SHENZHEN ZHONGHENG HUAFA CO., LTD.
SEMI-ANNUAL REPORT 2017
August 2017
Section I. Important Notice, Contents and Paraphrase
Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of Shenzhen Zhongheng Huafa Co., Ltd. (hereinafter referred to as the Company) hereby confirm that there are no any fictitious statements, misleading statements, or important omissions carried in this report, and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of the whole contents.
Li Zhongqiu, Principal of the Company, Yang Bin, person in charger of accounting works and Wu Aijie, person in charge of accounting organ (accounting principal) hereby confirm that the Financial Report of 2017 Semi-Annual Report is authentic, accurate and complete.
All directors are attended the Board Meeting for report deliberation.
Concerning the forward-looking statements with future planning involved in the Report, they do not constitute a substantial commitment for investors. Majority investors are advised to exercise caution of investment risks.
Risks factors are being well-described in the Report, please found more in relevant content.
The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either.
Contents
Semi-annual Report 2017 ................................................................................................................ 1 Section I Important Notice and Paraphrase .................................................................................... 2 Section II Company Profile and Main Finnaical Indexes .............................................................. 5 Section III Summary of Company Business .................................................................................... 8 Section IV Discussion and Analysis of Operation ........................................................................... 9 Section V Important Events ............................................................................................................ 15 Section VI Changes in shares and particular about shareholders ............................................. 30 Section VII Preferred Stock ............................................................................................................ 34 Section VIII Particulars about Directors, Supervisors and Senior Executives ........................ 35 Section IX Corporate Bonds .......................................................................................................... 36 Section X Financial Report ............................................................................................................. 37 Section XI Documents Available for Reference ......................................................................... 128
Paraphrase
||||
|-|-|-|
|Items|Refers to|Contents|
|Company, Shen Huafa|Refers to|SHENZHEN ZHONGHENG HUAFA CO., LTD.|
|Hengfa Technology|Refers to|Wuhan Hengfa Technology Co., Ltd.|
|Huafa Property|Refers to|Shenzhen Zhongheng Huafa Property Co., Ltd|
|Huafa Lease|Refers to|Shenzhen Huafa Property Lease Management Co., Ltd|
|Huafa Trade|Refers to|Wuhan Zhongheng Huafa Trade Co., Ltd.|
|||Wuhan Zhongheng New Science & Technology Industrial Group Co.,|
|Wuhan Zhongheng Group|Refers to||
|||Ltd.|
|HK Yutian|Refers to|Hong Kong Yutian International Investment Co., Ltd.|
|Hengsheng Photoelectricity|Refers to|Wuhan Hengsheng Photoelectricity Industry Co., Ltd.|
|Hengsheng Yutian|Refers to|Wuhan Hengsheng Yutian Industrial Co., Ltd.|
|Yutian Henghua|Refers to|Shenzhen Yutian Henghua Co., Ltd.|
|Huafa Hengtian|Refers to|Shenzhen Huafa Hengtian Co., Ltd.|
|Huafa Hengtai|Refers to|Shenzhen Huafa Hengtai Co., Ltd.|
|Shenzhen Vanke|Refers to|Shenzhen Vanke Real Estate Co., Ltd.|
|Vanke Guangming|Refers to|Shenzhen Vanke Guangming Real Estate Development Co., Ltd|

Section II Company Profile and Main Finnaical Indexes
I. Company profile
|||||
|-|-|-|-|
|Short form of the stock|Shen Huafa A, Shen Huafa B|Stock code|000020, 200020|
|Short form of the stock after||||
||N/A|||
|changed (if applicable)||||
|Stock exchange for listing|Shenzhen Stock Exchange|||
|Name of the Company (in|深圳中恒华发股份有限Company|||
|Chinese)||||
|Short form of the Company||||
||深华发|||
|(in Chinese)||||
|Foreign name of the Company||||
||SHENZHEN ZHONGHENG HUAFA CO., LTD.|||
|(if applicable)||||
|Abbr. of the foreign name (if||||
||N/A|||
|applicable)||||
|Legal representative|Li Zhongqiu|||

II. Person/Way to contact
||||
|-|-|-|
||Secretary of the Board|Rep. of security affairs|
|Name|Yang Bin|Niu Yuxiang|
||33/F, No. 2 Building of Dachong Business|33/F, No. 2 Building of Dachong Business|
|Contact add.|||
||Center, Nanshan District, Shenzhen|Center, Nanshan District, Shenzhen|
|Tel.|0755-86360220|0755-86360201|
|Fax.|0755-86360206|0755-86360206|
|E-mail|Huafainvestor@126.com.cn|Huafainvestor@126.com.cn|

III. Others
1. Way of contact
Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or not
□ Applicable√ Not applicable
Registrations address, offices address and codes as well as website and email of the Company has no change in reporting period,
found more details in Annual Report 2016.
2. Information disclosure and preparation place
Whether information disclosure and preparation place changed in reporting period or not
□ Applicable√ Not applicable
The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparation place for semi-annual report have no change in reporting period, found more details in Annual Report 2016
IV. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data or not
□Yes√No
|||||
|-|-|-|-|
||Current period|Same period last year|Changes over last year (+,-)|
|Operating income (RMB)|439,480,144.17|309,538,525.56|41.98%|
|Net profit attributable to shareholders of|2,146,472.00|7,272,956.22||
||||-70.49%|
|the listed company(RMB)||||
|Net profit attributable to shareholders of||||
|the listed company after deducting|1,477,201.29|6,182,473.52|-76.11%|
|non-recurring gains and losses(RMB)||||
|Net cash flow arising from operating|-35,397,366.92|-25,424,349.57||
||||-39.23%|
|activities(RMB)||||
|Basic earnings per share (RMB/Share)|0.0076|0.0257|-70.43%|
|Diluted earnings per share (RMB/Share)|0.0076|0.0257|-70.43%|
|Return on Equity|0.67%|2.31%|-1.64%|
||||Changes over period-end of|
||Period-end|Period-end of last year||
||||last year(+,-)|
|Total assets (RMB)|683,400,353.73|632,475,542.40|8.05%|
|Net assets attributable to shareholder of|321,845,040.63|319,698,568.63||
||||0.67%|
|listed company (RMB)||||

V. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable√Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (International Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable√Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
VI. Items and amounts of extraordinary profit (gains)/loss
√Applicable□ Not applicable
||||
|-|-|-|
|Item|Amount|Note|
|Gains/losses from the disposal of non-current asset (including the|-33,321.94||
|write-off that accrued for impairment of assets)|||
|Governmental subsidy reckoned into current gains/losses (not|802,269.68||
|including the subsidy enjoyed in quota or ration according to|||
|national standards, which are closely relevant to enterprise’s|||
|business)|||
|Other non-operating income and expenditure except for the|123,413.20||
|aforementioned items|||
|Less: Impact on income tax|223,090.23||
|Total|669,270.71|--|

Concerning the extraordinary profit (gain)/loss defined byQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss inQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable√Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss inQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss
Section III Summary of Company Business
I. Main businesses of the company in the reporting period
Whether the company needs to comply with the disclosure requirements of the particular industry
No
After years of development, the Company has gradually formed two main businesses in industrial production and property management. Among them, the industrial production includes injection molding, foam pieces (light-weight packaging materials), and liquid crystal display business. Industry business of the Company mainly refers to the supporting products and service provided for home appliance industry; and property management business is mainly the lease of its own property.
II. Major changes in main assets
1. Major changes in main assets
|||
|-|-|
|Major assets|Note of major changes|
|Equity assets|N/A|
|Fixed assets|N/A|
|Intangible assets|N/A|
|Construction in progress|N/A|

2. Main overseas assets
□ Applicable√Not applicable
III. Core competitiveness analysis
Whether the company needs to comply with the disclosure requirements of the particular industry
No
All industrial land of the company located in Shenzhen are included in the first-batch plan of 2010 Shenzhen urban renewal unit planning, in the future, the development and management of its own land resources will become the company's long-term and stable source of income for its progressive development and the new profits growth point.
Section IV Discussion and Analysis of Operation
1. Introduction
In the first half of 2017, the domestic appliance industry grew to some extent but was lack of power, as the traditional manufacturing industry, the production and assembly of liquid crystal display, injection molding and foam parts have already entered the mature stage and the demand became saturated. During the reporting period, the company overcame difficulties, positively responded and protected the substantial growth of operating income, but the industrial profit margins were greatly compressed. During the reporting period, the company achieved operating income of RMB 439,480,100, with a year-on-year growth of41.98%; operating profit of RMB 1,977,900, with a year-on-year decrease of75.88%; net profit of RMB 2,146,700, with a year-on-year decrease of70.49%.
● Injection molding business achieved operating income of RMB 131,993,300 in the first half of the year, with an increase of45.01% on a year-on-year basis, the growth was rather fast. The main reasons included the increase in new high-end products for customers, the rise in raw material prices, the re-stocking of air conditioning industry, the peak selling season of real estate, and the continuous high temperature weather in this summer and so on. Under the environment of constant increase in human costs, the injection molding division improved the technical strength and quality according to the market conditions of home appliance so that the orders increased rapidly; meanwhile, it strengthened the internal management, introduced the competition mechanism, paid attention to the staff training, and practically completed the staff logistics and security work, fully mobilized the enthusiasm of staff, enhanced the quality of staff, and strengthened the sense of belonging of the staff; the company developed the effective quality prevention and corrective measures, strengthened the fine management, improved the product quality, and won the trust of customers, and enhanced the competitiveness to gain more product shares with high gross margins.
●Polystyrene business achieved operating income of RMB 42,092,000 in the first half of the year, with an increase of36.59% on a year-on-year basis, the growth was rather fast. With the severe challenges of more intense market competition in appliance industry, constant rising in production costs, great compression on profit margins, the polystyrene division took the market demand as guiding, actively cooperated with customers to improve product mix, constantly explored and innovated, constantly updated devices, paid great attention to eco-environment protection while improving the output and quality, strengthened the sustainable production and management philosophy, and formed its own unique competitive advantages. In the future, the company will further improve the product quality, reduce the raw material loss, decrease the production costs, and ensure its own advantages and market shares by innovative design and product optimization.
●LCD business achieved operating income of RMB 244,178,800 in the first half of the year, an increase of48.41% on a year-on-year basis. The first main reason was that the overseas market orders increased in the first half of this year, the shipments to overseas markets in the first half of the year accounted for more than20% of the overall shipments. The second main reason was that the market demand for large-size LCD in domestic internet bars declined a lot, and many brand customers transformed to the industry customers and some low-cost sizes for keeping the market shares, which just met the product sizes produced by the factory, resulting in the increase in orders.
● Property leasing business achieved operating income of RMB 19,602,000, a decrease of5.66% over the same period last year. Most sites of the company's own property Huafa building have been rented, but Huafa Building has been included in the urban renewal, due to the tenancy term and other factors, the company's overall rental income declined compared with the same period of last year.
II. Main business analysis
See the “I-Introduction” in “Discussion and Analysis of Operation”
Change of main financial data on a y-o-y basis
In RMB
||||||
|-|-|-|-|-|
||Current period|Same period last year|y-o-y changes|Reasons|
||439,480,144.17|309,538,525.56||Sales increased in the|
|Operating revenue|||41.98%||
|||||period|
||398,913,925.08|264,288,398.24||The purchasing increased|
|Operating cost|||50.94%||
|||||in the period|
||7,363,051.86|5,283,735.71||Human and|
|||||transportation costs|
|Sales expenses|||39.35%||
|||||increased for the growth|
|||||of sales|
|Administrative expenses|24,085,956.74|27,295,883.47|-11.76%||
||4,914,890.46|2,312,379.13||Exchange earnings|
|Financial expenses|||112.55%||
|||||declined over last period|
||723,746.91|2,384,214.46||Current income tax|
|Income tax expenses|||-69.64%|expenses decreased over|
|||||same period of last year|
||-35,397,366.92|-25,424,349.57||Intercourse funds|
|Net cash flow from|||||
||||39.23%|received from enterprise|
|operating activities|||||
|||||declined|
|Net cash flow from|-3,903,702.73|-3,790,585.96|||
||||2.98%||
|investment activities|||||
|Net cash flow from|7,520,619.22|-544,260,367.28||Long-term loans are paid|
||||101.38%||
|financing activities||||in last period|
|Net increase of cash and|-32,170,554.64|-573,490,540.29||Long-term loans are paid|
||||94.39%||
|cash equivalent||||in last period|

Major changes on profit composition or profit resources in reporting period
□ Applicable√ Not applicable
No major changes on profit composition or profit resources occurred in reporting period
Constitution of main business
In RMB
|||||||
|-|-|-|-|-|-|
|Operating|Operating cost|Gross profit ratio|Increase/decrease|Increase/decrease|Increase/decrease|

||||||||
|-|-|-|-|-|-|-|
||revenue|||of operating|of operating cost|of gross profit|
|||||revenue y-o-y|y-o-y|ratio y-o-y|
|According to industries|||||||
|Display|244,178,831.40|238,599,523.48|2.28%|48.41%|53.60%|-3.30%|
|Plastic injection|||||||
||131,993,291.50|120,353,683.56|8.82%|45.01%|50.16%|-3.13%|
|hardware|||||||
|Foam|42,091,942.44|37,498,945.77|10.91%|36.59%|45.78%|-5.62%|
|According to products|||||||
|Display|244,178,831.40|238,599,523.48|2.28%|48.41%|53.60%|-3.30%|
|Plastic injection|||||||
||131,993,291.50|120,353,683.56|8.82%|45.01%|50.16%|-3.13%|
|hardware|||||||
|Foam|42,091,942.44|37,498,945.77|10.91%|36.59%|45.78%|-5.62%|
|According to region|||||||
|Hong Kong|145,590,841.04|142,179,084.27|2.34%|28.19%|32.92%|-3.48%|
|Central China|272,673,224.30|254,273,068.54|6.75%|57.80%|64.85%|-3.98%|

 III. Analysis of the non-main business
□Applicable√ Not applicable
IV. Assets and liability
1. Major changes of assets composition
In RMB
||||||||
|-|-|-|-|-|-|-|
||Period-end||Period-end last year||||
||||||Ratio||
|||Ratio in total||Ratio in total||Notes of major changes|
||Amount||Amount||changes||
|||assets||assets|||
|Monetary fund|66,352,098.10|9.71%|65,403,374.30|10.55%|-0.84%||
|Account|223,831,614.45||||||
|||32.75%|182,542,130.75|29.45%|3.30%||
|receivable|||||||
|Inventory|52,166,592.59|7.63%|37,519,314.34|6.05%|1.58%||
|Investment real|53,277,285.84||||||
|||7.80%|29,404,574.44|4.74%|3.06%||
|estate|||||||
|Long-term equity|||||||
|||0.00%||0.00%|0.00%||
|investment|||||||
|Fix assets|79,839,263.86|11.68%|108,018,926.67|17.43%|-5.75%||
|Construction in|654,356.00|0.10%|654,356.00|0.11%|-0.01%||

|||||||
|-|-|-|-|-|-|
|process||||||
||192,108,516.60|||||
|Short-term loans||28.11%|85,012,392.00|13.72%|14.39%|
|Long-term loans||0.00%|50,850,000.00|8.20%|-8.20%|

2. Assets and liability measured by fair value
□ Applicable√Not applicable
3. Assets right restriction till end of reporting period
Wuhan Zhongheng Group Co., Ltd. and Shenzhen Vanke were applied for arbitration due to the dispute case of “Contract for the Cooperative Operation of the Old Projects at Huafa Industrial Park, Gongming Street, Guangming New District”. On October 28, 2016, Wuhan Zhongheng Group and the company received the (2016) Yue 03 Cai Bao No. 51 civil ruling paper sent by Shenzhen Intermediate People's Court of Guangdong Province, which ruled to seal up and freeze the property of RMB 190 million under the name of the respondents Wuhan Zhongheng Group and the company. See details on thecompany’s announcement published at www.cninfo.com.cn on November 1, 2016.
V. Investment analysis
1. Overall situation
□ Applicable√Not applicable
2. The major equity investment obtained in the reporting period
□ Applicable√Not applicable
3. The major non-equity investment doing in the reporting period
□ Applicable√ Not applicable
4. Financial assets investment
(1) Securities investment
□ Applicable√Not applicable
The Company has no securities investment in the Period.
(2) Derivative investment
□ Applicable√Not applicable
The Company has no derivatives investment in the Period.
VI. Sales of major assets and equity
1. Sales of major assets
□ Applicable√Not applicable
The Company had no sales of major assets in the reporting period.
2. Sales of major equity
□ Applicable√Not applicable
VII. Analysis of main holding company and stock-jointly companies
√Applicable□ Not applicable
Particular about main subsidiaries and stock-jointly companies net profit over10%
In RMB
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Company||Main||Register|||Operating|Operating||
||Type||Industry||Total assets|Net Assets|||Net profit|
|name||business||capital|||revenue|profit||
||||R&D,|||||||
||||production|||||||
||||and sales of|||||||
|Hengfa|||the products|||||||
|||Production||181,643,11|516,043,80|213,759,36|419,071,09|2,143,271||
|Technology|Subsidiary||as well as||||||2,239,178.76|
|||sales||1.00|2.24|6.19|0.14|.75||
|Company|||import &|||||||
||||export|||||||
||||business|||||||
||||etc.|||||||
||||Leasing and|||||||
|Huafa||Property||||||||
||||managemen|1,000,000.0|3,523,916.5||1,040,734.0|||
|Property|Subsidiary|managemen||||-814,969.45||70,209.17|70,209.17|
||||t of own|0|0||4|||
|Company||t||||||||
||||property|||||||
||||Leasing and|||||||
|Huafa||Property||||||||
||||managemen|1,000,000.0|1,900,692.2|-5,026,990.||||
|Lease|Subsidiary|managemen||||||||
||||t of own|0|0|71||||
|Company||t||||||||
||||property|||||||
||||Leasing and|||||||
|Huafa||Property||||||||
||||managemen|1,000,000.0||||||
|Hengtian|Subsidiary|managemen|||997,307.29|997,307.29|0.00|-776.57|-776.57|
||||t of own|0||||||
|Company||t||||||||
||||property|||||||
|Huafa||Property|Leasing and|||||||
|||||1,000,000.0||||||
|Hengtai|Subsidiary|managemen|managemen||998,036.07|998,036.07|0.00|-775.94|-775.94|
|||||0||||||
|Company||t|t of own|||||||

||
|-|
|property|

Particular about subsidiaries obtained or disposed in report period
□Applicable√ Not applicable
Explanation
VIII. Structured vehicle controlled by the Company
□ Applicable√Not applicable
IX. Prediction of business performance from January– September 2017
Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the warning of its material change compared with the corresponding period of the last year and explanation on reason
□ Applicable√ Not applicable
X. Risks and countermeasures
1. Operational risks of industrial business: industrial restructuring, fluctuations in raw material prices, decline in market demand, and frustration of new product promotion.
Countermeasures: continue to open up the market, maintain the existing customers, positively develop new customers, and continue to improve production efficiency;
2. Financial risks: large demands for funds, substantial increase or decrease in financial costs caused by exchange rate fluctuations, and bank credit constraints caused by changes in financial costs and so on.
Countermeasures: pay close attention to macroeconomic policy trends, actively expand the financing channels, establish a virtuous circle mechanism for funds, improve the service efficiency, and use financial instruments to avoid exchange rate risks.
Section V. Important Events
I. In the report period, the Company held annualshareholders’ general meeting and extraordinaryshareholders’ general meeting
1. AnnualShareholders’ General Meeting in the report period
|||||||
|-|-|-|-|-|-|
|||Ratio of investor||||
|Session of meeting|Type||Date|Date of disclosure|Index of disclosure|
|||participation||||
||||||http://www.cninfo.co|
||||||m.cn/cninfo-new/dis|
|Annual General|||||closure/szse_main/b|
||AGM|0.03%|2017-05-16|2017-05-17||
|Meeting of 2016|||||ulletin_detail/true/12|
||||||03526132?announce|
||||||Time=2017-05-17|

 2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore□ Applicable√Not applicable
II. Profit distribution plan in the period and capitalizing of common reserves plan
□ Applicable√Not applicable
The Company plans not to distribute cash dividend and bonus for the semi-annual, and no capitalizing of common reserves either. III. Commitments that the actual controller, shareholders, related party, offeror and committed party as the Company etc. have fulfilled during the reporting period and have not yet fulfilled by the end of reporting period
□Applicable√ Not applicable
The Company has no commitments that the actual controller, shareholders, related party, offeror and committed party as the Company etc. have fulfilled during the reporting period and have not yet fulfilled by the end of reporting period
IV. Appointment and non-reappointment (dismissal) of CPA
Whether the financial report has been audited or not
□Yes√no
Not audited
V. Explanation from Board of Directors and Supervisory Committee for “Qualified Opinion”
that issued by CPA
□ Applicable√Not applicable
VI. Explanation from the Board for “Qualified Opinion” of lastyear’s
□ Applicable√Not applicable
VII. Bankruptcy reorganization
□ Applicable√Not applicable
No bankruptcy reorganization for the Company in reporting period
VIII. Lawsuits
Significant lawsuits and arbitrations
√Applicable □Not applicable
|||||||||
|-|-|-|-|-|-|-|-|
||Amount of|||||||
||||Advances in|The results and||||
|The basic situation|money||||Execution of the|||
|||Predicted|litigation|effects of||Disclosure|Disclosure|
|of litigation|involved (in||||litigation|||
|||liabilities (Y/N)|(Arbitration|litigation||date|index|
|(Arbitration)|10 thousand||||(Arbitration)|||
||||)|(Arbitration)||||
||Yuan)|||||||
|In September 2016,||||||||
|Wuhan Zhongheng||||||||
|Group Co., Ltd.||||||||
|and the Company||||||||
||||||||http://www.|
|and Shenzhen||||||||
||||||||cninfo.com.|
|Vanke were||||||||
||||||||cn/cninfo-n|
|applied for||||||||
||||Open a||||ew/disclosu|
|arbitration due to||||||||
||||court||||re/fulltext/b|
|the dispute case of|46,460|N||Without judgment|Not applicable|2016-09-14||
||||session on||||ulletin_detai|
|“Contract for the||||||||
||||13 May 217||||l/true/12036|
|Cooperative||||||||
||||||||71874?anno|
|Operation of the||||||||
||||||||unceTime=|
|Old Projects at||||||||
||||||||2017-07-01|
|Huafa Industrial||||||||
|Park, Gongming||||||||
|Street, Guangming||||||||
|New District”.||||||||
|In March 2016,|||In|Court decision as|||http://www.|
|Huafa Property suit|||November|Jifang Company|||cninfo.com.|
|against the|||2016, the|has to paid|||cn/cninfo-n|
|Shenzhen Jifang|||Company|27.9023 million|||ew/disclosu|
|Investment Co.,|1,416.67|N|win in the|Yuan (including|Implementing|2016-11-08|re/szse_mai|
|Ltd. for site|||ruling|rental,|||n/bulletin_d|
|occupation,|||judged by|administrative fee,|||etail/true/12|
|without rental, and|||Shenzhen|compensation,|||02817664?a|
|utilities paid for a|||Arbitration|penalty, lawyer’s|||nnounceTi|

|||||||||
|-|-|-|-|-|-|-|-|
|long-time|||Commission|f ee and arbitration|||me=2016-1|
|||||fees) in total for|||1-08|
|||||the Company||||
|In March 2016, the||||||||
|Company and||||||||
|Huafa Science &||||||||
|Technology suit||||||||
|against the follow||||||||
|companies,||||||||
|including||||||||
|Shenzhen||||||||
|Huayongxing||||||||
|Environmental||||||||
|Technology Co.,|||||||http://www.|
|Ltd., Shenzhen|||||||cninfo.com.|
|Guangyong|||||||cn/cninfo-n|
|Breadboard Co.,|||Open a||||ew/disclosu|
|Ltd., Shenzhen|||court||||re/szse_mai|
|Mingyi Electronic|1,964.92|N|session on|Without judgment|Not applicable|2016-09-14|n/bulletin_d|
|Co., Ltd.,|||14 February||||etail/true/12|
|Shenzhen Ouruilai|||2017||||02702423?a|
|Technology Co.,|||||||nnounceTi|
|Ltd and Shenzhen|||||||me=2016-0|
|Kangzhengxin|||||||9-14 07:41|
|Technology Co.,||||||||
|Ltd., for arrears of||||||||
|rent. and refuse to||||||||
|move the site,||||||||
|forcibly occupied||||||||
|switch board room||||||||
|and other power||||||||
|unit under the||||||||
|name of the||||||||
|Company||||||||
|The Company and|||||||http://www.|
|Huafa Property suit|||||||cninfo.com.|
|against Shenzhen|||||||cn/cninfo-n|
|Jifang investment|||||||ew/disclosu|
|Co., Ltd. and|||||||re/szse_mai|
||73.38|N|2017-2-13|Without judgment|Not applicable|2016-09-14||
|Shenzhen|||||||n/bulletin_d|
|Jianianhua Foreign|||||||etail/true/12|
|Trade Clothing|||||||02702423?a|
|City Co., Ltd. for|||||||nnounceTi|
|refusing to paid the|||||||me=2016-0|

|||||||||
|-|-|-|-|-|-|-|-|
|rents and|||||||9-14 07:41|
|administrative fee||||||||
|without justified||||||||
|reasons||||||||
|n March 2016, the||||||||
|Company and||||||||
||||||||http://www.|
|Huafa Property suit||||||||
||||||||cninfo.com.|
|against Shenzhen||||||||
||||||||cn/cninfo-n|
|Huayongxing||||||||
||||Open a||||ew/disclosu|
|Environmental||||||||
||||court|Huayongxing and|||re/szse_mai|
|Technology Co.,||||||||
||947.26|N|session on|Yidaxin prosecute|Not applicable|2016-09-14|n/bulletin_d|
|Ltd., and Shenzhen||||||||
||||20 March|an appeal|||etail/true/12|
|Yidaxin||||||||
||||2017||||02702423?a|
|Technology Co.,||||||||
||||||||nnounceTi|
|Ltd. for contract||||||||
||||||||me=2016-0|
|violation and||||||||
||||||||9-14 07:41|
|refuse to move the||||||||
|site||||||||
|||||Court decision as||||
|||||Dai Qiangbo has||||
|||||to paid the rental||||
|||||and utilities of||||
|||||327300 Yuan to||||
|||||Huafa Property;||||
|In December 2015,||||||||
||||The|paid the late||||
|the Company and||||||||
||||Company|rental, and||||
|Huafa Property suit||||||||
||||win in the|surcharge for||||
|against Dai||||||||
||||ruling|overdue utilities||||
|Qiangbo for arrears||||||||
||||judged by|payment, which is||||
|of rent and||||||||
||||People’s|counted since 6||||
|occupied the leased||||||||
||68|N|Court of|November 2015,|Implementing|||
|premises, and||||||||
||||Futian|based on 327300||||
|refuse to move out;||||||||
||||District,|Yuan, to the||||
|Dai Zhijun, Xie||||||||
||||Shenzhen|payment actual||||
|Lihua and Dai||||||||
||||Municipal|paid in full by 50||||
|Tianyi bear joint||||||||
||||on 13|Yuan per 10000||||
|liability for debts||||||||
||||Feb.2017|Yuan as charge||||
|of Dai Qiangbo||||||||
|||||everyday; paid||||
|||||867800 Yuan for||||
|||||occupation||||
|||||charge; and court||||
|||||acceptance fee||||
|||||12600 Yuan.||||

