Section X Financial Report
I.Auditor’s Report
Whether the semi-annual report has been audited?
□Yes√ No
The semi-annual report of the Company has not been audited.
II. Financial Statements
The unit of the financial statements attached: RMB
1. Consolidated Balance Sheet
Prepared by Guangdong Rieys Group Company Ltd.
June 30, 2017
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current assets:|||
|Monetary funds|7,018,207.88|123,886,976.82|
|Settlement reserve|||
|Interbank lendings|||
|Financial assets at fair value through|||
||9,977,189.76|15,499,631.52|
|profit/loss|||
|Derivative financial assets|||
|Notes receivable|||
|Accounts receivable|18,387,843.59|43,557,743.28|
|Accounts paid in advance|8,504,750.72|207,424.73|
|Premiums receivable|||
|Reinsurance premiums receivable|||
|Receivable reinsurance contract|||
|reserve|||
|Interest receivable|||
|Dividends receivable|||
|Other accounts receivable|51,081,880.32|41,739,384.75|
|Financial assets purchased under|||
|agreements to resell|||

||||
|-|-|-|
|Inventories|114,555,062.41|74,939,082.16|
|Assets held for sale|||
|Non-current assets due within one|||
|year|||
|Other current assets|15,714,694.76|9,985,213.09|
|Total current assets|225,239,629.44|309,815,456.35|
|Non-current assets:|||
|Loans and advances to customers|||
|Available-for-sale financial assets|||
|Held-to-maturity investments|||
|Long-term accounts receivable|||
|Long-term equity investments|270,015,275.93|149,998,221.71|
|Investment property|||
|Fixed assets|42,702,470.53|44,012,361.38|
|Construction in progress|||
|Engineering materials|||
|Disposal of fixed assets|||
|Productive living assets|||
|Oil-gas assets|||
|Intangible assets|9,216,788.84|9,355,420.76|
|R&D expenses|||
|Goodwill|2,395,820.87|2,395,820.87|
|Long-term deferred expense|||
|Deferred income tax assets|4,579,598.53|4,617,398.53|
|Other non-current assets|||
|Total non-current assets|328,909,954.70|210,379,223.25|
|Total assets|554,149,584.14|520,194,679.60|
|Current liabilities:|||
|Short-term borrowings|||
|Borrowings from the Central Bank|||
|Money deposits accepted and|||
|inter-bank deposits|||
|Interbank borrowings|||
|Financial liabilities at fair value|||
|through profit/loss|||

||||
|-|-|-|
|Derivative financial liabilities|||
|Notes payable|||
|Accounts payable|19,318,197.56|25,524,801.45|
|Accounts received in advance|32,362,367.65|482,960.95|
|Financial assets sold for repurchase|||
|Fees and commissions payable|||
|Payroll payable|400,257.72|412,376.20|
|Taxes payable|33,827,155.34|33,965,898.62|
|Interest payable|||
|Dividends payable|||
|Other accounts payable|68,492,796.93|55,197,870.96|
|Reinsurance premiums payable|||
|Insurance contract reserve|||
|Payables for acting trading of|||
|securities|||
|Payables for acting underwriting of|||
|securities|||
|Liabilities held for sale|||
|Non-current liabilities due within one|||
|year|||
|Other current liabilities|||
|Total current liabilities|154,400,775.20|115,583,908.18|
|Non-current liabilities:|||
|Long-term borrowings|||
|Bonds payable|||
|Of which: Preference shares|||
|Perpetual bonds|||
|Long-term accounts payable|||
|Long-term payroll payable|||
|Special payables|||
|Provisions|||
|Deferred income|||
|Deferred income tax liabilities|||
|Other non-current liabilities|||
|Total non-current liabilities|||

||||
|-|-|-|
|Total liabilities|154,400,775.20|115,583,908.18|
|Owners’ equity:|||
|Share capital|318,600,000.00|318,600,000.00|
|Other equity instruments|||
|Of which: Preference shares|||
|Perpetual bonds|||
|Capital reserve|52,303,274.79|52,129,496.58|
|Less: Treasury shares|||
|Other comprehensive income|||
|Special reserve|||
|Surplus reserve|86,036,260.20|86,036,260.20|
|Provisions for general risks|||
|Retained earnings|-98,092,507.78|-90,095,403.00|
|Equity attributable to owners of the|||
||358,847,027.21|366,670,353.78|
|Company|||
|Minority interests|40,901,781.73|37,940,417.64|
|Total owners’ equity|399,748,808.94|404,610,771.42|
|Total liabilities and owners’ equity|554,149,584.14|520,194,679.60|

 Legal representative: Ding Lihong Chief of the accounting work: Chen Jincai Chief of the accounting organ: Zeng Zhihua
2. Balance Sheet of the Company
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current assets:|||
|Monetary funds|1,677,088.41|119,117,878.02|
|Financial assets at fair value through|||
|profit/loss|||
|Derivative financial assets|||
|Notes receivable|||
|Accounts receivable|||
|Accounts paid in advance|29,895.87|66,198.00|
|Interest receivable|||
|Dividends receivable|||
|Other accounts receivable|66,887,351.87|75,929,989.74|

||||
|-|-|-|
|Inventories|||
|Assets held for sale|||
|Non-current assets due within one|||
|year|||
|Other current assets|||
|Total current assets|68,594,336.15|195,114,065.76|
|Non-current assets:|||
|Available-for-sale financial assets|||
|Held-to-maturity investments|||
|Long-term accounts receivable|||
|Long-term equity investments|350,015,284.19|224,998,229.97|
|Investment property|||
|Fixed assets|41,009,010.69|42,121,038.15|
|Construction in progress|||
|Engineering materials|||
|Disposal of fixed assets|||
|Productive living assets|||
|Oil-gas assets|||
|Intangible assets|9,216,788.84|9,355,420.76|
|R&D expenses|||
|Goodwill|||
|Long-term deferred expense|||
|Deferred income tax assets|2,718,629.60|2,718,629.60|
|Other non-current assets|||
|Total non-current assets|402,959,713.32|279,193,318.48|
|Total assets|471,554,049.47|474,307,384.24|
|Current liabilities:|||
|Short-term borrowings|||
|Financial liabilities at fair value|||
|through profit/loss|||
|Derivative financial liabilities|||
|Notes payable|||
|Accounts payable|19,442.64|19,442.64|
|Accounts received in advance|376,757.66|164,667.00|
|Payroll payable|215,067.82|202,963.22|

||||
|-|-|-|
|Taxes payable|27,214,831.30|26,764,743.75|
|Interest payable|||
|Dividends payable|||
|Other accounts payable|45,131,482.40|42,223,361.35|
|Liabilities held for sale|||
|Non-current liabilities due within one|||
|year|||
|Other current liabilities|||
|Total current liabilities|72,957,581.82|69,375,177.96|
|Non-current liabilities:|||
|Long-term borrowings|||
|Bonds payable|||
|Of which: Preference shares|||
|Perpetual bonds|||
|Long-term payables|||
|Long-term payroll payable|||
|Special payables|||
|Provisions|||
|Deferred income|||
|Deferred income tax liabilities|||
|Other non-current liabilities|||
|Total non-current liabilities|||
|Total liabilities|72,957,581.82|69,375,177.96|
|Owners’ equity:|||
|Share capital|318,600,000.00|318,600,000.00|
|Other equity instruments|||
|Of which: Preference shares|||
|Perpetual bonds|||
|Capital reserve|52,129,496.58|52,129,496.58|
|Less: Treasury shares|||
|Other comprehensive income|||
|Special reserve|||
|Surplus reserve|86,036,260.20|86,036,260.20|
|Retained earnings|-58,169,289.13|-51,833,550.50|
|Total owners’ equity|398,596,467.65|404,932,206.28|

||||
|-|-|-|
|Total liabilities and owners’ equity|471,554,049.47|474,307,384.24|

 3. Consolidated Income Statement
Unit: RMB
||||
|-|-|-|
|Item|January-June 2017|January-June 2016|
|1. Operating revenues|190,460,084.85|200,186,975.70|
|Including: Sales income|190,460,084.85|200,186,975.70|
|Interest income|||
|Premium income|||
|Fee and commission income|||
|2. Operating costs|187,846,722.05|199,776,483.69|
|Including: Cost of sales|178,534,654.04|190,594,842.57|
|Interest expenses|||
|Fee and commission expenses|||
|Surrenders|||
|Net claims paid|||
|Net amount provided as insurance|||
|contract reserve|||
|Expenditure on policy dividends|||
|Reinsurance premium|||
|Taxes and surtaxes|654,183.56|122,989.29|
|Selling expenses|1,434,407.39|1,189,892.46|
|Administrative expenses|7,324,503.57|6,961,491.74|
|Finance costs|310,534.11|739,933.86|
|Asset impairment loss|-411,560.62|167,333.77|
|Add: Profit on fair value changes (“-”|||
||-5,539,925.21|0.00|
|means loss)|||
|Investment income (“-” means loss)|33,294.77|-1,522.94|
|Including: Share of profit/loss of|||
|associates and joint ventures|||
|Exchange gains (“-” means loss)|||
|Other gains|||
|3. Operating profit (“-” means loss)|-2,893,267.64|408,969.07|
|Add: Non-operating income|0.33|0.44|
|Including: Profit on disposal of|||
|non-current assets|||

||||
|-|-|-|
|Less: Non-operating expense|2,404.16|200,000.00|
|Including: Loss on disposal of|||
|non-current assets|||
|4. Total profit (“-” means loss)|-2,895,671.47|208,969.51|
|Less: Corporate income tax|2,307,032.61|1,848,553.62|
|5. Net profit (“-” means loss)|-5,202,704.08|-1,639,584.11|
|Net profit attributable to owners of|||
||-7,997,104.78|-4,308,101.71|
|the Company|||
|Minority interests’ income|2,794,400.70|2,668,517.60|
|6. Other comprehensive income net of tax|||
|Other comprehensive income net of|||
|tax attributable to owners of the|||
|Company|||
|6.1 Other comprehensive income|||
|that will not be reclassified into|||
|profit/loss|||
|6.1.1 Changes in net liabilities|||
|or assets with a defined benefit plan upon|||
|re-measurement|||
|6.1.2 Share of other|||
|comprehensive income of investees that|||
|cannot be reclassified into profit/loss|||
|under the equity method|||
|6.2 Other comprehensive income|||
|to be subsequently reclassified into|||
|profit/loss|||
|6.2.1 Share of other|||
|comprehensive income of investees that|||
|will be reclassified into profit/loss under|||
|the equity method|||
|6.2.2 Profit/loss on fair value|||
|changes of available-for-sale financial|||
|assets|||
|6.2.3 Profit/loss on|||
|reclassifying held-to-maturity|||
|investments into available-for-sale|||
|financial assets|||
|6.2.4 Effective profit/loss on|||
|cash flow hedges|||
|6.2.5 Currency translation|||
|differences|||
|6.2.6 Other|||

||||
|-|-|-|
|Other comprehensive income net o|f||
|tax attributable to minority interests|||
|7. Total comprehensive income|-5,202,704.08|-1,639,584.11|
|Attributable to owners of th|e-7,997,104.78||
|||-4,308,101.71|
|Company|||
|Attributable to minority interests|2,794,400.70|2,668,517.60|
|8. Earnings per share|||
|8.1 Basic earnings per share|-0.030|-0.010|
|8.2 Diluted earnings per share|-0.030|-0.010|

 Where business mergers under the same control occurred in this Reporting Period, the net profit achieved by the
merged parties before the business mergers was RMB0.00, with the corresponding amount for the last period being RMB0.00.
Legal representative: Ding Lihong Chief of the accounting work: Chen Jincai Chief of the accounting organ: Zeng Zhihua
4. Income Statement of the Company
Unit: RMB
||||
|-|-|-|
|Item|January-June 2017|January-June 2016|
|1. Operating revenues|637,064.14|0.00|
|Less: Operating costs|166,356.27|0.00|
|Taxes and surtaxes|418,155.62||
|Selling expenses|||
|Administrative expenses|5,868,665.93|4,584,885.65|
|Finance costs|536,679.17|642,274.67|
|Asset impairment loss|||
|Add: profit on fair value changes (“-”means loss)|||
|Investment income (“-” meansloss)|||
||17,054.22||
|Including: Share of profit/loss ofassociates and joint ventures|||
|Other gains|||
|2. Operating profit (“-” means loss)|-6,335,738.63|-5,227,160.32|
|Add: Non-operating income|||
|Including: Profit on disposal ofnon-current assets|||
|Less: Non-operating expense||200,000.00|

||||
|-|-|-|
|Including: Loss on disposal of|||
|non-current assets|||
|3. Total profit (“-” means loss)|-6,335,738.63|-5,427,160.32|
|Less: Corporate income tax|||
|4. Net profit (“-” means loss)|-6,335,738.63|-5,427,160.32|
|5. Other comprehensive income net of|||
|tax|||
|5.1 Other comprehensive income that|||
|will not be reclassified into profit and|||
|loss|||
|5.1.1 Changes in net liabilities or|||
|assets with a defined benefit plan upon|||
|re-measurement|||
|5.1.2 Share of other|||
|comprehensive income of investees that|||
|cannot be reclassified into profit/loss|||
|under the equity method|||
|5.2 Other comprehensive income to|||
|be subsequently reclassified into|||
|profit/loss|||
|5.2.1 Share of other|||
|comprehensive income of investees that|||
|will be reclassified into profit/loss|||
|under the equity method|||
|5.2.2 Profit/loss on fair value|||
|changes of available-for-sale financial|||
|assets|||
|5.2.3 Profit/loss on reclassifying|||
|held-to-maturity investments into|||
|available-for-sale financial assets|||
|5.2.4 Effective profit/loss on cash|||
|flow hedges|||
|5.2.5 Currency translation|||
|differences|||
|5.2.6 Other|||
|6. Total comprehensive income|-6,335,738.63|-5,427,160.32|
|7. Earnings per share|||
|7.1 Basic earnings per share|-0.020|-0.020|
|7.2 Diluted earnings per share|-0.020|-0.020|

5. Consolidated Cash Flow Statement
Unit: RMB
||||
|-|-|-|
|Item|January-June 2017|January-June 2016|
|1. Cash flows associated with operating|||
|activities:|||
|Cash received from sale of|||
||279,104,141.77|235,472,158.88|
|commodities and rendering of service|||
|Net increase in money deposits from|||
|customers and interbank placements|||
|Net increase in loans from the|||
|Central Bank|||
|Net increase in funds borrowed from|||
|other financial institutions|||
|Cash received from premium of|||
|original insurance contracts|||
|Net cash received from reinsurance|||
|business|||
|Net increase in deposits of policy|||
|holders and investment fund|||
|Net increase in disposal of financial|||
|assets at fair value through profit/loss|||
|Interest, fees and commissions|||
|received|||
|Net increase in interbank borrowings|||
|Net increase in funds in repurchase|||
|business|||
|Tax refunds received|||
|Cash generated by other operating|||
||35,298,621.21|612,905,230.54|
|activities|||
|Subtotal of cash generated by operating|||
||314,402,762.98|848,377,389.42|
|activities|||
|Cash paid for goods and services|280,323,737.91|231,558,558.05|
|Net increase in loans and advances to|||
|customers|||
|Net increase in funds deposited in the|||
|Central Bank and interbank placements|||
|Cash paid for claims of original|||
|insurance contracts|||
|Interest, fees and commissions paid|||
|Cash paid as policy dividends|||
|Cash paid to and for employees|2,049,087.43|2,327,459.34|

||||
|-|-|-|
|Taxes paid|3,962,251.90|2,120,127.84|
|Cash used in other operating|||
||24,934,811.29|608,577,429.24|
|activities|||
|Subtotal of cash used in operating|||
||311,269,888.53|844,583,574.47|
|activities|||
|Net cash generated by operating|||
||3,132,874.45|3,793,814.95|
|activities|||
|2. Cash flows associated with investing|||
|activities:|||
|Cash received from retraction of|||
||1,326,057.76|2,867.06|
|investments|||
|Cash received as investment income|50,187.43|10.00|
|Net cash received from disposal of|||
|fixed assets, intangible assets and other|||
|long-term assets|||
|Net cash received from disposal of|||
|subsidiaries or other business units|||
|Cash generated by other investing|||
|activities|||
|Subtotal of cash generated by investing|||
||1,376,245.19|2,877.06|
|activities|||
|Cash paid to acquire fixed assets,|||
|intangible assets and other long-term||1,393,075.92|
|assets|||
|Cash paid for investment|121,377,497.91||
|Net increase in pledged loans|||
|Net cash paid to acquire subsidiaries|||
|and other business units|||
|Cash used in other investing|||
|activities|||
|Subtotal of cash used in investing|||
||121,377,497.91|1,393,075.92|
|activities|||
|Net cash generated by investing|||
||-120,001,252.72|-1,390,198.86|
|activities|||
|3. Cash flows associated with financing|||
|activities:|||
|Cash received from capital|||
|contributions|||
|Including: Cash received from|||
|minority shareholder investments by|||
|subsidiaries|||
|Cash received as borrowings|||

||||
|-|-|-|
|Cash received from issuance of|||
|bonds|||
|Cash generated by other financing|||
|activities|||
|Subtotal of cash generated by financing|||
|activities|||
|Repayment of borrowings|||
|Cash paid for interest expenses and|||
|distribution of dividends or profit|||
|Including: dividends or profit paid|||
|by subsidiaries to minority interests|||
|Cash used in other financing|||
|activities|||
|Sub-total of cash used in financing|||
|activities|||
|Net cash generated by financing|||
|activities|||
|4. Effect of foreign exchange rate|||
||-390.67|66.00|
|changes on cash and cash equivalents|||
|5. Net increase in cash and cash|||
||-116,868,768.94|2,403,682.09|
|equivalents|||
|Add: Opening balance of cash and|||
||123,886,976.82|301,471,305.21|
|cash equivalents|||
|6. Closing balance of cash and cash|||
||7,018,207.88|303,874,987.30|
|equivalents|||

6. Cash Flow Statement of the Company
Unit: RMB
||||
|-|-|-|
|Item|January-June 2017|January-June 2016|
|1. Cash flows associated with operating|||
|activities:|||
|Cash received from sale of|||
|||395,200.00|
|commodities and rendering of service|||
|Tax refunds received|||
|Cash generated by other operating|||
||36,632,375.31|8,443,529.07|
|activities|||
|Subtotal of cash generated by operating|||
||36,632,375.31|8,838,729.07|
|activities|||
|Cash paid for goods and services|||
|Cash paid to and for employees|846,506.12|638,288.55|
|Taxes paid|27,707.62|9,663.86|

||||
|-|-|-|
|Cash used in other operating|||
||28,198,951.18|253,940,952.94|
|activities|||
|Subtotal of cash used in operating|||
||29,073,164.92|254,588,905.35|
|activities|||
|Net cash generated by operating|||
||7,559,210.39|-245,750,176.28|
|activities|||
|2. Cash flows associated with investing|||
|activities:|||
|Cash received from retraction of|||
|investments|||
|Cash received as investment income|||
|Net cash received from disposal of|||
|fixed assets, intangible assets and other|||
|long-term assets|||
|Net cash received from disposal of|||
|subsidiaries or other business units|||
|Cash generated by other investing|||
|activities|||
|Subtotal of cash generated by investing|||
|activities|||
|Cash paid to acquire fixed assets,|||
|intangible assets and other long-term||1,180,000.00|
|assets|||
|Cash paid for investment|120,000,000.00||
|Net cash paid to acquire subsidiaries|||
||5,000,000.00||
|and other business units|||
|Cash used in other investing|||
|activities|||
|Subtotal of cash used in investing|||
||125,000,000.00|1,180,000.00|
|activities|||
|Net cash generated by investing|||
||-125,000,000.00|-1,180,000.00|
|activities|||
|3. Cash flows associated with financing|||
|activities:|||
|Cash received from capital|||
|contributions|||
|Cash received as borrowings|||
|Cash received from issuance of|||
|bonds|||
|Cash generated by other financing|||
|activities|||
|Subtotal of cash generated by financing|||
|activities|||

||||
|-|-|-|
|Repayment of borrowings|||
|Cash paid for interest expenses anddistribution of dividends or profit|||
|Cash used in other financingactivities|||
|Sub-total of cash used in financingactivities|||
|Net cash generated by financingactivities|||
|4. Effect of foreign exchange ratechanges on cash and cash equivalents|||
|5. Net increase in cash and cashequivalents|||
||-117,440,789.61|-246,930,176.28|
|Add: Opening balance of cash andcash equivalents|||
||119,117,878.02|250,310,105.45|
|6. Closing balance of cash and cashequivalents|||
||1,677,088.41|3,379,929.17|

7. Consolidated Statement of Changes inOwners’ Equity
January-June 2017
Unit: RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||January-June 2017|||||||||||||
||Equity attributable to owners of the Company|||||||||||||
|||Other equity||||||||||||
|Item|||||||Other||||Retaine|Minorit|Total|
|||instruments||||Less:||||General||||
||Share||||Capital||compre|Special|Surplus||d|y|owners’|
|||Prefer|Perpet|||Treasur||||risk||||
||capital||||reserve||hensive|reserve|reserve||earning|interests|equity|
|||ence|ual|Other||y shares||||reserve||||
||||||||income||||s|||
|||shares|bonds|||||||||||
|1. Balance at the|318,60|||||||||||||
||||||52,129,||||86,036,||-90,095,|37,940,|404,610|
|end of the prior|0,000.|||||||||||||
||||||496.58||||260.20||403.00|417.64|,771.42|
|year|00|||||||||||||
|Add: Changes||||||||||||||
|in accounting||||||||||||||
|policies||||||||||||||
|Correction of||||||||||||||
|errors in prior||||||||||||||
|periods||||||||||||||
|Business||||||||||||||
|mergers under the||||||||||||||
|same control||||||||||||||
|Other||||||||||||||

||||||||
|-|-|-|-|-|-|-|
|2. Balance at the|318,60||||||
|||52,129,|86,036,|-90,095,|37,940,|404,610|
|beginning of the|0,000.||||||
|||496.58|260.20|403.00|417.64|,771.42|
|year|00||||||
|3. Increase/|||||||
|decrease in the||173,778||-7,997,1|2,961,3|-4,861,9|
|period (“-” means||.21||04.78|64.09|62.48|
|decrease)|||||||
|3.1 Total|||||||
|||||-7,997,1|2,794,4|-5,202,7|
|comprehensive|||||||
|||||04.78|00.70|04.08|
|income|||||||
|3.2 Capital|||||||
|increased and|||||||
|reduced by owners|||||||
|3.2.1|||||||
|Ordinary shares|||||||
|increased by|||||||
|shareholders|||||||
|3.2.2 Capital|||||||
|increased by|||||||
|holders of other|||||||
|equity instruments|||||||
|3.2.3|||||||
|Amounts of|||||||
|share-based|||||||
|payments charged|||||||
|to owners’ equity|||||||
|3.2.4 Other|||||||
|3.3 Profit|||||||
|distribution|||||||
|3.3.1|||||||
|Appropriation to|||||||
|surplus reserve|||||||
|3.3.2|||||||
|Appropriation to|||||||
|general risk|||||||
|provisions|||||||
|3.3.3|||||||
|Appropriation to|||||||
|owners (or|||||||
|shareholders)|||||||
|3.3.4 Other|||||||
|3.4 Internal||173,778|||166,963|340,741|
|carry-forward of||.21|||.39|.60|

||||||||
|-|-|-|-|-|-|-|
|owners’ equity|||||||
|3.4.1 New|||||||
|increase of capital|||||||
|(or share capital)|||||||
|from capital|||||||
|reserve|||||||
|3.4.2 New|||||||
|increase of capital|||||||
|(or share capital)|||||||
|from surplus|||||||
|reserve|||||||
|3.4.3 Surplus|||||||
|reserve for making|||||||
|up loss|||||||
|3.4.4 Other|||||||
|3.5 Special reserve|||||||
|3.5.1|||||||
|Withdrawn for the|||||||
|period|||||||
|3.5.2 Used in|||||||
|the period|||||||
|3.6 Other|||||||
||318,60|||||399,748,808.94|
|||52,303,|86,036,|-98,092,|40,901,||
|4. Closing balance|0,000.||||||
|||274.79|260.20|507.78|781.73||
||00||||||

