SHENZHEN TELLUS HOLDING CO., LTD
Annual Report 2017
April 2018
SectionI. Important Notice, Contents and Paraphrase
Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of Shenzhen Tellus Holding 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.
Lv Hang, Principal of the Company, Lou Hong, person in charge of accounting works and Liu Yuhong, person in charge of accounting organ (accounting principal) hereby confirm that the Financial Report of 2017 Annual Report is authentic, accurate and complete.
All directors are attended the Board Meeting for report deliberation.
Securities Times, Hong Kong Commercial Daily and Juchao Website (www.cninfo.com.cn) are the media for information disclosure appointed by the Company, all information under the name of the Company disclosed on the above said media shall prevail. Concerning the forward-looking statements with future planning involved in the Report, they do not constitute a substantial commitment for investors, and investors are advised to exercise caution of investment risks.
The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either.
Contents
SectionI. Important Notice, Contents and Paraphrase .................................................................. 2 Section II Company Profile and Main Finnaical Indexes .............................................................. 5 Section III Summary of Company Business .................................................................................. 10 Section V. Important Events ............................................................................................................ 40 Section VI. Changes in Shares and Particulars about Shareholders .......................................... 57 Section VII. Preferred Stock ........................................................................................................... 63 Section VIII. Particulars about Directors, Supervisors, Senior Executives and Employees .... 64 Section IX. Corporate Governance ................................................................................................ 72 Section X. Corporate Bond ............................................................................................................. 80 Section XI Financial Report ............................................................................................................ 81 Section XII. Documents available for Reference ......................................................................... 195
Paraphrase
||||
|-|-|-|
|Items|Refers to|Contents|
|CSRC|Refers to|China Securities Regulatory Commission|
|SZ Exchange|Refers to|Shenzhen Stock Exchange|
|||Shenzhen Branch of China Securities Depository & Clearing|
|Shenzhen Branch of SD&C|Refers to||
|||Corporation Limited|
|Company, the Company, our Company, Tellus|||
||Refers to|Shenzhen Tellus Holding Co., Ltd.|
|Group|||
|Reporting period, this reporting period, this|||
||Refers to|Year of 2017|
|year|||
|Auto Industry and Trade Co.,|Refers to|Shenzhen Auto Industry and Trade Corporation|
|Zhongtian Company|Refers to|Shenzhen Zhongtian Industrial Co,. Ltd.|
|GAC|Refers to|Gems & Jewelry Trade Association of China|
|||Shenzhen Huari Toyota Auto Sales Co., Ltd. ;Shenzhen SD Huari|
|Huari Company|Refers to||
|||Automobile Enterprise Co.Limited|
|Zungfu Tellus|Refers to|Shenzhen Zungfu Tellus Auto Service Co., Ltd|
|Tellus Starlight|Refers to|Anhui Tellus Starlight Jewelry Investment Co., Ltd.|
|Tellus Starlight Jinzun|Refers to|Anhui Tellus Starlight Jinzun Jewelry Co., Ltd.|
|Sichuan Channel Platform Company|Refers to|Sichuan Tellus Jewelry Technology Co., Ltd.|
|Xinglong Company|Refers to|Shenzhen Xinglong Machinery Co., Ltd|
|Tellus Property Company|Refers to|Shenzhen SD Tellus Property Management Co., Ltd|

Section II Company Profile and Main Finnaical Indexes
I. Company information
|||||
|-|-|-|-|
|Short form of the stock|Tellus-A, Tellus-B|Stock code|000025, 200025|
|Stock exchange for listing|Shenzhen Stock Exchange|||
|Name of the Company (in|深圳市特力(集团)股份有限公司|||
|Chinese)||||
|Short form of the Company||||
||特力A|||
|(in Chinese)||||
|Foreign name of the Company||||
||Shenzhen Tellus Holding Co.,Ltd|||
|(if applicable)||||
|Legal representative|Lv Hang|||
|Registrations add.|3/F, TellusBuilding, Shui Bei Er Road, Luohu District, Shenzhen|||
|Code for registrations add|518020|||
|Offices add.|15/F, CNNCBuilding, Shennan Middle Road, Futian District, Shenzhen|||
|Codes for office add.|518031|||
|Company‟s Internet Web Site|www.tellus.cn|||
|E-mail|ir@tellus.cn|||

II. Person/Way to contact
||||
|-|-|-|
||Secretary of the Board|Rep. of security affairs|
|Name|Qi Peng|Sun Bolun|
||15/F, CNNCBuilding, Shennan Middle|15/F, CNNCBuilding, Shennan Middle|
|Contact add.|||
||Road, Futian District, Shenzhen|Road, Futian District, Shenzhen|
|Tel.|(0755)83989378|(0755)83989339|
|Fax.|(0755)83989386|(0755)83989386|
|E-mail|ir@tellus.cn|sunbl@tellus.cn|

III. Information disclosure and preparation place
|||
|-|-|
|Newspaper appointed for information disclosure|Securities Times (Shenzhen) and Hong Kong Commercial Daily(H.K.)|
|Website for annual report publish appointed by CSRC|h ttp://www.cninfo.com.cn|
|Preparation place for annual report|Secretariat of the Board of Directors of Shenzhen Tellus Holding Co., Ltd.|

IV. Registration changes of the Company
|||
|-|-|
|Organization code|91440300192192210U|
|Changes of main business since listing (if||
||No changes during the period|
|applicable)||
||1. On 31 March 1997, the 159,588,000 state shares held by Shenzhen Investment|
||Management Co., Ltd., the only non-circulation shareholder, were transfer to SDG;|
||total share capital of the Company was 220,281,600 shares while 159,588,000 state|
||shares held by SDG, a 72.45% in total share capital. 2. On 4 January 2006, the|
||13,717,440 shares, as the consideration of share merger reform, were transfer to|
||account of A-shareholders from SDG. After share merger reform, SDG holds 66.22% of|
|Previous changes for controlling||
||the total share capital of the Company. 3. On March 27, 2015, the Company has|
|shareholders (if applicable)||
||completed the non-public offering of A shares of 77,000,000, of which 6,000,000|
||shares are issued to the controlling shareholder - SDG, and SDG holds 51.09% of the|
||Company's total shares after the issuance.4.SDG reducted circulation stocks with|
||unrestricted in 2016 by concentrated bidding, which accounts for 2% of total shares of|
||the Company. Till the end of 2017, SDG holds49.09% of the total share capital of the|
||Company, is still the controlling shareholder of the company|

V. Other relevant information
CPA engaged by the Company
|||
|-|-|
|Name of CPA|Ruihua Certified Public Accountants (LLP)|
||3-9/F, West Tower, China Oversea Property Plaza,7# Building, 8# Yard, Yongdingmen West|
|Offices add. for CPA||
||Binhe Rd., Dongcheng District, Beijing|
|Signing Accountants|Cai Xiaodong, Zhou Xuechun|

Sponsor engaged by the Company for performing continuous supervision duties in reporting period
□Applicable√Not applicable
Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable√ Not applicable
VI. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data or not
□ Yes√ No
||||||
|-|-|-|-|-|
||2017|2016|Changes over last year|2015|
|Operating income (RMB)|347,237,289.80|324,240,841.90|7.09%|303,726,790.57|
|Net profit attributable to|66,862,772.68|27,193,562.63|||
||||145.88%|42,768,789.52|
|shareholders of the listed|||||

||||||
|-|-|-|-|-|
|Company(RMB)|||||
|Net profit attributable to|||||
|shareholders of the listed Company|||||
||54,431,067.47|24,233,716.21|124.61%|28,588,480.42|
|after deducting non-recurring gains|||||
|and losses(RMB)|||||
|Net cash flow arising from|-2,093,068.05|57,874,934.32|||
|||||80,682,627.33|
|operating activities(RMB)|||||
|Basic earnings per share|0.2249|0.0915|||
||||145.79%|0.1538|
|(RMB/Share)|||||
|Diluted earnings per share|0.2249|0.0915|||
||||145.79%|0.1538|
|(RMB/Share)|||||
|Weighted average ROE|7.20%|3.08%|4.12%|6.21%|
||||Changes over end of||
||End of 2017|End of 2016||End of 2015|
||||last year||
|Total assets (RMB)|1,403,314,594.42|1,189,001,074.98|18.02%|1,168,667,927.49|
|Net assets attributable to|963,259,056.63|895,362,614.95|||
|shareholder of listed Company|||7.58%|868,169,052.32|
|(RMB)|||||

VII. 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.
VIII. Quarterly main financial index
In RMB
||||||
|-|-|-|-|-|
||1st Q|2nd Q|3rd Q|4th Q|
|Operating income|81,147,771.18|79,836,333.38|77,386,017.88|108,867,167.36|
|Net profit attributable to|4,494,980.27|20,101,924.82|16,007,734.85|26,258,132.74|

||||||
|-|-|-|-|-|
|shareholders of the listed Company|||||
|Net profit attributable to|||||
|shareholders of the listed Company|||||
||4,075,861.27|13,629,184.84|13,138,710.26|23,587,311.10|
|after deducting non-recurring gains|||||
|and losses|||||
|Net cash flow arising from|||||
||6,177,082.70|1,203,478.70|32,404,498.57|-41,878,128.02|
|operating activities|||||

Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financial index disclosed in theCompany‟s quarterly report and semi-annual report
□Yes√ No
IX. Items and amounts of extraordinary profit (gains)/loss
√Applicable□ Not applicable
In RMB
||||||
|-|-|-|-|-|
|Item|2017|2016|2015|Note|
|Gains/losses from the disposal of|5,523,267.93||||
|non-current asset (including the write-off||-51,690.07|-34,345.09||
|that accrued for impairment of assets)|||||
|Governmental subsidy reckoned into current|25,753.22||||
|gains/losses (not including the subsidy|||||
|enjoyed in quota or ration according to|||371,850.00||
|national standards, which are closely|||||
|relevant to enterprise‟s business)|||||
|Fund possession cost reckoned into current|76,041.64||||
|gains/losses charged from non-financial|||||
|business|||||
|Gains/losses from entrust investment or|6,606,218.86||||
|||3,916,317.84|5,740,301.35||
|assets management|||||
|Gains/losses from contingency without|||||
|||-1,192,618.90|-61,965.00||
|routine business concerned|||||
|Restoring of receivable impairment|15,000.00||||
||||31,980.00||
|provision that tested individually|||||
|Other non-operating income and expenditure|690,397.76||||
|||-70,940.53|118,638.89||
|except for the aforementioned items|||||
|Other items (gain/loss) conformed to the|||||
|definition of the extraordinary profit|||9,722,688.86||
|(gain)/loss|||||
|Less: Impact on income tax|59,964.10|-170,101.35|1,576,392.95||
|Impact on minority shareholders‟ equity|445,010.10|-188,676.73|132,446.96||

||||||
|-|-|-|-|-|
|(post-tax)|||||
|Total|12,431,705.21|2,959,846.42|14,180,309.10|--|

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
Does the Company need to comply with the disclosure requirements of the special industry
No
The Company's main business iscar sales; car testing, maintenance, accessories sales and resource asset management.
1. Car sales, testing, maintenance and accessories sales: During the reporting period, the company overcame market difficulties, optimized the relevant business segments by strengthening the operation and control of the holding companies, the performance of the holding companies of various automobile business segments continued to rise, and the holding subsidiary Huari Company hit a new high in the operating profits after continuously turning losses into gains in 2015 and 2016 and continuedto maintain a good momentum of development. Thecompany‟s auto sales revenue for the full year was 146.15 million Yuan, an increase of5.37% over the same period of last year.
2. Resourcesassetsmanagement
During the reporting period, the company adopted a variety of business methods to improve the performance, and achieved resource asset management income of more than 90 million Yuan, reaching their highest level.
3. Jewelry service business: During the reporting period, the company closely focused on the strategic thinking of transforming to a comprehensive service operator for the jewelry industry and fully promoted thecompany‟s strategy implementation.
During the reporting period, the company used the raised funds to invest in the establishment of Sichuan Tellus Jewelry Technology Co., Ltd., and successfully launched operations and achieved the landing of the regional jewelry channel platform,completed the preparatory work for the establishment of the jewelry industry innovation investment fund, including the selection of fund partners, discussion and confirmation of specific elements of the fund program, market research on some jewelry internet platform enterprises, and shall actively promote and implement the fund investment projects. In order to successfully transform to the jewelry industry, after market survey and industry research, the company submitted the “Tellus Group Innovation and Creation Base Construction Plan” to the Development and Reform Commission of Shenzhen Municipality and was awardedthe Shenzhen Innovative and Creative Base, and the tentative implementation plan is being implemented.In September 2017, Tellus was successfully elected as the president unit of the Shenzhen Jewelry Designers Association, and at the end of 2017, it promoted the designer counter to enter the platform projects in Sichuan and Anhui so as to provide basic guarantees and strong support for building the designer innovation and entrepreneurial platforms in the future.
II. Major changes in main assets
1. Major changes in main assets
|||
|-|-|
|Major assets|Note of major changes|
||Book value of long-term equity investment up to 31st December 2017 amounting to|
||284.4647 million Yuan, increased 80.8314 million Yuan over that of period beginning|
|Equity assets|with 39.69% goes up, mainly because purchasing 13% equity of Xinglong Company and|
||the investment income of share-holding enterprise accrual by equity increased in the|
||period|
|Fixed assets|No major change|
|Intangible assets|No major change|
||Book value of the construction in progress till end of 31st December 2017 amounting to|
|Construction in progress|378.1609 million Yuan, an increase of 34.7956 million Yuan from a year earlier with|
||10.13% up. Mainly due to the continuous input on Shuibei Jewelry Building|
||Book value of other current assets till end of 31st December 2017 amounting to 219.5823|
|Other current assets|million Yuan, an increase of 129.4583 million Yuan from a year earlier with 143.64% up,|
||mainly due to the increase of financial products in the period.|
||Book value of account receivable till end of 31st December 2017 amounting to 44.2152|
||million Yuan, an increase of 44.1015 million Yuan from a year earlier, mainly because|
|Account receivable||
||the wholesale credit for jewelry from subsidiary Sichuan Tellus Company increased in|
||the period|
||Book value of account paid in advance till end of 31st December 2017 amounting to|
||3.7377 million Yuan, a decrease of 4.699 million Yuan from a year earlier with 55.7%|
|Account paid in advance||
||down, mainly because account paid in advance to FAW Toyota from Huari Toyota and|
||rent for shopping malls from Anhui Company declined in the period|

2. Main overseas assets
□ Applicable√ Not applicable
III. Core Competitiveness Analysis
Does the Company need to comply with the disclosure requirements of the special industry
No
1. Master the core area resources of property in jewelry industry
Shenzhenjewelry‟s output value accounts for more than70% of the national jewelry industry, and Shuibei-Buxin area is the core gathering area of Shenzhen jewelry industry with over70% in aspect of output value of the jewelry industry in Shenzhen, has formed the largest cluster of gold jewelry enterprises in the country, covering the entire industry chain including raw material procurement, production and processing, and wholesale sales, and the economic and strategic position and the core aggregation effects of this area
in jewelry industry have remained stable for many years.
According to the urban renewal “13th Five-Year” Plan of the Luohu District in Shenzhen, Shuibei-Buxin area will be built as the Jewelry Fashion Industry Zone in Luohu District, including the international jewelry art center in Shuibei, and the jewelry intelligence high-end manufacturing center in Buxin, the international jewelry ecological creative city will be established.The company is the largest owner in the Tellus Gimeng Gold Jewelry Industry Park in Shuibei. The phase I of Tellus Shuibei Jewelry Building will soon be put into use, and the phase II project will also soon be launched; and the Company is also the largest owner of the#04 and#05 plots in the urban renewal unit planning project for Buxin industrial park. In 2017, the Company engaged the intermediary agency to conduct a comprehensive planning for Buxin property and will make full efforts to promote the renovation of Buxin property, and the property area owned by Tellus in this area will increase from37,000㎡ to 70,000 -80,000㎡ after the completion of renovation project.The Company will continue to maintain its position as the largest owner of Shuibei and Buxin areas, and grasp the resource advantages of physical platforms in the core area of jewelry industry.
2. Meet the core platform enterprise requirements for jewelry industry chain
In recent years, the jewelry market pattern has undergone drastic changes, at the same time, affected by the financial policies such as deleveraging and financial risk prevention, the banks reduced the credit scale, which brought financing difficulties to the entire jewelry industry and restricted the industry development. In 2018, in order to respond to the spirit of “strengthening the reform of financial system and enhancing the economic capabilities of financial services entities” proposed by the 19th National Congress of the Communist Party of China, the banks has formulated various supportive policies and intensified their cooperation with state-owned enterprises, and to carrying out inclusive financial services by cooperating with the core platform enterprise within the industry; and service entity economy by emphasized on the financial supporting to medium, small and micro enterprises.Under these circumstances, credit endorsement ability and vital function of the state-owned enterprise increasingly enhanced, as the state-owned enterprise in jewelry industry, the special identity advantage are more and more prominent.
The Company mapped out its strategic blueprint as creating the third-party operation integrated service provider in the jewelry industry,without participate in the specific operations of jewelry products, and compete for the stock market businesses either; but to avoiding directly interest conflict with jewelry enterprise by innovating new business models to fill up the market vacancies and explore the incremental markets. After decades of hard work transformation to the jewelry industry, the Company has closely strategy cooperation with many corporate champion within the jewelry industry, many jewelry innovation platform projects jointly investment are landing operation, and we will carry out more in-depth cooperation in third-party service area in more jewelry industry.
During the jewelry industry, the Company has its unique advantage for having specific third-party service platform strategy, the good credit ability of state-owned enterprise and core property resources in the industry. The Company has qualification of being a core platform enterprise in jewelry industry chain, and it is the best choice for banks to cooperate in jewelry industry. Tellus will give full pay to its own advantage, on one hand, providing low-cost inclusive financial service and other value added services to medium, small and micro enterprises in jewelry industry through cooperate with the banks, reducing industry costs effectively, conscientiously fulfill the social responsibility of state-owned enterprise and service the entity economy; on other hand, unite the upstream& downstream within the jewelry industry, integrated industrial demand, improved traditional models, provided innovation services in full, solve the industry pain points, while realizing its own social responsibility and returning the shareholders of the Company, promote the industry progress and achieved the win-win situation in many ways.
Section IV Discussion and Analysis of the Operation
I. Introduction
In 2017,China‟s supply-side structural reform gradually showed its effects, andthe GDP had an increase of6.9% over the previous year, and the total volume, increment, and quality of economic operations have been improved.China‟s economy was undergoing the key period of industrial upgrading, structural optimization, quality improvement, and kinetic energy conversion, but many complicated problems needed to be solved to consolidate the good momentum, and there were arduous challenges. Facing the complicated economic situation, under the leadership of the party committee and the board of directors and the joint efforts of all Tellus people, and guided by innovation-driven development, the company actively promoted various work, constantly clarified the business model and specific implementation path of the jewelry platform services, some of the projects have already been implemented; completed the equity transfer of Tellus Property Company and the acquisition of shares of Xinglong Company; as a result, the operating profit has continued to rise and hit a new historical high.
During the reporting period, the Company has achieved operating income of 347.24 million Yuan, increased 23 million Yuan compared with 324.24 million Yuan in the same period of last year, an increase of7.09%, which is mainly due to the increase of income from auto sales and jewelry wholesale& retail. Total profits amounting to 68.93 million Yuan, an increase of 38.44 million Yuan compared with 30.49 million Yuan in the same period of last year.Mainly because① operation income from controlling enterprise increased 12.64 million Yuan from a year earlier;②inenterprise business performance increase over the previous year,investment income increased 20.12 million yuan from a year earlier,(increased 10.21 million Yuan of investment income from shareholding enterprise Shenzhen Dongfeng Automobile Co., Ltd.and increased 8.23 million Yuan from Shenzhen Zungfu Tellus Auto Service Co., Ltd. and increased 1.68 million Yuan from Shenzhen Tellus Gman Investment Co., Ltd.;③5.28 million Yuan recognized as investment income from disposal of property company in May.The net profit belonging to parent Company is 66.86 million Yuan, an increase of 39.67 million Yuan compared with 27.19 million Yuan in the same period of last year,the net profit attributable to shareholder of listed company after deducted non-recurring gains/losses amounted as 54.43 million Yuan, an increase of 30.2 million Yuan from last year.
II. Main business analysis
1. Introduction
See the “I-Introduction” in “Discussion and Analysis of the Operation”
2. Revenue and cost
(1) Constitute of operation revenue
In RMB
|||||||
|-|-|-|-|-|-|
||2017||2016|||
|||Ratio in operation||Ratio in operation|y-o-y changes|
||Amount||Amount|||
|||revenue||revenue||
|Total operation|347,237,289.80||324,240,841.90|||
|||100%||100%|7.09%|
|revenue||||||
|According to industries||||||
|Auto sales|146,150,511.84|42.09%|138,702,514.96|42.78%|5.37%|
|Auto inspection and||||||
|maintenance and|50,192,766.34|14.45%|51,777,605.75|15.97%|-3.06%|
|accessories sales||||||
|Property rental and||||||
||108,174,167.58|31.15%|133,760,721.19|41.25%|-19.13%|
|service||||||
|Jewelry wholesale||||||
||42,719,844.04|12.30%||||
|and retails||||||
|According to products||||||
|Auto sales|146,150,511.84|42.09%|138,702,514.96|42.78%|5.37%|
|Auto inspection and||||||
|maintenance and|50,192,766.34|14.45%|51,777,605.75|15.97%|-3.06%|
|accessories sales||||||
|Property rental and||||||
||108,174,167.58|31.15%|133,760,721.19|41.25%|-19.13%|
|service||||||
|Jewelry wholesale||||||
||42,719,844.04|12.30%||||
|and retails||||||
|According to region||||||
|Shenzhen|304,517,445.76|87.70%|324,240,841.90|100.00%|-6.08%|
|Anhui|4,884,558.80|1.40%||||
|Sichuan|37,835,285.24|10.90%||||

(2) About the industries, products, or regions accounting for over10% of theCompany’s operating income or operating profit
√Applicable□ Not applicable
Does the Company need to comply with the disclosure requirements of the special industry
No
In RMB
||||||||
|-|-|-|-|-|-|-|
|||||Increase/decrease|Increase/decrease|Increase/decrease|
||Operating||||||
|||Operating cost|Gross profit ratio|of operating|of operating cost|of gross profit|
||revenue||||||
|||||revenue y-o-y|y-o-y|ratio y-o-y|
|According to industries|||||||
|Auto sales|146,150,511.84|141,236,154.23|3.36%|5.37%|6.15%|-0.71%|
|Auto inspection|||||||
|and maintenance|||||||
||50,192,766.34|38,200,637.20|23.89%|-3.06%|-5.54%|2.00%|
|and accessories|||||||
|sales|||||||
|Property rental|||||||
||100,820,353.86|33,397,969.18|66.87%|-19.94%|-36.64%|8.73%|
|and service|||||||
|Jewelry|||||||
|wholesale and|42,719,844.04|38,718,354.34|9.37%|||9.37%|
|retails|||||||
|According to products|||||||
|Auto sales|146,150,511.84|141,236,154.23|3.36%|5.37%|6.15%|-0.71%|
|Auto inspection|||||||
|and maintenance|||||||
||50,192,766.34|38,200,637.20|23.89%|-3.06%|-5.54%|2.00%|
|and accessories|||||||
|sales|||||||
|Property rental|||||||
||100,820,353.86|33,397,969.18|66.87%|-19.94%|-36.64%|8.73%|
|and service|||||||
|Jewelry|||||||
|wholesale and|42,719,844.04|38,718,354.34|9.37%|||9.37%|
|retails|||||||
|According to region|||||||
|Shenzhen|297,163,632.04|208,077,898.04|29.98%|-6.08%|-8.02%|1.47%|
|Anhui|4,884,558.80|8,047,976.80|-64.76%|||-64.76%|
|Sichuan|37,835,285.24|35,427,240.11|6.36%|||6.36%|

 Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based on latest oneyear‟s scope of period-end
□ Applicable√ Not applicable
(3) Income from physical sales larger than income from labors
√ Yes□ No
|||||||
|-|-|-|-|-|-|
|Industries|Item|Unit|2017|2016|v|
||Sales volume|Set|834|815|2.33%|
|Auto sales (vehicle)||||||
||Storage|Set|58|54|7.41%|

Reasons for y-o-y relevant data with over30% changes
□Applicable√ Not applicable
(4) Fulfillment of theCompany’s signed significant sales contracts up to this reporting period
□ Applicable√ Not applicable
(5) Constitute of operation cost
Classification of industries
In RMB
||||||||
|-|-|-|-|-|-|-|
|||2017||2016|||
|||||||Increase/decrease|
|Industries|Item||Ratio in operation||Ratio in operation||
|||Amount||Amount||y-o-y|
||||cost||cost||
|Auto sales|Auto|141,236,154.23|55.55%|133,056,820.98|58.09%|6.15%|
|Auto inspection|||||||
||Accessory,||||||
|and maintenance|||||||
||maintenance and|38,200,637.20|15.02%|40,440,530.10|17.66%|-5.54%|
|and accessories|||||||
||detection||||||
|sales|||||||
||Lease, property||||||
|Property rental|||||||
||management and|36,099,814.88|14.20%|55,545,498.55|24.25%|-35.01%|
|and service|||||||
||other||||||
||Retail and||||||
|Jewelry operation|w holesale of|38,718,354.34|15.23%||||
||jewelry||||||
|Total||254,254,960.65|100.00%|229,042,849.63|100.00%|11.01%|

 Note
(6) Whether the changes in the scope of consolidation in Reporting Period
√Yes□ No
Totally 16 enterprises included in consolidate statement for year of 2017, comparing with last year, there is one subsidiary included: Sichuan Tellus JewelryTechnology and one company disposed: Shenzhen SDG Tellus Property Management Co., Ltd.
(7) Major changes or adjustment in business, product or service of the Company in Reporting Period□ Applicable√ Not applicable
(8) Major sales and main suppliers
Major sales client of the Company
|||
|-|-|
|Total top five clients in sales (RMB)|21,186,896.12|

|||
|-|-|
|Proportion in total annual sales volume for top five clients|6.10%|
|Ratio of the sales from related parties in total annual sales||
||1.45%|
|among the top five clients||

Information of top five clients of the Company
|||||
|-|-|-|-|
|Serial|Name|Sales (RMB)|Proportion in total annual sales|
||Shenzhen Zung Fu Tellus Automobile|||
|1||5,047,619.20|1.45%|
||Service Co., Ltd.|||
||Shenzhen Jiafengcheng Industrial|||
|2||5,148,529.06|1.48%|
||Development Co., Ltd.|||
||Shenzhen Yiquan Investment Consulting|||
|3||4,410,000.00|1.27%|
||Co., Ltd.|||
|4|Shenzhen Hongjiayi Investment Co., Ltd.|3,504,542.86|1.01%|
||Shenzhen Xingguangda Jewelry Industrial|||
|5||3,076,205.00|0.89%|
||Co., Ltd.|||
|Total|--|21,186,896.12|6.10%|

 Other situation of main clients
□ Applicable√ Not applicable
Main suppliers of the Company
|||
|-|-|
|Total purchase amount from top five suppliers (RMB)|188,145,055.36|
|Proportion in total annual purchase amount for top five||
||74.00%|
|suppliers||
|Ratio of the purchase from related parties in total annual||
||0.00%|
|purchase among the top five suppliers||

Information of top five suppliers of the Company
|||||
|-|-|-|-|
|Serial|Name|Sales (RMB)|Proportion in total annual sales|
|1|FAW TOYOTA Motor Sales Co., Ltd.|153,457,533.60|60.36%|
||ShenzhenKaiheng Jewelry Industrial Co.,|||
|2||16,495,726.50|6.49%|
||Ltd.|||
|3|Shenzhen Jinyudeshang Gold Co., Ltd.|12,393,162.39|4.87%|
||TOYOTA Motor (China) Investment Co.,|||
|4||3,644,145.30|1.43%|
||Ltd.|||
|5|Shenzhen Perfect Diamond Co., Ltd.|2,154,487.57|0.85%|
|Total|--|188,145,055.36|74.00%|

 Other notes of main suppliers of the Company
□ Applicable√ Not applicable
3. Expenses
In RMB
||||||
|-|-|-|-|-|
||||Increase/decrease||
||2017|2016||Note of major changes|
||||y-o-y||
|Sales expense|16,490,379.71|16,656,674.49|-1.00%||
|Management expense|36,735,283.59|42,446,751.49|-13.46%||
||1,520,168.86|-505,960.97||Mainly due to the increase of loans|
|Financial expense|||||
|||||interest|

4.R&D investment
□ Applicable√ Not applicable
5. Cash flow
In RMB
|||||
|-|-|-|-|
|Item|2017|2016|Y-o-y changes|
|Subtotal of cash in-flow from|360,454,671.41|382,254,957.22||
||||-5.70%|
|operation activity||||
|Subtotal of cash out-flow from|362,547,739.46|324,380,022.90||
||||11.77%|
|operation activity||||
|Net cash flow from operation|-2,093,068.05|57,874,934.32||
|activity||||
|Subtotal of cash in-flow from|686,489,369.68|413,663,270.79||
||||65.95%|
|investment activity||||
|Subtotal of cash out-flow from|835,440,610.55|374,327,206.62||
||||123.18%|
|investment activity||||
|Net cash flow from investment|-148,951,240.87|39,336,064.17||
|activity||||
|Subtotal of cash in-flow from|239,272,000.00|64,330,000.00||
||||271.94%|
|financing activity||||
|Subtotal of cash out-flow from|124,931,753.63|82,228,479.17||
||||51.93%|
|financing activity||||
|Net cash flow from financing|114,340,246.37|-17,898,479.17||
|activity||||
|Net increased amount of cash|-36,704,421.54|79,312,929.17||
|and cash equivalent||||

Main reasons for y-o-y major changes in aspect of relevant data
√Applicable□ Not applicable
||||||
|-|-|-|-|-|
|Item|2017|2016|Y-o-y changes|Note|
|Net cash flow from operation|-2,093,068.05|57,874,934.32||Jewelry sales on credit from Sichuan|
|activity||||Tellus Company has long period of|
|||||collection and the goods deposit|
|||||paid to Zhoudafu by Anhui Starlight|
|||||Company|
|Subtotal of cash in-flow from|686,489,369.68|413,663,270.79|65.95%|More redemption of financial|
|investment activity||||products in the period and received|
|||||the margin from Xinglong Company|
|||||for equity transfer|
|Subtotal of cash out-flow from|835,440,610.55|374,327,206.62|123.18%|Increase of the financial products|
|investment activity||||investment|
|Net cash flow from investment|-148,951,240.87|39,336,064.17||The undue financial products|
|activity||||increased over that of last period|
||239,272,000.00|64,330,000.00|271.94%|More bank loans in the period and|
|||||investment from minority|
|Subtotal of cash in-flow from|||||
|||||shareholders increased from Tellus|
|financing activity|||||
|||||Starlight Company and Sichuan|
|||||Jewelry Company|
||124,931,753.63|82,228,479.17|51.93%|Loan payment increased, mainly due|
|Subtotal of cash out-flow from||||to the loan principal and interest|
|financing activity||||paid to SDG and the bank in the|
|||||period|
|Net cash flow from financing|114,340,246.37|-17,898,479.17||Bank loans increased from a year|
|activity||||earlier|

Reasons of major difference between the cash flow of operation activity in report period and net profit of the Company
□Applicable√Not applicable
III. Analysis of the non-main business
□ Applicable√ Not applicable
IV. Assets and liability
1. Major changes of assets composition
In RMB
||||||||
|-|-|-|-|-|-|-|
||End of 2017||End of 2016||||
||||||Ratio||
|||Ratio in total||Ratio in total||Notes of major changes|
||Amount||Amount||changes||
|||assets||assets|||
|Monetary fund|161,793,218.56|11.53%|218,497,640.10|18.38%|-6.85%||
|Account|44,215,236.68||113,736.64||||
|||3.15%||0.01%|3.14%||
|receivable|||||||
|Inventory|12,646,227.22|0.90%|11,038,915.69|0.93%|-0.03%||
|Investment|73,223,512.21||77,602,248.53||||
|||5.22%||6.53%|-1.31%||
|property|||||||
|Long-term|284,464,749.15||203,633,308.06||||
|equity||20.27%||17.13%|3.14%||
|investment|||||||
|Fix assets|120,296,822.84|8.57%|129,226,236.16|10.87%|-2.30%||
|Construction in|378,160,896.69||343,365,313.46||||
|||26.95%||28.88%|-1.93%||
|process|||||||
|Short-term loans|120,000,000.00|8.55%|50,000,000.00|4.21%|4.34%||
|Long-term loans|38,600,000.00|2.75%|12,000,000.00|1.01%|1.74%||

2. Assets and liability measured by fair value
□ Applicable√ Not applicable
3. Right of the assets restrained till end of the Period
Found more in the “Auditing Report 2017” disclosed on the same day in Juchao Website: 50. Assets with ownership or use right restrained listed in Note VI. Items of Consolidate Statement
V. Investment
1. Overall situation
√Applicable□Not applicable
||||
|-|-|-|
||Investment amount at same period of last||
|Investment amount in the period (RMB)||Changes|
||year (RMB)||
|97,600,000.00|4,980,000.00|1,807.63%|

 2. The major equity investment obtained in the reporting period
√Applicable□Not applicable
In RMB
||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||||||Index|
||||||||||||||Date of||
||||||||||Status||Current||||
|||||||||||||||of|
|Name|Princip|Method|Amoun||||||as of||investm|Whethe|disclos||
||||||||Term of|Type of||||||disclos|
|of|al|of|t of|Shareh|Capital|Partner|||the|Expecte|ent|r|ure (if||
||||||||investm|product||||||ure (if|
|investe|busines|investm|investm|olding|sources|s|||balance|d return|profit|litigatio|||
||||||||||||||applica||
||||||||ent|s|||||||
|||||||||||||||applica|
|e|s|ent|ent||||||sheet||and|n|||
||||||||||||||ble||
||||||||||date||loss|||ble|
||||||||||||||)||
|||||||||||||||)|
|||||||||||||||Found|
|||||||||||||||more in|
|||||||||||||||Notice|
|||||||||||||||(No.:|
|||||||||||||||2017-0|
|||||||Shenzh||||||||73)|
|Shenzh|||||||||||||||
|||||||en||||||||release|
|en|||||||||||||||
|||||||Runhe|||13%|||||d on|
|Xinglo|||||||||||||||
|||||||Union|||equity|||||Securiti|
|ng|Private||||||To 1|Propert|||||||
|||Acquisi|67,600,||Owned|Investm|||acquisit||||2017-0|es|
|Mecha|propert|||13.00%|||Jan.|y||0.00|0.00|N|||
|||tion|000.00||fund|ent|||ion||||9-02|Times,|
|nical|y lease||||||2030|leasing|||||||
|||||||Develo|||complet|||||Hong|
|Mold|||||||||||||||
|||||||pment|||ed|||||Kong|
|Co.,|||||||||||||||
|||||||Co.,||||||||Comm|
|Ltd.|||||||||||||||
|||||||Ltd.||||||||ercial|
|||||||||||||||Daily|
|||||||||||||||and|
|||||||||||||||Juchao|
|||||||||||||||Websit|
|||||||||||||||e|
|Sichuan|Sales of|New|30,000,|66.67%|Fund-ra|Chengd|2047-0|Sales of|Registr|0.00|558,48|N|2017-0|Found|

||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Tellus|jewelry|establis|000.00||ising|u|7-02|jewelry|ation||5.24||7-08|more in|
|ewelry||hed||||Ruihan|||complet|||||Notice|
|Technol||||||g|||ed|||||(No.:|
|ogy Co.,||||||Jewelry||||||||2017-0|
|Ltd.||||||Co.,||||||||53)|
|||||||Ltd,||||||||release|
|||||||Chengd||||||||d on|
|||||||u||||||||Securiti|
|||||||Caizhiy||||||||es|
|||||||uan||||||||Times,|
|||||||Jewelry||||||||Hong|
|||||||Co.,||||||||Kong|
|||||||Ltd.,||||||||Comme|
|||||||Chengd||||||||rcial|
|||||||u||||||||Daily|
|||||||Kaixing||||||||and|
|||||||Industri||||||||Juchao|
|||||||al Co.,||||||||Website|
|||||||Ltd.and|||||||||
|||||||Sichuan|||||||||
|||||||Baoxie|||||||||
|||||||Comme|||||||||
|||||||rcial|||||||||
|||||||Manage|||||||||
|||||||ment|||||||||
|||||||Co.,|||||||||
|||||||Ltd.|||||||||
||||97,600,||||||||558,48||||
|Total|--|--||--|--|--|--|--|--|0.00||--|--|--|
||||000.00||||||||5.24||||

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 had no securities investment in the reporting period.
(2) Derivative investment
□ Applicable√ Not applicable
The Company has no derivatives investment in the Period
5. Application of raised proceeds
√Applicable□Not applicable
(1) Overall application of raised proceeds
√Applicable□Not applicable
In 10 thousand Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||||||||Usage of||
|||||||Cumulativ|Ratio of||the||
||||||Total||||||
|||||||e raised|cumulative||retained||
||||Total|Total|raised|||Total||Raised|
|||||||capitals|raised||raised||
|||Total|raised|accumulati|capital has|||accumulati||capitals|
|||||||has|capitals||capitals||
|Year|Way|raised|capital|ve raised|purpose of|||ve raised||idle for|
|||||||purpose of|has||and what||
|||capitals|used|capitals|uses|||capitals||more than|
|||||||uses|purpose of||is expected||
||||in Period|used|changed in|||unused||two years|
|||||||changed in|uses||to invested||
||||||Period||||||
|||||||total|changed||with those||
||||||||||capitals||
||||||||||The||
||||||||||Company||
||||||||||used||
||||||||||temporaril||
||||||||||y idle||
||||||||||funds to||
||||||||||purchase||
||||||||||guaranteed||
||||||||||financial||
||Non -||||||||||
||||||||||products||
|2015|Public|63,352|3,696.78|48,185.25|17,097.4|17,097.4|26.99%|17,239.1||0|
||||||||||124.5||
||Offering||||||||||
||||||||||million||
||||||||||Yuan, raise||
||||||||||funds||
||||||||||account||
||||||||||balances||
||||||||||amounting||
||||||||||to||
||||||||||47,891,048||
||||||||||.56 Yuan||
|Total|--|63,352|3,696.78|48,185.25|17,097.4|17,097.4|26.99%|17,239.1|--|0|
|Explanation on General usage of raised capital|||||||||||
|According to the “Proposal of the Company‟s plan for non-public offering of shares” and other related proposals deliberated and|||||||||||
|approved by the Company‟s 19th extraordinary meeting of the seventh board of directors and the 4th extraordinary general meeting|||||||||||
|of 2014, and the “Approval for non-public offering of shares of Shenzhen Tellus(Group) Co., Ltd.” (CSRC license No. [2015]173)|||||||||||

||
|-|
|approved by China Securities Regulatory Commission, the Company has adopted non-public offering of shares to issue RMB|
|ordinary shares (A shares) of 77 million shares, and the issue price is 8.40 Yuan /Share. The total raised funds of this issuance are|
|646,800,000 Yuan; the net amount of raised funds is 633,520,000 Yuan after deducting the issuance costs of 13,280,000 Yuan. On|
|March 12, 2015, Ruihua Certified Public Accountants (special general partnership) has verified the capital of this issuance and|
|issued "Capital Verification Report" RHYZ No. [2015]48330003. During the reporting period, the Company has totally put into|
|raised funds of 36,967,800 Yuan, and accumulated to put into raised funds of 481,852,500Yuan|

(2) Situation of committed project of raised proceeds
√Applicable□Not applicable
In 10 thousand Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||||Amount|Investme|||||
||||||of|nt|Predicted|||Project|
||Projects|Total|Total||||||||
|||||Amount|accumula|program|serviceab|Profit|Reach the|feasibility|
||changed|committe|investme||||||||
|Committed investment|or not|d||invested|ted|till the|le|realized|predicted|was|
|projects &investment|(includin|investme|nt after||||||||
|||||in this|investme|period-en|condition|in this|interest or|changed|
|of raised fund|g|nt of|adjustme||||||||
||changed|raised||period|nt till the|d|date of|year|not|hugely or|
||partially)|capitals|nt (1)||||||||
||||||period-en|(3)=(2)/(1|project|||not|
||||||d (2)|)|||||
|Investment project commitment|||||||||||
||||||||||Not||
|1. Tellus Shuibei|||||||||||
||Y|26,000|33,097.4|660.78|25,999.25|78.55%||0|applicabl|N|
|Jewelry Building|||||||||||
||||||||||e||
|2.1 Newly increased|||||||||Not||
|renovation costs of|Y|6,809|2,799.79|36|36|1.29%||0|applicabl|N|
|Tellus Shuibei project|||||||||e||
||||||||||Not||
|2.2Bank loans payment|N|19,150|19,150|0|19,150|100.00%||0|applicabl|N|
||||||||||e||
|2.3 Sichuan Regional|||||||||Not||
|Jewelry Channel|Y|0|10,000|3,000|3,000|30.00%||55.85|applicabl|N|
|Platform Company|||||||||e||
||||||||||Not||
|2.4Retail market of|||||||||||
||Y|19,500|0|0|0|0.00%||0|applicabl|Y|
|jewelry business|||||||||||
||||||||||e||
||||||||||Not||
|2.5Jewerly e-business|Y|4,500|0|0|0|0.00%||0|applicabl|Y|
||||||||||e||
||||||||||Not||
|2.6 Jewelry training|||||||||||
||Y|3,800|0|0|0|0.00%||0|applicabl|Y|
|business|||||||||||
||||||||||e||

