东沣科技集团股份有限公司
Dongfeng Sci-Tech Group CO., Ltd.
ANNUAL REPORT 2018
April 2019
Section I. Important Notice, Contents and Paraphrase
Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of Dongfeng Sci-Tech Group CO., Ltd. (hereinafter referred to as the Company) hereby confirm that there are no any fictitious statements, misleading statements, or important omissions carried in this report, and shall take legal liability, individual and/or joint, for the whole contents.
Zhao Yongsheng, Principal of the Company, Zhao Yongsheng, person in charger of accounting works and Liu Fengguo, person in charge of accounting organ (accounting principal) hereby confirm that the Financial Report of 2018 Annual Report is authentic, accurate and complete.
All directors are attended the Board Meeting for report deliberation.
The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either.
Note: The Report is prepared in bilingual versions of Chinese and English respectively, in the event of any discrepancy in understanding the two aforementioned versions, the Chinese version shall prevail.
Contents
Section I. Important Notice, Contents and Paraphrase ................................................................. 2 Section II. Company Profile and Main Financial Indexes ............................................................. 5 Section III. Summary of Company Business ................................................................................. 10 Section IV. Discussion and Analysis of the Business ..................................................................... 12 Section V. Important Event ............................................................................................................. 33 Section VI. Changes in Shares and Particulars about Shareholders .......................................... 45 Section VII. Preferred Stock ........................................................................................................... 52 Section VIII. Particulars about Directors, Supervisors, Senior Executives and Employees .... 53 Section IX. Corporate Governance ................................................................................................ 61 Section X. Corporation bonds ......................................................................................................... 71 Section XI. Financial Report ........................................................................................................... 72 Section XII. Documents available for reference .......................................................................... 201
Paraphrase
||||
|-|-|-|
|Items|Refers to|Contents|
|CSRC, SRC|Refers to|China Securities Regulatory Commission|
|SZ Stock Exchange, Exchange|Refers to|Shenzhen Stock Exchange|
|Company, The Company|Refers to|Dongfeng Sci-Tech Group CO., LTD.|
|Dongfeng Investment|Refers to|Chengde Dongfeng Investment Co., Ltd.|
|Kefeng Trading|Refers to|Chengde Kefeng Trading Co., Ltd.|
|Kefeng Engineering|Refers to|Chengde Kefeng Engineering Project Management Co. Ltd.|
|Nanjiang Trading|Refers to|Chengde Nanjiang Trading Co., Ltd.|
|Nanjiang Technology|Refers to|Chengde Nanjiang Technology Co. Ltd.|
|Ecological Agriculture|Refers to|Chengde Dongfeng Ecological Agriculture Co., Ltd.|
|Asia Investment, Nanjiang Asia|Refers to|Nanjiang Asia Investment Co., Ltd.|
|Runhua RW|Refers to|Runhua Rural Water (Tianjin) International Trade Co., Ltd.|
|Hangzhou Dongfeng|Refers to|Hangzhou Dongfeng Technology Co. Ltd.|
|Dongfeng Technology Development|Refers to|Dongguan Dongfeng Technology Development Co., Ltd.|
|Dongfeng Intelligent|Refers to|Dongguan Dongfeng Intelligent Technology Co., Ltd.|
|Zhongchuang New Energy|Refers to|Dongguan Zhongchuang New Energy Technology Co., Ltd.|
|Aolin New Materials|Refers to|Dongguan Aolin New Materials Co., Ltd.|
|Haizhuo Energy|Refers to|Dongguan Haizhuo Energy Technology Co., Ltd.|
|Huijing Property|Refers to|Chengde Huijing Property Services Co., Ltd.|
|Dongfeng Power|Refers to|Dongguan Dongfeng Power Tech. Co., Ltd.|
|Company Law|Refers to|Company Law of the People’s Republic of China|
|Securities Law|Refers to|Securities Law of the People’s Republic of China|
|||Rules Governing the Listing of Securities on Shenzhen Stock|
|Listing Rules|Refers to||
|||Exchange|
|Yuan, 10 thousand Yuan|Refers to|RMB, RMB 10 thousand|

Section II. Company Profile and Main Financial Indexes I. Company information
|||||
|-|-|-|-|
|Short form of the stock|Dongfeng-B|Stock code|200160|
|Short form of the Stock after||||
||N/A|||
|changed (if applicable)||||
|Stock exchange for listing|Shenzhen Stock Exchange|||
|Name of the Company (in|东沣科技集团股份有限公司|||
|Chinese)||||
|Short form of the Company||||
||东沣B|||
|(in Chinese)||||
|Foreign name of the||||
||DongfengSci-Tech Group CO.,LTD|||
|Company(if applicable)||||
|Short form of foreign name of||||
||DONGFENG-B|||
|the Company(if applicable)||||
|Legal representative|Zhao Yongsheng|||
|Registrations add.|XiaBanCheng Town, Chengde County, Hebei Province, P.R.C|||
|Codes for office add.|067400|||
|Offices add.|XiaBanCheng Town, Chengde County, Hebei Province, P.R.C|||
|Codes for office add.|067400|||
|Website|--|||
|E-mail|dfjt@dftechgroup.com|||

II. Person/Way to contact
||||
|-|-|-|
||Secretary of the Board|Rep. of security affairs|
|Name|Li Wenying|Wang Haijian|
||XiaBanCheng Town, Chengde County,|XiaBanCheng Town, Chengde County,|
|Contact add.|||
||Hebei Province|Hebei Province|
|Tel.|0314-3115048|0314-3115048|
|Fax.|0314-3111475|0314-3111475|
|E-mail|liwy@dftechgroup.com|wanghj@dftechgroup.com|

III. Information disclosure and preparation place
|||
|-|-|
|Media appointed for information disclosure|In China: Securities Times; overseas: Hong Kong Commercial Daily|
|Website for annual report publish appointed by CSRC|Ju chao website: http://www.cninfo.com.cn|
|Preparation place for annual report|Security department of the Company|

IV. Registration changes of the Company
|||
|-|-|
|Organization code|911308001065768766|
|Changes of main business since listing (if||
||No changes|
|applicable)||
|Previous changes for controlling||
||No changes|
|shareholders (if applicable)||

V. Other relevant information
CPA engaged by the Company
|||
|-|-|
|Name of CPA|Dahua Certified Public Accountants (Limited Liability Partnership)|
|Offices add. for CPA|No. 689, Tianhe Road (N), Guangzhou|
|Signing Accountants|Hu Zhigang, Yan Lisheng|

Sponsor engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable√ Not applicable
Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable√ Not applicable
VI. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data
□ Yes√ No
||||||
|-|-|-|-|-|
||2018|2017|Changes over last year|2016|
|Operating income (RMB)|123,508,083.90|250,071,863.07|-50.61%|367,898,631.53|
|Net profit attributable to|7,383,835.76|4,102,325.89|||
|shareholders of the listed company|||79.99%|3,760,806.51|
|(RMB)|||||
|Net profit attributable to|||||
|shareholders of the listed company|||||
||-12,564,268.78|-49,734,326.42|74.74%|553,720.92|
|after deducting non-recurring gains|||||
|and losses (RMB)|||||
|Net cash flow arising from|34,566,049.31|-84,551,574.28|||
||||140.88%|54,484,351.33|
|operating activities (RMB)|||||

||||||
|-|-|-|-|-|
|Basic earnings per share|0.01|0.01|||
||||0.00%|0.01|
|(RMB/Share)|||||
|Diluted earnings per share|0.01|0.01|||
||||0.00%|0.01|
|(RMB/Share)|||||
|Weighted average ROE|2.01%|1.13%|0.88%|1.06%|
||||Changes over end of||
||End of2018|End of2017||End of2016|
||||last year||
|Total assets (RMB)|624,370,817.40|503,762,445.04|23.94%|626,756,827.34|
|Net assets attributable to|351,593,999.08|363,928,776.87|||
|shareholder of listed company|||-3.39%|359,826,450.98|
|(RMB)|||||

VII. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable√ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (International Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable√ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
VIII. Quarterly main financial index
In RMB
||||||
|-|-|-|-|-|
||First quarter|Second quarter|Third quarter|Fourth quarter|
|Operating income|57,256,600.57|22,559,268.21|15,883,771.67|27,808,443.45|
|Net profit attributable to|||||
||1,206,225.64|-6,416,983.86|8,356,632.89|4,237,961.09|
|shareholders of the listed company|||||
|Net profit attributable to|||||
|shareholders of the listed company|||||
||-1,688,014.85|-6,527,892.79|-10,105,275.24|5,756,914.10|
|after deducting non-recurring gains|||||
|and losses|||||
|Net cash flow arising from|||||
||13,873,390.65|20,051,902.37|-9,019,953.54|9,660,709.83|
|operating activities|||||

Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financial index disclosed in thecompany’s quarterly report and semi-annual report
□Yes√ No
IX. Items and amounts of extraordinary profit (gains)/loss
√Applicable□ Not applicable
In RMB
||||||
|-|-|-|-|-|
|Item|2018|2017|2016|Note|
|Gains/losses from the disposal of|4,526,245.58|||---|
|non-current asset (including the write-off||65,016,094.13|4,800,704.58||
|that accrued for impairment of assets)|||||
|Tax return, reduction and exemption with|||||
|unauthorized approval or without formal|||||
|approval documents|||||
|Governmental subsidy reckoned into current|2,896,000.00||||
|gains/losses (not including the subsidy|||||
|enjoyed in quota or ration according to|||94,100.26||
|national standards, which are closely|||||
|relevant to enterprise’s business)|||||
|Held transaction financial asset, gains/losses|1,144,246.03|||Income from financialproducts|
|of changes of fair values from transaction|||||
|financial liabilities, and investment gains|||||
|from disposal of transaction financial asset,|||||
|transaction financial liabilities and financial|||||
|asset available for sales, exclude the|||||
|effective hedging business relevant with|||||
|normal operations of the Company|||||
|Custodial fee income from trusteeship|||||
|Other non-operating income and expenditure|-470,819.42||||
|||-754,839.79|-618,690.72||
|except for the aforementioned items|||||
|Gain/losses items qualified definition of theextraordinary gains/losses|18,501,800.54|||Subsidiary disposal|
|||2,482,382.07|||
|Less: Impact on income tax|6,649,368.19|12,906,984.10|1,069,028.53||
|Impact on minority shareholders’ equity(post-tax)|||||
|Total|27,858,178.45|53,836,652.31|3,207,085.59|--|

Concerning the extraordinary profit (gain)/loss defined byQ&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss inQ&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable√ Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss inQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss
Section III. Summary of Company Business
I. Main businesses of the company in the reporting period
Whether the company needs to comply with the disclosure requirements of the particular industry
Yes
Real estate industry
I. Main business operations during the reporting period
Real estate business: the real estate development business was the main operating business of the Company during the reporting period, and the business model was the development and sales of commercial housing, and the business scope was mainly located in Chengde area.The main products were residence and commerce. With high-quality product quality and property services, thecompany’s real estate business had established a good reputation in the local area.
On the basis of ensuring the steady development of real estate business, the company actively promoted the strategic transformation of the hydrogen energy and new materials sectors. The progress of main business during the reporting period was as follows:
Hydrogen fuel cell business: with Dongguan Zhongchuang New Energy as the business platform, the Company mainly engaged in theR&D, production and sales of fuel cell core raw materials (membrane electrodes) and fuel cell power systems, as well as providing integrated solutions for platforms such as fuel cell power systems in automobiles, drones, electric forklifts, distributed power stations, and emergency power supplies. At present, 500W to 5000W series air-cooled fuel cell pile (graphite bipolar plates) have been finalized for production, and the mass power density of the pile is above 500W/kg, which is in small batch production and sales.
For the hydrogen energy business, the company took Haizhuo Energy as its business platform, mainly engaged in research and development, production and sales of real-time hydrogen production equipment. The real-time hydrogen production equipment research by the Haizhuo Energy consists of on-board hydrogen generator and hydrogen fuel cell. At present, the real-time hydrogen production equipment has been successfully tested on hydrogen fuel cell buses and is undergoing road test.
New material business: with Aolin New Materials as its business platform, the Company mainly engaged in the research& development, production and sales of high-performance ceramic fiber materials, its main products were alumina fiber and zirconia fiber, which possess with excellent thermal insulation, energy saving, fire resistance, and fireproof performance and can be widely used in industrial furnace wall lining, backing, lining, pipe insulation, thermal insulation and sealing (automobile gasket), radiation and heat insulation of petrifaction, metallurgy, non-ferrous metals, building materials, electric power, machinery, ceramics, glass, shipping and other industries. At present, the initial production line of alumina short fiber, researched and developed by Aolin New Materials was completed, and have entered the small batch production and sales.
II. Main performance drivers
During the reporting period, due to the tightening of regulatory policies, the tightening policies in the real estate market such as purchase restrictions, limited loans, and price limits were frequent, and the real estate market in Beijing-surrounded areas has stabilized. TheCompany’s real estate development has been mainly located in the Chengde area, and the opening of the Beijing-Shenyang high-speed railway shall make Chengde enter the―one-hour economic circle of thecapital‖ and thus has better regional advantages. In recent years, the real estate projects developed by the Company have established a good reputation and brand image in the local area with excellent quality and perfect property management. In the future, under the background of Beijing-Tianjin-Hebei integration, the Company will continue to improve service quality, build high-end boutique houses, and improve market competitiveness. Meanwhile, we proactively promoted the strategy transformation and fostering new profit growth points for the Company.
II. Major changes in main assets
1. Major changes in main assets
|||
|-|-|
|Major assets|Note of major changes|
|Fixed assets|Increased 78.85%, mainly because purchased fixed assets in the period|
|Construction in process|Increased 4383.61%, mainly because new construction in process increased in the period|

 2. Main overseas assets
□ Applicable√ Not applicable
III. Core Competitiveness Analysis
Whether the company needs to comply with the disclosure requirements of the particular industry
Yes
Real estate industry
1. Team advantages. The company has an excellent management team who has an acute sense of market judgment, efficient decision-making and executive capacity, rich management experience, strong adaptability and innovation ability, and is strong backing to protect the company's development and promote the company's strategic transformation.
2. Brand advantages. The company has strictly controlled the quality, built high-quality and high-level residences, established a good corporate image and reputation by precisely positioning the market.
3. Location advantage. The Company locates in Chengde, and adjacent to Beijing and Tianjin, which has a favorable location under the background of―integration of Beijing-Tianjin-Hebeiregions‖.
4. Technical advantage: the Company cooperate with the Dongguang Beihang Institution in respect of hydrogen energy and new materials, and owes a technical advantage in field of hydrogen energy and new materials
Section IV. Discussion and Analysis of the Business
I. Introduction
The Company needs to comply with the disclosure requirement of Shenzhen Stock Exchange Industry Information Disclosure Guidelines No.3- Listed Companies Engaging in Real Estate Business
(I) Analysis of the industry situation during the reporting period
During the reporting period, the real estate policy continued the main tone of―housing is for residence instead of viciousspeculation‖, various control policies were mainly stable, and more emphasis was placed on urban policy, rational policy and structural optimization. Under the guidance of classification and regulation, local policies continued to be overweight and continue to implement differentiated regulation and control. At the same time, it paid attention to the adjustment of housing supply structure, vigorously developed affordable housing such as housing rental market and shared property housing, increased the proportion of effective supply, and established a sound and stable long-term mechanism for industrial development. According to the statistics of the Hebei Provincial Bureau of Statistics, in 2018, the investment in real estate development in Hebei Province was 447.64 billion yuan, declined by7.2% on a year-on-year basis, the sales area of commercial housing was 52.519 million square meters, a decline of18.3% on a year-on-year basis, and the area of commercial housing for sale was 9.181 million square meters, a decline of13.1% on a year-on-year basis, the real estate development and sales continued to cool down, and the de-stocking was better.
(II) Operation of the company during the reporting period
During the reporting period, under the background of the downturn pressure on the international and domestic economy and the strict regulation of real estate, the company adhered to the development idea of―real estate+ strategictransformation‖ and utilized thecompany’s good reputation in the local area to develop the real estate business, and meanwhile accelerated the process of thecompany’s strategic transformation business.
In terms of real estate, during the reporting period, the company responded to market changes on the one hand, increased sales efforts, and accelerated the destocking of stocks; on the other hand, strictly controlled quality, focused on the development of new real estate projects– Tianxi Project, covering an area of 25,128.90 square meters, the construction period would continue until 2020.
In terms of hydrogen energy and new materials, we accelerated the construction of the Dongfeng New Energy Equipment Industrialization Base project. During the reporting period, some businesses achieved breakthrough progress. The first production line for alumina short fiber based on Aolin New Materials has been completed and started to be put into production and sales in small batches. At present, the market is being vigorously developed, and at the same time, product performance is upgraded according to customer demand, productivity is increased, and cost is further reduced. The mass production of this product will effectively fill the market gap of domestic high-end alumina fiber; the real-time hydrogenation equipment developed by Haizhuo Energy has been
successfully tested on hydrogen fuel cell buses, and road test experiments are being carried out, and the product performance is further improved and upgraded. The successful experiment of real-time hydrogenation equipment enables large vehicles such as hydrogen fuel cell bus, bus, and logistics vehicles not to carry high-pressure hydrogen cylinders and can be operated without relying on hydrogenation at the hydrogen fueling station, you only need to add water and solid hydrogen fuel rods to the real-time hydrogenation equipment at regular intervals and the equipment supplies hydrogen according to the needs of fuel cell. And the real-time hydrogenation equipment produces hydrogen as needed, it does not produce hydrogen at the idle hours, nor store hydrogen, and the safety is improved significantly. The hydrogen fuel cell with Zhongchuang New Energy as the platform has formed a 500W to 5000W series fuel cell stack (graphite bipolar plate) production, the power density of the stack is above 500W/kg, and small batch production and sales are underway.
1. During the reporting period, thecompany’ real estate development was as follows:
||||||||||
|-|-|-|-|-|-|-|-|-|
|Project underconstruction|Area|Equity ratio|Start-up time|Floor space|Calculatedbuilding area(m2)|Completedbuilding area(m2)|Estimatedinvestmentamount(hundredmillion yuan)|Actualinvestedamount(hundred million yuan)|
|Tianxi|Chengde|100%|2018.10|25,128.9|43472|0|3.8|1.08|

 2. During the reporting period, thecompany’s real estate sales were as follows:
||||||||||
|-|-|-|-|-|-|-|-|-|
|Projectname|Area|Type ofoperation|Saleable areaat thebeginning ofthe period(m2)|Pre-salearea in currentperiod(m2)|Settlement areain currentperiod(m2)|Operating income(RMB)|Operating cost(RMB)|Grossprofitmargin (%)|
|Nanjiang–HuijingTiandi|Chengde|Residence|11242.07|5971.82|17268.34|76538629.46|61453486.74|19.71%|
|||Commerce|14190.11|12118.77|10819.78|42269090.47|42367762.05|-0.23%|
|||Total|25432.18|18090.59|28088.12|118807719.93|103821248.79|12.61%|

 3. During the reporting period, the company did not have any new land reserves:
4. During the reporting period, the company provided guarantees to its commercial housing purchasers for bank mortgage loans:
As of the end of the reporting period, the balance of guarantees provided by the company for commercial house purchasers for bank mortgage loans was 70.74 million yuan. During the reporting period, there was no guarantee for this guarantee and the amount involved accounting for10% of thecompany’s latest audited net profit.
5. Progress of equipment industrialization base project of Dongfeng New Energy:
The No. 1-9 factory buildings of Dongfeng New Energy equipment industrialization base has been fully capped,
the interior and exterior wall decoration, floor, elevator, doors and windows, bathroom and other decorative
projects have been completed, and the outdoor pipelines in the factory have been pre-buried.
Scientific research building: The exterior wall tile, doors and windows of Zone A and Zone C have been
completed, and the stairwell decoration and elevator installation are being carried out; the masonry project in Zone B has been completed and the interior and exterior walls are being plastered. The overall project is expected to be completed and accepted in the third quarter of 2019.
6. During the reporting period, thecompany’s financing situation was as follows:
||||||
|-|-|-|-|-|
|Financing category|Credit amount (tenthousand yuan)|Financing balance(ten thousand yuan)|Financing cost|Financing period|
|Bank loan|20000|20000|7.105%|5 years|

7. Stock repurchase of the company
Due to the influence of multiple factors, thecompany’s share price fluctuated greatly and even dropped below the face value during the reporting period. In order to boostinvestors’ confidence and safeguard the interests of thecompany’s shareholders, especially the majority of small and medium shareholders, the company comprehensively considered its operation, financial status and development strategy, at the same time, based on the confidence in thecompany’s future stable development prospects and the recognition of thecompany’s long-term investment value, the company held the second extraordinary shareholders meeting in 2018 on November 7, 2018 to consider and approve the matter of repurchasing thecompany’s shares by means of centralized bidding. As of the disclosure date of this report, the number of shares repurchased by the company through the stock repurchase special securities accounts by centralized bidding was 28,307,783 shares, accounting for4.01% of thecompany’s total share capital, of which the highest transaction price wasHK$1.18 per share, the lowest transaction price wasHK$1.09 per share, and the total amount paid wasHK$32,095,614.32 (excluding transaction fees). See the table below for details:
||||||||
|-|-|-|-|-|-|-|
|Repurchase date|Repurchasequantity|Highestprice(HKD)|Lowest price(HKD)|Repurchaseamount(HKD)|Proportionin totalsharecapital|Announcement index|
|2018.12.6|6,586,658|1.14|1.11|7,449,626.48|0.93%|Announcement on theFirst Repurchase ofCompany Shares2018-070|
|2018.12.20|12,864,055|1.14|1.09|14,529,142.54|1.82%|Announcement onProportion ofRepurchase ofCompany SharesAmounting to 2% ofthe Total ShareCapital 2018-075|
|2018.12.27|4,994,970|1.18|1.12|5,697,753.10|0.71%|Announcement onProportion ofRepurchase ofCompany SharesAmounting to 3% of|

||||||||
|-|-|-|-|-|-|-|
|||||||the Total ShareCapital ―2018-076‖|
|2018.12.28|532,100|1.14|1.14|606,594.00|0.08%|Announcement onProportion ofRepurchase ofCompany SharesAmounting to 4% ofthe Total ShareCapital 2019-006|
|2019.1.29|3,330,000|1,16|1.14|3,812,498.20|0.47%||
|Total|28,307,783|||32,095,614.32|4.01%||

II. Main business analysis
1. Introduction
See the―I-Introduction‖ in―Discussion and Analysis of theBusiness‖
2. Revenue and cost
(1) Constitute of operation revenue
In RMB
|||||||
|-|-|-|-|-|-|
||2018||2017|||
|||Ratio in operation||Ratio in operation|Y-o-y changes (+,-)|
||Amount||Amount|||
|||revenue||revenue||
|Total operation|123,508,083.90||250,071,863.07|||
|||100%||100%|-50.61%|
|revenue||||||
|According to industries||||||
|Real estate|118,807,719.93|96.19%|244,805,702.13|97.89%|-51.47%|
|Property||||||
||4,582,079.48|3.71%|3,855,595.87|1.54%|18.84%|
|management||||||
|Agriculture|118,284.49|0.10%|1,410,565.07|0.56%|-91.61%|
|According to products||||||
|Sales of real estate|118,807,719.93|96.19%|244,805,702.13|97.89%|-51.47%|
|Heating, property|4,582,079.48|3.71%|3,855,595.87|1.54%|18.84%|
|Agriculture|118,284.49|0.10%|1,410,565.07|0.56%|-91.61%|
|According to region||||||

|||||||
|-|-|-|-|-|-|
|Chengde|123,508,083.90|100.00%|250,071,863.07|100.00%|-50.61%|

 (2) About the industries, products, or regions accounting for over10% of thecompany’s operating income or operating profit
√Applicable□ Not applicable
Whether the company needs to comply with the disclosure requirements of the particular industry
Yes
Real estate industry
In RMB
||||||||
|-|-|-|-|-|-|-|
|||||Increase/decrease|Increase/decrease|Increase/decrease|
||Operating||||||
|||Operating cost|Gross profit ratio|of operating|of operating cost|of gross profit|
||revenue||||||
|||||revenue y-o-y|y-o-y|ratio y-o-y|
|According to industries|||||||
|Real estate|118,807,719.93|103,821,248.79|12.61%|-51.47%|-55.17%|7.20%|
|According to products|||||||
|Sales of real|||||||
||118,807,719.93|103,821,248.79|12.61%|-51.47%|-55.17%|7.20%|
|estate|||||||
|According to region|||||||
|Chengde|123,508,083.90|108,747,731.24|11.95%|-50.61%|-54.15%|6.80%|

 Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based on latest oneyear’s scope of period-end
□ Applicable√ Not applicable
(3) Income from physical sales larger than income from labors
□Yes√No
(4) Fulfillment of thecompany’s signed significant sales contracts up to this reporting period
□ Applicable√ Not applicable
(5) Constitute of operation cost
Industry and Product classification
In RMB
||||||||
|-|-|-|-|-|-|-|
|||2018||2017|||
|Industry||||||Increase/decrease|
||Item||Ratio in operation||Ratio in operation||
|classification||Amount||Amount||y-o-y|
||||cost||cost||
|Real estate|Real estate|103,821,248.79|95.47%|231,565,613.02|97.63%|-55.17%|

||||||||
|-|-|-|-|-|-|-|
|industry|||||||
|Property|Property||||||
|||4,818,262.48|4.43%|4,964,668.31|2.09%|-2.95%|
|management|management||||||
|Agriculture and|Agriculture and||||||
|||108,219.97|0.10%|652,858.34|0.28%|-83.42%|
|others|others||||||

In RMB
||||||||
|-|-|-|-|-|-|-|
|||2018||2017|||
|Product||||||Increase/decrease|
||Item||Ratio in operation||Ratio in operation||
|classification||Amount||Amount||y-o-y|
||||cost||cost||
|Sales of real|Sales of real||||||
|||103,821,248.79|95.47%|231,565,613.02|97.63%|-55.17%|
|estate|estate||||||
|Heating, property|Heating, property|4,818,262.48|4.43%|4,964,668.31|2.09%|-2.95%|
|Agriculture and|Agriculture and||||||
|||108,219.97|0.10%|652,858.34|0.28%|-83.42%|
|others|others||||||

Other explanation
(6) Whether the changes in the scope of consolidation in Reporting Period
√ Yes□ No
1. Subsidiary newly included in consolidation scope
|||
|-|-|
|Name|Causes|
|Dongfeng Power|Enterprise combined under the same control|
|Haizhuo Energy|Enterprise combined under the different control|

2. Subsidiary excluded in the consolidation scope in the period
|||
|-|-|
|Name|Causes|
|Nanjiang Trading|Disposal|

(1) The Company transferred its100% equity of NanjiangTrading to Chengde Country Jinshangmao Co., Ltd on August 14, 2018, therefore, Nanjiang Trading was no longer included in the consolidated balance sheet in the current period, but the Accounting Standards for Business Enterprises No. 33– Consolidated Financial Statements stipulates that if a parent company disposes of a subsidiary during the reporting period, the income, expenses and profits of the subsidiary from the beginning of the period to the disposal date should be included in the consolidated income statement, and the cash flows of the subsidiary from the beginning of the period to the disposal date should be included in the consolidated cash flow statement. Therefore, the income, expenses and profits of NanjiangTrading from the beginning of the current period to the date of cancellation were still included in the scope of consolidation. (2) Dongguan Dongfeng Power Tech. Co., Ltd. is a holding sub-subsidiary acquired on August 28, 2018. On December 25, 2018, Dongguan Dongfeng Tech. transferred it to the Company to become a holding subsidiary.
(3) Dongguan Haizhuo Energy Technology Co., Ltd. is a holding sub-subsidiary that increased its capital and shares on March 6,
2018.
(7) Major changes or adjustment in business, product or service of the Company in Reporting Period□ Applicable√ Not applicable
(8) Major sales and main suppliers
Major sales client of the Company
|||
|-|-|
|Total sales from top five clients (RMB)|42,920,866.61|
|Ratio of the total sales from top five clients in total||
||34.75%|
|annual sales||
|Ratio of the amount of related party’s sales in top five||
||0.00%|
|clients in total annual sales||

Top five clients of the Company
|||||
|-|-|-|-|
|Serial|Name|Sales (RMB)|Proportion in total annual sales|
|1|Client I|34,443,952.34|27.89%|
|2|Client II|3,809,523.80|3.08%|
|3|Client III|1,828,571.43|1.48%|
|4|Client IV|1,646,057.14|1.33%|
|5|Client V|1,192,761.90|0.97%|
|total|--|42,920,866.61|34.75%|

 Other situation of main clients
□ Applicable√ Not applicable
Main suppliers of the Company
|||
|-|-|
|Total purchase amount from top five suppliers (RMB)|283,081,773.37|
|Ratio of the total purchase from top five suppliers in||
||96.73%|
|total annual purchase amount||
|Ratio of the amount of related party’s purchase in top||
||0.00%|
|five suppliers in total annual purchase amount||

Top five suppliers of the Company
|||||
|-|-|-|-|
|Serial|Supplier|Purchasing amount (RMB)|Ratio in total annual purchasing amount|
|1|Supplier I|215,010,000.00|73.47%|
|2|Supplier II|60,038,761.00|20.52%|
|3|Supplier III|3,139,474.27|1.07%|

|||||
|-|-|-|-|
|4|Supplier IV|2,661,689.10|0.91%|
|5|Supplier V|2,231,849.00|0.76%|
|Total|--|283,081,773.37|96.73%|

 Other notes of main suppliers of the Company
□ Applicable√ Not applicable
3. Expenses
In RMB
||||||
|-|-|-|-|-|
||||Increase/decrease||
||2018|2017||Note of major changes|
||||y-o-y||
||115,346.71|14,417,090.26||Agency charges accrual in advance in|
|Sales expense|||-99.20%||
|||||the period|
|Management expense|29,236,648.47|29,552,371.61|-1.07%||
||-385,552.98|1,346,177.29||Interests expenses declined in the|
|Financial expense|||-128.64%||
|||||period|
||4,748,852.86|124,889.69||E x p e nses from R&D increased in the|
|R&D expense|||||
||||3702.44%|period|

4.R&D investment
√Applicable□ Not applicable
During the reporting period, the company continued to increaseR&D investment in hydrogen energy and new materials related projects, the main investment projects included hydrogenation equipment, ceramic short fiber and hydrogen fuel cell projects, with a total investment of RMB 14,581,700. During the reporting period, thecompany’s hydrogen energy and new materials business made great progress, and the first production line of alumina short fiber was completed and started to be put into production and sold in small batches. The real-time hydrogenation equipment has been successfully tested on the hydrogen fuel cell bus, and further road test experiments are underway. The hydrogen fuel cell has formed a 500W to 5000W series fuel cell stack (graphite bipolar plate) production, the power density of stack is above 500W/kg, and small batch production is underway, which further promoted the industrialization and marketization of thecompany’s hydrogen energy and new materials business.
Investment forR&D
|||||
|-|-|-|-|
||2018|2017|Ratio of changes|
|Number of R&D personnel||||
||47|21|123.81%|
|(person)||||
|The proportion of R&D||||
||25.97%|14.69%|11.28%|
|personnel||||
|Funds invested for R&D||||
||14,581,701.77|3,638,451.25|300.77%|
|(RMB)||||
|The ratio of R&D investment to||||
||11.81%|1.45%|10.36%|
|operation revenue||||

|||||
|-|-|-|-|
|Capitalization of the investment||||
||13,346,410.47|3,513,561.56|279.85%|
|for R&D (RMB)||||
|The ratio of capitalization of the||||
|investment for R&D to R&D|91.53%|96.57%|-5.04%|
|investment||||

As for the obvious changes of the ratio of totalR&D amount to operation revenue over that of last year, explain the causes
√Applicable□ Not applicable
During the year, the company addedR&D investment in hydrogenation equipment, and increased investment in the originalR&D projects, which significantly increased theR&D investment in the current period compared with the previous year, but the sales of real estate development projects decreased in the current period compared with the previous year, resulting in a sharp decrease in the operating income compared with the previous year, as a result, the proportion of totalR&D investment in the operating income has changed significantly compared with the previous year.
As for the major changes of capitalization rate of theR&D investment, explain the causes and reasonableness description
□ Applicable√Not applicable
5. Cash flow
In RMB
|||||
|-|-|-|-|
|Item|2018|2017|Y-o-y changes (+,-)|
|Subtotal of cash in-flow from|208,693,860.24|108,491,780.86||
||||92.36%|
|operation activity||||
|Subtotal of cash out-flow from|174,127,810.93|193,043,355.14||
||||-9.8%|
|operation activity||||
|Net cash flow arising from|34566049.31|-84,551,574.28||
||||140.88%|
|operating activities||||
|Subtotal of cash in-flow from|77,398,996.88|194,516,247.27||
||||-60.21%|
|investment activity||||
|Subtotal of cash out-flow from|226,742,685.22|177,399,405.19||
||||27.81%|
|investment activity||||
|Net cash flow from investment|-149,343,688.34|17,116,842.08||
||||-972.5%|
|activity||||
|Subtotal of cash in-flow from|101,710,000.00|9,600,000.00||
||||959.48%|
|financing activity||||
|Subtotal of cash out-flow from|21,796,513.79|698,492.97||
||||3,020.51%|
|financing activity||||
|Net cash flow from financing|79,913,486.21|8,901,507.03|797.75%|

|||||
|-|-|-|-|
|activity||||
|Net increased amount of cash|-34,594,471.70|-58,863,446.14||
||||41.23%|
|and cash equivalent||||

Main reasons for y-o-y major changes in aspect of relevant data
√Applicable□ Not applicable
1. Major changes in cash flow from operating activities: the intercourse funds received in the year growth;
2. Major changes in cash flow from investment activities: the amount paid for construction in process increased in the year; 3. Major changes in cash flow from financing activities: received loans from the bank in the year
Reasons of major difference between the cash flow of operation activity in report period and net profit of the Company
□ Applicable√ Not applicable
III. Analysis of the non-main business
√Applicable□ Not applicable
In RMB
||||||
|-|-|-|-|-|
||Amount|Ratio in total profit|Causes|Whether it is sustainable (Y/N)|
||||Due to subsidiary disposal in||
|Investment income|19,646,046.57|263.95%||N|
||||the period||
||||Due to the accrual of||
|Assets impairment|448,072.80|6.02%||N|
||||impairment in the period||
|Non-operating|||||
||3,125.00|0.04%||N|
|revenue|||||
|Non-operating|||||
||473,944.42|6.37%|Expenditure from donation|N|
|expenditure|||||
||||Subsidy for demonstration of||
|Other income|2,896,903.64|38.92%|renewable energy buildings|N|
||||received||
|Income from assets|||Due to disposal of fixed||
||4,526,245.58|60.81%||N|
|disposal|||assets in the period||

IV. Assets and liability
1. Major changes of assets composition
In RMB
||||||||
|-|-|-|-|-|-|-|
||End of 2018||End of 2017||||
||||||Ratio||
|||Ratio in total||Ratio in total||Notes of major changes|
||Amount||Amount||changes||
|||assets||assets|||
||36,306,825.10||74,805,209.06|||The amount received in advance for|
|Monetary fund||5.81%||14.85%|-9.04%||
|||||||property declined|

||||||||
|-|-|-|-|-|-|-|
|Account|11,171.25||17,608.00||||
|||0.00%||0.00%|0.00%||
|receivable|||||||
||151,585,557.50||234,653,825.84|||Carry forward the development|
|Inventory||24.28%||46.58%|-22.30%||
|||||||products|
|Investment real|||4,236,346.34||||
|||||0.84%|-0.84%||
|estate|||||||
|Long-term equity|||||||
||||||0.00%||
|investment|||||||
|Fixed assets|17,302,279.65|2.77%|9,674,396.99|1.92%|0.85%||
|Construction in|101,650,833.16||2,267,164.04||||
|||16.28%||0.45%|15.83%|New construction in process increased|
|process|||||||
|Short-term loans|||||0.00%||
||101,710,000.00||||||
|Long-term loans||16.29%|||16.29%|New bank loans increased|

2. Assets and liability measured by fair value
□ Applicable√ Not applicable
3. Limited assets rights ended as the reporting period
Limited monetary funds:
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Deposit for housing mortgage|2,793,908.11|6,697,820.37|
|Total|2,793,908.11|6,697,820.37|

V. Investment
1. Overall situation
√Applicable□ Not applicable
||||
|-|-|-|
|Investment in the reporting (RMB)|Investment in the same period of last year ( RMB)|Changes|
|90,000,000.00|107,358,500.00|16.17%|

 2. The major equity investment obtained in the reporting period
√Applicable□ Not applicable
In RMB
||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Invested|Principa|l Method|Amount|Sharehol|Capital|Partn|Term|Type of|Status|Expec|Current|Whet|||
||||||||||||||Date|Index of|
|company|business|of|of|ding|sources|ers|of|products|as of the|ted|invest|her|||

||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||investm|investme||||invest||balance|return|ment|litigat|of|disclosur|
|||ent|nt||||ment||sheet||profit|ion|disclos|e (if|
||||||||||date||and||ure (if|applicabl|
||||||||||||loss||||
||||||||||||||applica|e|
||||||||||||||ble|)|
||||||||||||||)||
|||||||||||||||‖External|
|||||||||||||||Investme|
|||||||||||||||nt from|
|||||||||||||||the|
|||||||||||||||controllin|
|||||||||||||||g|
|Donggua||||||||||||||subsidiar|
|n|R&D|||||||||||||y‖ (No.:|
|||||||||Clean|||||||
|Dongfen|and|||||||||||||2018-014|
|||||||||energy|Registra||||||
|g|sales of|Capital|||Self-ow||||||||19|) released|
||||60,000,00|||||power|tion||||||
|Intellige|the|Increas||100.00%|ned|N/A|---|||0.00|0.00|N|May|on|
||||0.00|||||plant|complet||||||
|nt|intellige|e|||capital||||||||2018|Securitie|
|||||||||and|e||||||
|Technolo|nt|||||||||||||s Times,|
|||||||||carrier|||||||
|gy Co.,|products|||||||||||||Hong|
|Ltd.||||||||||||||Kong|
|||||||||||||||Commer|
|||||||||||||||cial|
|||||||||||||||Daily|
|||||||||||||||and|
|||||||||||||||Juchao|
|||||||||||||||Website|
|||||||||||||||‖Equity|
|||||||||||||||Acquisiti|
|||||||||||||||on and|
|Donggua|Technica|||||||Technica|||||||
|||||||||||||||Related|
|n|l|||||||l|||||||
|||||||||||||||Transacti|
|Dongfen|develop|||||||develop|||||||
||||||||||Registra|||||ons‖|
|g|ment of||||Self-ow|||ment of|||||20||
|||Acquisi|30,000,00||||||tion|||||(No.:|
|Technolo|new|||100.00%|ned|N/A|---|new||0.00|0.00|N|Dec.||
|||tion|0.00||||||complet|||||2018-074|
|gy|energy||||capital|||energy|||||2018||
||||||||||e|||||) released|
|Develop|and|||||||and|||||||
|||||||||||||||on|
|ment|material|||||||material|||||||
|||||||||||||||Securitie|
|Co., Ltd.|s|||||||s|||||||
|||||||||||||||s Times,|
|||||||||||||||Hong|
|||||||||||||||Kong|
|||||||||||||||Commer|

||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||||||cial|
|||||||||||||||Daily|
|||||||||||||||and|
|||||||||||||||Juchao|
|||||||||||||||Website|
||||90,000,00||||||||||||
|Total|--|--||--|--|--|--|--|--|0.00|0.00|--|--|--|
||||0.00||||||||||||

3. The major non-equity investment doing in the reporting period
□ Applicable√ Not applicable
4. Financial assets investment
(1) Securities investment
□ Applicable√ Not applicable
The company had no securities investment in the reporting period
(2) Derivative investment
□ Applicable√ Not applicable
The Company has no derivatives investment in the Period
5. Application of raised proceeds
□ Applicable√ Not applicable
The company had no application of raised proceeds in the reporting period.
(1) Overall utilization of the raised proceeds
□Applicable□Not applicable
(2) Situation of committed project of raised proceed
□Applicable□Not applicable
(3) The changed project of raised proceeds
□Applicable□Not applicable
VI. Sales of major assets and equity
1. Sales of major assets
√Applicable□ Not applicable
||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||||Does|||
|||||The net||||||||the plan|||
|||||profits||||||||implem|||
|||||contrib||||||||ented|||
|||||||The|||||||||
|||||uted to||||||||on|||
|||||||proporti|||||||||
|||||the||||||||schedul|||
|||||||on of|||||||||
|||||listed||||||The||e or|||
|||||||the net|||||||||
|||||compan||||||owners||not,|||
|||||||profits|||The||||||
|||||y by the||||||hip of||explain|||
|||||||that the|||associat||Claims||||
||||Transac|assets||||Related||propert||the|||
||||||Impact|assets-|||ion||and||||
||||tion|for sale||||transact||y rights||reasons||Index|
|||The|||on the|for|Pricing||with||debts||Date of||
|Counte|Assets||price|from||||ion||that||and||of|
|||date of|||Compa|-sale|principl||the||transfer||disclos||
|rpart|for sale||(in 10|the||||confirm||involve||counter||disclos|
|||sale|||ny(note|contrib|e||counter||red in||ure||
||||thousan|beginni||||ed||d has||measur||ure|
||||||3)|uted to|||party(if||total||||
||||d Yuan)|ng of||||(Y/N)||transfer||es the|||
|||||||the|||applica||(Y/N)||||
|||||current||||||red||Compa|||
|||||||listed|||ble)||||||
|||||period||||||totally||ny have|||
|||||||compan|||||||||
|||||to the||||||(Y/N)||taken|||
|||||||y in|||||||||
|||||date of||||||||for not|||
|||||||total|||||||||
|||||sale(in||||||||implem|||
|||||||profits|||||||||
|||||10||||||||ented|||
|||||thousan||||||||on|||
|||||d Yuan)||||||||schedul|||
|||||||||||||e|||
||||||It has a|||||||||‖Sales|
||||||positive|||||||||of the|
||||||impact|||||||||Propert|
||Propert||||||||||||||
||||||on the|||||||||y‖ (No.|
||y of the||||||||||||||
||||||Compa|||||||||2018-0|
||subsidi||||||||||||||
||||||ny’s|||||||||72)|
|Liu|ary of||||||Based||||||||
||||||current||||Not|||||release|
|Wei;|the|12 Dec.|||||on|||||Comple|13 Dec.||
||||480|371|financia|56.58%||N|applica|Y|Y|||d on|
|Xu|Compa|2018|||||assessm|||||ted|2018||
||||||l||||ble|||||Securiti|
|Ranran|ny||||||ent||||||||
||||||situatio|||||||||es|
||-Kefen||||||||||||||
||||||n and|||||||||Times,|
||g||||||||||||||
||||||operati|||||||||Hong|
||Trading||||||||||||||
||||||on|||||||||Kong|
||||||perform|||||||||Comme|
||||||ance|||||||||rcial|

||
|-|
|DailyandJuchaoWebsite|

 2. Sales of major equity
√ Applicable□Not applicable
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||||Implem|||
|||||Net||||||||||
||||||||||||ented on|||
|||||profit||Ratio of||||||||
||||||||||||schedul|||
|||||contribu||the net||||||||
||||||||||||e (Y/N),|||
|||||ted by||profit||||Owners||||
||||||||||||explaine|||
|||||the sold||from||Whether||hip||||
||||Trading||||||Relation||d the|||
|||||equity|Impact|equity||it was a||transferr||||
||||price||||Pricing||ship||reasons||Disclos|
|Counter|Equity|Sales||from|on the|sales||related||ed||Disclos||
||||(10||||principa||with the||and||ure|
|part|sold|day||period-b|Compan|in total||transacti||complet||ure day||
||||thousan||||l||counter||counter||index|
|||||egin to|y|net||on||ely or||||
||||d Yuan)||||||party||measure|||
|||||date for||profit of||(Y/N)||not||||
||||||||||||for not|||
|||||sales (in||the||||(Y/N)||||
||||||||||||complet|||
|||||10||Compan||||||||
||||||||||||ed on|||
|||||thousan||y||||||||
||||||||||||schedul|||
|||||d Yuan)||||||||||
||||||||||||e|||
||||||||||||||‖Sales|
||||||||||||||of 100%|
||||||||||||||equity|
||||||It has a||||||||of|
||||||positive||||||||wholly-|
||||||impact||||||||owned|
||||||on the||||||||subsidia|
|Chengd|||||Compan||||||||ry ‖|
||100%|||||||||||||
|e|||||y’s||||||||(No.|
||equity||||||Based|||||||
|Country|||||current||||||||2018-02|
||of|14 Aug.|2,263.9|||282.13|on||||Complet|15 Aug.||
|Jinshan||||1850.18|financia|||N|N/A|Y|||8)|
||Nanjian|2018|5|||%|assessm||||ed|2018||
|gmao|||||l||||||||released|
||g||||||ent|||||||
|Co.,|||||situation||||||||on|
||Trading|||||||||||||
|Ltd.|||||and||||||||Securiti|
||||||operatio||||||||es|
||||||n||||||||Times,|
||||||perform||||||||Hong|
||||||ance||||||||Kong|
||||||||||||||Comme|
||||||||||||||rcial|
||||||||||||||Daily|

||
|-|
|and|
|Juchao|
|Website|

 VII. Analysis of main holding company and stock-jointly companies
√Applicable□ Not applicable
Particular about main subsidiaries and stock-jointly companies net profit over10%
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|Company||Main|Register|||Operating|Operating||
||Type|||Total assets|Net Assets|||Net profit|
|name||business|capital|||revenue|profit||
|||Engineering|||||||
|Chengde|||||||||
|||management|||||||
|Kefeng|||||||||
|||and|||||||
|Engineering|||||||||
||Subsidiary|consulting|500,000|46,587.79|-68,619.09|0.00|-180,858.53|-180,858.53|
|Project|||||||||
|||service;|||||||
|Management|||||||||
|||house leasing|||||||
|Co. Ltd.|||||||||
|||service|||||||
|||Industrial|||||||
|||investment,|||||||
|||investment|||||||
|Chengde|||||||||
|||management,|||||||
|Dongfeng||||76,492,179.0|76,492,179.0||||
||Subsidiary|investment|90,000,000|||0.00|-201,626.78|-201,626.78|
|Investment||||5|5||||
|||consulting|||||||
|Co., Ltd.|||||||||
|||and import &|||||||
|||export|||||||
|||trading|||||||
|||International|||||||
|Nanjiang||investment|||||||
|Asia||and trading,|US$ 20||||||
||Subsidiary|||5,626,396.53|5,621,425.31|0.00|269,325.97|269,325.97|
|Investment||ship sales|million||||||
|Co., Ltd.||and purchase|||||||
|||and lease|||||||
|||Sales of|||||||
|||machinery|||||||
|Chengde|||||||||
|||equipment|||||||
|Kefeng||||320,971,667.|258,199,129.|||-1,600,884.9|
||Subsidiary|and|8,500,000|||0.00|-525,611.82||
|Trading Co.,||||77|83|||0|
|||mechanical|||||||
|Ltd.|||||||||
|||& electrical|||||||
|||products|||||||
|Hangzhou||New energy,||17,571,349.1|17,463,923.5||-10,750,567.|-10,750,567.|
||Subsidiary||30,000,000|||0.00|||
|Dongfeng||new||0|0||71|71|

||||||||||
|-|-|-|-|-|-|-|-|-|
|Technology||materials and|||||||
|Co. Ltd.||applied|||||||
|||products|||||||
|||research and|||||||
|||development,|||||||
|||sales and|||||||
|||technical|||||||
|||promotion,|||||||
|||technical|||||||
|||services|||||||
|||Industrial|||||||
|||investment in|||||||
|||technology|||||||
|Dongguan|||||||||
|||field,|||||||
|Dongfeng|||||||||
|||investment||233,633,258.|99,180,086.9||||
|Technology|Subsidiary||200,000,000|||0.00|-502,531.99|-502,531.99|
|||consultant||98|5||||
|Development|||||||||
|||and|||||||
|Co., Ltd.|||||||||
|||management,|||||||
|||equity|||||||
|||investment|||||||
|||Cultivation|||||||
|||and sales of|||||||
|||field crop,|||||||
|||edible|||||||
|Chengde||mushrooms,|||||||
|Dongfeng||fruit and|||||||
||||||-16,130,055.||||
|Ecological|Subsidiary|vegetables as|10,000,000|1,395,559.77||37,731.96|-794,322.25|-839,879.93|
||||||22||||
|Agriculture||well as|||||||
|Co., Ltd.||Chinese|||||||
|||Herbs;|||||||
|||breeding and|||||||
|||sales of|||||||
|||livestock|||||||
|Chengde|||||||||
|Huijing||Property|||||||
||||||-7,966,368.8||-1,238,643.1|-1,238,643.1|
|Property|Subsidiary|management|500,000|1,608,024.93||4,627,853.90|||
||||||8||8|8|
|Services Co.,||service|||||||
|Ltd.|||||||||
|Dongguan||Development|||||||
|Zhongchuang||and transfer|||||||
|||||24,573,220.4|24,278,297.0||||
|New Energy|Subsidiary|of the new|24,600,000|||0.00|-310,407.66|-310,407.66|
|||||3|3||||
|Technology||energy|||||||
|Co., Ltd.||technology,|||||||

||||||||||
|-|-|-|-|-|-|-|-|-|
|||new-type|||||||
|||fuel battery|||||||
|||R&D and|||||||
|||sales of the|||||||
|||intelligent|||||||
|||products;|||||||
|||engaged in|||||||
|||the technical|||||||
|||development|||||||
|||and transfer|||||||
|||in field of|||||||
|||technology,|||||||
|||technical|||||||
|||consultant|||||||
|Dongguan||and services;|||||||
|Dongfeng||R&D of the|||||||
|||||282,576,013.|114,171,129.||-2,823,795.8|-2,824,029.6|
|Intelligent|Subsidiary|clean energy|120,000,000|||0.00|||
|||||00|27||6|0|
|Technology||power|||||||
|Co., Ltd.||equipment as|||||||
|||well as the|||||||
|||sales,|||||||
|||technical|||||||
|||transfer and|||||||
|||consultant;|||||||
|||R&D of the|||||||
|||carrier with|||||||
|||clean energy|||||||
|||power,|||||||
|||technical|||||||
|||transfer and|||||||
|||consultant|||||||
|||Nano-fiber,|||||||
|Dongguan|||||||||
|||functional|||||||
|Aolin New||||23,221,720.7|22,976,448.9||-1,390,951.8|-1,390,951.8|
||Subsidiary|ceramics and|25,000,000|||0.00|||
|Materials||||2|0||1|1|
|||clean energy|||||||
|Co., Ltd.|||||||||
|||materials|||||||
|||Development|||||||
|Dongguan||and|||||||
|Haizhuo||marketing of|||||||
|||||25,032,158.2|24,868,222.8||||
|Energy|Subsidiary|the hydrogen|25,000,000|||0.00|-465,527.38|-465,527.38|
|||||0|6||||
|Technology||energy|||||||
|Co., Ltd.||products and|||||||
|||special|||||||

||
|-|
|energy|
|mechanical|
|equipment,|
|technical|
|consultation|
|and services|
|for hydrogen|
|energy and|
|power|