Other lawsuits
□Applicable√ Not applicable
IX. Penalty and rectification
√Applicable□ Not applicable
||||||||
|-|-|-|-|-|-|-|
||||Type of||||
|||||Conclusion (if|Date of|Index of|
|Name|Type|Reason|investigation and||||
|||||applicable)|disclosure|disclosure|
||||punishment||||
|||I. Fail to consider|||||
|||and disclose the|||||
|||related|||||
|||transactions with|||||
|||the controlling|||||
|||||||http://www.cninf|
|||shareholder’s|||||
|||||||o.com.cn/cninfo-|
|||subsidiaries by|||||
|||||||new/disclosure/fu|
|||rule. II. Fail to||Denounced on|||
|Shen Huafa|Other||Other||2017-01-06|lltext/bulletin_det|
|||disclose the funds||Shen Huafa|||
|||||||ail/true/12029948|
|||transactions by|||||
|||||||56?announceTim|
|||rule. III. Fail to|||||
|||||||e=2017-01-06|
|||consider and|||||
|||disclose the|||||
|||excessive related|||||
|||transactions by|||||
|||rule.|||||
|||I. Fail to consider|||||
|||and disclose the|||||
|||related|||||
|||transactions with|||||
|||the controlling|||||
|||||||http://www.cninf|
|||shareholder’s|||||
|||||||o.com.cn/cninfo-|
|||subsidiaries by|||||
|||||||new/disclosure/fu|
|||rule. II. Fail to|||||
|Li Zhongqiu|Actual controller||Other|Denounced|2017-01-06|lltext/bulletin_det|
|||disclose the funds|||||
|||||||ail/true/12029948|
|||transactions by|||||
|||||||56?announceTim|
|||rule. III. Fail to|||||
|||||||e=2017-01-06|
|||consider and|||||
|||disclose the|||||
|||excessive related|||||
|||transactions by|||||
|||rule.|||||
|||I. Fail to consider||||http://www.cninf|
|||||Circulate a notice|||
|Chen Zhigang|Director|and disclose the|Other||2017-01-06|o.com.cn/cninfo-|
|||||of criticism|||
|||related||||new/disclosure/fu|

||||||||
|-|-|-|-|-|-|-|
|||transactions with||||lltext/bulletin_det|
|||the controlling||||ail/true/12029948|
|||shareholder’s||||56?announceTim|
|||subsidiaries by||||e=2017-01-06|
|||rule. II. Fail to|||||
|||disclose the funds|||||
|||transactions by|||||
|||rule. III. Fail to|||||
|||consider and|||||
|||disclose the|||||
|||excessive related|||||
|||transactions by|||||
|||rule.|||||
|||I. Fail to consider|||||
|||and disclose the|||||
|||related|||||
|||transactions with|||||
|||the controlling|||||
|||||||http://www.cninf|
|||shareholder’s|||||
|||||||o.com.cn/cninfo-|
|||subsidiaries by|||||
|||||||new/disclosure/fu|
|||rule. II. Fail to||Circulate a notice|||
|Tang Ganyu|Senior executive||Other||2017-01-06|lltext/bulletin_det|
|||disclose the funds||of criticism|||
|||||||ail/true/12029948|
|||transactions by|||||
|||||||56?announceTim|
|||rule. III. Fail to|||||
|||||||e=2017-01-06|
|||consider and|||||
|||disclose the|||||
|||excessive related|||||
|||transactions by|||||
|||rule.|||||
|||I. Fail to consider|||||
|||and disclose the|||||
|||related|||||
|||transactions with|||||
|||the controlling||||http://www.cninf|
|||shareholder’s||||o.com.cn/cninfo-|
|||subsidiaries by||||new/disclosure/fu|
|||||Circulate a notice|||
|Weng Xiaojue|Senior executive|rule. II. Fail to|Other||2017-01-06|lltext/bulletin_det|
|||||of criticism|||
|||disclose the funds||||ail/true/12029948|
|||transactions by||||56?announceTim|
|||rule. III. Fail to||||e=2017-01-06|
|||consider and|||||
|||disclose the|||||
|||excessive related|||||
|||transactions by|||||

||||||||
|-|-|-|-|-|-|-|
|||rule.|||||
|||I. Fail to consider||Circulate a noticeof criticism|||
|||and disclose the|||||
|||related|||||
|||transactions with|||||
|||the controlling|||||
|||||||http://www.cninf|
|||shareholder’s|||||
|||||||o.com.cn/cninfo-|
|||subsidiaries by|||||
|||||||new/disclosure/fu|
|||rule. II. Fail to|||||
|Cao Li|Senior executive||Other||2017-01-06 l|ltext/bulletin_det|
|||disclose the funds|||||
|||||||ail/true/12029948|
|||transactions by|||||
|||||||56?announceTim|
|||rule. III. Fail to|||||
|||||||e=2017-01-06|
|||consider and|||||
|||disclose the|||||
|||excessive related|||||
|||transactions by|||||
|||rule.|||||

X. Integrity of the company and its controlling shareholders and actual controllers
□ Applicable√Not applicable
XI. Implementation of thecompany’s stock incentive plan, employee stock ownership plan or other employee incentives
□ Applicable√Not applicable
The Company had no stock incentive plan, employee stock ownership plan or other employee incentive in the reporting period. XII. Major related transaction
1. Related transaction with routine operation concerned
√Applicable□ Not applicable
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||Whether|||||
|||||||||Trading||||||
|||||||Related|||over the|||||
|||||||||limit|||Availabl||Index|
|||Type of|Content|||transacti|Proporti||approve|Clearing||Date ofdisclosure||
||||of|Pricing|Related|on|on in|approve||form for|e similar||of|
|Related|Relation|related|related|principl|transacti|amount|similar||d|related||||
|party|ship|transacti||||||d (in 10|||market||disclos|
|||on|transacti|e|on price|(in 10|transacti||limited|transacti||||
||||on|||thousan|ons|thousan||on|price||ure|
|||||||d Yuan)|||or not|||||
|||||||||d Yuan)||||||
||||||||||(Y/N)|||||
||Sharing||||||||||||http://|
||||Purchasi|Synchro||||||||||
||the same|||||||||Telegrap|||www.c|
|HK||Purchas|ng LCD|nized|10,807.5|10,807.5||||||2017-04-25||
||controlli||||||45.29%|27,748|N|hic|--||ninfo.c|
|Yutian||e|monitor|with the|7|7||||||||
||ng|||||||||transfer|||om.cn/|
||||s|market||||||||||
||sharehol||||||||||||finalpa|

|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||der||||||||||||ge/201|
||||||||||||||7-04-2|
||||||||||||||5/1203|
||||||||||||||37458|
||||||||||||||8.PDF|
||||||||||||The|||
||||||||||||average|||
||||||||||||market|||
||||||||||||price|||
||||||||||||refers to|||
||||||||||||the price|||
||||||||||||of same|||
||||||||||||specific|||
||||||||||||ations|||
||||||||||||which is|||
||||||||||||searched|||
||||||||||||from|||
|||||Confirm|||||||through|||
|||||ed with|||||||the|||
|||||1% of|||||||world|||
||||||||||||||http://|
|||||current|||||||famous|||
||||||||||||||www.c|
|||||market|||||||professi|||
||Sharing||||||||||||ninfo.c|
|||||average|||||||onal|||
|Hengshe|the same||Purchasi||||||||||om.cn/|
|||||price in||||||Telegrap|market|||
|ng|controlli|Purchas|ng LCD|||||11,446.0||||2017-04|finalpa|
|||||principl|5,228.69|5,228.69|21.91%||No|hic|survey|||
|Photoele|ng|e|monitor|||||5||||-25|ge/201|
|||||e, and||||||transfer|compan|||
|ctricity|sharehol||s||||||||||7-04-2|
|||||refer to|||||||y|||
||der||||||||||||5/1203|
|||||both|||||||website|||
||||||||||||||37458|
|||||their|||||||http://w|||
||||||||||||||8.PDF|
|||||bargaini|||||||ww.wits|||
|||||ng|||||||view.co|||
|||||power|||||||m|||
||||||||||||recogniz|||
||||||||||||ed|||
||||||||||||authorit|||
||||||||||||y in the|||
||||||||||||industry|||
||||||||||||and|||
||||||||||||LCD|||
||||||||||||professi|||
||||||||||||onal|||
||||||||||||market|||
||||||||||||survey|||
||||||||||||compan|||

|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||||y|||
||||||||||||website|||
||||||||||||http://w|||
||||||||||||ww.wits|||
||||||||||||view.co|||
||||||||||||m|||
||||||||||||||http://|
|||||Accordi||||||||||
||||||||||||||www.c|
|||||ng to the||||||||||
||Sharing||||||||||||ninfo.c|
|||||order||||||||||
|Hengshe|the same||Purchasi||||||||||om.cn/|
|||||price,||||||Telegrap||||
|ng|controlli|Purchas|ng LCD|||||||||2017-04|finalpa|
|||||deducte|817.59|817.59|3.43%|7,283.85|No|hic|--|||
|Photoele|ng|e|monitor|||||||||-25|ge/201|
|||||d 1 Yuan||||||transfer||||
|ctricity|sharehol||s||||||||||7-04-2|
|||||each for||||||||||
||der||||||||||||5/1203|
|||||operatio||||||||||
||||||||||||||37458|
|||||n charge||||||||||
||||||||||||||8.PDF|
||||||||||||||http://|
||||||||||||||www.c|
|||||Accordi||||||||||
||Sharing||Sales||||||||||ninfo.c|
|||||ng to the||||||||||
||the same||LCD||||||||||om.cn/|
|||||custome||||||Telegrap||||
|HK|controlli||overall|||||40,650.8||||2017-04|finalpa|
|||Sales||r sales|9,954.30|9,954.3|40.76%||No|hic|--|||
|Yutian|ng||monitor|||||2||||-25|ge/201|
|||||order||||||transfer||||
||sharehol||machine||||||||||7-04-2|
|||||price||||||||||
||der||set||||||||||5/1203|
|||||sure||||||||||
||||||||||||||37458|
||||||||||||||8.PDF|
|||||||26,808.1||87,128.7||||||
|Total||||--|--||--||--|--|--|--|--|
|||||||5||2||||||
|Detail of sales return with major||||||||||||||
|||||N/A||||||||||
|amount involved||||||||||||||
|||||In the reporting, Hengfa Technology purchased LCD from HK Yutian with $ 15.7128 million||||||||||
|||||approximately, 39.28% of the annual amount predicted at the beginning of the year;||||||||||
|Report the actual implementation of||||||||||||||
|||||purchased LCD from Hengsheng Photoelectricity with $7.7183 million approximately,||||||||||
|the daily related transactions which||||||||||||||
|||||46.78% of the annual amount predicted at the beginning of the year; purchasing LCD from||||||||||
|were projected about their total||||||||||||||
|||||Hengsheng Photoelectricity with about $1.2069 million, 11.49% of the annual amount||||||||||
|amount by types during the reporting||||||||||||||
|||||predicted at the beginning of the year; sold LCD whole machine to HK Yutian with||||||||||
|period(if applicable)||||||||||||||
|||||$ 14.4845 million approximately, 25.87% of the annual amount predicted at the beginning of||||||||||
|||||the year. (cid:10)(cid:10)||||||||||
|Reasons for major differences||||||||||||||
|between trading price and market||||N/A||||||||||
|reference price (if applicable)||||||||||||||

2. Related transactions by assets acquisition and sold
□Applicable√ Not applicable
No above mentioned transactions occurred
3. Main related transactions of mutual investment outside
□ Applicable√Not applicable
No main related transactions of mutual investment outside for the Company in reporting period.
4. Contact of related credit and debt
□ Applicable√Not applicable
No contact of related credit and debt in the period
5. Other related transactions
□ Applicable√Not applicable
The company had no other significant related transactions in reporting period.
XIII. Non-operational fund occupation from controlling shareholders and its related party□ Applicable√Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.
XIV. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable√Not applicable
No trusteeship for the Company in reporting period
(2) Contract
□ Applicable√Not applicable
No contract for the Company in reporting period
(3) Leasing
□ Applicable√Not applicable
No leasing for the Company in reporting period
2. Major guarantees
√Applicable□ Not applicable
(1) Guarantees
In 10 thousand Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)|||||||||
||Related|||||||Guarante|
|Name of the|||Actual date of||||||
||Announce|Guarantee||Actual|Guarantee|Guarantee|Implemen|e for|
|Company|||happening (Date||||||
||ment|limit||guarantee limit|type|term|ted (Y/N)|related|
|guaranteed|||of signing||||||
||disclosure|||||||party|

||||||||||
|-|-|-|-|-|-|-|-|-|
||date||agreement)|||||(Y/N)|
|N/A|||||||||
|Guarantee of the Company and the subsidiaries|||||||||
||Related|||||||Guarante|
||||Actual date of||||||
|Name of the|Announce|||||||e for|
|||Guarantee|happening (Date|Actual|Guarantee|Guarantee|Implemen||
|Company|ment|||||||related|
|||limit|of signing|guarantee limit|type|term|ted (Y/N)||
|guaranteed|disclosure|||||||party|
||||agreement)||||||
||date|||||||(Y/N)|
|Wuhan Hengfa|||||||||
||||||Joint liability||||
|Technology Co.,|2017-04-25|30,000||5,560.85||1 year|N|N|
||||||guarantee||||
|Ltd.|||||||||
|||||Total amount of actual|||||
|Total amount of approving|||||||||
|||||occurred guarantee for|||||
|guarantee for subsidiaries in||30,000||||8,267.9|||
|||||subsidiaries in report period|||||
|report period (B1)|||||||||
|||||(B2)|||||
|||||Total balance of actual|||||
|Total amount of approved|||||||||
|||||guarantee for subsidiaries at|||||
|guarantee for subsidiaries at the||30,000||||5,560.85|||
|||||the end of reporting period|||||
|end of reporting period (B3)|||||||||
|||||(B4)|||||
|Guarantee of the subsidiaries for the subsidiaries|||||||||
||Related||||||||
||||Actual date of||||Complete|Guarante|
|Name of the|Announce||||||||
|||Guarantee|happening (Date|Actual|Guarantee|Guarantee|implemen|e for|
|Company|ment||||||||
|||limit|of signing|guarantee limit|type|term|tation or|related|
|guaranteed|disclosure||||||||
||||agreement)||||not|party|
||date||||||||
|Total amount of guarantee of the Company( total of three abovementioned guarantee)|||||||||
|Total amount of approving||||Total amount of actual|||||
|guarantee in report period||30,000||occurred guarantee in report||8,267.9|||
|(A1+B1+C1)||||period (A2+B2+C3)|||||
|Total amount of approved||||Total balance of actual|||||
|guarantee at the end of report||30,000||guarantee at the end of report||5,560.85|||
|period (A3+B3+C2)||||period (A4+B4+C4)|||||
|The proportion of the total amount of actually guarantee in the|||||||||
|||||17.28%|||||
|net assets of the Company(that is A4+ B4+C4)|||||||||
|Including:|||||||||
|Amount of guarantee for shareholders, actual controller and its|||||||||
|||||0|||||
|related parties(D)|||||||||
|The debts guarantee amount provided for the guaranteed|||||||||
|parties whose assets-liability ratio exceed 70% directly or||||0|||||
|indirectly(E)|||||||||
|Proportion of total amount of guarantee in net assets of the||||0|||||

|||
|-|-|
|Company exceed 50%(F)||
|Total amount of the aforesaid three guarantees(D+E+F)|0|
|Explanations on possibly bearing joint and several liquidating||
||N/A|
|responsibilities for undue guarantees (if applicable)||
|Explanations on external guarantee against regulated||
||N/A|
|procedures (if applicable)||

Explanation on compound guarantee
(2) Guarantee outside against the regulation
□Applicable√ Not applicable
No guarantee outside against the regulation in Period.
3. Other material contracts
□ Applicable√Not applicable
No other material contracts for the Company in reporting period.
XV. Social responsibility
1. Execution of social responsibility of targeted poverty alleviation
(1) Summary of targeted poverty alleviation
(2) Targeted poverty alleviation for first half Year
(3) Follow-up targeted poverty alleviation scheme
2. Material environmental protection
The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department No
XVI Explanation on other significant events
√Applicable□ Not applicable
(I) The Company signed Asset Exchange Contract with Wuhan Zhongheng Group on 29 April 2009 (details were referred to in the announcement dated 30 April 2009), and pursuant to the contract, since part of the assets of the Company (namely two parcel of industrial lands located at Huafa road, Gongming town, Guangming new district, Shenzhen (the property certificate No. were SFDZ No.7226760 and SFDZ No.7226763, No. of parcels were A627-005 andA627-007, and the aggregate area was 48,200 sq.m) were the
lands listed in the first batch of plan for 2010 Shenzhen urbanization unit planning preparation plan. For promotion of such
urbanization project and joint cooperation, the Company has not completed the transfer procedures in respect of the aforesaid land.
The Company convoked the first extraordinary meeting of the Board in 2015 on February 16, 2015 and the first extraordinary general meeting of the Board in 2015 on March 4, 2015, which considered and approved the “Motion on promoting and implementing the urban renewal project for the renewal units of Huafa area at Gongming street, Guangming new district, Shenzhen”, specified that the Company and Wuhan Zhongheng Group shall obtain the corresponding compensatory consideration for removal from the respectively owned project plots and the respectively contributed and constructed above-ground buildings before the land development, it is estimated that the compensatory consideration obtained by the Company accounts for50.5% of the total consideration and Wuhan Zhongheng Group accounts for49.5% by calculation.
The sixth extraordinary meeting of the board of directors in 2015 and the third extraordinary general meeting held on September 11, 2015 have considered and adopted the “Proposal on the project promotion and implementation of urban renewal and the progress of related transactions of‘the updated units at Huafa Area, Gong Ming Street, Guangming New District,Shenzhen’”, the company has signed the “Agreement on the cooperation of urban renewal project of the updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen”, “Contract for the cooperative venture of reconstruction project for Huafa Industrial Park, Gong Ming Street, Guangming New District” and “Agreement on housing acquisition and removal compensation and resettlement” with Wuhan Zhongheng New Technology Industry Group Co., Ltd. (hereinafter referred to as “Wuhan Zhongheng Group”), Shenzhen Vanke Real Estate Co., Ltd. (hereinafter referred to as “Shenzhen Vanke”), and Shenzhen Vanke Guangming Real Estate Development Co., Ltd. (hereinafter referred to as “Vanke Guangming”).
On 12 September 2016, the Company received a “Notice of Arbitration No.: SHEN DP20160334” from SCIA, Shenzhen Vanke applied for arbitration in respect of “Agreement on the cooperation of urban renewal project of the updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen” against the Company and Wuhan Zhongheng Group. The arbitra court hold hearings on 12 November 2016 and 13 May 2017. The judgement will pospone to 16 August 2017. Progress of the case found more in the Notices released on juchao website (www.cninfo.com.cn) dated 14 Sept. 2016, 1 Nov. 2016, 16 Nov. 2016, on 18 Feb. 2017, 24 March 2017, 25 April 2017 and on 1 July 2017 respectively.
(II) Our controlling shareholder Wuhan Zhongheng Group holds 116,489,894 shares of the Company, accounting for41.14% of total share capital. As for involving the arbitration case of “Agreement on the cooperation of urban renewal project of the updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen”, the above shares were judicially sealed on 27 September 2016 forcreditor’s application for property preservation. Assets frozen from 27 September 2016 to 26 September 2018. Details are set out in the announcement published at Juchao information website (www.cninfo.com.cn) on 27 October 2017.
(III) On 31 December 2015, the 88,750,047 shares held by Wuhan Zhongheng Group, are pledge to China Merchants Securities Assets Co., Ltd. with due date of 31 December 2016. Wuhan Zhongheng Group deferred the repurchase business day to 31 December 2017. And on 1 Feb. 2016, Wuhan Zhongheng Group pladge the 27,349,953 shares held to China Merchants Securities Assets Co., Ltd. with due date of 31 December 2016. and also deferring the repurchase business, same as the pledge release. Ended as the period-end, the pledge did not removed. Found more in notice released on juchao website (www.cninfo.com.cn) dated 5 July 2017
(IV) The Company received the notice about registering and investigating from China Securities Regulatory Commission on January 18, 2016, who decided to register and investigate the company on suspicion of illegal information disclosure. On September 18, 2016, the Company received the “Prior Notice of Administrative Penalty” ([2016] No.6) from Shenzhen Regulatory Bureau of China Securities Regulatory Commission. On December 22, 2016, the Company received the “Written Decision of Administrative Penalty”([2016] No. 7) from Shenzhen Regulatory Bureau of China Securities Regulatory Commission. See details on the “Notice on Receiving Written Decision of Administrative Penalty from CSRC” the company published at www.cninfo.com.cn on December 23, 2016. On January 5, 2017, the Company received the “Notice on Giving Public Censure and Punishment to Shenzhen Zhongheng Huafa Co., Ltd. and the Relevant Parties” from the Shenzhen Stock Exchange, see details on the notice published at
www.cninfo.com.cn on January 6, 2017.
(V) On March 21, 2014, Huafa Property and Shenzhen Jifang Investment Co., Ltd. (hereinafter referred to as "Jifang Investment") signed the "Shenzhen Housing Leasing Contract" and the "Supplemental Agreement on Leasing Contract", which were canceled on February 5, 2016. As Jifang Investment occupied the site, and defaulted rent, management fee and water and electricity bills in the long term, in order to safeguard the legitimate rights and interests, Huafa Property submitted a request for arbitration to Shenzhen Arbitration Commission on March 8, 2016, and received the (2016) SZCZ No. 346 ruling paper from Shenzhen Arbitration Commission in November 2016 which ruled Huafa Property won the lawsuit. See details on the notice published at www.cninfo.com.cn by the Company on November 8, 2016.
(vi) Mr. Li Yongping, the director and vice-president of the company, has applied for resigning the director, vice-president and the committee member of the special committee under the board of directors of the company due to the mandatory retirement age (60 years old), recommended by thecompany’s second largest shareholder, SEG (Hong Kong) Co., Ltd., thecompany’s first extraordinary general meeting of shareholders in 2017 considered and approved Mr. Zhang Guangliu to be the director of the company, and elected Mr. Zhang Guangliu as the vice-president of thecompany’s 9th Board of Directors by the 3rd extraordinary meeting of the board of directors of the company in 2017, see details on the relevant announcement the company issued at www.cninfo.com.cn on July 19, 2017.
(vii) Thecompany’s planning for major assets restructuring
The company was planning for major asset reorganization which involved the sale of the stock right of the wholly-owned subsidiary - Wuhan Hengfa Technology Co., Ltd. and the small land and plant located at Wuhan plant under the name of the Company, due to the uncertainties in relevant matters, the company's stock was suspended since the opening on May 31, 2017 in order to maintain the investor interests and avoid significant impact on thecompany’s share price. On June 22, 2017, the 4th meeting of the 9th session of the Board of Directors of the Company considered and approved the Proposal on the Consideration of Preplanning on Sale of Major Assets and the Summary and other proposals related to this transaction. On July 3, 2017, the company received the “Reorganization Inquiry Letter” (Non-permitted Reorganization Inquiry Letter No.[2017] 13, hereinafter referred to as “Inquiry Letter”) issued by the Shenzhen Stock Exchange, requiring the company to submit the written document before July 6, 2017. The company immediately organized relevant parties and intermediaries to implement and reply the questions involved in the Inquiry Letter term by term. As the relevant data and matters involved in the Inquiry Letter still needed further verification and improvement and also needed the intermediaries to issue the verification opinions, the company applied to the Shenzhen Stock Exchange for postponing the reply to the Inquiry Letter in order to sufficiently complete the reply and protect the legitimate rights and interests of all shareholders, after the questions concerning the Inquiry Letter being replied and approved by the Shenzhen Stock Exchange, the company would promptly announce and apply for resumption of stock in accordance with the relevant provisions
(viii) Changes in the ownership structure of controlling shareholders
Li Zhongqiu, the original shareholder of the controlling shareholder - Wuhan Zhongheng Group, transferred part of shares he held in Wuhan Zhongheng Group to Li Li, and Wuhan Henghui Investment and Consulting Co., Ltd. transferred all shares it held in Wuhan Zhongheng Group to Li Li, after the transfer, Li Zhongqiu held51% equity stake of Wuhan Zhongheng Group, and Li Li held49% equity stake of Wuhan Zhongheng Group, in the above natural person shareholders, Li Zhongqiu and Li Li have parent-child relationship and belong to concerted action person.
XVII. Significant event of subsidiary of the Company
□ Applicable√Not applicable
Section VI. Changes in Shares and Particulars about Shareholders I. Changes in Share Capital
1. Changes in Share Capital
In Share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Before the Change||Increase/Decrease in the Change (+, -)|||||After the Change||
||||||Capitalizat|||||
||||New|||||||
|||||Bonus|ion of||||Proportio|
||Amount|Proportion|shares|||Others|Subtotal|Amount||
||||issued|shares|public||||n|
||||||reserve|||||
|I. Restricted shares|0|0.00%|0|0|0|0|0|0|0.00%|
||283,161,2|||||||283,161,2||
|II. Unrestricted shares||100.00%|0|0|0|0|0||100.00%|
||27|||||||27||
||181,165,3|||||||181,165,3||
|1. RMB Ordinary shares||63.98%|0|0|0|0|0||63.98%|
||91|||||||91||
|2. Domestically listed|101,995,8|||||||101,995,8||
|||36.02%|0|0|0|0|0||36.02%|
|foreign shares|36|||||||36||
||283,161,2|||||||283,161,2||
|III. Total shares||100.00%|0|0|0|0|0||100.00%|
||27|||||||27||