January-June 2016
Unit: RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||January-June 2016|||||||||||||
||Equity attributable to owners of the Company|||||||||||||
|||Other equity||||||||||Minorit||
|Item|||||||Other||||||Total|
|||instruments||||Less:||||General|Retaine|y||
||Share||||Capital||compre|Special|Surplus||||owners’|
|||Prefer|Perpet|||Treasur||||risk|d|interest||
||capital||||reserve||hensive|reserve|reserve||||equity|
|||ence|ual|Other||y shares||||reserve|earnings|s||
||||||||income|||||||
|||shares|bonds|||||||||||
|1. Balance at the|318,60|||||||||||||
||||||52,129,||||86,036,||-92,329,|33,357,|397,794|
|end of the prior|0,000.|||||||||||||
||||||496.58||||260.20||076.97|710.95|,390.76|
|year|00|||||||||||||
|Add: Changes||||||||||||||
|in accounting||||||||||||||
|policies||||||||||||||
|Correction of||||||||||||||

||||||||
|-|-|-|-|-|-|-|
|errors in prior|||||||
|periods|||||||
|Business|||||||
|mergers under the|||||||
|same control|||||||
|Other|||||||
|2. Balance at the|318,60||||||
|||52,129,|86,036,|-92,329,|33,357,|397,794|
|beginning of the|0,000.||||||
|||496.58|260.20|076.97|710.95|,390.76|
|year|00||||||
|3. Increase/|||||||
|decrease in the||||2,233,6|4,582,7|6,816,3|
|period (“-” means||||73.97|06.69|80.66|
|decrease)|||||||
|3.1 Total|||||||
|||||2,233,6|4,582,7|6,816,3|
|comprehensive|||||||
|||||73.97|06.69|80.66|
|income|||||||
|3.2 Capital|||||||
|increased and|||||||
|reduced by owners|||||||
|3.2.1|||||||
|Ordinary shares|||||||
|increased by|||||||
|shareholders|||||||
|3.2.2 Capital|||||||
|increased by|||||||
|holders of other|||||||
|equity instruments|||||||
|3.2.3|||||||
|Amounts of|||||||
|share-based|||||||
|payments charged|||||||
|to owners’ equity|||||||
|3.2.4 Other|||||||
|3.3 Profit|||||||
|distribution|||||||
|3.3.1|||||||
|Appropriation to|||||||
|surplus reserve|||||||
|3.3.2|||||||
|Appropriation to|||||||
|general risk|||||||
|provisions|||||||
|3.3.3|||||||

||||||||
|-|-|-|-|-|-|-|
|Appropriation to|||||||
|owners (or|||||||
|shareholders)|||||||
|3.3.4 Other|||||||
|3.4 Internal|||||||
|carry-forward of|||||||
|owners’ equity|||||||
|3.4.1 New|||||||
|increase of capital|||||||
|(or share capital)|||||||
|from capital|||||||
|reserve|||||||
|3.4.2 New|||||||
|increase of capital|||||||
|(or share capital)|||||||
|from surplus|||||||
|reserve|||||||
|3.4.3 Surplus|||||||
|reserve for making|||||||
|up loss|||||||
|3.4.4 Other|||||||
|3.5 Special reserve|||||||
|3.5.1|||||||
|Withdrawn for the|||||||
|period|||||||
|3.5.2 Used in|||||||
|the period|||||||
|3.6 Other|||||||
||318,60||||||
|||52,129,|86,036,|-90,095,|37,940,|404,610|
|4. Closing balance|0,000.||||||
|||496.58|260.20|403.00|417.64|,771.42|
||00||||||

8. Statement of Changes inOwners’ Equity of the Company
January-June 2017
Unit: RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||January-June 2017|||||||||||
|||Other equity instruments|||||Other|||||
|||||||Less:||||Retaine|Total|
|Item|Share|Prefere|||Capital||comprehe|Special|Surplus|||
||||Perpetu|||Treasury||||d|owners’|
||capital|nce||Other|reserve||nsive|reserve|reserve|||
||||al bonds|||shares||||earnings|equity|
|||shares|||||income|||||

|||||||
|-|-|-|-|-|-|
|1. Balance at the||||||
||318,600,|52,129,49|86,036,26|-51,833,|404,932,2|
|end of the prior||||||
||000.00|6.58|0.20|550.50|06.28|
|year||||||
|Add: Changes||||||
|in accounting||||||
|policies||||||
|Correction of||||||
|errors in prior||||||
|periods||||||
|Other||||||
|2. Balance at the||||||
||318,600,|52,129,49|86,036,26|-51,833,|404,932,2|
|beginning of the||||||
||000.00|6.58|0.20|550.50|06.28|
|year||||||
|3. Increase/||||||
|decrease in the||||-6,335,7|-6,335,73|
|period (“-” means||||38.63|8.63|
|decrease)||||||
|3.1 Total||||||
|||||-6,335,7|-6,335,73|
|comprehensive||||||
|||||38.63|8.63|
|income||||||
|3.2 Capital||||||
|increased and||||||
|reduced by owners||||||
|3.2.1||||||
|Ordinary shares||||||
|increased by||||||
|shareholders||||||
|3.2.2 Capital||||||
|increased by||||||
|holders of other||||||
|equity instruments||||||
|3.2.3||||||
|Amounts of||||||
|share-based||||||
|payments charged||||||
|to owners’ equity||||||
|3.2.4 Other||||||
|3.3 Profit||||||
|distribution||||||
|3.3.1||||||
|Appropriation to||||||
|surplus reserve||||||
|3.3.2||||||

|||||||
|-|-|-|-|-|-|
|Appropriation to||||||
|owners (or||||||
|shareholders)||||||
|3.3.3 Other||||||
|3.4 Internal||||||
|carry-forward of||||||
|owners’ equity||||||
|3.4.1 New||||||
|increase of capital||||||
|(or share capital)||||||
|from capital||||||
|reserve||||||
|3.4.2 New||||||
|increase of capital||||||
|(or share capital)||||||
|from surplus||||||
|reserve||||||
|3.4.3 Surplus||||||
|reserve for making||||||
|up loss||||||
|3.4.4 Other||||||
|3.5 Special reserve||||||
|3.5.1||||||
|Withdrawn for the||||||
|period||||||
|3.5.2 Used in||||||
|the period||||||
|3.6 Other||||||
||318,600,|52,129,49|86,036,26|-58,169,|398,596,467.65|
|4. Closing balance||||||
||000.00|6.58|0.20|289.13||

 January-June 2016
Unit: RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||January-June 2016|||||||||||
|||Other equity instruments|||||Other|||||
|||||||Less:||||Retaine|Total|
|Item|Share|Prefere|||Capital||comprehe|Special|Surplus|||
||||Perpetu|||Treasury||||d|owners’|
||capital|nce||Other|reserve||nsive|reserve|reserve|||
||||al bonds|||shares||||earnings|equity|
|||shares|||||income|||||
|1. Balance at the||||||||||-172,94||
||318,600,||||52,129,49||||86,036,26||283,818,9|
|end of the prior||||||||||6,764.5||
||000.00||||6.58||||0.20||92.25|
|year||||||||||3||
|Add: Changes||||||||||||

|||||||
|-|-|-|-|-|-|
|in accounting||||||
|policies||||||
|Correction of||||||
|errors in prior||||||
|periods||||||
|Other||||||
|2. Balance at the||||-172,94||
||318,600,|52,129,49|86,036,26||283,818,9|
|beginning of the||||6,764.5||
||000.00|6.58|0.20||92.25|
|year||||3||
|3. Increase/||||||
|decrease in the||||121,113|121,113,2|
|period (“-” means||||,214.03|14.03|
|decrease)||||||
|3.1 Total||||||
|||||121,113|121,113,2|
|comprehensive||||||
|||||,214.03|14.03|
|income||||||
|3.2 Capital||||||
|increased and||||||
|reduced by owners||||||
|3.2.1||||||
|Ordinary shares||||||
|increased by||||||
|shareholders||||||
|3.2.2 Capital||||||
|increased by||||||
|holders of other||||||
|equity instruments||||||
|3.2.3||||||
|Amounts of||||||
||318,600,|52,129,49||||
|share-based||||||
||000.00|6.58||||
|payments charged||||||
|to owners’ equity||||||
|3.2.4 Other||||||
|3.3 Profit||||||
|distribution||||||
|3.3.1||||||
|Appropriation to||||||
|surplus reserve||||||
|3.3.2||||||
|Appropriation to||||||
|owners (or||||||
|shareholders)||||||
|3.3.3 Other||||||

|||||||
|-|-|-|-|-|-|
|3.4 Internal||||||
|carry-forward of||||||
|owners’ equity||||||
|3.4.1 New||||||
|increase of capital||||||
|(or share capital)||||||
|from capital||||||
|reserve||||||
|3.4.2 New||||||
|increase of capital||||||
|(or share capital)||||||
|from surplus||||||
|reserve||||||
|3.4.3 Surplus||||||
|reserve for making||||||
|up loss||||||
|3.4.4 Other||||||
|3.5 Special reserve||||||
|3.5.1||||||
|Withdrawn for the||||||
|period||||||
|3.5.2 Used in||||||
|the period||||||
|3.6 Other||||||
||318,600,|52,129,49|86,036,26|-51,833,|404,932,2|
|4. Closing balance||||||
||000.00|6.58|0.20|550.50|06.28|