Particular about subsidiaries obtained or disposed in report period
√Applicable□Not applicable
||||
|-|-|-|
||The method of obtaining and handling|The influence to the whole production and|
|Company Name|||
||subsidiaries during the report period|performance|
|||Acting as the platform for hydrogen energy|
|Dongguan Haizhuo Energy Technology||production, has minor influence on|
||Capital increase||
|Co., Ltd.||performance of the Company during the|
|||period|
|Donggua Dongfeng Power Technology||It has minor impact on performance of the|
||Equity acquisition||
|Co., Ltd.||Company|
|||It has a positive impact on performance of|
|Chengde Nanjiang Trading Co., Ltd.|Selling 100% equity of Nanjiang Trading||
|||the Company|

Notes of holding and shareholding companies
VIII. Structured vehicle controlled by the Company
□ Applicable√ Not applicable
IX. Future Development Prospects
(1) Industry pattern
The Central Economic Work Conference held at the end of 2018 proposed―building a long-term mechanism for the healthy development of the real estate market, insisting that the house is used for living but not for speculation, implementing different urban policies, giving classification guidance, consolidating the main responsibility of the city government, and improving housing market system and housing guaranteesystem‖, and combined with the requirements of―stable land prices, stable housing prices, and stableexpectations‖ of the Ministry of Housing and Urban-Rural Development at the end of 2018,it’s expected that the overall real estate control policy in 2019 will not change much, under the premise of continuing the existing regulation, and―stable‖ will become the main tone of the real estate market. In the future, more emphasis will be placed on the regulation and intervention to the market through the regional policies of the city governments, the flexibility of regulation and control of local governments will increase, and the control policies involving land, lease and guarantee will be further improved, and the control methods will be optimized. At present, theworld’s new energy technologies are engaged in research and development competition in the fields of alternative
energy, environmental protection, storage, etc., and automobile manufacturing is also rapidly transforming in power and alternative
energy technologies. The hydrogen energy is regarded as―the ultimate energy source for humanbeings‖ because it only generates
water when burned and is characterized by clean and efficient, energy storable, transportable, and rich application scenarios.
According to the Hydrogen Energy Future Development Report released by the International Association for Hydrogen Energy, by 2050, the global hydrogen energy industry will create 30 million jobs, reduce 6 billion tons of carbon dioxide, and create a market value of 2.5 trillion US dollars, the hydrogen automobile will account for20%-25% of vehicles worldwide. China is paying more and more attention to the development of hydrogen energy, the Government Work Report of 2019 has mentioned―promoting the construction of facilities such as charging andhydrogenation‖, which indicates that the development of hydrogen energy will be raised to a new height in the future. As an important guarantee for the national economy leading industry and high-end manufacturing and defense industry, the new materials will become the focus of strategic competition in various industries due to its excellent performance, high tolerance and wide application.
(II) Thecompany’s development strategy and business plan
In 2019, the company will continue to develop its real estate business with a steady pace while promoting strategic transformation so as to foster new profit growth points for the company. At the same time, we will explore new financing channels, continue to try multi-channel financing, increase project financing, actively supplement high-quality funding sources, and provide solid financial support for the project development of thecompany’s various sectors.
(III) Possible risks and responses
1. Policy risk
The real estate industry is greatly affected by macroeconomic policies, land policies, real estate tax policies, and financial policies for the real estate industry will have direct impacts on real estate companies. The company will pay close attention to the macro situation, strengthen the research and tracking of policies, rationally analyze the market, adapt to market adjustments and changes, and improve thecompany’s ability to resist risks.
2. Market risk
Under the background of slowing economic growth, the real estate market has become more differentiated and the market competition has become increasingly fierce, the company will continue to strengthen its own construction, improve its management capabilities, and continuously enhance its competitive strength.
3. Management risks brought about by strategic transformation
Through the strategic layout of the company, the company will enter a new business field, the company will face the risks brought by uncertain factors in the market, technology, operation and management in the preparation and operation of new projects. The company will further strengthen the management team building, improve management level and management capabilities, continuously improve corporate governance and management mechanisms, and form a more scientific and effective decision-making mechanism and control and supervision mechanism. At the same time, guided by technological innovation, the company will strengthen technical research and development capabilities, build technological advantages with core competitiveness, improve thecompany’s overall competitiveness, and promote thecompany’s sustainable development.
X. Reception of research, communication and interview
1. In the report period, reception of research, communication and interview
√Applicable□ Not applicable
|||||
|-|-|-|-|
|Time|Way|Type|Basic situation index of investigation|
||||Operation of the Company, no materials|
|26 Feb. 2018|Telephone communication|Individual||
||||required|
||||Current condition of the Company, no|
|22 Mar. 2018|Telephone communication|Individual||
||||materials required|
|2 Aug. 2018|Telephone communication|Individual|Operation of the Company, no materials|

||||||
|-|-|-|-|-|
|||||required|
|||||Current condition of the Company, no|
|28 Sept. 2018|Telephone communication||Individual||
|||||materials required|
|||||Current condition of the Company, no|
|13 Nov. 2018|Telephone communication||Individual||
|||||materials required|
|Reception (times)||5|||
|Number of hospitality||0|||
|Number of individual reception||5|||
|Number of other reception||0|||
|Disclosed, released or let out major undisclosed|||||
|||N|||
|information|||||

Section V. Important Event
I. Profit distribution plan of common stock and capitalizing of common reserves plan
Formulation, Implementation and Adjustment of common stock Profit Distribution Policy Especially Cash Dividend policy during the Reporting Period
□Applicable√Not applicable
Profit distribution plan (pre-plan) of common stock and capitalizing of common reserves plan (pre-plan) in latest three years (including the reporting period)
In latest three years, net profit of the Company after making up the annual losses of previous years, retained profit at end of the Period still negative, being deliberated and approved by the Board and General Meeting, the Company has no profit distributed carried out. The Company has no plan of cash dividend distributed, bonus shares and capitalizing from common shares conducted either for year of 2018.According to the Detailed Rules for the Share Repurchase of Listed Companies of the Shenzhen Stock Exchange,―when the listed company uses cash as the consideration, and adopts the offer method or centralized bidding to buy back the shares, the amount of money used for share repurchase in the current year is regarded as the cash dividends amount and is calculated by the relevant proportion of annual cashdividends‖. In 2018, the amount of the shares that the company repurchased by centralized bidding was RMB 19,718,613.55, which was regarded as the cash dividends of 2018.
Cash dividend of common stock in latest three years (including the reporting period)
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
||||||||Ratio of the|
||||||Ratio of the|||
||||Ratio of the||||total cash|
|||Net profit|||cash bonus by|||
||||cash bonus in||||bonus (other|
|||attributable to|||other ways in|||
||||net profit||||ways included)|
|||common stock||Proportion for|net profit|||
||||attributable to|||Total cash|in net profit|
||Amount for|shareholders of||cash bonus by|attributable to|||
|Year for bonus|||common stock|||bonus|attributable to|
||cash bonus (tax|listed company||other ways(i.e.|common stock|||
|shares|||shareholders of|||(including|common stock|
||included)|in||share|shareholders of|||
||||listed company|||other ways)|shareholders of|
|||consolidation||buy-backs)|listed company|||
||||contained in||||listed company|
|||statement for|||contained in|||
||||consolidation||||contained in|
|||bonus year|||consolidation|||
||||statement||||consolidation|
||||||statement|||
||||||||statement|
|2018|0.00|7,383,835.76|0.00%|19,718,613.55|267.05%|19,718,613.55|267.05%|
|2017|0.00|4,102,325.89|0.00%|0.00|0.00%|0.00|0.00%|
|2016|0.00|3,760,806.51|0.00%|0.00|0.00%|0.00|0.00%|

 The Company gains profits in reporting period and the retained profit of common stock shareholders provided by parent company is positive but no plan of cash dividend proposed of common stock
□ Applicable√ Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
□ Applicable√ Not applicable
The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either for the year
III. Implementation of commitment
1. Commitments completed in Period and those without completed till end of the Period from actual controller, shareholders, related parties, purchaser and companies
√Applicable□ Not applicable
||||||||
|-|-|-|-|-|-|-|
|||Type of|||||
|||||Commitmen|Commitmen|Implementa|
|Commitments|Promise|commitment|Content of commitments||||
|||||t date|t term|tion|
|||s|||||
|Commitments for Share|||||||
|Merger Reform|||||||
||||1. Commitments in aspect of||||
||||independence of listed company:||||
||||For the equity changes, that is||||
||||208,324,800 shares of Chengde||||
||||Dalu Co., Ltd held by Chen Rong||||
||||was transfer, Wang Dong||||
||||guarantee there are no influence||||
||||on the independent of employee,||||
||||financial, institution, business and||||
|||Commitmen|||||
||||integrity of assets of Chengde||||
|||ts in|Dalu Co., Ltd. After transaction,||||
|||horizontal|Chengde Dalu Co., Ltd still has||||
||||||In duration|Normal|
|Commitments in report of|Controlling|competition,|the ability of independent|24 April|||
||||||of the|performanc|
|acquisition or equity change|shareholder|related|operation and owes independent|2012|||
||||||Company|e|
|||transactions,|legal person, and continues to||||
|||and capital|owes the independence of||||
|||occupying|institution, assets, employees,||||
||||production and financial. 2.||||
||||Commitments for horizontal||||
||||competition: after 208,324,800||||
||||shares of Chengde Dalu Co., Ltd||||
||||held by Chen Rong was transfer,||||
||||Wang Dong guarantee there are||||
||||no or potential horizontal||||
||||competition between the Chengde||||
||||Dalu Co., Ltd and Wang Dong||||

||||||||
|-|-|-|-|-|-|-|
||||and related parties of Wang Dong||||
|Commitments in assets|||||||
|reorganization|||||||
|Commitments in initial|||||||
|public offering or|||||||
|re-financing|||||||
|Commitments in stock|||||||
|option incentive plan|||||||
||||Because the company’s share|||On 29|
||||price fell below the face value, in|||December|
||||order to safeguard the interests of|||2018, the|
||||all investors and express|||closing|
||||confidence in the company’s|||price of the|
||||long-term development, Mr. Wang|||stock was|
||||Dong made solemn commitment|||HK$ 1.14,|
||||that from October 22, 2018 to|||and no|
||||October 31, 2018, when the|||book loss|
||||company’s stock price was lower|||occurs|
||||than or equal to HK$1.13/share,|||when the|
||||all employees of the company and|||investors|
||||the shareholders who held the|||buy (buy|
||||company’s shares on the equity|||the stock|
||||registration date of October 24,|||when share|
|||Commitmen|2018 (the last trading day of B|||price is|
|Other commitments for||t for|shares was October 19, 2018) and||22 Oct. 2018|below or|
||Controlling||||||
|medium and small||initiative to|their immediate family members|19 Oct. 2018|to 28 Dec.|equal to|
||shareholder||||||
|shareholders||increase the|that bought the company’s shares||2018|HK$ 1.13/S|
|||holdings|could take the delivery list at the|||hare) on the|
||||time of purchase to register and|||initiative’s|
||||verify at the company’s securities|||commitmen|
||||affairs department, if they could|||t to|
||||continue to hold the company’s|||increase|
||||shares until December 28, 2018,|||their|
||||the shares of the company held by|||holdings,|
||||them would be calculated based|||thus, there|
||||on the closing price on December|||is no|
||||28, 2018, if there were book|||compensati|
||||losses of investment, Mr. Wang|||on for this|
||||Dong would compensate 100% of|||commitmen|
||||the losses of the investors. Mr.|||t.|
||||Wang Dong took all restricted|||Commitme|
||||shares of the Company he held as|||nt has been|
||||the performance guarantee of this|||fulfilled.|

|||||||
|-|-|-|-|-|-|
|||commitment, namely 208,324,800||||
|||shares of the company’s stock or||||
|||cash equivalents of 100 million||||
|||Yuan.||||
||||||Completed.|
||||||After|
||||||confirming|
||||||with Mr.|
||||||Yang|
||||||Chengshe|
||||||and Ms.|
||||||Zhou|
||||||Haihong,|
||||||Mr. Yang|
||||||Chengshe|
|||Based on the confidence in the||||
||||||did not|
|||company’s long-term||||
||||||reduce his|
|||development, I am willing to||||
||||||holding of|
|||actively respond to the proposal of||||
||||||the|
|||the major shareholder Mr. Wang||||
||||||company’s|
|||Dong and voluntarily promise not||||
||||||stock|
|||to reduce my holding of the||||
||||||during the|
|||company’s stock when the||||
|Yang|||||period of|
||No|company’s share price is lower||22 Oct. 2018||
|Chengshe,|||||his|
||reduction|than HK$1.13 before December|22 Oct. 2018|to 31 Dec.||
|Zhou|||||commitmen|
||commitment|3 1, 2018. During the above||2018||
|Haihong|||||t; Ms. Zhou|
|||commitment period, if I violate||||
||||||Haihong|
|||the above-mentioned commitment||||
||||||made a|
|||and reduce my holding of the||||
||||||written|
|||shares of the listed company, the||||
||||||reply that|
|||income from the reduction of the||||
||||||she reduced|
|||shares of the listed company will||||
||||||her holding|
|||be owned by the listed company.||||
||||||of the|
||||||company’s|
||||||stock of|
||||||5,627,873|
||||||shares|
||||||during the|
||||||commitmen|
||||||t period,|
||||||and the|
||||||reduced-hol|
||||||ding share|
||||||price per|

||||||||
|-|-|-|-|-|-|-|
|||||||share was|
|||||||HK$1.14,|
|||||||there was|
|||||||no reducing|
|||||||of shares|
|||||||lower than|
|||||||HK$1.13,|
|||||||and there|
|||||||was no|
|||||||violation of|
|||||||this|
|||||||commitmen|
|||||||t.|
||||Based on the confidence in the||||
||||company’s long-term||||
||||development, I voluntarily||||
||||promise the following: 1. From||||
||||January 28, 2019 to December 31,||||
||||2019, I will not reduce my||||
|||No|holding of the company’s stock. 2.||28 Jan. 2019||
||Yang|||||Implementi|
|||reduction|During the above commitment|28 Jan. 2019|to 31 Dec.||
||Chengshe|||||ng|
|||commitment|period, if I violate the||2019||
||||above-mentioned commitment to||||
||||reduce my holding of the||||
||||company’s stock, the income from||||
||||the reduction of the shares of the||||
||||listed company will be owned by||||
||||the listed company.||||
|Completed on time|Yes||||||
|If the commitments is not|||||||
|fulfilled on time, shall|||||||
||N/A||||||
|explain the specify reason|||||||
|and the next work plan|||||||

2. Concerning assets or project of the Company, which has profit forecast, and reporting period still in forecasting period, explain reasons of reaching the original profit forecast
□ Applicable√ Not applicable
IV. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable√ Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.
V. Explanation from Board of Directors, Supervisory Committee and Independent Directors (if applicable) for “Qualified Opinion” that issued by CPA
□ Applicable√ Not applicable
VI. Particulars about the changes in aspect of accounting policy, estimates and calculation method compared with the financial report of last year
√Applicable□ Not applicable
Found more in the 33. of V. Important accounting policy and estimation carried in the Section XI Financial Report in the full text of Annual Report 2018
VII. Major accounting errors within reporting period that needs retrospective restatement□ Applicable√ Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in the period.
VIII. Compare with lastyear’s financial report; explain changes in consolidationstatement’s scope
√Applicable□ Not applicable
1. Subsidiary newly included in consolidation scope
|||
|-|-|
|Name|Causes|
|Dongfeng Power|Enterprise combined under the same control|
|Haizhuo Energy|Enterprise combined under the different control|

2.Subsidiary excluded in the consolidation scope in the period
|||
|-|-|
|Name|Causes|
|Nanjiang Trading|Disposal|

(1) The Company transferred its100% equity of NanjiangTrading to Chengde Country Jinshangmao Co., Ltd on August 14, 2018, therefore, Nanjiang Trading was no longer included in the consolidated balance sheet in the current period, but the Accounting Standards for Business Enterprises No. 33– Consolidated Financial Statements stipulates that if a parent company disposes of a subsidiary during the reporting period, the income, expenses and profits of the subsidiary from the beginning of the period to the disposal date should be included in the consolidated income statement, and the cash flows of the subsidiary from the beginning of the period to the disposal date should be included in the consolidated cash flow statement. Therefore, the income, expenses and profits of NanjiangTrading from the beginning of the current period to the date of cancellation were still included in the scope of consolidation. (2) Dongguan Dongfeng Power Tech. Co., Ltd. is a holding sub-subsidiary acquired on August 28, 2018. On December 25, 2018, Dongguan Dongfeng Tech. transferred it to the Company to become a holding subsidiary.
(3) Dongguan Haizhuo Energy Technology Co., Ltd. is a holding sub-subsidiary that increased its capital and shares on March 6, 2018.
IX. Appointment and non-reappointment (dismissal) of CPA
Accounting firm appointed
|||
|-|-|
||Dahua Certified Public Accountants (Limited LiabilityPartnership)|
|Name of domestic accounting firm||
|Remuneration for domestic accounting firm (10 thousand Yuan)|50|
|Continuous life of auditing service for domestic accounting firm|7|
|Name of domestic CPA|Hu Zhigang, Yan Lisheng|
|Continuous life of auditing service for domestic CPA|1|
|Name of foreign accounting firm (if applicable)|N/A|
|Continuous life of auditing service for foreign accounting firm (if||
||N/A|
|applicable)||
|Name of foreign CPA (if applicable)|N/A|

Whether re-appointed accounting firms in this period or not
□Yes√No
Appointment of internal control auditing accounting firm, financial consultant or sponsor
√Applicable□Not applicable
The Company engaged Dahua CPA (LLP) as the internal control auditing organ in the Year; the auditing costs paid amounting to 250,000 Yuan in reporting period.
X. Particular about suspended and delisting after annual report disclosed
□ Applicable√ Not applicable
XI. Bankruptcy reorganization
□ Applicable√ Not applicable
No bankruptcy reorganization for the Company in reporting period
XII. Significant lawsuits and arbitration of the Company
□Applicable √Not applicable
No significant lawsuits and arbitration occurred in the reporting period
XIII. Penalty and rectification
□ Applicable√ Not applicable
No penalty and rectification for the Company in reporting period.
XIV. Integrity of the company and its controlling shareholders and actual controllers
□ Applicable√ Not applicable
XV. Implementation of thecompany’s stock incentive plan, employee stock ownership plan or other employee incentives
□ Applicable√ Not applicable
During the reporting period, the company has no stock incentive plan, employee stock ownership plan or other employee incentives that have not been implemented.
XVI. Major related transaction
1. Related transaction with routine operation concerned
□ Applicable√ Not applicable
No related transaction with routine operation concerned occurred in the period
2. Related transactions by assets acquisition and sold
□ Applicable√ Not applicable
No related transactions by assets acquisition and sold for the Company in reporting period
3. Main related transactions of mutual investment outside
□ Applicable√ Not applicable
No main related transactions of mutual investment outside for the Company in reporting period.
4. Contact of related credit and debt
□ Applicable√ Not applicable
The Company had no contact of related credit and debt in the reporting period.
5. Other related transactions
√Applicable□Not applicable
(1) Thecompany’s controlling subsidiary Dongfeng Technology Development signed an Equity Transfer Agreement with Tibet Dongfeng Investment Co., Ltd. that Dongfeng Technology Development purchases100% stock equity of Dongguan Dongfeng Power Technology Co., Ltd. held by Tibet Dongfeng with 0 yuan. After the stake purchase, Dongfeng Technology Development will hold100% stock equity of Dongfeng Power.
Because Tibet Dongfeng and the company are controlled by Mr. Wang Dong, thecompany’s controlling shareholder and actual controller, and the director of the company, Mr. Chen Weihuan, serves as a director of Tibet Dongfeng, according to the relevant regulations ofRules Governing the Listing of Securities on Shenzhen Stock Exchangeand Articles of Association, Tibet Dongfeng is a related legal person of the company, and the stake purchase matters constitute a related transaction.
(2) The company signed an Equity Transfer Agreement with Mr. Wu Zhe that the company purchases30% stock equity of Dongfeng Technology held by Mr. Wu Zhe with 0 yuan. After the stake purchase, the company will hold100% stock equity of Dongfeng Technology Development.
As Mr. Wu Zhe is a director of the seventh board of directors of the company, according to the relevant regulations of Stock Listing Rules of Shenzhen Stock Exchange and Articles of Association, Mr. Wu Zhe is a related natural person of the company, and the stake purchase matters constitute a related transaction.
Relevant website for information disclosure
||||
|-|-|-|
|Temporary notice|Dated disclosed|Website for disclosure|
|Equity Acquisition and Related TransactionNo. 2018-032|||
||30 Aug. 2018|Juchao website|
|Equity Acquisition and Related TransactionNo. 2018-074|||
||20 Dec. 2018|Juchao website|

XVII. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable√ Not applicable
No trusteeship for the Company in reporting period
(2) Contract
□ Applicable√ Not applicable
No contract for the Company in reporting period
(3) Leasing
□ Applicable√ Not applicable
No leasing for the Company in reporting period
2. Major guarantees
√Applicable□Not applicable
(1) Guarantee
In 10 thousand Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Particulars about the external guarantee of the Company and its subsidiary (Barring the guarantee for subsidiaries)|||||||||
||Related|||||||Guarante|
||Announce|||Actual||||e for|
|Name of the Company||Guarantee|Actual date of||Guarantee|Guarantee|Implemen||
||ment|||guarantee||||related|
|guaranteed||limit|happening||type|term|ted (Y/N)||
||disclosure|||limit||||party|
||date|||||||(Y/N)|

||||||||||
|-|-|-|-|-|-|-|-|-|
|Guarantee of the Company for subsidiaries|||||||||
||Related|||||||Guarante|
||Announce|||Actual||||e for|
|Name of the Company||Guarantee|Actual date of||Guarantee|Guarantee|Implemen||
||ment|||guarantee||||related|
|guaranteed||limit|happening||type|term|ted (Y/N)||
||disclosure|||limit||||party|
||date|||||||(Y/N)|
||||||Joint liability||||
|Dongguan Dongfeng|||||||||
||14 June||||guaranty;||||
|Intelligent Technology||20,000|2 July 2018|||5 years|N|N|
||2018||||mortgage;||||
|Co., Ltd.|||||||||
||||||pledge||||
|||||Total amount of actual|||||
|Total amount of approving|||||||||
|||||occurred guarantee for|||||
|guarantee for subsidiaries in report||20,000||||10,171|||
|||||subsidiaries in report period|||||
|period (B1)|||||||||
|||||(B2)|||||
|||||Total balance of actual|||||
|Total amount of approved|||||||||
|||||guarantee for subsidiaries at|||||
|guarantee for subsidiaries at the||20,000||||20,000|||
|||||the end of reporting period|||||
|end of reporting period (B3)|||||||||
|||||(B4)|||||
|Guarantee of the subsidiaries for subsidiaries|||||||||
||Related|||||||Guarante|
||Announce|||Actual||||e for|
|Name of the Company||Guarantee|Actual date of||Guarantee|Guarantee|Implemen||
||ment|||guarantee||||related|
|guaranteed||limit|happening||type|term|ted (Y/N)||
||disclosure|||limit||||party|
||date|||||||(Y/N)|
|Total amount of guarantee of the Company (total of three abovementioned guarantee)|||||||||
|Total amount of approving||||Total amount of actual|||||
|guarantee in report period||20,000||occurred guarantee in report||10,171|||
|(A1+B1+C1)||||period (A2+B2+C2)|||||
|Total amount of approved||||Total balance of actual|||||
|guarantee at the end of report||20,000||guarantee at the end of||20,000|||
|period (A3+B3+C3)||||report period (A4+B4+C4)|||||
|The proportion of the total amount of actually guarantee in the net|||||||||
|||||56.88%|||||
|assets of the Company (that is A4+ B4+C4)|||||||||
|Including:|||||||||
|Amount of guarantee for shareholders, actual controller and its|||||||||
|||||0|||||
|related parties (D)|||||||||
|The debts guarantee amount provided for the guaranteed parties|||||||||
|||||0|||||
|whose assets-liability ratio exceed 70% directly or indirectly (E)|||||||||
|Explanations on possibly bearing joint and several liquidating|||||||||
|||||N/A|||||
|responsibilities for undue guarantees (if applicable)|||||||||
|Explanations on external guarantee against regulated procedures|||||||||
|||||N/A|||||
|(if applicable)|||||||||

Explanation on guarantee with composite way
In order to meet the operation and development needs of thecompany’s holding sub-subsidiary Dongfeng Intelligent, Dongfeng Intelligent planned to apply for comprehensive credit line of no more than RMB 200 million to Bank of Dongguan, Songshan Lake Technology Sub-branch, the credit period is two years, and the single-use period should not be more than 5 years, it is specially used to build the Dongfeng New Energy Equipment Industrialization Project located at the east side of Fuxing Road, Ecological Park, Dongguan City, and thecompany’s holding subsidiary, Dongguan Dongfeng Technology Development Co., Ltd., takes its100% equity of Dongfeng Intelligent as a pledge guarantee, and Dongfeng Intelligent uses its own land and above-ground buildings as security guarantees, and Dongfeng Technology Group, Dongfeng Technology Development, Zhongchuang New Energy, Haizhuo Energy and Aolin New Materials are jointly and severally liable for it, and the guarantee period is 5 years. For details, please refer to the Announcement on the Provision of Mortgage Guarantee forSubsidiary’s Application for Bank Credit Announcement No. 2018-018 published on June 14, 2018 by Juchao Website.
(2) Guarantee outside against the regulation
□Applicable√Not applicable
No guarantee outside against the regulation in Period.
3. Entrust others to cash asset management
(1) Trust financing
√Applicable□ Not applicable
Entrust financing in the period
In 10 thousand Yuan
||||||
|-|-|-|-|-|
|Type|Capital resources|Amount for entrust|Balance un-expired|Overdue amount|
|Bank financing product|Self-owned capital|3,380|2,400|0|
|Total||3,380|2,400|0|

 Details of the single major amount, or high-risk trust investment with low security, poor fluidity and non-guaranteed
□ Applicable√ Not applicable
Entrust financial expected to be unable to recover the principal or impairment might be occurred
□ Applicable√ Not applicable
(2) Entrusted loans
□ Applicable√ Not applicable
The company had no entrusted loans in the reporting period.
4. Other material contracts
□ Applicable√ Not applicable
No other material contracts for the Company in reporting period.
XVIII. Social responsibility
1. Fulfill social responsibility
Not applicable
2. Execution of social responsibility of targeted poverty alleviation
The Company has no execution of targeted poverty alleviation and no follow-up plan either.
3. Environmental protection
Listed company and its subsidiary belongs to the key pollution enterprise listed by Department of Environmental Protection No
Not applicable
XIX. Explanation on other significant events
√Applicable□Not applicable
(1) On August 14, 2018, the second session of the seventh board of directors of the company reviewed and approved the Proposal on Disposal100% Equity of a Wholly-owned Subsidiary, and agreed the company to transfer its100% stake in Chengde Nanjiang Trading Co., Ltd. (hereinafter referred to as―NanjiangTrading‖) to Chengde Country Jinshangmao Co., Ltd. According to the Equity Transfer Agreement signed on the same day, Nanjiang Trading allocated the profits according to theShareholders’ Meeting Resolution issued by its100% controlling shareholder (i.e. the company) on April 28, 2018, and still owed thecompany’s profit distribution amounting to 23.36 million yuan. For details, please refer to the Announcement on the Disposal of100% Equity of a Wholly-owned Subsidiary (No.:2018-028) disclosed by the company on www.cninfo.com.cn.
As of November 9, 2018, the company has received a total of 23.36 million yuan of profit distribution from Nanjiang Commercial and Trading.
(2) On March 12, 2019, the company signed an Equity Transfer Agreement with Ms. Yu Jie, a natural person, that the company transfers100% stock equity of its wholly-owned subsidiary Nanjiang Asia Investment Co., Ltd. to Ms. Yu Jie at a transfer price of RMB 5.55 million.
XX. Significant event of subsidiary of the Company
√Applicable□Not applicable
On December 25, 2018, the company signed an Equity Transfer Agreement with its wholly-owned subsidiary Dongfeng Technology Development that the company purchases100% stock equity of Dongfeng Power held by Dongfeng Technology Development with 0 Yuan. Dongfeng Power comes to the wholly-owned subsidiary of the Company from wholly-owned sub-subsidiary.
Section VI. Changes in Shares and Particulars about Shareholders I. Changes in Share Capital
1. Changes in Share Capital
In Share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Before the Change||Increase/Decrease in the Change (+, -)|||||After the Change||
||||||Capitaliza|||||
||||New|||||||
|||||Bonus|tion of||||Proportio|
||Amount|Proportion|shares|||Others|Subtotal|Amount||
||||issued|shares|public||||n|
||||||reserve|||||
||244,800,0|||||||244,800,0||
|I. Unlisted shares||34.66%|||||||34.66%|
||00|||||||00||
||244,800,0|||||||244,800,0||
|1. Sponsor’s shares||34.66%|||||||34.66%|
||00|||||||00||
|Domestic legal|23,147,30|||||||23,147,30||
|||3.28%|||||||3.28%|
|person’s shares|9|||||||9||
||221,652,6|||||||221,652,6||
|Other||31.38%|||||||31.38%|
||91|||||||91||
||461,520,0|||||||461,520,0||
|II. Listed shares||65.34%|||||||65.34%|
||00|||||||00||
|2. Domestically listed|461,520,0|||||||461,520,0||
|||65.34%|||||||65.34%|
|foreign shares|00|||||||00||
||706,320,0|||||||706,320,0||
|III. Total shares||100.00%|||||||100.00%|
||00|||||||00||

Reasons for share changed
□ Applicable√ Not applicable
Approval of share changed
□ Applicable√ Not applicable
Ownership transfer of share changed
□ Applicable√ Not applicable
Progress of shares buy-back
√Applicable□Not applicable
On October 22, 2018, the company held the 4thsession of the seventh board of directors which reviewed and approved the Proposal on the Repurchase of Company Shares by Centralized Bidding, and the second extraordinary shareholders meeting of 2018 held on November 7, 2018 reviewed and approved the above proposal. On November 14, 2018, the company disclosed the Repurchase
Report on the Repurchase of Company Shares by Centralized Bidding (Announcement No.: 2018-062). The company implemented
the repurchase for the first time on December 6, 2018, and disclosed the Announcement on the First Repurchase of theCompany’s
Shares (Announcement No.: 2018-070) on December 7, 2018. For details of the above, please refer to the relevant announcements
disclosed by the company on Securities Times, Hong Kong Commercial Daily and http://www.cninfo.com.cn. The progress of thecompany’s share repurchase was as follows:
Ended as the reporting period, the company repurchased thecompany’s shares of 28,307,783 shares through a stock repurchase special security account by centralized bidding transactions, accounting for4.01% of thecompany’s total share capital, of which the highest transaction price wasHK$1.18/share, the lowest transaction price wasHK$1.09/share, and the total amount paid wasHK$32,095,614.32 (excluding transaction fees). Found more as:
||||||||
|-|-|-|-|-|-|-|
|Repurchased date|Amountrepurchased|Ceilingprice (HKD)|Bottom price(HKD)|Price repurchased(HKD)|Ratio intotal sharecapital|Announcement index|
|2018.12.6|6,586,658|1.14|1.11|7,449,626.48|0.93%|Notice on the FirstRepurchase ofCompany’s Shares(No.:2018-070)|
|2018.12.20|12,864,055|1.14|1.09|14,529,142.54|1.82%|Notice on theRepurchase of 2% ofthe Company’s SharesCapital(No.:2018-075)|
|2018.12.27|4,994,970|1.18|1.12|5,697,753.10|0.71%|Notice on theRepurchase of 3% ofthe Company’s SharesCapital(No.:2018-076)|
|2018.12.28|532,100|1.14|1.14|606,594.00|0.08%|Notice on theRepurchase of 4% ofthe Company’s SharesCapital(No.:2019-006)|
|2019.1.29|3,330,000|1,16|1.14|3,812,498.20|0.47%||
|Total|28,307,783|||32,095,614.32|4.01%||

Implementation progress of the reduction of repurchases shares by centralized bidding
□Applicable√Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common shareholders of Company in latest year and period
√ Applicable□ Not applicable
EPS and diluted ESP for year of 2018 was 0.0105, if the Company did not implemented the share repurchased, the EPS and diluted EPS comes to 0.0105; the net assets per share for year of 2018 was 0.498 Yuan, if the whole repurchased shares are canceled, the net assets per share amounted as 0.512 Yuan.
Other information necessary to disclose for the Company or need to disclosed under requirement from security regulators
□ Applicable√ Not applicable
2. Changes of restricted shares
□ Applicable√ Not applicable
II. Securities issuance and listing
1. Security offering (without preferred stock) in reporting Period
□ Applicable√ Not applicable
2. Changes of total shares and shareholders structure as well as explanation on changes of assets and liability structure
□ Applicable√ Not applicable
3. Existing internal staff shares
□ Applicable√ Not applicable
III. Particulars about shareholder and actual controller of the Company
1. Amount of shareholders of the Company and particulars about shares holding
In Share
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||||Total preference|||
||||||||Total preference||||shareholders|||
|||Total common|||||shareholders||||with voting|||
|Total common||||||||||||||
|||stock|||||with voting||||rights recovered|||
|stock||||||||||||||
|||shareholders at|||||rights recovered||||at end of last|||
|shareholders in|17,519||||17,698||||0||||0|
|||end of last month|||||at end of||||month before|||
|reporting||||||||||||||
|||before annual|||||reporting period||||annual report|||
|period-end||||||||||||||
|||report disclosed|||||(if applicable)||||disclosed (if|||
||||||||(found in note8)||||applicable)|||
||||||||||||(found in note8)|||
|Particulars about shares held above 5% by shareholders or top ten shareholders||||||||||||||
|||||Total||||||Number of share pledged/frozen||||
||||||||Amount|||||||
|||||sharehol||||Amount||||||
||||Proportio|||Changes|of|||||||
|||||ders at||||of listed||||||
|Full name of|Nature of||n of|||in report|un-listed|||||||
|Shareholders|shareholder||shares|the end||||shares||State of share||Amount||
||||held|||period|shares|||||||
|||||of report||||held||||||
||||||||held|||||||
|||||period||||||||||
|Wang Dong|Domestic natureperson||29.49%|208,324,800||0|208,324,800|0||||||

||||||||
|-|-|-|-|-|-|-|
|EverbrightSecurities (H.K.)Co., Ltd.|Overseas legalperson|8.73%|61,644,467|-37,634,389|0|61,644,467|
|GUOTAI JUNANSECURITIES(HONGKONG)LIMITED|Overseas legalperson|6.69%|47,253,826|-1,584,618|0|47,253,826|
|HaitongInternationalSecuritiesCompanyLimited-AccountClient|Overseas legalperson|2.79%|19,694,959|19,694,959|0|19,694,959|
|Chengde NorthIndustrialCorporation|Domesticnon-state ownedlegal person|2.62%|18,517,651|0|18,517,651|0|
|ShenwanHongYuanSecurities (HongKong) Co., Ltd.|Overseas legalperson|2.01%|14,181,761|884,214|0|14,181,761|
|Wag Zhengsong|Domestic natureperson|1.89%|13,327,891|0|13,327,891|0|
|Su Youhe|Domestic natureperson|1.10%|7,750,947|6,945,738|0|7,750,947|
|Wang Wensheng|Domestic natureperson|1.03%|7,258,007|0|0|7,258,007|
|COREPACIFIC-YAMAICHIINTERNATIONAL (H.K.)LIMITED|Overseas legalperson|0.97%|6,882,243|6,882,243|0|6,882,243|
|Strategy investors or general legal|||||||
|person becomes top 10 shareholders|||||||
|||N/A|||||
|due to rights issued (if applicable)|||||||
|(see note 3)|||||||
|Explanation on associated||The Company is unknown whether there exists associated relationship or belongs to|||||
|relationship among the aforesaid||consistent actor regulated by ―management method for acquisition of listed company‖ among|||||
|shareholders||the above said shareholders.|||||
|Particular about top ten circulated shareholders|||||||

|||||
|-|-|-|-|
|||Type of shares||
|Shareholders’ name|Amount of listed shares held at period-end|||
|||Type|Amount|
|Everbright Securities (H.K.) Co.,Ltd.|61,644,467|Domestically||
|||listed foreign|61,644,467|
|||shares||
|GUOTAI JUNANSECURITIES(HONGKONG)LIMITED|47,253,826|Domestically||
|||listed foreign|47,253,826|
|||shares||
|Haitong International SecuritiesCompany Limited-Account Client|19,694,959|Domestically||
|||listed foreign|19,694,959|
|||shares||
|Shenwan HongYuan Securities(Hong Kong) Co., Ltd.|14,181,761|Domestically||
|||listed foreign|14,181,761|
|||shares||
|Su Youhe|7,750,947|Domestically||
|||listed foreign|7,750,947|
|||shares||
|Wang Wensheng|7,258,007|Domestically||
|||listed foreign|7,258,007|
|||shares||
|CORE PACIFIC-YAMAICHIINTERNATIONAL (H.K.)LIMITED|6,882,243|Domestically||
|||listed foreign|6,882,243|
|||shares||
|Zhou Haihong|6,711,600|Domestically||
|||listed foreign|6,711,600|
|||shares||
|Tang Haiming|3,990,000|Domestically||
|||listed foreign|3,990,000|
|||shares||
|Peng Wei|2,978,525|Domestically||
|||listed foreign|2,978,525|
|||shares||
|Expiation on associated relationship||||
|or consistent actors within the top 10|The Company is unknown whether there exists associated relationship or belongs to|||
|un-restrict shareholders and between|consistent actor regulated by ―management method for acquisition of listed company‖ among|||
|top 10 un-restrict shareholders and|the above said shareholders.|||
|top 10 shareholders||||
|Explanation on shareholders||||
|involving margin business about top|N/A|||
|ten common shareholders with||||

||
|-|
|un-restrict shares held (if applicable)|
|(see Note 4)|

Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-back agreement dealing in reporting period
□ Yes√ No
The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have no buy-back agreement dealing in reporting period.
2. Controlling shareholder of the Company
Nature of controlling shareholders: natural person holding
Type of controlling shareholders: natural person
||||
|-|-|-|
|||Enjoy the residence power in the other country or area|
|Controlling shareholder|Nationality||
|||(Y/N)|
|Wang Dong|P.R.C|N|
||He served as executive director respectively in Guangzhou Lianzhengda||
||Communication Technology Co., Ltd., Shanghai Nanjiang Investment Co., Ltd.,||
||Chengdu Nanjiang Engineering Technology Co., Ltd., Ningbo Morsh Technology||
||Co., Ltd., Shanghai Nanjiang (Group) Co., Ltd., Chongqing Nanjiang Investment||
|Main occupation or position|||
||Co., Ltd. and Beijing Morsh Holding Group Co., Ltd. from September 2009 to July||
||2016. and he served as executive director and GM of Tibet Dongfeng Investment||
||Co., Ltd. He serves as executive director and GM of Shenzhen Dongfeng Group||
||Co., Ltd. since March 2015||
|Equity of listed Company in and out of China|||
||N/A||
|control and hold in the Period|||

Changes of controlling shareholders in reporting period
□ Applicable√ Not applicable
The Company had no changes of controlling shareholders in reporting period
3. Actual controller of the Company and persons acting in concert
Nature of actual controller:Domestic nature person
Type of actual controller: natural person
|||||
|-|-|-|-|
||Relationship with||Enjoy the residence power in the other country|
|Actual controlling shareholders||Nationality||
||actual controller||or area (Y/N)|
|Wang Dong|Mr. Wang himself|P.R.C|N|
||He served as executive director respectively in Guangzhou Lianzhengda Communication|||
||Technology Co., Ltd., Shanghai Nanjiang Investment Co., Ltd., Chengdu Nanjiang|||
|Main occupation or position|Engineering Technology Co., Ltd., Ningbo Morsh Technology Co., Ltd., Shanghai Nanjiang|||
||(Group) Co., Ltd., Chongqing Nanjiang Investment Co., Ltd. and Beijing Morsh Holding|||
||Group Co., Ltd. from September 2009 to July 2016. and he served as executive director and|||

|||
|-|-|
||GM of Tibet Dongfeng Investment Co., Ltd. He serves as executive director and GM of|
||Shenzhen Dongfeng Group Co., Ltd. since March 2015|
|Listed companies in and out of||
||N/A|
|China that controlled in last 10 years||

Changes of actual controller in reporting period
□ Applicable√ Not applicable
No changes of actual controllers for the Company in reporting period.
Property right and controlling relationship between the actual controller and the Company is as follow:
Wang Dong
29.49%
Dongfeng Sci-Tech Group CO., LTD.
Actual controller controlling the Company by entrust or other assets management
□ Applicable√ Not applicable
4. Particulars about other legal person shareholders with over10% shares held
□ Applicable√ Not applicable
5. Limitation and reducing the holdings of shares of controlling shareholders, actual controllers, restructuring side and other commitment subjects
□ Applicable√ Not applicable
Section VII. Preferred Stock
□ Applicable√ Not applicable
The Company had no preferred stock in the Period.
Section VIII. Particulars about Directors, Supervisors, Senior Executives and Employees
I. Changes of shares held by directors, supervisors and senior executives
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Amount|Amount|||
||||||||Shares||||Shares|
|||||||||of shares|of shares|||
||||||Start||held at|||Other|held at|
|||W o rking||||End date||increased|decreased|||
||Title||Sex|Age|dated of|of office|period-be|||changes|period-en|
|Name||status|||office|||in this|in this|||
||||||term|term|gin|||(share)|d|
|||||||||period|period|||
||||||||(Share)||||(Share)|
|||||||||(Share)|(Share)|||
|Zhao||||||||||||
|||Currently|||11 June|12 June||||||
|Yongshen|Chairman||M|42|||0|0|0||0|
|||in office|||2015|2021||||||
|g||||||||||||
|Zhao||||||||||||
|||Currently|||9 Nov.|12 June||||||
|Yongshen|GM||M|42|||0|0|0||0|
|||in office|||2018|2021||||||
|g||||||||||||
|Zhao||||||||||||
|||Currently|||11 June|12 June||||||
|Yongshen|CFO||M|42|||0|0|0||0|
|||in office|||2015|2021||||||
|g||||||||||||
|Li|Vice|Currently|||11 June|12 June||||||
||||M|56|||0|0|0||0|
|Weimin|Chairman|in office|||2015|2021||||||
|Chen||Currently|||11 June|12 June||||||
||Director||M|44|||0|0|0||0|
|Weihuan||in office|||2015|2021||||||
|Wang||Currently|||13 June|12 June||||||
||Director||M|44|||0|0|0||0|
|Liang||in office|||2018|2021||||||
||Independ|||||||||||
|Zhai||Currently|||13 June|12 June||||||
||ent||M|40|||0|0|0||0|
|Hongtao||in office|||2018|2021||||||
||director|||||||||||
||Independ|||||||||||
|||Currently|||13 June|12 June||||||
|Li Jianhui|ent||M|51|||0|0|0||0|
|||in office|||2018|2021||||||
||director|||||||||||
||Independ|||||||||||
|||Currently|||13 June|12 June||||||
|Zhou Jian|ent||M|47|||0|0|0||0|
|||in office|||2018|2021||||||
||director|||||||||||
|||Currently|||27 Nov.|12 June||||||
|Wu Zhe|Director||M|62|||0|0|0||0|
|||in office|||2018|2021||||||