Reasons for share changed
□Applicable√Not applicable
Approval of share changed
□ Applicable√Not applicable
Ownership transfer of share changed
□ Applicable√Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common shareholders of Company in latest year and period
□ Applicable√Not applicable
Other information necessary to disclose or need to disclosed under requirement from security regulators
□ Applicable√Not applicable
2. Changes of restricted shares
□ Applicable√Not applicable
II. Securities issuance and listing
□ Applicable√Not applicable
III. Amount of shareholders of the Company and particulars about shares holding
In Share
|||||
|-|-|-|-|
|Total common stock||Total preference shareholders||
||23,044||0|
|shareholders in reporting||with voting rights recovered at||

|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|period-end|||||end of reporting period (if|||||
||||||applicable) (found in note8)|||||
|Particulars about common shares held above 5% by shareholders or top ten common shareholders||||||||||
||||Total|||||Number of share pledged/frozen||
|||||||Amount||||
||||common|||||||
|||||||of|Amount of|||
||||sharehold|Changes in||||||
|||Proportion||||restricted|un-restricte|||
|Full name of|Nature of|||||||||
|||of shares|ers at|report||||||
|Shareholders|shareholder|||||common|d common|State of share|Amount|
|||held|the end of|period||||||
|||||||shares|shares held|||
||||report|||||||
|||||||held||||
||||period|||||||
|WuhanZhonghengGroup|Domesticnon-state-ownedlegal person|41.14%|116,489,894|0||0|116,489,894|Pledged|116,489,894|
|||||||||Frozen|116,489,894|
|SEG (HONGKONG) CO.,LTD.|Overseas legalperson|5.85%|16,569,560|0||0|16,569,560|Pledged|0|
|||||||||Frozen|0|
|GOOD HOPECORNERINVESTMENTS LTD|Overseas legalperson|4.49%|12,700,000||||12,700,000|Pledged|0|
|||||||||Frozen|0|
|ChangjiangSecuritiesBrokerage(Hong Kong)Co., Ltd.|Overseas legalperson|1.89%|5,355,249||||5,355,249|Pledged|0|
|||||||||Frozen|0|
|ChinaConstructionBankCorporation –Internetconnectionmedia flexiblemixed fund|Other|0.79%|2,233,878||||2,233,878|||
|Xu Dogdong|Domestic natureperson|0.60%|1,690,307||||1,690,307|||
|ChinaConstructionBankCorporation–Financingleading growth|Other|0.57%|1,611,254||||1,611,254|||

||||||||
|-|-|-|-|-|-|-|
|mix fund|||||||
|Zhou Hongbing|Domestic natureperson|0.43%|1,221,800|1,221,800|||
|Bank ofCommunications – FinancingIndustrialProsperitySecurity Fund|Other|0.41%|1,150,439|1,150,439|||
|Zhong Jiachao|Domestic natureperson|0.38%|1,068,500|1,068,500|||
|Strategy investors or general|||||||
|corporation comes top 10|||||||
|||N/A|||||
|shareholders due to rights issue (if|||||||
|applicable) (see note 3)|||||||
|||Among the top ten shareholders, Wuhan Zhongheng Group neither bears associated|||||
|||relationship with other shareholders, nor belongs to the consistent actor that are prescribed in|||||
|Explanation on associated||Measures for the Administration of Disclosure of Shareholder Equity Changes of Listed|||||
|relationship among the aforesaid||Companies. The Company neither knew whether there exists associated relationship among|||||
|shareholders||the other tradable shareholders, nor they belong to consistent actors that are prescribed in|||||
|||Measures for the Administration of Disclosure of Shareholder Equity Changes of Listed|||||
|||Companies.|||||
|Particular about top ten shareholders with un-restrict common shares held|||||||
|||Amount of un-restrict common shares held at|||Type of shares||
|Shareholders’ name|||||||
|||Period-end|||Type|Amount|
|Wuhan Zhongheng Group||116,489,894|||RMB common||
|||||||116,489,894|
||||||share||
|SEG (HONG KONG) CO., LTD.||16,569,560|||Domestically||
||||||listed foreign|16,569,560|
||||||shares||
|GOOD HOPE CORNERINVESTMENTS LTD||12,700,000|||Domestically||
||||||listed foreign|12,700,000|
||||||shares||
|Changjiang Securities Brokerage(Hong Kong) Co., Ltd.||5,355,249|||Domestically||
||||||listed foreign|5,355,249|
||||||shares||
|China Construction BankCorporation – Internet connectionmedia flexible mixed fund||2,233,878|||||
||||||RMB common||
|||||||2,233,878|
||||||share||
|Xu Dongdong||1,690,307|||RMB common|1,690,307|

|||||
|-|-|-|-|
|||share||
|China Construction BankCorporation –Financing leadinggrowth mix fund|1,611,254|||
|||RMB common||
||||1,611,254|
|||share||
|Zhou Hongbing|1,221,800|RMB common||
||||1,221,800|
|||share||
|Bank of Communications –Financing Industrial ProsperitySecurity Fund|1,150,439|||
|||RMB common||
||||1,150,439|
|||share||
|Zhong Jiachao|1,068,500|RMB common||
||||1,068,500|
|||share||
||Among the top ten unrestricted shareholders, the Company neither knew whether there exists|||
|Expiation on associated relationship||||
||associated relationship among the other tradable shareholders, nor they belong to consistent|||
|or consistent actors within the top||||
||actors that are prescribed in Measures for the Administration of Disclosure of Shareholder|||
|10 un-restrict common shareholders||||
||Equity Changes of Listed Companies. Among the top ten shareholders, Wuhan Zhongheng|||
|and between top 10 un-restrict||||
||Group neither bears associated relationship with other shareholders, nor belongs to the|||
|common shareholders and top 10||||
||consistent actor that are prescribed in Measures for the Administration of Disclosure of|||
|shareholders||||
||Shareholder Equity Changes of Listed Companies.|||
|Explanation on top 10 common||||
|shareholders involving margin|N/A|||
|business (if applicable) (see note 4)||||

Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-back agreement dealing in reporting period
□ Yes√ No
The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have no buy-back agreement dealing in reporting period.
IV. Change of controlling shareholder or actual controller
Changes of controlling shareholders in reporting period
□ Applicable√Not applicable
The Company had no changes of controlling shareholders in reporting period
Changes of actual controller in reporting period
□ Applicable√Not applicable
No changes of actual controllers for the Company in reporting period.
Section VII. Preferred Stock
□ Applicable√Not applicable
The Company had no preferred stock in the Period.
Section VIII. Particulars about Directors, Supervisors and Senior Executives
I. Changes of shares held by directors, supervisors and senior executives
□ Applicable√ Not applicable
Found more in annual report 2016 for the changes of shares held by directors, supervisors and senior executives
II. Changes of directors, supervisors and senior executives
√ Applicable□ Not applicable
||||||
|-|-|-|-|-|
|Name|Title|Type|Date|Reasons|
||Director, deputy||||
|Li Yongping||Leave the office|2017-07-18|Reaches the mandatory age for retirement|
||president||||
||Director, deputy||||
|Zhang Guangliu||Election|2017-07-18|Election|
||president||||

Section IX Corporate Bond
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date when semi-annual report approved for released or fail to cash in full on due
No
Section X. Financial Report
I. Audit report
Whether the semi-annual report was audited or not
□ Yes√ No
The financial report of this semi-annual report was unaudited
II．Financial statement
Currency used in note of financial statement is RMB (Yuan)
1. Consolidated Balance Sheet
Prepared by SHENZHEN ZHONGHENG HUAFA CO., LTD
2017-06-30
In RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current assets:|||
|Monetary funds|66,352,098.10|93,332,709.81|
|Settlement provisions|||
|Capital lent|||
|Financial assets measured by fair|||
|value and with variation reckoned into|||
|current gains/losses|||
|Derivative financial liability|||
||38,299,308.80|52,663,100.89|
|Notes receivable|||
||223,831,614.45|139,808,058.20|
|Accounts receivable|||
|Accounts paid in advance|5,571,250.65|13,075,721.93|
|Insurance receivable|||
|Reinsurance receivables|||
|Contract reserve of reinsurance|||
|receivable|||
|Interest receivable|||
|Dividend receivable|||
|Other receivables|17,763,398.92|3,934,376.89|
|Purchase restituted finance asset|||
|Inventories|52,166,592.59|46,902,384.80|
|Divided into assets held for sale|||

||||
|-|-|-|
|Non-current asset due within one|1,741.47|12,191.49|
|year|||
|Other current assets|||
|Total current assets|403,986,004.98|349,728,544.01|
|Non-current assets:|||
|Loans and payments on behalf|||
|Finance asset available for sales|||
|Held-to-maturity investment|||
|Long-term account receivable|||
|Long-term equity investment|||
|Investment real estate|53,277,285.84|54,145,225.02|
|Fix assets|79,839,263.86|81,544,707.02|
|Construction in progress|654,356.00|654,356.00|
|Engineering material|||
|Disposal of fixed asset|92,857,471.69|92,857,471.69|
|Productive biological asset|||
|Oil and gas asset|||
|Intangible assets|44,167,184.84|44,878,095.77|
|Expense on Research and|||
|Development|||
|Goodwill|||
|Long-term expenses to be|166,666.57|191,666.59|
|apportioned|||
|Deferred income tax asset|8,452,119.95|8,475,476.30|
|Other non-current asset|||
|Total non-current asset|279,414,348.75|282,746,998.39|
|Total assets|683,400,353.73|632,475,542.40|
|Current liabilities:|||
|Short-term loans|192,108,516.60|181,210,467.81|
|Loan from central bank|||
|Absorbing deposit and interbank|||
|deposit|||
|Capital borrowed|||
|Financial liability measured by fair|||
|value and with variation reckoned into|||
|current gains/losses|||
|Derivative financial liability|||
|Notes payable|8,373,065.43|16,714,584.01|

||||
|-|-|-|
|Accounts payable|116,266,306.30|73,714,424.77|
|Accounts received in advance|1,678,293.04|48,846.60|
|Selling financial asset of|||
|repurchase|||
|Commission charge and|||
|commission payable|||
|Wage payable|3,775,280.25|4,542,531.22|
|Taxes payable|15,534,826.76|16,768,030.70|
|Interest payable|185,285.99|123,641.69|
|Dividend payable|||
|Other accounts payable|21,029,326.92|17,050,035.16|
|Reinsurance payables|||
|Insurance contract reserve|||
|Security trading of agency|||
|Security sales of agency|||
|Divided into liability held for sale|||
|Non-current liabilities due within 1|||
|year|||
|Other current liabilities|||
|Total current liabilities|358,950,901.29|310,172,561.96|
|Non-current liabilities:|||
|Long-term loans|||
|Bonds payable|||
|Including: preferred stock|||
|Perpetual capital|||
|securities|||
|Long-term account payable|||
|Long-term wages payable|||
|Special accounts payable|||
|Projected liabilities|2,604,411.81|2,604,411.81|
|Deferred income|||
|Deferred income tax liabilities|||
|Other non-current liabilities|||
|Total non-current liabilities|2,604,411.81|2,604,411.81|
|Total liabilities|361,555,313.10|312,776,973.77|
|Owner’s equity:|||
|Share capital|283,161,227.00|283,161,227.00|

||||
|-|-|-|
|Other equity instrument|||
|Including: preferred stock|||
|Perpetual capital|||
|securities|||
|Capital public reserve|146,587,271.50|146,587,271.50|
|Less: Inventory shares|||
|Other comprehensive income|||
|Reasonable reserve|||
|Surplus public reserve|77,391,593.25|77,391,593.25|
|Provision of general risk|||
|Retained profit|-185,295,051.12|-187,441,523.12|
|Total owner’s equity attributable to|321,845,040.63|319,698,568.63|
|parent company|||
|Minority interests|||
|Total owner’s equity|321,845,040.63|319,698,568.63|
|Total liabilities and owner’s equity|683,400,353.73|632,475,542.40|

 Legal representative: Li Zhongqiu Person in charge of accounting works: Yang Bin Person in charge of accounting institution: Wu Aijie
2. Balance Sheet of Parent Company
In RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current assets:|||
||12,014,665.36|10,375,152.87|
|Monetary funds|||
|Financial assets measured by fair|||
|value and with variation reckoned into|||
|current gains/losses|||
|Derivative financial liability|||
|Notes receivable|||
|Accounts receivable|||
|Account paid in advance|2,500,000.00|2,500,000.00|
|Interest receivable|||
|Dividends receivable|||
|Other receivables|112,395,792.64|114,067,051.57|
|Inventories|14,806.50|14,806.50|

||||
|-|-|-|
|Divided into assets held for sale|||
|Non-current assets maturing within|||
|one year|||
|Other current assets|||
|Total current assets|126,925,264.50|126,957,010.94|
|Non-current assets:|||
|Available-for-sale financial assets|||
|Held-to-maturity investments|||
|Long-term receivables|||
|Long-term equity investment|186,608,900.00|186,608,900.00|
|Investment real estate|28,189,106.32|28,796,525.38|
|Fix assets|5,499,002.42|6,491,983.71|
|Construction in progress|654,356.00|654,356.00|
|Project materials|||
|Disposal of fixed assets|92,857,471.69|92,857,471.69|
|Productive biological assets|||
|Oil and natural gas assets|||
|Intangible assets|4,952,309.97|4,988,546.40|
|Research and development costs|||
|Goodwill|||
|Long-term deferred expenses|166,666.57|191,666.59|
|Deferred income tax assets|9,194,186.97|9,217,543.32|
|Other non-current assets|||
|Total non-current assets|328,121,999.94|329,806,993.09|
|Total assets|455,047,264.44|456,764,004.03|
|Current liabilities:|||
|Short-term borrowings|120,000,000.00|120,000,000.00|
|Financial liability measured by fair|||
|value and with variation reckoned into|||
|current gains/losses|||
|Derivative financial liability|||
|Notes payable|||
|Accounts payable|9,740,367.33|10,745,840.16|
|Accounts received in advance|1,353,927.00|44,162.00|
|Wage payable|891,561.16|857,735.20|

||||
|-|-|-|
|Taxes payable|9,642,210.73|10,094,737.11|
|Interest payable|||
|Dividend payable|||
|Other accounts payable|11,942,971.48|13,383,939.40|
|Divided into liability held for sale|||
|Non-current liabilities due within 1|||
|year|||
|Other current liabilities|||
|Total current liabilities|153,571,037.70|155,126,413.87|
|Non-current liabilities:|||
|Long-term loans|||
|Bonds payable|||
|Including: preferred stock|||
|Perpetual capital|||
|securities|||
|Long-term account payable|||
|Long-term wages payable|||
|Special accounts payable|||
|Projected liabilities|2,604,411.81|2,604,411.81|
|Deferred income|||
|Deferred income tax liabilities|||
|Other non-current liabilities|||
|Total non-current liabilities|2,604,411.81|2,604,411.81|
|Total liabilities|156,175,449.51|157,730,825.68|
|Owners’ equity:|||
|Share capita|283,161,227.00|283,161,227.00|
|Other equity instrument|||
|Including: preferred stock|||
|Perpetual capital|||
|securities|||
|Capital public reserve|146,587,271.50|146,587,271.50|
|Less: Inventory shares|||
|Other comprehensive income|||
|Reasonable reserve|||
|Surplus reserve|77,391,593.25|77,391,593.25|

||||
|-|-|-|
|Retained profit|-208,268,276.82|-208,106,913.40|
|Total owner’s equity|298,871,814.93|299,033,178.35|
|Total liabilities and owner’s equity|455,047,264.44|456,764,004.03|

 3. Consolidated Profit Statement
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|I. Total operating income|439,480,144.17|309,538,525.56|
|Including: Operating income|439,480,144.17|309,538,525.56|
|Interest income|||
|Insurance gained|||
|Commission charge and commission|||
|income|||
|II. Total operating cost|437,502,286.20|301,336,765.71|
|Including: Operating cost|398,913,925.08|264,288,398.24|
|Interest expense|||
|Commission charge and commission|||
|expense|||
|Cash surrender value|||
|Net amount of expense of|||
|compensation|||
|Net amount of withdrawal of|||
|insurance contract reserve|||
|Bonus expense of guarantee slip|||
|Reinsurance expense|||
|Taxes and surcharge|2,317,887.45|2,156,369.16|
|Sales expenses|7,363,051.86|5,283,735.71|
|Administration expenses|24,085,956.74|27,295,883.47|
|Financial expenses|4,914,890.46|2,312,379.13|
|Losses of devaluation of asset|-93,425.39||
|Add: Changing income of fair|||
|value(Loss is listed with “-”)|||
|Investment income (Loss is listed|||
|with “-”)|||
|Including: Investment income|||
|on affiliated company and joint venture|||

||||
|-|-|-|
|Exchange income (Loss is|||
|listed with “-”)|||
|Other income|||
|III. Operating profit (Loss is listed with|||
||1,977,857.97|8,201,759.85|
|“-”)|||
|Add: Non-operating income|927,283.49|1,518,636.51|
|Including: Disposal gains of|||
||1,549.73|116,007.01|
|non-current asset|||
|Less: Non-operating expense|34,922.55|63,225.68|
|Including: Disposal loss of|||
||34,871.67|18,924.00|
|non-current asset|||
|IV. Total Profit (Loss is listed with “-”)|2,870,218.91|9,657,170.68|
|Less: Income tax expense|723,746.91|2,384,214.46|
|V. Net profit (Net loss is listed with “-”)|2,146,472.00|7,272,956.22|
|Net profit attributable to owner’s of|||
||2,146,472.00|7,272,956.22|
|parent company|||
|Minority shareholders’ gains and|||
|losses|||
|VI. Net after-tax of other comprehensive|||
|income|||
|Net after-tax of other comprehensive|||
|income attributable to owners of parent|||
|company|||
|(I) Other comprehensive income|||
|items which will not be reclassified|||
|subsequently to profit of loss|||
|1. Changes as a result of|||
|re-measurement of net defined benefit|||
|plan liability or asset|||
|2. Share of the other|||
|comprehensive income of the investee|||
|accounted for using equity method which|||
|will not be reclassified subsequently to|||
|profit and loss|||
|(II) Other comprehensive income|||
|items which will be reclassified|||
|subsequently to profit or loss|||
|1. Share of the other|||
|comprehensive income of the investee|||

||||
|-|-|-|
|accounted for using equity method which|||
|will be reclassified subsequently to profit|||
|or loss|||
|2. Gains or losses arising|||
|from changes in fair value of|||
|available-for-sale financial assets|||
|3. Gains or losses arising|||
|from reclassification of held-to-maturity|||
|investment as available-for-sale financial|||
|assets|||
|4. The effect hedging portion|||
|of gains or losses arising from cash flow|||
|hedging instruments|||
|5. Translation differences|||
|arising on translation of foreign currency|||
|financial statements|||
|6. Other|||
|Net after-tax of other comprehensive|||
|income attributable to minority|||
|shareholders|||
|VII. Total comprehensive income|2,146,472.00|7,272,956.22|
|Total comprehensive income|||
||2,146,472.00|7,272,956.22|
|attributable to owners of parent Company|||
|Total comprehensive income|||
|attributable to minority shareholders|||
|VIII. Earnings per share:|||
|(i) Basic earnings per share|0.0076|0.0257|
|(ii) Diluted earnings per share|0.0076|0.0257|

 Enterprise combine under the same control in the Period, the combined party realized net profit of 0 Yuan before combination, and realized 0 Yuan at last period for combined party
Legal representative: Li Zhongqiu Person in charge of accounting works: Yang Bin Person in charge of accounting institution: Wu Aijie
4. Profit Statement of Parent Company
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|I. Operating income|19,368,319.99|21,050,313.65|
|Less: Operating cost|2,104,257.94|2,177,884.29|

||||
|-|-|-|
|Taxes and surcharge|1,295,896.25|1,097,952.84|
|Sales expenses|||
|Administration expenses|13,448,031.17|15,433,330.85|
|Financial expenses|2,847,630.46|5,221,263.90|
|Losses of devaluation of asset|-93,425.39||
|Add: Changing income of fair|||
|value(Loss is listed with “-”)|||
|Investment income (Loss is|||
|listed with “-”)|||
|Including: Investment income|||
|on affiliated company and joint venture|||
|Other income|||
|II. Operating profit (Loss is listed|||
||-234,070.44|-2,880,118.23|
|with “-”)|||
|Add: Non-operating income|50,111.89|41,539.00|
|Including: Disposal gains of|||
||1,278.00||
|non-current asset|||
|Less: Non-operating expense|50.88|18,924.00|
|Including: Disposal loss of|||
|||18,924.00|
|non-current asset|||
|III. Total Profit (Loss is listed with|||
||-184,009.43|-2,857,503.23|
|“-”)|||
|Less: Income tax expense|-22,646.01|-714,375.81|
|IV. Net profit (Net loss is listed with|||
||-161,363.42|-2,143,127.42|
|“-”)|||
|V. Net after-tax of other comprehensive|||
|income|||
|(I) Other comprehensive income|||
|items which will not be reclassified|||
|subsequently to profit of loss|||
|1. Changes as a result of|||
|re-measurement of net defined benefit|||
|plan liability or asset|||
|2. Share of the other|||
|comprehensive income of the investee|||
|accounted for using equity method|||
|which will not be reclassified|||
|subsequently to profit and loss|||

||||
|-|-|-|
|(II) Other comprehensive income|||
|items which will be reclassified|||
|subsequently to profit or loss|||
|1. Share of the other|||
|comprehensive income of the investee|||
|accounted for using equity method|||
|which will be reclassified subsequently|||
|to profit or loss|||
|2. Gains or losses arising|||
|from changes in fair value of|||
|available-for-sale financial assets|||
|3. Gains or losses arising|||
|from reclassification of held-to-maturity|||
|investment as available-for-sale|||
|financial assets|||
|4. The effect hedging|||
|portion of gains or losses arising from|||
|cash flow hedging instruments|||
|5. Translation differences|||
|arising on translation of foreign|||
|currency financial statements|||
|6. Other|||
|VI. Total comprehensive income|-161,363.42|-2,143,127.42|
|VII. Earnings per share:|||
|(i) Basic earnings per share|||
|(ii) Diluted earnings per share|||

5. Consolidated Cash Flow Statement
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|I. Cash flows arising from operating|||
|activities:|||
|Cash received from selling|||
|commodities and providing labor|245,041,670.12|178,719,535.63|
|services|||
|Net increase of customer deposit|||
|and interbank deposit|||
|Net increase of loan from central|||
|bank|||

||||
|-|-|-|
|Net increase of capital borrowed|||
|from other financial institution|||
|Cash received from original|||
|insurance contract fee|||
|Net cash received from reinsurance|||
|business|||
|Net increase of insured savings and|||
|investment|||
|Net increase of amount from|||
|disposal financial assets that measured|||
|by fair value and with variation|||
|reckoned into current gains/losses|||
|Cash received from interest,|||
|commission charge and commission|||
|Net increase of capital borrowed|||
|Net increase of returned business|||
|capital|||
|Write-back of tax received|||
|Other cash received concerning|||
||1,905,715.83|6,735,237.88|
|operating activities|||
|Subtotal of cash inflow arising from|||
||246,947,385.95|185,454,773.51|
|operating activities|||
|Cash paid for purchasing|||
|commodities and receiving labor|216,567,324.72|130,584,597.67|
|service|||
|Net increase of customer loans and|||
|advances|||
|Net increase of deposits in central|||
|bank and interbank|||
|Cash paid for original insurance|||
|contract compensation|||
|Cash paid for interest, commission|||
|charge and commission|||
|Cash paid for bonus of guarantee|||
|slip|||
|Cash paid to/for staff and workers|36,300,498.57|30,682,437.45|
|Taxes paid|9,434,091.06|14,888,534.34|
|Other cash paid concerning|||
||20,042,838.52|34,723,553.62|
|operating activities|||

||||
|-|-|-|
|Subtotal of cash outflow arising from|||
||282,344,752.87|210,879,123.08|
|operating activities|||
|Net cash flows arising from operating|||
||-35,397,366.92|-25,424,349.57|
|activities|||
|II. Cash flows arising from investing|||
|activities:|||
|Cash received from recovering|||
|investment|||
|Cash received from investment|||
|income|||
|Net cash received from disposal of|||
|fixed, intangible and other long-term|75,901.58|158,656.34|
|assets|||
|Net cash received from disposal of|||
|subsidiaries and other units|||
|Other cash received concerning|||
|investing activities|||
|Subtotal of cash inflow from investing|||
||75,901.58|158,656.34|
|activities|||
|Cash paid for purchasing fixed,|||
||3,979,604.31|3,949,242.30|
|intangible and other long-term assets|||
|Cash paid for investment|||
|Net increase of mortgaged loans|||
|Net cash received from|||
|subsidiaries and other units obtained|||
|Other cash paid concerning|||
|investing activities|||
|Subtotal of cash outflow from investing|||
||3,979,604.31|3,949,242.30|
|activities|||
|Net cash flows arising from investing|||
||-3,903,702.73|-3,790,585.96|
|activities|||
|III. Cash flows arising from financing|||
|activities|||
|Cash received from absorbing|||
|investment|||
|Including: Cash received from|||
|absorbing minority shareholders’|||
|investment by subsidiaries|||

||||
|-|-|-|
|Cash received from loans|99,600,311.57|57,020,825.00|
|Cash received from issuing bonds|||
|Other cash received concerning|||
|financing activities|||
|Subtotal of cash inflow from financing|||
||99,600,311.57|57,020,825.00|
|activities|||
|Cash paid for settling debts|87,960,209.96|595,950,388.73|
|Cash paid for dividend and profit|||
||4,119,482.39|5,330,803.55|
|distributing or interest paying|||
|Including: Dividend and profit of|||
|minority shareholder paid by|||
|subsidiaries|||
|Other cash paid concerning|||
|financing activities|||
|Subtotal of cash outflow from financing|||
||92,079,692.35|601,281,192.28|
|activities|||
|Net cash flows arising from financing|||
||7,520,619.22|-544,260,367.28|
|activities|||
|IV. Influence on cash and cash|||
|equivalents due to fluctuation in|-390,104.21|-15,237.48|
|exchange rate|||
|V. Net increase of cash and cash|||
||-32,170,554.64|-573,490,540.29|
|equivalents|||
|Add: Balance of cash and cash|||
||104,015,312.97|632,846,956.16|
|equivalents at the period-begin|||
|VI. Balance of cash and cash|||
||71,844,758.33|59,356,415.87|
|equivalents at the period-end|||

6. Cash Flow Statement of Parent Company
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|I. Cash flows arising from operating|||
|activities:|||
|Cash received from selling|||
|commodities and providing labor|10,850,641.39|11,823,161.27|
|services|||
|Write-back of tax received|||
|Other cash received concerning|37,579,467.16|31,580,866.37|

||||
|-|-|-|
|operating activities|||
|Subtotal of cash inflow arising from|||
||48,430,108.55|43,404,027.64|
|operating activities|||
|Cash paid for purchasing|||
|commodities and receiving labor|||
|service|||
|Cash paid to/for staff and workers|2,524,734.01|2,433,244.76|
|Taxes paid|2,236,783.63|10,242,618.35|
|Other cash paid concerning|||
||37,794,518.68|39,784,929.43|
|operating activities|||
|Subtotal of cash outflow arising from|||
||42,556,036.32|52,460,792.54|
|operating activities|||
|Net cash flows arising from operating|||
||5,874,072.23|-9,056,764.90|
|activities|||
|II. Cash flows arising from investing|||
|activities:|||
|Cash received from recovering|||
|investment|||
|Cash received from investment|||
|income|||
|Net cash received from disposal of|||
|fixed, intangible and other long-term||576.00|
|assets|||
|Net cash received from disposal of|||
|subsidiaries and other units|||
|Other cash received concerning|||
|investing activities|||
|Subtotal of cash inflow from investing|||
|||576.00|
|activities|||
|Cash paid for purchasing fixed,|||
||1,377,592.31|2,765,792.00|
|intangible and other long-term assets|||
|Cash paid for investment|||
|Net cash received from|||
|subsidiaries and other units|||
|Other cash paid concerning|||
|investing activities|||
|Subtotal of cash outflow from investing|||
||1,377,592.31|2,765,792.00|
|activities|||

||||
|-|-|-|
|Net cash flows arising from investing|||
||-1,377,592.31|-2,765,216.00|
|activities|||
|III. Cash flows arising from financing|||
|activities|||
|Cash received from absorbing|||
|investment|||
|Cash received from loans|15,000,000.00|15,000,000.00|
|Cash received from issuing bonds|||
|Other cash received concerning|||
|financing activities|||
|Subtotal of cash inflow from financing|||
||15,000,000.00|15,000,000.00|
|activities|||
|Cash paid for settling debts|15,000,000.00|518,550,000.00|
|Cash paid for dividend and profit|||
||2,857,775.00|4,278,638.49|
|distributing or interest paying|||
|Other cash paid concerning|||
|financing activities|||
|Subtotal of cash outflow from financing|||
||17,857,775.00|522,828,638.49|
|activities|||
|Net cash flows arising from financing|||
||-2,857,775.00|-507,828,638.49|
|activities|||
|IV. Influence on cash and cash|||
|equivalents due to fluctuation in|807.57|90.95|
|exchange rate|||
|V. Net increase of cash and cash|||
||1,639,512.49|-519,650,528.44|
|equivalents|||
|Add: Balance of cash and cash|||
||10,375,152.87|524,937,734.32|
|equivalents at the period -begin|||
|VI. Balance of cash and cash|||
||12,014,665.36|5,287,205.88|
|equivalents at the period -end|||

