Shenzhen China Bicycle Company (Holdings) Limited ANNUAL REPORT 2015
April 2016
Section I. Important Notice, Contents and Paraphrase
Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of Shenzhen China Bicycle Company (Holdings) Limited (hereinafter referred to as the Company) hereby confirm that there are no any fictitious statements, misleading statements, or important omissions carried in this report, and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of the whole contents.
Li Hai, Principal of the Company, Sun Longlong, person in charge of accounting works and Zhong Xiaojin, person in charge of accounting organ (accounting principal) hereby confirm that the Financial Report of 2015 Annual Report is authentic, accurate and complete.
Except the following director, other directors are attended the Board Meeting for Quarterly Report deliberation in person.
|||||
|-|-|-|-|
|Name of director not|Title of director not|||
|||Reasons for absent|Trustee|
|attended in person|attended in person|||
|Kong Na|Director|Due to work|Yang Fenbo|

Concerning the unqualifiedauditor’s report with explanatory paragraph issued by Ruihua Certified Public Accountant (LLP) for the financial report 2015 of the Company, board of the directors and supervisory committee are well-explained for relevant events, investors are advice to pay attention on reading.
The Company has no plan of cash bonus, dividends and capitalizing of reserves either.
Contents
Section I Important Notice, Contents and Paraphrase ................................................................. 2 Section II Company Profile and Main Finnaical Indexes ............................................................. 9 Section III Summary of Company Business .................................................................................. 9 Section IV Discussion and Analysis by the Management Team ................................................. 11 Section V Important Events .......................................................................................................... 27 Section VI Changes in shares and particular about shareholders ............................................... 34 Section VII PreferredStock……………………………………………………………………….47 Section VIII Particulars about Directors, Supervisors,Senior Executives and Employees ...... 35 Section IX Corporate Governance ................................................................................................. 56 Section X Financial Report ............................................................................................................. 51 Section XI Documents available for reference .............................................................................. 51
Paraphrase
||||
|-|-|-|
|Items|Refers to|Contents|

Section II Company Profile and Main Finnaical Indexes
I. Company information
|||||
|-|-|-|-|
|Short form of the stock|Zhonghua – A, Zhonghua -B|Stock code|000017、200017|
|Stock exchange for listing|Shenzhen Stock Exchange|||
|Name of the Company (in|深圳中华自行车(集团)股份有限公司|||
|Chinese)||||
|Short form of the Company||||
||深中华A、B|||
|(in Chinese)||||
|Foreign name of the Company||||
||China Bicycle Company (Holdings) Limited|||
|(if applicable)||||
|Short form of foreign name of||||
||CBC|||
|the Company (if applicable)||||
|Legal representative|Li Hai|||
|Registrations add.|No. 3008, Buxin Rd., Shenzhen|||
|Code for registrations add|518020|||
|Offices add.|Room 1201, Wantong Building, No.3002, Sungang East Road, Shenzhen|||
|Codes for office add.|518030|||
|Company’s Internet Web Site|www.cbc.com.cn|||
|E-mail|dmc@szcbc.com|||

II. Person/Way to contact
||||
|-|-|-|
||Secretary of the Board|Rep. of security affairs|
|Name|Sun Longlong|Cui Hongxia|
||Room 1201, Wantong Building, No.3002,|Room 1201, Wantong Building, No.3002,|
|Contact add.|||
||Sungang East Road, Shenzhen|Sungang East Road, Shenzhen|
|Tel.|0755-25516998,28181666|0755-25516998,28181666|
|Fax.|0755-28181009|0755-28181009|
|E-mail|dmc@szcbc.com|dmc@szcbc.com|

III. Information disclosure and preparation place
|||
|-|-|
|Newspaper appointed for information disclosure|Securities Times; Hong Kong Commercial Daily|
|Website for annual report publish appointed by CSRC|Ju chao Website (www.cninfo.com.cn)|

|||
|-|-|
|Preparation place for annual report|Room 1201, Wantong Building, No.3002, Sungang East Road, Shenzhen|

 IV. Registration changes of the Company
|||
|-|-|
|Organization code|440361883045-2|
|Changes of main business since listing (if||
||No change|
|applicable)||
||1. In March 1992, the Stock of the Company was listed in Shenzhen Stock Exchange,|
||and 23.28% equity of the Company was held by Shenzhen Lionda Holding Co., Ltd.|
||and Hong Kong Dahuan Bicycle Co., Ltd respectively. 2. In March 2002, legal shares|
||13.58% A-stock of the Company was obtained by China Huarong Asset Management|
||Co., Ltd. through court auction, and became the first majority shareholder of the|
||Company. 3. On 13 November 2006, the 65,098,412 legal shears of CBC held by|
||Huarong Company was acquired by Shenzhen Guosheng Energy Investment|
||Development Co., Ltd. via the “Equity Transfer Agreement” signed, and first majority|
|Previous changes for controlling||
||of the Company comes to Guosheng Energy. Guosheng Energy is the wholly-owned|
|shareholders (if applicable)||
||subsidiary of National Investment, actual controller was Zhang Yanfeng. 4. In January|
||2011, controlling shareholder of Shenzhen Guosheng Energy Investment Development|
||Co., Ltd.—Shenzhen National Investment Development Co., Ltd. entered into equity|
||transfer agreement with Mr. Ji Hanfei, 100% equity of Guosheng Energy was transfer|
||to Mr. Ji Hanfei with price of 70 million. Shenzhen Guocheng Energy Investment|
||Development Co., Ltd. Shenzhen Guosheng Energy Investment Development Co., Ltd.|
||holds 63,508,747 A-stock of the Company with 11.52% in total share capital of the|
||Company.|

V. Other relevant information
CPA engaged by the Company
|||
|-|-|
|Name of CPA|Ruihua Certified Public Accountant (LLP)|
|Offices add. for CPA|4/F, Tower 2, No.16 XiSihuanZhongLu, Haidian District, Beijing, P.R.C|
|Signing Accountants|Li Zehao, Ren Weixing|

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 for accounting policy changed and accounting error correction or not
□ Yes√ No
|||||
|-|-|-|-|
|2015|2014|Changes over last year|2013|

||||||
|-|-|-|-|-|
|Operating income (RMB)|170,990,030.10|212,070,585.77|-19.37%|271,111,736.07|
|Net profit attributable to|-138,355.58|4,885,678.56|||
|shareholders of the listed|||-102.83%|1,575,223,894.89|
|company(RMB)|||||
|Net profit attributable to|||||
|shareholders of the listed company|||||
||-416,262.14|-6,073,439.70|-87.06%|4,360,002.01|
|after deducting non-recurring gains|||||
|and losses(RMB)|||||
|Net cash flow arising from|-3,029,023.82|3,921,048.18|||
||||-177.25%|-28,210,167.86|
|operating activities(RMB)|||||
|Basic earnings per share|-0.0003|0.0089|||
||||-103.37%|2.8570|
|(RMB/Share)|||||
|Diluted earnings per share|-0.0003|0.0089|||
||||-103.37%|2.8570|
|(RMB/Share)|||||
|Return on Equity|-1.17%|51.72%|-52.89%|0.00%|
||||Changes over end of||
||End of 2015|End of 2014||End of 2013|
||||last year||
|Total assets (RMB)|45,869,094.97|51,489,647.55|-10.92%|151,511,429.85|
|Net assets attributable to|11,765,046.11|11,903,347.67|||
|shareholder of listed company|||-1.16%|7,003,335.40|
|(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|22,326,412.71|54,210,387.97|62,791,436.14|31,661,793.28|
|Net profit attributable to|||||
||272,334.51|143,838.35|121,934.11|-676,462.55|
|shareholders of the listed company|||||
|Net profit attributable to|||||
|shareholders of the listed company|||||
||228,302.51|154,846.35|63,666.61|-863,077.61|
|after deducting non-recurring gains|||||
|and losses|||||
|Net cash flow arising from|||||
||-2,814,082.91|-2,804,170.44|5,540,017.64|-2,950,788.11|
|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|2015|2014|2013|Note|
|Gains/losses from the disposal of|||||
|non-current asset (including the write-off||33,851.46|1,611,690,513.84||
|that accrued for impairment of assets)|||||
|Gains/losses from debt reorganization|||49,342,739.18||
|Reorganization expenses, such as|||||
|expenditure for allocation of employees and|||-70,732,704.23||
|integration fee|||||
|Other non-operating income and expenditure|369,201.08||||
||||27,177.40||
|except for the aforementioned items|||||
|Other loss/profit qualified definition of|||||
|||14,622,462.77|72,934,048.27||
|extraordinary profit and loss|||||
|Less: Impact on income tax|92,300.27|3,664,078.56|92,393,298.62||
|Impact on minority shareholders’|-1,005.75||||
|||33,117.41|4,582.96||
|equity (post-tax)|||||
|Total|277,906.56|10,959,118.26|1,570,863,892.88|--|

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
The company is engaged in the main business for the bicycle business, including production, assembly, procurement, sales of bicycles and electric bicycles, etc.
II. Major changes in main assets
1. Major changes in main assets
|||
|-|-|
|Major assets|Note of major changes|
|Equity assets|No major change|
|Fixed assets|No major change|
|Intangible assets|No major change|
|Construction in progress|No major change|

2. Main overseas assets
□ Applicable√ Not applicable
III. Core Competitiveness Analysis
Despite the fierce market competition in the bicycle industry as a conventional industry, the increased awareness of green commuting, leisure and exercises as a result of the development ofChina’s social economy and the change ofpeople’s living concept creates structural development opportunity for the bicycle industry. The Company will continue to do better in various aspects of operation such as market development, product development, quality management and sales of e-commerce so as to maintain and improve theCompany’s ability to continue as a going concern before the restructuring. On the other side, the Company has set out the condition of introduction of investors in the restructuring plan with expectation to restore its ability to continue as a going concern and its continuous profitability through the restructuring of assets.
Section IV Discussion and Analysis by the Management Team 1. Introduction
Over the past year, the international environment has been complex and severe, and the international financial market turmoil has intensified, which caused direct impact and influence on the economy of our country. China has been facing multiple difficulties and severe challenges, deep-seated problems have been prominent, pressures on economic downturn have increased, abnormal fluctuations of stock market and foreign currency market and other various risks and challenges in financial field have exacerbated the influence on traditional manufacturing industry and social consumption structure demand. Under the leadership of the central government and governments at all levels, people across the country have strengthened their confidence, overcome difficulties, forged ahead, achieved steady economic and social development, and continuously made new achievements. As a member in traditional manufacturing field, bicycle industry has continued the predicament of increases in labor costs, manufacturing costs, capital costs, and material costs. The low industry entry threshold and numerous manufacturers has led to fierce market competition and intensified industry reshuffle. With China's social and economic development and transformation of people's life concept, green travel, leisure and exercise awareness enjoy popular supports, bicycle industry has structural development opportunities. In 2015, the company has focused on the following work in business management: firstly, make every endeavor to maintain the company's existing traditional model of business operation under the harsh business environment of traditional manufacturing at home and abroad, and achieving overall stable of business. Secondly, comprehensively start the e-commerce business model based on the traditional model, combine with the actual situation of the company, learn from the successes and failures of social e-commerce suppliers, and carry out the e-commerce business development ideas of e-commerce transformation, internal introduction and external association, and controllable costs in accordance with the principles of efficiency and effectiveness. By the end of 2015, the e-commerce development of thecompany’s bicycle business has completed the basic layout, Emmelle flagship stores have been gradually on the line of e-commerce platforms such as Tmall, Jingdong, Suning, Gome, official websites, official Wechat, mutual benefit alliance, etc., and have achieved positive results, sustainable development ideas of e-commerce business have been verified and implemented. Thirdly, continue to increase efforts to promote research and development of medium-end and high-end products, the positively apply various new technologies, closely track the cutting-edge innovative technology and exploration application like super-capacitor smart helmet, establish Qinghu base, complete the recovery of the production permit of electric car and ISO9000 quality system certification, and improve and extend the product lines. Fourthly, improve the supporting and cooperating level of background departments to front desk business by strengthening the background management and office automation. Fifthly, actively carry out the operation business, and seriously cooperate with the administrators to carry out the unaccomplished matters related to the reorganization proceedings.
In the context of stagnant domestic traditional manufacturing industry, the company accelerates the transformation of its own professionalization, informatization, and manufacturing miniaturization, intensifies the adjustment of product structure, strengthens the quality management, enhances the costs management and control, makes efforts to improve the adaptability of traditional businesses to economy new normal and the market competitiveness. Through various efforts, in 2015, the company has achieved operating income of 170,990,000 yuan, net profits of -105,900 yuan, thereinto, the net profits attributable to shareholders of listed companies are -138,400 yuan.
Statement of changes in the main financial indicators of the reporting period:
|||||
|-|-|-|-|
|The period|The same period of last|Increase/decrease y-o-y|Reason|

||||||
|-|-|-|-|-|
|||period|||
|Operation income|170,990,030.10|212,070,585.77|-19.37%|Sales decline|
|Operation cost|159,399,271.88|198,964,665.65|-19.89%|Sales decline|
|Sales expenses|6,515,605.90|5,340,463.40|22.00%|Increase in promotional|
|||||expenses|
|Administration expenses|5,391,566.14|14,108,887.56|-61.79%|Paid the 2014 operating|
|||||expenses reserved by|
|||||reorganization plan in last|
|||||year|
|Financial expenses|-675,198.21|-173,453.60|289.27%|Increase in interest|
|||||income|
|Income tax expense|94,609.13|2,145,860.08|-95.59%|Decrease in total profits|
|Net cash flow from|-3,029,023.82|3,921,048.18|-177.25%|Received the 2014|
|operation activities||||working capital|
|||||appropriated by the|
|||||custodian at the same|
|||||period of last year|
|Net cash flow from|-382,777.30|-591,352.99|-35.27%|Fixed-asset investment|
|investment activities||||has reduced in current|
|||||year|
||-3,411,801.12|3,329,695.19|-202.47%|Received the 2014|
|||||working capital|
|Net increased amount of|||||
|||||appropriated by the|
|cash and cash equivalent|||||
|||||custodian at the same|
|||||period of last year|

 II. Main business analysis
1. Introduction
See the “I-Introduction” in “Discussion and Analysis by the Management Team”
2. Revenue and cost
(1) Constitute of operation revenue
In RMB
|||||||
|-|-|-|-|-|-|
||2015||2014|||
||||||Increase/decrease|
|||Ratio in operation||Ratio in operation||
||Amount||Amount||y-o-y|
|||revenue||revenue||
|Total of operation|170,990,030.10|100%|212,070,585.77|100%|-19.37%|

|||||||
|-|-|-|-|-|-|
|revenue||||||
|According to industries||||||
|Sales of bicycles and||||||
||170,990,030.10|100.00%|212,070,585.77|100.00%|-19.37%|
|accessories and||||||
|fittings||||||
|According to products||||||
|Sales of bicycles and||||||
||170,990,030.10|100.00%|212,070,585.77|100.00%|-19.37%|
|accessories and||||||
|fittings||||||
|According to region||||||
|Domestic|170,990,030.10|100.00%|212,070,585.77|100.00%|-19.37%|

 (2) About the industries, products, or regions accounting for over10% of thecompany’s operating income or operating profit
√Applicable□ Not applicable
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|||||||
|Sales of bicycles|||||||
||170,990,030.10|159,399,271.88|6.78%|-19.37%|-19.89%|0.60%|
|and accessories|||||||
|and fittings|||||||
|According to products|||||||
|Sales of bicycles|||||||
||170,990,030.10|159,399,271.88|6.78%|-19.37%|-19.89%|0.60%|
|and accessories|||||||
|and fittings|||||||
|According to region|||||||
|Domestic|170,990,030.10|159,399,271.88|6.78%|-19.37%|-19.89%|0.60%|

 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
|||||||
|-|-|-|-|-|-|
||||||Increase/decrease|
|Industries|Item|Unit|2015|2014||
||||||y-o-y|
||Sales volume|In 10 thousand|21.19|27.69|-23.47%|
|Bicycles|Output|In 10 thousand|20.99|27.89|-24.74%|
||Storage|In 10 thousand|0.6|0.8|-25.00%|

Reasons for y-o-y relevant data with over30% changes
□ Applicable√ Not applicable
(4) Fulfillment of thecompany’s signed significant sales contracts up to this reporting period
□ Applicable√ Not applicable
(5) Constitute of operation cost
Classification of industries
Classification of industries
In RMB
||||||||
|-|-|-|-|-|-|-|
|||2015||2014|||
|||||||Increase/decrease|
|Industries|Item||Ratio in operation||Ratio in operation||
|||Amount||Amount||y-o-y|
||||cost||cost||
|Sales of bicycles|||||||
|||159,399,271.88|100.00%|198,964,665.65|100.00%|-19.89%|
|and accessories|||||||
|and fittings|||||||

Note
(6) Whether the changes in the scope of consolidation in Reporting Period
□Yes√□ No
(7) Major changes or adjustment in business, product or service of the Company in Reporting Period□ Applicable√ Not applicable
(8) Major sales and main suppliers
Major sales client of the Company
|||
|-|-|
|Total top five clients in sales (RMB)|155,272,692.64|
|Proportion in total annual sales volume for top five clients|90.81%|

 Information of top five clients of the Company
|||||
|-|-|-|-|
|Serial|Name|Sales (RMB)|Proportion in total annual sales|
|1|Client 1|68,601,169.62|40.12%|
|2|Client 2|49,153,593.66|28.75%|
|3|Client 3|25,621,079.53|14.98%|
|4|Client 4|7,920,554.04|4.63%|
|5|Client 5|3,976,295.79|2.33%|
|Total|--|155,272,692.64|90.81%|

 Other situation of main clients
□ Applicable√ Not applicable
Main suppliers of the Company
|||
|-|-|
|Total purchase amount from top five suppliers (RMB)|144,625,287.99|

|||
|-|-|
|Proportion in total annual purchase amount for top five||
||90.73%|
|suppliers||

nformation of top five suppliers of the Company
|||||
|-|-|-|-|
|Serial|Name|Purchase (RMB)|Proportion in total annual puechase|
|1|Supplier 1|70,084,208.51|43.97%|
|2|Supplier 2|36,476,205.13|22.88%|
|3|Supplier 3|14,219,649.57|8.92%|
|4|Supplier 4|12,883,407.69|8.08%|
|5|Supplier 5|10,961,817.09|6.88%|
|Total|--|144,625,287.99|90.73%|

 Other notes of main suppliers
□ Applicable√ Not applicable
3. Expenses
In RMB
||||||
|-|-|-|-|-|
||||Increase/decrease||
||2015|2014||Note of major changes|
||||y-o-y||
|Sales expense|6,515,605.90|5,340,463.40|22.00%||
||5,391,566.14|14,108,887.56||Paid the 2014 operating expenses|
|Management expense|||-61.79%|reserved by reorganization plan in last|
|||||year|
|Financial expense|-675,198.21|-173,453.60|289.27%|Increase in interest income|

4.R&D investment
□ Applicable√ Not applicable
5. Cash flow
In RMB
|||||
|-|-|-|-|
|Item|2015|2014|Y-o-y changes|
|Subtotal of cash in-flow from|100,041,540.65|223,967,528.32||
||||-55.33%|
|operation activity||||
|Subtotal of cash out-flow from|103,070,564.47|220,046,480.14||
||||-53.16%|
|operation activity||||
|Net cash flow from operation|-3,029,023.82|3,921,048.18||
||||-177.25%|
|activity||||
|Subtotal of cash in-flow from||100,500.00|-100.00%|

|||||
|-|-|-|-|
|investment activity||||
|Subtotal of cash out-flow from|382,777.30|691,852.99||
||||-44.67%|
|investment activity||||
|Net cash flow from investment|-382,777.30|-591,352.99||
||||-35.27%|
|activity||||
|Net increased amount of cash|-3,411,801.12|3,329,695.19||
||||-202.47%|
|and cash equivalent||||

Main reasons for y-o-y major changes in aspect of relevant data
√Applicable□ Not applicable
1. In 2015, the cash inflow from operating activities has significantly declined compared with 2014, mainly because the 2013 corporate income tax of 92,388,200 yuan appropriated by the custodian and the 2014 operating expenses reserved by reorganization plan have been received in 2014.
2. In 2015, cash outflow from operating activities has significantly declined compared with 2014, mainly because the company has paid the 2013 corporate income tax and the 2014 operating expenses reserved by reorganization plan in 2014.
Reasons of major difference between the cash flow of operation activity in report period and net profit of the Company
√Applicable□Not applicable
Mainly to pay accounts payable etc. operating payable items
III. Analysis of the non-main business
√Applicable□Not applicable
In RMB
||||||
|-|-|-|-|-|
||Amount|Ratio in total profit|Note|Whether be sustainable|
|Asset impairment|308,237.93|-2,723.04%|Provision for bad debts|No|
||||Restructuring case to be||
|Non-operating|||||
||4,210,594.98|-37,197.25%|disposed of asset|No|
|income|||||
||||management income||
||||Restructuring case to be||
|Non-operating|||||
||3,841,393.90|-33,935.65%|disposed of asset|No|
|expense|||||
||||management income||

IV. Assets and liability
1. Major changes of assets composition
In RMB
|||||||
|-|-|-|-|-|-|
|End of 2015||End of 2014||Ratio||
||||||Notes of major changes|
|Amount|Ratio in total|Amount|Ratio in total|changes||

|||||||
|-|-|-|-|-|-|
|||assets||assets||
|Monetary fund|26,752,065.66|58.32%|30,163,866.78|58.58%|-0.26%|
|Account|9,195,296.32||6,790,982.50|||
|||20.05%||13.19%|6.86%|
|receivable||||||
|Inventory|4,057,247.68|8.85%|6,171,307.53|11.99%|-3.14%|
|Fix assets|1,007,906.43|2.20%|773,961.84|1.50%|0.70%|
|Note receivable|||2,200,000.00|4.27%|-4.27%|
|Advance payment|397,833.20|0.87%|348,277.01|0.68%|0.19%|
|Other receivables|395,523.78|0.86%|511,254.81|0.99%|-0.13%|
|Intangible assets|3,765,000.00|8.21%|4,518,000.00|8.77%|-0.56%|
|Deferred tax||||||
||89,066.31|0.19%|11,997.08|0.02%|0.17%|
|assets||||||
|Other current||||||
||209,155.59|0.46%|||0.46%|
|assets||||||

2. Assets and liability measured by fair value
□ Applicable√ Not applicable
V. Investment
1. Overall situation
□ Applicable√ Not applicable
2. The major equity investment obtained in the reporting period
□ Applicable√ Not applicable
3. The major non-equity investment doing in the reporting period
□ Applicable√ Not applicable
4. Financial assets investment
(1) Securities investment
□ Applicable√ Not applicable
The company 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.
VI. Sales of major assets and equity
1. Sales of major assets
□ Applicable√ Not applicable
The Company had no sales of major assets in the reporting period.
2. Sales of major equity
□ Applicable√ Not applicable
VII. Analysis of main holding company and stock-jointly companies
√Applicable□ Not applicable
Particular about main subsidiaries and stock-jointly companies net profit over10%
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|Company||Main|Register|||Operating|Operating||
||Type|||Total assets|Net Assets|||Net profit|
|name||business|capital|||revenue|profit||
|Shenzhen|||||||||
|||Sales of|||||||
|Emmelle||||39,689,215.8||170,989,389.|||
||Subsidiary|bicycles and|2000000||5,417,284.02||188,220.65|108,089.35|
|Industry Co.,||||1||07|||
|||accessories|||||||
|Ltd.|||||||||

Particular about subsidiaries obtained or disposed in report period
□ Applicable√ Not applicable
Notes of holding and shareholding companies
The Company holds 70 percent equity of the Shenzhen Emmelle Industry Co., Ltd., the balance of minority equity at year-end amounting to 1,764,393.82 Yuan.
VIII. Structured vehicle controlled by the Company
□ Applicable√ Not applicable
IX. Future Development Prospects
1. Development trend of the industry the Company operates in and market competition pattern it deals with:
The Company has been engaging in the electric bicycle business since 2002. After going through the rapid
development in the past few years, the electric bicycle industry has witnessed obvious stagnation since 2007. The
short supply of batteries as the main component of electrical machine caused by the enhanced management of rare
earth industry and battery industry in 2011 has constrained, to some extent, the manufacturing of electric bicycle industry. The new standard of electric bicycle industry and the uncertainty of its launch time have also caused a negative impact on the selling of electric bicycles. Meanwhile, the electric bicycle industry as a conventional manufacturing field is expected to remain in a hard situation with rising labor cost, manufacturing cost, financing cost and parts. Due to the low entry threshold and numerous manufacturers, the market competition is extremely fierce. However, with the development ofChina’s social economy and the change ofpeople’s living concept, the increased awareness of green commuting, leisure and exercises creates structural development opportunity for bicycle industry.
2. Future development opportunity and new yearly business plan of the Company:
The fierce market competition creates structural development opportunity for the industry. At the end of 2013, the Company completed the implementation of its restructuring plan and concluded its bankruptcy procedure, thereby improving the legal environment its business faces with. The business plan of the Company for 2016 is:
(1) To continuously promote restructuring while in active cooperation with shareholders and the Board.
(2) To reform and perfect the internal operating mechanism; distributed the annual targets to every marketing companies and every regional manager, evaluation based on manager responsibility system, following up month by month and rolling evaluation
(3) Make great efforts to maintain the traditional business, closely watch the first-tier big customers, focus on developing the second-tier customers, actively promote the extension of its distribution network terminal building, further expand new markets, and support new customers.
(4) Create conditions in terms of human, finance, and materials, etc., continue to build a comprehensive e-commerce business model and promote the information management based on the e-commerce work of last year, further train the e-commerce team, focus on improving the marketing capacity and brand publicity coverage of Emmelle flagship stores at various e-commerce platforms, improve the company's official shopping mall website and Wechat shopping mall, expand the brand influence, drive the fast growth of network marketing, and improve theenterprises’ market competiveness and profitability.
(5) Improve the supporting work of offline business, bring the traditional network dealers, physical stores and OEM plants into the offline supporting system of e-commerce business by reforming the mechanisms and sharing the benefits, utilize Qinghu base to create effective support services of small manufacturing for market demand and e-commerce business, and achieve win-win and common development.
(6) Increase the follow-up work to group purchase orders through the cooperation with government procurement information center.
(7) Combine the e-commerce means with the traditional business means for brand and product publicity, utilize the clubs to organize some special competitions and cycling races around Qinghai Lake and Hainan Island to publicize and promote the brand.
(8) Adjust rebate policy, take the month-by-month activities, assessment and rebate to promote sales.
(9) To enhance the development of medium-to-high end bikes and lithium batteries electric bikes, and enhance the development and promotion of medium-to-high end auxiliary parts.
(10) To strictly implement the entry and exit mechanism of OEM factories and suppliers and perform strict quality management and control, and carry out staff supplement and training as planned.
(11) Strengthen the background management and office automation, and improve the support degree of background departments to front desk business.
3. Risk factors adverse to theCompany’s development:
The tough international economic situation has a deep impact on the domestic consumption market where significant amount of export-oriented manufacturing enterprises has shifted. The bicycle and electric bicycle market is facing a complex environment that price war is a major competition means. Since the domestic economy is at the structural adjustment stage, coupled with a difficult situation of continuously rising labor cost, manufacturing cost, financing cost and parts the bicycle industry as a conventional manufacturing field recorded a decline in the market turnover. Due to the low entry threshold and numerous manufacturers, the competition in the market is extremely fierce.
To solve the above problems, the Company will on one hand strive to expand the main business while ensuring its sustainable and stable development, especially the manufacturing and selling of electric bicycles and medium-to-high end bicycles, and will on the other hand actively promote the restructuring.
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|
|||||Consulting company restructuring|
|2015|Telephone communication||Individual||
|||||problem|
|Reception (times)||8|||
|Number of hospitality||0|||
|Number of individual reception||8|||
|Number of other reception||0|||
|Disclosed, released or let out major undisclosed|||||
|||No|||
|information|||||

Section V. Iimportant Events
I. Profit distribution plan of common stock and capitalizing of common reserves plan
Formulation, Implementation and Adjustment of common stock Profit Distribution Policy Especially Cash Dividend policy during the Reporting Period
□ Applicable√ Not applicable
Profit distribution plan (pre-plan) of common stock and capitalizing of common reserves plan (pre-plan) in latest three years (including the reporting period)
Nil
Cash dividend of common stock in latest three years (including the reporting period)
In RMB
|||||||
|-|-|-|-|-|-|
|||Net profit|Ratio in net profit|||
|||attributable to|attributable to|||
|||common stock|common stock|||
|Year for bonus|Amount for cash|shareholders of|shareholders of|Amount for cash|Proportion for cash|
|shares|bonus (tax included)|listed company in|listed company|bonus by other ways|bonus by other ways|
|||consolidation|contained in|||
|||statement for bonus|consolidation|||
|||year|statement|||
|2015|0.00|-138,355.58||0.00|0.00%|
|2014|0.00|4,885,678.56||0.00|0.00%|
|2013|0.00|1,575,223,894.89||0.00|0.00%|

 The Company gains profits in reporting period and the retained profit of common stock shareholders provided by parent company is positive but no plan of cash dividend proposed of common stock
□ Applicable√ Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
□ Applicable√ Not applicable
The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either for the year .
III. Implementation of commitment
1. Commitments that the company, shareholders, actual controller, offeror, directors, supervisors, senior management or other related parties have fulfilled during the reporting period and have not yet fulfilled by the end of reporting period
□ Applicable√ Not applicable
In the reporting period, the Company had no commitment that the company, shareholders, actual controller, offeror, directors,
supervisors, senior management or other related parties have fulfilled during the reporting period and have not yet fulfilled by the end
of reporting period.
2. Concerning assts 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
On 11th, May 2012, the largest shareholder and biggest creditor of the Company, Shenzhen Guosheng Energy Investment and Development Co., Ltd. applied to Shenzhen Municipal Intermediate People's Court for reforming the Company as the Companycouldn’t pay off the matured debts and was seriously insolvent. On 12th, Oct., 2012, Shenzhen Municipal Intermediate People's Court ruled to accept the application proposed by Guosheng Energy according to (2012) Shenzhen Intermediate Court Po Zi No. 30 civil ruling. In late October, 2012, Shenzhen Municipal Intermediate People's Court ruled to reform the Company since 25th, Oct., 2012 according to (2012) Shenzhen Intermediate Court Po Zi No. 30-1 civil ruling, appointed King& Wood (Shenzhen) Mallesons and Shenzhen ZhengYuan Liquidation Affairs Co., Ltd. as the custodians of the Company. At the same time, Shenzhen Municipal Intermediate People's Court made (2012) Shenzhen Intermediate Court Po Zi No. 30-1 written decision, and approved the Company to manage property and business affairs by itself under the supervision of custodians according to the law. On 5 November 2013, the Shenzhen IntermediatePeople’s Court (2012) Shen Zhong Fa Po Zi No. 30-6 Civil Ruling Paper judged that approved the reorganization plan of the Company. On 27 December 2013, the Civil Ruling Paper Shenzhen IntermediatePeople’s Court (2012) Shen Zhong Fa Po Zi No. 30-10 ruled that the reorganization plan of CBC was completed and bankruptcy procedures of CBC closed down.
The Company has solved the debt problem by reforming, realized the net assets with positive value, the main business of bicycle is able to be maintained and realizes the stable development. The Company has set up the conditions for introducing the recombination party in the reforming plan, and expects to restore the abilities of sustainable operation and sustained profitability by reorganization. The conditions of introducing the recombination party includes: the assessed value of net assets should be no less than 2 billion Yuan, the net assets in the same year for implementing the major reorganization should be no less than 200 million Yuan. The Companydoesn’t have the recombination party at the moment. The Company will continue to carry out vary related works actively and promote the reorganization work with all efforts.
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
No particulars about the changes in aspect of accounting policy, estimates or calculation method in Period.
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
No changes in consolidationstatement’s scope for the Company in the reporting.
IX. Appointment and non-reappointment (dismissal) of CPA
Accounting firm appointed
|||
|-|-|
|Name of domestic accounting firm|Ruihua Certified Public Accountant (LLP)|
|Remuneration for domestic accounting firm (in 10||
||45|
|thousand Yuan)||
|Continuous life of auditing service for domestic||
||11|
|accounting firm||
|Name of domestic CPA|Li Zehao, Ren Weixing|