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||Currently|||27 Nov.|12 June|||||
|Lin Lixin|Director||M|57|||0|0|0|0|
|||in office|||2018|2021|||||
|Shen|Director,|Office|||11 June|9 Nov.|||||
||||M|55|||0|0|0|0|
|Linxiang|GM|leaving|||2015|2018|||||
|Cui||Office|||26 May|9 Nov.|||||
||Director||M|49|||0|0|0|0|
|Huating||leaving|||2016|2018|||||
||Independ||||||||||
|Guo||Office|||31 July|13 June|||||
||ent||M|48|||0|0|0|0|
|Huibin||leaving|||2012|2018|||||
||director||||||||||
||Independ||||||||||
|Zhang||Office|||31 July|13 June|||||
||ent||M|65|||0|0|0|0|
|Zhiyong||leaving|||2012|2018|||||
||director||||||||||
||Independ||||||||||
|Cao||Office|||27 April|13 June|||||
||ent||M|52|||0|0|0|0|
|Guohua||leaving|||2012|2018|||||
||director||||||||||
||Chairman||||||||||
||of||||||||||
||Superviso||||||||||
||ry||||||||||
|Hao||Currently|||27 April|12 June|||||
||Committe||M|43|||5,900|0|0|5,900|
|Guangxin||in office|||2012|2021|||||
||e,||||||||||
||Employee||||||||||
||superviso||||||||||
||r||||||||||
|Xiao|Superviso|Currently|||26 May|12 June|||||
||||M|52|||0|0|0|0|
|Yongfu|r|in office|||2016|2021|||||
|Ma|Superviso|Currently|||26 May|12 June|||||
||||M|53|||0|0|0|0|
|Haipeng|r|in office|||2016|2021|||||
|Sun|Deputy|Currently|||11 June|12 June|||||
||||M|55|||0|0|0|0|
|Hongwei|GM|in office|||2015|2021|||||
||Secretary||||||||||
|Li||Currently|||4 July|12 June|||||
||of the||F|34|||0|0|0|0|
|Wenying||in office|||2014|2021|||||
||Board||||||||||
|Total|--|--|--|--|--|--|5,900|0|0|5,900|

 II. Changes of directors, supervisors and senior executives
√Applicable□ Not applicable
||||||
|-|-|-|-|-|
|Name|Title|Type|Date|Reasons|
|Shen Linxiang|Director, GM|Office leaving|9 Nov. 2018|Voluntary turnover|

||||||
|-|-|-|-|-|
|Cui Huating|Director|Office leaving|9 Nov. 2018|Voluntary turnover|
|||Leave the office|||
||Independent||||
|Guo Huibin||while office term|13 June 2018|Leave the office while office term ends|
||director||||
|||ends|||
|||Leave the office|||
||Independent||||
|Zhang Zhiyong||while office term|13 June 2018|Leave the office while office term ends|
||director||||
|||ends|||
|||Leave the office|||
||Independent||||
|Cao Guohua||while office term|13 June 2018|Leave the office while office term ends|
||director||||
|||ends|||

III. Post-holding
Professional background, major working experience and present main responsibilities in Company of directors, supervisors and senior executive
Zhao Yongsheng, male, born in January 1977, he owes a master of business administration. He served as GM for WholeWise Sci.& Tech. Co., Ltd and Netcom division from 1999 to 2006; and served as GM of Shenzhen XinJinDa Investment Co., Ltd. from 2006 to 2012. He serves as director, GM of the Company from 2012 to June 2015; he serves as deputy president of Eagles Men Aeronautic Science and Technology Group Co., Ltd. since August 2015 and now he is the president, GM and CFO of the Company.
Li Weimin: male, born in 1963 and has a graduate diploma. He worked in 1st section of Ministry of Metallurgical Industry and Zhongjian Law Practice Center; he works in China Kejian Co., Ltd. since October 2001 to May 2014; hold secretary of the Board for China Kejian Co., Ltd. since April 2003 to July 2013; hold director for China Kejian Co., Ltd. since April 2003 to May 2014; and he successively serves as Director, chairman and deputy chairman of the Company since July 2012, he is the deputy chairman of the Company right now.
Chen Weihuan, male, born in December 1975, an accountant with university degree. He successively served as manager of financial dept. of WholeWiseSci.& Tech. Co., Ltd, as CFO of China Kejian Co., ltd., CFO of the Shanghai Nanjiang Group Co.,Ltd., deputy GM of Shenzhen Dongfeng Group Co., Ltd., Director of the Beijing Morsh Holding Group Co., Ltd. He is work in Scenery Culture Culture Industry Co., Ltd. Now he is the Director of the Company.
Wang Liang, male, born in June 1975, holds a college degree. From 2011 to 2014, he served as a deputy general manager and the chairman of Ningbo Morsh Tech. Co., Ltd.; from 2014 to 2016, he served as a deputy general manager of Hangzhou Nanjiang Robotics Co., Ltd.; since 2016, he has been serving as the chief financial officer of Hangzhou Dongfeng Cloaking Technology Co., Ltd. and Hangzhou Dongfeng Technology Co., Ltd., and since June 2018, he has been serving as a director of the company. Lin Lixin, male, born in September 1962, is a master of engineering and a senior engineer. He served as the director of China Huaneng Group Co., Ltd., the executive deputy general manager of China Unicom Chongqing Branch, the chairman and general manager of Beijing Shidai Hongzhi Software Co., Ltd.; the director and general manager of Beijing Langxin Information System Co., Ltd.; the director and general manager of Sichuan Direction Optoelectronics Co., Ltd., the chairman and general manager of Beijing
Huawei Langxin Technology Co., Ltd., and the chairman of Deluxe Family Holdings Limited. He currently serves as the chairman of
Beijing Xizhou Group Co., Ltd. Since December 2018, he has been serving as a director of Chian Dive Company Limited. Since
November 2018, he has been serving as a director of the company.
Wu Zhe, male, born on February 10, 1957, Han nationality, Taiyuan City, Shanxi Province, a member of the Communist Party of China. He was the former vice-president of Beijing University of Aeronautics and Astronautics, a professor of aircraft design major, a doctoral tutor, and a specially-appointed professor for the Cheung Kong Scholar of Ministry of Education, and is currently the dean of Institute of Beihang University in Dongguan. Since November 2018, he has been serving as a director of the company.
Li Jianhui, born in 1968, holds amaster’s degree, and is a certified public accountant and a senior accountant. He has served as an accountant of Yangcheng Evening News, the assistant general manager of Guangzhou Lingnan Certified Public Accountants Co., Ltd., the director of Guangzhou GuangLing Certified Public Accountants Co., Ltd., the deputy chief accountant of Guangzhou Construction Group Co., Ltd., the chief financial officer of Guangzhou Construction Co., Ltd., an independent director of Guangdong Anjubao Digital Technology Co., Ltd.. He currently serves as a consultant of Guangzhou Guangling Certified Public Accountants Co., Ltd., an independent director of Guangdong Xiongsu Technology Group Co., Ltd., a supervisor of Guanhao Biotech Co., Ltd., an independent director of Qiaoyin Environmental Protection Technology Co., Ltd., and an independent director of Guangdong Huate Gas Co., Ltd. Since June 2018, he has been serving as a director of the company.
Zhou Jian, male, born in 1972, graduate degree. From July 1996 to October 2013, he served as the sales director of China for RC Air Conditioning Beijing Office and the chairman of Beijing Shiji Shengtong Environmental Engineering Technology Co., Ltd. Since April 2014, he has been the general manager of Beijing Guoding Kechuang Capital Management Co., Ltd. and the general manager of Beijing Gongdao Innovation Investment Co., Ltd. Since June 2018, he has been serving as a director of the company.
Zhai Hongtao, male, born in 1979, a Master of Laws of Peking University, and aMaster of Business Administration for Senior Management at Cheung Kong GraduateSchool of Business. Since 2009, he has been serving as a partner of Grandall Law Firm (Beijing). Since August 2016, he has been serving as an independent director ofLangfang Development Co., Ltd. Since June 2018, he has been serving as a director ofthe company.
Hao Guangxin, male, born in 1976, has a secondary school education. In 1996, he joined the former Dixian Co., Ltd., and served as the factory director, the business supervisor and the section chief of the integrated business department, and the office director of Chengde Dalu Co., Ltd. He is currently the chairman of the board of supervisors of the company and the employee supervisor. Xiao Yongfu, male, born in July 1967, has a college degree, and is a member of the Communist Party of China. In 1988, he joined Chengde Dixian Textile Co., Ltd., and served as the factory director of the dyeing factory, the manager of the weaving and dyeing branch, the manager of the weaving factory, the general manager of Hanhe Company, and the project manager of Chengde Nanjiang Co., Ltd., since March 2012, he has been serving as the manager of the sales department. He is currently a supervisor of the company.
Ma Haipeng, male, born in October 1965, has a high school education. In 1990, he joined Chengde Dixian Textile Co., Ltd., and served as the section chief of the mechanical and electrical department and the manager of the power department. Since May 2013, he has been serving as the deputy manager of the Integrated Affairs Department of Chengde Nanjiang Co., Ltd. He is currently a supervisor of the company.
Sun Hongwei, male, born in 1964, a high school background, worked in Chengde Dixian Knitting Co., Ltd. in 1986, and successively served as chief of electrical and mechanical department of Dye Plant, GM of infrastructure division for electromechanical device, person in charge of the preparatory office of Xingye Paper Making, manager of Xingye Paper Making Company and manager of engineering department of Chengde Nanjiang Co., Ltd. He served as GM assistant of the Company from October 2013 to June 2015; and served as the deputy GM of the Company since June 2015.
Li Wenying, female, was born in 1985, a university degree. She served as planning specialist and system support administrator of the Joyoung Co., Ltd. from July 2008 to October 2010; and worked in security department of Chengde Nanjiang Co., Ltd. in November 2010; she serves as GM of the security department of Chengde Nanjiang Co., Ltd. from April 2012 to July 2014; and serves as Secretary of the Board of the Company since July 2014.
Post-holding inshareholder’s unit
□ Applicable√ Not applicable
Post-holding in other unit
√Applicable□ Not applicable
|||||||
|-|-|-|-|-|-|
||||||Received|
|||Position in|||remuneration|
|Name|Name of other units||Start dated of|End date of office||
|||other unit n|office term|term|from other unit|
||||||(Y/N)|
|Chen Weihuan|Shenzhen Dongfeng Group Co., Ltd.|CFO|19 April 2011||y|
|Chen Weihuan|Scenery Culture Culture Industry Co., Ltd.|Director|19 Sept. 2017||N|
||Dongguan Dongfeng New Energy Tech.|||||
|Chen Weihuan||Chairman|13 Nov. 2015||N|
||Co., Ltd.|||||
|Zhao|Eagles Men Aeronautic Science and|Vice||||
||||31 Aug. 2015||N|
|Yongsheng|Technology Group Co., Ltd|Chairman||||
|Lin Lixin|China Dive Company Limited|Director|17 Dec. 2018|2 Dec. 2019|Y|
|Lin Lixin|Beijing Xizhou Group Co., Ltd.|Director|2 Dec. 2015||N|

Punishment of securities regulatory authority in recent three years to thecompany’s current and outgoing directors, supervisors and senior management during the reporting period
□ Applicable√ Not applicable
IV. Remuneration for directors, supervisors and senior executives
Decision-making procedures, recognition basis and payment for directors, supervisors and senior executives
Decision-making procedures: remuneration& appraisal committee proposed remuneration plan, and being approved after deliberation by the Board, submitted for approval toshareholders’ general meeting.
Recognition basis: based on the industry and scales of the remuneration standards, formulate remuneration combine with actual operation status of the Company.
Payment: distribute monthly according to remuneration plan
In reporting period, the in-post directors, supervisors and senior executives received remuneration from the Company totally approximately as RMB 2,125,600
Remuneration for directors, supervisors and senior executives in reporting period
In 10 thousand Yuan
||||||||
|-|-|-|-|-|-|-|
|||||Post-holding|Total|Whether|
|Name|Title|Sex|Age||||
|||||status|remuneration|remuneration|

||||||||
|-|-|-|-|-|-|-|
||||||obtained from the|obtained from|
||||||Company (before|related party of|
||||||taxes)|the Company|
||Chairman, GM|||Currently in|||
|Zhao Yongsheng||M|42||26.42|N|
||and CFO|||office|||
|||||Currently in|||
|Li Weimin|Vice Chairman|M|56||11.76|N|
|||||office|||
|||||Currently in|||
|Chen Weihuan|Director|M|44||14.56|Y|
|||||office|||
|||||Currently in|||
|Wang Liang|Director|M|44||22.85|N|
|||||office|||
||Independent|||Currently in|||
|Zhai Hongtao||M|40||5.34|N|
||director|||office|||
||Independent|||Currently in|||
|Li Jianhui||M|51||5.34|N|
||director|||office|||
||Independent|||Currently in|||
|Zhou Jian||M|47||5.34|N|
||director|||office|||
|||||Currently in|||
|Wu Zhe|Director|M|62||0.83|N|
|||||office|||
|||||Currently in|||
|Lin Lixin|Director|M|57||0.83|N|
|||||office|||
|Shen Linxiang|Director, GM|M|55|Office leaving|28.88|N|
|Cui Huating|Director|M|49|Office leaving|10.93|N|
||Independent||||||
|Guo Huibin||M|48|Office leaving|4.98|N|
||director||||||
||Independent||||||
|Zhang Zhiyong||M|65|Office leaving|4.98|N|
||director||||||
||Independent||||||
|Cao Guohua||M|52|Office leaving|4.98|N|
||director||||||
||Chairman of||||||
||Supervisory||||||
|||||Currently in|||
|Hao Guangxin|Committee,|M|43||13.57|N|
|||||office|||
||Employee||||||
||supervisor||||||
|||||Currently in|||
|Xiao Yongfu|Supervisor|M|52||11.89|N|
|||||office|||
|||||Currently in|||
|Ma Haipeng|Supervisor|M|53||11.89|N|
|||||office|||
|Sun Hongwei|Deputy GM|M|55|Currently in|13.57|N|

||||||||
|-|-|-|-|-|-|-|
|||||office|||
||Secretary of the|||Currently in|||
|Li Wenying||F|34||13.62|N|
||Board|||office|||
|Total|--|--|--|--|212.56|--|

 Delegated equity incentive for directors, supervisors and senior executives in reporting period
□ Applicable√ Not applicable
V. Particulars of workforce
1.Number of Employees, Professional composition, Education background
|||
|-|-|
|Employee in-post of the parent Company(people)|56|
|Employee in-post of main Subsidiaries (people)|125|
|The total number ofcurrent employees(people)|181|
|The total number of current employees to receive pay (people)|181|
|Retired employee’ s expenses borne by the parent Company and||
||0|
|main Subsidiaries(people)||
|Professional composition||
|Category of professional composition|Numbers of professional composition (people)|
|Production personnel|36|
|Sales personnel|10|
|Technical personnel|77|
|Financial personnel|22|
|Administrative personnel|36|
|Total|181|
|Education background||
|Category of education background|Numbers (people)|
|Doctor|6|
|Master|19|
|Bachelor degree|44|
|College|52|
|High school or below|60|
|Total|181|

 2. RemunerationPolicy
In accordance with national labor laws and policies and combining thecompany’s actual situation, the company has established the
salary management system, and pays the salary according to the assessment of salary management system. Theemployees’
remuneration and benefit level are adjusted appropriately according to the company's operating conditions, and the local living standards, and the changes in the price index.
The company strictly obeys the "Labor Law" and the relevant national and local labor laws and regulations; signs labor contracts with employees, and pays the employee insurances by rule.
3. Training programs
The company focuses on staff training and career planning, actively carries out staff training, and organizes various business skill training from time to time.
4. Labor outsourcing
□Applicable√ Not applicable
Section IX. Corporate Governance
I. Corporate governance of the Company
In reporting period, the Company complied to laws and rules such as the Company Law, the Security Law, the Governance Rules of Listed Companies, related regulations of CSRC and the Rules Governing the Listing of Securities on Shenzhen Stock Exchange, the Internal Control Guidelines of Listed Companies as well as relevant laws and regulations, standardized the operation, continues to improved and perfected the structure for corporate governance. Actual condition of the corporate governance almost consistent with requirement and regulations of normative documents of relevant laws and statute
1. Shareholders and theShareholders’ General Meeting:
The Company set up Rules of Procedure ofShareholders’ General Meeting and was able to convene and hold theShareholders’ General Meeting strictly according to the requirement of normative opinions of theShareholders’ General Meeting and the procedure of the meeting was legal. The Company ensures that all shareholders share the actual information of the Company equally and guarantee the legal rights of medium and small shareholders. 2. Relation of the controlling shareholder and the listed company:
The Company is completely independent from the controlling shareholder in terms of personnel; assets, finance, organization and business, there are no decision-making and operation activities of the Company that being interfered directly or indirectly by controlling shareholder over theshareholders’ general meeting, and no condition of capital and assets of the Company occupied by controlling shareholder and its related parties either. 3. Directors and the Board of Directors:
The Company elected directors strictly according to the procedure stated in the Articles of Association and engaged independent directors according to relevant requirements. All directors can take the responsibilities in a diligent attitude on behalf of the maximum interests of the Company and the shareholders. The Board of Directors established Rules of procedure of the Board of Directors, implemented patiently the regulations of the laws, regulations and the Articles of Association of the Company, treated all shareholders fairly and concentrated on the interest of relevant beneficial parties.
Specialized commissions were set up in the board of directors such as audit commission, remuneration and appraisal commission, strategy commission and nomination commission. They respectively take over function of discussion and determination of significant events according to corresponding working details.
4. Supervisors and the Supervisory Committee:
The population and constitution of the board of supervisors conform to requirements of the Articles of Association, including one staff representative among the three members. The supervisors could carefully exert duties, take necessary check and supervision on finance, directors, general managers and other senior managerial personnel, thus maintain lawful interests of the Company. The procedure of assembling and holding of the board of
supervisors conform to relevant rules of the Listing Rules, the Articles of Association and the Parliamentary Procedures of the Board of Supervisor.
5. In aspect of relevant beneficial parties
The company fully respects and safeguards the legitimate rights and interests of stakeholders, achieves the coordination and balance of the interests of shareholders, employees, and community, jointly promotes the sustainable and healthy development of the company.
6. In aspect of information disclosure and transparency:
The Company authorized the secretary of the Board of Directors to be responsible for information disclosure, reception of theshareholders’ interviewing and consultation. The Company could disclose relevant information in a true, accurate, complete and timely manner strictly according to provisions of laws, regulations and the Articles of Association so as to ensure equal chances for all shareholders to obtain information.
Is there any difference between the actual condition of corporate governance and relevant regulations about corporate governance for listed company from CSRC?
□Yes√ No
There are no differences between the actual condition of corporate governance and relevant regulations about corporate governance for listed company from CSRC.
II. Independence of the Company relative to controllingshareholders’ in aspect of businesses, personnel, assets, organization and finance
The company is completely independent from the controlling shareholder in terms of personnel, assets, finance, organization and business for independent responsibility and risks undertake, owes an independent business and ability of self operation.
1. In aspect of personnel: The Company has an independent management of labor force, human resources and salary. Senior executive of the Company did not take double position in the listed company and controlling shareholders and with no remuneration received either.
2. In aspect of assets: the Company has clear property relations with its controlling shareholder, and assets of the Company are totally independent of controlling shareholder. The Company holds completely control and disposition over the assets, there are no assets or capital occupied by controlling shareholders with interest of the Company damaged.
3. In aspect of finance: The Company has independent financial department, whole, independent and normatively operated business accounting system and financial administration system and independent bank account.
4. In aspect of organization independence: TheCompany’s organizations are wholly independent and the offices of the Company are wholly separated from the controlling shareholder.
5. In aspect of business: The Company is independent from the controlling shareholder in terms of businesses and has independent and whole business and operating ability.
III. Horizontal competition
□ Applicable√ Not applicable
IV. In the report period, the Company held annualshareholders’ general meeting and extraordinaryshareholders’ general meeting
1. AnnualShareholders’ General Meeting in the report period
|||||||
|-|-|-|-|-|-|
|||Ratio of investor||||
|Session of meeting|Type||Date|Date of disclosure|Index of disclosure|
|||participation||||
||||||Securities Times,|
||||||Hong Kong|
|Annual general|||||Commercial Daily|
||AGM|13.84%|13 June 2018|14 June 2018||
|meeting of2017|||||and Juchao Website|
||||||http://www.cninfo.co|
||||||m.cn|
||||||Securities Times,|
||||||Hong Kong|
|First extraordinary|Extraordinary|||||
||||||Commercial Daily|
|shareholders general|shareholders general|13.98%|29 June 2018|30 June 2018||
||||||and Juchao Website|
|meeting of 2018|meeting|||||
||||||http://www.cninfo.co|
||||||m.cn|
||||||Securities Times,|
|Second|||||Hong Kong|
||Extraordinary|||||
|extraordinary|||||Commercial Daily|
||shareholders general|10.30%|7 Nov. 2018|8 Nov. 2018||
|shareholders general|||||and Juchao Website|
||meeting|||||
|meeting of 2018|||||http://www.cninfo.co|
||||||m.cn|
||||||Securities Times,|
|The Third|||||Hong Kong|
||Extraordinary|||||
|extraordinary|||||Commercial Daily|
||shareholders general|10.41%|27 Nov. 2018|28 Nov. 2018||
|shareholders general|||||and Juchao Website|
||meeting|||||
|meeting of 2018|||||http://www.cninfo.co|
||||||m.cn|

2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore□ Applicable√ Not applicable
V. Responsibility performance of independent directors
1.The attending of independent directors to Board meetings and shareholders general meeting
|||||||||
|-|-|-|-|-|-|-|-|
|The attending of independent directors to Board meetings and shareholders general meeting||||||||
||Times of|||||Absent the|Times|
||||Times of|||||
||Board meeting|Times of||Times of||Meeting for|presented in|
|Independent|||attending by||Times of|||
||supposed to|present in||entrusted||the second|shareholders’|
|director|||communicatio||Absence|||
||attend in the|person||presence||time in a row|general|
||||n|||||
||report period|||||(Y/N)|meeting|
|Cao Guohua|2|0|2|0|0|N|1|
|Zhang Zhiyong|2|0|2|0|0|N|1|
|Guo Huibin|2|0|2|0|0|N|1|
|Zhou Jian|9|1|8|0|0|N|1|
|Zhai Hongtao|9|1|8|0|0|N|3|
|Li Jianhui|9|1|8|0|0|N|1|

 Explanation of absent the Board Meeting for the second time in a row
2. Objection for relevant events from independent directors
Independent directors come up with objection aboutCompany’s relevant matters
□Yes√No
Independent directors has no objections for relevant events in reporting period
3. Other explanation about responsibility performance of independent directors
The opinions from independent directors have been adopted
√ Yes□ No
Explanation on advice that accepted/not accepted from independent directors
According to the requirement of Company Law, Security Laws, Rules for Stock Listing, Article of Association and Working Mechanism for Independent Directors, independent directors of the Company pay attention to operation of the Company, performing vary responsibility of independent directors seriously; furthermore, they proactively investigate and studied operation status, business development and financial status of the Company, strictly supervise standard operation of the Company. Concerning the engagement of accounting firm, external guarantee, profit distribution plan and self-evaluation report of internal control, they carry out specific explanation and independent opinions; and fulfill responsibility to propose scientific and reasonable opinions and recommendation for operation and development of the Company base on their own professional knowledge, which protect all interest of the shareholders for the Company. In the report period, independent directors have no objections on
relevant issues of the Company.
VI. Duty performance of the special committees under the board during the reporting period 1. Responsibility performance of Auditing Committee
In the report period, auditing committee followed related regulation of Annual Report Work Regulations of Audit Committee, seriously fulfilled their duties: examine accounting policy, financial system and financial status of eth Company for year of 2016 as well as the improvement and implementation of internal control; auditingcompany’s periodic report and financial report; during the preparation, they cooperated with auditing institution to ensure the reality, accuracy and completeness of periodic report, and summary the annual work of auditing institution 2. Responsibility performance of Nomination Committee
In the reporting period, nomination committee in line with related regulation of CSRC and Shenzhen Stock Exchange, conscientiously performed their duties, reviewed the appointment qualification and competency-based for the Board, supervisory committee and senior executives: the person shall required relevant professional knowledge and ability of decision-making, supervision and cooperation, and be qualified for relevant positions, the qualification meets regulations from the Company Law, Governance Rules for Listed Companies and Article of Association.
3. Responsibility performance of Remuneration and Appraisal Committee
In reporting period, in strict accordance with Working Rules of Remuneration and Appraisal Committee, the committee earnestly perform their duties, mainly in charge of the formulation of assessment standards for directors and senior executives, and carried out evaluations; formulated and reviewed the remuneration policy and plan for directors and managers and directing the Board to improve remuneration system of the Company. 4. Responsibility performance of Strategy Committee
In the reporting period, strategy committee in line with related regulation of CSRC and Shenzhen Stock Exchange, conscientiously performed their duties, carried on research and proposed advice on the development strategy plans of the Company as well as the major events that may impact on theCompany’s development in the future; they broadly responsible for the strategic macro management of the Company, strategy formulation, planning approval and supervision implementation, and study the annual strategy development needs of the Company, development planning, strengthen scientific of decision-making, improved the decision-making efficiency for major investment and decision-making quality, perfected the structure of corporate governance.
VII. Works from Supervisory Committee
Whether the Company has risks or not in reporting period that found in supervisory activity from supervisory committee
□ Yes√ No
Supervisory committee has no objection about supervision events in reporting period
In 2018, all supervisor of the supervisory committee in a responsible manner for general meeting and whole shareholders, conscientiously abide by the State Laws, regulations and Article of Association, diligent and responsible, forge ahead, giver full play to the due role of supervisory committee in the Company.
(I) Meeting of the supervisory committee and resolutions in Period
Supervisory committee held three meetings in the Period with contents as:
1. On 24 April 2018, the
13th
session of
6th
supervisory committee was held on way of communication. Proposals below are been deliberated and approved:
(1) Deliberated and passed theWorking Report of Supervisory Committee for year of 2017;
(2) Deliberated and passed the Financial Report of 2017;
(3) Deliberated and passed the Annual Report of 2017 and Summary;
(4) Deliberated and passed theGeneral Election of Supervisory Committee;
(5) Deliberated and passed the―Appraisal Report of Internal Control for year of2017‖
(6) Deliberated and passed the proposal of Accrual of the Assets impairment provision for year of 2017;
(7) Deliberated and passed the First Quarterly Report of 2018 and its Summary
The resolution notices were released on Hong Kong Commercial Daily, Securities Times and Juchao Website http://www.cninfo.com.cn dated 26 April 2018.
2. On June 13, 2018, the first meeting of the seventh board of supervisors of the company was held at Dahongpao Mountain Villa Hotel, Mount Wuyi, No. 22, Shuangmen Road, Xingtian Town, Wuyishan City, Nanping City, Fujian Province. The meeting reviewed and approved the Proposal on the Election of the Chairman of the Seventh Board of Supervisors of the Company.
The resolution notice was released on Hong Kong Commercial Daily, Securities Times and Juchao Website http://www.cninfo.com.cn dated 14 June 2018.
3. On 28 August 2018, the
2nd
session of
7th
supervisory committee was held on conference room in 2/F. Deliberated and approved the Semi-Annual Report of 2018 and Summary. The resolution was submitted for a record in Shenzhen Stock Exchange on 29 August 2018.
4. On 29 October 2018, the
3rd
session of
7thsupervisory
committee was held on conference room in 2/F Deliberated and approved the Full Text/Text of 3Q Report of 2018. The resolution was submitted for a record in Shenzhen Stock Exchange on 30 October 2018.
(II) Independent opinion on relevant events of the Company for year of 2018
1. Independent opinion on operate according to law regulations
In accordance with relevant laws and regulations of the State, supervisory committee supervised the convening procedures of the Board Meeting and resolutions, execution of generalmeeting’s resolution by the Board, duty performance of senior executives and management system of the Company. They considered that as for the work for year of 2018, the Board carried out standard operations in strict accordance with the Company Law, Securities Law, Listing Rules, Article of Association as well as other regulations and mechanism, responsible and conscientious, making operation decisions scientifically and reasonably, further to improved the internal management system and internal control mechanism, established a favorable IC mechanism; no interest of the Company was violated and behavior against the laws, regulations, article of associations in way of duty
performance from the directors and managers been found.
2. Independent opinion on financial condition of the Company
Supervisory committee exercise carefully and diligent examination on the financial system and financial status of the Company, they considered that real financial status and operation results of the Company have been reflected in the financial report of 2018.
3. Independent opinion on latest actual investment of raised fund
The Company has no fund raised in the reporting period.
4. Independent opinion on related transaction
Related transactions occurred in the Period:
(1) Thecompany’s controlling subsidiary Dongfeng Technology Development signed an Equity Transfer Agreement with Tibet Dongfeng Investment Co., Ltd. that Dongfeng Technology Development purchases100% stock equity of Dongguan Dongfeng Power Technology Co., Ltd. held by Tibet Dongfeng with 0 yuan. After the stake purchase, Dongfeng Technology Development will hold100% stock equity of Dongfeng Power.
Because Tibet Dongfeng and the company are controlled by Mr. Wang Dong, thecompany’s controlling shareholder and actual controller, and the director of the company, Mr. Chen Weihuan, serves as a director of Tibet Dongfeng, according to the relevant regulations ofRules Governing the Listing of Securities on Shenzhen Stock Exchangeand Articles of Association, Tibet Dongfeng is a related legal person of the company, and the stake purchase matters constitute a related transaction.
This equity acquisition will help the company to expand new business, foster new profit growth points for the company and enhance its sustainable development capability. This matter conforms to the long-term interests of the company.
(2) The company signed an Equity Transfer Agreement with Mr. Wu Zhe that the company purchases30% stock equity of Dongfeng Technology held by Mr. Wu Zhe with 0 yuan. After the stake purchase, the company will hold100% stock equity of Dongfeng Technology Development.
As Mr. Wu Zhe is a director of the seventh board of directors of the company, according to the relevant regulations of Stock Listing Rules of Shenzhen Stock Exchange and Articles of Association, Mr. Wu Zhe is a related natural person of the company, and the stake purchase matters constitute a related transaction.
This equity acquisition and related transactions do not affect thecompany’s normal production and operation, and is in line with thecompany’s future development needs. The equity acquisition is conducive to the structural integration of thecompany’s hydrogen energy and new materials industry, can enhance thecompany’s core competitiveness and sustainable development capabilities, and is in line with thecompany’s long-term interests. 5. Independent opinion on acquisition of assets sold
Acquisition and sales of the assets are runs in a reasonable price, no interest of part of the shareholders been violated or assets of the Company loss been found.
6. Self-appraisal of internal control
In line with relevant regulation of CSRC and Shenzhen Stock Exchange, the Company follow basic principle of internal control, according to actual condition, established and improved an internal control system that covers all aspects of the Company, guarantee business activities operates normally, protect the safety and completion of assets. In the reporting period, no situation of violation of Guideline of Internal Control for Listed Companies and IC system of the Company been found. In conclusion, the supervisory committee considered that the self-appraisal report of the internal control reflects a real, accurate condition of the Company in aspect of internal control, therefore, supervisory show no objections.
VIII. Examination and incentives of senior management
Seniorexecutives’ annual remuneration is paid monthly. They based on rules of salary management and level standard made by the company. They made the remuneration case for senior manager based on the annual examination of their work ability, performance and accomplishment of duty goals.
IX. Internal Control
1. Details of major defects in IC appraisal report that found in reporting period
□Yes√ No
2. Appraisal Report of Internal Control
||||
|-|-|-|
|Disclosure date of full internal control|||
||13 April 2019||
|evaluation report|||
|Disclosure index of full internal control|||
||Juchao Website (www.cninfo.com.cn)||
|evaluation report|||
|The ratio of the total assets of units|||
|included in the scope of evaluation|||
|accounting for the total assets on the|100.00%||
|company's consolidated financial|||
|statements|||
|The ratio of the operating income of units|||
|included in the scope of evaluation|||
|accounting for the operating income on the|100.00%||
|company's consolidated financial|||
|statements|||
|Defects Evaluation Standards|||
|Category|Financial Reports|Non-financial Reports|
||(1) Major deficiencies: major violations|(1) Major deficiencies: the company's|
|Qualitative criteria|found in the company's financial statements,|important businesses are lack of system|
||financial reports and information disclosure,|control or have system failure, the|

||||
|-|-|-|
||the company's audit committee and internal|security of information systems has|
||audit service failed to effectively play their|significant risks, and major deficiencies|
||supervision functions, the CPA issued there|of internal control assessment are not|
||kinds of opinion reports to the company's|rectified and reformed completely. (2)|
||financial statements except for clean|Significant deficiencies: the company's|
||opinion. (2) Significant deficiencies: the|general businesses are lack of system|
||establishment of the company's accounting|control or have system failure, and the|
||statements and financial reports does not|security of information systems has risks.|
||fully comply with the accounting standards|(3) General deficiencies: other internal|
||for business enterprises and disclosure|control deficiencies do not constitute|
||requirements, resulting in the material|major or significant deficiencies.|
||misstatements of financial statements, the||
||company's financial reports declared in||
||previous years have material misstatements||
||and need to be retrospect and adjusted. (3)||
||General deficiencies: other internal control||
||deficiencies do not constitute major or||
||significant deficiencies.||
||(1) Amount of potential mistakes and||
||omissions in operating income: major||
||deficiencies: amount of mistakes and||
||omissions ≥ 3% of total operating income or||
||10 million Yuan; significant deficiencies: 1%||
||of total operating income or 5 million Yuan ≤||
||mistakes and omissions < 3% of total||
||operating income or 10 million Yuan;||
||general deficiencies: mistakes and omissions|(1) Major deficiencies: direct property|
||< 1% of total operating income or 5 million|loss ≥ 10 million Yuan, and punished by|
||Yuan.|national authorities; (2) Significant|
||(2) Amount of potential mistakes and|deficiencies: 5 million Yuan ≤ direct|
||omissions in expenses: major deficiencies:|property loss < 10 million Yuan, and|
|Quantitative standard|||
||amount of mistakes and omissions ≥ 3% of|punished by the provincial government;|
||total expenses or 5 million Yuan; significant|(3) General deficiencies: direct property|
||deficiencies: 2% of total expenses or 3|loss < 5 million Yuan, and punished by|
||million Yuan ≤ mistakes and omissions < 3%|the municipal or below government.|
||of total expenses or 5 million Yuan; general||
||deficiencies: mistakes and omissions < 2%||
||of total expenses or 3 million Yuan.||
||(3) Amount of potential mistakes and||
||omissions in total assets: major deficiencies:||
||amount of mistakes and omissions ≥ 1% of||
||total assets or 30 million Yuan; significant||
||deficiencies: 0.5% of total assets or 20||
||million Yuan ≤ mistakes and omissions < 1%||

|||
|-|-|
||of total assets or 30 million Yuan; general|
||deficiencies: mistakes and omissions < 0.5%|
||of total assets or 20 million Yuan.|
|Amount of significant defects in financial||
||0|
|reports||
|Amount of significant defects in||
||0|
|non-financial reports||
|Amount of important defects in financial||
||0|
|reports||
|Amount of important defects in||
||0|
|non-financial reports||

X. Auditing report of internal control
√Applicable□ Not applicable
|||
|-|-|
|Deliberations in Audit Report of Internal Control||
|We consider that, according to relevant regulations and Basic Rules of Internal Control for Enterprise, Dongfeng Sic-Tech||
|maintained an efficiency internal control of financial report dated 31 December 2018, in all material aspects.||
|Disclosure details of audit report of||
||Disclosed|
|internal control||
|Disclosure date of audit report of||
||13 April 2019|
|internal control (full-text)||
|Index of audit report of internal||
||Juchao Website (www.cninfo.com.cn)|
|control (full-text)||
|Opinion type of auditing report of||
||Standard unqualified|
|IC||
|Whether the non-financial report||
||No|
|had major defects||

Carried out modified opinion for internal control audit report from CPA
□Yes√ No
The internal control audit report, issued by CPA, has concerted opinion with self-evaluation report, issued from the Board
√ Yes□ No
Section X. Corporation bonds
Whether or not the Company public offering corporation bonds in stock exchange, which undue or without payment in full at maturity on the approval date for annual report disclosed
No
Section XI. Financial Report
I. Audit report
|||
|-|-|
|Type of audit opinion|Standard unqualified opinion|
|Signing date of audit report|11 April 2019|
|Name of audit institute|Da Hua Certified Public Accountants (LLP)|
|Serial No. of audit report|Da Hua Shen Zi[2019] No.: 004503|
|Name of CPA|Hu Zhigang, Yan Lisheng|

Text ofAuditor’s Report
Auditor’s Report
Da Hua ShenZi[2019] No.: 004503 To Shareholders of Dongfeng Sci-Tech Group CO., LTD.:
I.Auditor’s opinion
We, as the auditors, audited the financial statements of Dongfeng Sci-Tech Group CO., LTD. (the―Company‖), which included the consolidated balance sheet as of 31 December 2018, the consolidated statement of income, the consolidated statement of cash flow and the consolidated statement of changes in equity of the Company for the year ended 31 December 2018, together with the relevant notes thereto.
In our opinion, theCompany’s financial statements have been prepared in accordance with the Enterprises Accounting Standards and Enterprises Accounting System, and they fairly present the financial status of the Company and of its parent company as of 31 December 2018 and its operation results and cash flows for the year ended.
II. Basis of opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. Our responsibilities under those standards are further described in the―Auditor’s Responsibilities for the Audit of the FinancialStatements‖ section of theauditor’s report. We are independent of the Company in accordance with the Certified Public Accountants ofChina’s Code of Ethics for Professional Accountants, and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
III. Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The key audit matter we identified is as
follows:
We determine the following matters to be the key audit matters which require discussion in our audit report:
1. Confirmation of construction in progress;
2. Confirmation of real estate sales income.
(II) Confirmation of construction in progress
1. Description of the matter
Please refer to Note IV (16) and Note VI, Annotation 11 of the consolidated financial statements. As of December 31, 2018, the balance of construction in progress in the consolidated financial statements of Dongfeng Technology Group was RMB 101,650,833.16, accounting for16.26% of the total assets. The original value of new construction in progress during the period was RMB 99,383,669.12.
Due to the importance of the construction in progress to the financial statements of Dongfeng Technology Group, and the management of Dongfeng Technology Group has invested heavily in the construction in progress this year, we identified the recognition and measurement of the construction in progress as a key audit matter.
2. Audit response
Our important audit procedures for the confirmation of construction in progress include:
(1) Understand and test the design and implementation of the internal control system and financial accounting system of Dongfeng Technology Group related to the construction in progress.
(2) Obtain or prepare a detailed statement of construction in progress and impairment provision, check whether the statement is correct, and whether it is consistent with the number of general account and the detailed account, and check whether it is consistent with the impairment provision of the construction in progress and the number of statements.
(3) Consider the source, comparability, nature and relevance of the information available and the controls related to the compilation of the information, and evaluate the reliability of the data used in anticipating the recording amount or rate.
(4) Calculate the capitalization amount of borrowing costs based on the borrowing and project construction, and compare it with the actual capitalization of borrowing costs of the audited entity. Check if the interest capitalization is correct. Review the borrowing costs, capitalization rate, and actual expenditures for calculating capitalized interest, and the start and stop time of capitalization (5) Inquire the management about the increase in the construction in progress in the current year and check with the acquired or compiled list of the construction in progress.
(6) Consult thecompany’s capital expenditure budget, company-related meeting resolutions, etc., and check whether all the constructions in progress increased during the year are recorded.
(7) Check whether the original documents of the construction in progress increased during the year are complete, such as the application for project approval, the project loan contract, the construction contract, the invoices, the application for purchase requisition of engineering materials, the bills of payment, the construction contract, the waybill, the acceptance reports, etc., and whether the valuation is right or not.
(8) Implement the on-site inspection procedures for construction in progress.
Based on the audit work performed, we have obtained the audit conclusion that the confirmation of the construction in progress of the management of Dongfeng Technology Group is reasonable.
(ii) Recognition of property sales revenue
1. Description
Please refer to Note IV (26) and Note VI (30) of the consolidated financial statement. In 2018, the sales revenue for the period shown in the consolidated financial statement of Dongfeng Sci-Tech Group is 123,508,083.90 Yuan, among which, 118,807,719.93 Yuan is attributable to property development revenue accounting for96.19%of the total revenue.
Since property development revenue is essential to the financial statements of Dongfeng Sci-Tech Group, we deem realization of property development revenue as key audit matter.
2.Audit actions
(1)understand and test design and implementation of the internal control system and financial accounting system of Dongfeng Sci-Tech Group relating to sales and collection.
(2)select property purchase and sale contract samples and have an interview with the management to evaluate whether the revenue realization policies adopted by Dongfeng Sci-Tech Group for property development projects is in compliance with relevant accounting standards.
(3)select property sales sample, review sales contract and other supporting documents which may serve as an evidence to prove the property has met delivery conditions, so as to evaluate whether the property sales revenue has been realized under the revenue realization policy of Dongfeng Sci-Tech Group.
(4)obtain from the relevant departments sales progress control sheet, sales record, filing with competent property management authority, sales collection record and property hand-over procedures, so as to make a judgment on the actual sales and that whether the sales complies with financial data.
(5)with respect to the property sales revenue realized from property development projects during the year, we selected samples and compared its average selling price per square meter and the selling price per square meter available to us based on public information; analyze the reasonableness of change in gross profit margin of the respective property projects.
(6)make cut-off test for revenue realization of property development projects; cross-check the sales revenue realized around the balance sheet date and the supporting documents relating to delivery procedures, in order to assess whether revenue is realized during the right periods.
Based on our audit works done and the audit evidence acquired, we made the audit conclusion that realization of sales revenue by the management of Dongfeng Sci-Tech Group is in compliance with the accounting policies of the Company.
IV. Other information
The management of Dongfeng Sci-Tech Group CO., LTD. (the―Management‖) is responsible for other information which includes the information covered in theCompany’s 2017 annual report excluding the financial statement and our audit report.
The audit opinion issued by us for the financial statement has not covered other information, for which we do not issue any form of assurance opinions.
Considering our audit on financial statements, we are liable to read other information, during which, we shall consider whether other information differs materially from the financial statements or that we understand during our audit, or whether there is any material misstatement.
Based on the works executed by us, we should report the fact if we find any material misstatement in other information. In t his regards, we have nothing to report.
V. Responsibilities of management and those charged with governance for the financial statements
The management is responsible for the preparation of the financial statements in accordance with the Accounting Standards for Enterprise to secure a fair presentation, and for the design, establishment and maintenance of the internal control necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing theCompany’s ability to continue as a going concern, disclosing matters related to going concern and using the going concern assumption unless the management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing theCompany’s financial reporting process.
VI. Responsibilities of the auditor for the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an audit report that includes our audit opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the CAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
As part of an audit in accordance with the CAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
(1)identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for audit opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.
(4) Conclude on the appropriateness of themanagement’s use of the going concern assumption and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on theCompany’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required by the CAS to drawusers’ attention in audit report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify audit opinion. Our conclusions are based on the information obtained up to the date of audit report. However, future events or conditions may cause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express audit opinion on the financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguard measures.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in theauditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in theauditor’s report because of the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
(There is no text in this page, and it is the signature page of Dahua CPA (LLP) for auditing report 2018 under the name of Dongfeng Sci-Tech Group Co., Ltd.)
DaHua CPA (LLP) Certified Public Accountant of China: Yan
Lisheng
(engagement partner)
Beijing, China Certified Public Accountant of China: Hu
Zhigang
11 April 2019
II. Financial Statement
Statement in Financial Notes are carried in RMB/CNY
1. Consolidated Balance Sheet
Prepared by Dongfeng Sci-Tech Group CO., LTD.
2018-12-31
In RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current assets:|||
|Monetary fund|36,306,825.10|74,805,209.06|
|Settlement provisions|||
|Capital lent|||
|Financial assets measured by fair value and|||
|with variation reckoned into current gains/losses|||
|Derivative financial assets|||
|Note receivable and account receivable|11,171.25|17,608.00|

||||
|-|-|-|
|Including: Note receivable|||
|Account receivable|11,171.25|17,608.00|
|Accounts paid in advance|61099009.67|183,595.06|
|Insurance receivable|||
|Reinsurance receivables|||
|Contract reserve of reinsurance receivable|||
|Other account receivable|8,588,597.44|58,740,204.94|
|Including: Interest receivable|||
|Dividend receivable|||
|Buying back the sale of financial assets|||
|Inventory|151,585,557.50|234,653,825.84|
|Assets held for sale|||
|Non-current asset due within one year|||
|Other current assets|37,786,874.66|34,559,505.29|
|Total current assets|295378035.62|402,959,948.19|
|Non-current assets:|||
|Loans and payments on behalf|||
|Finance asset available for sales|16,331,037.08|16,670,403.13|
|Held-to-maturity investment|||
|Long-term account receivable|||
|Long-term equity investment|||
|Investment real estate||4,236,346.34|
|Fixed assets|17,302,279.65|9,674,396.99|
|Construction in process|101,650,833.16|2,267,164.04|
|Productive biological asset|121,437.50|17,971.39|
|Oil and gas asset|||
|Intangible assets|56,686,960.59|51,705,311.04|
|Expense on Research and Development|13,346,410.47|3,513,561.56|
|Goodwill|1,543,786.41|1,294,711.56|
|Long-term expenses to be apportioned|266,884.56|219,963.84|
|Deferred income tax asset||775,645.41|
|Other non-current asset|121743152.36|10,427,021.55|
|Total non-current asset|328992781.78|100,802,496.85|
|Total assets|624,370,817.40|503,762,445.04|

||||
|-|-|-|
|Current liabilities:|||
|Short-term loans|||
|Loan from central bank|||
|Absorbing deposit and interbank deposit|||
|Capital borrowed|||
|Financial liability measured by fair value and|||
|with variation reckoned into current gains/losses|||
|Derivative financial liability|||
|Note payable and account payable|6,668,789.67|15,487,833.06|
|Accounts received in advance|16,269,319.99|64,165,709.37|
|Selling financial asset of repurchase|||
|Commission charge and commission payable|||
|Wage payable|981,089.59|2,201,668.93|
|Taxes payable|921,967.58|13,171,059.13|
|Other account payable|118,570,218.85|25,952,193.34|
|Including: Interest payable|193,333.41||
|Dividend payable|||
|Reinsurance payable|||
|Insurance contract reserve|||
|Security trading of agency|||
|Security sales of agency|||
|Liability held for sale|||
|Non-current liabilities due within one year|||
|Other current liabilities|||
|Total current liabilities|143,411,385.68|120,978,463.83|
|Non-current liabilities:|||
|Long-term loans|101,710,000.00||
|Bonds payable|||
|Including: preferred stock|||
|Perpetual capital securities|||
|Long-term account payable|||
|Long-term wages payable|||
|Accrual liability|||
|Deferred income|||

||||
|-|-|-|
|Deferred income tax liabilities|||
|Other non-current liabilities|||
|Total non-current liabilities|101,710,000.00||
|Total liabilities|245,121,385.68|120,978,463.83|
|Owner’s equity:|||
|Share capital|706,320,000.00|706,320,000.00|
|Other equity instrument|||
|Including: preferred stock|||
|Perpetual capital securities|||
|Capital public reserve|463,681,309.55|463,681,309.55|
|Less: Inventory shares|19,718,613.55||
|Other comprehensive income|||
|Reasonable reserve|||
|Surplus public reserve|76,791,550.17|76,791,550.17|
|Provision of general risk|||
|Retained profit|-875,480,247.09|-882,864,082.85|
|Total owner’s equity attributable to parent company|351,593,999.08|363,928,776.87|
|Minority interests|27,655,432.64|18,855,204.34|
|Total owner’s equity|379,249,431.72|382,783,981.21|
|Total liabilities and owner’s equity|624,370,817.40|503,762,445.04|