7. Statement of Changes inOwners’ Equity (Consolidated)
This Period
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Current period|||||||||||
||Owners’ equity attributable to parent company|||||||||Minorit|Total|
|Item||||||||||||
||Share|Other equity|Capital|Less:|Other|Reason|Surplus|Provisio|Retaine|y|owners’|
||capital|instrument|reserve|Invento|compre|able|reserve|n of|d profit|interests|equity|

||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||Perpet|||ry|hensive|reserve||generalrisk|||
||||ual|||shares|income||||||
|||Prefer|||||||||||
||||capita||||||||||
|||red||Other|||||||||
||||l||||||||||
|||stock|||||||||||
||||securi||||||||||
||||ties||||||||||
||283,16||||||||||-187,44||
|I. Balance at the|||||146,587||||77,391,|||319,698|
||1,227.||||||||||1,523.1||
|end of the last year|||||,271.50||||593.25|||,568.63|
||00||||||||||2||
|Add:|||||||||||||
|Changes of|||||||||||||
|accounting policy|||||||||||||
|Error|||||||||||||
|correction of the|||||||||||||
|last period|||||||||||||
|Enterprise|||||||||||||
|combine under|||||||||||||
|the same control|||||||||||||
|Other|||||||||||||
||283,16||||||||||-187,44||
|II. Balance at the|||||146,587||||77,391,|||319,698|
|beginning of this|1,227.||||||||||1,523.1||
||||||,271.50||||593.25|||,568.63|
|year|00||||||||||2||
|III. Increase/|||||||||||||
||||||||||||2,146,4|2,146,4|
|Decrease in this|||||||||||||
|year (Decrease is|||||||||||72.00|72.00|
|listed with “-”)|||||||||||||
|(i) Total|||||||||||2,146,4|2,146,4|
|comprehensive|||||||||||||
||||||||||||72.00|72.00|
|income|||||||||||||
|(ii) Owners’|||||||||||||
|devoted and|||||||||||||
|decreased capital|||||||||||||
|1.Common shares|||||||||||||
|invested by|||||||||||||
|shareholders|||||||||||||
|2. Capital invested|||||||||||||
|by holders of other|||||||||||||
|equity instruments|||||||||||||
|3. Amount|||||||||||||
|reckoned into|||||||||||||
|owners equity with|||||||||||||
|share-based|||||||||||||
|payment|||||||||||||
|4. Other|||||||||||||
|(III) Profit|||||||||||||
|distribution|||||||||||||
|1. Withdrawal of|||||||||||||

|||||||
|-|-|-|-|-|-|
|surplus reserves||||||
|2. Withdrawal of||||||
|general risk||||||
|provisions||||||
|3. Distribution for||||||
|owners (or||||||
|shareholders)||||||
|4. Other||||||
|(IV) Carrying||||||
|forward internal||||||
|owners’ equity||||||
|1. Capital reserves||||||
|conversed to||||||
|capital (share||||||
|capital)||||||
|2. Surplus reserves||||||
|conversed to||||||
|capital (share||||||
|capital)||||||
|3. Remedying loss||||||
|with surplus||||||
|reserve||||||
|4. Other||||||
|(V) Reasonable||||||
|reserve||||||
|1. Withdrawal in||||||
|the report period||||||
|2. Usage in the||||||
|report period||||||
|(VI)Others||||||
||283,16|||-185,29|321,845,040.63|
|IV. Balance at the||146,587|77,391,|||
|end of the report|1,227.|||5,051.1||
|||,271.50|593.25|||
|period|00|||2||

Last Period
In RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Last Period|||||||||||||
||Owners’ equity attributable to parent company|||||||||||||
|||Other equity||||||||||||
|||instrument||||||||||Minorit||
|||||||Less:|Other|||Provisio|||Total|
|Item||||||||||||||
||||Perpet|||||Reason||||y||
||Share||||Capital|Invento|compre||Surplus|n of|Retaine||owners’|
||capital|Prefer|ual||reserve|ry|hensive|able|reserve|general|d profit|interest|equity|
|||red|capita|Other||||reserve||||s||
|||||||shares|income|||risk||||
|||stock|l|||||||||||
||||securi|||||||||||

||||||||
|-|-|-|-|-|-|-|
|||ties|||||
||283,16||||-195,42||
||||146,283|77,391,||311,406|
|I. Balance at the|||||||
||1,227.||||9,900.9||
|end of the last year|||,642.90|593.25||,562.20|
||00||||5||
|Add:|||||||
|Changes of|||||||
|accounting policy|||||||
|Error|||||2,530,6|2,530,6|
|correction of the|||||||
||||||67.50|67.50|
|last period|||||||
|Enterprise|||||||
|combine under the|||||||
|same control|||||||
|Other|||||||
||283,16||||-192,89||
|II. Balance at the|||146,283|77,391,||313,937|
|beginning of this|1,227.||||9,233.4||
||||,642.90|593.25||,229.70|
|year|00||||5||
|III. Increase/|||||||
||||303,628||5,457,7|5,761,3|
|Decrease in this|||||||
|year (Decrease is|||.60||10.33|38.93|
|listed with “-”)|||||||
|(i) Total|||||5,457,7|5,457,7|
|comprehensive|||||||
||||||10.33|10.33|
|income|||||||
|(ii) Owners’|||303,628|||303,628|
|devoted and|||||||
||||.60|||.60|
|decreased capital|||||||
|1.Common shares|||||||
|invested by|||||||
|shareholders|||||||
|2. Capital invested|||||||
|by holders of other|||||||
|equity instruments|||||||
|3. Amount|||||||
|reckoned into|||||||
|owners equity with|||||||
|share-based|||||||
|payment|||||||
||||303,628|||303,628|
|4 Other|||||||
||||.60|||.60|
|(III) Profit|||||||
|distribution|||||||
|1. Withdrawal of|||||||
|surplus reserves|||||||
|2. Withdrawal of|||||||
|general risk|||||||
|provisions|||||||

|||||||
|-|-|-|-|-|-|
|3. Distribution for||||||
|owners (or||||||
|shareholders)||||||
|4. Other||||||
|(IV) Carrying||||||
|forward internal||||||
|owners’ equity||||||
|1. Capital reserves||||||
|conversed to||||||
|capital (share||||||
|capital)||||||
|2. Surplus reserves||||||
|conversed to||||||
|capital (share||||||
|capital)||||||
|3. Remedying loss||||||
|with surplus||||||
|reserve||||||
|4. Other||||||
|(V) Reasonable||||||
|reserve||||||
|1. Withdrawal in||||||
|the report period||||||
|2. Usage in the||||||
|report period||||||
|(VI)Others||||||
||283,16|||-187,44||
|IV. Balance at the||146,587|77,391,||319,698|
|end of the report|1,227.|||1,523.1||
|||,271.50|593.25||,568.63|
|period|00|||2||

8. Statement of Changes inOwners’ Equity (Parent Company)
Current amount
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Current period|||||||||||
|||Other equity instrument||||||||||
||||Perpetu||||Other|||||
|||||||Less:|||||Total|
|Item|Share||al||Capital||comprehe|Reasonab|Surplus|Retaine||
|||Preferre||||Inventory|||||owners’|
||capital||capital|Other|reserve||nsive|le reserve|reserve|d profit||
|||d stock||||shares|||||equity|
||||securiti||||income|||||
||||es|||||||||
||283,161,||||146,587,2||||77,391,59|-208,10|299,033,1|
|I. Balance at the||||||||||||
|end of the last year|227.00||||71.50||||3.25|6,913.4|78.35|

|||||||
|-|-|-|-|-|-|
|||||0||
|Add: Changes||||||
|of accounting||||||
|policy||||||
|Error||||||
|correction of the||||||
|last period||||||
|Other||||||
|||||-208,10||
|II. Balance at the|283,161,|146,587,2|77,391,59||299,033,1|
|beginning of this||||6,913.4||
||227.00|71.50|3.25||78.35|
|year||||0||
|III. Increase/||||||
|||||-161,36|-161,363.|
|Decrease in this||||||
|year (Decrease is||||3.42|42|
|listed with “-”)||||||
|(i) Total||||-161,36|-161,363.|
|comprehensive||||||
|||||3.42|42|
|income||||||
|(ii) Owners’||||||
|devoted and||||||
|decreased capital||||||
|1.Common shares||||||
|invested by||||||
|shareholders||||||
|2. Capital invested||||||
|by holders of other||||||
|equity instruments||||||
|3. Amount||||||
|reckoned into||||||
|owners equity with||||||
|share-based||||||
|payment||||||
|4. Other||||||
|(III) Profit||||||
|distribution||||||
|1. Withdrawal of||||||
|surplus reserves||||||
|2. Distribution for||||||
|owners (or||||||
|shareholders)||||||
|3. Other||||||
|(IV) Carrying||||||
|forward internal||||||
|owners’ equity||||||
|1. Capital reserves||||||
|conversed to||||||
|capital (share||||||
|capital)||||||

|||||||
|-|-|-|-|-|-|
|2. Surplus reserves||||||
|conversed to||||||
|capital (share||||||
|capital)||||||
|3. Remedying loss||||||
|with surplus||||||
|reserve||||||
|4. Other||||||
|(V) Reasonable||||||
|reserve||||||
|1. Withdrawal in||||||
|the report period||||||
|2. Usage in the||||||
|report period||||||
|(VI)Others||||||
|||||-208,26|298,871,814.93|
|IV. Balance at the|283,161,|146,587,2|77,391,59|||
|end of the report||||8,276.8||
||227.00|71.50|3.25|||
|period||||2||

Amount last period
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Last period|||||||||||
|||Other equity instrument||||||||||
||||Perpetu||||Other|||||
|||||||Less:|||||Total|
|Item|Share||al||Capital||comprehe|Reasonab|Surplus|Retaine||
|||Preferre||||Inventory|||||owners’|
||capital||capital|Other|reserve||nsive|le reserve|reserve|d profit||
|||d stock||||shares|||||equity|
||||securiti||||income|||||
||||es|||||||||
|||||||||||-209,42||
||283,161,||||146,283,6||||77,391,59||297,415,7|
|I. Balance at the||||||||||||
|||||||||||0,732.2||
|end of the last year|227.00||||42.90||||3.25||30.87|
|||||||||||8||
|Add: Changes||||||||||||
|of accounting||||||||||||
|policy||||||||||||
|Error||||||||||||
|||||||||||2,530,6|2,530,667|
|correction of the||||||||||||
|||||||||||67.50|.50|
|last period||||||||||||
|Other||||||||||||
|||||||||||-206,89||
|II. Balance at the|283,161,||||146,283,6||||77,391,59||299,946,3|
|beginning of this||||||||||0,064.7||
||227.00||||42.90||||3.25||98.37|
|year||||||||||8||
|III. Increase/||||||||||||
||||||303,628.6|||||-1,216,8|-913,220.|
|Decrease in this||||||||||||

|||||
|-|-|-|-|
|year (Decrease is|0|48.62|02|
|listed with “-”)||||
|(i) Total||-1,216,8|-1,216,84|
|comprehensive||||
|||48.62|8.62|
|income||||
|(ii) Owners’|303,628.6||303,628.6|
|devoted and||||
||0||0|
|decreased capital||||
|1.Common shares||||
|invested by||||
|shareholders||||
|2. Capital invested||||
|by holders of other||||
|equity instruments||||
|3. Amount||||
|reckoned into||||
|owners equity with||||
|share-based||||
|payment||||
||303,628.6||303,628.6|
|4. Other||||
||0||0|
|(III) Profit||||
|distribution||||
|1. Withdrawal of||||
|surplus reserves||||
|2. Distribution for||||
|owners (or||||
|shareholders)||||
|3. Other||||
|(IV) Carrying||||
|forward internal||||
|owners’ equity||||
|1. Capital reserves||||
|conversed to||||
|capital (share||||
|capital)||||
|2. Surplus reserves||||
|conversed to||||
|capital (share||||
|capital)||||
|3. Remedying loss||||
|with surplus||||
|reserve||||
|4. Other||||
|(V) Reasonable||||
|reserve||||
|1. Withdrawal in||||
|the report period||||
|2. Usage in the||||

|||||||
|-|-|-|-|-|-|
|report period||||||
|(VI)Others||||||
|||||-208,10||
|IV. Balance at the|283,161,|146,587,2|77,391,59||299,033,1|
|end of the report||||6,913.4||
||227.00|71.50|3.25||78.35|
|period||||0||

III. Company profile
1. The registration place of the enterprise, the form of organization and the headquarters address
Shenzh Zhongheng HUAFA Company Limited (hereinafter referred to as Company or the Company), established on 8 December 1981. uniform social cedit code 91440300618830372G.
Registered place and head office of the Company: 411 Bldg., Huafa (N) Road, Futian District, Shenzhen
Legal representative: Li Zhongqiu
Registered capital: RMB 283,161,227.00
2. The nature of the business and the main business activities
The Company belongs to the computer, telecommunication and manufacturing of other electronic equipment. Business scope: producing and sales of vary colour TV set, liquid crystal disply, LCD (operates in branch), radio-recorder, sound equipment, electronic eatch, electronic game and computers, the printed wiring board, precision injection parts, light packaging material (operates in Wuhan) and hardware (including tool and mould) for various elctronic producs and supporting parts, plating and surface treatment and tin wire, development and operation of real estate (Shen Fang Di Zi No.: 7226760) and property management. Funded affiliated companies in Wuhan and Julin. Setting up branches in capital of the province (Lhasa City excluded) in China and municipality directrly under the central government.
3. Relevant party offering approval reporting of financial statements and date thereof
The financial statement has been deliberated and approved by BOD on 25 August 2017. According to Article of Association, the statement shall be submit for deliberation in shareholders general meeting.
4. Scope of consolidate financial statement
Consolidate scope in the Period including: parent company– Shenzhen Zhongheng Huafa Company Limited, subsidiary including Shenzhen Huafa Perpoerty Leasing Management Co., Ltd. (no annual inspection in 2011, and business license revoke on 1 April 2014 ), Shenzhen Zhongheng Huafa perperty Co., Ltd., Wuhan Hengfa Technology Co., Ltd., Shenzhen Huafa Hengtian Co., Ltd. and Shenzhen Huafa Hengtai Co., Ltd. more of subsidiaries found in “Equity in other subjects”.
IV. Preparation basis of Financial Statements
1. Preparation basis
Base on the running continuously and actual transactions and events, in line with the Accounting Standards for Business Enterprise– Basic Standards and specific principle of accounting standards issued by the Ministry of Finance, the Company prepared and
formulate the financial statement lies on the followed important accounting policy and estimation.
2. Going concern
The Company estimated that the production and sales of the Company, in 12 months since end of the period, will in a virtuous cycle. We has good management and continuous operation ability, and there is no risk of continuing operations.
V. Important accounting policy and estimation
Notes on specific accounting policies and accounting estimation:
According to actual operation charateristic, the Group formulate specific accounting policy and accounting estimation, including trade cycle, recognization and measurement on account bad debt provision of receivables, inventory measurement, classification and depreciation method of fixed assets, intangible assets amortization and recognization and measurement of revenue etc.
1. Declaration of obedience to Accounting Standards for Business Enterprise
The Financial Statements of the Company are up to requirements of Accounting Standards for Business Enterprise and also a true and thorough reflection to the relevant information as theCompany’s financial position dated 30th June 2017 and the operation results as well as cash flow for the first half of 2017.
2. Accounting period
TheCompany’s accounting year is Gregorian calendar year, namely from 1st January to 31st December of every year.
3. Business cycle
TheCompany’s business cycle is one year (12 months) as a normal cycle, and the business cycle is the determining criterion for the liquidity of assets and liabilities of the Company.
4. Bookkeeping standard currency
The Renminbi (RMB) is taken as the book-keeping standard currency.
5. Accounting methods for consolidation of enterprises under the same control or otherwise
(1) Consolidation of enterprises under the same control
Where the Company for long term equity investment arising from business combination under common control satisfies the combination consideration by payment of cash, transfer of non-cash assets or assumption of debt, the carrying value of the net assets of the acquire in combined financial statement of the ultimate controller shared by the Company as at the combination date shall be deemed as the initial investment cost of such long term equity investment. If the equity instrument issued by combining party are consider as the combination consideration, than the total value of the issuing shares are consider as the share capital. The difference between the initial cost of long-term equity investment and book value of consideration (or total face value of the shares issued) paid,
capital surplus adjusted; if the capital surplus not enough to written down, than retained earning adjusted.
(2) Business combination not under common control
As for business combination not under common control, combination costs refer to the sum of the fair value of the assets paid, liabilities occurred or assumed as well as equity securities issued by the acquirer to obtain control over the acquire as at the acquisition date. As for acquiree that obtained by consolidation not under the same control, the qualified confirmation of identified assets, liability and contingency liabilities should calculated by fair value on day of purchased. If the consolidation cost larger than the fair value amount of indentified net assets fromacquiree’s, the differences should be recognized as goodwill. If the consolidation cost less than the fair value amount of indentified net assets fromacquiree’s, the differences should reckoned into current gains/losses after re-examination.
6. Preparation methods for consolidated financial statements
(1) Consolidation financial statement range
The Company includes all the subsidiaries (including the separate entities controlled by the Company) into consolidated financial statement, including companies controlled by the Company, non-integral part of the investees and structural main body.
(2) Centralize accounting policies, balance sheet dates and accounting periods of parent and subsidiaries.
As for the inconsistency between the subsidiaries and the Company in the accounting policies and periods, the necessary adjustment is made on thesubsidiaries’ financial statements in the preparation of the consolidated financial statements according to theCompany’s accounting policies and periods.
(3) Setoff of consolidated financial statement
The consolidated financial statements shall be prepared on the basis of the balance sheet of the parent company and subsidiaries, which offset the internal transactions incurred between the parent company and subsidiaries and within subsidiaries. Theowner’s equity of the subsidiaries not attributable to the parent company shall be presented as minority equity under theowner’s equity item in the consolidated balance sheet. The long term equity investment of the parent company held by the subsidiaries, deemed as treasury stock of the corporate group as well as the reduction ofowners’ equity, shall be presented as “Less: treasury stock” under theowners’ equity item in the consolidated balance sheet.
(4) Accounting for acquisition of subsidiary through combination
For subsidiaries acquired under enterprise merger involving enterprises under common control, the assets, liabilities, operating results and cash flows of the subsidiaries are included in the consolidated financial statements from the beginning of the financial year in which the combination took place. When preparing the consolidated financial statements, for the subsidiaries acquired from business combination not involving entities under common control, the identifiable net assets of the subsidiaries are adjusted on the basis of their fair values on the date of acquisition.
7. Classification of joint arrangements and accounting treatment of joint operation
(1) Classification of joint arrangements
Joint arrangements are divided into joint operations and joint ventures. Joint arrangements achieved not through separate entities are classified as joint operations. Separate entities refer to the entities with separate identifiable financial architecture including separate legal entities and legally recognized entities without the qualification of legal entity. Joint arrangements achieved through separate entities are generally classified as joint ventures. In case of changes in rights entitled to and obligations undertaken by the parties of joint venture under a joint arrangement due to the changes in relevant facts and circumstances, the parties of joint venture will re-assess the classification of joint arrangements.
(2) Accounting treatment for joint operations
The parties of joint operation should recognize the following items in relation to their share of interest in joint operation, and proceed
with accounting in accordance with the relevant provisions under the Accounting Standards for Business Enterprises: to recognize their separate assets or liabilities held, and recognize the assets or liabilities jointly held according to their respective shares; to recognize the income from the disposal of their output share under joint operation; to recognize the income from the disposal of output under joint operation according to their respective shares; to recognize the expenses incurred separately, and recognize the expenses incurred under joint operation according to their respective shares.
For the parties of a joint operation not under common control, if they are entitled to relevant assets and undertake relevant liabilities of the joint operation, accounting will be carried out with reference to the provisions of the parties of joint operation; otherwise, it should be subject to relevant Accounting Standards for Business Enterprises.
(3) Accounting treatment for joint ventures
The parties of a joint venture should perform accounting for investments by the joint venture in accordance with the Accounting Standards for Business Enterprises No. 2– Long-term Equity Investments. The parties not under common control should carry out accounting depending on their influence on the joint venture.
8. Determination criteria of cash and cash equivalent
The cash recognized in the preparation of the cash flow statements, is theCompany’s storage cash and deposits available for payment anytime. The cash equivalents recognized in the preparation of the cash flow statements refers to the investment held by the Company with characteristic of short-term, strong mobility, easy transfer to known sum cash and has slim risk from value changes. 9. Foreign currency exchange and the conversion of foreign currency statements
(1) Foreign currency exchange
The foreign trading, shall be converted with the rates of exchange, released byPeople’s Bank of China at beginning of the current month, when trading occurred. On the balance sheet day, the monetary items are converted on the current rate on the balance sheet day, concerning the exchange differences between the spot exchange rate on that date and initial confirmation or the sport exchange rate on previously balance sheet date, should reckoned in to current gains/losses except the capitalizing on exchange differences for foreign specific loans, which was reckoned into cost for capitalizing. The non-monetary items measured on the historic cost are still measured by the original bookkeeping rate with the sum of the bookkeeping standard currency unchanged. Items of non-monetary foreign currency which was calculated by fair value, should converted by spot exchange rate on the confirmation day of fair value, difference between the converted amount of bookkeeping currency and original amount of bookkeeping currency, was treated as changes of fair value (including exchange rate changed) reckoned into current gains/losses or recognized as other consolidated income.
(2) Conversion of foreign currency financial statements
Upon the conversion of the foreign currency financial statements of the controlling subsidiaries, joint enterprises, and the affiliated enterprises on the bookkeeping standard currency different from theCompany’s, the accounting check and preparation of the consolidated financial statements are made. Assets and liabilities items in the balance sheet are converted on the current rate on the balance sheet day;owners’ equity items besides the “retained profit” item, the other items are converted on the actual rate. The revenue and expenses, shall be converted with the rates of exchange, released byPeople’s Bank of China at beginning of the current month, when trading occurred. The conversion difference of the foreign currency financial statements is listed specifically in theowners’ equity in the balance sheet. The cash flow of foreign currency, which was recognized by systematic rational method, shall be converted with the rates of exchange, released byPeople’s Bank of China at beginning of the current month, when trading occurred. The cash influenced by the rate fluctuation is listed specifically in the cash flow statement. As for the foreign operation, the
conversion difference of the foreign currency statement related to the foreign operation is transferred in proportion into the disposal of the current loss/gain.
10. Financial instruments
(1) Categories and recognition of financial instruments
The financial instruments are classified as the financial assets, liabilities and equity instruments. As the Company becomes one party of the financial instrument contract, the instrument is recognized as one financial asset, liability or equity instruments.
In the initial recognition, the financial assets are classified as, the financial assets measured on fair value and with its changes reckoned into the current loss/gain, long-term invest-bonds, account receivables, and financial assets available for sale. Categories of the financial assets besides account receivables are dependent on the holding intention and purpose of the Company and its subsidiaries for the financial assets. In the initial recognition, the financial liabilities are classified as the financial liabilities measured on the fair value and with its changes reckoned into the current loss/gain, other financial liabilities.
The financial assets measured by fair value and with its variation reckoned into current gains/losses including the transacitonal finacnial assets held for sale in short period, and the financial assets initially recognzied as financial assets measured by fair value and with its variation reckoned into current gains/losses; receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market; available-for-sale financial assets are non-derivative financial assets that are either designated in this category or not classified in any of the other categories at initial recognition; held-to-maturity investments are non-derivative financial assets with fixed maturity and fixed or determinable payments that management has the positive intention and ability to hold to maturity.
(2) Measurement of financial instruments
In the initial recognition, the financial instruments are measured on fair value; and the follow-up measurements are: financial assets and financial assets available for sale that measured by fair value and with alteration reckoned into current gains/losses together with the financial liabilities that measured by fair value with alteration reckoned into current gains/losses should measured by fair value; the held-to-maturity securities, loans, account receivable and other financial liability are measured by amortized cost; as for the equity instrument investment without quote in an active market and with its fair value can not be reliably measured, and those derivative financial assets or liability that paid with equity instrument, which have hook with such instrument, should measured by cost. The loss/gain from the fair value changes in the follow-up measurement of the financial assets and liabilities, besides one related to the hedge, is dealt with in the following methods:① The financial assets or liabilities measured on the fair value and with its changes reckoned into the current loss/gain, are reckoned into the fair value loss/gain;② The fair value change of the financial assets available for sale, is reckoned into the other comprehensive income.
(3) Recognition of the fair value for the financial assets and liabilities
For those financial instruments existing in active markets, market quotation in the active market is used to confirm their fair values; fair value of the financial instruments which have no active market is confirmed by adoption of estimation technology. The estimation technology mainly including market approach, income approach and cost method
(4) Recognition basis and measurement method for the transfer of financial assets/liabilities
As for the financial assets with all risks and compensations on their patent transferred, or all risks and compensations neither maintained nor transferred but the control over the assets given up, the recognition of the financial asset may terminate. For the financial assets are qualified for the recognition of termination conditions, the measurement may be taken on the financial assets transfer, namely the difference is reckoned into the current loss/gain, between the book value of the transferred financial assets and, the total of the consideration value received from the transfer and the fair value change accumulative sum originally booked into the capital reserve. If the partial transfer satisfies the criteria for derecognition, the entire carrying value of the transferred financial asset shall proportionally allocated between the derecognized portion and the retained portion according to their respective relative fair
value.
When all or part of the current obligation to a financial liability has been terminated, the entire or part of such financial liability shall be derecognized.
(5) Impairment loss on financial assets
When an impairment loss on a financial asset carried at amortized cost has occurred, the amount of loss is provided for at the difference between theasset’s carrying amount and the present value of its estimated future cash flows (excluding future credit losses that have not been incurred). If there is objective evidence that the value of the financial asset recovered and the recovery is related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed and the amount of reversal is recognized in profit or loss.
Where there is objective evidence that an impairment loss on available-for-sale financial assets occurs, the cumulative loss arising from the decline in fair value that had been recognized directly in equity is removed from equity and recognized in impairment loss. For en investment in debt instrument classified as available-for-sale on which impairment losses have been recognized, if, in a subsequent period, its fair value increases and the increase can be objectively related to an even occurring after the impairment loss was recognized in profit or loss, the previously recognized impairment loss is reversed and recognized in profit or loss for the current period. For an investment in an equity instrument classified as available-for-sale on which impairment losses have been recognized, the increase in its fair value in a subsequent period is recognized in equity directly.
For investments in equity instruments, the specific quantitative criteria for the Company to determine “serious” or “not temporary” decrease in their fair value, cost computing method, method for determining closing fair value, and basis for determining the continuous decrease period are set out below:
|||
|-|-|
|Specific quantitative criterion on “serious” decrease intheir fair value|Decrease in closing fair value relative to the cost has reached orexceeded 50%|
|Specific quantitative criterion on “not temporary”decrease in their fair value|Fall for 12 consecutive months|
|Cost computing method|Consideration of payment at acquisition (net of cash dividendsdeclared but not yet paid or due but unpaid interest on bonds)and the relevant transaction cost are recognized as theinvestment cost.|
|Method for determining closing fair value|As for a financial instrument for which there is an activemarket, the quoted prices in the active market shall be used torecognize the fair values thereof. Where there is no activemarket for a financial instrument, the enterprise concerned shalladopt value appraisal techniques to determine its fair value.|
|Basis for determining thecontinuous decrease period|The rebound in the continuous fall or the period with the treadof fall is less than 20% margin. Rebound duration not morethan six months is treated as continuous decrease period.|