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|2.7 Automobile leasing|||||||||Not||
|business supporting the|Y|2,630|0|0|0|0.00%||0|applicabl|Y|
|jewelry market|||||||||e||
|Subtotal of|||||||||||
||--|82,389|65,047.19|3,696.78|48,185.25|--|--|55.85|--|--|
|commitment projects|||||||||||
|Investment orientation for over raised fund|||||||||||
|N/A|||||||||||
|Total|--|82,389|65,047.19|3,696.78|48,185.25|--|--|55.85|--|--|
||1. Tellus Shuibei Jewelry Building has currently completed the main construction, and completed other||||||||||
||acceptance except for planning acceptance. The project is in the pre-work of merchandise absorption, and||||||||||
||it is unable to determine the time for used.||||||||||
||2. In the investment projects of raised funds for supplementing the Company's working capital:||||||||||
||(1) Repayment of bank loans of 191,500,000 Yuan has been completed.||||||||||
||(2) The newly increased renovation costs of Tellus Shuibei project will be put into use according to the||||||||||
||project implementation progress.||||||||||
||(3) On 7 April 2017 and 4 May 2017, the Company holding the official 7th meeting of 8th BOD and AGM||||||||||
||of 2016 respectively, deliberated and approved the “Proposal of Cancelling Part of the Fund-Raised||||||||||
||Investment Projects”, that is, the jewelry e-business, jewelry training, jewelry market matching with the||||||||||
|Situation about not|||||||||||
||automobile leasing business supporting the jewelry market are determined to cancelled. (4) On 8 May 2017||||||||||
|coming up to schemed|||||||||||
||and 25 May 2017, the Company holding the 8th extraordinary meeting of 8th BOD and First Extraordinary||||||||||
|progress or expected|||||||||||
||shareholders meeting of 2017 respectively, deliberated and approved the “Proposal of ”Changed the||||||||||
|revenue and the|||||||||||
||Fund-Raised Purpose and Investment on Jewelry Channel Platform Company in Sichuan area”, that is, the||||||||||
|reason(In specific|||||||||||
||Company will contribute fund-raised of 100 million Yuan in the project of Sichuan Regional Jewelry||||||||||
|project)|||||||||||
||Channel Platform Company, the Company takes 66.67% equity in the above mentioned new company. (5)||||||||||
||On 12 December 2017 and 28 December 2017, the Company holding the 13th extraordinary meeting of 8th||||||||||
||BOD and Third Extraordinary Shareholders Meeting of 2017 respectively, deliberated and approved||||||||||
||“Proposal of Change the Projects with Fund-Raised Investment”, that is, the Company will change the||||||||||
||fund-raised projects according to actual conditions, increased more investment in Tellus Shuibei Jewelry||||||||||
||Buildings and the total fund raised investment, the second capital for decoration will reduce to 27.9979||||||||||
||million Yuan from former 68.09 million Yuan, the 13.93 million Yuan which has no projects occupied, the||||||||||
||40.0921 million Yuan reduced from decoration and 16.9519 million Yan from part of the interest and||||||||||
||financial products will totally (70.974 million Yuan) invested in the follow-up construction of Tellus||||||||||
||Shuibei Jewelry Building, the Tellus Shuibei Jewelry Building project plans to have 330.974 million Yuan||||||||||
||from the fund-raised after changed.||||||||||
||(1) Jewelry E-business: Jewelry e-commerce business: the jewelry e-commerce business market is||||||||||
||highly competitive, payback period is long, the Company needs to bear some business risks and||||||||||
||long-playing losses, which may bring adverse effects on the Company‟s overall performance if investing||||||||||
|Explanation on great|||||||||||
||the jewelry e-commerce platform according to the original plan under the current market situation, so the||||||||||
|changes of feasibility|||||||||||
||Company has decided to suspend the plan to use raised funds to invest in this project. The raised funds in||||||||||
|of project|||||||||||
||the original plan shall be used for other projects.(2) Jewelry retail market business: since 2015, affected by||||||||||
||the decline of prosperity in jewelry industry and the raise of property costs, large jewelry retail markets||||||||||
||across the country have shrunk the business and reduced the income and profits, if the Company continued||||||||||

|||
|-|-|
||to invest large funds into the jewelry retail market, the business risks would be large, so the Company has|
||planned to cancel the raised-fund investment plan for the jewelry retail market business. (3) Jewelry|
||training business: this project has not yet been put into use. The Company has started to investigate some|
||schools in early 2015 and found that there are already many jewelry training schools in Shenzhen Shuibei|
||area and the market competition is rather intense; at the same time, affected by the decline of prosperity in|
||jewelry industry, the demand for training business has substantially reduced. If the Company invests in the|
||construction of jewelry training schools, the return on investment is relatively low and the payback period|
||is long, so the Company has decided to suspend the investment plan for this project, and wait to argue until|
||the business of jewelry service industry goes smoothly and enough resources are accumulated. The raised|
||funds in the original plan shall be used for other projects. (4) Automobile leasing business supporting the|
||jewelry market: the project has not yet been put into use. One main reason is that Shenzhen Municipal|
||Government announced the implementation of car-purchase restriction policy on December 29, 2014, the|
||car purchase takes two methods, i.e. lottery and bidding, this policy made the Company unable to carry out|
||this business as planned; another reason is that the prosperity of jewelry industry has declined, the demand|
||for automobile leasing has greatly reduced in jewelry industry of Shuibei, and the business prospects are|
||influenced, so the Company has decided to cancel the investment in this project. The raised funds in the|
||original plan shall be used for other projects.|
|Amount, usage and|Not applicable|
|progress of using for||
|fund raising out of the||
|plan||
|Change of|Not applicable|
|implementation place||
|of investment project||
|of raised capitals||
||Applicable|
||Occurred in the period|
||1. On 7 April 2017 and 4 May 2017, the Company holding the official 7th meeting of 8th BOD and AGM of2016 respectively, deliberated and approved the “Proposal of Cancelling Part of the Fund-RaisedInvestment Projects”, that is, the jewelry e-business, jewelry training, jewelry market matching with theautomobile leasing business supporting the jewelry market are determined to cancelled. 2. On 8 May 2017and 25 May 2017, the Company holding the 8th extraordinary meeting of 8th BOD and FirstExtraordinaryshareholders meeting of 2017 respectively, deliberated and approved the “Proposalof ”Changed the Fund-Raised Purpose and Investment on Jewelry Channel Platform Company in Sichuanarea”, that is, the Company will contribute fund-raised of 100 million Yuan in the project of SichuanRegional Jewelry Channel Platform Company, the Company takes 66.67% equity in the above mentionednew company. 3.On 12 December 2017 and 28 December 2017, the Company holding the13thextraordinary meeting of 8th BOD and Third Extraordinary Shareholders Meeting of 2017 respectively,deliberated and approved “Proposal of Change the Projects with Fund-Raised Investment”, that is, theCompany will change the fund-raised projects according to actual conditions, increased more investment inTellus Shuibei Jewelry Buildings and the total fund raised investment, the second capital for decorationwill reduce to 27.9979 million Yuan from former 68.09 million Yuan, the 13.93 million Yuan which has noprojects occupied, the 40.0921 million Yuan reduced from decoration and 16.9519 million Yan from part of|
|Adjustment of||
|implementation way||
|for investment project||
|of raised capitals||

|||
|-|-|
||the interest and financial products will totally (70.974 million Yuan) invested in the follow-up constructionof Tellus Shuibei Jewelry Building, the Tellus Shuibei Jewelry Building project plans to have 330.974million Yuan from the fund-raised after changed.|
||Applicable|
||On April 27, 2015, the Company held the thirtieth interim meeting of the seventh board of directors whichdeliberated and approved the motion about replacing the self-raised funds beforehand invested infundraising project with the raise funds, and agreed the Company to replace the self-raised funds of114,162,000 Yuan invested in fundraising project with the raise funds, of which 15.6 million Yuan wasused to replace and supplement the beforehand invested self-raised funds of the Company‟s circulatingfunds and 98,562,000 Yuan was used to replace and supplement the beforehand invested self-raised fundsof Tellus ShuibeiJewelry Building project. The Company‟s independent director and sponsor institutionhave expresses their agreement on this matter.|
|Particular about the||
|advanced input and||
|replacement||
|Temporarily|Not applicable|
|supplement for the||
|current capitals with||
|idle raised capitals||
|Balance of the amount|Not applicable|
|for raised-fund||
|investment project after||
|implementation and||
|reasons||
||On 7 April 2017 and 4 May 2017, the Company holding 7th session of 8th BOD and the AGM 2016|
||respectively, deliberated and approved the proposal of Purchasing Financial Products with Part of the|
||Raised-Funds and Self-owned Capital, that is, in the premise of guarantee no impact on construction|
|Use of funds and|process of the raised-fund projects, in one year since the AGM resolution agreed, use the accumulate idle|
|allocation for reserved|raised-fund up to 500 million Yuan for purchasing short-term guaranteed financial products; cumulative|
|raised capital|amount of the idle raised-fund up to 200 million Yuan use for purchasing low-risk and highly liquid|
||financial products. Among the above said limit, the funds can be scroll to used; during the implementation,|
||the investment balance will not over 250 million Yuan at any point of time. Till end of 31st December 2017,|
||the balance of cash management used from idle raised-fund amounting to 124.5 million Yuan.|
|Issues or other||
|conditions found in use||
||N/A|
|of fund raised and||
|disclosure||

(3)The changed project of raised proceeds
√ Applicable□ Not applicable
In 10 thousand Yuan
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||||||||Project|
|||||Accumulati|||||feasibility|
|||Total raised|||Investment|Predicted||||
||||Amount|ve funds||||Reach the|was|
||Correspondi|funds plans|||program till|serviceable|Profit|||
|Project after|||actually|actually||||predicted|changed|
||ng original|to invested|||the|condition|realized in|||
|changed|||invested in|invested||||interest or|hugely or|
||project|after|||period-end|date of|this year|||
||||the Period|ended as the||||not (Y/N)|not after|
|||changed (1)|||(3)=(2)/(1)|project||||
|||||Period (2)|||||project|
||||||||||changed|
|Tellus|Tellus|||||||||
|Shuibei|Shuibei|||||||||
|||33,097.4|660.78|25,999.25|78.55%||0|N|N|
|Jewelry|Jewelry|||||||||
|Building|Building|||||||||
|Newly|Newly|||||||||
|increased|increased|||||||||
|renovation|renovation|||||||||
|costs of|costs of|2,799.79|36|36|1.29%||0|N|N|
|Tellus|Tellus|||||||||
|Shuibeiproj|Shuibeiproj|||||||||
|ect|ect|||||||||
||Jewelry|||||||||
||retailing|||||||||
||market,|||||||||
||jewelry|||||||||
||e-business,|||||||||
|Sichuan||||||||||
||jewelry|||||||||
|Regional||||||||||
||training|||||||||
|Jewelry||||||||||
||business|10,000|3,000|3,000|30.00%||55.85|Y|N|
|Channel||||||||||
||and|||||||||
|Platform||||||||||
||automobile|||||||||
|Company||||||||||
||leasing|||||||||
||business|||||||||
||supporting|||||||||
||the jewelry|||||||||
||market|||||||||
|Total|--|45,897.19|3,696.78|29,035.25|--|--|55.85|--|--|
|Explanation on reasons of the changes,|||1. On 7 April 2017 and 4 May 2017, the Company holding the official 7th meeting of 8th|||||||
|decision-making procedures and|||BOD and AGM of 2016 respectively, deliberated and approved the “Proposal of Cancelling|||||||
|information disclosure (explain by|||Part of the Fund-Raised Investment Projects”, that is, the jewelry e-business, jewelry|||||||

|||
|-|-|
|specific project)|training, jewelry market matching with the automobile leasing business supporting the|
||jewelry market are determined to cancelled. 2. On 8 May 2017 and 25 May 2017, the|
||Company holding the 8th extraordinary meeting of 8th BOD and First|
||Extraordinaryshareholders meeting of 2017 respectively, deliberated and approved the|
||“Proposal of ”Changed the Fund-Raised Purpose and Investment on Jewelry Channel|
||Platform Company in Sichuan area”, that is, the Company will contribute fund-raised of|
||100 million Yuan in the project of Sichuan Regional Jewelry Channel Platform Company,|
||the Company takes 66.67% equity in the above mentioned new company. 3. On 12|
||December 2017 and 28 December 2017, the Company holding the 13thextraordinary|
||meeting of 8th BOD and Third Extraordinary Shareholders Meeting of 2017 respectively,|
||deliberated and approved “Proposal of Change the Projects with Fund-Raised Investment”,|
||that is, the Company will change the fund-raised projects according to actual conditions,|
||increased more investment in Tellus Shuibei Jewelry Buildings and the total fund raised|
||investment, the second capital for decoration will reduce to 27.9979 million Yuan from|
||former 68.09 million Yuan, the 13.93 million Yuan which has no projects occupied, the|
||40.0921 million Yuan reduced from decoration and 16.9519 million Yan from part of the|
||interest and financial products will totally (70.974 million Yuan) invested in the follow-up|
||construction of Tellus Shuibei Jewelry Building, the Tellus Shuibei Jewelry Building|
||project plans to have 330.974 million Yuan from the fund-raised after changed.|
||1. Tellus Shuibei Jewelry Building has currently completed the main construction, and|
|Particular and reasons of fail to||
||completed other acceptance except for planning acceptance. The project is in the pre-work|
|reached the target advance or||
||of merchandise absorption, and it is unable to determine the time for used.|
|anticipated income (explain by||
||2. Newly increased renovation costs of Tellus Shuibei project will put into use according to|
|specific project)||
||the progress|
|Explanation on major changes on||
|project feasibility after project|N/A|
|changed||

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
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||||Implem|||
|||||Net||||||||||
||||||||||||ented on|||
|||||profit||Ratio of||||||||
||||||||||||schedul|||
|||||contribu||the net||||||||
||||||||||||e (Y/N),|||
|||||ted by||profit||||Owners||||
||||||||||||explaine|||
|||||the sold||from||Whether||hip||||
||||Trading||||||Relation||d the|||
|||||equity|Impact|equity||it was a||transferr||||
||||price||||Pricing||ship||reasons||Disclos|
|Counter|Equity|Sales||from|on the|sales||related||ed||Disclos||
||||(10||||principa||with the||and||ure|
|part|sold|day||period-b|Compan|in total||transacti||complet||ure day||
||||thousan||||l||counter||counter||index|
|||||egin to|y|net||on||ely or||||
||||d Yuan)||||||part 与||measure|||
|||||date for||profit of||(Y/N)||not||||
||||||||||||for not|||
|||||sales (in||the||||(Y/N)||||
||||||||||||complet|||
|||||10||Compan||||||||
||||||||||||ed on|||
|||||thousan||y||||||||
||||||||||||schedul|||
|||||d Yuan)||||||||||
||||||||||||e|||
||||||||In|||||||
||||||||accorda|||||||
||||||||nce with|||||||
||||||||the||||||Notice(|
||||||||Assets||||||No.:|
||||||||||SDG|||||
||||||||Apprais||||||2017-03|
||||||||||Property|||||
||||||||al||||||9)|
||||||||||Compan|||||
||||||||Report||||||released|
||100%||||||||y has|||||
||||||||(Guozo||||||on|
||equity||||||||the|||||
||||||||nglian||||||Securiti|
|Shenzhe|of||||||||same|||||
||||||||Ping||||||es|
|n SDG|Shenzhe||||Transfer||||controlli|||||
||||||||Bao Zi||||||Times,|
|Property|n SDG||||income||||ng||On|||
|||2017-05|||||920170|||||2017-05|Hong|
|Manage|Tellus||1,415|25|of 5.28|8.03%||Y|sharehol|Y|schedul|||
|||-25|||||No.|||||-26|Kong|
|ment|Property||||million||||der of||e|||
||||||||3-0058||||||Comme|
|Co.,|Manage||||Yuan||||the|||||
||||||||issued||||||rcial|
|Ltd.|ment||||||||Compan|||||
||||||||by||||||Daily|
||Co.,||||||||y, we|||||
||||||||Guozho||||||and|
||Ltd.||||||||has|||||
||||||||nglian||||||Juchao|
||||||||||related|||||
||||||||Land||||||Website|
||||||||||relations|||||
||||||||Real||||||(www.c|
||||||||||hip|||||
||||||||Estate||||||ninfo.co|
||||||||Assets||||||m.cn).|
||||||||Apprais|||||||
||||||||al Co.,|||||||
||||||||Ltd.- the|||||||

|||
|-|-|
|enterpri|f|
|se with||
|qualific||
|ation o||
|exercisi||
|ng||
|securitie||
|s and||
|futures||
|business||
|, the||
|assessm||
|ent is||
|adopted||
|asset-ba||
|sed||
|approac||
|h and||
|income||
|approac||
|h||

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|||Total assets|Net Assets|||Net profit|
|name||business|capital|||revenue|profit||
|Shenzhen|||||||||
|Auto||Sales of auto|||||||
||||RMB 58.96|297,482,781.|257,455,261.|19,529,339.2|11,793,481.7|10,052,309.0|
|Industry and|Subsidiary|and|||||||
||||million|26|67|4|3|7|
|Trade||accessories|||||||
|Corporation|||||||||
|||Auto|||||||
|Shenzhen SD|||||||||
|||maintenance|||||||
|Huari|||||||||
|||and|US$ 5|76,167,949.9|28,883,354.7|36,550,379.4|||
|Automobile|Subsidiary||||||-525,444.47|137,080.56|
|||production|million|0|8|2|||
|Enterprise|||||||||
|||and sales of|||||||
|Co.Limited|||||||||
|||accessories|||||||
|Shenzhen|||RMB||||||
|||Property||441,958,976.|281,009,360.||-2,390,588.0|-2,390,474.3|
|Zhongtian|Subsidiary||338.224|||5,070,427.53|||
|||rental||41|30||1|1|
|Industrial|||million||||||

||||||||||
|-|-|-|-|-|-|-|-|-|
|Co., Ltd|||||||||
|Shenzhen|||||||||
|Huari Toyota||Sales of|RMB 2|50,066,796.2|-1,405,479.6|194,934,139.|||
||Subsidiary||||||2,926,927.83|2,929,767.26|
|Automobile||automobile|million|7|2|85|||
|Sales Co. Ltd|||||||||
|Shenzhen|||||||||
|||Manufacture|||||||
|Xinyongtong|||||||||
|||of inspection|||||||
|Auto Vehicle|||RMB 19.61|11,112,154.1|||||
||Subsidiary|equipment|||4,065,550.52|4,833,791.88|1,299,875.76|919,062.12|
|Inspection|||million|1|||||
|||for motor|||||||
|Equipment|||||||||
|||vehicle|||||||
|Co., Ltd.|||||||||
|Shenzhen|||||||||
|Tellus||Inspection|||||||
|Xinyongtong||and repair of|RMB 32.90|86,792,919.4|51,647,320.9|12,788,630.5|||
||Subsidiary||||||4,666,233.56|4,015,969.18|
|Automobile||motor|million|1|6|2|||
|Development||vehicle|||||||
|Co. Ltd|||||||||
|Anhui Tellus|||||||||
|Starlight||Jewelry|||||||
||||RMB 9.8|14,193,711.0|10,344,732.1||-4,376,133.0|-4,376,744.0|
|Jewelry|Subsidiary|sales, jewelry||||4,884,558.80|||
||||million|4|9||0|5|
|Investment||investment|||||||
|Co.,Ltd.|||||||||
|Shenzhen|||||||||
|Zung Fu|||||||||
|Tellus|Joint stock|Car sales and|RMB 30|413,827,603.|240,327,190.|1,246,685,89|64,404,075.0|49,997,245.0|
|Automobile|Company|maintenance|million|00|00|1.00|0|0|
|Service Co.,|||||||||
|Ltd.|||||||||
|||Manufacture|||||||
|Shenzhen|||||||||
|||and|||||||
|Dongfeng|Joint stock||RMB 100|926,904,747.|157,768,303.|708,394,340.||16,335,024.8|
|||maintenance|||||5,805,379.72||
|Automobile|Company||million|52|05|47||3|
|||of|||||||
|Co., Ltd.|||||||||
|||automobile|||||||
|||Investment in|||||||
|Shenzhen|||||||||
|||industry,|||||||
|Tellus Gman|Joint stock||RMB|434,882,962.|112,488,553.|53,060,351.0|-2,073,272.9|-1,873,272.9|
|||property|||||||
|Investment|Company||123,704,960|12|64|6|9|9|
|||management|||||||
|Co., Ltd.|||||||||
|||and leasing|||||||

Particular about subsidiaries obtained or disposed in report period
√ Applicable□ Not applicable
||||
|-|-|-|
|||Impact on overall operation and|
|Name|Way to obtained and dispose in the Period||
|||performance|
|Sichuan Tellus Jewelry Technology Co.,||Increased profit of 1.27 million Yuan in|
||Newly established subsidiary||
|Ltd.||total in the year|
|Shenzhen SDG Tellus Property||Achieved investment income of 5.28|
||Sold by equity transfer||
|Management Co., Ltd.||million Yuan|

Notes of holding and shareholding companies
VIII. Structured vehicle controlled by the Company
□ Applicable√ Not applicable
IX. Future Development Prospects
(I) The development strategy and implementation situation of the Company
After Tellus made a strategic planning of its transition to jewelry industry since 2014, the jewelry market just went through dramatic changes in the pattern after a decade of robust growth and it entered into a new development stage of optimizing and integrating industry. Based on the practical investigation on jewelry industry for more than two years, Tellus has a much clearer picture of transition routine, strategic layout and core working content, that is, on the basis of physical platforms at Shuibei and Buxin, with distribution channels and terminal platforms from Sichuan and Hefei companies and through providing whole industry supply chain financial services, a large financial service platform would be built to link the platforms of jewelry regional distributions, retails and e-commerce, to make financial services permeating into the whole industry chain, to make the business drain to every platform, to expand its business scale in a rapid way, to accumulate real data of the industry and to enhance the resource sharing among each platforms, so as to form a real jewelry ecosystem and transit to a third-party comprehensive operating service provider. During the reporting period, the Company has taken active steps to promote the implementation of its transition strategy and part of projects has already put into operation, which has laid a solid foundation for the successful transition of Tellus. In the future, the Company will actively promote the implementation of its transition strategy with various innovation models.
1.Physical platform
(1)Industry Park project: physical platform is the core base of the overall strategy of the Company. By the end of reporting period, except that the first phase project of Tellus Shuibei Jewelry Building was still undertaking planning acceptance, all the other acceptances had been completed and ready for decoration and pre-lease; Shuibei Jinzuo Building, constructed by a joint venture Shenzhen Tellus Gmen Investment Co.,Ltd. as the main implementation body, has fully went into operation and turned profitable; The project of Xinglong Gold Jewelry Building, previously named as Shenzhen Shuibei Xinglong Research and Development Center Building, which was constructed by its joint-stock corporation Shenzhen Xionglong Machinery Mold Co.,Ltd. as the main implementation body, has completed the process of planning construction and quality acceptance in December
2017, and it is under decoration and ready for decoration and pre-lease; the Company is making preparation for
preliminary works of the second phase of Tellus Shuibei Jewelry Building project, striving to get it started as soon
as possible in 2018.
(2)The industry of Shenzhen Jewelry is mainly concentrated in the areas of Shuibei and Buxin in Luohu district of Shenzhen. Since the second half of 2016, the Luohu district government has formulated a strategic planning on the supply-side structural reform of Jewelry industry in Luohu and Buxin, making Buxin area as the Luohu Jewelry Intelligent Manufacturing Base. The Company is the largest estate owner in the No. 04 and No. 05 sub-unit of Buxin Industry Area Urban Renewal Units Planning project for the reason that it has a multitude of real estates in Buxin industry area and the transition strategy of the Company is fully complying with the reform strategy made by Luohu district government. During the reporting period, the Company has engaged an intermediary organization to formulate a comprehensive scheme, and in order to maximize its revenue, the Company will make a clear plan for the development, major implementation body, compensation for demolition as well as renovation in 2018 in line with the existing planning of Luohu district.
2.Regional distribution platform
In July 2017, with raised funds, the Company, in cooperation with a competitive distributor in Sichuan area, jointly invested to set up Sichuan Tellus Jewelry Technology Co.,Ltd. Which declared the officially implementation of the first regional distribution platform. During the reporting period, under smooth development, the project in Sichuan has officially put into operation in September and successfully turned profitable through effective and reasonable risk control. After this business model has been tested by practice, the Company will copy it and extend this regional distribution platform to a series of major regions in the future so as to form a national distribution platform in the end, and will provide various value-added supporting services such as grafting finance and have initial market influences on the upstream and downstream of jewelry industry by means of national distribution platform.
3.Retail terminal platform
The Company has invested to establish Anhui Tellus Xingguang Jinzun Jewelry Co.,Ltd. in 2016, which was the first project of Tellus during the implementation of transition, also the first try beyond cities of Tellus jewelry platform. The core staffs from Tellus were participated in all the works related to decoration, pre-lease, financial approving and daily operation; established relative working systems for finance, procurement and human resources; and the EOS system was supported to remotely query the retail sales data at terminal. The first phase of the first floor at the mall has started a trial operation in May Day of 2017 and all the stores at the first floor officially put into operation during the National Day of 2017. Taking the project in Anhui province as the window of entering into the jewelry market, jointly cooperated with superior jewelry distributors, the Company has had a good master of jewelry terminal operation model and obtained consumption data with excellent resources in distribution and industry so as to enhance the profitability and sustainable development capacity of the Company, which was of positive significance for the future development of the Company. When the business model of retail platform has been fully developed and after its project operation capability has been verified, Tellus will copy and expand its jewelry retail market business to several areas in the country in various ways. At that time, the retail terminal platform will be able to provide terminal supports and industry environment tentacles for physical platform, and provide whole industry chain services as well as more terminal supports for the Company.
4.E-commerce platform
In order to give full play to its advantages in fixed asset, to accelerate the steps to transit into jewelry industry, to realize the strategic planning and to avoid such unfavorable effects as long payback period and loss at embryonic phase caused by direct investment by the Company and by cultivating jewelry industry from scratch, Tellus was planning to make equity investment on potential target enterprises by means of setting up jewelry industry innovation investment funds, making the most of advantages of capital of the funds, professional resources from professional investment organization and other social resources, to make a strategic goal that is to build Tellus into a jewelry industry comprehensive service operator, with professional investment mechanism and ways, to reserve superior mergers and acquisitions projects for the industry development of the Company, to cultivate new profit growth point, to innovate business model, expand business scale and achieve a sustainable, health and smooth development of the Company. The funds will be focused on jewelry industry e-commerce, big data, supply chain finance, brand service, jewelry designer platform, jewelry industry intelligent manufacturing and other related fields, and dedicated to cultivate leaders in segment industry with cross-stage investment and resources integration. By making the most of the low point of jewelry market cycle and grasping the opportunity of the wave of internet application, the Company has explored the leading enterprises with new business format in jewelry industry chain and sought for opportunities of mergers and acquisitions at price depression, with priority to the project of establishing innovative internet platform enterprises within jewelry industry.
During the reporting period, the Company has finished the preliminary decision-making and preparatory works of the funds, including the selection of fund partner, determination of the details of fund scheme, making market investigation on part of jewelry internet platform enterprise. At present, the fund staffs are actively carrying out the fidelity investigations as well as screening investment projects, striving to make investments on the selected suitable internet platform enterprise in 2018, to integrate resources and business in line with the overall strategic planning of Tellus, to build Tellus jewelry e-commerce platform.
5.Design and entrepreneurship platform
Tellus was successfully elected as the chairman company of Shenzhen Jewelry Designer Association in September 2017 and launched a project that the designer counters entering into the platform of Sichuan and Anhui in 2017, offering a fundamental guarantee and strong support to the innovation and entrepreneurship platform for the designers in the future. During the reporting period, the Company has handed in the Construction Scheme of Tellus Group Innovation and Entrepreneurship Base to Shenzhen Development and Reform Commission, which has already been approved by Shenzhen Development and Reform Commission and won the awarding of Shenzhen Innovation and Entrepreneurship Base. Tellus has initially identified the service model of Innovation and Entrepreneurship Base. In 2018, Tellus will be planning to make the most of its resources advantage, to cooperate with part of quality enterprises in jewelry industry, to prompt the implementation of innovation and entrepreneurship base with over 3,000 square meters of property planned at the first phase of Tellus Shuibei Jewelry Building, to jointly invest on building gold jewelry innovation incubator platform. With the innovation within industry as well as new innovation teams, at the theme of New Design, New Technique, New Material, New Technology and New Model, a world-leading jewelry industry innovationR&D platform will be built to provide services for all the industry, to renovate the jewelry industry by the way of Innovation and
Entrepreneurship, constantly inject new energy to the upgrading of jewelry industry transition, and to enhance the comprehensive competitiveness of jewelry industry.
6.Jewelry big financial service platform
In the new strategic concept of the Company, all the platforms of jewelry regional distribution, retail terminal, e-commerce as well as innovation and entrepreneurship would attract customers with the supply chain financial service provided by Tellus big financial service platform, drain the business to each platform, expand the business scale in a rapid way, accumulate real data of the industry, enhance the resource sharing between platforms, so as to form a real jewelry industry ecosystem. In 2018, Tellus will take active steps to promote the landing of all the platform projects especially the larger financial service platform, explore and develop business of financing guarantee and small loans by means of investment and mergers and acquisitions, providing standard and fast financial services to the nationwide customers. In the future, based on the development situation of the business, Tellus will continue to explore the feasibility of establishing factoring companies and pawn companies, improve the Tellus supply chain financial service, and build a standard and comprehensive big financial service platform. The big financial service platform, working as the bond, will be better integrated into the business of all the platforms and remain a crucial support for the future business of the Company.
7.Jewelry industry ecosystem
In conclusion, with implementation of the above planning, based on the physical platform located in Shuibei and Buxin Industry Park as well as regional distribution and retail terminal platforms, the Company has built a comprehensive jewelry financial service for the whole industry chain, whole industry chain trading service as well as design and entrepreneurship service, linking to the industry, capital and business partners on one side while linking to designers, products and users on the other side. In addition, all the platforms, fields and services will support and inter-connect one another, jointly creating a third-party service platform for jewelry industry and building a jewelry industry ecosystem.
(II)Operating plan
1.Business review
In last year, the Company made the development strategy and operation plan for 2017. during the reporting period, the Company reinforced corporate management and improved management ability and effectiveness through investing more efforts in management and increasing vertical service and management, which enabled Tellus Group to continuously enhance its recurring income and record the best performance in operating indicators in the history. With respect to implementation of business transformation, the Company established the Jewelry Regional Distribution Platform Project in Sichuan, realized opening and operation of Anhui Jewelry Retail Platform, completed establishment of decision-making procedure of jewelry industry innovation investment funds, promoted settlement of special designer counters in Sichuan and Anhui platforms according to the scheduled development strategy. Substantial progress has been made by the Company in these platform projects, which propels its strategic transformation.
2.Operating plan for 2018
(1)to witness solid progress in transformed business with jewelry supply chain service platform as the core business and physical platform construction as the foundation
In 2018, the Company will facilitate the strategic transformation with strong determination, aiming to drive forward the materialization and development of the overall strategy with diversified platform business, including: carry out the jewelry industry supply chain financial service business via various forms to build the mass financial service platform of Tellus Group; improve operation scale of Suchuan distribution platform project, establish reasonable and effective risk control system, further determine and verify operation model to improve operation efficiency; make good operation of Hefei retail platform to accomplish operating targets with the best efforts; complete planning acceptance and title registration in relating to the phase I of Shuibei Jewelry Building, complete the business invitation and operation of the tower building and podium building; promote preliminary works of the phase II of Shuibei Jewelry Building; identify the property renovation plan in Buxin region to maximize interest protection for the Company; proactively facilitate materialization of the golden jewelry innovation incubator platform project and double-innovation platform.
(2)to maximize efficiency of the existing business while adjusting business structure and securing growth
With respect to management of resource assets, the Company has carried put a series of effective preliminary business invitation works in 2017, by which, clients have been enabled to be secured by the Company through execution of letter of intention for the phase I of Tellus Shuibei Jewelry Building. In particular, the core areas available for rent have been totally booked by potential clients through execution of letter of intention. In 2018, the Company will capitalize on the operation of phase I of Shuibei Jewelry Building to increase income and profit arising from resource assets via various innovative operation and service model, targeting to maximize value of resource assets. Meanwhile, the Company will manage to improve operating management, enhance value of the existing properties, optimize working manners to create value and maintain stable operation of the existing resource business. Our subsidiaries, in addition to conducting resource assets operation, will establish reasonable planning pursuant to the government planning to make substantial breakthrough in old property renovation project. Besides, intensive efforts will be made to propel upgrade and transform of existing property to improve property quality, and to make property renovation based on business planning to realize value of the Company to the largest extent.
(3)to have deep understanding on and implement the conference spirits delivered by the
19th
National Congress of the CPC, to propel party building and poverty assistance properly
The Company will further implement the spirits delivered by the
19th
National Congress of the CPC by combination of the party building works and its operation and management. To materialize poverty assistance on a precise basis to complete its planning in this regard.
(4)to explore and innovate talent mechanism
In order to satisfy its needs for business transform and project materialization, the Company will explore system reform of the respective enterprise and market-based selection and engagement of its leader team, improve
safeguard measures for talents and assessment incentives system and cultivation of management reserve, and cultivate and reserve the professionals required for business transform.
(III) Possible risks and countermeasures
In the process of strategic transformation and project operation, we will objectively and clearly understand the possible risks and take active and effective measures to prevent them:
1. Risks caused by fluctuations in the macroeconomic situation
In 2017,China‟s supply-side structural reform gradually showed its effects, andthe GDP was on a steady rise. However, at the same time,China‟s reforms have entered the critical stage and the deep end, there are many intricate and complex issues need to be resolved, and daunting challenges still exist. In 2018, there are still uncertainties in the continued recovery of the global economy.China‟s economy is still facing the risks of slowdown in growthand increasing industrial restructuring pressures,which brings uncertainties to the overall economic environment and thecompany‟s operating performance.
In response to this risk, the company will actively adopt various types of preventive measures. The first is to comprehensively improve the profitability of original businesses. The profits from thecompany‟s main businesses have hit new highs in recent years, and the company will continue to strengthen the management, enhance the profitability by strengthening customer development, optimizing management structure, and improving service quality, meanwhile, increase the investment in strategic transformation of new businesses, explore incremental markets, expand business scale, find new profit growth points, and ensure the stable development of thecompany‟s operating performance.
2. Risks brought by transforming to new fields
After years of research and planning, the company has had a more clear understanding about the characteristics of jewelry industry, the core links of industrial chain and the pain points of enterprises, and has begun to spare no effort to implement the transformational business, in this process, the company is facing various kinds of challenges in the transformation of new business fields. Some of thecompany‟s transformation projects have been implemented,although the development prospects of such projects are good, the projects need to maintain a sustained and stable operation for a long period of time after being put into operation so as to achieve scale and brand effect. In addition, whether or not the effective synergy can be formed among each business platform project and whether the synergy can mutually promote the business development still require the inspection of actual operations. Therefore, there may be a risk oflong investment payback period in theCompany‟s transformational business.
In response to this risk, firstly, the company will firm the transformation beliefs, strictly control the investment projects, and make scientific and prudent decisions to protect the investment returns. Secondly, the company will deepen its operation and management, strengthen the management and supervision to its subsidiaries, seek benefits from management, discover and solve problems encountered in new business development, and improve its own operating and management level; and continue to promote the information management, steadily push forward the reform and innovation, establish a market-oriented assessment and incentive mechanism, mobilize the enthusiasm of all employees, improve the management level and operating efficiency of enterprises, and ensure
that the implemented projects are efficient and controllable.
X. Reception of research, communication and interview
1. In the report period, reception of research, communication and interview
□ Applicable√Not applicable
No reception of research, communication and interview in the Period
Section V. Important Events
I. Profit distribution plan of common stock and capitalizing of common reserves plan
Formulation, Implementation and Adjustment of common stock Profit Distribution Policy Especially Cash Dividend policy during the Reporting Period
√Applicable□ Not applicable
The company attaches great importance to the reasonable returns for investors; the Articles of Association clearly defines the standards and proportions of cash dividends, the decision-making procedures and mechanisms, and the form of profit distribution. The company strictly complies with the Articles of Association and the resolutions of the shareholders' general meeting, the dividends standards and proportions are clear, relevant decision-making procedures and mechanisms are complete, the independent directors are responsible and give play to their duties, the medium and small shareholders have the opportunities to express their opinions and demands, and the legitimate rights and interests of medium and small shareholders are fully maintained. During the reporting period, the company has not implemented profit distribution.
|||
|-|-|
|Special description on cash dividend policy||
|Whether it meets the requirements of the Article of Association||
||Y|
|or the Resolution of the General Meeting (Y/N):||
|Whether the bonus standards and proportion is clear and||
||Y|
|well-defined (Y/N):||
|Whether has a completed relevant decision-making procedures||
||Y|
|and mechanism (Y/N):||
|Whether independent directors fulfill duties and play a due role||
||Y|
|(Y/N):||
|Minority shareholders whether has opportunity of full expression||
|and appeals, the legal interest of the minority are being protected|Y|
|totally (Y/N):||
|As for the adjustment and change of cash bonus policy, the||
|condition and procedures whether meets regulations and|Y|
|transparent (Y/N):||

Distribution plan (pre-pan) for common stock dividends, capitalization scheme of capital reserve (pre-plan) in latest three years (including this period)
The parentCompany‟s retained profit ended as 2015 and 2016 was -91,388,900 Yuan and -55,254,500 Yuan respectively, which is no profit distribution and cash bonus carried out for fails to meet the condition of dividends;
The retained profit in consolidate statement ended as 31st December 2017 was 97,798,595.80 Yuan, retained profit of the parent
Company amounting to -1,372,862.05 Yuan.
In reporting period, Shenzhen Automobile Industry and Trading Co., Ltd., - the only subsidiary with over10% impact on consolidate
retained profit of the Company. The subsidiary did not have bonus carried out for its working capital strained and there is not enough cash to pay dividends.
In accordance with the 7.6.7 clause of the “Guidelines for the Operation of the Listed Companies on Main Board of Shenzhen Stock Exchange” (2015 Revised): when a listed company formulating a profit distribution plan, it should be based on the distributable profit carried out in statement of the parent company. Meanwhile, to avoid super distribution, the principle of which is lower in distributable profit between the consolidate statement and parentcompany‟s statement should be recognized as the specific distribution ratio.
The Company did not carry out 2017 profit distribution for the negative retained profit in parentcompany‟s statement, and no capitalizing of public reserves carry out either.
Cash dividend of common stock in latest three years (including the reporting period)
In RMB
|||||||
|-|-|-|-|-|-|
|||Net profit|Ratio in net profit|||
|||attributable to|attributable to|||
|||common stock|common stock|||
|Year for bonus|Amount for cash|shareholders of|shareholders of|Amount for cash|Proportion for cash|
|shares|bonus (tax included)|listed Company in|listed Company|bonus by other ways|bonus by other ways|
|||consolidation|contained in|||
|||statement for bonus|consolidation|||
|||year|statement|||
|2017|0.00|66,862,772.68|0.00%|0.00|0.00%|
|2016|0.00|27,193,562.63|0.00%|0.00|0.00%|
|2015|0.00|42,768,789.52|0.00%|0.00|0.00%|

 The Company gains profits in reporting period and the retained profit of common stock shareholders provided by parent Company is positive but no plan of cash dividend proposed of common stock
□ Applicable√ Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
□ Applicable√ Not applicable
The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either for the year
III. Implementation of commitment
1. Commitments that the Company, shareholders, actual controller, offeror, directors, supervisors, senior management or other related parties have fulfilled during the reporting period and have not yet fulfilled by the end of reporting period
√Applicable□ Not applicable
||||||||
|-|-|-|-|-|-|-|
|||Type of|||||
|||||Commitm|Commitm|Implementa|
|Commitments|Promise|commit|Content of commitments||||
|||||ent date|ent term|tion|
|||ments|||||
|Commitments for share merger|||||||
|reform|||||||
|Commitments in report of|||||||
|acquisition or equity change|||||||
|Commitments in assets reorganization|||||||
||||The commitments to the||||
||||fulfillment of information||||
||||disclosure about the Company||||
||||business development are as||||
||||follows: except for the||||
||||information has been disclosed||||
||||publicly, the Company has not||||
||Shenzhen||||||
||||had the disclosed information||||
|Commitments make in initial public|Tellus|||2014-10-1||Implementi|
|||Other|about asset acquisition and||Long-term||
|offering or re-financing|Holding|||7||ng|
||||business development that has not||||
||Co., Ltd.||||||
||||been disclosed within one year. In||||
||||the future, the Company shall||||
||||timely, accurately and adequately||||
||||disclose the relevant information||||
||||according to the progress of new||||
||||business and the related||||
||||requirements.||||
|Equity incentive commitment|||||||
||||In order to avoid the horizontal||||
||||competition, the Company‟s||||
||||controlling shareholder, Shenzhen||||
||||SDG Co., Ltd., has issued the||||
||||“commitment letter about the||||
||||avoidance of horizontal||||
|||Horizont|||||
||||competition” on May 26, 2014.||||
|Other commitments for medium and||al||2014-05-2||Implementi|
||SDG||The full commitment letter is as||Long-term||
|small shareholders||Competi||6||ng|
||||follows: 1. The Company and||||
|||tion|||||
||||other enterprises controlled by the||||
||||Company except Tellus Group||||
||||haven‟t occupied in any business||||
||||that could substantially compete||||
||||with the main businesses of Tellus||||
||||Group, and have no horizontal||||

|||||||
|-|-|-|-|-|-|
|||competition relationship with||||
|||Tellus Group.||||
|||From 2017 to 2019, the||||
|||Company‟s profits will first be||||
|||used to cover the losses of||||
|||previous years; after making up||||
|||for losses of previous years, in the||||
|||premise that the Company‟s||||
|||profits and cash flow can meet the||||
|||Company's normal operations and||||
|||long-term development, reward||||
|||shareholders, the Company will||||
|||implement positive profit||||
|||distribution approaches to reward||||
|||the shareholders, details are as||||
|||follows: 1. The Company‟s profit||||
|||distribution can adopt cash, stock||||
|||or the combination of cash and||||
|||stock or other methods permitted||||
|||by law. The foreign currency||||
|||conversion rates of domestically||||
|Shenzhen|Dividen|listed foreign shares dividend are||||
|Tellus|d|calculated according to the|2017-05-0|2019-12-3|Implementi|
|Holding|commit|standard price of HK dollar|4|1|ng|
|Co., Ltd.|ment|against RMB announced by||||
|||People's Bank of China on the||||
|||first working day after the||||
|||resolution date of the||||
|||shareholders' meeting. The||||
|||Company prefers to adopt the||||
|||cash dividends to distribute||||
|||profits. In order to maintain the||||
|||adaptability between capital||||
|||expansion and performance||||
|||growth, in the premise of ensuring||||
|||the full cash dividend||||
|||distributions and the rationality of||||
|||equity scale and equity structure,||||
|||the Company can adopt the stock||||
|||dividend methods to distribute||||
|||profits. 2. According to the||||
|||"Company Law" and other||||
|||relevant laws and the provisions||||
|||of the Company‟s "Articles of||||

||
|-|
|Association", following|
|conditions should be satisfied|
|when the Company implements|
|cash dividends: (1) the Company's|
|annual distributable profits (i.e.|
|the after-tax profits after making|
|up for losses and withdrawing|
|accumulation funds) are positive|
|value, the implementation of cash|
|dividends will not affect the|
|Company's subsequent continuing|
|operations; (2) the audit|
|institution issues the standard|
|audit report with clean opinion to|
|the Company's annual financial|
|report; (3) the Company has no|
|significant investment plans or|
|significant cash outlay (except for|
|fund-raising projects). Major|
|investment plans or significant|
|cash outlay refer to: the|
|accumulated expenditures the|
|Company plans to used for|
|investments abroad, acquisition of|
|assets, or purchase of equipments|
|within the next 12 months reach|
|or exceed 30% of the net assets|
|audited in the latest period. 3. In|
|the premise of meeting the|
|conditions of cash dividends and|
|ensuring the Company‟s normal|
|operation and long-term|
|development, the Company makes|
|cash dividends once a year in|
|principle, the Company‟s board of|
|directors can propose the|
|Company to make interim cash|
|dividends in accordance with the|
|Company's profitability and|
|capital demand conditions. The|
|proportion of cash dividends in|
|profits available for distribution|
|and in distribution of profits|
|should meet the following|

||
|-|
|requirements: (1) in principle, the|
|Company‟s profits distributed in|
|cash every year should not be less|
|than 10% of profit available for|
|distribution realized in the same|
|year, and the Company‟s profits|
|accumulatively distributed in cash|
|in the last three years should not|
|be less than 30% of the annual|
|average profit available for|
|distribution realized in the last|
|three years. (2) if the Company‟s|
|development stage belongs to|
|mature stage and there is no|
|significant capital expenditure|
|arrangement, when distributing|
|profits, the minimum proportion|
|of cash dividends in this profit|
|distribution should be 80%; (3) if|
|the Company‟s development stage|
|belongs to mature stage and there|
|are significant capital expenditure|
|arrangements, when distributing|
|profits, the minimum proportion|
|of cash dividends in this profit|
|distribution should be 40%; (4) if|
|the Company‟s development stage|
|belongs to growth stage and there|
|are significant capital expenditure|
|arrangements, when distributing|
|profits, the minimum proportion|
|of cash dividends in this profit|
|distribution should be 20%; when|
|the Company's development stage|
|is not easy to be differed but there|
|are significant capital expenditure|
|arrangements, please handle|
|according to the preceding|
|provisions. 4. On the condition of|
|meeting the cash dividend|
|distribution, if the Company's|
|operation revenue and net profit|
|grow fast, and the board of|
|directors considers that the|

||||
|-|-|-|
|||Company‟s equity scale and|
|||equity structure are reasonable,|
|||the Company can propose and|
|||implement the dividend|
|||distribution plans except|
|||proposing the cash dividend|
|||distribution plans. When|
|||allocating stock dividend every|
|||time, the stock dividend per 10|
|||shares should be no less than 1|
|||share. Stock allocation can be|
|||implemented individually or in|
|||combination of cash dividends.|
|||When confirming the exact|
|||amount of profit distribution by|
|||stock, the Company should fully|
|||consider if the general capital|
|||after profit distribution by stock|
|||matches with the Company‟s|
|||current operation scale and profit|
|||growth rate and consider the|
|||impact on future financing so as|
|||to make sure the allocation plans|
|||meet the overall interests of all|
|||shareholders.|
|Completed on time(Y/N)|Y||
|As for the commitment out of the|||
|commitment time, explain the specific|Not applicable||
|reasons and further plans|||