 Legal Representative:Zhao Yongsheng
Person in charge of accounting works:Zhao Yongsheng
Person in charge of accounting institute: Liu Fengguo
2. Balance Sheet of Parent Company
In RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current assets:|||
|Monetary fund|28,933,135.09|12,091,839.66|
|Financial assets measured by fair value and with|||
|variation reckoned into current gains/losses|||
|Derivative financial assets|||
|Note receivable and account receivable|||

||||
|-|-|-|
|Including: Note receivable|||
|Account receivable|||
|Accounts paid in advance|60,821,190.73|5,000.33|
|Other account receivable|80,991,042.06|27,954,251.88|
|Including: Interest receivable|||
|Dividend receivable|||
|Inventory|150,581,753.98|234,077,374.89|
|Assets held for sale|||
|Non-current asset due within one year|||
|Other current assets|24,163,071.63|1,709,204.34|
|Total current assets|345,490,193.49|275,837,671.10|
|Non-current assets:|||
|Finance asset available for sales|16,331,037.08|16,670,403.13|
|Held-to-maturity investment|||
|Long-term account receivable|||
|Long-term equity investment|272,803,036.40|248,114,466.37|
|Investment real estate|||
|Fixed assets|1,551,517.36|1,826,078.88|
|Construction in process|||
|Productive biological asset|||
|Oil and gas asset|||
|Intangible assets|||
|Expense on Research and Development|||
|Goodwill|||
|Long-term expenses to be apportioned|||
|Deferred income tax asset||750.00|
|Other non-current asset|||
|Total non-current asset|290,685,590.84|266,611,698.38|
|Total assets|636,175,784.33|542,449,369.48|
|Current liabilities:|||
|Short-term loans|||
|Financial liability measured by fair value and|||
|with variation reckoned into current gains/losses|||
|Derivative financial liability|||

||||
|-|-|-|
|Note payable and account payable|6,263,184.67|15,157,800.54|
|Accounts received in advance|14,427,450.03|62,427,764.58|
|Wage payable|257,362.42|596,118.22|
|Taxes payable|125,482.71|43,262.13|
|Other account payable|432,985,336.27|325,994,266.48|
|Including: Interest payable|||
|Dividend payable|||
|Liability held for sale|||
|Non-current liabilities due within one year|||
|Other current liabilities|||
|Total current liabilities|454,058,816.10|404,219,211.95|
|Non-current liabilities:|||
|Long-term loans|||
|Bonds payable|||
|Including: preferred stock|||
|Perpetual capital securities|||
|Long-term account payable|||
|Long-term wages payable|||
|Accrual liability|||
|Deferred income|||
|Deferred income tax liabilities|||
|Other non-current liabilities|||
|Total non-current liabilities|||
|Total liabilities|454,058,816.10|404,219,211.95|
|Owner’s equity:|||
|Share capital|706,320,000.00|706,320,000.00|
|Other equity instrument|||
|Including: preferred stock|||
|Perpetual capital securities|||
|Capital public reserve|456,569,124.55|456,569,124.55|
|Less: Inventory shares|19,718,613.55||
|Other comprehensive income|||
|Reasonable reserve|||
|Surplus public reserve|76,791,550.17|76,791,550.17|

||||
|-|-|-|
|Retained profit|-1,037,845,092.94|-1,101,450,517.19|
|Total owner’s equity|182,116,968.23|138,230,157.53|
|Total liabilities and owner’s equity|636,175,784.33|542,449,369.48|

 3. Consolidated Profit Statement
In RMB
||||
|-|-|-|
|Item|Current period|Last period|
|I. Total operating income|123,508,083.90|250,071,863.07|
|Including: Operating income|123,508,083.90|250,071,863.07|
|Interest income|||
|Insurance gained|||
|Commission charge and|||
|commission income|||
|II. Total operating cost|142,663,266.21|298,891,792.83|
|Including: Operating cost|108,747,731.24|237,183,139.67|
|Interest expense|||
|Commission charge and|||
|commission expense|||
|Cash surrender value|||
|Net amount of expense of compensation|||
|Net amount of withdrawal of insurance|||
|contract reserve|||
|Bonus expense of guarantee slip|||
|Reinsurance expense|||
|Tax and extras|-247,832.89|9,791,294.48|
|Sales expense|115,346.71|14,417,090.26|
|Management expense|29,236,648.47|29,552,371.61|
|R&D expense|4,748,852.86|124,889.69|
|Financial expense|-385,552.98|1,346,177.29|
|Including: Interest expenses|||
|Interest income|175,090.92|645,550.99|
|Losses of devaluation of asset|448,072.80|6,476,829.83|
|Add: Other income|2,896,903.64||
|Investment income (Loss is listed|||
||19,646,046.57|1,501,873.01|
|with ―-‖|||

||||
|-|-|-|
|Including: Investment income on|||
|affiliated company and joint venture|||
|Income from change of fair value|||
|(Loss is listed with ―-‖)|||
|Exchange income (Loss is listed with|||
|―-‖)|||
|Income from assets disposal (Loss is|||
||4,526,245.58|65,059,983.64|
|listed with ―-‖)|||
|III. Operating profit (Loss is listed with ―-‖)|7,914,013.48|17,741,926.89|
|Add: Non-operating revenue|3,125.00|24,633.24|
|Less: Non-operating expenditure|473,944.42|823,362.54|
|IV. Total Profit (Loss is listed with ―-‖)|7,443,194.06|16,943,197.59|
|Less:Income tax expense|885,955.09|12,906,984.10|
|V. Net profit (Net loss is listed with ―-‖)|6,557,238.97|4,036,213.49|
|(i) net profit from continuous operation|||
||10,617,300.84|4,124,362.74|
|(Net loss is listed with ―-‖)|||
|(ii) net profit from discontinued operation|||
||-4,060,061.87|-88,149.25|
|(Net loss is listed with ―-‖)|||
|Net profit attributable to owner’s of parent|||
||7,383,835.76|4,102,325.89|
|company|||
|Minority shareholders’ gains and losses|-826,596.79|-66,112.40|
|VI. Net amount of other comprehensive income|||
|after-tax|||
|Net after-tax of other comprehensive income|||
|attributable to owners of parent company|||
|(i) Other comprehensive income items|||
|which will not be reclassified subsequently to|||
|gain/loss|||
|1.Re-measurement of the change of|||
|defined benefit plan|||
|2.Other comprehensive income|||
|unable transfer to gain/loss under equity method|||
|(II) Other comprehensive income items|||
|which will be reclassified subsequently to profit|||
|or loss|||
|1.Other comprehensive income|||
|able to transfer to gain/loss under equity method|||
|2.Gains or losses arising from|||

||||
|-|-|-|
|changes in fair value of available-for-sale|||
|financial assets|||
|3.Gains or losses arising from|||
|reclassification of held-to-maturity investment|||
|as available-for-sale financial assets|||
|4.The effect hedging portion of|||
|gains or losses arising from cash flow hedging|||
|instruments|||
|5.Translation differences arising on|||
|translation of foreign currency financial|||
|statements|||
|6. Other|||
|Net amount of other comprehensive income|||
|after-tax attributable to minority shareholders|||
|VII. Total comprehensive income|6,557,238.97|4,036,213.49|
|Total comprehensive income attributable to|||
||7,383,835.76|4,102,325.89|
|owners of parent Company|||
|Total comprehensive income attributable to|||
||-826,596.79|-66,112.40|
|minority shareholders|||
|VIII. Earnings per share:|||
|(i) Basic earnings per share|0.01|0.01|
|(ii) Diluted earnings per share|0.01|0.01|

 As for the enterprise combined under the same control, net profit of Yuan achieved by the merged party before combination while Yuan achieved last period Legal Representative:Zhao Yongsheng
Person in charge of accounting works:Zhao Yongsheng
Person in charge of accounting institute: Liu Fengguo
4. Profit Statement of Parent Company
In RMB
||||
|-|-|-|
|Item|Current period|Last period|
|I. Operation income|121,071,870.89|252,808,109.87|
|Less: Operating cost|103,821,248.79|231,621,565.96|
|Tax and extras|-1,521,613.57|8,783,840.21|
|Sales expense|110,444.59|14,255,025.45|

||||
|-|-|-|
|Management expense|12,121,942.53|14,477,838.05|
|R&D expense|||
|Financial expense|2,590.40|-23,760.83|
|Including: Interest expenses|||
|Interest income|||
|Losses of devaluation of asset|-530,281.37|24,023,352.93|
|Add: Other income|2,890,000.00||
|Investment income (Loss is listed|||
||53,773,285.06||
|with ―-‖|||
|Including: Investment income on|||
|affiliated company and joint venture|||
|Income from change of fair value|||
|(Loss is listed with ―-‖)|||
|Income from assets disposal (Loss is|||
|listed with ―-‖)|||
|II. Operating profit (Loss is listed with ―-‖)|63,730,824.58|-40,329,751.90|
|Add: Non-operating revenue||0.04|
|Less: Non-operating expenditure|124,650.33|75,323.27|
|III. Total Profit (Loss is listed with ―-‖)|63,606,174.25|-40,405,075.13|
|Less:Income tax expense|750.00||
|IV. Net profit (Net loss is listed with ―-‖)|63,605,424.25|-40,405,075.13|
|(i) net profit from continuous operation|||
||63,605,424.25|-40,405,075.13|
|(Net loss is listed with ―-‖)|||
|(ii) net profit from discontinued operation|||
|(Net loss is listed with ―-‖)|||
|V. Net amount of other comprehensive income|||
|after-tax|||
|(i) Other comprehensive income items|||
|which will not be reclassified subsequently to|||
|gain/loss|||
|1.Re-measurement of the change of|||
|defined benefit plan|||
|2.Other comprehensive income|||
|unable transfer to gain/loss under equity method|||
|(II) Other comprehensive income items|||
|which will be reclassified subsequently to profit|||
|or loss|||

||||
|-|-|-|
|1.Other comprehensive income|||
|able to transfer to gain/loss under equity method|||
|2.Gains or losses arising from|||
|changes in fair value of available-for-sale|||
|financial assets|||
|3.Gains or losses arising from|||
|reclassification of held-to-maturity investment|||
|as available-for-sale financial assets|||
|4.The effect hedging portion of|||
|gains or losses arising from cash flow hedging|||
|instruments|||
|5.Translation differences arising on|||
|translation of foreign currency financial|||
|statements|||
|7. Other|||
|VI. Total comprehensive income|63,605,424.25|-40,405,075.13|
|VII. Earnings per share:|||
|(i) Basic earnings per share|||
|(ii) Diluted earnings per share|||

5. Consolidated Cash Flow Statement
In RMB
||||
|-|-|-|
|Item|Current period|Last period|
|I. Cash flows arising from operating activities:|||
|Cash received from selling commodities|||
||84,460,974.01|77,634,880.19|
|and providing labor services|||
|Net increase of customer deposit and|||
|interbank deposit|||
|Net increase of loan from central bank|||
|Net increase of capital borrowed from|||
|other financial institution|||
|Cash received from original insurance|||
|contract fee|||
|Net cash received from reinsurance business|||
|Net increase of insured savings and|||
|investment|||
|Net increase of amount from disposal|||

||||
|-|-|-|
|financial assets that measured by fair value and|||
|with variation reckoned into current|||
|gains/losses|||
|Cash received from interest, commission|||
|charge and commission|||
|Net increase of capital borrowed|||
|Net increase of returned business capital|||
|Write-back of tax received|8,101,715.65|7,012,138.87|
|Other cash received concerning operating|||
||116131170.58|23,844,761.80|
|activities|||
|Subtotal of cash in-flow from operation activity|208693860.24|108,491,780.86|
|Cash paid for purchasing commodities and|||
||123728104.36|126,145,604.98|
|receiving labor service|||
|Net increase of customer loans and|||
|advances|||
|Net increase of deposits in central bank|||
|and interbank|||
|Cash paid for original insurance contract|||
|compensation|||
|Cash paid for interest, commission charge|||
|and commission|||
|Cash paid for bonus of guarantee slip|||
|Cash paid to/for staff and workers|16697226.16|16,357,414.95|
|Taxes paid|32,848,901.70|8,733,973.58|
|Other cash paid concerning operating|||
||853,578.71|41,806,361.63|
|activities|||
|Subtotal of cash out-flow from operation|||
||174,127,810.93|193,043,355.14|
|activity|||
|Net cash flow arising from operating activities|34,566,049.31|-84,551,574.28|
|II. Cash flows arising from investing activities:|||
|Cash received from recovering investment|31,230,000.00|105,000,000.00|
|Cash received from investment income|680926.85|2,490,847.27|
|Net cash received from disposal of fixed,|||
||28,160,000.00|87,025,400.00|
|intangible and other long-term assets|||
|Net cash received from disposal of|||
||17,328,070.03||
|subsidiaries and other units|||
|Other cash received concerning investing|||

||||
|-|-|-|
|activities|||
|Subtotal of cash in-flow from investment|||
||77,398,996.88|194,516,247.27|
|activity|||
|Cash paid for purchasing fixed, intangible|||
||231847353.86|53,549,390.18|
|and other long-term assets|||
|Cash paid for investment|1500000|130,030,000.00|
|Net increase of mortgaged loans|||
|Net cash received from subsidiaries and|||
||-6,604,668.64|-6,179,984.99|
|other units obtained|||
|Other cash paid concerning investing|||
||-----||
|activities|||
|Subtotal of cash out-flow from investment|||
||226,742,685.22|177,399,405.19|
|activity|||
|Net cash flow from investment activity|-149,343,688.34|17,116,842.08|
|III. Cash flows arising from financing activities|||
|Cash received from absorbing investment||9,600,000.00|
|Including: Cash received from absorbing|||
|minority shareholders’ investment by||9,600,000.00|
|subsidiaries|||
|Cash received from loans|101,710,000.00||
|Cash received from issuing bonds|||
|Other cash received concerning financing|||
|activities|||
|Subtotal of cash in-flow from financing activity|101,710,000.00|9,600,000.00|
|Cash paid for settling debts|||
|Cash paid for dividend and profit|||
||2,077,900.24||
|distributing or interest paying|||
|Including: Dividend and profit of minority|||
|shareholder paid by subsidiaries|||
|Other cash paid concerning financing|||
||19,718,613.55|698,492.97|
|activities|||
|Subtotal of cash out-flow from financing|||
||21,796,513.79|698,492.97|
|activity|||
|Net cash flow from financing activity|79,913,486.21|8,901,507.03|
|IV. Influence on cash and cash equivalents due|||
||269,681.12|-330,220.97|
|to fluctuation in exchange rate|||
|V. Net increased amount of cash and cash|-34,594,471.70|-58,863,446.14|

||||
|-|-|-|
|equivalent|||
|Add: Balance of cash and cash equivalents|||
||68,107,388.69|126,970,834.83|
|at the period -begin|||
|VI. Balance of cash and cash equivalents at the|||
||33,512,916.99|68,107,388.69|
|period -end|||

6. Cash Flow Statement of Parent Company
In RMB
||||
|-|-|-|
|Item|Current period|Last period|
|I. Cash flows arising from operating activities:|||
|Cash received from selling commodities|||
||79,011,942.34|72,881,435.81|
|and providing labor services|||
|Write-back of tax received|86,715.65|7,012,138.87|
|Other cash received concerning operating|||
||124344882.32|217,554,262.24|
|activities|||
|Subtotal of cash in-flow from operation activity|203,443,540.31|297,447,836.92|
|Cash paid for purchasing commodities and|||
||106,587,804.23|121,926,111.90|
|receiving labor service|||
|Cash paid to/for staff and workers|5,445,538.85|6,029,524.99|
|Taxes paid|9,232,241.12|7,703,760.87|
|Other cash paid concerning operating|||
||65,454,115.32|152,397,541.00|
|activities|||
|Subtotal of cash out-flow from operation|||
||186,719,699.52|288,056,938.76|
|activity|||
|Net cash flow arising from operating activities|16,723,840.79|9,390,898.16|
|II. Cash flows arising from investing activities:|||
|Cash received from recovering investment|||
|Cash received from investment income|36445215.03||
|Net cash received from disposal of fixed,|||
|||3,678,200.00|
|intangible and other long-term assets|||
|Net cash received from disposal of|||
||17,328,070.03||
|subsidiaries and other units|||
|Other cash received concerning investing|||
|activities|||
|Subtotal of cash in-flow from investment|||
||53,773,285.06|3,678,200.00|
|activity|||
|Cash paid for purchasing fixed, intangible|33,304.61|358,389.88|

||||
|-|-|-|
|and other long-term assets|||
|Cash paid for investment|30,000,000.00|70,000,000.00|
|Net cash received from subsidiaries and|||
|other units obtained|||
|Other cash paid concerning investing|||
|activities|||
|Subtotal of cash out-flow from investment|||
||30,033,304.61|70,358,389.88|
|activity|||
|Net cash flow from investment activity|23,739,980.45|-66,680,189.88|
|III. Cash flows arising from financing activities|||
|Cash received from absorbing investment|||
|Cash received from loans|||
|Cash received from issuing bonds|||
|Other cash received concerning financing|||
|activities|||
|Subtotal of cash in-flow from financing activity|||
|Cash paid for settling debts|||
|Cash paid for dividend and profit|||
|distributing or interest paying|||
|Other cash paid concerning financing|||
||19,718,613.55|698,492.97|
|activities|||
|Subtotal of cash out-flow from financing|||
||19,718,613.55|698,492.97|
|activity|||
|Net cash flow from financing activity|-19,718,613.55|-698,492.97|
|IV. Influence on cash and cash equivalents due|||
|to fluctuation in exchange rate|||
|V. Net increased amount of cash and cash|||
||20,745,207.69|-57,987,784.69|
|equivalent|||
|Add: Balance of cash and cash equivalents|||
||5,394,019.29|63,381,803.98|
|at the period -begin|||
|VI. Balance of cash and cash equivalents at the|||
||26,139,226.98|5,394,019.29|
|period -end|||

7. Statement of Changes inOwners’ Equity (Consolidated)
Current period
In RMB
|||
|-|-|
|Item|Current period|

|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Owners’ equity attributable to parent company|||||||||||||
|||Other equity instrument||||||||||||
||||Perpetu||||Other||||||Total|
||||||Capital|Less:|||Surplus|Provision||Minority||
||Share|Preferr|al||||comprehe|Reasonab|||Retained||owner’s|
||||||public|Inventory|||public|of general||interests||
||capital|ed|capital|Other|||nsive|le reserve|||profit||equity|
||||||reserve|shares|||reserve|risk||||
|||stock|securiti||||income|||||||
||||es|||||||||||
|I. Balance at the end|706,320||||463,681,3||||76,791,55||-882,864,|18,855,20|382,783,9|
|of the last year|,000.00||||09.55||||0.17||082.85|4.34|81.21|
|Add: Changes of||||||||||||||
|accounting policy||||||||||||||
|Error||||||||||||||
|correction of the last||||||||||||||
|period||||||||||||||
|Enterprise||||||||||||||
|combined under the||||||||||||||
|same control||||||||||||||
|Other||||||||||||||
|II. Balance at the|706,320||||463,681,3||||76,791,55||-882,864,|18,855,20|382,783,9|
|beginning of this year|,000.00||||09.55||||0.17||082.85|4.34|81.21|
|III. Increase/ Decrease||||||||||||||
|||||||19,718,61|||||7,383,835|8,800,228|-3,534,54|
|in this year (Decrease||||||||||||||
|||||||3.55|||||.76|.30|9.49|
|is listed with ―-‖)||||||||||||||
|(i) Total||||||||||||||
||||||||||||7,383,835|-826,596.|6,557,238|
|comprehensive||||||||||||||
||||||||||||.76|79|.97|
|income||||||||||||||
|(ii) Owners’ devoted||||||19,718,61||||||9,626,825|-10,091,7|
|and decreased capital||||||3.55||||||.09|88.46|
|1. Common shares||||||||||||||
|invested by owners||||||||||||||
|2. Capital invested by||||||||||||||
|holders of other equity||||||||||||||
|instruments||||||||||||||
|3. Amount reckoned||||||||||||||
|into owners equity||||||||||||||
|with share-based||||||||||||||
|payment||||||||||||||
|||||||19,718,61||||||9,626,825|-10,091,7|
|4. Other||||||||||||||
|||||||3.55||||||.09|88.46|

|||||||||
|-|-|-|-|-|-|-|-|
|(III) Profit distribution||||||||
|1. Withdrawal of||||||||
|surplus reserves||||||||
|2. Withdrawal of||||||||
|general risk provisions||||||||
|3. Distribution for||||||||
|owners (or||||||||
|shareholders)||||||||
|4. Other||||||||
|(IV) Carrying forward||||||||
|internal owners’ equity||||||||
|1. Capital reserves||||||||
|conversed to capital||||||||
|(share capital)||||||||
|2. Surplus reserves||||||||
|conversed to capital||||||||
|(share capital)||||||||
|3. Remedying loss||||||||
|with surplus reserve||||||||
|4. Change amount of||||||||
|defined benefit plans||||||||
|that carry forward||||||||
|retained earnings||||||||
|5. Other||||||||
|(v) Reasonable reserve||||||||
|1. Withdrawal in the||||||||
|report period||||||||
|2. Usage in the report||||||||
|period||||||||
|(vi) Other||||||||
|IV. Balance at the end|706,320|463,681,3|19,718,61|76,791,55|-875,480,|27,655,43|379,249,431.72|
|of the report period|,000.00|09.55|3.55|0.17|247.09|2.64||

 Last period
In RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Last period|||||||||||||
||Owners’ equity attributable to parent company|||||||||||||
||||||||||||||Total|
|Item||||||||||||Minority||
||Share|Other equity instrument|||Capital|Less:|Other|Reasonab|Surplus|Provision|Retained||owner’s|
|||||||||||||interests||
||capital|Preferr|Perpetu|Other|public|Inventory|comprehe|le reserve|public|of general|profit||equity|

|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||ed|al|reserve|shares|nsive|reserve|risk||||
|||stock|capital|||income||||||
||||securiti|||||||||
||||es|||||||||
|I. Balance at the end|706,320|||463,681,3|||76,791,55||-886,966,|2,349,55|362,176,0|
|of the last year|,000.00|||09.55|||0.17||408.74|8.95|09.93|
|Add: Changes of||||||||||||
|accounting policy||||||||||||
|Error||||||||||||
|correction of the last||||||||||||
|period||||||||||||
|Enterprise||||||||||||
|combined under the||||||||||||
|same control||||||||||||
|Other||||||||||||
|II. Balance at the|706,320|||463,681,3|||76,791,55||-886,966,|2,349,55|362,176,0|
|beginning of this year|,000.00|||09.55|||0.17||408.74|8.95|09.93|
|III. Increase/ Decrease||||||||||||
||||||||||4,102,325|16,505,6|20,607,97|
|in this year (Decrease||||||||||||
||||||||||.89|45.39|1.28|
|is listed with ―-‖)||||||||||||
|(i) Total||||||||||||
||||||||||4,102,325|-66,112.4|4,036,213|
|comprehensive||||||||||||
||||||||||.89|0|.49|
|income||||||||||||
|(ii) Owners’ devoted||||||||||16,571,7|16,571,75|
|and decreased capital||||||||||57.79|7.79|
|1. Common shares||||||||||16,571,7|16,571,75|
|invested by owners||||||||||57.79|7.79|
|2. Capital invested by||||||||||||
|holders of other equity||||||||||||
|instruments||||||||||||
|3. Amount reckoned||||||||||||
|into owners equity||||||||||||
|with share-based||||||||||||
|payment||||||||||||
|4．Other||||||||||||
|(III) Profit distribution||||||||||||
|1. Withdrawal of||||||||||||
|surplus reserves||||||||||||
|2. Withdrawal of||||||||||||

||||||||
|-|-|-|-|-|-|-|
|general risk provisions|||||||
|3. Distribution for|||||||
|owners (or|||||||
|shareholders)|||||||
|4．Other|||||||
|(IV) Carrying forward|||||||
|internal owners’ equity|||||||
|1. Capital reserves|||||||
|conversed to capital|||||||
|(share capital)|||||||
|2. Surplus reserves|||||||
|conversed to capital|||||||
|(share capital)|||||||
|3. Remedying loss|||||||
|with surplus reserve|||||||
|4. Change amount of|||||||
|defined benefit plans|||||||
|that carry forward|||||||
|retained earnings|||||||
|5．Other|||||||
|(v) Reasonable reserve|||||||
|1. Withdrawal in the|||||||
|report period|||||||
|2. Usage in the report|||||||
|period|||||||
|(vi) Other|||||||
|IV. Balance at the end|706,320|463,681,3|76,791,55|-882,864,|18,855,2|382,783,9|
|of the report period|,000.00|09.55|0.17|082.85|04.34|81.21|

 8. Statement of Changes inOwners’ Equity (Parent Company)
Current period
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Current period|||||||||||
|||Other equity instrument||||||||||
||||||Capital|Less:|Other||Surplus||Total|
|Item|Share||Perpetual|||||Reasonable||Retained||
|||Preferred|||public|Inventory|comprehens||public||owner’s|
||capital||capital|Other||||reserve||profit||
|||stock|||reserve|shares|ive income||reserve||equity|
||||securities|||||||||
|I. Balance at the end|706,320,0||||456,569,12||||76,791,550.|-1,101,45|138,230,15|

||||||||
|-|-|-|-|-|-|-|
|of the last year|00.00|4.55||17|0,517.19|7.53|
|Add: Changes of|||||||
|accounting policy|||||||
|Error|||||||
|correction of the last|||||||
|period|||||||
|Other|||||||
|II. Balance at the|706,320,0|456,569,12||76,791,550.|-1,101,45|138,230,15|
|beginning of this year|00.00|4.55||17|0,517.19|7.53|
|III. Increase/ Decrease|||||||
||||19,718,613.||63,605,42|43,886,810.|
|in this year (Decrease|||||||
||||55||4.25|70|
|is listed with ―-‖)|||||||
|(i) Total|||||||
||||||63,605,42|63,605,424.|
|comprehensive|||||||
||||||4.25|25|
|income|||||||
|(ii) Owners’ devoted|||19,718,613.|||-19,718,613|
|and decreased capital|||55|||.55|
|1. Common shares|||||||
|invested by owners|||||||
|2. Capital invested by|||||||
|holders of other equity|||||||
|instruments|||||||
|3. Amount reckoned|||||||
|into owners equity|||||||
|with share-based|||||||
|payment|||||||
||||19,718,613.|||-19,718,613|
|4．Other|||||||
||||55|||.55|
|(III) Profit distribution|||||||
|1. Withdrawal of|||||||
|surplus reserves|||||||
|2．Distribution for|||||||
|owners (or|||||||
|shareholders)|||||||
|3．Other|||||||
|(IV) Carrying forward|||||||
|internal owners’ equity|||||||
|1. Capital reserves|||||||
|conversed to capital|||||||

||||||||
|-|-|-|-|-|-|-|
|(share capital)|||||||
|2. Surplus reserves|||||||
|conversed to capital|||||||
|(share capital)|||||||
|3. Remedying loss|||||||
|with surplus reserve|||||||
|4. Change amount of|||||||
|defined benefit plans|||||||
|that carry forward|||||||
|retained earnings|||||||
|5．Other|||||||
|(v) Reasonable reserve|||||||
|1. Withdrawal in the|||||||
|report period|||||||
|2. Usage in the report|||||||
|period|||||||
|(vi) Other|||||||
|IV. Balance at the end|706,320,0|456,569,12|19,718,613.|76,791,550.|-1,037,84|182,116,968.23|
|of the report period|00.00|4.55|55|17|5,092.94||

 Last period
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Last period|||||||||||
|||Other equity instrument||||||||||
||||||Capital|Less:|Other||Surplus||Total|
|Item|Share||Perpetual|||||Reasonable||Retained||
|||Preferred|||public|Inventory|comprehens||public||owner’s|
||capital||capital|Other||||reserve||profit||
|||stock|||reserve|shares|ive income||reserve||equity|
||||securities|||||||||
|I. Balance at the end|706,320,0||||456,569,12||||76,791,550.|-1,061,04|178,635,23|
|of the last year|00.00||||4.55||||17|5,442.06|2.66|
|Add: Changes of||||||||||||
|accounting policy||||||||||||
|Error||||||||||||
|correction of the last||||||||||||
|period||||||||||||
|Other||||||||||||
|II. Balance at the|706,320,0||||456,569,12||||76,791,550.|-1,061,04|178,635,23|
|beginning of this year|00.00||||4.55||||17|5,442.06|2.66|
|III. Increase/ Decrease||||||||||-40,405,0|-40,405,075|
|in this year (Decrease||||||||||75.13|.13|

||||
|-|-|-|
|is listed with ―-‖)|||
|(i) Total|||
||-40,405,0|-40,405,075|
|comprehensive|||
||75.13|.13|
|income|||
|(ii) Owners’ devoted|||
|and decreased capital|||
|1. Common shares|||
|invested by owners|||
|2. Capital invested by|||
|holders of other equity|||
|instruments|||
|3. Amount reckoned|||
|into owners equity|||
|with share-based|||
|payment|||
|4．Other|||
|(III) Profit distribution|||
|1. Withdrawal of|||
|surplus reserves|||
|2．Distribution for|||
|owners (or|||
|shareholders)|||
|3．Other|||
|(IV) Carrying forward|||
|internal owners’ equity|||
|1. Capital reserves|||
|conversed to capital|||
|(share capital)|||
|2. Surplus reserves|||
|conversed to capital|||
|(share capital)|||
|3. Remedying loss|||
|with surplus reserve|||
|4. Change amount of|||
|defined benefit plans|||
|that carry forward|||
|retained earnings|||
|5．Other|||
|(v) Reasonable reserve|||

|||||||
|-|-|-|-|-|-|
|1. Withdrawal in the||||||
|report period||||||
|2. Usage in the report||||||
|period||||||
|(vi) Other||||||
|IV. Balance at the end|706,320,0|456,569,12|76,791,550.|-1,101,45|138,230,15|
|of the report period|00.00|4.55|17|0,517.19|7.53|

 III. Company profile
(i) Registered place, organization structure and head office of the Company
Dongfeng Sci-Tech. Group Co., Ltd. (Hereinafter referred to as Dongfeng Sci-Tech. Group or the Company) was formerly known as Chengde Dixian Knitting Co., Ltd., and was reorganized on 3 November 1999 by sponsorship, approved by the People's Government of Hebei Province with the issue of Ji Gu Ban[1999] No.: 36 with license of the business corporation obtained from Hebei Administration for Industry& Commerce; registered capital while established amounting as RMB 100,000,000, and RMB 1.00 per share. Among the abovementioned, RMB 85.10 million contributed by Wang Shuxian, representing 7.56 percent of the registered capital; Wang Zhengsong invested RMB 5.4444 million with 5.44 percent in total registered capital presented; Chengde Longfeng Cosmetics Co., Ltd. contributed RMB 0.9456 million, a 0.95 percent in registered capital and RMB 0.9456 million contributed by Chengde Xiabancheng Hongxing Plastics Products Plant with 0.95 percent in registered capital presented.
On 29 August 2000, according to the Zheng Jian Fa Xing Zi[2000] No.: 121 issued by the China Securities Regulatory Commission, the Company issued 100,000,000 domestically listed foreign shares in Shenzhen Stock Exchange dated 19 September 2000; and excised the over-allotment option to increase issuing 15,000,000 B shares from September 29, 2000 to October 29, 2000. The registered capital of the Company after the issuance of B shares was RMB 215,000,000 with one Yuan of face value per share. According to the resolution of theshareholder’s general meeting on March 12, 2002, the Company allotted 43,000,000 bonus shares to all of the shareholders according to the proportion of 2 free shares for every 10 shares, and meanwhile increased 107,500,000 shares to all of the shareholding by transferring from capital reserve according to 5 shares free for every 10 shares. The registered capital of the company was changed to RMB 365,500,000 after it allotted bonus shares and increased by transferring.
According to the resolution of theshareholder’s general meeting on July 22, 2003, the Company allotted 73,100,000 bonus shares to all of the shareholders according to the proportion of 2 free shares for every 10 shares, and the registered capital of the company was changed to RMB 438,600,000 after such bonus shares were allotted.
On March 11, 2004, approved by the Ministry of Commerce of the People's Republic of China, the Company was allowed to be changed as a foreign investment limited liability company.
In July 2004, the Company increased 150,000,000 B shares directionally, during which 91,300,000 shares were subscribed inHK$, and another 58,700,000 shares were subscribed in RMB, upon check by China Securities Regulatory Commission with the issue[2004] No.101.
According to the resolution of theshareholder’s general meeting on June 8, 2006, the Company allotted 117,720,000 bonus shares to
all of the shareholders according to the proportion of 2 free shares for every 10 shares,
On August 4, 2008, according to the judgment ruled by Shenzhen Intermediate People's Court, 112,324,800 sponsor shares held by Wang Shuxian was compensated to Chen Rong for 45,491,544 Yuan, and on August 15, 2008, 96,000,000 sponsor shares held by Wang Shuxian was compensated to Chen Rong for 38,880,000 Yuan according to the judgment ruled by Dalian Intermediate People's Court.
On November 11, 2009, according to―reply to the approval of capital increase, and change of share as well as name of Chengde Dixian Knitting Co.,Ltd‖ with No.143[2009] by Bureau of Commerce of Hebei Province, it agreed that the Company increased 150,000,000 domestically listed foreign shares in 2004 and allotted 2 bonus shares free for every 10 shares in 2006; and it agreed that 208,324,800 shares of Dixian stock held by Wang Shuxian was changed to Chen Rong ; as well as the name of the Company changed to Chengde Dalu Co., Ltd. Total share capital of the Company was 706,320,000 shares and the registered capital of the Company was 706,320,000 Yuan after theCompany’s share increased and allotted,
On 23 August 2011, the Company received the enterprise corporate business license issued from Chengde Administration for Industry and Commerce, register serial was No.: 130000400001225; registered capital and paid-up capital was 706.32 million Yuan with corporate type of limited liability company (Sino-foreign joint venture, listed)
On April 6, 2012, Chen Rong, shareholder of Company, signed a share transfer agreement with Mr. Wang Dong for transferred all of the 208,324,800 shares held by himself (accounting for29.49% of total capital of the Company) to Mr. Wang Dong; After equity transfer the above mentioned, capital contribution proportion of the shareholders of the Company were: 208.3248 million Yuan invested by Wang Dong, representing 29.49 percent of the register capital; 18517651 Yuan contributed by Hebei Chengde Northern Industrial Corporation, representing 2.62 percent of the register capital; 13327891 Yuan invested by Wang Zhengsong, a 0.33 percent in register capital; 2314829 Yuan invested by Chengde Xiabancheng Hongxing Plastics Products Plant, a 0.33 percent in register capital and 461.52 million Yuan contributed by shareholders of domestically listed foreign shares, representing 65.34 percent of the register capital.
On 19 September 2012, being verified and approved by Chengde Administration for Industry and Commerce, theCompany’s name changed as Chengde Nanjiang Co., Ltd.
On 15 May 2017, being verified and approved by Chengde Administration for Industry and Commerce, theCompany’s name changed as Dongfeng Sci-Tech Group Co., Ltd
Over the years of bonus issue, rights issue and capitalization, up to 31st December 2017, the issued shares totally amounting to 706.32 million shares, registered capital of the Company was 706.32 million Yuan; registered address: Xiabancheng Town, Chengde County, Hebei Province; HQ: Xiabancheng Town, Chengde County, Hebei Province. The Company has no parent company and Mr. Wang Dong is the first largest shareholder of the Company and also is the controller of the Company.
(ii) Business scope
R&D and sales of new energy, and new material products as well as technology promotion and technical service; scientific research of modern ecological agriculture and technology promotion service, wholesales of ecological agriculture products; import and export trade of goods and technology; Engage in the real estate development and management in the scope approved by the qualification certificates; property management.
(iii) Business nature and main operating activities of the Company
Dongfeng Sci-Tech Group belongs to the development operation of real estate business, subsidy engaged in new energy, new
materials,property management and agricultural farming and breeding
(iv) Report approval for the financial statement
The statement has been approved by all Directors of the Company dated 11 April 2019 for reporting.
(v) Consolidation scope for the financial statement
Totally 17 subjects are included in consolidate financial statement, mainly including the follow except the Company:
||||||
|-|-|-|-|-|
|Subsidiaries|Type|Level|Shareholding ratio(%)|Voting rights ratio (%)|
|Chengde Nanjiang Trading Co., Ltd.(hereinafter referred to as―Nanjiang Trading‖)|Wholly-ownedsubsidiary|1|100.00|100.00|
|Chengde Kefeng Engineering Project Management Co.Ltd.(hereinafter referred to as―Kefeng Engineering‖)|Wholly-ownedsubsidiary|1|100.00|100.00|
|Chengde Dongfeng Investment Co., Ltd.(hereinafter referredto as―Dongfeng Investment ‖)|Wholly-ownedsubsidiary|1|100.00|100.00|
|Nanjiang Asia Investment Co., Ltd.(hereinafter referred toas―Nanjiang Asia ‖)|Wholly-ownedsubsidiary|1|100.00|100.00|
|Chengde Kefeng Trading Co., Ltd.(hereinafter referred toas―Kefeng Trading‖)|Wholly-ownedsubsidiary|1|100.00|100.00|
|Hangzhou Dongfeng Technology Co. Ltd.(hereinafter referredto as―Hangzhou Dongfeng‖)|Wholly-ownedsubsidiary|1|100.00|100.00|
|Dongguan Dongfeng Technology Development Co.,Ltd.(hereinafter referred to as―Dongguan DongfengTechnology‖)|Controllingsubsidiary|1|100.00|100.00|
|Chengde Kefeng Aerospace Technology Development Co.Ltd(hereinafter referred to as―Kefeng Aerospace‖)|Wholly-ownedsubsidiary|1|100.00|100.00|
|Dongguan Dongfeng Power Tech. Co., Ltd. (hereinafterreferred to as―Dongfeng Power ‖)|Controllingsubsidiary|1|100.00|100.00|
|Chengde Dongfeng Ecological Agriculture Co.,Ltd.(hereinafter referred to as―Ecological Agriculture ‖)|Wholly-ownedsub-subsidiary|2|100.00|100.00|
|Chengde Nanjiang Technology Co. Ltd.(hereinafter referred toas―Nanjiang Technology‖)|Wholly-ownedsub-subsidiary|2|100.00|100.00|
|Chengde Huijing Property Services Co., Ltd.(hereinafterreferred to as―Huijing Property‖)|Wholly-ownedsub-subsidiary|2|100.00|100.00|
|Dongguan Zhongchuang New Energy Technology Co.,Ltd.(hereinafter referred to as―Zhongchuang New Energy‖)|Controllingsub-subsidiary|2|60.98|60.98|
|Dongguan Dongfeng Intelligent Technology Co.,Ltd.(hereinafter referred to as―Dongguan DongfengIntelligent‖)|Wholly-ownedsub-subsidiary|2|100.00|100.00|
|Dongguan Aolin New Materials Co., Ltd.(hereinafter referredto as―Aolin New Materials ‖)|Controllingsub-subsidiary|2|62.00|62.00|
|Dongguan Haizhuo Energy Technology Co., Ltd.(hereinafterreferred to as―Haizhuo Energy‖)|Controllingsub-subsidiary|2|62.00|62.00|

(1) The Company transferred its100% equity of NanjiangTrading to Chengde Country Jinshangmao Co., Ltd on August 14, 2018, therefore, Nanjiang Trading was no longer included in the consolidated balance sheet in the current period, but the Accounting Standards for Business Enterprises No. 33– Consolidated Financial Statements stipulates that if a parent company disposes of a subsidiary during the reporting period, the income, expenses and profits of the subsidiary from the beginning of the period to the disposal date should be included in the consolidated income statement, and the cash flows of the subsidiary from the beginning of the period to the disposal date should be included in the consolidated cash flow statement. Therefore, the income, expenses and profits of NanjiangTrading from the beginning of the current period to the date of cancellation were still included in the scope of consolidation. (2) Dongguan Dongfeng Power Tech. Co., Ltd. is a holding sub-subsidiary acquired on August 28, 2018. On December 25, 2018, Dongguan Dongfeng Tech. transferred it to the Company to become a holding subsidiary.
(3) Dongguan Haizhuo Energy Technology Co., Ltd. is a holding sub-subsidiary that increased its capital and shares on March 6, 2018.
1. Subsidiary newly included in consolidation scope in the period
|||
|-|-|
|Name|Causes|
|Dongfeng Power|Enterprise combined under the same control|
|Haizhuo Energy|Enterprise combined under the different control|

2. In the period, there were no new special purpose entity and operation entity that with control resulted through entrust operation or leasing newly included in consolidation scope
3. Subsidiary excluded in the consolidation scope in the period
|||
|-|-|
|Name|Causes|
|Nanjiang Trading|Disposal|