 III. Company Profile
1. The registration place, the organization method and the headquarters address of the Company
Guangdong Jadiete Holdings Group Company Limited (original name: Guangdong Rieys Group Company Ltd, hereinafter referred to as‘theCompany’) was a limited liability company registered in Guangdong Province and had been approved by the Y-H-B[1997] No. 580 document ofPeople’s Government of Guangdong Province on November 17, 1997, which established by five enterprises including Puning Haicheng Industrial Co., Ltd. (this company changed its name to Shenzhen Shenghengchang Industrial Co., Ltd. after relocating in Shenzhen; in 2007 this company was renamed as Guangzhou Shenghengchang Investment Co., Ltd.; in 2008 this company was renamed as Guangzhou Shenghengchang Trade and Development Co., Ltd.; on
January 28, 2010 this company was renamed as Puning Shenghengchang Trade
Development Co., Ltd.; on July 26, 2013, this company was renamed as Shenzhen
Shenghengchang Huifu Industrial Co., Ltd. as relocation), an original Sino-foreign cooperated enterprise of Hongxing Weaving Garment Co., Ltd. Under approval of Guangdong Province Administration for Industry and Commerce, the Company registered with the registration number of the license of the business corporation of: 914452002311318335. The Share B, which was the HK common stock as well as the domestically listed foreign share issued by the Company, had listed on the SZSE. The registration place of the Company: Meixin Industrial Park, Junbu Town, Puning, Guangdong Province, of which the parent company was the Shenzhen Shenghengchang Huifu Industrial Co., Ltd. and the ultimate actual controller of the Group was Chen Hongcheng.
The Company used to be the Puning Hongxing Weaving Garment Co., Ltd., which had reorganized as a limited liability company based on the former company on November 17, 1997.
The original registration capital of the Company was of RMB80,000,000.00 with the total amount of the share capital of 80,000,000 shares. And the face value of the shares of the Company was of RMB1 per share. In March 1999, with the approval of theShareholders’ General Meeting, the Company declared a Bonus Issue of 3.5 shares per 10 shares based on the total number of shares accrued in the register as at December 31, 1998 (80 million shares), making the registered capital increased to 108,000,000 shares. The Company issued 60,000,000 shares of foreign invested stock domestically listed (“Stock B”) for foreign investors on October 17, 2000, and issued 9,000,000 shares of Stock B for exercise of over-allotment options during the period from October 27 to November 22, 2000 in accordance with approval of ZJFXZ (2000) No. 133 issued by China Securities Regulatory Commission on September 29, 2000. The registered capital of the Company increased to RMB177,000,000 after issuance of Stock B, which was divided into 177,000,000 shares of RMB1.00 each. The registered capital of the Company increased to 318,600,000 after years of bonus distribution and transfer increase in paid-in capital, which was divided into 318,600,000 shares of RMB1.00 each.
As at June 30, 2017, theCompany’s total share capital was 318,600,000 shares, including 164,025,000 non-tradable legal shares (representing51.48% of total shares and 154,575,000 domestic listed foreign shares (stock B) (representing48.52% of total shares).
2. Operating scope
The operating scope of the Company: executes the self-management and agent of the import and export business of other goods and techniques except for the national organization unified joint venture export commodities and the national approved corporation operation export commodities; executes the processing imported materials operation, “three-processing and one compensation”, counter trade and entrepot trade (operates according to the[98] WZMZSHZ No. 1225 document); the production, processing and sales of the clothing, needle and textiles. Sales of the industrial capital
goods (excluding the gold, car, dangerous chemicals), department stores, furniture, arts and crafts (excluding the gold jewelry) and the domestic commerce (except for those forbidden by the laws, administrative regulations and the State Council; and as for the projects limited by the laws, administrative regulations and the State Council should acquire the permission before operating).Crops planting. Storage. Various investments. Real Estate development (three-level with the period of validity to 31 December 2015.) Commercial residential buildings developed owning to renting out the Company. Hotel management. Engages in the technique development, design and sales of the gold, silver, platinum, diamond, jade, jewelry, hardstone article and so on. Engage itself in: technical service in the field of network technology and communication technology, technical development, technical consultation, technology transfer, computer software development, computer information system integration, and wholesale and retail of computers, software and accessory equipment, communication equipment and electronic products, and construction of computer network engineering, e-commerce, design and production of various advertising, publishing advertisements through self-own media, cultural and art exchange planning and the wholesale and retail of clothing, daily articles and crafts.
3. Information of the special enterprises with limited business allotted time
Naught
4. Business nature and major operating activities of the Company
The Company is the gold jewelry vendor; mainly engages in the technique development, design and sales of the gold jewelry.
5. Approval of the presentation of the financial statements
The financial statements and the notes to the financial statements were approved by the
14rd
Session of the
7th
Board of Directors of the Company on August 28, 2017.
There were 4 main bodies included in the consolidated financial statement scope at the period-end of the Reporting Period, which specifically including:
Name of the subsidiaries Type of the Shareholding Voting proportion subsidiaries proportion(%) (%) Shenzhen Rieys Industrial Co., Limited liability 90.00 90.00 Ltd. company
Tianrui (Hong Kong) Limited liability 100.00 100.00 Trading Co., Ltd. company
Shenzhen Chinese Gold Limited liability 51.00 51.00 Nobility Jewelry Co., Ltd. company
Shanghai Yunpeng Internet 60.00 60.00 Limited company
Technology Co., Ltd
There was no change of main bodies in the Reporting Period included into the scope
of consolidated financial statement compared with last period.
IV. Basis for the Preparation of the Financial Statement
1. Basis for the Preparation
The Company and its subsidiaries are prepared based on assumption of theCompany’s continuing operations, according to transactions and events actually occurred, and based on “Basic Accounting Standard for Business Enterprises” and specific accounting standards as well as the application guide, explanation and other relevant regulations (generally referred to as “ASBE”) issued by Ministry of Finance. In addition, theCompany’s financial statements also comply with the relevant financial information in “Compilation Rules for Information Disclosures by Companies that Offer Securities to the Public No.15 - General Provisions for Financial Reports” (hereinafter referred to as “the No. 15”) issued by CSRC (revised in 2014).
The accounting measurement of the Company based on the accrual basis. Except for certain financial instruments, the financial statements were all based on the historical cost for measurement. If there was impairment of the assets, should withdraw the impairment provision according to the relevant regulations.
2. Continuing Operations
The financial statement presented based on the continuing operations. There was no any event or situation caused major concerns on the continuing operation ability of the Company within 12 months from the period-end.
V. Significant Accounting Policies and Estimates
Specific accounting policies and accounting estimates indicators:
Not applicable
1. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company are in compliance with in compliance with the Accounting Standards for Business Enterprises, which factually and completely present theCompany’s, and the relevant information of theCompany’s merger and financial positions as at June 30, 2017, as well as the merger, business results and the merger and cash flows for the first half year of 2017.
2. Fiscal Period
TheCompany’s fiscal year starts on January 1 and ends on December 31 of every year according to the Gregorian calendar.
3. Operating Cycle
Normal operating cycle refers to the period from the Group purchases the assets for processing to realize the cash or cash equivalents. The Group regards 12 months as an operating cycle and regards which as the partition criterion of the mobility of the assets and liabilities.
4. Recording Currency
Recording currency is RMB.
5. Accounting Treatment for Business Combinations under the Common Control and Not under the Common Control
(1) Judgment standard of the package deal
If the terms, conditions and the economic influences of each transaction in the process of the enterprise merger realized by multiple steps met with one or various situation of the followings, should execute the accounting treatment by considering the multiple transactions as the package deal:
① these transactions are considered simultaneously, or in the case of mutual influence made;
② these transactions as a whole in order to achieve a complete business results;
③ the occurrence of a transaction depends on occurs at least one other transaction ;
④ a transaction look alone is not economical, but when considered together with other transaction is economical.
(2) Business combination under the same control
For the business combination under the same control, the assets and liabilities that the combining party obtains in a business combination, except for the adjustment executed owning to the differences between the accounting policies, shall be measured on the basis of their originally carrying amount in the combined party on the combining date. As for the balance between the carrying amount of the net assets obtained by the combining party and the carrying amount of the consideration paid by it (or the total par value of the shares issued), the additional paid-in capital (share/capital premium) shall be adjusted. If the additional paid-in capital (share/capital premium) is not sufficient to be offset, the retained earnings shall be adjusted.
The direct relevant expenses occurred for executing the enterprise merger should be recorded in the current gains and losses when occurred.
(3) Business combination not under the same control
Business combination not under the common control refers to that parties involved in the merger are not subject to the ultimate control of the same party or same multi-parties before& after the merger.
For a business combination not under the same control, the combination costs shall include the fair values, on the acquisition date, of the assets paid, the liabilities incurred or assumed and the equity securities issued by the acquirer in exchange for the control on the acquiree. On the purchase date, the merger cost occurred in the Company and the assets, liabilities and the contingent liabilities of the acquirees should be recognized according to the fair value.
As for the expenses for audit, legal services and assessment, and other administrative expenses, should be recorded into the profits and losses in the current period. The trading expenses for the equity securities or debt securities issued by the acquirer as the combination consideration shall be recorded into the amount of initial measurement of the equity securities or debt securities.
The Company shall recognize the positive balance between the combination costs and the fair value of the identifiable net assets it obtains from the acquiree as business reputation and shall execute the follow-up measurement according to the cost which deducted the accumulative impairment provision; the Company shall record which in the current gains and losses after the reexamination to treat the balance between the combination costs and the fair value of the identifiable net assets it obtains from the acquiree.
As for the deductible temporary differences the acquirer obtains from the acquiree which are not recognized into deferred income tax liabilities due to their not meeting the recognition standards, if new or further information shows that the relevant situation has existed on the acquiring date and the economic benefits brought by the deductible temporary differences the acquirer obtains from the acquiree on the acquiring date can be realized, they shall be recognized into deferred income tax assets and the relevant goodwill shall be reduced. Where the goodwill is not sufficient to be offset, the difference shall be recognized into the profits and losses in the current period. In other circumstances than the above, where the deductible temporary differences are recognized into deferred income tax assets on the acquiring date, they shall be recorded into the profits and losses in the current period.
In a business combination not under same control realized by two or more transactions of exchange, according to about the
5th
Notice about the Treasury Issuing the Accounting Standards for Enterprises (Finance accounting)[2012] No. 19 Criterion about the “package deal”, whether the deals are “package deal” or not, belong to the “package deal”, see the previous paragraphs described in this section and note IV, 12 “long term equity investment transaction” and conduct accounting treatment, those not belong to the “package deal” distinguish between the individual
financial statements and the consolidated financial statements and conduct relevant accounting treatment.
In the individual financial statements, the sum of the book value and new investment cost of the Company holds in the acquiree before the acquiring date shall be considered as initial cost of the investment. Other related comprehensive gains in relation to the equity interests that the Company holds in the acquiree before the acquiring date, except for the corresponding share in the changes in the net liabilities or assets with a defined benefit plan measured at the equity method arising from theacquiree’s re-measurement, the others shall be transferred into current investment gains.
In theCompany’s consolidated financial statements, the merger cost is the sum of the consideration pays on the purchase date and the fair value on the purchase date of the equity of the acquirees hold before the purchase date. As for the equity interests that the Company holds in the acquiree before the acquiring date, they shall be re-measured according to their fair values at the acquiring date; the positive difference between their fair values and carrying amounts shall be recorded into the investment gains for the period including the acquiring date. Other related comprehensive gains in relation to the equity interests that the Company holds in the acquiree before the acquiring date, except for the corresponding share in the changes in the net liabilities or assets with a defined benefit plan measured at the equity method arising from theacquiree’s re-measurement, the others shall be transferred into current investment gains.
6. Preparation of the Consolidated Financial Statements
The consolidation scope for financial statements is determined on the basis of control and all the subsidiaries (including the individual main body controlled by the Company) are all included in the consolidated financial statement.
The consolidated financial statement bases on the financial statement of the Company and the subsidiaries and prepares according to the other relevant materials by the Company. When preparing the consolidated financial statement, the accounting policies and the accounting period of the Company and the subsidiaries were required to maintain unanimous while the intercompany significant contracts and the come-and-go balance should be offset.
For the subsidiaries increased owning to the enterprise merger under the same control during the Reporting Period, the Company includes their income, expenses and profits from the period-begin of the merger to the end of the Reporting Period in the consolidated statement of income and includes the cash flow in the consolidated statement of cash flow, as well as adjust the opening balance and the comparison amount of the consolidated financial statement; as for the subsidiaries increased owning to the enterprise merger not under the same control during the Reporting Period, the Company includes their income, expenses and profits from the purchase
date to the end of the Reporting Period in the consolidated statement of income and includes the cash flow in the consolidated statement of cash flow, while not to as adjust the opening balance and the comparison amount of the consolidated financial statement; during the Reporting Period, as for the disposed subsidiaries, the Company includes their income, expenses and profits from the period-begin of the merger to the disposal date in the consolidated statement of income and includes the cash flow in the consolidated statement of cash flow, and not to adjust the opening balance of the consolidated balance sheet.
The portion of asubsidiary’sshareholders’ equity and the portion of asubsidiary’s net profits and losses for the period not held by the Company are recognized as minority interests and minority shareholder profits and losses respectively and presented separately undershareholders’ equity and net profits in the consolidation financial statements. The portion of asubsidiary’s net profits and losses for the period that belong to minority interests is presented as the item of “minority shareholder profits and losses” under the bigger item of net profits in the consolidated financial statements. Where the loss of a subsidiary shared by minority shareholders exceeds the portion enjoyed by minority shareholders in thesubsidiary’s openingowners’ equity, minority interests are offset.
As for the transactions purchasing minority equities of the subsidiaries or the transitions not losing the control right of the subsidiaries owning to disposing the equity investment on them, should be measured as the equity transactions and adjust the book value that attributes to the equities of the shareholders of the Company and the equities of the minority shareholders for reflecting the changes in the relevant equities of the subsidiaries. The Company adjusts the capital surplus of the difference between the adjusted amount of the equities of the minority shareholders and the fair value of the paid/received consideration, if the capital surplus is insufficient to write down, the retained income should be adjusted.
Where the Company losses control on its original subsidiaries due to disposal of some equity investments or other reasons, the residual equity interests are re-measured according to the fair value on the date when such control ceases. The summation of the consideration obtained from the disposal of equity interests and the fair value of the residual equity interests, minus the portion in the originalsubsidiary’s net assets measured on a continuous basis from the acquisition date that is enjoyable by the Company according to the original shareholding percentage in the subsidiary, is recorded in investment gains for the period when theCompany’s control on the subsidiary ceases. Other comprehensive incomes in relation to the equity investment in the original subsidiary are treated on the same accounting basis as the acquiree directly disposes the relevant assets or liabilities (that is, except for the changes in the net liabilities or assets with a defined benefit plan resulted from re-measurement of the original subsidiary, the rest shall all be transferred into current investment gains) when such control ceases. And subsequent measurement is conducted on the residual equity interests according to the No. 2 Accounting Standard for Business
Enterprises-Long-term Equity Investments or the No. 22 Accounting Standard for Business Enterprises-Recognition and Measurement of Financial Instruments.
Where the Company losses control on its original subsidiaries due to step by step disposal of equity investments through multiple transactions, it need to distinguish the Company losses control on its subsidiaries due to disposal of equity investments whether belongs to a package deal. If each transaction of disposing the equity investment of the subsidiaries until losing the control right belongs to the package deal, should be regarded as a transaction of disposing the subsidiaries and losing the control right for accounting treatment. Those not belong to a package deal, each of them a deal depends on circumstances respectively conduct accounting treatment in accordance with the applicable principles of “part disposal of subsidiaries of a long-term equity investment under the condition of not losing control on its subsidiaries” (see details to the first two paragraphs)and “Where the Group losses control on its original subsidiaries due to disposal of some equity investments or other reasons” (see the details to the first paragraph).However, before losing control, every disposal cost and corresponding net assets balance of subsidiary of disposal investment are confirmed as other comprehensive income in consolidated financial statements, which together transferred into the current profits and losses in the loss of control , when the Company losing control on its subsidiary.
7. Classification of Joint Arrangements and Accounting Treatment of Joint Operations
Not applicable
8. Confirmation Standard for Cash and Cash Equivalent
In preparing the cash flow statement, the cash equivalents of the Company include the investments with short period (it usually expires within three months from the purchase date), characteristics of high liquidity, easy conversion to certain amount of cash and little risk of value change.
9. Transactions of Foreign Currencies and Conversion of Financial Statements in Foreign Currencies
(1) Adjustments are made to foreign currency accounts in accordance with the exchange rate prevailing on the balance sheet date
Value of non currency item accrued at fair value by foreign currency is adjusted in accordance with the exchange rate prevailing on fair value confirm date. Conversion differences arising from those specific borrowings are to be capitalized as part of the cost of the construction in progress in the period before the fixed assets being acquired and constructed has not yet reached working condition for its intended use. Conversion differences arising from other accounts are charged to financial expenses.
(2) In balance sheet, assets and liabilities items are converted into RMB at the exchange rate prevailing on the consolidated balance sheet date.Owner’s equity items (excluding undistributed profit item) are converted into RMB at the exchange rate when the transaction occurs. In income statement, revenue and expenses items are accrued by the proper method and the approximate rate when the transaction occurs. Translation difference occurred for above reason is disclosed in the consolidated balance sheet as a separate item.
10. Financial Instruments
The term “financial instruments” refers to the contracts under which the financial assets of an enterprise are formed and the financial liability or right instruments of any other entity are formed. Financial instruments include the financial assets, financial liabilities and equity instruments.
(1) Recognition and derecognition of the financial instruments
When the Company becomes a party to a financial instrument, it shall recognize a financial asset or financial liability.
Where a financial asset satisfies any of the following requirements, the recognition of it shall be terminated:
① Where the contractual rights for collecting the cash flow of the said financial asset are terminated;
② Where the said financial asset has been transferred and meets the conditions for recognizing the termination of financial assets as follows.
Only when the prevailing obligations of a financial liability are relieved in all or in part may the recognition of the financial liability be terminated in all or partly. Where the Company (debtor) enters into an agreement with a creditor so as to substitute the existing financial liabilities by way of any new financial liability, and if the contractual stipulations regarding the new financial liability is substantially different from that regarding the existing financial liability, it shall terminate the recognition of the existing financial liability, and shall at the same time recognize the new financial liability.
Buying and selling the financial assets by conventional methods and executing the accounting recognition and derecognition according to the transaction date.
(2) Category and measurement of the financial assets
The Company classifies the financial assets into the following four kinds when initially recognizing according to the contract terms of the issued financial instruments and the economic nature reflected by which but not by the law methods as well as combines with the aims of acquiring and holding the financial assets and
undertaking the financial liabilities: financial assets measured by fair value with the changes be recorded in the current gains and losses, held-to-maturity investment, loans and accounts receivable as well as the available-for-sale financial assets. The financial assets should be measured by fair value when initially recognizing. As for the financial assets measured by fair value with the changes be recorded in the current gains and losses, the relevant transactions expenses should be directly recorded in the current gains and losses while the relevant transactions expenses of the financial assets of other categories should be recorded in the initially recognized amount.
Financial assets measured by fair value with the changes be included in the current gains and losses
As for the financial assets measured by fair value with the changes are included in the current gains and losses which include the tradable financial assets and the financial assets be appointed as the one be measured by fair value with the changes are included in the current gains and losses when initially recognized. For this kind of the financial assets, should be executed the follow-up measurement by adopting the fair value, and the profits or losses form from the changes of the fair value as well as the dividends and the interest income related to the financial assets should be recorded in the current gains and losses.
Held-to-maturity investment
The term “held-to-maturity investment “refers to a non-derivative financial asset with a fixed date of maturity, a fixed or determinable amount of repo price and which the enterprise holds for a definite purpose or the enterprise is able to hold until its maturity. The following non-derivative financial assets shall not be classified as investments held to their maturity. As for the held-to-maturity investment, shall make subsequent measurement on its financial liabilities on the basis of the post-amortization costs by adopting the actual interest rate method, while the gains or losses of the derecognition, impairment or amortization should be recorded in the current gains and losses.
Accounts receivable
Accounts receivable refers to the non-derivative financial assets without any quotation in the active market but with fixed or recognizable recovery amount, which include the accounts receivable and other accounts receivable etc. As for the accounts receivable, shall make subsequent measurement on its financial liabilities on the basis of the post-amortization costs by adopting the actual interest rate method, while the gains or losses of the derecognition, impairment or amortization should be recorded in the current gains and losses.
Available-for-sale financial assets
Available-for-sale financial assets refers to the non-derivative financial assets be appointed as available-for-sale and the financial assets except for the above category
of the financial assets. The available-for-sale financial assets should adopt the follow-up measurement and the premium should adopt the actual interest rate for amortization and be recognized as the interest income. Except for the impairment losses and the exchange differences of the foreign currency financial assets which be regarded as the current gains and losses, the changes of the fair value of the available-for-sale financial assets should be recognized as other comprehensive income, and when the financial assets being derecognizing, the portion of the accumulative amount of changes in the fair value originally recorded in the other comprehensive income which corresponds to the portion whose recognition has been disposed, shall be transferred and recorded in the current gains and losses. And the dividends or the interest income related to the available-for-sale financial assets should be recorded in the current gains and losses.
(3) Category and measurement of financial liabilities
The financial liabilities of the Company are classified as the follows when initially recognized: financial liabilities measured by fair value with the changes are recorded in the current gains and losses and other financial liabilities. As for those had not be divided as the financial liabilities measured by fair value with the changes be recorded in the current gains and losses, the relevant transaction expenses should be recorded in the initial recognized amount.
Financial liabilities measured by fair value with the changes be recorded in the current gains and losses
The financial liabilities measured by fair value with the changes be recorded in the current gains and losses, which include the tradable financial liabilities and the financial liabilities be appointed as measured by fair value with the changes be recorded in the current gains and losses when initially recognized. For this kind of financial liabilities should be executed the follow-up measurement according to the fair value, while the profits or losses form from the changes of the fair value and the dividends and the interest expenses related to the financial liabilities should be recorded in the current gains and losses.
Other financial liabilities
For the derivative financial liabilities, which are connected to the equity instrument for which there is no quotation in the active market and whose fair value cannot be reliably measured, and which must be settled by delivering the equity instrument, they shall be executed follow-up measurement on the basis of their costs. As for the other financial liabilities, should adopt the effective interest method and be executed the follow-up measurement according to the amortized cost with the profits or losses form from derecognition or amortization be recorded in the current gains and losses.
(4) Fair value of the financial instruments
As for the financial assets or financial liabilities for which there is an active market,
the current offer or current price in the active market shall be used to determine the fair values thereof.
Where there is no active market for a financial instrument, the Company concerned shall adopt value appraisal techniques to determine its fair value. The result obtained by adopting value appraisal techniques shall be able to reflect the transaction prices that may be adopted in fair dealings on the value appraisal day. The value appraisal techniques mainly include the prices adopted by the parties, who are familiar with the condition, in the latest market transaction upon their own free will, the current fair value obtained by referring to other financial instruments of the same essential nature, the cash flow capitalization method and the option pricing model, etc.
To determine the fair value of a financial asset, the Company chooses those value appraisal techniques which are generally acknowledged by market participants and have been proved as reliable by past actual transaction prices of the market. To determine the fair value of a financial asset by adopting value appraisal techniques, the Company shall adopt, if possible, all the market parameters that are taken into account by market participants in pricing financial instruments and the observable transaction price of the current market with the same financial instruments for testing the validity of the valuation technique.
(5) Impairment of financial assets
The Company shall carry out an inspection, on the balance sheet day, on the carrying amount of the financial assets and where there is any objective evidence proving that such financial asset has been impaired, an impairment provision shall be made. The expression “objective evidence proving that the financial asset has been impaired” refers to the actually incurred events which, after the financial asset is initially recognized, have an impact on the predicted future cash flow of the said financial asset that can be reliably measured by the Company.
Financial assets measured by amortized cost
If there are objective evidences indicate that the financial assets occur impairment, the carrying amount of the said financial asset shall be written down to the current value of the predicted future cash flow (excluding the loss of future credits not yet occurred), and the amount as written down shall be recorded in the current gains and losses. The current value of the predicted future cash flow shall be determined according to the capitalization of the original actual interest rate of the said financial asset, taking into account the value of the relevant guarantee.
An impairment test shall be made on the financial assets with significant single amounts. If any objective evidence shows that it has been impaired, the impairment-related losses shall be recognized and shall be recorded into the profits and losses of the current period. With regard to the financial assets with insignificant single amounts, an independent impairment test may be carried out, or they may be
included in a combination of financial assets with similar credit risk features so as to carry out an impairment-related test. Where, upon independent test, the financial asset (including those financial assets with significant single amounts and those with insignificant amounts) has not been impaired, it shall be included in a combination of financial assets with similar risk features so as to conduct another impairment test. The financial assets which have suffered from an impairment loss in any single amount shall not be included in any combination of financial assets with similar risk features for any impairment test.
Where any financial asset measured on the basis of post-amortization costs is recognized as having suffered from any impairment loss, if there is any objective evidence proving that the value of the said financial asset has been restored, and it is objectively related to the events that occur after such loss is recognized, the impairment-related losses as originally recognized shall be reversed and be recorded into the profits and losses of the current period. However, the reversed carrying amount shall not be any more than the post-amortization costs of the said financial asset on the day of reverse under the assumption that no provision is made for the impairment.
Available-for-sale financial assets
Where there are objective evidences indicate that the available-for-sale financial assets are impaired, the accumulative losses arising from the decrease of the fair value of theowner’s equity which was directly included shall be transferred out and recorded into the profits and losses of the current period. The accumulative losses that are transferred out shall be the balance obtained from the initially obtained costs of the sold financial asset after deducting the principals as taken back, the current fair value and the impairment-related losses as was recorded into the profits and losses of the current period.
As for the sellable debt instruments whose impairment-related losses have been recognized, if, within the accounting period thereafter, the fair value has risen and are objectively related to the subsequent events that occur after the originally impairment-related losses were recognized, the originally recognized impairment-related losses shall be reversed and be recorded into the profits and losses of the current period. The impairment-related losses incurred to a sellable equity instrument investment shall not be reversed through profits and losses.
Financial assets measured by cost
When the equity instrument investments for which there is no quotation in the active market and whose fair value cannot be measured reliably, or the derivative financial assets which are connected with the said equity instrument and must be settled by delivering the said equity instrument are impaired, should recognize the book value of the financial assets and the differences between the current value recognized from the discounting according to the current market earnings rate of the similar financial
assets to the future cash flow as the impairment losses and record which in the current gains and losses. And the occurred impairment losses once being recognized should not be reversed.
(7) Transformation of the financial assets
The term “"transfer of a financial asset” refers to transferring or delivering a financial asset to a party other than the issuer of the financial asset (the transferee).
Where the Company has transferred nearly all of the risks and rewards related to the ownership of the financial asset to the transferee, it shall stop recognizing the financial asset. If it retained nearly all of the risks and rewards related to the ownership of the financial asset, it shall not stop recognizing the financial asset.
Where the Company does not transfer or retain nearly all of the risks and rewards related to the ownership of a financial asset, it shall deal with it according to the circumstances as follows, respectively: if it gives up its control over the financial asset, it shall stop recognizing the financial asset; if it does not give up its control over the financial asset, it shall, according to the extent of its continuous involvement in the transferred financial asset, recognize the related financial asset and recognize the relevant liability accordingly.
11. Receivables
(1) Accounts Receivable with Significant Single Amount for Which the Bad Debt Provision is Made Individually
|||
|-|-|
||Individual material receivables are the top five largest receivables|
|Standard of significant single amounts|or sum of receivables which account for 10% of ending balance of|
||accounts receivable.|
||As for the accounts receivable with significant single amount at|
||the period-end, could execute the impairment test individually. If|
||there was objective evidence to shows that it has been impaired,|
|Withdrawing method of provision for bad debts of significant||
||the impairment-related losses shall be recognized and shall be|
|single amounts||
||made bed debt provision according to the difference that the|
||current value of the future cash flow lowers than its book value|
||of the accounts receivable.|

(2) Accounts Receivable Which the Bad Debt Provision is Withdrawn by Credit Risk Characteristics
|||
|-|-|
|Name of portfolios|Bad debt provision method|

In the groups, adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Not applicable
||||
|-|-|-|
||Withdrawal proportion for accounts|Withdrawal proportion for other accounts|
|Age|||
||receivable|receivable|
|Within 1 year (including 1 year)|2.00%|2.00%|
|1-2 years|10.00%|10.00%|
|2-3 years|50.00%|50.00%|
|Over 3 years|80.00%|80.00%|
|3 to 4 years|80.00%|80.00%|
|4 to 5 years|80.00%|80.00%|
|Over 5 years|100.00%|100.00%|

 In the groups, adopting balance percentage method to withdraw bad debt provision:
□ Applicable√ Not applicable
In the groups, adopting other methods to withdraw bad debt provision:
□ Applicable√ Not applicable
(3) Accounts Receivable with an Insignificant Single Amount but for Which the Bad Debt Provision is Made Individually
|||
|-|-|
||As for the accounts receivable with insignificant single amount at|
||the period-end, could execute the impairment test individually.|
||the impairment-related losses shall be calculated and recognized|
||and shall be made bed debt provision according to the proportion|
||of the accounts receivable portfolios that are accounts receivable|
|Withdrawal method for bad debt provision||
||that didn’t incur impairment in individual test (including|
||accounts receivable with significant single amount and accounts|
||receivable with insignificant single amount ) and the accounts|
||receivable portfolios with similar credit risk characteristics to|
||closing balance.|