11. Account receivable
(1) Account receivables with single major amount and withdrawal bad debt provision independently
|||
|-|-|
||Book balance of the account receivable with over 0.5 million|
|Criterion or amount standards of major single amount||
||Yuan|
|Withdrawal method for individual bad debt provision accrual|Recognized on the difference between the book value and the|
|with major single amount concerned|current value of the estimative future cash flow|

(2) Account receivable with bad debt provision accrual by portfolio
|||
|-|-|
|Portfolio|Accrued method for bad debts|
|Age portfolio|Aging of accounts|

Withdrawing bad bed provision by aging method in portfolio:
√ Applicable□ Not applicable
||||
|-|-|-|
|||Accrued proportion of other accounts|
|Account ages|Accrued proportion of accounts receivable||
|||receivable|
|1－2 years|5.00%|5.00%|
|2－3 years|10.00%|10.00%|
|Over three years|30.00%|30.00%|

 Withdrawing bad bed provision by percentage of total accounts receivable outstanding in portfolio:
□ Applicable√ Not applicable
Withdrawing bad bed provision by other methods in portfolio:
□ Applicable√ Not applicable
(3) Account receivable with minor single amount but has individual bad debt provision accrual
|||
|-|-|
||Receivable has minor amount and can not reflect the risk|
|Reasons for individual bad debt prevision accrual||
||characteristic by withdrawing bad debt provision by group|
||Recognized on the difference between the book value and the|
|Accrued method for bad debt provision||
||current value of the estimative future cash flow|

12. Inventory
Whether the company needs to comply with the disclosure requirements of the particular industry
No
(1) Categories of inventory
The inventory is goods or manufactured products held for sale, products in process, and materials and matters utilized in the
production or supply of labor. It mainly consists of the raw material, products in process, inventory goods, consumable low-value
product, homemade semi-finished products and commissioned processing materials etc.
(2) Accounting method for inventory delivery
When inventories are issued, the actual cost is determined by the first in first out method.
(3) Accrual method inventory falling price reserves
On the balance sheet day, the inventory is measured on the lower one between the cost and the net realizable value, and the provision for the falling price reserves is accrued on each inventory item; however, as for the inventory of large quantity and low price, the provision is accrued on the inventory category.
(4) Inventory system
Inventory system of the Company is perpetual inventory system
(5) Amortization method for the low-value consumables and wrap page
Low-value consumables and packages are amortized by one-point method
13. Classify to assets available for sale
The non-current assets meet the following conditions shall classify as assets availabel for sale: 1. resolution of disposal on such non-current assts are being made; 2. Signing an irrevocable transfer agreement with acquiring party; and 3. the transfer will complete in one year.
14. Long term equity investment
(1) Recognition of initial investment cost
Initial investment cost of long term equity investment obtained by corporate consolidation: in the case of the consolidation of enterprises under the same control, recognized as the initial cost is the book value of theowners’ equity obtained from the consolidated party; in the case of the consolidation of enterprises not under the same control, recognized as the initial cost is the recognized consolidation cost on the purchase day. As for the long term equity investment obtained by cash payment, the initial investment cost is the actual purchase payment. As for the long term equity investment obtained by the equity securities offering, the initial investment cost is the fair value of the equity securities. As for the long-term equity investment obtained by debt reorganization, initial investment cost of such investment should determine by relevant regulation of the “Accounting Standards for Business Enterprise No.12- Debt Reorganization”; As for the long term equity investment obtained by the exchange of the non-monetary assets and the debts restructuring, the initial investment cost is recognized on the relevant rules in the Principles. (2) Subsequent measurement and profit or loss recognition
Where the investor has a control over the investee, long-term equity investments are measured using cost method. Long-term equity investments in associates and joint ventures are measured using equity method. Where part of the equity investments of an investor in its associates are held indirectly through venture investment institutions, common fund, trust companies or other similar entities including investment linked insurance funds, such part of equity investments indirectly held by the investor shall be measured at fair value through profit or loss according to according to relevant requirements of Accounting Standards for Business EnterprisesNo.22—Recognization and measurement of Financial Instruments regardless whether the above entities have significant influence on such part of equity investments, while the remaining part shall be measured using equity method.
(3) Basis of conclusion for common control and significant influence over the investee
Joint control over an investee refers to where the activities which have a significant influence on return on certain arrangement could be decided only by mutual consent of the investing parties sharing the control, which includes the sales and purchase of goods or services, management of financial assets, acquisition and disposal of assets, research and development activities and financing activities, etc.; Significant influence on the investee refers to that: significant influence over the investee exists when holding more
than20% but less than50% of the shares with voting rights or even if the holding is below20%, there is still significant influence if
any of the following conditions is met: there is representative in the board of directors or similar governing body of the investee; participation in theinvestee’s policy setting process; assign key management to the investee; the investee relies on the technology or technical information of the investing company; or major transactions with the investee.
15. Investment real estate
Measurement for investment real estate
Cost method
Depreciation or amortization method
The leased buildings in theCompany’s investment property adopts straight-line depreciation to calculate and distill depreciation, the specific depreciation period is 5 to 50 years, the estimated residual rate is10.00%, and the annual depreciation rate is1.80%-18.00%; the leased land use rights in the investment property and the land use rights to be transferred after appreciation adopt straight-line amortization, the specific amortization period is 50 years, the estimated residual rate is10.00%, and the annual amortization rate is1.80%
16. Fixed assets
(1) Recognition
The fixed assets refers to the tangible assets that possess the features as follows: 1. they are held for the sake of producing commodities, rendering labor service, renting or business management; and 2.their useful life is in excess of one fiscal year with over 2000 Yuan in value. Meanwhile as up to the following conditions, they are recognized: the economic interest related to the fixed assets probably flow into the Company; the cost of the fixed assets can be measured reliably.
(2) Depreciation method
||||||
|-|-|-|-|-|
|Category|Depreciation method|Depreciation life (year)|Salvage rate|Annual depreciation rate|
|House and buildings|Straight-line depreciation|20-50|10.00%|1.80%-4.50%|
|Machinery equipment|Straight-line depreciation|10|10.00%|9.00%|
|Mold equipment|Straight-line depreciation|3|10.00%|30.00%|
|Transportation|||||
||Straight-line depreciation|5|10.00%|18.00%|
|equipment|||||
|Instrument equipment|Straight-line depreciation|5|10.00%|18.00%|
|Tool equipment|Straight-line depreciation|5|10.00%|18.00%|
|Office equipment|Straight-line depreciation|5|10.00%|18.00%|

17. Project in progress
Project in progress of the Company divided as self-run construction and out-bag construction. The project in progress of the
Company carried forward as fixed assets while the construction is ready for the intended use. Criteria of the expected condition for
use should apply one of the follow conditions: The substance construction (installation included) of the fixed assets has completed all or basically; As the projects have been in test production or operation, and the results show that the assets can operate properly and produce the qualified products stably, or the test operation result shows the assets can operate or open properly. The expenditure of the fixed assets on the construction is a little or little. The fixed assets of the project constructed have been up to the requirements of the design or contract, or basically up to.
18. Borrowing expenses
(1) Recognition principle on capitalization of borrowing expenses
As for theCompany’s actual borrowing expenses directly attributable to the assets construction or production, it is capitalized and reckoned into the relevant assets cost; as for other borrowing expenses, it is recognized on the actual sum and reckoned into the current loss/gain. The assets up to the capitalization are assets as the capital assets, investment real estate, and inventory reaching the expectant availability or sale ability.
(2) Calculation of the capitalization
Capitalization term: the period from the time starts to capitalization to the time the capitalization ends. The period of capitalization suspended is not included. The capitalization of borrowing expenses should be suspended while the abnormal interrupt, which surpass three months continuously, in the middle of acquisition or construction or production.
As for the borrowing of the specific borrowing, the capitalization sum is recognized on the current actual interest expenses less the interest income of the borrowing capital not utilized but deposited in the bank or the return of the temporary investment; As for the appropriation of the general borrowing, the capitalization sum is recognized on the weighted average of, the accumulative assets expenditure above the specific borrowing, and times the capitalization rate of the appropriation; As for the discount or premium of the borrowing, the discount or premium to be diluted in every accounting period is recognized in the actual rate method.
The effective interest method is the method for the measurement of the diluted discount or premium or interest expenses on the actual interest rate; and the actual interest rate is the interest rate used in the discount of the future cash flow in the expectant duration period as the current book value of the borrowing.
19. Intangible assets
(1) Accounting method, service life and impairment test
TheCompany’s intangible assets are measured initially on cost. The intangible assets purchased in are taken as the actual cost on the actual payment and relevant expenditure. As for the intangible assets invested in by the investors, the actual cost is recognized on the value stipulated in the contract or agreement; however, if what is stipulated in the contract or agreement is not fair value, the actual cost is recognized on fair value. As for the self-developed intangible assets, their cost is the actual total expenditure before reaching the expectant purpose.
The follow-up measurements of theCompany’s intangible assets respectively are: the line amortization method is taken on the intangible assets of finite service life, and at the yea-end, the check is taken on the service life and dilution of the intangible assets, and the corresponding adjustment is made if there is inconsistency with the previous estimative ones. As for the intangible assets of uncertain service life, it is not diluted, however, the service life is checked at year-end; If there is solid evidence to its finite service life, its service life is estimated and diluted in straight line method.
20. Long-term investment impairment
Long-term equity investments, investment properties measured at cost and long-term assets such as fixed assets, construction in progress, productive biological assets at cost method, oil and gas assets, intangible assets and goodwill are tested for impairment if there is any indication that an asset may be impaired at the balance date. If the result of the impairment test indicates that the recoverable amount of the asset is less than its carrying amount, a provision for impairment and an impairment loss are recognized for the amount by which theasset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of anasset’s fair value less costs to sell and the present value of the future cash flows expected to be derived from the asset. Provision for asset impairment is determined and recognized on the individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of a group of assets to which the asset belongs is determined. A group of assets is the smallest group of assets that is able to generate independent cash inflows.
Goodwill arising from a business combination is tested for impairment at least at each year end, irrespective of whether there is any indication that the asset may be impaired. For the purpose of impairment testing, the carrying amount of goodwill acquired in a business combination is allocated from the acquisition date on a reasonable basis to each of the related asset groups; if it is impossible to allocate to the related asset groups, it is allocated to each of the related set of asset groups. If the carrying amount of the asset group or set of asset groups is higher than its recoverable amount, the amount of the impairment loss first reduced by the carrying amount of the goodwill allocated to the asset group or set of asset groups, and then the carrying amount of other assets (other than the goodwill) within the asset group or set of asset groups, pro rata based on the carrying amount of each asset.
Once the impairment loss of such assets is recognized, it is not be reversed in any subsequent period.
21. Long-term deferred expenditure
TheCompany’s long-term deferred expenditure is expenses paid out and with one year above (1-year included) benefit period. The long-term unamortized expenses are diluted by periods according to the benefit period. As the long-term unamortized expenses cannot enable the accountingperiod’s beneficiary, all dilution values of the project undiluted yet, are transferred into the current loss/gain.
22. Employees benefits
(1) Accounting for short-term benefits
In the period of employee services, short-term benefits are actually recognized as liabilities and charged to profit or loss, or if otherwise required or allowed by other accounting standards, to the related costs of assets for the current period. At the time of actual occurrence, TheCompany’s employee benefits are recorded into the profits and losses of the current year or assets associated costs according to the actual amount. The non-monetary employee benefits are measured at fair value. Regarding to the medical and health insurance, industrial injury insurance, maternity insurance and other social insurances, housing fund and labor union expenditure and personnel education that the Company paid for employees, the Company should recognize corresponding employees benefits payable according to the appropriation basis and proportion as stipulated by relevant requirements and recognize the corresponding liabilities and include these expenses in the profits or losses of the current period or recognized as respective assets costs.
(2) Accounting for post-employment benefits
During the accounting period in which an employee provides service, the amount payable calculated under defined contribution scheme shall be recognized as a liability and recorded in profit and loss of the current period or in assets. In respect of the defined
benefit scheme, the Company shall use the projected unit credit method and attribute the welfare obligations calculated using the formula stipulated by the defined benefit scheme to the service period of the employee, and record the obligation in the current profit and loss or related assets cost.
(3) Accounting for termination benefits
The Company recognizes a liability and expenses in the current profit or loss for termination benefits at the earlier of the following dates: when the Company can no longer withdraw the offer of those benefits; and when the Company recognizes costs for restructuring involving the payment of termination costs.
(4) Accounting for other long-term employee benefits.
The Company provides other long-term employee benefits to its employees. For those falling within the scope of defined contribution scheme, the Company shall account for them according to relevant requirements of the defined contribution scheme. In addition, the Company recognizes and measures the net liabilities or net assets of the other long-term employee benefits according to relevant requirements of the defined contribution scheme.
23. Accrual liability
The obligation related to contingencies is the current obligation assumed by the company, and performing this obligation may result in an outflow of economic benefits, and this obligation can be determined as the estimated liabilities when the amount can be reliably measured. The Company makes initial measurement in accordance with the best estimate for performing the related current obligation, if the expenditure as needed has a continuous range, and the likelihood of occurrence of various results in this range is the same, the best estimate is determined by the median value within the range; if a number of items are involved, the best estimate is determined by the calculation of various possible outcomes and related probabilities.
At the balance sheet date, the book value of estimated liabilities should be rechecked, if there is conclusive evidence indicates that this book value cannot truly reflect the current best estimate, and then the book value should be adjusted in accordance with the current best estimate.
24. Share-based payment
The Company's share-based payment includes the equity-settled share-based payments and the cash-settled share-based payments. The equity-settled share-based payments in exchange for the provision of services by employees shall be measured by the fair value of theemployee’s equity instruments. When there is an active market, it is determined by the quotation in the active market; if there is no active market, it is determined by the valuation technique, including the price used in the market transactions conducted by the parties who are familiar with the situation and voluntarily make transactions, the current fair value of other financial instruments substantially the same, the discount cash flow method, and the option pricing model.
At each balance sheet date, correct the stock options amount of estimated available rights according to the newest achieved follow-up information such as the change in the number of available rights, the completion of performance indicators, etc., and confirm the cost should be apportioned at each period on the basis of this. As for the option charges that span multiple accounting periods, it is generally possible to apportion according to the proportion of the waiting period of this option in a certain accounting period accounted for the entire waiting period.
25. Revenue
Whether the company needs to comply with the disclosure requirements of the particular industry
No
(1) Sales of goods
The Company shall ascertain the revenue incurred by selling goods in accordance with the received or receivable price stipulated in the contract or agreement signed between the enterprise and the buyer unless the following conditions are met simultaneously:① the significant risks and rewards of ownership of the goods have been transferred to the buyer by the enterprise;② the enterprise retains neither continuous management right that usually keeps relation with the ownership nor effective control over the sold goods;③the relevant amount of revenue can be measured in a reliable way;④ relevant economic benefits may flow into the enterprise and⑤ the relevant costs incurred or to be incurred can be measured in a reliable way.
Money collection for the contract or agreement use the mode of deferred, actually has the finacning features. The revenue of commodity sales are recognized by the fair value of the money receivable on contract or agreement.
(2) Labor service providing
If an enterprise can, on the date of the balance sheet, reliably estimate the outcome of a transaction concerning the labor services it provides, it shall recognize the revenue from providing services employing the percentage-of-completion method. The enterprise can ascertain the schedule of completion (percentage-of-completion) under the transaction concerning the providing of labor services based on calculation of completed works.
If an enterprise cannot, on the date of the balance sheet, measure the result of a transaction concerning the providing of labor service in a reliable way, it shall be conducted in accordance with the following circumstances, respectively:①if the cost of labor services incurred is expected to be compensated, the revenue from the providing of labor services shall be recognized in accordance with the amount of the cost of labor services incurred, and the cost of labor services shall be carried forward at the same amount;②if the cost of labor services incurred is not expected to compensate, the cost incurred should be included in the current profits and losses, and no revenue from the providing of labor services may be recognized.
(3) Transition of asset use right
When economic benefits relating to transition of asset use right is likely to inflow into the Company and the relevant income can be measured reliably, the Company shall recognize such income from transition of asset use right
26. Government subsidy
(1) Determination basis and accounting treatment for government grants related to assets
Government grant obtained by the Company for the purpose of constructing or otherwise forming long term assets is recognized as government grant related to assets which will be recognized as deferred income. Deferred income is averagely allocated against the estimated service life of asset since the asset is available for use, and recorded in profit or loss for the current period.
(2) Determination basis and accounting treatment for government grants related to income
The government grants other than the government grants related to assets are recognized as government grants related to income. Government grants related to income shall be treated as follows: those used to compensate relevant expenses or losses to be incurred by the enterprise in subsequent periods are recognized as deferred income and recorded in profit and loss for the current period when such expenses are recognized; and those used to compensate relevant expenses or losses that have been incurred by the enterprise are recorded directly in profit or loss for the current period.
27. Deferred income tax asset / deferred income tax liability
(1) Where there is difference between the carrying amount of the assets or liabilities and its tax base, (as for an item that has not been recognized as an asset or liability, if its tax base can be determined in light of the tax law, the tax base shall recognized as the difference) the deferred income tax and deferred income tax liabilities shall be determined according to the applicable tax rate in period of assets expected to recover or liability expected to pay off.
(2) The deferred income tax assets shall be recognized to the extent of the amount of the taxable income which it is most likely to obtain and which can be deducted from the deductible temporary difference. On balance sheet date, if there have concrete evidence of obtaining, in future period, enough taxable amounts to deduct the deductible temporary difference, the un-confirmed deferred income tax assts in previous accounting period shall be recognized. If there has no enough taxable amounts, obtained in future period, to deducted the deferred income tax assets, book value of the deferred income tax assets shall be kept in decreased.
(3) The taxable temporary differences related to the investments of subsidiary companies and associated enterprises shall recognized as deferred income tax liability, unless the Company can control the time of the reverse of temporary differences and the temporary differences are unlikely to be reversed in the expected future. As for the deductible temporary difference related to the investment of the subsidiary companies and associated enterprises, deferred income tax assets shall be recognized while the temporary differences are likely to be reversed in the expected future and it is likely to acquire any amount of taxable income tax that may be used for making up the deductible temporary differences.
28. Leasing
(1) Accounting treatment for operating lease
Operating lease payments are recognized on a straight-line basis over the term of the relevant lease, and are either included in the cost of related asset or charged to profit or loss for the period.
(2) Accounting treatment for finance lease
At the commencement of the lease term, the Group records the leased asset at an amount equal to the lower of the fair value of the leased asset and the present value of the minimum lease payments. The difference between the recorded amounts is accounted for as unrecognized finance charge, using the effective interest method amortization during the lease term. Minimum lease payments deducting unrecognized financing charges are listed as long-term payables.
29. Other important accounting policy and estimation
The company does not disclose other important accounting policies and accounting estimates.
30. Changes in important accounting policies and estimates
(1) Changes in important accounting policies
□ Applicable√ Not applicable
(2) Changes in important accounting estimates
□ Applicable√ Not applicable
VI. Taxes
1. Major tax and tax rate
||||
|-|-|-|
|Taxes|Taxation basis|Tax rate|
|VAT|Taxable income|6%, 17%|
|Urban maintenance and construction tax|Transfer tax payable|7%|
|Corporate income tax|Taxable income|25%|
|Educational surtax|Transfer tax payable|3%|
|Local educational surtax|Transfer tax payable|2%, 1.5%|
|Property tax|70% of original value of the property|1.2%|

Explain the different taxation entity of the enterprise income tax
|||
|-|-|
|Taxation entity|Income tax rate|

VII. Notes to major items in consolidated financial statements
1. Monetary fund
In RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Cash on hand|219,461.32|235,039.12|
|Bank deposit|59,375,612.16|91,075,765.36|
|Other monetary fund|6,757,024.62|2,021,905.33|
|Total|66,352,098.10|93,332,709.81|

 Other explanation
(1) Other monetary funds at period-end refers to the bank acceptance deposits.
(2) Among the monetary funds at period-end, capital restricted amounted to 6,757,024.62 Yuan. The amounted restricted at
period-begin amounted to 2,021,905.33 Yuan.
2. Note receivable
(1) Category
In RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Bank acceptance bill|15,192,326.33|30,321,803.17|
|Commercial acceptance bill|23,106,982.47|22,341,297.72|
|Total|38,299,308.80|52,663,100.89|

 (2) Note receivable pledged at period-end
In RMB
|||
|-|-|
|Item|Amount pledged at period-end|
|Bank acceptance bill|6,523,922.13|
|Total|6,523,922.13|

 (3) Note receivable which have endorsed and discount at period-end and has not expired on balance sheet date
In RMB
||||
|-|-|-|
|Item|De-recognization amount at period-end|Un de-recognization amount at period-end|
|Bank acceptance bill|32,612,996.83||
|Commercial acceptance bill|17,913,186.02||
|Total|50,526,182.85||

(4) Notes transfer to account receivable for un-implementation from the drawer at period-end
In RMB
|||
|-|-|
|Item|Amount transferred to receivable at period-end|

 Other explanation
3. Account receivable
(1) Category of account receivable
In RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Category|||||||
||Book balance|Bad debt provision|Book|Book balance|Bad debt provision|Book value|

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||Proportio||Accrualratio|value||Proportio||Accrual||
||Amount||Amount|||Amount||Amount|||
|||n|||||n||ratio||
|Account receivable|||||||||||
|with single|||||||||||
|significant amount|7,556,36||7,556,36|||7,649,7||7,649,789|||
|||3.19%||100.00%|||5.00%||100.00%||
|and withdrawal bad|3.72||3.72|||89.11||.11|||
|debt provision|||||||||||
|separately|||||||||||
|Account receivable|||||||||||
|with bad debt|223,856,||24,580.6||223,831,6|139,832||||139,808,05|
|||94.46%||0.01%|||91.36%|24,580.65|0.02%||
|provision accrual by|195.10||5||14.45|,638.85||||8.20|
|portfolio|||||||||||
|Accounts with single|||||||||||
|significant amount|||||||||||
||5,576,97||5,576,97|||5,576,9||5,576,978|||
|and bad debts||2.35%||100.00%|||3.64%||100.00%||
||8.19||8.19|||78.19||.19|||
|provision accrued|||||||||||
|individually|||||||||||
||236,989,||13,157,9||223,831,614.45|153,059||13,251,34||139,808,058.20|
|Total||100.00%|||||100.00%||||
||537.01||22.56|||,406.15||7.95|||

 Account receivable with major single amount and withdrawal bad debt provision single at period-end:
√ Applicable□ Not applicable
In RMB
||||||
|-|-|-|-|-|
|Account receivable (by|Closing balance||||
|units)|Account receivable|Bad debt provision|Accrual ratio|Accrual reasons|
|Shenzhen Portman|||||
||2,555,374.75|2,555,374.75|100.00%|Un-collectable|
|Bowling Club Co., Ltd.|||||
|Hong Kong Haowei|||||
||1,870,887.18|1,870,887.18|100.00%|Un-collectable|
|Industrial Co. Ltd.|||||
|TCL ACE ELECTRIC|||||
|APPLIANCE|1,325,431.75|1,325,431.75|100.00%|Un-collectable|
|(HUIZHOU) CO., LTD|||||
|Qingdao Haier Parts|||||
||1,225,326.15|1,225,326.15|100.00%|Un-collectable|
|Procurement Co., Ltd.|||||
|SKYWORTH|||||
|Multimedia (Shenzhen)|579,343.89|579,343.89|100.00%|Un-collectable|
|Co., Ltd.|||||
|Total|7,556,363.72|7,556,363.72|--|--|

Account receivable with bad debt provision withdrawal by method of account age in portfolio:
√ Applicable□ Not applicable
In RMB
|||||
|-|-|-|-|
||Closing balance|||
|Account age||||
||Account receivable|Bad debt provision|Accrual ratio|
|Sub-item of within one year||||
|Subtotal of within one year|223,364,582.05|||
|1-2 year|491,613.05|24,580.65|5.00%|
|Total|223,856,195.10|24,580.65||

Explanation on portfolio basis:
Withdrawing bad bed provision by percentage of total accounts receivable outstanding in portfolio:
□ Applicable√ Not applicable
Withdrawing bad bed provision by other methods in portfolio:
Accounts with single significant amount and bad debts provision accrued individually
||||||
|-|-|-|-|-|
|||||Accrual|
|Debtor|Book balance|Bad debt provision|Accrual ratio (%)||
|||||reasons|
|Shenzhen HuixinVideo TechnologyCo., Ltd.|381,168.96|381,168.96|100.00|U n - c o l l e c ta ble|
|Shenzhen WandelaiDigital TechnologyCo., Ltd.|351,813.70|351,813.70|100.00|U n - c o l l e c ta ble|
|Shenzhen DalongElectronic Co., Ltd.|344,700.00|344,700.00|100.00|U n - c o l le c ta ble|
|Shenzhen KeyaElectronic Co., Ltd.|332,337.76|332,337.76|100.00|U n - c o l l e c ta ble|
|Yuehai InternationalShippingInternational Co.,Ltd.|323,405.97|323,405.97|100.00|U n - c o l l e c ta ble|
|Shenzhen QunpingElectronic Co., Ltd.|304,542.95|304,542.95|100.00|U n - c o l le c ta ble|
|China GalaxyElectronics (HongKong) Co., Ltd.|288,261.17|288,261.17|100.00|U n - c o l l e c ta ble|
|Dongguan WeiteElectronic Co., Ltd.|274,399.80|274,399.80|100.00|U n - c o l l e c ta ble|
|Hong Kong NewCentury ElectronicsCo., Ltd.|207,409.40|207,409.40|100.00|U n - c o l le c ta ble|
|Shenyang BeitaiElectronic Co., Ltd.|203,304.02|203,304.02|100.00|U n - c o l l e c ta ble|
|Beijing Xinfang||||U n - c o l l e c ta ble|

||||||
|-|-|-|-|-|
|Weiye TechnologyCo., Ltd.|193,000.00|193,000.00|100.00||
|TCLELECTRONICS(HONG KONG)CO., LTD.|145,087.14|145,087.14|100.00|U n - c o l l e c ta ble|
|Huizhou TCL XinteElectronics Co., Ltd.|142,707.14|142,707.14|100.00|U n - c o l l e c ta ble|
|Shenzhen Sky Worth– RGB ElectronicCo., Ltd.|133,485.83|133,485.83|100.00|U n - c o l l e c ta ble|
|Other|1,951,354.35|1,951,354.35|100.00|U n - c o l l e c ta ble|
|Total|5,576,978.19|5,576,978.19|||

(2)Bad debt provision accrual, switch-back or taken back in the period
Bad debt provision accrual was 0.00 Yuan; the amount collected or switches back amounting to 93,425.39 Yuan.
Including major amount of bad debt provision that switch-back or taken back in the Period:
In RMB
||||
|-|-|-|
|Company|Amount switch back or taken back|Collection way|

(3) Account receivable actually charge off in the period
In RMB
|||
|-|-|
|Item|Amount charge off|

Including major account receivable charge off:
In RMB
|||||||
|-|-|-|-|-|-|
||||||Account arising|
||Account receivable|||Charge off||
|Company||Amount charge off|Reasons||from related|
||nature|||procedures||
||||||transactions (Y/N)|