Re-appointed accounting firms in this period
□Yes√No
Appointment of internal control auditing accounting firm, financial consultant or sponsor
√Applicable□ Not applicable
In 2015, the Company appointed Ruihua Certified Public Accountant (LLP) as the auditing of the internal control, and auditing fee RMB 150,000.
X. Particular about suspended and delisting after annual report disclosed
□ Applicable√ Not applicable
XI. Bankruptcy reorganization
□ Applicable√ Not applicable
No bankruptcy reorganization for the Company in reporting period
XII. Significant lawsuits and arbitrations of the Company
□Applicable √Not applicable
No significant lawsuits and arbitrations occurred in the reporting period
XIII. Penalty and rectification
□ Applicable√ Not applicable
No penalty and rectification for the Company in reporting period.
XIV. Integrity of the company and its controlling shareholders and actual controllers
□ Applicable√ Not applicable
XV. Implementation of thecompany’s stock incentive plan, employee stock ownership plan or other employee incentives
□ Applicable√ Not applicable
The Company had no implementation of thecompany’s stock incentive plan, employee stock ownership plan or other employee incentives in the reporting period.
XVI. Major related transaction
1. Related transaction with routine operation concerned
□ Applicable√ Not applicable
No related transaction with daily operation concerned for the Company in reporting 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
Whether exist non-operating contact of related credit and debt or not
√Yes□No
Claim receivable from related party
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||Whether||Current|||||
|||||Balance at||Current||Current||
||||has||newly||||Balance at|
|||||period-begi||recovery||interest||
|Related|Relationshi||non-busines||added||||period-end|
|||Causes||n (10||(10|Interest rate|(10||
|party|p||s capital||(10||||(10 thousand|
|||||thousand||thousand||thousand||
||||occupying||thousand||||Yuan)|
|||||Yuan)||Yuan)||Yuan)||
||||or not||Yuan)|||||
|Influence on operation||||||||||
|result and financial||||||||||
|||N/A||||||||
|statue of the Company||||||||||
|from related credit||||||||||

Debts payable to related party
||||||||||
|-|-|-|-|-|-|-|-|-|
||||Balance at|Current|Current||Current|Balance at|
||||period-begin|newly added|recovery||interest|period-end|
|Related party|Relationship|Causes||||Interest rate|||
||||(10 thousand|(10 thousand|(10 thousand||(10 thousand|(10 thousand|
||||Yuan)|Yuan)|Yuan)||Yuan)|Yuan)|

||||||
|-|-|-|-|-|
|Shenzhen|||||
|Guosheng|||||
|||Subsidiary|||
|Energy|Controlling||||
|||Emmelle|650|650|
|Investment|shareholder||||
|||loan|||
|Development|||||
|Co., Ltd.|||||
|Influence on operation result|||||
|and financial statue of the||No influence|||
|Company from related debts|||||

5. Other related transactions
□ Applicable√ Not applicable
The company had no other significant related transactions in reporting period.
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
No guarantee for the Company in reporting period
3. Entrust others to cash asset management
(1) Trust financing
□ Applicable√ Not applicable
No trust financing for the Company in reporting period
(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. Explanation on other significant events
□ Applicable√ Not applicable
No explanation on other significant events for the Company in reporting period.
XIX. Significant event of subsidiary of the Company
□ Applicable√ Not applicable
XX. Social responsibility
□ Applicable√ Not applicable
XXI. Issuance of corporate bonds
Whether the company has corporate bonds that have been publicly issued and listed on the stock exchange, and not yet due or due but not fully cashed on the approval date of annual report
No
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|||||||
|||Proportio||Bonus|tion of||||Proportio|
||Amount||shares|||Others|Subtotal|Amount||
|||n|issued|shares|public||||n|
||||||reserve|||||
|I. Restricted shares|6,207|0.00%|||||0|6,207|0.00%|
|1. State-owned shares|0|0.00%|||||0|0|0.00%|
|2. State-owned legal person’s||||||||||
||0|0.00%|||||0|0|0.00%|
|shares||||||||||
|3. Other domestic shares|6,207|0.00%|||||0|6,207|0.00%|
|Including: Domestic legal||||||||||
||0|0.00%|||||0|0|0.00%|
|person’s shares||||||||||
|Domestic natural person’s||||||||||
||6,207|0.00%|||||0|6,207|0.00%|
|shares||||||||||
|4. Foreign shares|0|0.00%|||||0|0|0.00%|
|Including: Foreign legal||||||||||
||0|0.00%|||||0|0|0.00%|
|person’s shares||||||||||
|Foreign natural person’s||||||||||
||0|0.00%|||||0|0|0.00%|
|shares||||||||||
||551,341,7|||||||551,341,7||
|II. Unrestricted shares||100.00%|||||0||100.00%|
||40|||||||40||
||302,978,7|||||||302,978,7||
|1. RMB Ordinary shares||54.95%|||||0||54.95%|
||58|||||||58||
|2. Domestically listed foreign|248,362,9|||||||248,362,9||
|||45.05%|||||0||45.05%|
|shares|82|||||||82||
|3. Overseas listed foreign||||||||||
||0|0.00%|||||0|0|0.00%|
|shares||||||||||
|4. Others|0|0.00%|||||0|0|0.00%|
||551,347,9|||||||551,347,9||
|III. Total shares||100.00%|||||0||100.00%|
||47|||||||47||

Reasons for share changed
□ Applicable√ Not applicable
Approval of share changed
□ Applicable√ Not applicable
Ownership transfer of share changed
□ Applicable√ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common shareholders of Company in latest year and period
□ Applicable√ Not applicable
Other information necessary to disclose for the Company or need to disclosed under requirement from security regulators
□ Applicable√ Not applicable
2. Changes of restricted shares
□ Applicable√ Not applicable
II. Securities issuance and listing
1. Security offering (without preferred stock) in Reporting Period
□ Applicable√ Not applicable
2. Changes of total shares and shareholders structure as well as explanation on changes of assets and liability structure
□ Applicable√ Not applicable
3. Existing internal staff shares
□ Applicable√ Not applicable
III. Particulars about shareholder and actual controller of the Company
1. Amount of shareholders of the Company and particulars about shares holding
In Share
||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||||Total preference|||
|||||||||||||shareholders|||
||||||||Total preference||||||||
||||Total common|||||||||with voting|||
|Total common|||||||shareholders with||||||||
||||stock|||||||||rights recovered|||
|stock|||||||voting rights||||||||
||||shareholders at|||||||||at end of last|||
|shareholders in|49,038||||52,931||recovered at end of|||0||||0|
||||end of last month|||||||||month before|||
|reporting|||||||reporting period (if||||||||
||||before annual|||||||||annual report|||
|period-end|||||||applicable) (found||||||||
||||report disclosed|||||||||disclosed (if|||
||||||||in note8)||||||||
|||||||||||||applicable)|||
|||||||||||||(found in note8)|||
|Particulars about shares held above 5% by shareholders or top ten shareholders|||||||||||||||
||||||Total|||Amount|Amount||Number of share pledged/frozen||||
|||||Proportio||Changes|||||||||
|Full name of||Nature of||n of|sharehold|in report||of|of||||||
|Shareholders||shareholder||shares|ers at|||restricted|un-restrict||State of share||Amount||
|||||held||period|||||||||
||||||the end of|||shares|ed shares||||||

||||||||
|-|-|-|-|-|-|-|
||||report||held|held|
||||period||||
|ShenzhenGuocheng EnergyInvestmentDevelopment Co.,Ltd.|Domesticnon-State-ownedlegal person|11.52%|63,508,747|0|0|63,508,747|
|UOB Koy Hian(Hongkong) Co.,Ltd.|Foreign legalperson|2.23%|12,293,850|12293850|0|12,293,850|
|Specific account ofpropertydisposition forbankruptcyenterprise of CBC|Domesticnon-State-ownedlegal person|1.53%|8,450,002|0|0|8,450,002|
|ShenwanHongyuanSecurities(Hongkong) Co.,Ltd.|Foreign legalperson|1.15%|6,348,670|6348670|0|6,348,670|
|Guosen Securities(Hongkong)brokerage Co., Ltd.|Foreign legalperson|0.99%|5,476,051|5476051|0|5,476,051|
|Zhu Xiaowei|Domestic natureperson|0.73%|4,012,600|4012600|0|4,012,600|
|Li Huili|Domestic natureperson|0.71%|3,891,124|0|0|3,891,124|
|China MerchantsSecurities HongKong Co., Ltd.|State-owned legalperson|0.70%|3,870,972|3870972|0|3,870,972|
|Xu Hongbo|Domestic natureperson|0.57%|3,137,419|0|0|3,137,419|
|Zong Bin|Domestic natureperson|0.55%|3,056,400|3056400|0|3,056,400|
|Strategy investors or general|||||||
|corporation comes top 10 shareholders|||||||
|||N/A|||||
|due to rights issue (if applicable) (see|||||||
|note 3)|||||||
|||Li Huili, the spouse of actual controller Ji Hanfei, holding B-share of the Company on|||||
|Explanation on associated relationship|||||||
|||behalf of Shenzhen Guocheng Energy Investment Development Co., Ltd., beyond that, the|||||
|among the aforesaid shareholders|||||||
|||Company has no idea of whether other circulated shareholders belong to concerted action|||||

|||||
|-|-|-|-|
||persons ruled in the Administration Norms for Information Disclosure of Change on|||
||Shareholding of Shareholders of Listed Companies.|||
|Particular about top ten shareholders with un-restrict shares held||||
|||Type of shares||
|Shareholders’ name|Amount of un-restrict shares held at Period-end|||
|||Type|Amount|
|Shenzhen Guocheng EnergyInvestment Development Co., Ltd.|63,508,747|RMB common||
||||63,508,747|
|||shares||
|UOB Koy Hian (Hongkong) Co., Ltd.|12,293,850|Domestically||
||||12,293,850|
|||foreign shares||
|Specific account of propertydisposition for bankruptcy enterpriseof CBC|4,655,913|RMB common||
||||4,655,913|
|||shares||
||3,794,089|Domestically||
||||3,794,089|
|||foreign shares||
|Shenwan Hongyuan Securities(Hongkong) Co., Ltd.|6,348,670|Domestically||
||||6,348,670|
|||foreign shares||
|Guosen Securities (Hongkong)brokerage Co., Ltd.|5,476,051|Domestically||
||||5,476,051|
|||foreign shares||
|Zhu Xiaowei|4,012,600|RMB common||
||||4,012,600|
|||shares||
|Li Huili|3,891,124|Domestically||
||||3,891,124|
|||foreign shares||
|China Merchants Securities HongKong Co., Ltd.|3,870,972|Domestically||
||||3,870,972|
|||foreign shares||
|Xu Hongbo|3,137,419|Domestically||
||||3,137,419|
|||foreign shares||
|Zong Bin|3,056,400|RMB common||
||||3,056,400|
|||shares||
|Expiation on associated relationship or|Li Huili, the spouse of actual controller Ji Hanfei, holding B-share of the Company on|||
|consistent actors within the top 10|behalf of Shenzhen Guocheng Energy Investment Development Co., Ltd., beyond that, the|||
|un-restrict shareholders and between|Company has no idea of whether other circulated shareholders belong to concerted action|||
|top 10 un-restrict shareholders and top|persons ruled in the Administration Norms for Information Disclosure of Change on|||
|10 shareholders|Shareholding of Shareholders of Listed Companies.|||
|Explanation on top 10 shareholders||||
|involving margin business (if|N/A|||
|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: legal person
||||||
|-|-|-|-|-|
||Legal person/person||||
|Controlling shareholders||Date of foundation|Organization code|Main operation business|
||in charge of the unit||||
|||||Industry development,|
|||||domestic commerce,|
|Shenzhen Guocheng Energy|||||
|||||materials supply and sale|
|Investment Development Co.,|Ji Hanfei|2005-04-26|440301105151303||
|||||(excluding specially run,|
|Ltd.|||||
|||||controlled and sold|
|||||merchandises)|
|Equity of other|||||
|domestic/oversea listed|||||
|company control by|||||
||N/A||||
|controlling shareholder as|||||
|well as stock-joint in report|||||
|period|||||

Changes of controlling shareholders in reporting period
□ Applicable√ Not applicable
The Company had no changes of controlling shareholders in reporting period
3. Actual controller of the Company
Nature of actual controller: domestic natural person
Type of actual controller: natural person
||||
|-|-|-|
|||Whether obtained right of residence of other countries or|
|Actual controller|Nationality||
|||regions or not|
|Ji Hanfei|P.R.C|No|
|Profession and title in latest five years|Legal person of Shenzhen Guocheng Energy Investment Development Co., Ltd.||
|Listed company in and out of China|||
||N/A||
|controlled in past decades|||

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:
Ji Hanfei
Hanfei
100%
Shenzhen Guocheng Energy Investment Development Co.,
Ltd.
11.52%
Shenzhen China Bicycle Company (Holding) Limited
司
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|||
|||Worki|||||held at|||Other|held at|
|||||||||increased|decreased|||
||||S e||Start dated of|End date of office||||||
||Title|ng||Age|||period-be|||changes|period-en|
|Name|||x||office term|term||in this|in this|||
|||status|||||gin|||(share)|d|
|||||||||period|period|||
||||||||(Share)||||(Share)|
|||||||||(Share)|(Share)|||
|||Curre||||||||||
|||ntly||||||||||
|Li Hai|Director,||M|47|2013-09-26|2016-09-25|0|0|0|0|0|
||Chairman|in||||||||||
|||office||||||||||
|||Curre||||||||||
|Yang|Director|ntly in|M|59|2013-09-26|2016-09-25|0|0|0|0|0|
|Fenbo||||||||||||
|||office||||||||||
|||Curre||||||||||
|Yao||||||||||||
|Zhengwa|Director|ntly in|M|42|2013-09-26|2016-09-25|0|0|0|0|0|
|ng||office||||||||||
|||Curre||||||||||
|||ntly||||||||||
|Cao Fang|Director||M|42|2013-09-26|2016-09-25|0|0|0|0|0|
|||in||||||||||
|||office||||||||||
|||Curre||||||||||
|Kong Na|Director|ntly in|F|40|2013-09-26|2016-09-25|0|0|0|0|0|
|||office||||||||||
|||Curre||||||||||
||Independ|ntly||||||||||
|Cui Jun|ent||M|52|2013-09-26|2016-09-25|0|0|0|0|0|
|||in||||||||||
||director|||||||||||
|||office||||||||||
|||Curre||||||||||
||Independ|||||||||||
|Chen|ent|ntly in|M|48|2013-09-26|2016-09-25|0|0|0|0|0|
|Shujun||||||||||||
||director|office||||||||||
|||Curre||||||||||
||Independ|ntly||||||||||
|Li Bing|ent||F|41|2013-09-26|2016-09-25|0|0|0|0|0|
|||in||||||||||
||director|||||||||||
|||office||||||||||

|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Curre||||||||||
|Li Xiang|Superviso|ntly in|M|42|2014-06-27|2017-06-26|0|0|0|0|0|
||r|||||||||||
|||office||||||||||
|||Curre||||||||||
|Zheng||ntly||||||||||
||Superviso||M|54|2014-06-27|2017-06-26|8,276|0|2,000|0|6,267|
|Zhonghua||||||||||||
||r|in||||||||||
|n||||||||||||
|||office||||||||||
|||Curre||||||||||
||Staff|||||||||||
|Li Jialin|Superviso|ntly in|M|55|2014-06-27|2017-06-26|0|0|0|0|0|
||r|office||||||||||
|||Curre||||||||||
|Sun|Secretary|||||||||||
|||ntly in|M|43|2013-09-26|2016-09-25|0|0|0|0|0|
|Longlong|of Board|||||||||||
|||office||||||||||
|||Office||||||||||
|Luo|Director|leavin|M|53|2013-09-26|2015-04-13|0|0|0|0|0|
|Guiyou||||||||||||
|||g||||||||||
|Total|--|--|--|--|--|--|8,276|0|2,000|0|6,267|

 II. Changes of directors, supervisors and senior executives
||||||
|-|-|-|-|-|
|Name|Title|Type|Date|Reasons|
|||Appointed and|||
|Li Hai|Chairman||2015-04-15|Appointment of board of directors|
|||removed|||
|Luo Guiyou|Director,|Office leaving|2015-04-13|Personal reasons to resign|
||Chairman||||

III. Post-holding
Professional background, major working experience and present main responsibilities in Company of directors, supervisors and senior executive
1. Mr. Li Hai, born in 1969, graduated from Economic department of Shenzhen University in major of accounting; he took the turns of deputy manager of finance department, chief supervisor associate of finance department, secretary of the Board and vice president, etc. of the Company, and now he serves as chairman, legal representative adn president of the Company.
2. Mr. Yang Fenbo, born in 1957, China senior economist with master degree of MBA and engineer, held the position of minister of development department, concurrently minister of science and technology department, assistant general manager, assistant to chairman, deputy chief engineer and chief engineer at Shenzhen Lionda Group; took the chairman and concurrently general manager of Guangdong Sunrise Holding Co., Ltd.; now, he is
the chairman of Shenzhen Liona Group Co., Ltd.
3. Mr. Yao Zhengwang, born in 1975, with bachelor degree of law, successively took the post of Supervisor of
Supervision Office, Deputy Manager of Sales Department, and Deputy Manager of Legal Affairs Department of
Shenzhen Guomin Investment Development Co. Ltd. and deputy general manager of Administration Center of Compliant Risk Control, as well as director, secretary of the Board and convener of supervisory committee of CBC; now he serves as director of the Company.
4. Mr. Cao Fang, born in 1974, master degree; since May of 2007, he took post of item manager of marketing and management department in headquarter of Life Insurance, associate of general manager of marketing and management headquarter as well as general manager of market and business department, he acted as member of planning team of Life Insurance Branch in Guangdong. And subsequently served in strategy and development center, Office of the Chairman, Supervision office; he serves as deputy GM of Shanghai Branch of Life Insurance since March 2012.
5. Ms. Kong Na, born in 1976, master degree; From Sep. of 2005 to Apr. of 2010, he took post of Assistant Chief Executive in Ruifude Health Insurance Holding Co., Ltd. From Apr. of 2010 till now, he is in charge of associate of president in Yingkong Holding Co., Ltd.
6. Mr. Cui Jun, born in1964, party member of CPC, doctor of engineering, master of law and a first-grade lawyer; once he took posts of director of the
5th
session of nationwide lawyers association, director of the
8th
session and the
9th
session of Guangdong lawyer association, vice president of the
5th
and the
6th
session of Shenzhen lawyers association, committee of international business commission of nationwide lawyers association, deputy director of law business of intellectual property commission of Guangdong lawyers association, director of civil law business commission of Guangdong lawyers association and director of culture construction committee of Guangdong lawyers association. And now he is director of Guangdong Xingchen Law Firm, member of the CPPCC Shenzhen Committee, committee of law business of intellectual property commission of nationwide lawyers association, executive vice president of Shenzhen Patent Commission, vice president of Shenzhen promotion commission of creative design and intellectual property, arbitrator of mediation center of south China International economy and trade arbitration commission, mediation expert of mediation center and arbitrator of Shenzhen arbitration commission.
7. Mr. Chen Shujun, born in1968, master of the Chinese University of Hong Kong, majoring in business administration of finance, master of international accountant from City University of Hong Kong and he owes a university degree from law school of Tsinghua University. And he is senior accountant, China Certified Accountant, Chinese Certified Tax Agent, judicial authenticator and owes professional qualification of state laws; served as the legislative consultants of standing committee of Guangdong Province 12th session of the NationalPeople’s Congress, government procurement review expert of Shenzhen Municipal Finance Committee, Science and technology expert of Shenzhen Municipal Science& Technology Committee of Experts, Director of the eight Shenzhen Institute of accounting and Deputy director of the Expert Committee on accounting standards of enterprises in Shenzhen, Member of the five Shenzhen Institute of Certified Public Accountants in the development of small and medium firms, and Vice president of the second session Accounting Society of Futian District Shenzhen. He once took post of auditor and manager of Guangzhou CPAs. From 1998 till now he acted as executive partner of Shenzhen Guangzhou-Shenzhen CPAs, legal representative of Guangdong Guangzhou-Shenzhen Justice and Accounting judgment institution. And also independent director of Chiwan Base-B, Funde Insurance Holding and FundeP&C, director of Vengood E-commerce and Cybemaut Yingke. And he served as independent director of the Company since August 2010.
8. Ms. Li Bing, born in 1975, bachelor of law major and lawyer; From Jul. of 1998 to Jan. of 2002 she taught in Guizhou University; from Jan. of 2002 to Jan. of 2006 she acted as lawyer in Guangdong Yunsheng Law Firm; from Jan. of 2006 till now, she had been in charge of lawyer of Beijing Deheng Law Firm Branch in Shenzhen. 9. Mr. Li Xiang, born in 1974, a master degree, and he used to served as organ secretary, director-general of the organiztion department, manager ofH&R dept. of Jiangxi Branch of Pacific Life. He serves as deputy GM of Shenzhen Guosheng Energy Investment Development Co., Ltd. since March 2008.
10. Mr. Zheng Zhonghuan, born in 1962, engineer with bachelor degree, successively took the post in Shenzhen Light Textile Industry Company and Shenzhen Light Industry Company; since Oct. 1985, worked in Shenzhen China Bicycle (Group) Holdings Co. Ltd. and successively took the post of Deputy Manager, Manager of Planning Department, Manager of Material Department and manufacturing dept.; now he is the supervisor of the Company and Manager of Purchasing Department of the Shenzhen Emmelle Industry Co., Ltd.
11. Mr. Li Jialin, born in 1961, a master degree with a title of senior engineer. He successively served as senior engineer of the Company in electrical& mechanical engineering division, GM assistant of Hunan Guangdian Motocycle Company, manager of the Company inH&R Dept. now he serves as commissioner of comprehensive office of the Company and person in charge of the labor union.
12. Mr. Sun Longlong, born in 1973, graduated from Shanghai University of Finance and Economics in 1995 with a bachelor degree, a bachelor of Economics. He successively worked as financial affairs in Shenzhen Qiongjiao Industry Co., Ltd. and Shenzhen Solar Pipe Co., Ltd., he worked in the Company since May 1999, and successively served as Deputy Manager of financial department, manager of comprehensive management department, manager of enterprise management department, now he serves as secretary of the Board and manager of financial department of the Company.
13. Mr. Luo Guiyou, born in 1963, graduated from Fudan University as a bachelor majoring in history. Since Mar. of 2007, he worked in Life Insurance Holding Co., Ltd, and successively took posts of general manager of headquarter of personal insurance business, temporary committee of operation and management commission, associate of general manager of headquarter and committee of marketing management commission. From Mar. of 2010 to Oct. of 2010, he was committee of marketing management commission in planning team in Guangdong Branch of Life Insurance Holding Co., Ltd and charger of planning team of Guangdong Branch; he served as chairman and legal representative of the Company form August 2010 to April 2015. He resigned Director and Chairman of the Company on 13 April 2015.
Post-holding inshareholder’s unit
√Applicable□ Not applicable
|||||||
|-|-|-|-|-|-|
||||||Received|
|||Position in||||
||||||remuneration from|
|Name|Name of shareholder’s unit|shareholder’s|Start dated of|End date of||
||||office term|office term|shareholder’s unit|
|||unit n||||
||||||(Y/N)|
|Yao|Shenzhen Guocheng Energy Investment|||||
|||Supervisor|2006-10-09||Yes|
|Zhengwang|Development Co., Ltd.|||||
|Note of|N/A|||||

||
|-|
|post-holding in|
|shareholder’s|
|unit|

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)|
||Shenzhen Fude Real Estate Investment|||||
|Luo Guiyou|||||Yes|
||Development Co., Ltd.|||||
|Cao Fang|Shanghai Branch of Life Insurance|Deputy GM|2012-03-01||Yes|
|Yang Fenbo|Shenzhen Lionda Group Co., Ltd.|Chairman|2009-10-12||Yes|
|||Non-staff||||
|Yang Fenbo|Fawer Auto Parts Co., ltd.||2013-03-25|2016-03-24|Yes|
|||supervisor||||
|||President||||
|Kong Na|Yingkong Holding Co., Ltd.||2010-04-01||Yes|
|||assistant||||
|Cui Jun|Guangdong Ange Laws Firm|Attorney|2014-06-01||Yes|
|||Managing||||
|Chen Shujun|Shenzhen Guangshen CPA||1998-01-01||Yes|
|||partner||||
||Guangdong Guangshen Judicial Accounting|Legal||||
|Chen Shujun|||2002-12-01||No|
||Appraisal Institute|representative||||
|||Independent||||
|Chen Shujun|Shenzhen Chiwan Base Co., Ltd.||2013-05-20||Yes|
|||director||||
|||Independent||||
|Chen Shujun|Funde Insurance Holding Co., Ltd.||2015-07-01|2018-07-01|Yes|
|||director||||
|||Independent||||
|Chen Shujun|Funde P&C Co., Ltd.||2015-06-04|2018-06-04|Yes|
|||director||||
|Chen Shujun|Vengood E-commerce|Director|2016-01-26|2019-01-26|No|
|Li Bing|Cybemaut Yingke|Director|2016-02-26|2019-02-26|No|

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
|||
|-|-|
||According to relevant rules of the Article of Association, the general meeting of shareholders decidesremuneration of directors and supervisors. The Board of Directors decides senior management’s.|
|Decision procedure of||
|remuneration of directors,||

|||
|-|-|
|supervisors, senior||
|management||
|management||
|Confirmation basis ofremuneration of directors,supervisors and seniormanagement|The Company refers to the position rank and comprehensive industry level. And then general meeting of|
||shareholders approves compensation standard and allowance of independent directors. According to the|
||"Interim Measures to Annual Performance Assessment of Executives" and performance evaluation|
||standards the Company issues annual performance salary.|
||standards the Company issues annual performance salary.|
|Actual payment ofremuneration of directors,supervisors and seniormanagement|The Company strictly paid remuneration of directors, supervisors and senior management accordinglywith decision procedure and confirmation basis. Total payment for remuneration of directors,supervisors and supervisors amounted to RMB 1,840,900 from January to December in 2015.|

Remuneration for directors, supervisors and senior executives in reporting period
In 10 thousand Yuan
||||||||
|-|-|-|-|-|-|-|
||||||Total|Whether|
||||||remuneration|remuneration|
|||||Post-holding|||
|Name|Title|Sex|Age||obtained from the|obtained from|
|||||status|||
||||||Company (before|related party of|
||||||taxes)|the Company|
|||||Currently in|||
|Li Hai|Director, GM|M|47||97.21||
|||||office|||
|||||Currently in|||
|Cui Jun|Independent|M|52||4|No|
||director|||office|||
|||||Currently in|||
|Chen Shujun|Independent|M|48||4|No|
||director|||office|||
|||||Currently in|||
|Li Bing|Independent|F|41||4|No|
||director|||office|||
|||||Currently in|||
|Zheng|Supervisor|M|54||13.44||
|Zhonghuan||||office|||
|||||Currently in|||
|Li Jialin|Staff Supervisor|M|55||18.25||
|||||office|||
||Secretary of|||Currently in|||
|Sun Longlong||M|43||43.19||
||Board|||office|||
|Total|--|--|--|--|184.09|--|

 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)|8|

|||
|-|-|
|Employee in-post of main Subsidiaries (people)|46|
|The total number of current employees (people)|54|
|The total number of current employees to receive pay (people)|54|
|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|20|
|Sales personnel|10|
|Technical personnel|7|
|Financial personnel|6|
|Administrative personnel|11|
|Total|54|
|Education background||
|Category of education background|Numbers (people)|
|Undergraduate|9|
|Junior college|17|
|Other|28|
|Total|54|

 2. Remuneration Policy
--
3. Training programs
Nil
4. Labor outsourcing
□Applicable√ Not applicable
Section IX. Corporate Governance
I. Corporate governance of the Company
During the reporting period, the Company was strictly in accordance with the "Company Law", "Securities Law" as well as "Listing Corporation Management Standards" and other relevant laws, regulations and normative documents. We combined the actual situation, constantly improved the corporate governance structure, and strived to build a modern enterprise system. Operation, assembling and holding of general meeting of shareholders, the Board of Directors and board of supervisors were strictly with relevant rules of procedure. Thus we protected interests of the Company. The actual situation of corporate governance structure was in accordance with the release of normative documents about the listing Corporation management rules from China Securities Regulatory Commission.
Is there any difference between the actual condition of corporate governance and relevant regulations about corporate governance for listed company from CSRC?
□Yes√ No
There are no differences between the actual condition of corporate governance and relevant regulations about corporate governance for listed company from CSRC.
II. Independency of the Company relative to controllingshareholders’ in aspect of businesses, personnel, assets, organization and finance
The Company separate business, personnel, assets, institute and finance with largest shareholder or other related parties, owes independent and completed self-operation 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||||
||||||No.: 2015015,|
||||||Resolution|
|24th General Meeting|Annual General|||||
|||12.21%|2015-06-29|2015-06-29|announcement 24th|
|(for 2014)|Meeting|||||
||||||General Meeting (for|
||||||2014)|

2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore□ Applicable√ Not applicable
V. Responsibility performance of independent directors
1. The attending of independent directors to Board meetings and general meeting
The attending of independent directors to Board Meeting
||||||||
|-|-|-|-|-|-|-|
||Times of Board||||||
|||||||Absent the|
||meeting||Times of|Times of|||
|Name of independent||Times of|||Times of|Meeting for the|
||supposed to||attending by|entrusted|||
|director||Presence|||Absence|second time in a|
||attend in the||communication|presence|||
|||||||row (Y/N)|
||report period||||||
|Cui Jun|6|2|4|0|0|No|
|Chen Shujun|6|2|4|0|0|No|
|Li Bing|6|2|4|0|0|No|
|Times for attending general meeting|||||||
|||1|||||
|from independent directors|||||||