4. In the period, there were no special purpose entity and operation entity that with control resulted through entrust operation or leasing not included in consolidation scope any more
5. Specific change of the entity in consolidation scope found more in Change of Consolation Scope in Note VIII
IV. Basis of preparation of financial statements
1. Preparation basis
The Company conducts recognition and measurement according to actual occurrence of transactions and issues, pursuant to the Accounting Standards for Business Enterprises- Basic Standard and specific accounting principle as well as the application guidance for the accounting principles for enterprise, interpretation to the accounting principles for enterprise and other related requirements (hereinafter referred to as Enterprise Accounting Principles) issued by the ministry of finance, on that basis, combining the Information Disclosure Preparation Rules for Company Public Issuing Securities No.15-General Rules for Financial Report (amended in 2014) of the CSRC for statement preparation.
2. Going concern
We evaluated the sustainable management ability for 12 months since end of the period, and found out that there was a significant
doubt on sustainable management ability of the Runhua RW, listed in Note XII, while no impact on other entity in consolidation
scope. Therefore, the financial statement is prepared based on the continuing operation assumption
V. Major accounting policy and accounting estimation
Whether the company needs to comply with the disclosure requirements of the particular industry
Yes
Real estate industry
Notice of specific accounting policy and estimation:
1. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company meet the requirements of the Accounting Standards for Business Enterprises; truthfully and completely reflect the financial status, operation results and cash flow etc. of the Company.
2. Fiscal period
The fiscal year of the Company is from 1 January to 31 December on basis of Gregorian calendar.
3. Operating cycle
One operating cycle for the Company is from 1 January to 31 December in Gregorian calendar
4. Standard currency
The Company and its subsidiaries take RMB as the standard currency for bookkeeping.
5. Accounting treatment for business combinations under the same control and those not under the same control
1. If the terms, conditions, and economic impact of each transaction involved in business combination achieved in stages fall within one or more of the following situations, such transactions will be accounted for as a package deal:
(1) Such transactions are entered into simultaneously or in the case of considering the impact of each other;
(2) Such transactions as a whole in order to reach a complete business results;
(3) The occurrence of a transaction subject to that of at least one other transaction;
(4) One transaction alone is not economic, but otherwise when considered with other transactions.
2. Business combination under the same control
TheCompany’s assets and liabilities acquired in a business combination are measured by the book value in the consolidated financial statements of ultimate controlling party in accordance with the assets and liabilities (including the goodwill formed by the ultimate controllingparty’s acquisition to the combined party) of combined party on combining date. If there is balance between the book value of net assets obtained in merger and the book value of paid merger consideration (or total face value of issued shares), adjust the stock premium in capital reserve, and adjust the retained earnings if the stock premium in capital reserve is not enough for writing down.
If there is a contingent consideration needs to confirm the expected liabilities or assets, and there is balance between the expected liabilities or assets amount and the settlement amount of follow-up contingent consideration, adjust the capital reserve (capital
premium or stock premium), and adjust the retained earnings if the capital reserve is not enough.
As for business combination realized through numbers of transactions, and if these transactions belong to a bundle of transactions, then each of them shall be accounted as a transaction to acquire controlling right; and if not belong to a bundle of transactions, then the difference between the initial investment cost of the long term equity investment as of the date on which the Company obtains controlling right and the carrying value of the long term equity investment prior to combination plus the carrying value of the new consideration paid for further acquisition of shares as of the combination date shall be used to adjust capital reserve; in case of insufficient capital reserve, adjust retained earnings. For equity investment held prior to the combination date, the other comprehensive income recognized due to calculation by equity method or based on recognition and measurement principles for financial instruments would not be accounted for temporarily until the Company disposes of this investment on the same basis as the invested enterprise directly disposes of relevant assets or liabilities; other changes ofowners’ equity in the net assets of invested enterprise as recognized under equity method, except for net profit or loss, other comprehensive income and profit distribution, shall not be accounted for until being transferred to current profit or loss when this investment is disposed of.
3. Business combination not under the same control
An acquisition date represents the date when the Company obtains the actual control of the acquiree, which means the date when the net assets or the right of control in relation to production or operation decisions of the acquiree transfer to the Company. In general, the Company will be deemed to materialize transfer of right of control upon satisfaction of the following conditions:
①the contracts or agreements relating to business combination has been approved by the internal authority of the Company.②consent from the national competent authorities relating to business combination, if required, has been obtained.
③necessary property transfer procedure has been completed.
④the Company has paid a majority of the consolidated consideration, and it is capable of and scheduled to pay the outstanding balance.
⑤the Company has actually controlled the financing and operating policies of the acquiree, and is entitled to share relevant benefits and assume relevant risks.
The assets paid and liabilities occurred or assumed by the Company on the acquisition data as the consideration of the business combination shall be measured at fair value, and the difference between the fair value and its carrying value shall be included in profit or loss for the period.
The Company confirms the balance that the combined cost is greater than the fair value shares ofacquiree’s recognizable net assets obtained in the combination as the goodwill; the balance that the combined cost is less than the fair value shares ofacquiree’s net identifiable assets obtained in the combination is included in the currentprofit and loss after re-checking.
As for the business combination not under the same control realized through several exchange transactions step by step, part of the package deal, than carrying accounting treatment on transactions with controlling rights obtained through vary transactions; for equity investment held prior to combination date which is calculated under equity method, the sum between carrying value of the equity investment prior to acquisition date and cost of additional investment made on the acquisition date is deemed to be the initial investment cost of this investment. Other comprehensive income recognized for equity investment held prior to combination date under equity method shall be accounted for when the Company disposes of this investment on the same basis as the invested enterprise directly disposes of relevant assets or liabilities. In case that equity investment held prior to combination date is calculated based on recognition and measurement principles for financial instruments, then the fair value of this equity investment as of combination date plus new investment cost shall be deemed as initial investment cost. The difference between fair value and carrying value of the originally held equity interests and the accumulated fair value movements as originally recorded in other comprehensive
income shall be all transferred to investment income of the period in which the combination date falls.
4. Relevant expenses from combination
The intermediate expenses occurred for business combination such as audit, legal service and appraisal consultation expenses and other related expenses shall be recorded in current gains and losses when occurred; the trading expenses for equity securities offering shall be excluded while reckoned into equity transaction directly.
6. Methods for preparation of consolidated financial statements
1. Consolidated scope
The consolidation scope of the consolidated financial statements of the Company is fixed on the basis of control, and all subsidiaries (including the independent subject control by the Company) have been consolidated.
2. Consolidated procedure
Based on financial statements of its own and the subsidiaries, the Company establishes the consolidated financial statements according to other relevant data. The consolidated financial statements established by the Company regard the whole enterprise group as an accounting subject, and reflect the overall financial situation, operating results and cash flow of the enterprise group by the uniform accounting policies in accordance with the relevant confirmation, measurement and presentation requirements of accounting standards.
The accounting policies and accounting period adopted by the subsidiaries taken into account of the consolidation scope are in line with the Company. If it is not the same as the Company, necessary adjustments will be made when preparing consolidated financial statements according to the accounting policy and accounting period of the Company.
When consolidating financial statements, the Company shall offset all effects upon consolidated balance sheet, consolidated profit statement, consolidated cash flow statement and consolidated statement of changes in equity arising from the internal transactions between the Company and each subsidiary and between various subsidiaries. If there is difference between the point of view of consolidated financial statements ofenterprise group and the affirmation to the same transaction by taking the Company or its subsidiaries as the accounting subject, adjust the transaction from the enterprisegroup’s point of view.
The ownership interests of subsidiaries, current net profits or losses and shares of current comprehensive income belonging to minority shareholders are respectively and separately listed under the ownership interest item of consolidated balance sheet, the net profit item of consolidated profit statement and the total comprehensive income item. The balance that the current losses shared by the subsidiary's minority shareholders is greater than the shares in the ownership interests held by the minority shareholders in the beginning period of this subsidiary offsets against the minority stockholders' interests.
For the subsidiaries acquired through business combination under the same control, take the fair value of its assets and liabilities (including the goodwill formed by the ultimate controllingparty’s acquisition to the combined party) in the financial statements of ultimate controlling party as a basis to adjust its financial statements.
For the subsidiaries acquired through business combination not under the same control, take the fair value of net identifiable assets on acquisition date to adjust its financial statements.
(1) Increase subsidiaries or businesses
During the reporting period, if there are subsidiaries or businesses increased by the business combination under the same control, adjust the opening balance of consolidated balance sheet; include the income, expenses and profits of the subsidiaries or business combination from the beginning of the period to the end of the reporting period into the consolidated profit statement; include the cash flow of the subsidiaries or business combination from the beginning of the period to the end of the reporting period into the consolidated statement of cash flows, adjust the relevant items of comparative statements at the same time, and regard that the reporting entity after combination has been exiting since the ultimate controller starts controlling.
If the control can be implemented to the invested enterprises under the same control due to the additional investment, it can be regarded that all partied in the combination can be adjusted when the ultimate controller starts controlling, i.e. by the current status and existence. For the equity investment held before obtaining thecontrol power of combined party, the relevant profit and loss, other comprehensive income and other changes in net assets from the later date between the acquisition date of original stock right and the
date when the combining party and combined party are under the same control to the combination date respectively offset against the retained earnings at the beginning of the period or the current profit and loss in the comparative statement period.
During the reporting period, if there are subsidiaries or businesses increased by the business combination not under the same control,don’t adjust the opening balance of consolidated balance sheet; include the income, expenses and profits of the subsidiaries or business combination from the purchase date to the end of the reporting period into the consolidated profit statement; include the cash flow of the subsidiaries or business combination from the purchase date to the end of the reporting period into the consolidated statement of cash flows.
If the control can be implemented to the invested enterprises not under the same control due to the additional investment, the Company re-measures the stock right of acquiree held before the purchase date according to the fair value of this stock right on the purchase date, the balance between fair value and its book value is included in the current investment income. Other comprehensive income that the stock right of acquiree held before the purchase date involving in equity methodbusiness accounting and otherchanges in ownership interest except for net profit or loss, other comprehensive income andprofits distribution, together with its relevant other comprehensive income and other changes in ownership interest are transferred into the current investment income attributable to the purchase date, besides the other comprehensive income generated by the changes in thenet indebtedness and net assets re-measured and defined benefit plans by invested enterprises.
(2) Disposal of subsidiaries or businesses
1) General approaches
During the reporting period, if the Company disposes a subsidiary or business, the income, expense and profit of this subsidiary or business from the beginning of the period to the disposal date are included in the consolidated income statement; the cash flow of this subsidiary or business from the beginning of the period to the disposal date are included in theconsolidated statement of cash flows. When control power over invested enterprises are lost due to disposal of some equity investment or other reasons, the Company re-measure the remaining equity investment after disposal in accordance with its fair value on the date to lose the control power. The balance by subtracting the sum of consideration obtained by disposing stock right and fair value of residual equity from the sum of the shares of net assets continuously calculated according to the original shareholding ratio since the purchase date or combination date of the original subsidiary and the goodwill are included in the investment income of the current period of losing control power. Other comprehensive income related to the equity investment of original subsidiary and other changes in ownership interest except for other net profit and loss, other comprehensive income and profits distribution are transferred into current investment income when losing the control power, besides the other comprehensive income generated by the changes in thenet indebtedness and net assets re-measured and defined benefit plans by invested enterprises.
2) Dispose subsidiaries step by step
Dispose a subsidiary'sequity investment until losing the control power step by step through multiple transactions, if the terms, conditions and economic impact of the disposal to various transactions of the subsidiary's equity investment conform to following one or various conditions, it means that the multiple transactions should have accounting treatment as a package deal:
A. These transactions are made by considering eachother’s impacts;
B. These transactions can only reach a complete business result as a whole;
C. The occurrence of one transaction depends on the occurrence of at least one other transaction;
D. One transaction alone is not economical, but it is economical when it is considered together with other transactions.
The various transactions that dispose a subsidiary'sequity investment until losing the control power belong to a package deal, the Company handles accounting treatment to various transactions by taking them as a transaction disposing a subsidiary'sequity investment and losing the control power; however, the balance between every disposal price before losing control power and net asset shares of the subsidiary corresponding to disposal of investment should be confirmed as other comprehensive income in the consolidated financial statements and transferred into the profit and loss of the current period of losing control power when losing the control power.
The various transactions that dispose a subsidiary'sequity investment until losing the control power anddon’t belong to a package deal, before losing control power, are handled with accounting treatment according to relevant policies which used to partly dispose
the subsidiary'sequity investment on the condition of not losing the control power; when losing the control power, they are handled with accounting treatment according to the general handling methods used to dispose the subsidiary.
(3) Purchase the minority shareholding of a subsidiary
If there is balance between theCompany’s long-term equity investment newly obtained by purchasing the minority shareholding and the net asset shares of the subsidiary continuously calculated from the acquisition date (or combination date) according to thenewly increasedshareholding ratio, adjust the capital stock premium in capital reserve onconsolidated balance sheet, if the capital stock premium in capital reserve is not enough for offset, adjust the retained earnings.
(4) The partial disposal of equity investments in subsidiaries without losing the control power
If there is balance between the disposal price obtained by the partial disposal of long-term equity investments in subsidiaries without losing the control power and the net asset shares of the subsidiary continuously calculated from the acquisition date or combination datecorresponding to the disposal of long-term equity investments, adjust the capital stock premium in capital reserve onconsolidated balance sheet, if the capital stock premium in capital reserve is not enough for offset, adjust the retained earnings.
7. Classification of joint arrangement and accounting for joint operations
1. Classification of joint arrangement
The Company classifies joint venture arrangement into joint operations and joint ventures based on the structure, legal form, agreed terms of the arrangement and other related facts and conditions.
Joint venture arrangement not concluded through separate entity is classified as joint operation; and those concluded through separate entity are generally classified as joint ventures. However, joint venture arrangement which meets any of the following conditions as proven by obvious evidence and satisfies relevant laws and rules is grouped as joint operation:
1. The legal form of the arrangement shows that parties to the arrangement are entitled to and assume rights and obligations in respect of the relevant assets and liabilities.
2. It is agreed by the terms of the arrangement that parties to the arrangement are entitled to and assume rights and obligations in respect of the relevant assets and liabilities.
3. Other related facts and conditions show that parties to the arrangement are entitled to and assume rights and obligations in respect of the relevant assets and liabilities. For instance, joint parties are entitled to almost all the output related to joint venture arrangement and settlement of the liabilities under the arrangement continues to rely on supports from the joint parties.
2. Accounting for joint operations
The Company recognizes its proportion of interests in joint operation as related to the Company, and accounts for under relevant business accounting principles:
1. To recognize separately-assumed liabilities and jointly-assumed liabilities under its proportion;
2. To recognize revenue from disposal of the output which the Company is entitled to under the proportion;
3. To recognize separately-held assets and jointly-held assets under its proportion;
4. To recognize revenue from disposal of the output under the proportion;
5. To recognize separately occurred expenses, and to recognize expenses occurred for joint operations under its proportion.
For injection to or disposal of assets of joint operations (other than those assets constituting business operation), gain or loss arising from the transaction is only recognized to the extent it is attributable to other parties to the joint operation before the joint operation is sold to any third party. In case those assets injected or disposed satisfy the condition for asset impairment loss under Business Accounting Principle No.8-Assets Impairment, the Company recognizes this loss in full.
For acquisition of assets from joint operations (other than those assets constituting business operation), gain or loss arising from the transaction is only recognized to the extent it is attributable to other parties to the joint operation before the relevant assets are sold to any third party. In case that the acquired assets satisfy the condition for asset impairment loss under Business Accounting Principle No.8-Assets Impairment, the Company recognizes relevant loss according to the proportion it assumes.
The Company exercises no common control over joint operations. If the Company is entitled to relevant assets of the joint operation
and assure relevant liabilities, it shall be accounted for under the above principle, otherwise it would be accounted for under the relevant business accounting principles.
8. Recognition standards for cash and cash equivalents
When preparing cash flow statement, the Company recognized the stock cash and deposits available for payment at any time as cash, and investments featuring with the following four characters at the same time as cash equivalents: short term (expire within 3 months commencing from purchase day), active liquidity, easy to convert to already-known cash, and small value change risks.
9. Foreign currency business and conversion of foreign currency statement
1. Foreign currency business
For the foreign currency business, the Company converts the foreign currency into RMB for book-keeping based on spot exchange rate at date of trading occurred while initially recognized.
On balance sheet date, balance of foreign currency monetary items shall be converted based on the spot rate as at the balance sheet date, and the arising exchange difference shall be recorded in current gains and losses other than those arising from the special foreign currency borrowings related to purchasing assets qualifying for capitalization which is treated under the principle of borrowing expense capitalization. As for the foreign currency non-monetary items measured in historical cost, conversion is still conducted with the spot rate as at the transaction date, without any change to its functional currency.
As for the foreign currency non-monetary items measured in fair value, conversion is conducted with the spot rate as at the date for determination of fair value, and the arising exchange difference shall be recorded in current gains and losses as the changes of fair value. if the foreign currency non-monetary items belong to foreign currency available for sale, the arising exchange difference shall be recorded in other comprehensive income.
2. Translation of foreign currency financial statement
Assets and liabilities in balance sheet are translated at the spot exchange rate at the balance sheet date. Equity items, excluding―undistributedprofit‖, are translated at the spot exchange rates at the transaction dates. As for those translated at the spot exchange rates at the transaction dates or those recognized in line with the reasonable method in system, translated at the similar exchange rate as at the transaction date. The resulting translation differences are recognized in other comprehensive income.
When disposing overseas operations, the foreign currency financial statement translation differences listed under items of other comprehensive income in balance sheet and which are directly related to the overseas operations are transferred to profit or loss in the period when the overseas operation is disposed; In case of partial disposal or the overseas business, which has lower operation ratio overseas without operation controlling loss due to other reason, the translation differences related to disposal part shall including in equity of minority shareholders, no need to transfer into current gains/losses. In case of partial disposal of associated or joint venture, foreign currency translation differences shall be calculated in respect of the disposed part under disposal proportion and transferred to profit or loss in the period when the overseas operation is disposed.
10. Financial instruments
Financial instruments include financial assets, financial liabilities and equities instruments.
1. Categories of financial instruments
According to the contract terms of the financial instrument issued and economic substance reflects by such instrument, not only in form of law, combine with purposes held for financial assets and liabilities, the management categorizes financial assets and liability into different types at the time of initial confirmation: financial assets (or financial liabilities) at fair value through current gains and losses; accounts receivable; financial assets available for sale; other financial liabilities, etc.
2. Recognition and measurement for financial instrument
(1) Financial assets or liabilities at fair value through profit or loss
Financial assets or liabilities at fair value through profit or loss include transaction financial assets or financial liabilities and financial assets or liabilities directly designated at fair value through profit or loss.
Transaction financial assets or financial liabilities refer to those meeting any of the following conditions:
1) Purpose for holding the assets or liabilities are to disposal, repurchase or redemption in a short time;
2) Constitute part of the identifiable financial instrument group for central management, and there is objective evidence proving that the Company manages this group in a short-time-return way recently;
3) Belong to derivative financial instrument, other than those derivatives designated as effective hedge instruments, belonging to financial guarantee contracts and those linked to equity instrument investment which is not quoted in an active market and whose fair cannot be measured reliably and the settlement of which is conditional upon delivery of the equity instrument.
Subject to satisfaction of any of the following conditions, financial assets or liabilities can be designated as financial assets or liabilities at fair value through profit or loss upon initial measurement:
1) The designation can eliminate or substantially eliminate the inconsistencies between profit or loss from the financial assets arising from different measurement basis;
2) The portfolio of financial assets and liabilities in which the financial asset belongs to are designated as measured at fair value in the risk management report or investment strategic report handed in to key management personnel;
3) Hybrid instruments which contains one or more embedded derivatives, unless the containing of embedded derivatives does not have substantial effect on the cash flows of the hybrid instruments, or the embedded derivatives obviously should not be separated from relevant hybrid instruments;
4) Hybrid instruments which contains embedded derivatives that should split, but cannot be measured separately when acquired or on the subsequent balance sheet date.
Amount is initially measured by the sum of fair value (deducted bond interest expired without received) while obtained and relevant transaction expenses.
Interest or cash dividend in period of holding shall be recognized as investment income, and reckoned into current gains/losses with the variation of fair value at period-end.
In case of disposal, the difference between the amount while obtained and book value of the investment shall reckon into investment income, and gains/loses of variation of the fair value shall be adjusted correspondingly.
(2) Account receivables
Account receivables refers to the non-derivative financial assets in active market, which has no quoted but has fixed amount or amount can be determined in collection.
The contract price charged to the buyers shall be recognized as initial value for those account receivables which mainly comprise the receivablecreditor’s right caused by the sale of goods and providing of labor service to external customers by the Company, and receivables in other companies excluding debt instruments priced in active markets, includes but not limited to trade receivables, notes receivables, account paid in advance and other receivables. If characterized as of financing nature, the initial recognition shall be priced at the present value.
Upon disposal, the difference between the sale value and the book value of the receivables shall be accounted into current profit or loss on its recovery or disposal.
(3) Held-to-maturity investment
The non-derivative financial assets with maturity date, fix return amount or amount able to determined, and the Company held with specific intention and ability.
The Company takes the sum of fair value (after deducting bond interests which is due for interest payment but not received) and related transaction fee as initial recognition amount in respect of held-to-maturity investment upon acquisition of the investment. During the holding period, the Company recognizes interest income at amortized cost and effective interest rate which is included in investment income. The effective interest rate is determined upon acquisition of the investment and remains unchanged for the
expected continuous period or appropriate shorter period. Difference between sale price and carrying value of the investment is included in investment income.
If held-to-maturity investment is disposed or reclassified as other types of financial asset, and the relevant amount is relatively bigger than the total amount of our all held-to-maturity investments prior to disposal or reclassification, the remaining held-to-maturity investments shall be reclassified as available-for-sale financial assets immediately following such disposal or reclassification. On the reclassification date, difference between the carrying value and fair value of the investment is included in other comprehensive income and is transferred out into current profit or loss when the available-for-sale financial assets experience impairment or derecognition. However, the followings are exceptions:
1) The date of disposal or reclassification is approaching to the date of expiration or redemption of the investment (such as three months prior to expiration), and change of market rate has no material influences over the fair value of the investment.
2) Company has already recovered nearly all initial principal under the repayment means as agreed in contract.
3) Disposal or reclassification is arising from separate matters which are out of our control, which are expected not to occur repeatedly and which are difficult to predict reasonably.
(4) Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale upon initial recognition and financial assets other than other categories of financial assets.
The Company initially measures available-for-sale financial assets at the sum between their fair values when acquiring the assets or liabilities (after deducting cash dividend already declared but not paid or bond interests which is due for interest payment but not received) and the relevant transaction fee.
Interest or cash dividend acquired during the holding period shall be recognized as investment income. Gains or losses arising from movement of fair value is directly included in other comprehensive income except for impairment loss and exchange difference arising from foreign currency monetary financial assets.
When disposing available-for-sale financial assets, the Company includes the difference between the acquired price and carrying value of the financial assets into investment profit or loss. Meanwhile, accumulated fair value movement attributable to the disposed part which is originally directly included in other comprehensive income is transferred out and included investment profit or loss. For equity instrument investment which is not quoted in an active market and whose fair value cannot be reliably measured, and derivative financial assets which are linked to the equity instrument and whose settlement is conditional upon delivery of the equity instrument, they are stated at cost by the Company.
(5) Other financial liabilities
Initial recognition amount is determined at the sum of fair value and relevant transaction fee. Subsequent measurement is conducted at amortized cost.
(6) Held-to-maturity investment for sales or reclassify as financial assets available for sale:
In case that the amount of held-to-maturity investments disposed or reclassified into other categories of financial assets is greater than the total amount of all the held-to-maturity investment of the Company before the disposal or reclassification, the remaining held-to-maturity investment shall be recorded as financial assets available for sale immediately after such disposal or reclassification, unless:
1) The date of disposal or reclassification is relatively close to the maturity date or redemption date of the investment (such as three months before expiration), and change of market rate has no material affects on the fair value of the investment.
2) The enterprise has nearly recovers the entire initial principal under the payment method as agreed by contract.
3) The disposal or reclassification is due to such independent matter that the enterprise is not able to control, will not happen again as expected and can not predicted reasonably.
3. Confirmation evidence and measurement methods for transfer of financial assets
When transfer of financial assets occurs, the Company shall stop recognition of such financial assets if all risks and remunerations related to ownership of such financial assets have almost been transferred to the receiver; while shall continue to recognize such financial assets if all risks and remunerations related to ownership of such financial assets have almost been retained.
When judging whether or not the aforesaid terminal recognition condition for financial assets is arrived at for transfer of financial assets, the Company generally adopts the principle that substance overweighs format. The Company divides such transfer into entire transfer and part transfer. As for the entire transfer meeting condition for discontinued recognition, balance between the following two items is recorded in current gains and losses:
(1) Carrying value of financial assets in transfer;
(2) Aggregate of the consideration received from transfer and accumulative movements of fair value originally recorded inowners’ equity directly (applicable when financial assets involved in transfer belong to financial assets available for sale).
As for the part transfer meeting condition for discontinued recognition, entire carrying value of financial assets in transfer is shared by discontinued recognition part and continued recognition part, in light of their respective fair value. Balance between the following two items is recorded in current gains and losses:
(1) Carrying value of discontinued recognition part;
(2) Aggregate of the consideration of discontinued recognition part and amount of such part attributable to accumulative movements of fair value originally recorded inowners’ equity directly (applicable when financial assets involved in transfer belong to financial assets available for sale).
Financial assets are still subject to recognition if transfer of such assetsdoesn’t satisfy the condition for discontinued recognition. And consideration received is recognized as financial liability.
4. De-recognition condition for financial liability
As for the financial liabilities with its whole or part present obligations released, the company shall de-realize such financial liabilities or part of it. if the company enters into agreement with its creditor to substitute for the existing financial liabilities by means of assuming new financial liabilities, then the company shall de-realize the existing financial liabilities and realize the new financial liabilities provided that the contract clauses of the new and the existing financial liabilities are different in substance. If the company makes substantial amendment to the whole or part contract clauses of the existing financial liabilities, it shall de-realize the existing financial liabilities or part of it. Meanwhile, the financial liabilities with amendment to its clauses shall be realized as new financial liabilities.
In case of derecognizing of financial liabilities in whole or part, the difference between the carrying value of such de-realized financial liabilities and consideration paid (including the non-cash assets exchanged or new financial liabilities assumed) shall be recorded in current gains and losses.
In case that the company repurchases part of financial liabilities, based on the comparative fair value of the continuing recognition part and the derecognizing part, the company shall allocate the carrying value of the financial liabilities in whole on the repurchase date. Difference between the carrying value allocated to the derecognizing part and the consideration paid (including the non-cash assets exchanged or new financial liabilities assumed) shall be recorded in current gains and losses.
5. Determination method for fair value of financial assets and financial liabilities
As for the financial assets or financial liability for which there is an active market, the quoted prices in the active market shall be used to determine the fair value thereof; the quoted prices in the active market refers to the prices, which are easily available from the stock exchanges, brokers, industry associations, pricing service institutions and etc. at a fixed term, and which represent the prices at which actually occurred market transactions are made under fair conditions.
As for the financial assets and financial liabilities measured by fair value and in case that there are active market for those assets and liabilities, then the fair value shall be determined based on the quotation on active market; as for the financial assets initially acquired or financial liabilities assumed, their fair value are determined based on the market transaction prices; in case that there are no such active market for financial assets and financial liabilities, the fair value shall be determined by evaluation technology. At time of evaluation, the applicable evaluation technology, in the prevailing circumstance, and those have available date and other information supporting shall be adopted, choose the input value, same with the assets or liability features that consider in transaction by market participants, and use the relevant observable input values as far as possible. Use the un-observable input values when relevant observable input values unable to obtained or obtained without feasible.
6. Provision of impairment reserve for impairment of financial assets (excluding account receivables)
The company reviews the carrying value of the financial assets (excluding those measured by fair value and the change thereof is recorded in current gains and losses) on the balance sheet date, if there is objective evidence showing impairment of the financial assets, it shall provide impairment reserve.
Objective evidence that a financial asset is impaired includes the following observable events:
1.Significant financial difficulty of the issuer or debtor;
2.A breach of contract by the borrower, such as a default or delinquency in interest or principal payments;
3.The creditor, for economic or legal reasons relating to theborrower’s financial difficulty, granting a concession to the borrower; 4.It becoming probable that the borrower will enter bankruptcy or other financial reorganizations;
5.The disappearance of an active market for that financial asset because of financial difficulties of the issuer;
6.Observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the group, including: adverse changes in the payment status of borrowers in the group, an increase in the unemployment rate in the country or geographical area of the borrowers, a decrease in property prices for mortgages in the relevant area, or adverse changes in industry conditions that affect the borrowers in the group;
7.Significant adverse changes in the technological, market, economic or legal environment in which the issuer operates, indicating that the cost of the investment in the equity instrument may not be recovered by the investor;
8.A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost;
Details for impairment of financial assets are set out below:
(1) Impairment provision for available-for-sale financial assets
The Group has separately tested various available-for-sale equity instruments at the balance sheet date. It will be defined as impairment if the fair value is lower than the initial investment cost by more than50% (including50%) or the low state has lasted for no less than 1 year. While the lower proportion is between20% and50%, the Group will take other factors such as price fluctuation into consideration to estimate whether the equity instrument has impaired or not.
Cost stated in the above paragraph is determined based on the initial acquisition cost of available for sale equity instrument investment less recovered principal and amortized amount as well as impairment loss originally included in profit or loss; fair value is determined at the closing price quoted on stock exchange at period end, unless the available for sale equity instrument investment is limited for sale for certain periods. For available for sale equity instrument investment which is limited for sale for certain periods, fair value is determined at the closing price quoted on stock exchange at period end less the compensation required by market participator who would otherwise assume risks due to impossibility of selling the equity instrument on open market in designated period.
When an available-for-sale financial asset is impaired, the cumulative loss arising from decline in fair value that had been recognized in other comprehensive income is reclassified to the profit or loss even though the financial asset has not been derecognized. The amount of the cumulative loss that is removed from equity is the difference between the acquisition cost (net of any principal repayment and amortization) and current fair value, less any impairment loss on that financial asset previously recognized in profit or loss.
If there are objective evidences showing that the value of available-for-sale debt instrument is recovered and it relates to the matters happened after the impairment loss recognition, the impairment loss recognized shall be reversed and accounted in current profit or loss. Impairment losses recognized for equity instrument investments classified as available-for-sale are reversed through equity. However, impairment loss occurred by equity instrument investment which is not quoted in an active market and whose fair value cannot be measured reliably and derivative financial assets which are linked to the equity instrument and whose settlement is conditional upon delivery of the equity instrument, shall not be reversed.
(2) Impairment provision for held-to-maturity investment
For held-to-maturity investment, if there is object evidence showing the investment is impaired, then impairment loss is determined based on the difference between its fair value and present value of predicted future cash flow. After provision, if there is evidence showing its value has been restored, the originally recognized impairment loss can be reversed and included in current profit or loss,
provided that the reversed carrying value shall not exceed the amortized cost of the financial asset as at reversal date assuming no impairment provision had been made.
7. Offset of financial assets and financial liabilities
Financial assets and financial liabilities are stated in balance sheet separately without inner-offset. However, the net amount after inner offset is stated in balance sheet date when the following conditions are all met:
(1) The Company has legal right to offset recognized amount and the right is enforceable;
(2) The Company plans to settle on a net basis, or simultaneously realize the financial assets and settle the financial liabilities. 11. Note receivable and account receivable
(1) Account receivable with single significant amount and withdrawal single item bad debt provision
|||
|-|-|
|Determine basis or amount standards for single significant||
||Account with single significant amount not less than RMB one million|
|amount||
||Conducted impairment testing separately, balance between the|
||present value of future cash flow and its carrying value, bad debt|
|Withdrawal method for bad debt provision of account receivable||
||provision withdrawal and reckoned into current gains/losses.As|
|with single significant amount:||
||for the receivable without impairment being out in test, accrual|
||bad debt provision in corresponding group|

(2) Accounts receivable whose bad debts provision was accrued by combination of credit risk characteristics portfolio
|||
|-|-|
|Portfolio|Methods on withdrawal of bad debt provision|
|Aging analysis|Age analysis method|
|Related parties within the consolidation scope|Other method|
|Risk-less|Other method|

Accrued for provision of bad debt by aging analysis method in portfolio:
√Applicable□ Not-applicable
||||
|-|-|-|
|Account age|Accrual ratio for account receivable|Accrual ratio for other account receivable|
|Within one year (one year included)|5.00%|5.00%|
|1－2 years|20.00%|20.00%|
|2－3 years|50.00%|50.00%|
|Over 3 years|100.00%|100.00%|

 Accrued for provision of bad debt by balance proportion method in portfolio:
□Applicable√ Not-applicable
Accrued for provision of bad debt by other method in portfolio:
√Applicable□ Not-applicable
||||
|-|-|-|
|Combination|Accrual ratio for account receivable|Accrual ratio for other account receivable|
|Related parties within the consolidation|0.00%|0.00%|

||||
|-|-|-|
|scope|||
|Risk-less|0.00%|0.00%|

 (3) Accounts receivable with single significant amount and bad debts provision accrued individually
|||
|-|-|
||There is an objective evidence of impairment which is probably|
||about to occurred, such as revocation from the debtor,|
|Reasons for withdrawal single item bad debt provision|bankruptcy or dead, and still able to recover after liquidated by|
||the bankruptcy property or heritage as well as serious insufficient|
||cash flow etc.|
||For those account receivable with objective evidence of|
||impairment been found, separated them from the relevant groups|
||for impairment testing independently, and impairment losses|
|Withdrawal method for bad debt provision||
||shall recognized and withdrawal bad debt reserves on the|
||difference between the present values of estimated future cash|
||flow which is lower than its carrying value,|

12. Inventory
Whether the company needs to comply with the disclosure requirements of the particular industry
Yes
Real estate industry
1. Classification of inventories
Inventories are categorized into development cost, development products, relocation housing animals& plants aquaculture plant products, finished goods of polyethylene and low value consumables etc.
2. Valuing of inventory
The Company adopts the historical cost for obtaining or the planned cost to value the inventory according to its actual situation, and specific identification method for the development projects.
Specific valuation method for consumptive biological assets found more in the biological assets listed in Note IV(18)
3. Confirmation of net realizable value for the inventory and provision for inventory impairment
The ending inventory is measured at the lower of cost and net realizable value. Provision for impairment of inventory is determined at the excess amount of the single cost of the inventory over its net realizable value. Net realizable value is determined based on the estimated selling price in the ordinary course of business, less the estimated costs to completion and estimated costs necessary to make the sale and related taxes.
In case the influencing factor for write-down of the inventory values has disappeared, the amount which has been written down can be recover, and shall switch back within the inventory falling price reserves which has been accrual originally, the amount switch back shall reckoned into current gains/losses.
4. Inventory System
Perpetual inventory system
5. Amortization method for low-value consumables and wrappage
(1) Low-value consumables are amortized on one-off amortization method
6. Relocation housing refers to the house for turnover purpose to arrange for relocation of residents, and amortized evenly in
50 years.
7. Calculation method of the lands for development purpose
As for the pure land development project, the costs constitute costs of the land development; the project develops along with the real estate, costs with clear burden of objects shall split into commercial house costs with actual area.
8. Calculation method of the expenses of public supporting facilities
Public supporting facilities cannot be transfer with compensation: reckoned into commercial house costs by the benefit ratio; Public supporting facilities can transfer with compensation: take all supporting facilities as the cost calculation subject, summarize the costs occurred.
9.Accounting for maintenance funds
According to the relevant provisions at the location of the developed projects, the maintenance funds should be collected from the house buyer or withdrawn and stated by the Company as development costs of relevant developed projects at the time of sale (presale) of the developed projects and uniformly turned in to the maintenance fund management department.
10.Accounting for quality assurance funds
The quality assurance funds should be deducted from the project payment for the construction unit according to the construction contracts. Maintenance expense incurred in the warranty period of the developed projects should be written down by the quality assurance funds. The balance of the quality assurance funds should be returned to the construction unit upon expiry of the specified warranty period of the developed projects.
13. Assets held for sale
1. Recognition criteria of assets held for sale
The non-current asset will recognize as held-for-sale while satisfied the followed conditions simultaneously:
(1)immediate sale is available under the existing status based on the conventional practice for sale of such kind of assets or disposal group in similar transaction;
(2)The sale is likely to occur, that is, the Company has made resolution on the selling plan and obtained approval from regulatory department (if applicable) and obtained definite purchase commitment, the selling is estimated to be completed within one year. Definite purchase commitment means a binding purchase agreement entered into by the Company and other parties, which contains transaction price, time and adequately strict punishments for breach of contract provisions, which renders the possibility of material adjustment or revocation of the agreement is extremely minor.
2. Accounting for assets held for sale
The Company makes no provision for depreciation or amortization for non-current assets or disposal group held for sale. For non-current asset or disposal group held for sale, for which it is found that the carrying value is higher than its fair value less disposal expense, the carrying value shall be deducted to the net amount of fair value less disposal expense, and the reduced amount shall be recognized as impairment loss in profit or loss for the period, and provision of impairment of assets held for sale shall be provided for accordingly.
As for non-current asset or disposal group classified as held for sale on the acquisition data, they are measured at the lower of their initial measurement amount and the net amount after their fair value less the selling expenses based on the assumption that such non-current assets or disposal group are not classified as held for sale at the time of initial measurement.
The above principle applies to all the non-current assets, other than investment property subsequently measured at fair value, biological assets measured at the net amount of fair value less selling expense, assets formed from staff remuneration, deferred income tax assets, financial assets regulated by financial instrument related accounting standards and right arising from insurance contract regulated by insurance contract related accounting standards.
14. Long-term equity investment
1. Recognition of investment cost
(1) As for the long-term equity investment formed from business combination under the same control, accounting policy found in (IV) Accounting method for business combination (not) under the same control of Note IV
(2) Long-term equity investment obtained by other means
For long-term equity investments obtained through payment with cash, then the actual payment shall be viewed as initial investment cost. Initial investment cost including the expenses, taxes and other necessary costs that directly concerned with the long-term equity investment that acquired.
For long-term equity investments obtained through issuance of equity securities, then the fair value of such securities shall be viewed as initial investment cost; for transaction expenses from issuing or own equity instrument acquired, it can be deducted from the equity when such expenses attributable directly to equity transaction.
Under the precedent condition that non-monetary assets exchanges are featured with commercial nature and fair values of exchange-in or exchange-out assets can be reliably measured, long-term equity investment exchange-in through non-monetary assets exchange shall be recognized with initial investment cost on the basis of the fair value of the assets exchange-out, unless there is obvious evidence showing that fair value of exchange-in assets is more reliable; as for non-monetary assets exchanges not satisfying such precedent condition, initial investment cost of exchange-in long-term equity investment falls to the carrying value of exchange-out assets and relevant taxes payable.
For long-term equity investments obtained through debt reorganization, its initial investment cost is recognized based on fair value. 2. Subsequent measurement and recognition of gains and losses
(1) Cost method
The long-term equity investment control by invested entity shall counted by cost method, and pricing on initial investment cost, cost of the long-term equity investment shall be adjusted while additional investment or dis-investment.
Other than payment actually paid for obtaining investment or cash dividend or profit included in consideration which has been declared while not granted yet, the Company recognizes investment income according to its share in the cash dividend or profit declared for grant by the invested unit.
(2) Equity method
The Company calculates long term equity investment in associates and joint ventures under equity method. For certain equity investments in associates indirectly held through risk investment institutions, joint funds, trust companies or similar entities including investment linked insurance fund, the Company measures the investment at fair value through profit or loss.
Where the initial investment cost of a long-term equityinvestment exceeds theGroup’s share of the fair value of the investedenterprise’sidentifiable net assets at the time of acquisition, no adjustment is made to theinitial investment cost. Where the initial investment cost is less than theGroup’sshare of the fair value of the investedenterprise’s identifiable net assets at the time ofacquisition, the difference is recognized in profit or loss for the period.
Return on investments and other comprehensive income is recognized respectively by shares of net gains and losses realized by the invested company and other comprehensive income after acquisition of long-term equity, and book value of such investment is adjusted accordingly. Profit or cash dividends pro rata distributed by the invested company are to minus book value of the relative long-term investment.Book value of long-term investment is adjusted when changes occur other than net gains and losses, other comprehensive income and profit distribution of the invested company, and is to reported inowners’ equity accordingly
The Company should recognized net profit of invested unit after adjustment, based on fair value of vary identifiable assets of invested unit while obtained investment, while recognized net profit or net losses of invested units that should be enjoy by investment enterprise. the un-realized transaction gains/losses attributable to investment enterprise, internally occurred between the Company, affiliated units and joint-ventures should calculated by proportion of shares-holding which should be offset, than recognized investment gains/losses.
When the Company is confirmed to share losses of the invested units, the following order shall prevail for disposal: first of all, offset carrying value of long-term equity investment. Second, for long-term equity investment whose carrying value is not enough for offset, investment loss should be continued to recognize within the limit of carrying value of other long-term equity which substantially forms net investment to invested units, to offset carrying value of long-term items receivable. At last, after the aforesaid treatment, if enterprise still bears additional duties according to investment contract or agreement, projected liabilities are recognized in accordance to the obligations which are expected to undertake, and then recorded in current gains and losses.
In the event that the invested unit realizes profit in later periods, the Company will adopt disposal adverse to the above order after deduction the unrecognized share of loss, i.e. write off the carrying value of the recognized projected liabilities, recover carrying value of long-term equity which substantially forms net investment to invested unit and long-term equity investment, and recognize investment income at the same time.
3. Transfer of calculation for long term equity investment
(1) Measure at fair value transfer to equity method
For the equity investment originally held by the Company in which it has no control, common control or significant influence over the invested enterprise and which is accounted for under recognition and measurement principle as financial assets, in case that the Company becomes able to exercise significant influence or common control upon the invested enterprise due to additional investment while no control is reached, the sum of fair value of the originally held equity investment as determined under Accounting Standards for Business Enterprise No.22- Recognition and Measurement of Financial Instrument plus cost of the new investment shall be deemed as the initial investment cost upon calculation under equity method.
If the originally held equity investment is classified as available for sale financial assets, the difference between its fair value and carrying value and the accumulated fair value movement which is originally included in other comprehensive income shall be transferred to current period gains and losses under equity method.
In case that the initial investment cost under equity method is lesser than share of fair value of the investedenterprise’s net identifiable assets as of the date when additional investment is made as calculated based on the latest shareholding proportion upon additional investment, carrying value of the long term equity investment shall be adjusted against such difference which is included in current period non-operating income.
(2) Measure at fair value or calculation under equity method transfer to calculation under cost method
For the equity investment originally held by the Company in which it has no control, common control or significant influence over the invested enterprise and which is accounted for under recognition and measurement principle as financial instrument, or for long term equity investment originally held in associates or joint ventures, in case that the Company becomes able to exercise control over invested enterprise not under common control due to additional investment, the sum of fair value of the originally held equity investment plus cost of the new investment shall be deemed as the initial investment cost upon calculation under cost method when preparing separate financial statement.
For other comprehensive income as recognized under equity method in respect of equity investment held prior to acquisition date, when the Company disposes this investment, the aforesaid income shall be accounted for on the same basis as the invested enterprise would otherwise adopt when it directly disposes relevant assets or liabilities.
For equity investment held prior to acquisition date which is accounted for under Business Accounting Principles No.22- Recognition and Measurement of Financial Assets, the accumulated fair value movement which originally included in other comprehensive income shall be transferred to current period gains and losses upon calculation under cost method.
(3) Calculation under equity method transfer to fair value measurement
In case that the Company lost common control or significant influence upon invested enterprise due to disposal of part equity investment, the remaining equity investment shall be calculated under Accounting Standards for Business Enterprise No.22- Recognition and Measurement of Financial Instrument, and the difference between its fair value and carrying value as of the date when the Company lost common control or significant influence shall be included in current period gains and losses.
For other comprehensive income as recognized under equity method in respect of the original equity investment, when the Company ceases calculation under equity method, the aforesaid income shall be accounted for on the same basis as the invested enterprise
would otherwise adopt when it directly disposes relevant assets or liabilities.
(4) Cost method transfer to equity method
In case that the Company lost control upon invested enterprise due to disposal of part equity investment, and if the remaining equity investment can exercise common control or significant influence over the invested enterprise, equity method shall be adopted when preparing separate financial statement, and the remaining equity investment shall be adjusted as if it had been stated under equity method since the acquisition.
(5) Cost method transfer to fair value measure
In case that the Company lost control upon invested enterprise due to disposal of part equity investment, and if the remaining equity investment cannot exercise common control or significant influence over the invested enterprise, Accounting Standards for Business Enterprise No.22- Recognition and Measurement of Financial Instrument shall be adopted for accounting treatment when preparing separate financial statement, and the fair value and carrying value as of the date when control is lost shall be included in current period gains and losses.
4. Disposal of long term equity investment
Difference between carrying value and actual acquisition price in respect of disposal of long term equity investment shall be included in current period gains and losses. For long term equity investment under equity method, the Company shall adopt the same basis as the invested enterprise directly disposes relevant assets or liabilities when disposing this investment, and account for the part originally included in other comprehensive income under appropriate proportion.
If the terms, conditions and economic impact of each transaction involved in the disposal by steps of investment in subsidiaries fall into one or more of the following situations, such transactions will be accounted for as a package deal:
1. Such transactions are entered into simultaneously or in the case of considering the impact of each other;
2. Such transactions as a whole in order to reach complete commercial results;
3. The occurrence of one transaction is subject to that of at least one other transaction;
4. A transaction alone is not economic, but otherwise when considered with other transactions.
Enterprises that lose control of their original subsidiaries due to the disposal of partial equity investment or otherwise, and therefore disqualify a package deal, should prepare the relevant accounting treatment in differentiation with individual financial statements and consolidated financial statement:
(1) In separate financial statement, as for disposal of equity interest, difference between carrying value and actual acquisition price shall be included in current period gains and losses. In case that the remaining equity interests can exercise common control or significant influence over invested enterprise, it shall be stated under equity method in stead, and shall be adjusted as if the remaining equity interests had been stated under equity method since the acquisition. In case that the remaining equity interests cannot exercise common control or significant influence over invested enterprise, it shall be accounted for under Business Accounting Principles No.22- Recognition and Measurement Principle of Financial Instruments, and the difference between its fair value and carrying value as of the date then the Company lost control shall be included in current period gains and losses.
(2) In consolidated financial statement, for those transactions occurred before lost of control in subsidiaries, the difference between disposal price and share of net assets of subsidiaries since purchase date or combination date shall be used to adjust capital reserve (equity premium), and if capital reserve is insufficient to offset, then it shall adjust retained earnings; when the Company lost control in a subsidiary, the remaining equity interests would be re-measured at the fair value as of the control-lost date. The sum of consideration gained from the disposal of equity and the fair value of remaining equity minus the share of net assets of original subsidiaries since the day of purchase and based on its original shareholding ratio is credited into investment gain for the current period, and off-set the goodwill at the same time. Other comprehensive income in relation to equity investments of original subsidiaries should be transferred to investment gain for the period at the time of loss of control.
Each transaction involved in the disposal of equity investments of subsidiaries until loss of control falls into a package deal, carrying accounting treatment on transaction of losing control rights and disposing the company, and should be accounted for accordingly in differentiation with individual financial statements and consolidated financial statements:
(1) In consolidated financial statements, difference between each payment from disposal of an equity and the book value of such
long-term equity investment before the loss of control should be recognized as other comprehensive income and at the time of loss of control, transferred to profit or loss for the current period.
(2) In consolidated financial statements, difference between each payment from disposal of a subsidiary and the share of its net assets through investment before the loss of control should be recognized as other comprehensive income and at the time of loss of control, transferred to profit or loss for the current period.
5. Criteria for common control and significant influence
Where the Company jointly controls an arrangement with other participators under agreed terms, and decisions which materially affect return of such arrangement can only exist when other participators unanimously agree on the decisions, the Company is deemed to jointly control this arrangement with other participators, and the arrangement belongs to joint venture arrangement. In case of a joint venture arrangement concluded through separate entity, when the Company is judged to be entitled to the net assets of the separate entity under relevant agreements, the entity shall be viewed as a joint venture under equity method. However, when the Company is judged to be not entitled to the net assets of the separate entity under relevant agreements, the entity shall be viewed as a joint operation, in which case, the Company recognizes items relating to its share of interests from the joint operation and accounts for according to relevant business accounting rules.
Significant influence refers to that investor has right to participate in making decisions relating to the financial and operational policies of the invested enterprise, while not able to control or jointly control (with others) establishment of these policies. The following one or more conditions are based to judge whether the Company has significant influence over invested enterprise with consideration of all facts and situations: (1) Has delegate in the board of directors or similar authority organs of invested enterprise; (2) Participate in establishing financial and operational policies of the invested enterprise; (3) Occur material transactions with the invested enterprise; (4) Delegate management to the invested enterprise; (5) Provide key technical data to the invested enterprise. 15. Investment real estate
Measurement model of investment real estate
Measure by cost
Depreciation or amortization method
Investment real estate is defined as the real estate with the purpose to earn rent or capital appreciation or both, including the rented land use rights and the land use rights which are held and prepared for transfer after appreciation, the rented buildings. Besides, in respect of any vacant building held by the Company ready for operation lease, if the Board passed a written resolution to expressly indicate that the building will be used for operation lease and the intention of such hold will not change in a short run, the building shall be presented as investment property either.
The investment property of the Company is accounted at its cost. Cost of investment property purchased from the external sources includes purchase payment, related taxes and other expenditures which can be directly attributable to such assets; Cost of investment property constructed by the Company comprise of the necessary expenditure occurred during the construction for reaching the condition of planned use.
Consequent measurement of investment estate shall be measured by cost method. Depreciation and amortization are provided to the buildings and land use right pursuant to the predicted service life and net rate of salvage value. The predicted service life and net rate of salvage value and annual depreciation (amortization) are listed as follows:
|||||
|-|-|-|-|
|Type|Expected operating life(year)|Predicted rate of net salvagevalue|Yearly depreciation(amortization)|
|Land Use Right|50|0%-10%|1.80%-2.00%|
|House and buildings|20-28|0%-10%|3.56%-4.50%|

When investment real estate turns to be used by holders, it shall switch to fixed assets or intangible assets commencing from the date
of such turning. And when self-used real estate turns to be leased out for rental or additional capital, the fixed assets or intangible
assets shall switch to investment real estate commencing from the date of such turning. In situation of switch, the carrying value before the switch shall be deemed as the credit value after the switch.
Indication of impairment is assessed, the recoverable amount shall be estimated and the impairment shall be recognizing while the recoverable amount lower than its book value.
Impairment loss once recognized shall not be reversed.
When investment is disposed, or out of utilization forever and no economic benefit would be predicted to obtain through the disposal, the Company shall terminate recognition of such investment real estate. The amount of income from disposal, transfer, discarding as scrap or damage of investment real estate after deducting theasset’ s carrying value and relevant taxation shall be written into current gains and losses.
16. Fixed asset
(1) Recognition
Fixed assets is defined as the tangible assets which are held for the purpose of producing goods, providing services, lease or for operation& management, and have more than one year of service life. Fixed assets should be recognized for qualified the followed conditions at the same time:
(1) It is probable that the economic benefits associated with the assets will flow into the Company; and
(2) The cost of the assets can be measured reliably.
2. Initial measurement of fixed assets
Fixed assets of the Company are initially measured at cost.
(1) The cost of purchased fixed assets includes the purchase price, import duties and other related taxes, and other expenses directly attributable to the assets before the fixed assets are ready for their intended use.
(2) The cost of self-constructed fixed assets consists of the necessary expenses incurred before the construction of the asset reaches its intended usable condition.
(3) The fixed assets invested by investors shall be recorded at the value agreed in the investment contract or agreement, but if the value agreed in the contract or agreement is not fair, it will be recorded at fair value.
(4) If the purchase price of the fixed assets has a delay in payment beyond the normal credit conditions and is of financing nature, the cost of the fixed assets shall be determined on the basis of the present value of the purchase price. The difference between the actually paid price and the present value of the purchase price shall be included in the current profit and loss during the credit period, except for the capitalization.
3. Subsequent measurement and disposal of fixed assets
(1) Depreciation of fixed assets
Depreciation of fixed assets is accrued based on the recorded valueminus the estimated net residual value within the expected useful lives. For fixed assets with impairment provision, the depreciation amount will be determined based on the book value after deducting the impairment provision in the future period and the remaining useful life.
For fixed assets formed by special reserve expenses, the special reserve is offset by the cost of forming fixed assets, and the accumulated depreciation of the same amount is confirmed, the fixed assets are no longer depreciated in the future period; the fixed assets that have been fully depreciated and continue to be used shall not be depreciated.
The company determines the service life and estimated net residual value of fixed assets based on the nature and use of fixed assets. At the end of the year, the service life of the fixed assets, the estimated net residual value and the depreciation method are reviewed. If there is a difference from the original estimate, the corresponding adjustments are made.
(2) Subsequent expenditure on fixed assets
Subsequent expenditures related to fixed assets that meet the conditions for recognition of fixed assets are included in the fixed assets
cost; and those do not meet the conditions for recognition of fixed assets are included in current profit or loss when occurred. (3) Disposal of fixed assets
When a fixed asset is disposed of, or cannot generate economic benefits through use or disposal, derecognize the fixed asset. The amount of the disposal income from the sale, transfer, retirement or damage of fixed assets after taking away its book value and related taxes and expenses is included in current profit or loss.
(2) Depreciation method
||||||
|-|-|-|-|-|
|Category|Depreciation method|Estimated useful life|Estimated residual rate|Annual depreciation rate|
|Houses and buildings|Straight-line depreciation|20.00-28.00|5.00|3.39%-4.75%|
|Machinery equipment|Straight-line depreciation|4.00-5.00|5.00|19.00%-23.75%|
|Transportation|||||
||Straight-line depreciation|5.00-20.00|5.00|4.75%-19.00%|
|equipment|||||
|Other equipment|Straight-line depreciation|3.00-5.00|5.00|19.00-31.67%|