2. Concerning assets or project of the Company, which has profit forecast, and reporting period still in forecasting period, explain reasons of reaching the original profit forecast
□ Applicable√ Not applicable
IV. 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.
V. Explanation from Board of Directors, Supervisory Committee and Independent Directors
(if applicable) for “Qualified Opinion” that issued by CPA
□ Applicable√ Not applicable
VI. Particulars about the changes in aspect of accounting policy, estimates and calculation method compared with the financial report of last year
√Applicable□Not applicable
On 28 April 2017, the “Notice of Print and Distribute Accounting Standards for Business Enterprise No.42- Holding of the non-current assets and disposal group ready for sale and Discontinued Operation (Cai Kuai[2017] No.13)” was issued by Ministry of Finance, which was came into effect since 28 May 2017. On 10 May 2017, the Ministry of Finance released the circular(CK[2017]No.15) relating to Accounting Standards for Business Enterprise No.16-Government grant (amended in 2017), which came into effect form 12 June 2017. The Company implemented the above mentioned Accounting Standards since the date for effective.
The government grant obtained before execution of the Accounting Standards for Business Enterprise No.16-Government grant (amended in 2017) are reckoned into non-operation revenue; as for the government grant with assets concerned will recognized as deferred income and reckoned into current gains/losses through averagely amortized over the period of assets using. After implemented the Accounting Standards for Business Enterprise No.16-Government grant (amended in 2017), the government grant with routine activity concerned occurred since 1 January 2017, will reckon into other income; while those without routine activity concerned will record into non-operation expenditure.
After deliberation by 11th session of 8th BOD, the Company exercises the accounting policy since the date of the above mentioned standards implemented:
||||
|-|-|-|
|Serial|Content for changed|Items and amount being impacted|
|1|“Continuous operation net profit” and “discontinued operation netprofit” listed in profit statement. Corresponding date during thecomparable accounting period shall be adjusted|Continuous operation net profit: consolidate(65,781,568.71 Yuan), the Company(53,881,590.77 Yuan); same period of lastyear was: consolidate (27,617,932.54 Yuan),the Company (36,134,460.59 Yuan)|
|2|The government grant with routine activity concerned reckoned into“Other income” instead of non-operation revenue, correspondingdate during the comparable accounting period shall not be adjusted|Other income: consolidate (25,753.22Yuan), the Company ( 0 Yuan)|
|3|New item of “Income from assets disposal” listed in profitstatement, part of the gains/losses from assets disposal originallylisted as „non-operation revenue” and “non-operation expenditure”will re-classify to item of “Income from assets disposal”.Corresponding date during the comparable accounting period shallbe adjusted|Gains/losses from assets disposal:consolidate (374,583.14 Yuan), theCompany (0 Yuan); same period of last yearwas: consolidate (68,314.27 Yuan), theCompany (0 Yuan).Non-operation revenue: same period of lastyear shall be adjusted as: consolidate(68,314.27 Yuan), the Company (0 Yuan).Non-operation expenditure: no adjustmentlast year|

VII. Major accounting errors within reporting period that needs retrospective restatement□ Applicable√ Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in the period.
VIII. Compare with lastyear’s financial report; explain changes in consolidationstatement’s scope
√Applicable□Not applicable
Totally 16 enterprises included in consolidate statement for year of 2017, comparing with last year, there is 1 subsidiary included: Sichuan Tellus Jewelry Science Technology Co., Ltd.; one enterprise reduced: Shenzhen SDG Tellus Property Management Co., Ltd.
IX. Appointment and non-reappointment (dismissal) of CPA
Accounting firm appointed
|||
|-|-|
|Name of domestic accounting firm|Ruihua Certified Public Accountants (LLP)|
|Remuneration for domestic accounting firm (in 10 thousand||
||55|
|Yuan)||
|Continuous life of auditing service for domestic accounting firm|4|
|Name of domestic CPA|Zhou Xuechun, Cai Xiaodong|
|Continuous life of auditing service for domestic accounting firm|2|

Re-appointed accounting firms in this period
□Yes √No
Appointment of internal control auditing accounting firm, financial consultant or sponsor
□ Applicable√ Not applicable
X. Particular about suspended and delisting after annual report disclosed
□ Applicable√ Not applicable
XI. Bankruptcy reorganization
□ Applicable√ Not applicable
No bankruptcy reorganization for the Company in reporting period
XII. Significant lawsuits and arbitrations of the Company
□Applicable √Not applicable
No significant lawsuits and arbitrations occurred in the reporting period.
XIII. Penalty and rectification
□ Applicable√ Not applicable
No penalty and rectification for the Company in reporting period.
XIV. Integrity of the Company and its controlling shareholders and actual controllers
√Applicable□ Not applicable
During the reporting period, the Company and the controlling shareholders and the actual controllers have had good reputation, and there is no large amount due un-liquidated debt sentenced by the court.
XV. Implementation of theCompany’s stock incentive plan, employee stock ownership plan or other employee incentives
□ Applicable√ Not applicable
During the reporting period, the Company has no stock incentive plan, employee stock ownership plan or other employee incentives that have not been implemented.
XVI. Major related transaction
1. Related transaction with routine operation concerned
√Applicable□Not applicable
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||Whethe|||||
|||||||||Trading|r over|||||
|||||||Related|||||Availabl|||
|||||||||limit|the|Clearin|||Index|
|||Type of|Content|||transacti|Proporti|||g form|e|Date of||
||||of|Pricing|Related|on|on in|approve|approve||||of|
|Related|Relation|related|related|principl|transacti|amount|similar|||for|similar|disclosu||
|party|ship|transacti||||||d (in 10|d|related|||disclos|
|||on|transacti|e|on price|(in 10|transacti|||transacti|market|re||
||||on|||thousan|ons|thousan|limited||||ure|
|||||||d Yuan)||||on|price|||
|||||||||d Yuan)|or not|||||
||||||||||(Y/N)|||||
||Director||||||||||||Notice|
||,||||||||||||No.:|
||supervis||||||||||||2017-0|
||or and||||||||||||17 on|
|Shenzhen||||||||||Agreed||||
||senior||||||||||||Securiti|
|Zung Fu||Routine||Referen||||||by||||
||executiv||||||||||||es|
|Tellus||related|House|ce||||||contract||2017-04||
||es of the||||530|530|5.84%|530|No||530||Times,|
|Automobi||transacti|leasing|market||||||or||-08||
||Compan||||||||||||Hong|
|le Service||on||pricing||||||agreeme||||
||y serves||||||||||||Kong|
|Co., Ltd.||||||||||nt||||
||director||||||||||||Comme|
||of the||||||||||||rcial|
||enterpri||||||||||||Daily|
||se||||||||||||and|

|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||||||Juchao|
||||||||||||||Website|
||||||||||||||(www.c|
||||||||||||||ninfo.c|
||||||||||||||om.cn)|
|Shenzhen||||||||||Agreed||||
||Subsidia||Accept|||||||||||
|SDG||Routine||Referen||||||by||||
||ry of the||property|||||||||||
|Property||related||ce||||||contract||||
||parent||manage||74.47|74.47||74.47|No||74.47|||
|Managem||transacti||market||||||or||||
||compan||ment|||||||||||
|ent Co.,||on||pricing||||||agreeme||||
||y||services|||||||||||
|Ltd.||||||||||nt||||
|Total||||--|--|604.47|--|604.47|--|--|--|--|--|
|Detail of sales return with major||||||||||||||
|||||N/A||||||||||
|amount involved||||||||||||||
|Report the actual implementation of||||||||||||||
|the daily related transactions which||||||||||||||
|were projected about their total||||Performing normally||||||||||
|amount by types during the reporting||||||||||||||
|period (if applicable)||||||||||||||
|Reasons for major differences||||||||||||||
|between trading price and market||||Not applicable||||||||||
|reference price||||||||||||||

2.Related transactions by assets acquisition and sold
□ Applicable√ Not applicable
No related transactions by assets acquisition and sold for the Company in reporting period.
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
Whether the Company had non-operating contact of related credit and debt
√ Yes□ No
Debts payable to related party
||||||||||
|-|-|-|-|-|-|-|-|-|
||||Balance at|Current|Current||Current|Balance at|
||||period-begin|newly added|recovery||interest|period-end|
|Related party|Relationship|Causes||||Interest rate|||
||||(10 thousand|(10 thousand|(10 thousand||(10 thousand|(10 thousand|
||||Yuan)|Yuan)|Yuan)||Yuan)|Yuan)|
|||Intercourse|||||||
||Controlling||||||||
|SDG||funds and|3,186|99|41||93|3,244|
||shareholders||||||||
|||loan interest|||||||
|||Loan|||||||
|||principal for|||||||
||Controlling||||||||
|SDG||the HQ and|1,879|7,000|7,011|||1,868|
||shareholders||||||||
|||Hurari|||||||
|||Company|||||||
|Impact on operation results|||||||||
|||Total profit decreased 0.93 million Yuan due to the interest expenses increased in the Year|||||||
|and financial status|||||||||

5. Other related transactions
√Applicable□Not applicable
(1) In order to concentrate resources and promote the strategic transformation of the company, the company signed a “property transfer contract” with Shenzhen SDG Property Management Co., Ltd. to transfer the100% equity of Shenzhen SDG Property Management Co., Ltd. held by the Company to SDG Property by agreement transfer, and the transfer price was 14.15 million Yuan. SDG Property and the Company are under the control of the same controlling shareholder and there is an associated relationship. For details, please refer to the relevant announcements published by the Company on Securities Times, Hong Kong Commercial Daily and Juchao Website (www.cninfo.com.cn.),announcement No.: 2017-039.
(2) In order to give full play to theCompany‟s inherent resource advantages, accelerate theCompany‟s transformation to the jewelry industry and realize the strategic planning idea, the Company intends to cooperate with theCompany‟s joint ventures, Shenzhen Tellus Gman Investment Co., Ltd. and Shenzhen Baochuang Heying Partnership (a limited partnership) (a temporary name, planned to be jointly funded and established by some directors and management staff of the Company), and some strategic partners and jointly invested in setting up a jewelry industry innovation investment fund. For details, please refer to the relevant announcements published by the Company on Securities Times, Hong Kong Commercial Daily and Juchao Website (www.cninfo.com.cn.),announcement No.: 2017-089.
Relevant inquiry for the major related transactions
||||
|-|-|-|
|Notice name|Date for disclosure|Website disclosed|
|Equity Transfer of Shenzhen SDG TellusProperty Management Co., Ltd. and RelatedTransactions||Securities Times, Hong Kong Commercial|
||2017-05-26|Daily and Juchao Website|
|||(www.cninfo.com.cn).No.: 2017-039|
|Plans to participate in establishment of thejewelry innovation industrial investment fundand related transaction||Securities Times, Hong Kong Commercial|
||2017-12-02|Daily and Juchao Website|
|||(www.cninfo.com.cn). No.: 2017-089|

XVII. 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)|||||||||
|||||||||Guarante|
||Related||||||||
||||Actual date of|||||e for|
||||||||Implemen||
|Name of the Company|Announcement|Guarantee|happening (Date|Actualguarantee|Guarantee|Guarantee||related|
|guaranteed||limit|of signing||type|term|ted (Y/N)||
||disclosure||agreement)|limit||||party|
||date||||||||
|||||||||(Y/N)|
|Shenzhen Zung Fu|2014-09-30|3,500||3,500|Pledged|To the expire|N|Y|

||||||||||
|-|-|-|-|-|-|-|-|-|
|Tellus Automobile||||||date of joint|||
|Service Co., Ltd.||||||venture|||
|||||||contract|||
|||||Total actual occurred|||||
|Total approving external guarantee||0||||3,500|||
|||||external guarantee in report|||||
|in report period (A1)|||||||||
|||||period (A2)|||||
|||||Total actual balance of|||||
|Total approved external guarantee||3,500||||3,500|||
|||||external guarantee at the|||||
|at the end of report period ( A3)|||||||||
|||||end of report period (A4)|||||
|Guarantee of the Company and the subsidiaries|||||||||
|||||||||Guarante|
||Related||||||||
||||Actual date of|||||e for|
||||||||Implemen||
|Name of the Company|Announcement|Guarantee|happening (Date|Actualguarantee|Guarantee|Guarantee||related|
|guaranteed||limit|of signing||type|term|ted (Y/N)||
||disclosure||agreement)|limit||||party|
||date||||||||
|||||||||(Y/N)|
|||||||24 June 2014|||
|Shenzhen Zhongtian|||||Joint liability||||
||2014-05-07|30,000|2014-06-24|30,000||to 23 June|N|Y|
|Industrial Co,. Ltd.|||||guaranty||||
|||||||2024|||
|||||Total amount of actual|||||
|Total amount of approving|||||||||
|||0||occurred guarantee for||30,000|||
|guarantee for subsidiaries in report|||||||||
|||||subsidiaries in report period|||||
|period (B1)|||||||||
|||||(B2)|||||
|||||Total balance of actual|||||
|Total amount of approved|||||||||
|||30,000||guarantee for subsidiaries at||30,000|||
|guarantee for subsidiaries at the|||||||||
|||||the end of reporting period|||||
|end of reporting period (B3)|||||||||
|||||(B4)|||||
|Guarantee of the subsidiaries and the subsidiaries|||||||||
|||||||||Guarante|
||Related||||||||
||||Actual date of|||||e for|
||||||||Implemen||
|Name of the Company|Announcement|Guarantee|happening (Date|Actualguarantee|Guarantee|Guarantee||related|
|guaranteed||limit|of signing||type|term|ted (Y/N)||
||disclosure||agreement)|limit||||party|
||date||||||||
|||||||||(Y/N)|
|||||Total amount of actual|||||
|Total amount of approving|||||||||
|||0||occurred guarantee for||0|||
|guarantee for subsidiaries in report|||||||||
|||||subsidiaries in report period|||||
|period (C1)|||||||||
|||||(C2)|||||
|||||Total balance of actual|||||
|Total amount of approved|||||||||
|||0||guarantee for subsidiaries at||0|||
|guarantee for subsidiaries at the|||||||||
|||||the end of reporting period|||||
|end of reporting period (C3)|||||||||
|||||(C4)|||||
|Total amount of guarantee of the Company (total of three abovementioned guarantee)|||||||||
|Total amount of approving||||Total amount of actual|||||
|||0||||33,500|||
|guarantee in report period||||occurred guarantee in report|||||
|(A1+B1+C1)||||period (A2+B2+C2)|||||
|Total amount of approved||||Total balance of actual|||||
|||33,500||||33,500|||
|guarantee at the end of report||||guarantee at the end of|||||
|period (A3+B3+C3)||||report period (A4+B4+C4)|||||
|The proportion of the total amount of actually guarantee in the net|||||||||
|||||34.78%|||||
|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||
||0|
|whose assets-liability ratio exceed 70% directly or 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 procedures||
||N/A|
|(if applicable)||

(2) Guarantee outside against the regulation
□Applicable√Not applicable
No guarantee outside against the regulation in Period.
3. Entrust others to cash asset management
(1) Trust financing
√Applicable□Not applicable
Trust financing in the reporting period
In 10 thousand Yuan
||||||
|-|-|-|-|-|
|Type|Capital resources|Amount for entrust|Balance un-expired|Overdue amount|
|Bank financing product|Idle raised funds|20,000|12,450|0|
|Bank financing product|Own funds|9,900|9,900|0|
|Total||29,900|22,350|0|

 Entrust financial expected to be unable to recover the principal or impairment might be occurred
□ Applicable√ Not applicable
(2) Entrusted loans
□ Applicable√ Not applicable
The Company had no entrusted loans in the reporting period.
4. Other material contracts
□ Applicable√ Not applicable
No other material contracts for the Company in reporting period
XVIII. Social responsibility
1. Fulfill social responsibility
The Company has always taken theshareholders‟ return,employees‟ achievements, and social feedback as its own duty. We adheres to the principle of fairness and actively safeguards the legitimate rights and interests of shareholders; actively advocates achieving the self-worth while realizing the enterprise value, and creates a working environment that the enterprise cares for employees and employees love the enterprise so as to have a harmoniousdevelopment together; actively returns to the society and the public, and commits itself to achieve the harmonious and sustainable development of the Company and society.
2. Performance of taking targeted measures in poverty alleviation
(1) Targeted measures in poverty alleviation
During the period, the Company participates in the targeted measures in poverty alleviation for Libai Village, Shangguang Town, Dongyuan County, Heyuan City, Guangdong Province.
(2) Annual poverty alleviation in the Year
The Company is concerned about the mountainous areas, takes the initiative to assume social responsibilities for poverty alleviation. According to the arrangement, the Company is responsible for thehard bottoming and widening of village roads and thehard bottoming of roads for transporting of Libai village. The project has begun on December 29, 2017, currently, more than half of the project has been completed, and it is expected that it will be fully completed and put into use in the first half of 2018. After the project is completed, it will greatly facilitate the production and transportation of Libai villagers, and the “difficulties in roads” that have plagued the villagers for many years will be thoroughly resolved.
(3) Results of targeted poverty alleviation
Nil
(4) Follow-up of targeted poverty alleviation
Plans to completed the road expansion and repair in Li Bai village in first half of 2018
3. Environmental protection
The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department No
Nil
XIX. Explanation on other significant events
□ Applicable√ Not applicable
The Company had no explanation on other significant events in the reporting period.
XX. 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 change||Increase/decrease in this time (+ , - )|||||After change||
||||||Capitaliza|||||
|||||Bonus|tion of||Subtota|||
||Amount|Ratio|New issue|||Other||Amount|Ratio|
|||||share|public||l|||
||||||reserve|||||
|I. Restricted shares|77,000,000|25.90%||||||77,000,000|25.90%|
|2. State-owned corporation||||||||||
||6,000,000|2.02%||||||6,000,000|2.02%|
|shares||||||||||
|3. Other domestic shares|71,000,000|23.88%||||||71,000,000|23.88%|
|II. Un-restricted shares|220,281,600|74.10%||||||220,281,600|74.10%|
|1. RMB ordinary shares|193,881,600|65.22%||||||193,881,600|65.22%|
|2. Domestically listed foreign||||||||||
||26,400,000|8.88%||||||26,400,000|8.88%|
|shares||||||||||
|III. Total shares|297,281,600|100.00%||||||297,281,600|100.00%|

 Reasons for share changed
□Applicable√Not applicable
Approval of share changed
□Applicable√Not applicable
Ownership transfer of share changes
□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 for the Company 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
1. Security offering (without preferred stock) in Reporting Period
□Applicable√ Not applicable
2. Changes of total shares and shareholders structure as well as explanation on changes of assets and liability structure
□Applicable√ Not applicable
3. Existing internal staff shares
□ Applicable√ Not applicable
III. Particulars about shareholder and actual controller of the Company
1. Amount of shareholders of the Company and particulars about shares holding
In Share
||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||||Total preference|||
|||||||||||||shareholders|||
|||||||||Total preference|||||||
||||Total common|||||||||with voting|||
|Total common||||||||shareholders with|||||||
||||stock|||||||||rights recovered|||
|stock||||||||voting rights|||||||
||||shareholders at|||||||||at end of last|||
|shareholders in|55,304|||||53,609||recovered at end of||0||||0|
||||end of last month|||||||||month before|||
|reporting||||||||reporting period (if|||||||
||||before annual|||||||||annual report|||
|period-end||||||||applicable) (found|||||||
||||report disclosed|||||||||disclosed (if|||
|||||||||in note8)|||||||
|||||||||||||applicable)|||
|||||||||||||(found in note8)|||
|Particulars about shares held above 5% by shareholders or top ten shareholders|||||||||||||||
||||||Total|||||||Number of share|||
|||||Proporti|shareholders||Changes||Amount of||Amount of|pledged/frozen|||
|Full name of||Nature of||on of|at the end||in report||restricted||un-restricted|State ofAmountshare|||
|Shareholders||shareholder||shares||||||||State of|||
|||||held|of report||period||shares held||shares held||Amount||
|||||||||||||share|||
||||||period||||||||||
|SDG||State-ownedcorporation||49.09%|145,925,256||||6,000,000||139,925,256||||
|Shenzhen CapitalFortune JewelryIndustryInvestmentEnterprise (limited||Domestic nonstate-ownedcorporate||23.88%|71,000,000||||71,000,000||||||

|||||||
|-|-|-|-|-|-|
|partnership)||||||
|GUOTAI JUNANSECURITIES(HONGKONG)LIMITED|Foreigncorporation|0.40%|1,198,204|||
|Li Guangxin|Domestic natureperson|0.26%|761,161|||
|Weng Zhengwen|Foreign natureperson|0.19%|561,700|||
|He Xing|Domestic natureperson|0.10%|300,100|||
|Sheng Zhiqin|Domestic natureperson|0.10%|290,000|||
|Huang Chuyun|Domestic natureperson|0.09%|266,500|||
|Zeng Huiming|Foreign natureperson|0.08%|250,000|||
|Agricultural Bankof China Ltd. –CSI 500 ETF|Other|0.08%|236,100|||
|Strategy investors or general||||||
|corporation comes top 10||||||
|||Not applicable||||
|shareholders due to rights issue (if||||||
|applicable) (see note3)||||||
|||Among the top ten shareholders, there exists no associated relationship between the||||
|Explanation on associated relationship||state-owned legal person‟s shareholders SDG, Ltd and other shareholders, and they do not||||
|among the top ten shareholders or||belong to the consistent actionist regulated by the Management Measure of Information||||
|consistent action||Disclosure on Change of Shareholding for Listed Companies. For the other shareholders of||||
|||circulation share, the Company is unknown whether they belong to the consistent actionist.||||
|Particular about top ten shareholders with un-restrict shares held||||||
|||||Type of shares||
|Shareholders‟ name||Amount of un-restrict shares held at Period-end||||
|||||Type|Amount|
|SDG||139,925,256||RMB ordinary||
||||||139,925,256|
|||||shares||
|GUOTAI JUNANSECURITIES(HONGKONG)LIMITED||1,198,204||Domestically||
|||||listed foreign|1,198,204|
|||||shares||
|Li Guangxin||761,161||Domestically||
||||||761,161|
|||||listed foreign||

|||||
|-|-|-|-|
|||shares||
|Weng Zhengwen|561,700|Domestically||
|||listed foreign|561,700|
|||shares||
|He Xing|300,100|Domestically||
|||listed foreign|300,100|
|||shares||
|Sheng Zhiqin|290,000|RMB ordinary||
||||290,000|
|||shares||
|Huang Chuyun|266,500|Domestically||
|||listed foreign|266,500|
|||shares||
|Zeng Huiming|250,000|Domestically||
|||listed foreign|250,000|
|||shares||
|Agricultural Bank of China Ltd. – CSI500 ETF|236,100|RMB ordinary||
||||236,100|
|||shares||
|Celestial Securities Limited|196,226|Domestically||
|||listed foreign|196,226|
|||shares||
|Expiation on associated relationship or|Among the top ten shareholders, there exists no associated relationship between the|||
|consistent actors within the top 10|state-owned legal person‟s shareholders SDG and other shareholders, and they do not|||
|un-restrict shareholders and between|belong to the consistent actionist regulated by the Management Measure of Information|||
|top 10 un-restrict shareholders and top|Disclosure on Change of Shareholding for Listed Companies. For the other shareholders of|||
|10 shareholders|circulation share, the Company is unknown whether they belong to the consistent actionist.|||
|Explanation on shareholders involving||||
|margin business about top ten common||||
||N/A|||
|shareholders with un-restrict shares||||
|held(if applicable) (see note4)||||

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.
2. Controlling shareholder of the Company
Nature of controlling shareholders: local state-owned holding
Type of controlling shareholders: legal person
||||||
|-|-|-|-|-|
||Legal person/person||||
|Majority shareholder||Date of foundation|Organization code|Main operation business|
||in charge of the unit||||
|||||Investment in industry|
|||||(specific item should be|
|||||declaration); investment in|
|||||tourism industry;|
|||||development and operation|
|||||of the real estate; domestic|
|||||business, material supply|
|SDG|Zhang Junlin|1982-06-20|91440300192194195C|and marketing industry|
|||||(excluding monopolized|
|||||commodity and commodity|
|||||under special government|
|||||control); economic|
|||||information(excluding|
|||||restricted projects); import|
|||||& export business|
|Equity of listed Company in|||||
||Except the shares of the Company held by SDG, SDG still holds 39.18% equity of Shenzhen SDG||||
|and out of China control and|||||
||Information Co., Ltd. (Stock name: SDGI, Stock code: 000070); holds 1.28% equity of Sichuan||||
|hold by the majority|||||
||Jinlu Group Co., Ltd. (Stock name: Jinlu Group, Stock code: 000510)||||
|shareholder in the Period|||||

Changes of controlling shareholders in reporting period
□ Applicable√ Not applicable
The Company had no changes of controlling shareholders in reporting period
3. Actual controller of the Company
Nature of actual controller: local state-owned assets management
Type of actual controller: legal person
||||||
|-|-|-|-|-|
||Legal||||
|Actual controlling shareholders|person/person in|Date of foundation|Organization code|Main operation business|
||charge of the unit||||
|Shenzhen Municipal People‟s|||||
|Government State-owned|||||
||Peng Haibin|2003-07-20|K31728067|Not applicable|
|Assets Supervision and|||||
|Administration Commission|||||
|Equity of domestic/oversea|||||
|listed Company control by|Not applicable||||
|actual controller in report period|||||

Changes of actual controller in reporting period
□ Applicable√ Not applicable
No changes of actual controllers for the Company in reporting period.
Property right and controlling relationship between the actual controller and the Company is as follow:
Shenzhen MunicipalPeople‟s Government State-owned Assets Supervision and Administration Commission
100%
|||
|-|-|
|Shenzhen Investment Holdings Co., Ltd.||
||43.3%|

Shenzhen SDG Co., Ltd.
49.09%
Shenzhen Tellus Holding Co., Ltd.
Actual controller controlling the Company by entrust or other assets management
□ Applicable√ Not applicable
4. Particulars about other legal person shareholders with over10% shares held
√ Applicable□Not applicable
||||||
|-|-|-|-|-|
||Legal rep./person in|||Main business or|
|Corporate shareholders||Dated founded|Register capital||
||charge of unit|||management activity|
|Shenzhen Capital Fortune Jewelry|||||
|Industry Investment Enterprise|Cheng Houbo|2014-04-18|620 million Yuan|Equity investment|
|(limited partnership)|||||

5. Limitation and reducing the holdings of shares of controlling shareholders, actual controllers, restructuring side and other commitment subjects
□ Applicable√ Not applicable
Section VII. Preferred Stock
□ Applicable√ Not applicable
The Company had no preferred stock in the Period.
Section VIII. Particulars about Directors, Supervisors, Senior Executives and Employees
I. Changes of shares held by directors, supervisors and senior executives
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Amount|Amount|||
||||||||Shares||||Shares|
|||||||||of shares|of shares|||
||||||||held at|||Other|held at|
|||W o rking|||Start dated|||increased|decreased|||
|||||||End date of||||||
||Title||Sex|Age|of office||period-be|||changes|period-en|
|Name||status||||office term||in this|in this|||
||||||term||gin|||(share)|d|
|||||||||period|period|||
||||||||(Share)||||(Share)|
|||||||||(Share)|(Share)|||
|||Currently||||||||||
|Lv Hang|Chairman||M|57|2015-05-20|2018-05-19||||||
|||in office||||||||||
|||Currently||||||||||
|Yu Lei|Director||F|50|2015-05-20|2018-05-19||||||
|||in office||||||||||
|Zhang||Currently||||||||||
||Director||M|45|2015-05-20|2018-05-19||||||
|Quanxun||in office||||||||||
|Chen||Currently||||||||||
||Director||M|46|2015-05-20|2018-05-19||||||
|Gengsen||in office||||||||||
||Director,|Currently||||||||||
|Ding Hui|||M|45|2015-05-20|2018-05-19||||||
||GM|in office||||||||||
|Yang|Director,|Leave the||||||||||
||||F|46|2015-05-20|2018-01-04||||||
|Jianping|CFO|office||||||||||
||Independ|||||||||||
|Wei||Currently||||||||||
||ent||M|46|2015-05-20|2018-05-19||||||
|Shaohui||in office||||||||||
||Director|||||||||||
||Independ|||||||||||
|||Currently||||||||||
|Ji Huibin|ent||M|48|2015-05-20|2018-05-19||||||
|||in office||||||||||
||Director|||||||||||
||Independ|||||||||||
|Li||Currently||||||||||
||ent||M|56|2015-05-20|2018-05-19||||||
|Xiangjun||in office||||||||||
||Director|||||||||||
||Chairman|||||||||||
||of|||||||||||
|||Currently||||||||||
|Chen Hua|S uperviso||F|54|2015-05-20|2018-05-19||||||
|||in office||||||||||
||ry|||||||||||
||Committe|||||||||||

|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||e|||||||||||
|Chen||||||||||||
||Superviso|Currently||||||||||
|Yangshen|||M|55|2017-5-4|2018-5-19||||||
||r|in office||||||||||
|g||||||||||||
||Superviso|Leave the||||||||||
|Li Miao|||M|45|2015-05-20|2017-05-04||||||
||r|office||||||||||
|Fu|Superviso|Currently||||||||||
||||M|45|2015-05-20|2018-05-19||||||
|Chunlong|r|in office||||||||||
|Ke||||||||||||
||Superviso|Leave the||||||||||
|Wenshen|||F|50|2015-05-20|2017-04-06||||||
||r|office||||||||||
|g||||||||||||
|Li|Superviso|Leave the||||||||||
||||F|50|2015-05-20|2017-12-20||||||
|Xiaohong|r|office||||||||||
|Liu|Superviso|Leave the||||||||||
||||F|46|2017-04-06|2017-12-20||||||
|Yuhong|r|office||||||||||
|Li|Superviso|Currently||||||||||
||||F|52|2017-12-20|2018-05-19||||||
|Yudong|r|in office||||||||||
||Superviso|Currently||||||||||
|Wang Pei|||F|37|2017-12-20|2018-05-19||||||
||r|in office||||||||||
|Ren|Deputy|Currently||||||||||
||||M|55|2015-05-20|2018-05-19||||||
|Yongjian|GM|in office||||||||||
||Deputy|Currently||||||||||
|Feng Yu|||M|51|2015-05-20|2018-05-19||||||
||GM|in office||||||||||
||Deputy|Currently||||||||||
|Li Ming|||M|56|2015-05-20|2018-05-19||||||
||GM|in office||||||||||
||Secretary|||||||||||
|||Currently||||||||||
|Qi Peng|of the||M|45|2015-12-28|2018-05-19||||||
|||in office||||||||||
||Board|||||||||||
|Total|--|--|--|--|--|--|0|0|0|0|0|

 II. Changes of directors, supervisors and senior executives
√Applicable□ Not applicable
||||||
|-|-|-|-|-|
|Name|Title|Type|Date|Reasons|
|Li Miao|Supervisor|Leave the office|2017-05-04|Resigned post as supervisor due to work changes|
|||Dismiss|||
|Chen Yangsheng|Supervisor||2017-05-04|Elected as supervisor by the shareholders general meeting|
|||&appoint|||
||Employee||||
|Ke Wensheng||Leave the office|2017-04-06|Resigned post as supervisor due to work changes|
||supervisor||||

||||||
|-|-|-|-|-|
||Employee|Dismiss &|||
|Liu Yuhong|||2017-04-06|Elected as staff supervisor|
||supervisor|appoint|||
||Employee||||
|Liu Yuhong||Leave the office|2017-12-20|Resigned post as staff supervisor due to personal reasons|
||supervisor||||
||Employee||||
|Li Xiaohong||Leave the office|2017-12-20|Resigned post as staff supervisor due to personal reasons|
||supervisor||||
||Employee|Dismiss &|||
|Li Yudong|||2017-12-20|Elected as staff supervisor|
||supervisor|appoint|||
||Employee|Dismiss &|||
|Wang Pei|||2017-12-20|Elected as staff supervisor|
||supervisor|appoint|||

III. Post-holding
Professional background, major working experience and present main responsibilities in Company of directors, supervisors and senior executive
|||
|-|-|
|Name|Main work experience and holding the post|
|Lv Hang|Master degree, a senior political division. He successively served as chairman, GM and deputy secretary of thegeneral branch in Shenzhen SDG Xiaomeisha Tourism Center; Director and GM of Shenzhen Tellus Holding Co.,Ltd.; GM of Shenzhen SDG Property Management Co., Ltd.; now he serves as chairman of the Company.|
|Yu Lei|Master degree, a certified real estate appraiser and real estate economist. She successively served as secretary of theinternational project cooperation department of Beijing Chaoyan Vocation Education Training Center, deputy chief,chief and deputy director of Luohu Branch, the Bureau of Planning and Land of Shenzhen Municipality, the deputydirector and director of State-owned Assets Supervision and Administration Commission of the People‟sGovernment of Shenzhen Municipality. Now she serves as deputy GM of the majority shareholder of the Company-SDG and director of the Company|
|Zhang Quanxun|Master degree, he successively served as auditor and project manager in auditing department of Shenzhen ZhixingCPA Office; the GM assistant of Xiamen Xingdao Feilu Investment Co., Ltd., secretary of the Board, GM assistantand staff director of Fujian Logistics Investment Financing Co., Ltd.; deputy director of Xiamen ProductivityPromotion Center; director of the plastic business department and strategy development department of ShenzhenTongchan Package Group and the director of strategy research and merger department of SZ Capital. Now he servesas deputy president of CMAF and director of the Company|
|Chen Gengsen|Bachelor degree, an intermediate economist and accountant. He successively served as account in financialdepartment of the Guangdong Shanjian International Industrial (Group) Co., Ltd.; the manager, CFO and director ofsettle center in Guangdong Shanjian International Industrial (Group) Co., Ltd.; CFO of Longshan Environment;director and GM of the Shenzhen Qibang Investment Holding Co., Ltd. now he serves as chairman of ShenzhenShengbang Trading Co., Ltd. and director of the Company|
|Ding Hui|Master degree, a senior political division. He successively served as GM and deputy chairman of Huali Company;chief of office of SDG and serves as director and GM of the Company currently.|
|Lou Hong|Bachelor degree, senior account. Used to worked as staff of the financial dept. in Suzhou Silk Industry Company andin Shenzhen Southeast Silk Co., Ltd.; staff of the accounting & financial dept. of Shenzhen Special Economic ZoneDevelopment (Group) Company and worked in accounting management office; also worked as deputy GM ofShenzhen SDG Liancheng Real Estate Development Co., Ltd.; manager of the financial dept. of Shenzhen SDG|

|||
|-|-|
||Investment Co., Ltd.; the business manager and deputy director in accounting & financial dept. of Shenzhen SDGGroup Co., Ltd.; CFO of the Shenzhen SDG Real Estate Co., Ltd. and the director and CFO of Shenzhen SDGXiaomeisha Investment Development Co., Ltd.; now she serves as director and CFO of the Company|
|Wei Shaohui|Master degree. He ever took post of law assistant and full-time attorney of Guangdong Shu Jun Law Firm. Now heserves as senior partner of Guangdong Shu Jun Law Firm, and independent director of the Company; meanwhileserves as independent director of Longhao Tiandi Co., Ltd. and Shenzhen Click Technology Co., Ltd. respectively.|
|Ji Huibin|Master degree, senior engineer. He ever took the post of project manager, director of engineering dept. deputy GMand GM of Shenzhen Jianyi Municipal Engineering Co., Ltd; director of engineering dept. and director of operationdept. of Shenzhen Jianyi Industrial Co., Ltd. and deputy GM of Pang Yuan Real Estate Development Co., Ltd. Nowhe works in Shenzhen International Logistic Development Co., Ltd. and serves as independent director of theCompany|
|Li Xiangjun|Master‟s degree, economist, CPA, CTA. Served as the leader in Shenzhen Auditing Bureau, and serves as the seniorpartner of Zhongqin Wanxin Certified Public Accountants (special general partnership), and the independentdirectors of the Company.|
|Chen Hua|Bachelor's degree, economist. Served as deputy director in credit investment department of Guangdong InternationalTrust and Investment Co., Ltd., Shenzhen Branch; deputy general manager of Guangdong International Trust andInvestment (Hong Kong) Co., Ltd.; director in customer service center of Shenzhen Changjiang XingyeDevelopment Co., Ltd.; director in human resources department of Shenzhen Shipping Corporation;office director ofShenzhen SDG Co., Ltd.; director and general manager of Shenzhen SDG Information Co., Ltd.; and serves as thechairman of the board of supervisors of the Company.|
|Chen Yangsheng|A postgraduate and senior accountant. He ever served as deputy director/director of the financial dept. in ShenzhenIndustrial Products Trade Group Company; deputy director/director/CFO of the financial dept. in ShenzhenA okangde Group Company; director and CFO of Shenzhen State-owned Duty-Free Commodity (Group) Company;director of Shenzhen Agricultural Products Co., Ltd. and supervisor of Shenzhen Tagen Group Co., Ltd.; now heserves as director and CFO of Shenzhen SDG Co., Ltd.|
|Fu Chunlong|Master degree. He ever took the Business Deputy General Manager of HR Department of Shenzhen SDG Co., Ltd.,Deputy Team Leader in Work Team of Shenzhen SDG Huatong Packaging Co., Ltd. and Deputy Minister of HRDepartment of Shenzhen SDG Co., Ltd. Now, he is Deputy GM of Shenzhen SDG Co., Ltd. and Supervisor of theCompany.|
|Li Yudong|Bachelor degree. She used to worked as a teacher in Shaogang No.1 Middle School, and a translator in JingxingCompany; a translator and director of southern China region in Shenzhen Branch of Israel SAM Company; workedas staff in technical center and enterprise management dept. of the Company; the secretary and deputy director ofadministrative office; now she serves as director and staff supervisor of the administrative office of the Company|
|Wang Bei|Bachelor degree. She used to worked as the sales chief in the sales dept. of Shenzhen Huari Toyota Auto SalesService Co., Ltd., the commissioner/director/sales director of CR department; now she service as deputy director ofthe secretary office of the Board and staff supervisor of the Company|
|Ren Yongjian|Bachelor degree, an accountant. He ever took the posts of Deputy Manager of Planning & Financial Dept. andManager of Auditing Dept. in Shenzhen Special Economic Zone Development (Group) Company; Director and CFOof the Company. He now acts as Deputy General Manager of the Company.|
|Feng Yu|Bachelor degree. He ever took the Deputy General Manager of Shenzhen Xianke Real-estate Co., Ltd., Manager ofInvestment Department of China Sports Group Industry Co., Ltd.; Director to the Office of General Manger ofShenzhen SDG Co., Ltd; and Supervisor of the Company. Now, he acts as Deputy General Manager of the Company.|
|Li Ming|Bachelor degree, engineer. Served as a teacher in Guangzhou Nonferrous Metals Industry School; director of|

|||
|-|-|
||engineering and deputy general manager of Shenzhen South Tongfa Real Estate Development Co., Ltd.; director ofdevelopment department and property management department of Shenzhen South Tongfa Industry Co., Ltd.; deputygeneral manager, director andchief engineer in enterprise development department of Shenzhen Jintong PropertyManagement Co., Ltd.,; manager in Swan project department and deputy general manager of Shenzhen SDGProperties Co., Ltd., and serves as the deputy general manager of the Company.|
|Qi Peng|Master's degree, economist. Served as the secretary to the president and director in information center of ShenzhenSpecial Economic Zone Development (Group) Co., Ltd.; deputy director in secretariat of the board, and deputymanager in enterprise development department, and manager in automobile business department and managementdepartment of Shenzhen Tellus(Group) Co., Ltd.; general manager of Shenzhen Tellus Automobile Service ChainCo., Ltd.; general manager of Shenzhen Tellus New Yongtong Automobile Development Co., Ltd.; directorsecretariat of the board of Shenzhen Tellus(Group) Co., Ltd.; and serves as secretary of the board of the Company|

 Post-holding inshareholder‟s unit
√Applicable□ Not applicable
|||||||
|-|-|-|-|-|-|
||||||Received|
|||Position in||||
||||||remuneration from|
|Name|Name of shareholder‟s unit|shareholder‟s|Start dated of|End date of||
||||office term|office term|shareholder‟s unit|
|||unit n||||
||||||(Y/N)|
|Yu Lei|SDG|Deputy GM|||Y|
|Chen||||||
||SDG|CFO|||Y|
|Yangsheng||||||
|Fu Chunlong|SDG|Deputy GM|||Y|
|Zhang|Shenzhen Capital Fortune Jewelry Industry|||||
||||||Y|
|Quanxun|Investment Enterprise (limited partnership)|||||
||Shenzhen Capital Fortune Jewelry Industry|||||
|Chen Gengsen|||||Y|
||Investment Enterprise (limited partnership)|||||

Post-holding in other unit
√Applicable□ Not applicable
|||||||
|-|-|-|-|-|-|
||||||Receivedremuneration|
|||Position inother unit n||||
|Name|Name of other units||Start dated of|End date of office||
||||office term|term|from other unit(Y/N)|
|Wei Shaohui|Guangdong Shu Jun Law Firm|Senior partner|||Yes|
||Shenzhen International Logistic|||||
|Ji Huibin|||||Yes|
||Development Co., Ltd.|||||
||Zhong Qin Wanxin Certified Public|||||
|Li Xiangjun||Senior partner|||Yes|
||Accountants (LLP)|||||