 Explanation on account receivable charge off
(4)Top five receivables collected by arrears party at ending balance
Total closing balance of top five receivables by arrears party amounting to 196,189,807.89 Yuan, takes 82.78 percent of the total account receivable at year-end, bad debt provision accrual correspondingly at year-end amounting as 1,225,326.15Yuan.
The amount of top five receivables collected by arrears party at ending balance has increased over that of last period, mainly due to
the growth of products sales revenue.
(5)Account receivable derecognition due to financial assets transfer
(6)Assets and liabilities resulted by account receivable transfer and continues involvement
Other explanation:
4. Prepayments
(1) Prepayments listed by account age
In RMB
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Account age|||||
||Amount|Proportion|Amount|Proportion|
|Within one year|5,288,241.11|94.92%|12,760,284.18|97.59%|
|1-2 year|57,639.57|1.03%|17,494.85|0.13%|
|2-3 year|225,369.97|4.05%|297,942.90|2.28%|
|Total|5,571,250.65|--|13,075,721.93|--|

Explanation on prepayments with over one year in age and reasons of un-settle:
(2)Top 5 prepayments collected by objects at ending balance
Total year-end balance of top five advance payment by prepayment object amounted to 4,285,000.00 Yuan, takes 76.91 percent of the total advance payment at year-end.
Other explanation:
5. Other account receivable
(1) Category of other account receivable
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Category|||||Book||||||
|||Proportio||Accrualratio|||Proportio||Accrual|Book value|
||Amount||Amount||value|Amount||Amount|||
|||n|||||n||ratio||
|Other account|||||||||||
|receivable with|||||||||||
|single significant|19,668,2||6,042,82||13,625,42|7,572,2||6,042,827||1,529,426.6|
|||61.20%||30.72%|||41.36%||79.80%||
|amount and|54.02||7.38||6.64|54.02||.38||4|
|withdrawal bad debt|||||||||||
|provision separately|||||||||||
|Other account|4,117,06|12.81%|57,893.1|1.41%|4,137,972|2,384,0|13.02%|57,893.17|2.43%|2,326,151.8|

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|receivable with bad|7.05||7||.28|45.02||||5|
|debt provision|||||||||||
|accrual by portfolio|||||||||||
|Other account||||99.06%|||||||
|receivable with|||||||||||
|single minor amount|8,351,89||8,273,10|||8,351,8||8,273,100|||
|||25.99%|||||45.62%||99.06%|78,798.40|
|but withdrawal single|8.56||0.16|||98.56||.16|||
|item bad debt|||||||||||
|provision|||||||||||
||32,137,2||14,373,8||17,763,398.92|18,308,||14,373,82||3,934,376.89|
|Total||100.00%|||||100.00%||||
||19.63||20.71|||197.60||0.71|||

 Other account receivable with major single amount and withdrawal bad debt provision single at period-end:
√ Applicable□ Not applicable
In RMB
||||||
|-|-|-|-|-|
|Other account receivable|Closing balance||||
|(units)|Other account receivable|Bad debt provision|Accrual ratio|Accrual reasons|
|Shenzhen Jifang|||||
||12,096,000.00|||Without bad debt risks|
|Investment Co., Ltd.|||||
|Shenzhen Jifang|||||
||1,268,800.00|380,640.00|30.00%|Partially recyclable|
|Investment Co., Ltd.|||||
|Portman|4,021,734.22|4,021,734.22|100.00%|Un-collectable|
|Wuwu Branch of|||||
|Shenzhen Dachong|641,266.64|||Without bad debt risks|
|Industrial Co., Ltd.|||||
|Zhao Baomin|564,646.35|564,646.35|100.00%|Un-collectable|
|Traffic accident|||||
||555,785.81|555,785.81|100.00%|Un-collectable|
|compensation|||||
|Hebei Botou Court|520,021.00|520,021.00|100.00%|Un-collectable|
|Total|19,668,254.02|6,042,827.38|--|--|

Other account receivable with bad debt provision withdrawal by method of account age in portfolio:
√ Applicable□ Not applicable
In RMB
|||||
|-|-|-|-|
||Closing balance|||
|Account age||||
||Other account receivable|Bad debt provision|Accrual ratio|
|Sub-item of within one year||||
|Subtotal of within one year|3,826,013.05|||
|1-2 year|64,299.00|7,937.67|12.34%|
|2-3 year|90,355.00|9,035.50|10.00%|

|||||
|-|-|-|-|
|Over three years|136,400.00|40,920.00|30.00%|
|Total|4,117,067.05|57,893.17||

Explanation on portfolio basis:
Withdrawing bad bed provision by percentage of total accounts receivable outstanding in portfolio:
□ Applicable√ Not applicable
Withdrawing bad bed provision by other methods in portfolio:
√ Applicable□ Not applicable
Other account receivable with single minor amount but withdrawal single item bad debt provision at period-end
||||||
|-|-|-|-|-|
|Debtor|Book balance|Bad debt amount|Accrual ratio (%)|Accrual reasons|
|Jiantao (Fogang) LaminatesCo., Ltd.|465,528.10|465,528.10|100.00|U n - c o llectable|
|Shenzhen Lotus IslandRestaurant Co., Ltd.|236,293.80|236,293.80|100.00|U n - c o llectable|
|Shenzhen Mingli Co., Ltd.|170,394.84|170,394.84|100.00|U n - c o llectable|
|China Great Wall ComputerShenzhen Company Limited|168,436.33|168,436.33|100.00|U n - c o llectable|
|Shenzhen HongyaElectronic Co., Ltd.|156,390.00|156,390.00|100.00|U n - c o llectable|
|Shangxi ShengyiTechnology Co., Ltd.|156,239.32|156,239.32|100.00|U n - c o llectable|
|Changchun Artificial ResinCo., Ltd.|147,486.96|147,486.96|100.00|U n - c o llectable|
|Shenzhen XinlanTechnology Co., Ltd.|138,038.00|138,038.00|100.00|U n - c o llectable|
|Fujian Zhangzhou WeiliElectronic Enterprise Co.,Ltd.|112,335.62|112,335.62|100.00|U n - c o llectable|
|Chuangjing Studio|192,794.00|192,794.00|100.00|U n - c o llectable|
|Individuals borrow|1,799,073.12|1,799,073.12|100.00|U n - c o llectable|
|Labor union|332,402.55|332,402.55|100.00|U n - c o llectable|
|Staff canteen etc.|856,753.66|856,753.66|100.00|U n - c o llectable|
|Other|3,340,933.86|3,340,933.86|100.00|U n - c o llectable|
|Shenzhen Poly Property|78,798.40|||Margin without|

||||||
|-|-|-|-|-|
|Group Co., Ltd.||||accrual|
|Total|8,351,898.56|8,273,100.16|——|——|

 (2)Bad debt provision accrual, switch-back or taken back in the period
Bad debt provision accrual was 0.00 Yuan; the amount collected or switches back amounting to 0.00 Yuan.
Including major amount of bad debt provision that switch-back or taken back in the Period:
In RMB
||||
|-|-|-|
|Company|Amount switch-back or taken back|Collection way|

(3) Other account receivable actually charge off in the period
In RMB
|||
|-|-|
|Item|Amount charge off|

Including major other account receivable charge off:
In RMB
|||||||
|-|-|-|-|-|-|
||||||Account arising|
||Other account|||Charge off||
|Company||Amount charge off|Reasons||from related|
||receivable nature|||procedures||
||||||transactions (Y/N)|

 Explanation on other account receivable charge off:
(4)Other account receivable classify according to nature
In RMB
||||
|-|-|-|
|Nature|Ending book balance|Opening book balance|
|Margin|720,065.04|1,793,485.04|
|Borrow money|1,687,485.10|2,719,549.04|
|Intercourse funds|9,829,847.66|7,503,053.91|
|Rent receivable|19,868,931.85|6,195,824.01|
|Other|30,889.98|96,285.60|
|Total|32,137,219.63|18,308,197.60|

 (5)Top 5 other receivables collected by arrears party at ending balance
In RMB
|||||||
|-|-|-|-|-|-|
|||||Proportion in total||
||||||Ending balance of|
|Company|Nature|Closing balance|Account age|other receivables at||
||||||bad debt provision|
|||||year-end||

|||||||
|-|-|-|-|-|-|
|Shenzhen Jifang||||||
||Rent receivable|13,364,800.00|Within 1 year|41.59%||
|Investment Co., Ltd.||||||
|Portman|Rent receivable|4,021,734.22|Over three years|12.51%|4,021,734.22|
|Wuwu Branch of||||||
|Shenzhen Dachong|Leasing margin|740,909.97|Within 1 year|2.31%||
|Industrial Co., Ltd.||||||
|Zhao Baomin|Rent receivable|564,646.35|Over three years|1.76%|564,646.35|
|Traffic accident||||||
||Intercourse funds|555,785.81|Over three years|1.73%|555,785.81|
|compensation||||||
|Total|--|19,247,876.35|--|59.89%|5,142,166.38|

 (6)Account receivables related to government subsidies
In RMB
||||||
|-|-|-|-|-|
|||||Estimated time/amount|
|Company|Government subsidies|Closing balance|Ending account age||
|||||of collection and basis|

 (7)Other receivable for termination of confirmation due to the transfer of financial assets
(8)The amount of assets and liabilities that are transferred other receivable and continued to be involved Other explanation:
6. Inventory
Whether the company needs to comply with the disclosure requirements of the real estate industry
No
(1) Category of inventory
In RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Provision for|||Provision for||
||Book balance||Book value|Book balance||Book value|
|||price fall-down|||price fall-down||
|Raw materials|27,425,146.08|1,089,943.56|26,335,202.52|29,871,068.31|1,089,943.56|28,781,124.75|
|Goods in process|65,822.68||65,822.68|||0.00|
|Inventory goods|22,953,891.26|914,927.55|22,038,963.71|15,940,570.96|914,927.55|15,025,643.41|
|Low value|||||||
||933,846.23|24,626.66|909,219.57|404,377.39|24,626.66|379,750.73|
|consumables|||||||

||||||||
|-|-|-|-|-|-|-|
|Homemade|||||||
|semi-finished|2,859,200.40|41,816.29|2,817,384.11|2,757,682.20|41,816.29|2,715,865.91|
|products|||||||
|Total|54,237,906.65|2,071,314.06|52,166,592.59|48,973,698.86|2,071,314.06|46,902,384.80|

 Does the Company comply with the disclosure requirement of “Information Disclosure Guidelines of Shenzhen Stock Exchange No.4– Listed Companies Engaged in Seed Industry and Planting Business” or not
No
(2) Provision for price fall-down
In RMB
||||||||
|-|-|-|-|-|-|-|
|||Current increased||Current decreased|||
|Item|Opening balance|||Switch back or||Closing balance|
|||Accrual|Other||Other||
|||||Written-off|||
|Raw materials|1,089,943.56|||||1,089,943.56|
|Inventory goods|914,927.55|||||914,927.55|
|Low value|||||||
||24,626.66|||||24,626.66|
|consumables|||||||
|Homemade|||||||
|semi-finished|41,816.29|||||41,816.29|
|products|||||||
|Total|2,071,314.06|||||2,071,314.06|

 (3)Explanation on capitalization of borrowing costs in ending balance of inventory
(4)Assets completed without settle resulted by construction contract at period-end
In RMB
|||
|-|-|
|Item|Amount|

Other explanation:
7. Non-current assets due within one year
In RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Decoration fee|1,741.47|12,191.49|
|Total|1,741.47|12,191.49|

Other explanation:
8. Investment real estate
(1) Investment real estate measured at cost
√ Applicable□ Not applicable
In RMB
||||||
|-|-|-|-|-|
|Item|House and building|Land use right|Construction in process|Total|
|I. Original book value|||||
|1.Opening balance|133,661,686.94|||133,661,686.94|
|2.Current increased|||||
|(1)outsourcing|||||
|(2) inventory\fixed|||||
|assets\construction in|||||
|process transfer-in|||||
|(3) increased by|||||
|combination|||||
|3.Current decreased|||||
|(1) disposal|||||
|(2)Other|||||
|transfer-out|||||
|4.Closing balance|133,661,686.94|||133,661,686.94|
|II. Accumulated|||||
|depreciation and|||||
|accumulated|||||
|amortization|||||
|1.Opening balance|79,516,461.92|||79,516,461.92|
|2.Current increased|867,939.18|||867,939.18|
|(1)accrual or|||||
||867,939.18|||867,939.18|
|amortization|||||
|3.Current decreased|||||
|(1) disposal|||||
|(2)Other|||||
|transfer-out|||||

||||
|-|-|-|
|4.Closing balance|80,384,401.10|80,384,401.10|
|III. Depreciation reserves|||
|1.Opening balance|||
|2.Current increased|||
|(1)accrual|||
|3、Current decreased|||
|(1) disposal|||
|(2)Other|||
|transfer-out|||
|4.Closing balance|||
|IV. Book value|||
|1. Ending book||53,277,285.84|
||53,277,285.84||
|value|||
|2. Opening book||54,145,225.02|
||54,145,225.02||
|value|||

(2)Investment real estate measure on fair value
□ Applicable√ Not applicable
(3)Investment real estate without property certification held
In RMB
||||
|-|-|-|
|Item|Book value|Reasons|

Other explanation
9. Fixed assets
(1) Fixed assets
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||House and|Machinery|Transportatio|Tool|Office|Mold|Instrument||
|Item||||||||Total|
||buildings|equipment|n equipment|equipment|equipment|equipment|equipment||
|I. Original|||||||||
|book value:|||||||||
|1.Opening|65,608,798.8|77,069,199.6||||12,606,833.3||174,538,795.|
||||5,213,153.64|4,384,205.71|6,900,942.25||2,755,661.49||
|balance|5|9||||9||02|

||||||||||
|-|-|-|-|-|-|-|-|-|
|2.Current|||||||||
|||1,899,888.15|1,333,235.05|315,125.87|58,908.93|942,051.20|135,923.08|4,685,132.28|
|increased|||||||||
|||1,899,888.15|1,333,235.05|315,125.87|58,908.93|942,051.20|135,923.08|4,685,132.28|
|(1)purchasing|||||||||
|(2)Constructi|||||||||
|on in|||||||||
|progress|||||||||
|transfer-in|||||||||
|(3)|||||||||
|increased by|||||||||
|combination|||||||||
|3.Current|||||||||
|||280,526.00|152,298.00|1,181.28|2,101.06|||436,106.34|
|decreased|||||||||
|(1)|||||||||
|disposal or||280,526.00|152,298.00|||||432,824.00|
|scrapping|||||||||
|4.Closing|65,608,798.8|78,688,561.8||||13,548,884.5||178,787,820.|
||||6,394,090.69|4,698,150.30|6,957,750.12||2,891,584.57||
|balance|5|4||||9||96|
|II.|||||||||
|Accumulativ|||||||||
|e|||||||||
|depreciation|||||||||
|1.Opening|12,890,366.5|57,558,303.0||||||92,994,088.0|
||||3,162,640.76|2,566,496.57|5,197,749.19|9,192,414.59|2,426,117.30||
|balance|6|3||||||0|
|2.Current|||||||||
||2,650,840.26|2,163,890.44|304,424.38|260,214.75|147,151.49|764,354.05|35,839.44|6,326,714.81|
|increased|||||||||
||2,650,840.26|2,163,890.44|304,424.38|260,214.75|147,151.49|764,354.05|35,839.44|6,326,714.81|
|(1)accrual|||||||||
|3.Current|||||||||
|||252,473.40|116,818.20|1,063.15|1,890.96|||372,245.71|
|decreased|||||||||
|(1)|||||||||
|disposal or||252,473.40|116,818.20|1,063.15|1,890.96|||372,245.71|
|scrapping|||||||||
|4.Closing|15,541,206.8|59,469,720.0|3,350,246.94|2,825,648.17|5,343,009.72|9,956,768.64|2,461,956.74|98,948,557.1|

||||||||||
|-|-|-|-|-|-|-|-|-|
|balance|2|7||||||0|
|III.|||||||||
|Depreciation|||||||||
|reserves|||||||||
|1.Opening|||||||||
|balance|||||||||
|2.Current|||||||||
|increased|||||||||
|(1)accrual|||||||||
|3.Current|||||||||
|decreased|||||||||
|(1)|||||||||
|disposal or|||||||||
|scrapping|||||||||
|4.Closing|||||||||
|balance|||||||||
|IV. Book|||||||||
|value|||||||||
|1. Ending|50,067,592.0|19,218,841.7||||||79,839,263.8|
||||3,043,843.75|1,872,502.13|1,614,740.40|3,592,115.95|429,627.83||
|Book value|3|7||||||6|
|2. Opening|52,718,432.2|19,510,896.6||||||81,544,707.0|
||||2,050,512.88|1,817,709.14|1,703,193.06|3,414,418.80|329,544.19||
|Book value|9|6||||||2|

 (2)Temporarily idle fixed assets
In RMB
|||||||
|-|-|-|-|-|-|
|||Accumulated|Depreciation|||
|Item|Original book value|||Book value|Note|
|||depreciation|reserves|||

(3) Fixed assets acquired by financing lease
In RMB
||||||
|-|-|-|-|-|
|||Accumulated|||
|Item|Original book value||Depreciation reserves|Book value|
|||depreciation|||

(4) Fixed assets acquired by operating lease
In RMB
|||
|-|-|
|Item|Ending book value|
|House and buildings|931,635.11|

 (5) Certificate of title un-completed
In RMB
||||
|-|-|-|
|Item|Book value|Reasons|

Other explanation
10、Construction in process
(1)Construction in process
In RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Depreciation|||Depreciation||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||
|Renovation|||||||
|project of Huafa|654,356.00||654,356.00|654,356.00||654,356.00|
|Building|||||||
|Total|654,356.00||654,356.00|654,356.00||654,356.00|

 (2) Changes of major construction in process in the period
In RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||Openingbalance|||||||Accumul|including|||
||||||||Proporti||||||
|||||Fixed|||||ated|: interest|Interest||
||||||Other||on of||||||
|||||assets|||||amount|capitaliz|capitaliz||
||||Current||decrease|Closing|project|||||Source of|
|Item|Budget|||transfer-i||||Progress|of|ed|ation rate||
||||increased||d in the|balance|investme|||||funds|
|||||n in the|||||interest|amount|of the||
||||||Period||nt in||||||
|||||Period|||||capitaliz|of the|year||
||||||||budget||||||
||||||||||ation|year|||

(3) The provision for impairment of construction projects
In RMB
||||
|-|-|-|
|Item|Current accrual amount|Accrual reason|

Other explanation
11. Disposal of fixed assets
In RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Gongming Huafa Electronic City|92,857,471.69|92,857,471.69|
|Total|92,857,471.69|92,857,471.69|

 Other explanation:
12. Intangible assets
(1) Intangible assets
In RMB
|||||||
|-|-|-|-|-|-|
||||Non-patented|||
|Item|Land use right|Patent right||Software expenses|Total|
||||technology|||
|I. Original book||||||
|value||||||
|1.Opening||||||
||55,187,826.36|||661,878.97|55,849,705.33|
|balance||||||
|2.Current||||||
|increased||||||
|(1)purchasing||||||
|(2) internal||||||
|R&D||||||
|(3) increased||||||
|by combination||||||
|3.Current||||||
|decreased||||||
|(1) disposal||||||
|4.Closing||||||
||55,187,826.36|||661,878.97|55,849,705.33|
|balance||||||
|II. Accumulated||||||
|amortization||||||
|1.Opening||||||
||10,569,435.45|||402,174.11|10,971,609.56|
|balance||||||
|2.Current|685,967.97|||24,942.96|710,910.93|

|||||
|-|-|-|-|
|increased||||
|(1)accrual|685,967.97|24,942.96|710,910.93|
|3.Current||||
|decreased||||
|(1) disposal||||
|4.Closing||||
||11,255,403.42|427,117.07|11,682,520.49|
|balance||||
|III. Depreciation||||
|reserves||||
|1.Opening||||
|balance||||
|2.Current||||
|increased||||
|(1)accrual||||
|3.Current||||
|decreased||||
|(1) disposal||||
|4.Closing||||
|balance||||
|IV. Book value||||
|1. Ending book||||
||43,932,422.94|234,761.90|44,167,184.84|
|value||||
|2. Opening||||
||44,618,390.91|259,704.86|44,878,095.77|
|book value||||

The proportion of intangible assets form by internalR&D in total book value of intangible assets at period-end
(2) Land use rights without certificate of ownership
In RMB
||||
|-|-|-|
|Item|Book value|Reasons|

Other explanation:
13. Long-term deferred expenditure
In RMB
|||||||
|-|-|-|-|-|-|
|Item|Opening balance|Current increased|Amortized in Period|Other decreased|Closing balance|
|Golf membership fee|191,666.59||25,000.02||166,666.57|
|Total|191,666.59||25,000.02||166,666.57|

 Other explanation
14. Deferred income tax asset /deferred income tax liability
(1) Deferred income tax assets un-offset
In RMB
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Item|Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||differences|asset|differences|asset|
|Provision for impairment|||||
||26,449,578.92|6,612,394.73|26,543,004.31|6,635,751.08|
|of assets|||||
|Accrual liability|2,604,411.81|651,102.95|2,604,411.81|651,102.95|
|Other|4,754,489.08|1,188,622.27|4,754,489.08|1,188,622.27|
|Total|33,808,479.81|8,452,119.95|33,901,905.20|8,475,476.30|

 (2) Deferred income tax liabilities un-offset
In RMB
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Item|Taxable temporary|Deferred income tax|Taxable temporary|Deferred income tax|
||differences|liabilities|differences|liabilities|

 (3) Amount of deferred income tax asset and deferred income tax liability after trade-off
In RMB
||||||
|-|-|-|-|-|
|||Ending balance of|Trade-off between the|Opening balance of|
||Trade-off between the||||
|||deferred income tax|deferred income tax|deferred income tax|
|Item|deferred income tax||||
|||assets or liabilities after|assets and liabilities at|assets or liabilities after|
||assets and liabilities||||
|||off-set|period-begin|off-set|
|Deferred income tax||8,452,119.95||8,475,476.30|
|asset|||||

(4) Deferred income tax asset without confirmed
In RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Deductible loss|936,025.05|1,006,234.22|
|Provision for impairment of assets|3,153,478.41|3,153,478.41|
|Total|4,089,503.46|4,159,712.63|

 (5) Deductible losses of deferred income tax asset without confirmed will expired in later year
In RMB
|||||
|-|-|-|-|
|Year|Closing amount|Opening amount|Note|
|2015||||
|2016||||
|2017|410,676.72|480,885.89||
|2018|525,348.33|525,348.33||
|2019||||
|Total|936,025.05|1,006,234.22|--|

Other explanation:
15 .Short-term borrowing
(1) Category of short-term borrowing
In RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Pledge loan|6,500,000.00|6,500,000.00|
|Mortgage borrowing|110,000,000.00|100,000,000.00|
|Guaranteed loan|20,000,000.00|20,000,000.00|
|Collateral loan|55,608,516.60|54,710,467.81|
|Total|192,108,516.60|181,210,467.81|

 Explanation on category of short-term borrowing:
(2) Overdue short-term loans without payment
The overdue short-term loans without payment at period-end were 0.00 Yuan, including major loans as:
In RMB
||||||
|-|-|-|-|-|
|Borrower|Closing balance|Lending rate|Overdue time|Overdue charge rate|

Other explanation:
16. Note payable
In RMB
||||
|-|-|-|
|Category|Closing balance|Opening balance|
|Bank acceptance|8,373,065.43|16,714,584.01|
|Total|8,373,065.43|16,714,584.01|

 Totally 0 Yuan due note payable are paid at period-end
17. Account payable
(1) Account payable
In RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Within 1 year (one year included)|106,141,596.28|61,929,564.68|
|Over 1 year|10,124,710.02|11,784,860.09|
|Total|116,266,306.30|73,714,424.77|

 (2)Major account payable over one year
In RMB
||||
|-|-|-|
|Item|Closing balance|Reasons of un-paid or carry-over|
|Shenzhen Yuehai Global Logistics Co.,|||
||2,858,885.97|Unsettled|
|Ltd.|||
|Taiwan LG Company|1,906,267.50|Unsettled|
|Total|4,765,153.47|--|

Other explanation:
18. Account received in advance
(1) Account received in advance
In RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Within 1 year (one year included)|1,674,598.44|1,067.00|
|Over 1 year|3,694.60|47,779.60|
|Total|1,678,293.04|48,846.60|

(2) Important account received in advance with account age over one year
In RMB
||||
|-|-|-|
|Item|Closing balance|Reasons of un-paid or carry-over|

 (3) Items have already cleared without completion from the construction contract at period-end
In RMB
|||
|-|-|
|Item|Amount|

Other explanation:
19. Salary payable
(1) Salary payable
In RMB
||||||
|-|-|-|-|-|
|||Increase during the|Decrease during this||
|Item|Opening balance|||Closing balance|
|||period|period||
|I. Short-term|||||
||4,547,625.04|32,966,654.41|33,718,817.98|3,795,461.46|
|compensation|||||
|II. Post-employment|||||
|welfare- defined|-5,093.82|2,377,173.35|2,392,260.75|-20,181.21|
|contribution plans|||||
|Total|4,542,531.22|35,343,827.76|36,111,078.73|3,775,280.25|

 (2) Short-term compensation
In RMB
||||||
|-|-|-|-|-|
|||Increase during the|Decrease during this||
|Item|Opening balance|||Closing balance|
|||period|period||
|1. Wages , bonuses, allowances|||||
||3,542,662.41|29,015,314.91|29,836,231.63|2,721,745.69|
|and subsidies|||||
|2. Welfare for workers|||||
|||2,669,959.73|2,641,302.75|28,656.98|
|and staff|||||
|3. Social insurance|23,041.98|926,216.85|929,180.44|20,078.38|
|Including: Medical|||||
||23,041.98|770,109.84|772,419.45|20,732.37|
|insurance|||||
|Work injury|||||
|||86,571.04|86,808.16|-237.12|
|insurance|||||
|Maternity||69,535.97|69,952.84|-416.87|

||||||
|-|-|-|-|-|
|insurance|||||
|4. Housing accumulation|||||
||24,310.00|309,863.16|309,863.16|24,310.00|
|fund|||||
|5. Labor union|||||
|expenditure and|||||
||957,610.65|45,299.76|2,240.00|1,000,670.41|
|personnel education|||||
|expense|||||
|Total|4,547,625.04|32,966,654.41|33,718,817.98|3,795,461.46|

 (3) Defined contribution plans
In RMB
||||||
|-|-|-|-|-|
|||Increase during the|Decrease during this||
|Item|Opening balance|||Closing balance|
|||period|period||
|1. Basic endowment|||||
||-5,093.82|2,334,402.36|2,349,283.87|-19,975.32|
|insurance|||||
|2. Unemployment|||||
|||42,770.99|42,976.88|-205.89|
|insurance|||||
|Total|-5,093.82|2,377,173.35|2,392,260.75|-20,181.21|

 Other explanation:
20. Tax payable
In RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Value-added tax|6,167,030.04|5,921,066.33|
|Enterprise income tax|6,414,180.44|8,460,507.90|
|Individual income tax|324,480.28|72,577.79|
|Urban maintenance and construction tax|54,052.60|444,600.28|
|Business tax|0.00|958.14|
|House property tax|295,173.21|763,249.59|
|Land use tax|743,005.32|324,212.71|
|Education surcharge|127,271.02|191,311.22|
|Local education surcharge|72,755.02|101,317.51|
|Dike fee|1,149.33|1,149.33|
|Stamp tax|43,149.50|20,009.90|
|Disposal fund of waste electrical products|1,292,580.00|467,070.00|
|Total|15,534,826.76|16,768,030.70|

Other explanation:
21. Interest payable
In RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Interest payable of short-term loans|185,285.99|123,641.69|
|Total|185,285.99|123,641.69|