(3) Basis of asserting, pricing and depreciation method on fixed assets under financing lease
A fixed asset leased by the Company is recognized as the fixed asset held under finance lease if one or more of the following criteria are met: (1) Upon the expiry of the lease term, the ownership is transferred to the Company. (2) The Company has the option to purchase the leased asset at a predetermined price that is expected to be much lower than the fair value of the leased assets when the option is exercised. Therefore, it can be reasonably determine that the company will exercise this option on the lease start date. (3) The lease term approximates the useful life of the relevant asset even if the ownership is not transferred. (4) At the inception of the lease, the present value of the minimum lease payments is substantially equivalent to the fair value of the leased asset. (5) The leased assets are of such a specialized nature that only the Company can use them without major modification. A fixed asset held under finance lease is initially recognized at the lower of fair value of the leased asset and the present value of the minimum lease payments, while the amount of the minimum lease payments will be recognized as the entry value of long-term account payable, the difference between them will be recognized as unrecognized financing costs. The initial direct costs such as commissions,attorney’s fees, and travelling expenses, stamp duties attributable to the leased item incurred during the process of lease negotiating and signing the leasing agreement shall be recorded in the asset value. Unrealized finance costs will be amortized using actual interest rate method over each period during the lease terms. The Company adopts depreciation policies for leased assets consistent with those of self-owned fixed assets for the purpose of calculating the depreciation of a leased asset. If it is reasonable to be certain that the lessee will obtain the ownership of the leased asset when the lease term expires, the leased asset shall be fully depreciated over its useful life. If it is not reasonable to be certain that the lessee will obtain the ownership of the leased asset at the expiry of the lease term, the leased asset shall be fully depreciated over the shorter one of the lease term or its useful life.
17. Construction in process
Whether the company needs to comply with the disclosure requirements of the particular industry
Yes
Real estate industry
1. Classification of constructions under progress
The construction in progress constructed by the Company on its own shall be measured at the actual cost which comprises of all the
necessary expenses occurred to enable the asset to meet such conditions as required for expected purpose, including engineering
materials cost, labor cost, relevant tax payment, loan expenses which should be capitalized and indirect expenses which should be amortized, etc.
2. Standard and point of time for construction in process carrying forward to fixed assets
Fixed asset is booked with the entire expenditures occurred in the construction in process till it arrives at predicted state for use. For those constructions in process of fixed assets which have already arrived at the predicted state for use, while still with absence of completion settlement, they shall be carried forward to fixed assets at the estimated value based on engineering budget, construction cost or actual cost commencing from the date of arrival of the predicted state for use. Meanwhile, they shall be also subject to the depreciation policies applicable to fixed assets of the Company for provision of depreciation. Once completion settlement is made, the original temporary estimated value shall be adjusted at the effective cost. However, the original provision of depreciation remains unchanged.
3. Impairment test and impairment provision for construction in process
The Company determines whether there is evidence of impairment that may occur upon construction in progress at end of each period.
If there is indication of impairment of construction in progress, the Company shall estimate its recoverable amount. The recoverable amount is to be determined by the higher between the net price of the fair value of construction in progress after subtracting costs of disposal and the present value of expected future cash flow from construction in progress.
When the recoverable amount of construction in progress is below their book value, the book value of construction in progress shall be written down to its recoverable amount, and the amount of write-down shall recognized as impairment loss of construction in progress, and included into current profits and losses. At the same time, the provision for depreciation of construction in progress shall be accrued.
After the recognition, the impairment loss of construction in progress shall not be reversed in subsequent accounting period. If there are indications showing that impairment of certain construction in progress is possible, the Company shall estimate its recoverable amount based on individual construction. If difficult to do so, the Company shall determine the recoverable amount of the assets group on basis of the asset groups to which the construction in progress belongs.
18. Borrowing expenses
1. Recognition of the borrowing expenses capitalization
Borrowing expenses that attributed for purchasing or construction of assets that are complying with capitalizing conditions start to be capitalized and counted as relevant assets cost; other borrowing expenses, reckoned into current gains and losses after expenses recognized while occurred.
Assets satisfying the conditions of capitalization are those assets of fixed, investment real estate etc. which need a long period of time to purchase, construct, or manufacturing before becoming usable.
Capitalizing for borrowing expenses by satisfying the followed at same time:
(1) Assets expense occurred, and paid as expenses in way of cash, non-cash assets transfer or debt with interest taken for purchasing, constructing or manufacturing assets that complying with capitalizing condition;
(2) Borrowing expenses have occurred;
(3) Necessary activities occurred for reaching predicted usable statues or sale-able status for assets purchased, constructed or manufactured.
2. Period of capitalization
Capitalizing period was from the time star capitalizing until the time of suspended capitalization. The period for borrowing expenses suspended excluded in the period.
If purchasing, construction, or manufacturing process of an asset satisfying the conditions of capitalization reached its predicted
usable status or sale-able status, capitalization suspended for borrowing expenses.
If purchasing, construction, or manufacturing process of an asset satisfying the conditions of capitalization completed projects and usable independently for part of the projects, borrowing expenses for this kind of assets shall suspended capitalization.
If the assets have been completed in every part, but can be reached the useful status or sale-able status while completed entirely, the borrowing expense shall be suspended for capitalization while the assets completely finished in whole.
3. Period of suspended
If purchasing, construction, or manufacturing process of an asset satisfying the conditions of capitalization is suspended abnormally for over 3 months, capitalizing of borrowing expenses shall be suspended; the suspended assets that satisfying the conditions of capitalization meets the necessary procedure of reaching predicted usable status or saleable status, capitalizing of borrowing expenses shall be resumed. The borrowing expenses occurred during the period of suspended shall reckon into current gains and losses until the purchasing, construction, or manufacturing process is resumed for capitalizing.
4. Calculation for capitalization amount
Interest expenses practically occurred at the current term of a special borrowing are capitalized after deducting of the bank saving interest of unused borrowed fund or provisional investment gains
Capitalization amounts of common borrowings are decided by the weighted average of exceeding part of accumulated asset expenses over the special borrowing assets multiply the capitalizing rate of common borrowings adopted. Capitalization rates are decided by the weighted average of common borrowings.
For those expenses with discount or premium, determined the amortizable discount or premium in every fiscal year by effective interest method, than adjusted interest amount in every period
19. Biological assets
1. Classification
The biological assets of the Company refer to consumptive biological assets and productive biological assets. The consumptive biological assets including young and livestock etc., productive biological assets including eggs etc.
Biological assets are recognized upon satisfaction of the following conditions:
(1) The company owns or controls the biological asset due to the past transaction or proceeding;
(2) The economic benefits or service potential related to the biological assets are likely to flow into the company;
(3) Cost of the biological assets can be measured reliably.
2.Initial measurement of biological assets
Biological assets acquired by the Company is initially measured at the acquired cost. Cost of purchasing biological assets comprises of purchase price, relevant tax, delivery expense, insurance premium and other expenditure directly attributable to purchase of such asset. Biological assets injected by investors are accounted for with the value set out in the investment contract or agreement plus tax payable as the carrying value of the assets. However, if the value set out in the contract or agreement is not fair, the actual cost shall be determined at fair value.
3.Subsequent measurement of biological assets
(1)Subsequent expenditure
The cost of a consumptive biological asset that is propagated or bred by the Company itself is determined according to the necessary expenses, such as the feed fee, the labor cost and the indirect cost that should be allocated before the sale. Cost of the self propagating productive biological assets is determined according to the necessary expenses, such as the feed fee, the labor cost and the indirect cost that should be allocated before the asset satisfies the expected production and operation purposes. The subsequent expenditures of biological assets occurred after the asset satisfies the expected production and operation purposes, such as management and maintenance, raising expenses, etc, are recorded in current profits and losses.
(2)Depreciation of productive biological assets
For such productive biological assets as satisfy their expected production and operation purposes, the Company makes provision of depreciation over their periods on an average basis. The Company determines its service life and anticipated net residual value according to the nature and service condition of the productive biological assets and the anticipated implementation way of the related economic interests. At the end of the year, the Company re-checks the service life, anticipated net residual value and depreciation method of the productive biological assets, and adjusts correspondingly if it differs from the original assessment. The expected service life, anticipated net residual value and yearly depreciation of the productive biological assets of the Company are as follows:
|||||
|-|-|-|-|
|Category|Estimated useful life (Year)|Estimated residual rate|Yearly depreciation rate|
|Eggs|1|5%|95%|
|Sheep and pigs|3|5%|31.67%|

(3)Disposal of biological assets
The Company adopts weighted average method to carry forward cost of consumptive biological assets when acquiring or disposing such asset; cost of a biological asset after change of purpose is determined based on the carrying value as of such change; for sale, destroy or deficit of a biological asset, the balance between the disposal income less carrying value and relevant taxes should be recorded in current profit or loss.
4. Impairment of biological assets
The Company conducts inspection of consumptive and productive biological assets at least once at the end of each year. If there is any evidence proving that the net realizable value of consumptive biological assets or recoverable amount of productive biological assets is less than carrying value due to natural disaster, disease or insect pests, animal epidemic disease invasion or market demand change, the assets shall be measured at net realizable value or recoverable amount.For any difference lower than the carrying value, the Company makes devaluation provision or impairment provision for biological assets and records in current profit or loss. In case that the factors affecting impairment of consumptive biological assets disappear, the reduced amount shall be restored and reverted from the devaluation provision previously made with the amount reverted recorded in current profit or loss. However, impairment provision for productive biological assets, once made, will be reverted in no way.
20. Oil and gas asset
21. Intangible assets
(1) Pricing method, service life and impairment test
An intangible asset is an identifiable non-monetary asset without physical substance owned or controlled by the Company, including land use right and non-patented technology etc.
1. Initial measurement of intangible assets
For those intangible assets purchased from outside, the purchase value, relevant taxes and other payments attributable to predicted purpose obtained should recognized as cost for this assets. For those purchased amount that paid overdue exceeded the normal credit condition, owns financing natures actually, the cost should be recognized based on the current value while purchased
As for the intangible assets acquired from the debtor in debt restructuring for the purpose of settlement of debt, the fair value of the
intangible assets shall be based to determine the accounting value. The difference between the carrying value of restructured debt and
the fair value of the intangible assets use for settlement of debt shall be recorded in current gains and losses.
With the preceding conditions that non-monetary assets exchange has commerce nature and the fair value of the assets exchanged in
or out can be measured reliably, the intangible assets exchanged in through non-monetary assets exchange are accounted at the value based on the fair value of assets exchanged out, unless there is obvious evidence showing the fair value of assets exchanged in is more reliable; for non-monetary assets exchange not qualifying for the preceding conditions, the carrying value of assets exchanged out and related taxes payable shall be viewed as the cost of intangible assets exchanged in, without recognition of gains and losses. Intangible assets obtained by means of enterprise combined under common control, recognized book-keeping value by the book value of combined party; Intangible assets obtained by means of enterprise combined under different control, recognized book-keeping value by the its fair value.
For those cost of intangible assets development internally including: the used materials, labor cost and register charge for development; amortization for other patent and concession used and interest expense satisfying the capitalization condition during process of development; other directly expense before reached its predated useful purpose.
2.Subsequent measurement
Analysis and determined the service life for intangible assets while obtained. And classified into intangible assets with limited useful life and assets without certain service life
(1) Intangible assets with limited useful life
Those intangible assets with limited useful life are evenly amortized on straight basis from the date when they become useful to the end of expected useful life. Particular about the estimation on intangible assets with limited service life:
||||
|-|-|-|
|Item|Predicted useful life|Basis|
|Patent right, trademark right, non-patentsand outsourcing software|5-year|Within the terms of contractual rights or otherstatutory rights|
|Land Use Right|50-year|Within the terms of contractual rights or otherstatutory rights|

At end of year, revising will be performed on the useful life of intangible assets with limited useful life and the methods of amortizing, if there is a difference with the original estimation, adjustment shall be implemented correspondingly
Being revised, the useful life of intangible assets and amortization method at period-end shows the same as previous
(2) Judgment basis of criterion for intangible assets without certain service life
Intangible assets for which it is impossible to predict the term during which the assets can bring in economic benefits are viewed as intangible assets with indefinite life.
Intangible assets with indefinite life are not amortized during the holding period, and useful life is re-reviewed at the end of each accounting period. In case that it is still determined as indefinite after such re-review, then impairment test will be conducted continuously in every accounting period.
At end of year, revising will be performed on the useful life of intangible assets with uncertain life.
The Company has no such intangible assets without certain service life after review.
(2) Accounting policy for expenditure of internalR&D
1. Detail standard for classification on research stage and exploitation stage
Research stage: stage of a planned investigation or research activity designed to acquire and understand new scientific or technological knowledge.
Exploitation stage: stage of the activities that produced new or material advance materials, devices and products that by research results or other knowledge adoption in certain plan or design before the commercial production or usage.
The expenditure of the research stage inR&D project internally shall reckon into current gains and losses while occurred.
2. Standards for capitalization satisfaction of expenditure in exploitation state
Intangible assets recognized for expenditure in exploitation stage by satisfying the followed at same time:
(1) Owes feasibility in technology and completed the intangible assets for useful or for sale;
(2) Owes the intention for completed the intangible assets and for sale purpose;
(3) The way in which intangible assets generate economic benefits include proving that the products produced by the intangible assets exist in the market or that the intangible assets them selves exist in the market, that the intangible assets will be used internally and that their usefulness can be proved;
(4) Possess sufficient technique, financial resources and other resources for the development of kind of intangible assets and has the ability for used or for sale;
(5) The expenditure attributable to the exploitation stage for intangible assets could be measured reliably.
22. Impairment of long term assets
Long term asset is judged whether for which there is indication of impairment on balance sheet date. If there is indication of impairment, the Company would estimate its recoverable amount based on single asset; if it is difficult to estimate the recoverable amount of single asset, then the assets group which the single asset belongs to is based to determine the recoverable amount of the assets group.
Recoverable amount of an asset is determined at the higher of its fair value less disposal fee and present value of its predicted future cash flow.
If measurement of recoverable amount shows that the recoverable amount of long term asset is lower than carrying value, and then the carrying value shall be deducted to recoverable amount, with the deducted amount recognized as impairment loss which is included in current period gains and losses, meanwhile, asset impairment provision shall be made accordingly. Once recognized, asset impairment loss would not be reversed in future accounting period.
Once an asset is recognized for impairment loss, its depreciation or amortization expense would be adjusted in future periods, so as to systematically allocate the adjusted asset carrying value (after deduction of predicted net residual value) during the remaining useful life.
Goodwill arising from business combination and intangible assets with indefinite useful life shall be tested annually for impairment whether or not there is indication of impairment.
Goodwill is tested for impairment with the related assets group. When conducting impairment test for relevant asset group with inclusion of goodwill, in case that there is indication of impairment for such asset group, impairment test would be firstly conducted in respect of the asset groups without inclusion of goodwill. Then, it shall calculate the recoverable amount and determine the corresponding impairment loss as compared to its carrying value. Second, asset group with inclusion of goodwill would be tested for impairment. If it is found after comparison between the carrying value and recoverable amount of the asset group that the recoverable amount is less than carrying value, the Company would recognize impairment loss for goodwill.
23. Long-term expenses to be apportioned
1. Amortization method
Long term prepaid expense represents the expense which the Company has occurred and shall be amortized in the current and later periods with amortization period exceeding one year. Long term prepaid expense amortized on straight-line method by stages in benefit period.
2. Amortization term
Amortized equally during the benefit period for those long-term expenses whose has a defined benefit period, for those without a defined benefit period, amortized equally within 5 years.
24. Staff remuneration
(1) Accounting treatment of short-term remuneration
Staff remuneration refers to various forms of remuneration or compensation provided by the Company for services provided by employees or termination of employment relations. Staff remuneration includes short-term payoff, post employment benefits, dismissal benefits and other long-term employee benefits.
Short term remuneration refers to all the staff remuneration payable by the Company to its staff within 12 months after the end of annual reporting period in which staff provides relevant services, other than post office benefit and dismissal benefits. The Company recognizes short term remuneration payable as liabilities during the accounting period during which staff provides services, and includes in cost and expense of relevant asset according to the beneficial parties of such services.
(2) Accounting treatment of post office benefits
Post office benefits refer to kinds of remuneration or benefits granted by the Company to staff for their provision of service upon retirement or release of employment, other than short term remuneration and dismissal benefits. Post benefit plan is categorized as defined withdraw plan and defined benefit plan.
Defined withdraw plan under post office benefit mainly represents participation into social basic pension insurance and unemployment insurance operated by labor and social security authorities. During the accounting period when employee provides services for the Company, the contribution calculated under defined withdraw plan would be recognized as liabilities and included in current gains and losses or relevant asset cost.
Defined benefit plans for post-employment benefits are primarily clear and standard outside-plan welfareto pay the retirees and pay theliving expenses for the deceasedemployees’ family members. For the obligation assumed in the defined benefit plans, the independent actuaries will accurately calculate by using the expected cumulative actuarial unit credit method on the balance sheet date, attribute the benefit obligations arising from defined benefit plan to the period of employee providing services, and include in the current profit or loss or associatedasset cost, thereinto, unless other accounting standards require or allow the employee benefits costs to be included in the asset cost, the service costs of defined benefit plans and the net interest of net indebtedness and net assets of defined benefit plans should be included in the current profit and loss in the current occurrence period; changes in the net indebtedness and net assets of re-measured defined benefit plans should be included in theother comprehensive income in the current occurrence period, and are not allowed to switch back to profit and loss in the follow-up accounting period.
(3) Accounting treatment of dismissal benefit
Dismissal benefit represents compensation paid to employees for release of employment before expiration or as compensation for their willing of cut, if the Company cannot recall the dismissal unilaterally or re-organization-related costs with dismissal benefit involved in cutting down, the liability arising from compensation for recognition of labor relationship released, reckoned into current gains/losses at the same time.
(4) Accounting treatment of other long term staff benefits
25. Accrual liability
When the Company is involved in proceedings, debt guarantees, onerous contracts and reorganization events, if such events may require delivery of assets or rendering of services in the future and the amounts of such events can be reliably measured, accrued
liabilities are recognized.
1. Recognition criteria of accrued liability
The Company recognizes the accrued liabilities when obligations related to contingencies satisfy all the following conditions: This obligation is a present obligation of the Company;
The performance of such obligation is likely to result in outflow of economic benefits from the Company; and
The amount of the obligation can be measured reliably.
2. Method of measuring of accrued liabilities
Accrued liabilities shall be initially measured at the best estimate of the expenditure required to settle the related present obligation. The Company, when determining the best estimate, has had a comprehensive consideration of risks with respect to contingencies, uncertainties and the time value of money. If the time value of money is significant, the best estimate shall be determined after discounting the relevant future outflow of cash.
The best estimate will be dealt with separately in the following circumstances:
The expenses required have a successive range (or band), in which the possibilities of occurrence of each result are the same, and the best estimate should be determined as the middle value for the range, i.e. the average of the upper and lower limit.
The expenses required does not have a successive range (or band), or although there is a successive range (or band), the possibilities of occurrence of each result are not the same, if the contingency is related to individual item, the best estimate should be determined as the most likely amount; where the contingency is related to a number of items, the best estimate should be calculated and determined according to the possible results and the relevant possibilities.
When all or part of the expenses necessary for the settlement of an estimated liability of the Company is expected to be compensated by a third party, the compensation should be separately recognized as an asset only when it is virtually certain that the compensation will be received. The amount recognized for the compensation should not exceed the book value of the estimated liability.
26. Share-based payment
1. Category of share-based payment
Share-based payment of the Company divided into share-based payment settled by equity and by cash
2. Determination of fair value of equity instruments
If there is an active market for an equity instrument granted such as share option, the quoted price in the active market is used to establish the fair value of the equity instrument. If there is no active market for the equity instrument granted such as share option, the option pricing model is used to determine the fair value. Option pricing model is elected after taking into account the following factors: (1) Exercise price of the option; (2) Effective period of the option; (3) Prevailing price of the subject shares; (4) Predicted fluctuation rate of share prices; (5) Predicted dividend of shares; (6) Risk-free interest rate of the option in effective period.
When determining fair value of equity instruments on the date of grant, influences from market conditions among conditions available for exercising rights and those not available for exercising rights as provided in share-based payment agreement should be considered. If there is condition not available for exercising rights in respect of share-based payment, cost expenses attributable to services received can be recognized provided that employees or other parties satisfy all the non-market conditions among conditions available for exercising rights (such as service term).
3. Bases for determining the best estimate for equity instruments with feasible rights
On each balance sheet date during the vesting period, best estimate shall be made based on the latest available information on change of employees who are entitled to exercise right, and number of equity instruments of the feasible rights shall be amended accordingly. On the feasible date, the number of instruments of the feasible rights and interests is eventually predicted to be the same as the actual number of feasible rights.
4. Accounting treatment method
Equity-settled share-based payment is measured at fair value of equity instruments granted to staff. For equity instruments which are
exercise immediately upon grant, they are included in relevant costs or expenses at fair value of the instruments as of the date of grant, with increase of capital reserve accordingly. For instruments for which exercise is conditional upon completion of service in vesting period or satisfaction of required results, services received in current period are included in relevant costs or expenses and capital reserve at the fair value of the equity instrument as of the date of grant based on the best estimate of the feasible rights of equity instruments on each balance sheet date during the vesting period. Recognized relevant costs or expense and totalowners’ equity will not be adjusted after the exercise date.
The cash-settled share-based payment shall be measured at the fair value of liabilities identified on the basis of shares or other equity instruments undertaken by the Group. For the instruments that may be exercised immediately after the grant, the fair value shall, on the date of the grant, be recognized in relevant costs or expenses and the liabilities shall be increased accordingly. For instruments that cannot be exercised until the services are fully provided during vesting period or specified performance targets are met, on each balance sheet date within the vesting period, the services acquired in the current period shall, based on the best estimate of the feasible rights, be recognized in relevant costs or expenses and the corresponding liabilities at the fair value of the liability incurred by the Group. The Group shall, on each balance sheet date and on each account date prior to the settlement of the relevant liabilities, re-measure the fair values of the liabilities and include the changes in the profit or loss for the period.
5. Amendment and relevant accounting treatment for those with amendment clauses and condition concerned
During the vesting period, where an equity instrument award is canceled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognized for the award is included immediately into the profit or loss for the period and capital reserve is recognized. Where employees or other parties are permitted to choose to fulfill non-vesting conditions but have not fulfilled during the vesting period, equity instrument award are deemed canceled.
27. Other financial instrument as preferred stock and perpetual capital securities
28. Revenue
Whether the company needs to comply with the disclosure requirements of the particular industry
Yes
Real estate industry
Revenue of the Company mainly including revenue from goods selling, sale of real estate, and revenue from property rent-out and labor service revenue etc.
1. Recognition standards of income from commodity sales:
When main risks and rewards attached to the ownership of goods have been transferred to the buyer, reserved neither continuous management power nor effective control over the goods, incoming payment can be measured reliably, relative financial benefit possibly inflow to the company, cost occurred or will occur can be reliably measured, sales income of goods is recognized.
2. Sales revenue recognition for property industry:
(1) Construction completion and qualified acceptance of properties;
(2) Commercial property pre-sale license granted by relevant state resources and housing bureau;
(3) Enter into sales contract;
(4) Sales contract has been certified and confirmed by property exchange center;
(5) Receive property price or obtain payment certificate from buyers;
(6) Complete deliver procedure for commercial properties.
Upon satisfaction of all the above conditions, the Company recognizes sales revenue
3. Recognition of property leasing revenue:
Property leasing revenue is recognized when the Company receives rental or obtain payment certificate from buyers based on the payment date and rental amount to be paid by lessee as provided in the contract or agreement entered into between the Company and
the lessee.
4. Labor service revenue
(1) Income of the contract can be measured reliably
(2) Financial benefit attached to the contract is possibly inflow to the company
(3) Schedule of the contracted project can be determined reliably;
(4) And the relevant amount of cost incurred or to be incurred can be measured reliably
5. Recognition basis of revenue from transferring the use right of assets
The economic benefits related to transactions are probable to flow into the Company; and amount of revenue can be measured reliably.
29. Government grants
1.Type
Government grant represents the monetary and non-monetary assets of the Company obtained from government agencies for free. Depending on the grantees under relevant government documents, government grant is classified into grant related to assets and income, respectively.
For such government grant under which no specific grantee is defined, it is classified as grant related to assets or income depending on the actual grantee. The details relating to relevant judgment reference is set out in note VI to this financial statement - deferred income/non-operating income.
Government grant related to assets refers to that obtained by the Company for the purpose of acquiring or otherwise forming long term assets. Government grant related to income refers to that other than that related to assets.
2.Realization of government grant
Where there are evidences showing that the Company meets the requirements of the financial supporting policies and it is expected that the financial supporting funds will be received, the government grant is recognized on the receivables. Otherwise, the government grant is recognized when actually received.
The grant is measured as the amount received or receivable where it takes the form of a cash asset, or at fair value where it is not a cash asset. Where the fair value cannot be reliably obtained, it should be measured at the nominal value (RMB1.00). government grants measured at nominal value will be recorded in profit or loss for the period directly.
3.Accounting treatment
Government grant related to assets constructed or purchased is realized as deferred income, and included in profit or loss by stages over theassets’ useful life in a reasonable and systematic manner;
Government grant related to income, if it is used to compensate relevant expense or loss of a company to be occurred in future periods, shall be recognized as deferred income and included in profit or loss during the period in which the above expense or loss is recognized; if it is used to compensate relevant expense or loss of a company incurred, it shall be included in profit or loss upon acquisition.
Government grant related to acompany’s normal operation is recognized as other income, and otherwise, as non-operating income or expense.
Borrowing expense shall be reduced against the government grant received by a company provided that the grant is related to policy preferential loan discount. If the Company is granted by lending bank with policy preferential loan interest, the amount of borrowing actually received shall be taken as the carrying value of the borrowing with borrowing expense calculated based on principal of the borrowing and such policy preferential loan interest.
If a government grant recognized is required to return, carrying value of the asset shall be adjusted if the carrying value is written down at initial recognition; balance of carrying value of deferred income shall be written down if there such balance exists with the
amount of excess included in current profit or loss; it shall be directly included in current profit or loss if no relevant deferred income exists.
30. Deferred income tax assets / Deferred income tax liabilities
Deferred tax assets and deferred tax liabilities are calculated and recognized according to the balance between the tax base and the book value of assets and liabilities (temporary differences). At the balance sheet date, the deferred tax assets and deferred tax liabilities are measured by theapplicable tax rate during the period of expected recovery of assets or clearing off the liability. 1. The basis for confirming deferred tax assets
The Company takes the taxable income which is likely to be obtained for deducting the deductible temporary differences and can carry over the deductible loss and tax credits as the limit to confirm the deferred income tax assets generated by deductible temporary differences. However, the deferred income tax assets generated by the initial recognition of assets or liabilities in the transactions with following characteristics shall not be recognized: (1) The transaction is not a business combination; (2) The occurrence of transaction affects neither the accounting profit nor the taxable income or deductible loss.
For the deductible temporary differences associated with investments in associated enterprises and satisfying the following conditions, confirm the corresponding deferred income tax assets: temporary difference is likely to be reversed back in the foreseeable future, and it is likely to obtain the taxable income used for deducting the deductible temporary differences in the future. 2. The basis for confirming deferred tax liabilities
The company recognizes the currently and previously payable but not paid taxable temporary differences as the deferred income tax liabilities. But not including:
(1) The temporary differences formed in the initial recognition of goodwill;
(2) Transactions or events formed by non-business combination, and it affects neither the accounting profit nor the temporary differences formed by taxable income (or deductible loss) when the transactions or events occur;
(3) For the taxable temporary differences related to the subsidiary companies and investments in associated enterprises, the reversal time of this temporary difference can be controlled and this temporary difference is unlikely to be reversed back in the foreseeable future.
3. Deferred tax assets and liabilities are offset if all the following conditions are met
(1) An enterprise has the legal rights to settle the income tax assets and income tax liabilities for the current period by net amount; (2) They relate to income taxes levied by the same tax authority on either the taxable entity has a legally enforceable right or set off current income tax assets against current income tax liabilities, and different taxable entities which either intend to settle the current income tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
31. Lease
(1) Accounting treatment of operation lease
If a lease contains such clause that substantially transfers to the lessee all the risks and reward related to the ownership of the leased asset, this lease is accounted for as financial leasing, and others are operating leases.
(1) Assets under operation lease-in
The lease payment paid for leasing assets is amortized under straight line method in the entire lease period without deduction of lease-for-free period, and is recorded in current expenses. The initial direct expenses paid by the Company related to lease transactions shall be recorded in current expenses.
If asset leaser assumes the lease related expenses which shall be assumed by the Company, the Company shall deduct such expenses
from the total rental and amortize based on the deducted rental expenses during the lease period and record in current expenses.
(2) Assets under operation rent-out
The lease fee collected by the Company for assets lease is amortized under straight line method in the entire lease period without deduction of lease-for-free period, and is realize as lease income. The initial direct expenses paid by the Company related to lease transactions shall be recorded in current expenses; for significant amount, it shall be capitalized and recorded in current income in phases under the same basis as realization of lease income in the entire lease period.
If the Company assumes the lease related expenses which shall be assumed by the lessee, the Company shall deduct such expenses from the total rental income and allocate based on the deducted rental expenses during the lease period.
(2) Accounting treatment of financing lease
(1) Assets leased by financing lease: the Company accounts the leased assets at the lower of the fair value of leased assets and present value of the minimum lease payment on the inception date of the lease, and the minimum lease payment is deemed as the accounting value of long term account payable, and the difference is taken as unrealized financing expenses. The identification basis, evaluation and depreciation method for assets leased by financing lease found more in the Fixed assets in Note IV (15)
The Company amortizes the unrealized financing expenses at effective interest rate method in the asset lease period and records in finance expenses.
(2) Assets leased out by financing lease: at the beginning of the lease, the Company recognizes the difference between the sum of financial lease receivable and the unsecured residual value and its present value as unrealized financing income, and recognized as rental income during the period of rents accepted; the initial direct expenses incurred by the Company in connection with the lease transaction are included in the initial measurement of financial lease receivable and the amount of revenue recognized during the lease period is reduced.
32. Other important accounting policies and accounting estimates
Discontinued operation
The Company recognizes a component as discontinued operation component if it meets any of the following conditions, it has been treated or classified as held for sale and can be distinguished from others:
(1)the component represents an independent major business or a separate major operation region.
(2)the component is a part of a related plan proposed for the purpose of treatment of an independent major business or a separate major operation region.
(3)the component is a subsidiary particularly acquired for resale.
Impairment loss, reverted amount and other operating gains and losses or disposal gains and losses of discontinued operation are presented in profit statement as profit or loss from discontinued operation.
33. Changes of main accounting policy and estimate
(1) Changes of accounting policies
√Applicable□ Not-applicable
||||
|-|-|-|
|Content and reasons for accounting policy|||
||Approval procedure|Note|
|changed|||

Explanation on change of items in financial statement
On June 15, 2018, the Ministry of Finance issued the Notice on Amending the Format of Financial Statements of General Enterprises
in 2018 (CK No.[2018] 15), revised the financial statements format of general enterprises, merged some of the balance sheet items,
and split some of the income statement items; and issued the Interpretation of the Issues Concerning the Format of Financial
Statements of General Enterprises in 2018 on September 7, 2018, clearly requiring that the handling charge of withholding the personal income tax be returned to the―otherincome‖ presentation, and the actually received government subsidies whether related to assets or related to income were presented as cash flows from operating activities when preparing the cash flow statement. The Company prepared financial statements in accordance with the requirements of the new enterprise financial statement format, and the presentation items of the financial statements changed, and the comparative data during the comparable period were adjusted in accordance with the relevant provisions of the Accounting Standards for Business Enterprises No. 30– Presentation of Financial Statements.
The impacts on the items and amounts of the presentation of financial statements during the comparable periods were as follows:
||||
|-|-|-|
|31st Dec. 2017/Items for 2017|Before adjustment|Amount affected|
|Note receivable|---|---|
|Account receivable|17,608.00|-17,608.00|
|Note receivable and accountreceivable|---|17,608.00|
|Interest receivable|---|---|
|Dividend receivable|---|---|
|Other account receivable|58,740,204.94|---|
|Note payable|---|---|
|Account payable|15,487,833.06|-15,487,833.06|
|Note payable and accountpayable|---|15,487,833.06|
|Interest payable|---|---|
|Dividend payable|---|---|
|Other account payable|25,952,193.34|---|
|Management expense|29,677,261.30|-124,889.69|
|R&D expense|---|124,889.69|

(2) Changes in important accounting estimates
□Applicable√ Not-applicable
34. Other
VI. Taxes
1. Main tax category and tax rate
||||
|-|-|-|
|Taxes|Basis|Rate|
||Sales of goods, taxable sales service||
|VAT||5%-16%|
||income, intangible assets or real property||
|Urban maintenance and construction tax|Turnover tax payable|5%|

||||
|-|-|-|
|Enterprise income tax|Taxable income|25%, 16.5%(Hong Kong, China)|
|Land appreciation tax|Appreciation value or prerequisitioned|Progressive rates|
|Educational surtax|Turnover tax payable|3%|
|Local educational surtax|Turnover tax payable|2%|
||Rental income or original value of the||
|Property tax||12% or 1.2%|
||property||

As for the taxpaying body with different tax rate for enterprise income tax, disclosed explanations:
|||
|-|-|
|Taxpaying body|Rate for income tax|
|Dongfeng Sci-Tech Group|25%|
|Nanjiang Trading|25%|
|Kefeng Engineering|25%|
|Dongfeng Investment|25%|
|Nanjiang Asia|16.5%|
|Kefeng Trading|25%|
|Hangzhou Dongfeng|25%|
|Dongguan Dongfeng Technology|25%|
|Kefeng Aerospace|25%|
|Dongfeng Power|25%|
|Ecological Agriculture|25%|
|Nanjiang Technology|25%|
|Huijing Property|25%|
|Zhongchuang New Energy|25%|
|Dongguan Dongfeng Intelligent|25%|
|Aolin New Materials|25%|
|Haizhuo Energy|25%|

2. Tax preference
3. Other
In accordance with the provisions of the Notice on Adjusting the Value-Added Tax Rate (CS No.[2018] 32) of the Ministry of Finance and the State Administration of Taxation, the tax rate of theCompany’s VAT taxable sales or imported goods which was previously applicable for17% and11% has been respectively adjusted to16% and10% since May 1, 2018.
Nanjiang Asia paying taxes in Hong Kong Special Administrative Region (HKSAR) with income tax rate of16.5%
VII. Notes to the main items of consolidate financial statements
1. Monetary fund
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Cash in stock|368,614.69|61,945.60|
|Bank deposit|12,986,115.85|68,045,443.09|
|Other monetary funds|22,952,094.56|6,697,820.37|
|Total|36,306,825.10|74,805,209.06|
|Including: total amount deposit aboard|5,626,045.88|5,356,719.91|

 Other explanation
Monetary fund with restrictions:
|||
|-|-|
|Item|Ending balance|
|Margin of housing mortgage|2,793,908.11|
|Total|2,793,908.11|

2. Derivative financial assets
□Applicable√ Not-applicable
3. Note receivable and account receivable
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Account receivable|11,171.25|17,608.00|
|Total|11,171.25|17,608.00|

 (1)Account receivable
1)Account receivable by types
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Ending balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Type|||||Book||||||
|||Proportio||Provision|||Proportio||Provision|Book value|
||Amount||Amount||value|Amount||Amount|||
|||n||ratio|||n||ratio||
|Accounts receivable|2,320,04||2,320,04|||2,320,0||2,320,047|||
|||94.84%||100.00%|||94.84%||100.00%||
|with large single|7.40||7.40|||47.40||.40|||

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|amount and accrued|||||||||||
|for provision of bad|||||||||||
|debt on a single basis|||||||||||
|Accounts receivable|||||||||||
|accrued for provision|82,138.8||70,967.6|||82,138.|||||
|||3.36%||86.40%|11,171.25||3.36%|64,530.85|78.56%|17,608.00|
|of bad debt by|5||0|||85|||||
|portfolio|||||||||||
|Accounts receivable|||||||||||
|with minor single|||||||||||
||44,172.0||44,172.0|||44,172.|||||
|amount but accrued||1.81%||100.00%|||1.80%|44,172.00|100.00%||
||0||0|||00|||||
|for provision of bad|||||||||||
|debt on a single basis|||||||||||
||2,446,35||2,435,18||11,171.25|2,446,3||2,428,750||17,608.00|
|Total||100.00%||99.54%|||100.00%||99.28%||
||8.25||7.00|||58.25||.25|||

Accounts receivable with large single amount and accrued for provision of bad debt on a single basis at period-end
√Applicable□ Not-applicable
In RMB
||||||
|-|-|-|-|-|
||Ending balance||||
|Account receivable(unit)|||||
||Account receivable|Bad debt provision|Provision ratio|Reasons of accrual|
|Beijing Xiangeqing|||||
|Industrial & Trade Co.,|2,320,047.40|2,320,047.40|100.00%|Uncollectible|
|Ltd.|||||
|Total|2,320,047.40|2,320,047.40|--|--|

Accounts receivable accrued for provision of bad debt by aging analysis method in portfolio
√Applicable□ Not-applicable
In RMB
|||||
|-|-|-|-|
||Ending balance|||
|Account age||||
||Account receivable|Bad debt provision|Provision ratio|
|Within 1 year||||
|1-2 years|10,150.00|2,030.00|20.00%|
|2-3 years|6,102.50|3,051.25|50.00%|
|Over 3 years|65,886.35|65,886.35|100.00%|
|Total|82,138.85|70,967.60|86.40%|

 Portfolio recognized:
Accrued for bad debt provision of account receivable by balance proportion method in portfolio :
□Applicable√ Not-applicable
Accrued for bad debt provision of account receivable by other method in portfolio :
2)Provision for bad debts accrued, regain or switch back in the period
In the Period, RMB 6,436.75 accrued for provision of bad debts; RMB 0.00 provision for bad debts regains or switch back in the Period.
Including major amount of bad debt provision regain or switch back in the Period:
In RMB
||||
|-|-|-|
|Unit|Amount regain or switch back|Way of regain|

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

Charge-off for the major receivable:
In RMB
|||||||
|-|-|-|-|-|-|
||||||Arising from related|
|Unit|Nature|Amount charge off|Reasons|Procedures||
||||||transaction (Y/N)|

 Explanation on:
4)Top five account receivables collected by arrears party at ending balance
||||
|-|-|-|
|Unit|Ending balance|Ratio in accountreceivable atperiod-end(%)|
|Beijing Xiangeqing Industrial & TradeCo., Ltd.|2,320,047.40|94.84|
|Electricity Authority of ChengdeCounty|82,138.85|3.36|
|Inner Mongolia Ajinnai Horse CultureDevelopment Co., Ltd.|44,172.00|1.80|
|Total|2,446,358.25|100.00|

(5) Account receivable de-recognition due to financial assets transfer
(6) Assets and liabilities resulted by account receivable transfer and continues involvement
Other explanation :
4. Accounts paid in advance
(1)Accounts paid in advance by account age
In RMB
||||||
|-|-|-|-|-|
||Ending balance||Opening balance||
|Account age|||||
||Amount|Proportion|Amount|Proportion|
|Within one year|61,088,678.72|99.98%|171,695.28|93.52%|

||||||
|-|-|-|-|-|
|1-2 years|3,431.50|0.01%|11,899.78|6.48%|
|2-3 years|6,899.45|0.01%|||
|Total|61,099,009.67|--|183,595.06|--|

Reasons for significant repayment with over one year age without settle:
(2)Top five prepayment collected by objects at ending balance
|||||
|-|-|-|-|
|Unit|Ending amount|Ratio inprepayment (%)|Time ofrepayment|
|Chengde Wanxuan Construction Engineering Co.,Ltd.|60,038,761.00|98.26|Within oneyear|
|Beijing Jianyan Lianhe Architectural DesignConsulting Co., Ltd.|600,000.00|0.98|Within oneyear|
|Elfa International Supply Chain Management Co.,Ltd.|205,784.00|0.34|Within oneyear|
|Wu Xiaojie|122,400.00|0.20|Within oneyear|
|Shenzhen Sinmary Technology Co., Ltd.|11,500.00|0.02|Within oneyear|
|Total|61,742,761.00|99.80|---|

Other explanation :
5. Other account receivable
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Other account receivable|8,588,597.44|58,740,204.94|
|Total|8,588,597.44|58,740,204.94|

 (1)Other account receivable
1)Other account receivable by types
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Ending balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Type|||||Book||||||
|||Proportio||Provisionratio|||Proportio||Provision|Book value|
||Amount||Amount||value|Amount||Amount|||
|||n|||||n||ratio||
|Other receivables|2,709,27|19.47%|2,709,27|100.00%||2,709,2|4.24%|2,709,273|100.00%||

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|with large single|3.00||3.00|||73.00||.00|||
|amount and accrued|||||||||||
|for provision of bad|||||||||||
|debt on a single basis|||||||||||
|Other receivables||||5.98%|||||||
|accrued for provision|9,117,72||544,864.||8,572,855|59,168,||442,594.6||58,725,942.|
|||65.53%|||||92.50%||0.75%||
|of bad debt by|0.05||61||.44|537.55||1||94|
|portfolio|||||||||||
|Other receivables|||||||||||
|with minor single|||||||||||
||2,087,07||2,071,33|||2,085,5||2,071,332|||
|amount but accrued||15.00%||99.25%|15,742.00||3.26%||99.32%|14,262.00|
||4.08||2.08|||94.08||.08|||
|for provision of bad|||||||||||
|debt on a single basis|||||||||||
||13,914,0||5,325,46|38.27%|8,588,597.44|63,963,||5,223,199||58,740,204.94|
|Total||100.00%|||||100.00%||8.17%||
||67.13||9.69|||404.63||.69|||

 Other receivables with large single amount and accrued for provision of bad debt on a single basis at period-end:
√Applicable□ Not-applicable
In RMB
||||||
|-|-|-|-|-|
|Other account|Ending balance||||
|receivable(unit)|Other account receivable|Bad debt provision|Provision ratio|Reasons of accrual|
|Non-Taxable Revenue|||||
|Authority of Chengde|1,500,000.00|1,500,000.00|100.00%|Uncollectible|
|County|||||
|Claims obtained from|||||
||1,209,273.00|1,209,273.00|100.00%|Uncollectible|
|auction|||||
|Total|2,709,273.00|2,709,273.00|--|--|

Other receivables accrued for provision of bad debt by aging analysis method in portfolio :
√Applicable□ Not-applicable
In RMB
|||||
|-|-|-|-|
||Ending balance|||
|Account age||||
||Other account receivable|Bad debt provision|Provision ratio|
|Within 1 year||||
|Subtotal within one year|3,581,860.41|179,929.56|5.00%|
|1-2 years|67,447.43|13,489.49|20.00%|
|2-3 years|48,200.00|24,100.00|50.00%|
|Over 3 years|327,345.66|327,345.56|100.00%|
|Total|4,024,853.50|544,864.61|13.54%|

Portfolio recognized:
Other accounts receivable accrued for provision of bad debt by percentage of balance in portfolio :
□Applicable√ Not-applicable
Other accounts receivable accrued for provision of bad debt by other methods in portfolio :
√Applicable□ Not-applicable
|||||
|-|-|-|-|
|Combination|Ending balance|||
||Other account receivable|Bad debt provision|Provision ratio (%)|
|Tax Bureau of Chengde County|4,942,346.42|---|---|
|Chengde Nanjiang Trading Co., Ltd.|135,241.42|---|---|
|Social insurance|14,928.06|---|---|
|LIMITED|350.65|---|---|
|Total|5,092,866.55|---|---|

2)Bad debt provision accrual collected or switch back
There is 102,270.00Yuan provision for bad debts accrued in the Period; and Yuan regains or switch back in the Period.
Including the followed significant amount:
In RMB
||||
|-|-|-|
|Unit|Regains or switch back|Way of regain|

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

Major other account receivables written-off:
In RMB
|||||||
|-|-|-|-|-|-|
||||||Arising from related|
|Unit|Nature|Amount charge off|Reasons|Procedures||
||||||transaction (Y/N)|

 Explanation on other account receivable:
4)Other account receivable by nature of money
In RMB
||||
|-|-|-|
|Nature of money|Ending book balance|Opening book balance|
|Margin|1,520,000.00|1,762,154.50|
|Petty cash|1,485,155.23|872,244.72|
|Debt auction|1,209,273.00|1,209,273.00|
|Land acquisition account||51,360,000.00|
|Tax rebate|4,942,346.42||
|Other|4,757,292.48|8,759,732.41|
|Total|13,914,067.13|63,963,404.63|

5) Top five other account receivables collected by arrears party at ending balance
In RMB
|||||||
|-|-|-|-|-|-|
|||||Proportion in total||
||||||Ending balance of|
|Unit|Nature|Ending balance|Account age|Ending balance of||
||||||bad debt provision|
|||||other receivables||
|Tax Bureau of||||||
||VAT for lands rebate|4,942,346.42|Within one year|1.04%||
|Chengde County||||||
|Non-Taxable||||||
|Revenue Authority|Margin|1,500,000.00|Over 3 years|0.32%|1,500,000.00|
|of Chengde County||||||
|Auction claims|Debt auction|1,209,273.00|Over 5 years|0.26%|1,209,273.00|
|Zhou Haihong|Other|642,689.25|4-5 years|0.14%|642,689.25|
|Bao Degang|Other|356,838.00|Over 5 years|0.08%|356,838.00|
|Total|--|8,651,146.67|--|1.84%|3,708,800.25|

 6)Account receivables related to government grant
In RMB
||||||
|-|-|-|-|-|
||||Account age at|Time and amount|
|Unit|Government grant|Ending balance|||
||||period-end|collected and basis|

 7) Other receivable for termination of confirmation due to the transfer of financial assets
8)The amount of assets and liabilities that are transferred other receivable and continued to be involved
Other explanation :
6. Inventory
Whether the company needs to comply with the disclosure requirements of the particular industry
Yes
(1)Classification of inventories
The Company needs to comply with the disclosure requirement of Information Disclosure Guidelines of Shenzhen Stock Exchange No.3-engaged in real estate business for the listed companies
By nature:
In RMB
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Opening balance|||
|Item||Depreciation|||Depreciation||
||Book balance||Book value|Book balance||Book value|
|||reserve|||reserve||
|Development cost|107,073,123.28||107,073,123.28|86,747,495.40||86,747,495.40|
|Development|||||||
||42,082,664.49||42,082,664.49|145,903,913.28||145,903,913.28|
|products|||||||
|Raw materials|53,653.93||53,653.93|71,640.85||71,640.85|

||||||
|-|-|-|-|-|
|Production costs|1,442,179.44|1,442,179.44|1,749,205.68|1,749,205.68|
|Stock products|933,817.53|933,817.53|150,484.25|150,484.25|
|Revolving|||||
||118.83|118.83|28,170.33|28,170.33|
|materials|||||
|Consumptive|||||
||||2,916.05|2,916.05|
|biological assets|||||
|Total|151,585,557.50|151,585,557.50|234,653,825.84|234,653,825.84|

 Disclose of―developmentcost‖ and interest capitalization rate:
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||||S|||Increase||Cumulati|Including:||
||||Estimated||witch to||||ve|amount of||
|||Estimated||||Other|in Period|||||
|Name of|Time to||total|Opening d|evelopm|||Ending|amount of|interest|Source of|
|||completio||||decrease|(develop|||||
|project|start||investme|nbalance|ent|||balance|interest|capitalizat|funds|
|||n time||||in Perio|d ment|||||
||||t||products||||capitalize|ion in||
||||||||costs)|||||
||||||||||d|Period||
|Tian Xi|1 Dec.|31 Dec.|380,000,|0 86,747,490 5.40|||20,325,627.88|107,073,1|543,616.4|543,616.4||
||||||||||||Other|
|project|2018|2020|00.0|||||23.28|4|4||
||||380,000,|0 86,747,490 5.40|||20,325,627.88|107,073,1|543,616.4|543,616.4||
|Total|--|--|||||||||--|
||||00.0|||||23.28|4|4||

Disclose of―Developmentproducts‖:
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||||Currentdecreased|||Including: amount|
|||||||Cumulative||
|Name of|Time of|Opening|Current||||of interest|
||||||Ending balance|amount of interest||
|project|completion|balance|increased||||capitalization in|
|||||||capitalized||
||||||||Period|
|Huijing|30 Sept.|145,903,913.28||103,821,248.79||||
||||||42,082,664.49|||
|Tiandi|2016|||||||
|||145,903,913.28||103,821,248.79||||
|Total|--||||42,082,664.49|||