Punishment of securities regulatory authority in recent three years to theCompany‟s current and outgoing directors, supervisors and
senior management during the reporting period
□ Applicable√ Not applicable
IV. Remuneration for directors, supervisors and senior executives
Decision-making procedures, recognition basis and payment for directors, supervisors and senior executives
The Company executes in strict accordance with the "Salary Management System for Headquarters of Shenzhen Tellus(Group) Co., Ltd. ", "Staff Performance Management System for Headquarters of Shenzhen Tellus (Group) Co., Ltd. ", "Implementing Rules of Remuneration and Appraisal Committee of the Board of Shenzhen Tellus(Group) Co., Ltd.", "Annual Performance Management Approaches for Leading Group Members of Shenzhen Tellus(Group) Co., Ltd." and other relevant system regulations, strictly implements the performance appraisal, and pay the remuneration in accordance with the assessment results.
Remuneration for directors, supervisors and senior executives in reporting period
In 10 thousand Yuan
||||||||
|-|-|-|-|-|-|-|
||||||Total|Whether|
||||||remuneration|remuneration|
|||||Post-holding|||
|Name|Title|Sex|Age||obtained from the|obtained from|
|||||status|||
||||||Company (before|related party of|
||||||taxes)|the Company|
||Chairman, Party|||Currently in|||
|Lv Hang||M|57||86.78|No|
||secretary|||office|||
|||||Currently in|||
|Ding Hui|GM|M|45||83.1|No|
|||||office|||
||Chairman of||||||
|||||Currently in|||
|Chen Hua|Supervisory|F|54||42.4|No|
|||||office|||
||Committee||||||
|||||Currently in|||
|Ren Yongjian|Deputy GM|M|55||69.53|No|
|||||office|||
|Yang Jianping|CFO|F|46|Leave the office|72.57|No|
|||||Currently in|||
|Feng Yu|Deputy GM|M|51||66.15|No|
|||||office|||
|||||Currently in|||
|Li Ming|Deputy GM|M|56||64.46|No|
|||||office|||
||Secretary of the||||||
|||||Currently in|||
|Qi Peng|board of the|M|45||56|No|
|||||office|||
||Company||||||
|Liu Yuhong|Supervisor|F|46|Leave the office|32.91|No|
|Li Xiaohong|Supervisor|F|50|Leave the office|39.39|No|
||Independent|||Currently in|||
|Wei Shaohui||M|46||6.75|No|
||Director|||office|||
||Independent|||Currently in|||
|Ji Huibin||M|48||6.75|No|
||Director|||office|||

||||||||
|-|-|-|-|-|-|-|
||Independent|||Currently in|||
|Li Xiangjun||M|56||6.75|No|
||Director|||office|||
|Total|--|--|--|--|633.54|--|

 Delegated equity incentive for directors and senior executives in reporting period
□ Applicable√ Not applicable
V. Particulars of workforce
1.Number of Employees, Professional composition, Education background
|||
|-|-|
|Employee in-post of the parent Company(people)|53|
|Employee in-post of main Subsidiaries (people)|267|
|The total number ofcurrent employees(people)|320|
|The total number of current employees to receive pay (people)|320|
|Retired employee‟ s expenses borne by the parent Company and||
||0|
|main Subsidiaries(people)||
|Professional composition||
|Category of professional composition|Numbers of professional composition (people)|
|Production personnel|36|
|Sales personnel|33|
|Technician|100|
|Financial staff|32|
|Administration staff|119|
|Total|320|
|Education background||
|Type of education background|Numbers (people)|
|Master|17|
|Bachelor degree|77|
|Junior college|70|
|Technical secondary school|40|
|Other|116|
|Total|320|

 2. RemunerationPolicy
The Company executes in strict accordance with the "Salary Management System for Headquarters of Shenzhen
Tellus (Group) Co., Ltd. ", "Staff Performance Management System for Headquarters of Shenzhen Tellus (Group)
Co., Ltd. " and other relevant system regulations strictly implement.
3. Training programs
The Company always attaches importance to the training and development work for employees; create innovation into part of the long-term development strategy of the Company. Combine with current situation of the Company, and take annual planning, position requirement and responsibility as well asenterprise‟s development needs into consideration, the Company formulated a systematic training plans and talent cultivation projects; strengthen training works in aspect of multi-tiered, multi-channel, multi-field and multi-form, including induction training for new employees, business training for on-job employees, operation skill training for workers at the production line, upgrade training for manager, project development and risk control training, continues to improve general quality for employees in order to achieve a win-win situation for the Company and employees.
4. Labor outsourcing
□Applicable√ Not applicable
Section IX. Corporate Governance
I. Corporate governance of the Company
During the reporting period, the Company has been observing the Company Law, Securities Law and relevant rules issued by the CSRC, for the purpose of improving its legal person governance structure, setting up and improving the internal control system, and standardizing its operation level. According to the Articles of Association, Procedure Rules of General Meeting, Procedure Rules of Board of Directors, Procedure Rules of Supervisory Committee, Working Rules of Independent Directors, Working Rules of General Manager and a series of rules and regulations, the Company maintained formal procedures, clearly duties and obligations of its general meeting, board of directors, supervisory committee, each specialized committee of the board and senior manager. Each of its directors, supervisors and senior managers can perform their duties earnestly. Its corporate governance conformed to the requirements of certain regulation documents issued by the CSRC concerning corporate governance of listed Company until the end of reporting period.
During the reporting period, in order to improve theCompany‟s governance with well-defined responsibility among the Company, we have revised the "Articles of Association", which has been deliberate and approved by the shareholders general meeting.
Is there any difference between the actual condition of corporate governance and relevant regulations about corporate governance for listed Company from CSRC?
□Yes√ No
There are no differences between the actual condition of corporate governance and relevant regulations about corporate governance for listed Company from CSRC.
II. Independency of the Company relative to controllingshareholders’ in aspect of businesses, personnel, assets, organization and finance
The Company has been independent from the controlling shareholders in terms of business, personnel, asset, institution and finance. The Company has independent and complete business and is able to operate independently.
(I) Business: the Company belongs to independent legal person entity. Being completely independent from controlling shareholders, it has independent and complete business system and is able to operate independently. The Company has independent production, sales and service systems and its major business. There is no inter-competition between the Company and its controlling shareholders and related parties.
(II) Personnel: the Company establishes complete labor, human resources and salary management systems. All the senior management of the Company receives remuneration from the Company since they are employed by the Company, and no one takes position in the enterprises owned by shareholders.
(III) Assets: the Company is completely independent from the controlling shareholder in terms of assets; each of them is able to operate independently. The Company has complete and separate purchase system, production system, sales system and relevant service system. Intangible assets including industry property, trademark and non-proprietary technology are owned by the Company on separate basis.
(IV) Finance: the Company has independent financial accounting department which set independent accounting calculation system and finance management system. No controlling shareholder intervenes in the capital application of the Company. The Company opens separate bank accounts. No capital is saved in the financial Company or settlement center account controlled by substantial shareholder or other related parties. The Company pays taxes by law independently.
(V) Institution: the board, the supervisory committee and other internal institutions of the Company operate independently. All the institutions of the Company are set according to the standards requirements applicable to listed Company and actual business natures of the Company. It has independent office location.
III. Horizontal competition
□ Applicable√ Not applicable
IV. 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||||
||||||“Resolution Notice|
||||||of Annual General|
||||||Meeting of 2016”|
||||||(No.: 2017-029)|
||||||published on|
|Annual General|Annual General|||||
|||73.01%|2017-05-04|2017-05-05|Securities Times,|
|Meeting of 2016|Meeting|||||
||||||Hong Kong|
||||||Commercial Daily|
||||||and Juchao Website|
||||||(www.cninfo.com.cn|
||||||)|
||||||“Resolution Notice|
||||||of First|
|First Extraordinary||||||
||Extraordinary||||Extraordinary|
|General Meeting of||73.01%|2017-05-25|2017-05-26||
||General Meeting||||General Meeting of|
|2017||||||
||||||2017” (No.:|
||||||2017-036) published|

|||||||
|-|-|-|-|-|-|
||||||on Securities Times,|
||||||Hong Kong|
||||||Commercial Daily|
||||||and Juchao Website|
||||||(www.cninfo.com.cn|
||||||“Resolution Notice|
||||||of Second|
||||||Extraordinary|
||||||General Meeting of|
|Second|||||2017” (No.:|
|Extraordinary|Extraordinary||||2017-099) published|
|||73.01%|2017-12-18|2017-12-19||
|General Meeting of|General Meeting||||on Securities Times,|
|2017|||||Hong Kong|
||||||Commercial Daily|
||||||and Juchao Website|
||||||(www.cninfo.com.cn|
||||||)|
||||||“Resolution Notice|
||||||of Third|
||||||Extraordinary|
||||||General Meeting of|
||||||2017” (No.:|
|Third Extraordinary||||||
||Extraordinary||||2017-103) published|
|General Meeting of||73.01%|2018-12-28|2017-12-29||
||General Meeting||||on Securities Times,|
|2017||||||
||||||Hong Kong|
||||||Commercial Daily|
||||||and Juchao Website|
||||||(www.cninfo.com.cn|
||||||)|

2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore□ Applicable√ Not applicable
V. Responsibility performance of independent directors
1.The attending of independent directors to Board meetings and general meeting
|||||||||
|-|-|-|-|-|-|-|-|
|The attending of independent directors to Board Meeting||||||||
||Times of|||||Absent the||
||||Times of||||Times of|
|Name of|Board meeting|||Times of||Meeting for||
|||Times of|attending by||Times of||attending|
|independent|supposed to|||entrusted||the second||
|||Presence|communicatio||Absence||shareholders‟|
|director|attend in the|||presence||time in a row||
||||n||||meeting|
||report period|||||(Y/N)||
|Li Xiangjun|12|3|9|0|0|N|0|
|Ji Huibin|12|3|9|0|0|N|2|
|Wei Shaohui|12|3|9|0|0|N|1|

 Explanation of absent the Board Meeting for the second time in a row
2. Objection for relevant events from independent directors
Independent directors come up with objection aboutCompany‟s relevant matters
□Yes√No
Independent directors has no objections for relevant events in reporting period
3. Other explanation about responsibility performance of independent directors
The opinions from independent directors have been adopted
√ Yes□ No
Explanation on advice that accepted/not accepted from independent directors
In accordance with relevant laws and regulation of “Company Law”, “Securities Laws”, “Listing Rules for Stocks” and “System of Independent Directors”, independent directors focus on the normative ofCompany‟s operation, performed responsibility independently and carry out their duties diligently; issued independent and fair-ness independent opinions on the audit institution, appointed in reporting period for financial report and internal control of the Company, related transactions, capital contact with related parties and external guarantee, profit distribution, change the project with fund-raised investment, amendment of article of association, director,supervisor and senior executives changes as well as other events needs independent opinions issued, which perfected supervision mechanism for the Company and play a corresponding role in protecting legal interest of the Company and whole shareholders.
VI. Duty performance of the special committees under the board during the reporting period
1. Duty performance of the strategic committee
The strategic committee of the board is specially set according to general meeting resolution and the Articles of
Association, responsible for study on the long term development strategy and material investment decisions and
raising its recommendations. The committee comprised of 5 directors, and the committee is chaired by chairman of the board. During the reporting period, the committee performed its duties according to the Working Rules of the Strategic Committee, with each of its members doing their best to perform the respective duties. The Committee takes part in the discussion on the operation development planning and related investment projects. On 8 May 2017, the Committee holds a meeting for deliberating the Proposal of “change the fund-raised investment projects and investment for Sichuan Regional Jewelry Channel Platform Company” and “participated in bidding the30% equity of Shenzhen Xinglong Mechanical Mold Co., Ltd.”, On 11 December 2017, the Committee holds a meeting for deliberating the Proposal of “selling43% equity of Shenzhen Xinglong Mechanical Mold Co., Ltd.” and “change the fund-raised investment projects”, individual opinions and recommendations are encouraged. It emphasizes on legal person governance and standardized operation. By raising measures to prevent operation risks, the committee plays an important role in increasing the core competitiveness, strengthening scientific decisions and enhancing efficiency of material investment decision as well as the quality of decisions.
2. The audit committee
During the reporting period, the committee performed its duties according to the Articles of Association and Working Procedures of the Audit Committee. The committee pays close attention to the operation, finance and implementation of standard internal control. It strengthens communications with the relevant responsible departments within the Company, and reviews the effective appraisal on the internal control and corporate risk management by means of telecommunication, investigation and reporting. It reviews that whether the operation, finance and accounting policy of the Company follows relevant laws and rules, and provides management and audit opinions.
On 30 August 2017, audit committee of the Company holding a meeting for deliberating the “proposal of continuing contract with the auditing institution for year of 2017”. During the annual audit, the audit committee took active attitude in relevant works. Prior to the official involvement of Ruihua Certified Public Accountants (LLP) (hereinafter referred to as Ruihua) in the annual audit, on 30 January 2018, the audit committee held meeting and determined the working arrangement for 2017 annual audit after negotiation with Ruihua, reviewed the financial statements prepared by the Company, the committee agreed to submit the financial statements and related information to Ruihua for audit.
After the official audit by Ruihua, members of the audit committee made calls to enquire the audit progress, and urged the accounting firm to complete audit as scheduled according to the working arrangement, so as to ensure prompt disclosure of its annual report. Meanwhile, the committee conducted communications with the accountants in respect of the issues found in audit works.
After the issuance of initial audit opinions by the accountants, the audit committee held meeting on 2 April 2018 to re-review the financial statements, and formed written opinions and resolutions in respect of the annual financial statements, audit work summary report.
3. Duty performance of the remuneration and examination committee
During the reporting period, the remuneration and examination committee hold two meetings for reviewing the
remuneration of directors, supervisors and senior management of the Company and “Management Measures on Annual Performance for Senior Executives”, the “proposal of adjustment on remuneration for independent directors” has deliberated on the meeting held on 8 May 2017, after reviewing, the entire members of the committee believed that the remuneration payment in the reporting period complied with theCompany‟s performance examination system. The remuneration of directors, supervisors and senior management were determined according to the relevant systems of the Company.
VII. Works from Supervisory Committee
The Company has risks in reporting period that found in supervisory activity from supervisory committee
□ Yes√ No
Supervisory committee has no objection about supervision events in reporting period
VIII. Examination and incentives of senior management
Board of the Company evaluated senior executives based on relevant regulations at end of this reporting period.
IX. Internal Control
1. Details of major defects in IC appraisal report that found in reporting period
□Yes√ No
2. Appraisal Report of Internal Control
||||
|-|-|-|
|Disclosure date of full internal control|||
||2018-04-03||
|evaluation report|||
|Disclosure index of full internal control|Juchao website for information disclosure appointed by Shenzhen Stock Exchange:||
|evaluation report|http://www.cninfo.com.cn||
|Ratio of the total assets from enterprise|||
|included in the appraisal range in total|92.76%||
|assets in consolidate statement|||
|Ratio of the operation revenue from|||
|enterprise included in the appraisal range|81.00%||
|in total revenue in consolidate statement|||
|Defects Evaluation Standards|||
|Category|Financial Reports|Non-financial Reports|
||1. Major deficiencies: a. Fraud of|1. Major deficiencies: a. Great decisions|
||management leading to material|violate the Company‟s established|
|Qualitative criteria|||
||misstatements of financial results or false|procedure, resulting in significant losses|
||financial reports, which mislead users of|to the Company; b. Serious violation of|

||||
|-|-|-|
||financial statements and result in|laws and regulations results in|
||decision-making mistakes and litigation; b.|significant losses to the Company; c.|
||Ineffective control environment; c. Major|Important businesses are lack of system|
||internal control deficiencies found and|control or system control fails; d.|
||reported to the management but haven‟t|Serious brain drain of core management|
||been corrected after a reasonable time; d.|or core technical staff; e. Significant|
||The decision-making of the Company‟s|deficiencies in the internal evaluation|
||major matters has not fulfilled the|results have not been corrected.|
||corresponding decision-making process,||
||resulting in significant losses of the||
|||2. Significant deficiencies: a. The|
||Company; e. Important businesses||
|||Company violates the enterprise|
||involving the Company‟s production and||
|||internal regulations and causes|
||management are lack of effective control; f.||
|||significant losses; b. Serious brain drain|
||Other correct judgments to the statement||
|||of business personnel in the Company‟s|
||users.||
|||key positions; c. The Company‟s|
|||s i g n if i ca n t b u s i n es s systems have|
||2. Significant deficiencies:a. The selection|deficiencies; d. The significant|
||and application of accounting policies do|deficiencies in the internal control of|
||not follow the generally accepted|the Company have not been corrected.|
||accounting principles; b. Anti-fraud||
||programs and control measures have been||
|||3. General deficiencies:Deficiencies|
||not established; c. Corresponding control||
|||except for major and significant|
||mechanism for accounts handling of||
|||deficiencies.|
||unconventional or special transactions has||
||not been established or implemented and||
||has no there is no appropriate||
||compensatory controls; d. The controls to||
||the period-end financial reporting process||
||have one or more defects and cannot||
||reasonably ensure that the financial||
||statements prepared are true and accurate.||
||3. General deficiencies:Deficiencies except||
||for major and significant deficiencies.||
||1. Major deficiencies: misstatement|1. Major deficiencies: loss amount >|
||amount > 10% of total profit, and absolute|1.5% of owner's equity attributable to|
||amount > 2 million Yuan;|p a r e n t C o m p a n y , a n d a b so l u t e|
||2. Significant deficiencies: 5% of total|amount > 5 million Yuan;|
|Quantitative standard|profit < misstatement amount ≤10% of total|2. Significant deficiencies: 0.5% of|
||profit, and absolute amount > 1 million|owner's equity attributable to parent|
||Yuan; or 1 million Yuan < absolute amount|Company < loss amount ≤ 1.5% of|
||≤ 2 million Yuan, and misstatement|owner's equity attributable to parent|
||amount > 5% of total profit.|C o m p a n y , o r 1 m i llion Yuan < absolute|

||||
|-|-|-|
||3. General deficiencies: misstatement|amount ≤ 5 million Yuan;|
||amount ≤ 5% of total profit, or absolute||
||amount ≤ 1 million Yuan|3. General deficiencies: loss amount ≤|
|||0.5% of owner's equity attributable to|
|||parent Company, or absolute amount ≤|
|||1 million Yuan|
|Amount of significant defects in financial|||
||0||
|reports|||
|Amount of significant defects in|||
||0||
|non-financial reports|||
|Amount of important defects in financial|||
||0||
|reports|||
|Amount of important defects in|||
||0||
|non-financial reports|||

X. Auditing report of internal control
√Applicable□ Not applicable
|||
|-|-|
|Deliberations in Internal Control Audit Report||
|We consider that, according to relevant regulations and “Basic Rules of Internal Control for Enterprise”, Shenzhen Tellus Holding||
|Co., Ltd. maintained an efficiency internal control of financial report dated 31 December 2017, in all material aspects.||
|Disclosure details of audit report of||
||Disclosure|
|internal control||
|Disclosure date of audit report of||
||2018-04-03|
|internal control (full-text)||
|Index of audit report of internal|Juchao website for information disclosure appointed by Shenzhen Stock Exchange:|
|control (full-text)|http://www.cninfo.com.cn|
|Opinion type of auditing report of||
||Standard without reserved reports|
|IC||
|whether the non-financial report||
||No|
|had major defects||

Carried out modified opinion for internal control audit report from CPA
□Yes√ No
The internal control audit report, issued by CPA, has concerted opinion with self-evaluation report, issued from the Board
√ Yes□ No
Section X. Corporate Bond
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date when annual report approved for released or fail to cash in full on due
No
Section XI Financial Report
I. Audit Report
|||
|-|-|
|Type of audit opinion|Standard unqualified auditor‟s report|
|Date of audit report signing|2018-04-02|
|Audit authority|Ruihua CPA (LLP)|
|Auditing file No.|Ruihua Shen Zi【2018】No.: 48400002|
|CPA‟s name|Cai Xiaodong, Zhou Xuechun|

Text of auditing report
To the shareholders of Shenzhen Tellus Holding Company Limited:
I. Opinion
We have audited the financial statements of Shenzhen Tellus Holding Company Limited (“the Company”), which comprise the consolidated and company balance sheet as at 31 December 2017, and the consolidated and theCompany‟s income statements, the consolidated and theCompany‟s statements of changes in equity and the consolidated and theCompany‟s statements of cash flows for the year then ended, and notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated and theCompany‟s financial position as at 31 December 2017, and the consolidated and theCompany‟s financial performance and cash flows for the year then ended in accordance with Accounting Standards for Business Enterprises.
II. Basis for Opinion
We conducted our audit in accordance with China Standards on Auditing (“CSAs”). Our responsibilities under those standards are further described in theAuditor‟s responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with China Code of Ethics for Certified Public Accountants (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We determine the followings are key audit matters in need of
communication in our report.
(I) Measurement of the carrying value of construction in progress
1. Factual description
As disclosed in Note(Ⅵ) 15 to financialstatements，The construction in progress is mainly the phase I of Tellus Shuibei Jewelry Building (“the Project”). Capitalraising、bank loans and internal funds are sources of funds for the Project. The Project accounts for a large proportion of the total assets in the Company and has a significant effect on the misstatement in the financial statements, thus the measurement of construction in progress is identified as the key audit matter.
2. How our audit addressed the matter
We performed the following procedures for construction in progress.
We assessed the design and implementation of the key project-related internal controls of the Company in order to determine the effectiveness of the internal control policies;
We conducted a field investigation procedure by consulting supervision company as well as the person who was in charge of the Project about the progress of the Project.
We verified the accounting records about the Project by obtaining substantial accounting vouchers, such as constructioncontracts、acceptancereports、projectstatement、demand notes for interimpayments、invoices、payment certificate and so on, in order to determine the accuracy of the construction in progress.
We obtained and cross-checked the records in the Project payments standing books and applications of bill of quantities so as to verify the completeness of the construction in progress.
We performed a confirmation procedure by issuing letters to the third parties and enquiring the total projectprice、accumulative amount of project payments and outstanding project payments.
We evaluated the provision impairment of construction in progress by conducting the following procedures:
(II) Revenue recognition for sales of cars
1. Factual description
As disclosed in Note(Ⅵ) 36 and Note(Ⅻ) 4to financialstatements，the Company had operating income of RMB 347.24 million in 2017, of which car sales was RMB 146.15 million, accounting for a large proportion of the total operating incomes. On the other hand, China has enforced the implementation of the Car sales administrative policy since July 1,2017，the sales model of cars is expected to be adjusted and has a significant effect on the key performance indicators in the financial statements, thus the revenue recognition for sales of cars is identified as the key audit matter.
2. How our audit addressed the matter
We performed the following procedures for sales of cars.
We assessed the design and implementation of the key revenue recognition internal controls of the
Company in order to determine the effectiveness of the internal control policies;
We performed an analytical procedure for identified risks based on the understanding of theCompany‟s customers and business environment. By comparing car sales figures during this year with last yearfigures，we evaluated whether the commodity structure and price change are keys to abnormal movements.
We obtained and cross-checked supporting documents related to the sales of cars on sample basis, including sales agreements, transportation documents, receipt notes, sales invoices.
We examined supporting documents including receipt notes or settlement notes from customers for sales of cars recognized before or after the balance sheet date, so as to evaluate whether the sales of cars was recorded in the correct period.
We assessed the advances from customers were whether carried forward timely when the sales of cars were realized so as to determine the accuracy and appropriateness of the carrying value of car sales.
We performed a confirmation procedure by issuing letters to the third parties for verifying the records of advances from customers.
IV. Other information
Management of the Company is responsible for the other information. The other information comprises all of the information included in 2017 annual report of the Company other than the financial statements and ourauditor‟s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information. We are required to report that fact. We have nothing to report in this regard.
(V) Responsibilities of the management and those charged with governance for the financial statements
The management of the Company is responsible for the preparation and fair presentation of the financial statements in accordance with CSAs, and for designing, implementing and maintaining such internal control as the management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing theCompany‟s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting, unless the management either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing theCompany‟s financial reporting process (VI)Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue anauditor‟s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with CSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are generally considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with CSAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
A. Identify and assess the risks of material misstatement of the financial statements due to fraud and error, design and implement audit procedures to address these risks, and obtain sufficient and appropriate audit evidence as a basis for forming the audit opinion. As fraud may involve collusion, forgery, willful omission, misrepresentation or override of internal control, the risk of not discovering a material misstatement due to fraud is higher than the risk of failing to detect a material misstatement resulting from a mistake.
B. Understand the internal controls related to auditing in order to design appropriate audit procedures. C. Evaluate the appropriateness of accounting policies adopted by the management and the reasonableness of accounting estimates and relevant disclosures made by management.
D. Conclude on the appropriateness ofmanagement‟s application of the going concern assumption. Meanwhile, based on the audit evidence obtained, conclude whether there is material uncertainty about theCompany‟s ability to continue as a going-concern. If we conclude that there is material uncertainty, the auditing standards require us to draw attention of the users of the financial statements to the relevant disclosures in the financial statements. If the disclosure is inadequate, we shall express a qualified opinion. Our conclusion is based on information available as of the date of the audit report. However, future events or circumstances may cause the Company not being able to continue as a going-concern. E. Evaluate the overall presentation, structure and content of financial statements (including disclosures), and evaluate whether the financial statements present fairly the relevant transactions and events.
F. Obtain sufficient and appropriate audit evidence regarding to theCompany‟s financial information of the entities or business activities in order to express opinion on the financial statements. We are responsible for the guidance, supervision and execution of the group audit. We take full responsibility for the audit opinion.
We communicate with those charged with governance on the scope and time schedule of the audit, and significant audit findings, etc., including deficiency of internal control that we identified during the audit which warrants attention.
We also provide a statement to those charged with governance regarding the fact that we comply with the requirements of professional ethics relating to independence, and also communicate with them about all relationships and other matters that may be reasonably deemed to affect ourindependence，as well as, where applicable, the relevant precautions(if applicable).
Through the matters we communicate with those charged with governance, we identify matters that are significant in the audit of the financial statements for the current period, which therefore become the key audit items. We disclose these items in the audit report, unless public disclosure of such items is
prohibited by laws and regulations; in exceptional circumstances, where the benefit arising from public disclosure of certain matters is outweighed by the negative consequence brought by such disclosure in consideration of public interest, we do not disclosure such items in the audit report.
II. Financial statements
Units in Notes of Financial Statements is RMB
Consolidated Balance Sheet
As at 31 December 2017
Preparedby：Shenzhen Tellus Holding Co.,Ltd. Currency: RMB Yuan
|||||
|-|-|-|-|
|Item|Note VI.|Closing balance|Opening balance|
|Current Assets：||||
|Monetary funds|1|1 61,793,218.56|2 18,497,640.10|
|Financial assets held-for-trading||||
|Note receivables||||
|Account receivables|2|4 4,215,236.68|1 13,736.64|
|Prepayments|3|3 ,737,706.70|8,436,668.35|
|Interest receivable|4|2 21,232.88|1 72,055.56|
|Dividends receivable|5|7 79,868.09||
|Other receivables|6|1 4,819,164.11|1 6,586,387.45|
|Inventories|7|1 2,646,227.22|1 1,038,915.69|
|Non-current asset due within one year||||
|Other current assets|8|2 19,582,250.70|9 0,123,901.32|
|Total current assets||3 44,969,305.11|3 44,969,305.11|
|Non-current Assets:||||
|Financial assets held-for-trade|9|1 0,176,617.20|1 0,478,985.77|
|Held-to-maturity investments|10|||
|Long-term receivables|11|||
|Long-term equity investments|12|2 84,464,749.15|2 03,633,308.06|
|Investment properties|13|7 3,223,512.21|7 7,602,248.53|
|Fixed assets|14|1 20,296,822.84|1 29,226,236.16|
|Construction in progress|15|3 78,160,896.69|3 43,365,313.46|
|Materials for construction||||
|Disposal of fixed assets||||
|Bio-assets in production||||
|Oil and gas assets||||
|Intangible assets|16|5 2,349,686.92|5 3,739,118.72|
|Development expenditure||||
|Goodwill||||
|Long-term deferred expenses|17|1 ,779,713.94|1 ,437,761.31|
|Deferred tax assets|18|2 4,394,028.91|2 4,448,797.86|
|Other non-current assets|19|6 73,661.62|1 00,000.00|
|Total non-current assets||9 45,519,689.48|8 44,031,769.87|
|Total Assets||1 ,403,314,594.42|1 ,189,001,074.98|

Consolidated BalanceSheet（Continued）
As at 31 December 2017
Preparedby：Shenzhen Tellus Holding Co.,Ltd. Currency: RMB Yuan
|||||
|-|-|-|-|
|Item|Note VI.|Closing balance|Opening balance|
|Current liabilities：||||
|Short-term loans|21|1 20,000,000.00|5 0,000,000.00|
|Financial liabilities held-for-trade||||
|Notes payable||||
|Accounts payable|22|2 8,032,708.69|2 3,599,227.33|
|Advances from customers|23|1 3,790,019.47|1 1,930,493.02|
|Employee benefits payable|24|2 3,171,154.53|2 7,144,631.18|
|Taxes payable|25|9 ,927,572.27|1 0,081,678.60|
|Interest payables|26|2 29,494.72|7 7,826.33|
|Dividends payable||||
|Other payables|27|1 53,099,910.49|1 26,045,854.54|
|Non-current liabilities due within one year||||
|Other current liabilities||||
|Total current liabilities||3 48,250,860.17|2 48,879,711.00|
|Non-current liabilities：||||
|Long-term loans|28|3 8,600,000.00|1 2,000,000.00|
|Bonds payable||||
|Long-term payables|29|3 ,920,160.36|3 ,920,160.36|
|Long-term employee benefits payable||||
|Special payables||||
|Accrued liabilities|30||1 ,192,618.90|
|Deferred tax liabilities|18||2 32,711.06|
|Other non-current liabilities|31|1 4,520,000.00|1 4,239,537.48|
|Total non-current liabilities||5 7,040,160.36|3 1,585,027.80|
|Total liabilities||4 05,291,020.53|2 80,464,738.80|
|Owners' equity：||||
|Paid-in capital|32|2 97,281,600.00|2 97,281,600.00|
|Capital reserve|33|5 65,226,274.51|5 64,192,605.51|
|Less: treasury shares||||
|other comprehensive income||||
|Special reserve||||
|Surplus reserves|34|2 ,952,586.32|2 ,952,586.32|
|General risk reserve||||
|Undistributed profit|35|9 7,798,595.80|3 0,935,823.12|
|Foreign exchange translation difference||||
|Total owners' equity attributable to parentcompany||9 63,259,056.63|8 95,362,614.95|
|Minority interests||3 4,764,517.26|1 3,173,721.23|
|Total owners’equity||9 98,023,573.89|9 08,536,336.18|
|Total liabilities and owners’equity||1 ,403,314,594.42|1 ,189,001,074.98|

Legal representative: Lv Hang Person in charge of accounting: Lou Hong Person in charge of accounting organ: Liu Yuhong
Consolidated Income Statement
For the Year Ended 31 December 2017
Preparedby：Shenzhen Tellus Holding Co.,Ltd. Currency: RMB Yuan
|||||
|-|-|-|-|
|Item|Note VI.|Closing balance|Opening balance|
|Ⅰ.Total operating income|36|3 47,237,289.80|3 24,240,841.90|
|Including: Operating income|36|3 47,237,289.80|3 24,240,841.90|
|Ⅱ.Total operating Costs||3 13,002,481.12|2 97,539,255.62|
|Including: Operating costs|36|2 54,254,960.65|2 29,042,849.63|
|Taxes and surcharges|37|3 ,638,454.37|8 ,772,047.77|
|Selling and distribution expenses|38|1 6,490,379.71|1 6,656,674.49|
|Administrative expense|39|3 6,735,283.59|4 2,446,751.49|
|Financial expense|40|1 ,520,168.86|- 505,960.97|
|Impairment losses of assets|41|3 63,233.94|1 ,126,893.21|
|Add: Gains from changes in fair value ("-" meansloss)||||
|Investment income ("-" means loss)|42|3 3,599,860.09|5 ,098,993.57|
|Including: Investment income fromassociates and joint venture|42|2 1,297,772.09|1 ,182,675.73|
|Gains on disposal of assets ("-" means loss)|43|374,583.14|68,314.27|
|Other income|44|25,753.22|-|
|Ⅲ.Operating profit ("-" means loss)||6 8,235,005.13|3 1,868,894.12|
|Add: Non-operating income|45|7 25,518.07|3 2,237.30|
|Including:Gain from disposal of non-currentassets|45|-|-|
|Less: Non-operating expenses|46|3 5,120.31|1 ,415,801.07|
|Including: Loss on disposal of non-currentassets|46|2 9,444.35|1 20,004.34|
|Ⅳ.Total profit ("-" means loss)||6 8,925,402.89|3 0,485,330.35|
|Less: Income tax expenses|47|3 ,143,834.18|2 ,867,397.81|
|Ⅴ.Net profit ("-" means loss)||6 5,781,568.71|2 7,617,932.54|
|(Ⅰ)Categorization by continuity of operation||||
|1.Net profit of continued operation||65,781,568.71|27,617,932.54|
|2.Net profit of discontinued operation||-|-|
|(Ⅱ)Categorization by attribution of ownership||||
|1.Net profit attributable to shareholders of the parent||-1,081,203.97|424,369.91|
|2.Profit of loss attributable to minority shareholder||66,862,772.68|27,193,562.63|
|Ⅵ.Earnings per share||||
|Basic Earnings per share||0.2249|0.0915|
|Diluted Earnings per share||0.2249|0.0915|
|Ⅶ.Net value of other comprehensive income aftertax||||
|Net value of other comprehensive income after taxto owners of parent company||||
|Otherc omprehensivei ncomet hatc anb ereclassifiedi ntop rofita ndl oss||||
|The gains and losses on fair value changes offinancial assets held-for-trade||||
|Ⅷ.Total comprehensive income||6 5,781,568.71|2 7,617,932.54|
|Total comprehensive income attributable to ownersof parent company||6 6,862,772.68|2 7,193,562.63|
|Total comprehensive income attributable to minorityinterests||- 1,081,203.97|4 24,369.91|

Legal representative: Lv Hang Person in charge of accounting: Lou Hong Person in charge of accounting organ: Liu Yuhong
Consolidated Statement of Cash Flows
For the Year Ended 31 December 2017
Preparedby：Shenzhen Tellus Holding Co.,Ltd. Currency: RMB Yuan
|||||
|-|-|-|-|
|Item|Note VI.|Amount for thecurrent period|Amount for theprior period|
|Ⅰ. Cash Flow from Operating Activities：||||
|Cash received from sales of goods or rendering ofservices||3 51,036,436.94|3 70,098,515.70|
|Refund of taxes and levies||||
|Cash received relating to other operating activities|48|9 ,418,234.47|1 2,156,441.52|
|Sub-total of Cash Inflows||3 60,454,671.41|3 82,254,957.22|
|Cash paid for goods and services||2 36,140,838.02|2 09,258,447.95|
|Cash paid to and on behalf of employees||5 5,047,561.06|6 0,984,493.75|
|Cash paid on taxes and levies||2 0,250,075.88|2 0,335,212.12|
|Cash paid relating to other operating activities|45|5 1,109,264.50|3 3,801,869.08|
|Sub-total of Cash Outflows||3 62,547,739.46|3 24,380,022.90|
|Net Cash Flows from Operating Activities||- 2,093,068.05|5 7,874,934.32|
|Ⅱ. Cash Flows from Investing Activities:||||
|Cash received from return of investments||6 28,171,900.00|4 01,300,000.00|
|Cash received investing income||1 5,714,288.78|1 2,363,270.79|
|Net cash received from disposal of fixed assets,intangible assets and other long assets||2 59,940.00||
|Net cash flows from disposal subsidiary and otheroperating unite||2 ,343,240.90||
|Other cash received relating to investing activities||4 0,000,000.00||
|Sub-total of Cash Inflows||6 86,489,369.68|4 13,663,270.79|
|Cash paid to acquire fixed assets, intangible assetsand other long assets||3 1,340,610.55|6 7,736,915.76|
|Cash paid on investments||8 04,100,000.00|3 06,590,290.86|
|Net cash paid on obtain subsidiary and other operatingunite||||
|Cash paid on other investing activities||||
|Sub-total of Cash Outflows||8 35,440,610.55|3 74,327,206.62|
|Net Cash Flows from Investing Activities||- 148,951,240.87|3 9,336,064.17|
|Ⅲ. Cash flow from Financing Activities||||
|Cash received from investments||2 2,672,000.00|2 ,330,000.00|
|Including: Cash received from investments by minorityinterests of subsidiaries||2 2,672,000.00|2 ,330,000.00|
|Cash received from borrowing||2 16,600,000.00|6 2,000,000.00|
|Cash received from issuing bonds||||
|Cash received from other financing activities||||
|Sub-total of Cash Inflows||2 39,272,000.00|6 4,330,000.00|
|Cash repayments on borrowed amounts||1 20,000,000.00|6 3,000,000.00|
|Cash payments for distribution of dividends or profits||4 ,931,753.63|1 9,228,479.17|
|Including: Dividends or profit paid to minority interestsof subsidiaries||||
|Cash payments on other financing activities||||
|Sub-total of cash Outflows||1 24,931,753.63|8 2,228,479.17|
|Net cash flows from financing activities||1 14,340,246.37|- 17,898,479.17|
|Ⅳ. Effect of foreign exchange rate on cash||- 358.99|4 09.85|
|Ⅴ. Net increase in cash and cash equivalents||- 36,704,421.54|7 9,312,929.17|
|Add: cash equivalents at the beginning of the period||1 78,497,640.10|9 9,184,710.93|
|Ⅵ. Cash equivalents at the end of the period||1 41,793,218.56|1 78,497,640.10|

Legal representative: Lv Hang Person in charge of accounting: Lou Hong Person in charge of accounting organ: Liu Yuhong
CONSOLIDATED STATEMENT OF CHANGE IN OWNER'S EQUITY
For the Year Ended 31 December 2017
Preparedby：Shenzhen Tellus Holding Co.,Ltd. Currency: RMB Yuan
||||||||||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|Amount for the current year|||||||||||Amount for the prior year|||||||||||
||Attribute to the equity of parent company|||||||||Minorityinterests|Total owners'equity|Attribute to the equity of parent company|||||||||Minorityinterests|Total owners'equity|
||Paid-in capital (orShare capital)|Capital reserve|Less:Treasuryshares|Specialreserve|othercomprehensiveincome|Surplus reserve|Generalreserve|Undistributedprofit|Others|||Paid-in capital(or Sharecapital)|Capital reserve|Less:Treasuryshares|othercomprehensive income|Specialreserve|Surplusreserve|Generalreserve|Undistributed profit|Others|||
|1.Balance at the End of Last Period|297,281,600.00|564,192,605.51||||2,952,586.32||30,935,823.12||13,173,721.23|908,536,336.18|220,281,600.00|564,192,605.51||||2,952,586.32||3,742,260.49||10,419,351.32|878,588,403.64|
|Add: Changes of accounting policies|||||||||||||||||||||||
|Prior year adjustments|||||||||||||||||||||||
|Others|||||||||||||||||||||||
|2. Balance at the Beginning of the Year|297,281,600.00|564,192,605.51||||2,952,586.32||30,935,823.12||13,173,721.23|908,536,336.18|220,281,600.00|564,192,605.51||||2,952,586.32||3,742,260.49||10,419,351.32|878,588,403.64|
|3. Increase/Decrease movements inthis Year ("-" means loss)||1,033,669.00||||||66,862,772.68||21,590,796.03|89,487,237.71|77,000,000.00|556,520,000.00||||||27,193,562.63||2,754,369.91|49,667,001.28|
|(I)Total comprehensive income||||||||66,862,772.68||-1,081,203.97|65,781,568.71||||||||27,193,562.63||424,369.91|47,337,001.28|
|(II) Gain/Loss to Owners' Equity Directly|||||||||||||||||||||||
|(III) Capital Injected and Reduced by Owners||1,033,669.00||||||||22,672,000.00|23,705,669.00|77,000,000.00|556,520,000.00||||||||2,330,000.00|2,330,000.00|
|a. Capital injected by owners||1,033,669.00||||||||22,672,000.00|23,705,669.00|77,000,000.00|556,520,000.00||||||||2,330,000.00|2,330,000.00|
|b. Payment for shares included in owners' equity|||||||||||||||||||||||
|c. Others|||||||||||||||||||||||
|(IV) Profit Distribution|||||||||||||||||||||||
|a. Withdrawal surplus reserve|||||||||||||||||||||||
|b. Provisions withdrawn for general risk|||||||||||||||||||||||
|c. Distribution to owners (or shareholders)|||||||||||||||||||||||
|d. Others|||||||||||||||||||||||
|(V) Internal transfers of owners' equity|||||||||||||||||||||||
|a. Capitalisation of Additional paid-incapital; (or share capital)|||||||||||||||||||||||
|b. Capitalization of surplus reserve (orshare capital)|||||||||||||||||||||||
|c. Making up losses of surplusreserve|||||||||||||||||||||||
|d. Others|||||||||||||||||||||||
|(VI) Special Reserve|||||||||||||||||||||||
|a. Withdrawal of special reserve|||||||||||||||||||||||
|b. Use of special reserve|||||||||||||||||||||||
|(VII) Others|||||||||||||||||||||||
|4. Balance at the end of the period|297,281,600.00|565,226,274.51||||2,952,586.32||97,798,595.80||34,764,517.26|998,023,573.89|297,281,600.00|564,192,605.51||||2,952,586.32||30,935,823.12||13,173,721.23|908,536,336.18|

 Legal representative: Lv Hang Person in charge of accounting: Lou Hong Person in charge of accounting organ: Liu Yuhong
Balance Sheet
As at 31 December 2017
Preparedby：Shenzhen Tellus Holding Co.,Ltd. Currency: RMB Yuan
|||||
|-|-|-|-|
|Item|Note XIII.|Closing balance|Opening balance|
|Current Assets：||||
|Monetary funds||9 7,991,738.05|1 50,800,890.39|
|Financial assets held-for-trade||||
|Notes receivable||||
|Accounts receivable|1|||
|Prepayments|||3 2,280.00|
|Interest receivable||2 21,232.88|1 72,055.56|
|Dividends receivable||7 79,868.09||
|Other receivables|2|9 8,321,166.40|9 8,999,650.03|
|Inventories||||
|Non-current asset due within one year||||
|Other current assets||2 03,500,000.00|9 0,000,000.00|
|Total current assets||4 00,814,005.42|3 40,004,875.98|
|Non-current Assets:||||
|Financial assets available-for-sale||1 0,176,617.20|1 0,176,617.20|
|Held-to-maturity investments||||
|Long-term receivable||||
|Long-term equity investments|3|7 89,830,758.66|6 86,225,666.43|
|Investment properties||4 6,749,467.61|4 9,847,406.09|
|Fixed assets||1 5,536,781.07|1 6,497,899.89|
|Construction in progress||5 ,554,512.79|3 73,191.69|
|Materials for construction||||
|Disposal of fixed assets||||
|Bio-assets in production||||
|Oil and gas assets||||
|Intangible assets||3 41,121.77|4 84,538.73|
|Development expenditure||||
|Goodwill||||
|Long-term deferred expenses||2 23,715.66|2 39,924.49|
|Deferred tax assets||1 3,869,311.84|1 3,908,254.04|
|Other non-current assets||||
|Total non-current assets||8 82,282,286.60|7 77,753,498.56|
|Total Assets||1 ,283,096,292.02|1 ,117,758,374.54|

Balance Sheet (Continued)
As at 31 December 2017
Preparedby：Shenzhen Tellus Holding Co.,Ltd. Currency: RMB Yuan
|||||
|-|-|-|-|
|Item|Note|Closing balance|Opening balance|
|Current liabilities：||||
|Short-term loans||1 20,000,000.00|5 0,000,000.00|
|Financial liabilities held-for-trade||||
|Notes payable||||
|Accounts payable||1 4,000.00||
|Advance from customers||1 ,511.00||
|Employee benefits payable||5 ,769,360.88|7 ,713,651.26|
|Taxes payable||4 74,977.89|5 24,089.23|
|Interest payable||1 65,604.16|6 6,458.33|
|Dividends payable||||
|Other payables||2 95,776,662.59|2 53,475,259.99|
|Non-current liabilities due within one year||||
|Other current liabilities||||
|Total current liabilities||4 22,202,116.52|3 11,779,458.81|
|Non-current liabilities：||||
|Long-term loans||||
|Bonds payable||||
|Long-term payables||||
|Long-term empolyee benefits||||
|Special payables||||
|Accrued liabilities||||
|Deferred tax liabilities||||
|Other non-current liabilities||||
|Total non-current liabilities||||
|Total liabilities||4 22,202,116.52|3 11,779,458.81|
|Owners' equity：||||
|Paid-in capital||2 97,281,600.00|2 97,281,600.00|
|Capital reserve||5 62,032,851.23|5 60,999,182.23|
|Less: treasury shares||||
|Other comprehensive income||||
|Special reserve||||
|Surplus reserves||2 ,952,586.32|2 ,952,586.32|
|General risk reserve||||
|Undistributed profit||-1,372,862.05|- 55,254,452.82|
|Total owners' equity attributable to parent company||8 60,894,175.50|8 05,978,915.73|
|Total liabilities and owners' equity||1 ,283,096,292.02|1 ,117,758,374.54|