Explanation of absent the Board Meeting for the second time in a row
Nil
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
Nil
VI. Duty performance of the special committees under the board during the reporting period Board of directors set up audit commission and remuneration and appraisal commission taking responsibility based on Governance Rules of Listed Company, Article of Association as well as Procedure Rules of Board of Directors and other duties and rights various departments endowed.
As for compiling and audit on annual financial report were checked and communicated by Audit commission in accordance with rules of Working Procedure of Annual Report of Audit Commission, and they submitted decision to board of directors for approval. Remuneration and appraisal commission of the Company, in reporting period, according to the “Interim Measure on Assessment Reward of Annual Performance for Senior Executives”, carry out evaluation on the management team members for operation works in 2014, and propose a annual reward plans. In line with the requirement of internal control, and actual current operation condition of the Company, propose the proposal of “revised the‘Interim Measure on Assessment Reward of Annual Performance for Senior Executives”, and submit for deliberation on general meeting.
VII. Works from Supervisory Committee
The Company has risks in reporting period that found in supervisory activity from supervisory committee
□ Yes√ No
Supervisory committee has no objection about supervision events in reporting period
VIII. Examination and incentives of senior management
The Company initially established the standard and incentive mechanism for open and transparent performance
evaluation on directors, supervisors and management layer. The appointment of senior management staff was open
and transparent, in accordance with provisions of the law.
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|||||||
||2016-04-25||||||
|evaluation report|||||||
|Disclosure index of full internal control|Self-evaluation report of internal control for year of 2015 of China Bicycle Company||||||
|evaluation report|(Holdings) Limited||||||
|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|||
||Material defect: (1) inefficiency of|||Material defect: (1) inefficiency of|||
||environment control; (2) inefficiency of|||environment control; (2) inefficiency of|||
||internal supervision; (3) direct impact on|||internal supervision; (3) direct impact on|||
||major mistakes of investment decisions; (4)|||major mistakes of investment decisions;|||
||directly make the significant error in the|||(4) directly make the significant error in|||
||financial statements; (5) violation of the|||the financial statements; (5) violation of|||
||laws, regulations, rules and other normative|||the laws, regulations, rules and other|||
||documents, resulting in investigation of the|||normative documents, resulting in|||
|Qualitative criteria|central government and regulatory agencies,|||investigation of the central government|||
||and being sentenced to a fine or penalty,|||and regulatory agencies, and being|||
||being restricted industry exit,||canceling|sentenced to a fine or penalty, being|||
||business license|and being forced the closure||restricted industry exit,||canceling|
||of etc. Major defect: (1) indirect impact on|||business license|and being forced the||
||major mistakes of investment decisions; (2)|||closure of etc. Major defect: (1) indirect|||
||indirectly make the significant error in the|||impact on major mistakes of investment|||
||financial statements; (3) Lack of important|||decisions; (2) indirectly make the|||
||system; (4) violation of the laws, regulations,|||significant error in the financial|||

||||
|-|-|-|
||rules and other normative documents,|statements; (3) Lack of important|
||resulting in investigation of the local|system; (4) violation of the laws,|
||government and regulatory agencies, and|regulations, rules and other normative|
||being sentenced to a fine or penalty, and|documents, resulting in investigation of|
||being ordered to suspend business for|the local government and regulatory|
||rectification and cause the Company’s|agencies, and being sentenced to a fine|
||business stop of etc. General defect: other|or penalty, and being ordered to suspend|
||control defect besides material defect and|business for rectification and cause the|
||major defect.|Company’s business stop of etc.|
|||General defect: other control defect|
|||besides material defect and major defect.|
|||1. Potential loss or potential error of total|
||1. Potential loss or potential error of total|profit: (1) General defect: less than or|
||profit: (1) General defect: less than or equal|equal to pre-tax total profit of 3%, (2)|
||to pre-tax total profit of 3%, (2) Major|Major defect: more than pre-tax total|
||defect: more than pre-tax total profit of|profit of 3%( and absolute amount more|
||3%( and absolute amount more than RMB|than RMB 0.5 million), (3) Material|
||0.5 million), (3) Material defect:: more than|defect:: more than 5% of pre-tax total|
||5% of pre-tax total profit and absolute|profit and absolute amount more than|
||amount more than RMB 1 million; 2.|RMB 1 million; 2. Potential loss or|
||Potential loss or potential error of operating|potential error of operating income: (1)|
||income: (1) General defect: less than or|General defect: less than or equal to|
||equal to operating income of 1%, (2) Major|operating income of 1%, (2) Major|
|Quantitative standard|||
||defect: more than 1% of operating income|defect: more than 1% of operating|
||and less than or equal to 3% of operation|income and less than or equal to 3% of|
||income, (3) Material defect:: more than 3%|operation income, (3) Material defect::|
||of operating income; 3. Potential loss or|more than 3% of operating income; 3.|
||potential error of total assets: (1) General|Potential loss or potential error of total|
||defect: less than or equal to 1% of total|assets: (1) General defect: less than or|
||assets, (2) Major defect: more than 1% of|equal to 1% of total assets, (2) Major|
||total profit and less than or equal to 3% of|defect: more than 1% of total profit and|
||total profit, (3) Material defect:: more than|less than or equal to 3% of total profit,|
||3% of total profit|(3) Material defect:: more than 3% of|
|||total profit|
|Amount of significant defects in financial|||
||0||
|reports|||
|Amount of significant defects in|||
||0||
|non-financial reports|||
|Amount of important defects in financial|||
||0||
|reports|||

|||
|-|-|
|Amount of important defects in||
||0|
|non-financial reports||

X. Auditing report of internal control
√Applicable□ Not applicable
|||
|-|-|
|Deliberations in Internal Control Audit Report||
|We considers that China Bicycle Company (Holdings) Limited, in line with Basic Norms of Internal Control and relevant||
|regulations, shows an effectiveness internal control of financial report in all major aspects dated 31 December 2015.||
|Disclosure details of audit report of||
||Disclosed|
|internal control||
|Disclosure date of audit report of||
||2016-04-25|
|internal control (full-text)||
|Index of audit report of internal|Rui Hua Zhuan Shen Zi [2016] No. 48030016 “Auditing Report of Internal Control for year of|
|control (full-text)|2015”, Juchao website|
|Opinion type of auditing report of||
||Unqualified auditor’s report with explanatory paragraph|
|IC||
|Whether the non-financial report||
||No|
|had major defects||

Carried out modified opinion for internal control audit report from CPA
√Yes□No
Explanation on modified audit opinions for internal control issued by CPA
RuihuaCertified Public Accountants (LLP) issued qualified audit opinions with explanatory notes for the internal control of 2015. Ruihua CPA considers that the Company, in line with Basic Norms of Internal Control and relevant regulations, shows an effectiveness internal control of financial report in all major aspects dated 31 December 2015. With the explanatory notes attached, remind users of the internal control auditing report, the Company has completed implementation of the restructuring plan dated 27 December 2013 and terminate the bankruptcy proceedings, in which the condition of introduction of investors has been set out with a view to restoring its ability to continue as a going concern and its sustainable profitability through asset restructuring. Up to the reporting date of auditing, the Company has not introduced any investor, but retained the business of bicycles so as to maintain its ability to continue as a going concern before the injection of assets by investors. Therefore, there is uncertainty in the ability of China Bicycle Company to continue as a going concern, and it is stressed that the published opinions on auditing will not be impacted by the subject matter.
The internal control audit report, issued by CPA, has concerted opinion with self-evaluation report, issued from the Board
√ Yes□ No
Section X. Financial Report
I. Audit report
|||
|-|-|
|Type of audit opinion|Unqualified auditor’s report with explanatory paragraph|
|Signing date of audit report|2016-04-22|
|Name of audit institute|Ruihua Certified Public Accountant (LLP)|
|Number of audit report|Ruihua Shen Zi [2016] No. 48030032|
|Name of CPA|Li Zehao, Ren Weixing|

Text ofauditor’s Report
To all shareholders of Shenzhen China Bicycle Company (Holdings) Limited
We have audited the Companying consolidated and parentCompany’s financial statements of Shenzhen China Bicycle Company (Holdings) Limited (“CBC”), including balance sheet of 31 December 2015, and profit statement for year of 2015, cash flow statement and statement on changes ofshareholders’ equity for the year ended, and notes to the financial statements for the year ended.
I.Management’s responsibility for the financial statements
Management of the Company is responsible for prepare and present financial statement of the Company, which including: (1) Prepare financial statements with fair presentation in line with Accounting Standards for Business Enterprises; (2) Designing, executed and maintaining necessary internal control in order to prevent fundamental miscarrying in financial statement from fraudulent or errors.
II. Auditor's responsibility
Our responsibility is to express an audit opinion on these financial statements based on our audit. We performed our audit in accordance with Chinese Certified Public Accountants' Auditing Standards. Those standards require us to comply with professional ethics, and to plan and perform our audit so as to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures of the financial statements. The selective audit procedures depend on auditor's judgment, including the evaluation of the risk of material misstatement of the consolidated financial statements due to frauds or errors. When evaluating risk, we consider internal control related to financial statements, in order to design auditing procedures, but not for the purpose of expressing an opinion on the internal control's effectiveness. An audit also includes assessing the appropriateness of the accounting policies adopted and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that we have obtained sufficient and appropriate audit evidences to provide a basis for our audit
opinion.
III. Auditing opinion
In our opinion, in all material aspects,CBC’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 consolidated and parentcompany’s as of December 31, 2015, and its operation results and cash flows for the year ended.
IV. Emphasis of Matter
We bring to the attention of the users of the financial statements, as stated in note XII-1 of the financial statements under the name of CBC, China Bicycle Company has completed implementation of the restructuring plan dated 27 December 2013 and terminate the bankruptcy proceedings, in which the condition of introduction of investors has been set out with a view to restoring its ability to continue as a going concern and its sustainable profitability through asset restructuring. Up to the reporting date of auditing, the Company has not introduced any investor, but retained the business of bicycles so as to maintain its ability to continue as a going concern before the injection of assets by investors. Therefore, there is uncertainty in the ability of China Bicycle Company to continue as a going concern, and it is stressed that the published opinions on auditing will not be impacted by the subject matter. II. Financial statement
Unit in note of financial statement refers to CNY: RMB (Yuan)
1. Consolidated Balance Sheet
Prepared by Shenzhen China Bicycle Company (Holdings) Limited
2015-12-31
In RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current assets:|||
|Monetary funds|26,752,065.66|30,163,866.78|
|Settlement provisions|||
|Capital lent|||
|Financial liability measured by fair|||
|value and with variation reckoned into|||
|current gains/losses|||
|Derivative financial liability|||
|||2,200,000.00|
|Notes receivable|||
||9,195,296.32|6,790,982.50|
|Accounts receivable|||
|Accounts paid in advance|397,833.20|348,277.01|
|Insurance receivable|||
|Reinsurance receivables|||
|Contract reserve of reinsurance|||
|receivable|||
|Interest receivable|||
|Dividend receivable|||

||||
|-|-|-|
|Other receivables|395,523.78|511,254.81|
|Purchase restituted finance asset|||
|Inventories|4,057,247.68|6,171,307.53|
|Divided into assets held for sale|||
|Non-current asset due within one|||
|year|||
|Other current assets|209,155.59||
|Total current assets|41,007,122.23|46,185,688.63|
|Non-current assets:|||
|Loans and payments on behalf|||
|Finance asset available for sales|||
|Held-to-maturity investment|||
|Long-term account receivable|||
|Long-term equity investment|||
|Investment property|||
|Fixed assets|1,007,906.43|773,961.84|
|Construction in progress|||
|Engineering material|||
|Disposal of fixed asset|||
|Productive biological asset|||
|Oil and gas asset|||
|Intangible assets|3,765,000.00|4,518,000.00|
|Expense on Research and|||
|Development|||
|Goodwill|||
|Long-term expenses to be|||
|apportioned|||
|Deferred income tax asset|89,066.31|11,997.08|
|Other non-current asset|||
|Total non-current asset|4,861,972.74|5,303,958.92|
|Total assets|45,869,094.97|51,489,647.55|
|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|||
|Notes payable|||
|Accounts payable|7,787,813.83|10,278,377.96|
|Accounts received in advance|2,024,718.30|2,595,736.07|
|Selling financial asset of|||
|repurchase|||
|Commission charge and|||
|commission payable|||
|Wage payable|1,384,667.20|1,772,814.72|
|Taxes payable|1,271,303.96|2,232,187.80|
|Interest payable|||
|Dividend payable|||
|Other accounts payable|20,010,360.36|21,114,424.93|
|Reinsurance payables|||
|Insurance contract reserve|||
|Security trading of agency|||
|Security sales of agency|||
|Divided into liability held for sale|||
|Non-current liabilities due within 1|||
|year|||
|Other current liabilities|||
|Total current liabilities|32,478,863.65|37,993,541.48|
|Non-current liabilities:|||
|Long-term loans|||
|Bonds payable|||
|Including: preferred stock|||
|Perpetual capital|||
|securities|||
|Long-term account payable|||
|Long-term wages payable|||
|Special accounts payable|||
|Projected liabilities|||
|Deferred income|||
|Deferred income tax liabilities|||

||||
|-|-|-|
|Other non-current liabilities|||
|Total non-current liabilities|||
|Total liabilities|32,478,863.65|37,993,541.48|
|Owner’s equity:|||
|Share capital|551,347,947.00|551,347,947.00|
|Other equity instrument|||
|Including: preferred stock|||
|Perpetual capital|||
|securities|||
|Capital public reserve|627,834,297.85|627,834,243.83|
|Less: Inventory shares|||
|Other comprehensive income|||
|Reasonable reserve|||
|Surplus public reserve|32,673,227.01|32,673,227.01|
|Provision of general risk|||
|Retained profit|-1,200,090,425.75|-1,199,952,070.17|
|Total owner’s equity attributable to|11,765,046.11|11,903,347.67|
|parent company|||
|Minority interests|1,625,185.21|1,592,758.40|
|Total owner’s equity|13,390,231.32|13,496,106.07|
|Total liabilities and owner’s equity|45,869,094.97|51,489,647.55|

 Legal Representative: Li Hai Person in charge of Accounting Works: Sun Longlong Person in charge of Accounting Institution: Zhong Xiaojin
2. Balance Sheet of Parent Company
In RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current assets:|||
||1,199,934.09|1,363,097.01|
|Monetary funds|||
|Financial liability measured by fair|||
|value and with variation reckoned into|||
|current gains/losses|||
|Derivative financial liability|||
|Notes receivable|||
|Accounts receivable||694,416.00|

||||
|-|-|-|
|Account paid in advance|82,848.00|140,275.00|
|Interest receivable|||
|Dividends receivable|||
|Other receivables|12,579,547.00|13,714,033.12|
|Inventories|||
|Divided into assets held for sale|||
|Non-current assets maturing within|||
|one year|||
|Other current assets|||
|Total current assets|13,862,329.09|15,911,821.13|
|Non-current assets:|||
|Available-for-sale financial assets|||
|Held-to-maturity investments|||
|Long-term receivables|||
|Long-term equity investments|10,379.73|10,379.73|
|Investment property|||
|Fixed assets|740,727.77|624,330.89|
|Construction in progress|||
|Project materials|||
|Disposal of fixed assets|||
|Productive biological assets|||
|Oil and natural gas assets|||
|Intangible assets|3,765,000.00|4,518,000.00|
|Research and development costs|||
|Goodwill|||
|Long-term deferred expenses|||
|Deferred income tax assets|||
|Other non-current assets|||
|Total non-current assets|4,516,107.50|5,152,710.62|
|Total assets|18,378,436.59|21,064,531.75|
|Current liabilities:|||
|Short-term borrowings|||
|Financial liability measured by fair|||
|value and with variation reckoned into|||
|current gains/losses|||

||||
|-|-|-|
|Derivative financial liability|||
|Notes payable|||
|Accounts payable||294,300.00|
|Accounts received in advance|||
|Wage payable|290,130.11|568,210.39|
|Taxes payable|-278,741.70|309,944.51|
|Interest payable|||
|Dividend payable|||
|Other accounts payable|10,383,721.15|11,694,785.72|
|Divided into liability held for sale|||
|Non-current liabilities due within 1|||
|year|||
|Other current liabilities|||
|Total current liabilities|10,395,109.56|12,867,240.62|
|Non-current liabilities:|||
|Long-term loans|||
|Bonds payable|||
|Including: preferred stock|||
|Perpetual capital|||
|securities|||
|Long-term account payable|||
|Long-term wages payable|||
|Special accounts payable|||
|Projected liabilities|||
|Deferred income|||
|Deferred income tax liabilities|||
|Other non-current liabilities|||
|Total non-current liabilities|||
|Total liabilities|10,395,109.56|12,867,240.62|
|Owners’ equity:|||
|Share capita|551,347,947.00|551,347,947.00|
|Other equity instrument|||
|Including: preferred stock|||
|Perpetual capital|||
|securities|||

||||
|-|-|-|
|Capital public reserve|627,834,297.85|627,834,243.83|
|Less: Inventory shares|||
|Other comprehensive income|||
|Reasonable reserve|||
|Surplus reserve|32,673,227.01|32,673,227.01|
|Retained profit|-1,203,872,144.83|-1,203,658,126.71|
|Total owner’s equity|7,983,327.03|8,197,291.13|
|Total liabilities and owner’s equity|18,378,436.59|21,064,531.75|

 3. Consolidated Profit Statement
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|I. Total operating income|170,990,030.10|212,070,585.77|
|Including: Operating income|170,990,030.10|212,070,585.77|
|Interest income|||
|Insurance gained|||
|Commission charge and commission|||
|income|||
|II. Total operating cost|171,370,550.82|218,798,040.74|
|Including: Operating cost|159,399,271.88|198,964,665.65|
|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|||
|Operating tax and extras|431,067.18|508,902.12|
|Sales expenses|6,515,605.90|5,340,463.40|
|Administration expenses|5,391,566.14|14,108,887.56|
|Financial expenses|-675,198.21|-173,453.60|
|Losses of devaluation of asset|308,237.93|48,575.61|

||||
|-|-|-|
|Add: Changing income of fair|||
|value(Loss is listed with “-”)|||
|Investment income (Loss is listed|||
|with “-”)|||
|Including: Investment income on|||
|affiliated company and joint venture|||
|Exchange income (Loss is listed|||
|with “-”)|||
|III. Operating profit (Loss is listed with|||
||-380,520.72|-6,727,454.97|
|“-”)|||
|Add: Non-operating income|4,210,594.98|14,685,352.23|
|Including: Disposal gains of|||
|||39,731.46|
|non-current asset|||
|Less: Non-operating expense|3,841,393.90|29,038.00|
|Including: Disposal loss of|||
|||5,880.00|
|non-current asset|||
|IV. Total Profit (Loss is listed with “-”)|-11,319.64|7,928,859.26|
|Less: Income tax expense|94,609.13|2,145,860.08|
|V. Net profit (Net loss is listed with “-”)|-105,928.77|5,782,999.18|
|Net profit attributable to owner’s of|||
||-138,355.58|4,885,678.56|
|parent company|||
|Minority shareholders’ gains and|||
||32,426.81|897,320.62|
|losses|||
|VI. Net after-tax of other comprehensive|||
|income|||
|Net after-tax of other comprehensive|||
|income attributable to owners of parent|||
|company|||
|(I) Other comprehensive income|||
|items which will not be reclassified|||
|subsequently to profit of loss|||
|1. Changes as a result of|||
|re-measurement of net defined benefit|||
|plan liability or asset|||
|2. Share of the other|||
|comprehensive income of the investee|||
|accounted for using equity method which|||
|will not be reclassified subsequently to|||
|profit and loss|||

||||
|-|-|-|
|(II) Other comprehensive income|||
|items which will be reclassified|||
|subsequently to profit or loss|||
|1. Share of the other|||
|comprehensive income of the investee|||
|accounted for using equity method which|||
|will be reclassified subsequently to profit|||
|or loss|||
|2. Gains or losses arising|||
|from changes in fair value of|||
|available-for-sale financial assets|||
|3. Gains or losses arising|||
|from reclassification of held-to-maturity|||
|investment as available-for-sale financial|||
|assets|||
|4. The effect hedging portion|||
|of gains or losses arising from cash flow|||
|hedging instruments|||
|5. Translation differences|||
|arising on translation of foreign currency|||
|financial statements|||
|6. Other|||
|Net after-tax of other comprehensive|||
|income attributable to minority|||
|shareholders|||
|VII. Total comprehensive income|-105,928.77|5,782,999.18|
|Total comprehensive income|||
||-138,355.58|4,885,678.56|
|attributable to owners of parent Company|||
|Total comprehensive income|||
||32,426.81|897,320.62|
|attributable to minority shareholders|||
|VIII. Earnings per share:|||
|(i) Basic earnings per share|-0.0003|0.0089|
|(ii) Diluted earnings per share|-0.0003|0.0089|

 Enterprise combine under the same control in the Period, the combined party realized net profit of 0 Yuan before combination, and realized 0 Yuan at last period for combined party
Legal Representative: Li Hai Person in charge of Accounting Works:Sun Longlong Person in charge of Accounting Institution: Zhong Xiaojin
4. Profit Statement of Parent Company
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|I. Operating income|3,183,534.28|7,287,880.92|
|Less: Operating cost|1,183,430.55|4,505,933.46|
|Operating tax and extras|154,451.03|195,188.86|
|Sales expenses|||
|Administration expenses|2,412,060.36|13,181,561.45|
|Financial expenses|2,372.72|1,734.98|
|Losses of devaluation of asset|-39.00|587.29|
|Add: Changing income of fair|||
|value(Loss is listed with “-”)|||
|Investment income (Loss is|||
|listed with “-”)|||
|Including: Investment income|||
|on affiliated company and joint venture|||
|II. Operating profit (Loss is listed|||
||-568,741.38|-10,597,125.12|
|with “-”)|||
|Add: Non-operating income|4,210,594.98|14,532,283.73|
|Including: Disposal gains of|||
|non-current asset|||
|Less: Non-operating expense|3,836,923.90|23,158.00|
|Including: Disposal loss of|||
|non-current asset|||
|III. Total Profit (Loss is listed with|||
||-195,070.30|3,912,000.61|
|“-”)|||
|Less: Income tax expense|18,947.82|1,120,070.17|
|IV. Net profit (Net loss is listed with|||
||-214,018.12|2,791,930.44|
|“-”)|||
|V. Net after-tax of other comprehensive|||
|income|||
|(I) Other comprehensive income|||
|items which will not be reclassified|||
|subsequently to profit of loss|||
|1. Changes as a result of|||
|re-measurement of net defined benefit|||
|plan liability or asset|||

||||
|-|-|-|
|2. Share of the other|||
|comprehensive income of the investee|||
|accounted for using equity method|||
|which will not be reclassified|||
|subsequently to profit and loss|||
|(II) Other comprehensive income|||
|items which will be reclassified|||
|subsequently to profit or loss|||
|1. Share of the other|||
|comprehensive income of the investee|||
|accounted for using equity method|||
|which will be reclassified subsequently|||
|to profit or loss|||
|2. Gains or losses arising|||
|from changes in fair value of|||
|available-for-sale financial assets|||
|3. Gains or losses arising|||
|from reclassification of held-to-maturity|||
|investment as available-for-sale|||
|financial assets|||
|4. The effect hedging|||
|portion of gains or losses arising from|||
|cash flow hedging instruments|||
|5. Translation differences|||
|arising on translation of foreign|||
|currency financial statements|||
|6. Other|||
|VI. Total comprehensive income|-214,018.12|2,791,930.44|
|VII. Earnings per share:|||
|(i) Basic earnings per share|-0.0004|0.0051|
|(ii) Diluted earnings per share|-0.0004|0.0051|

 5. Consolidated Cash Flow Statement
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|I. Cash flows arising from operating|||
|activities:|||
|Cash received from selling|||
|commodities and providing labor|93,016,514.64|108,375,320.26|
|services|||

||||
|-|-|-|
|Net increase of customer deposit|||
|and interbank deposit|||
|Net increase of loan from central|||
|bank|||
|Net increase of capital borrowed|||
|from other financial institution|||
|Cash received from original|||
|insurance contract fee|||
|Net cash received from reinsurance|||
|business|||
|Net increase of insured savings and|||
|investment|||
|Net increase of amount from|||
|disposal financial assets that measured|||
|by fair value and with variation|||
|reckoned into current gains/losses|||
|Cash received from interest,|||
|commission charge and commission|||
|Net increase of capital borrowed|||
|Net increase of returned business|||
|capital|||
|Write-back of tax received|||
|Other cash received concerning|||
||7,025,026.01|115,592,208.06|
|operating activities|||
|Subtotal of cash inflow arising from|||
||100,041,540.65|223,967,528.32|
|operating activities|||
|Cash paid for purchasing|||
|commodities and receiving labor|80,757,205.50|96,445,270.32|
|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|6,970,654.49|9,113,860.33|
|Taxes paid|4,102,934.63|96,588,723.27|
|Other cash paid concerning|||
||11,239,769.85|17,898,626.22|
|operating activities|||
|Subtotal of cash outflow arising from|||
||103,070,564.47|220,046,480.14|
|operating activities|||
|Net cash flows arising from operating|||
||-3,029,023.82|3,921,048.18|
|activities|||
|II. Cash flows arising from investing|||
|activities:|||
|Cash received from recovering|||
|investment|||
|Cash received from investment|||
|income|||
|Net cash received from disposal of|||
|fixed, intangible and other long-term||100,500.00|
|assets|||
|Net cash received from disposal of|||
|subsidiaries and other units|||
|Other cash received concerning|||
|investing activities|||
|Subtotal of cash inflow from investing|||
|||100,500.00|
|activities|||
|Cash paid for purchasing fixed,|||
||382,777.30|691,852.99|
|intangible and other long-term assets|||
|Cash paid for investment|||
|Net increase of mortgaged loans|||
|Net cash received from|||
|subsidiaries and other units obtained|||
|Other cash paid concerning|||
|investing activities|||
|Subtotal of cash outflow from investing|||
||382,777.30|691,852.99|
|activities|||
|Net cash flows arising from investing|||
||-382,777.30|-591,352.99|
|activities|||
|III. Cash flows arising from financing|||
|activities|||
|Cash received from absorbing|||

||||
|-|-|-|
|investment|||
|Including: Cash received from|||
|absorbing minority shareholders’|||
|investment by subsidiaries|||
|Cash received from loans|||
|Cash received from issuing bonds|||
|Other cash received concerning|||
|financing activities|||
|Subtotal of cash inflow from financing|||
|activities|||
|Cash paid for settling debts|||
|Cash paid for dividend and profit|||
|distributing or interest paying|||
|Including: Dividend and profit of|||
|minority shareholder paid by|||
|subsidiaries|||
|Other cash paid concerning|||
|financing activities|||
|Subtotal of cash outflow from financing|||
|activities|||
|Net cash flows arising from financing|||
|activities|||
|IV. Influence on cash and cash|||
|equivalents due to fluctuation in|||
|exchange rate|||
|V. Net increase of cash and cash|||
||-3,411,801.12|3,329,695.19|
|equivalents|||
|Add: Balance of cash and cash|||
||30,163,866.78|26,834,171.59|
|equivalents at the period -begin|||
|VI. Balance of cash and cash|||
||26,752,065.66|30,163,866.78|
|equivalents at the period -end|||

6. Cash Flow Statement of Parent Company
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|I. Cash flows arising from operating|||
|activities:|||
|Cash received from selling|38,250.00||

||||
|-|-|-|
|commodities and providing labor|||
|services|||
|Write-back of tax received|||
|Other cash received concerning|||
||12,679,197.51|124,889,662.76|
|operating activities|||
|Subtotal of cash inflow arising from|||
||12,717,447.51|124,889,662.76|
|operating activities|||
|Cash paid for purchasing|||
|commodities and receiving labor|824,576.60||
|service|||
|Cash paid to/for staff and workers|2,574,126.10|5,757,714.66|
|Taxes paid|1,050,776.71|93,606,825.19|
|Other cash paid concerning|||
||8,208,908.80|24,682,497.75|
|operating activities|||
|Subtotal of cash outflow arising from|||
||12,658,388.21|124,047,037.60|
|operating activities|||
|Net cash flows arising from operating|||
||59,059.30|842,625.16|
|activities|||
|II. Cash flows arising from investing|||
|activities:|||
|Cash received from recovering|||
|investment|||
|Cash received from investment|||
|income|||
|Net cash received from disposal of|||
|fixed, intangible and other long-term|||
|assets|||
|Net cash received from disposal of|||
|subsidiaries and other units|||
|Other cash received concerning|||
|investing activities|||
|Subtotal of cash inflow from investing|||
|activities|||
|Cash paid for purchasing fixed,|||
||222,222.22|560,364.97|
|intangible and other long-term assets|||
|Cash paid for investment|||
|Net cash received from|||
|subsidiaries and other units|||

||||
|-|-|-|
|Other cash paid concerning|||
|investing activities|||
|Subtotal of cash outflow from investing|||
||222,222.22|560,364.97|
|activities|||
|Net cash flows arising from investing|||
||-222,222.22|-560,364.97|
|activities|||
|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 inflow from financing|||
|activities|||
|Cash paid for settling debts|||
|Cash paid for dividend and profit|||
|distributing or interest paying|||
|Other cash paid concerning|||
|financing activities|||
|Subtotal of cash outflow from financing|||
|activities|||
|Net cash flows arising from financing|||
|activities|||
|IV. Influence on cash and cash|||
|equivalents due to fluctuation in|||
|exchange rate|||
|V. Net increase of cash and cash|||
||-163,162.92|282,260.19|
|equivalents|||
|Add: Balance of cash and cash|||
||1,363,097.01|1,080,836.82|
|equivalents at the period -begin|||
|VI. Balance of cash and cash|||
||1,199,934.09|1,363,097.01|
|equivalents at the period -end|||

7. Statement of Changes inOwners’ Equity (Consolidated)
This Period
In RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||This Period|||||||||||||
||Owners’ equity attributable to parent company|||||||||||||
|||Other||||||||||||
|||equity instrument||||||||||||
|Item||||||||||||Minorit|Total|
|||||||Less:|Other|||Provisio||||
||Share||Perpet|||||Reason||||y|owners’|
||capital|Prefer|ual||Capitalreserve|Inventory|comprehensive|able|Surplusreserve|n ofgeneral|Retained profit|interests|equity|
|||red|capita|Other||shares|income|reserve||risk||||
||||l|||||||||||
|||stock||||||||||||
||||securi|||||||||||
||||ties|||||||||||
||551,34||||||||||-1,199,9|||
|I. Balance at the|||||627,834||||32,673,|||1,592,7|13,496,|
||7,947.||||||||||52,070.|||
|end of the last year|||||,243.83||||227.01|||58.40|106.07|
||00||||||||||17|||
|Add:||||||||||||||
|Changes of||||||||||||||
|accounting policy||||||||||||||
|Error||||||||||||||
|correction of the||||||||||||||
|last period||||||||||||||
|Enterprise||||||||||||||
|combine under||||||||||||||
|the same control||||||||||||||
|Other||||||||||||||
||551,34||||||||||-1,199,9|||
|II. Balance at the|||||627,834||||32,673,|||1,592,7|13,496,|
|beginning of this|7,947.||||||||||52,070.|||
||||||,243.83||||227.01|||58.40|106.07|
|year|00||||||||||17|||
|III. Increase/||||||||||||||
||||||||||||-138,35|32,426.|-105,87|
|Decrease in this||||||||||||||
||||||54.02|||||||||
|year (Decrease is|||||||||||5.58|81|4.75|
|listed with “-”)||||||||||||||
|(i) Total|||||||||||-138,35|32,426.|-105,92|
|comprehensive||||||||||||||
||||||||||||5.58|81|8.77|
|income||||||||||||||
|(ii) Owners’||||||||||||||
|devoted and||||||||||||||
|decreased capital||||||||||||||
|1.Common shares||||||||||||||
|invested by||||||||||||||
|shareholders||||||||||||||
|2. Capital invested||||||||||||||
|by holders of other||||||||||||||
|equity instruments||||||||||||||
|3. Amount||||||||||||||
|reckoned into||||||||||||||
|owners equity with||||||||||||||
|share-based||||||||||||||
|payment||||||||||||||

||||||||
|-|-|-|-|-|-|-|
|4. Other|||||||
|(III) Profit|||||||
|distribution|||||||
|1. Withdrawal of|||||||
|surplus reserves|||||||
|2. Withdrawal of|||||||
|general risk|||||||
|provisions|||||||
|3. Distribution for|||||||
|owners (or|||||||
|shareholders)|||||||
|4. Other|||||||
|(IV) Carrying|||||||
|forward internal|||||||
|owners’ equity|||||||
|1. Capital reserves|||||||
|conversed to|||||||
|capital (share|||||||
|capital)|||||||
|2. Surplus reserves|||||||
|conversed to|||||||
|capital (share|||||||
|capital)|||||||
|3. Remedying loss|||||||
|with surplus|||||||
|reserve|||||||
|4. Other|||||||
|(V) Reasonable|||||||
|reserve|||||||
|1. Withdrawal in|||||||
|the report period|||||||
|2. Usage in the|||||||
|report period|||||||
|||54.02||||54.02|
|(VI)Others|||||||
||551,34|||-1,200,0||13,390,231.32|
|IV. Balance at the||627,834|32,673,||1,625,1||
|end of the report|7,947.|||90,425.|||
|||,297.85|227.01||85.21||
|period|00|||75|||

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

|||||||||
|-|-|-|-|-|-|-|-|
|||l||||||
|||securi||||||
|||ties||||||
||551,34||||-1,204,8|||
|I. Balance at the|||627,819|32,673,||695,437|7,698,7|
||7,947.||||37,748.|||
|end of the last year|||,910.12|227.01||.78|73.18|
||00||||73|||
|Add:||||||||
|Changes of||||||||
|accounting policy||||||||
|Error||||||||
|correction of the||||||||
|last period||||||||
|Enterprise||||||||
|combine under||||||||
|the same control||||||||
|Other||||||||
||551,34||||-1,204,8|||
|II. Balance at the|||627,819|32,673,||695,437|7,698,7|
|beginning of this|7,947.||||37,748.|||
||||,910.12|227.01||.78|73.18|
|year|00||||73|||
|III. Increase/||||||||
||||14,333.||4,885,6|897,320|5,797,3|
|Decrease in this||||||||
|year (Decrease is|||71||78.56|.62|32.89|
|listed with “-”)||||||||
|(i) Total|||||4,885,6|897,320|5,782,9|
|comprehensive||||||||
||||||78.56|.62|99.18|
|income||||||||
|(ii) Owners’||||||||
|devoted and||||||||
|decreased capital||||||||
|1.Common shares||||||||
|invested by||||||||
|shareholders||||||||
|2. Capital invested||||||||
|by holders of other||||||||
|equity instruments||||||||
|3. Amount||||||||
|reckoned into||||||||
|owners equity with||||||||
|share-based||||||||
|payment||||||||
|4. Other||||||||
|(III) Profit||||||||
|distribution||||||||
|1. Withdrawal of||||||||
|surplus reserves||||||||
|2. Withdrawal of||||||||
|general risk||||||||
|provisions||||||||

||||||||
|-|-|-|-|-|-|-|
|3. Distribution for|||||||
|owners (or|||||||
|shareholders)|||||||
|4. Other|||||||
|(IV) Carrying|||||||
|forward internal|||||||
|owners’ equity|||||||
|1. Capital reserves|||||||
|conversed to|||||||
|capital (share|||||||
|capital)|||||||
|2. Surplus reserves|||||||
|conversed to|||||||
|capital (share|||||||
|capital)|||||||
|3. Remedying loss|||||||
|with surplus|||||||
|reserve|||||||
|4. Other|||||||
|(V) Reasonable|||||||
|reserve|||||||
|1. Withdrawal in|||||||
|the report period|||||||
|2. Usage in the|||||||
|report period|||||||
|||14,333.||||14,333.|
|(VI)Others|||||||
|||71||||71|
||551,34|||-1,199,9|||
|IV. Balance at the||627,834|32,673,||1,592,7|13,496,|
|end of the report|7,947.|||52,070.|||
|||,243.83|227.01||58.40|106.07|
|period|00|||17|||