12. Inventory
Whether the Company need to comply with the disclosure requirements of special industry?
No
(1) Inventory classification
The inventory of the Company classified as:
A. Real estate development products: developed products, development cost.
B. Non-real estate products: raw materials, products in production, stock merchandise,
delivery commodity, commission processing materials, etc.
(2) Method for inventory valuation
Inventories are valued at the lower of cost and net realizable value.
Real estate development product costs include land cost, construction costs and other costs. Borrowing costs meet the capitalization conditions are also included in real estate development product costs. Non-real estate development product costs include purchase cost, process cost and other costs.
The raw materials acquired by the Company are measured according to the actual cost and the raw materials, outside processing materials, goods in process and self-made semi-manufactured goods adopt weighted average valuation when issued or received (winding wheel setting and jade accessories adopt individual pricing).
(3) Confirmation of net realizable value of inventory and Recording method of provision for inventory devaluation
At the end of the year, after overall check of the inventory, draw or adjust provision for inventory devaluation according to the lower of the cost of inventory and net realizable values of inventory.
In normal operation process, net realizable values of commodities inventories for direct sales including finished goods, commodities and materials for sales are determined by the estimated selling prices minus the estimated selling expenses and relevant taxes and fees; In normal operation process, net realizable values of materials that need further processing are determined by the estimated selling prices of the finished goods minus estimated cost to completion, estimated selling expenses and relevant taxes. For the inventory held to implement sales contract or work contract, its net realizable value is calculated on the basis of contract price. For the balance of inventory beyond the amount of the sales contract, its net realizable value is calculated on the basis of general selling price.
Provision for inventory devaluation is provided for based on individual inventory item at end of the period. For inventory that has large quantity and low unit price, the provision for inventory devaluation is provided for based on categories of the inventory. For inventory related to the products manufactured and sold in the same district, with same or similar use or purpose, and difficult to account for separately from other items, the provision for inventory devaluation is provided for on a consolidated basis.
When the factors that influence the decreased bookkeeping of inventory value have disappeared, switch back from the provision for inventory devaluation amount that previously appropriated and the amount that switched back is charged to profit or loss of current period.
(4) System of stock inventories
Perpetual inventory system is applied.
(5) Amortization for low cost and short lived articles and package materials
When consuming the low cost and short lived articles, the Company adopts the one-time amortization method for amortization.
The turnover package materials should be recorded in the cost expenses according to the one-time amortization method.
13. Divided as Assets Held for Sale
(1) Recognition standard of assets held for sale
The Company recognizes the non-current assets or the assets group that simultaneously meet with the following conditions as the assets held for sale. The compose part must be immediately sold only according to the usual terms of selling the compose part under the current conditions; the enterprise had made resolution on the disposal of the compose part, if needed to receive the approval from the shareholders according to the rules, should had acquired the approval from the Annual General Meeting or the corresponding capability mechanism; the enterprise had signed the irrepealably transfer agreement with the transferee; and the transfer should be completed within 1 year.
(2) Accounting treatment method of assets held for sale
As for the fixed assets held for sale, shall adjust its expected net salvage value that lead which reflect the amount of the fair value minuses the disposal expenses but should not exceed the original book value of the fixed assets when meet with the conditions held for sale and as for the difference that the original book value higher than the expected net salvage after adjustment, should be recorded in the current gains and losses as the losses of the assets impairment. As for the other non-current assets held for sale, should be disposed by comparing the above principles, and the non-current assets held for sale include the single assets and disposal group, while the disposal group refers to a group of assets sold as a whole or disposed together by other methods.
(3) Liabilities in the disposal group of assets held for sale
As for the liabilities be divided in the disposal group held for sale, the Company lists which as the liabilities among the disposal group held for sale. The long-term equity investment of this part refers to the long-term equity investment owns the control, jointly control or the significant influences on the investees of the Company. As for the long-term equity investment not owning the control, jointly control or the significant influences on the investees of the Company, should be regarded as the available-for-sale financial assets or be measured as the financial assets for measurement by fair value with the changes be recorded in the current gains and losses, of which the details of the accounting policies in Notes IV. 9 “Financial Instruments”.
14. Long-term Equity Investment
The long-term equity investments of this part refer to the long-term equity investments that the Group has control, joint control or significant influence over the investees. The long-term equity investment that the Group does not have control, joint control or significant influence over the investees, should be recognized as available-for-sale financial assets or be measured by fair value with the changes should be included in the financial assets accounting of the current gains and losses.
(1) Recognition of investment costs
As for long-term equity investments acquired by enterprise merger, if the merger is under the same control, the share of the book value of theowner’s equity of the merged enterprise, on the date of merger, is regarded as the initial cost of the long-term equity investment. The difference between the initial cost of the long-term equity investment and the payment in cash, non-cash assets transferred as well as the book value of the debts borne by the merging party shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted (If the consideration of the merging enterprise is that it issues equity securities, it shall, on the date of merger, regard the share of the book value of the shareholder's equity of the merged enterprise on the consolidated financial statement of the ultimate control party as the initial cost of the long-term equity investment. The total face value of the stocks issued shall be regarded as the capital stock, while the difference between the initial cost of the long-term equity investment and total face value of the shares issued shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. The equities of the combined party which respectively acquired through multiple transaction under the same control that ultimately form into the combination of the enterprises under the same control, should be disposed according whether belongs to package deal; if belongs to package deal, each transaction would be executed accounting treatment by the Company as a transaction of acquiring the control right. If not belongs to package deal, it shall, on the date of merger, regard the enjoyed share of the book value of the shareholder's equity of the merged enterprise on the consolidated financial statement of the ultimate control party as the initial cost of the long-term equity investment, and as for the difference between the initial investment cost of the long-term equity investment and sum of the book value of the long-term equity investment before the combination and the book value of the consideration of the new payment that further required on the combination date, should adjust the capital reserve; if the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. The equity investment held before the combination date which adopted the equity method for accounting, or the other comprehensive income confirmed for the available-for-sale financial assets, should not have any accounting disposal for the moment).
For the long-term investment required from the business combination under different control, the initial investment cost regarded as long-term equity investment on the
purchasing date according to the combination cost, the combination costs shall be the sum of the fair values of the assets paid, the liabilities incurred or assumed and the equity securities issued by the Company (The equities of the acquirees which respectively acquired through multiple transaction that ultimately form into the combination of the enterprises under the different control, should be disposed according whether belongs to package deal; if belongs to package deal, each transaction would be executed accounting treatment by the Company as a transaction of acquiring the control right. If not belongs to package deal, the sum of the book value of the original held equity investment of the acquirees and the newly added investment cost should be regarded as the initial investment cost of the long-term equity investment that changed to be accounted by cost method. If the original held equity is calculated by cost method, the other relevant comprehensive income would not have any accounting disposal for the moment. If the original held equity investment is the financial assets available for sale, its difference between the fair value and the book value as well as the accumulative changes of the fair value that include in the other comprehensive income, should transfer into the current gains and losses).
The commission fees for audit, law services, assessment and consultancy services and other relevant expenses occurred in the business combination by the combining party or the purchase party, shall be recorded into current profits and losses upon their occurrence; the transaction expense from the issuance of equity securities or bonds securities which are as consideration for combination by the combining party, should be recorded as the initial amount of equity securities and bonds securities.
Besides the long-term equity investments formed by business combination, the other long-term equity investments shall be initially measured by cost, the cost is fixed in accordance with the ways of gaining, such as actual cash payment paid by the Group, the fair value of equity securities issued by the Group, the agreed value of the investment contract or agreement, the fair value or original carrying amount of exchanged assets from non-monetary assets exchange transaction, the fair value of the long-term equity investments, etc. The expenses, taxes and other necessary expenditures directly related with gaining the long-term equity investments shall also be recorded into investment cost. The long-term equity investment cost for those could execute significant influences on the investees because of appending the investment or could execute joint control but not form as control, should be as the sum of the fair value of the original held equity investment and the newly added investment cost recognized according to the No. 22 of Accounting Standards for BusinessEnterprises—Recognition and Measurement of Financial Instrument.
(2) Subsequent measurement and recognition of gains or losses
Long-term equity investment measured by cost method
The long-term equity investment which the Company could execute the control on the investees, should be measured by cost method and shall be included at its initial
investment cost and append as well as withdraw the cost of investing and adjusting the long-term equity investment.
As for the long-term equity investment measured by cost method, the return on investment at current period shall be recognized in accordance with the cash dividend or profit announced to distribute by the invested entity, except the announced but not distributed cash dividend or profit included in the actual payment or consideration upon gaining the investment.
Long-term equity investment measured by equity method
As for the long-term equity investment of the joint ventures and the associated enterprises, the Company adopts the equity method for measurement; as for the one part of the equity investment that indirectly held by the joint ventures through the similar main bodies such as the venture capital Institutions, mutual fund, trust company or the unit-linked Insurance funds, should be measured by adopting fair value with the changes be recorded in the gains and losses.
If the initial cost of a long-term equity investment is more than theCompany’s attributable share of the fair value of the investedentity’s identifiable net assets for investment, the initial cost of the long-term equity investment may not be adjusted. If the initial cost of a long-term equity investment is less than theCompany’s attributable share of the fair value of the investedentity’s identifiable net assets for investment, the difference shall be included in the current profits and losses.
After the Company acquires the long-term equity investment, respectively recognize investment income and other comprehensive income according to the net gains and losses as well as the portion of other comprehensive income which should be enjoyed or be shared, and at the same time adjust the book value of the long-term equity investment; corresponding reduce the book value of the long-term equity investment according to profits which be declared to distribute by the investees or the portion of the calculation of cash dividends which should be enjoyed; for the other changes except for the net gains and losses, other comprehensive income and theowners’ equity except for the profits distribution of the investees, should adjust the book value of the long-term equity investment as well as include in theowners’ equities.
When executes the measurement on the long-term equity investment by the equity method, the Company should adjust the net profits of the investees in the aspects such as the fair value, accounting policies and accounting period of each identifiable asset of the investees when acquiring firstly and secondly recognize the current investment gains and losses according to the net gains and losses which should enjoyed or undertook of the investees.
For the unrealized profits or losses of internal transactions occurred among the Company and joint ventures, the proportion attributable to the Company will be recognized based on the offset as the investment gains and losses.
Recognition of share of losses of the invested companies under the equity method is treated in the following steps: First, reduce the book value of the long-term equity investment. Second, when the book value is insufficient to cover the share of losses, investment losses are recognized up to a limit of book values of other long-term equity which form net investment in substance by reducing the book value of long term receivables, etc. Finally, after all the above treatments, if the Company is still responsible for any additional liabilities in accordance with the provisions stipulated in the investment contracts or agreements, estimated liabilities are recognized and charged into current investment loss according to the liabilities estimated. If the invested company achieve profit in subsequent periods, the treatment is in the reversed steps described above after deduction of any unrecognized investment losses, i.e., reduce book value of estimated liabilities recognized, restore book values of other long-term equity which form net investment in substance, and in long-term equity investment, and recognize investment income at the same time.
Disposal of the long-term equity investment
When disposing of a long-term equity investment, the difference between its book value and the actual purchase price shall be included in the current profits and losses. As for the long-term equity investment measured by adopting the equity method, when disposing the investment, should adopt the same basis as the investees when directly disposing the relevant assets or liabilities and execute the accounting treatment on the part which originally be recorded in the other comprehensive income according to the corresponding proportion. As for theowners’ equities recognized owning to the changes of the otherowners’ equities except for the net gains and losses, other comprehensive income and the profits distribution of the investees, should be carried down in the current gains and losses according to the proportion. If lost the jointly control or the significant influences on the investees owning to the reasons such as disposing part of the equity investment, the retained equities after the disposal should change to be recognized according to the financial instruments and be measured by the measure criterion, with the difference between the fair value on the date losing the jointly control or the significant influences and the book value, should be recorded in the current gains and losses. As for the other comprehensive income recognized owning to the original equity investment which be measured by adopting the equity method, should be executed the accounting treatment bases on the same basis as directly disposing the relevant assets or liabilities by the investees when terminating the measurement by adopting the equity method. And theowners’ equities recognized owning to the changes of the otherowners’ equities except for the net gains and losses, other comprehensive income and the profits distribution, should be totally transferred in the current gains and losses when terminating the measurement by adopting the equity method.
As for those lost the control right on the investees owning to the reasons such as disposing part of the equity investment, when preparing the individual financial statement, if the retained equities after the disposal could execute the jointly control or
significant influences on the investees, should change to be measured by equity method and execute the adjustment of the retained equity by regarding which as adopting the equity method for measurement the time when acquires; and if the retained equities after the disposal could not execute the jointly control or significant influences on the investees, should change to be recognized according to the financial instruments and be executed the accounting treatment according to the relevant regulations of the measure criterion with the difference between the fair value on the date lost the control and the book value, should be recorded in the current gains and losses.
If the disposed equity is acquired by the enterprise merger owning to the reasons such as the additional investment, when preparing the individual financial statement, as for the disposed retained equities be measured by adopting the cost method or the equity method, the other comprehensive income and the otherowners’ equities recognized owning to the equity investment which adopts the equity method for measurement before the purchase date should be carried forward according to the proportion; as for the disposed retained equities change to be recognized according to the financial instruments and be executed the accounting treatment according to the measure criterion, the other comprehensive income and otherowners’ equities should be totally carried forward.
(3) Judgment criterion of the jointly control and significant influences
If the Company jointly control certain arrangement according to the relevant agreement with the other participants and owns the activity decision-making with significant influences on the return of the arrangement, which only exists through the consensus of the participants with enjoy and control right, should regard the Company and other participants jointly control certain arrangement and the arrangement is the joint venture arrangement.
As for the joint venture arrangement reaches through the individual main body, when judging the Company enjoying the right on the net assets of the individual main body according to the relevant agreement, should regard the individual main body as the joint venture and should measure which by adopting the equity method. If the Company not enjoys the right on the net assets of the individual main body according to the relevant agreement after the judgment, the individual main body should be regarded as the jointly operation and the Company should recognize the projects related to the interest shares of the joint operation and execute the accounting treatment according to the regulations of the relevant ASBE.
The term “significant influence” means having the power to participate in the formulation of financial and operating policies of an enterprise, but not the power to control or jointly control the formulation of these policies together with other parties. The Company judges whether there are significant influences on the investees through one or various situations of the following and comprehensively considers all the facts and situations. (1) there are representatives assigned in the Board of Directors or the
similar capability mechanisms in the investees; (2) participates in the decision-making process of the financial and operating policies of the investees; (3) there are significant transactions with the investees; (4) sends the administrative staffs to the investees; (5) provides the key technical materials to the investees.
(4) Impairment testing and impairment provision methods
On the balance sheet date, if there are similar situations such as the book value of the long-term equity investment larger than the shares of the book value of theowners’ equities of the investees, the Company should execute the impairment test of the long-term equity investment according to the No. 8 of ASBE– Assets Impairment and as for the recoverable amount less than book value of the long-term equity investment, should be withdrawn the impairment provision. As for the specific methods for withdrawing the assets impairment, please refer to Notes IV. 19.
15. Investment Real Estates
Measurement mode of investment real estates
Measurement of cost method
Depreciation or amortization method
Investment real estates refer to the real estate held for gaining the rental or the capital appreciation or for both causes mentioned above, which includes the leased land use right, held-to-transferred land use right after appreciation and the leased buildings.
The Company adopts cost mode measurement on the current investment real estates. For investment properties and rental assets measured at the cost model, they will be implemented the same depreciation policy similar to fixed assets, land use right for rental will be implemented the same amortization policy to intangible assets; for those with the indication of impairment, the recoverable amount can only be estimated, and if recoverable amount is lower than its book value, the corresponding impairment loss should be confirmed.
16. Fixed Assets
(1) Conditions for Recognition
Fixed assets are tangible assets that are held for use in the production or supply of services, for rental to others, or for administrative purposes; they have useful lives over one fiscal year. And they shall be recognized only when both of the following conditions are satisfied: A. It is probable that economic benefits associated with the assets will flow to the enterprise; B. The cost of the fixed assets can be measured reliably.
(2) Depreciation Methods
||||||
|-|-|-|-|-|
||||Expected net salvage||
|Category of fixed assets|Method|Useful life||Annual deprecation|
||||value||
||Average method of||||
|Buildings and||35 years|5%|2.71%|
|constructions|useful life||||
||Average method of||||
|||10 years|5%|9.50%|
|Machinery equipment|||||
||useful life||||
|Transportation|||||
||Average method of||||
|||8 years|5%|11.88%|
|equipment|useful life||||
|Office equipment and|||||
||Average method of||||
|||5 years|5%|19.00%|
|others|useful life||||

Not applicable
(3) Recognition Basis, Pricing and Depreciation Method of Fixed Assets by Finance Lease
The fixed assets gained from financing leasing, if could ensure reasonable to gain the ownership of the leasing assets when the term expired, should withdraw the depreciation during the service period of the leasing assets; if could not ensure reasonable to gain the ownership of the leasing assets when the term expired, should withdraw the depreciation during the shorter period between the leasing period and the service period of the leasing assets.
If the fixed assets gained from the financing leasing method met with the capitalization condition of the remodeling expense, should average amortized according to the shortest period among the period between the two decorations, the rest leasing period and the service period of the fixed assets.
17. Construction in Progress
(1) Classification of construction in progress
The Construction in progress will be calculated based on the classification of proposed projects.
(2) Transfer time of construction in progress to fixed assets
For the construction in progress, all expenses occurring before they are ready for the use will be the book values as the fixed assets. In case the construction in progress has
been ready for use but the final accounts for completion have not been handled, from
the date when such projects has been ready for use, the Company will evaluate the
values and determine the costs based on the project budgets, prices or actual costs of projects, etc and the depreciation amount will also be withdrawn; when the final accounts for completion are handled, the Company will adjust the originally evaluated values subject to the actual costs, but will not adjust the withdrawn depreciation amount.
18. Borrowing Expenses
(1) Confirmation principle of capitalization of borrowing expenses
In case the borrowing expenses occurring in the Company may directly be attributable to the construction and productions of assets complying with the capitalization conditions, they will be capitalized and accrued to the relevant capital costs; other borrowing expenses will be confirmed as the expenses based on the actual amount at the time of occurrence and accrued to the current profit or loss.
The assets complying with the capitalization conditions mean the assets such as fixed assets, investment real estates and inventory, etc that need a long time of construction and production activities before they are ready for use or for sales.
The borrowing expenses begin to be capitalized under the following circumstances:
A. The asset payment have been made which include the payment such as the paid cashes, transferred non-currency assets or borne liabilities with the interests to construct or produce the assets complying with the capitalization conditions;
B. The borrowing expenses have occurred;
C. The necessary construction or production activities to make the assets ready for use or sales have been launched.
In case during the construction or production period the assets complying with the capitalization conditions are abnormally suspended and the suspension period exceeds 3 months continuously, the capitalization of borrowing expenses will also be suspended.
The capitalization of borrowing expenses for the assets that have been constructed or produced and are ready for use or sales will be stopped.
When parts of the purchased assets or assets whose production satisfies the capitalization conditions are completed respectively and can be used individually, the capitalization of the borrowing expenses of these parts will be stopped.
(2) Capitalization period of borrowing expenses
The capitalization period means the period from the moment that the borrowing expenses start to be capitalized to the moment that the capitalization is stopped, which does not include the period that the capitalization of borrowing expenses is
suspended.
(3) Calculation method about capitalization amount of borrowing expenses
The interest expenses for special loans (after the deduction of interest income generated by the unused loan capitals or the investment return obtained from the temporary investments) and auxiliary expenses will be capitalized before the assets complying with the capitalization conditions are ready for the expected use or sales.
The interest amount of general loans to be capitalized will be determined by multiplying the weighted average amount of the asset payment by which the accumulated assets exceed the special loans with the capitalization rate of general loans. The capitalization rate will be determined based on the weighted average interest rate of general loans.
In case the loans have the discounts or premiums, the Company will adjust the interest amount in each period based on the amortized discount and premium amount in each
accounting period in accordance with the actual interest rate method.
19. Biological Assets
Not applicable
20. Oil-gas Assets
21. Intangible Assets
(1) Pricing Method, Service Life and Impairment Test
Pricing method of the intangible assets
When acquiring, the intangible assets are generally recorded according to actual cost;
A. For those the price of intangible assets deferred paid exceed normal credit condition so substantively has financing character, the cost of intangible assets is confirmed on the basis of present value of purchasing price.
B. For fixed assets formed through obtaining them by the debtor paying for debt in debt restructure, recognize its recording value as fair value of the fixed assets, and record the difference between the carrying amounts of debt restructure and the fixed assets used for paying debt into current profit or loss; in the circumstance of the non monetary assets exchange has commercial nature and fair value of surrendered or received assets can be measured reliably, recording value of received assets should be recognized as fair value of surrendered assets unless there is clear evidence to indicate that fair value of received assets is more reliable; for non monetary assets exchange whichdoesn’t meet the requirement of premise mentioned above, cost of received assets should be recognized as carrying amount and related tax expenses payable of
surrendered assets and should not be recognized as profit or loss.
C. Recording value of fixed assets obtained by absorbing and consolidated by enterprise under the common control should be recognized as carrying amount of the consolidated party; recording value of fixed assets obtained by absorbing and consolidated by enterprise under different control should be recognized as fair value.
Service life and amortization of the intangible assets
A. Estimation of useful life for intangible assets with finite useful life
At end of each year, the Company will recheck the useful life of intangible assets with the definite useful life and amortization method will be rechecked.
According to the re-check, the useful life and amortization method of the intangible assets at the end of the year are not different from those estimated before.
B. Amortization of the intangible assets:
In case their useful life is limited, the intangible assets are amortized evenly over the period in which they produce economic profit for the Company; in case it is impossible to evaluate the useful life when the intangible assets bring the benefits to enterprises, it will be deemed that the useful life of such intangible assets is uncertain and amortization is not applicable and not execute the amortization.
(2) Accounting Policy for Internal Research and Development Expenditures
Not applicable
22. Long-term Assets Impairment
For the long-term non-current financial assets of the fixed assets, projects under construction and intangible assets, the Company would judge whether decrease in value exists on the date of balance sheet at every period-end. No matter whether there is any sign of possible assets impairment, the business reputation formed by the merger of enterprises and intangible assets with uncertain service lives shall be subject to impairment test every year.
If there is the sign of possible impairment of the assets, should estimate the recoverable amount:
(1) Where there is any evidence indicating a possible impairment of assets, the enterprise shall, on the basis of single item assets, estimate the recoverable amount.
(2) Where it is difficult to do so, it shall determine the recoverable amount of the group assets on the basis of the asset group to which the asset belongs.
(3) The recoverable amount shall be determined on the basis of the higher one of the
net amount of the fair value of the asset minus the disposal expenses and the current value of the expected future cash flow of the asset
Where the recoverable amount of the assets is lower than its carrying value, the book value of the assets should be written down to the recoverable amount with the written-down amount be recognized as the impairment losses of the assets and record which in the current gains and losses as well as at the same time withdraw the corresponding impairment provision of the assets.
After the recognition of the impairment losses of the assets, the depreciation or the amortization expenses of the impairment assets should be corresponding adjusted in the future period to lead the assets in the retained service life so that to systematically sharing the book value of the assets after the adjustment (deducted the expected net salvage).
The impairment losses of the long-term non-current financial assets of the fixed assets, projects under construction and intangible assets once being recognized should no longer be reversed in the accounting period afterwards.
23. Long-term Expenses to be Amortized
Long-term expenses to be amortized will be averagely amortized in the benefit period, including:
(1) Prepaid rentals for operating leased fixed assets will be averagely amortized according to the term stipulated in the lease contract.
(2) Fixed assets improvement expenses for operating leased fixed assets will be averagely amortized according to the remaining lease period and the useful life of leased assets, whichever is shorter.
24. Payroll
(1) Accounting Treatment of Short-term Compensation
Short-term compensation refers to the Company needs to pay all of the payroll for the employees within 12 months after the end of the annual Reporting Period during which the employees provide the relevant service and exclude the welfare after demission and the demission welfare. The short-term compensation actually happened during the accounting period when the active staff offering the service for the Company should be recognized as liabilities and is included in the current gains and losses or relevant assets cost. During the accounting period the service workers providing the service, the social insurance charges such as the medical treatment, industrial injury, birth insurance and the housing fund paid for the employees by the Company as well as the labor union expenditure and the personnel education fund withdrawn according to the regulations, should be calculated the corresponding
amount of the payroll according to the stipulated withdraw basis and withdraw proportion
If the employee services and benefits is the non-monetary welfare, should be measured by fair value.
(2) Accounting Treatment of the Welfare After Demission
Welfare after demission refers to various forms of the compensation and benefits provided by the Company which receive the service from the employees after the retirement or the relief of the labor relation with the enterprise of the service workers, except for the short-term compensation and demission welfare. Welfare plan after demission is classified into defined contribution plans and defined benefit plans.
A. Defined contribution plans
During the accounting period the service workers providing the service for the Company, the Company should pay the basic endowment insurance and unemployment insurance for the employees according to the relevant regulations of the local government and the payable amount calculated according to the cardinal number of the payment as well as the proportion stipulated by the local, should be recognized as the liabilities and record which in the current gains and losses or the relevant assets cost.
The Company pays the fees for the local social insurance agencies according to the certain proportion of the total amount of the staff salaries and the corresponding expenses should be recorded in the current gains and losses or the relevant assets cost. B. Defined benefit plans
The Company attributes the benefits obligations from the defined benefit plans according to the formula recognized by the expected accumulative benefit units to the period the employees providing the service and records which in the current gains and losses or the relevant assets cost.
The deficits or surplus formed from the current value of the defined benefit plans obligations minuses the fair value of the defined benefit plans assets should be recognized as a net liability or net assets of the defined benefit plans. If there is surplus of the defined benefit plans, the Company should measure the net assets of the defined benefit plans according to the lower one between the surplus and the assets of the defined benefit plans.
All the obligations of the defined benefit plans, including the obligations paid within 12 months after the end of the expected annual Reporting Period the service workers providing the service, should be discounted according to the national debt matched with the obligatory term of the defined benefit plans and the currency on the balance sheet date or the market returns of the high-quality company bonds on the active
market.
The service cost from the defined benefit plans and the net liabilities or the net amount of the interests of the net assets from the defined benefit plans should be recorded in the current gains and losses or the relevant assets cost; the net liabilities of the defined benefit plans be remeasured or the changes from the net assets should be recorded in the other comprehensive income and should not be reversed to the gains and losses in the follow-up accounting period.
When settling the defined benefit plans, should recognize the settled gains or losses according to the difference between the current value of the defined benefit plans recognized on the settlement date and the settlement price.
(3) Accounting Treatment of the Demission Welfare
Demission welfare which refers to that the Company cancels the labor relationship with any employee prior to the expiration of the relevant labor contract or brings forward any compensation proposal for the purpose of encouraging the employee to accept a layoff was recorded into current gains and losses in the Current Period. When the Company cannot unilaterally withdraw the earlier one between the demission welfare provided owning to the relieve of the labor relation plans or the reduction advices and the recognition of the cost or expenses related to the reorganization involved with the payment of the demission welfare, the liabilities of the employee compensation from the demission welfare should be recognized and be recorded in the current gains and losses.
(4) Accounting Treatment of the Welfare of Other Long-term Staffs
Not applicable
25. Estimated Liabilities
(1) Recognition principles:
Only if the obligation pertinent to a contingencies such as external guarantee, unsettled lawsuits or arbitrations, quality guarantee of the products, losses contracts, restructuring obligations, retirement obligations of fixed assets shall be recognized as an estimated debts when the following conditions are satisfied simultaneously:
A. That obligation is a current obligation of the Company;
B. It is likely to cause any economic benefit to flow out of the Company as a result of performance of the obligation; and
C. The amount of the obligation can be measured in a reliable way.
(2) Measurement methods:
The Company shall measure the estimated debts in accordance with the best estimate of the necessary expenses for the performance of the current obligation.
When recognizing the current best estimate, the Company should comprehensive consider the elements such as the risks, uncertainty and currency time and value of the contingencies.
The best estimate should be respectively disposed according to the following situations:
A. If there is a sequent range (or section) for the necessary expenses and if all the outcomes within this range are equally likely to occur, the best estimate shall be determined in accordance with the middle estimate which is equaled to the average amount of the bound amount within the range.
B. When there is not a sequent range (or section) for the necessary expenses, or there is a sequent range but the possibility of various kinds of results happed would be different within the range, so if the contingencies concern a single item, the best estimate shall be determined in the light of the most likely outcome; and if the contingencies concern two or more items, the best estimate should be calculated and determined in accordance with all possible outcomes and the relevant probabilities.
When all or some of the expenses necessary for the liquidation of an estimated debts of an enterprise is expected to be compensated by a third party, the compensation should be separately recognized as an asset when it is virtually certain that the reimbursement will be obtained and the amount recognized for the reimbursement should not exceed the book value of the estimated debts.
26. Share-based Payment
Not applicable
27. Other Financial Instruments Such as Preferred Shares and Perpetual Capital Securities
Not applicable
28. Revenue
Whether the Company needs to comply with the disclosure requirements of special industry?
No
(1) Sales of goods
Revenue from the sale of goods is recognized when the enterprise has transferred to the buyer the significant risks and rewards of ownership of the goods; the enterprise retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; it is probable that the
economic benefits associated with the transaction will flow to the enterprise; and the relevant amount of revenue and costs can be measured reliably.
Real estate sales will be confirmed the realization of revenue thereof upon the complete and acceptance of real estate, meeting the delivery terms of sales contract, and obtaining the proof of payment made by the purchasers according to the agreement under the contract on delivering real estate (usually after receiving the first phase of sales contract payment and confirming the payment arrangements of the remaining).
(2) Providing service
In case on the preparation date of balance sheet the results about service transaction can be reliably evaluated, the labor income will be confirmed by the completion percentage method. The completed percentage of service transactions is determined by the measurement of finished work (or the proportion of services performed to date to the total services to be performed, or the proportion of costs incurred to date to the estimated total costs).
The Company will determine the total amount of rendering of service based on the prices in contracts and agreements that have been received or will be receivable, except that such prices are not fair. On the balance sheet date, the current labor incomes will be determined based on the amount after the total labor income amount multiplied by the completion progress deducts the accumulated labors in the past accounting periods. At the same time, the current labor incomes will be carried forward based on the amount after the estimated total labor cost multiplied by the completion progress deducts the accumulated labors in the past accounting periods.
In case the service transaction results on the preparation date of balance sheet cannot be reliably evaluated, they will be determined in the following methods:
A. In case the service costs that have occurred can be compensated, the service income will be confirmed based on such service costs and the same amounts will be settled as the service costs.
B. In case the service costs that have occurred cannot be compensated, such service costs will be accrued to the current profit or loss and will not be confirmed as the service costs.
(3) Use right of transferred assets
In case the economic benefits related to the transaction will probably flow into the enterprise and the income amounts can be reliably calculated, the Company will determine the income amount about use right of transferred assets by the following means:
A. The interest income amount will be calculated and determined based on the use
time of currency capital from the Company by others and actual interest rate.
B. The income amount of use expenses will be calculated and determined subject to the charging time and method agreed in the relevant contracts and agreements.
29. Government Subsidies
(1) Judgment Basis and Accounting Treatment of Government Subsidies Related to Assets
Government grants refer to monetary assets or non-monetary assets obtained free by a company from the government, but not include the capital invested by government as a business owner.
The government grants should be recognized when simultaneously met with the following conditions:
A. The Company can meet the conditions for the government subsidies;
B. The enterprise can obtain the government subsidies.
Government grants related to assets are recognized as deferred income and are averagely distributed in the life of relevant assets, and recorded to current profit or loss.
(2) Judgment Basis and Accounting Treatment of Government Subsidies Related to Income
Government grants related to income are handled under the following circumstances:
A. If such grants are used to compensate for relevant costs and losses of the company during later periods, they will be recognized as deferred income and recorded to current profit or loss upon recognizing related costs;
B. If such grants are used to compensate for relevant costs and losses occurred of the company, they will be directly through current profit or loss.
30. Deferred Income Tax Assets/Deferred Income Tax Liabilities
Corporate income tax will be calculated by liability method of the balance sheet.
Thecompany’s tax base will be determined upon the company obtains the assets or liabilities; on the balance sheet date, take the balance sheet as the basis, and if the book value of related assets or liabilities are different to the tax bases provided by tax laws, it will calculate and confirm the deferred income tax assets or deferred income tax liabilities occurred in accordance with the provisions of tax laws, which effect will be included in current income tax expense.
The company is subject to the limit of the amount of taxable income likely to be used to offset temporary difference, thus confirms the deferred income tax asset produced by the deductible temporary difference.
In addition to the cases specified under income guidelines that no need to confirm the deferred income tax liabilities, the company should recognize related deferred income tax liabilities for all taxable temporary differences.
31. Lease
(1) Accounting Treatment of Operating Lease
If the terms of the lease will be transferred to the lessee substantially together with all the risks and rewards related to the ownership of leased assets, then the lease is a finance lease, and other lease is operating lease.
(1) The Company as the leaser
As for the rent expenses from operating leases, the Company recognizes the current gains and losses by using the straight-line method over each period of the lease term. The initial direct costs shall be recognized as the profits and losses of the current period
(2) The Company as the leasee
The Company uses depreciation policy consistent with its own fixed assets to make provision for depreciation of leased assets.
For rent in operating leases, the Company will use the straight-line method to record it into the cost of relevant assets or current profit or loss in each period during the lease term; and initial direct costs occurred will be through current profit or loss.
Rent in operating leases will be recorded into the cost of relevant assets or current profit or loss in each period during the lease term.
(2) Accounting Treatments of Finance Lease
The Company as the leaser
In finance lease, at the lease beginning date, the Company takes the minimum lease receipt and the initial direct costs as the entry value of finance lease receivable, and records the unguaranteed residual value; and the difference between the sum of minimum lease receipt, initial direct costs and unguaranteed residual value and its present value is recognized as unrealized finance income. For unrealized finance income each period during the lease term, it will use the effective interest method to confirm the current financing income.
The Company as the leasee
In finance lease, at the lease beginning date, the Company will take the lower of the fair value of the leased assets and the present value of minimum lease payment as the entry value of leased assets, and take the minimum lease payment as the entry value of long-term payables, and their difference will be as unrecognized finance cost.
Initial direct costs are included in the value of leased assets. For unrecognized finance income each period during the lease term, it will use the effective interest method to confirm the current financing cost.
32. Other Significant Accounting Policies and Estimates
Not applicable
33. Changes in Main Accounting Policies and Estimates
(1) Change of Accounting Policies
□ Applicable√ Not applicable
(2) Significant Changes in Accounting Estimates
□ Applicable√ Not applicable
34. Other
Not applicable
VI. Taxation
1. Main Taxes and Tax Rate
||||
|-|-|-|
|Category of taxes|Tax basis|Tax rate|
|VAT|Revenue of product|17|
|Consumption tax|Revenue of sale of taxable product|5|
||Consumption tax, VAT and business tax||
|Urban maintenance and construction tax||7|
||the taxpayer actually paid||
|Corporate income tax|Income tax payable|25|
||Revenue of sales of real estate (after May||
|VAT||5|
||1, 2016, apply a simplified method)||
||Revenue of sales of real estate (before||
|Business tax||5|
||April 30, 2016)||

Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
|||
|-|-|
|Name|Income tax rate|

2. Tax Preference
3. Other
1. The Company implements the uniform tax rebate policy of export, i.e. the export is exempt from VAT and the input-VAT of goods is refunded with refund rate according to relevant rules before export in accordance with the requirements of tax law.
2. Since January 1, 2008, other subsidiaries of the Company has adopted the applicable income tax rate of25%, except for those company established in the below-mentioned districts.
Companies established in Hong Kong SAR are entitled to a profits tax rate of16.5%.
VII. Notes on Major Items in Consolidated Financial Statements of the Company 1. Monetary Funds
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Cash on hand|525,024.48|49,087.45|
|Bank deposits|6,491,008.82|123,834,488.84|
|Other monetary funds|2,174.58|3,400.53|
|Total|7,018,207.88|123,886,976.82|
|Of which: total amount deposited in|||
||4,308.67|39,715.34|
|overseas|||

Other notes:
There was no any account pledged, frozen or with potential recovery risks of the Company at the period-end.
2. Financial Assets Measured by Fair Value and the Changes be Included in the Current Gains and Losses
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Trading financial assets|9,977,189.76|15,499,631.52|
|Equity tool investment|9,977,189.76|15,499,631.52|
|Total|9,977,189.76|15,499,631.52|

Other notes:
3. Derivative Financial Assets
□ Applicable√ Not applicable
4. Notes Receivable
(1) Notes Receivable Listed by Category
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|

 (2) Notes Receivable Pledged by the Company at the Period-end
Unit: RMB
|||
|-|-|
|Item|Pledged amount at the period-end|

 (3) Notes Receivable which had Endorsed by the Company or had Discounted and had not Due on the Balance Sheet Date at the Period-end
Unit: RMB
||||
|-|-|-|
||Amount of recognition termination at the|Amount of not terminated recognition at|
|Item|||
||period-end|the period-end|

 (4) Notes Transferred to Accounts Receivable Because Drawer of the Notes Fails to Executed the Contract or Agreement
Unit: RMB
|||
|-|-|
|Item|Transferred accounts receivable amount at the period-end|

 Other notes:
5. Accounts Receivable
(1) Accounts Receivable Disclosed by Category
Unit: RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|||||Withdrawalproportion|||||||
|Category|||||Book||||||
|||Proportio|||||Proportio||Withdrawal|Book value|
||Amount||Amount||value|Amount||Amount|||
|||n|||||n||proportion||

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Accounts receivable|||||||||||
|with significant|||||||||||
|single amount for|10,072,1||10,072,1|||10,212,||10,212,50|||
|||33.33%||100.00%|||18.30%||100.00%||
|which bad debt|46.03||46.03|||506.65||6.65|||
|provision separately|||||||||||
|accrued|||||||||||
|Accounts receivable|||||||||||
|withdrawal of bad|||||||||||
||19,733,6||1,345,83||18,387,84|45,174,||1,617,034||43,557,743.|
|debt provision of by||65.30%||6.82%|||80.96%||3.58%||
||77.94||4.35||3.59|777.63||.35||28|
|credit risks|||||||||||
|characteristics:|||||||||||
|Accounts receivable|||||||||||
|with insignificant|||||||||||
|single amount for|414,548.||414,548.|||414,548||414,548.5|||
|||1.37%||100.00%|||0.74%||100.00%||
|which bad debt|51||51|||.51||1|||
|provision separately|||||||||||
|accrued|||||||||||
||30,220,3||11,832,5||18,387,843.59|55,801,||12,244,08||43,557,743.28|
|Total||100.00%||39.15%|||100.00%||21.94%||
||72.48||28.89|||832.79||9.51|||

 Accounts receivable with single significant amount and withdrawal bad debt provision separately at end of period
√ Applicable□ Not applicable
Unit: RMB
||||||
|-|-|-|-|-|
|Accounts receivable|Closing balance||||
|(classified by units)|Account receivable|Bad debt provision|Withdrawal proportion|Withdrawal reason|
|||||Long-term credit, the|
|Victoria|||||
||5,847,841.40|5,847,841.40|100.00%|Company believe it|
|International(USA) INC|||||
|||||irrecoverable|
|||||Long-term credit, the|
|Hong Kong Jinhua Trade|||||
||4,224,304.63|4,224,304.63|100.00%|Company believe it|
|Limited|||||
|||||irrecoverable|
|Total|10,072,146.03|10,072,146.03|--|--|

 In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Not applicable
Unit: RMB
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Account receivable|Bad debt provision|Withdrawal proportion|
|Sub-item within 1 year||||
|Subtotal within 1 year|18,990,846.30|617,438.92|3.25%|
|1 to 2 years|14,442.76|1,444.28|10.00%|

|||||
|-|-|-|-|
|2 to 3 years|2,155.24|1,077.62|50.00%|
|Over 3 years|726,233.64|725,873.53|99.95%|
|Total|19,733,677.94|1,345,834.35|6.82%|

 Notes of confirming the basis of the groups:
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision
□ Applicable√ Not applicable
In the groups, accounts receivable adopting other methods to withdraw bad debt provision:
(2) Accounts Receivable Withdraw, Reversed or Collected during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB 0.00; the amount of
the reversed or collected part during the Reporting Period was of RMB 411,560.62.
Significant amount of reversed or recovered bad debt provision:
Unit: RMB
||||
|-|-|-|
|Name of the entity|Amount|Method|

 (3) The Actual Write-off Accounts Receivable
Unit: RMB
|||
|-|-|
|Item|Amount|

Of which the significant write-off accounts receivable:
Unit: RMB
|||||||
|-|-|-|-|-|-|
||||||Whether produced|
|Name|Nature|Amount|Reason|Procedure|by related|
||||||transaction|

 Notes of accounts receivable write-off:
(4) Top 5 of the Closing Balance of the Accounts Receivable Collected According to the Arrears Party
Name Amount Bad debt Proportion provision % Shanghai Zhaoke Trading Co., Ltd 18,384,868.25 615,537.83 60.84 Victoria International(USA) INC 5,847,841.40 5,847,841.40 19.35 Hong Kong Jinhua Trade Limited 4,224,304.63 4,224,304.63 13.98 Hong Kong Heyi Co., Ltd 452,499.70 452,499.70 1.50 Chen Shunqin 335,904.80 335,904.80 1.11
Total 29,245,418.78 11,476,088.36 96.78
(5) Account Receivable which Terminate the Recognition Owning to the Transfer of the Financial Assets
(6) The Amount of the Assets and Liabilities Formed by the Transfer and the Continues Involvement of Accounts Receivable
Other notes:
6. Prepayment
(1) List by Aging Analysis
Unit: RMB
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Aging|||||
||Amount|Proportion|Amount|Proportion|
|Within 1 year|8,504,750.72|100.00%|207,424.73|207,424.73%|
|Total|8,504,750.72|--|207,424.73|--|

 Notes of the reasons of the prepayment ages over 1 year with significant amount but failed settled in time:
(2) Top 5 of the Closing Balance of the Prepayment Collected According to the Prepayment Target
Name of the entity Closing amount Proportion(%) Time Reason Shenzhen Zhaokang Investment 7,753,398.40 91.17 Y2017 The contract is not Co., Ltd fulfilled Shanghai Jiancheng Trading Co., 350,000.00 4.12 Y2017 The contract is not Ltd fulfilled Shandong Humon Smelting Co., 199,567.19 2.35 Y2017 The contract is not Ltd. fulfilled Shenzhen Wenxing Industrial Co., 76,331.63 0.90 Y2017 The contract is not Ltd fulfilled Mcs Outfitters (Shanghai) Limited 37,846.19 0.45 Y2017 The contract is not fulfilled Total 8,417,143.41 98.99
Other notes:
7. Interest Receivable
(1) Category of Interest Receivable
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|

(2) Significant Overdue Interest
||||||
|-|-|-|-|-|
|||||Impairment or not and its|
|Borrowing unit|Closing balance|Time|Reason||
|||||judgment basis|

 Other notes:
8. Dividend Receivable
(1) Dividend Receivable
Unit: RMB
||||
|-|-|-|
|Item (or investee unit)|Closing balance|Opening balance|

 (2) Significant Dividend Receivable with Aging over 1 Year
Unit: RMB
||||||
|-|-|-|-|-|
|||||Impairment or not and its|
|Item (or investee unit)|Closing balance|Aging|Reason||
|||||judgment basis|

 Other notes:
9. Other Accounts Receivable
(1) Other Accounts Receivable Disclosed by Category
Unit: RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|||||Withdrawalproportion|||||||
|Category|||||Book||||||
|||Proportio|||||Proportio||Withdrawal|Book value|
||Amount||Amount||value|Amount||Amount|||
|||n|||||n||proportion||
|Other accounts|||||||||||
|receivable with|||||||||||
|significant single|40,333,6||2,331,60||38,002,01|40,333,||2,331,608||38,002,013.|
|||67.68%||5.78%|||80.26%||5.78%||
|amount for which|22.03||8.20||3.83|622.03||.20||83|
|bad debt provision|||||||||||
|separately accrued|||||||||||
|Other accounts|||||||||||
|receivable withdrawn|16,481,7||3,401,84||13,079,86|6,822,6||3,401,847||3,420,834.9|
|||27.66%||20.64%|||13.58%||49.86%||
|bad debt provision|14.35||7.86||6.49|82.78||.86||2|
|according to credit|||||||||||

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|risks characteristics|||||||||||
|Other accounts|||||||||||
|receivable with|||||||||||
|insignificant single|2,780,16||2,780,16|||3,096,6||2,780,160|||
|||4.66%||100.00%|||6.16%||89.78%|316,536.00|
|amount for which|0.81||0.81|||96.81||.81|||
|bad debt provision|||||||||||
|separately accrued|||||||||||
||59,595,4||8,513,61|14.29%|51,081,880.32|50,253,||8,513,616||41,739,384.75|
|Total||100.00%|||||100.00%||16.94%||
||97.19||6.87|||001.62||.87|||

 Other accounts receivable with single significant amount and withdrawal bad debt provision separately at end of
period：
√ Applicable□ Not applicable
Unit: RMB
||||||
|-|-|-|-|-|
||Closing balance||||
|Other accounts|||||
||Other accountsreceivable||||
|receivable (unit)||Bad debt provision|Withdrawal proportion|Withdrawal reason|
|||||Long-term credit, the|
|Refund of tax for export|||||
||2,331,608.20|2,331,608.20|100.00%|Company believe it|
|receivable|||||
|||||irrecoverable|
|Puning Tianhe Weaving||||The amount had been|
|& Garments Factory Co.,|38,002,013.83|||collected by Jadiete|
|Ltd.||||Holding Group.|
|Total|40,333,622.03|2,331,608.20|--|--|

 In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Not applicable
Unit: RMB
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Other accounts receivable|Bad debt provision|Withdrawal proportion|
|Sub-item within 1 year||||
|Subtotal within 1 year|12,865,021.19|62,119.80|0.48%|
|1 to 2 years|141,526.37|14,152.63|10.00%|
|2 to 3 years|50,790.42|25,395.22|50.00%|
|Over 3 years|3,424,376.37|3,300,180.21|96.37%|
|Total|16,481,714.35|3,401,847.86|20.64%|

 Notes:
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable√ Not applicable
In the groups, other accounts receivable adopting other methods to withdraw bad debt provision:
□ Applicable√ Not applicable
(2) Bad Debt Provision Withdrawal, Reversed or Collected during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB0.00; the amount of the reversed or collected part during the Reporting Period was of RMB0.00.
Of which the significant amount of the reversed or collected part during the Reporting Period:
Unit: RMB
||||
|-|-|-|
|Name of the entity|Reversed or collected amount|Method|

 (3) The Actual Write-off Other Accounts Receivable
Unit: RMB
|||
|-|-|
|Item|Amount|

Of which the significant write-off other accounts receivable:
Unit: RMB
|||||||
|-|-|-|-|-|-|
||||||Whether produced|
|Name|Nature|Amount|Reason|Procedure|by related|
||||||transaction|

 Notes of other accounts receivable write-off:
(4) Other Account Receivable Classified by Account Nature
Unit: RMB
||||
|-|-|-|
|Nature|Closing book balance|Opening book balance|
|The cash pledge and guarantee|120,960.00|319,536.00|
|Payment on behalf|467,381.47|2,948,349.86|
|Intercourse funds|18,673,533.69|6,651,363.25|
|Bonus|38,002,013.83|38,002,013.83|
|Tax|2,331,608.20|2,331,738.68|
|Total|59,595,497.19|50,253,001.62|

 (5) Top 5 of the Closing Balance of the Other Accounts Receivable Collected According to the Arrears Party
Unit: RMB
|||||||
|-|-|-|-|-|-|
||||||Closing balance of|
|Name of the entity|Nature|Closing balance|Aging|Proportion%||
||||||bad debt provision|
|Puning Tianhe||||||
||Bonus|38,002,013.83|Within 1 year|63.77%||
|Weaving &||||||

|||||||
|-|-|-|-|-|-|
|Garments Factory||||||
|Co., Ltd.||||||
|Puning Yanlilai||||||
||Intercourse funds|12,000,000.00|Within 1 year|20.14%||
|Trade Co., Ltd||||||
|Refund of tax for||||||
|export|Tax|2,331,608.20|Over 5 years|3.91%|2,331,608.20|
|receivable-VAT||||||
|Suning Banhe||||||
|Chemical Fiber||||||
||Intercourse funds|800,000.00|Over 5 years|1.34%|800,000.00|
|Fabric Simulation||||||
|Co., Ltd.||||||
|Guangzhou Panyu||||||
|Tanzhou Zhenyu||||||
||Intercourse funds|800,000.00|Over 5 years|1.34%|800,000.00|
|Textile Printing and||||||
|Dyeing Co., Ltd||||||
|Total|--|53,933,622.03|--|90.50%|3,931,608.20|

 (6) Accounts Receivable Involved with Government Subsidies
Unit: RMB
||||||
|-|-|-|-|-|
|||||Estimated time, amount|
|Name of the units|Projects name|Closing balance|Closing aging||
|||||and basis|

 (7) Other Account Receivable which Terminate the Recognition Owning to the Transfer of the Financial Assets
(8) The Amount of the Assets and Liabilities Formed by the Transfer and the Continues Involvement of Other Accounts Receivable
Other notes:
10. Inventory
Whether the Company needs to comply with the disclosure requirements of the real estate industry
No
(1) Category of Inventory
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Falling price|||Falling price||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||

||||||
|-|-|-|-|-|
|Raw materials|3,538,001.64|3,538,001.64|||
|Inventory goods|111,017,060.77|111,017,060.77|47,695,584.06|47,695,584.06|
|Commissioned|||||
|processing|||18,861,349.18|18,861,349.18|
|materials|||||
|Delivery|||||
||||8,382,148.92|8,382,148.92|
|commodity|||||
|Total|114,555,062.41|114,555,062.41|74,939,082.16|74,939,082.16|

 Whether the Company needs to comply with the disclosure requirements of Shenzhen Stock Exchange Industry Information Disclosure Guidelines No. 4 - Listed companies engaged in seed industry and planting business
No
(2) Falling Price Reserves of Inventory
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
|||Increased amount||Decreased amount|||
|Item|Opening balance|||Reverse or||Closing balance|
|||Withdrawal|Other||Other||
|||||write-off|||

No such case in Reporting Period
(3) Notes of the Closing Balance of the Inventory which Includes Capitalized Borrowing Expenses
There was no closing balance of the inventory which includes capitalized borrowing
expenses
(4) Completed Unsettled Assets Formed From the Construction Contact at the Period-end
Unit: RMB
|||
|-|-|
|Item|Amount|

Other notes:
11. Assets Divided as Held-to-sold
Unit: RMB
||||||
|-|-|-|-|-|
||||Estimated disposal||
|Item|Closing book value|Fair value||Estimated disposal time|
||||expense||

Other notes:
12. Non-current Assets Due Within 1 Year
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|

 Other notes:
13. Other Current Assets
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Input tax to be verified|15,714,694.76|9,985,213.09|
|Total|15,714,694.76|9,985,213.09|

 Other notes:
Ministry of Finance issued Regulations of VAT Accounting Treatment (CK[2016] No. 22) on December 3, 2016, which specifically required that debit balance at the period-end of classification item, such as “VAT payable”, “unpaid VAT”, “input tax to be deducted”, and “input tax to be verified” in the course of “tax payable” should be listed in the item of “other current assets” or “other non-current assets” of balance sheet according to the situations. Credit balance at the period-end of course, like “taxpayable—tax to be written-off” should be listed in the item of “other current liabilities” or “other non-current liabilities” of balance sheet according to the situations.
14. Available-for-sale Financial Assets
(1) List of Available-for-sale Financial Assets
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Depreciation|||Depreciation||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||

(2) Available-for-sale Financial Assets Measured by Fair Value at the Period-end
Unit: RMB
|||||
|-|-|-|-|
|Category of theavailable-for-salefinancial assets||||
||Available-for-sale equity|Available-for-sale||
||||Total|
||instruments|liabilities instruments||

(3) Available-for-sale Financial Assets Measured by Cost at the Period-end
Unit: RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Book balance||||Depreciation reserves||||Shareholdi|Cash|
||||||||||ng|bonus of|
|Investee|Period-beg||||Period-beg||||proportion|the|
|||Increase|Decrease|Period-end||Increase|Decrease|Period-end|||
||in||||in||||among the|Reporting|
||||||||||investees|Period|

 (4) Changes of the Impairment of the Available-for-sale Financial Assets during the Reporting Period
Unit: RMB
|||||
|-|-|-|-|
|Category of the||||
||Available-for-sale equity|Available-for-sale||
|available-for-sale|||Total|
||instruments|liabilities instruments||
|financial assets||||

(5) Relevant Notes of the Fair Value of the Available-for-sale Equity Instruments which Seriously Fell or Temporarily Fell but not Withdrawn the Impairment Provision
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
|Item of|||||||
||||Falling range of||Withdrawn|Reason of not|
|available-for-sale||Fair value of the||Continued fallingtime (month)|||
||Investment cost||the fair value||amount of|withdrawn the|
|equity||period-end|||||
||||against the cost||impairment|impairment|
|instruments|||||||

Other notes:
15. Investment Held-to-maturity
(1) List of Investment Held-to-maturity
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Provision for|||Provision for||
||Book balance||Book value|Book balance||Book value|
|||impairment|||impairment||

(2) Significant Investment Held-to-maturity at the End of the Reporting Period
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Book value|Coupon rate|Actual interest rate|Due date|