Legal representative: LvHang Person in charge of accounting: Lou Hong Person in charge of accounting organ: Liu Yuhong
Income Statement
For the Year Ended 31 December 2017
Preparedby：Shenzhen Tellus Holding Co.,Ltd. Currency: RMB Yuan
|||||
|-|-|-|-|
|Item|Note XIII.|Amount for the currentperiod|Amount for the priorperiod|
|Ⅰ.Total operating income|4|44,035,720.63|42,675,858.14|
|Less:Operating cost|4|3,662,936.04|3,596,474.49|
|Taxes and surcharges||1,658,236.32|1,946,487.56|
|Selling and distribution expenses||||
|Administrative expense||15,151,430.07|18,123,683.40|
|Financial expense||856,292.09|-54,231.75|
|Impairment losses of assets||-178,762.83|210,905.47|
|Add: Gain from changes in fair value ("-" meansloss)||||
|Investment income ("-" means loss)|5|31,049,977.47|17,320,863.81|
|Including: Investment income from associatesand joint venture||17,123,423.23|6,984,139.28|
|Gains on disposal of assets ("-" means loss)||||
|Other income||||
|II.Operating profit ("-" means loss)||53,935,566.41|36,173,402.78|
|Add: Non-operating income||0.04|0.01|
|Including:Gain from disposal of non-currentassets||||
|Less:Non-operating expenses||15,033.48||
|Including: Loss on disposal of non-currentassets||15,033.48||
|III.Total profit ("-" means loss)||53,920,532.97|36,173,402.79|
|Less: Income tax expenses||38,942.20|38,942.20|
|IV.Net profit ("-" means loss)||53,881,590.77|36,134,460.59|
|V.Other comprehensive income||||
|Otherc omprehensivei ncomet hatc anb er eclassifiedintop rofita ndl oss||||
|The gains and losses on fair value changes offinancial assets held-for-trade||||
|VI.Total comprehensive income||53,881,590.77|36,134,460.59|

Legal representative: LvHang Person in charge of accounting: LouHong Person in charge of accounting organ: LiuYuhong
Cash Flow Statement
For the Year Ended 31 December 2017
Preparedby：Shenzhen Tellus Holding Co.,Ltd. Currency: RMB Yuan
|||||
|-|-|-|-|
|Item|Note|Amount for thecurrent period|Amount for the priorperiod|
|Ⅰ. Cash Flow from Operating Activities：||||
|Cash received from sales of goods or rendering ofservices||60,856,831.09|51,007,384.73|
|Refund of taxes and levies||||
|Cash received relating to other operating activities||9,696,177.07|28,092,646.25|
|Sub-total of Cash Inflows||70,553,008.16|79,100,030.98|
|Cash paid for goods and services||||
|Cash paid to and on behalf of employees||14,515,785.88|15,349,455.10|
|Cash paid on taxes and levies||3,755,038.44|3,969,332.10|
|Cash paid relating to other operating activities||21,185,336.08|22,389,973.93|
|Sub-total of Cash Outflows||39,456,160.40|41,708,761.13|
|Net Cash Flows from Operating Activities||31,096,847.76|37,391,269.85|
|Ⅱ. Cash Flows from Investing Activities:||||
|Cash received from return of investments||535,500,000.00|365,000,000.00|
|Cash received investing income||15,146,686.15|12,201,500.94|
|Net cash received from disposal of fixed assets,intangible assets and other long assets||13,195.84||
|Net cash flows from disposal subsidiary and otheroperating unite||14,150,000.00||
|Other cash received relating to investing activities||40,000,000.00||
|Sub-total of Cash Inflows||604,809,881.99|377,201,500.94|
|Cash paid to acquire fixed assets, intangible assetsand other long assets||4,549,479.98|574,662.05|
|Cash paid on investments||730,598,000.00|291,290,290.86|
|Cash paid on other investing activities||||
|Sub-total of cash outflows||735,147,479.98|291,864,952.91|
|Net Cash Flows from Investing Activities||-130,337,597.99|85,336,548.03|
|Ⅲ. Cash flow from Financing Activities||||
|Cash received from investments||||
|Cash received from borrowing||190,000,000.00|50,000,000.00|
|Cash received from issuing bonds||||
|Cash received from other financing activities||||
|Sub-total of cash inflows||190,000,000.00|50,000,000.00|
|Cash repayments on borrowed amounts||120,000,000.00|63,000,000.00|
|Cash payments for distribution of dividends orprofits||3,568,402.11|19,228,479.17|
|Cash payments on other financing activities||||
|Sub-total of cash Outflows||123,568,402.11|82,228,479.17|
|Net cash flows from financing activities||66,431,597.89|-32,228,479.17|
|Ⅳ. Effect of foreign exchange rate on cash||||
|Ⅴ. Net increase in cash and cash equivalents||-32,809,152.34|90,499,338.71|
|Add: cash equivalents at the beginning of the period||110,800,890.39|20,301,551.68|
|Ⅵ. Cash equivalents at the end of the period||77,991,738.05|110,800,890.39|

Legal representative: Lv Hang Person in charge of accounting: Lou Hong Person in charge of accounting organ: Liu Yuhong
STATEMENT OF CHANGE IN OWNER'S EQUITY
For the Year Ended 31 December 2017
Preparedby：Shenzhen Tellus Holding Co.,Ltd. Currency: RMB Yuan
||||||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|Amount for the current year|||||||||Amount for the prior year|||||||||
||Paid-in capital(or Sharecapital)|Capitalreserve|Less:Treasuryshares|Specialreserve|othercomprehensiveincome|Surplusreserve|Generalreserve|Undistributed profit|Total owners' equity|Paid-in capital(or Share capital)|Capital reserve|Less:Treasuryshares|othercomprehensiveincome|Specialreserve|Surplusreserve|Generalreserve|Undistributedprofit|Total owners'equity|
|1.Balance at the End of Last Period|297,281,600.00|560,999,182.23||||2,952,586.32||-55,254,452.82|805,978,915.73|297,281,600.00|560,999,182.23||||2,952,586.32||-91,388,913.41|769,844,455.14|
|Add: Changes of accounting policies|||||||||||||||||||
|Prior year adjustments|||||||||||||||||||
|Others|||||||||||||||||||
|2. Balance at the Beginning of theYear|297,281,600.00|560,999,182.23||||2,952,586.32||-55,254,452.82|805,978,915.73|297,281,600.00|560,999,182.23||||2,952,586.32||-91,388,913.41|769,844,455.14|
|3. Increase/Decrease movements inthis Year ("-" means loss)||1,033,669.00||||||53,881,590.77|54,915,259.77||||||||36,134,460.59|36,134,460.59|
|(I)Total comprehensive income||||||||53,881,590.77|53,881,590.77||||||||36,134,460.59|36,134,460.59|
|(II) Other comprehensive income|||||||||||||||||||
|(III) Capital Injected and Reducedby Owners||1,033,669.00|||||||1,033,669.00||||||||||
|a. Capital injected by owners||1,033,669.00|||||||1,033,669.00||||||||||
|b. Payment for shares included inowners' equity|||||||||||||||||||
|c. Others|||||||||||||||||||
|(IV) Profit distribution|||||||||||||||||||
|a. Withdrawal surplus reserve|||||||||||||||||||
|b. Provisions withdrawn for generalrisk|||||||||||||||||||
|c. Distribution to owners (orshareholders)|||||||||||||||||||
|d. Others|||||||||||||||||||
|(V) Internal transfers of owners'equity|||||||||||||||||||
|a. Capitalisation of Additional paid-incapital; (or share capital)|||||||||||||||||||
|b. Capitalisation of surplus reserve (orshare capital)|||||||||||||||||||
|c. Making up losses of surplusreserve|||||||||||||||||||
|d. Others|||||||||||||||||||
|(VI) Special Reserve|||||||||||||||||||
|a. Withdrawal of current period|||||||||||||||||||
|b. Use of special reserve|||||||||||||||||||
|(VII) Others|||||||||||||||||||
|4. Balance at the end of the period|297,281,600.00|562,032,851.23||||2,952,586.32||-1,372,862.05|860,894,175.50|297,281,600.00|560,999,182.23||||2,952,586.32||-55,254,452.82|805,978,915.73|