Disclosed the―installment developmentproducts‖,―rental developmentproducts‖ and―relocationhousing‖:
In RMB
||||||
|-|-|-|-|-|
|Name of project|Opening balance|Current increased|Current decreased|Ending balance|

The Company needs to comply with the disclosure requirement of Information Disclosure Guidelines of Shenzhen Stock Exchange No.11- Listed Companies Engaged in Related Business of Jewelry
(2)Inventory Depreciation reserve
Accrual for inventory depreciation reserves:
By nature:
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Current increased||Current decreased||||
||Opening|||||||
|Item||||Reversing or||Ending balance|Note|
||balance|Accrual|Other||Other|||
|||||write-off||||

By project:
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Current increased||Current decreased||||
||Opening|||||||
|Name of project||||Reversing or||Ending balance|Note|
||balance|Accrual|Other||Other|||
|||||write-off||||

(3)Rate of capitalization of interest for inventory at period-end
(4) Inventory constrained
Disclosure by items:
In RMB
|||||
|-|-|-|-|
|Name of project|Opening balance|Ending balance|Reasons of restricted|

 (5)Assets completed without settlement from construction contract at period-end
In RMB
|||
|-|-|
|Item|Amount|

Other explanation :
Balance of inventory at period-end decreased 83,068,268.34 Yuan over that of period beginning with35.40% declined, mainly because the Huijing Tiandi project has completed the settlement last period, the development products are transfer to cost for sale Does the Company comply with the disclosure requirement ofInformation Disclosure Guidelines of Shenzhen Stock Exchange No.4– Listed Companies Engaged in Seed Industry and Planting Business or not
No
7.Other current assets
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Taxes paid in advance|10,986,874.66|2,029,505.29|
|Financial products|26,800,000.00|32,530,000.00|
|Total|37,786,874.66|34,559,505.29|

Other explanation :
8. Finance asset available for sales
(1)Finance asset available for sales
In RMB
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Opening balance|||
|Item||Depreciation|||Depreciation||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||
|Equity instrument|||||||
||25,000,000.00|8,668,962.92|16,331,037.08|25,000,000.00|8,329,596.87|16,670,403.13|
|available for sale:|||||||
|Measured by cost|25,000,000.00|8,668,962.92|16,331,037.08|25,000,000.00|8,329,596.87|16,670,403.13|
|Total|25,000,000.00|8,668,962.92|16,331,037.08|25,000,000.00|8,329,596.87|16,670,403.13|

 (2)Financial assets available for sale measured by fair value at period-end
In RMB
|||||
|-|-|-|-|
|Classification of finance|Equity instrument|Debt instrument||
||||Total|
|asset available for sales|available for sale|available for sales||

(3)Financial assets available for sale measured by cost at period-end
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Book balance||||Depreciation reserves||||Ratio of||
||||||||||share-holdi|Current|
|Invested|||||||||||
||Period-beg|Current|Current||Period-beg|Current|Current||ng in|cash|
|company||||Period-end||||Period-end|||
||in|increased|decreased||in|increased|decreased||invested|dividend|
||||||||||entity||
|Dongguan|||||||||||
|Dongfeng|||||||||||
|New|25,000,000|||25,000,000|8,329,596.|||8,668,962.|||
|||||||339,366.05|||2.56%||
|Energy|.00|||.00|87|||92|||
|Technolog|||||||||||
|y Co. Ltd.|||||||||||
||25,000,000|||25,000,000|8,329,596.|||8,668,962.|||
|Total||||||339,366.05|||--||
||.00|||.00|87|||92|||

(4)Change of financial assets depreciation for sale during reporting period
In RMB
|||||
|-|-|-|-|
|Classification of finance|Equity instrument|Debt instrument||
||||Total|
|asset available for sales|available for sale|available for sales||

||||
|-|-|-|
|Balance of accrual at|||
||8,329,596.87|8,329,596.87|
|period-begin|||
|Accrual in the period|339,366.05|339,366.05|
|Balance of accrual at|||
||8,668,962.92|8,668,962.92|
|period-end|||

(5)Fair value of the available-for-sale equity instrument drops significantly or not contemporarily without depreciation reserves accrued
In RMB
||||||||
|-|-|-|-|-|-|-|
||||Decline range offair valuecompare with thecost||||
|||||Times continued|||
|Equity instrument|||||Amount accrual|Reasons for|
||Investment cost|Ending fair value||to declined|||
|available for sale|||||for impairment|un-accrual|
|||||(Month)|||

Other explanation
9. Long-term equity investment
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Changes in Period||||||||||
|||||Investme||||||||
||||||||||||Ending|
|||||nt|Adjustme|||||||
||||||||Cash||||balance|
|||Additiona||gains/loss|nt of|||Provision||||
|Invested|Opening|||||Other|dividend|||Ending|of|
|||l|Capital|es|other|||for||||
|company|balance|||||equity|or profit||Other|balance|impairme|
|||investmen|reduction|recognize|comprehe|||impairme||||
|||||||changes|declare to||||nt|
|||t||d by|nsive|||nt losses||||
||||||||issue||||provision|
|||||equity|income|||||||
|||||method||||||||
|I. Joint venture||||||||||||
|II. Associated enterprise||||||||||||
|Runhua||||||||||||
|Rural||||||||||||
|Water||||||||||||
||9,170,370|||||||||9,170,370|9,170,370|
|(Tianjin)||||||||||||
||.00|||||||||.00|.00|
|Internatio||||||||||||
|nal Trade||||||||||||
|Co., Ltd.||||||||||||
||9,170,370|||||||||9,170,370|9,170,370|
|Subtotal||||||||||||
||.00|||||||||.00|.00|
||9,170,370|||||||||9,170,370|9,170,370|
|Total||||||||||||
||.00|||||||||.00|.00|

Other explanation
10. Investment real estate
(1)Investment real estate measured at cost
√Applicable□ Not-applicable
In RMB
||||||
|-|-|-|-|-|
|Item|Houses, buildings|Land Use Right|Construction in process|Total|
|I. Original book value|||||
|1.Opening balance||5,051,773.92||5,051,773.92|
|2.Current increased|||||
|(1)Outsourcing|||||
|(2)Transfer-in from|||||
|inventory/fixed|||||
|assets/construction in|||||
|process|||||
|(3) Increased by|||||
|enterprise combination|||||
|3.Current decreased||5,051,773.92||5,051,773.92|
|(1) Disposal||5,051,773.92||5,051,773.92|
|(2) Other|||||
|transfer-out|||||
|4.Ending balance|||||
|II. Accumulated|||||
|depreciation and|||||
|accumulated|||||
|amortization|||||
|1.Opening balance||815,427.58||815,427.58|
|2.Current increased||69,256.00||69,256.00|
|(1) Provision or|||||
|||69,256.00||69,256.00|
|amortization|||||
|3.Current decreased||884,683.58||884,683.58|
|(1) Disposal||884,683.58||884,683.58|
|(2) Other|||||

||||
|-|-|-|
|transfer-out|||
|4.Ending balance|||
|III. Depreciation reserves|||
|1.Opening balance|||
|2.Current increased|||
|(1) Accrual|||
|3.Current decreased|||
|(1) Disposal|||
|(2) Other|||
|transfer-out|||
|4.Ending balance|||
|IV. Book value|||
|1.Ending book value|||
|2.Opening book||4,236,346.34|
||4,236,346.34||
|value|||

(2)Investment real estate measured by fair value
□Applicable√ Not-applicable
The Company needs to comply with the disclosure requirement of Information Disclosure Guidelines of Shenzhen Stock Exchange No.3-engaged in real estate business for the listed companies
Investment real estate measured by fair value disclosed by items:
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||||Fair value||||
||||Revenue||||Reasons for fair|
||Geographi|Covered||at||Change of fair||
|Name of project|||rent-in in||Ending fair value||value changed and|
||c position|area||period-begi||value||
||||period||||report index|
|||||n||||

Whether the Company has new investment real estate measured by fair value in the period
□Yes√No
(3) Investment real estate without property rights certificate held
In RMB
||||
|-|-|-|
|||Reasons for failure to handle the property|
|Item|Book value||
|||right certificate|

Other explanation
Decrease of the investment real estate in the period refers to the transfer-out from disposal of Nanjiang Trading
11. Fixed assets
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Fixed assets|17,302,279.65|9,674,396.99|
|Total|17,302,279.65|9,674,396.99|

 (1)fixed assets
In RMB
|||||||
|-|-|-|-|-|-|
||Houses and|Machinery|Transportation|||
|Item||||Other equipment|Total|
||buildings|equipment|equipment|||
|I. Original book||||||
|value:||||||
|1.Opening balance|5,259,168.09|2,220,348.20|5,204,758.70|1,393,816.06|14,078,091.05|
|2.Current||||||
||9,860,208.19|65,384.62|151,489.66|1,853,991.82|11,931,074.29|
|increased||||||
|(1) Purchase|8,203,689.11|65,384.62|151,489.66|1,844,661.82|10,265,225.21|
|(2) Transferred||||||
|from construction in||||||
|process||||||
|(3) Increased by||||||
|enterprise||||9,330.00|9,330.00|
|combination||||||
|(4) Other transfer-in|1,656,519.08||||1,656,519.08|
|3.Current||||||
||2,076,831.05|||189,796.00|2,266,627.05|
|decreased||||||
|(1) Disposal or||||||
||1,784,350.35|||5,200.00|1,789,550.35|
|scrap||||||
|(2) Other||||||
||292,480.70|||184,596.00|477,076.70|
|transfer-out||||||
|4.Ending balance|13,042,545.23|2,285,732.82|5,356,248.36|3,058,011.88|23,742,538.29|
|II. Accumulated||||||
|depreciation||||||
|1.Opening balance|249,808.69|1,262,321.81|1,884,384.94|1,007,178.62|4,403,694.06|
|2.Current|1,187,270.83|101,736.04|600,669.65|378,084.09|2,267,760.61|

|||||||
|-|-|-|-|-|-|
|increased||||||
|(1) Accrual|1,187,270.83|101,736.04|600,669.65|371,832.01|2,261,508.53|
|(2) Increased by||||||
|enterprise||||6,252.08|6,252.08|
|combination||||||
|3.Current||||||
||38,411.97||3,248.04|189,536.02|231,196.03|
|decreased||||||
|(1) Disposal or||||||
||38,411.97||3,248.04|4,940.02|46,600.03|
|scrap||||||
|(2) Other||||||
|||||184,596.00|184,596.00|
|transfer-out||||||
|4.Ending balance|1,398,667.55|1,365,589.69|2,482,839.71|1,193,161.69|6,440,258.64|
|III. Depreciation||||||
|reserves||||||
|1.Opening balance||||||
|2.Current||||||
|increased||||||
|(1) Accrual||||||
|3.Current||||||
|decreased||||||
|(1) Disposal or||||||
|scrap||||||
|4.Ending balance||||||
|IV. Book value||||||
|1.Ending book||||||
||11,643,877.68|920,143.13|2,873,408.65|1,864,850.19|17,302,279.65|
|value||||||
|2.Opening book||||||
||5,009,359.40|958,026.39|3,320,373.76|386,637.44|9,674,396.99|
|value||||||

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

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

 (4)Fixed assets acquired by operating lease
In RMB
|||
|-|-|
|Item|Ending book value|

(5)Fixed assets without property certificates
In RMB
||||
|-|-|-|
|||Reasons for failure to handle the property|
|Item|Book value||
|||right certificate|

Other explanation
(6) Disposal of fixed assets
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|

Other explanation
12. Construction in process
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Construction in process|101,650,833.16|2,267,164.04|
|Total|101,650,833.16|2,267,164.04|

 (1)Construction in process
In RMB
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Opening balance|||
|Item||Depreciation|||Depreciation||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||
|Industrialization|||||||
|of equipment of|||||||
||101,650,833.16||101,650,833.16|2,267,164.04||2,267,164.04|
|the Dongfeng|||||||
|New Energy|||||||

||||||
|-|-|-|-|-|
|Total|101,650,833.16|101,650,833.16|2,267,164.04|2,267,164.04|

 (2)Changes of major projects under construction
In RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||Includin|||
||||||||||Cumulati||||
||||||||Proporti|||g:|||
|||||Fixed|||||ve||Interest||
||||||||on of|||amount|||
|||||assets|Other||||amount||capitaliz||
|Name of||Opening|Current|||Ending|project|||of||Source|
||Budget|||transfer-i|decrease|||Progress|of||ation rate||
|project||balance|increased|||balance|investme|||interest||of funds|
|||||n in the|in Period||||interest||of the||
||||||||nt in|||capitaliz|||
|||||Period|||||capitaliz||year (%)||
||||||||budget|||ation in|||
||||||||||ed||||
|||||||||||Period|||
|Industria|||||||||||||
|lization|||||||||||||
|of|||||||||||||
|equipme|380,000,|2,267,16|99,383,6|||101,650,|||2,271,23|2,271,23|||
||||||||87.00%|87.00%|||100.00%|Other|
|nt of the|000.00|4.04|69.12|||833.16|||3.65|3.65|||
|Dongfen|||||||||||||
|g New|||||||||||||
|Energy|||||||||||||
||380,000,|2,267,16|99,383,6|||101,650,|||2,271,23|2,271,23|||
|Total|||||||--|--|||100.00%|--|
||000.00|4.04|69.12|||833.16|||3.65|3.65|||

(3)provision for impairment of construction in process in the period
In RMB
||||
|-|-|-|
|Item|Accrual in the period|Accrual reasons|

Other explanation
(4) Engineering material
In RMB
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Opening balance|||
|Item||Depreciation|||Depreciation||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||

Other explanation :
13. Productive biological asset
(1)Productive biological assetmeasured by cost
√Applicable□ Not-applicable
In RMB
|||||||
|-|-|-|-|-|-|
|Item|Plantation|Livestock|Forestry|Aquaculture|Total|
|I. Original book||||||
|value||||||
|1.Opening balance||40,121.80|||40,121.80|
|2.Current||||||
|||218,050.20|||218,050.20|
|increased||||||
|(1)Outsourcing||183,000.00|||183,000.00|
|(2)||||||
|||35,050.20|||35,050.20|
|Self-cultivation||||||
|3.Current||||||
|||57,172.00|||57,172.00|
|decreased||||||
|(1) Disposal||57,172.00|||57,172.00|
|(2)Other||||||
|4.Ending balance||201,000.00|||201,000.00|
|II. Accumulated||||||
|depreciation||||||
|1.Opening balance||22,150.41|||22,150.41|
|2.Current||||||
|||78,469.81|||78,469.81|
|increased||||||
|(1) Accrual||78,469.81|||78,469.81|
|3.Current||||||
|||21,057.72|||21,057.72|
|decreased||||||
|(1) Disposal||21,057.72|||21,057.72|
|(2)Other||||||
|4.Ending balance||79,562.50|||79,562.50|
|III. Depreciation||||||

||||
|-|-|-|
|reserves|||
|1.Opening balance|||
|2.Current|||
|increased|||
|(1) Accrual|||
|3.Current|||
|decreased|||
|(1) Disposal|||
|(2)Other|||
|4.Ending balance|||
|IV. Book value|||
|1.Ending book|||
||121,437.50|121,437.50|
|value|||
|2.Opening book|||
||17,971.39|17,971.39|
|value|||

(2)Productive biological asset measured by fair value
□Applicable√ Not-applicable
14. Intangible assets
(1)Intangible assets
In RMB
||||||
|-|-|-|-|-|
||||Non-patent||
|Item|Land Use Right|Patent right||Total|
||||technology||
|I. Original book|||||
|value|||||
|1.Opening|||||
||52,406,400.00|||52,406,400.00|
|balance|||||
|2.Current|||||
||6,951,748.89|||6,951,748.89|
|increased|||||
|(1) Purchase|6,951,748.89|||6,951,748.89|
|(2) Internal|||||
|R&D|||||

||||
|-|-|-|
|(3) Increased|||
|by enterprise|||
|combination|||
|3.Current|||
|decreased|||
|(1) Disposal|||
|4.Ending|||
||59,358,148.89|59,358,148.89|
|balance|||
|II. Accumulated|||
|amortization|||
|1.Opening|||
||701,088.96|701,088.96|
|balance|||
|2.Current|||
||1,970,099.34|1,970,099.34|
|increased|||
|(1) Accrual|1,970,099.34|1,970,099.34|
|3.Current|||
|decreased|||
|(1) Disposal|||
|4.Ending|||
||2,671,188.30|2,671,188.30|
|balance|||
|III. Depreciation|||
|reserves|||
|1.Opening|||
|balance|||
|2.Current|||
|increased|||
|(1) Accrual|||
|3.Current|||
|decreased|||
|(1) Disposal|||
|4.Ending|||

||||
|-|-|-|
|balance|||
|IV. Book value|||
|1.Ending book|||
||56,686,960.59|56,686,960.59|
|value|||
|2.Opening book|||
||51,705,311.04|51,705,311.04|
|value|||

Ratio of the intangible assets resulted by internalR&D in balance of the intangible assets at period
(2) Failure to handle the property right certificate
In RMB
||||
|-|-|-|
|||Reasons for failure to handle the property|
|Item|Book value||
|||right certificate|

Other explanation :
15. Expense on Research and Development
In RMB
|||||||
|-|-|-|-|-|-|
||Opening||||Ending|
|Item||Current increased|Current decreased|||
||balance||||balance|
|Airship|2,543,414.10|881,531.28||3,424,945.38||
|Air-cooled||||||
|hydrogen fuel||||||
|cell power|31,847.46|3,333,663.53||269,385.86|3,096,125.13|
|system for||||||
|vehicle used||||||
|ZS01||||||
||938,300.00|4,547,118.05||645,862.23|4,839,555.82|
|alumina fiber||||||
|Real-time||||||
|hydrogen||||||
|||5,819,388.91||408,659.39|5,410,729.52|
|production||||||
|equipment||||||
|||14,581,701.7|||13,346,410.4|
|Total|3,513,561.56|||4,748,852.86||
|||7|||7|

 Other explanation
The capitalization start point of air-cooled hydrogen fuel cell power system for vehicle used was September 26, 2017, the project has a total of four stages, by the end of the period, the research and development phase has been completed to the third stage; the capitalization start point of real-time hydrogenation equipment was September 26, 2017, the project has a total of four stages, as of
the end of the period, the research and development phase has been completed to the third stage; the capitalization start point of ZS01
alumina fiber was September 26, 2017, the project has a total of three stages, as of the end of the period, the research and
development phase has been completed to the third stage, and the specific basis for its capitalization include: 1. The intangible assets
have been completed to enable them to be used or sold and technically possess feasibility; 2. The intangible assets have been completed to enable them to be used or sold and technically possess feasibility; 3. The way in which intangible assets generate economic benefits, including the proof that the products produced by using the intangible assets have markets or the intangible assets have markets themselves; if intangible assets are to be used internally, it should prove its usefulness; 4. There are enough technical and financial resources and other resources to support to complete the development of the intangible assets, and have ability to use or sell the intangible assets; 5. The expenditure attributable to the development phase of the intangible assets can be reliably measured. 16. Goodwill
(1)Original book value of goodwill
In RMB
||||||
|-|-|-|-|-|
|Name of invested|||||
|company or items|Opening balance|Current increased|Current decreased|Ending balance|
|formed goodwill|||||
|Aolin New|||||
||1,294,711.56|||1,294,711.56|
|Materials|||||
|Haizhuo Energy||249,074.85||249,074.85|
|Total|1,294,711.56|249,074.85||1,543,786.41|

 (2)Depreciation reserves of goodwill
In RMB
||||||
|-|-|-|-|-|
|Name of invested|||||
|company or items|Opening balance|Current increased|Current decreased|Ending balance|
|formed goodwill|||||

Assets group with the goodwill involved or portfolio information
Aolin New Materials, the subsidiary operates as an independent economic entity after the merger, and the cash inflow generated by it is basically independent of other assets or asset groups, so it is regarded as an asset group during the impairment test, and the carrying amount (including goodwill) is 22,976,448.90 Yuan and the asset group or asset group combination is consistent with the asset group or asset group combination determined on the date of purchase.
Haizhuo Energy, the subsidiary operates as an independent economic entity after the merger, and the cash inflow generated by it is basically independent of other assets or asset groups, so it is regarded as an asset group during the impairment test, and the carrying amount (including goodwill) is 24,868,222.86 Yuan and the asset group or asset group combination is consistent with the asset group or asset group combination determined on the date of purchase.
Instructions for goodwill impairments test process and key parameters (such as the forecast period growth rate, stable period growth
rate, profit rate, discount rate, and forecast period when estimating the present value of the future cash flow), and the method of
confirming the impairment loss of goodwill:
The company conducted impairment test for the asset group related to goodwill at the end of the period, when conducting the
impairment test, the book value of goodwill was apportioned to the asset group or asset group combination expected to benefit from the synergy of business combination, and then compared the book value of the asset group with the recoverable amount so as to determine whether the asset group (including goodwill) had been impaired. The test results showed that the recoverable amount of the asset group including the apportioned goodwill was lower than the book value, and the corresponding impairment loss was confirmed.
The specific test process was as follows:
The recoverable amount of the asset group was a five-year forecast prepared by thecompany’s management based on the future development trend and business plan, which was calculated by using the future cash flow to convert into the present value. After testing, the recoverable amount of Aolin New Materials was 35,341,494.01 Yuan, which was greater than the book value (including goodwill) of 22,976,448.90 Yuan, and the recoverable amount of Haizhuo Energy was 34,721,467.79 Yuan, which was greater than the book value (including goodwill) of 24,868,222.86 Yuan. Asset groups including goodwill predicted by the management were not impaired and no impairment provision was required.
Impact of goodwill impairment test
Other explanation
The goodwill formed due to the consideration paid by Haizhuo Energy for the capital increase and share expansion in current period being higher than the share of the book value of the net assets on the purchase date had no indication of impairment as the formation time of goodwill was relatively short.
The appreciation in the goodwill which formed due to the consideration paid by Aolin New Materials for the capital increase and share expansion on December 29, 2017 being higher than the share of the book value of the net assets of Aolin New Materials on the purchase date was mainly fixed assets and development expenditure, the recoverable amount of the fixed assets of 649,584.80 yuan was higher than the book value of 348,638.70 yuan, the development expenditure has been patented in 2018 and obtained the patent certificate, the recoverable amount of both was higher than the book value, so there was no indication of impairment.
17. Long-term expenses to be apportioned
In RMB
|||||||
|-|-|-|-|-|-|
||||Amortized in current|||
|Item|Opening balance|Current increased||Other decrease|Ending balance|
||||period|||
|Office remodeling||||||
||149,963.84||129,408.36||20,555.48|
|costs||||||
|Fire protection||||||
||70,000.00||60,000.00||10,000.00|
|engineering||||||
|Plant decoration||154,847.48|13,786.17||141,061.31|
|Floor pain||||||
|engineering of the||99,496.91|4,229.14||95,267.77|
|plant in Eco-Park||||||
|Total|219,963.84|254,344.39|207,423.67||266,884.56|

Other explanation
18. Deferred income tax assets and deferred income tax liabilities
(1)Deferred income tax assets without offset
In RMB
||||||
|-|-|-|-|-|
||Ending balance||Opening balance||
|Item|Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||difference|assets|difference|assets|
|Preparations of assets|||||
||||3,102,581.64|775,645.41|
|depreciation|||||
|Total|||3,102,581.64|775,645.41|

 (2)Deferred income tax liabilities without offset
In RMB
||||||
|-|-|-|-|-|
||Ending balance||Opening balance||
|Item|Taxable temporary|Deferred income tax|Taxable temporary|Deferred income tax|
||differences|liabilities|differences|liabilities|

 (3)Deferred income tax assets and deferred income tax liabilities listed after off-set
In RMB
||||||
|-|-|-|-|-|
|||Ending balance of|Trade-off between the|Opening balance of|
||Trade-off between the||||
|||deferred income tax|deferred income tax|deferred income tax|
|Item|deferred income tax||||
|||assets or liabilities after|assets and liabilities at|assets or liabilities after|
||assets and liabilities||||
|||off-set|period-begin|off-set|
|Deferred income tax||||775,645.41|
|assets|||||

(4)Details of unrecognized deferred income tax assets
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Deductible temporary difference|25,599,989.61|22,049,335.17|
|Deductible losses|144,594,924.49|135,919,643.05|
|Total|170,194,914.10|157,968,978.22|

 (5)Deductible losses of un-recognized deferred income tax assets expired on the followed year
In RMB
|||||
|-|-|-|-|
|Year|Period-end|Period-begin|Note|
|2019|30,576,125.82|30,576,125.82|2014|
|2020|33,429,382.84|33,429,382.84|2015|
|2021|19,481,015.78|19,481,015.78|2016|
|2022|52,327,940.32|52,433,118.61|2017|
|2023|8,780,459.73||2018|
|Total|144,594,924.49|135,919,643.05|--|

Other explanation :
19. Other non-current assets
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Engineering amount paid in advance|120,392,369.00||
|Account paid in advance for lands||10,427,021.55|
|Equipment amount paid in advance|1,350,783.36||
|Total|121,743,152.36|10,427,021.55|

 Other explanation :
20. Note payable and account payable
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Account payable|6,668,789.67|15,487,833.06|
|Total|6,668,789.67|15,487,833.06|

 (1)Category of note payable
In RMB
||||
|-|-|-|
|Category|Ending balance|Opening balance|

Total due note payable without payment at end of the period was Yuan
(2)Account payable
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Account payable for materials|33,996.00||
|Account payable for engineering|6,596,413.67|15,406,565.98|

||||
|-|-|-|
|Account payable for goods||7,994.50|
|Account payable for equipment|20,200.00|8,700.00|
|Other|18,180.00|64,572.58|
|Total|6,668,789.67|15,487,833.06|

 (3) Important account payable with over one year account age
In RMB
||||
|-|-|-|
|Item|Ending balance|Reasons for non-repayment or carry-over|
|Chengde County Xingcheng Construction|||
||1,474,499.03|Engineering amount|
|& Installation Company|||
|Chengde Great Wall Construction Group|||
||1,353,100.46|Engineering amount|
|Co., Ltd.|||
|Chengde Licheng Construction &|||
||1,276,900.24|Engineering amount|
|Installation Engineering Co., Ltd.|||
|Chengde Yongwang Construction|||
||867,887.22|Engineering amount|
|Engineering Co., Ltd.|||
|Handan Hanyi Construction Engineering|||
||400,000.00|Engineering amount|
|Co., Ltd.|||
|Total|5,372,386.95|--|

Other explanation :
21. Accounts received in advance
(1)Accounts received in advance
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Account received in advance for|||
||14,427,450.03|62,427,764.58|
|property-Huijing Tiandi|||
|Account received in advance for goods|64,400.00||
|Resident heating fees received in advance|1,561,464.19|1,530,016.02|
|Other|216,005.77|207,928.77|
|Total|16,269,319.99|64,165,709.37|

 (2)Major account received in advance for over one year age
In RMB
||||
|-|-|-|
|Item|Ending balance|Reasons for non-repayment or carry-over|

(3)Project closed for account without complete in construction from construction contract at period-end In RMB
|||
|-|-|
|Item|Amount|

Other explanation :
The Company needs to comply with the disclosure requirement of Information Disclosure Guidelines of Shenzhen Stock Exchange No.3-engaged in real estate business for the listed companies
Top 5 accounts received in advance:
In RMB
|||||||
|-|-|-|-|-|-|
|||||Estimated|Ratio for sales in|
|Serial|Name of project|Opening balance|Ending balance|||
|||||completion time|advance|
|1|Huijing Tiandi|62,427,764.58|14,427,450.03|31 Dec. 2016|95.89%|

 22. Wage payable
(1)Wage payable
In RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Current increased|Current decreased|Ending balance|
|I. Short-term employee|||||
||2,177,237.35|19,230,912.96|20,456,998.72|951,151.59|
|benefits|||||
|II. Post-employment|||||
|benefits - defined|24,431.58|1,738,973.07|1,733,466.65|29,938.00|
|contribution plans|||||
|III. Dismission welfare||350,910.00|350,910.00||
|Total|2,201,668.93|21,320,796.03|22,541,375.37|981,089.59|

 (2)Short-term employee benefits
In RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Current increased|Current decreased|Ending balance|
|1. Salary, bonus,|||||
||2,159,954.12|16,584,879.67|17,820,532.20|924,301.59|
|allowance and subsidy|||||
|2. Employee welfare||1,048,726.37|1,048,726.37||
|3. Social insurance|16,390.01|800,082.26|799,002.27|17,470.00|
|Including: medical|||||
||14,341.26|660,767.95|659,634.21|15,475.00|
|insurance expenses|||||
|Work|682.92|67,528.45|67,774.37|437.00|

||||||
|-|-|-|-|-|
|injury insurance|||||
|expenses|||||
|Maternity|||||
||1,365.83|71,785.86|71,593.69|1,558.00|
|insurance|||||
|4. Housing provident|||||
||495.00|793,613.40|784,728.40|9,380.00|
|funds|||||
|5. Labor union|||||
|expenditures and|||||
||398.22|3,611.26|4,009.48||
|employee education|||||
|expenses|||||
|Total|2,177,237.35|19,230,912.96|20,456,998.72|951,151.59|

 (3)Defined contribution plans
In RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Current increased|Current decreased|Ending balance|
|1.Basic endowment|||||
||23,646.10|1,694,363.43|1,688,889.53|29,120.00|
|insurance expenses|||||
|2.Unemployment|||||
||785.48|44,609.64|44,577.12|818.00|
|insurance expenses|||||
|Total|24,431.58|1,738,973.07|1,733,466.65|29,938.00|

 Other explanation :
23. Taxes payable
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|VAT|364,882.08|41,473.25|
|Enterprise income tax||12,906,984.10|
|Individual income tax|12,830.10|47,250.06|
|Urban maintenance and construction tax|20,216.47|432.35|
|Land appreciation tax|468,597.56||
|Land use tax||136,349.73|
|Educational surtax|12,129.88|354.44|
|Stamp tax|35,224.90|37,978.90|
|Local educational surtax|8,086.59|236.30|

||||
|-|-|-|
|Total|921,967.58|13,171,059.13|

 Other explanation :
24. Other account payable
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Interest payable|193,333.41||
|Other account payable|118,376,885.44|25,952,193.34|
|Total|118,570,218.85|25,952,193.34|

 (1)Interest payable
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Interest of the long-term loans which has|||
|interest paid by installment and repayment|193,333.41||
|of principal at maturity|||
|Total|193,333.41||

Important interest overdue without payment:
In RMB
||||
|-|-|-|
|Borrower|Amount overdue|Overdue causes|

Other explanation :
(2)Other account payable
1)Other account payable by nature
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Deposit and margin|971,041.20|712,541.20|
|Agency fee|309,178.00|1,525,800.00|
|Intercourse current|19,580,486.66|22,953,440.32|
|Withhold and remit tax|10,679.28|22,061.90|
|Other|97,505,500.30|738,349.92|
|Total|118,376,885.44|25,952,193.34|

 2)Other account payablewith large amount and aging of over one year
In RMB
||||
|-|-|-|
|Item|Ending balance|Reasons for non-repayment or carry-over|

Other explanation
25. Long-term loans
(1)Category of long-term loans
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Mortgage loan|101,710,000.00||
|Total|101,710,000.00||

Explanation on category of long-term loans:
Other explanation, including the section of the rate:
As of December 31, 2018, thecompany’s long-term loan balance of Bank of Dongguan Co., Ltd. Songshan Lake Technology Sub-branch was 1,017,100 millionYuan, and the loan was limited to the follow-up construction of the equipment industrialization project of Dongfeng New Energy. Dongfeng Technology Group Co., Ltd., Dongguan Dongfeng Technology Development Co., Ltd., Dongguan Zhongchuang New Energy Technology Co., Ltd., Dongguan Aolin New Materials Co., Ltd., and Dongguan Haizhuo Energy Technology Co., Ltd. guaranteed with the joint liability warranty; and the collaterals were the land use rights and above-ground buildings of Yue ( 2017) Dongguan Real Property No. 0121786; the pledge was100% equity of Dongguan Dongfeng Intelligent Technology Co., Ltd. held by Dongguan Dongfeng Technology Development Co., Ltd.
26. Share capital
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Increased (decreased) in Period||||||
||Opening|||Shares||||
|||New shares|||||Ending balance|
||balance||Bonus shares|converted from|Other|Sub-total||
|||issued||||||
|||||public reserve||||
|Total shares|706,320,000.00||||||706,320,000.00|

 Other explanation :
27. Capital public reserve
In RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Current increased|Current decreased|Ending balance|
|Capital premium (share|||||
||397,808,090.32|||397,808,090.32|
|premium)|||||
|Other capital reserves|65,873,219.23|||65,873,219.23|
|Total|463,681,309.55|||463,681,309.55|

Other explanation, including changed in Period as well as reasons for changes:
28. Treasury stock
In RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Current increased|Current decreased|Ending balance|
|Equity repurchase||19,718,613.55||19,718,613.55|
|Total||19,718,613.55||19,718,613.55|

 Other explanation, including changed in Period as well as reasons for changes:
29. Surplus public reserve
In RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Current increased|Current decreased|Ending balance|
|Statutory surplus|||||
||76,791,550.17|||76,791,550.17|
|reserves|||||
|Total|76,791,550.17|||76,791,550.17|

 Explanation on surplus reserve, including changed in Period as well as reasons for changes:
30. Retained profit
In RMB
||||
|-|-|-|
|Item|Current period|Last period|
|Retained profits at the end of last period beforeadjustment|||
||-882,864,082.85|-886,966,408.74|
|Retained profits at the beginning of the periodafter adjustment|-882,864,082.85||
|||-886,966,408.74|
|Add: The net profits belong to owners of patentcompany of this period|||
||7,383,835.76|4,102,325.89|
|Retained profits at the end of the period|-875,480,247.09|-882,864,082.85|

 Details about adjusting the retained profits at the beginning of the year:
1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new regulations affect the undistributed profits at the beginning of the year amounting to Yuan.
2) The changes in accounting policies affect the undistributed profits at the beginning of the year amounting to Yuan.
3) The major accounting error correction affects the undistributed profits at the beginning of the year amounting to Yuan.
4) Merge scope changes caused by the same control affect the undistributed profits at the beginning of the year amounting to Yuan. 5) Other adjustments affect the undistributed profits at the beginning of the year amounting to Yuan.
31. Operating income and operating cost
In RMB
||||||
|-|-|-|-|-|
||Current period||Last period||
|Item|||||
||Income|Cost|Income|Cost|
|Main business|123,462,309.48|108,747,731.24|248,704,998.16|236,724,015.73|
|Other business|45,774.42||1,366,864.91|459,123.94|
|Total|123,508,083.90|108,747,731.24|250,071,863.07|237,183,139.67|

 The Company needs to comply with the disclosure requirement of Information Disclosure Guidelines of Shenzhen Stock Exchange No.3-engaged in real estate business for the listed companies
Top 5 account with revenue recognized in the period:
In RMB
||||
|-|-|-|
|Serial|Name of project|Revenue|
|1|Huijing TiandiItem|118,807,719.93|

 32. Tax and extras
In RMB
||||
|-|-|-|
|Item|Current period|Last period|
|Urban maintenance and construction tax|207,179.94|607,169.86|
|Educational surtax|129,234.81|364,301.93|
|Property tax|109,230.51|90,831.37|
|Business tax|547,780.45|9,120,014.46|
|Local educational surtax|77,945.15|242,867.96|
|Land appreciation tax|-2,214,613.09|-1,865,748.43|
|Other|895,409.34|1,231,857.33|
|Total|-247,832.89|9,791,294.48|

 Other explanation :
33. Sales expense
In RMB
||||
|-|-|-|
|Item|Current period|Last period|
|Repair charge||196,990.00|
|Salary|89,350.00||
|Advertising fees|1,200.00|148,130.00|
|Production costs||61,286.00|

||||
|-|-|-|
|Packaging fee|4,902.12|162,064.81|
|Agency fee||13,848,419.45|
|Other|19,894.59|200.00|
|Total|115,346.71|14,417,090.26|

 Other explanation :
34. Management expense
In RMB
||||
|-|-|-|
|Item|Current period|Last period|
|Remuneration|11,289,704.54|13,255,871.45|
|Agency fee|2,712,227.89|3,684,947.19|
|Business entertainment|4,503,880.70|4,067,254.25|
|Depreciation and amortization|3,993,026.12|2,160,421.40|
|Business-travel expense|1,299,616.63|1,615,666.00|
|Office allowance|723,349.13|928,976.58|
|Travelling expenses|47,218.03|199,479.05|
|Amortization of low value consumables|111,693.84|35,015.42|
|Long-term deferred expenses|41,682.82|153,935.87|
|Repair charge|415,429.92|245,340.37|
|Material consumption|390,272.71|354,911.66|
|Rental fee|5,700.00|201,720.00|
|Premium|129,447.86|117,794.81|
|Residual premium|8,746.67|169,852.55|
|Other|3,564,651.61|2,361,185.01|
|Total|29,236,648.47|29,552,371.61|

 Other explanation :
35.R&D expense
In RMB
||||
|-|-|-|
|Item|Current period|Last period|
|Staff salary|2,989,415.84|120,080.00|
|Cost of fuel and power|15,191.25||
|Material expenses|305,017.96|4,809.69|
|Depreciation expenses|131,417.67||

||||
|-|-|-|
|Other|1,307,810.14||
|Total|4,748,852.86|124,889.69|

 Other explanation :
36. Financial expense
In RMB
||||
|-|-|-|
|Item|Current period|Last period|
|Interest expense||1,617,172.91|
|Less: Interest income|175,090.92|645,550.99|
|Profit/loss on exchange|-269,681.12|330,220.97|
|Bank handling charges|59,219.06|44,334.40|
|Total|-385,552.98|1,346,177.29|

 Other explanation :
37. Asset impairment loss
In RMB
||||
|-|-|-|
|Item|Current period|Last period|
|I. Bad debt loss|108,706.75|367,061.18|
|II. Loss on inventory valuation||-3,960.15|
|III. Impairment loss of financial assets|||
||339,366.05|6,113,728.80|
|available for sale|||
|Total|448,072.80|6,476,829.83|

 Other explanation :
38. Other income
In RMB
||||
|-|-|-|
|Sources of other income|Current period|Last period|
|Government grant|2,896,903.64||

39. Investment income
In RMB
||||
|-|-|-|
|Item|Current period|Last period|
|Long-term equity investment income|||
|||-980,509.06|
|calculated on equity method|||

||||
|-|-|-|
|Investment income from disposal of long-term|||
||18,501,800.54||
|equity investment|||
|Investment income from financial products in|||
||1,144,246.03|2,482,382.07|
|the Year|||
|Total|19,646,046.57|1,501,873.01|

 Other explanation :
40. Income from assets disposal
In RMB
||||
|-|-|-|
|Income from assets disposal|Current period|Last period|
|Gains/losses from biological assets|||
||-18,684.68|-304,370.98|
|disposal|||
|Gains/losses from intangible assets|||
|||17,692,850.63|
|disposal|||
|Gains/losses from fixed assets disposal|4,544,930.26|47,671,503.99|
|Total|4,526,245.58|65,059,983.64|

 41. Non-operating revenue
In RMB
|||||
|-|-|-|-|
||||Amount reckoned into current|
|Item|Current period|Last period||
||||non-recurring gains/losses|
|Other|3,125.00|24,633.24|3,125.00|
|Total|3,125.00|24,633.24||

Government grants reckoned into current gains/losses:
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||Impact on||||Assets-relate|
||Distributed|||current|Special|Current||d|
|Item||Reasons|Nature||||Last Period||
||by|||gains/losses|grants (Y/N)|Period||/income-relat|
|||||(Y/N)||||ed|

 Other explanation :
42. Non-operating expenditure
In RMB
|||||
|-|-|-|-|
||||Amount reckoned into current|
|Item|Current period|Last period||
||||non-recurring gains/losses|
|Donating|384,980.00|700,000.00|384,980.00|

|||||
|-|-|-|-|
|Total losses on disposal of||||
||259.98|43,889.51|259.98|
|non-current assets||||
|Penalty and fine|2,373.71|32,943.78|2,373.71|
|Compensation||30,000.00||
|Other|86,330.73|16,529.25|86,330.73|
|Total|473,944.42|823,362.54||

Other explanation :
43. Income tax expense
(1) Statement of income tax expenses
In RMB
||||
|-|-|-|
|Item|Current period|Last period|
|Current income tax|110,309.68|12,906,984.10|
|Deferred income tax expenses|775,645.41||
|Total|885,955.09|12,906,984.10|

 (2)Adjustment on accounting profit and income tax expenses
In RMB
|||
|-|-|
|Item|Current period|
|Total profit|7,443,194.06|
|Income tax measured by statutory/applicable tax rate|1,860,798.52|
|Impact on different tax rate for subsidiary|-44,438.79|
|Impact from adjustment for previous period’s income tax|110,309.68|
|Impact of cost, expenses or losses unable to deductible|659,772.96|
|Impact on deductible losses for deferred income tax recognized||
||-4,756,971.25|
|at period-end before adjustment||
|The deductible temporary differences or deductible losses of the||
||3,056,483.97|
|un-recognized deferred income tax assets in the Period||
|Income tax expenses|885,955.09|

 Other explanation
44. Other comprehensive income
Found in Note
45. Notes to statement of cash flow
(1) Other cash received in relation to operation activities
In RMB
||||
|-|-|-|
|Item|Current period|Last period|
|Interest income|175,090.92|645,550.99|
|Intercourse current|47,378,409.76|20,201,421.06|
|Subsidy income|2,896,000.00||
|Other|65,681,669.90|2,997,789.75|
|Total|116,131,170.58|23,844,761.80|

 Explanation on other cash received in relation to operation activities:
(2)Other cash paid in relation to operation activities
In RMB
||||
|-|-|-|
|Item|Current period|Last period|
|Disbursement costs|264,339.21|17,015,616.01|
|Donation costs|384,980.00|700,000.00|
|Intercourse current|163,483.99|20,683,332.74|
|Penalty and overdue fine|2,373.71|32,943.78|
|Other|38,401.80|3,374,469.10|
|Total|853,578.71|41,806,361.63|

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

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

Explanation on cash paid related with other investment activities:
(5)Cash received from other financing activities
In RMB
||||
|-|-|-|
|Item|Current period|Last period|

Explanation on cash received from financing activities:
(6) Cash paid related with other financing activities
In RMB
||||
|-|-|-|
|Item|Current period|Last period|
|Change in restricted currency funds||698,492.97|
|Stock repurchase|19,718,613.55||
|Total|19,718,613.55|698,492.97|

 Explanation on cash paid related with otherfinancing activities:
46. Supplementary information to statement of cash flow
(1)Supplementary information to statement of cash flow
In RMB
||||
|-|-|-|
|Supplementary information|Current Period|Last Period|
|1. Net profit adjusted to cash flow of|||
||--|--|
|operation activities:|||
|Net profit|6,557,238.97|4,036,213.49|
|Add: Preparations of assets depreciation|448,072.80|6,476,829.83|
|Depreciation of fixed assets, consumption of|||
|oil assets and depreciation of productive|2,261,508.53|1,751,789.36|
|biology assets|||
|Amortization of intangible assets|1,970,099.34|747,346.80|
|Amortization of long-term deferred expenses|207,423.67|153,935.87|
|Loss from disposal of fixed assets, intangible|||
|assets and other long-term assets(gain is|-4,526,245.58|-66,313,983.64|
|listed with ―-‖)|||
|Loss of fixed assets scrapping (gain is listed|||
||259.98|43,889.51|
|with ―-‖)|||
|Financial expenses (gain is listed with ―-‖)|-----||
|Investment losses(gain is listed with ―-‖)|-19,646,046.57|-1,501,873.01|
|Decrease of deferred income tax assets(gain|||
||775,645.41||
|is listed with ―-‖)|||

||||
|-|-|-|
|Decrease of inventory (gain is listed with|||
||83,068,268.34|107,315,235.57|
|―-‖)|||
|Decrease of operating receivable accounts|||
||-58,983,097.43|6,341,395.52|
|(gain is listed with ―-‖)|||
|Increase of operating payable accounts (loss|||
||22,432,921.85|-143,602,353.58|
|is listed with ―-‖)|||
|Net cash flow arising from operating|34,566,049.31|-84,551,574.28|
|activities|||
|2. Material investment and financing not|||
||--|--|
|involved in cash flow|||
|3. Net change of cash and cash equivalents:|--|--|
|Balance of cash at period end|33,512,916.99|68,107,388.69|
|Less: Balance of cash equivalent at|||
||68,107,388.69|126,970,834.83|
|year-begin|||
|Net increase of cash and cash equivalents|-34,594,471.70|-58,863,446.14|

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

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

Other explanation :
(4)Constitution of cash and cash equivalent
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|

||||
|-|-|-|
|Ⅰ. Cash|33,512,916.99|68,107,388.69|
|Including: Cash in stock|368,614.69|61,945.60|
|Bank deposit available for payment at|||
||33,144,302.30|68,045,443.09|
|any time|||
|Ⅲ. Balance of cash and cash equivalent at|33,512,916.99|68,107,388.69|
|period-end|||

Other explanation :
Balance of cash and cash equivalent dated 31 December 2018 amounted as 33,512,916.99 Yuan, monetary fund has 36,306,825.10 Yuan at end of the period, which has 2,793,908.11 Yuan in difference, mainly because among the ending balance of monetary fund, there is a margin of housing mortgage that can not be free in three months, and same as the year for 2017
47. Notes on items of changes ofowner’s equity
Name and adjusted amount on―Other‖ at balance of year-end of last year:
48. Assets with ownership or right-to-use restricted
In RMB
||||
|-|-|-|
|Item|Ending book value|Reasons of restricted|
|Monetary fund|2,793,908.11|Margin of housing mortgage|
|Total|2,793,908.11|--|

Other explanation :
49. Foreign currency monetary items
(1) Foreign currency monetary
In RMB
|||||
|-|-|-|-|
||Balance of foreign currency at|||
|Item||Converted exchange rate|RMB concert at Period-end|
||period-end|||
|Monetary fund|--|--||
|Including: USD|819,740.92|6.8632|5,626,045.88|
|Euro||||
|HKD|23,006,375.77|0.8762|20,158,186.45|
|Account receivable|--|--||
|Including: USD||||
|Euro||||

||||
|-|-|-|
|HKD|||
|Long-term loans|--|--|
|Including: USD|||
|Euro|||
|HKD|||

Other explanation :
(2) Explanation on foreign operational entity, as for major foreign operational entity, disclosed foreign main operation land, book-keeping currency and basis; and disclosed reasons if the book-keeping currency changed
□Applicable√ Not-applicable
50. Government grants
(1) Government grants
In RMB
|||||
|-|-|-|-|
||||Amount reckoned into current|
|Category|Amount|Item listed||
||||gain/loss|
|Subsidy for demonstration ofthe renewable energy building||Subsidy for demonstration of||
||2,890,000.00||2,890,000.00|
|||the renewable energy building||
|Subsidy from entrepreneurshipdrives employment||Subsidy from entrepreneurship||
||6,000.00||6,000.00|
|||drives employment||
|VAT reduction|903.64|VAT reduction|903.64|
|Total|2,896,903.64||2,896,903.64|

