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ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄShenzhen China Bicycle Company (Holdings) Limited

ANNUAL REPORT 2014

April 2015

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Section I. Important Notice, Contents and ParaphraseBoard of Directors, Supervisory Committee, all directors, supervisors and seniorexecutives of Shenzhen China Bicycle Company (Holdings) Limited (hereinafterreferred 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 allresponsibilities, individual and/or joint, for the reality, accuracy and completion ofthe whole contents.Except the following director, other directors are attended the Board Meeting forQuarterly Report deliberation in person.

Name of director not Title of director not

Reasons for absent Trustee

attended in person attended in person

Yang Fenbo Director Due to work Li Hai

Kong Na Director Due to work Cao FangThe Company has no plan of cash bonus, dividends and capitalizing of reserveseither.Luo Guiyou, Principal of the Company, Li Hai, person in charge of accounting worksand Sun Longlong, person in charge of accounting organ (accounting principal)hereby confirm that the Financial Report of 2014 Annual Report is authentic,accurate and complete.Concerning the unqualified auditor¡¯s report with explanatory paragraph issued byRuihua Certified Public Accountant (LLP) for the financial report 2014 of theCompany, board of the directors and supervisory committee are well-explained forrelevant events, investors are advice to pay attention on reading.

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

ContentsAnnual Report 2014........................................................................................................................... 1Section I Important Notice, Contents and Paraphrase .................................................................2Section II Company Profile............................................................................................................... 6Section III Accounting data and summary of finnaical indexes .................................................. 9Section IV Report of the Board of Directors ................................................................................11Section V Important Events .......................................................................................................... 27Section VI Changes in shares and particular about shareholders...................................................Section VII Preferred Stock¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­..Section VIII Particulars about Directors, Supervisors,Senior Executives and Employees.......35Section IX Corporate Governance......................................................................................................................................................................................................................................................................Section X Internal Control.............................................................................................................. 49Section XI Financial Report............................................................................................................ 51Section XII Documents available for reference............................................................................. 51

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Paraphrase

Items Refers to Contents

Company, The Company, the Group Refers to SHENZHEN CHINA BICYCLE COMPANY(HOLDINGS)LIMITED

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Section II Company profileI. Company information

Short form of the stock Zhonghua ¨C A, Zhonghua -B Stock code 000017, 200017

Stock exchange for listing Shenzhen Stock ExchangeName of the Company (in

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾Chinese)Short form of the Company

ÉîÖлª(in Chinese)Foreign name of the

China Bicycle Company (Holdings) LimitedCompany(if applicable)Short form of foreign name of

CBCthe Company(if applicable)

Legal representative Luo Guiyou

Registrations add. No. 3008, Buxin Rd., Shenzhen, Guangdong Province

Code for registrations add 518020

Offices add. Room 1201, Wantong Building, No.3002, Sungang East Road, Shenzhen

Codes for office add. 518030Company¡¯s Internet Web Site www.cbc.com.cn

E-mail dmc@szcbc.comII. 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.comIII. Information disclosure and preparation place

Newspaper appointed for information disclosure Securities Times; Hong Kong Commercial DailyWebsite for annual report publish appointed by CSRC Juchao Website (www.cninfo.com.cn)

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Preparation place for annual report Room 1201, Wantong Building, No.3002, Sungang East Road, ShenzhenIV. Registration changes of the Company

Registration NO. for

No. of taxation

Date for registration Place for registration enterprise legal Organization code

registration

license

State Revenue Shen

Zi No.:

Shenzhen, QGYSZF Zi No. 440301618830452;

Initial registration 1984-08-24 61883045-2

Guangdong Province 101165 Shen Local Tax

Deng Zi No.:

440303618830452

State Revenue Shen

Zi No.:

Registration at end Shenzhen, 440301618830452;

2014-12-31 440301501122085 61883045-2

of report period Guangdong Province Shen Local Tax

Deng Zi No.:

440303618830452Changes of main business since listing (if

No changesapplicable)

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 majorityPrevious changes for controlling

of the Company comes to Guosheng Energy. Guosheng Energy is the wholly-ownedshareholders (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.¡ªShenzhen 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 informationCPA engaged by the Company

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

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 Chen Songbo, Ren WeixingSponsor engaged by the Company for performing continuous supervision duties in reporting period

¡õ Applicable ¡Ì Not applicableFinancial consultant engaged by the Company for performing continuous supervision duties in reporting period

¡õ Applicable ¡Ì Not applicable

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Section III. Accounting data and summary of financial indexesI. Main accounting data and financial indexesWhether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accountingerror correction or not

¡õYes ¡Ì¡õ No

2014 2013 Changes over last year 2012

Operating income (RMB) 212,070,585.77 271,111,736.07 -21.78% 292,827,026.55Net profit attributable to

shareholders of the listed 4,885,678.56 1,575,223,894.89 -99.69% -52,443,234.29company(RMB)Net profit attributable toshareholders of the listed company

-6,073,439.70 4,360,002.01 -239.30% -55,517,844.94after deducting non-recurring gainsand losses(RMB)Net cash flow arising from

3,921,048.18 -28,210,167.86 -113.90% -7,026,573.55operating activities(RMB)Basic earnings per share

0.0089 2.8570 -99.69% -0.0951(RMB/Share)Diluted earnings per share

0.0089 2.8570 -99.69% -0.0951(RMB/Share)