 Legal representative: Lv Hang Person in charge of accounting: Lou Hong Person in charge of accounting organ: Liu Yuhong
SHENZHEN TELLUS HOLDING CO., LTD.
Notes to Financial Statements
（For the Year Ended 31 December, 2017 Expressed in RMBYuan）
Ⅰ、 Corporation profile
1.Foundation of Tellus
The Chinese name of Tellus:深圳市特力(集团)股份有限公司
The English name of Tellus: ShenZhen Tellus Holding Co.,Ltd
Registered company addrss: Tellus Building level 3, Shuibei second Road, Luohu, Shenzhen City, Guangdong Province.
Office address: the
15th Floor of Nuclear Building ,Shennan
Road, Futian
District, Shenzhen
Stock market: Shenzhen Stock Exchange
Name and code: TellusA（000025）,TellusB（200025）
Legalrepresentative：Hang LV
The number of business license: 91440300192192210U
2. Theindustry characteristic and business scope with the main products or services
Theindustrycharacteristic：Theindustry of providing energy materials, machinery and electronics equipment
The business scope:automotive integrated services, including the test of equipment maintenance, property leasing and management etc.
The main products or services: sales of vehicles and accessories, the maintenance and inspection of vehicles and the services of property leasing etc.
3. The history of Tellus
Shenzhen Tellus Holding Company Limited(―theCompany‖) was developed from the Shenzhen Tellus Machinery Co.,Ltd., which established on 11 October, 1986. On 2nd January, 1992, with the approval of Shenzhen MunicipalPeople‘s Government―shen fu ban fu (1992), No.1850‖, Shenzhen Tellus Machinery Co.,Ltd. reorganized to a public limited company and renamed to Shenzhen Tellus Machinery Holding Company Limited. On 15 March 1993, with the approval of Bank of China Shenzhen branch―Shen Ren Yin Fu Zi (1993)No.92‖, the Company issued the initial public registered shares and turned into Limited Liability Company with the name of―Tellus mechanical and electrical co. LTD,Shenzhen‖. At this moment, the whole share capital is 166.88million shares, including the original 120.9million shares with 45.98million new shares. The new shares is divided into two parts,
one is RMB 25.98 million ordinary shares (A shares) ,the other is special shares (B) RMB 20 million shares .
In June 1993, Shenzhen securities management office was about to agree that―Tellus mechanical and electrical co. LTD,Shenzhen―wasqualified to list in Shenzhenstock exchange market(shen zheng banfu[1993]34) and (shen zheng shi zi[1993]22).On 30 June 1994, the Company changed name to Shenzhen Tellus Holding Company Limited with the approval of Shenzhen administrative bureau for industry and commerce .
On March 15, 1993, with the approval of the branch ofpeople‘s bank of China in shenzhen special economic zone, the group could issue A ordinary shares 25.98 million with B ordinary shares20 million (shen ren yin fu zi (1993)092).On June 30, 1994, with the approval of the shenzhen city administration for industry and commerce, Tellus mechanical and electrical co. LTD, Shenzhen was renamed ShenZhen Tellus Holding Co.,Ltd
The capital structure of the Company at listingdate：
Category Amount (share) Ratio（%）
1. Non-tradable shares
Include: State shares 120,900,000 72.45 Sub-total of non-tradable shares 120,900,000 72.45 2. Tradable shares
- A 25,980,000 15.57 - B 20,000,000 11.98 Sub-total tradable shares 45,980,000 27.55 Total 166,880,000 100.00 Change of capital structure after established:
（1）Issue bonus shares in 1993
According to the decision made by general meeting of shareholders in 1993, the company distributed a 2 for 10 bonus shares with cash dividend of RMB 0.5. The whole capital changed into 2,002.56 million shares.
On 22 April1994，the Shenzhen Stock Management Office agreed about plan of distributing bonus . After plan, thecompany‘s capital structure changed as follows:
Category Amount（share） Ratio（%）
Category Amount（share） Ratio（%）
State - owned shares 145,080,000 72.45 Public shares 31,176,000 15.57 RMB specialstock（Bshares） 24,000,000 11.98 Total 200,256,000 100.00（2）Issue bonus shares and increase capital in 1994
On 28 May 1995, the Group shareholder meeting agreed about plan of distributing bonus and increasing capital. On the basis of 2,002.56 million shares in the end of 1994, the Group distributed 0.5 of 10 shares, and give RMB 0.5 from every increasing 0.5 share capital. After theGroup‘s share capital increased to 2,202.816 million shares.
After plan, thecompany‘s capital structure changed as follows:
Category Amount（share） Ratio（%）
State - owned shares 159,588,000 72.45 Public shares 34,293,600 15.57 RMB specialstock（Bshares） 26,400,000 11.98 Total 220,281,600 100.00（3）Majority shareholder change in 1997
On 31st March 1997, with the approval of Shenzhen MunicipalPeople‘s Government―shen fu han (1997), No.19‖ and China Securities Regulatory Commission―zheng jian han shang (1997), No.5‖, Shenzhen Investment Administrative Company transferred its 159,588,000 shares to Shenzhen Te Fa (Group) Company Limited (hereinafter referred to as―the Te FaGroup‖). The shares transferred represent72.45% of the total issued shares of the Company.
（4）The reform of listing non-tradable shares in 2006
In December 2005, shenzhen, the State-owned Assets Supervision and Administration Commission agreed about the plan of reforming non-tradable shares.
On 4th January 2006, Te Fa Group gave 13,717,440 shares to the holders of tradable shares of the company in the A share market. After the split-share reform was completed, it held66.22% of the shares capital of the Company.
After the split-share reform, thecompany‘s capital structure changed as follows:
Category Amount（share） Ratio（%）
State - owned shares 145,870,560 66.22
Category Amount（share） Ratio（%）
Public shares 48,011,040 21.79 RMB specialstock（Bshares） 26,400,000 11.98 Total 220,281,600 100.00 (5) Private placement of RMB ordinary shares in 2015
According to the 19th special meeting of the 7th Board Meeting on April 21st,2015, and the 4thstockholders‘ meeting on June 3rd, 2015, the Company private issued RMB ordinary shares (A shares) 77,000,000.00 shares to Shenzhen Tefa Group Co. and Shenzhen Yuanzhifuhai Jewerly Investment Co. The total raising money is less than RMB 646,800,000.00 and it is all by cash.After plan, thecompany‘s capital structure changed as follows:
Category Amount Ratio（%）
State-owned legal person shares 151,870,560 51.09 Domestic public shares 119,011,040 40.03 RMB special shares (b share) 26,400,000 8.88 Total 297,281,600 100.00（6）Shares reduction of controlling shareholders in 2016
According to Shares Reduction of Controlling Shareholders Announcement, Shenzhen SDG co., LTD reducted 2,972,537 circulation stocks with unrestricted in terms by concentrated bidding during May 4th to May 31st in 2016, which accounts for1% of total shares of the Company. On September 30th 2016, the Company received Notation of Compliment Shares Reduction Schedule of Tellus A from SDG Company, who reducted 2,972,767 circulation stocks with unrestricted in terms by concentrated bidding during August 29th to September 29th in 2016, accounting for1% of total shares of the Company. Up to September 29th 2016, SDG Company had completed its shares reduction schedule.Thecompany‘s capital structure changed as follows:
Category Amount Ratio（%）
State-owned legal person shares 145,925,256 49.09 Domestic public shares 124,956,344 42.03 RMB special shares (b share) 26,400,000 8.88 Total 297,281,600 100.00 Till the end of 2017, the Company had issued 29,728.16 million shares, details in VI-32.
4. The scope of consolidation
There are 16 subsidiariesincluded in the 2017 consolidation scope, details innotes8―the equity in otherentities‖. Compared with last year(2016), one entity is newly added to the consolidation scope,one entity is excluded to the consolidation scope.
5. The approval and the date of financial statements
The financial statements of the Company are authorized to be issued to the public on April 2nd,2018 by the Board of Directors.
Ⅱ、 Basis of Preparation
1. Basis of preparation
The financial statements of the Company have been prepared on the basis of going concern in conformity with Chinese Accounting Standards for Business Enterprises and Accounting Systems for Business Enterprises issued by the Ministry of Finance ofPeople‘s Republic of China in February 2006, and Accounting Standards (order No.33 of the Ministry of Finance announcedand order No.76 of the Ministry of Finance revised ) and Compilation Rules for Information Disclosure by Companies Offering Securities to the PublicNo.15—General Provisions on Financial Reports (2015 Revision) issued by the China Securities Regulatory Commission (CSRC).
According to the relevant accounting regulations in Chinese Accounting Standards for Business Enterprises, the Group has adopted the accrual basis of accounting. Except for certain financial instruments which are measured by at fair value, the Group adopts the historical cost as the principle of measurement in the financial statements. Where assets are impaired, provisions for asset impairment are made in accordance with relevant requirements.
Ⅲ、 Statement of Compliance with Enterprise Accounting Standards
The financial statements of the Group comply are recognized and measured in accordance with the regulations in the Chinese Accounting Standards for Business Enterprises and they give a true and fair view of the financial position, business results and cash flow of the Group as of 31 December 2017. In addition, in all material respects ,the financial statements of the Company and the Group complywith the revised disclosing requirements for financial statements and the notes‗Compilation Rules for Information Disclosure by Companies Offering Securities to the PublicNo.15—General Provisions on Financial Reports (2014Revision)‘ issued by China Securities Regulatory Commission (CSRC) in 2014.
Ⅳ、 Important Accounting Principles and Accounting Estimates
According to the Chinese Accounting standards,the Group ensures the relevant accounting policies and estimation by means of characteristics of subsidiaries. In terms of theexplanation of judgment and
estimation of important accounting policies made by Board of Directors, details will be found in noteⅣ.29‖the important judgment andestimation‖.
1、 Accounting period
The accounting period of the Group is classified as annual period and interim period. Interim period refers to the reporting period shorter than a complete annual period. The accounting period of the Group is the calendar year from January 1 to December 31.
2、Operating Cycle
The normal operating cycle is referring to buying assets used into generating new products to sell products and recollect monetary assets.
3、 Monetary Unit
Renminbi (RMB) is the currency of the primary economic environment in which the Group and its domestic subsidiaries operate. Therefore, the Group and its domestic subsidiaries choose RMB as their functional currency. The Group adopts RMB to prepare its functional statements.
4、Basis of accounting
A business combination is a transaction or event that brings together two or more separate entities into one reporting entity. Business combinations are classified into business combinations involving enterprises under common control and business combinations not involving enterprises under common control.
（1）Business combination involving entities under common control
A business combination involving enterprises under common control is a business combination in which all of the combining enterprises are ultimately controlled by the same party or parties both before and after the combination, and that control is not transitory. For a business combination involving enterprises under common control, the party that, on the combination date, obtains control of another enterprise participating in the combination is the absorbing party, while that other enterprise participating in the combination is a party being absorbed. Combination date is the date on which the absorbing party effectively obtains control of the party being absorbed.
The assets and liabilities obtained are measured at the carrying amount as recorded by the enterprise being combined at the combination date. The differences between the carrying amount of the net assets obtained and the carrying amount of consideration paid for the combination (or the total face value of shares issued) is adjusted to the capital premium (or share premium) in the capital reserve. If the balance of the capital premium (or share premium) is insufficient, any excess is adjusted to retained earnings.
The cost of a combination incurred by the absorbing party includes any costs directly attributable to the combination shall be recognized as an expense through profit or loss for the current period when incurred.
（2）Business combination involving entities not under common control
A business combination involving enterprises not under common control is a business combination in which all of the combining enterprises are not ultimately controlled by the same party or parties both before and after the business combination. For a business combination not involving enterprises under common control, the party that, on the acquisition date, obtains control of another enterprise participating in the combination is the acquirer, while that other enterprise participating in the combination is the acquiree. Acquisition date is the date on which the acquirer effectively obtains control of the acquiree.
For a business combination not involving enterprise under common control, the combination cost including the sum of fair value, at the acquisition date, of the assets given, liabilities incurred or assumed, and equity securities issued by the acquirer. The intermediary expenses incurred by the acquirer in respect of auditing, legal services, valuation and consultancy services etc. and other associated administrative expenses attributable to the business combination are recognized in profit or loss when they are incurred. The transaction cost arose from issuing of equity securities or liability securities shall be initially recognized as equity securities or liability securities.
The contingent consideration related to the combination shall be booked as combination cost at the fair value at the acquisition date. If, within the 12 months after acquisition, additional information can prove the existence of related information at acquisition date and the contingent consideration need to be adjusted, goodwill can be offset. For a business combination achieved in stages that involves multiple exchange transactions, the equity interest in the acquiree previously held before the acquisition date re-assessed at the fair value at the acquisition date, with any differences between its fair value and its carrying amount is recorded as investment income. The other comprehensive income of the acquiree before the acquisition date relating to the previously held interest in the acquiree is transferred to investment income. Combination cost is the aggregate of the carrying amount of the equity interest held in the acquiree prior to the acquisition date and the fair value of the cost of the additional investment at the acquisition date.
Combination cost of theacquirer‘s interest and identifiable net assets of the acquirer acquired through the business combination shall be measured by the fair value at the acquisition date. Where the cost of combination exceeds theacquirer‘s interest in the fair value of theacquiree‘s identifiable net assets, the difference shall be recognized as goodwill. Where the cost of combination is less than theacquirer‘s interest in the fair value of theacquiree‘s identifiable net assets, the difference shall be
accounted for according to the following requirements: (i) the acquirer shall reassess the measurement of the fair values of theacquiree‘s identifiable assets, liabilities and contingent liabilities and measurement of the cost of combination; (ii) if after that reassessment, the cost of combination is still less than theacquirer‘s interest in the fair values of theacquiree‘s identifiable net assets, the acquirer shall recognize the remaining difference immediately in profit or loss for the current period. Where the temporary difference obtained by the acquirer was not recognized due to inconformity with the conditions applied for recognition of deferred income tax, if, within the 12 months after acquisition, additional information can prove the existence of related information at acquisition date and the expected economic benefits on the acquisition date arose from deductible temporary difference by the acquiree can be achieved, relevant income tax assets can be recognized, and goodwill offset. If the goodwill is not sufficient, the differences shall be recognized as profit of the current period.
Apart from above, the differences shall be taken into profit or loss of the current period if the recognition of deferred income tax assets is related to the combination.
5、Preparation of consolidated financial statements
（1）The scope of consolidated financial statements
The scope of consolidation in the consolidated financial statements is determined on the basis of control. Control is the power to govern the financial and operating policies of an enterprise so as to obtain benefits from its operating activities. The scope of consolidation includes the Group and all of the subsidiaries. Subsidiary is an enterprise or entity under the control of the Group.
（2）Preparation of the consolidated financial statements
The subsidiary of the Group is included in the consolidated financial statements from the date when the control over the net assets and business decisions of the subsidiary is effectively obtained, and excluded from the date when the control ceases. For a subsidiary disposed of by the Group, the operating results and cash flows before the date of disposal (the date when control is lost) are included in the consolidated income statement and consolidated statement of cash flows, as appropriate. For a subsidiary disposed during the period, no adjustment is made to the opening balance of the consolidated financial statements.
For a subsidiary acquired through a business combination not under common control, the operating results and cash flows from the acquisition (the date when the control is obtained) are included in the consolidated income statement and consolidated statement of cash flows, as appropriated; no adjustment is made to the opening balance and comparative figures in the consolidated financial statements. Where a subsidiary was acquired during the reporting period, through a business combination involving enterprises under common control, the financial statements of the subsidiaries are included in the consolidated financial statements. The results of operations and cash flow are
included in the consolidated balance sheet and the consolidated income statement, respectively, based on their carrying amounts, from the date that common control was established, and the opening balances and the comparative figures of the consolidated financial statements are restated.
When the accounting period or accounting policies of a subsidiary are different from those of the Group, the Group makes necessary adjustments to the financial statements of the subsidiary based on theGroup‘s own accounting period or accounting policies. Where a subsidiary was acquired during the reporting period through a business combination not under common control, the financial statements was re-conciliated on the basis of the fair value of identifiable net assets at the date of acquisition. Intra-group balances and transactions, and any unrealized profit or loss arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.
Minority interest and the portion in the net profit or loss not attributable to the Group are presented separately in the consolidated balance sheet withinshareholders‘ equity and net profit. Net profit or loss attributable to minority shareholders in the subsidiaries is presented separately as minority interest in the consolidated income statement below the net profit line item. When the amount of loss for the current period attributable to the minority shareholders of a subsidiary exceeds the minorityshareholders‘ portion of the opening balance ofowners‘ equity of the subsidiary, the excess is allocated against the minority interests.
When the Group loses control of a subsidiary due to the disposal of a portion of an equity investment or other reasons, the remaining equity investment is re-measured at its fair value at the date when control is lost. The difference between 1) the total amount of consideration received from the transaction that resulted in the loss of control and the fair value of the remaining equity investment and 2) the carrying amounts of the interest in the formersubsidiary‘s net assets immediately before the loss of the control is recognized as investment income for the current period when control is lost. The amount recognized in other comprehensive income in relation to the formersubsidiary‘s equity investment is reclassified as investment income for the current period when control is lost. The retained interest is subsequently measured according to the rules stipulated in the―Chinese Accounting Standards for Business EnterprisesNo.2—Long-term equityinvestment‖ or―Chinese Accounting Standards for Business EnterprisesNo.22—Determination and measurement of financialinstruments‖ . Details in NoteⅣ. 9―Financialinstruments‖ or NoteⅣ.13‖Long-term equity investments‖.
Control is the foundation of ensuring the scope financial statements. Control is referring to the power of controlling investee via the relevant investing activities with changeable returns and of influencing to change values of them. The consolidation scope refers to the group and subsidiaries. Subsidiary is entity of the controlled party.
From the day of acquiring the equity and actual control of management decisions, it should be in the scope vice versa. As for the subsidiary of disposition, the assets and monetary flow should be included into the consolidated financial statements, not adjusting the opening balance. Under the non-same control surrounding, the operating results and cash flows have been included in the consolidated financial statements properly and accurately with no adjustment of the opening balance.Under the same control surrounding, the operating results and cash flows have been included in the consolidated financial statements properly and accurately with adjustment of the opening balance.
When making financial statements, if the period of the group and the subsidiary is different, we should necessarily adjust thesubsidiary‘ period in accordance with thegroup‘s. As for the non-same control subsidiaries, the values at acquisition date will be applied when adjusting.
The values all major transactions in the group and unrealized profits should be offsetin the preparation of consolidated financial statements.
It should be listed individually when the entity of subsidiaries have non-controlling shares. Furthermore, if there are share belonging to the non-controlling shareholders, we should classify it as―Non-controllinginterests‖. If there is a loss in the investment of non-controlling shareholders, we still list the loss in the category of―Non-controllinginterests‖.
When losing the control power of subsidiesbecause of deposing partial share capital, for the remaining values, it will be recalculated. The sum of consideration at acquisition date minus the original equity held by the group with the relevant route, the difference should be listed into current investment outcome. The comprehensive income relevant to subsidiaries should be used the same accounting methods to measure. Besides, for the remaining share capital, it should be measured by the accounting standards of NO.2 andNO.22, details will be found innoteⅣ.9 ornoteⅣ.13.
It is necessary to distinguish how to lose the control power: for a package of transactions or not. The following would suggest whether affected by a package oftransactions：①fair andequal；②the result of the entire trasanction could be accomplished by thetransaction；③the transaction happens depends on theother；④it will be considered as a whole when measuring the economic results, details will be found innoteⅣ.13.(2)④.
6．Joint Venture
Joint venture refers to an arrangement controlled be two or more than two parties. The group will divide joint venture into joint management and joint ventures in accordance with the standards.Joint venture is the arrangement of acquiringbenefits .
The equity method will be used into the calculation ,details will be found innoteⅣ.13（2）②.
As a party of joint venture, we should ensure the assets and liabilities individually; besides, revenues
and costs of production and sales.
If selling or buying assets, the group should only ensure gain or loss which belonged to the other partiesparticipated in joint venture, accountingstandards—8.
7. Cash and Cash equivalent
Cash and cash equivalents of the Group include cash on hand, ready usable deposits and investments having short holding term (normally will be due within three months from the day of purchase), with strong liquidity and easy to be exchanged into certain amount of cash that can be measured reliably and have low risks of change.
8. Foreign exchange
（1）Translation in foreign exchange transactions
The foreign currency transactions are recorded, on initial recognition in the functional currency, by applying the spot exchange rate on the date of the transaction（an exchange rate that approximates the actual spot exchange rate on the date oftransaction）. The exchange of foreign currency and transactions related to the foreign exchange are translated at the spot exchange rate.
（2）Translation of monetary foreign currency and non-monetary foreign currency
At the balance sheet date, foreign currency monetary items are translated using the spot exchange rate at the balance sheet date. All the exchange differences thus resulted are taken to profit or loss, except for①those relating to foreign currency borrowings specifically for construction and acquisition of qualifying assets, which are capitalized in accordance with the principle of capitalization of borrowing costs.②The exchange difference from changes of other account balance of foreign currency monetary items available-for-trade is recorded into profit or loss except for amortized cost. Non-monetary foreign currency items measured at historical cost shall still be translated at the spot exchange rate prevailing on the transaction date, and the amount denominated in the functional currency is not changed. Non-monetary foreign currency items measured at fair value are translated at the spot exchange rate prevailing at the date when the fair values are determined. The exchange difference thus resulted are recognized in profit or loss for the current period or as capital reserve.9、Financial instruments
（1）Determination of financial assets andliabilities‘ fair value
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in anarm‘s length transaction. For a financial instrument which has an active market, the Group uses quoted price in the active market to establish its fair value. The quoted price in the active market refers to the price that can be regularly obtained from exchange market, agencies, industry associations, pricing authorities; it represents the fair market trading price in the actual transaction.
For a financial instrument which does not have an active market, the Group establishes fair value by using a valuation technique. Valuation techniques include using recentarm‘s length market transactions between knowledgeable, willing parties, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models.（2）Classification, recognition and measurement of financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. On initial recognition, theGroup‘s financial assets are classified into one of the four categories, including financial assets at fair value though profit or loss, held-to maturity investments, loans and receivables and available-for-trade financial assets. A financial asset is recognized initially at fair value. In the case of financial assets at fair value through profit or loss, relevant transaction costs are immediately charged to the profit and loss of the current period; transaction costs relating to financial assets of other categories are included in the amount initially recognized.
① Financial assets at fair value through profit or loss:
Including financial assets held-for-trade and financial assets designated at fair value through profit or loss.
Financial asset held-for-trade is the financial asset that meets one of the following conditions:
A. the financial asset is acquired for the purpose of selling it in a short term;
B. the financial asset is a part of a portfolio of identifiable financial instruments that are collectively managed, and there is objective evidence indicating that the enterprise recently manages this portfolio for the purpose of short-term profits;
C. the financial asset is a derivative, except for a derivative that is designated and effective hedging instrument, or a financial guarantee contract, or a derivative that is linked to and must be settled by delivery of an unquoted equity instrument (without a quoted price from an active market) whose fair value cannot be reliably measured. For such kind of financial assets, fair values are adopted for subsequent measurement.
Financial asset is designated on initial recognition as at fair value through profit or loss only when it meets one of the following conditions:
A. the designation eliminates or significantly reduces the inconsistency in the measurement or recognition of relevant gains or losses that would otherwise arise from measuring the financial instruments on different bases.
B. a group of financial instruments is managed and its performance is evaluated on a fair value basis, and is reported to theenterprise‘s key management personnels. Formal documentation regarding risk management or investment strategy has prepared.
Financial assets at fair value through profit or loss are subsequently measured at the fair value. Any gains or losses arising from changes in the fair value and any dividends or interest income earned on
the financial assets are recognized in the profit or loss.
② Investment held-to maturity
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity that an entity has the positive intention and ability to hold to maturity. Such kind of financial assets are subsequently measured at amortized cost using the effective interest method. Gains or losses arising from derecognition, impairment or amortization are recognized in profit or loss for the current period.
Effective interest rate is the rate that exactly discounted estimated future cash flows through the expected life of the financial asset or financial liability or, where appropriate, a shorter period to the net carrying amount of the financial asset or financial liability.
When calculating the effective interest rate, the Group shall estimate future cash flow considering all contractual terms of the financial asset or financial liability without considering future credit losses, and also consider all fees paid or received between the parties to the contract giving rise to the financial asset and financial liability that are an integral part of the effective interest rate, transaction costs, and premiums or discounts, etc.
③ Loans and receivables
Loans and receivables are non-derivative financial assets with fixed determinable payment that are not quoted in an active market. Financial assets classified as loans and receivables by the Group include note receivables, account receivables, interest receivable dividends receivable and other receivables.
Loans and receivables are subsequently measured at amortized cost using the effective interest method. Gain or loss arising from derecognition, impairment or amortization is recognized in profit or loss.
④ Financial assets available-for-trade
Financial assets available-for-trade include non-derivative financial assets that are designated on initial recognition as available for trade, and financial assets that are not classified as financial assets at fair value through profit or loss, loans and receivables or investment held-to-maturity.
Financial assets available-for-trade are subsequently measured at fair value, and gains or losses arising from changes in the fair value are recognized as other comprehensive income and included in the capital reserve, except that impairment losses and exchange differences related to amortized cost of monetary financial assets denominated in foreign currencies are recognized in profit or loss, until the financial assets are derecognized, at which time the gains or losses are released and recognized in profit or loss.
Interests obtained and dividends declared by the investee during the period in which the financial assets available-for-trade are held, are recognized in investment gains.
（3）Impairment of financial assets
The Group assesses at the balance sheet date the carrying amount of every financial asset except for the financial assets that measured by the fair value. If there is objective evidence indicating a financial asset may be impaired, a provision is provided for the impairment.
The Group makes an impairment test for a financial asset that is individually significant. For a financial asset that is not individually significant, it is included in a group of financial assets with similar credit risk characteristics and collectively assessed for impairment[or individually assessed forimpairment]. If no objective evidence of impairment incurs for an individually assessed financial asset (whether the financial asset is individually significant or not individually significant), it is included in a group of financial assets with similar credit risk characteristics and collectively assessed for impairment. Assets for which an impairment loss is individually recognized is not included in a group of financial assets with similar credit risk characteristics and collectively assessed for impairment.
① Impairment on held-to maturity investment, loans and receivables
The financial assets measured by cost or amortized cost write down their carrying value by the estimated present value of future cash flow. The difference is recorded as impairment loss. If there is objective evidence to indicate the recovery of value of financial assets after impairment, and it is related with subsequent event after recognition of loss, the impairment loss recorded originally can be reversed. The carrying value of financial assets after impairment loss reversed shall not exceed the amortized cost of the financial assets without provisions of impairment loss on the reserving date.② Impairment loss on available-for-trade financial assets
When decision is made with all related factors on whether the fall of fair value investment of an equity instrument available-for-trade is significant or non-transient, it indicates impairment of such equity instrument investment, in which,―significant‖ means over20% of fall in fair value and―non-transient‖ means over 12 months of subsequent fall.
When an available-for-trade financial asset is impaired, the cumulative loss arising from declining in fair value that had been recognized in capital reserve shall be removed and recognized in profit or loss. The amount of the cumulative loss that is removed shall be difference between the acquisition cost with deduction of recoverable amount less amortized cost, current fair value and any impairment loss on that financial asset previously recognized in profit or loss.
If, after an impairment loss has been recognized, there is objective evidence that the value of the financial asset is recovered, and it is objectively related to an event occurring after the impairment loss was recognized, the initial impairment loss can be reversed and the reserved impairment loss on
available-for-trade equity instrument is recorded in the profit or loss, the reserved impairment loss on available-for-trade debt instrument is recorded in the current profit or loss.
The equity instrument where there is no quoted price in an active market, and whose fair value cannot be reliably measured, or impairment loss on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument shall not be reversed.
（4）Recognition and measurement of financial assets transfer
The Group derecognizes a financial asset when one of the following conditions is met:
1) the rights to receive cash flows from the asset have expired;
2) the enterprise has transferred its rights to receive cash flows from the asset to a third party under a―pass-through‖ arrangement;
3) the enterprise has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. If the enterprise has neither retained all the risks and rewards from the financial asset nor control over the asset, the asset is recognized according to the extent it exists as financial asset, and correspondent liability is recognized. The extent of existence refers the level of risk by the financial asset changes the enterprise is facing.
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, (a). the carrying amount of the financial asset transferred; and (b) the sum of the consideration received from the transfer and any cumulative gain or loss that had been recognized in other comprehensive income, is recognized in profit or loss.
If a part of the transferred financial asset qualifies for derecognition, the carrying amount of the transferred financial asset is allocated between the part that continues to be recognized and the part that is derecognized, based on the relative fair value of those parts. The difference between (a) the carrying amount allocated to the part derecognized; and (b) the sum of the consideration received for the part derecognized and any cumulative gain or loss allocated to the part derecognized which has been previously recognized in other comprehensive income, is recognized in profit or loss.
（5）Classification and measurement of financial liabilities
TheGroup‘s financial liabilities are, on initial recognition, classified into financial liabilities at fair value through profit or loss and other financial liabilities. For financial liabilities at fair value through profit or loss, relevant transaction costs are immediately recognized in profit or loss for the current period, and transaction costs relating to other financial liabilities are included in the initial recognition amounts.①Financial liabilities measured by the fair value and the changes recorded in profit or loss
The classification by which financial liabilities held-for-trade and financial liabilities designed at the
initial recognition to be measured by the fair value follows the same criteria as the classification by which financial assets held-for-trade and financial assets designed at the initial recognition to be measured by the fair value and their changes are recorded in the current profit or loss.
For the financial liabilities measured by the fair value and changes recorded in the profit or loss, fair values are adopted for subsequent measurement. All the gains or losses on the change of fair value and the expenses on dividends or interests related to these financial liabilities are recognized in profit or loss for the current period.
②Other financial liabilities
Derivative financial liabilities that linked with equity instruments, which do not have a quoted price in an active market and their fair value cannot be measured reliably, is subsequently measured by cost Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Gains or losses arising from derecognition or amortization are recognized in profit or loss for the current period.
（6）Derecognition
The Group derecognizes a financial liability (or part of it) when the underlying present obligation (or part of it) is discharged or cancelled or has expired. An agreement between the Group (an existing borrower) and existing lender to replace original financial liability with a new financial liability with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new liability.
When the Group derecognizes a financial liability or a part of it, it recognizes the difference between the carrying amount of the financial liability (or part of the financial liability) derecognized the consideration paid (including any non-cash assets transferred or new financial liabilities assumed) in profit or loss.
（7）Derivatives and embedded derivatives
Derivatives in the relevant contract are initially recorded at fair value, and subsequent valuesmeasure at fair value.
（8）Offsetting financial assets and financial liabilities
When the group has a legal right that is currently enforceable to set off the recognized financial assets and financial liabilities, and intends either to settle on a net basis, or to realize the financial asset and settle the financial liability simultaneously, a financial asset and a financial liability shall be offset and the net amount is presented in the balance sheet. Except for the above circumstances, financial assets and financial liabilities shall be presented separately in the balance sheet and shall not be offset.
（9） Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. The consideration received from issuing equity instruments, net of transaction costs, are added toowners‘ equity.
All types of distribution (excluding stock dividends) made by the Group to holders of equity instruments are deducted fromowners‘ equity. The Group does not recognize any changes in the fair value of equity instruments.
10、Account receivables
The account receivable by the Group includes account receivables, and other receivables.
（1）Criteria for recognition of bad debts:
The Company carries out an inspection on the balance sheet date. Where there is any objective evidence proving that the receivables have been impaired, an impairment provision shall be made:①A serious financial difficulty occurs to the issuer or debtor;
②The debtor breaches any of the contractual stipulations, for example, fails to pay or delays the payment of interests or the principal, etc.;
③The debtor will probably become bankrupt or carry out other financial reorganizations;
④ Other objective evidences showing the impairment of the receivables.
（2）Method for bad debts provision
① Provisions of bad debts in account receivables that is individually significant.
The Group treats account receivables over RMB 1,000,000 and other receivables over RMB 500,000 as individually significant items.
For an account receivable that is individually significant, the asset is individually assessed for impairment, and the amount of impairment is recognized in profit or loss if there is objective evidence of impairment is included in a group of financial assets with similar credit risk characteristics and collectively assessed for impairment. An account receivable for which an impairment loss is individually recognized is not included in a group of account receivables with similar credit risk characteristics and collectively assessed for impairment.
② Provisions of bad debts in account receivables that individually insignificant items with similar credit risk characteristics that have significant risk:
A．Evidence of credit risk characteristics
Whether the financial asset is individually significant or not individually significant, it is included in a group of financial assets with similar credit risk characteristics and collectively assessed for impairment. Such credit risk reflects the repayment of all due amount under the contract, and is
related to the estimation of future cash flow expected to be derived from the assets.
Evidence ofportfolios：
Items Evidence of portfolios
Aging portfolios Use the aging of account receivables as credit risk characteristics
B．Provision by credit risk characteristics
During the group impairment test, the amount of bad debts provisions is determined by the assessed result from the experience of historical loss and current economic status and the existing loss in the estimated account receivables according to the set of account receivables and credit risk characteristic.
Provisions for differenceportfolios：
Item Method of provision
Aging portfolios Provision by Aging
a. Provision by Aging analysis
Aging Accountsreceivable（%） Otherreceivables（%）
Within 1 year(inclusive) No provision No provision
1-2 years (inclusive) 5 5
2-3 years (inclusive) 20 20
Over 3 years 50 50
③ Provisions of bad debts that is individually insignificant.
The Group treats account receivables under RMB 1,000,000 and other receivables under RMB 500,000 as individually insignificant items.
For the account receivables not individually significant, the Group assesses the account receivables individually for impairment when are of following characteristics: if there is objective evidence indicating the impairment, the impairment loss is recognized at the difference between the present value of future cash flow less the carrying amount, and provision is made accordingly. For example, account receivables with related parties; account receivables under litigations or arbitrations, or account receivables with obvious indication that debtor cannot fulfill the obligation of repayment.
（3）The reversal of bad debts provision
If there is objective evidence of recovery in value of account receivables, and the recovery can be related to an event occurring after the impairment was recognized, the previously recognized
impairment loss is reversed and recognized in profit or loss. However, the reversal shall not result in a carrying amount that exceeds what the amortized cost would have been had the impairment loss not been recognized at the date the impairment is reversed.
11、Inventories
（1）Classification of inventory
TheGroup‘s inventory mainly include raw materials, goods in stock, work-in-progress and low value consumables, etc.
（2）Valuation method of inventories upon delivery
Inventories are initially carried at the actual cost and delivered at the value by weighted average method. The low value consumables and packaging should be amortized in equal installment.
（3）Basis for determining net realizable value of inventories and provision methods for decline in value of inventories
Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion, the estimated costs necessary to make the sale and relevant taxes. Net realizable value is determined on the basis of clear evidence obtained, and takes into consideration the purpose of holding inventories and effect of post balance sheet events.
At the balance sheet date, inventories are measured at the lower of the cost and net realizable value. If the net realizable value is below the cost of inventories, a provision for decline in value of inventories is made. The provision for inventories decline in value is normally determined by the difference of the cost of individual item less its realizable value.
After the provision for decline in value of inventories is made, if the circumstances that previously caused inventories to be written down below cost no longer exist so that the net realizable value of inventories is higher than their cost, the original provision for decline in value is reversed and the reversal is included in profit or loss for the period.
（4）Inventory system is maintained for stock system.
12. Held-to-maturity investmentd
Held-to-maturity investments are initially measured at fair value (deducting bond interest that has matured but not yet been retrieved) plus relevant transaction costs when acquired. Interest income is recognized as investment income based on the amortized cost and effective interest rate. If differences between the effective interest rate and coupon rate is negligible, the coupon rate is applicable. The actual interest rate is determined upon acquisition and remains unchanged during the expected remaining period, or a shorter period if applicable. Differences between the proceeds and book values of the investments are recognized as investment income on disposal.
If an asset could be sold under the normal conditions with precise decisions from directors of board in
an irrevocable agreement in one year, then it would be regarded as held-to maturity asset. The method of calculation is no deprecation or amortization from the beginning-holding-day, instead of choosing the lower one between book value and fair value minus disposal expenses. If the disposable asset is an asset group under the accounting standards 8 and the goodwill will be divided into this asset group, then it should be included the goodwill.
It should be disclosed individually when it is classified as held-to-maturity asset. If it is classified as the liability connecting to the asset group, it should also list separately.
13、Long-term equity investments
The term of long-term equity investments refers to the investment which has control, joint venture and significant influence over the investees. If the group does not have control, joint venture and significant influence over the investees, then it should be classified as available-for-sale financial asset or the asset measured at fair value and recorded into the profits and losses of the current financial assets, details will be found innotes4.9‖FinancailInstruments‖.
The term―jointcontrol‖ refers to the contractually agreed sharing of control over an economic activity, which exists only when the investing parties involved in the economic activity reach a consensus on sharing control over critical financial and operating policies concerning that activity. An entity which is subject to joint control by the investor and other parties is their joint venture.
（1）Determination of investment cost
For a business combination involving enterprises under common control, the initial investment cost of the long-term equity investment shall be carrying value of the absorbingparty‘s share of theowners‘ equity of the party being absorbed at the date of combination. For a business combination not involving enterprise under common control, the combination cost including the sum of fair value, at the acquisition date, of the assets given, liabilities incurred or assumed, and equity securities issued by the acquirer. The intermediary expenses incurred by the acquirer in respect of auditing, legal services, valuation and consultancy services etc. and other associated administrative expenses attributable to the business combination are recognized in profit or loss when they are incurred. Transaction fee of equity securities or debt securities issued bypurchaser‘s business combination should be calculated in initializing confirming amount of equity securities or debt securities.
The equity investments other than the long-term equity through combination shall be initially measured by cost. The cost shall be recognized to the difference in the way of acquisition of long-term equity investment. Theses ways include the cash purchase price the Group actually paid, the fair value of equity security issued by the Group, value specified in the investment contract or agreement, the fair value or carrying value of the asset out in the transaction of non-monetary asset exchanges, and the fair value of the long-term equity investment. Other direct cost, tax and necessary expenses related to the acquisition of long-term equity investment are recognized in investment cost.
（2）Subsequent measurement
Cost method shall be adopted in a long-term equity investment where the investing enterprise does not have common control or significant influence over the investee, the investment is not quoted in an active market and its fair value cannot be measured reliably. Where an investing enterprise can exercise common control or significant influence over the investee, a long-term investment shall be accounted for using the equity method. When an investing enterprise can no longer exercise joint control or common control nor significant influence over the investee, and its fair value cannot be measured reliably, a long-term investment shall be counted as financial asset ready-for trade.
A long-term equity investment where cost method is adopted in theCompany‘s financial statements can exercise controls over the investee.
① Cost method of accounting for long-term equity investments
Under the cost method, a long-term equity investment is measured at initial investment cost. Except for cash dividends or profits declared but not yet paid that are included in the price or consideration actually paid upon acquisition of the long-term equity investment, investment income is recognized in the period in accordance with the attributable share of cash dividends or profit distributions declared by the investee.
② Equity method of accounting for long-term equity investments
Where the initial investment cost of a long-term equity investment exceeds the investingenterprise‘s interest in the fair values of theinvestee‘s identifiable net assets at the time of acquisition, no adjustment shall be made to the initial investment cost. Where the initial investment cost of a long-term equity investment is less than the investingenterprise‘s interest in the fair values ofinvestee‘s identifiable net assets at the time of acquisition, the difference shall be charged to profit or loss for the current period, and the cost of the long-term equity investment shall adjusted accordingly. Under the equity method, the Group recognizes its share of the net profit or loss of the investee for the period as investment income or loss for the period. The Group recognizes it share of theinvestee‘s net profit or loss based on the fair value of theinvestee‘s individual separately indentible assets etc. at the acquisition date after making appropriate adjustments to confirm with theGroup‘s accounting policies and accounting period. Unrealized profits or losses resulting from theGroup‘s transactions with its associates and joint ventures are recognized as investment income or loss to the extent that those attributable to theGroup‘s equity interest are eliminated. However, unrealized losses resulting from theGroup‘s transactions with its investees on the transferred assets, in accordance with "Accounting Standards for Enterprises No. 8 - Impairment of Assets", are not eliminated. Changes inowners‘ equity of the investee other than net profit or loss are correspondingly adjusted to the carrying amount of the long-term equity investment, and recognized as other compressive income which is
included in the capital reserve.
When the investee is recognized net losses, reduce the carrying value of long-term equity investments and long-term equity of net investment (in substance) in investee to zero. In addition, the Group has the obligations on additional losses, then the expected obligation as estimated liabilities and included in the current investment losses. Where the net profit from investee units, restoration confirm the amount of revenue sharing after offset the amount of unrecognized loss sharing.
For long-term equity investments in associates and joint ventures which had been held by the Group before its first time adoption of Accounting Standards for Business Enterprises in 01-01-2007, where the initial investment cost of a long-term equity investment exceeds theGroup‘s interest in theinvestee‘s net assets at the time of acquisition, the excess is amortized and is recognized in profit or loss on a straight line basis over the original remaining life.
③ Acquisition of minority interest
The difference between newly increased equity investment due to acquisition of minority interests and portion of net asset cumulatively calculated from the acquisition date is adjusted as capital reserve. If the capital reserve is not sufficient to absorb the difference, the excess are adjusted against returned earnings.
④ Disposal of long-term equity investment
Where the parent company disposes long-term investment in a subsidiary without a change in control, the difference in the net asset between the amount of disposed long-term investment and the amount of the consideration paid or received is adjusted to theowner‘s equity. If the disposal of long-term investment in a subsidiary involves loss of control over the subsidiary, the related accounting policies inNoteⅣ.5 applies.
(3) The accounting methods described at consolidated financial statements
On disposal of a long-term equity investment, the difference between the proceeds actually received and receivable and the carrying amount is recognized in profit or loss for the period.
For along-term equity investment accounted for using the equity method, the amount included in theowners‘ equity attributable to the percentage interest disposed is transferred to profit or loss for the period.
For any retained interest, it shall be subsequently measured according to the related accounting policies in regard of long-term equity investments or financial assets as described above if its carrying amount is recognized as long-term equity investments or other related financial assets. Retroactive adjustment is made on the basis of relevant policies if the retained interests are settled from cost method to equity method.
Recognition of investee under common control or significant influence
Control is the power to govern the financial and operating policies of an enterprise so as to obtain benefits from its operating activities. Common control is the contractually agreed sharing of control over an economic activity, and exists only when the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. When determining whether an investing enterprise is able to exercise control or significant influence over an investee, the effect of potential voting rights of the investee held the investing enterprise or other parties that are currently exercisable or convertible shall be considered.
The group would lose the power of control over subsidiaries gradually via multiple transactions. If it is a package of transactions, then every transaction would be treated as lose control power. The difference of disposable value and carrying amount would be regarded as other comprehensive profits until the power is certainly ensured that the group lost the power of control.
14、Investment properties
Investment property is property held to earn rental or for capital appreciation or both. It includes a land use right that is leased out, a land use right held for transfer upon capital appreciation, and a building that is leased out.
The investment properties shall be initially measured in light of their cost when getting it and make a follow-up measurement to the investment real estate through the cost pattern on the date of the balance sheet. The test method of depreciation or impairment of the buildings is the same as fixed assets, the test method of depreciation or impairment of the land use rights is the same as intangible assets.
The details of assess method and impairment provision for investment properties are in Note4.20―Impairment of non-current non-financialassets‖.
Where an investment property is disposed or no longer in use permanently and no economic benefits shall be obtained from the disposal, derecognized the investment property. The income from sale, transfer or disposal of the investment property is recorded in the profit or loss after deduction of its carrying amount and related tax.
15、Fixed assets
（1）The conditions of recognition
Fixed assets refers to the tangible assets that are held for the sake of producing commodities, rendering labor service, renting or business management and their useful life is in excess of one fiscal year.
（2）The method for depreciation
Fixed assets are stated at cost and consider the impact of expected costs of abandoning the initial measurement. From the following month of state of intended use, the straight-line method is used for different categories of fixed assets to take depreciation. The recognition of the classification, useful life and estimated residual rate are as follows:
Category Expected useful life Estimated residualvalue（%） Depreciation（%） Building& construction 35 3 2.77
Machines& equipments 12 3 8.08
Vehicles 7 3 13.86
Electronic appliances 7 3 13.86
Office and other equipment 7 3 13.86
Private housing renovation costs 10 0 10.00
Expected net residual value of fixed assets is the balance of the Group currently obtained from the disposal of the asset less the estimated costs of disposal amount, assuming the asset is out of useful life and state the expected service life in the end.
（3） Measurement and recognition of fixed assets
Impairment and provisions of fixed assets are disclosed on NoteⅣ.20―Long-term assetsimpairment‖.
（4）Others
A fixed asset is recognized only when the economic benefits associated with the asset will probably flow to the Company and the cost of the asset can be measured reliably. Subsequent expenditure incurred for a fixed asset that meet the recognition criteria shall be included in the cost of the fixed asset, and the carrying amount of the component of the fixed asset that is replaced shall be derecognized. Otherwise, such expenditure shall be recognized in profit or loss in the period in which they are incurred.
The revenue from selling or transferring, or disposing a fixed asset is booked into profit and loss after deduction of carrying value and related tax.
The Group conducts a review of useful life, expected net realizable value and depreciation methods of the fixed asset at least on an annual base. Any change is regarded as change in accounting estimates.
16、Construction in progress
Construction in progress is measured at its actual cost. The actual costs include various construction
expenditures during the construction period and other relevant costs. Construction in progress is transferred to a fixed asset when it is ready for intended use.
Testing method for provision impairment of construction in progress and accrued method for provision impairment please refer toNoteⅣ.20―Long-term assetsimpairment‖.
17、Borrowing costs
The borrowing costs shall include interests on borrowings, amortization of discounts or premiums on borrowings, ancillary expenses, and exchange balance on foreign currency borrowings. Where the borrowing costs incurred to an enterprise can be directly attributable to the acquisition and construction or production of assets eligible for capitalization, it shall be capitalized and recorded into the costs of relevant assets. Other borrowing costs shall be recognized as expenses on the basis of the actual amount incurred, and shall be recorded into the current profits and losses.