 (2) Government grants refund
□Applicable√ Not-applicable
Other explanation :
51. Other
VIII. Changes of consolidation range
1. Enterprise combined not under the same control
(1)Enterprise combined not under the same control in the period
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||||||||Revenue of|Net profit of|
||||||||the purchaser|the purchaser|
||Time for|Cost for|Ratio of|||Basis of the|||
|The||||Way to|Purchasing||from|from|
||equity|equity|equity|||purchasing|||
|purchaser||||obtained|date||purchasing|purchasing|
||obtained|obtained|obtained|||date|||
||||||||date to|date to|
||||||||period-end|period-end|
|HaizhuoEnergy||||Enterprise|2018-3-6|*1|0.00|-465,527.38|
||6 March|15,956,000.0||combined not|||||
||||62.00%||||||
||2018|0||under the|||||
|||||same control|||||

*1 The investment agreement has been approved by the Board and completed the changes in industry and commerce. The equity investment amount has paid in full, the financial and operation policy of the combined party has been control
Other explanation :
Haizhuo Energy established on 15 September 2015 with registered capital of 25 million Yuan.Registered capital comes to 25 million Yuan from 9.5 million Yuan.Dongguan Hangda Venture Investment Co., ltd. and Dongfeng Technology Development entered into an equity transfer agreement, that is increasing capital of 15.956 million Yuan to Haizhuo Energy from Dongguan Technology, including registered capital of 15.5 million Yuan and 456000 Yuan reckoned into the capital reserves of Haizhuo Energy. On 6 March 2018, Dongguan Dongfeng Technology invested 15.5 million Yuan, a62% in total registered capital.
(2)Combined cost and goodwill
In RMB
|||
|-|-|
|Combined cost|Haizhuo Energy|
|--Cash|15,956,000.00|
|Total combined costs|15,956,000.00|
|Less: ratio of the recognizable fair value of the net assets||
||15,500,000.00|
|obtained||
|Amount of the goodwill/combined cost less than the|456,000.00|

||
|-|
|recognizable fair value of the net assets|

Explanation on determination method for fair value of combine cost, contingent consideration and its changes:
Reason of major goodwill resulted:
Other explanation :
(4) The purchaser's identifiable assets and liabilities on purchasing date
In RMB
||||
|-|-|-|
||Fair value on purchasing date|Book value on purchasing date|
|Net assets|25,333,750.24|25,338,723.00|
|Less: Minority interests|9,626,825.09|9,628,714.74|
|Net assets acquired|15,706,925.15|15,710,008.26|

 Determination method for fair value of the identifiable assets and liabilities:
Contingent liability of the purchaser taken during enterprise merger:
Other explanation :
(4) Gains/losses arising from re-calculation on fair value for the equity held before purchasing date
Whether the enterprise combine through multiple transaction by steps or not and obtained controlling rights during the reporting period
□Y√N
(5)Explanation on the combination consideration, which is unable to confirm rationally on purchasing date or combination date or on the fair value of identifiable assets and liabilities for the purchaser
(6)Other explanation
2.Enterprise combined under the same control
(1)Enterprise combined under the same control in the period
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||||||Revenue of|Net profit of|||
||||||the combined|the combined|Revenue of|Net profit of|
|||Basis for|||||||
||Equity ratio|||Basis of|party from|party from|the combined|the combined|
|Combined||merger under|Combination||||||
||in|||combination|period of|period of|party during|party during|
|party||the same|date||||||
||combination|||date|combined to|combined to|comparative|comparative|
|||control|||||||
||||||combination|combination|period|period|
||||||date|date|||

||||||||
|-|-|-|-|-|-|-|
|Dongfeng|||||||
||100.00%|7 April 2016|0.00|0.00|0.00|0.00|
|Power|||||||

Other explanation :
Gist of transaction constituting the business merger under the same control and instructions for the basis of determination on the merger date
Dongfeng Power was invested and established by Tibet Dongfeng Investment Co., Ltd. on April 7, 2016, and its ultimate owner was Mr. Wang Dong who is thecompany’s largest shareholder.
(2)Combine cost
In RMB
||
|-|
|Combine cost|

Explanation on contingent consideration and its changes:
Other explanation :
Dongfeng Power was established on April 7, 2016 with a registered capital of RMB 70 million. On August 28, 2018, Dongguan Dongfeng Technology Development and Tibet Dongfeng Investment Co., Ltd. signed an equity transfer agreement to transfer100% equity at RMB 0.00. On December 25, 2018, Dongguan Dongfeng Technology Development signed a shareholder transfer agreement with the Company to assign100% equity at RMB0.00.
(3)Book value of the combined party's assets and liabilities on combine date
In RMB
||||
|-|-|-|
||Combination date|End of last period|
|Other account payable|500.00|500.00|
|Net assets|-500.00|-500.00|
|Net assets acquired|-500.00|-500.00|

 Contingent liability of the combined party taken in combination:
Other explanation :
3. Subsidiary disposal
Whether there is a single disposal of the investment in subsidiaries that is the loss of control
√ Yes□No
In RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||Basis for|The|Proporti|Book|Fair|Gain/los|The|The|
|||Ratio of|Disposal|The time|||||||||
||Price of||||determin|differenc|on of|value of|value of|s of the|method|amount|
|Subsidia||the|method|when|||||||||
||equity||||ing the|e|residual|the|the|residual|and main|of other|
|ry||equity|for|controlli|||||||||
||disposed||||time|between|equity on|residual|residual|equity|hypothes|compreh|
|||disposed|equity|ng right|||||||||
||||||when|the|the date|equity|equity|re-measu|is of|ensive|

||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||lose|controlli|disposal|when|on the|on the|red by|determin|income|
||||||ng right|price and|controlli|date|date|fair|ing the|transferr|
||||||lose|the net|ng right|when|when|value|fair|ed into|
|||||||assets|lose|controlli|controlli||value of|investme|
|||||||share of||ng right|ng right||residual|nt|
|||||||the||lose|lose||equity on|gain/loss|
|||||||subsidiar|||||the date|related to|
|||||||y at the|||||when|equity|
|||||||level of|||||controlli|investme|
|||||||consolid|||||ng right|nt of|
|||||||ated|||||lose|original|
|||||||financial||||||subsidiar|
|||||||statemen||||||ies|
|||||||ts|||||||
|||||||correspo|||||||
|||||||nding to|||||||
|||||||the|||||||
|||||||disposal|||||||
|||||||investme|||||||
|||||||nt|||||||
|||||30|Controlli||||||||
|Nanjiang|22,639,5|||||18,328,0|||||||
|||100.00%|On sale|August|ng rights||0.00%|0.00|0.00|0.00|-|0.00|
|Trading|00.00|||||70.03|||||||
|||||2018|transfer||||||||

Other explanation :
The Company transferred its100% stake in Chengde NanjiangTrading Co., Ltd. to Chengde Chengjin Commercial and Trading Co., Ltd. on August 14, 2018, therefore, Chengde Nanjiang Trading Co., Ltd. was no longer included in the consolidation scope of the balance sheet in current period. However, the Accounting Standards for Business Enterprises No. 33– Consolidated Financial Statements stipulates that if a parent company disposes of a subsidiary during the reporting period, the income, expenses and profits of the subsidiary from the beginning of the period to the disposal date should be included in the consolidated income statement, and the cash flows of the subsidiary from the beginning of the period to the disposal date should be included in the consolidated cash flow statement. Therefore, the income, expenses and profits of Chengde Nanjiang Trading Co., Ltd. from the beginning of the current period to the date of cancellation were still included in the scope of consolidation.
Whether there is disposal of the investment in subsidiaries through multiple transactions step by step and loss of control in the current period
□ Yes√ No
4. Other reasons for consolidation range changed
Reasons for changed on consolidation range (such as new subsidiary established, subsidiary liquidated etc.)And relevant information: 5. Other
IX. Equity in other entity
1. Equity in subsidiary
(1) Constitute of enterprise group
||||||||
|-|-|-|-|-|-|-|
||Main operation|||Share-holding ratio|||
|Subsidiary||Registered place|Business nature|||Acquired way|
||place|||Directly|Indirectly||
||||Management and||||
|Kefeng|||consultant of||||
||Chengde|Chengde||100.00%||Establishment|
|Engineering|||engineering||||
||||project||||
|Dongfeng|||Industrial||||
||Chengde|Chengde||100.00%||Establishment|
|Investment|||investment||||
||||International||||
|Nanjiang Asia|Chengde|Chengde||100.00%||Establishment|
||||investment||||
|Kefeng Trading|Chengde|Chengde|Commercial trade|100.00%||Establishment|
|Hangzhou|||High-tech||||
||Hangzhou|Hangzhou||100.00%||Establishment|
|Dongfeng|||development||||
|Dongguan|||Technology||||
|Dongfeng|Dongguan|Dongguan|Development of|100.00%||Establishment|
|Technology|||new materials||||
||||Technology||||
|Kefeng|||Development of||||
||Chengde|Chengde||100.00%||Establishment|
|Aerospace|||aerospace||||
||||products||||
||||Technology|||Enterprise|
|Dongfeng Power|Dongguan|Dongguan|Development of|100.00%||combined under|
||||clean energy|||the same control|
|Ecological|||Animal||||
||Chengde|Chengde|||100.00%|Establishment|
|Agriculture|||husbandry||||
||||Inflatable||||
|Nanjiang|||capsule,||||
||Chengde|Chengde|||100.00%|Establishment|
|Technology|||production and||||
||||sale of Grapheme||||
|Huijing Property|Chengde|Chengde|Property||100.00%|Establishment|

|||||||
|-|-|-|-|-|-|
||||management|||
||||||Enterprise|
||||Technology|||
|Zhongchuang|||||combined not|
||Dongguan|Dongguan|Development of|60.98%||
|New Energy|||||under the same|
||||new energy|||
||||||control|
||||Technology|||
|Dongguan|||||Enterprise|
||||Development in|||
|Dongfeng|Dongguan|Dongguan||100.00%|combined under|
||||field of|||
|Intelligent|||||the same control|
||||technology|||
||||||Enterprise|
||||Nano metric|||
|Aolin New|||||combined not|
||Dongguan|Dongguan|technology|62.00%||
|Materials|||||under the same|
||||material|||
||||||control|
||||||Enterprise|
||||Technology|||
||||||combined not|
|Haizhuo Energy|Dongguan|Dongguan|Development of|62.00%||
||||||under the same|
||||new materials|||
||||||control|

Explanation on share-holding ratio in subsidiary different from ratio of voting right:
Basis for controlling the invested entity with half or below voting rights held and without controlling invested entity but with over half and over voting rights:
Controlling basis for the structuring entity included in consolidated range:
Basis on determining to be an agent or consignor:
Other explanation :
*1Nanjiang Investment was established by Nanjiang Real Estate dated 9 October 2012, original registered capital was 50 million Yuan, shareholder Nanjiang Real Estate contribute 50 million Yuan, presenting 100 percent of the registered capital; on 21 December 2012, the 100 percent equity held by Nanjiang Real Estate are transferred to Nanjiang Company with 50 million Yuan, after transferred, Dongfeng Sci-Tech Group holds total equity of the Nanjiang Investment; on 6 January 2013, Dongfeng Sci-Tech Group increase capital 40 million Yuan to Nanjiang Investment, and registered capital comes to 90 million Yuan after capital increased.*2 Ecological Agriculture was established by Nanjiang Investment on 24 October 2012, original registered capital was 5 million Yuan, shareholder Nanjiang Investment contributes 5 million Yuan with 100 percent held in total registered capital. On 18 April 2013, Nanjiang Investment increase 5 million Yuan to Ecological Agriculture and the registered capital turns to 10 million Yuan after increased.
*3Nanjiang Asia was founded by Dongfeng Sci-Tech Group on 14th Nov. 2013, located in Hong Kong, with register capital ofUS$ 20 million, the paid-up wasUS$ 797, 583.34.
*4Nanjiang Technologywas founded jointly by Nanjiang Investment and Ningbo Morsh Technology on 24th Jan. 2013 with register capital of 50 million Yuan, including Nanjiang Investment invested 45 million Yuan taking up90% of the total investment; Ningbo Morsh Technology invested 5 million Yuan taking up10%.
*5 Huijing Property was founded by Nanjiang Investment on 18th Nov. 2013 with register capital of 500,000 Yuan. Shareholder
Nanjiang Investment invested 500, 000 Yuan wholly owning it.
*6Dongfeng Power was established by Tibet Dongfeng Investment Co., Ltd. on April 7, 2016 with a registered capital of RMB 70 million and an actual capital contribution of RMB 0. On August 28, 2018, it signed an equity transfer agreement with Dongguan Dongfeng Technology to transfer the100% equity to Dongguan Dongfeng Technology at 0 yuan. On December 25, 2018, Dongguan Dongfeng Technology transferred its100% equity to the Company at 0.00 yuan. As of December 31, 2018, it has not actually invested.
*7 Hangzhou Dongfeng established on 21 September 2016 by Dongfeng Sci-Tech Group, registered capital was 50 million Yuan; actually paid-in capital was 30 million Yuan.
*8Kefeng Aerospace established on 12 December 2016 by Dongfeng Sci-Tech Group, registered capital was 30 million Yuan, no funds actually paid-up ended as 31st December 2018.
*9 Kefeng Engineering and Kefeng Trading are the new enterprise derivative split from Dongfen Trade and Business on 6 March 2017, registered capital amounted as 0.5 million Yuan and 8.5 million Yuan respectively. Totally100% of the registered capital are taken by Dongfeng Sci-Tech Group.
*10 DongguanDongfengTechnology established on 17 August 2017 with registered capital of 100 million Yuan. Dongfeng Sci-Tech Group invested 100 million Yuan on 20 September 2017, a100% of the registered capital takes.
*11Zhongchuang New Energy established on 4 July 2017 with registered capital of 24.6 million Yuan. On 5 September 2017, the Dongguang Dongfeng Technology Development entered into a capital increase agreement with Dongguang Hangda Venture Investment, registered capital goes to 24.6 million Yuan from one million Yuan. Among them, Dongguang Dongfeng Technology Development contributes 15 million Yuan in monetary, a60.98% in total shares. Dongguang Dongfeng Technology contributed 15 million Yuan on 24 October 2017
*12Dongguan Dongfeng Intelligent established on 14 February 2017 with registered capital of 60 million Yuan. On 5 December 2017, Dongfeng Technology Development entered into an equity transfer agreement with Dongguan Dongfeng New Energy with consideration of 15 million Yuan. Registered capital of 45 million are paid on 27 December 2017 with totally100% holds in shares*13 Aolin New Material established on 23 October 2015 with registered capital of 25 million Yuan. On 4 December 2017, Aolin entered into a capital increase agreement with Dongguang Dongfeng Technology, registered capital comes to 25 million Yuan from 9.5 million Yuan. In line with the agreement between Dongguang Hangda Venture Investment Co., ltd. and Dongfeng Technology Development, increasing capital of 16.4025 million Yuan to Aolin New Material, among which, 15.5 million Yuan will increased for registered capital, the 902,500 Yuan will reckoned into the capital reserves of Aolin New Material. On 29 December 2017, Dongguang Dongfeng Technology invested 15.5 million Yuan, a62% in total registered capital.
*14Haizhuo Energy established on 15 September 2015 with registered capital of 25 million Yuan. On 28 December 2017, Haizhuo Energy entered into a capital increase agreement with Dongguan Dongfeng Technology, registered capital comes to 25 million Yuan from 9.5 million Yuan. In line with the agreement between Dongguan Hangda Venture Investment Co., ltd. and Dongfeng Technology Development, increasing capital of 15.956 million Yuan to Haizhuo Energy, among which, 15.5 million Yuan will increased for registered capital, the 456,000 Yuan will reckoned into the capital reserves of Haizhuo Energy. On 6 March 2018, Dongguan Dongfeng Technology invested 15.5 million Yuan, a62% in total registered capital.
(2)Important non-wholly-owned subsidiary
In RMB
||||||
|-|-|-|-|-|
||||Dividend announced to||
||Share-holding ratio of|Gains/losses attributable||Ending equity of|
|Subsidiary|||distribute for minority in||
||minority|to minority in the Period||minority|
||||the Period||
|Zhongchuang New|||||
||39.02%|-121,134.70|0.00|9,474,457.38|
|Energy|||||
|Aolin New Materials|38.00%|-528,561.69||8,731,050.58|
|Haizhuo Energy|38.00%|-176,900.40||9,449,924.69|

 Explanation on share-holding ratio of minority different from ratio of voting right:
Other explanation :
(3)Main finance of the important non-wholly-owned subsidiary
In RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Ending balance||||||Opening balance||||||
|Subsidia||Non-curr|||Non-curr|||Non-curr|||Non-curr||
||Current||Totalassets|Current||Total|Current||Total|Current||Total|
|ry||ent|||ent|||ent|||ent||
||assets|||liability||liabilities|assets||assets|liability||liabilities|
|||assets|||liability|||assets|||liability||
|Zhongch|||||||||||||
|uang|21,246,0|3,327,16|24,573,2|294,923.||294,923.|24,491,4|123,791.|24,615,2|26,515.0||26,515.0|
||||||0.00||||||0.00||
|New|51.26|9.17|20.43|40||40|28.69|00|19.69|0||0|
|Energy|||||||||||||
|Aolin|||||||||||||
||16,870,1|6,351,54|23,221,7|245,271.||245,271.|22,602,5|1,808,53|24,411,1|43,720.7||43,720.7|
|New|||||0.00||||||0.00||
||73.43|7.29|20.72|82||82|84.99|6.43|21.42|1||1|
|Materials|||||||||||||
|Haizhuo|18,877,6|6,154,48|25,032,1|163,935.||163,935.|||||||
||||||0.00||0.00|0.00|0.00|0.00|0.00|0.00|
|Energy|69.29|8.91|58.20|34||34|||||||

In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||Current period||||Last period||||
||||Total|Cash flow of|||Total|Cash flow of|
|Subsidiary|Operatingrevenue||||Operating||||
|||Net profit|comprehensi|operation||Net profit|comprehensi|operation|
||||||revenue||||
||||ve income|activity|||ve income|activity|
|Aolin New||||-24,286,641.7|||||
||0.00|-310,407.66|-310,407.66||0.00|-11,295.31|-11,295.31|-14,295.31|
|Materials||||1|||||
|Zhongchuang||||-20,514,416.3|||||
||0.00|-1,390,951.81|-1,390,951.81||0.00|0.00|0.00|0.00|
|New Energy||||8|||||
|Haizhuo|0.00|-465,527.38|-465,527.38|-21,762,749.1|0.00|0.00|0.00|0.00|

|||
|-|-|
|Energy|7|

Other explanation :
(4) Significant restrictions on the use of enterprise group assets and pay off debts of the enterprise group (5)Financial or other supporting offer to structuring body included in consolidate statement scope
Other explanation :
2. Transaction that has owners equity shares changed in subsidiary but still with controlling rights
(1) Explanation on changes in owner's equity in subsidiaries
(2) Impact on minority interest and owner's equity attributable to parent company from transaction In RMB
 Other explanation
3. Equity in joint venture and associated enterprise
(1) Important joint venture and associated enterprise
||||||||
|-|-|-|-|-|-|-|
|||||Share-holding ratio||Accounting|
|||||||treatment on|
|Joint venture and|||||||
||Main operation|||||investment for|
|associated||Registered place|Business nature||||
||place|||Directly|Indirectly|joint venture and|
|enterprise|||||||
|||||||associated|
|||||||enterprise|
|Runhua Rural|||||||
|Water (Tianjin)|||International||||
||Tianjin|Tianjin||30.00%||Equity method|
|International|||Trading||||
|Trade Co., Ltd.|||||||

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

Other explanation
(3)Main financial information of the important associated business
In RMB
|||
|-|-|
|Ending balance/Current period|Opening balance/Last period|

 Other explanation
(4)Financial summary for non-important Joint venture and associated enterprise
In RMB
||||
|-|-|-|
||Ending balance/Current period|Opening balance/Last period|
|Joint venture:|--|--|
|Total on below item by shareholding ratio|--|--|
|Associated enterprise:|--|--|
|Total on below item by shareholding ratio|--|--|

Other explanation
(5) Major limitation on capital transfer ability to the Company from joint venture or affiliates
(6) Excess loss occurred in joint venture or associated
In RMB
|||||
|-|-|-|-|
|||Losses un-determined in the||
|Associated enterprise and joint|Accumulated previous losses||Accumulated losses|
|||Period(net profit share in the||
|venture|determined||un-determined at period-end|
|||Period)||

Other explanation
(7) Unconfirmed commitment with joint venture investment concerned
(8) Intangible liability with joint venture or affiliates investment concerned
4. Major conduct joint operation
|||||||
|-|-|-|-|-|-|
|||||Shareholding ratio/quota enjoy||
|Joint operation|Main operation site|Register place|Business nature|||
|||||Directly|Indirectly|

 Explanation on shareholding ratio or quota enjoy in joint operation different from voting rights:
If the joint operation was the independent body, basis of classification of joint operation:
Other explanation
5. Structured body excluding in consolidate financial statement
Relevant explanation:
6. Other
X. Risk related with financial instrument
XI. Related party and related transactions
1. Parent company of the enterprise
|||||||
|-|-|-|-|-|-|
|||||Share-holding ratio||
||||||Voting right ratio on|
|Parent company|Registration place|Business nature|Registered capital|on the enterprise for||
||||||the enterprise|
|||||parent company||

Explanation on parent company of the enterprise
The Company has no parent company; controller refers to the first largest shareholder Mr. Wang Dong, who holds29.49% equity of the Company.
Ultimate controller of the Company is Mr. Wang Dong
Other explanation :
2. Subsidiary of the Enterprise
Found more in Note IX (i) Equity in subsidiary .
3. Associated enterprise and joint venture
Found more in Note IX .
Other associated enterprise and joint venture that have related transaction with the Company in the Period or occurred in previous period:
|||
|-|-|
|Associated enterprise and joint venture||
||Relationship with the Enterprise|
|Runhua Rural Water (Tianjin) International Trade Co., Ltd.|Joint venture|

Other explanation
4. Other related party
|||||
|-|-|-|-|
|Other related party|Relationship with the Enterprise|||
|Runhua RW Industrial Development Company|||Controller of the associated enterprise of the Company|
|Shanxi Products Minfeng Chemical Co., Ltd.|||Controller of the associated enterprise of the Company|
|Dongguan Hangda Venture Investment Co., Ltd.||Non-controlling shareholder of the subsidiary of the Company||

Other explanation
5. Related transaction
(1) Goods purchasing, labor service providing and receiving
Goods purchasing/labor service receiving
In RMB
|||||||
|-|-|-|-|-|-|
|||||Whether over the||
|Related party|Content|Current period|Amount approved||Last period|
|||||transaction limit||

Goods sold/labor service providing
In RMB
|||||
|-|-|-|-|
|Related party|Content|Current period|Last period|

Explanation on goods purchasing, labor service providing and receiving
(2) Related trusteeship management/contract& entrust management/ outsourcing
Trusteeship management/contract:
In RMB
||||||||
|-|-|-|-|-|-|-|
|||||Termination date||Trusteeship/contr|
|Entrusting||Type of|Starting date of||Pricing basis of||
||Trustee/|||of||acting income|
|party/outsourcing||trusteeship/contra|trusteeship/contra||trusteeship/contra||
||Contractor|||trusteeship/contra||recognized in the|
|party||cted assets|ct||cting income||
|||||ct||period|

 Explanation on related entrust/contract
Entrust management/ outsourcing:
In RMB
||||||||
|-|-|-|-|-|-|-|
|||||Termination date||Entrusted/outsour|
|Entrusting||Type of|Starting date of||Pricing basis of||
||Trustee/|||of||cing expenses|
|party/outsourcing||entrusted/outsour|entrusted/outsour||entrusted/outsour||
||Contractor|||entrusted/outsour||recognized in the|
|party||cing assets|cing||cing expenses||
|||||cing||period|

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

As a lessee for the Company:
In RMB
|||||
|-|-|-|-|
|||Rental fee recognized in the|Rental fee recognized in last|
|Lessor|Assets type|||
|||Period|Period|
|Dongguan Hangda Venture||||
||Warehouse and dormitory|1,268,486.50|---|
|Investment Co., Ltd.||||
|Total|---|1,268,486.50|---|

Explanation on related lease
Leasing factory: The factory that Dongguan Hangda Venture Capital Co., Ltd. rented out to Dongguan Aolin New Materials Co., Ltd., Dongguan Haizhuo Energy Technology Co., Ltd., and Dongguan Zhongchuang New Energy Technology Co., Ltd. is located at Room101—102, Building No. 6, Modern Enterprise Accelerator No. 24, Gongye East Road, Songshan Lake High-tech Industrial Development Zone, Dongguan with total building area of 6,399.60 square meters, of which Dongguan Aolin New Materials Co., Ltd. leased building area of 3,226.95 square meters, Dongguan Haizhuo Energy Technology Co., Ltd. leased building area of 2,008.20 square meters, and Dongguan Zhongchuang New Energy Technology Co., Ltd. leased building area of 1,164.45 square meters; of which the factory rent standard (including property management fee) was 36.00 yuan /㎡/ month (including tax).
Leasing dormitory: The dormitory that Dongguan Hangda Venture Capital Co., Ltd. rented out to Dongguan Aolin New Materials Co., Ltd., Dongguan Haizhuo Energy Technology Co., Ltd., and Dongguan Zhongchuang New Energy Technology Co., Ltd. is located at the 7th Floor, Dormitory No. 8, Modern Enterprise Accelerator No. 24, Gongye East Road, Songshan Lake High-tech Industrial Development Zone, Dongguan, a total of 19 suites of single suite. Among them, Dongguan Aolin New Materials Co., Ltd. leased 8 suites of dormitory including Room 706, 707, 708, 709, 710, 711, 712, 713; Dongguan Haizhuo Energy Technology Co., Ltd. leased 8 suites of dormitory, including Room 714, 715, 717, 718, 719, 720, Dongguan Zhongchuang New Energy Technology Co., Ltd. leased 5 suites of dormitory, including Room 701, 702, 703, 704, 705, the dormitory rental standard (including property management fees) for a single suite was 620 yuan / suite / month (including tax).
(4) Related guarantee
The Company acts as a secured party
In RMB
||||||
|-|-|-|-|-|
|||||Whether the guarantee|
|Secured party|Guarantee amount|Start date|Expiry date||
|||||implemented or not|
|Dongguan Dongfeng|||||
|Intelligent Technology|20,000.00|2018-7-2|2023-7-2|N|
|Co., Ltd.|||||
|Total|20,000.00|---|---|---|

As a secured party by the Company
In RMB
||||||
|-|-|-|-|-|
|||||Whether the guarantee|
|Guarantor|Guarantee amount|Start date|Expiry date||
|||||implemented or not|

 Explanation on related guarantee
In order to meet the operation and development needs of Dongguan Dongfeng Intelligent Technology Co., Ltd. (hereinafter referred
to as―DongfengIntelligent‖), which is the holding sub-subcompany of Dongfeng Technology Group, Dongfeng Intelligent intended
to apply for a comprehensive credit of the amount of not more than 200 million Yuan from Dongguan Bank Songshan Lake
Technology Sub-branch, with a credit period of two years and a single-use period of no more than five years, the special project was
dedicated to the construction of the equipment industrialization project of Dongfeng New Energy located at the east side of Fuxing Road, Dongguan Ecological Park, which took the100% equity of Dongfeng Intelligent held by Dongguan Dongfeng Technology Development Co., Ltd. (hereinafter referred to as―TechnologyDevelopment‖), a holding subsidiary of the company, as the pledge guarantee, and Dongfeng Intelligent used its own land and above-ground buildings as collateral guarantee, Dongfeng Technology Group, Technology Development, Dongguan Zhongchuang New Energy Technology Co., Ltd., Dongguan Haizhuo Energy Technology Co., Ltd., and Dongguan Aolin New Materials Co., Ltd. guaranteed with the joint liability warranty; and the guarantee period was 5 years
As of December 31, 2018, Dongfeng Intelligent obtained the long-term loan balance from Bank of Dongguan Co., Ltd. Songshan Lake Technology Sub-branch of 1,017,100 million Yuan, the borrowing was limited to the follow-up construction of the equipment industrialization project of Dongfeng New Energy. Dongfeng Technology Group Co., Ltd., Dongguan Dongfeng Technology Development Co., Ltd., Dongguan Zhongchuang New Energy Technology Co., Ltd., Dongguan Aolin New Materials Co., Ltd., and Dongguan Haizhuo Energy Technology Co., Ltd. guaranteed with the joint liability warranty; and the collaterals were the land use rights and above-ground buildings of Yue ( 2017) Dongguan Real Property No. 0121786; the pledge was100% equity of Dongguan Dongfeng Intelligent Technology Co., Ltd. held by Dongguan Dongfeng Technology Development Co., Ltd.
(5)Borrowed funds from related party
In RMB
||||||
|-|-|-|-|-|
|Related party|Borrowing amount|Start date|Expiry date|Note|
|Borrowing funds|||||
|Funds lent|||||

(6)Relatedparty’s assets transfer and debt reorganization
In RMB
|||||
|-|-|-|-|
|Related party|Content|Current period|Last period|

(7) Remuneration of key management personnel
In RMB
||||
|-|-|-|
|Item|Current period|Last period|
|Remuneration of key management|||
||2,215,600.00|1,816,000.00|
|personnel|||

(8) Other related transaction
6. Account receivable/payable from/to related party
(1)Account receivables
In RMB
|||||||
|-|-|-|-|-|-|
|||Ending balance||Opening balance||
|Name of project|Related party|||||
|||Book balance|Bad debt provision|Book balance|Bad debt provision|

 (2)Account payable
In RMB
|||||
|-|-|-|-|
|Name of project|Related party|Ending book balance|Opening book balance|

 7. Commitment of related party
8.Other
XII. Share-based payment
1. Share-based payment
□Applicable√ Not-applicable
2. Share-based payment settled by equity
□Applicable√ Not-applicable
3. Share-based payment settled by cash
□Applicable√ Not-applicable
4. Modification and termination of the share-based payment
5.Other
XIII. Commitment and contingency
1. Important commitment
Important commitment on balance sheet date
2. Contingency
(1) Important contingency on balance sheet date
As of 31 December 2018, as for the mortgage loans from the owner of commercial property, balance for guarantee
providing amounted as 70.74 million Yuan.
Except for the above mentioned contingency, the Company has no other important contingency that need to
released up to
31st
December 2018
(2) If the Company has no important contingency need to disclosed, explain reasons
The Company has no important contingency that need to disclose.
3. Other
XIV. Events after balance sheet date
1. Important non adjustment matters
In RMB
|||||
|-|-|-|-|
|||Impact on financial status and|Reasons of fails to estimate the|
|Item|Content|||
|||operation results|impact|

2. Profit distribution
In RMB 3. Sales return
4. Other events after balance sheet date
On March 13, 2019, the 10th session of the seventh board of directors reviewed and approved the Company to increase the capital of 100 million yuan to Dongguan Dongfeng Technology Development Co., Ltd., and increased the registered capital of Dongguan Dongfeng Technology from 100 million yuan to 200 million yuan, and the Company still holds100% equity. As of the approval date of the financial report, the Company has actually increased the capital. Ended as 31st December 2018, the equity pledge has not been occurred by the controlling shareholder.
Except for the above mentioned events, till end of the date when financial report released, the Company has no other events after major balance sheet date need to disclosed.
XV. Other important events
1. Previous accounting errors collection
(1)Retrospective restatement
In RMB
|||||
|-|-|-|-|
|||Items impact during vary||
|Content|Treatment procedure||Accumulated impact|
|||comparative period||

(2) Prospective application
||||
|-|-|-|
|Content|Approval procedure|Reasons|

2. Debt restructuring
3. Assets exchange
(1) Exchange of non-monetary assets
(2)Other assets exchange
4. Pension plan
5. Discontinuing operation
In RMB
||||||||
|-|-|-|-|-|-|-|
|||||||Profit of|
|||||||discontinuing|
|||||Income tax||operation|
|Item|Revenue|Expenses|Total profit||Net profit||
|||||expenses||attributable to|
|||||||owners of parent|
|||||||company|

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

(3)The Company has no segment, or unable to disclose total assets and liability of the segment, explain reasons
(4)Other explanation
7.Other major transaction and events makes influence oninvestor’s decision
8.Other
Discontinuing operation
||||
|-|-|-|
|Item|Discontinuing operation items of Nanjiang Trading||
||Current period|Last period|

||||
|-|-|-|
|Revenue of discontinuing operation|---|66,640,312.36|
|Expenses of discontinuing operation|3,949,752.19|13,970,394.00|
|Total profit of discontinuing operation|-3,949,752.19|52,669,918.36|
|Income tax expenses of discontinuingoperation|110,309.68|12,906,984.10|
|Profit of discontinuing operation|-4,060,061.87|39,762,934.26|
|Including: Profit of discontinuing operationattributable to owners of parent company|-4,060,061.87|39,762,934.26|
|Total disposal income of discontinuingoperation|---|---|
|Income tax expenses (gains) ofdiscontinuing operation|---|---|
|Net gain/loss of disposal of discontinuingoperation|---|---|
|Including: Net gain/loss of disposal ofdiscontinuing operation attributable to ownersof parent company|---|---|
|Net cash flow of discontinuing operation|-96,600.88|-2,253,430.86|
|Including: Net cash flow from operationactivity|12,784,053.62|-14,558,880.64|
|Net cash flow from investment activity|---|21,305,449.78|
|Net cash flow from financing activity|-12,880,654.50|-9,000,000.00|

XVI. Principle notes of financial statements of parent company
1. Other account receivable
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Other account receivable|80,991,042.06|27,954,251.88|
|Total|80,991,042.06|27,954,251.88|

 (1)Other account receivable
1) Category of other account receivable
In RMB
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Opening balance|||
|Category|||||||
||Book balance|Bad debt provision|Book|Book balance|Bad debt provision|Book value|

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||Proportio|||value||Proportio||||
|||||Provisionratio|||||Provision||
||Amount||Amount|||Amount||Amount|||
|||n|||||n||ratio||
|Other receivables|||||||||||
|with large single|||||||||||
||16,668,186.90||16,665,1|||17,782,||17,686,90|||
|amount and accrued||16.98%||99.98%|3,082.00||38.66%||99.46%|95,533.00|
||||04.90|||439.90||6.90|||
|for provision of bad|||||||||||
|debt on a single basis|||||||||||
|Other receivables|||||||||||
|accrued for provision|81,270,949.93||282,989.||80,987,96|27,989,||130,835.2||27,858,718.|
|||82.79%||0.35%|||60.84%||0.47%||
|of bad debt by|||87||0.06|554.17||9||88|
|portfolio|||||||||||
|Other receivables|||||||||||
|with minor single|||||||||||
||229,787.72||229,787.|||229,787||229,787.7|||
|amount but accrued||0.23%||100.00%|||0.50%||100.00%||
||||72|||.72||2|||
|for provision of bad|||||||||||
|debt on a single basis|||||||||||
||98,168,924.55||17,177,8||80,991,042.06|46,001,||18,047,52||27,954,251.88|
|Total||100.00%||17.50%|||100.00%||39.23%||
||||82.49|||781.79||9.91|||

 Other receivables with large single amount and accrued for provision of bad debt on a single basis at period-end:
√Applicable□ Not-applicable
In RMB
||||||
|-|-|-|-|-|
||Ending balance||||
|Other account|||||
||Other accountreceivable||||
|receivable(unit)||Bad debt provision|Provision ratio|Reasons of accrual|
|Dongfeng Ecological|||||
||16,668,186.90|16,665,104.90|99.98%|Uncollectible|
|Agriculture|||||
|Total|16,668,186.90|16,665,104.90|--|--|

Other receivables accrued for provision of bad debt by aging analysis method in portfolio :
√Applicable□ Not-applicable
In RMB
|||||
|-|-|-|-|
||Ending balance|||
|Account age||||
||Other account receivable|Bad debt provision|Provision ratio|
|Within 1 year||||
|Subtotal within one year|3,499,589.52|174,979.48|5.00%|
|1-2 years|17,447.43|3,489.49|20.00%|
|2-3 years|28,200.00|14,100.00|50.00%|
|Over 3 years|90,421.00|90,421.00|100.00%|
|Total|3,635,657.95|282,989.97|7.78%|

Portfolio recognized:
Other accounts receivable accrued for provision of bad debt by percentage of balance in portfolio :
□Applicable√ Not-applicable
Other accounts receivable accrued for provision of bad debt by other methods in portfolio :
√Applicable□ Not-applicable
Other accounts receivable accrued for provision of bad debt by other methods in portfolio
|||||
|-|-|-|-|
|Combination|Ending balance|||
||Other account receivable|Bad debt provision|Provision ratio (%)|
|Nanjiang Trading|135,241.42|---|---|
|Tax Bureau of Chengde County|4,942,346.42|---|---|
|Nanjiang Asia|4,971.22|---|---|
|Kefeng Engineering|112,000.00|---|---|
|Huijing Property|7,380,732.92|---|---|
|Kefeng Aerospace|60,000.00|||
|Dongguan Dongfeng Technology|65,000,000.00|---|---|
|Total|77,635,291.98|---|---|

Portfolio recognized:
In portfolio, the accrual of bad debt in way of other method was 0.00 Yuan, mainly because there is minor estimated recoverable risk. 2)Bad debt provision accrual collected or switch back
There is152,154.58 Yuan provision for bad debts accrued in the Period; and 1,021,802.00 Yuan regains or switch back in the Period. Including the followed significant amount:
In RMB
||||
|-|-|-|
|Unit|Regains or switch back|Way of regain|

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

Major other account receivables written-off:
In RMB
|||||||
|-|-|-|-|-|-|
||Nature of other||Reasons of||Arising from related|
|Unit||Amount charge off||Procedures||
||account receivable||written-off||transaction (Y/N)|

 Explanation on other account receivable:
4)Other account receivables category by nature of money
In RMB
||||
|-|-|-|
|Nature of money|Ending book balance|Opening book balance|

||||
|-|-|-|
|Intercourse fund|89,225,891.04|44,963,887.31|
|Petty cash|1,399,398.05|800,332.72|
|Land appreciation tax rebate|4,942,346.42||
|Other|2,601,289.04|237,561.76|
|Total|98,168,924.55|46,001,781.79|

 5)Top five other account receivables collected by arrears party at ending balance
In RMB
|||||||
|-|-|-|-|-|-|
|||||Proportion in total||
||||||Ending balance of|
|Unit|Nature|Ending balance|Account age|Ending balance of||
||||||bad debt provision|
|||||other receivables||
|Dongguan Kefeng||||||
||Intercourse fund|65,000,000.00|Within one year|66.21%||
|Technology||||||
|Ecological|||Within one year, 1-2|||
||Intercourse fund|16,668,186.90||16.98%|16,665,104.90|
|Agriculture|||years and 2-3 years|||
||||Within one year, 1-2|||
|Huijing Property|Intercourse fund|7,380,732.92||7.52%||
||||years and 2-3 years|||
|Tax Bureau of||||||
||Intercourse fund|4,942,346.42|Within one year|5.03%||
|Chengde County||||||
|Chengde Liyuan||||||
|Investment|Intercourse fund|1,776,513.60|Within one year|1.81%||
|Consulting Company||||||
|Total|--|95,767,779.84|--|97.56%|16,665,104.90|

 6)Account receivables related to government subsidies
In RMB
||||||
|-|-|-|-|-|
||||Account age at|Time and amount|
|Unit|Government grant|Ending balance|||
||||period-end|collected and basis|

 7)Other receivable for termination of confirmation due to the transfer of financial assets
8)The amount of assets and liabilities that are transferred other receivable and continued to be involved
Other explanation :
2. Long-term equity investment
In RMB
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Opening balance|||
|Item||Depreciation|||Depreciation||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||
|Investment for|||||||
||272,803,036.40||272,803,036.40|248,114,466.37||248,114,466.37|
|subsidiary|||||||

||||||||
|-|-|-|-|-|-|-|
|Investment forjoint venture andassociatedenterprises|||||||
||9,170,370.00|9,170,370.00||9,170,370.00|9,170,370.00||
|Total|281,973,406.40|9,170,370.00|272,803,036.40|257,284,836.37|9,170,370.00|248,114,466.37|

 (1)Investment for subsidiary
In RMB
||||||||
|-|-|-|-|-|-|-|
||||||Accrual in the||
|||||||Ending balance of|
||||Current||period||
|Invested company|Opening balance|Current increased||Ending balance||impairment|
||||decreased||Depreciation||
|||||||provision|
||||||reserves||
|Nanjiang Trading|5,311,429.97||5,311,429.97||||
|Nanjiang|||||||
||90,000,000.00|||90,000,000.00|||
|Investment|||||||
|Nanjiang Asia|5,000,166.64|||5,000,166.64|||
|Hangzhou|||||||
||30,000,000.00|||30,000,000.00|||
|Dongfeng|||||||
|Kefeng Trading|45,147,154.77|||45,147,154.77|||
|Kefeng|||||||
||2,655,714.99|||2,655,714.99|||
|Engineering|||||||
|Dongguan|||||||
|Dongfeng|70,000,000.00|30,000,000.00||100,000,000.00|||
|Technology|||||||
|Dongfeng Power|||||||
|Total|248,114,466.37|30,000,000.00|5,311,429.97|272,803,036.40|||

(2) Investment for joint venture and associated enterprise
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Changes in Period||||||||||
|||||Investme|||Cash|||||
||||||||||||Ending|
|||||nt|Adjustme|||||||
||||||||||||balance|
|||Additiona||gains/loss|nt of|||Provision||||
|Invested|Opening|||||Other|dividend|||Ending|of|
|||l|Capital|es|other|||for||||
|company|balance|||||equity|or profit||Other|balance|impairme|
|||investmen|reduction|recognize c|omprehe|||impairme||||
|||||||changes|declare to||||nt|
|||t||d by|nsive|||nt losses||||
||||||||issue||||provision|
|||||equity|income|||||||
|||||method||||||||

|||||
|-|-|-|-|
|I. Joint venture||||
|II. Associated enterprise||||
|Runhua|9,170,370|9,170,370|9,170,370|
|RW|.00|.00|.00|
||9,170,370|9,170,370|9,170,370|
|Subtotal||||
||.00|.00|.00|
||9,170,370.00|9,170,370.00|9,170,370.00|
|Total||||

 (3)Other explanation
3. Operation income and operation cost
In RMB
||||||
|-|-|-|-|-|
||Current period||Last period||
|Item|||||
||Income|Cost|Income|Cost|
|Main business|118,807,719.93|103,821,248.79|244,805,702.13|231,565,613.02|
|Other business|2,264,150.96||8,002,407.74|55,952.94|
|Total|121,071,870.89|103,821,248.79|252,808,109.87|231,621,565.96|

 Other explanation :
4. Investment income
In RMB
||||
|-|-|-|
|Item|Current period|Last period|
|Long-term equity investment measured by|||
||36,240,654.50||
|cost|||
|Investment income from disposal of|||
||17,328,070.03||
|long-term equity investment|||
|Investment income from holding the|||
||204,560.53||
|financial products|||
|Total|53,773,285.06||

5. Other
XVII. Supplementary information
1. Details of current non-recurring profits/gains and losses
√Applicable□ Not-applicable
In RMB
||||
|-|-|-|
|Item|Amount|Remark|
|Gains/losses from the disposal of|||
||4,526,245.58|---|
|non-current asset|||
|Government grant reckoned into current|||
|gain/loss (not including the subsidy|||
|enjoyed in quota or ration according to|2,896,000.00||
|national standards, which are closely|||
|relevant to enterprise’s business)|||
|Held transaction financial asset, gains/losses|||
|of changes of fair values from transaction|||
|financial liabilities, and investment gains|||
|from disposal of transaction financial asset,|||
||1,144,246.03|Income from financial products|
|transaction financial liabilities and financial|||
|asset available for sales, exclude the|||
|effective hedging business relevant with|||
|normal operations of the Company|||
|Other non-operating income and expense|||
||-470,819.42||
|other than the abovementioned ones|||
|Gains/losses satisfied definition of the|||
||18,501,800.54|Subsidiary disposal|
|non-recurring gains/losses|||
|Less: Impact on income tax|-6,649,368.19||
|Total|33,246,840.92|--|

Concerning the extraordinary profit (gain)/loss defined byQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss inQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, explain reasons
□Applicable√ Not-applicable
2. ROE and earnings per share
||||
|-|-|-|
|Profits during report period|Weighted average ROE|Earnings per share|

|||||
|-|-|-|-|
||||Diluted EPS|
|||Basic EPS (Yuan/share)||
||||(Yuan/share)|
|Net profits belong to common stock||0.01|0.01|
||2.01%|||
|stockholders of the Company||||
|Net profits belong to common stock||||
|stockholders of the Company after||||
||-3.24%|-0.02|-0.02|
|deducting nonrecurring gains and||||
|losses||||

3. Difference of the accounting data under accounting rules in and out of China
(1) Difference of the net profit and net assets disclosed in financial report, under both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□Applicable√ Not-applicable
(2) Difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules and Chinese GAAP (Generally Accepted Accounting Principles)
□Applicable√ Not-applicable
(3) Explanation on data differences under the accounting standards in and out of China; as for the differences adjustment audited by foreign auditing institute, listed name of the institute
4.Other
Explanation on abnormal condition and reasons for the items of account statement
||||||
|-|-|-|-|-|
|Item|Ending balance(or current amount)|Opening balance (orlast amount)|Rate ofchanges(%)|Reasons|
|Monetary fund|36,306,825.10|74,805,209.06|-51.47|Account received in advance for propertydeclined in the period|
|Accounts paid inadvance|62,449,793.03|183,595.06|33,914.96|Account paid in advance for new project in theperiod|
|Other accountreceivable|8,588,597.44|58,740,204.94|-85.38|The intercourse funds declined in the period|
|Inventory|151,585,557.50|234,653,825.84|-35.40|Development products carried forward in theperiod|
|Fixed assets|17,302,279.65|9,674,396.99|78.85|Purchased fixed assets in the period|
|Construction inprocess|101,650,833.16|2,267,164.04|43.84|New construction in process increased in theperiod|
|Productive biologicalasset|121,437.50|17,971.39|575.73|Purchased productive biological asset in theperiod|
|Expense on Research|13,346,410.47|3,513,561.56|279.85|New project developed in the period|

||||||
|-|-|-|-|-|
|and Development|||||
|Other non-currentassets|120,392,369.00|10,427,021.55|105.46|Engineering amount paid in advance increased|
|Note payable andaccount payable|6,668,789.67|15,487,833.06|-56.94|The amount payable for engineering decreasedin the period|
|Accounts received inadvance|16,269,319.99|64,165,709.37|-74.65|Sales of property declined in the period|
|Wage payable|981,089.59|2,201,668.93|-55.44|Staff declined in the period|
|Taxes payable|921,967.58|13,171,059.13|-93.00|Income taxes paid for land disposal in the period|
|Other account payable|118,570,218.85|25,952,193.34|356.88|The intercourse funds increased in the period|
|Operating revenue|123,508,083.90|250,071,863.07|-50.61|Sales of property declined in the period|
|Tax and extras|-247,832.89|9,791,294.48|-102.53|Rebate of the land appreciation tax in the period|
|Sales expense|115,346.71|14,417,090.26|-99.20|No sale agency fee withdrawal in the period|
|Financial expense|-385,552.98|1,346,177.29|-128.64|Capitalization of interest in the period|
|Investment income|19,646,046.57|1,501,873.01|120.81|Bonus received in the period and subsidiarydisposed|
|Income from assetsdisposal|4,526,245.58|65,059,983.64|-93.04|Disposal of fixed assets and intangible assets aredeclined in the period|
|Income tax expenses|110,309.68|12,906,984.10|-99.15|Income tax paid for assets disposal last period|

Section XII. Documents available for reference
1. Financial statement carried with the signature and seal of the Person in charge of the Company, person in charge of the accounting works and accountant in charge.
2. Original audit report seal with accounting firms and signature and seal from CPA.
3. Text and original draft of the notice that disclosed in reporting period on newspapers appointed by CSRC.