 Major interest overdue without payment
In RMB
||||
|-|-|-|
|Borrower|Overdue amount|Overdue reasons|

Other explanation:
22. Other payable
(1) Classification of other payable according to nature of account
In RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Margin and deposit|8,451,301.12|5,957,390.38|
|Lease management fee|753,558.41|2,003,231.87|
|Payables on equipment|32,665.00||
|Intercourse funds|8,497,970.52|5,330,161.96|
|After sale and repairmen|1,917,385.00|1,302,101.54|
|Other|1,376,446.87|2,457,149.41|
|Total|21,029,326.92|17,050,035.16|

 (2) Significant other payable with over one year age
In RMB
||||
|-|-|-|
|Item|Closing balance|Reasons of un-paid or carry-over|
|Shenzhen Huayongxing Environmental|||
||1,000,000.00|Margin|
|Protection Technology Co., Ltd.|||
|Linghang Technology (Shenzhen) Co., Ltd.|656,345.28|Unsettled|
|Shenzhen SED Property Development Co.,|||
||787,057.45|Unsettled|
|Ltd.|||
|Shenzhen Tongxing Electronics Co., Ltd.|578,259.83|Unsettled|
|Shenzhen Yongdasheng Investment|558,970.00|Margin|

||||
|-|-|-|
|Development Co., Ltd.|||
|Total|3,580,632.56|--|

Other explanation
23. Accrual liability
In RMB
|||||
|-|-|-|-|
|Item|Closing balance|Opening balance|Causes|
|Pending action|2,604,411.81|2,604,411.81|Business and labor disputes|
|Total|2,604,411.81|2,604,411.81|--|

Other explanations, including important assumptions and estimation about important estimated liabilities:
24. Share capital
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Changes in the Period (+,-)||||||
||Opening|||Shares transfer|||Closing|
|||Issuing new||||||
||balance||Bonus shares|from public|Other|Subtotal|balance|
|||shares||||||
|||||reserves||||
|Total shares|283,161,227.00||||||283,161,227.00|

 Other explanation:
Ended as 30 June 2017, the shares of the Company held by controlling shareholder has 116,100,000 shares in status of pledge, taking41% of the total share capital; pmortgagee is China Merchants Securities Assets Manaegment Co., Ltd. Shares in judicial feeze amounted as 116,489,894 shares.
25. Capital reserve
In RMB
||||||
|-|-|-|-|-|
|||Increase during the|Decrease during this||
|Item|Opening balance|||Closing balance|
|||period|period||
|Capital premium (equity|||||
||96,501,903.02|||96,501,903.02|
|premium)|||||
|Other capital reserve|50,085,368.48|||50,085,368.48|
|Total|146,587,271.50|||146,587,271.50|

 Other explanation, including changes and reasons of changes:
26. Surplus reserve
In RMB
||||||
|-|-|-|-|-|
|||Increase during theperiod|Decrease during this||
|Item|Opening balance|||Closing balance|
||||period||
|Statutory surplus|||||
||21,322,617.25|||21,322,617.25|
|reserves|||||
|Discretionary surplus|||||
||56,068,976.00|||56,068,976.00|
|reserve|||||
|Total|77,391,593.25|||77,391,593.25|

 Other explanation, including changes and reasons for changes:
27. Retained profit
In RMB
||||
|-|-|-|
|Item|Current period|Last period|
|Retained profit at the end of the previous periodbefore adjustment|-187,441,523.12|-195,429,900.95|
|Total undistributed profit at the beginning ofadjustment period (+,-)|||
|||2,530,667.50|
|Retained profit at period-begin after adjustment|-187,441,523.12|-192,899,233.45|
|Add: net profit attributable to owners of the parentcompany|2,146,472.00|5,457,710.33|
|Retained profit at period-end|-185,295,051.12|-187,441,523.12|

 Details about adjusting the retained profits at the beginning of the period:
1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new regulations affect the retained profits at the beginning of the period amounting to 0.00 Yuan.
2) The changes in accounting policies affect the retained profits at the beginning of the period amounting to 0.00 Yuan.
3) The major accounting error correction affects the retained profits at the beginning of the period amounting to 0.00 Yuan
4) Merge scope changes caused by the same control affect the retained profits at the beginning of the period amounting to 0.00 Yuan. 5) Other adjustments affect the retained profits at the beginning of the period amounting to 0.00 Yuan
28. Operating income and operating cost
In RMB
||||||
|-|-|-|-|-|
||Current Period||Last Period||
|Item|||||
||Income|Cost|Income|Cost|
|Main business|418,264,065.34|396,452,152.81|286,371,182.79|261,215,066.60|
|Other business|21,216,078.83|2,461,772.27|23,167,342.77|3,073,331.64|
|Total|439,480,144.17|398,913,925.08|309,538,525.56|264,288,398.24|

29. Tax and surcharges
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|City maintenance and construction tax|171,863.36|648,491.13|
|Educational surtax|99,530.65|279,899.79|
|House property tax|1,349,909.12|184,274.40|
|Land use tax|432,592.87|119,997.05|
|Vehicle use tax|3,555.62||
|Stamp tax|245,831.90||
|Business tax|0.00|741,511.13|
|Local education development fee|14,603.93|181,617.29|
|Other|0.00|578.37|
|Total|2,317,887.45|2,156,369.16|

 Other explanation:
30. Sales expenses
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|Employee compensation|2,485,833.89|1,895,241.77|
|Transportation fee|2,120,964.03|1,626,969.69|
|Commodity inspection fee|425,265.68|417,538.75|
|Customs fee|10,754.07|50,422.80|
|Commodity loss|486,106.38|184,429.08|
|Other|1,834,127.81|1,109,133.62|
|Total|7,363,051.86|5,283,735.71|

 Other explanation:
31. Administrative expenses
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|Salary|4,544,763.62|4,515,773.03|
|Depreciation charge|2,821,716.89|2,634,069.61|
|Social insurance premium|1,744,892.34|3,582,840.30|
|Entertainment expense|1,480,848.53|1,402,388.24|
|Taxes and surcharges|0.00|1,587,116.48|
|Employee benefits|1,210,380.49|1,178,133.14|

||||
|-|-|-|
|Travel expenses|2,451,878.65|2,012,899.56|
|Amortization of intangible assets|710,910.93|747,147.36|
|Transportation fee|552,799.31|836,651.41|
|Consulting fee|1,201,427.16|1,507,497.56|
|Security fee|1,010,168.29|545,366.05|
|Repairs fee|957,282.03|571,994.61|
|Audit fee|972,000.00|734,235.85|
|Office allowance|397,708.36|1,550,706.35|
|Communication fee|148,788.78|189,732.98|
|Amortization of low value consumables|174,265.51|210,497.70|
|Securities information disclosure fee|560,425.00|36,071.80|
|Litigation fee|10.00|264,923.00|
|Employee education funds|53,821.70||
|Water and electricity fee|149,863.85||
|Lease fee|2,246,800.90||
|Gree fee|127,614.00||
|Premium|50,736.43||
|Other expenses|516,853.97|3,187,838.44|
|Total|24,085,956.74|27,295,883.47|

 Other explanation:
32. Financial expenses
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|Interest costs|4,180,114.84|5,330,803.55|
|Less: interest income|794,663.73|613,209.75|
|Add: Exchange loss|1,209,235.54|-3,716,468.30|
|Add: Other expense|320,203.81|1,311,253.63|
|Total|4,914,890.46|2,312,379.13|

 Other explanation:
33. Losses on assets impairment
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|

|||
|-|-|
|I. Bad debt losses|-93,425.39|
|Total|-93,425.39|

Other explanation:
34. Non-operating income
In RMB
|||||
|-|-|-|-|
||||Amount reckoned in current|
|Item|Current Period|Last Period||
||||non-recurring gains/losses|
|Total income from disposal of|1,549.73|116,007.01||
|non-current assets||||
|Including: gains from disposal||||
||1,549.73|116,007.01||
|of fixed assets||||
|Receive donations|51,500.00|||
|Government subsidy|802,269.68|1,163,469.00||
|Unable to pay|7,130.19|175,522.50||
|Penalty revenue|48,833.89|41,539.00||
|Fine income|16,000.00|22,099.00||
|Total|927,283.49|1,518,636.51||

Government subsidy reckoned into current gains/losses:
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||Subsidy|||||
|||||impact|The special|||Assets-relate|
||Issuing|Offering||||Amount in|Amount in||
|Item|||Nature|current|subsidy|||d/income-rela|
||subject|causes||||the Period|last period||
|||||gains/losses|(Y/N)|||ted|
|||||(Y/N)|||||
||||Subsidy||||||
||||obtained for||||||
||Economic &||conforms||||||
||Information||with the local||||||
|Enterprise|||||||||
||Bureau of||support|||||Income-relate|
|development||Subsidy||N|Y||100,000.00||
||Caidian||policy for|||||d|
|subsidy|||||||||
||District,||investment||||||
||Wuhan||incentive to||||||
||||encourage||||||
||||investment||||||
|Excellent|Caidian||Subsidy||||||
|enterprise|Bureau of||obtained for|||||Income-relate|
|||Reward||N|Y|200,000.00|200,000.00||
|award for|Finance,||conforms|||||d|
|year of 2016|Wuhan||with the local||||||

||||||||||
|-|-|-|-|-|-|-|-|-|
||||support||||||
||||policy for||||||
||||investment||||||
||||incentive to||||||
||||encourage||||||
||||investment||||||
||||Subsidy||||||
||||obtained for||||||
||||conforms||||||
||Commercial||||||||
||||with the local||||||
||Bureau of||||||||
||||support|||||Income-relate|
|Export bonus|Caidian|Reward||N|Y|343,769.68|863,469.00||
||||policy for|||||d|
||District,||||||||
||||investment||||||
||Wuhan||||||||
||||incentive to||||||
||||encourage||||||
||||investment||||||
||||Subsidy||||||
||||obtained for||||||
||||conforms||||||
||Caidian||with the local||||||
|Subsidized|Bureau of||support|||||Income-relate|
|||Subsidy||N|Y|258,500.00|||
|loan|Finance,||policy for|||||d|
||Wuhan||investment||||||
||||incentive to||||||
||||encourage||||||
||||investment||||||
|Total|--|--|--|--|--|802,269.68|1,163,469.00|--|

 Other explanation:
35 Non-operating expenditure
In RMB
|||||
|-|-|-|-|
||||Amount reckoned in current|
|Item|Current Period|Last Period||
||||non-recurring gains/losses|
|Total losses on disposal of|34,871.67|18,924.00||
||||34,871.67|
|non-current assets||||
|Other|50.88||50.88|
|Total|34,922.55|63,225.68|34,922.55|

 Other explanation:
36 Income tax expenses
(1) Statement of income tax expense
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|Current income tax expense|746,392.92|3,098,590.27|
|Deferred income tax expense|-22,646.01|-714,375.81|
|Total|723,746.91|2,384,214.46|

 (2) Adjustment on accounting profit and income tax expenses
In RMB
|||
|-|-|
|Item|Current Period|
|Total profit|2,870,218.91|
|Income tax based on statutory/applicable rate|717,554.73|
||23,356.35|
|Cost, expenses and loss which are not deductible||
|Impact of the deductible loss for deferred income tax assets,||
||-17,552.29|
|which has not recognized before used||
|Impact on deductible temporary differences or losses deductible||
||388.13|
|which was un-recognized as deferred income tax assets||
|Income tax expense|723,746.91|

 Other explanation
37 Items of cash flow statement
(1) Other cash received in relation to operation activities
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|Unit intercourse account|614,876.45|2,902,221.40|
|Collection management fee and utilities|||
||159,474.66|2,932,023.33|
|etc.|||
|Repayment from employees|23,555.74|23,221.40|
|Margin|15,271.20|264,562.00|
|Interest income|290,268.10|613,209.75|
|Government subsidy|802,269.68||
|Total|1,905,715.83|6,735,237.88|

Explanation:
(2) Other cash paid in relation to operation activities
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|Unit intercourse account|412,358.54|8,763,196.37|
|Advances to employees|1,737,524.56|1,390,022.62|
|Litigation fee|2,200,000.00|264,923.00|
|Margin, deposit|441,370.00|6,601,906.95|
|Entertainment expense|1,220,133.12|1,477,186.54|
|Water and electricity|1,623,214.94|2,001,355.59|
|Travel expenses|1,394,764.69|2,034,807.36|
|Transportation fee|2,120,964.03|1,896,893.96|
|Transportation fee|739,779.60|967,138.76|
|Repairs|956,708.92|571,994.61|
|Audit fees, consulting fees|2,686,552.16|1,507,497.56|
|Security|218,400.00|545,366.05|
|Financial institutions handling fee|213,790.21|1,311,253.63|
|Office expenses|457,621.51|1,553,388.35|
|Communication fee|153,528.16|200,451.18|
|Lease fee|2,233,640.64|2,245,877.49|
|Other|1,232,487.44|1,390,293.60|
|Total|20,042,838.52|34,723,553.62|

 Explanation:
(3) Cash received from other investment activities
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|

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

Explanation:
(5) Other cash received in relation to financing activities
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|

Explanation:
(6) Cash paid related with other financing activities
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|

Explanation:
38 Supplementary information to statement of cash flow
(1) Supplementary information to statement of cash flow
In RMB
||||
|-|-|-|
|Supplementary information|This Period|Last Period|
|1. Net profit adjusted to cash flow of|||
||--|--|
|operation activities:|||
|Net profit|2,146,472.00|7,272,956.22|
|Depreciation of fixed assets, consumption of|||
|oil assets and depreciation of productive|6,822,408.28|7,271,576.88|
|biology assets|||
|Amortization of intangible assets|710,910.93|747,147.36|
|Amortization of long-term deferred expenses|35,450.04|35,450.04|
|Loss from disposal of fixed assets, intangible|||
|assets and other long-term assets(gain is|227,675.02|-97,083.01|
|listed with “-”)|||
|Abandonment loss of fixed assets (gain is|||
||34,871.67||
|listed with “-”)|||
|Financial expenses (gain is listed with “-”)|5,488,969.99|5,330,803.55|
|Decrease of deferred income tax|||
|||-714,375.81|
|asset( (increase is listed with “-”)|||
|Decrease of inventory (increase is listed with|||
||-5,264,207.79|-10,387,188.43|
|“-”)|||
|Decrease of operating receivable accounts|||
||-74,799,461.03|-78,574,397.07|
|(increase is listed with “-”)|||
|Increase of operating payable accounts|29,199,543.97|43,690,760.70|

||||
|-|-|-|
|(decrease is listed with “-”)|||
|Net cash flow arising from operating|-35,397,366.92|-25,424,349.57|
|activities|||
|2. Material investment and financing not|||
||--|--|
|involved in cash flow|||
|3. Net change of cash and cash equivalents:|--|--|
|Balance of cash at period end|71,844,758.33|59,356,415.87|
|Less: Balance of cash equivalent at|||
||104,015,312.97|632,846,956.16|
|year-begin|||
|Net increasing of cash and cash equivalents|-32,170,554.64|-573,490,540.29|

 (2) Net cash payment for the acquisition of a subsidiary of the current period
In RMB
|||
|-|-|
||Amount|
|Including:|--|
|Including:|--|
|Including:|--|

Other explanation:
(3) Net cash received from the disposal of subsidiaries
In RMB
|||
|-|-|
||Amount|
|Including:|--|
|Including:|--|
|Including:|--|

Other explanation:
(4) Constitution of cash and cash equivalent
In RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Ⅰ. Cash|71,844,758.33|104,015,312.97|
|Including: Cash on hand|219,461.32|235,039.12|
|Bank deposit available for payment|||
||59,375,612.16|91,075,765.36|
|at any time|||
|Ⅲ. Balance of cash and cash equivalent at|71,844,758.33|104,015,312.97|

||
|-|
|period-end|

Other explanation:
39. Notes for the statement of owners equity changes
Explain the items and adjusted amounted which have adjusted in “Other” of lastyear’s ending balance:
40. Assets with ownership or use right restricted
In RMB
||||
|-|-|-|
|Item|Ending book value|Restriction reasons|
|Monetary Fund|4,557,024.62|Bank acceptance bill|
|Fixed assets|45,441,469.26|Bank loan secured|
|Intangible assets|38,980,112.97|Bank loan secured|
|Investment real estate|28,189,106.32|Bank loan secured|
|||Loans from Hai’er Financial Company|
|Account receivable|7,268,495.46||
|||secured|
|Total|124,436,208.63|--|

Other explanation:
41. Item of foreign currency
(1) Item of foreign currency
In RMB
|||||
|-|-|-|-|
||Closing balance of foreign|||
|Item||Rate of conversion|Ending RMB balance converted|
||currency|||
|Including: USD|312,246.56|6.77|2,115,283.10|
|HKD|32.66|0.89|28.95|
|Including: USD|13,348,631.02|6.77|90,428,965.98|
|Short term loan||||
|Including: USD|5,254,163.46|6.77|35,593,804.94|
|Account payable||||
|Including: USD|1,738,127.25|6.77|11,774,769.24|

 Other explanation:
(2) Explanation on foreign operational entity, including as for the major foreign operational entity, disclosed main operation place, book-keeping currency and basis for selection; if the book-keeping currency changed, explain reasons
□ Applicable√ Not applicable
VIII. Equity in other entity
1. Equity in subsidiary
(1) Constitute of enterprise group
||||||||
|-|-|-|-|-|-|-|
||Main operation|||Share-holding ratio|||
|Subsidiary||Registered place|Business nature|||Acquired way|
||place|||Directly|Indirectly||
|Huafa Lease|||Property|||Investment|
||Shenzhen|Shenzhen||60.00%|||
|Company|||management|||establishment|
|Huafa Property|||Property|||Investment|
||Shenzhen|Shenzhen||100.00%|||
|Company|||management|||establishment|
|Hengfa|||||||
||||Production and|||Investment|
|Technology|Wuhan|Wuhan||100.00%|||
||||sales|||establishment|
|Company|||||||
|Huafa Hengtian|||Property|||Investment|
||Shenzhen|Shenzhen||100.00%|||
|Company|||management|||establishment|
|Huafa Hengtai|||Property|||Investment|
||Shenzhen|Shenzhen||100.00%|||
|Company|||management|||establishment|

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

Explanation on holding ratio different from the voting right ratio for minority shareholders:
Other explanation:
(3) Main finance of the important non-wholly-owned subsidiary
In RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance||||||Opening balance||||||
|Subsidia||Non-curr|||Non-curr|||Non-curr|||Non-curr||
||Current||Totalassets|Current||Total|Current||Total|Current||Total|
|ry||ent|||ent|||ent|||ent||
||assets|||liability||liability|assets||assets|liability||liability|
|||assets|||liability|||assets|||liability||

In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||Current Period||||Last Period||||
|||||Cash flow||||Cash flow|
||||Total||||Total||
|Subsidiary|OperationIncome|||from|Operation|||from|
|||Net profit|comprehensi|||Net profit|comprehensi||
|||||operation|Income|||operation|
||||ve income||||ve income||
|||||activity||||activity|

 Other explanation:
(4) Major restriction in aspect of using theGroup’s assets and pay off the debts of the Group
(5) Financial supports or other supporting for the structured body included in consolidate financial statement range
Other explanation:
IX. The risk associated with financial instruments
The Group's main financial instruments include loans, receivables, payables, tradable financial assets, trading financial liabilities, etc., please refer to the details of each financial instrument in Note VII. The risks associated with these financial instruments and the risk management policies adopted by the Group to reduce these risks are described below. The management of the Group manages and monitors these risk exposures to ensure that the above risks are controlled within the limits.
1. Various risk management objectives and policies
The objective of the Group's risk management is to strike a proper balance between risks and profits, minimize the negative impact of risks on the Group's operating results, and maximize the benefits of shareholders and other equity investors. Based on this risk management objectives, the Group's basic strategy for risk management is to identify and analyze the risks faced by the Group, establish appropriate risk bottom lines and carry out risk management, and timely and reliably monitor the risks control them within the limits.
(1) Market risk
The market risk of financial instruments refers to the risk that the fair value or the future cash flows of financial instruments fluctuate due to the changes in market prices, including foreign exchange risk, interest rate risk and
other price risk.
1) Exchange rate risk
The Group's exchange rate risk is mainly related to US dollars and Hong Kong dollars. Except the Group's second level subsidiary, Hengfa TechnologyCompany’s monitor business has day-to-day operations in US dollars, other principal business activities of the Group settle accounts in RMB. On 30 June 2017, except for the US dollar balance of assets and liabilities in below table and the sporadic Hong Kong dollar balance, the Group's assets and liabilities are all RMB balance. The exchange rate risk arising from the assets and liabilities of the US dollar, Hong Kong dollar balance may have an impact on the Group's operating results.
Item 2017-6-30 (RMB convertion) 2016-12-31(RMB convertion)
|||
|-|-|
|312,246.56|16,473.78|
|32.66|29.21|
|13,348,631.02|46,955,995.68|
|0.00|8,873,087.08|
|1,738,127.25|1,172,353.00|
|5,254,163.46|34,710,467.81|

 The Company eyes on the influence from viaration of exchange
2) Interest rate risk
The interest rate risk of the Group arises from bank loans. The financial liabilities of floating interest rate make the Group face cash flow interest rate risk, and the financial liabilities of fixed rate make the Group face the interest rate risk of fair value. The Group determines the relative proportion of fixed rate and floating interest rate contracts based on the prevailing market environment. On 30 June 2017, the Group's interest-bearing debt was mainly the floating interest rate loan contract denominated in Renminbi and US dollars, amounting to 192,108,516.60 Yuan (December 31, 2016: 181,210,467.81 Yuan).
The Group's risk of changes in the cash flow of financial instruments due to changes in interest rates is mainly related to the floating interest rate bank loans. The Group's policy is to maintain the floating interest rate of these loans so as to eliminate the fair value risk of the interest rate changes.
3) Price risk
The Group sells monitors and so on at market prices and is therefore affected by such price fluctuations.
(2) Credit risk
Credit risk refers to the risk that a party of the financial instrument does not fulfill its obligations and causes property loss to another party. On December 31, 2016, the maximum credit risk exposure that may cause financial losses to the Group is mainly attributable to the failure of the other party to fulfill its obligations resulting in the losses of the Group's financial assets and the Group's financial guarantees, including:
The carrying amount of the financial assets recognized in the consolidated balance sheet; for the financial
instruments measured at fair value, the book value reflects its risk exposures but not the maximum risk exposure,
and its maximum risk exposure changes with the future changes in fair value.
In order to reduce the credit risk, the Group has set up a special department to determine the credit line, carry out the credit approval, and implement other monitoring procedures to take necessary measures to recover the overdue credit. In addition, the Group reviews the recovery of each individual receivable at every balance sheet date to accrue sufficient provision for bad debts of uncollectible funds. As a result, the Group's management believes that the Group's credit risk has been greatly reduced.
The Group's working capital is deposited in banks with higher credit ratings, so the credit risk of working capital is low.
The Group has adopted necessary policies to ensure that all customers have good credit records. In addition to the top five account receivables, the Group has no other significant credit risk.
The total amount of the top five account receivables is 196,189,807.89 Yuan.
(3) Liquidity risk
The liquidity risk is the risk that the Group is unable to fulfill its financial obligations on the due date. The Group's approach to manage liquidity risk is to ensure that there is sufficient financial liquidity to fulfill its due debts but not cause unacceptable losses or damages to the corporate reputation. The Group regularly analyzes the structure and duration of liabilities to ensure there are sufficient funds. The management of the Group monitors the use of bank loans and ensures the compliance with loan agreement, and conducts financing consultations with financial institutions in order to maintain a certain line of credit and reduce the liquidity risk.
The financial assets and financial liabilities held by the Group based on the maturity of the undiscounted outstanding contractual obligations are analyzed as follows
Amount dated 30 June 2017
Item Within 1 year 1-2 years 2-3 years Over three Total years
|||
|-|-|
|66,352,098.10|66,352,098.10|
|38,299,308.80|38,299,308.80|
|223,831,614.45|223,831,614.45|
|17,763,398.92|17,763,398.92|
|5,571,250.65|5,571,250.65|
|192,108,516.60|192,108,516.60|
|8,373,065.43|8,373,065.43|

Account payable 116,266,306.30 116,266,306.30
|||
|-|-|
|21,029,326.92|21,029,326.92|
|1,678,293.04|1,678,293.04|
|3,775,280.25|3,775,280.25|

 2. Sensitivity analysis
The Group uses the sensitivity analysis technique to analyze the possible impacts of the reasonable and possible changes in risk variable on the currents profit and losses or the owner's equity. Since any risk variable rarely changes in isolation, and the correlation among the variables has a significant effect on the final effect amount of a certain risk variable changes, and the following contents are on the assumption that the change in each variable is independent.
(1) Sensitivity analysis of foreign exchange risk
Sensitivity analysis of foreign exchange risk assumes that all overseas operating net investment hedges and cash flow hedges are highly effective.
On the basis of the above assumptions, in case that other variabledon’t change, the after-tax effect of the possible and reasonable changes in the exchange rate on the current profits and losses are as follows
|||||||
|-|-|-|-|-|-|
|Item|Exchange ratefluctuation|Jan.- Jun. 2017||Jan.- Jun. 2016||
|||Impact on net profit|Impact on owner'sequity|Impact on net profit|Impact on owner'sequity|
|All foreigncurrency|5% appreciationof the RMB|1,694,088.89|1,694,088.89|1,298,817.96|1,298,817.96|
|All foreigncurrency|5% devaluarion ofthe RMB|-1,694,088.89|-1,694,088.89|-1,298,817.96|-1,298,817.96|

X. Related party and related transactions
1. Parent company of the enterprise
|||||||
|-|-|-|-|-|-|
|||||Share-holding ratio||
||||||Voting right ratio on|
|Parent company|Registration place|Business nature|Registered capital|on the enterprise for||
||||||the enterprise|
|||||parent company||
|||Production and sales,||||
|Wuhan Zhongheng||||||
|||real estate||||
|New Science &||||||
|||development and||||
|Technology|Wuhan||34,500,000.00|41.14%|41.14%|
|||sales, housing||||
|Industrial Group||||||
|||leasing and||||
|Co., Ltd.||||||
|||management||||

Explanation on parent company of the Group
The ultimate control of the enterprise is Li Zhongqiu.
Other explanation:
2 Subsidiary of the enterprise
Found more in .VII. Equity in other entity in the Note
3. Other related party
|||
|-|-|
|Other related party|Relationship with the Enterprise|
|Shenzhen Zhongheng Huafa Science and Technology Co., Ltd.|Control by same controlling shareholder and ultimate controller|
|Wuhan Hengsheng Yutian Industrial Co., Ltd.|Control by same controlling shareholder and ultimate controller|
|Wuhan Hengsheng Photoelectricity Industry Co., Ltd.|Control by same controlling shareholder and ultimate controller|
|Hong Kong Yutian International Investment Co., Ltd.|Control by same controlling shareholder and ultimate controller|
|Wuhan New Oriental Real Estate Development Co., Ltd.|Control by same controlling shareholder and ultimate controller|
|Wuhan Zhongheng Property Management Co., Ltd.|Control by same controlling shareholder and ultimate controller|
|Wuhan Optical Valley Display System Co., Ltd.|Control by same controlling shareholder and ultimate controller|
|Wuhan Yutian Xingye Property Co., Ltd.|Control by same controlling shareholder and ultimate controller|
|Wuhan Yutian Dongfang Property Co., Ltd.|Control by same controlling shareholder and ultimate controller|
|Wuhan Xiahua Zhongheng Electronics Co. Ltd.|Control by same controlling shareholder and ultimate controller|
|Wuhan Zhongheng Yutian Trade Co., Ltd.|Control by same controlling shareholder and ultimate controller|
|Wuhan Yutian Hongguang Real Estate Co., Ltd.|Control by same controlling shareholder and ultimate controller|
|Shenzhen Zhongheng Huayu Investment Holding Co., Ltd.|Control by same controlling shareholder and ultimate controller|
|Yutian Investment Co., Ltd. (Famous Sky Capital Limited)|Control by same controlling shareholder and ultimate controller|
|Yutian International Co., Ltd.|Control by same controlling shareholder and ultimate controller|
|Hong Kong Zhongheng Yutian Co., Ltd.|Control by same controlling shareholder and ultimate controller|
|Shenzhen Yutian Henghua Co., Ltd.|Control by same controlling shareholder and ultimate controller|
|Shenzhen Zhongheng Yongye Technology Co., Ltd.|Control by same controlling shareholder and ultimate controller|
|Shenzhen Yutian Hengrui Co., Ltd.|Control by same controlling shareholder and ultimate controller|