Where funds are borrowed for a specific-purpose, the amount of interest to be capitalized is the actual interest expense incurred on that borrowing for the period less any bank interest earned from depositing the borrowed funds before being used on the asset or any investment income on the temporary investment of those funds. Where funds are borrowed for a general-purpose, the amount of interest to be capitalized on such borrowings is determined by applying a weighted average interest rate to the weighted average of the excess amounts of accumulated expenditure on the asset over and above the amounts of specific-purpose borrowings. During the capitalization period, exchange differences related to a specific-purpose borrowing denominating in foreign currency are all capitalized. Exchange differences in connection with general-purpose borrowings are recognized in profit or loss in the period in which they are incurred.
Assets qualified for capitalization are the fixed assets, investment properties or inventories which need a long time of construction or production activities before ready for intended used or sale. Capitalization of borrowing costs is suspended during periods in which the acquisition, construction or production of a qualifying asset is interrupted by activities other than those necessary to prepare the asset for its intended use or sale, when the interruption is for a continuous period of more than 3 months. Borrowing costs incurred during these periods recognized as an expense for the current period until the acquisition, construction or production is resumed.
18、Intangible assets
（1）Recognition and calculation of intangible asset
The term―intangibleasset‖ refers to the identifiable non-monetary assets without physical shape, possessed or controlled by enterprises.
The intangible assets are initially measured by its cost. Expenses related to intangible assets, if the economic benefits related to intangible assets are likely to flow into the enterprise and the cost of
intangible assets can be measured reliably, shall be recorded as cost of intangible assets. The expenses other than this shall be booked in the profit or loss when they occur.
Land use rights that are purchased by the Group are accounted for as intangible assets. Buildings, such as plants that are developed and constructed by the Group, and relevant land use rights and buildings, are accounted for as intangible assets and fixed assets, respectively. Payments for the land and buildings purchased are allocated between the land use rights and the buildings; if they cannot be reasonably allocated all of the land use rights and buildings are accounted for as fixed assets.
When an intangible asset with a definite useful life is available for use, its original cost is amortized over its estimated useful life using the straight-line method. An intangible asset with an indefinite useful life is not amortized.
For an intangible asset with a definite useful life, the Group reviews the useful life and amortization method at the end of the period, and makes adjustment when necessary. An additional review is also carried out for useful life of the intangible assets with indefinite useful life. If there is evidence showing the foreseeable limit period of economic benefits generated to the enterprise by the intangible assets, then estimate its useful life and amortize according to the policy of intangible assets with definite useful life.
（2）Research and Development expenditures
The expenditures of the internal research could be divided into two phrases: a research phrase and a development phrase.
The expenditures happened during research phrase should be regarded as the current profit and loss.In the research phase of an internal project, an entity cannot demonstrate that an intangible asset exists that will generate probable future economic benefits. Therefore, this expenditure is recognised as an expense when it is incurred.
An intangible asset arising from development (or from the development phase of an internal project) shall be recognised if, and only if, an entity can demonstrate all of the following:
(a) the technical feasibility of completing the intangible asset so that it will be available for use or sale; (b) its intention to complete the intangible asset and use or sell it;
(c) how the intangible asset will generate probable future economic benefits. Among other things, the entity can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset;
(d) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset;
(e) its ability to measure reliably the expenditure attributable to the intangible asset during its development.
（3）Methods of impairment assessment and determining the provision for impairment losses of
intangible assets
Testing method for provision impairment of intangible assets and accrued method for provision impairment please refer to NoteⅣ.20―Long-term assetsimpairment‖.
19、Long-term prepaid expenses
Long-term prepaid expenses represent expenses incurred that should be borne and amortized over the current and subsequent period together of more than one year. Long-term prepaid expenses are amortized by using straight line method.
20、Long-term assets impairment
On each balance sheet date, the Group will make judgments to determine whether there are signs for impairment to the fixed assets ,construction in progress, definite intangible assets, investmentproperties& equity investment insubsidiaries& jointventures& jointly run business measured using the cost method etc. non-current and non-financial assets. If there are signs for impairment, the impairment should be tested by estimating the recoverable amount. Goodwill, indefinite intangible assets and intangible assets having not reached the usable condition, should be yearly tested for impairment no matter whether there are signs for impairment.
The result of impairment test demonstrates that the recoverable amount is less than its carrying amount, the difference will be recorded as provision for impairment and debited as impairment loss. The recoverable amount equals to the greater of 1)fair value less disposal expenses and 2) present value of the predicted future cash flows.
The fair value of the assets is determined by the sale contract price of fair trade; When there are no sale contracts but exist active market ,the fair value will be determined with the quotation from the buyer; When there exist neither sale contracts nor active market, the assets fair value will be determined by the best information available.
The disposal expenses include the legal expenses, related taxes, delivery fees and other direct fees incurred for making the assets reach the salable condition. The present value of the predicted future cash flows is calculated according to the predicted future cash flows generated from the continuous use of the assets and final disposal discounted with the applicable discounted rate. The provision for impairment test should be recognized based on the individual asset. If it is hard to estimate the recoverable amount to individual asset, the recoverable amount of the assets group of which the individual assets are included should be determined. Assets group is the smallest unit that can independently generate the cash inflow.
For the goodwill separately displayed on the financial statement, when making the impairment test, the carry value of the goodwill should be allocated to assets group or the group of assets group predicted to be benefit from the synergistic effect from the enterprises combination. When the rest
result shows that the recoverable of the assets group or the group of assets group having been allocated with the relevant goodwill is less than the carrying amount, the related impairment loss should be recognized. The impairment losses will firstly reduce the book value of the goodwill allocated and then reduce the book value of each asset of the assets group or the group of assets group according to the percentage of each asset to the assets group or the group of assets group beside the goodwill.
The impairment loss of the above assets would not be reversed back once they are recognized.
21.Employee benefits
Employee benefits payable shall be recognized as liabilities in the accounting periods during which the employees provide services to the Group. They are all forms of consideration given by an entity in exchange for service rendered by employees or for the termination of employment: short-term employee, post-employment benefits and other long-term employee benefits.
Short-term employee benefits include items such as the following, if expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees render the related services:
(a) wages, salaries and social security contributions;
(b) paid annual leave and paid sick leave;
(c) profit-sharing and bonuses; and
(d) non-monetary benefits (such as medical care, housing, cars and free or subsidised goods or services) for current employees.
Post-employment benefits include items such as the following:
(a) retirement benefits (pensions and lump sum payments on retirement);
(b) other post-employment benefits, such as post-employment life insurance and post-employment medical care.
In the event that the Group terminates the employment relationship with employees unilaterally before the end of the employment contracts, or offers to compensate the employees in order to encourage them to accept voluntary redundancy, if the Company has formally formulated plans for termination of the employment relationship or offer for voluntary redundancy, and the plans will be implemented shortly afterwards, compensations for redundancy shall be recognized as estimated liabilities and charged to profit or loss for the current period.
The plan for early retirement of employees shall be treated in the same way as the above compensations for redundancy. The salaries and social insurance premiums paid by the Company to employees subject to early retirement during the period from termination of service provision to normal retirement shall be recognized as estimated liabilities and charged to profit or loss for the current
period (compensations for redundancy).
22.Accrued liabilities
Accrued liabilities (or Provisions) are recognized when following obligations related to a contingency are satisfied simultaneously. They are (a) such obligation is the present obligation of the Group, (b)it is probable that an outflow of economic benefits will be required to settle the obligation, and (c) the amount of the obligation can be measured reliably.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account factors pertaining to a contingency such as risks, uncertainties and time value of money.
Where all or some of the expenditure required to settle a provision is expected to be reimbursed by a third party, the reimbursement is recognized as a separate asset only when it is virtually certain that reimbursement will be received, and the amount of reimbursement recognized does not exceed the carrying amount of the provision.
(1) Onerous contracts
An onerous contract is a contract in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. The exceeding part over the assets in the contract shall be recognized as a provision when an executor contract becomes an onerous contract and the obligation arising under the onerous contract satisfies the requirements of provisions.
(2) Restructuring Obligation
The amount of a restructuring provision shall be recognized by the total direct expenditures arising from the restructuring when the enterprise has a detailed, formal plan for the restructuring, and a public announcement of the plan has been made for restructuring and above requirements for the provision mentioned above are satisfied.
[For the restructuring obligation carried for the portion of business for sale, the obligation related to the restructuring can only be recognized when the Group has committed for the sales of portion of the business (signing the selling agreement with termination)
23. Revenue
（1）Revenue from sales of goods
The Group has transferred to the buyer the significant risks and rewards of ownership of the goods; the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; the associated costs incurred or to be incurred can be measured reliably.
The group sales vehicles as the main transaction, sosales‘ revenue should be ascertained after ensuring accept cash or the right to collect cash or cash equivalents.
（2）Revenue from services
When the outcome of a transaction involving the rendering of services can be estimated reliably at the balance sheet date, revenue associated with the transaction is recognized using the percentage of completion method, or otherwise, the revenue is recognized to the extent of costs incurred that are expected to be recoverable. The stage of completion of a transaction for rendering services is determined based on[survey of work performed / services performed to the date of as a percentage of total services to be performed / the proportion that costs incurred to date bear to the estimated total costs of thetransaction]
The outcome of a transaction involving rendering of services can be estimated reliably when all of the following conditions are satisfied:
1) the amount of revenue can be measured reliably;
2) it is probable that the associated economic benefits will flow to the Group;
3) the stage of completion of the transaction can be measured reliably;
4) the costs incurred and to be incurred for the transaction can be measured reliably.
If the outcome of a transaction involving rendering of services cannot be estimated reliably, the revenue is recognized by the cost incurred and estimated compensation, and the actual cost is booked into profit and loss. No revenue is recognized if the cost incurred cannot be recovered.
For contract or agreement entered between the Group and other enterprises with sales of goods and rendering services, if part of goods selling and the part of rendering service can be separated and measured individually, they are settled separately. If the part of goods selling and the part of rendering service cannot be separated or they can be separated but cannot be measured individually, the parts in the contract shall be treated as goods of selling.
（3）Revenue from royalty revenue
According to the contract or agreement, the revenue is recognized on an accrual basis.
（4）Revenue from interests
The amount of interest revenue should be measured and confirmed in accordance with the length of time for which the enterprise's cash is used by others and the actual interest rate.
24. Government Grants
Government grants are transfer of monetary assets and non-monetary assets from the government to the Group at no consideration, excluding the capital invested by the government as equity owner. Government grant can be classified as grant related to the assets and grants related to the income. If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount received or receivable. If a government grant is in the form of a non-monetary asset, it is measured at fair value. If the fair value cannot be reliably determined, it is measured at a nominal amount. A government grant measured at a nominal amount is recognized immediately in profit or loss for the period.
A government grant related to an asset is recognized as deferred income, and evenly amortized to profit or loss over the useful life of the related asset. For a government grant related to income, if the grant is a compensation for related expenses or losses to be incurred in subsequent period, the grant is recognized as deferred income, and recognized in profit or loss over the periods in which the related costs are recognized. If the grant is a compensation for related expenses or losses already incurred, the grant is recognized immediately in profit or loss for the period.
For repayment of a government grant already recognized, if there is a related deferred income, the repayment is offset against the carrying amount of the deferred income, and any excess is recognized in profit or loss for the period. If there is no related deferred income, the repayment is recognized immediately in profit or loss for the period.
25. Deferred income tax assets and deferred income tax liabilities
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, according to the requirements of tax laws. The measurement of deferred tax assets and deferred tax liabilities reflects the tax consequences that would follow from the manner in which the Group expects at the balance sheet date, to recover the assets or settle the liabilities.
For temporary differences between the carrying amount of certain assets or liabilities and their tax base, or between the nil carrying amount of those items that are not recognized as assets or liabilities and their tax base that can be determined according to tax laws, deferred tax assets and liabilities are recognized using the balance sheet liability method.
For temporary differences associated with the initial recognition of goodwill and the initial recognition of an asset or liability arising from a transaction (not a business combination) that affects neither the accounting profit nor taxable profits (or deductible losses) at the time of transaction, no deferred tax asset or liability is recognized.
For taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, no deferred income tax liability related is recognized except where the
Group is able to control the timing of reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
All deferred income tax liabilities arising from taxable temporary differences except the ones mentioned above are recognized.
For temporary deductible differences associated with the initial recognition of an asset or liability arising from a transaction (not a business combination) that affects neither the accounting profit nor taxable profits (or deductible losses) at the time of transaction, no deferred tax asset is recognized. For taxable temporary deductible differences associated with investments in subsidiaries and associates, and interests in joint ventures, no deferred income tax asset related is recognized if it is impossible to reversal the temporary difference in the foreseeable future, or it is not probable to obtain taxable income which can be used for the deduction of the temporary difference in the future.
Except mentioned above, the Group recognizes other deferred income tax assets that can deduct temporary differences to the extent that it is probable that taxable profits will be available against which the deductible temporary differences can be utilized.
For the deductible losses and tax credit that can be carried forward, deferred tax assets for deductible temporary differences are recognized to the extent that it is probable that taxable profits will be available against which the deductible temporary differences can be utilized.
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates according to tax lawsthat are expected to apply in the period in which the asset is realized or the liability is settled.
At the balance sheet date, the Group reviews the carrying amount of deferred tax assets. If it is no longer probable that sufficient taxable profit will be available in future periods to allow the benefits of the deferred tax assets to be used, the Group reduces the carrying amount of deferred tax assets. The amount of such reduction is reversed when it becomes probable that sufficient taxable profit will be available.
26. Leases
(1) Operating Lease
①The Group as Lessee under Operating Lease
Lease payments under an operating lease are recognized by a lessee on a straight-line basis over the lease term, and either included in the cost of the related asset or charged to profit or loss for the current period. The contingent rents shall be recorded in the profit or loss of the period in which they actually arise.
②The Group as Leaser under Operating Lease
Lease income from operating leases shall be recognized by the leaser in profit or loss on a
straight-line basis over the lease term. Initial direct cost of significance in amount shall be capitalized when incurred. If another basis is more systematic and rational, that basis may be used. Contingent rents are credited to profit or loss in the period in which they actually arise.
(2)Financing Lease
①The Group as Lessee under Operating Lease
For an asset that is held under a finance lease, at the lease commencement, the leased asset is recorded at the lower of its fair value at the lease commencement and the present value of the minimum lease payments, and the minimum lease payment is recorded as the carrying amount of the long-term payables; the difference between the recorded amount of the leased asset and the recorded amount of the payable is accounted for as unrecognized finance charge, Initial direct costs incurred by the lessee during the process of negotiating and securing the lease agreement shall be added to the amount recognized for the leased asset.
The net amount of minimum lease payment deducted by the unrecognized finance shall be separated into long-term liabilities and long-term liability within one year for presentation.
Unrecognized finance charge shall be computed by the effective interest method during the lease term. Contingent rent shall be booked into profit or loss when actually incurred.
②The Group as Leaser under Operating Lease
For an asset that is leased out under a finance lease, the aggregate of the minimum lease receipts at the inception of the lease and the initial direct costs is recorded as a finance lease receivable, and unguaranteed residual value is recorded at the same time; the difference between the aggregate of the minimum lease receipt, initial direct costs, and unguaranteed residual value, and the aggregate of their present values, is recognized as unearned finance income, which is amortized using the effective interest rate method over each period during the lease term.
Finance lease receivable less unearned finance income shall be separated into long-term liabilities and long-term liability within one year for presentation.
Unearned finance income shall be computed by the effective interest method during the lease term. Contingent rent shall be credited into profit or loss in which actually incurred.
27.Other accounting policies and accounting estimates
(1) Termination of business
Refers to the termination of the operation, to meet one of the following conditions have been part of the company's disposal or classified as held for sale, and capable of operating in the preparation of the financial statements separately: the part represents an independent business or a major business area; the part is part of the proposed disposal plans for a major business independent or a major
business area; the part is just to sell a subsidiary acquired.
(2) Repurchase of shares
The consideration and transaction costs paid in the share repurchase to reduce the shareholders' equity, repurchase, transfer or cancellation of the shares of the company, does not recognize gains or losses.
Transfer of stock, according to the actual amount of money received and the difference between the carrying amount of the stock, included in the capital reserve, capital surplus is not reduced, the reduction of surplus reserve and undistributed profits. The cancellation of treasury shares, according to the face value of the stock and cancellation of shares less equity, according to the difference between the carrying amount and the par value of treasury shares canceled, reducing capital surplus, capital surplus is not enough to offset, offset the surplus reserve and undistributed profit.
(3)Asset Securitization
The company will be part of the assets ("trust") securities, assets trust to the special purpose entity, the entity to investors is the priority of asset-backed securities, the company holding subprime asset-backed securities, subprime assets in support of the priority of asset-backed securities principal and interest payments before the end of may not transfer securities. The company's assets as service providers, providing asset maintenance and daily management, asset disposal plan annual formulation, formulation and implementation of asset disposal program, signed an agreement to dispose of assets and asset services regularly compile reports and other services; at the same time as the company liquidity support mechanism, the priority of asset-backed securities principal has not been repaid in full supply flow support, to make up the difference between the interest or principal. After the payment of the trust property trust taxes and related expenses, priority for payment of priority asset-backed securities principal, all principal and interest payments remaining after the trust property as subprime asset-backed securities gains, owned by the company. The company retains all the risks and rewards of trust property, so not to confirm the termination of the trust property; at the same time, the company has actual control of the special purpose entity, has to be included in the scope of consolidated financial statements.
28. Changes in major accounting policies and accounting estimates
(1) Changes of accounting policies
①Changes of accounting policy resulting from the implementation of the new enterprise accounting standards.
In 28 April, 2017, the Ministry of Finance issued the accounting standard for Enterprises No. 42 - non current assets held for sale, disposal group and termination of operating, based on Accounting[2017] No.13, which was implemented since 28 May, 2017. In 10 May, 2017, the Ministry ofFinance issued
the accounting standards for Enterprises No.16 - government subsidy (2017 Revision), based on accounting[2017] No.15, whichwas implemented since 12 June, 2017.The company began to implement the aforementioned two accounting standards in 2, April 2018.
Before the implementation of " the accounting standards for Enterprises No. 16 - government subsidy (2017 Revision)", government subsidies the company obtained were included in non-operating income; the government grants related to assets recognized as deferred income, which wereamortized averagely in the operational life of assets. After the implementation of " the accounting standards for Enterprises No. 16– governmentsubsidy (2017 Revision)", the government subsidies related to daily activities took place after January 1, 2017 were included in other income, and the government subsidies which were not related to daily activities were included in non-operating income.
In 25 December, 2017, the Ministry of finance issued the notice of the ministry of finance on revising the form of general corporate financial statements, based on accounting[2017] No.30 revised and issued, non-financial enterprise implementing the accounting standards should be inaccordance with the accounting standards for enterprises and the requirements of this notice for the financial statements of the year 2017 andfollowing years. In accordance with implementation of the notice of the ministry of finance on revising the form of general corporate financialstatements, the original presentation in the "non-operating income" and "non-operating expenses" of the disposal gains and losses of non-currentassets and the exchange gains and losses of non-monetary assets, is changed into―Gains(losses) from disposal of assets".
The financial statements are prepared in accordance with the above standards and circular, and impacts are as follows:
serial
The nature and the reasons of the changes in accounting policies The line items and amounts affected number
1 The Company and its subsidiaries recorded the Net profit of continued Net profits of continued operation :
and discontinued operation in income statement. The comparatives as at Consolidated and The company are RMB 31 December 2016 were restated accordingly 65,781,568.71 and 53,881,590.77 espectively during this year, RMB 27,617,932.54 and 36,134,460.59 respectively during last year. The Company and its subsidiaries recorded the VAT return obtained and
Otherincome：Consolidated and The company 2 other government grants related to ordinary activities in 2017 in other
are RMB25,753.22 and 0respectively。
income. The comparatives as at 31 December 2016 were not restated
The Company and its subsidiaries recorded the gains or losses on Gains(losses) from disposal ofassets：
3 disposals of fixed assets occurred in 2017, in loss on disposals of assets. consolidated and The company are RMB The comparatives as at 31 December 2016 were restated 374,583.14 and 0 respectively during thisyear，
serial
The nature and the reasons of the changes in accounting policies The line items and amounts affected number
1 The Company and its subsidiaries recorded the Net profit of continued Net profits of continued operation :
and discontinued operation in income statement. The comparatives as at Consolidated and The company are RMB 31 December 2016 were restated accordingly 65,781,568.71 and 53,881,590.77 espectively during this year, RMB 27,617,932.54 and 36,134,460.59 respectively during last year. accordingly RMB 68,314.27 and 0 respectively during lastyear。
Non-operatingincome：adjusted consolidated and The company RMB -68,314.27 and 0 respectively during lastyear。
(2)Changes of accounting estimates
There were no changes of main accounting estimations during this period.
29. Material accounting judgments and accounting estimations
Because of the inherent uncertainties of the operating activities, the Group needs to make judgments, estimations and assumptions to the financial statement items whose carrying amount cannot be accurately measured. Those judgments, estimations and assumptions are made based on themanagement‘s historical experience and taking other relevant factors into account. Those judgments, estimations and assumptions would influence the reported amount of revenue, expense, asset and liability and disclosure of the contingency liability on the balance sheet date. However, the actual result caused by the uncertainty of these estimations may be different with the present estimation made by the management, which may cause significant adjustments to the carrying amount of the influenced assets and liabilities in the future.
The Group are making periodical review on the judgments, estimations and assumptions mentioned above based on the premise of going concern. For the changes of estimations that only influence the current period, the influenced amount will be recognized in the current period. For the changes of estimations that not only influence the current period ,but also affect the future periods, the influenced amount will be recognized in the current period and future period.
As of the balance sheet date, the material areas that need to be judged ,estimated and assumed are listed below:
（1）Classification of lease
The Company classifies leases as operating lease and financing lease according to the rule stipulated in the Accounting Standard for Business Enterprises No. 21--Leasing. The management shall make
analysis and judgment on whether the risks and rewards related to the title of leased assets has been transferred to the leaser, or whether the Company has substantially held the risks and rewards related to the ownership of leased assets.
（2）The provision for allowance for bad debt
The Group applies the allowance method to estimate the bad debt, according to the policy of accounts receivable. The impairment of accounts receivable is based on the evaluation of accountsreceivable‘s possibility of collection. The difference between the actual result and the original estimation would influence the accountsreceivable‘s carrying value and cause the balance of allowance for bad debt to increase or reverse back during the period when the estimation is changed.
（3）Provision for inventory
According to inventory accounting policy, the ending inventory is measured by the lower of cost and net realizable value. When the cost is greater than the net realizable value and the obsolete and unsalable inventory, the inventory falling price reserve shall be withdrawn. Reduce the inventory to the net realizable value is based on the evaluation the salable of the inventory and its net realizable value. Estimates of net realizable value are based on the most reliable evidence available at the time the estimates are made and take into consideration the purpose for which the inventory is held and the influences of events occurring after the balance sheet date. The difference between the actual result and original estimation will influence the carrying amount of the inventory and cause the provision for inventory to increase or reverse back during the period when the estimation is changed.
（4）The fair value of financial instrument
For the financial instrument lacking active trading market, the Group will use several valuation methods to make sure the fair value. The methods include the model to analyze the discounted cash flow etc. The Group will evaluate the following aspects, such as the future cash flow, credit risk, market volatility and the relativity etc. and then choose the applicable discounted rate, when making the evaluation. There are uncertainties for the relevant assumptions whose changes will influence the fair value of financial instrument.
（5）Provision for non-financial and non-current assets
The Group will make judgment on the non-current assets beside the financial assets about whether there are signs for impairment on the balance sheet date. For the intangible assets whose life is uncertain, when there are signs for impairment, it should be tested for impairment, beside the yearly impairment test. Other non-current assets beside the financial statement, when there are signs indicating that the carrying value are unrecoverable, it should be tested for impairment.
When the carrying value of the asset or asset group is greater than the recoverable amount (i.e., the net value of fair value less the cost of disposal and present value of the predicted future cash flow whichever is higher), it indicates impairment.
The net value of fair value less the cost of disposal, is referred to the agreed sale price of similar assets under fair trade or the observable market price, less the incremental cost directly related with the disposal of the assets.
The Group need to make significant judgment to the output of assets (or assets group), sale price, relevant operating cost and the discounted rate when estimating the present value of future cash flows. The Group will make use of any relevant material available when estimating the recoverable amount , including the prediction of the output, sale price and relevant operating cost according to reasonable and supportable assumptions.
The Group will test the goodwill for impairment at least once a year, which requires to estimate the present value of the future cash flows of the assets and assets group allocated with the goodwill . When estimating the present value to the future cash flow, the Group need to estimate the cash flows generating from the assets and assets group, and choose the applicable discount rate to determine the present value.
（6）Depreciation and amortization
The Group use the straight-line method to depreciate and amortize the investment real estate, fixed assets and intangible assets within the useful life after taking into the consideration of the residual value. By the way, the amount of depreciation and amortization during the report period are determined. The useful life is determined based on past experience and the predicted technical changes of similar assets. If there are significant changes of previous estimations, the depreciation and amortization would be adjusted in the future periods.
（7）Deferred tax asset
To the degree that there are sufficient taxable profit to make up the deductible losses, the Group will recognize the deferred tax assets for the un-used deductible losses. It requires the management to apply massive judgments to estimate the time and amount the taxable profits will generate in the future period combining with the strategic of tax planning to determine the amount of deferred tax asset.
（8）Income tax
There are some uncertainties for sometrades‘ ultimate tax treatment and calculation. Some items need the determination from the tax authorities about whether they are deductible before tax or not. If the ultimate tax determination are different with the originally estimated amount, the difference will influence the current period income tax and the deferred income tax when the tax determination are finally made.
（9）Accrued liabilities
According to the terms of the contract, the existing knowledge and historical experience, the product quality assurance, expected loss of contract, liquidated damages, such as the delay in the estimation
and preparation of the corresponding provision. In such contingencies has formed a present obligation, and fulfill the obligations are likely to result in an outflow of economic benefits from the company, the company or the best estimate there are items according to the performance of the current obligation expenditure required confirmation of expected liabilities. The recognition and measurement of the estimated liabilities are largely dependent on management's judgment. In the course of the judgment, the company shall assess the risks, uncertainties, and the time value of the currency.
Ⅴ、 Principal Taxes Applied
Taxes and their rates
Category Taxable basis Tax rate Rental income and water charges pay VAT on5% and3% rate respectively,
Jewellery,automobile and parts sales, auto repair and electric charges pay 17%,6%, Value added tax(―VAT‖)
VAT on17% rate, property management fee pay VAT on6% rate. Tax base 5%,3% is difference between out put tax and deductible input tax.
Construction tax Turnover tax 7% Extra charges of education funds Turnover tax 3% Local Educational charge Turnover tax 2% Income tax Income tax payable 25%*The applied rate in the group is25% exceptShenzhen Xinyongtong Dongxiao Automobile Inspection Equipment Co., Ltd.
Ⅵ、 Notes to the Consolidated Financial Statements
Unless specified, the items of the Opening in the followings (including the notes to the Company financial statements) refers to the date of January 1, 2017, the Closing refers to the December 31, 2017.
1、 Monetary assets
Items Closing balance Opening balance
Cash on hand 119,576.83 96,167.91
Items Closing balance Opening balance
Cash in bank 161,673,641.73 218,401,472.19 Total 161,793,218.56 218,497,640.10 Up to December 31st, 2017, the Company buy 6 months structural deposits in China Everbright Bank worth RMB 20,000,000.00,which the ownership is limited. The opening balance of the similar structural depositsworth RMB 40,000,000.00.
2、Accounts receivables
(1) Accounts receivable by categories
Closing balance
Items Book balance Bad debt provision
Carrying amount Amount (%) Amount (%)
Accounts receivable of which provision for bad debts
65,959,038.60 70.59 22,936,980.76 34.77 43,022,057.84 is of individually significant
The aging analysis of the receivables that are
1,193,178.84 1.28 1,193,178.84 grouped and impaired
Accounts receivable of which provision for bad debts
26,282,070.64 28.13 26,282,070.64 100.00
is of individually insignificant
Total
93,434,288.08 100.00 49,219,051.40 52.68 44,215,236.68（continued）
Opening balance
Items Book balance Bad debt provision
Carrying amount Amount (%) Amount (%)
Accounts receivable of which provision for bad debts
22,512,414.52 46.03 22,512,414.52 100.00
is of individually significant
The aging analysis of the receivables that are
113,736.64 0.23 113,736.64 grouped and impaired
Accounts receivable of which provision for bad debts
26,282,070.64 53.74 26,282,070.64 100.00
is of individually insignificant
Total 48,908,221.80 100.00 48,794,485.16 99.77 113,736.64
① Accounts receivables which has a significant closing balance to prepare bad-debt
Closing balance
Accounts receivables
Bad debt
Carrying amount Ratio% Reason
provision
Shenzhen Jinlu Trading Co.,Ltd. 9,846,607.00 9,846,607.00 100.00 Uncertainly withdraw
Guangdong Zhanjiang Sanxing Automobile
4,060,329.44 4,060,329.44 100.00 The aging is too long to collect Co.,Ltd
Changlong WANG 2,370,760.40 2,370,760.40 100.00 The aging is too long to collect Huizhou Jiandacheng Co.,Ltd. 2,021,657.70 2,021,657.70 100.00 It is hardly to collect
Jiangling Automobile Factory 1,191,059.98 1,191,059.98 100.00 The aging is too long to collect Yangjiang Automobile Trading Co.,Ltd. 1,150,000.00 1,150,000.00 100.00 The aging is too long to collect Guangdong Province Commodity Group 1,862,000.00 1,862,000.00 100.00 The aging is too long to collect Jewellery sales on credit,within Yueliang Xiao etc. 43,456,624.08 434,566.24 1.00
credit period
65,959,038.60 22,936,980.76
Total amount 34.77
② Bad debt provision by aging
Closing balance
Aging
Carrying amount Bad debt provision Ratio（%）
Within 1 year 1,193,178.84
Total 1,193,178.84
(2)Recognisation, recovery or reversal of provision for bad debts in 2017
The amount of provision for bad debts recognised during the year is RMB434,566.24 The amount of provision for bad debtsduring the year is recovered or reversed RMB10,000.00.
(3) Top 5 entities with the largest balances of accounts receivable
Proportion of the amount to Name of entities Relationship with the Group Amount Age
the total AR(%) Shenzhen Jinlu Trading Co.,Ltd. Un-related party 9,846,607.00 Over 3year 10.54
Guangdong Zhanjiang Sanxing
Un-related party 4,060,329.44 Over 3year 4.35 Antomobile Co.,Ltd
Yueliang Xiao Un-related party 3,204,349.99 Within 1 year 3.43 Tingyun Wei Un-related party 3,135,293.97 Within 1 year 3.35 Xiaoli Zhou Un-related party 3,047,620.40 Within 1 year 3.26 Total 23,294,200.80 24.93 (4) Accountreceivables from which the financial instruments had been transferred
There is no situation happened in 2017 under this condition.
(5) The value of transferred accounts receivables changed into asset or liabilities
There is no situation happened in 2017under this condition.
3、Prepayments
(1) Aging analysis
Closing balance Opening balance
Aging
Amount (%) Amount (%)
Within 1 year 3,717,452.76 99.46 8,259,644.18 97.90 1-2 years 68,400.90 0.81 2-3 years 20,253.94 0.54
Over 3 years 108,623.27 1.29 Total 3,737,706.70 100.00 8,436,668.35 100.00 (2) Top 5 entities with the largest balances of prepayments
The total amount of top five prepayments as at the end of current year is RMB 3,710,340.76, accounting for 99.27% of the total advance to suppliers.
4、Interest receivable
(1) Interest receivable by categories
Category Closing balance Opening balance
Structural deposits 221,232.88 172,055.56 Total 221,232.88 172,055.565、 Dividends receivable
（1）Dividends receivable
Items (or investees) Closing balance Opening balance
China Pufa Machinery Industrial Co.,Ltd. 547,184.35
Shenzhen Tefa Tellus Property Management Co., Ltd. 232,683.74
Total 779,868.09
6、Other receivables
(1) Other receivables by categories
Closing balance
Category Carrying amount Bad debt provision Carrying amount Amount (%) Amount (%)
Other receivables of which provision for bad debts is
39,192,975.09 57.37 39,192,975.09 100.00
of individually significant
The aging analysis of the other receivables that are
18,393,888.57 26.92 3,574,724.46 19.43 14,819,164.11 grouped and impaired
Other receivables of which provision for bad debts is
10,735,208.95 15.71 10,735,208.95 100.00
of individually insignificant
Total 68,322,072.61 100.00 53,502,908.50 78.31 14,819,164.11 (Continued)
Opening balance
Category Carrying amount Bad debt provision Carrying amount Amount (%) Amount (%)
Other receivables of which provision for bad debts is
39,200,840.68 55.76 39,200,840.68 100.00
of individually significant
The aging analysis of the other receivables that are
20,423,595.69 29.05 3,837,208.24 18.79 16,586,387.45 grouped and impaired
Other receivables of which provision for bad debts is
10,678,096.75 15.19 10,678,096.75 100.00
of individually insignificant
Total 70,302,533.12 100.00 53,716,145.67 76.41 16,586,387.45① The significantindividuals in the end of year
Closing balance
Name of companies
Bad debt
Carrying amount Ratio% Reason
provision
Closing balance
Name of companies
Bad debt
Carrying amount Ratio% Reason
provision
It is unexpected to collect since the Zhongqi Huanan Automobile Sales Co.,Ltd. 9,832,956.37 9,832,956.37 100.00
company has gone
It is unexpected to collect since the Shenzhen Nanfang Industry and Trade Co.,Ltd. 7,359,060.75 7,359,060.75 100.00
company has gone
Win the case, this company do not Shenzhen Zhonghao (Group) Co.,Ltd. 5,000,000.00 5,000,000.00 100.00
have asset to pay.
Jinbeili Household Company 2,706,983.51 2,706,983.51 100.00 It is too long to collect
It is unexpected to collect since the Shenzhen Xinxingtai Trading Co.,Ltd. 2,418,512.90 2,418,512.90 100.00
company has gone
Shenzhen Petrochemical Group 1,904,156.18 1,904,156.18 100.00 It is unexpected to collect
It is unexpected to collect since the Shenzhen Tefa Huatong Casing Co.,Ltd. 1,212,373.79 1,212,373.79 100.00
company has gone
It is unexpected to collect since the Shenzhen Jinhe Mould Co.,Ltd. 1,023,560.00 1,023,560.00 100.00
company has gone
It is unexpected to collect since the Heyuan Dongfeng Technique Service Station 930,000.00 930,000.00 100.00
company has gone
Shenzhen Nuoer Electromechanical Co.,Ltd. 906,024.60 906,024.60 100.00 It is too long to collect
Shenzhen South Great Wall Investment Co.,Ltd. 819,460.91 819,460.91 100.00 It is uncertain to collect
It is unexpected to collect since the Shenzhen Xiandao Chemical Materials Co.,Ltd. 660,790.09 660,790.09 100.00
company has gone
Shenzhen Baodong Real Estate Co.,Ltd. 609,773.00 609,773.00 100.00 It is too long to collect
Others 3,809,322.99 3,809,322.99 100.00 It is too long to collect
Total 39,192,975.09 39,192,975.09 100.00
②Other receivables by aging balance
Closing balance
Aging
Carrying amount Bad debt provision Ratio(%)
Within 1 year 10,882,158.43
Closing balance
Aging
Carrying amount Bad debt provision Ratio(%)
1-2 years 222,322.41 11,116.13 5.00 2-3 years 270,318.45 54,063.69 20.00 Over 3 years 7,019,089.28 3,509,544.64 50.00 Total 18,393,888.57 3,574,724.46 19.43 (2) Recognisation, recovery or reversal of provision for bad debts in 2017
The amount of provision for bad debts recognised during this year is RMB57,112.20. The amount of recovered or reversed provision for bad debts during this year is RMB207,042.37.
(3) The classification of other receivables
Category Carrying amount of closing balance Opening balance Related-party 5,043,179.46 4,960,425.05 Others 63,278,893.15 65,342,108.07 Total 68,322,072.61 70,302,533.12 (4) At 31 December 2017, the top five debtors of other receivable balance:
Bad-debt Name of companies the nature of payment Closing balance Age Ratio(%)
closing balance Zhongqi Huanan Automobile Sales
intercourse funds 9,832,956.37 Over 3 years 14.39 9,832,956.37 Co.,Ltd.
Chow tai fook jewellery (shenzhen) co.
intercourse funds 8,836,981.36 Within 1 year 12.93
LTD.
Shenzhen Nanfang Industry and Trade
intercourse funds 7,359,060.75 Over 3 years 10.77 7,359,060.75 Co.,Ltd.
Shenzhen Zhonghao (Group) Co.,Ltd. intercourse funds 5,000,000.00 Over 3 years 7.32 5,000,000.00 Shenzhen Kaifeng Automobile Co., Ltd. intercourse funds 4,413,728.50 Over 3 years 6.46 2,206,864.25 Total 35,442,726.98 51.87 24,398,881.377、Inventory
(1) Categories of inventory
Items Closing balance
Carrying amount Provision for inventories Net carrying amount Raw materials 15,289,604.77 14,771,812.17 517,792.60 Low value consumables
Finished products 26,225,810.26 14,097,375.64 12,128,434.62 Total 41,515,415.03 28,869,187.81 12,646,227.22（continued）
Opening balance
Items
Carrying amount Provision for inventories Net carrying amount Raw materials 15,237,602.35 14,771,812.17 465,790.18 Low value consumbles 855.67 855.67 Finished products 25,436,110.25 14,863,840.41 10,572,269.84 Total 40,674,568.27 29,635,652.58 11,038,915.69 (2) Provision for decline in value of inventories
Increased in 2017 Decreased in 2017
Items Opening balance Closing balance Withdraw Others Written-off Others
Raw materials 14,771,812.17 14,771,812.17 Finished products 14,863,840.41 88,597.87 855,062.64 14,097,375.64 Total 29,635,652.58 88,597.87 855,062.64 28,869,187.81 (3) Reason of the change of bad-debt
Item Withdraw reason Written-off reason Resell reason
Finished products Realizable value is lower than the cost Products been sold
8、Other current assets
Items Closing balance Opening balance
Deductible input tax 1,082,250.70 123,901.32 Financial products 218,500,000.00 90,000,000.00 Total 219,582,250.70 90,123,901.329、Available-for-sale financial assets
(1) Situation of available-for-sale financial assets
Closing balance Opening balance
Items
Book value Impairment loss Net book value Book value Impairment loss Net book value Available-for-sale equity
18,302,857.20 8,126,240.00 10,176,617.20 18,605,225.77 8,126,240.00 10,478,985.77 investments
Include：Measured by
faie value
Measured by cost value 18,302,857.20 8,126,240.00 10,176,617.20 18,605,225.77 8,126,240.00 10,478,985.77 Total 18,302,857.20 8,126,240.00 10,176,617.20 18,605,225.77 8,126,240.00 10,478,985.77
(2) Closing balance of available-for-sale financial assets
Carrying amount Provision for impairment
Names Ratio（%） Opening balance Increased Decreased Closing balance Opening balance Increased Decreased Closing balance
China Pufa Machinery Industrial
10,176,617.20 10,176,617.20 4.94 Co.,Ltd.
Shenzhen Jingwei Industrial
4,000,000.00 4,000,000.00 4,000,000.00 4,000,000.00 12.50 Co.,Ltd.
Shenzhen (Moscow) Co,.Ltd. 825,000.00 825,000.00 825,000.00 825,000.00 7.00 Wuhan Weite Hotel 640,000.00 640,000.00 640,000.00 640,000.00
Shenzhen Petrochemical Industry 100 thousand 700,000.00 700,000.00 700,000.00 700,000.00
(Group) Co., Ltd. shares Shenzhen Shuntian Vehicle
600,000.00 600,000.00 600,000.00 600,000.00 11.10 Technology Co.,Ltd.
Shenzhen Jinhe Mould Co.,Ltd 453,440.00 453,440.00 453,440.00 453,440.00 15.00 Shenzhen Zhongqi Training Center 600,000.00 600,000.00 600,000.00 600,000.00 6.25 Minilong 162,000.00 162,000.00 162,000.00 162,000.00 6.25 Shenzhen Bisik Transportation
302,368.57 302,368.57 7.50 Industrial Co., Ltd
Rishen International Co.,Ltd 145,800.00 145,800.00 145,800.00 145,800.00 7.50 Total 18,605,225.77 302,368.57 18,302,857.20 8,126,240.00 8,126,240.00
(3) Changes of impairment provision on available-for-sale financial assets
Available-for-sale Available-for-sale
Items Total equity instrument liabilities instrument
Opening balance 8,126,240.00 8,126,240.00 Withdraw in 2017
including：from comprehensive profits
Decreased in 2017
including：fair value of return back
Closing balance 8,126,240.00 8,126,240.0010、Held-to-maturity investment
(1) Situation
Closing balance Opening balance
Item
Bad debt Bad debt
Book value Net book value Book value Net book value provision provision
National coupons 20,000.00 20,000.00 20,000.00 20,000.00
Total 20,000.00 20,000.00 20,000.00 20,000.00
11、Long-term receivables
(1) Situation
Closing balance Opening balance Discount Rate Range Net
Items
Bad debt Bad debt Net book
Book value book Book value
provision provision value
value
Other：
Long-term equity 2,179,203.68 2,179,203.68 2,179,203.68 2,179,203.68
including: Shenzhen Tellus
Automobile Services Chain Co.,Ltd. 2,179,203.68 2,179,203.68 2,179,203.68 2,179,203.68
*
total 2,179,203.68 2,179,203.68 2,179,203.68 2,179,203.68
Note：*This company is one of the joint companies, the non-operating account receivable is actually the net investment to Shenzhen Tellus Automobile Services Chain Co.,Ltd. At 2017 Dec. 31st, the
liabilities exceeds its assets and theowner‘s equity is negative. The book value of long-term receivables to Shenzhen Tellus Automobile Service is zero. Considering the actual situation of this company which had stopped operation, we have already got100% preparation for the bad-debt.
12、Long-term equity investments
Change in 2017
Investment Adjustment of
Investee Opening balance
Increasi-ng Decreas-ing
income under comprehensiv-e Other changes investment investment
equity-method profits
Ⅰ、Cooperative enterprise
Shenzhen Tellus Jimeng
57,180,913.33 -936,636.49
Investment Co.,Ltd.
Shenzhen Tellus Xing
10,583,444.88 279,948.88
Investment Co.,Ltd.
Total 67,764,358.21 -656,687.61
Ⅱ、Joint venture
Shenzhen Xing Long
Mechanical Models Co.,Ltd. 15,878,254.74 67,600,000.00 281,075.09 1,033,669.00*Note
Shenzhen Tellus Automobile
Services Chain Co.,Ltd.
Shenzhen Ren fu Tellus
75,715,480.75 17,499,035.75
Automobiles Services Co.,Ltd.
Shenzhen Automobile
Industrial Import and Export 8,427,067.20 -286,593.36
Co.,Ltd
Shenzhen Dongfeng
35,476,407.97 4,452,019.54
Automobile Co., Ltd.
Shenzhen Xinyongtong
368,948.94 11,712.93
Tenology Co.,Ltd
Shenzhen Xinyongtong Pump
127,836.59
and Environmental Protection
Change in 2017
Investment Adjustment of
Investee Opening balance
Increasi-ng Decreas-ing
income under comprehensiv-e Other changes investment investment
equity-method profits
Co.,Ltd
Shenzhen Xinyongtong
41,556.83
Consulting Service Co.,Ltd.
Shenzhen Xinyongtong
2,790.25 -2,790.25
Automobile Service Co.,Ltd.
Shenzhen Xinyongtong
Dongxiao Automobile Parts
Sales Co.,Ltd.
Shenzhen Xinyongtong Xinda
Inspection Eqiupment Co.,Ltd
Hunan Changyang Industrial
1,810,540.70
Co.,Ltd.*Note①
Shenzhen Jiecheng Electronic
3,225,000.00
Co.,Ltd.*Note①
Shenzhen Xiandao Chemical
4,751,621.62
MaterialsCo.,Ltd.*Note①
China Automobile Shenzhen
400,000.00
Trading Co.,Ltd.*Note①
Shenzhen General Standard
500,000.00
Co.,Ltd.*Note①
Shenzhen Torch Spark Plug
17,849.20
IndustrialCo.,Ltd.*Note①
Zhongqi South China
Automobile Sales Co.,Ltd. 2,250,000.00
*Note①
Shenzhen Bailiyuan Power
1,320,000.00
Co.,Ltd.*Note①
Change in 2017
Investment Adjustment of
Investee Opening balance
Increasi-ng Decreas-ing
income under comprehensiv-e Other changes investment investment
equity-method profits
Shenzhen Yiming Automobile
200,001.10
Trading Co.,Ltd.*Note①
Total 150,513,355.89 67,600,000.00 21,954,459.70 1,033,669.00Ⅲ、Others
Shenzhen Hanli Hi-technology
1,956,000.00
CeramicsCo.,Ltd.*Note*②
Nanfang Automobile Repairing
6,700,000.00
Center*Note*②
Total 8,656,000.00
Total 226,933,714.10 67,600,000.00 21,297,772.09 1,033,669.00（continued）
Change in 2017
Closing balance Investee
Declaration of cash Bad debt
Closing balance for bad debt Others
dividends or profits provision
provisionⅠ、Cooperative enterprise
Shenzhen Tellus Jimeng Investment Co.,Ltd. 56,244,276.84
Shenzhen Tellus Xing Investment Co.,Ltd. 10,863,393.76
Total 67,107,670.60
Ⅱ、Joint venture
Shenzhen Xing Long Mechanical Models
84,792,998.83
Co.,Ltd.*Note
Shenzhen Tellus Automobile Services Chain
Co.,Ltd.
Shenzhen Ren fu Tellus Automobiles Services
9,100,000.00 84,114,516.50
Co.,Ltd.
Shenzhen Automobile Industrial Import and 8,140,473.84
Change in 2017
Closing balance Investee
Declaration of cash Bad debt
Closing balance for bad debt Others
dividends or profits provision
provision Export Co.,Ltd
Shenzhen Dongfeng Automobile Co., Ltd. 39,928,427.51
Shenzhen Xinyongtong Tenology Co.,Ltd 380,661.87
Shenzhen Xinyongtong Pump and Environmental
127,836.59 127,836.59 Protection Co.,Ltd
Shenzhen Xinyongtong Consulting Service
41,556.83 41,556.83 Co.,Ltd.
Shenzhen Xinyongtong Automobile Service
Co.,Ltd.
Shenzhen Xinyongtong Dongxiao Automobile
Parts Sales Co.,Ltd.
Shenzhen Xinyongtong Xinda Inspection
Eqiupment Co.,Ltd
Hunan Changyang IndustrialCo.,Ltd.*Note① 1,810,540.70 1,810,540.70 Shenzhen Jiecheng ElectronicCo.,Ltd.*Note① 3,225,000.00 3,225,000.00 Shenzhen Xiandao Chemical Materials
4,751,621.62 4,751,621.62Co.,Ltd.*Note①
China Automobile Shenzhen Trading Co.,Ltd.
400,000.00 400,000.00*Note①
Shenzhen General StandardCo.,Ltd.*Note① 500,000.00 500,000.00 Shenzhen Torch Spark Plug Industrial
17,849.20 17,849.20Co.,Ltd.*Note①
Zhongqi South China Automobile Sales Co.,Ltd.
2,250,000.00 2,250,000.00*Note①
Shenzhen Bailiyuan PowerCo.,Ltd.*Note① 1,320,000.00 1,320,000.00 Shenzhen Yiming Automobile Trading Co.,Ltd.
200,001.10 200,001.10*Note①
Change in 2017
Closing balance Investee
Declaration of cash Bad debt
Closing balance for bad debt Others
dividends or profits provision
provision Total 9,100,000.00 232,001,484.59 14,644,406.04Ⅲ、Others
Shenzhen Hanli Hi-technology Ceramics
1,956,000.00 1,956,000.00Co.,Ltd.*Note*②
Nanfang Automobile Repairing Center*Note*② 6,700,000.00 6,700,000.00 Total 8,656,000.00 8,656,000.00 Total 9,100,000.00 307,765,155.19 23,300,406.04Note：*①Companies have been withdrawn, so we haverecognised100% provision for the bad-debt.*② Other details will be founded in Note VIII-1.
13、Investment properties
(1) Investment properties measured at cost
Items House, Building Total
I. Original book value
1、Opening balance 160,870,656.51 160,870,656.512、Increased at this period 446,468.61 446,468.61（1）Land premium 446,468.61 446,468.613、Decreased at this period
（1）Disposal
4、Closing balance 161,317,125.12 161,317,125.12II、Total accumulated depreciation and accumulated amortization
1、Opening balance 83,268,407.98 83,268,407.982、Increased at this period 4,825,204.93 4,825,204.93（1）Provisionor amortization 4,825,204.93 4,825,204.933、Decreased at this period
（1）Disposal
4、Closing balance 88,093,612.91 88,093,612.91 III. Impairment allowance
Items House, Building Total
IV.Book value
1、Closing book value 73,223,512.21 73,223,512.212、Book value at year beginning 77,602,248.53 77,602,248.53 (2) There are no real estate investment of ownership or use-right restriction.
(3)There are no real estate investment buildings without property certicificate up to December 31st,2017.
14、Fixed assets
(1) List of fixed assets
Transportation Office equipment and Self-owned housing
Items House and buildings Machinery equipment Electronic equipment Total equipment others decoration
I.Original book value
1、Opening balance 271,459,922.00 17,638,367.72 6,214,055.64 12,659,097.05 4,757,968.36 3,056,469.95 315,785,880.722、Increased at this period 135,503.05 381,449.56 189,178.68 21,771.21 727,902.50（1）Purchase 135,503.05 381,449.56 189,178.68 21,771.21 727,902.503、Decreased at this period 446,468.61 640,163.70 1,052,296.79 2,054,476.86 637,694.62 358,757.96 5,189,858.54（1）Disposal or scrap 446,468.61 640,163.70 1,052,296.79 2,054,476.86 637,694.62 358,757.96 5,189,858.544、Closing balance 271,013,453.39 17,133,707.07 5,543,208.41 10,793,798.87 4,142,044.95 2,697,711.99 311,323,924.68 II. Accumulated depreciation
Transportation Office equipment and Self-owned housing
Items House and buildings Machinery equipment Electronic equipment Total equipment others decoration
III. Impairment allowance
1、Opening balance 3,555,385.70 1,552,359.79 6,165.00 17,984.71 69,562.98 281,382.73 5,482,840.912、Increased at this period
（1）Provision
3、Decreased at this period
（1）Disposal or scrap
4、Closing balance 3,555,385.70 1,552,359.79 6,165.00 17,984.71 69,562.98 281,382.73 5,482,840.91 IV.Book value
Note：Current depreciation is RMB8,483,116.11.There is no fixed assets transferred fromconstruction in progress in current period.
(2) Temporary idle fixed assets
The Company had no temporary idle fixed assets at the end of this period.
(3) Fixed assets with un-completed property certificates
Items Book Value Reasons for un-completed certificates Shuibei Zhongtian building 1,160,674.74 R eason left over by history
Hostel at North Remin Road 5,902.41 R eason left over by history
Songquanapartment（Mix） 34,504.34 R eason left over by history
Tellus building underground park 10,531,724.84 U nable to handle real estate license
Tellus building conversion layer 1,874,303.72 U nable to handle real estate license
Warehouse of trading department 93,123.97 R eason left over by history
Warehouse 971,438.53 R eason left over by history
The 1st, 2nd, 3rd factory building, 3 to 5 layers 4,290,406.96 R eason left over by history
Yongtong building 39,621,850.15 R eason left over by history
The 16th apartment house, Taohua Yuan 1,742,338.80 R eason left over by history
Automobile building 18,363,494.29 R eason left over by history
Floor 1 of business housing, Baoan 1,089,781.89 R eason left over by history
Zhonghe building 5,336,321.37 R eason left over by history
Total 85,115,866.01
(4) There areno fixed assets with restricted ownership .
15、Construction in progress
(1) List of Construction in Progress
Closing balance Opening balance
Items
Provision for Provision for
Book balance Book value Book balance Book value devaluation devaluation
ShuibeiJewelry industrial
5,554,512.79 5,554,512.79
park
Shuibei Jewelry Building 372,606,383.90 372,606,383.90 343,365,313.46 343,365,313.46
Closing balance Opening balance
Items
Provision for Provision for
Book balance Book value Book balance Book value devaluation devaluation
Total 378,160,896.69 378,160,896.69 343,365,313.46 343,365,313.46 (2) Changes of significant construction in progress
Increase atthis Transferred to Other
Name Budget Opening balance Closing balance period fixed assets decrease
433.62 343,365,313.46 29,241,070.44 372,606,383.90 Shuibei Jewelry Building
million
Total 343,365,313.46 29,241,070.44 372,606,383.90（continued）
Including：Current
Rate of
Proportion Capitalizationof amount of
Name Progress capitalization of Source of funds(%) interest capitalization of
interest（%）
interest
Capitalfunds\
Shuibei Jewelry Building 85.93 85.93 16,522,840.38 1,415,874.08 0.36
Raising funds
Total 85.93 85.93 16,522,840.38 1,415,874.08 0.36
(3) Provision for devaluation for current year.
There is no provision for devaluation for construction in progress at the end of December 31st, 2017.
16、Intangible assets
(1) List of intangible assets
Items Land use right Trademarks Software Total
1. Original book value
1、Opening balance 56,252,774.80 95,800.00 1,070,185.00 57,418,759.802、Increased at this period
（1）Purchase
3、Decreased at thisperiod
（1）Disposal
Items Land use right Trademarks Software Total
4、Closing balance 56,252,774.80 95,800.00 1,070,185.00 57,418,759.80 II. Accumulated amortization
1、Opening balance 3,052,194.81 68,924.87 558,521.40 3,679,641.082、Increased at this period 1,219,014.84 6,379.96 164,037.00 1,389,431.80 (1)Provision 1,219,014.84 6,379.96 164,037.00 1,389,431.803、Decreased at this period
（1）Disposal
4、Closing balance 4,271,209.65 75,304.83 722,558.40 5,069,072.88 III.Impairment allowance