 (3) The Current Reclassified Investment Held-to-maturity
Other notes
16. Long-term Accounts Receivable
(1) List of Long-term Accounts Receivable
Unit: RMB
|||||||||
|-|-|-|-|-|-|-|-|
||Closing balance|||Opening balance||||
||||||||Interval of|
|Item||Provision for|||Provision for|||
||Book balance||Book value|Book balance||Book value|discount rate|
|||impairment|||impairment|||

(2) Long-term Accounts Receivable Derecognized for the Transfer of Financial Assets
(3) Amount of Assets and Liabilities Generated from the Transfer of Long-term Accounts Receivable and Continuous involvement
Other notes
17. Long-term Equity Investment
Unit: RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Increase/decrease||||||||||
||||||||||||Closing|
|||||Gains and|Adjustme|||||||
||||||||Cash|Withdraw|||balance|
|||Additiona||losses|nt of|||||||
||Opening||Reduced|||Changes|bonus or|al of||Closing|of|
|Investees||||||||||||
|||l||recognize|other|||||||
||balance||investmen|||of other|profits|impairme|Other|balance|impairme|
|||investmen||d under|comprehe|||||||
||||t|||equity|announce|nt|||nt|
|||t||the equity|nsive|||||||
||||||||d to issue|provision|||provision|
|||||method|income|||||||
|I. Joint ventures||||||||||||
|II. Associated enterprises||||||||||||
|Shenzhen||||||||||||
|Shenguor||||||||||||
|ong|149,998,2|||||||||150,014,5||
|||||16,324.24||||||||
|Financing|21.71|||||||||45.95||
|Guarantee||||||||||||
|Co., Ltd.||||||||||||
|Shenzhen||||||||||||
|Future||||||||||||
|Growing||||||||||||
|Business||120,000,0||||||||120,000,7||
|||||729.98||||||||
|Fund||00.00||||||||29.98||
|(Limited||||||||||||
|Partnershi||||||||||||
|p)||||||||||||

||||||
|-|-|-|-|-|
||149,998,2|120,000,0||270,015,2|
|Subtotal|||17,054.22||
||21.71|00.00||75.93|
||149,998,2|120,000,0||270,015,2|
|Total|||17,054.22||
||21.71|00.00||75.93|

 Other notes
The
7th
meeting of
7th
board of directors held on Jan. 17, 2017, reviewed and passed the Proposal of participating and establishing a merger and acquisition fund: Shenzhen Future Growing Business Fund (Limited Partnership). The company participated and established the merger and acquisition fund: Shenzhen Future Growing Business Fund (Limited Partnership) with RMB 12 million on Mar. 14, 2017. After capital increase, the company takes up30% of Shenzhen Future Growing Business Fund (Limited Partnership). For details please see (1) in Note XII.
18. Investment Property
(1) Investment Property Adopting the Cost Measurement Mode
□ Applicable√ Not applicable
(2) Investment Property Adopting Fair Value Measurement Mode
□ Applicable√ Not applicable
(3) Details of Investment Property without Certificate of Property Right
Unit: RMB
||||
|-|-|-|
|Item|Book value|Reason|

 Other notes
19. Fixed Assets
(1) List of Fixed Assets
Unit: RMB
|||||||
|-|-|-|-|-|-|
||Houses and|Machinery|Transportation|Electronic and other||
|Item|||||Total|
||buildings|equipment|equipment|equipment||
|I. Original book||||||
|value||||||
|1. Opening||||||
||75,424,039.96||3,638,278.11|1,525,484.27|80,587,802.34|
|balance||||||
|2. Increased||||||
|amount of the period||||||

||||||
|-|-|-|-|-|
|(1) Purchase|||||
|(2) Transfer of|||||
|construction in|||||
|progress|||||
|(3) Increased|||||
|from enterprise|||||
|merger|||||
|3. Decreased|||||
|amount of the period|||||
|(1) Disposal or|||||
|Scrap|||||
|4. Closing balance|75,424,039.96|3,638,278.11|1,525,484.27|80,587,802.34|
|II. Accumulative|||||
||34,343,519.23|1,883,250.46|348,671.27|36,575,440.96|
|depreciation|||||
|1. Opening|||||
|balance|||||
|2. Increased|||||
||998,532.90|174,998.94|136,359.01|1,309,890.85|
|amount of the period|||||
|(1) Withdrawal|998,532.90|174,998.94|136,359.01|1,309,890.85|
|3. Decreased|||||
|amount of the period|||||
|(1) Disposal or|||||
|Scrap|||||
|4. Closing balance|35,342,052.13|2,058,249.40|485,030.28|37,885,331.81|
|III. Depreciation|||||
|reserves|||||
|1. Opening|||||
|balance|||||
|2. Increased|||||
|amount of the period|||||
|(1) Withdrawal|||||
|3. Decreased|||||
|amount of the period|||||

||||||
|-|-|-|-|-|
|(1) Disposal or|||||
|Scrap|||||
|4. Closing balance|||||
|IV. Book value|||||
|1. Closing book|||||
||35,342,052.13|2,058,249.40|485,030.28|37,885,331.81|
|value|||||
|2. Opening book|||||
||41,080,520.73|1,755,027.65|1,176,813.00|44,012,361.38|
|value|||||

(2) List of Temporarily Idle Fixed Assets
Unit: RMB
|||||||
|-|-|-|-|-|-|
|||Accumulative|Impairment|||
|Item|Original book value|||Book value|Notes|
|||depreciation|provision|||
|Houses and||||||
||20,962,955.00|11,625,378.60||9,337,576.40||
|buildings||||||

(3) Fixed Assets Leased in from Financing Lease
Unit: RMB
||||||
|-|-|-|-|-|
|||Accumulative|||
|Item|Original book value||Impairment provision|Book value|
|||depreciation|||

(4) Fixed Assets Leased out from Operation Lease
Unit: RMB
|||
|-|-|
|Item|Closing book value|

(5) Details of Fixed Assets without Certificate of Property Right
Unit: RMB
||||
|-|-|-|
|Item|Book value|Reason|

 Other notes
①Current period depreciation: RMB 1,309,890.85
②Original price of fixed assets changed from projects under construction in current period.
③In current period, the situation of fixed assets being used as guaranties: on Jun. 30,
2017, houses and buildings with a book value of RMB 9,337,576.40 (original value:
RMB 20,962,955.00) are used to provide guaranty to ICBC Jieyang Rongcheng
Sub-branch. Please see 2 (1) in Note XI.
④In current period, “disposal or crapping” of “houses and buildings”, please see Note XIII for details.
20. Construction in Progress
(1) List of Construction in Progress
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Impairment|||Impairment|Book value|
||Book balance||Book value|Book balance|||
|||provision|||provision||

(2) Changes of Significant Construction in Progress
Unit: RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||Of|||
|||||Amount|||Proporti|||which:|||
||||||||||Accumul||||
|||||that|||on|||the|Capitaliz||
||||||Other||||ative||||
|||||transferr|||estimate|||amount|ation rate||
||Estimate||||decrease||||amount||||
|Name o f||Openingbalance||ed to||Closing|d of the|Project||of the|of the|Capital|
||d||Increase||d amount||||of||||
|item||||fixed||balance|project|progress||capitaliz|interests|resources|
||number||||of the||||capitaliz||||
|||||assets of|||accumul|||ed|of the||
||||||period||||ed||||
|||||the|||ative|||interests|period||
||||||||||interests||||
|||||period|||input|||of the|||
|||||||||||period|||

(3) List of the Withdrawal of the Impairment Provision of the Construction in Progress
Unit: RMB
||||
|-|-|-|
|Item|Amount of provision|Reason of provision|

 Other notes
21. Engineering Material
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|

 Other notes:
22. Liquidation of Fixed Assets
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|

 Other notes:
23. Productive Biological Assets
(1) Productive Biological Assets Adopting Cost Measurement Mode
□ Applicable√ Not applicable
(2) Productive Biological Assets Adopting Fair Value Measurement Mode
□ Applicable√ Not applicable
24. Oil and Gas Assets
□ Applicable√ Not applicable
25. Intangible Assets
(1) List of Intangible Assets
Unit: RMB
|||||||
|-|-|-|-|-|-|
|Item|Land use right|Patent right|Non-patent right|373,115.00|Total|
|I. Original book||||||
|value||||||
|1. Opening||||||
||13,863,200.00|||373,115.00|14,236,315.00|
|balance||||||
|2. Increased||||||
|amount of the period||||||
|(1) Purchase||||||
|(2) Internal R||||||
|&D||||||
|(3) Increased||||||
|from enterprise||||||
|merger||||||
|3. Decreased||||||
|amount of the period||||||
|(1) Disposal||||||
|4. Closing|13,863,200.00|||373,115.00|14,236,315.00|

|||||
|-|-|-|-|
|balance||||
|II. Total accrued||||
|amortization||||
|1. Opening||||
||4,507,779.24|373,115.00|4,880,894.24|
|balance||||
|2. Increased||||
||138,631.92||138,631.92|
|amount of the period||||
|(1)||||
||138,631.92||138,631.92|
|Withdrawal||||
|3. Decreased||||
|amount of the period||||
|(1) Disposal||||
|4. Closing||||
||4,646,411.16|373,115.00|5,019,526.16|
|balance||||
|III. Depreciation||||
|reserves||||
|1. Opening||||
|balance||||
|2. Increased||||
|amount of the period||||
|(1)||||
|Withdrawal||||
|3. Decreased||||
|amount of the period||||
|(1) Disposal||||
|4. Closing||||
|balance||||
|IV. Book value||||
|1. Closing book||||
||9,216,788.84||9,216,788.84|
|value||||
|2. Opening||||
||9,216,788.84||9,355,420.76|
|book value||||

The proportion of the intangible assets formed from the internalR&D through the Company among the balance of
the intangible assets at the period-end is000%.
(2) Details of Land Use Right without Certificate of Property Right
Unit: RMB
||||
|-|-|-|
|Item|Book value|Reason|

 Other notes:
①In current period the amortization amount is RMB 138,631.92
②The situation of intangible assets being used as guaranties: on Jun. 30, 2017, a book value of RMB 2,061,759.21 (original value: RMB 3,206,000.00) is used to provide guaranty to ICBC Jieyang Rongcheng Sub-branch. Please see 2 (1) in Note XI.
③“Disposal” in current period, please see annotation Thirteen for details.
(2) No such cases of land use right without certificate of ownership in the Reporting Period.
26.R&D Expenses
Unit: RMB
||||||
|-|-|-|-|-|
||Opening|||Closing|
|Item||Current increased amount|Current decreased amount||
||balance|||balance|

 Other notes
27. Goodwill
(1) Original Book Value of Goodwill
Unit: RMB
||||||
|-|-|-|-|-|
|Name of the|||||
|invested units or|||||
||Opening balance|Increase|Decrease|Closing balance|
|events generating|||||
|goodwill|||||
|CHINESE GOLD|||||
||2,395,820.87|||2,395,820.87|
|NOBILITY|||||
|Total|2,395,820.87|||2,395,820.87|

 (2) Impairment Provision of Goodwill
Unit: RMB
||||||
|-|-|-|-|-|
|Name of the|||||
|invested units or|||||
||Opening balance|Increase|Decrease|Closing balance|
|events generating|||||
|goodwill|||||

||
|-|
|CHINESE GOLD|
|NOBILITY|

Notes to the recognition methods of the goodwill impairment test process, parameters and goodwill impairment
losses:
In line with the Capital increase agreement signed by the Company and the CHINESE GOLD NOBILITY, the CHINESE GOLD NOBILITY had fulfilled100% profits committed, after test, the recoverable goodwill was no less than RMB2,395,820.87, thus, the impairment provision of goodwill would not been withdrawn in Reporting Period.
Other notes
28. Long-term Unamortized Expenses
Unit: RMB
|||||||
|-|-|-|-|-|-|
||||Amortization|||
|Item|Opening balance|Increased amount||Decreased amount|Closing balance|
||||amount|||

Other notes
29. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets Had Not Been Off-set
Unit: RMB
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Item|Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||difference|assets|difference|assets|
|Assets impairment|||||
||14,563,051.00|3,640,762.75|14,714,251.00|3,678,562.75|
|provision|||||
|Trading financial assets|3,755,343.11|938,835.78|3,755,343.11|938,835.78|
|Total|18,318,394.11|4,579,598.53|18,469,594.11|4,617,398.53|

 (2) Deferred Income Tax Liabilities Had Not Been Off-set
Unit: RMB
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Item|Taxable temporary|Deferred income tax|Taxable temporary|Deferred income tax|
||differences|liabilities|differences|liabilities|

(3) Deferred Income Tax Assets or Liabilities Listed by Net Amount after Off-set
Unit: RMB
||||||
|-|-|-|-|-|
||Mutual set-off amount of|Amount of deferred||Amount of deferred|
||||Mutual set-off amount of||
||deferred income tax|income tax assets or||income tax assets or|
|Item|||deferred income tax||
||assets and liabilities at|liabilities after off-set at||liabilities after off-set at|
||||assets and liabilities||
||the period-end|the period-end||the period-begin|
|Deferred income tax||4,579,598.53||4,617,398.53|
|assets|||||

(4) List of Unrecognized Deferred Income Tax Assets
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Deductible losses|39,946,051.50|39,946,051.50|
|Total|39,946,051.50|39,946,051.50|

 (5) Deductible Losses of Unrecognized Deferred Income Tax Assets Will Due the Following Years
Unit: RMB
|||||
|-|-|-|-|
|Years|Closing balance|Opening balance|Notes|
|2016|3,205,969.16|3,205,969.16||
|2017|661,650.60|661,650.60||
|2018|19,429,361.72|19,429,361.72||
|2019|14,209,131.72|14,209,131.72||
|2020|2,439,938.30|2,439,938.30||
|Total|39,946,051.50|39,946,051.50|--|

 Other notes:
30. Other Non-current Assets
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|

31. Short-term Loans
(1) Category of Short-term Loans
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|

 Notes of short-term loans category:
(2) List of the Overdue Short-term Loans
The amount of the overdue short-term loans at the period-end was of RMB000, of which the significant overdue short-term loans are as follows:
Unit: RMB
||||||
|-|-|-|-|-|
|Borrower|Closing balance|Lending rate|Overdue time|Overdue rate|

 Other notes:
32. Financial Liabilities Measured by Fair Value and the Changes Included in the Current Gains and Losses
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|

 Other notes:
33. Derivative Financial Liabilities
□ Applicable√ Not applicable
34. Notes Payable
Unit: RMB
||||
|-|-|-|
|Category|Closing balance|Opening balance|

 The total amount of the due but not paid notes payable at the period-end was of RMB000.
35. Accounts Payable
(1) List of Accounts Payable
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Payment for goods|19,318,197.56|25,524,801.45|
|Total|19,318,197.56|25,524,801.45|

(2) Notes of the Significant Accounts Payable Aging over One Year
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Unpaid/ Un-carry-over reason|

 Other notes:
36. Advance from Customers
(1) List of Advance from Customers
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Payment for goods|32,362,367.65|482,960.95|
|Total|32,362,367.65|482,960.95|

 (2) Significant Advance from Customers Aging over One Year
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Unpaid/ Un-carry-over reason|

 (3) Particulars of Settled but Unfinished Projects Formed by Construction Contract at Period-end.
Unit: RMB
|||
|-|-|
|Item|Amount|

Other notes:
37. Payroll Payable
(1) List of Payroll Payable
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|I. Short-term salary|412,376.20|2,171,660.75|2,183,779.23|400,257.72|
|II. Post-employment|||||
|benefit-defined||112,912.35|112,912.35||
|contribution plans|||||
|Total|412,376.20|2,284,573.10|2,296,691.58|400,257.72|

(2) List of Short-term Salary
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|1. Salary, bonus,|||||
||412,376.20|1,940,891.86|1,953,010.34|400,257.72|
|allowance, subsidy|||||
|2. Employee welfare||130,867.38|130,867.38||
|3. Social insurance||57,692.63|57,692.63||
|Of which: Medical|||||
|||52,626.12|52,626.12||
|insurance premiums|||||
|Work-related|||||
|||2,230.66|2,230.66||
|injury insurance|||||
|Maternity|||||
|||2,835.85|2,835.85||
|insurance|||||
|4. Housing fund||30,821.95|30,821.95||
|5. Labor union budget|||||
|and employee education||11,386.93|11,386.93||
|budget|||||
|Total|412,376.20|2,171,660.75|2,183,779.23|400,257.72|

 (3) List of Drawing Scheme
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|1. Basic pension benefits||107,308.82|107,308.82||
|2. Unemployment|||||
|||5,603.53|5,603.53||
|insurance|||||
|Total||112,912.35|112,912.35||

Other notes:
38. Taxes Payable
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|VAT|3,347,385.57|3,458,437.91|
|Corporate income tax|20,320,138.26|20,871,916.64|
|Business tax|781,313.74|781,313.74|
|Land VAT|2,560,000.00|2,560,000.00|

||||
|-|-|-|
|Property tax|3,144,771.10|2,850,741.80|
|Land use tax|1,855,116.00|1,735,056.00|
|Others|1,818,430.67|1,708,432.53|
|Total|33,827,155.34|33,965,898.62|

 Other notes:
39. Interest Payable
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|

 List of the significant overdue interest:
Unit: RMB
||||
|-|-|-|
|Borrower|Overdue amount|Overdue reasons|

 Other notes:
40. Dividends Payable
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|

 Note: Including significant unpaid dividends payable over one year, the unpaid reason shall be disclosed:
41. Other Accounts Payable
(1) Other Accounts Payable Listed by Nature of the Account
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Intercourse funds|29,941,672.96|16,358,621.28|
|Bonus margin|38,002,013.82|38,002,013.82|
|Payment on behalf|67,448.40|360,771.83|
|Rental bond|380,000.00|380,000.00|
|Others|101,661.75|96,464.03|
|Total|68,492,796.93|55,197,870.96|

 (2) Other Significant Accounts Payable with Aging over One Year
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Unpaid/ Un-carry-over reason|

Other notes
42. Liabilities Classified as Held-for-Sale
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|

 Other notes:
43. Non-current Liabilities Due within 1 Year
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|

 Other notes:
44. Other Current Liabilities
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|

 Increase/decrease of the short-term bonds payable:
Unit: RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||||||Withdraw|Overflow|||
|||||||The|||Pay in||
|Bonds|Face|Issuing|Bonds||Opening||interest|discount||Closing|
|||||Amount||current|||current||
|name|value|date|maturity||balance||by face|amortizati||balance|
|||||||issue|||period||
||||||||value|on|||

Other notes:
45. Long-term Loan
(1) Category of Long-term Loan
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|

 Notes of long-term loans category:
Other notes including interest rate range:
46. Bonds Payable
(1) Bonds Payable
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|

(2) Increase/Decrease of Bonds Payable (Excluding the Other Financial Instruments Classified as the Preference Shares, Perpetual Capital Securities of the Financial Liabilities) Unit: RMB (3) Notes to the Conditions and Time of the Shares Transfer of the Convertible Corporate Bonds
(4) Notes to the Other Financial Instruments Classified as Financial Liabilities
Basic situation of outstanding preferred stock, perpetual capital securities and other financial instrument at the
period-end
Change in outstanding preferred stock, perpetual capital securities and other financial instrument at the period-end Unit: RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|Outstanding|Opening period||Increase||Decrease||Closing period||
|financial|||||||||
||Amount|Book value|Amount|Book value|Amount|Book value|Amount|Book value|
|instrument|||||||||

Notes to judgment of other financial instrument classified as financial liabilities
Other notes:
47. Long-term Payables
(1) Long-term Payables Listed by the Nature of the Account
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|

 Other notes:
48. Long-term Payroll Payable
(1) Long-term Payroll Payable Chart
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|

 (2) List of the Changes of Defined Benefit Plans
Obligation present value of defined benefit plans:
Unit: RMB
||||
|-|-|-|
|Item|Reporting period|Same period of last year|

Plan assets:
Unit: RMB
||||
|-|-|-|
|Item|Reporting period|Same period of last year|

 Liabilities (net assets) of defined benefit plans:
Unit: RMB
||||
|-|-|-|
|Item|Reporting period|Same period of last year|

 Notes of influence of content of defined benefit plans and its relevant risks to the future cash flow, time and uncertainty of the Company:
Notes to the results of significant actuarial assumptions and sensitivity analysis of defined benefit plans:
Other notes:
49. Special Payable
Unit: RMB
|||||||
|-|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|Reasons|

 Other notes:
50. Accrued Liabilities
Unit: RMB
|||||
|-|-|-|-|
|Item|Closing balance|Opening balance|Reasons|

 Other notes, including significant assumptions, valuation explanation related to significant estimated liabilities:
51. Deferred Revenue
Unit: RMB
|||||||
|-|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|Reason|

 Item involving government subsidies:
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||||Amount recorded||||
||||into|||Related to|
|||Amount of newly|||||
|Item|Opening balance||non-operating|Other changes|Closing balance|assets/related|
|||subsidy|||||
||||income in report|||income|
||||period||||

Other notes:
52. Other Non-current Liabilities
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|

Other notes:
53. Share Capital
Unit: RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Increase/decrease (+/-)||||||
||Opening|||Capitalized|||Closing|
|||New shares||||||
||balance||Bonus shares|Capital|Others|Subtotal|balance|
|||issued||||||
|||||reserves||||
|The sum of|318,600,000.00||||||318,600,000.00|
|shares||||||||

Other notes:
Notes: for more details, please refer to Note I. Basic Information of the Company.
54. Other Equity Instruments
(1) The Basic Information of Other Financial Instruments such as Preferred Stock and Perpetual Bond Outstanding at the End of the Period
(2) The Statement of Changes in Financial Instruments such as Preferred Stock and Perpetual Bond Outstanding at the End of the Period
Unit: RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|Outstanding|The beginning of the||||||||
||||Increase||Decrease||The end of the period||
|financial|period||||||||
|instruments|Amount|Book value|Amount|Book value|Amount|Book value|Amount|Book value|

 The current changes in other equity instruments and the corresponding reasons and the basis of the relevant
accounting treatment
Other notes:
55. Capital Surplus
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|Capital premium|52,129,496.58|173,778.21||52,303,274.79|
|Total|52,129,496.58|173,778.21||52,303,274.79|

 Other notes, including changes and reason of change:
Due to the failure of Shenzhen Chinese Gold Nobility Jewelry Co., Ltd in fulfilling a
net profit of RMB 10 million as indicated in performance commitment requirement,
the shareholders: Zhang Jielin and Yu Shizhen will, as regulated in the performance
commitment, provide accordingly Chinese Gold Nobility with a performance
compensation of RMB 340,741.60, which has been transferred to the account of Chinese Gold Nobility on Apr. 20, 2017.
56. Treasury Stock
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|

 Other notes, including changes and reason of change:
57. Other Comprehensive Income
Unit: RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Reporting Period||||||
||||Less: recorded|||||
||||in other|||||
|||Amountbefore|||Attributable|||
||||comprehensive|||||
|||||Less:||||
||Opening||||||Closing|
||||income in||to owners|Attributable||
|Item||||||||
||balance|income tax|prior period|Income tax|of the|to minority|balance|
|||in currentperiod|and transferred|expense|Company|shareholder||
||||to profit or||after tax|s after tax||
||||loss in current|||||
||||period|||||

Other explanation, including the active part of the hedging gains/losses of cash flow transferred to initial
reorganization adjustment for the arbitraged items:
58. Special Reserves
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|

 Other notes, including changes and reason of change:
59. Surplus Reserves
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|Statutory surplus|||||
||49,036,260.20|||49,036,260.20|
|reserves|||||
|Discretionary surplus|||||
||37,000,000.00|||37,000,000.00|
|reserves|||||
|Total|86,036,260.20|||86,036,260.20|