8. Statement of Changes inOwners’ Equity (Parent Company)
This Period
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||This Period|||||||||||
|||Other||||||||||
|||equity instrument||||||||||
||||||||Other||||Total|
|Item|Share||Perpetu||Capital|Less:|comprehe|Reasonab|Surplus|Retaine||
|||||||Inventory|||||owners’|
||capital||al||reserve||nsive|le reserve|reserve|d profit||
|||Preferre|capital|Other||shares|income||||equity|
|||d stock||||||||||
||||securiti|||||||||
||||es|||||||||
||551,347,||||627,834,2||||32,673,22|-1,203,6|8,197,291|
|I. Balance at the||||||||||||
|end of the last year|947.00||||43.83||||7.01|58,126.|.13|

|||||||
|-|-|-|-|-|-|
|||||71||
|Add: Changes||||||
|of accounting||||||
|policy||||||
|Error||||||
|correction of the||||||
|last period||||||
|Other||||||
|||||-1,203,6||
|II. Balance at the|551,347,|627,834,2|32,673,22||8,197,291|
|beginning of this||||58,126.||
||947.00|43.83|7.01||.13|
|year||||71||
|III. Increase/||||||
|||||-214,01|-213,964.|
|Decrease in this||||||
|||54.02||||
|year (Decrease is||||8.12|10|
|listed with “-”)||||||
|(i) Total||||-214,01|-214,018.|
|comprehensive||||||
|||||8.12|12|
|income||||||
|(ii) Owners’||||||
|devoted and||||||
|decreased capital||||||
|1.Common shares||||||
|invested by||||||
|shareholders||||||
|2. Capital invested||||||
|by holders of other||||||
|equity instruments||||||
|3. Amount||||||
|reckoned into||||||
|owners equity with||||||
|share-based||||||
|payment||||||
|4. Other||||||
|(III) Profit||||||
|distribution||||||
|1. Withdrawal of||||||
|surplus reserves||||||
|2. Distribution for||||||
|owners (or||||||
|shareholders)||||||
|3. Other||||||
|(IV) Carrying||||||
|forward internal||||||
|owners’ equity||||||
|1. Capital reserves||||||
|conversed to||||||
|capital (share||||||
|capital)||||||

|||||||
|-|-|-|-|-|-|
|2. Surplus reserves||||||
|conversed to||||||
|capital (share||||||
|capital)||||||
|3. Remedying loss||||||
|with surplus||||||
|reserve||||||
|4. Other||||||
|(V) Reasonable||||||
|reserve||||||
|1. Withdrawal in||||||
|the report period||||||
|2. Usage in the||||||
|report period||||||
|||54.02|||54.02|
|(VI)Others||||||
|||||-1,203,8|7,983,327.03|
|IV. Balance at the|551,347,|627,834,2|32,673,22|||
|end of the report||||72,144.||
||947.00|97.85|7.01|||
|period||||83||

Last period
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Last period|||||||||||
|||Other||||||||||
|||equity instrument||||||||||
||||||||Other||||Total|
|Item|Share||Perpetu||Capital|Less:|comprehe|Reasonab|Surplus|Retaine||
|||||||Inventory|||||owners’|
||capital||al||reserve||nsive|le reserve|reserve|d profit||
|||Preferre|capital|Other||shares|income||||equity|
|||d stock||||||||||
||||securiti|||||||||
||||es|||||||||
|||||||||||-1,206,4||
||551,347,||||627,819,9||||32,673,22||5,391,026|
|I. Balance at the||||||||||||
|||||||||||50,057.||
|end of the last year|947.00||||10.12||||7.01||.98|
|||||||||||15||
|Add: Changes||||||||||||
|of accounting||||||||||||
|policy||||||||||||
|Error||||||||||||
|correction of the||||||||||||
|last period||||||||||||
|Other||||||||||||
|||||||||||-1,206,4||
|II. Balance at the|551,347,||||627,819,9||||32,673,22||5,391,026|
|beginning of this||||||||||50,057.||
||947.00||||10.12||||7.01||.98|
|year||||||||||15||
|III. Increase/||||||||||2,791,9|2,806,264|
||||||14,333.71|||||||
|Decrease in this||||||||||||
|||||||||||30.44|.15|
|year (Decrease is||||||||||||

||||
|-|-|-|
|listed with “-”)|||
|(i) Total|2,791,9|2,791,930|
|comprehensive|||
||30.44|.44|
|income|||
|(ii) Owners’|||
|devoted and|||
|decreased capital|||
|1.Common shares|||
|invested by|||
|shareholders|||
|2. Capital invested|||
|by holders of other|||
|equity instruments|||
|3. Amount|||
|reckoned into|||
|owners equity with|||
|share-based|||
|payment|||
|4. Other|||
|(III) Profit|||
|distribution|||
|1. Withdrawal of|||
|surplus reserves|||
|2. Distribution for|||
|owners (or|||
|shareholders)|||
|3. Other|||
|(IV) Carrying|||
|forward internal|||
|owners’ equity|||
|1. Capital reserves|||
|conversed to|||
|capital (share|||
|capital)|||
|2. Surplus reserves|||
|conversed to|||
|capital (share|||
|capital)|||
|3. Remedying loss|||
|with surplus|||
|reserve|||
|4. Other|||
|(V) Reasonable|||
|reserve|||
|1. Withdrawal in|||
|the report period|||
|2. Usage in the|||
|report period|||

|||||||
|-|-|-|-|-|-|
|||14,333.71|||14,333.71|
|(VI)Others||||||
|||||-1,203,6||
|IV. Balance at the|551,347,|627,834,2|32,673,22||8,197,291|
|end of the report||||58,126.||
||947.00|43.83|7.01||.13|
|period||||71||

III. Company Profile
(I) Company History
According to the Approval Document SFBF (1991) No. 888 issued by thePeople’s Government of Shenzhen, Shenzhen China Bicycle Company (Holdings) Limited (hereinafter referred to as the Company) was reincorporated as the company limited by shares in November 1991. On 28 December 1991, upon the Approval Document SRYFZ(1991) No. 119 issued by Shenzhen Special Economic Zone Branch of thePeople’s Bank of China, the Company got listed on Shenzhen Stock Exchange. The Company reserves the business license for the enterprise legal person (QGYSZFZ No.101165)[the registered number has been altered as440301501122085] with the registered capital of RMB551, 347,947.00.
(II) Business Scope and Operation
The Company belongs to the machinery manufacture industry and mainly engages in the production and assembly of various bicycles and spare parts, components, parts, mechanical product, sport machinery, fine chemicals, carbon fiber composites material, household electrical appliance and affiliated components (products management by license excluded).
The Company is specialized in making the middle-top rank bicycles, the main brands are EMMELLE and various electrical bicycles.
The majority of its products were previously exported, however, the sales volume sharply declined in recent years because of the antidumping litigation. Hence, the Company commences on the debt reorganization and the reorganization plan was completed on 27 December 2013 with bankruptcy proceedings terminated. Meanwhile, makes greater efforts to develop and research the new products, and creates a range of electrical bicycles to occupy the domestic market. Up to 31 December 2015, shares issued by the Company counted as 551,347,947 shares accumulated.
The financial statement has been deliberated and approved on the Board dated 22 April 2016. Nil
IV. Compilation Basis of Financial Statement
1. Compilation Basis
The Company proceed on continue operating as a premise, according to the actual occurred transactions and
events, based on Accounting Standard for BusinessEnterprise—Basic Rules(Ministry of Finance Order No. 33,
Ministry of Finance Order No. 76 Revised), 41 specific accounting rules issued and revised on 15 February 2006 and later, the Application Guide of Accounting Standard for Enterprise, the Accounting Standard Explanation and other relevant regulations(together as “Accounting Standards for Business Enterprises”) as well as the Information Disclosure Rules of the Company who Publicly Issues SecuritiesNo.15—General Rules of Financial Report (2015 Revised) issued by CSRC to prepare financial statements.
Accounting records of the Company is based on accrual basis in line with relevant regulations of Accounting Standards for Enterprise. Except for some financial instruments, the financial statement is calculated based on historical cost. As for the non-current assets ready for sold, amount after deducted estimated cost by fair value and the original book value qualify with condition of hold ready for sold, calculated based on the lower one. If impairment occurred for assets, accrual relevant impairment provision in line with relevant regulations.
2. Going concern
On 11 May 2012, the largest shareholder and biggest creditor of the Company, Shenzhen Guocheng Energy Investment Development Co., Ltd. applied to Shenzhen Municipal Intermediate People's Court for reforming the Company as the Companycouldn’t pay off the matured debts and was seriously insolvent. On 12th, Oct., 2012, Shenzhen Municipal Intermediate People's Court ruled to accept the application proposed by Guocheng Energy according to (2012) Shenzhen Intermediate Court Po Zi No. 30 civil ruling. On the last ten-day of October 2012, Shenzhen Municipal Intermediate People's Court ruled to reform the Company since 25th, Oct., 2012 according to (2012) Shenzhen Intermediate Court Po Zi No. 30-1 civil ruling, appointed King& Wood (Shenzhen) Mallesons and Shenzhen ZhengYuan Liquidation Affairs Co., Ltd. as the custodians of the Company. On the same day, Shenzhen Municipal Intermediate People's Court made (2012) Shenzhen Intermediate Court Po Zi No. 30-1 written decision, and approved the Company to manage property and business affairs by itself under the supervision of custodians according to the law. On 5 November 2013, the Shenzhen IntermediatePeople’s Court (2012) Shen Zhong Fa Po Zi No. 30-6 Civil Ruling Paper judged that approved the reorganization plan of the Company. On 27 December 2013, the Civil Ruling Paper Shenzhen IntermediatePeople’s Court (2012) Shen Zhong Fa Po Zi No. 30-10 ruled that the reorganization plan of CBC was completed and bankruptcy procedures of CBC closed down.
The Company has solved the debt problem by reforming, realized the net assets with positive value, the main business of bicycle is able to be maintained and realizes the stable development. The Company has set up the conditions for introducing the recombination party in the reforming plan, and expects to restore the abilities of sustainable operation and sustained profitability by reorganization. The conditions of introducing the recombination party includes: the assessed value of net assets should be no less than 2 billion Yuan, the net assets in the same year for implementing the major reorganization should be no less than 200 million Yuan. The Companydoesn’t have the recombination party at the moment.
V. Main accounting policy and Accounting Estimate
Tips for specific accounting policy and estimate:
Accounting policy and estimate are strictly in line with relevant regulations and laws.
1. Declaration on compliance with accounting standards
The financial statement prepared by the Company are compliance with the requirement of accounting rules, reflect a true and completed financial status of the Company dated 31 December 2015 and operation results and cash flows for the year of 2015. Furthermore, the financial statement, in all major aspects, conform to the Information Disclosure Rules of the Company who Publicly Issues SecuritiesNo.15—General Rules of Financial Report
issued by CSRC, revised in 2015, and relevant disclosure requirement and its notes.
2. Accounting period
Accounting period of the Company consist of annual and mid-term, mid-term refers to the reporting period shorter than one annual accounting year. The company adopts Gregorian calendar as accounting period, namely form each 1 January to 31 December.
3. Business cycles
Normal business cycle is the period from purchasing assets used for process by the Company to the cash and cash equivalent achieved. TheCompany’s business cycle was 12 months, and it is the determining criterion for asses liquidity and liability liquidity.
4. Recording currency
Renminbi is the operation location and main economyenvironment’s currency for the Company and subsidiaries in China, Renminbi is the book-keeping currency of the Company and subsidiaries. Renminbi is used for
recording in the financial statement under the name of the Company.
5. Accounting Treatment Method for Business Combinations
企 Business combination is the transaction or events that two or two above independent enterprises combined as a reporting entity. Business combination including enterprise combined under the same control and business combined under different control.
(1) The business combination under the same control
Enterprise combination under the same control is the enterprise who take part in the combination are have the same ultimate controller or under the same controller, the control is not temporary. The combining party is the one, on combination day, obtained controlling rights from other participant enterprise. Combination day is the date when combining party obtained controlling rights from the combined party.
The assets and liability acquired by combining party are measured by book value of the combined party on combination date. Balance of netassets’s book value acquired by combining party and combine consideration paid (or total book value of the shares issued), shall adjusted capital reserve (share premium); if the capital reserves (share premium) is not enough for deducted, adjusted for retained earnings.
Vary directly expenses occurred for enterprise combination, the combining party shall reckoned into current gains/losses while occurring.
(2) Combine not under the same control
A business combination not involving entities under common control is a business combination in which all of the combining entities are not ultimately controlled by the same party or parties both before and after the combination. For a business combination not involving entities under common control, the party that, on the acquisition date, obtains control of another entity participating in the combination is the acquirer, while that other entity participating in the combination is the acquiree. Acquisition date refers to the date on which the acquirer effectively obtains control of the acquiree.
For business combinations not under common control, the combination cost is the assets paid, liabilities incurred or assumed and the equity securities issued by the acquirer, at fair value at the acquisition date, in exchange for the control power over the acquiree. The direct cost, of the business combination including the expenses for audit, legal service, valuation and other administrative expenses, is recorded into the profit or loss in the current period. Transaction expenses of the issued equity securities or liability securities for the consideration are recorded into the amount of initial measurement of the equity securities or liability securities. The relevant contingent consideration is recorded into the combination costs at its fair value at the acquisition date, and the goodwill is adjusted if the new or additional evidences of adjustment to contingent considerations emerged within 12 months from the acquisition date. The cost of combination and identifiable net assets obtained by the acquirer in a business combination is measured at fair value at the acquisition date. If the cost of combination exceeds the fair value of theacquirer’s share in the identifiable net assets, the difference is recognized as good will; if the cost of combination is lower than the fair value of theacquirer’s share in the identifiable net assets, the acquirer shall firstly review the measurement of the fair value of the identifiable assets obtained, liabilities incurred and contingent liabilities incurred, as well as the combination costs. after that, if the combination costs are still lower than the fair value of the identifiable net assets obtained, the acquirer shall recognize the difference as the profit or loss in the current period.
In relation to the deductible temporary difference acquired from the acquiree, which was not recognized as deferred tax assets due to non-fulfillment of the recognition criteria at the date of the acquisition, if new or further information that is obtained within 12 months after the acquisition date indicates that related conditions at the acquisition date already existed, and that the implementation of the economic benefits brought by the deductible temporary difference of the acquiree can be expected, the relevant deferred tax assets shall be recognized and goodwill shall be deducted. When the amount of goodwill is less than the deferred tax assets that shall be recognized, the difference shall be recognized in the profit or loss of the period. Except for the above circumstances, deferred tax assets in relation to business combination are recognized in the profit or loss of the period.
For a business combination not involving enterprises under common control and achieved in stages, the company shall determine whether the business combination shall be regarded as “a bundle of transactions” in accordance with the standards in relation to judgment of a bundle of transactions in “Notice issued by the Ministry of Finance on Interpretation 5 on Accounting standards for Business Enterprises”(CK(2012)No.19) and rule No. 51 of “No. 33 Accounting standards for Business Enterprises– Consolidated Financial Statement” (Refer to note IV 5(2)). When the business combination is regarded as “a bundle of transactions”, the accounting treatment for the business combination shall be in accordance with the previous paragraphs and note IV 4, 13 “Long term equity investment”; when the business combination is not regarded as “a bundle of transactions”, the accounting treatment for the business combination in thecompany’s and the consolidated financial statements shall be as follows:
In thecompany’s financial statements, the initial cost of the investment shall be the sum of the carrying amount of its previously-held equity interest in the acquiree prior to the acquisition date and the amount of additional investment made to the acquiree at the acquisition date. other comprehensive income involved in the
previously-held equity interest of the acquiree prior to the acquisition date shall be treated on the same basis as if they were disposed of by the acquiree directly, namely be transferred to current investment income other than the relevant part of the movement arising from re-measuring net liabilities or net assets under defined benefit scheme by the acquiree which shall be calculated under equity method.
In the consolidated financial statements, the previously-held equity interest of the acquiree is re-measured according to the fair value at the acquisition date; the difference between the fair value and the carrying amount is recognized as investment income for the current period; other comprehensive income involved in the previously-held equity interest of the acquiree prior to the acquisition date shall be treated on the same basis as if they were disposed of by the acquiree directly, namely be transferred to current investment income other than the relevant part of the movement arising from re-measuring net liabilities or net assets under defined benefit scheme by the acquiree which shall be calculated under equity method.
6. Preparation method for consolidated financial statement
(1) Recognition principle of consolidated scope
The scope of consolidation of consolidated financial statements is ascertained on the basis of effective control. Control is the right to govern an investee so as to obtain variable return through participating in theinvestee’s relevant activities and the ability to affect such return by use of the aforesaid right over the investee. The consolidated financial statements comprise the financial statements of the Company and all of its subsidiaries. Subsidiaries refer to entities regulated by the Company.
Once certain elements involved in the above definition of control change due to changes of relevant facts or circumstances, the Company will make separate assessment.
(2) Preparation of consolidated financial statements
Subsidiaries are consolidated from the date on which the company obtains their net assets and actual control over their operating decisions, and are deconsolidated from the date that such control ceases. For subsidiaries being disposed, the operating results and cash flows prior to the date of disposal are included in the consolidated income statement and consolidated cash flow statement; for subsidiaries disposed during the period, the opening balances of the consolidated balance sheet would not be restated. For subsidiaries acquired from a business combination not under common control, their operating results and cash flows subsequent to the acquisition date are included in the consolidated income statement and consolidated cash flow statement, and the opening balances and comparative figures of the consolidated balance sheet would not be restated. For subsidiaries acquired from a business combination under common control, their operating results and cash flows from the date of commencement of the accounting period in which the combination occurred to the date of combination are included in the consolidated income statement and consolidated cash flow statement, and the comparative figures of the consolidated balance sheet would be restated.
In preparing the consolidated financial statements, where the accounting policies or the accounting periods are inconsistent between the company and subsidiaries, the financial statements of subsidiaries are adjusted in accordance with the accounting policies and accounting period of the company. For subsidiaries acquired from a business combination not under common control, the financial statements of the subsidiaries are adjusted based on
the fair value of the identifiable net assets at the acquisition date.
All significant inter-group balances, transactions and unrealized profits are eliminated in the consolidated financial statements.
The portion of asubsidiary’s equity and the portion of asubsidiary’s net profits and losses for the period not attributable to company are recognized as minority interests and profits and losses attributable to minority interests. Minority interest is presented separately in the consolidated balance sheet withinshareholders’ equity. Net profit or loss attributable to minority shareholders is presented separately in the consolidated income statement under the net profit line item. When the amount of loss for the current period attributable to the minority shareholders of a subsidiary exceeds the minorityshareholders’ portion of the opening balance ofshareholders’ equity of the subsidiary, the excess is allocated against the minority interests.
When the control over a subsidiary is ceased due to disposal of a portion of an interest in a subsidiary, the fair value of the remaining equity interest is re-measured on the date when the control ceased. The difference between the sum of the consideration received from disposal of equity interest and the fair value of the remaining equity interest, less the net assets attributable to the company since the acquisition date, is recognized as the investment income from the loss of control. Other comprehensive income relating to original equity investment in subsidiaries shall be treated on the same basis as if the relevant assets or liabilities were disposed of by the acquiree directly when the control is lost, namely be transferred to current investment income other than the relevant part of the movement arising from re-measuring net liabilities or net assets under defined benefit scheme by the original subsidiary.. Subsequent measurement of the remaining equity interests shall be in accordance with relevant accounting standards such as “Accounting Standards for business Enterprises 2– Long-term Equity Investments” or “Accounting Standards for business Enterprises 22– Financial Instruments Recognition and Measurement”, which are detailed in Note IV 13 “Long-term equity investments” or Note IV 9 “Financial instruments”.
The company shall determine whether loss of control arising from disposal in a series of transactions should be regarded as a bundle of transactions. When the economic effects and terms and conditions of the disposal transactions met one or more of the following situations, the transactions shall normally be accounted for as a bundle of transactions: (i) The transactions are entered into after considering the mutual consequences of each individual transaction; (ii) The transactions need to be considered as a whole in order to achieve a deal in commercial sense; (iii) The occurrence of an individual transaction depends on the occurrence of one or more individual transactions in the series; (iv) The result of an individual transaction is not economical, but it would be economical after taking into account of other transactions in the series. When the transactions are not regarded as a bundle of transactions, the individual transactions shall be accounted as “disposal of a portion of an interest in a subsidiary which does not lead to loss of control” (detailed in Note IV 13 (2) (iv)) and “disposal of a portion of an interest in a subsidiary which lead to loss of control” (detailed in previous paragraph). When the transactions are regarded as a bundle of transactions, the transactions shall be accounted as a single disposal transaction; however, the difference between the consideration received from disposal and the share of net assets disposed in each individual transactions before loss of control shall be recognized as other comprehensive income, and reclassified as profit or loss arising from the loss of control when control is lost.
7. Joint arrangement classification and accounting treatment for joint operations
A joint arrangement refers to an arrangement of two or more parties have joint control. In accordance with theCompany’s rights and obligation ns under a joint arrangement, the Company classifies joint arrangements into: joint ventures and joint operations. Joint operations refer to a joint arrangement during which the Company is entitled to relevant assets and obligations of this arrangement. Joint ventures refer to a joint arrangement during which the Company only is entitled to net assets of this arrangement.
The Company treats investments in joint ventures by using the equity method of accounting in accordance with accounting policies as set out in Note IV.13.(2)② “long-term equity investment by using equity method of accounting”.
The Company shall, as a joint venture, recognize the assets held and obligations assumed solely by the Company, and recognize assets held and obligations assumed jointly by the Company in appropriation to the share of the Company; recognize revenue from disposal of the share of joint operations of the Company; recognize fees solely occurred by Company and recognize fees from joint operations in appropriation to the share of the Company. When the Company, as a joint venture, invests or sells assets to or purchase assets (the assets dose not constitute a business, the same below) from joint operations, the Company shall only recognize the part of profit or lost from this transaction attributable to other parties of joint operations before these assets are sold to the third party. If the occurrence of these assets meet the impairment loss of asset as set our in “Accounting Standard for Business Enterprises No. 8– Asset Impairment”, the Company shall recognize the full amount of this loss in relation to the Company invests in or sells assets to joint operations; the Company recognize the loss according to theCompany’s share of commitment in relation to the Company purchase assets from joint operations.
8. Determining standards for cash and cash equivalent
Cash and cash equivalent including stock cash, savings available for paid at any time and the cash held by the Company with short terms(expired within 3 months since purchased), and liquid and easy to transfer as known amount and investment with minor variation in risks.
9. Foreign currency business and conversion
(1) Conversion for foreign currency transaction
Foreign currency transactions are, on initial recognition, translated to the functional currency using the exchange rates prevailing at the dates of the transactions, except when the Company carries on a business of currency exchange or involves in currency exchange transactions, at which the actual exchange rates would be used. (2) Foreign currency translations for foreign-currency monetary items and foreign-currency non-monetary items At the balance sheet date, monetary items denominated in foreign currency are translated into the functional currency using the spot rate of the balance sheet date. Exchange differences arising from these translations are recognized in profit or loss for the current period, except for (i) those attributable to foreign currency borrowings that have been taken out specifically for the acquisition, construction or production of qualifying assets, which are capitalised as part of the cost of those assets; (ii)exchange difference of hedge instruments used as effective
hedging for net investment of overseas operations (this difference is included in other comprehensive income until
such net investment is disposed of, and is recognized as profit or loss for the current period upon such disposal) ; and (iii) exchange difference arising from changes in carrying amount of available for sale foreign-currency monetary items other than changes in amortized cost, which is recognized in other comprehensive income. In case that preparation of consolidated financial statement involves overseas operation, and if there is foreign currency monetary items that indeed constitute net investment in overseas operation, the exchange difference arising from movement of exchange rate shall be included in other comprehensive income, and transferred to current profit or loss for the current period when the overseas operation is disposed of.
Non-monetary items denominated in foreign currency that are measured in terms of historical cost are translated into the functional currency at the balance sheet date using the spot rate at the date of the transactions. Non-monetary items denominated in foreign currency that are measured at fair value are translated into the functional currency using the spot rate on the date when fair value is determined and the resulting exchange differences will be recognized as fair value change (including exchange difference) in profit or loss or in other comprehensive income as capital reserve in the current year.
(3) Translation of foreign currency financial statement
In case that preparation of consolidated financial statement involves overseas operation, and if there is foreign currency monetary items that indeed constitute net investment in overseas operation, the exchange difference arising from movement of exchange rate shall be recognized in other comprehensive income as “foreign statement translation difference”, and transferred to current profit or loss for the current period when the overseas operation is disposed of.
The following displays the methods for translating financial statements involving foreign operations into the statements in RMB: The asset and liability items in the balance sheets for overseas operations are translated at the spot exchange rates on the balance sheet date. Among theshareholders’ equity items, the items other than “undistributed profits” are translated at the spot exchange rates of the transaction dates. The income and expense items in the income statements of overseas operations are translated at the spot exchange rates of the transaction dates. Opening balance of undistributed profits is equal to the closing balance of undistributed profits after translation in last year; closing balance of undistributed profit is computed according to the items in profit distribution after translation. The exchange difference arising from translation of assets, liabilities and equity items are recognized in other comprehensive income and is shown separately undershareholders’ equity in the balance sheet, such exchange difference will be reclassified to profit or loss in current year when the foreign operation is disposed according to the proportion of disposal.
The cash flows of overseas operations are translated at the spot exchange rates on the dates of the cash flows. The effect of exchange rate changes on cash is presented separately in the cash flow statement.
The opening balance and the prioryear’s figures are presented according to the translated amounts of the prior year.
On disposal of the entireowners’ equity in a foreign operation of the Company, or upon a loss of control over a foreign operation due to disposal of certain equity investment or other reasons, the Company transfers the exchange differences arising on translation of financial statements of this foreign operation attributable toowners’ equity of parent company presented underowners’ equity in the balance sheet, to profit or loss in the period in
which the disposal took place.
In case of partial disposal of equity investment or other reason that result in reduction in shareholding in a foreign operation without losing control over it, the proportionate share of exchange differences arising from the translation of financial statements will attributable to minority interests and will not recognized in profit or loss. For partial disposals of equity interests in foreign operations which are associates or joint ventures, the proportionate share of the exchange differences arising from the translation of financial statements of foreign operations is reclassified to profit or loss.
10. Financial instrument
Financial asset or financial liability will be recognized when the Group became one of the parties under a financial instrument contract. Financial assets and financial liabilities are initially recognized at fair value. For financial assets and financial liabilities at fair value through profit or loss, relevant transaction costs are directly recognized in profit or loss for the period. For financial assets and financial liabilities classified as other categories, relevant transaction costs are included in the amount initially recognized.
(1) Determination of fair values for financial assets and financial liabilities
The fair value refers to the price that will be received when selling an asset or the price to be paid to transfer a liability in an orderly transaction between market participants on the date of measurement. Financial instruments exist in an active market. Fair value is determined based on the quoted price in such market. An active market refers to where pricing is easily and regularly obtained from exchanges, brokers, industrial organizations and price fixing service organizations, representing the actual price of a market transaction that takes place in a fair deal. While financial instruments do not exist in an active market, the fair value is determined using valuation techniques. Valuation technologies include reference to be familiar with situation and prices reached in recent market transactions entered into by both willing parties, reference to present fair values of similar other financial instruments, cash flow discounting method and option pricing models.
(2) Classification, recognition and measurement of financial assets
Conventionally traded financial assets shall be recognized and derecognized at the trading date. Financial assets shall be classified into financial assets at fair value through profit and loss, held-to-maturity investment, loans and accounts receivable and available-for-sale financial assets for initial recognition.
①Financial assets at fair value through profit or loss
They include financial assets held for trading and financial assets designated as at fair value through profit or loss for the current period.
Financial assets may be classified as financial assets held for trading if one of the following conditions is met: A. the financial assets is acquired or incurred principally for the purpose of selling it in the near term; B. the financial assets is part of a portfolio of identified financial instruments that are managed together and for which there is objective evidence of a recent pattern of short-term profit-taking; or C. the financial assets is a derivative, excluding the derivatives designated as effective hedging instruments, the derivatives classified as financial guarantee contract, and the derivatives linked to an equity instrument investment which has no quoted price in an
active market nor a reliably measured fair value and are required to be settled through that equity instrument. A financial asset may be designated as at fair value through profit or loss upon initial recognition only when one of the following conditions is satisfied: A. Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise result from measuring assets or recognizing the gains or losses on them on different bases; or B. The financial asset forms part of a group of financial assets or a group of financial assets and financial liabilities, which is managed and its performance is evaluated on a fair value basis, in accordance with theGroup’s documented risk management or investment strategy, and information about the grouping is reported to key management personnel on that basis.
A financial asset at fair value through profit or loss is subsequently measured at fair value. Any gains or losses arising from changes in the fair value and any dividend or interest income earned on the financial asset are recognized in profit or loss in the current period.
②Held-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.
Held-to-maturity investment adopts effective interest method and carry out subsequent measure on amortized cost, the incomes and losses arising from derecognition, impairment or amortization shall reckoned into current gains/losses/
The effective interest method is a method of calculating the amortized cost of a financial asset and of allocating interest income or expense over each period based on the effective interest of a financial asset or a financial liability (including a group of financial assets or financial liabilities). The effective interest is the rate that discounts future cash flows from the financial asset or financial liability over its expected life or (where appropriate) a shorter period to the carrying amount of the financial asset or financial liability.
In calculating the effective interest rate, the Group will estimate the future cash flows (excluding future credit losses) by taking into account all contract terms relating to the financial assets or financial liabilities whilst considering various fees, transaction costs and discounts or premiums which are part of the effective interest rate paid or received between the parties to the financial assets or financial liabilities contracts.
③Loan and account receivable
Refers to the non-derivative financial assets for which there is no quoted price in the active market and of which the repo amount is fixed or determinable. The financial assets classify as loans and account receivables including note receivable, account receivable, interest receivable, dividend receivable and other account receivables etc. Loans and account receivables subsequently stated at amortized cost using the effective interest method; the gains or losses arising from derecognition, impairment incurred or amortization shall reckoned into current gains/losses.④Financial assets available for sale
Including the non-derivative financial assets initial recognition that is appointed as available for sale, and except for the financial assets measured by fair value and with its variation reckoned into current gains/losses as financial assets, loans and receivables and held-to-maturity investment.
The closing cost of available-for-sale debt instrument investment is determined based on its amortized cost, namely the initial recognition amount less the repaid principal plus or less the accumulated amortization amount as amortized against the difference between the initial recognition amount and amount as of the maturity date at effective interest method, and less the occurred impairment loss. The closing cost of available-for-sale equity
instrument investment refers to the acquisition cost.
Available-for-sale financial assets are subsequently measured at fair value. The gain or loss on change in fair value are recognized as other comprehensive income, except for impairment loss and exchange differences arising from foreign monetary financial assets and amortized cost which are accounted for through profit or loss for the current period. The financial assets will be transferred out of the financial assets on derecognition and accounted for through profit or loss for the current period. However, equity investment that is not quoted in an active market and the fair value of which cannot be measured reliably and derivative financial assets related to the equity instrument which must be settled by delivery of such equity instrument are subsequently measured at cost.
Interests received from available-for-sale financial assets held and the cash dividends declared by the investee are recognized as investment income.
(3) Impairment of financial assets
In addition to financial assets at fair value through profit or loss for the current period, the Group reviews the book value of other financial assets at each balance sheet date and provide for impairment where there is objective evidence that financial assets are impaired.
For a financial asset that is individually significant, the Group assesses the asset individually for impairment. For a financial asset that is not individually significant, the Group assess the asset individually for impairment or include the asset in a group of financial assets with similar credit risk characteristics and collectively assess them for impairment. If it is determined that no objective evidence of impairment exists for an individually assessed financial asset, whether the financial asset is individually significant or not, the financial asset is included in a group of financial assets with similar credit risk characteristics and collectively assessed for impairment. Financial assets for which an impairment loss is individually recognized are not included in the collective assessment for impairment.
①Impairment of held-to-maturity investments, loans and receivables
The carrying amount of financial assets measured as costs or amortized costs are subsequently reduced to the present value discounted from its projected future cash flow. The reduced amount is recognized as impairment loss and recorded as profit or loss for the period. After recognition of the impairment loss from financial assets, if there is objective evidence showing recovery in value of such financial assets impaired and which is related to any event occurring after such recognition, the impairment loss originally recognized shall be reversed to the extent that the carrying value of the financial assets upon reversal will not exceed the amortized cost as at the reversal date assuming there is no provision for impairment.
②Impairment of available-for-sale financial assets
In the event that decline in fair value of the available-for-sale equity instrument is regarded as “severe decline” or “non-temporary decline” on the basis of comprehensive related factors, it indicates that there is impairment loss of the available-for-sale equity instrument. In particular, “severe decline” refers to fair value is lower than50% of the cost price and last for over one year. “Non-temporary decline” refers to fair value is lower than80% of the cost price and last for over three years.
When the available-for-sale financial assets impair, the accumulated loss originally included in the other comprehensive income arising from the decrease in fair value was transferred out from the capital reserve and included in the profit or loss for the period. The accumulated loss that transferred out from the capital reserve is the balance of the acquired initial cost of asset, after deduction of the principal recovered, amortized amounts, current fair value and the impairment loss originally included in the profit or loss.
After recognition of the impairment loss, if there is objective evidence showing recovery in value of such financial assets impaired and which is related to any event occurring after such recognition in subsequent periods, the impairment loss originally recognized shall be reversed. The impairment loss reversal of the available-for-sale equity instrument will be recognized as other comprehensive income, and the impairment loss reversal of the available-for-sale debt instrument will be included in the profit or loss for the period.
When an equity investment that is not quoted in an active market and the fair value of which cannot be measured reliably, or the impairment loss of a derivative financial asset linked to the equity instrument that shall be settled by delivery of that equity instrument, then it will not be reversed.
(4) Recognition and measurement of transfers of financial asset
Financial asset that satisfied any of the following criteria shall be derecognized:① the contract right to recover the cash flows of the financial asset has terminated;② the financial asset, along with substantially all the risk and return arising from the ownership of the financial asset, has been transferred to the transferee; and③ the financial asset has been transferred to the transferee, and the transferor has given up the control on such financial asset, though it does not assign maintain substantially all the risk and return arising from the ownership of the financial asset.
When the entity does not either assign or maintain substantially all the risk and return arising from the ownership of the financial asset and does not give up the control on such financial asset, to the extent of its continuous involvement in the financial asset, the entity recognizes it as a related financial asset and recognizes the relevant liability accordingly. The extent of the continuous involvement is the extent to which the entity exposes to changes in the value of such financial assets.
On derecognition of a financial asset, the difference between the following amounts is recognized in profit or loss for the current period: the carrying amount and the sum of the consideration received and any accumulated gain or loss that had been recognized directly in equity.
If a part of the financial assets qualifies for derecognition, the carrying amount of the financial asset is allocated between the part that continues to be recognized and the part that qualifies for derecognition, based on the fair values of the respective parts. The difference between the following amounts is recognized in profit or loss for the period: the sum of the consideration received and the carrying amount of the part that qualifies for derecognition
and the aforementioned carrying amount.
For financial assets that are sold or transferred with recourse or endorsement, the Company need to determine whether the risk and rewards of ownership of the financial asset have been substantially transferred. If the risk and rewards of ownership of the financial asset have been substantially transferred, the financial assets shall be derecognized. If the risk and rewards of ownership of the financial asset have been retained, the financial assets shall not be derecognized. If the Company neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset, the Company shall assess whether the control over the financial asset is retained, and the financial assets shall be accounting for according to the above paragraphs.
(5) Category and measurement of financial liability
Financial liability divide into financial liability and other financial liability which are measured by fair value and with its variation reckoned into current gains/losses, while initially recognized. The financial liability initially recognized shall be measured at their fair values. As for the financial liability measured by fair value and with its variation reckoned into current gains/losses, relevant transaction expenses shall reckoned into current gains/losses directly; and for the other financial liability, relevant transaction expenses shall be reckoned as initial recognization amount.
①Financial liability measured by fair value and with its variation reckoned into current gains/losses
Financial liability held for trading and financial liability designated as at fair value through profit and loss meet the same condition to classify financial assets as financial assets held for trading and financial assets designated as at fair value through profit and loss.
Subsequent measurement of liability at fair value through profit or loss is based on fair value. The gain or loss arising from the change in fair value and the dividend and interest expenses related to the financial liability are included into the current profit or loss.
②Other financial liabilities
Other financial liabilities which have no quoted price in an active market, or are linked to equity instrument without a reliably measured fair value and are required to be settled through that equity instrument are subsequently measured based on cost. Other financial liabilities are subsequently measured based on amortized cost using the effective interest rate method. The gain or loss arising from discontinuing recognition or amortization is included in current profit or loss.
③Financial guarantee contracts and loan commitment
Financial guarantee contracts other than those designated as financial liabilities at fair value through profit or loss or loan commitments that are not designated at fair value through profit or loss and granted at a rate below market rates are initially recognized at fair value, and shall be subsequently measured at the higher of the following: the
amount determined in accordance with CAS 13 “Contingencies” and the amount initially recognized less cumulative amortization recognized in accordance with the principles set out in CAS No. 14”Revenue”.
(6) Derecognition of Financial Liabilities
The Group derecognizes a financial liability (or part of it) only when the underlying present obligation (or part of it) is discharged. An agreement between the Group (an existing borrower) and an existing lender to replace the original financial liability with a new financial liability with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability.
When the Group derecognizes a financial liability or a part of it, it recognizes the difference between the carrying amount of the financial liability (or part of the financial liability) derecognized and the consideration paid (including any non-cash assets transferred or new financial liabilities assumed) in profit or loss.
(7) Derivatives and embedded derivatives
Derivative financial instruments initially recognize at fair value at the contract date, and subsequently measured at their fair value. Except for designated as hedge instrument and high effective hedging instruments, the gain or loss arising from changes in fair value shall be recognized into related period profit or loss on the basis of accounting standards of hedging accounting based on hedge characteristics, and fair value change of other derivative instruments is recorded to current profit or loss.
For hybrid instrument with embedded derivatives, where the hybrid instrument is not designated as a financial asset or financial liability at FVTPL, and the economic characteristics and risks of the embedded derivatives are not closely related to that of the host contract and the conditions of which are the same as that of the embedded derivatives and a separate instrument meet the definition of a derivative, the embedded derivatives are separated from the hybrid instrument. If the Group is unable to measure the embedded derivative separately either at acquisition or at a subsequent balance sheet date, it designates the entire hybrid instrument as a financial asset or financial liability at FVTPL.
(8) Offsetting financial assets and financial liabilities
Where the Group has current enforceable legal rights to offset the recognized financial assets and financial liabilities, and intends either to settle on a net basis, or to realize the financial asset and settle the financial liability simultaneously, the amount after offsetting the financial assets and the financial liabilities is presented in the balance sheet. Except for the above circumstances, financial assets and financial liabilities shall be presented separately in the balance sheet and shall not be offset.
(9) Equity instruments
An equity instrument is a contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. The Company issues (including refinancing), repurchases, sells or cancels equity instruments as
treatment for change of equity. The Company does not recognize change of fair value of equity instrument. Transaction fees related to equity transactions are deducted from equity.
All types of distributions (excluding share dividends) made by the Group to holders of equity instruments are charged toshareholders’ equity. The Group does not recognize any changes in the fair value of equity instruments.
11. Account Receivable
(1) Account Receivable Withdrawal method on single significant amount and with bad debt provision accrued for single item
|||
|-|-|
|Determine basis or amount standards for Single Significant||
||The account receivable over RMB 5 million|
|Amount||
||Impairment testing for the receivables independently with single|
||significant amount, if no impairment being found in financial|
|Withdrawal method on single significant amount and with bad||
||assets, testing in the assets portfolio with similar risk. If|
|debt provision accrued for single item||
||impairment losses being recognized, than not testing in the|
||receivable combination with similar risk.|