 Other explanation
4. Related transaction
(1) Goods purchasing, labor service providing and receiving
Goods purchasing/labor service receiving
In RMB
|||||||
|-|-|-|-|-|-|
|Related party|Related transaction|Current Period|Trading limit|Whether over the|Last Period|

|||||||
|-|-|-|-|-|-|
||||approved|approved limited or||
|||||not||
|Hong Kong Yutian||||||
|International||||||
||Purchase good|108,075,657.11|277,480,000.00|N|85,710,600.86|
|Investment Co.,||||||
|Ltd.||||||
|Wuhan Hengsheng||||||
|Photoelectricity|Purchase good|60,462,785.68|187,299,000.00|N|27,331,191.04|
|Industry Co., Ltd.||||||

Goods sold/labor service providing
In RMB
|||||
|-|-|-|-|
|Related party|Related transaction|Current Period|Last Period|
|Hong Kong Yutian International||||
||Sales good|99,543,022.00|108,182,506.77|
|Investment Co., Ltd.||||
|Wuhan Hengsheng||||
|Photoelectricity Industry Co.,|Sales good|1,237,955.69|1,325,408.25|
|Ltd.||||

Explanation on goods purchasing, labor service providing and receiving
(2) Related guarantee
As the guarantor
In RMB
||||||
|-|-|-|-|-|
|Secured party|Amount guarantee|Valid from|Due date|Completed or not (Y/N)|
|Hengfa Technology|||||
||50,000,000.00|2016-11-01|2017-11-01|N|
|Company|||||
|Hengfa Technology|||||
||30,000,000.00|2016-09-19|2018-09-19|N|
|Company|||||

As the secured party
In RMB
||||||
|-|-|-|-|-|
|Guarantor|Amount guarantee|Valid from|Due date|Completed or not (Y/N)|
|Li Zhongqiu|5,000,000.00|2016-12-12|2017-12-12|N|
|Li Zhongqiu|55,000,000.00|2016-07-25|2017-07-24|Y|
|Li Zhongqiu|10,000,000.00|2016-08-11|2017-08-10|Y|
|Li Zhongqiu|20,000,000.00|2016-08-11|2017-08-10|Y|
|Li Zhongqiu|15,000,000.00|2016-08-11|2017-08-10|Y|

Explanation on related guarantee
(3) Relatedparty’s fund loan
In RMB
||||||
|-|-|-|-|-|
|Related party|Fund borrowed|Valid from|Due date|Note|
|Borrowing|||||
|Lending|||||

(4) Relatedparty’s assets transfer and debt reorganization
In RMB
|||||
|-|-|-|-|
|Related party|Transactions|Current Period|Last Period|

(5) Remuneration of key manager
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|Total remuneration|744,034.16|640,060.60|

 (6)Other related transactions
5. Receivable/payable items of related parties
(1) Receivable item
In RMB
|||||||
|-|-|-|-|-|-|
|||Closing balance||Opening balance||
|Item|Related party|||||
|||Book balance|Bad debt provision|Book balance|Bad debt provision|
||Hong Kong Yutian|||||
|Account receivable|International|59,803,239.61||41,299,300.89||
||Investment Co., Ltd.|||||
||Hong Kong Yutian|||||
|Advance payment|International|||8,873,087.08||
||Investment Co., Ltd.|||||

(2) Payable item
In RMB
|||||
|-|-|-|-|
|Item|Related party|Ending book balance|Opening book balance|
||Wuhan Hengsheng|||
|Account payable||7,525,071.38|7,173,172.20|
||Photoelectricity Industry Co.,|||

||||
|-|-|-|
||Ltd.||
||Hong Kong Yutian International||
|Account payable||15,821,707.14|
||Investment Co., Ltd.||

6. Commitments of related party
7. Other
XI. Commitment or contingency
1. Important commitment
Important commitment on balance sheet date
The Company has no major commitment need to disclosed by end of 30 June 2017
2. Contingency
(1) Contingency on balance sheet date
In August 2015, Shenzhen HUAFA and Wuhan Zhongheng New Technology Industry Group Co., Ltd. (hereinafter referred to as “Wuhan Zhongheng”) signed the “Cooperation Agreement on Urban Renewal Project of Update Units at Huafa Industrial Park, Gongming Street, Guangming New District, Shenzhen”. As Shenzhen HUAFA and Wuhan Zhongheng planned to cooperate with Shenzhen Vanke Real Estate CO., Ltd. (hereinafter referred to as “Shenzhen Vanke”) on the Huafa urban renewal project (hereinafter referred to as “Huafa Renovation Project) at Gongming Street, Guangming New District, Shenzhen, both parties appointed that Shenzhen HUAFA entrusted Wuhan Zhongheng to represent it in this cooperation, and established project company - Shenzhen Vanke Guangming Real Estate Co., Ltd. (hereinafter referred to as “Vanke Guangming”) as the subject of project implementation with Shenzhen Vanke; Vanke Guangming signed “Demolition Compensation Agreement” with Shenzhen HUAFA and Wuhan Zhongheng, and paid the compensation for demolition.
On August 21, 2015, Shenzhen HUAFA, Wuhan Zhongheng and Shenzhen Vanke signed the “Cooperative Operation Contract of Renovation Project at Huafa Industrial Park, Gongming Street, Guangming New District”(hereinafter referred to as “Cooperative Operation Contract”), the contract refined and appointed the cooperation model and operating steps of both sides. And then Shenzhen HUAFA, Wuhan Zhongheng and Shenzhen Vanke signed the “Agreement on the Housing Acquisition and Removal Compensation and Settlement”. After signing the above agreement, Shenzhen Vanke paid the cooperation price of 600 million Yuan to Wuhan Zhongheng through Vanke Guangming.
In September 2016, Shenzhen Vanke filed an arbitration to South China International Economic and Trade Arbitration Commission (hereinafter referred to as “South China Arbitration”) as Shenzhen HUAFA and Wuhan Zhongheng violated the appointment of “Cooperative Operation Contract” and handled the “Confirmation of Subject of Reconstruction Implementation” at an overdue time, and required Shenzhen HUAFA and Wuhan Zhongheng to pay liquidated damages and attorneys' fees of RMB 464.60 million. While filing the arbitration, Shenzhen Vanke also applied for property preservation of 400 million Yuan of property under the name of Shenzhen Huafa and Wuhan Zhongheng to Shenzhen IntermediatePeople’s Court. According to the ruling of Shenzhen
Intermediate People's Court and “Notification of Sealing up, Seizing and Freezing Assets” (The reference numbers are (2016) Yue 03
Cai Bao No. 51, (2016) Yue 03 Cai Bao No. 53), the 27 house properties (Note: the property within the scope of Huafa renovation
project) under the name of Shenzhen HUAFA and 116,489,894 shares (Note: of which 116,100,000 shares have been pledged) of
Shenzhen HUAFA stock held by Wuhan Zhongheng were frozen.
On November 12, 2016, the arbitration court held a hearing on this case.
In December 2016, Wuhan Zhongheng to Shenzhen HUAFA issued a “Commitment Letter” which included that if the arbitration (Note: the case) ruled in favor of Shenzhen Vanke, the loss of arbitration caused by the contract disputes should be fully assumed by our company. In the above contingent losses, if the judicial decision ruled your company to pay the compensation in advance, our company promised to pay your company in cash within one month, if our company could not pay on time due to uncontrollable factors, our company would like to pay the corresponding interest according to the benchmark interest rate of bank loans in the corresponding period. Because the plots in the renovation project placed in our companyhadn’t been applied for transfer procedures and were still under yourcompany’s name (Note: based on the “Asset Replacement Contract” signed by Wuhan Zhongheng and Shenzhen HUAFA on April 29, 2009), therefore, there was no risk of compliance, at the same time, our company promised to give priority to paying the above compensation with the compensation for demolition of renovation project.
On March 14, 2017, Shenzhen HUAFA received the “Decision of Arbitrator not Granting Avoiding” issued by South China Arbitration, which rejected the application for avoiding of chief arbitrator proposed by Shenzhen Vanke. On March 15, 2017, Shenzhen HUAFA received the “Letter About the Resignation of the Chief Arbitrator of No. SHEN DP20160334 Case” signed by the chief arbitrator and forwarded by South China Arbitration. On March 20, 2017, Shenzhen HUAFA received the “Letter About the Resignation of the Arbitrator of No. SHEN DP20160334 Case” forwarded by South China Arbitration, the arbitrator selected by Shenzhen Vanke said to resign from the arbitrator of this case due to physical reasons.
The deadline for giving a ruling to this case was originally scheduled on February 12, 2017. According to the “Decision of Adjourning the Ruling” issued by South China Arbitration on February 10, 2017, the deadline for giving a ruling to this case shall be prolonged to May 12, 2017. Due to the changes in the members of above arbitration court, this case needs South China Arbitration to reassign the chief arbitrator and Shenzhen Vanke to reselect the arbitrators. According to the provisions of article 32 of the Arbitration Rules of South China Arbitration, after constituting the new arbitration court, it shall decide whether all or part of the hearing procedures that have been carried out before need to be reopened; if the arbitration court decides to reopen all hearing procedures, then the deadline for giving a ruling shall be calculated from the date that the arbitration court decides to reopen the hearing procedures. Therefore, the deadline for giving a ruling in this time is likely to be further extended.
(2) For the important contingency not necessary to disclosed by the Company, explained reasons
The Company has no important contingency that need to disclosed
XII. Events after balance sheet date
1. Explanation on other events after balance sheet date
Till end of the financial report disclosed, the Company did not has major events after balance sheet date need to released
XIII. Principle notes of financial statements of parent company
1. Account receivable
(1) Category of account receivable
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Category|||||Book||||||
|||||Accrualratio|||||Accrual|Book value|
||Amount|Ratio|Amount||value|Amount|Ratio|Amount|||
||||||||||ratio||
|Account receivable|||||||||||
|with single|||||||||||
|significant amount|5,000,98||5,000,98|||5,094,4||5,094,414|||
|||48.58%||100.00%|||49.05%||100.00%||
|and withdrawal bad|8.97||8.97|||14.36||.36|||
|debt provision|||||||||||
|separately|||||||||||
|Accounts with single|||||||||||
|significant amount|||||||||||
||5,292,43||5,292,43|||5,292,4||5,292,435|||
|and bad debts||50.12%||100.00%|||50.95%||100.00%||
||5.32||5.32|||35.32||.32|||
|provision accrued|||||||||||
|individually|||||||||||
||10,293,4||10,293,4|||10,386,||10,386,84|||
|Total||100.00%|||||100.00%||||
||24.29||24.29|||849.68||9.68|||

Account receivable with major single amount and withdrawal bad debt provision single at period-end:
√ Applicable□ Not applicable
In RMB
||||||
|-|-|-|-|-|
|Account receivable|Closing balance||||
|( by unit)|Account receivable|Bad debt provision|Accrual ratio|Accrual reasons|
|TCL ACE ELECTRIC|||||
|APPLIANCE|1,325,431.75|1,325,431.75|100.00%|Un-collectable|
|(HUIZHOU) CO., LTD|||||
|SKYWORTH Multimedia|||||
||579,343.89|579,343.89|100.00%|Un-collectable|
|(Shenzhen) Co., Ltd.|||||
|Hong Kong Haowei|||||
||1,870,887.18|1,870,887.18|100.00%|Un-collectable|
|Industrial Co. Ltd.|||||
|Qingdao Haier Parts|||||
||1,225,326.15|1,225,326.15|100.00%|Un-collectable|
|Procurement Co., Ltd.|||||
|Total|5,000,988.97|5,000,988.97|--|--|

Account receivable with bad debt provision withdrawal by method of account age in portfolio:
□ Applicable√ Not applicable
Withdrawing bad bed provision by percentage of total accounts receivable outstanding in portfolio:
□ Applicable√ Not applicable
Withdrawing bad bed provision by other methods in portfolio:
Accounts with single significant amount and bad debts provision accrued individually at year-end
||||||
|-|-|-|-|-|
|Debtor|Book balance|Bad debt amount|Accrual ratio|Accrual|
|||||reasons|
|Shenzhen Huixin Video Technology Co., Ltd.|381,168.96|381,168.96|100|Un-collectable|
|Shenzhen Wandelai Digital Technology Co., Ltd.|351,813.70|351,813.70|100|Un-collectable|
|Shenzhen Dalong Electronic Co., Ltd.|344,700.00|344,700.00|100|Un-collectable|
|Shenzhen Keya Electronic Co., Ltd.|332,337.76|332,337.76|100|Un-collectable|
|Yuehai International Shipping International Co., Ltd.|323,405.97|323,405.97|100|Un-collectable|
|Shenzhen Qunping Electronic Co., Ltd.|304,542.95|304,542.95|100|Un-collectable|
|China Galaxy Electronics (Hong Kong) Co., Ltd.|288,261.17|288,261.17|100|Un-collectable|
|Dongguan Weite Electronic Co., Ltd.|274,399.80|274,399.80|100|Un-collectable|
|Hong Kong New Century Electronics Co., Ltd.|207,409.40|207,409.40|100|Un-collectable|
|Shenyang Beitai Electronic Co., Ltd.|203,304.02|203,304.02|100|Un-collectable|
|Beijing Xinfang Weiye Technology Co., Ltd.|193,000.00|193,000.00|100|Un-collectable|
|TCL ELECTRONICS (HONG KONG) CO., LTD.|145,087.14|145,087.14|100|Un-collectable|
|Huizhou TCL Xinte Electronics Co., Ltd.|142,707.14|142,707.14|100|Un-collectable|
|Shenzhen Sky Worth – RGB Electronic Co., Ltd.|133,485.83|133,485.83|100|Un-collectable|
|Other|1,666,811.48|1,666,811.48|100|Un-collectable|
|Total|5,292,435.32|5,292,435.32|||

(2)Bad debt provision accrual, switch-back or taken back in the period
Bad debt provision accrual was 0.00 Yuan; the amount collected or switches back amounting to 93,425.39 Yuan.
Including major amount of bad debt provision that switch-back or taken back in the Period:
In RMB
||||
|-|-|-|
|Company|Amount switch back or taken back|Collection way|

(3)Account receivable actually charge off in the period
In RMB
|||
|-|-|
|Item|Amount charge off|

Including major account receivable charge off:
In RMB
|||||||
|-|-|-|-|-|-|
||Account receivable|||Charge off|Account arising from|
|Company||Amount charge off|Reasons|||
||nature|||procedures|related transactions|

||
|-|
|(Y/N)|

 Explanation on account receivable charge off
(4)Top five receivables collected by arrears party at ending balance
|||||
|-|-|-|-|
|Company|Closing balance|Ratio in total account receivable (%)|Balance of bad debtprovision|
|Hong Kong Haowei Industrial Co. Ltd.|1,870,887.18|18.18|1,870,887.18|
|TCL ACE ELECTRIC APPLIANCE(HUIZHOU) CO., LTD|1,325,431.75|12.88|1,325,431.75|
|Qingdao Haier Parts Procurement Co., Ltd.|1,225,326.15|11.90|1,225,326.15|
|SKYWORTH Multimedia (Shenzhen) Co., Ltd.|579,343.89|5.63|579,343.89|
|Shenzhen Huixin Video Technology Co., Ltd.|381,168.96|3.70|381,168.96|
|Total|5,382,157.93|52.29|5,382,157.93|

 (5)Account receivable derecognition due to financial assets transfer
(6)Assets and liabilities resulted by account receivable transfer and continues involvement
Other explanation:
2. Other account receivable
(1)Category of other account receivable
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Category|||||Book||||||
|||||Accrual|||||Accrual|Book value|
||Amount|Ratio|Amount||value|Amount|Ratio|Amount|||
|||||ratio|||||ratio||
|Other account|||||||||||
|receivable with|||||||||||
|single significant|121,553,||10,601,6||110,951,4|123,637||10,601,68||113,035,81|
|||92.85%||57.23%|||93.25%||57.23%||
|amount and|144.31||86.53||57.78|,504.36||6.53||7.83|
|withdrawal bad debt|||||||||||
|provision separately|||||||||||
|Other account|||||||||||
|receivable with bad|1,378,58||13,050.4||1,365,536|965,485|||||
|||1.05%||0.07%|||0.73%|13,050.45|0.07%|952,435.34|
|debt provision|6.91||5||.46|.79|||||
|accrual by portfolio|||||||||||

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Other account||||842.70%6|||||||
|receivable with|||||||||||
|single minor amount|7,988,484.16||7,909,6|||7,988,4||7,909,685|||
|||6.10%|||78,798.40||6.02%||42.70%|78,798.40|
|but withdrawal single|||5.7|||84.16||.76|||
|item bad debt|||||||||||
|provision|||||||||||
||130,920,215.38||18,524,|4100.00%4|112,395,792.64|132,591||18,524,42||114,067,051.57|
|Total||100.00%|||||100.00%||100.00%||
||||22.7|||,474.31||2.74|||

 Other account receivable with major single amount and withdrawal bad debt provision single at period-end:
√ Applicable□ Not applicable
In RMB
||||||
|-|-|-|-|-|
||Closing balance||||
|Other account receivable|||||
||Other account||||
|(units)||Bad debt provision|Accrual ratio|Accrual reasons|
||receivable||||
|Hengfa Technology|||||
||97,326,031.14|||Without bad debt risks|
|Company|||||
|Shenzhen Jifang|||||
||12,096,000.00|||Without bad debt risks|
|Investment Co., Ltd.|||||
|Shenzhen Jifang|||||
||1,268,800.00|380,640.00|30.00%|Partially recyclable|
|Investment Co., Ltd.|||||
|Huafa Lease Company|4,558,859.15|4,558,859.15|100.00%|Un-collectable|
|Portman|4,021,734.22|4,021,734.22|100.00%|Un-collectable|
|Wuwu Branch of|||||
|Shenzhen Dachong|641,266.64|||Without bad debt risks|
|Industrial Co., Ltd.|||||
|Zhao Baomin|564,646.35|564,646.35|100.00%|Un-collectable|
|Traffic accident|||||
||555,785.81|555,785.81|100.00%|Un-collectable|
|compensation|||||
|Hebei Botou Court|520,021.00|520,021.00|100.00%|Un-collectable|
|Total|121,553,144.31|10,601,686.53|--|--|

Other account receivable with bad debt provision withdrawal by method of account age in portfolio:
√ Applicable□ Not applicable
In RMB
|||||
|-|-|-|-|
||Closing balance|||
|Account age||||
||Other account receivable|Bad debt provision|Accrual ratio|
|Sub-item of within one year||||
|Subtotal of within one year|1,237,932.91|||
|1-2 year|44,299.00|2,214.95|5.00%|

|||||
|-|-|-|-|
|2-3 year|90,355.00|9,035.50|10.00%|
|Over three years|6,000.00|1,800.00|30.00%|
|Total|1,378,586.91|13,050.45||

Explanation on portfolio basis:
Withdrawing bad bed provision by percentage of total accounts receivable outstanding in portfolio:
□ Applicable√ Not applicable
Withdrawing bad bed provision by other methods in portfolio:
√ Applicable□ Not applicable
Other account receivable with single minor amount but withdrawal single item bad debt provision at year-end
||||||
|-|-|-|-|-|
|Debtor|Book balance|Bad debt|Accrual ratio (%)|Accrual|
|||amount||reasons|
|Jiantao (Fogang) Laminates Co., Ltd.|465,528.10|465,528.10|100|Un-collectable|
|Shenzhen Lotus Island Restaurant Co., Ltd.|236,293.80|236,293.80|100|Un-collectable|
|Shenzhen Mingli Co., Ltd.|170,394.84|170,394.84|100|Un-collectable|
|China Great Wall Computer ShenzhenCompany Limited|168,436.33|168,436.33|100|Un-collectable|
|Shenzhen Hongya Electronic Co., Ltd.|156,390.00|156,390.00|100|Un-collectable|
|Shangxi Shengyi Technology Co., Ltd.|156,239.32|156,239.32|100|Un-collectable|
|Changchun Artificial Resin Co., Ltd.|147,486.96|147,486.96|100|Un-collectable|
|Shenzhen Xinlan Technology Co., Ltd.|138,038.00|138,038.00|100|Un-collectable|
|Fujian Zhangzhou Weili ElectronicEnterprise Co., Ltd.|112,335.62|112,335.62|100|Un-collectable|
|Chuangjing Studio|192,794.00|192,794.00|100|Un-collectable|
|Individuals borrow|1,799,073.12|1,799,073.12|100|Un-collectable|
|Labor union|332,402.55|332,402.55|100|Un-collectable|
|Staff canteen etc.|856,753.66|856,753.66|100|Un-collectable|
|Other|2,977,519.46|2,977,519.46|100|Un-collectable|
|Shenzhen Poly Property Group Co., Ltd.|78,798.40||||
|Total|7,988,484.16|7,909,685.76|——|——|

(2)Bad debt provision accrual, switch-back or taken back in the period
Bad debt provision accrual was 0.00 Yuan; the amount collected or switches back amounting to 0.00 Yuan.
Including major amount of bad debt provision that switch-back or taken back in the Period:
In RMB
||||
|-|-|-|
|Company|Amount switch-back or taken back|Collection way|

Nil
(3)Other account receivable actually charge off in the period
In RMB
|||
|-|-|
|Item|Amount charge off|

Including major other account receivable charge off:
In RMB
|||||||
|-|-|-|-|-|-|
||||||Account arising from|
||Other account|||Charge off||
|Company||Amount charge off|Reasons||related transactions|
||receivable nature|||procedures||
||||||(Y/N)|

 Other account receivable charge off:
Nil
(4)Other account receivable classify according to nature
In RMB
||||
|-|-|-|
|Nature|Ending book balance|Opening book balance|
|Margin deposit|720,065.04|720,065.04|
|Borrow money|1,687,485.10|2,570,694.91|
|Intercourse funds|109,015,166.21|123,104,890.35|
|Rent revenue|19,466,609.05|6,195,824.01|
|Other|30,889.98||
|Total|130,920,215.38|132,591,474.31|

 (5)Top 5 other receivables collected by arrears party at ending balance
In RMB
|||||||
|-|-|-|-|-|-|
|||||Proportion in total||
||||||Ending balance of|
|Company|Nature|Closing balance|Account age|other receivables at||
||||||bad debt provision|
|||||year-end||

|||||||
|-|-|-|-|-|-|
|Hengfa Technology||||||
||Intercourse funds|97,326,031.14|Within 1 year|74.34%||
|Company||||||
|Shenzhen Jifang|Lease receivable|||||
|||13,364,800.00|Within 1 year|10.21%|380,640.00|
|Investment Co., Ltd.|etc.|||||
|Huafa Lease||||||
||Intercourse funds|4,558,859.15|Over three years|3.48%|4,558,859.15|
|Company||||||
||Lease receivable|||||
|Portman||4,021,734.22|Over three years|3.07%|4,021,734.22|
||etc.|||||
|Wuwu Branch of||||||
|Shenzhen Dachong|Leasing margin|641,266.64|Within 1 year|0.49%||
|Industrial Co., Ltd.||||||
|Total|--|119,912,691.15|--|91.59%|8,961,233.37|

 3. Long-term equity investment
In RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Depreciation|||Depreciationreserves||
||Book balance||Book value|Book balance||Book value|
|||reserves|||||
|Investment forsubsidiary|||||||
||187,208,900.00|600,000.00|186,608,900.00|187,208,900.00|600,000.00|186,608,900.00|
|Total|187,208,900.00|600,000.00|186,608,900.00|187,208,900.00|600,000.00|186,608,900.00|

 (1)Investment for subsidiary
In RMB
||||||||
|-|-|-|-|-|-|-|
||||||Current accrual of|Closing balance|
|||Increase during|Decrease during||||
|Invested unit|Opening balance|||Closing balance|the depreciation|of depreciation|
|||the period|this period||||
||||||reserves|reserves|
|Huafa Lease|||||||
||600,000.00|||600,000.00||600,000.00|
|Company|||||||
|Huafa Property|||||||
||1,000,000.00|||1,000,000.00|||
|Company|||||||
|Hengfa|||||||
|Technology|183,608,900.00|||183,608,900.00|||
|Company|||||||
|Huafa Trade|||||||
|||||0.00|||
|Company|||||||
|Huafa Hengtian|1,000,000.00|||1,000,000.00|||

|||||
|-|-|-|-|
|Company||||
|Huafa Hengtai||||
||1,000,000.00|1,000,000.00||
|Company||||
|Total|187,208,900.00|187,208,900.00|600,000.00|

 4. Operating income and operating cost
In RMB
||||||
|-|-|-|-|-|
||Current Period||Last Period||
|Item|||||
||Income|Cost|Income|Cost|
|Other business|19,368,319.99|2,104,257.94|21,050,313.65|2,177,884.29|
|Total|19,368,319.99|2,104,257.94|21,050,313.65|2,177,884.29|

 Other explanation:
XIV. Supplementary Information
1. Current non-recurring gains/losses
√ Applicable□ Not applicable
In RMB
||||
|-|-|-|
|Item|Amount|Note|
|Gains/losses from the disposal of|||
||-33,321.94||
|non-current asset|||
|Governmental subsidy reckoned into current|||
|gains/losses (not including the subsidy|||
|enjoyed in quota or ration according to|802,269.68||
|national standards, which are closely|||
|relevant to enterprise’s business)|||
|Other non-operating income and expenditure|||
||123,413.20||
|except for the aforementioned items|||
||223,090.23||
|Less: impact on income tax|||
|Total|669,270.71|--|

Concerning the extraordinary profit (gain)/loss defined byQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss inQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable√ Not applicable
2. REO and earnings per share
|||||
|-|-|-|-|
|||Earnings per share||
|Profits during report period|Weighted average ROE|||
|||Basic EPS (RMB/Share)|Diluted EPS (RMB/Share)|
|Net profits belong to common stock||0.0076|0.0076|
||0.67%|||
|stockholders of the Company||||
|Net profits belong to common stock||||
|stockholders of the Company after||||
||0.46%|0.0052|0.0052|
|deducting nonrecurring gains and||||
|losses||||

Section XI. Documents available for reference
I. Text of the Semi-Annual Report caring signature of the Chairman;
II. Financial statement carrying the signatures and seals of the person in charge of the Company, principal of the accounting works and person in charge of accounting organ;
III. All documents of the Company and manuscripts of public notices that disclosed in the China Securities Journal, Securities Times and Hong Kong Commercial Daily designated by CSRC in the report period;
IV. Article of Association
V. Other relevant files.