Other note, including changes and reason of change
60. Retained Earnings
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Opening balance of retained profits beforeadjustments|||
||-90,095,403.00|-92,329,076.97|
|Opening balance of retained profits afteradjustments|-90,095,403.00||
|||-92,329,076.97|
|Add: Net profit attributable to owners of theCompany|||
||-7,997,104.78|2,233,673.97|
|Closing retained profits|-98,092,507.78|-90,095,403.00|

 List of adjustment of opening retained profits:
1) RMB000 opening retained profits was affected by retrospective adjustment conducted according to the Accounting Standards for Business Enterprises and relevant new regulations.
2) RMB000 opening retained profits was affected by changes on accounting policies.
3) RMB000 opening retained profits was affected by correction of significant accounting errors.
4) RMB000 opening retained profits was affected by changes in combination scope arising from same control.
5) RMB000 opening retained profits was affected totally by other adjustments.
61. Revenues and Operating Costs
Unit: RMB
||||||
|-|-|-|-|-|
||Reporting Period||Same period of last year||
|Item|||||
||Sales revenue|Cost of sales|Sales revenue|Cost of sales|
|Main operations|189,823,020.71|178,368,297.77|200,186,975.70|190,594,842.57|
|Other operations|637,064.14|166,356.27|||
|Total|190,460,084.85|178,534,654.04|200,186,975.70|190,594,842.57|

 62. Business Tax and Surcharges
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Consumption tax|4,062.05|1,171.35|
|Urban maintenance and construction tax|58,068.04|71,083.83|
|Education Surcharge|42,204.68|50,734.11|
|Property tax|294,029.30||
|Land use tax|120,060.00||

||||
|-|-|-|
|Stamp duty|135,759.49||
|Total|654,183.56|122,989.29|

 Other notes:
According to relevant provisions in “Provisions Concerning the Accounting Treatments on Value-Added Tax” (Caikuai No.[2016] 22) published by ministry of finance, item “business tax and surcharges” in profit statement is adjusted to “tax and surcharges”. House property tax, land use tax, vehicle and vessel use tax, stamp tax and relevant taxes, which were counted into management fees before, are now adjusted into the item “tax and surcharges” since May 1, 2016.
63. Sale Expenses
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Salary|669,390.73|658,210.13|
|Office expenses|28,406.15|2,048.00|
|Depreciation|16,854.16|15,631.58|
|Business entertainment fees|14,088.40|29,936.80|
|Social security premiums|44,068.52|57,162.44|
|Business travel charges|10,830.60|57,635.40|
|Testing fees|1,810.00|62,651.00|
|Software expenses|216,912.77|94,273.08|
|Rental fees|270,270.29||
|Others|161,775.77|212,344.03|
|Total|1,434,407.39|1,189,892.46|

 Other notes:
64. Administration Expenses
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Depreciation|1,126,680.42|1,903,295.30|
|Salary|1,262,796.56|1,284,020.04|
|Charge for fund management|1,200,000.00||
|Automobile expenses|335,203.77|475,858.98|
|Rental fees|578,986.10|1,055,680.49|
|Auditing fees|411,527.23||

||||
|-|-|-|
|Welfare fees|130,867.38|377,624.98|
|Entertainment expenses|243,390.31|326,342.90|
|Office expenses|222,043.08|556,227.81|
|Social security premiums|134,483.43|134,414.08|
|Water & electricity fees|140,232.92|159,475.84|
|Amortization of intangible assets|138,631.92|336,594.12|
|Others|1,399,660.45|351,957.20|
|Total|7,324,503.57|6,961,491.74|

 Other notes:
65. Financial Expenses
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Interest expenses|605,207.50|645,695.56|
|Less: Interest income|88,059.03|17,501.15|
|Exchange loss|16,755.99|104,650.69|
|Less: exchange earning|241,014.94|14,180.07|
|Handling and other|17,644.59|21,268.83|
|Total|310,534.11|739,933.86|

 Other notes:
66. Asset Impairment Loss
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|I. Bad debt loss|-411,560.62|167,333.77|
|Total|-411,560.62|167,333.77|

 Other notes:
67. Gains and Losses from Changes in Fair Value
Unit: RMB
||||
|-|-|-|
|Sources of changes in fair value gains|Reporting period|Same period of last year|
|Financial assets measured by fair value and|||
|the changes be included in the current|-5,539,925.21||
|profits and losses|||
|Total|-5,539,925.21|0.00|

Other notes:
68. Investment Income
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Income received from long-term equity|||
||17,054.22||
|investment by equity method|||
|Investment income arising from disposal of|||
||16,240.55|-1,522.94|
|long-term equity investments|||
|Total|33,294.77|-1,522.94|

 Other notes:
69. Other Income
Unit: RMB
||||
|-|-|-|
|Sources of other income|Reporting period|Same period of last year|

 70. Non-operating Gains
Unit: RMB
|||||
|-|-|-|-|
||||Recorded in the amount of the|
|Item|Reporting Period|Same period of last year||
||||non-recurring gains and losses|
|Total|0.33|0.44||

Government subsidies recorded into current profits and losses
Unit: RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||Whether|||||
|||||subsidies|||||
||||||Special|||Related to|
||Distribution|Distribution||influence the||Reporting|Same period||
|Item|||Nature||subsidy or|||assets/related|
||entity|reason||current||Period|of last year||
||||||not|||income|
|||||profits and|||||
|||||losses or not|||||

Other notes:
71. Non-operating Expenses
Unit: RMB
|||||
|-|-|-|-|
||||Recorded in the amount of the|
|Item|Reporting Period|Same period of last year||
||||non-recurring gains and losses|
|Donation||200,000.00||

|||||
|-|-|-|-|
|Fine for delaying payment|2,404.16||2,404.16|
|Total|2,404.16|200,000.00|2,404.16|

 Other notes:
72. Income Tax Expense
(1) Lists of Income Tax Expense
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Current income tax expense|2,269,232.61|1,848,553.62|
|Deferred income tax expense|37,800.00||
|Total|2,307,032.61|1,848,553.62|

 (2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
|||
|-|-|
|Item|Reporting Period|
|Total profits|-2,895,671.47|
|Influence of deductible temporary difference or deductible losses||
||1,384,981.30|
|of deferred income tax assets derecognized in Reporting Period.||
|Profit and loss of joint ventures and associated enterprises||
||17,054.22|
|accounted by equity method||
|Others|867,197.09|
|influence of using unrecognized deductible losses and deductible||
||37,800.00|
|temporary differences of previous years (“-“ means loss)||
|Income tax expenses|2,307,032.61|

 Other notes
73. Other Comprehensive Income
See note.
74. Information of Cash Flow Statement
(1) Other Cash Received Relevant to Operating Activities
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Other intercourse fund|30,187,830.43|612,825,000.00|

||||
|-|-|-|
|Amount related business activities|5,110,790.78|80,230.54|
|Total|35,298,621.21|612,905,230.54|

 Note to other cash received relevant to operating activities:
(2) Other Cash Paid Relevant to Operating Activities
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Other intercourse fund|19,500,000.00|604,410,000.00|
|Audit intermediary fees, etc|356,000.00|800,000.00|
|Amount related business activities|5,078,811.29|3,367,429.24|
|Total|24,934,811.29|608,577,429.24|

 Note to other cash paid relevant to operating activities:
(3) Other Cash Received Relevant to Investment Activities
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|

 Note to other cash received relevant to investment activities:
(4) Other Cash Paid Relevant to Investment Activity
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|

 Note to other cash paid relevant to investment activities:
(5) Other Cash Received Relevant to Financing Activities
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|

 Note to other cash received relevant to financing activities:
(6) Other Cash Paid Relevant to Financing Activities
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|

75. Supplemental Information for Cash Flow Statement
(1) Supplemental Information for Cash Flow Statement
Unit: RMB
||||
|-|-|-|
|Supplemental information|Reporting Period|Same period of last year|
|1. Reconciliation of net profit to net cash|||
||--|--|
|flows generated from operating activities|||
|Net profit|-5,202,704.08|-1,639,584.11|
|Depreciation of fixed assets, of oil-gas|||
||1,309,890.85|1,918,926.88|
|assets, of productive biological assets|||
|Amortization of intangible assets|138,631.92|336,594.12|
|Losses on changes in fair value (gains:|||
||5,539,925.21||
|negative)|||
|Financial cost (gains: negative)||-66.00|
|Investment loss (gains: negative)|-33,294.77|1,522.94|
|Decrease in deferred income tax assets|||
||37,800.00||
|(gains: negative)|||
|Decrease in inventory (gains: negative)|-39,615,980.25|-7,203,140.64|
|Decrease in accounts receivable from|||
||65,800,489.84|481,536,676.02|
|operating activities (gains: negative)|||
|Increase in payables from operating|||
||-25,183,016.54|-471,157,114.26|
|activities (decrease: negative)|||
|Others|341,132.27||
|Net cash flows generated from operating|3,132,874.45|3,793,814.95|
|activities|||
|2. Significant investing and financing|||
|activities without involvement of cash|--|--|
|receipts and payments|||
|3. Net increase in cash and cash equivalents:|--|--|
|Closing balance of cash|7,018,207.88|303,874,987.30|
|Less: Opening balance of cash|123,886,976.82|301,471,305.21|
|Net increase in cash and cash equivalents|-116,868,768.94|2,403,682.09|

 (2) Net Cash Paid of Obtaining the Subsidiary
Unit: RMB
||
|-|
|Amount|

|||
|-|-|
|Including:|--|
|Including:|--|
|Including:|--|

Other notes:
(3) Net Cash Receive from Disposal of the Subsidiary
Unit: RMB
|||
|-|-|
||Amount|
|Including:|--|
|Including:|--|
|Including:|--|

Other notes:
(4) Cash and Cash Equivalents
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|I. Cash|7,018,207.88|123,886,976.82|
|Including: Cash on hand|525,024.48|1,208,935.64|
|Bank deposit on demand|6,491,008.82|302,636,688.39|
|Other monetary funds on demand|2,174.58|29,363.27|
|III. Closing balance of cash and cash|7,018,207.88|123,886,976.82|
|equivalents|||

Other notes:
76. Note to Items in the Statement of Change in Equity
Particulars about the name of the item of “Other” adjusting last closing balance and the adjustment amount:
Not applicable
77. Assets with Restricted Ownership and Right to Use
Unit: RMB
||||
|-|-|-|
|Item|Closing book value|Restricted reason|
|Fixed assets|9,337,576.40|External guaranty|
|Intangible assets|2,061,759.21|External guaranty|
|Total|11,399,335.61|--|

Other notes:
78. Foreign Currency Monetary Items
(1) Foreign Currency Monetary Items
Unit: RMB
|||||
|-|-|-|-|
||Closing foreign currency||Closing convert to RMB|
|Item||Exchange rate||
||balance||balance|
|Including: USD|64.28|6.7744|435.45|
|HKD|4,462.65|0.86792|3,873.22|
|Including: USD|863,226.47|6.7744|5,847,841.40|
|Other accounts receivable||||
|Including: USD|20,000.00|6.7744|135,488.00|
|EUR||||
|HKD|55,780.00|0.86792|48,412.58|

 Other notes:
(2) Note to Oversea Entities Including: for Significant Oversea Entities, Shall Disclose Main Operating Place, Recording Currency and Selection Basis, if there Are Changes into Recording Currency, Shall Also Disclose the Reason.
□ Applicable√ Not applicable
79. Arbitrage
Disclosure of arbitrage items according to the category of arbitrage and the qualitative and quantitative information of related arbitrage tools and hedging risk:
Not applicable
80. Other
Not applicable
VIII. Change of Consolidation Scope
1. Business Combination Not under the Same Control
(1) Business Combination Not under the Same Control during the Reporting Period
Unit: RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||||Proportion of|||The|The income|The net profit|
|Name of the|Time of the|Cost of the||Way of the|Date of||||
||||the|||determination|of the|of the|
|acquiree|acquisition of|acquisition of||acquisition of|acquisition||||
||||acquisition of|||basis of|acquiree from|acquiree from|

||||||||
|-|-|-|-|-|-|-|
|the stock|the stock|the stock|the stock|acquisition|the|the|
|||||date|acquisition|acquisition|
||||||date to the|date to the|
||||||end of the|end of the|
||||||period|period|

 Other notes:
No such cases in the Reporting Period.
(2) Combination Cost and Goodwill
Unit: RMB
||
|-|
|Cost of business combination|

The explanations on the contingent consideration and its changes as well as the determination method of the fair
value of the cost of business combination:
The main reason for the formation of large goodwill:
Other notes:
(3) The Identifiable Assets and Liabilities of Acquiree at Purchase Date
Unit: RMB
|||
|-|-|
|The fair value of the Purchase date|The book value of the purchase date|

 The determination method of the fair value of the recognizable assets and liabilities:
Not applicable
The contingent liabilities of the acquiree undertaken in business combination:
Not applicable
Other notes:
Not applicable
(4) The Profit or Loss from Equity Held by the Date before Acquisition in Accordance with the Fair Value Measured Again
Whether there is a transaction that through multiple transaction step by step to realize enterprises merger and gaining the control during the Reporting Period
□ Yes√ No
(5) The Explanations on the Situation in which the Merger Price Cannot Be determined Rationally at the Date of Acquisition or the End of the Period of Merger and Explanations on the Fair Value of theAcquiree’s Recognizable Assets and Liabilities
Not applicable
(6) Other Notes
Not applicable
2. Business Combination under the Same Control
(1) Business Combination under the Same Control during the Reporting Period
Unit: RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||||||Income of the|Net profits of|||
||||||merged party|the merged|||
||Proportion of|Basis of the|||||Income of the|Net profits of|
|||||Determinatio|from the|party from|||
||equity|enterprise|||||merged party|the merged|
|Name of the|||Date of|n basis of the|beginning of|the beginning|||
||acquired in|merger under|||||during the|party during|
|merged party|||merger|date of|the period of|of the period|||
||business|the same|||||period of|the period of|
|||||merger|merger to the|of merger to|||
||combination|control|||||comparison|comparison|
||||||date of|the date of|||
||||||merger|merger|||

Other notes:
Not applicable
(2) Combination Cost
Unit: RMB
||
|-|
|Combination cost|

Explanations on contingent consideration and its changes:
Other notes:
Not applicable
(3) The Book Value of the Assets and Liabilities of the Combined Party at Combining Date
Unit: RMB
|||
|-|-|
|At combining date|At the end of last period|

 The contingent liabilities of the merged party undertaken in enterprise merger:
Not applicable
Other notes:
Not applicable
3. Counter Purchase
The basic information of transactions, the constitutive basis of counter purchase, whether the retained assets and
liabilities of listed companies constitute the business or not and the relevant basis, the determination of the cost of
merger, the amount and accounting of the equity adjusted when treated as equity transaction:
Not applicable
4. The Disposal of Subsidiary
Whether there is such a situation where the control power of the subsidiary is lost for a single disposal of the investment to the subsidiary
□Yes√ No
Whether there is such a situation where many transactions are made to dispose the investment to the subsidiary in phases losing the control power of it during the report period
□Yes√ No
5. Other Reasons for the Changes in Combination Scope
Explanations on changes in consolidation scope caused by other reasons (such as the establishment of new subsidiary and liquidation of subsidiary) and the relevant information:
6. Other
IX. Equity in Other Entities
1. Equity in Subsidiary
(1) The Structure of the Enterprise Group
||||||||
|-|-|-|-|-|-|-|
||Main operating||Nature of|Holding percentage (%)|||
|Name||Registration place||||Way of gaining|
||place||business|Directly|Indirectly||
|Shenzhen Rieys|||||||
|Industrial Co.,|Shenzhen|Shenzhen|Trading|90.00%||100.00|
|Ltd.|||||||
|TIANRUI (HK)|||||||
|TRADING|||||||
||Hong Kong|Hong Kong|Trading|100.00%||Combination|
|COMPANY|||||||
|LIMITED|||||||
|Chinese Gold|||||||
||Shenzhen|Shenzhen|Trading|100.00%||Combination|
|Nobility|||||||
||||Technical service,||||
|Shanghai|||development,||||
|Yunpeng Network|||consulting,||||
||Shanghai|Shanghai||60.00%||Set-up|
|Technology Co.,|||transfer of||||
|Ltd.|||network||||
||||technology etc.||||

Notes: holding proportion in subsidiary different from voting proportion:
Not applicable
Basis of holding half or less voting rights but still been controlled investee and holding more than half of the voting rights not been controlled investee:
Not applicable
Significant structure entities and controlling basis in the scope of combination:
Not applicable
Basis of determine whether the Company is the agent or the principal:
Not applicable
Other notes:
(2) Significant Not Wholly Owned Subsidiary
Unit: RMB
||||||
|-|-|-|-|-|
|||The profits and losses|Declaring dividends|Balance of minority|
||Shareholding proportion||||
|Name||arbitrate to the minority|distribute to minority|shareholder at closing|
||of minority shareholder||||
|||shareholders|shareholder|period|
|Shenzhen Rieys|||||
||10.00%|-593,234.95||3,265,258.85|
|Industrial Co., Ltd.|||||
|Chinese Gold Nobility|49.00%|3,387,635.65||37,636,522.88|

 Holding proportion of minority shareholder in subsidiary different from voting proportion:
Other notes:
(3) The Main Financial Information of Significant Not Wholly Owned Subsidiary
Unit: RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance||||||Opening balance||||||
|||Non-curr|||Non-curr|||Non-curr|||Non-curr||
|Name|Current||Total|Current||Total|Current||Total|Current||Total|
|||ent|||ent|||ent|||ent||
||assets||assets|liabilities||liabilities|assets||assets|liabilities||liabilities|
|||assets|||liabilities|||assets|||liabilities||
|Shenzhe|||||||||||||
|n Rieys|||||||||||||
||49,949,7|2,863,71|52,813,4|52,813,4||20,160,8|50,919,3|3,000,94|53,920,2|15,335,3||15,335,3|
|Industria|||||||||||||
||59.41|7.42|76.83|76.83||88.38|08.96|7.92|56.88|18.97||18.97|
|l Co.,|||||||||||||
|Ltd.|||||||||||||
|Chinese|||||||||||||
||130,659,|159,450.|130,819,|54,010,0||54,010,0|98,646,4|219,218.|98,865,7|29,310,7||29,310,7|
|Gold|||||||||||||
||876.81|28|327.09|96.72||96.72|82.14|75|00.89|54.26||54.26|
|Nobility|||||||||||||

Unit: RMB
||||
|-|-|-|
|Name|Reporting period|The same period of last year|

||||||||||
|-|-|-|-|-|-|-|-|-|
|||||Cash flow||||Cash flow|
||||Total||||Total||
||Operation|||from|Operation|||from|
|||Net profit|consolidated|||Net profit|consolidated||
||revenue|||operating|revenue|||operating|
||||income||||income||
|||||activities||||activities|
|Shenzhen|||||||||
|Rieys|21,009,771.2||||47,950,476.6|||-26,948,658.0|
|||-5,932,349.46|-5,932,349.46|-2,925,265.06||-1,503,299.26|-1,503,299.26||
|Industrial|3||||6|||7|
|Co., Ltd.|||||||||
|Chinese Gold|167,918,918.||||305,270,090.||||
|||6,913,542.14|6,913,542.14|1,189.55||9,659,258.40|9,659,258.40|-667,194.24|
|Nobility|82||||96||||

Other notes:
(4) Significant Restrictions of Using Enterprise Group Assets and Paying Off Enterprise Group Debt
(5) Provide Financial Support or Other Support for Structure Entities Incorporate into the Scope of Consolidated Financial Statements
Other notes:
X. The Risk Related Financial Instruments
Not applicable
XI. The Disclosure of the Fair Value
1. Closing Fair Value of Assets and Liabilities Calculated by Fair Value
Unit: RMB
||||||
|-|-|-|-|-|
||Fair value at the end of the reporting period||||
||First level|Second level|Third level||
|Item|||||
|||||Total|
||Fair value measurement|Fair value measurement|Fair value measurement||
|I. Sustaining fair value|||||
||--|--|--|--|
|measurement|||||
|(2) equity instruments|||||
||9,977,189.76|||9,977,189.76|
|investment|||||
|Total assets continuously|||||
||9,977,189.76|||9,977,189.76|
|measured at fair value|||||
|II. Non-Sustaining fair|||||
||--|--|--|--|
|value measurement|||||

2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement Items at Level 1
Based on the stock trade price in SZSE and SSE.
3. Consistent and Inconsistent Fair value Measurement Items at Level 2, Valuation Techniques Adopted, the Qualitative and Quantitative Information of Important Parameters
Not applicable
4. Consistent and Inconsistent Fair Value Measurement Items at Level 3, Valuation Techniques Adopted, the Qualitative and Quantitative Information of Important Parameters
Not applicable
5. Consistent Fair Value Measurement Items at Level 3, the Adjustment Information of the Opening and Closing Book Value, and the Sensitivity Analysis of Unobservable Parameters
Not applicable
6. Consistent Fair Value Measurement Items, Conversion between All Levels during the Reporting Period, the Reasons for Conversion and Policies at the Time of Determination of Conversion
Not applicable
7. Change and Change Reason of Valuation Techniques in the Reporting Period
Not applicable
8. Particulars about the Fair Value of the Financial Assets and Financial Liabilities Not Measured at Fair Value
Not applicable
9. Other
Not applicable
XII. Related Party and Related Transaction
1. Information Related to Parent Company of the Company
|||||||
|-|-|-|-|-|-|
||||||Proportion of voting|
|||||Proportion of share||
||||||rights owned by|
|Name of parent||||held by parent||
||Registration place|Nature of business|Registered capital||parent company|
|company||||company against the||
||||||against the Company|
|||||Company (%)||
||||||(%)|
||Room No. 1805 of|||||
|Shenzhen||||||
||Nepstar Building in|||||
|Shenghengchang||||||
||Yuehai Street,|Trading|9800|36.99%|36.99%|
|Huifu Industrial Co.,||||||
||Nanshan District,|||||
|Ltd.||||||
||Shenzhen|||||

Notes: Information on the parent company:
There was no change in the registered capital of the parent company during the Reporting Period.
The final controller of the Company is Chen Hongcheng.
Other notes:
2. Subsidiaries of the Company
For more details, please refer to Note IX. 1. Equity in Subsidiaries.
3. Information on the Joint Ventures and Associated Enterprises of the Company
For information of the major joint ventures or associated enterprises of the Company, please refer to note
List of other joint ventures and associated enterprises that made related-party transactions with the Company generating balance during or before the report period:
|||
|-|-|
|Name of the joint venture or associated enterprise|Relationship with the Company|

 Other notes
4. Information on Other Related Parties of the Company
|||
|-|-|
|Name|Relationship|
||Shareholder holding 10.68% stake of the Company, affiliate|
|Shenzhen Rishen Investment Co., Ltd.||
||controlled under Chen Hongcheng’s family|
||Shareholder holding 3.81% stake of the Company, affiliate|
|Shenzhen Lianhua Huiren Industrial Co., Ltd.||
||controlled under Chen Hongcheng’s family|

|||
|-|-|
|Chen Xuewen|Direct relative of Chen Hongcheng|
|Ding Lihong|Board chairman of the Company, relative of Chen Hongcheng|