(2) Receivables with bad debt provision accrual by credit portfolio
|||
|-|-|
|Combination|Bad debt provision accrual|
|Age group|Aging analysis|

Adopt age analysis method for bad debt provision withdrawal in combination:
√ Applicable□ Not applicable
||||
|-|-|-|
|Age|Accrued ratio for account receivable|Accrued ratio for other account receivable|
|within one year (1 year included)|0.30%|0.30%|
|1－2 years|0.30%|0.30%|
|2－3 years|0.30%|0.30%|
|Over 3 years|100.00%|100.00%|
|3－4 years|100.00%|100.00%|
|4－5 years|100.00%|100.00%|
|Over 5 years|100.00%|100.00%|

 In combination, accrual bad debt provision with percentage of receivables:
□ Applicable√ Not applicable
In combination, accrual bad debt provision with other method:
□ Applicable√ Not applicable
(3) Account receivable with minor single amount but with withdrawal bad debt provision for single item:
|||
|-|-|
|Reasons of withdrawal bad debt provision for single item|Clearly evidence shows that the account hard to recover|
||Recognized impairment loss and accrued the bad debt provision|
|Withdrawal method for bad debt provision|according to the balance between future cash flow on account|
||receivable and its book value|

12. Inventory
(1) Classification of inventory
The inventory of the Company refers to such seven classifications as the raw materials, product in process, goods on hand, wrap page, low value consumables, materials for consigned processing and goods sold.
(2)Valuing of the delivered and received inventory
Purchasing and storage for the inventory are priced at actual costs, inventory cost including purchasing cost, processing cost and other expenses belongs to the inventory costs, and the expenses qualify capitalization of borrowing costs condition. Determined the amount for inventory by perpetual inventory system.
(3) Basis for determining net realisable value of inventories and provision methods for decline in value of inventories
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion, the estimated costs necessary to make the sale and relevant taxes. Net realisable value is determined on the basis of clear evidence obtained, and takes into consideration the purposes of holding inventories and effect of post balance sheet events.
At the balance sheet date, inventories are measured at the lower of cost and net realisable value. If the net realisable value is below the cost of inventories, a provision for decline in value of inventories is made. Provision for decline in value of inventories is generally made based on the difference between the cost of single item of inventory and its net realisable value. As for inventories with huge number and relatively low unit price, such provision is made under categories of inventories; as for inventories related to a series of products produced and sold in the same region, with same or similar ultimate usage or purpose and for which it is difficult to be measured separately from other items, such provision can be made on a consolidated basis.
After the provision for decline in value of inventories is made, if the circumstances that previously caused inventories to be written down below cost no longer exist so that the net realisable value of inventories is higher than their cost, the original provision for decline in value is reversed and the reversal is included in profit or loss for the period.
(4) Inventory system
存 Perpetual inventory system
(5) Amortization method for the low-value consumables and wrappage
The Company adopts one-off amortization method to amortize the low-value consumables.
The Company adopts one-off amortization method to amortize the wrappage at the time of receipt.
13. Classified as assets held for sale
If a non-current asset can be promptly sold at its existing status only according to the practice terms in connection with disposal of this kind of assets, and the Company has already made resolution on disposal of the non-current asset and entered into irrevocable transfer agreement with the transferee, and this transfer will be completed within one year, then the non-current asset would be calculated as non-current asset held for sale which would be not applicable to depreciation or amortization since the date of classification as asset held for sale, and would be measured at the lower of its carrying value less disposal cost and fair value less disposal cost. Non-current asset held for sale consists of single item asset and disposal group. If a disposal group is a group of assets as defined by No.8 of Business Accounting Standards-Assets Impairment, and goodwill arising from business combination shall be allocated to the group of assets under this accounting principle, or the disposal group constitutes one operation of the group of assets, then the disposal group includes the goodwill arising from business combination.
For single non-current asset and asset in disposal group classified as assets held for sale, they shall be presented in balance sheet separately as current assets. For liabilities in disposal group relating to the transferred assets classified as assets held for sale, they shall be presented in balance sheet separately as current liabilities.
If an asset or disposal group classified as held for sale no longer meets the recognition condition as non-current asset held for sale, the Company will cease such recognition and measure the asset at the lower of (1)the carrying value of the asset or disposal group prior to being classified as held for sale, based on the amount adjusted with the depreciation, amortisation or impairment which should have been recognized assuming it had not been classified as held for sale; (2)the recoverable amount on the date when the Company decides to cease disposal. 14. Long-term equity investments
Long-term equity investments under this section refer to long-term equity investments in which the Company has control, joint control or significant influence over the investee. Long-term equity investment without control or joint control or significant influence of the Group is accounted for as available-for-sale financial assets or financial assets measured at fair value with any change in fair value charged to profit or loss. Details on its accounting policy please refer to Note VI-10. “Financial instruments”.
Joint control is theCompany’s contractually agreed sharing of control over an arrangement, which relevant activities of such arrangement must be decided by unanimously agreement from parties who share control. Significant influence is the power of the Company to participate in the financial and operating policy decisions of an investee, but to fail to control or joint control the formulation of such policies together with other parties. (1) Determination of investment cost
For a long-term equity investment acquired through a business combination involving enterprises under common control, the initial investment cost of the long-term equity investment shall be the absorbingparty’s share of the carrying amount of theowner’s equity under the consolidated financial statements of the ultimate controlling party on the date of combination. The difference between the initial cost of the long-term equity investment and
the cash paid, non-cash assets transferred as well as the book value of the debts borne by the absorbing party shall offset against the capital reserve. If the capital reserve is insufficient to offset, the retained earnings shall be adjusted. If the consideration of the merger is satisfied by issue of equity securities, the initial investment cost of the long-term equity investment shall be the absorbingparty’s share of the carrying amount of theowner’s equity under the consolidated financial statements of the ultimate controlling party on the date of combination. With the total face value of the shares issued as share capital, the difference between the initial cost of the long-term equity investment and total face value of the shares issued shall be used to offset against the capital reserve. If the capital reserve is insufficient to offset, the retained earnings shall be adjusted. For business combination resulted in an enterprise under common control by acquiring equity of the absorbing party under common control through a stage-up approach with several transactions, these transactions will be judged whether they shall be treat as “transactions in a basket”. If they belong to “transactions in a basket”, these transactions will be accounted for a transaction in obtaining control. If they are not belong to “transactions in a basket”, the initial investment cost of the long-term equity investment shall be the absorbingparty’s share of the carrying amount of theowner’s equity under the consolidated financial statements of the ultimate controlling party on the date of combination. The difference between the initial cost of the long-term equity investment and the aggregate of the carrying amount of the long-term equity investment before merging and the carrying amount the additional consideration paid for further share acquisition on the date of combination shall offset against the capital reserve. If the capital reserve is insufficient to offset, the retained earnings shall be adjusted. Other comprehensive income recognized as a result of the previously held equity investment accounted for using equity method on the date of combination or recognized for available-for-sale financial assets will not be accounted for.
For a long-term equity investment acquired through a business combination involving enterprises not under common control, the initial investment cost of the long-term equity investment shall be the cost of combination on the date of acquisition. Cost of combination includes the aggregate fair value of assets paid by the acquirer, liabilities incurred or borne and equity securities issued. For business combination resulted in an enterprise not under common control by acquiring equity of the acquire under common control through a stage-up approach with several transactions, these transactions will be judged whether they shall be treat as “transactions in a basket”. If they belong to “transactions in a basket”, these transactions will be accounted for a transaction in obtaining control. If they are not belong to “transactions in a basket”, the initial investment cost of the long-term equity investment accounted for using cost method shall be the aggregate of the carrying amount of equity investment previously held by the acquire and the additional investment cost. For previously held equity accounted for using equity method, relevant other comprehensive income will not be accounted for. For previously held equity investment classified as available-for-sale financial asset, the difference between its fair value and carrying amount, as well as the accumulated movement in fair value previously included in the other comprehensive income shall be transferred to profit or loss for the current period.
Agent fees incurred by the absorbing party or acquirer for the acquisition such as audit, legal service, and valuation and consultation fees, and other related administration expenses are charged to profit or loss in the
current period at the time such expenses incurred.
The long-term equity investment acquired through means other than a business combination shall be initially measured at its cost. Such cost is depended upon the acquired means of long-term equity investments, which is recognized based on the purchase cost actually paid by the Company in cash, the fair value of equity securities issued by the Group, the agreed value of investment contract or agreement, the fair value or original carrying amounts of the non-monetary asset exchange transaction which the asset will be transferred out of the Company, and the fair value of long-term equity investment itself. The costs, taxes and other necessary expenses that are directly attributable to the acquisition of the long-term equity investments are also included in the investment cost. For additional equity investment made in order to obtain significant influence or common control over investee without resulted in control, the relevant cost for long-term equity investment shall be the aggregate of fair value of previously held equity investment and additional investment cost determined according to “Accounting Standard for Business Enterprises No. 22– Recognition and measurement of Financial Instruments”.
(2) Subsequent measurement and method for profit or loss recognition
Long-term equity investments with joint control (excluding those constitute joint ventures) or significant influence on the investee are accounted for using equity method. In addition, long-term equity investments with control on the investee are accounted for using cost method and record in theCompany’s financial statements.
①Long-term equity investments accounted for using the cost method
Under the cost method, a long-term equity investment is measured at its initial investment cost. The cost for long-term equity investment is adjusted in the event of additional investment or investment recovery. Except receiving the actual consideration paid for the investment or the declared but not yet distributed cash dividends or profits which is included in the consideration, investment gains for the period is recognized as the cash dividends or profits declared by the investee.
②Long-term equity investments accounted for using the equity method
Under the equity method, where the initial investment cost of a long-term equity investment exceeds theinvestor’s interest in the fair value of theinvestee’s identifiable net assets at the acquisition date, no adjustment shall be made to the initial investment cost. Where the initial investment cost is less than theinvestor’s interest in the fair value of theinvestee’s identifiable net assets at the acquisition date, the difference shall be charged to profit or loss for the current period, and the cost of the long term equity investment shall be adjusted accordingly. Under the equity method, investment gain and other comprehensive income shall be recognized based on theGroup’s share of the net profits or losses and other comprehensive income made by the investee, respectively. Meanwhile, the carrying amount of long-term equity investment shall be adjusted. The carrying amount of long-term equity investment shall be reduced based on theGroup’s share of profit or cash dividend distributed by the investee. In respect of the other movement of net profit or loss, other comprehensive income and profit
distribution of investee, the carrying value of long-term equity investment shall be adjusted and included in the capital reserves. The Group shall recognise its share of theinvestee’s net profits or losses based on the fair values of theinvestee’s individual separately identifiable assets at the time of acquisition, after making appropriate adjustments thereto. In the event of inconformity between the accounting policies and accounting periods of the investee and the Company, the financial statements of the investee shall be adjusted in conformity with the accounting policies and accounting periods of the Company. Investment gain and other comprehensive income shall be recognized accordingly. In respect of the transactions between the Group and its associates and joint ventures in which the assets disposed of or sold are not classified as operation, the share of unrealised gain or loss arising from inter-group transactions shall be eliminated by the portion attributable to the Company. Investment gain shall be recognized accordingly. However, any unrealised loss arising from inter-group transactions between the Group and an investee is not eliminated to the extent that the loss is impairment loss of the transferred assets. In the event that the Group disposed of an asset classified as operation to its joint ventures or associates, which resulted in acquisition of long-term equity investment by the investor without obtaining control, the initial investment cost of additional long-term equity investment shall be the fair value of disposed operation. The difference between initial investment cost and the carrying value of disposed operation will be fully included in profit or loss for the current period. In the event that the Group sold an asset classified as operation to its associates or joint ventures, the difference between the carrying value of consideration received and operation shall be fully included in profit or loss for the current period. In the event that the Company acquired an asset which formed an operation from its associates or joint ventures, relevant transaction shall be accounted for in accordance with “Accounting Standards for Business Enterprises No. 20 “Business combination”. All profit or loss related to the transaction shall be accounted for.
TheGroup’s share of net losses of the investee shall be recognized to the extent that the carrying amount of the long-term equity investment together with any long-term interests that in substance form part of theinvestor’s net investment in the investee are reduced to zero. If the Group has to assume additional obligations, the estimated obligation assumed shall be provided for and charged to the profit or loss as investment loss for the period. Where the investee is making profits in subsequent periods, the Group shall resume recognising its share of profits after setting off against the share of unrecognized losses.
③Acquisition of minority interest
Upon the preparation of the consolidated financial statements, since acquisition of minority interest increased of long-term equity investment which was compared to fair value of identifiable net assets recognized which are measured based on the continuous measurement since the acquisition date (or combination date) of subsidiaries attributable to the Group calculated according to the proportion of newly acquired shares, the difference of which recognized as adjusted capital surplus, capital surplus insufficient to set off impairment and adjusted retained earnings.
④Disposal of long-term equity investments
In these consolidated financial statements, for disposal of a portion of the long-term equity investments in a
subsidiary without loss of control, the difference between disposal cost and disposal of long-term equity investments relative to the net assets of the subsidiary is charged to theowners’ equity. If disposal of a portion of the long-term equity investments in a subsidiary by the parent company results in a change in control, it shall be accounted for in accordance with the relevant accounting policies as described in Note 6. (2) “Preparation Method of the Consolidated Financial Statements”.
On disposal of a long-term equity investment otherwise, the difference between the carrying amount of the investment and the actual consideration paid is recognized through profit or loss in the current period.
In respect of long-term equity investment accounted for using equity method with the remaining equity interest after disposal also accounted for using equity method, other comprehensive income previously underowners’ equity shall be accounted for in accordance with the same accounting treatment for direct disposal of relevant asset or liability by investee on pro rata basis at the time of disposal. Theowners’ equity recognized for the movement of otherowners’ equity (excluding net profit or loss, other comprehensive income and profit distribution of investee) shall be transferred to profit or loss for the current period on pro rata basis.
In the event of loss of control over investee due to partial disposal of equity investment by the Group, in preparing separate financial statements, the remaining equity interest which can apply common control or impose significant influence over the investee after disposal shall be accounted for using equity method. Such remaining equity interest shall be treated as accounting for using equity method since it is obtained and adjustment was made accordingly. For remaining equity interest which cannot apply common control or impose significant influence over the investee after disposal, it shall be accounted for using the recognition and measurement standard of financial instruments. The difference between its fair value and carrying amount as at the date of losing control shall be included in profit or loss for the current period. In respect of other comprehensive income recognized using equity method or the recognition and measurement standard of financial instruments before the Group obtained control over the investee, it shall be accounted for in accordance with the same accounting treatment for direct disposal of relevant asset or liability by investee at the time when the control over investee is lost. Movement of otherowners’ equity (excluding net profit or loss, other comprehensive income and profit distribution under net asset of investee accounted for and recognized using equity method) shall be transferred to profit or loss for the current period at the time when the control over investee is lost. Of which, for the remaining equity interest after disposal accounted for using equity method, other comprehensive income and otherowners’ equity shall be transferred on pro rata basis. For the remaining equity interest after disposal accounted for using the recognition and measurement standard of financial instruments, other comprehensive income and otherowners’ equity shall be fully transferred.
In the event of loss of common control or significant influence over investee due to partial disposal of equity investment by the Group, the remaining equity interest after disposal shall be accounted for using the recognition and measurement standard of financial instruments. The difference between its fair value and carrying amount as
at the date of losing common control or significant influence shall be included in profit or loss for the current period. In respect of other comprehensive income recognized under previous equity investment using equity method, it shall be accounted for in accordance with the same accounting treatment for direct disposal of relevant asset or liability by investee at the time when equity method was ceased to be used. Movement of otherowners’ equity (excluding net profit or loss, other comprehensive income and profit distribution under net asset of investee accounted for and recognized using equity method) shall be transferred to profit or loss for the current period at the time when equity method was ceased to be used.
The Group disposes its equity investment in subsidiary by a stage-up approach with several transactions until the control over the subsidiary is lost. If the said transactions belong to “transactions in a basket”, each transaction shall be accounted for as a single transaction of disposing equity investment of subsidiary and loss of control. The difference between the disposal consideration for each transaction and the carrying amount of the corresponding long-term equity investment of disposed equity interest before loss of control shall initially recognized as other comprehensive income, and subsequently transferred to profit or loss arising from loss of control for the current period upon loss of control.
15. Investment property
Measurement mode
Measured by cost method
Depreciation or amortization method
Investment property refers to real estate held to earn rentals or for capital appreciation, or both. Including the leased land use right, land use right held for transfer upon appreciation, leased buildings, etc. in addition, in connection with the vacant buildings held by the Company for operating lease, if the board of directors (or similar organ) makes written resolution that the buildings are to be used for operating lease and the holding purpose will not change in a short time, these buildings will be stated as investment properties.
Investment property is initially measured at cost. Subsequent expenditures related to an investment property shall be included in cost of investment property only when the economic benefits associated with the asset will likely flow to the Group and its cost can be measured reliably. All other expenditures on investment property shall be included in profit or loss for the current period when incurred.
The Group adopts cost method for subsequent measurement of investment property, which is depreciated using the same policy as that for buildings and land use rights.
Impairment test method and impairment provision method in relation to investment property is detailed in note IV.22 “Long term assets impairment”
In the event that an investment property is converted to an owner-occupied property, such property shall become
fixed assets or intangible assets since the date of its conversion. In the event that an owner-occupied property is converted to real estate held to earn rentals or for capital appreciation, such fixed assets or intangible assets shall become an investment property since the date of its conversion. Investment property is measured at cost during its conversion. Upon the conversion, the property shall be stated at the carrying amount prior to the conversion. If an investment property is disposed of or if it withdraws permanently from use and no economic benefit will be obtained from the disposal, the recognition of it as an investment property shall be terminated. When an investment property is sold, transferred, retired or damaged, the amount of proceeds on disposal of the property net of the carrying amount and related tax and surcharges is recognized in profit or loss for the current period. 16. Fixed assets
(1) Confirmation conditions
Fixed assets refer to the tangible assets for production of products, provision of labor, lease or operation, and with a service life in excess of 1 financial year. Fixed assets are recognized while relevant economic interests flow into the Company and the cost is can be reliably measured. Fixed assets shall be initially measured according to the cost and take the predicted discard expenses into consideration.
(2) Depreciation methods
||||||
|-|-|-|-|-|
|Categories|Method|Years of depreciation|Scrap value rate|Yearly depreciation rate|
|Housing buildings|Straight-line depreciation|20|10%|4.5%|
|Machines and equipment|Straight-line depreciation|10|10%|9%|
|Office equipment|Straight-line depreciation|5|10%|18%|
|Electronic equipment|Straight-line depreciation|5|10%|18%|
|Transportation|||||
||Straight-line depreciation|5|10%|18%|
|equipment|||||
|Other equipment|Straight-line depreciation|5|10%|18%|