IV.Book value
1. Closing book value 51,981,565.15 20,495.17 347,626.60 52,349,686.92 2. Opening book value 53,200,579.99 26,875.13 511,663.60 53,739,118.72Note：The current year amortization is RMB1,389,431.80.
(2) The intangible assets with restricted ownership
Details of the intangible assets with restricted ownership refer to Note VI-50.
(3) The Company had no Intangible assets with uncertain service life at the end of this period.
17、Long-term deferred expenses
Increase in this Amortized Other
Items Opening balance Closing balance period expenses decrease
Renovation costs 1,437,761.31 1,793,003.00 706,077.49 744,972.88 1,779,713.94 Total 1,437,761.31 1,793,003.00 706,077.49 744,972.88 1,779,713.9418、Deferred income tax assets/deferred income tax liabilities
(1) Details of the recognized deferred income tax assets
Closing balance Opening balance
Items
Deductible temporary Deferred income tax Deductible temporary Deferred income tax difference assets difference assets Allowances for assets impairment 78,513,371.56 19,628,342.90 78,576,678.56 19,644,169.65 Equity investment variance 14,844,139.31 3,711,034.83 14,844,139.31 3,711,034.83 Unrealized Profit on Transactions with 4,218,604.72 1,054,651.18 4,374,373.52 1,093,593.38
associate Companies
Total 97,576,115.59 24,394,028.91 97,795,191.39 24,448,797.86 (2) Details of the recognized deferred income tax liabilities
Closing balance Opening balance
Items
Taxable temporary Taxable temporary Deferred income tax Deferred income tax liabilities
differences differences liabilities Depreciation of fixed assets 930,844.24 232,711.06 Total 930,844.24 232,711.06 (3) Details of the un-recognized deferred income tax assets
Items Closing balance Opening balance
Deductible temporary difference 92,186,466.78 92,678,295.48 Deductible loss 34,548,078.47 39,164,563.93 Total 126,734,545.25 131,842,859.41 (4) Deductible losses of the un-recognized deferred income tax asset will expire in the following years
Year Closing balance Opening balance Remark
2017 5,875,485.17
2018 14,595,474.27 15,020,960.85
2019 14,499,089.58 14,499,089.58
2020 505,862.23 507,700.61
2021 1,842,637.49 3,261,327.72
2022 3,105,014.90
Total 34,548,078.47 39,164,563.93
19、Other non-current assets
Items Closing balance Opening balance
Prepayment for construction 573,661.62
Others 100,000.00 100,000.00 Total 673,661.62 100,000.0020、Provision for asset impairment
Decreased
Items Opening balance Increased Closing balance Reversal Resell
I.Bad debt provision 104,689,834.51 491,678.44 217,042.37 63,307.00 104,901,163.58 II. Provision for impairment of held-to-maturity 20,000.00 20,000.00 investments
III.Provision for decline in value of inventories 29,635,652.58 88,597.87 855,062.64 28,869,187.81 IV.Provision for impairment of long-term 23,300,406.04 23,300,406.04 investments
V.Provision for impairment of fixed assets 5,482,840.91 5,482,840.91 VI.Provision for impairment of available-for-sale 8,126,240.00 8,126,240.00 financial assets
Total 171,254,974.04 580,276.31 217,042.37 918,369.64 170,699,838.3421、Short-term loan
(1) Categories of short-term loans
Items Closing balance Opening balance
Fiduciary loan 120,000,000.00 50,000,000.00 Total 120,000,000.00 50,000,000.00 (2) There is no overdue short-term loans at the end of this period.
22、Accounts payable
(1) Accounts payable
Items Closing balance Opening balance
Accounts payable 28,032,708.69 23,599,227.33 Total 28,032,708.69 23,599,227.33 (2) Significant accounts payable which aged over one year
Items Closing balance The reason for not repaid or carried forward Shenzhen Tefa Real Estate Co.,Ltd. 6,054,855.46 Not repaid by related company
Total 6,054,855.46
23、Advances from customers
Aging Closing balance Opening balance
Within 1 year 10,035,943.26 10,872,120.44 1 to 2 years 2,699,525.20 345,811.38 2 to 3 years 345,811.38
Over 3 years 708,739.63 712,561.20 Total 13,790,019.47 11,930,493.02Note：Advances from customers aging over 3 years were not carried forward, mainly caused by the subsidiary (Shenzhen Xinyongtong Automobile Inspection Equipment Co.,Ltd.). Thesubsidiary‘s customers have not accepted the installation and debugging of the equipments yet.
24、 Employee benefits payable
(1) Details of employee benefits payable
Items Opening balance Increase in this period Decrease in this period Closing balance I. Short-term employee benifits
25,209,472.43 51,206,336.49 54,973,562.35 21,442,246.57 II. Post-employment benefit-defined
1,935,158.75 7,458,833.59 7,665,084.38 1,728,907.96 benefit plans
III. Termination benefits
612,543.50 612,543.50
IV. Other longterm employee benefits with
one year
Total 27,144,631.18 59,277,713.58 63,251,190.23 23,171,154.53 (2) Details of short-term employee benifits
Items Opening balance Increase in this period Decrease in this period Closing balance I. Salary, bonus, allowance and subsidies 22,876,175.76 42,930,714.46 46,581,199.35 19,225,690.87 II. Employee welfare 1,033,926.39 1,033,926.39
III.Social insurance premium 8,030.90 2,488,658.19 2,486,323.27 10,365.82 Including:medical insurance premium 7,002.85 2,193,546.57 2,191,369.68 9,179.74 Industries insurance premium 456.99 130,269.22 130,212.49 513.72
Items Opening balance Increase in this period Decrease in this period Closing balance Maternity insurance premium 571.06 164,842.40 164,741.10 672.36 V. Housing fund 2,094,682.39 3,478,351.68 3,537,753.46 2,035,280.61 VI. Union expenses and employee education
230,583.38 1,274,685.77 1,334,359.88 170,909.27 expenditure
VI. Short-term paid absence
VII. Short-term profit share plan
VIII.Others
Total 25,209,472.43 51,206,336.49 54,973,562.35 21,442,246.57 (3) The details of defined contribution plans
Items Opening balance Increased in this period Decreased in this period Closing balance I.Basic endowment insurance premium 143,967.68 5,917,994.03 5,928,800.09 133,161.62 II. Unemployment insurance premium 1,133.94 120,034.58 119,899.80 1,268.72 III. Company annuity payment 1,790,057.13 1,420,804.98 1,616,384.49 1,594,477.62 Total 1,935,158.75 7,458,833.59 7,665,084.38 1,728,907.9625、Taxes payable
Items Closing balance Opening balance
VAT 502,040.39 979,259.98 Enterprise income tax 2,319,674.83 1,951,517.14 Individual income tax 286,741.01 260,584.17 Urban construction and maintenance tax 155,053.76 179,827.99 Property tax 897,951.76 864,954.73 Land VAT 5,362,682.64 5,362,682.64 Land tax 123,484.44 241,516.81 Education surcharge 152,004.54 168,983.23 Stamp tax 62,434.50 72,351.91 Others 65,504.40
Total 9,927,572.27 10,081,678.60
26、Interest payable
Items Closing balance Opening balance
Interest on short-term borrowings 165,604.16 66,458.33 Interest payable on maturity debt due to maturity 63,890.56 11,368.00 Total 229,494.72 77,826.3327、Other payables
(1) Other payables by categories
Items Closing balance Opening balance Related parties transactions andloan、interest 58,367,438.13 56,774,469.90Deposit、security bond 16,365,292.81 16,252,470.66 Others 78,367,179.55 53,018,913.98 Total 153,099,910.49 126,045,854.54 (2) Significant other payables which aged over one year
Items Closing balance The reason for not repaid or carried forward
Shenzhen Tefa Group Co.,Ltd. 50,539,955.05 There are no expire date setted by the holding company
Total 50,539,955.05
28、Long-term borrowings
Items Closing balance Opening balance
Mortgaged loan 38,600,000.00 12,000,000.00 Total 38,600,000.00 12,000,000.0029、Long-term Payables
Items Closing balance Opening balance
Employee housing deposit 3,908,848.40 3,908,848.40 Technical innovation 11,311.96 11,311.96 Total 3,920,160.36 3,920,160.3630、Accrued liabilities
Items Closing balance Opening balance
Pending actions 1,192,618.90 Total 1,192,618.9031、Other non-current liabilities
Items Closing balance Opening balance
Deferred income* 14,520,000.00 14,239,537.48 Total 14,520,000.00 14,239,537.48Note*：Deferred income of the Company is rent received in advance of Shuibei Jewelry Building, which is subsequently measured at amortized cost using the effective interest method.
32、Share capital
Changes for theperiod（+-）
Opening
Items
Bonus Capitalization of
Closing balance balance
New issue Other Subtotal
issue public reserve
Restricted tradable shares
1.State-owned shares
2. State-owned legal person
6,000,000 6,000,000 shares
3.Other omestic-owned
shares
Including: Domestic
71,000,000 71,000,000 legalperson wnership
Domestic nature person
4. Foreign-owned shares
Including: Foreign
legalperson ownership
Foreign nature person
Total restricted tradable
77,000,000 77,000,000 shares
Ⅱ、Tradable shares
1. Ordinary shares 193,881,600 193,881,600
Changes for theperiod（+-）
Opening
Items
Bonus Capitalization of
Closing balance balance
New issue Other Subtotal
issue public reserve
denominated in RMB
2. Foreign-owned shares
26,400,000 26,400,000 listed domestically
3. Foreign-owned shares
listed overseas
4.Others
Total tradable shares 220,281,600 220,281,600Ⅲ、Total shares 297,281,600 297,281,60033、Capital reserve
Items Opening balance Increased in this period Decreased in this period Closing balance Capital premium 559,544,773.35 559,544,773.35 Other reserves 4,647,832.16 1,033,669.00 5,681,501.16 Total 564,192,605.51 1,033,669.00 565,226,274.5134、Surplus reserve
Items Opening balance Increased in this period Decreased in this period Closing balance Statutory surplus reserve 2,952,586.32 2,952,586.32 Total 2,952,586.32 2,952,586.3235、Undistributed profit
Items Current period Previous period Before adjustment: Undistributed profits at the end of prior year 30,935,823.12 3,742,260.49 Adjustment: Total undistributed profits at beginning of year (Increase+, decrease -)
After adjustment: Undistributed profits at beginning of year 30,935,823.12 3,742,260.49 Add: Net profit attributable to shareholders of the parent 66,862,772.68 27,193,562.63 Less: Appropriation to statutory surplus reserve
Appropriation to discretionary surplus reserve
Items Current period Previous period Appropriation to common risk provision
Common stock dividend payable
Common stock dividends converted to shares
Retained profits at the period end 97,798,595.80 30,935,823.1236、Operating Revenues and Operating Costs
Current period Previous period
Items
Revenue Cost Revenue Cost Principal operating activities 339,883,476.08 251,553,114.95 316,404,722.99 226,210,269.82 Other operating activities 7,353,813.72 2,701,845.70 7,836,118.91 2,832,579.81 Total 347,237,289.80 254,254,960.65 324,240,841.90 229,042,849.6337、Taxes and surcharges
Items Amount of current period Amount of previous period Business tax 1,657,980.71 City construction and maintenance tax 729,864.63 825,698.86 Education surcharges 510,822.53 577,748.71 Land tax 497,236.36 474,491.90 Property tax 1,488,204.94 5,098,228.48 Stamp tax 208,932.59 135,589.11 Others 203,393.32 2,310.00 Total 3,638,454.37 8,772,047.7738、Selling and distribution expenses
Items Current period Previous period
Employment benefits 10,546,913.38 11,089,565.59 Advertisement 1,147,158.13 434,329.39 Depreciation 968,936.09 826,067.67 Office expenses 826,075.39 985,403.14
Items Current period Previous period
Water and electricity fee 444,640.83 522,463.42 Travel expenses 300,686.39 558,536.32 Others 2,255,969.50 2,240,308.96 Total 16,490,379.71 16,656,674.4939、Administration expenses
Items Current period Previous period
Staff cost 25,843,768.29 29,870,747.79 Taxes and fees 932,933.04 Office expenses 2,273,112.45 2,677,198.76 Travel expenses 1,163,867.36 1,832,190.40 Entertainment expenses 776,245.62 811,691.39 Depreciation and amortization 1,828,593.64 1,705,301.77 Consultation and service fee 2,063,764.41 1,792,048.80 Others 2,785,931.82 2,824,639.54 Total 36,735,283.59 42,446,751.4940、Financial expenses
Items Current period Previous period
Interest expenses 5,605,718.38 4,344,016.18 Less: Interest income 2,776,945.85 4,342,149.21 Less: Interest capitalized 1,415,874.08 981,549.44 Exchange difference -170,406.06 153,927.41 Others 277,676.47 319,794.09 Total 1,520,168.86 -505,960.9741、Loss of assets impairment
Items Current period Previous period
Loss of bad debts 274,636.07 347,483.42 Loss of inventory valuation 88,597.87 779,409.79
Items Current period Previous period
Total 363,233.94 1,126,893.2142、Investment income
Items Current period Previous period Investment income from long-term equity investments under the cost method 547,184.35
Investment income from long-term equity investments under the equity method 21,297,772.09 1,182,675.73 Investment income from disposal of long-term equity investments 5,279,153.36
Investment income from holding financial products 6,606,218.86 3,916,317.84 Investment income from available-for-sale financial assets -130,468.57
Total 33,599,860.09 5,098,993.5743、Gains(losses)from disposal of assets
Items Current period Previous period Non-recurring gain or loss Gain on disposal of fixed assets 374,583.14 68,314.27 374,583.14 Total 374,583.14 68,314.27 374,583.1444、Other income
Items Current period Previous period Non-recurring gain or loss Maternity allowance 25,753.22 25,753.22 Total 25,753.22 25,753.2245、Non-operating income
Items Current period Previous period Non-recurring gain or loss Gain from writing off the unnecessary payment 232,077.95 232,077.95 Others 493,440.12 32,237.30 493,440.12 Total 725,518.07 32,237.30 725,518.0746、Non-operation expenses
Items Current period Previous period Non-recurring gain or loss Loss on scrap of non-current assets 29,444.35 120,004.34 29,444.35 Others 5,675.96 1,295,796.73 5,675.96 Total 35,120.31 1,415,801.07 35,120.31
47、Income tax expenses
(1) Income tax expenses
Items Amount of current period Amount of previous period Current income tax 3,687,877.38 3,145,622.73 Deferred income tax -193,768.86 -205,728.61 Adjustment of previous income tax -350,274.34 -72,496.31 Total 3,143,834.18 2,867,397.81 (2) Reconciliation of income tax expenses to the accounting profit is as follows
Items Amount of current period Profit before tax 68,925,402.89 Income tax calculated at applicable tax rates 17,231,350.72 Impact of various tax rates applicable to subsidiaries 48.53 Adjusted income tax of prior year -350,207.55 Impact of non-taxable income
Impact of non-deductible cost, expense and loss -6,799,224.18 Impact of deductible losses deferred income tax assets unconfirmed in the previous use period -737,861.74 Impact of the deductible temporary differences or deductible loss of unconfirmed deferred tax assets of -6,200,271.59 this year.
Changes of the deferred tax assets/liability caused by the adjustment of tax rate
Income taxes 3,143,834.1848、Notes to items in the cash flow statements
(1) Cash receipts related to other operating activities
Items Current period Previous period Intercourse funds 6,641,288.62 7,814,292.31 Interest income 2,776,945.85 4,342,149.21 Total 9,418,234.47 12,156,441.52 (2) Cash paid relating to other operating activities
Items Current period Previous period
Items Current period Previous period Cash paid to general and administrative expenses 27,207,903.46 26,369,109.90 Intercourse funds and others 23,901,361.04 7,432,759.18 Total 51,109,264.50 33,801,869.08 (3) Cash received relating to other investing activities
Items Current period Previous period Receipt of equity transfer deposit 40,000,000.00
Total 40,000,000.00
49、Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
Items Current period Previous period1、Adjusting net profit to cash flow from operating activities
Net profit 65,781,568.71 27,617,932.54 Add: Impairment loss provision of assets 363,233.94 1,126,893.21 Depreciation of fixed assets, oil and gas assets and consumable biological
12,873,230.19 13,139,540.29 assets
Amortization of intangible assets 273,988.12 231,561.97 Amortization of Long-term deferred expenses 706,077.49 585,928.04 Loss on disposal of fixed assets, intangible assets and other long-term
-374,583.14 51,690.07 deferred assets (gain as in "-")
Loss on scrap of fixed assets (gain as in "-") 29,444.35
Loss on fair value changes (gain as in "-")
Financial cost (gain as in "-") 4,151,985.16 3,516,394.15 Loss on investment (gain as in "-") -33,599,860.09 -5,098,993.57 Decreased in deferred income tax assets (increase as in "-") 38,942.20 39,645.45 Increased of deferred income tax liabilities (increase as in "-") -232,711.06 -245,374.06 Decreased of inventories (increase as in "-") -840,846.76 4,433,164.96 Decreased of operating receivables (increase as in "-") -41,562,369.89 -7,688,513.15
Items Current period Previous period Increased of operating Payable (decrease as in "-") -9,701,167.27 20,165,064.42 Others
Net cash flows from operating activities -2,093,068.05 57,874,934.322、Significant investment and financing activities that without cashflows：
Debt-to-capital conversion
Convertible loan due within 1 year
Fixed assets acquired under financial lease
3、Movement of cash and cashequivalents：
Ending balance of cash 141,793,218.56 178,497,640.10 Less: Beginning balance of cash equivalents 178,497,640.10 99,184,710.93Add：Ending balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase of cash and cash equivalents -36,704,421.54 79,312,929.17 (2) Composition of cash and cash equivalents
Items Closing balance Opening balance I. Cash 141,793,218.56 178,497,640.10 Including: Cash on hand 119,576.83 96,167.91 Bank deposits 141,673,641.73 178,401,472.19 Other monetary funds
II. Cash equivalents
Including: Investments in debt securities due within three months
III. Balance of cash and cash equivalents at the period end 141,793,218.56 178,497,640.10Including：Restricted cash and cash equivalents of Parent company or subsidiaries in the Group
Note: Cash and cash equivalents belong to the company or its subsidiaries were not included in this sheet.50、Ownership or use-right restricted assets
Items Book value at the end of thisperiod Reason of restriction
Monetory asstes 20,000,000.00 Note VI-1
Items Book value at the end of thisperiod Reason of restriction
Intangible assets 50,194,963.68
Long-term equity investment 84,114,516.50 N ote IX-5(2)
Total 154,309,480.18
Note：1.In June 24th, 2014, in order to support the Tellus Shuibei Jewelry Building project, the subsidiaryShenzhen Zhongtian Industrial Co.,Ltd. borrowed RMB 300 million from the Construction Bank Shuibei Jewelry Branch by signing a mortgagecontract（Di Jie 2014 Gu 250Tianbei）on pledge of the land, which is certificated as Shenfang Di Zi No.2000609764.The term of borrowing is from June 24th, 2014 to June 23rd, 2024. The Company assumesjoint and several liability for Shenzhen Zhongtian Industrial Co.,Ltd by signing a contract (Bao Jie 2014 Gu 250 Tianbei). At the end of this period, the loan is RMB38,600,000.00.51、Foreign currency monetary items
(1) Foreign currency monetary items
Items Closing foreign currency balance Exchange rate Closing convert to RMB balance Monetary funds
Including：Cash-USD 856.00 6.5342 5,593.28VII、Change of scope ofconsolidation
1、Business combination not under the same control
No change of business combination not under the same control in the reporting period.
2、Business combination under the same control
No change of business combination under the same control in the reporting period.
3、Counter purchase
There is no counter purchase in the reporting period.
4、Disposal of subsidiaries
The company lose the control right of Shenzhen Tefa Tellus Property Management Co., Ltd. signeda termination agreement with Shenzhen Tefa Property Management Co., Ltd.on 31 May 2017. The company withdrew RBM 14,150,000.00 which was noless than book value of net asset audited on 31 May 2017.5、Changes in consolidation scope due to other reasons
There is a new subsidiary corporation called SichuanTellus Jewelry Technology co., LTD established on July3rd 2017 which invested by the Company, Chengdu Ruihang Jewelry Co. Ltd.,Chengdu Caizhiyuan Jewelry Co., Ltd.,Chengdu Kaixin Industrial Co., Ltd.and Sichuan Baoxie Business Management Co., Ltd. The social credit
code is 91510106MA6DDULT3C on its business license.
Ⅷ、Equity in other entities
1、Equity in subsidiary
(1) The structure of the enterprise group
Main
Proportion
Registration Nature of Ways of Names operating
ofshareholding（%）
place business acquisition place
Directly Indirectly
Shenzhen Tellus Xinyongtong Automobile
Shenzhen Shenzhen Service 100.00 Establish/Investment Development Co.,Ltd.
Shenzhen Dongchang Yongtong Automobile
Shenzhen Shenzhen Service 95.00 Establish/Investment Inspection Co.,Ltd.
Shenzhen Xinyongtong Dongxiao Automobile
Shenzhen Shenzhen Service 95.00 Establish/Investment Inspection Equipment Co.,Ltd.
Shenzhen Baoan Shiquan Industrial Co.,Ltd. Shenzhen Shenzhen Business 100.00 Establish/Investment Shenzhen Tefa Tellus Real Estate Co.,Ltd. Shenzhen Shenzhen Manufacture 100.00 Establish/Investment Shenzhen Tellus Real Estate Exchange Co.,
Shenzhen Shenzhen Service 100.00 Establish/Investment Ltd
Shenzhen Xinyongtong Automobile Inspection
Shenzhen Shenzhen Service 51.00 Establish/Investment Equipment Co.,Ltd.
Shenzhen Automobile Industry and Trading
Shenzhen Shenzhen Business 100.00 Establish/Investment Co., Ltd.
Shenzhen Automobile Industry supply and
Shenzhen Shenzhen Service 100.00 Establish/Investment marketing Co.,Ltd.
Shenzhen Tefa Huari Automobile Enterprise
Shenzhen Shenzhen Service 60.00 Establish/Investment Co.,Ltd.
Shenzhen Huari Anxin Automobile Inspection
Shenzhen Shenzhen Service 100.00 Establish/Investment Equipment Co.,Ltd.
Shenzhen Zhongtian Industrial Co.,Ltd. Shenzhen Shenzhen Service 100.00 Establish/Investment Shenzhen Huari Toyota Automobile sales and
Shenzhen Shenzhen Business 60.00 Establish/Investment services Co.,Ltd.
Main
Proportion
Registration Nature of Ways of Names operating
ofshareholding（%）
place business acquisition place
Directly Indirectly
Shenzhen Hanli Hi-technology Ceramics Ceramic
Shenzhen Shenzhen 80.00 Establish/InvestmentCo.,Ltd.* technology
Shenzhen Nanfang Automobile Repairing Automobile
Shenzhen Shenzhen 100.00 Establish/Investment center* repairment
Anhui Tellus Star Jewelry Investment Co., LTD Hefei Hefei Business 51.00 Establish/Investment Anhui Tellus Xingguang Jinzun Jewelry Co.,
Hefei Hefei Business 60.00 Establish/Investment LTD
SichuanTellus Jewelry Technology co., LTD Chengdu Chengdu Business 66.67 Establish/InvestmentNote：*The operating periodof Shenzhen Hanli Hi-technology Ceramics Co., Ltd.was from September 9th, 1993 to September 21st, 1998, and the operating period ofShenzhen Nanfang Automobile Repairing centerwas from July 12th,1994to July 11th. For stop operating and did not participate annual inspections, the industry and commerce registrationof these two companies were revoked by the administrative department of industry and commerce. Therefore, these two companies do not included in the scope of consolidation, and the book value of net investment is zero.
(2) Important non wholly owned subsidiary
Shareholding ratio of Gains and losses
Dividend and profit paid Closing balance of Names of the subsidiary minority shareholders attributable to the minority
to minority shareholders minority equity（%） shareholders
Shenzhen Huari Toyota Automobile sales and
40% 1,171,906.90 -562,191.85 services Co.,Ltd.
Shenzhen Tefa Huari Automobile Enterprise
40% 54,832.21 11,553,341.91 Co.,Ltd.
(3) The main financial information of important non wholly owned subsidiary
Closing balance
Names of the subsidiary
Non-current
Current assets Fixed assets Total assets Current liabilities Total liabilities liabilities
Shenzhen Huari Toyota
48,902,736.46 1,164,059.81 50,066,796.27 51,472,275.89 51,472,275.89 Automobile sales and
Names of the subsidiary Closing balance
services Co.,Ltd.
Shenzhen Tefa Huari
Automobile Enterprise 46,281,176.84 29,886,773.06 76,167,949.90 47,284,595.12 47,284,595.12 Co.,Ltd.
(Continued)
Opening balance
Names of the subsidiary
Non-current
Current assets Fixed assets Total assets Current liabilities Total liabilities liabilities
Shenzhen Huari Toyota
Automobile sales and 40,898,136.14 1,571,594.67 42,469,730.81 46,804,977.69 46,804,977.69 services Co.,Ltd.
Shenzhen Tefa Huari
Automobile Enterprise 42,822,752.85 31,691,585.09 74,514,337.94 45,100,864.92 667,198.80 45,768,063.72 Co.,Ltd.
Names of
Current period Previous period
the
Operation Comprehensive Operating Operation Comprehensive Operating Net profit Net profit
subsidiary
revenue income cash flow revenue income cash flow Shenzhen
Huari
Toyota
Automobile 194,934,139.85 2,929,767.26 2,929,767.26 7,385,474.75 192,287,794.93 2,573,764.62 2,573,764.62 8,918,363.51 sales and
services
Co.,Ltd.
Shenzhen
Tefa Huari
Automobile 36,550,379.42 137,080.56 137,080.56 3,323,405.53 37,018,805.77 -1,780,393.92 -1,780,393.92 2,922,584.44 Enterprise
Co.,Ltd.
(4) The limitation of usingGroup‘s assets and repayingGroup‘s debts.
There is no significant limitation of usingGroup‘s assets and repayingGroup‘s debts.
2、The transaction of holding equity changed in a subsidiary without a change in control
There is no transaction of holding equity changed in a subsidiary without a change in control.
3、The equity in joint venture or associated company
(1) The significant joint venture or associated enterprise
Holdingproportion（%） Accounting treatment of Main operating
Registration investment in joint Names place Nature of business
place
Directly Indirectly
venture/associated enterprise Associated company:
Shenzhen Ren Fu-Tellus
Mercedes-Benzsales、
Automotive Service Shenzhen Shenzhen 35.00 Equity method repairment
Co.,Ltd.
Shenzhen Dongfeng Automobileproduction、
Shenzhen Shenzhen 25.00 Equity method Automobile Co., Ltd. repairment
Joint venture:
Shenzhen Tellus Jimeng Industrialinvestment、property
Shenzhen Shenzhen 50.00 Equity method investment Co.,Ltd. management、leasing
(2) Key financial information of significant associated company
Closing balance/Current period Opening balance/Previous period Shenzhen Ren
Items
Shenzhen Dongfeng Shenzhen Ren Fu-Tellus Shenzhen Dongfeng Fu-Tellus Automotive
Automobile Co., Ltd. Automotive Service Co.,Ltd. Automobile Co., Ltd. Service Co.,Ltd.
Current assets 390,613,571.00 685,184,923.52 380,939,942.00 433,147,120.64 Fixed assets 23,214,032.00 241,719,824.00 22,120,081.00 154,874,554.92 Total assets 413,827,603.00 926,904,747.52 403,060,023.00 588,021,675.56 Current liabilities 173,500,413.00 708,700,096.37 186,730,078.00 376,098,044.69 Non-current liabilities 60,436,348.10 68,990,352.65 Total liabilities 173,500,413.00 769,136,444.47 186,730,078.00 445,088,397.34 Equity of minority shareholders -1,945,407.03 1,027,646.31
Closing balance/Current period Opening balance/Previous period Shenzhen Ren
Items
Shenzhen Dongfeng Shenzhen Ren Fu-Tellus Shenzhen Dongfeng Fu-Tellus Automotive
Automobile Co., Ltd. Automotive Service Co.,Ltd. Automobile Co., Ltd. Service Co.,Ltd.
Shareholders' equity of the
240,327,190.00 159,713,710.08 216,329,945.00 141,905,631.91 company
Net assets calculated by
84,114,516.50 39,928,427.51 75,715,480.75 35,476,407.97 shareholding proportion
Adjustment
—Goodwill
—Unrealized profit of internal
transaction
—Others
The book value of investment in
84,114,516.50 39,928,427.51 75,715,480.75 35,476,407.97 associated company
The fair value of the equity
investment in associated
company which have open
quotation in market
Operating revenue 1,246,685,891.00 708,394,340.47 1,096,050,124.00 573,229,481.00 Net profit 49,997,245.00 16,335,024.83 26,479,750.00 -22,704,239.56 Net profit gain from the
termination of operation
Other comprehensive income
Total comprehensive income 49,997,245.00 16,335,024.83 26,479,750.00 -22,704,239.56 Dividends received from
9,100,000.00 6,300,000.00 11,720,379.82 associated company this period
(3) Key financial information of significant joint ventures
Shenzhen Tellus Jimeng investment Co.,Ltd.
Items
Closing balance/Current period Opening balance/Previous period Current assets 45,981,179.66 28,920,938.79Including：Cash& Cash Equivalents 14,656,470.18 18,429,108.04 Fixed assets 388,901,782.46 422,125,153.92 Total assets 434,882,962.12 451,046,092.71 Current liabilities 38,394,408.48 55,664,266.08 Non-current liabilities 284,000,000.00 281,020,000.00 Total liabilities 322,394,408.48 336,684,266.08 Equity of minority shareholders
Shareholders' equity of the Company 112,488,553.64 114,361,826.63 Net assets calculated by shareholding proportion 56,244,276.84 57,180,913.32 Adjustment
—Goodwill
—Unrealized profit of internal transaction
—Others
Book value of investment in joint ventures 56,244,276.84 57,180,913.32 Fair value of the equity investment in joint ventures which
have open quotation in market
Operating revenue 53,060,351.06 5,059,107.47 Financial expense 19,353,675.76 3,519,025.96
Shenzhen Tellus Jimeng investment Co.,Ltd.
Items
Closing balance/Current period Opening balance/Previous period Income tax
Net profit -1,873,272.99 -5,237,564.80 Net profit gain from the termination of operation
Other comprehensive income
Total comprehensive income -1,873,272.99 -5,237,564.80 Dividends received from joint ventures this period
(4) Other financial information of joint ventures and associated enterprises
Items Closing balance/Current period Opening balance/Previous period Jointventures：
Total book value of investment 10,863,393.76 10,583,444.89 Total amount of the pro rata calculation
of the following items
—Net profit 124,180.08 179,240.38—Other Comprehensive income
—Total comprehensive income 124,180.08 179,240.38 Associatedenterprises：
Total book value of investment 93,314,134.54 24,677,061.13 Total amount of the pro rata calculation
of the following items
—Net profit -277,670.68 -39,125.60—Other Comprehensive income
—Total comprehensive income -277,670.68 -39,125.60 (5) Excess deficit in joint ventures or associated enterprises
Accumulated unrealized Accumulated unrealized Unrealized losses at the end
Names lossesat the end of previous losses at the end of current of current period
period period
Shenzhen Tellus Automobile Services Chains 97,868.99 235.53 98,104.52
Accumulated unrealized Accumulated unrealized Unrealized losses at the end
Names lossesat the end of previous losses at the end of current of current period
period period
Co.,Ltd.
Shenzhen Xinyongtong Dongxiao Automobile
758,585.00 298,994.35 1,057,579.35 Service Co., Ltd.
Shenzhen Yongtong Xinda Inspection Equipment
381,557.52 -160,420.73 221,136.79 Co.,Ltd.
4、Significant common operation
There is no significant common operation in this reporting period.
Ⅸ、Related parties and related-party transactions
1、Parent company information
Registered Parentcompany‘s Parentcompany‘s vote Names Nature Registered capital
address shareholdingratio（%） ratio（%） Real estate development and
Shenzhen Tefa
Shenzhen management, domestic 2 ,582.82 million 49.09 49.09 Group Co.,Ltd.
commerce
Note：The finial control of the Company is Shenzhen State-owned Assets Supervision and Administration Commission
2、Information on the subsidiaries of the Company
Details refer to the Note VIII-1.
3、Information on the joint ventures and associated enterprises of the Company
Details refer to the Note VIII-3.
4、Other Related parties information
Names Relationship to the Company Shenzhen Tefa Swan Enterprise Co.,Ltd. Subject to the same party controls Shenzhen Mechanical Equipment Import and Export Co.,Ltd. Subject to the same party controls Shenzhen Tefa Real Estate Co.,Ltd. Subject to the same party controls Hongkong Yujia Investment Co., Ltd. Subject to the same party controls Shenzhen Tellus Real Estate(Yue Yang) Co.,Ltd. Subject to the same party controls Shenzhen Tefa Development Center Construction Management Co.,Ltd. Subject to the same party controls
Shenzhen Tellus Yang Chun Real Estate Co.,Ltd. Subject to the same party controls Shenzhen Tellus Real Estate(Long Gang) Co.,Ltd. Subject to the same party controls Shenzhen Tefa Tellus Property Management Co., Ltd. Subject to the same party controls Related party and related natural person of the Chengdu Hezhiyuan jewelry Co., Ltd.and Yungui Xiong
shareholder of the subsidiary Anhui Jinzun Jewellery Co., Ltd. The shareholder of the subsidiary5、Related transactions.
(1) Lease
Tellus is the leaser
Lease income Lease income lessee Type of lease recognized in current recognized in previous period period Shenzhen Ren Fu-Tellus Automotive Service Co.,Ltd. Houses leasing 5,047,619.20 5,047,618.84 Shenzhen Xinyongtong Automobile Service Co.,Ltd. Houses leasing 545,923.80 434,474.37 Shenzhen Xinyongtong Dongxiao Automobile Service Co., Ltd. Houses leasing 396,904.78 310,076.20 (2) Guarantee between related parties
①The Company as guarantor
According to the hypothecation contract signed by the company and the Ren Fu Automotive ManagementCo.,Ltd.（bellows short for Ren FuShenzhen）,from the settle date of associated company,Shenzhen Ren Fu-Tellus Automotive ServiceCo.,Ltd.（below short for Ren FuTellus）, to the end date of the joint venture contract between Ren Fu Shenzhen and the Company, the Company take35% responsibility for the loan which total amount less than RMB 100 million, and use35% equity of the Company in Ren Fu Tellus as counter guarantee pledge to Ren Fu Shenzhen. The applicable scope of this regulation includes: (1) Ren Fu Shenzhen offering entrusted loans to Ren Fu Tellus, ;( 2) Ren Fu Tellus receive bank or business loans under the guarantee of Ren Fu Shenzhen
All other conditions except above the Company as guarantorare offering guarantee to subsidiaries.
② The Company as secured creditor
SichuanTellus Jewelry Technology co., LTD is one of the subsidiaries in the Company. Chengdu Caizhiyuan Jewelry Co.is one of the shareholders in the subsidiary.Chengdu Hezhiyuan jewelry Co., Ltd and Yungui Xiong are related party and related natural person respectively in the subsidiary.SichuanTellus Jewelry Technology co., LTD is treated as the secured creditor and expected tooffer the maximum amount guarantee. The scope of
claims which is secured by the right of pledge of account receivables from Yueliang Xiao etc.The guaranteed amount is RMB 45 million.
(3) Offering services by employ associated parties
Shenzhen Zhongtian Industrial Co., Ltd. chose monitor and managementinstitute of Tellus Shuibei Project through an open bidding process. In 14th May, 2013, Shenzhen Tefa Development Center Construction Management Co., Ltd. was qualified by obtained the letter of acceptance from Shenzhen Construction Engineering Trading Center (No.20130514002C).
Shenzhen Zhongtian Industrial Co., Ltd. and Shenzhen Tefa Development Center Construction Management Co., Ltd. signed the monitor and management contract of Tellus Shuibei Jewelry Building Project in May of 2013. In accordance with the contract, entrusted fee is RMB 5,041.90 thousand. At the end of this reporting period, RMB 4,757.20 thousand of and entrusted fee had been paid.
Shenzhen Zhongtian Industrial Co., Ltd. and Shenzhen Tefa Tellus Property Management Co., Ltd. signed a supplementary contract about property management services for the phase I of Tellus Shuibei Jewelry Building. At the end of this reporting period, RMB 744.70 thousand early stage property management fee had been paid.
(4) Fees forfunds occupation of related parties
Amount of current Amount of previous Related parties Content
period periodBorrowing：
Shenzhen Tefa Group Co.,Ltd. Fees for funds occupation 928,296.36 3,206,502.33Lending：
Shenzhen Xing Long Mechanical Models Co.,Ltd. Fees for funds occupation 76,041.64 76,346.64 (5) Relatedparty‘s assets transfer and debt reorganization
Amount of current Amount of previous Related parties Content
period period Shenzhen Tefa Tellus Property 100% ownership of Shenzhen Tefa Tellus Property
14,150,000.00
Management Co., Ltd. Management Co., Ltd
(6)Rewards for the key management personnel
Items Amount of current period(RMB‘0000) Amount of previous period(RMB‘0000) Rewards for the key management personnel 634.00 640.006、Receivables and payables of related parties
(1) Receivables
Closing balance Opening balance
Names
Bad debt Bad debt Book balance Book balance
provision provision Accountsreceivables：
Shenzhen Xinyongtong Automobile Service Co.,Ltd. 1,359,506.00 927,602.00 960,731.00 927,602.00 Shenzhen Xinyongtong Dongxiao Automobile Parts Sales Co.,Ltd. 997,200.00 680,400.00 704,700.00 680,400.00 Total 2,356,706.00 1,608,002.00 1,665,431.00 1,608,002.00 Otherreceivables：
Shenzhen Tellus Automobile Services Chains Development Co.,Ltd. 1,359,297.00 1,359,297.00 1,359,297.00 1,359,297.00 Shenzhen Xinyongtong Tecnology Co.,Ltd. 116,480.22 58,240.11 116,480.22 58,240.11 Shenzhen Yongtong Xinda Inspection Equipment Co.,Ltd 529,111.24 529,111.24 522,398.47 522,398.47 Shenzhen Pilot New Chemical Materials Co.,Ltd. 660,790.09 660,790.09 660,790.09 660,790.09 Shenzhen Xing Long Mechanical Models Co.,Ltd. 2,262,724.58 1,036,172.99 2,186,682.94 998,136.92 Shenzhen Tellus Xinyongtong Automobile Service Co.,Ltd. 114,776.33 114,776.33 114,776.33 114,776.33 Total 5,043,179.46 3,758,387.76 4,960,425.05 3,713,638.92 Dvidend receivable
Shenzhen Tefa Tellus Property Management Co., Ltd. 232,683.74
Total 232,683.74
Long-term receivables:
Shenzhen Tellus Automobile Services Chain Co.,Ltd. 2,179,203.68 2,179,203.68 2,179,203.68 2,179,203.68 Total 2,179,203.68 2,179,203.68 2,179,203.68 2,179,203.68 (2) Payables
Names Closing balance Opening balance Accountspayables：
Shenzhen Tefa Real Estate Co., Ltd. 6,054,855.46 6,054,855.46 Shenzhen Mechanical Equipment Import and Export Co.,Ltd. 45,300.00 45,300.00
Names Closing balance Opening balance Shenzhen Tefa Tellus Property Management Co., Ltd. 279,793.26
Total 6,379,948.72 6,100,155.46 Otherpayables：
Shenzhen Tefa Real Estate Co., Ltd. 335,701.34 335,701.34 Hongkong Yujia Investment Co., Ltd. 2,009,360.35 2,171,300.16 Shenzhen Tefa Swan Enterprise Co.,Ltd. 20,703.25 20,703.25 Shenzhen Mechanical Equipment Import and Export Co.,Ltd. 1,554,196.80 1,576,424.94 Shenzhen Tefa Group Co.,Ltd. 51,122,660.84 50,645,612.05 Shenzhen Tellus Real Estate(Long Gang) Co.,Ltd. 1,095,742.50 1,095,742.50 Shenzhen Tellus Yang Chun Real Estate Co.,Ltd. 476,217.49 476,217.49 Shenzhen Xing Long Mechanical Models Co.,Ltd. 78,515.56 78,515.56 Shenzhen Tellus Xinyongtong Technoledge Co., Ltd. 320,000.00 320,000.00 Shenzhen Tellus Xing Investment Co.,Ltd. 29,912.61 Shenzhen Yongtong Xinda Inspection Equipment Co.,Ltd. 24,340.00 24,340.00 Anhui Jinzun Jewellery Co., Ltd. 1,330,000.00
Total 58,367,438.13 56,774,469.90Ⅹ、Commitment issues
1、Significant Commitment issues
（1）Capital commitment
Items Closing balance Opening balance Signed but not confirmed in financial report
—commitment of purchase long-term assets 100,505,887.53 126,313,353.45 Total 100,505,887.53 126,313,353.452、Contingency
（1）Lawsuits
①In October of 2005, a lawsuit was brought before Shenzhen Luo Hu DistrictPeople‘s Court by the Company, which was the recognizor of Jintian Industrial (Group) Co., Ltd.(―Jintian‖) to require Jintian to redress RMB
4,081,830 (principal: RMB 3,000,000, interest: RMB 1,051,380, legal fare: RMB 25,160 and executive fare: RMB 5,290, which were all dealt as a loss in last report term.) It was the amount money that was distrained forcibly. The Fu Tian DistrictPeople‘s Court had adjudged that the Company won the lawsuit and the forcible execution had been applied by the Company. The company has not yet received the money at the date of the approval of the financial report.
In April 2006 Shenzhen Development Bank brought an accusation againstJintian‘s overdueing loan two million U.S. dollars and the company who guaranteed for this case. The company took on the principal and all interest. After that, the company appealed to Shenzhen Luohu District People's Court, asking Jintian to repay 2,960,490 U.S. dollars and interest. In 2008, it reached Shen Luo No.937 Civil Reconciliation Agreement (2008) after the mediating action taken by the Shenzhen Luohu District People's Court. The agreement is as follows: If Jintian repay 2,960,490 U.S. dollars before October 31, 2008, the company will exempt all the interest. If Jintian can not settle the amount on time, it will pay the penalty in accordance with the People's Bank of China RMB benchmark lending rate over the same period.The company has made a progress in the property execution.The attorney from the company is consulting Jintian aboutthe liquidation scheme.Jintian is in the process of bankruptcy reorganization.
On January 29th 2018, Shenzhen Intermediate People's Court has ruled that process of bankruptcy reorganization was completed.Further distribution of money is still in progress. The company has not yet received the money from Jintian at the date of the approval of the financial report.
②Shenzhen Tellus Real Estate Development Co., Ltd.(―Real EstateCo.,‖), a wholly-owned subsidiary of the company, entered into a Joint Property Construction Contract with Shenzhen Jinlu Industrial and Trade Company(―JinluCompany‖) at November 29, 1994 to build a real estate in Shenzhen. Real Estate Co. paid RMB 9,822,500.00 to Jinlu Company as of December 31, 1996. However, Jinlu Company breached the contract and cooperated with Guangzhou Military Area Shenzhen Property Administrative Department(―GMAA‖) to develop the real estate and paid the RMB9,822,500 received from Real Estate Co. to GMAA. Therefore, Real Estate Co. lodged a claim against Jinlu Company. The Futian DistrictPeople‘s Court admitted GMAA as the third party of this case according to the law of the PRC. It was ruled by the Futian DistrictPeople‘s Court that the contract was of no effect; GMAA shall repay Jinlu Company the principal of RMB9,822,500, interests and judicial proceeding expense, which shall be transferred to Real Estate Co. within three days of the reception by Jinlu Company. GMAA applied for further trial that was allowed, and the original judgment was suspended during the retrial.
Real Estate Co., and Jinlu Company sued GMAA in March, 2005 as co-plaintiffs, appeal the judgement of enforcing the defendents deliver Yelihui Food Street (11,845㎡ which worth RMB 11,851,357) to plaintiffs. Meanwhile, the defendents should pay RMB 5,034,664.94 which is the rent income since 1998. At the same time, Real Estate Co., signed agreement with Jinlu Company stated that the Real Estate Co., will allocated
6,000㎡ of Yelihui Food Street, and the residual part belong to Jinlu Company. If the Food Streetis less than 6,000㎡, then all of it belong to Real Estate Co.. The profits gained from this case will equally allocated between Real Estate Co., and Jinlu Company. Shenzhen IntermediatePeople‘ Court tried this case on August 2010, however, the case is too complicated to make pronouncement of judgement in court.
As Real Estate Co. received Min Wu Chu Zi NO.82 civil order which stated that the Yelihui Food Street is illegal building and the Court cannot judge on it, the Court reject Real EstateCo.‘s request. The company has recognized bad debt provision in full ofinvestment fund of Tellus Real Estate.
③In 2014, the subsidiary, Shenzhen Automobile Industry and Trading Co., Ltd.,(bellow short for Automobile Industry and Trading) received the court summonsfrom Shenzhen Futian DistrictPeople‘s Court. China Huarong Asset Management Corporation Shenzhen Branch (bellow short for CHAMC)suedAutomobile Industry and Trading to take joint liability due to the claims and disputes of Shenzhen Guangming Watch Co., Ltd. and itscreditor.According to Shenzhen FutianPeople‘s Court (1997) Shen Fu―Jing‖ Zi NO.801 civil judgment,verdict the Guangming Watch Co., Ltd. repays 7 million and interest to China Citic Bank Co., Ltd,. The Guangming Watch Co., Ltd. did not repay the loan after the verdiction. Then the China Citic Bank Co., Ltd,. apply enforcement, token back RMB561,398.30，there are no more other assets to execut, Shenzhen FutianPeople‘s Court verdict Termination of execution by Shen Fu Fa―zhi‖Zi NO.102 in December10, 1998.The original debtorthe China Citic Bank Co., Ltd, transfered the debt to CHAMC in July, 2013. The company has not received a verdict yet at the date of the approval of the financial report.
④Guangming Watch Co., Ltd. was canceled the business licence by Shenzhen Adminstration of Industry and Commerce in Feb. 28, 2002. China Huarong Asset Management Corporation Shenzhen Branch sued Guangming Watch Co., Ltd. and Shenzhen Automobile Industry and Trading Co., Ltd. in May 2015, the plaintiff want the court verdict CHAMC takeover the whole right of Shen Fu―Jing‖ Zi NO.801 civil judgment(1997). Meanwhile, Shenzhen Automobile Industry and Trading Co., Ltd. did not establish a liquidate team to liquidate the associate in legal deadline,―should bear the jointliability‖.
⑤In October 2010, Shenzhen Futian District Construction Bureau sent Doc. SFJJJNO.[2010]115 Decision of Paying House and Public Utility Special Fund in Limit Time to Shenzhen Automobile Industry and Trading Co., Ltd, Shenzhen Fuyida Investment Development Co., LTD and Wenzhou Huaou Real Estate Development Co., LTD to pay RMB 2,161,910.40 of house and public utility special fund.
⑥Shenzhen Nigang Industrial Co., LTD sued the Company to Shenzhen Luohu DistrictPeople‘s Court about parcel land NO.H403-0054(B) in 2016, according to the first-instance judgement, the Company should return 1,585.84㎡ lands and RMB 347,271.74 land occupancy charge plus RMB 7,268 per month to the plaintiff. The Company had already appealed to Guangdong HigherPeople‘s Court. In September 2017, Shenzhen Tefa Huari Automobile Enterprise Co.,Ltd. has won the trial of second instance.
Ⅺ、Subsequent Event
1、Profit distribution
Pursuant to the resolution of Board at the Board ofDirectors‘ meeting on April 2nd,2018, the Company will neither distribute profits nor capitalize capital surplus for the current period. The allocation of profit resolution still need the board of shareholders to approval.
Ⅻ、Other significant events
1、Early error correction
The Company does not have any early error correction in this reporting period.
2、Debt restructuring
The Company does not have any information of debt restructuring to disclose in this reporting period.
3、Non-monetary asset replacement
The Company does not have any information of non-monetary asset replacement to disclose in this reporting period.
4、Segment reporting
Financial information of segment reporting.
Year 2017
Vehicle inspection
Jewellery Inter-segment
Items Automobile sales &Components Leasing and services Total sales elimination
sales
Principal
operating 146,150,511.84 77,745,757.53 104,689,290.86 42,719,844.04 -31,421,928.19 339,883,476.08 income
Principal
141,236,154.23 65,753,628.39 37,281,610.86 38,718,354.34 -31,436,632.87 251,553,114.95 operating cost
Total assets 32,681,904.29 97,711,493.10 2,150,019,964.74 60,842,941.31 -937,941,709.02 1,403,314,594.42 Total liabilities 43,416,707.60 59,498,814.63 682,141,153.33 4,660,481.26 -384,426,136.29 405,291,020.53 Year 2016
Vehicleinspection& Inter-segment
Items Automobile sales Leasing and services Total components sales elimination
Principal operating income 138,702,514.96 69,295,094.17 130,770,846.12 -22,363,732.26 316,404,722.99
Vehicleinspection& Inter-segment
Items Automobile sales Leasing and services Total components sales elimination
Principal operating cost 133,056,820.98 54,860,897.42 57,714,860.65 -19,422,309.23 226,210,269.82 Total assets 32,095,959.76 91,408,343.70 1,979,830,340.27 -914,333,568.75 1,189,001,074.98 Total liabilities 44,375,604.11 54,717,672.01 569,137,458.70 -387,765,996.02 280,464,738.805、Other matters
On July 20th 2017, the Company, Shenzhen Runhe investment development Co.,Ltd.(―Runhe‖),Shenzhen Xing Long Mechanical Models Co.,Ltd.,(―Xinglong‖)Shenzhen Yayu Investment Development Co., Ltd. had signed an agreement. Runhe promised to participate in open bid for30% ownership of Xinglong under the condition if the ownership was sold to the public or in the agreement. The open bid price made by Runhe could be high than 2 billion. Runhe was willing to put RMB 4 million as a security deposit for the deal. At the same time, Runhe promised that if the company is transferred theXinglong‘s ownership of Harbin First Machinery Group Co., Ltd, Runhe was willing to purchase the ownership of Xinglong at the same price. In the agreement, all parties only accepted the invitation of ownership transferring made by Run, but had not made a decision yet, which did not lead to an share transfer outcome. Up to the December 31st 2017, the Company has received the RMB 4 million deposit.
In September 2017,the company completed the share transfer deal, adding up to43% ownership of Xinglong. Pursuant to the resolution of Board at the Board ofDirectors‘ meeting on December 12th 2017, the Compay planed to sell43% ownership publicly and would not have any stake in Xinglong. As of the report date, the work of listing is still in progress.
XIII、Notes of main items in financial reports of the company
1、Accounts receivable
（1）Disclosure by category
Closing balance
Category Book balance Bad debt provision
Book Amount Proportion（%） Amount Proportion（%） value Accounts receivable of individual significance and subject to
individualimpairment assessment
Accounts receivable subject to impairment assessment by credit risk
characteristics of portfolio
Accounts receivable of individual insignificance but subject to 484,803.08 100.00 484,803.08 100.00
Closing balance
Category Book balance Bad debt provision
Book Amount Proportion（%） Amount Proportion（%） value individual impairment assessment
Total 484,803.08 100.00 484,803.08 100.00（Continued）
Opening balance
Category Book balance Bad debt provision
Book Amount Proportion（%） Amount Proportion（%） value Accounts receivable of individual significance and subject to
individualimpairment assessment
Accounts receivable subject to impairment assessment by credit risk
characteristics of portfolio
Accounts receivable of individual insignificance but subject to
484,803.08 100.00 484,803.08 100.00 individual impairment assessment
Total 484,803.08 100.00 484,803.08 100.002、Other receivables
(1) Disclosure by category
Closing balance
Category Book balance Provision for bad debts
Book balance Amount Proportion（%） Amount Proportion（%）
Other receivable ofindividual significance
and subject to individualimpairment 12,247,785.36 10.79 12,247,785.36 100.00
assessment
Other receivable subject to impairment
assessment by credit risk characteristics of 99,412,903.49 87.59 1,091,737.09 1.10 98,321,166.40 portfolio
Other receivable of individual insignificance
but subject to individual impairment 1,833,967.78 1.62 1,833,967.78 100.00
assessment
Total 113,494,656.63 100.00 15,173,490.23 13.37 98,321,166.40
（Continued）
Opening balance
Book balance Provision for bad debts
Category
Proportion Proportion
Book balance Amount Amount
（%） （%）
Other receivable ofindividual significance and subject to
12,262,363.72 10.72 12,262,363.72 100.00
individualimpairment assessment
Other receivable subject to impairment assessment by
100,230,803.79 87.65 1,231,153.76 1.23 98,999,650.03 credit risk characteristics of portfolio
Other receivable of individual insignificance but subject to
1,858,735.58 1.63 1,858,735.58 100.00
individual impairment assessment
Total 114,351,903.09 100.00 15,352,253.06 13.43 98,999,650.03① Other Receivable accounts with large amount individually and bad debt provisions wereprovided
Closing balance
Otherreceivable（Unit）
Bad debt Proportion
Other receivable Reason
provision （%）
Shenzhen ZhongHao (Group) Co.,Ltd. 5,000,000.00 5,000,000.00 100.00 Won the lawsuit,no assets recoverable Jinbeili electrical appliances Co.,Ltd. 2,706,983.51 2,706,983.51 100.00 Aging long, not expected to withdraw Shenzhen Petrochemical Industry (Group) Co.,
1,904,156.18 1,904,156.18 100.00 Aging long, not expected to withdraw Ltd.
Huatong casing Co.,Ltd. 1,212,373.79 1,212,373.79 100.00 Aging long, not expected to withdraw Shenzhen Pilot New Chemical Materials
660,790.09 660,790.09 100.00 Aging long, not expected to withdraw Co.,Ltd.
Others_VAT（Tradedepartment） 763,481.79 763,481.79 100.00 Aging long, not expected to withdraw Total 12,247,785.36 12,247,785.36
②In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision: Closing balance
Aging
Other receivable Bad debt provision Proportion（%） Within 1 year 97,003,542.42
1 to 2 years 76,346.64 3,817.33 5.00 2to 3years 261,958.19 52,391.64 20.00 Over 3 years 2,071,056.24 1,035,528.12 50.00
Closing balance
Aging
Other receivable Bad debt provision Proportion（%） Total 99,412,903.49 1,091,737.09 1.10 (2) The amount of bad debt provision during the current year is RMB178,762.83.
(3) Other receivables classified by nature
Nature Closing balance Opening balance Internal current account 96,526,430.14 97,287,270.49 Unit account 2,923,514.67 2,883,953.25 Others 14,044,711.82 14,180,679.35 Total 113,494,656.63 114,351,903.09 (4) The top five of other receivables classified by debtor at period end
Closing balance of bad Debtors Nature Closing balance Aging Proportion（%）
debt provision Shenzhen ZhongHao (Group) Co.,Ltd. Unit account 5,000,000.00 Over 3 years 4.41 5,000,000.00 Jinbeili Electrical Appliances Co.,Ltd. Unit account 2,706,983.51 Over 3 years 2.39 2,706,983.51 Shenzhen Petrochemical Industry (Group) Co.,
Unit account 1,904,156.18 Over 3 years 1.68 1,904,156.18 Ltd.
Huatong Casing Co.,Ltd. Unit account 1,212,373.79 Over 3 years 1.07 1,212,373.79Others_VAT（Tradedepartment） Unit account 763,481.79 Over 3 years 0.67 763,481.79 Total 11,586,995.27 10.22 11,586,995.27 (5) Accounts receivables related to government subsidy
There are no accounts receivables related to government subsidy in this reporting period.
(6) Terminated recognize of other receivables due to financial assets transfer.
There is noterminated recognize of other receivables due to financial assets transfer.
(7)Assets or liabilities caused by transferring other receivables
There are no assets or liabilities caused by transferring other receivables.
3、Long-term equity investments
(1) Disclosure by category
Items Closing balance Opening balance
Bad debt Bad debt
Book balance Book value Book balance Book value provision provision
Investment to the
555,771,572.73 1,956,000.00 553,815,572.73 528,823,572.73 1,956,000.00 526,867,572.73 subsidiaries
Investment to joint
ventures/as-sociated 245,802,348.25 9,787,162.32 236,015,185.93 169,145,256.02 9,787,162.32 159,358,093.70 enterprises
Total 801,573,920.98 11,743,162.32 789,830,758.66 697,968,828.75 11,743,162.32 686,225,666.43（2）Investment to the subsidiaries
Impairment Closing balance Closing
Names Opening balance Increased Decreased provision in of impairment balance
current year provision Shenzhen Tefa Tellus Real
31,152,888.87 31,152,888.87
Estate Co.,Ltd.
Shenzhen Tellus Real Estate
2,000,000.00 2,000,000.00
Exchange Co.,Ltd.
Shenzhen Tefa Tellus
Property Management Co., 7,050,000.00 7,050,000.00
Ltd.
Shenzhen Tellus Xinyongtong
Automobile Development 57,672,885.22 57,672,885.22
Co.,Ltd.
Shenzhen Zhongtian
270,708,622.90 270,708,622.90
Industrial Co.,Ltd
Shenzhen Automobile
126,251,071.57 126,251,071.57
Industry and Trading Co.,Ltd.
Shenzhen Tefa Huari
Automobile Enterprise 19,224,692.65 19,224,692.65
Co.,Ltd.
Shenzhen Huari Toyota 1,807,411.52 1,807,411.52
Impairment Closing balance Closing
Names Opening balance Increased Decreased provision in of impairment balance
current year provision Automobile Co.,Ltd.
Shenzhen Xinyongtong
Automobile Inspection 10,000,000.00 10,000,000.00
Equipment Co.,Ltd.
Shenzhen Hanli Hi-technology
1,956,000.00 1,956,000.00 1,956,000.00 CeramicsCo.,Ltd.*
Anhui Tellus Star Jewelry
1,000,000.00 3,998,000.00 4,998,000.00
Investment Co., LTD
SichuanTellus Jewelry
30,000,000.00 30,000,000.00
Technology co., LTD
Total 528,823,572.73 33,998,000.00 7,050,000.00 555,771,572.73 1,956,000.00Note：*The detail information of Shenzhen Hanli Hi-technology Ceramics Co.,Ltd.refers to Note VIII-1.Subsidiaries.
(3) Investment to joint ventures and associated enterprises
Increased /Decreased in reporting period
Adjust
De ment of
Gain/Loss of
Names Opening balance
cre otherco Other equity Increased investment under
as mprehe changes equity method
ed nsive
income
I. Joint ventures
Shenzhen Tellus Jimeng Investment Co.,Ltd. 57,180,913.33 -936,636.49
Shenzhen Tellus Xing Investment Co.,Ltd. 10,583,444.88 279,948.88
Subtotal 67,764,358.21 -656,687.61
II. Associated enterprises
Shenzhen Xing Long Mechanical Model Co.,Ltd. 15,878,254.74 67,600,000.00 281,075.09 1,033,669.00 Shenzhen Tellus Automobile Service Development
Co.,Ltd.
Shenzhen Ren Fu-Tellus Automotive Service 75,715,480.75 17,499,035.75
Increased /Decreased in reporting period
Adjust
De ment of
Gain/Loss of
Names Opening balance
cre otherco Other equity Increased investment under
as mprehe changes equity method
ed nsive
income
Co.,Ltd.
Hunan Changyang IndustrialCo.,Ltd.* 1,810,540.70
Shenzhen Jiecheng ElectronicCo.,Ltd.* 3,225,000.00
Shenzhen Pilot New Chemical MaterialsCo.,Ltd.* 4,751,621.62
Subtotal 101,380,897.81 67,600,000.00 17,780,110.84 1,033,669.00 Total 169,145,256.02 67,600,000.00 17,123,423.23 1,033,669.00（continued）
Increased /Decreased in reporting period
Closing balance Names
Declaration of cash Withdrawn impairment
Closing balance of impairment Other
dividends or profits provision
provision I. Joint ventures
Shenzhen Tellus Jimeng Investment
56,244,276.84
Co.,Ltd.
Shenzhen Tellus Xing Investment Co.,Ltd. 10,863,393.76
Subtotal 67,107,670.60
II. Associated enterprises
Shenzhen Xing Long Mechanical Model
84,792,998.83
Co.,Ltd.
Shenzhen Tellus Automobile Service
Development Co.,Ltd.
Shenzhen Ren Fu-Tellus Automotive
9,100,000.00 84,114,516.50
Service Co.,Ltd.
Hunan Changyang IndustrialCo.,Ltd.* 1,810,540.70 1,810,540.70 Shenzhen Jiecheng ElectronicCo.,Ltd.* 3,225,000.00 3,225,000.00
Increased /Decreased in reporting period
Closing balance Names
Declaration of cash Withdrawn impairment
Closing balance of impairment Other
dividends or profits provision
provision Shenzhen Pilot New Chemical Materials
4,751,621.62 4,751,621.62Co.,Ltd.*
Subtotal 9,100,000.00 178,694,677.65 9,787,162.32 Total 9,100,000.00 245,802,348.25 9,787,162.32Note:*Full provision for impairment has been made for these companies due tothe revocation of Business License.
4、Operating income and operating costs
Current year Previous year
Items
Income Cost Income Cost Principal operating activities 44,035,720.63 3,662,936.04 42,675,858.14 3,596,474.49 Total 44,035,720.63 3,662,936.04 42,675,858.14 3,596,474.495、Investment Income
Items Current year Previous year Income from long-term equity investment measured by cost method 547,184.35 6,582,176.54 Income from long-term equity investment measured by adopting the equity method 17,123,423.23 6,984,139.28 Investment income received from holding of held-to-maturity investment 7,332,683.74
Income fromfinancial products 6,046,686.15 3,754,547.99 Total 31,049,977.47 17,320,863.81XIV、Supplementary information
1、Non-recurring profit and lossfor the current year
Items Amount Description Gains or losses from disposal of non-current assets after expending impairment provisions 5,523,267.93
Exceeded-authority approved, non-official approved or accidental tax repayment and relief
Government grants recognized through profits or loss for the current reporting period, excluding grants
25,753.22
which are closely related to theCompany‘s operating activities and of which the quota or approval is
Items Amount Description eligible for automatic renewal in accordance with relevant regulations
Financial resource usage fees charged on non-financial institution recognized through profit or loss for the
76,041.64
current reporting period
Gains arising from bargain purchase in business combination and investments in associates and joint
ventures
Non-monetary assets exchange
Consigned investment and asset management 6,606,218.86
Impairment provision resulting from force majeure, e.g. natural disasters
Debt restructuring
Entity restructuring expenses, e.g., expenditure for layoff of employees, integration expenses, etc.
Profit or loss attributable to the evidently unfair portion of transaction price, being transacted price in
excess of fair transaction price, of a transaction
Net profits or losses achieved by an acquired under-common-control entity during the period from the start of the
period to the acquisition date
Gains or losses arising from contingent events unconnected with theCompany‘s daily operating activities
Fair value changes of tradable financial assets and tradable financial liabilities held and gains or losses
arising from disposals of tradable financial assets, tradable financial liabilities and available-for-sale
financial assets, excluding hedging contracts relevant to theCompany‘s daily operating activities
Reversal of provision for account receivables that are tested for impairment losses individually 15,000.00
Profit or loss on entrusted loans
Profit or loss on changes in the fair value of investment properties that are subsequently measured using
the fair value model
Effects on profit or loss of one-off adjustment to profit or loss for the period according to the period
requirements of tax laws and accounting laws and regulations
Custodian fees earned from entrusted operation
Other non-operating income or expenses other than the above 690,397.76
Other profit or loss that meets the definition of non-recurring profit or loss
Subtotal 12,936,679.41
Items Amount Description Tax effects 59,964.10
Effects attributable to minority interests (after tax) 445,010.10
Total 12,431,705.21
Note：‖+‖ means income or gain and―-‖ means loss or expense.
The Company defines items as non-recurring profit or loss items according to―Information Disclosure and Presentation Rules for Companies Making Public Offering of Securities No.1---Non-recurring Profit orLoss‖(CSRCNo.[2008]43).
2、Rate of return on net assets and earnings per share
Rate of the weighted average
Earnings per share
Profit category
netprofit（%）
Basic earnings per share Diluted earnings per share Net profit attributable to ordinary
7.1989 0.2249 0.2249 shareholders
Recurring profit or loss attributable to
5.8604 0.1831 0.1831 ordinary shareholders
Section XII. Documents available for Reference
The Company reserved completed integrated documents for CSRC, SZSE, relevant departments and public investor for reference, including:
1. Original Accounting Statement of 2017 carrying the signatures and seals of the legal representative, general manager, CFO and manager of Financial Department;
2. OriginalAuditors‟ Report (Chinese and English Version) carrying the seals of accounting firms, and signatures and seals of the CPA;
3. All original documents and notifications of the Company disclosed in newspapers that designated by CSRC in report period;
4. Annual report disclosed in other securities market (Summary).