 Other notes
5. List of Related-party Transactions
(1) Information on Acquisition of Goods and Reception of Labor Service (Unit: Ten Thousand Yuan)
Information on acquisition of goods and reception of labor service
Unit: RMB
|||||||
|-|-|-|-|-|-|
||||The approval trade|Whether exceed trade|Same period of last|
|Related-party|Content|Reporting Period||||
||||credit|credit or not|year|

 Information of sales of goods and provision of labor service
Unit: RMB
|||||
|-|-|-|-|
|Related-party|Content|Reporting Period|Same period of last year|

 Information on related-party transactions of sales of goods and provision and reception of labor service
(2) Relating Commissioned Management/Contract and Entrusted Management/Outsourcing List of commissioned management/contract of the Company:
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||||||Pricing basis of|Revenue from|
|Name of the|||Start date of|End date of|||
||Name of the|Type of the|||commissioned|commissioned|
|entrusting|||commissioned|commissioned|||
||commissioned|commissioned/co|||management|management/cont|
|party/contract-out|||management/cont|management/cont|||
||party/contractor|ntracted assets|||revenue/contract|ract confirmed in|
|party|||ract|ract|||
||||||revenue|the report period|

 Explanations on relating commissioned management/contract
List of entrusted management/outsourcing:
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
|||||||Trustee|
|Name of the|||Start date of|End date of|Pricing basis of||
||Name of the|Type of the||||fee/expense on|
|entrusting|||entrusted|entrusted|trustee||
||commissioned|entrusted/outsour||||outsourcing|
|party/contract-out|||management/outs|management/outs|fee/expense on||
||party/contractor|ced assets||||confirmed in the|
|party|||ourcing|ourcing|outsourcing||
|||||||report period|

 Explanations on relating management/outsourcing
(3) Information of Related Lease
The Company serves as the lessor:
Unit: RMB
|||||
|-|-|-|-|
|||Rental income confirmed in the|Rental income confirmed in the|
|Name of leasee|Type of leased assets|||
|||Report period|same period of last year|

 The Company serves as the leasee:
Unit: RMB
|||||
|-|-|-|-|
|||Rental expense confirmed in the|Rental expense confirmed in the|
|Name of lessor|Type of leased assets|||
|||report period|same period of last year|

 Explanations on related-party lease
(4) Related-party Guarantee
The Company serves as the guarantee
Unit: RMB
||||||
|-|-|-|-|-|
|Secured party|Amount|Start date|Maturity date|Fulfill or not|

 The Company serves as the secured party
Unit: RMB
||||||
|-|-|-|-|-|
|Guarantee|Amount|Start date|Maturity date|Fulfill or not|

 Explanations on related-party guarantee
(5) Borrowing and Lending of Related Parties
Unit: RMB
||||||
|-|-|-|-|-|
|Related party|Amount|Start date|Maturity date|notes|
|Borrowing|||||
|Lending|||||

(6) Related Party Asset Transfer and Debt Restructuring
Unit: RMB
|||||
|-|-|-|-|
||Contents of related-party|||
|Related party||Reporting period|Same period of last year|
||transactions|||

(7) Rewards for the Key Management Personnel
Unit: RMB
||||
|-|-|-|
|Item|Reporting period|Same period of last year|
|Rewards for the key management|||
||337,000.00|253,000.00|
|personnel|||

(8) Other Related-party Transactions
6. Receivables and Payables of Related Parties
(1) Receivables
Unit: RMB
|||||||
|-|-|-|-|-|-|
|||Closing balance||Opening balance||
|Name o f item|Related-party|||||
|||Book balance|Bad debt provision|Book balance|Bad debt provision|

 (2) Payables
Unit: RMB
|||||
|-|-|-|-|
|Name o f item|Related-party|Closing book balance|Opening book balance|
|Other accounts payable|Chen Xuewen|177,923.60|64,404.72|
||64,404.72|10,570,000.00||

7. Related Party Commitment
There was no related party commitment for the Company to disclose.
8. Other
XIII. Share-based Payment
1. General Share-based Payment
□ Applicable√ Not applicable
2. Shared-based Payment Settled by Equity
□ Applicable√ Not applicable
3. Shared-based Payment Settled by Cash
□ Applicable√ Not applicable
4. Modification and Termination on Share-based Payment
Not applicable
5. Other
Not applicable
XIV. Commitments and Contingencies
1. Significant Commitments
Significant commitments at balance sheet date
As of June 30, 2017, there were no significant commitments to be disclosed.
2. Contingencies
(1) Significant Contingencies at Balance Sheet Date
The Company mortgaged its real estate (The mortgaged property assessment value was RMB36.32 million) for Huafengqiang Trade Co., Ltd. and the Jieyang RongCheng sub-branch of The Industrial and Commercial Bank of China Co., Ltd. signing Maximum amount mortgage contract, the Maximum amount mortgage contract was: Maximum amount mortgage in 2014 NO. 3632 of RongCheng sub-branch. The secured principle credit was from November 11, 2014 to November 11, 2019. Huafengqiang Trade Co., Ltd. signed RMB17,000,000.00 loan contract with Jieyang RongCheng sub-branch of The Industrial and Commercial Bank of China Co., Ltd. on May 22, 2017, which was the guarantee for the Company. The borrowing period was for 12 months. The Huafengqiang Trade Co., Ltd. provided counter guarantee for the Company with this loan.
As of June 30, 2017, the Company provide guarantee for non-related party were as followed:
Entity Events Amount involved Period Notes(RMB’0,000)
Huafengqiang Trade Co., Ltd. Bank loan pledge 1,700.00 05/22/2017-05/19/2018 - Total - 1,700.00 - - As of June 30, 2017, there was no contingencies such as pending litigation, external guarantee for the Company to disclose.
As of June 30, 2017, there was no other contingency to disclose for the Company except for the aforesaid event.
(2) If the Company Has No Significant Contingency to Disclose, Relevant Explanations Should Also Be Given
There was no significant contingency for the Company to disclose.
3. Other
XV. Events after Balance Sheet Date
1. Significant Non-adjusting Events
Unit: RMB
|||||
|-|-|-|-|
|||Effects on financial condition|Reason for inability to estimate|
|Item|Content|||
|||and operating result|the influence number|

 2. Profit Distribution
Unit: RMB 3. Sales Return
4. Notes of Other Events after Balance Sheet Date
Shenzhen Rieys Industrial Co., Ltd. a subsidiary of the company, has sold by lots 465364 shares of BanBao Educational Toys own by the former from July 28 to August 4, 2017, the stock trade of which has caused an investment loss of RMB7,069,898.22. Up to Aug. 28, 2017, there are 6600 shares of BanBao Educational Toys left on the paper.
Up to Aug. 28, 2017, (date of report approval by the board), apart from the above important items, the company has no other events after the balance sheet date that should be disclosed.
XVI. Other Significant Events
1. The Accounting Errors Correction in Previous Period
(1) Retroactive Restatement
Unit: RMB
|||||
|-|-|-|-|
|||Name of each affected item of||
|Contents of the correction of||||
||Procedures of processing|statement during the period of|Cumulative effects|
|accounting errors||||
|||comparison||

(2) Prospective Application
||||
|-|-|-|
|Contents of the correction of accounting||Reason for adopting method of prospective|
||Procedures of approval||
|errors||application|

 2. Debt Restructuring
Not applicable
3. Assets Replacement
(1) Exchange of Non-monetary Assets
Not applicable
(2) Replacement of Other Assets
Not applicable
4. Annuity Plan
Not applicable
5. Discontinued Operation
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
|||||||Profits generated|
|||||||from|
|||||||discontinued|
|||||Income tax|||
|Item|Income|Expense|Total profits||Net profits|operation|
|||||expense|||
|||||||attributable to|
|||||||owners’ of the|
|||||||Company|

 Other notes
Not applicable
6. Segment Information
(1) Recognition Basis and Accounting Policies of Reportable Segment
Not applicable
(2) The Financial Information of Reportable Segment
Unit: RMB
||||
|-|-|-|
|Item|Offset between segments|Total|

 (3) If There Is No Reportable Segment, or the Total Amount of Assets and Liabilities of Each Part of Reportable Segment Cannot Be Disclosed, the Relevant Reasons Should Be Given
Not applicable
(4) Other Notes
Not applicable
7. Other Important Transactions and Events that Have an Impact onInvestors’ Decision-making
Not applicable
8. Other
Not applicable
XVII. Notes of Main Items in the Financial Statements of the Company
1. Accounts Receivable
(1) Accounts Receivable Classified by Category
Unit: RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|||||Withdra|||||||
|Category|||||Book||||||
|||Proportio||wal|||Proportio||Withdrawal|Book value|
||Amount||Amount||value|Amount||Amount|||
|||n||proportio|||n||proportion||
|||||n|||||||
|Accounts receivable|||||||||||
|with significant|||||||||||
|single amount for|4,608,27||4,608,27|||4,608,2||4,608,276|||
|||100.00%||100.00%|0.00||100.00%||100.00%|0.00|
|which bad debt|6.88||6.88|||76.88||.88|||
|provision separately|||||||||||
|accrued|||||||||||

||||||||||
|-|-|-|-|-|-|-|-|-|
||4,608,27||4,608,2|7100.00%8|4,608,2||4,608,276||
|Total||100.00%||||100.00%||100.00%|
||6.88||6.8||76.88||.88||

Accounts receivable with single significant amount and withdrawal bad debt provision separately at end of period
√ Applicable□ Not applicable
Unit: RMB
||||||
|-|-|-|-|-|
|Accounts receivable|Closing balance||||
|(classified by units)|Account receivable|Bad debt provision|Withdrawal proportion|Withdrawal reason|
|||||Long-term credit, the|
|Capital airport|21,713.00|21,713.00|100.00%|Company believe it|
|||||irrecoverable|
|||||Long-term credit, the|
|Ningbo Industrial and|||||
||26,354.45|26,354.45|100.00%|Company believe it|
|Commercial Bureau|||||
|||||irrecoverable|
|||||Long-term credit, the|
|Chen Shunqin|335,904.80|335,904.80|100.00%|Company believe it|
|||||irrecoverable|
|||||Long-term credit, the|
|Hong Kong Jinhua|||||
||4,224,304.63|4,224,304.63|100.00%|Company believe it|
|Trading Company|||||
|||||irrecoverable|
|Total|4,608,276.88|4,608,276.88|--|--|

 In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
□ Applicable√ Not applicable
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable√ Not applicable
In the groups, accounts receivable adopting other methods to withdraw bad debt provision:
(2) Accounts Receivable Withdrawn, Reversed or Collected during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB000; the amount of the reversed or collected part during the Reporting Period was of RMB000.
Significant amount of reversed or recovered bad debt provision:
Unit: RMB
||||
|-|-|-|
|Name of unit|Collected or reversed amount|Way|

(3) Particulars about Accounts Receivable Actually Verified during the Reporting Period
Unit: RMB
|||
|-|-|
|Item|Amount of verification|

The verification of significant accounts receivable:
Unit: RMB
|||||||
|-|-|-|-|-|-|
||||||Whether the|
|||||Procedures of|accounts are|
||Nature of otheraccounts receivable|Amount of|Reason for|||
|Name of unit||||verification|generated from|
|||verification|verification|||
|||||performed|related-party|
||||||transactions or not|

 Notes of the verification of accounts receivable:
(4) Accounts Receivable of the Top 5 of the Closing Balance Collected According to the Arrears Party
Name of the entity Amount Bad debt provision Proportion% Capital airport 21,713.00 21,713.00 0.47 Ningbo Industrial and 26,354.45 26,354.45 0.57 Commercial Bureau
Chen Shunqin 335,904.80 335,904.80 7.29 Hong Kong Jinhua 4,224,304.63 4,224,304.63 91.67 Trading Company
Total 4,608,276.88 4,608,276.88 100.00 (5) Accounts Receivable Derecognized for the Transfer of Financial Assets
(6) Amount of Assets and Liabilities Generated from the Transfer of Accounts Receivable
and Continued Involvement
Other notes:
2. Other Accounts Receivable
(1) Other Accounts Receivable Classified by Category
Unit: RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|||||Withdra|||||||
|Category|||||Book||||||
|||Proportio||wal|||Proportio||Withdrawal|Book value|
||Amount||Amount||value|Amount||Amount|||
|||n||proportio|||n||proportion||
|||||n|||||||
|Other accounts|||||||||||
|receivable with|69,709,4||2,931,60||66,777,86|75,469,||2,931,608||72,537,567.|
|||95.36%||4.21%|||5.94%||36.94%||
|significant single|77.93||8.20||9.73|176.05||.20||85|
|amount for which|||||||||||

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|bad debt provision|||||||||||
|separately accrued|||||||||||
|Other accounts|||||||||||
|receivable withdrawn|||||||||||
||1,594,82||1,485,34||109,482.1|4,877,7||1,801,879||3,075,885.8|
|bad debt provision||2.18%||93.14%|||5.94%||36.94%||
||6.10||3.96||4|65.85||.96||9|
|according to credit|||||||||||
|risks characteristics|||||||||||
|Other accounts|||||||||||
|receivable with|||||||||||
|insignificant single|1,794,76||1,794,76|||1,794,7||1,478,227|||
|||2.46%||100.00%|||2.19%||82.36%|316,536.00|
|amount for which|3.36||3.36|||63.36||.36|||
|bad debt provision|||||||||||
|separately accrued|||||||||||
||73,099,0||6,211,71||66,887,351.87|82,141,||6,211,715||75,929,989.74|
|Total||100.00%||8.50%|||100.00%||7.56%||
||67.39||5.52|||705.26||.52|||

 Other receivable with single significant amount and withdrawal bad debt provision separately at end of period:
√ Applicable□ Not applicable
Unit: RMB
||||||
|-|-|-|-|-|
||Closing balance||||
|Other accounts receivable|||||
||Other accountsreceivable||||
|(unit）||Bad debt provision|Withdrawal proportion|Withdrawal reason|
|||||Included in consolidated|
|Tianrui (HK) Trading Co.,||||related party did not|
||57,707,092.85||||
|Ltd.||||withdraw bad debt|
|||||provision|
|||||Included in consolidated|
|Shenzhen Rieys Industrial||||related party did not|
||9,070,776.88||||
|Co., Ltd.||||withdraw bad debt|
|||||provision|
|||||Long-term credit, the|
|Refund of tax for export|||||
||2,331,608.20|2,331,608.20|100.00%|Company believe it|
|receivable|||||
|||||irrecoverable|
|||||Long-term credit, the|
|Shenzhen Zhao Tong|||||
||600,000.00|600,000.00|100.00%|Company believe it|
|Investment Co., Ltd.|||||
|||||irrecoverable|
|Total|69,709,477.93|2,931,608.20|--|--|

 In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Not applicable
Unit: RMB
|||
|-|-|
|Aging|Closing balance|

|||||
|-|-|-|-|
||Other accounts receivable|Bad debt provision|Withdrawal proportion|
|Subentry within 1 year||||
|Subtotal within 1 year|49,814.10|58,199.26|116.83%|
|1 to 2 years|40,201.83|4,020.18|10.00%|
|2 to 3 years|8,298.65|4,149.33|50.00%|
|Over 3 years|1,496,511.52|1,418,975.19|94.82%|
|Total|1,594,826.10|1,485,343.96|93.14%|

 Notes:
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable√ Not applicable
In the groups, other accounts receivable adopting other methods to withdraw bad debt provision:
□ Applicable√ Not applicable
(2) The Bad-debt Provision Withdrawn, Reversed or Collected during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB000; the amount of the reversed or collected part during the Reporting Period was of RMB000.
Of which the significant amount of the reversed or collected part during the Reporting Period:
Unit: RMB
||||
|-|-|-|
|Name of unit|Collected or reversed amount|Way|

(3) Other Accounts Receivable Actually Verified during the Reporting Period
Unit: RMB
|||
|-|-|
|Item|Amount of verification|

The verification of significant other accounts receivable:
Unit: RMB
|||||||
|-|-|-|-|-|-|
||||||Whether the|
|||||Procedures of|accounts are|
||Nature of other|Amount of|Reason for|||
|Name of unit||||verification|generated from|
||accounts receivable|verification|verification|||
|||||performed|related-party|
||||||transactions or not|

 Notes of the verification of other accounts receivable:
(4) Other Accounts Receivable Classified by Account Nature
Unit: RMB
||||
|-|-|-|
|Nature|Closing book balance|Opening book balance|
|Fund of related party|66,777,869.73|72,537,567.85|

||||
|-|-|-|
|Intercourse funds|3,780,300.83|4,014,013.16|
|Tax|2,331,608.20|2,331,608.20|
|Payment on behalf|209,288.63|2,938,980.05|
|Margin||319,536.00|
|Total|73,099,067.39|82,141,705.26|

 (5) The Top Five Other Account Receivable Classified by Debtor at Period-end
Unit: RMB
|||||||
|-|-|-|-|-|-|
|||||Proportion to the||
|||||total of closing|Closing balance of|
|Name of unit|Nature of accounts|Closing balance|Aging|||
|||||balance of other|bad-debt provision|
|||||accounts receivable||
|Tianrui (HK) Trading|Intercourse of|||||
|||57,707,092.85|Over 5 years|78.94%||
|Co., Ltd.|related party|||||
|Shenzhen Rieys|Intercourse of|||||
|||9,070,776.88|Within 1 year|12.41%||
|Industrial Co., Ltd.|related party|||||
|Refund of tax for||||||
||Tax|2,331,608.20|Over 5 years|3.19%|2,331,608.20|
|export receivable||||||
|Guangdong Yuanfeng||||||
||Intercourse funds|700,000.00|Over 5 years|0.96%|700,000.00|
|Trade Co., Ltd.||||||
|Shenzhen Zhao Tong||||||
||Intercourse funds|600,000.00|Over 5 years|0.82%|600,000.00|
|Investment Co., Ltd.||||||
|Total|--|70,409,477.93|--|96.32%|3,631,608.20|

 (6) Account Receivable Involving Government Subsidies
Unit: RMB
||||||
|-|-|-|-|-|
||Name of the government||Account-age at the end|Estimated time, amount|
|Name of unit||Closing balance|||
||subsidy item||of the period|and basis of charge|

 (7) Other Account Receivable Derecognized Due To the Transfer of Financial Assets
(8) Amount of Assets and Liabilities Generated from the Transfer of Other Accounts Receivable and Continued Involvement
Other notes:
3. Long-term Equity Investment
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Impairment|||Impairment||
||Book balance||Book value|Book balance||Book value|
|||provision|||provision||
|Investment to thesubsidiary|||||||
||80,000,008.26||80,000,008.26|75,000,008.26||75,000,008.26|
|Investment tojoint ventures andassociatedenterprises|||||||
||270,015,275.93||270,015,275.93|149,998,221.71||149,998,221.71|
|Total|350,015,284.19||350,015,284.19|224,998,229.97||224,998,229.97|

 (1) Investment to the Subsidiary
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||||||Withdrawn||
|||||||Closing balance|
||||||impairment||
|Investee|Opening balance|Increase|Decrease|Closing balance||of impairment|
||||||provision in the||
|||||||provision|
||||||Reporting Period||
|Shenzhen Rieys|||||||
||45,000,000.00|||45,000,000.00|||
|Industrial Co., Ltd.|||||||
|Tianrui (HK)|||||||
||8.26|||8.26|||
|Trading Co., Ltd.|||||||
|Chinese Gold|||||||
||30,000,000.00|||30,000,000.00|||
|Nobility|||||||
|Shanghai Yunpeng|||||||
|Network|||||||
|||5,000,000.00||5,000,000.00|||
|Technology Co.,|||||||
|Ltd.|||||||
|Total|75,000,008.26|5,000,000.00||80,000,008.26|||

(2) Investment to Joint Ventures and Associated Enterprises
Unit: RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Increase/decrease|||||||||Closing|
|||||Profit and|Adjustme||Cash,||||balance|
|The|Opening|Additiona|Reduced|loss on|nt of|Changes|dividendsandprofitsdeclaredto issue|Impairme||Closing|for|
|||l||investmen|other|||nt|||impairme|
|investor|balance||investmen|||in other|||Others|balance||
|||investmen||ts|comprehe|||provision|||nt|
||||ts|||equity||||||
|||ts||confirmed|nsive|||s|||provision|
|||||according|income||||||s|

|||||
|-|-|-|-|
|||to equity||
|||law||
|I. Joint ventures||||
|II. Associated enterprises||||
|Shenzhen||||
|Shenguor||||
|ong|149,998,2||150,014,5|
|||16,324.24||
|Financing|21.71||45.95|
|Guarantee||||
|Co., Ltd.||||
|Shenzhen||||
|Future||||
|Growing||||
|Business|||120,000,7|
|||729.98||
|Fund|||29.98|
|(Limited||||
|Partnershi||||
|p)||||
||149,998,2||270,015,2|
|Subtotal||17,054.22||
||21.71||75.93|
||149,998,221.71||270,015,275.93|
|Total||17,054.22||

 (3) Other Notes
Not applicable
4. Revenues and Operating Costs
Unit: RMB
||||||
|-|-|-|-|-|
||Reporting Period||Same period of last year||
|Item|||||
||Sales revenue|Cost of sales|Sales revenue|Cost of sales|
|Other operations|637,064.14|166,356.27|||
|Total|637,064.14|166,356.27|||

Other notes:
The current other operations income was generated from the housing lease.
5. Investment Income
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|

|||
|-|-|
|Long-term equity investment income||
||17,054.22|
|accounted by equity method||
|Total|17,054.22|

6. Other
XVIII. Supplementary Materials
1. Items and Amounts of Extraordinary Gains and Losses
√ Applicable□ Not applicable
Unit: RMB
||||
|-|-|-|
|Item|Amount|Explanation|
|Government subsidies recorded into the||(1) gains and losses of changes in fair|
|current gains and losses (excluding the||value generated from holding trading|
|government subsidies that are closely||financial assets was RMB-5,539,925.21 (2)|
||-5,523,684.66||
|relative to business and enjoyed in normed||investment income received from the|
|way or quantitatively in accordance with the||disposal of trading financial assets was|
|national standards)||RMB16,240.55|
|Write-back of impairment provision of|||
|accounts receivable with separate|411,560.62||
|impairment test|||
|Other non-operating income and expenses|||
||14,650.39||
|other than the above|||
|Less: amount affected by income tax|72,063.56||
|Minority interests effects|-452,702.47||
|Total|-4,716,834.74|--|

Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Extraordinary Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item.
□ Applicable√ Not applicable
2. Return on Net Equity and Earnings Per Share
|||||
|-|-|-|-|
|||EPS（Yuan/share）||
|Profit as of Reporting Period|Weighted average ROE (%)|||
|||EPS-basic|EPS-diluted|
|Net profit attributable to common||-0.030|-0.030|
||-2.21%|||
|shareholders of the Company||||
|Net profit attributable to common|-0.90%|-0.0103|-0.0103|

||
|-|
|shareholders of the Company after|
|deduction of non-recurring profit|
|and loss|

3. Differences between Accounting Data under Domestic and Overseas Accounting Standards
(1) Differences of Net Profit and Net Assets Disclosed in Financial Reports Prepared under International and Chinese Accounting Standards
□ Applicable√ Not applicable
(2) Differences of Net Profit and Net Assets Disclosed in Financial Reports Prepared under Overseas and Chinese Accounting Standards
□ Applicable√ Not applicable
(3) Explain Reasons for the Differences between Accounting Data under Domestic and Overseas Accounting Standards, for Audit Data Adjusting Differences Had Been Foreign Audited, Should Indicate the Name of the Foreign Institutions