(3) Recognization basis, valuation and depreciation method for financial lease assets
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of asset ownership to the lessee and titles to the assets may or may not eventually be transferred. For fixed assets acquired under finance leases, the basis for provision of leased assets depreciation is the same as that of self-owned fixed assets. When it can be reasonably determined that the ownership of a leased asset will be transferred at the end of the lease term, it is depreciated over the period of expected use; otherwise, the lease asset is depreciated over the shorter period of the lease term and the period of expected use.
17. Project under Construction
Costs of construction in progress are recognized by actual construction expenses, including vary engineering
spending in construction period, the capitalized borrowing cost and other related costs before the construction
reaches condition for planned use. When construction in progress reaches condition for planned use, it shall be carried forward to fixed assets.
Impairment testing and provision for impairment found more in Note IV “22. Long-term assets impairment” 18. Borrowing costs
Borrowing costs include interest, amortization of discounts or premiums related to borrowings, ancillary costs incurred in connection with the arrangement of borrowings, and exchange differences arising from foreign currency borrowings. For borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset, when expenditures for the asset and borrowing costs are being incurred, activities relating to the acquisition, construction or production of the asset that are necessary to prepare the asset for its intended use or sale have commenced, such borrowing costs shall be capitalized as part of the cost of that asset; and capitalization shall discontinue when the qualifying asset is ready for its intended use or sale. Other borrowing costs shall be recognized as expense in the period in which they are incurred.
Where funds are borrowed for a specific purpose, the amount of interest to be capitalized shall be the actual interest expense incurred on that borrowing for the period less any bank interest earned from depositing the borrowed funds before being used into banks or any investment income on the temporary investment of those funds. Where funds are borrowed for general purpose, the Group shall determine the amount of interest to be capitalized on such borrowings by applying a capitalization rate to the weighted average of the excess amounts of cumulative expenditures on the asset over and above the amounts of specific-purpose borrowings. The capitalization rate shall be the weighted average of the interest rates applicable to the general-purpose borrowings. During the capitalization period, exchange differences on a specific purpose borrowing denominated in foreign currency shall be capitalized. Exchange differences related to general-purpose borrowings denominated in foreign currency shall be included in profit or loss for the current period.
Qualifying assets are assets (fixed assets, investment property, inventories, etc.) that necessarily take a substantial period of time for acquisition, construction or production to get ready for their intended use or sale.
Capitalization of borrowing costs shall be suspended during periods in which the acquisition, construction or production of a qualifying asset is interrupted abnormally, when the interruption is for a continuous period of more than 3 months, until the acquisition, construction or production of the qualifying asset is resumed.
19. Biological assets
Nil
20. Oil-and-gas assets
Nil
21. Intangible assets
(1) Valuation method, service life and impairment test
An intangible asset is an identifiable non-monetary asset without physical substance owned or controlled by the Company.
An intangible asset shall be initially measured at cost. The expenditures incurred on an intangible asset shall be recognized as cost of the intangible asset only if it is probable that economic benefits associated with the asset will flow to the Company and the cost of the asset can be measured reliably. Other expenditures on an item asset shall be charged to profit or loss when incurred.
Land use right acquired shall normally be recognized as an intangible asset. Self-constructed buildings (e.g. plants), related land use right and the buildings shall be separately accounted for as an intangible asset and fixed asset. For buildings and structures purchased, the purchase consideration shall be allocated among the land use right and the buildings on a reasonable basis. In case there is difficulty in making a reasonable allocation, the consideration shall be recognized in full as fixed assets.
An intangible asset with a finite useful life shall be stated at cost less estimated net residual value and any accumulated impairment loss provision and amortized using the straight-line method over its useful life when the asset is available for use.
Intangible assets with indefinite life are not amortized.
The Group shall review the useful life of intangible asset with a finite useful life and the amortization method applied at least at each financial year-end. A change in the useful life or amortization method used shall be accounted for as a change in accounting estimate. For an intangible asset with an indefinite useful life, the Group shall review the useful life of the asset in each accounting period. If there is evidence indicating that the useful life of that intangible asset is finite, the Company shall estimate the useful life of that asset and apply
the accounting policies accordingly.
(2)Internal accounting policies relating to research and development expenditures
Research and development expenditure of the Group was divided into expenses incurred during the research phase and expenses incurred during the development phase.
Expenses incurred during the research phase are recognized as profit or loss in the current period.
Expenses incurred during the development phase that satisfy the following conditions are recognized as intangible assets, while those that do not satisfy the following conditions are accounted for in the profit or loss for the current period:
①it is technically feasible that the intangible asset can be used or sold upon completion;
②there is intention to complete the intangible asset for use or sale;
③the intangible asset can produce economic benefits, including there is evidence that the products produced using the intangible asset has a market or the intangible asset itself has a market; if the intangible asset is for internal use, there is evidence that there exists usage for the intangible asset;
④there is sufficient support in terms of technology, financial resources and other resources in order to complete the development of the intangible asset, and there is capability to use or sell the intangible asset;
⑤the expenses attributable to the development phase of the intangible asset can be measured reliably.
If the expenses incurred during the research phase and the development phase cannot be distinguished separately, all development expenses incurred are accounted for in the profit or loss for the current period.
(3) Depreciation test method and depreciation allowance method for intangible assets
Depreciation test method and depreciation allowance method for intangible assets of the Company was been shown on Note IV-20 “Long-term assets depreciation”.
22. Impairment of long-term asset
The Company will judge if there is any indication of impairment as at the balance sheet date in respect of non-current non-financial assets such as fixed assets, construction in progress, intangible assets with a finite useful life, investment properties measured at cost, and long-term equity investments in subsidiaries, joint controlled entities and associates. If there is any evidence indicating that an asset may be impaired, recoverable amount shall be estimated for impairment test. Goodwill, intangible assets with an indefinite useful life and intangible assets beyond working conditions will be tested for impairment annually, regardless of whether there is any indication of impairment.
If the impairment test result shows that the recoverable amount of an asset is less than its carrying amount, the impairment provision will be made according to the difference and recognized as an impairment loss. The recoverable amount of an asset is the higher of its fair value less costs of disposal and the present value of the future cash flows expected to be derived from the asset. Anasset’s fair value is the price in a sale agreement in anarm’s length transaction. If there is no sale agreement but the asset is traded in an active market, fair value shall be determined based on the bid price. If there is neither sale agreement nor active market for an asset, fair value shall be based on the best available information. Costs of disposal are expenses attributable to disposal of the asset, including legal fee, relevant tax and surcharges, transportation fee and direct expenses incurred to prepare the asset for its intended sale. The present value of the future cash flows expected to be derived from the asset over the course of continued use and final disposal is determined as the amount discounted using an appropriately selected discount rate. Provisions for assets impairment shall be made and recognized for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the Group shall determine the recoverable amount of the asset group to which the asset belongs. The asset group is the smallest group of assets capable of generating cash flows independently.
For the purpose of impairment testing, the carrying amount of goodwill presented separately in the financial statements shall be allocated to the asset groups or group of assets benefiting from synergy of business combination. If the recoverable amount is less than the carrying amount, the Group shall recognize an impairment loss. The amount of impairment loss shall first reduce the carrying amount of any goodwill allocated to the asset group or set of asset groups, and then reduce the carrying amount of other assets (other than goodwill) within the asset group or set of asset groups, pro rata on the basis of the carrying amount of each asset.
An impairment loss recognized on the aforesaid assets shall not be reversed in a subsequent period in respect of the restorable value.
23. Long-term Deferred Expenses
Long term unamortized expenses represent the occurred expenses which should be shared by the current period and future periods with term more than one year. And shall be amortized by straight-line method during the period for estimated benefit.
24. Employee compensation
(1) Accounting treatment for short-term compensation
Short-term compensation including salary, bonus, allowance and subsidy, welfare expenses, medical insurance, birth insurance premium, industrial injury insurance premium, housing fund, labor union expenditure, personnel education fund and non-monetary welfare. During the accounting period when staff providing service to the Company, the actual short-term compensation occurred shall recognized as liabilities and reckoned into current gains/losses or relevant assets costs. The non-monetary welfare is measured by fair value.
(2) Accounting treatment for post-employment benefit
The post-employment benefit including the defined contribution plans. And defined contribution plans including basic endowment insurance, unemployment insurance and annuity, corresponding payable amount will reckoned into relevant assets costs or current gains/losses while occurred.
(3)Accounting for retirement benefits
When the Company terminates the employment relationship with employees before the end of the employment contracts or provides compensation as an offer to encourage employees to accept voluntary redundancy, the Company shall recognise employee compensation liabilities arising from compensation for staff dismissal and included in profit or loss for the current period, when the Company cannot revoke unilaterally compensation for dismissal due to the cancellation of labour relationship plans and employee redundant proposals; and the Company recognise cost and expenses related to payment of compensation for dismissal and restructuring, whichever is earlier. However, if the compensation for termination of employment is not expected to be fully paid within 12 months from the reporting period, it shall be accounted for other long-term staff remuneration.
The early retirement plan shall be accounted for in accordance with the accounting principles for compensation for termination of employment. The salaries or wages and the social contributions to be paid for the employees who retire before schedule from the date on which the employees stop rendering services to the scheduled retirement date, shall be recognized (as compensation for termination of employment) in the current profit or loss by the Group if the recognition principles for provisions are satisfied.
(4)Accounting for other long-term employee benefits
For other long-term employee benefits provided by the Company to its employees, if satisfy with the established withdraw plan, then the benefits are accounted for under the established withdraw plan, otherwise accounted for under defined benefit scheme.
25. Accrued liabilities
Obligations pertinent to the contingencies which satisfy the following conditions are recognized as accrued liabilities: (1) The obligation is a current obligation borne by the Company; (2) it is likely that an outflow of economic benefits will be resulted from the performance of the obligation; and (3) the amount of the obligation can be reliably measured.
At the balance sheet date, accrued liabilities shall be measured at the best estimate of the necessary expenses required for the performance of existing obligations, after taking into account relevant risks, uncertainties, time value of money and other factors pertinent to the contingencies.
If all or some expenses incurred for settlement of accrued liabilities are expected to be borne by the third party, the compensation amount shall, on a recoverable basis, be recognized as asset separately, and compensation amount recognized shall not be more than the carrying amount of accrued liabilities.
(1) Contact in loss
Contact in loss is identified when the inevitable cost for performance of the contractual obligation exceeds the inflow of expected economic benefits. When a contract in loss is identified and the obligations there under are qualified by the aforesaid recognition criterion for contingent liability, the difference of estimated loss under contract over the recognized impairment loss (if any) of the subject matter of the contract is recognized as contingent liability.
(2) Restructuring obligations
For detailed, official and publicly announced restructuring plan, the direct expenses attributable to the restructuring are recognized as contingent liabilities, provided that the aforesaid recognition criterion for contingent liability is met. For restructuring obligations arising from disposal of part business, the Company will recognise the obligations relating to restructuring only when it undertakes to dispose part business (namely entering into finalized disposal agreement).
26. Share-based payment
(1) Accounting for share-based payment
Share based payment refers to the transactions involving grant of equity instrument or assume liabilities as determined based on equity instrument for the purpose of acquiring services from employees or other parties. Share based payment is divided into the equity settled share based payment and cash settled share based payment.①equity settled share based payment
Equity settled share based payment for exchange of service provided by employees is measured at the fair value of the equity instrument granted to the employees as at the grant date. Subject to completion of services during the vest period or satisfaction with the required performance conditions for exercising right, the amount of the fair value is included in relevant cost or expense under straight line method based on the best estimate on the number of exercisable equity instruments during the vest period. If it becomes exercisable immediately following the relevant grant, it is included in relevant cost or expense on the grant date and accordingly increase capital reserve. On each balance sheet date during the vest period, the Company makes the best estimate based on subsequent information such as the latest available information about change of number of exercisable employees, thus to amend the number of equity instruments which are expected to be exercisable. Impact of the above estimate is included in relevant cost or expense for the current period, with corresponding adjustment in capital reserve. Equity settled share based payment for exchange of service provided by others is measured at fair value of the service as of the acquisition date provided that such fair value can be measured reliably. If such fair value can not be measured reliably, while fair value of the equity instrument can be measured reliably, the payment shall be measured at the fair value of equity instrument as of the acquisition date, and included in relevant cost or expense with corresponding increase inshareholders’ equity.
②cash settled share based payment
As for cash settled share based payment, it is measured at the fair value of the liabilities assumed by the Company as determined based on shares or other equity instruments. If it becomes exercisable immediately following the relevant grant, it is included in relevant cost or expense on the grant date and accordingly increase liabilities. If it is subject to completion of services during the vest period or satisfaction with the required performance conditions for exercising right, on each balance sheet date during the vest period, the Company makes the best estimate on the exercisable rights, and accounts for the service obtained in the current period in relevant cost or expense with corresponding increase of liabilities based on the fair value of the liabilities assumed by the Company.
The Company re-measures the fair value of liabilities on each balance sheet date and settlement date prior to settlement of relevant liabilities, with changes thereof included in profit or loss for the current period.
(2) Relevant accounting for amending or terminating share based payment plan
In case that the Company amends share based payment plan which leads to increase of fair value of the granted equity instruments, the Company will correspondingly increase recognition for services obtained according to the increase of fair value of equity instrument. Increase of fair value of equity instrument refers to the difference of fair values of equity instruments as at the revision date before and after such revision. In case that the amendment results in decrease in total fair value of share based payment or adoption of other means which are not beneficial to employees, the Company will continue account for the services obtained as if such amendment had never occurred, unless the Company cancel part or all the granted equity instruments.
During the vest period, if the granted equity instruments are cancelled, the Company will accelerate exercise of rights attaching to the granted equity instruments which are cancelled, and the remaining amount which should be recognized during the vest period is included in profit or loss for the current period promptly, meanwhile to recognise capital reserve. If employees or other parties who can choose to satisfy the non exercisable rights do not satisfy such conditions during the vest period, the Company will regard them as cancellation of granted equity instruments.
(3) Accounting for share based payment concerning the Company, its shareholders or actual controllers
As for share based payment concerning the Company, its shareholders or actual controllers, with either the settlement entity or service-acceptance entity in the Company or not, it is accounted for in our consolidated financial statement under the following provisions:
①for settlement entity making settlement with its own equity instruments, the transaction is accounted for as equity settled share based payment, otherwise it shall be accounted for as cash settled share based payment. If the settlement entity is an investor of the service-acceptance entity, the transaction is recognized as long term equity investment in the service-acceptance entity based on the fair value of the equity instruments as at the grant date or the fair value of assumed liabilities, with recognition of capital reserve (other capital reserve) or liabilities.②If service-acceptance entity is not obliged to settle or grant its own equity instruments to its employees, the share based payment transaction is accounted for as equity settled share based payment. If service-acceptance entity is obliged to settle or the equity instruments granted to its employee are not the own instruments of the entity, the share based payment transaction is accounted for as cash settled share based payment.
For intra-company share based payment transactions, if the service-acceptance entity and settlement entity are not the same enterprise, the share based payment transaction shall be recognized and measured in the respective financial statement of the two entities under the aforesaid principles.
27. Other financial instruments including senior shares and perpetual bonds
(1) Distinguish of senior shares and perpetual bonds
The perpetual bonds and senior shares issued by the Company are treated as equity instruments subject to satisfaction of all the below conditions:
①the financial instrument excludes delivery of cash or other financial assets to others, or exchange for contractual obligations on financial assets or financial liabilities with others under potential negative conditions;
②if its own equity instruments are required or may be used to settle the financial instruments, it excludes the contractual obligation to deliver varied numbers of own equity instruments for settlement provided that the financial instruments are non-derivatives; if the financial instruments are derivatives, the Company can only settle the financial instruments by fixed number of own equity instruments for exchange for fixed amount of cash or other financial assets.
Other than the financial instruments which can be classified as equity instruments under the above conditions, other financial instruments issued by the Company shall be classified as financial liabilities.
In case that financial instruments issued by the Company are compound financial instruments, they shall be recognized as liabilities at the fair value of liabilities portion. The actual amount received less fair value of the liabilities portion shall be recornised as other equity instrument. Transaction expenses occurred in issuance of compound financial instruments are allocated to the portions of liabilities and equities according to their respective proportion to the total issuance price.
2)Accounting for perpetual bonds and senior shares
For perpetual bonds and senior shares classified into financial liabilities, their relevant interest, dividends, gains or losses and gains or losses arising from redemption or refinancing are all included in current profit or loss other than those borrowing expenses which meet condition for capitalisation (please refer to note IV-18 “borrowing expenses”).
For perpetual bonds and senior shares classified into equity instruments, their issuance (including refinancing), repurchase, sale or cancel are treated as change of equity, and relevant transaction fees are also deducted from equity. The Company accounts for allocation of holders of equity instruments as profit distribution.
The Company dose not recognises change of fair value of equity instruments.
28. Revenue
(1) Income from goods sales
Income from goods sales are realized when the following conditions are met: the major risks and remuneration entitled to the ownership of goods are transferred to buyer; neither retain the continued management right generally related to ownership, nor exercise effective control over the sold products; the relevant economic
benefits are probable to flow into the Company; the relevant income and costs can be measured reliably.
(2) Provision of labor services
When the outcome of a transaction involving the rendering of services can be reliably estimated, it shall, on the balance sheet date, recognize the revenue from the rendering of services employing the percentage-of-completion method.
The outcome of a transaction concerning the rendering of services can be reliably estimated, which shall concurrently satisfy:① The relevant amount of revenue can be reliably measured;② it is probable that the economic benefits will flow into the enterprise;③ the completion schedule of the transaction can be reliably ascertained; and④ transaction costs incurred and to be incurred can be reliably measured.
When the outcome of a transaction involving the rendering of services cannot be reliably estimated, it shall recognize the revenue from the rendering of services based on the cost of rendering services already incurred and expected to be compensated, and the cost of rendering services incurred shall be recognized as an expense for the current period. If the cost of rendering services is expected not to be compensated, it shall be recognized as an expense.
When a contract or agreement signed by the Group includes sales of goods and rendering of services, if sales of goods and rendering of services can be differentiated and separately measured, they will be recognized respectively. If sales of goods and rendering of services cannot be differentiated or cannot be separately measured, they will be recognized as sales of goods in full.
(3) Income from charge for use
In line with relevant contract or agreement, recognized income on accrual basis
(4) Interest income
Recognized based on the times and real interest rates for the money used by others
29. Government Grants
(1)Determination basis and accounting for government grants related to assets
Government grants are transfer of monetary assets or non-monetary assets from the government to the Group at no consideration, excluding capital considerations from the government as an owner of the Group. Government grants are classified into government grants related to assets and government grants related to income.
If a government grant is in the form of a transfer of monetary asset, the item shall be measured at the amount received or receivable. If a government grant is in the form of a transfer of non-monetary asset, the item shall be measured at fair value. If fair value is not reliably determinable, the item shall be measured at a nominal amount and recognized immediately in profit or loss for the current period.
Government grants are generally recognized when received and measured at the amount actually received, but are measured at the amount likely to be received when there is conclusive evidence at the end of the accounting period that the Group will meet related requirements of such grants and will be able to receive the grants. The government grants so measured should also satisfy the following conditions: (1) the amount of the grants be confirmed with competent authorities in written form or reasonably deduced from related requirements under financial fund management measures officially released without material
uncertainties; (2) the grants be given based on financial support projects and fund management policies officially published and voluntarily disclosed by local financial authorities in accordance with the requirements under disclosure of government information, where such policies should be open to any company satisfying conditions required and not specifically for certain companies; (3) the date of payment be specified in related documents and the payment thereof be covered by corresponding budget to ensure such grants will be paid on time as specified; and (4)other relevant conditions which shall be met based on the specific situations of the Company and the subject matter.
A government grant related to an asset shall be recognized as deferred income, and evenly amortized to profit or loss over the useful life of the asset.
For the repayment of a government grant already recognized, if there is any related deferred income, the repayment shall be off set against the carrying amount of the deferred income, and any excess shall be recognized in profit or loss for the current period; if there is no related deferred income, the repayment shall be recognized immediately in profit or loss for the current period.
(2) Determination basis and accounting for government grants related to income
Government grants are transfer of monetary assets or non-monetary assets from the government to the Group at no consideration, excluding capital considerations from the government as an owner of the Group. Government grants are classified into government grants related to assets and government grants related to income.
If a government grant is in the form of a transfer of monetary asset, the item shall be measured at the amount received or receivable. If a government grant is in the form of a transfer of non-monetary asset, the item shall be measured at fair value. If fair value is not reliably determinable, the item shall be measured at a nominal amount and recognized immediately in profit or loss for the current period.
Government grants are generally recognized when received and measured at the amount actually received, but are measured at the amount likely to be received when there is conclusive evidence at the end of the accounting period that the Group will meet related requirements of such grants and will be able to receive the grants. The government grants so measured should also satisfy the following conditions: (1) the amount of the grants be confirmed with competent authorities in written form or reasonably deduced from related requirements under
financial fund management measures officially released without material uncertainties; (2) the grants be given based on financial support projects and fund management policies officially published and voluntarily disclosed by local financial authorities in accordance with the requirements under disclosure of government information, where such policies should be open to any company satisfying conditions required and not specifically for certain companies; (3) the date of payment be specified in related documents and the payment thereof be covered by corresponding budget to ensure such grants will be paid on time as specified; and (4)other relevant conditions which shall be met based on the specific situations of the Company and the subject matter.
For a government grant related to income, if the grant is a compensation for related expenses or losses to be incurred in subsequent periods, the grant shall be recognized as deferred income, and recognized in profit or loss over the periods in which the related costs are recognized; if the grant is a compensation for related expenses or losses already incurred, the grant shall be recognized immediately in profit or loss for the current period.
For the repayment of a government grant already recognized, if there is any related deferred income, the repayment shall be off set against the carrying amount of the deferred income, and any excess shall be recognized in profit or loss for the current period; if there is no related deferred income, the repayment shall be recognized immediately in profit or loss for the current period.
30. Deferred tax assets / deferred income tax liabilities
(1) Current income tax
At the balance sheet date, current income tax liabilities (or assets) for the current and prior periods shall be measured at the amount expected to be paid (or recovered) according to the requirements of tax laws. Taxable profits, which are the basis for calculating the current income tax expense, are determined after adjusting the accounting profits before tax for the year in accordance with relevant requirements of tax laws.
(2) Deferred income tax assets and deferred income tax liabilities
Temporary differences arising from the difference between the carrying amount of an asset or liability and its tax base, and the difference between the tax base and the carrying amount of those items that are not recognized as assets or liabilities but have a tax base that can be determined according to tax laws, shall be recognized as deferred income tax assets and deferred income tax liabilities using the balance sheet liability method.
Deferred income tax liabilities are not recognized for taxable temporary differences related to: the initial recognition of goodwill; and the initial recognition of an asset or liability in a transaction which is neither a business combination nor affects accounting profit or taxable profit (or deductible loss) at the time of the transaction. In addition, the Group recognises the corresponding deferred income tax liability for taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, except when both of the following conditions are satisfied: the Company able to control the timing of the reversal of the temporary difference; and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are not recognized for deductible temporary differences related to the initial recognition of an asset or liability in a transaction which is neither a business combination nor affects accounting profit or taxable profit (or deductible loss) at the time of the transaction. In addition, the Group recognises the corresponding deferred income tax asset for deductible temporary differences associated with investments in subsidiaries, associates and joint ventures to the extent that it is probable that taxable profits will be available against which the deductible temporary differences can be utilised, except when both of the following conditions are satisfied: it is not probable that the temporary difference will reverse in the foreseeable future; and it is not probable that taxable profits will be available in the future, against which the temporary difference can be utilised. The Company recognises a deferred income tax asset for the carry forward of deductible losses and tax credits to subsequent periods, to the extent that it is probable that future taxable profits will be available against which the deductible losses and tax credits can be utilised.
At the balance sheet date, deferred income tax assets and deferred income tax liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, according to the requirements of tax laws.
At the balance sheet date, the Company shall review the carrying amount of a deferred income tax asset. If it is probable that sufficient taxable profits will not be available in future periods to allow the benefit of the deferred income tax asset to be utilised, the carrying amount of the deferred income tax asset shall be reduced. Any such reduction in amount shall be reversed when it becomes probable that sufficient taxable profits will be available. (3) Income tax expense
Income tax expense comprises current income tax expense and deferred income tax expense.
Current income tax expense (current income tax income) and deferred income tax expense (deferred income tax income) are included in profit or loss for the current period, except for: recognized as other comprehensive income or current income tax and deferred income tax related to transactions or events that are directly recognized in other comprehensive income orowners’ equity, which are recognized directly inowners’ equity, and deferred income tax arising from a business combination, which is adjusted against the carrying amount of goodwill. (4) Presentation of income tax
When the Group has a legal right to settle on a net basis and intends either to settle on a net basis or to realise the assets and settle the liabilities simultaneously, current tax assets and current tax liabilities are offset and presented on a net basis.
When the Group has a legal right to settle current tax assets and liabilities on a net basis, and deferred tax assets
and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax assets and liabilities on a net basis or to realise the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be reversed, deferred tax assets and deferred tax liabilities are offset and presented on a net basis.
31. Lease
(1)Accounting for operating lease
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of asset ownership to the lessee and titles to the assets may or may not eventually be transferred. All other leases are classified as operating leases.
1) Operating lease business with the Group recorded as lessee
Lease payment for operating lease is recognized as related asset cost or profits and losses for the current period using the straight-line method over the lease term. The initial direct cost is directly accounted in profit or loss for the current period. Contingent rent is recognized as profit or loss for the current period upon occurrence.
2) Operating lease business with the Group recorded as lessor
Rental income is recognized in profit or loss for the current period using the straight-line method over the lease term. The initial direct cost where the amount is larger is capitalised when incurred, and accounted for as profit or loss for the current period on the same basis as recognition of rental income over the entire lease period; the initial direct cost where the amount is fewer is included in the profit or loss for the period when incurred. Contingent rental is accounted for as profit or loss for the period in which it is incurred.
(2) Accounting for financing lease
1) Financing lease business with the Group recorded as lessee
On the beginning date of the lease, the entry value of leased asset shall be at the lower of the fair value of the leased asset and the present value of minimum lease payment at the beginning date of the lease. Minimum lease payment shall be the entry value of long-term accounts payable, with difference recognized as unrecognized financing expenses. In addition, initial direct costs attributable to leased items incurred during the process of lease negotiation and signing of lease agreement shall be included in the value of leased assets. The balance of minimum lease payment after deducting unrecognized financing expenses shall be accounted for long-term liability and long-term liability due within one year.
Unrecognized financing expenses shall be recognized as financing expenses for the current period using effective interest method during the leasing period. Contingent rent shall be included in profit or loss for the current period at the time it incurred.
2) Financing lease business with the Group recorded as lessor
On the beginning date of the lease, the entry value of lease receivable shall be the aggregate of minimum lease receivable and initial direct costs at the beginning date of the lease. The unsecured balance shall be recorded. The aggregate of minimum lease receivable, initial direct costs and unsecured balance and the different between their present value shall be recognized as unrealised financing income. The balance of lease receivable after deducting unrecognized financing income shall be accounted for long-term debt and long-term debt due within one year. Unrecognized financing income shall be recognized as financing income for the current period using effective interest method during the leasing period. Contingent rent shall be included in profit or loss for the current period at the time it incurred.
32. Other important accounting policy and estimation
(1) Discontinued operation
Discontinued operation refers to the operation disposed or classified as held-for-sale by the Company and presented separately under operation segments and financial statements, which has fulfilled one of the following criteria:① it represents an independent key operation or key operating region;② it is part of the proposed disposal plan on an independent key operation or proposed disposal in key operating region; or③ it only establishes for acquisition of subsidiary through disposal.
Accounting for discontinued operation is set out in note IV-13 “classified as assets held for sale”.
33. Major accounting policy and changes
(1) Main accounting policy changes
□ Applicable√ Not applicable
(2) Changes of important accounting estimate
□ Applicable√ Not applicable
34. Other
Nil
VI. Taxes
1. Mai tax category and tax rate
||||
|-|-|-|
|Tax category|Tax calculation evidence|Tax rate|
||Sales income, and income from||
|Value added tax|processing, maintenance, making repairs|17%|
||and supplying replacements, and labor||
||service||
|Sales tax|Taxable labor income|5%|
|Tax for maintaining and building cities|Amount of value-added tax and sales tax|7%|
||payable||
|Business income tax|Taxable income||
|||25%|
|Educational surtax|Amount of value-added tax and sales tax|3%|
||payable||
||Amount of value-added tax and sales tax||
|Local educational surtax|||
|||2%|
||payable||
|Property tax|70% of the original value of the property||
|||1.2%|

Disclose reasons for different taxpaying body
|||
|-|-|
|Taxpaying body|Income tax rate|

2. Tax preference
Nil
3. Other
Nil
VII. Notes to Items in Consolidated Financial Statements
1. Monetary fund
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Cash on hand|141,271.10|2,894.71|
|Cash in bank|26,610,794.56|30,160,972.07|
|Total|26,752,065.66|30,163,866.78|

 Other explanation
2. Financial assets measured by fair value and reckoned into current gains/losses with its variation
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|

Other explanation:
3. Derivative financial assets
□ Applicable√ Not applicable
4. Note receivables
(1) Classification of notes receivable
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Bank acceptance bill|2,200,000.00||
|Total|2,200,000.00||

(2) Pledge at period-end
In RMB
|||
|-|-|
|Item|Amount pledge at period-end|
|Total|0.00|

 (3) Notes endorsement or discount and undue on balance sheet date
In RMB
||||
|-|-|-|
|Item|Amount derecognition at period-end|Amount not derecognition at period-end|
|Bank acceptance bill|47,314,732.69||
|Total|47,314,732.69||

(4) Notes transfer to account receivable due for failure implementation by drawer at period-end
In RMB
|||
|-|-|
|Item|Amount transfer to account receivable at period-end|
|Total|0.00|

 Other explanation
5. Accounts receivable
(1) Accounts receivable by category:
In RMB
||||
|-|-|-|
|Category|Ending balance|Opening balance|

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
||||||Book||||||
|||||Accrualratio|||||Accrual|Book value|
||Amount|Ratio|Amount||value|Amount|Ratio|Amount|||
||||||||||ratio||
|Receivables with bad|||||||||||
|debt provision|9,591,99||1,374,95||8,217,039|8,101,9||1,310,937||6,790,982.5|
|||88.69%||14.33%|||100.00%||16.18%||
|accrual by credit|8.29||9.25||.04|19.90||.40||0|
|portfolio|||||||||||
|Accounts with single|||||||||||
|significant amount|||||||||||
||1,222,82||244,564.||978,257.2||||||
|and bad debts||11.31%||20.00%|||||||
||1.60||32||8||||||
|provision accrued|||||||||||
|individually|||||||||||
||10,814,8||1,619,52||9,195,296.32|8,101,9||1,310,937||6,790,982.50|
|Total||100.00%||12.75%|||100.00%||16.18%||
||19.89||3.57|||19.90||.40|||

 Receivable with single significant amount and withdrawal bad debt provision separately at end of period:
□ Applicable√ Not applicable
In combination, accounts receivable whose bad debts provision was accrued by age analysis:
√ Applicable□ Not applicable
In RMB
|||||
|-|-|-|-|
||Ending balance|||
|Age||||
||Account receivable|Bad debt provision|Accrual ratio|
|within one year||||
|Within 1 year|7,465,772.01|22,397.32|0.30%|
|Subtotal within one year|7,465,772.01|22,397.32|0.30%|
|1-2 years|658,485.35|1,975.46|0.30%|
|2-3 years|117,506.98|352.52|0.30%|
|Over 3 years|1,350,233.95|1,350,233.95|100.00%|
|Total|9,591,998.29|1,374,959.25||

Explanation on combination determines:
According to the business scale, business nature, andcustomers’ settlement, etc., the account receivable with single significant amount is determined to be RMB 5 million. The account receivable with single significant amount has no depreciation reserve, and the reserve for bad debt provision is withdrawn with age analysis method.
In combination, withdrawal proportion of bad debt provision based on balance proportion for account receivable:
□ Applicable√ Not applicable
In combination, withdrawal proportion of bad debt provision based on other methods for account receivable:
(2) Bad debt provision accrual collected or switch back
Bad debt provision accrual was 308,586.17 Yuan; the amount collected or switches back amounting to 0.00 Yuan
Important bad debt provision collected or switch back:
In RMB
||||
|-|-|-|
|Company|Collected or switch back amount|Collection way|
|Total|0.00|--|

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

Written-off for the major receivable:
In RMB
|||||||
|-|-|-|-|-|-|
|||||Verification|Arising from related|
|Company|Nature|Amount written off|Reason for write-off|||
|||||procedures|transaction (Y/N)|
|Total|--|0.00|--|--|--|

Explanation for write-off of receivables:
(4) Top 5 receivables at ending balance by arrears party
Total year-end balance of top five receivables by arrears party amounting to 8,267,969.20 Yuan, takes 76.45 percent of the total account receivable at year-end, bad debt provision accrual correspondingly at year-end amounting as 1,196,764.45 Yuan.
(5) Receivable derecognition due to transfer of financial assets
(6) Assets and liability resulted by receivable transfer and continuous involvement
Other explanation:
6. Advance payment
(1) Advance payment by age
In RMB
||||||
|-|-|-|-|-|
||Ending balance||Opening balance||
|Age|||||
||Amount|Ratio|Amount|Ratio|
|within one year|386,433.20|97.13%|348,277.01|100.00%|
|1-2 years|11,400.00|2.87%|||

||||||
|-|-|-|-|-|
|Total|397,833.20|--|348,277.01|--|

Explanation on reasons of failure to settle on important advance payment with age over one year:
(2) Top 5 advance payment at ending balance by prepayment object
Total year-end balance of top five advance payment by prepayment object amounting to 393,906.00 Yuan, takes 99.01 percent of the total advance payment at year-end
Other explanation
7. Interest receivable
(1) Category
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|

(2) Important overdue interest
||||||
|-|-|-|-|-|
|||Overdue time Overdue||Impairment (Y/N) and|
|Borrower|Ending balance||Overdue reason||
|||time||judgment basis|
|Total|0.00|--|--|--|

Other explanation:
8. Dividend receivables
(1) Dividend receivables
In RMB
||||
|-|-|-|
|Item (or the invested entity)|Ending balance|Opening balance|

(2) Major dividend receivables with over one year age
In RMB
||||||
|-|-|-|-|-|
|Item or the invested||||Impairment (Y/N) and|
||Ending balance|Age|Reasons||
|entity)||||judgment basis|
|Total|0.00|--|--|--|

Other explanation:
9. Other accounts receivable
(1) Other accounts receivable by category
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Ending balance|||||Opening balance|||||
||Book balance||Bad debt provisionAccrualAmountratio|||Book balance||Bad debt provision|||
|Category|||||Book||||||
||||||||||Accrual|Book value|
||Amount|Ratio|Amount||value|Amount|Ratio|Amount|||
||||||||||ratio||
|Other receivables||||53.22%|||||||
|with bad debt|845,449.||449,925.||395,523.7|961,528||450,273.9|||
|||100.00%|||||100.00%||46.83%|511,254.81|
|provision accrual by|44||66||8|.71||0|||
|credit portfolio|||||||||||
||845,449.||449,925.|53.22%|395,523.78|961,528||450,273.9||511,254.81|
|Total||100.00%|||||100.00%||46.83%||
||44||66|||.71||0|||

Other receivable with single significant amount and withdrawal bad debt provision separately at end of period:
□ Applicable√ Not applicable
In combination, other accounts receivable whose bad debts provision was accrued by age analysis
√ Applicable□ Not applicable
In RMB
|||||
|-|-|-|-|
||Ending balance|||
|Age||||
||Other accounts receivable|Bad debt provision|Accrual ratio|
|within one year||||
|within one year|93,271.92|279.81|0.30%|
|Subtotal within one year|93,271.92|279.81|0.30%|
|1-2 years|291,442.00|874.33|0.30%|
|2-3 years|12,000.00|36.00|0.30%|
|Over 3 years|448,735.52|448,735.52|100.00%|
|Total|845,449.44|449,925.66||

Explanations on combination determine:
According to the business scale, business nature, andcustomers’ settlement, etc., the other account receivable with single big amount is determined to be RMB 5 million. The other account receivable with single big amount has no depreciation reserve, and the reserve for bad debt provision is withdrawn with age analysis method.
In combination, withdrawal proportion of bad debt provision based on balance proportion for other account receivable:
□ Applicable√ Not applicable
In combination, withdrawal proportion of bad debt provision based on other methods for other account receivable:
□ Applicable√ Not applicable
(2) Bad debt provision accrual collected or switch back
Bad debt provision accrual was 24,044.34 Yuan; the amount collected or switches back amounting to 348.24 Yuan
Important bad debt provision collected or switch back:
In RMB
||||
|-|-|-|
|Company|Amount reversal or collected|Collection way|
|Total|0.00|--|

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

Written-off for the major other receivable:
In RMB
|||||||
|-|-|-|-|-|-|
||Nature of other|||Verification|Arising from related|
|Company||Amount written off|Reason for write-off|||
||receivables|||procedures|transaction (Y/N)|
|Total|--|0.00|--|--|--|

