977,551,545.23|691,865,777.98|589,606,822.72|
|Total liabilities|1,210,187,603.7|1,052,387,723.6|940,727,004.78|
||7|3||
|Owner’s Equity||||
|Capital stock|244,596,000.00|244,596,000.00|244,596,000.00|
|Other equity instruments||||
|Including: Preferred stock||||
|Perpetual capital securities||||
|Capital reserve|144,051,953.70|143,722,534.13|143,140,855.12|
|Subtract: Treasury stock||||
|Other comprehensive income||||
|Special reserve||||
|Surplus reserve|20,257,613.25|20,366,185.76|22,576,670.40|
|Undistributed profits|120,312,029.25|157,507,816.06|196,221,338.97|
|Total owner's equity attributable to the company|529,217,596.20|566,192,535.95|606,534,864.49|
|Minority interests|298,454,347.77|331,640,247.00|337,249,296.88|
|Total owner’s equity|827,671,943.97|897,832,782.95|943,784,161.37|
|Total liabilities and owner’s equity|2,037,859,547.74|1,950,220,506.58|1,884,511,166.15|

Shanghai Young Sun Investment Co., Ltd.
Footnote to Annual Financial Statements in 2014
(Except indicated specially, otherwise, the amount unit is RMB Yuan.)
17 Approval of Financial Statements
The financial statements have been approved by the board of directors of the company.
Shanghai Young Sun Investment Co., Ltd. Chairman of the Board:
Financial Head:
Accounting Organ Head:
Date: Mar. 26, 2015