Explanation for write-off of other receivables:
(4) Other receivables by nature
In RMB
||||
|-|-|-|
|Nature|Ending book balance|Opening book balance|
|Deposit|169,135.00|220,999.00|
|Current money|676,314.44|740,529.71|
|Total|845,449.44|961,528.71|

 (5) Top 5 other receivables at ending balance by arrears party
In RMB
|||||||
|-|-|-|-|-|-|
|||||Ratio in total ending||
||||||Ending balance of|
|Company|Nature|Ending balance|Age|balance of other||
||||||bad bet provision|
|||||receivables||
|Luwei Electrical||||||
||payment for goods|300,000.00|Over 3 years|35.48%|300,000.00|
|Equipment Co.,||||||
|Shenzhen Anjinheng||||||
||Deposit|90,100.00|Within one year|10.66%|270.30|
|Industrial Co., Ltd.||||||
|Total|--|390,100.00|--|46.14%|300,270.30|

(6) Account receivable with government grants involved
In RMB
||||||
|-|-|-|-|-|
|||||Time, amount and basis|
|Company|Item|Ending balance|Ending age|of amount collection|
|||||estimated|
|Total|--|0.00|--|--|

(7) Other account receivable derecognition due to financial assets transfer
(8) Assets and liability resulted by other account receivable transfer and continuous involvement
Other explanation:
10. Inventory
(1) Inventory classification
In RMB
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Opening balance|||
|Item||Depreciation|||Depreciation||
||Book balance||Book value|Book balance||Book value|
|||reserve|||reserve||
|Raw materials|441,460.58||441,460.58|302,597.03||302,597.03|
|Finished goods|3,615,787.10||3,615,787.10|5,868,710.50||5,868,710.50|
|Total|4,057,247.68||4,057,247.68|6,171,307.53||6,171,307.53|

 (2) Inventory depreciation reserve
In RMB
||||||||
|-|-|-|-|-|-|-|
|||Increase in the current period||Decrease in the current period|||
|Item|Opening balance|||Switch back or||Ending balance|
|||Accrual|Other||Other||
|||||write-off|||
|Total||0.00|0.00|0.00|0.00||

(3) Explanation on capitalization of borrowing costs at ending balance of inventory
(4) Assets that completed without settlement from construction contract
In RMB
|||
|-|-|
|Item|Amount|

Other explanation:
11. Assets holding ready for sold
In RMB
||||||
|-|-|-|-|-|
||||Expected disposal||
|Item|Ending book value|Fair value||Expected disposal time|
||||expenses||
|Total|0.00|0.00|0.00|--|

Other explanation:
12. Non-current assets due within one year
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|

Other explanation:
13. Other current assets
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Prepaid tax|209,155.59||
|Total|209,155.59||

Other explanation:
14. Financial assets available for sale
(1) Financial assets available for sale
In RMB
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Opening balance|||
|Item||Depreciation|||Depreciation||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||
|Total|0.00|0.00||0.00|0.00||

(2) Financial assets available for sale measured by fair value at period-end
In RMB
|||||
|-|-|-|-|
||Equity instrument|Debt instrument||
|Type|||Total|
||available for sale|available for sale||
|Cost /liability of equity||||
|instrument/ amortization|||0.00|
|cost of debt instrument||||

|||
|-|-|
|Fair value|0.00|
|Amount of fair value||
|changes that||
|accumulatively reckoned|0.00|
|in other comprehensive||
|gains||
|Amount with impairment||
||0.00|
|accrual||

(3) Financial assets available for sale measured by cost at period-end
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Book balance||||Depreciation reserves||||Ratio of||
|The|||||||||share-holdi||
|||||||||||Cash|
|invested|Period-beg||||Period-beg||||ng in||
|||Increased|Decreased|Period-end||Increased|Decreased|Period-end||dividend|
|entity|inning||||inning||||invested||
||||||||||entity||
|Total|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|--|0.00|

 (4) Changes of impairment in Period
In RMB
|||||
|-|-|-|-|
||Equity instrument|Debt instrument||
|Type|||Total|
||available for sale|available for sale||
|Balance of impairment||||
||||0.00|
|accrual at period-begin||||
|Current accrual|||0.00|
|Including: transfer-in||||
|from other|||0.00|
|comprehensive income||||
|Current decrease|||0.00|
|Including: switch back||||
|due to fair value rebound|||0.00|
|at period-end||||
|Balance of impairment||||
||||0.00|
|accrual at period-end||||

(5) Fair value of equity instrument available for sale sharply declined or other-than-temporary declined at
period-end without depreciation reserves accrual
In RMB
||||||||
|-|-|-|-|-|-|-|
||||Fair value|Time of drops|Amount with||
|||||||Reasons for|
|Item|Investment cost|Ending fair value|declined relative|persistently|impairment||
|||||||un-accrual|
||||to cost|(month)|accrual||
|Total|0.00|0.00|--|--|0.00|--|

 Other explanation
15. Held-to-maturity investment
(1) Held-to-maturity investment
In RMB
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Opening balance|||
|Item||Depreciation|||Depreciation||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||
|Total|0.00|0.00||0.00|0.00||

(2) Important held-to-maturity investment at period-end
In RMB
||||||
|-|-|-|-|-|
|Bond|Face value|Coupon value|Actual rate|Maturity date|
|Total|0.00|--|--|--|

(3) Held-to-maturity investment reclassify in the Period
Other explanation
16. Long-term account receivable
(1) Long-term account receivable
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
||Ending balance|||Opening balance||||
||||||||Discount rate|
|Item||Bad debtprovision|||Bad debt|||
||Book balance||Book value|Book balance||Book value|section|
||||||provision|||
|Total|0.00|0.00||0.00|0.00||--|

 (2) Long-term account receivable derecognition due to transfer of financial assets
(3) Assets and liability resulted by long-term account receivable transfer and continuous involvement
Other explanation
17. Long-term equity investment
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||+,-||||||||||
||||||||||||Ending|
||||||Other||Cash|||||
|||||Investme|||||||balance|
|The||Additiona|||comprehe||dividend|||||
||Opening|||nt gains||Other||||Ending|of|
|invested||l|Capital||nsive||or profit|Impairme||||
||balance|||recognize||equity|||Other|balance|impairme|
|entity||investmen|reduction||income||announce|nt accrual||||
|||||d under||change|||||nt|
|||t|||adjustmen||d to|||||
|||||equity|||||||provision|
||||||t||issued|||||
|I. Joint venture||||||||||||
|Subtotal|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|
|II. Associated enterprise||||||||||||
|Subtotal|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|
|Total|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|

 Other explanation
18. Investment real estate
(1) Investment real estate measured at cost
□ Applicable√ Not applicable
(2) Investment real estate measured at fair value
□ Applicable√ Not applicable
(3) Certificate of title un-completed
In RMB
||||
|-|-|-|
|Item|Book value|Reasons for un-completed|

 Other explanation
19. Fixed assets
(1) Fixed assets
In RMB
||||||
|-|-|-|-|-|
|||Transportation|Electronic and other||
|Item|Machines and equipment|||Total|
|||equipment|equipment||
|I. original book value:|||||
|1.Opening balance|194,406.84|515,814.24|637,606.48|1,347,827.56|
|2. increased in the|||||
||222,222.22|122,831.69|37,723.39|382,777.30|
|Period|||||

||||||
|-|-|-|-|-|
|(1) Purchase|222,222.22|122,831.69|37,723.39|382,777.30|
|(2) construction in|||||
|process transfer-in|||||
|(3) the increase in|||||
|business combination|||||
|3.DecreasedAmount|||||
|(1) Disposal or|||||
|scrap|||||
|4.Ending balance|416,629.06|638,645.93|675,329.87|1,730,604.86|
|II. accumulated|||||
|depreciation|||||
|1.Opening balance|1,474.16|155,799.08|416,592.48|573,865.72|
|2. increased in the|||||
||32,778.68|90,487.44|25,566.59|148,832.71|
|Period|||||
|(1) provision|32,778.68|90,487.44|25,566.59|148,832.71|
|3.DecreasedAmount|||||
|(1) Disposal or scrap|||||
|4.Ending balance|34,252.84|246,286.52|442,159.07|722,698.43|
|III. impairment of|||||
|preparation|||||
|1.Opening balance|||||
|2. increased in the|||||
|Period|||||
|(1) provision|||||
|3.DecreasedAmount|||||
|(1) Disposal or scrap|||||
|4.Ending balance|||||
|IV. book value|||||
|1.Ending book value|382,376.22|392,359.41|233,170.80|1,007,906.43|
|2. Opening book|192,932.68|360,015.16|221,014.00|773,961.84|

||
|-|
|value|

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

(3) Fixed assets leased through operating lease
In RMB
||||||
|-|-|-|-|-|
|||Accumulated|||
|Item|Original book value||Depreciation reserves|Book value|
|||depreciation|||

(4) Fixed assets leased through operating lease
In RMB
|||
|-|-|
|Item|Ending book value|

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

Other explanation
20. Construction in progress
(1) Construction in progress
In RMB
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Opening balance|||
|Item||Depreciation|||Depreciation|Book value|
||Book balance||Book value|Book balance|||
|||reserves|||reserves||
|Total|0.00|0.00||0.00|0.00||

(2) Changes in significant construction in progress
In RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||Openingbalance|increased|Fixed|Other||Proporti||Accumul|including|Interest||
|||||||Ending||||||Source of|
|Item|Budget||in the|assets|decrease||on of|Progress|ated|: interest|capitaliz||
|||||||balance||||||funds|
||||Period|transfer-i|d in the||project||amount|capitaliz|ation rate||

||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||n in the|Period||investme||of|ed|of the||
|||||Period|||nt in||interest|amount|year||
||||||||budget||capitaliz|of the|||
||||||||||ation|year|||
|Total|0.00|0.00|0.00|0.00|0.00|0.00|--|--|0.00|0.00|0.00%|--|

 (3) Depreciation reserves accrual
In RMB
||||
|-|-|-|
|Item|Accrual Amount|Reasons|
|Total|0.00|--|

Other explanation
21. Engineering materials
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|

Other explanation:
22. Disposal of fixed assets
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|

Other explanation:
23. Productive biological assets
(1) Productive biological assets measured by cost
□ Applicable√ Not applicable
(2) Productive biological assets measured by fair value
□ Applicable√ Not applicable
24. Oil-and-gas assets
□ Applicable√ Not applicable
25. Intangible assets
(1) Intangible assets
In RMB
|||||||
|-|-|-|-|-|-|
||||Non-patent|||
|Item|Land use right|Patent||Trademark|Total|
||||technology|||
|I. original book||||||
|value:||||||
|1.Opening||||||
|||||5,271,000.00|5,271,000.00|
|balance||||||
|2. increased in||||||
|the Period||||||
|(1) Purchase||||||
|(2) internal R||||||
|& D||||||
|(3) the||||||
|increase in business||||||
|combination||||||
|3.DecreasedAmount||||||
|(1) Disposal||||||
|4.Ending||||||
|||||5,271,000.00|5,271,000.00|
|balance||||||
|II. accumulated||||||
|depreciation||||||
|1.Opening||||||
|||||753,000.00|753,000.00|
|balance||||||
|2. increased in||||||
|||||753,000.00|753,000.00|
|the Period||||||
|(1) provision||||753,000.00|753,000.00|
|3.DecreasedAmount||||||
|(1) Disposal||||||

||||
|-|-|-|
|4.Ending|||
||1,506,000.00|1,506,000.00|
|balance|||
|III. impairment of|||
|preparation|||
|1.Opening|||
|balance|||
|2. increased in|||
|the Period|||
|(1) provision|||
|3.DecreasedAmount|||
|(1) Disposal|||
|4.Ending|||
|balance|||
|IV. book value|||
|1.Ending book|||
||3,765,000.00|3,765,000.00|
|value|||
|2. Opening|||
||4,518,000.00|4,518,000.00|
|book value|||

Ratio of the intangible assets from internalR&D in balance of intangible assets at period-end
(2) Land use right without certificate of title completed
In RMB
||||
|-|-|-|
|Item|Book value|Reasons|

Other explanation:
26. Development expense
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
||Opening|||||||
|Item||increased in the Period||Decreased Amount|||Ending balance|
||balance|||||||
|Total|0.00|0.00|0.00|0.00|0.00|0.00|0.00|

 Other explanation
27. Goodwill
(1) Original book value of goodwill
In RMB
||||||||
|-|-|-|-|-|-|-|
|The invested|||||||
||Opening balance|Increase during the year||Decreased during the year||Ending balance|
|entity or items|||||||
|Total|0.00|0.00|0.00|0.00|0.00|0.00|

 (2) Depreciation reserves of goodwill
In RMB
||||||||
|-|-|-|-|-|-|-|
|The invested|||||||
||Opening balance|Increase during the year||Decreased||Ending balance|
|entity or items|||||||
|Total|0.00|0.00|0.00|0.00|0.00|0.00|

 Process of impairment testing, parameter and recognition method for impairment losses:
Other explanation:
28. Long-term unamortized expenses
In RMB
|||||||
|-|-|-|-|-|-|
|||increased in the|Amortized in the|||
|Item|Opening balance|||Other decrease|Ending balance|
|||Period|Period|||
|Total||0.00|0.00|0.00||

Other explanation
29. Deferred income tax assets and deferred income tax liabilities
(1) Deferred income tax assets un-offset
In RMB
||||||
|-|-|-|-|-|
||Ending balance||Opening balance||
|Item|Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||difference|assets|difference|assets|
|Asset depreciation|||||
||308,276.93|89,066.31|47,988.32|11,997.08|
|reserves|||||
|Total|308,276.93|89,066.31|47,988.32|11,997.08|

 (2) Deferred income tax liabilities un-offset
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|

||||||
|-|-|-|-|-|
||Taxable temporary|Deferred income tax|Taxable temporary|Deferred income tax|
||differences|liabilities|differences|liabilities|
|Total|0.00|0.00|0.00|0.00|

 (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||89,066.31||11,997.08|
||308,276.93||47,988.32||
|assets|||||

(4) Details of unrecognized deferred income tax assets
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Total|0.00|0.00|

 (5) Deductible losses of un-recognized deferred income tax assets expired on the followed year
In RMB
|||||
|-|-|-|-|
|Year|Ending amount|Opening amount|Note|
|Total|0.00|0.00|--|

Other explanation:
30. Other non-current assets
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|

Other explanation:
31. Short-term loans
(1)Types of short-term loans
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|

Explanation on short-term loans category
(2) Overdue outstanding short-term loans
Total 0.00 Yuan overdue outstanding short-term loans at period-end, including the followed significant amount:
In RMB
||||||
|-|-|-|-|-|
|Unit|Ending balance|Lending rate|Overdue time|Overdue rate|
|Total|0.00|--|--|--|

Other explanation:
32. Financial liability measured by fair value and with its variation reckoned into current gains/losses In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|

Other explanation:
33. derivative financial liabilities
□ Applicable√ Not applicable
34. Notes payable
In RMB
||||
|-|-|-|
|Type|Ending balance|Opening balance|

Notes expired at year-end without paid was 0.00 Yuan
35. Account payable
(1) Account payable
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Loans|7,787,813.83|10,278,377.96|
|Total|7,787,813.83|10,278,377.96|

 (2) Account payable with over one year book age
In RMB
||||
|-|-|-|
|Item|Ending balance|Reasons of un-paid or carry-over|
|Total|0.00|--|

Other explanation:
36. Account received in advance
(1) Account received in advance
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Loans|2,024,718.30|2,595,736.07|
|Total|2,024,718.30|2,595,736.07|

 (2) Account received in advance with over one year book age
In RMB
||||
|-|-|-|
|Item|Ending balance|Reasons of un-paid or carry-over|
|Total|0.00|--|

(3) Projects that settle without completed from construction contract at period-end
In RMB
|||
|-|-|
|Item|Amount|

Other explanation:
During the reporting period no significant advance payments for more than 1 years of age.
37. Wages payable
(1) Wages payable
In RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase during the year|Decreased|Ending balance|
|I. Short-term compensation|1,767,497.76|6,876,171.33|7,264,318.85|1,379,350.24|
|II. Post-employment|||||
|welfare- defined|5,316.96|420,023.66|420,023.66|5,316.96|
|contribution plans|||||
|Total|1,772,814.72|7,296,194.99|7,684,342.51|1,384,667.20|

 (2) Short-term compensation
In RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase during the year|Decreased|Ending balance|
|1. Wages , bonuses, allowances|||||
||1,526,329.12|6,030,079.98|6,408,167.91|1,148,241.19|
|and subsidies|||||
|2. Welfare for workers|||||
|||416,257.25|416,257.25||
|and staff|||||
|3. Social insurance|1,293.08|180,082.73|180,082.73|1,293.08|

||||||
|-|-|-|-|-|
|Including: Medical|||||
||1,293.08|150,245.41|150,245.41|1,293.08|
|insurance|||||
|Work injury|||||
|||6,964.73|6,964.73||
|insurance|||||
|Maternity|||||
|||22,872.59|22,872.59||
|insurance|||||
|4. Housing accumulation|||||
||11,334.44|180,654.20|181,720.68|10,267.96|
|fund|||||
|5. Labor union|||||
|expenditure and|||||
||228,541.12|69,097.17|78,090.28|219,548.01|
|personnel education|||||
|expense|||||
|Total|1,767,497.76|6,876,171.33|7,264,318.85|1,379,350.24|

 (3) Defined contribution plans
In RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase during the year|Decreased|Ending balance|
|1. Basic endowment|||||
||5,172.32|400,198.70|400,198.70|5,172.32|
|insurance|||||
|2. Unemployment|||||
||144.64|19,824.96|19,824.96|144.64|
|insurance|||||
|Total|5,316.96|420,023.66|420,023.66|5,316.96|

 Other explanation:
The Company participates in the pension insurance and unemployment insurance plans established by government authorities by laws. Under these plans, the Company makes monthly contribution to these plans based on14% and2% of the paid salaries of its employees respectively. Other than the aforesaid monthly contribution, the Company takes no further payment obligation. The relevant expenditure is included in current profit or loss or cost of relevant assets when occurs.
38. Tax payable
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Value-added tax|1,074,435.25|1,256,783.68|
|Business tax|28,175.45|25,782.60|
|Enterprise income tax||745,109.42|
|Individual income tax|30,039.52|40,662.68|
|Urban maintenance and construction tax|54,951.97|64,952.41|

||||
|-|-|-|
|Educational surtax|34,432.54|41,575.59|
|Embankment expenses|4,198.63|4,198.63|
|House property tax|45,070.60|53,122.79|
|Total|1,271,303.96|2,232,187.80|

 Other explanation:
The Company paid property tax on behalf of administrator.
39. Interest payable
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|

Interest overdue without paid:
In RMB
||||
|-|-|-|
|Borrower|Amount overdue|Reasons|
|Total|0.00|--|

Other explanation:
40. Dividends payable
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|

Other explanation, including dividends payable with over one year age and disclosure un-payment reasons:
41. Other payable
(1) Classification of other payable according to nature of account
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Custodian and common benefit debts|9,659,853.85|9,840,809.85|
|Current money|8,552,160.51|9,370,269.08|
|Margin|1,798,346.00|1,903,346.00|
|Total|20,010,360.36|21,114,424.93|

 (2) Significant other payable with over one year age
In RMB
||||
|-|-|-|
|Item|Ending balance|Reasons of un-paid or carry-over|
|Custodian and common benefit debts|9,659,853.85|Un-cleared|
|Guosheng Energy|6,500,000.00|Interest-free loans|
|Total|16,159,853.85|--|

Other explanation
42. Liability holding ready for sold
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|

Other explanation:
43. Non-current liability due within one year
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|

Other explanation:
Nil
44. Other current liability
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|

Changes of short-term bond payable:
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||Accrual|Premium/||||
||Face|Release|Bond|Issuing|Opening|Issued in|interest|discount|Paid in||Ending|
|Bond||||||||||||
||value|date|period|amount|balance|the Period|by face|amortizati|the Period||balance|
||||||||value|on||||
|Total|--|--|--|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|

 Other explanation:
Nil
45. Long-term loans
(1) Classification of long-term loans
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|

Explanation:
Nil
Other explanation, including interest rate section:
Nil
46. Bonds payable
(1) Bonds payable
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|

(2) Changes of bonds payable (not including the other financial instrument of preferred stock and perpetual capital securities that classify as financial liability)
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Total|--|--|--|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|

 (3) Convertible conditions and time for shares transfer for the convertible bonds
Nil
(4) Other financial instruments classify as financial liability
Basic information of the outstanding preferred stock and perpetual capital securities at period-end
Nil
Changes of outstanding preferred stock and perpetual capital securities at period-end
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|Outstanding|Period-begin||Increase during the year||Decreased||Period-end||
|financial|||||||||
||Amount|Book value|Amount|Book value|Amount|Book value|Amount|Book value|
|instrument|||||||||
|Total|0|0.00|0|0.00|0|0.00|0|0.00|

 Basis for financial liability classification for other financial instrument
Nil
Other explanation
Nil
47. Long-term account payable
(1) Listed by nature
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|

Other explanation:
48. Long-term employee payable
(1) Long-term employee payable
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|

(2) Changes of defined benefit plans
Present value of the defined benefit plans:
In RMB
||||
|-|-|-|
|Item|Current amount|Last amount|

Scheme assets:
In RMB
||||
|-|-|-|
|Item|Current amount|Last amount|

Net liability (assts) of the defined benefit plans
In RMB
||||
|-|-|-|
|Item|Current amount|Last amount|

Content of defined benefit plans and relevant risks, impact on future cash flow of the Company as well as times and uncertainty: Major actuarial assumption and sensitivity analysis:
Other explanation:
49. Special payable
In RMB
|||||||
|-|-|-|-|-|-|
|||Increase during the||||
|Item|Opening balance||Decreased|Ending balance|Causes|
|||year||||
|Total||0.00|0.00||--|

Other explanation:
50. Accrued liability
In RMB
|||||
|-|-|-|-|
|Item|Ending balance|Opening balance|Causes|

Other explanation, including relevant important assumptions and estimation:
51. Deferred income
In RMB
|||||||
|-|-|-|-|-|-|
|||Increase during the||||
|Item|Opening balance||Decreased|Ending balance|Causes|
|||year||||

|||||
|-|-|-|-|
|Total|0.00|0.00|--|

Item with government grants involved:
In RMB
||||||||
|-|-|-|-|-|-|-|
||||Amount reckoned||||
|||New grants in the||||Assets-related/inc|
|Item|Opening balance||in non-operation|Other changes|Ending balance||
|||Period||||ome related|
||||revenue||||
|Total||0.00|0.00|0.00||--|

 Other explanation:
52. Other non-current liability
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|

Other explanation:
53. Share capital
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Change during the year(+,-)||||||
|||||Shares||||
||Opening|||||||
|||New shares||transferred|||Ending balance|
||balance||Bonus share||Other|Subtotal||
|||issued||from capital||||
|||||reserve||||
|Total shares|551,347,947.00||||||551,347,947.00|

 Other explanation:
54. Other equity instrument
(1) Basic information of the outstanding preferred stock and perpetual capital securities at period-end (2) Changes of outstanding preferred stock and perpetual capital securities at period-end
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|Outstanding|Period-begin||Increase during the year||Decreased||Period-end||
|financial|||||||||
||Amount|Book value|Amount|Book value|Amount|Book value|Amount|Book value|
|instrument|||||||||
|Total|0||0|0.00|0|0.00|0||

Changes of other equity instrument, change reasons and relevant accounting treatment basis:
Other explanation:
55. Capital reserve
In RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase during the year|Decreased|Ending balance|
|Other capital reserve|627,834,243.83|54.02||627,834,297.85|
|Debt restructuring|||||
||482,580,588.23|||482,580,588.23|
|income|||||
|Other|145,253,655.60|54.02||145,253,709.62|
|Total|627,834,243.83|54.02||627,834,297.85|

 Other explanation, including changes and reasons for changes:
Among the other capital reserves, 135,840,297.18 Yuan refers to the payment for creditor from shares assignment by whole shareholders; majority shareholder Guosheng Energy donated 5,390,399.74 Yuan.
56. Treasury stock
In RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase during the year|Decreased|Ending balance|
|Total||0.00|0.00||

Other explanation, including changes and reasons for changes:
57. Other comprehensive income
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Current amount||||||
||||Less: written in|||||
|||Accountbeforeincome tax inthe year|other|||||
||Opening||comprehensive||||Ending|
|Item|||||Belong to|Belong to||
||||income in|||||
||balance|||Less : income|parent|minority|balance|
||||previous period|||||
|||||tax expense|company after|shareholders||
||||and carried||tax|after tax||
||||forward to gains|||||
||||and losses in|||||
||||current period|||||
|Total other comprehensive income||0.00|0.00|0.00||||

Other explanation, including the active part of the hedging gains/losses of cash flow transfer to initial recognization adjustment for the arbitraged items
58. Special reserves
In RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase during the year|Decreased|Ending balance|
|Total||0.00|0.00||

Other explanation, including changes and reasons for changes:
59. Surplus reserves
In RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase during the year|Decreased|Ending balance|
|Statutory surplus reserve|32,673,227.01|||32,673,227.01|
|Total|32,673,227.01|0.00|0.00|32,673,227.01|

 Other explanation, including changes and reasons for changes:
60. Retained profit
In RMB
||||
|-|-|-|
|Item|Current period|Last period|
|Retained profit at period-end before adjustment|-1,199,952,070.17|-1,204,837,748.73|
|Retained profit at period-begin after adjustment|-1,199,952,070.17|-1,204,837,748.73|
|Add: net profit attributable to shareholders ofparent company for this year|||
||-138,355.58|4,885,678.56|
|Retained profit at period-end|-1,200,090,425.75|-1,199,952,070.17|

 Adjustment for retained profit at period-begin:
1). Retroactive adjustment due to the Accounting Standards for Business Enterprise and relevant new regulations, retained profit at period-begin has 0.00 Yuan affected;
2) Due to the accounting policy changes, retained profit at period-begin has 0.00 Yuan affected;
3) Due to the major accounting errors correction, retained profit at period-begin has 0.00 Yuan affected;
4) Consolidation range changed due to the same control, retained profit at period-begin has 0.00 Yuan affected;
5) Total other adjustment impacts 0.00 Yuan retained profit at period-begin
61. Operating income and operating cost
In RMB
||||||
|-|-|-|-|-|
||Current amount||Last amount||
|Item|||||
||Income|Cost|Income|Cost|
|Main business|169,765,416.68|158,247,892.61|206,787,455.39|194,455,356.12|
|Other business|1,224,613.42|1,151,379.27|5,283,130.38|4,509,309.53|
|Total|170,990,030.10|159,399,271.88|212,070,585.77|198,964,665.65|

 62. Business tax and surcharge
In RMB
||||
|-|-|-|
|Item|Current amount|Last amount|
|Business tax|180,489.66|250,697.67|

||||
|-|-|-|
|Urban maintenance and construction tax|146,170.20|150,619.25|
|Educational surtax|104,407.32|107,585.20|
|Total|431,067.18|508,902.12|

 Other explanation:
Details of the various business taxes and additional standards are in "tax".
63. Sales expense
In RMB
||||
|-|-|-|
|Item|Current amount|Last amount|
|Salary|3,046,778.67|2,403,392.34|
|market promotion costs|1,474,565.46|721,113.68|
|Lease and property management fee|562,901.30|666,701.92|
|Travel expenses|601,963.66|479,398.60|
|Other|829,396.81|1,069,856.86|
|Total|6,515,605.90|5,340,463.40|

 Other explanation:
64. Administration expense
In RMB
||||
|-|-|-|
|Item|Current amount|Last amount|
|Salary|3,341,944.77|4,776,645.93|
|Lease and property management fee|1,113,211.99|2,801,452.78|
|Repair charge||1,287,036.57|
|Intermediary services charge|636,037.72|1,495,493.10|
|Other|300,371.66|3,748,259.18|
|Total|5,391,566.14|14,108,887.56|

 Other explanation:
65. Financial expense
In RMB
||||
|-|-|-|
|Item|Current amount|Last amount|
|Interest expenditure|||
|Less: Interest income|695,798.95|200,059.09|
|exchange loss|0.41|-18.12|
|Other|20,600.33|26,623.61|

||||
|-|-|-|
|Total|-675,198.21|-173,453.60|

 Other explanation:
66. Loss from Assets depreciation
In RMB
||||
|-|-|-|
|Item|Current amount|Last amount|
|I. Bad debt losses|308,237.93|48,575.61|
|Total|308,237.93|48,575.61|

 Other explanation:
Loss of provision for bad debts of accounts receivable was RMB 308,586.17, reversal of bad debt losses of other receivables was RMB 348.24.
67. Changes in fair value gains
In RMB
||||
|-|-|-|
|Changes resources|Current amount|Last amount|

Other explanation:
68. Investment income
In RMB
||||
|-|-|-|
|Item|Current amount|Last amount|

Other explanation:
69. Non-operation revenue
In RMB
|||||
|-|-|-|-|
||||Amount reckoned into|
|Item|Current amount|Last amount|non-recurring gains/losses in|
||||the Year|
|Total gains from disposal of||39,731.46||
|non-current assets||||
|Income from fine and penalty||103,000.00||
|Other|4,210,594.98|14,542,620.77|4,210,594.98|
|Total|4,210,594.98|14,685,352.23|4,210,594.98|

 Government grants reckoned into current gains/losses:
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||Whether the|||||
||Issuing||||Whether|Amount of|Amount of|Assets|
|Item||Issuing cause|Property type|impact of|||||
||subject||||special|this period|last period|related/Incom|
|||||subsidies on|||||

||||||||||
|-|-|-|-|-|-|-|-|-|
|||||the current|subsidies|||e related|
|||||profit and|||||
|||||loss|||||
|Total|--|--|--|--|--|0.00|0.00|--|

 Other explanation:
70. Non-operating expenditure
In RMB
|||||
|-|-|-|-|
||||Amount reckoned into|
|Item|Current amount|Last amount|non-recurring gains/losses in|
||||the Year|
|Total non-current assets||5,880.00||
|disposal losses||||
|Other|3,841,393.90|23,158.00|3,841,393.90|
|Total|3,841,393.90|29,038.00|3,841,393.90|

 Other explanation:
71. Income tax expense
(1) Income tax expense
In RMB
||||
|-|-|-|
|Item|Current amount|Last amount|
|Current income tax|171,678.36|2,157,857.16|
|Deferred income tax|-77,069.23|-11,997.08|
|Total|94,609.13|2,145,860.08|

 (2) Adjustment on accounting profit and income tax expenses
In RMB
|||
|-|-|
|Item|Current amount|
|Total profit|-11,319.64|
|Income tax measured by statutory/applicable tax rate|0.00|
|Impact on cost, expenses and losses that unable to deducted|105,928.77|
|income tax expenses|94,609.13|

 Other explanation
72. Other comprehensive income
Found more in Note 57.
73. Items of cash flow statement
(1) Other cash received in relation to operation activities
In RMB
||||
|-|-|-|
|Item|Current amount|Last amount|
|Interest and Rent and utilities etc.|5,087,819.08|4,171,494.61|
|Custodian (2013 annual income tax)||92,388,206.44|
|Custodian (common interest debt)||12,536,900.00|
|Custodian (employee claims)||2,360,640.00|
|Other Current money|1,937,206.93|4,134,967.01|
|Total|7,025,026.01|115,592,208.06|

 Explanation on other cash received in relation to operation activities
(2) Other cash paid in relation to operation activities
In RMB
||||
|-|-|-|
|Item|Current amount|Last amount|
|utilities|458,190.10|816,881.52|
|Market sales phase expenses as|||
||1,474,565.46|2,937,071.06|
|advertisement promoted|||
|Management phase expenses as listing|||
|charge, agency fee and three Meetings|5,588,378.31|5,033,523.00|
|operations expenses and office expenses|||
|Rent and property fee and maintenance fee|2,364,764.52|4,088,489.35|
|Deposit and Margin paid|1,353,871.46|2,800,580.55|
|Other Current money||2,222,080.74|
|Total|11,239,769.85|17,898,626.22|

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

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

Explanation on cash paid related with investment activities
(5) Other cash received in relation to financing activities
In RMB
||||
|-|-|-|
|Item|Current amount|Last amount|

Explanation on other cash received in relation to financing activities
(6) Cash paid related with financing activities
In RMB
||||
|-|-|-|
|Item|Current amount|Last amount|

Explanation on cash paid related with financing activities
74. Supplementary information to statement of cash flow
(1) Supplementary information to statement of cash flow
In RMB
||||
|-|-|-|
|Supplementary information|This Period|Last Period|
|1. Net profit adjusted to cash flow of|||
||--|--|
|operation activities:|||
|Net profit|-105,928.77|5,782,999.18|
|Add: Assets impairment provision|308,237.93|48,575.61|
|Depreciation of fixed assets, consumption of|||
|oil assets and depreciation of productive|148,832.71|79,066.98|
|biology assets|||
|Amortization of intangible assets|753,000.00|753,000.00|
|Loss from disposal of fixed assets, intangible|||
|assets and other long-term assets(gain is||-33,851.46|
|listed with “-”)|||
|Decrease of deferred income tax|||
||-77,069.23|-11,997.08|
|asset( (increase is listed with “-”)|||
|Decrease of inventory (increase is listed with|||
||2,114,059.85|-1,626,191.10|
|“-”)|||
|Decrease of operating receivable accounts|||
||-446,376.91|104,734,227.53|
|(increase is listed with “-”)|||
|Increase of operating payable accounts|||
||-5,723,833.42|-105,804,781.48|
|(decrease is listed with “-”)|||
|Other|54.02||
|Net cash flow arising from operating|-3,029,023.82|3,921,048.18|
|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|26,752,065.66|30,163,866.78|
|Less: Balance of cash at year-begin|30,163,866.78|26,834,171.59|
|Net increasing of cash and cash equivalents|-3,411,801.12|3,329,695.19|

(2) Net cash paid for obtaining subsidiary in the Period
In RMB
|||
|-|-|
||Amount|
|Including:|--|
|Including:|--|
|Including:|--|

Other explanation:
(3) Net cash received by disposing subsidiary in the Period
In RMB
|||
|-|-|
||Amount|
|Including:|--|
|Including:|--|
|Including:|--|

Other explanation:
(4) Constitution of cash and cash equivalent:
In RMB
||||
|-|-|-|
|Item|Ending balance|Opening balance|
|Ⅰ. Cash|26,752,065.66|30,163,866.78|
|Including: Cash on hand|141,271.10|2,894.71|
|Bank deposit available for|||
||26,610,794.56|30,160,972.07|
|payment at any time|||
|Ⅲ. Balance of cash and cash equivalent at|26,752,065.66|30,163,866.78|
|period-end|||

Other explanation:
Cash and cash equivalents is excluding the parent company or subsidiary of the group using restricted cash and cash equivalents.
75. Notes of changes ofowners’ equity
Explain the name and adjusted amount in “Other” at end of last period:
76. Assets with ownership or use right restricted
In RMB
||||
|-|-|-|
|Item|Ending book value|Restriction reasons|
|Total|0.00|--|

Other explanation:
77. Foreign currency monetary items
(1) Foreign currency monetary items
In RMB
|||||
|-|-|-|-|
||Ending foreign currency|||
|Item||Convert rate|Ending RMB balance converted|
||balance|||

Other explanation:
(2) Explanation on foreign operational entity, including as for the major foreign operational entity, disclosed main operation place, book-keeping currency and basis for selection; if the book-keeping currency changed, explain reasons
□ Applicable√ Not applicable
78. Hedging
Disclosed hedging items and relevant hedging instrument based onhedging’s category, disclosed qualitative and quantitative information for the arbitrage risks:
Nil
79. Other
Nil
VIII. Changes of consolidation range
1. Enterprise combined under different control
(1) Enterprise combined under different control in the Period
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||||||||Income of|Net profit of|
|||||||Standard to|||
||Time point|Cost of|Ratio of|Acquired|||acquiree from|acquiree from|
||||||Purchasing|determine the|||
|Acquiree|for equity|equity|equity|way Equity|||purchasing|purchasing|
||||||date|purchasing|||
||obtained|obtained|obtained|obtained way|||date to|date to|
|||||||date|||
||||||||period-end|period-end|

 Other explanation:
The Company had no enterprise merger not under the same control.
(2) Combination cost and goodwill
In RMB
||
|-|
|Combination cost|

Determination method for fair value of the combination cost and contingent consideration and changes:
Main reasons for large goodwill resulted:
Other explanation:
(3) Identifiable assets and liability on purchasing date under the acquiree
In RMB
|||
|-|-|
|Fair value on purchasing date|Book value on purchasing date|

 Determination method for fair value of the identifiable assets and liabilities:
Contingent liability of the acquiree bear during combination:
Other explanation:
(4) Gains or losses arising from re-measured by fair value for the equity held before purchasing date Whether it is a business combination realized by two or more transactions of exchange and a transaction of obtainted control rights in the Period or not
□Yes√No
(5) On purchasing date or period-end of the combination, combination consideration or fair value of identifiable assets and liability for the acquiree are un-able to confirm rationally
(6) Other explanation
2. Enterprise combined under the same control
(1) Enterprise combined under the same control in the Period
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||||||Income of the|Net profit of|||
||||||combined|the combined|||
||||||||Income of the|Net profit of|
||||||party from|party from|||
|||Basis of||Standard to|||combined|the combined|
||Equity ratio||||period-begin|period-begin|||
|||combined|Combination|determine the|||party during|party during|
|Acquiree|obtained in||||of|of|||
|||under the|date|combination|||the|the|
||combination||||combination|combination|||
|||same control||date|||comparison|comparison|
||||||to the|to the|||
||||||||period|period|
||||||combination|combination|||
||||||date|date|||

Other explanation:
(2) Combination cost
||
|-|
|Combination cost|

Explanation on contingent consideration and its changes:
Other explanation:
(3) Assets and liability of the combined party on combination date
|||
|-|-|
|On purchasing date|At end of last period|

Contingent liability of the combined party bear during combination:
Other explanation:
3. Counter purchase
Basic transaction information, basis of counter purchase, whether making up business due to the assets and liability reserved by listed company and basis, determination of combination cost, amount and calculation on adjusted equity by equity transaction
The Company had on counter purchase in the reporting period.
4. Subsidiary disposal
Whether lost controlling rights while dispose subsidiary on one time or not
□ Yes√ No
Whether lost controlling rights in the Period while dispose subsidiary on two or more steps or not
□ Yes√ No
5. Other reasons for consolidation range changed
Reasons for changed on consolidation range (such as new subsidiary established, subsidiary liquidated etc.)And relevant information 6. Other
Nil
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||
|Shenzhen|||Bicycle and spare||||
||Shenzhen|Shenzhen||70.00%||Investment|
|Emmelle|||parts distribution||||

||
|-|
|Industrial Co.,|
|Ltd.|

Explanation on share-holding ratio in subsidiary different from ratio of voting right:
Nil
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
Nil
Controlling basis for the structuring entity included in consolidated range
Nil
Basis on determining to be a agent or consignor:
Nil
Other explanation:
Nil
(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||
|Shenzhen Emmelle|||||
||30.00%|32,426.81||1,625,185.21|
|Industrial Co., Ltd.|||||

Explanation on share-holding ratio of minority different from ratio of voting right:
Nil
Other explanation:
Nil
(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||Total|Current||Total|Current||Total|Current||Total|
|ry||ent|||ent|||ent|||ent||
||assets||assets|liability||liability|assets||assets|liability||liability|
|||assets|||liability|||assets|||liability||
|Shenzhe|||||||||||||
|n|||||||||||||
|Emmelle|39,332,9|356,244.|39,689,2|34,271,9||34,271,9|44,487,1|161,628.|44,648,7|39,339,5||39,339,5|
|Industria|70.84|97|15.81|31.79||31.79|41.91|03|69.94|75.27||75.27|
|l Co.,|||||||||||||
|Ltd.|||||||||||||

In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||Current amount||||Last amount||||
|||||Cash flow||||Cash flow|
||||Total||||Total||
|Subsidiary|Operation|||from|Operation|||from|
|||Net profit|comprehensi|||Net profit|comprehensi||
||Income|||operation|Income|||operation|
||||ve income||||ve income||
|||||activity||||activity|
|Shenzhen|||||||||
|Emmelle|170,989,389.||||208,519,758.||||
|||108,089.35|108,089.35|-3,088,083.12||2,991,068.74|2,991,068.74|3,078,423.02|
|Industrial|07||||34||||
|Co., Ltd.|||||||||

Other explanation:
Nil
(4) Major restriction on using corporate assets and liquidate corporate debts
Nil
(5) Financial or other supporting provided to structuring entity that included in consolidated financial statement
Nil
Other explanation:
Nil
2. Transaction that has owners equity shares changed in subsidiary but still with controlling rights
(1) Owners equity shares changed in subsidiary
Nil
(2) Impact onminority’s interest andowners’ equity attributable to parent company
In RMB
 Other explanation
Nil
3. Equity in joint venture and cooperative enterprise
(1) Important joint venture and cooperative enterprise
||||||||
|-|-|-|-|-|-|-|
|||||Share-holding ratio||Accounting|
||Main operation||||||
|Name||Registered place|Business nature|||treatment on|
||place|||Directly|Indirectly||
|||||||investment for|

||
|-|
|joint venture andcooperativeenterprise|

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

 Other explanation
Nil
(3) Main financial information of the important cooperative enterprise
|||
|-|-|
|Closing balance/current amount|opening balance /last period amount|

 Other explanation
Nil
(4) Financial summary for un-important joint venture or cooperative enterprise
In RMB
||||
|-|-|-|
||Ending balance /Current amount|Opening balance /Last amount|
|Joint venture|--|--|
|Total numbers measured by share-holding|||
||--|--|
|ratio|||
|Cooperative enterprise|--|--|
|Total numbers measured by share-holding|||
||--|--|
|ratio|||

Other explanation
Nil
(5) Assets transfer ability has major restriction from joint venture or cooperative enterprise
Nil
(6) Excess losses from joint venture or cooperative enterprise
In RMB
|||||
|-|-|-|-|
|||Un-confirmed losses not||
||Cumulative un-confirmed||Cumulative un-confirmed|
|Name||recognized in the Period (or net||
||losses||losses at period-end|
|||profit enjoyed in the Period)||

Other explanation
Nil
(7) Un-confirmed commitment with investment concerned with joint venture
Nil
(8) Contingent liability with investment concerned with joint venture or cooperative enterprise
Nil
4. Co-runs operation
|||||||
|-|-|-|-|-|-|
|||||Share-holding ratio/ share enjoyed||
|Name|Main operation place|Registered place|Business nature|||
|||||Directly|Indirectly|

 Share-holding ratio or shares enjoyed different from voting right ratio:
Nil
If the co-runs entity is the separate entity, basis of the co-runs classification
Nil
Other explanation
Nil
5. Equity in structuring entity that excluding in the consolidated financial statement
Relevant explanation
Nil
6. Other
Nil
X. Risk related with financial instrument
Nil
XI. Disclosure of fair value
1. Ending fair value of the assets and liabilities measured by fair value
In RMB
||||||
|-|-|-|-|-|
||Ending fair value||||
|Item|||||
||First-order|Second-order|Third-order|Total|
|I. Sustaining measured by|||||
||--|--|--|--|
|fair value|||||
|(I) financial assets|||||
|measured at fair value and|||||
|||||0.00|
|changes accounted in the|||||
|current profits and losses|||||
|1. transaction financial|||||
|||||0.00|
|assets|||||
|(1) investment in debt|||||
|||||0.00|
|instruments|||||
|(2) investment in equity|||||
|||||0.00|
|instruments|||||
|(3) derivative financial|||||
|||||0.00|
|assets|||||
|2. financial assets|||||
|appointed to measure at|||||
|fair value and changes||||0.00|
|accounted in the current|||||
|profits and losses|||||
|(1) investment in debt|||||
|||||0.00|
|instruments|||||
|(2) investment in equity|||||
|||||0.00|
|instruments|||||
|(II) financial assets|||||
|||||0.00|
|available for sale|||||
|(1) investment in debt|||||
|||||0.00|
|instruments|||||
|(2) investment in equity|||||
|||||0.00|
|instruments|||||
|(3) other||||0.00|
|(III) investment real estate||||0.00|
|1. rental land use rights||||0.00|

||||||
|-|-|-|-|-|
|2. rental buildings||||0.00|
|3. land use rights holding|||||
|and preparing to transfer||||0.00|
|after add value|||||
|(IV) biological assets||||0.00|
|1. consumption biological|||||
|||||0.00|
|assets|||||
|2. productive biological|||||
|||||0.00|
|assets|||||
|Total assets continuously|||||
|||||0.00|
|measured by fair value|||||
|(V) transaction financial|||||
|||||0.00|
|liabilities|||||
|Among them: issue of|||||
|||||0.00|
|transaction bonds|||||
|Derivative|||||
|||||0.00|
|financial liabilities|||||
|Other||||0.00|
|(VI) financial liabilities|||||
|appointed to measure at|||||
|fair value and changes||||0.00|
|accounted in the current|||||
|profits and losses|||||
|Total liabilities|||||
|continuously measured by||||0.00|
|fair value|||||
|II. Non-persistent measure|--|--|--|--|
|(I) assets held for sale||||0.00|
|Total assets|||||
|non-continuously||||0.00|
|measured by fair value|||||
|Total liabilities|||||
|non-continuously||||0.00|
|measured by fair value|||||

2. Recognized basis for the market price sustaining and non-persistent measured by fair value on first-order
Nil
3. Valuation technique and qualitative and quantitative information on major parameters for the fair value measure sustaining and non-persistent on second-order
Nil
4. Valuation technique and qualitative and quantitative information on major parameters for the fair value measure sustaining and non-persistent on third-order
Nil
5. Adjustment information and sensitivity analysis of unobservable parameters for the fair value measure sustaining and non-persistent on third-order
Nil
6. Sustaining items measured by fair value, as for the conversion between at all levels, reasons for conversion and policy for conversion time point
Nil
7. Changes of valuation technique in the Period
Nil
8. Financial assets and liability not measured by fair value
Nil
9. Other
Nil
XII. 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||
|||Industrial||||
|Shenzhen Guosheng||||||
|||investment, domestic||||
|Energy Investment||||||
||Shenzhen|commerce, supply|RMB 220 million|11.52%|11.52%|
|Development Co.,||||||
|||and marketing||||
|Ltd.||||||
|||materials (excluding||||

||
|-|
|monopolized|
|commodities, and|
|commodity under|
|special government|
|control)|

Explanation on parent company of the enterprise
Nil
Ultimate controller of the Company is Ji Hanfei
Other explanation:
Nil
2. Subsidiary of the Enterprise
Found more in 1 of Note IX
3. Cooperative enterprise and joint venture
Found more in 3 of Note IX.
Other cooperative enterprise and joint venture that have related transaction with the Company in the Period or occurred in pervious period
|||
|-|-|
|Name|Relationship|

Other explanation
Nil
4. Other related party
|||
|-|-|
|Other related party|Relationship with the Enterprise|

Other explanation
Nil
5. Related transaction
(1) Goods purchasing, labor service providing and receiving
Goods purchasing/labor service receiving
In RMB
|||||||
|-|-|-|-|-|-|
||||Approved transaction|Whether more than||
|Related party|Content|Current amount|||Last amount|
||||amount|the transaction amount||

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

Explanation on goods purchasing, labor service providing and receiving
Nil
(2) Related trusteeship/contract and delegated administration/outsourcing
Trusteeship/contract
In RMB
||||||||
|-|-|-|-|-|-|-|
|||||||Income from|
|Client/|Entrusting party/||||Yield pricing||
|||Assets type|Starting date|Maturity date||trusteeship/contra|
|contract-out party|contractor||||basis||
|||||||ct|

 Explanation on related trusteeship/contract
Delegated administration/outsourcing
In RMB
||||||||
|-|-|-|-|-|-|-|
||||||Pricing basis of|trustee|
|Client/contract-outparty|||||||
||Entrusting party/||||trustee|fee/outsourcing|
|||Assets type|Starting date|Maturity date|||
||contractor||||fee/outsourcing|fee recognized in|
||||||fee|the Period|

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

As a lessee for the Company:
In RMB
|||||
|-|-|-|-|
|||Lease income in recognized in|Lease income in recognized last|
|Lessor|Assets type|||
|||the Period|the Period|

Explanation on related lease
Nil
(4) Related guarantee
As a guarantor for the Company
In RMB
||||||
|-|-|-|-|-|
|||||Guarantee completed|
|Secured party|Amount guarantee|Starting date|Maturity date||
|||||(Y/N)|

As a secured party for the Company
In RMB
||||||
|-|-|-|-|-|
|||||Guarantee completed|
|Guarantor|Amount guarantee|Starting date|Maturity date||
|||||(Y/N)|

Explanation on related guarantee
Nil
(5) Borrowed funds of related party
In RMB
||||||
|-|-|-|-|-|
|Related party|Borrowed funds|Starting date|Maturity date|Note|
|Borrowing|||||
|Lending|||||

(6) Assets transfer and debt restructuring of related party
In RMB
|||||
|-|-|-|-|
|Related party|Transaction content|Current amount|Last amount|

(7) Remuneration of key manager
In RMB
||||
|-|-|-|
|Item|Current amount|Last amount|
|Remuneration of key manager|1,554,900.00|1,592,000.00|

 (8) Other related transactions
Nil
6. Receivable/payable items of related parties
(1) Receivable item
In RMB
|||||||
|-|-|-|-|-|-|
|||Ending balance||Opening balance||
|Item|Related party|||||
|||Book balance|Bad debt provision|Book balance|Bad debt provision|

 (2) Payable item
In RMB
|||||
|-|-|-|-|
|Item|Related party|Ending book balance|Opening book balance|
||Shenzhen Guosheng Energy|||
|Other account payable|Investment Development Co.,|6,500,000.00|6,500,000.00|
||Ltd.|||

7. Commitments of related party
8. Other
Nil
XIII. Share-based payment
1. General 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. Revised and termination on share-based payment
Nil
5. Other
Nil
XIV. Commitment or contingency
1. Important commitments
Important commitments in balance sheet date
The Company has no important commitments that need to disclose ended as 31 December 2015.
2. Contingency
(1) Contingency on balance sheet date
Nil
(2) For the important contingency not necessary to disclosed by the Company, explained reasons
The Company has no important contingency that need to disclosed
3. Other
(1) Operating lease
Ended as balance sheet date, long-term lease contract signed outside by the Company as:
1. The Company entered into long-term house leasing contract with Shenzhen Material Group Co., Ltd. on 1 May 2014, leased the property of Room 1201, Wantong Building, No.3002 Sungang East Road, Luohu District, Shenzhen, as the office place of the Company. Leasing contract terms from 1 May 2014 to 30 April 2017 with floor areas of 681.34
m2;
In line with the contract, the Company shall pay property rental annual since 1 May 2014 with 474,200 Yuan till the rental terms expired or contract terminated by two parties.
2. The Company entered into long-term house leasing contract with Shenzhen Anjinheng Industrial Co., Ltd. on 18 September 2014, leased the property of C section, 2/F, Tower D, Shengli Industrial Park, Southwest side, Qinghua Road, Longhua Office, Longhua New Disstrict, Shenzhen, as the office place of the Company. Leasing contract terms from 21 September 2014 to 19 September 2018with floor areas of 681.34
m2;
In line with the contract, the Company shall pay property rental annual since 21 September 2014 with 510,600 Yuan till the rental terms expired or contract terminated by two parties.
XV. Events after balance sheet date
1. Important non-adjustment items
In RMB
|||||
|-|-|-|-|
|||Impact on financial status and|Reasons on un-able to estimated|
|Item|Content|||
|||operation results|the impact number|

 2. Profit distribution
In RMB
3. Sales return
4. Other events after balance sheet date
Up to
31st
December 2015, the Company has no major contingency need to be disclosed.
XVI. Other important events
1. Previous accounting errors collection
(1) Retrospective restatement
In RMB
|||||
|-|-|-|-|
|||Impact items of statement||
|Content|Treatment procedures||Cumulative impacted number|
|||during a comparison||

(2) Prospective application
||||
|-|-|-|
|||Reasons for prospective application|
|Accounting error correction|Approval procedures||
|||adopted|

2. Debt restructuring
On
11th,
May 2012, the largest shareholder and biggest creditor of the Company, Shenzhen Guosheng Energy Investment and Development Co., Ltd. applied to Shenzhen Municipal Intermediate People's Court for reforming the Company as the Companycouldn’t pay off the matured debts and was seriously insolvent. On
12th,
Oct., 2012, Shenzhen Municipal Intermediate People's Court ruled to accept the application proposed by Guosheng Energy according to (2012) Shenzhen Intermediate Court Po Zi No. 30 civil ruling. In late October, 2012, Shenzhen Municipal Intermediate People's Court ruled to reform the Company since
25th,
Oct., 2012 according to (2012) Shenzhen Intermediate Court Po Zi No. 30-1 civil ruling, appointed King& Wood (Shenzhen) Mallesons and Shenzhen ZhengYuan Liquidation Affairs Co., Ltd. as the custodians of the Company. Subsequently, Shenzhen Municipal Intermediate People's Court made (2012) Shenzhen Intermediate Court Po Zi No. 30-1 written decision, and approved the Company to manage property and business affairs by itself under the supervision of custodians according to the law. On 5 November 2013, the Shenzhen IntermediatePeople’s Court (2012) Shen Zhong Fa Po Zi No. 30-6 Civil Ruling Paper judged that approved the reorganization plan of the Company. On 27 December 2013, the Civil Ruling Paper Shenzhen IntermediatePeople’s Court (2012) Shen Zhong Fa Po Zi No. 30-10 ruled that the reorganization plan of CBC was completed and bankruptcy procedures of CBC closed down.
The Company has solved the debt problem by reforming, realized the net assets with positive value, the main
business of bicycle is able to be maintained and realizes the stable development. The Company has set up the
conditions for introducing the recombination party in the reforming plan, and expects to restore the abilities of
sustainable operation and sustained profitability by reorganization. The conditions of introducing the recombination party includes: the assessed value of net assets should be no less than 2 billion Yuan, the net assets in the same year for implementing the major reorganization should be no less than 200 million Yuan. The Companydoesn’t have the recombination party at the moment.
3. Assets replacement
(1) Non-monetary assets change
(2) Other assets replacement
4. Pension plan
5. Discontinued operations
In RMB
||||||||
|-|-|-|-|-|-|-|
|||||||Discontinued|
|||||||operations profit|
|||||Income tax|||
|Item|Revenue|Expenses|Total profit||Net profit|attributable to|
|||||expenses|||
|||||||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 segments|Total|

(3) The company has no reportable segments, or unable to disclose total assts and total liability for reportable segments, explain reasons
(4) Other explanation
7. Major transaction and events makes influence oninvestor’s decision
8. Other
XVII. Principle notes of financial statements of parent company
1. Accounts receivable
(1) Category
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Ending balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Types|||||Book||||||
|||||Accrual|||||Accrual|Book value|
||Amount|Ratio|Amount||value|Amount|Ratio|Amount|||
|||||ratio|||||ratio||
|Receivables with bad|||||||||||
|debt provision||||||694,416|||||
||||||||100.00%|||694,416.00|
|accrual by credit||||||.00|||||
|portfolio|||||||||||
|||||||694,416||||694,416.00|
|Total|||||||100.00%||||
|||||||.00|||||

Receivable with single significant amount and withdrawal bad debt provision separately at end of period:
□ Applicable√ Not applicable
In combination, accounts receivable whose bad debts provision was accrued by age analysis:
√ Applicable□ Not applicable
In RMB
|||||
|-|-|-|-|
||Ending balanceAccount receivable Bad debt provision Accrual ratio|||
|Age||||
|||Bad debt provision|Accrual ratio|
|within one year||||
|Total|694,416.0|0||

Explanations on combination determine:
Nil
In combination, withdrawal proportion of bad debt provision based on balance proportion for account receivable:
□ Applicable√ Not applicable
In combination, withdrawal proportion of bad debt provision based on other methods for account receivable:
Nil
(2) Bad debt provision accrual, collected or reversed
Accrual bad debt provision 0.00 Yuan; collected or reversed 0.00 Yuan.
Major bad debt provision reversal or collected in the Period
In RMB
||||
|-|-|-|
|Company|Amount reversal or collected|Collection way|
|Total|0.00|--|

(3) Receivables actually written-off during the reporting period
In RMB
|||
|-|-|
|Item|Amount written off|

Written-off for the major receivable
In RMB
|||||||
|-|-|-|-|-|-|
||Nature of|||Procedures|Arising from related|
|Company||Amount written off|Reason for write-off|||
||receivables|||implemented|transactions|
|Total|--|0.00|--|--|--|

Explanation for write-off of receivables
Nil
(4) Top 5 receivables at ending balance by arrears party
Nil
(5) Receivable derecognition due to transfer of financial assets
Nil
(6) Assets and liability resulted by receivable transfer and continuous involvement
Nil
Other explanation:
Nil
2. Other accounts receivable
(1) Classification
In RMB
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Opening balance|||
|Type|||||||
||Book balance|Bad debt provision|Book|Book balance|Bad debt provision|Book value|

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||Accrual|value||||Accrual||
||Amount|Ratio|Amount|||Amount|Ratio|Amount|||
|||||ratio|||||ratio||
|Other receivables|||||||||||
|with bad debt|12,580,095.29||||12,579,54|13,714,||||13,714,033.|
|||100.00%|548.29||||100.00%|587.29|||
|provision accrual by|||||7.00|620.41||||12|
|credit portfolio|||||||||||
||12,580,095.29||||12,579,547.00|13,714,||||13,714,033.12|
|Total||100.00%|548.29||||100.00%|587.29|||
|||||||620.41|||||

 Other receivable with single significant amount and withdrawal bad debt provision separately at end of period
□ Applicable√ Not applicable
In combination, other accounts receivable whose bad debts provision was accrued by age analysis
√ Applicable□ Not applicable
In RMB
|||||
|-|-|-|-|
||Ending balance|||
|Age||||
||Other receivable|bad debts provision|Accrual ratio|
|Within one year||||
|Within one year|12,580,095.29|548.29||
|Subtotal of within one year|12,580,095.29|548.29||
|Total|12,580,095.29|548.29||

Explanations on combination determine:
Nil
In combination, withdrawal proportion of bad debt provision based on balance proportion for other account receivable
□ Applicable√ Not applicable
In combination, withdrawal proportion of bad debt provision based on other methods for other account receivable
□ Applicable√ Not applicable
(2) Bad debt provision accrual, collected or reversed
Accrual bad debt provision 0.00 Yuan; collected or reversed 39 Yuan.
Major bad debt provision reversal or collected in the Period
In RMB
||||
|-|-|-|
|Company|Amount reversal or collected|Collection way|
|Total|0.00|--|

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

Written-off for the major other receivable:
In RMB
|||||||
|-|-|-|-|-|-|
||Nature of other|||Procedures|Arising from related|
|Company||Amount written off|Reason for write-off|||
||receivables|||implemented|transactions|
|Total|--|0.00|--|--|--|

Explanation for write-off of other receivables:
Nil
(4) Other receivables by nature
In RMB
||||
|-|-|-|
|Nature|Ending book balance|Opening book balance|
|Deposit|182,762.00|182,762.00|
|Current money|12,397,333.29|13,518,858.41|
|Employee loan||13,000.00|
|Total|12,580,095.29|13,714,620.41|

 (5) Top 5 other receivables at ending balance by arrears party
In RMB
|||||||
|-|-|-|-|-|-|
|||||Ratio in total ending||
||||||Ending balance of|
|Company|Nature|Ending balance|Book age|balance of other||
||||||bad bet provision|
|||||receivables||
|Shenzhen Emmelle||||||
||Current money|12,397,333.29|within one year|98.55%||
|Industrial Co., Ltd.||||||
|Shenzhen Anjingheng||||||
||Deposit|90,100.00|within two years|0.71%|548.29|
|Industrial Co. Ltd.||||||
|Shenzhen Materials||||||
||Deposit|79,035.00|within two years|0.63%||
|Group Co., Ltd.||||||
|Shenzhen Baifanghe||||||
||Deposit|13,627.00|within two years|0.11%||
|Property Co., Ltd.||||||
|Total|--|12,580,095.29|--|100.00%|548.29|

 (6) Account receivable with government subsidy involved
In RMB
||||||
|-|-|-|-|-|
|||||Time, amount and basis|
|Company|Item|Ending balance|Ending book age||
|||||for money collected|

||||||
|-|-|-|-|-|
|Total|--|0.00|--|--|

(7) Other receivable derecognition due to transfer of financial assets
Nil
(8) Assets and liability resulted by other receivable transfer and continuous involvement
Nil
Other explanation:
Nil
3. Long-term equity investment
In RMB
||||||||
|-|-|-|-|-|-|-|
||Ending balance|||Opening balance|||
|Item|||||||
||Book balance|Impairment|Book value|Book balance|Impairment|Book value|
|Investment forsubsidiary|||||||
||1,400,000.00|1,389,620.27|10,379.73|1,400,000.00|1,389,620.27|10,379.73|
|Total|1,400,000.00|1,389,620.27|10,379.73|1,400,000.00|1,389,620.27|10,379.73|

 (1) Investment for subsidiary
In RMB
||||||||
|-|-|-|-|-|-|-|
|||||||Ending balance of|
||||||Impairment||
|The invested entity|Opening balance|Increased|Decreased|Ending balance||impairment|
||||||accrual||
|||||||provision|
|Shenzhen|||||||
|Emmelle Industrial|1,400,000.00|||1,400,000.00||1,389,620.27|
|Co., Ltd.|||||||
|Total|1,400,000.00|||1,400,000.00||1,389,620.27|

 (2) Investment for associates and joint venture
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||+,-|||||||||Ending|
|||||Investme|Other||Cash||||balance|
|||Additiona||||||||||
|Company|Opening|l|Capital|nt gains|comprehe|Other|dividend|Impairme||Ending|of|
||balance|||recognize|nsive|equity|or profit||Other|balance|impairme|
|||investmen|reduction|||||nt accrual||||
|||||d under|income|change|announce||||nt|
|||t||||||||||
|||||equity|adjustmen||d to||||provision|

|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||||||t||issued|||||
|I. Joint venture||||||||||||
|Subtotal|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|
|II. Associated enterprise||||||||||||
|Subtotal|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|
|Total||0.00|0.00|0.00|0.00|0.00|0.00|0.00|0.00|||

(3) Other explanation
Nil
4. Operating income and cost
In RMB
||||||
|-|-|-|-|-|
||Current amount||Last amount||
|Item|||||
||Income|Cost|Income|Cost|
|Main business|32,692.31|32,051.28|||
|Other business|3,150,841.97|1,151,379.27|7,287,880.92|4,505,933.46|
|Total|3,183,534.28|1,183,430.55|7,287,880.92|4,505,933.46|

 Other explanation:
5. Investment gains
In RMB
||||
|-|-|-|
|Item|Current amount|Last amount|

6. Other
Nil
XVIII. Supplementary Information
1. Current non-recurring gains/losses
√ Applicable□ Not applicable
In RMB
||||
|-|-|-|
|Item|Amount|Note|
|Other non-operating income and expenditure|||
||369,201.08||
|except for the aforementioned items|||
|Less: Impact on income tax|92,300.27||

||||
|-|-|-|
|Impact on minority shareholders’ equity|-1,005.75||
|Total|277,906.56|--|

Concerning the extraordinary profit (gain)/loss defined byQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss inQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable√ Not applicable
2. REO and earnings per share
|||||
|-|-|-|-|
|||Earnings per share||
|Profits during report period|Weighted average ROE||Diluted EPS|
|||Basic EPS (RMB/Share)||
||||(RMB/Share)|
|Net profits belong to common stock||-0.0003|-0.0003|
||-1.17%|||
|stockholders of the Company||||
|Net profits belong to common stock||||
|stockholders of the Company after||||
||-3.52%|-0.0008|-0.0008|
|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) Explain accounting difference over the accounting rules in and out of China; as for the difference adjustment for data audited by foreign auditing organ, noted the name of such foreign organ
Nil
4. Other
Nil
Section XII. Documents available for reference
1. Accounting statement carrying the signatures and seals of the legal representative, person in charge of accounting and person in charge of accounting organ;
2. Original audit report with seal of the accounting firm and signature and seal of CPAs;
3. Originals documents of the Company and manuscripts of public notices that disclosed in the newspaper designated by CSRC in the report period;
4. English version of the Annual Report 2015