Weighted average ROE 51.72% 0.00% 51.72% 0.00%

Changes over end of

End of 2014 End of 2013 End of 2012

last year

Total assets (RMB) 51,489,647.55 151,511,429.85 -66.02% 162,649,076.30Net assets attributable to

shareholder of listed company 11,903,347.67 7,003,335.40 69.97% -1,709,451,256.41(RMB)II. Difference of the accounting data under accounting rules in and out of China1. Difference of the net profit and net assets disclosed in financial report, under both IAS (InternationalAccounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)

¡õ Applicable ¡Ì Not applicableThe Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (InternationalAccounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ2. Difference of the net profit and net assets disclosed in financial report, under both foreign accountingrules and Chinese GAAP (Generally Accepted Accounting Principles)

¡õ Applicable ¡Ì Not applicableThe Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules orChinese GAAP (Generally Accepted Accounting Principles) in the period.III. Items and amounts of extraordinary profit (gains)/loss

¡Ì Applicable ¡õ Not applicable

In RMB

Item Amount in 2014 Amount in 2013 Amount in 2012 NoteGains/losses from the disposal of

non-current asset (including the write-off 33,851.46 1,611,690,513.84that accrued for impairment of assets)

Gains/losses from debt reorganization 49,342,739.18Reorganization expenses, such as

expenditure for allocation of employees and -70,732,704.23integration feeOther non-operating income and expenditure

14,622,462.77 27,177.40 3,074,610.65except for the aforementioned itemsOther loss/profit qualified definition of

72,934,048.27extraordinary profit and loss

Less: Impact on income tax 3,664,078.56 92,393,298.62Impact on minority shareholders¡¯ equity

33,117.41 4,582.96(post-tax)

Total 10,959,118.26 1,570,863,892.88 3,074,610.65 --Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for CompaniesOffering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according tothe lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering TheirSecurities to the Public --- Extraordinary Profit/loss, explain reasons

¡õ Applicable ¡Ì Not applicableIn reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists ofextraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities tothe Public --- Extraordinary Profit/loss

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Section IV. Report of the Board of DirectorsI. IntroductionShenzhen Intermediate People¡¯s Court rendered a ruling of the completion of the implementation of therestructuring plan of Shenzhen China Bicycle Company and the conclusion of its bankruptcy procedure on 27December 2013, followed by the resumption of trading of its A share and B share on 31 December of the sameyear. Being approved by Shenzhen Stock Exchange, trading stock of the Company cancel the delisting riskwarning since 14 May 2014In 2014, domestic macro-economic situation remains severe, as in the field of traditional manufacturing, thebicycle industry continues to face the difficulties in soaring material costs, manufacture costs and capital costs,total available market continue to fall. In conference of the low market entry barriers and multiple vendors, marketis extremely competitive. However, with the development of social economic in China and changes of the conceptof life, the consciousness of green travel and practice relaxation continues been around, bicycle industry stands inthe opportunity of structural development. In 2014, on basis of maintain key market areas of northern and easternChina, the Company emphasize market development in the South and northwest through gridding method inaspect of business development; while in aspect of operation method, gradually establish the mode ofsupermarket-operation and E-commerce; in aspect of product research, continues to strengthen the development ofmid-to high-end bicycles, E-bike and auxiliaries; meanwhile, improve supporting and cooperation standardstowards front office for the back office via reinforcing back office management and office automation. Throughcarrying out various operations, under the circumstances of slightly down in bicycle business over that of last year,in 2014, the gross profit from bicycle operation stands the same as last year¡¯s, business operation of the bicyclemaintains a smooth and healthy running.In 2014, the Company achieved operating income of RMB 212,070,600, total profit of RMB 7,928,900, and net profit attributable toshareholders of the listed corporation of RMB 4,885,600.II. Main business analysis1. Introduction

2014 (in ten thousand 2013 (in ten Y-o-y changes Reasons for chanegs

Item Yuan) thousand Yuan)

Operation income 21207.06 27111.17 -21.78% Sales declined

Operation cost 19896.47 24322.56 -18.20% Sales declined

Business tax and surcharges 50.89 174.59 -70.85% Sales declined

Sales expenses 534.05 672.34 -20.57% Sales declined

Administration expenses 1410.89 8581.51 -83.56% Large expenses from reorganization last

year

Investment gains 0 7293.40 -100.00% Disposal of subsidiary from

reorganization last year

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Non-operation income 1468.54 194555.55 -99.25% Income from reorganization last year

Non-operation expenditure 2.90 28449.51 -99.99% Accrual liability withdrawal last year

Income tax expense 214.59 9300.01 -97.69% Income from reorganization assets

disposal last year

Net profit 578.30 157585.88 -99.63% Income from reorganization last year

Net profit attributable to parent 488.57 157522.39 -99.69% Income from reorganization last yearcompany

Net cash flow from operation 392.10 -2821.01 -113.90%Reorganization fee paid last yearactivities

Net cash flow from investment -59.14 165371.92 -100.04% Cash in-flow from reorganization ofactivities

assets disposal last year

Net cash flow from financing 0 -165107.02 -100.00% Cash out-flow from settlement ofactivities

reorganization debts last yearMajor changes on profit composition or profit resources in reporting periodThe net profit attributable to shareholders of listed company was RMB 4,885,600 in 2014, and the net profit attributable toshareholders of listed company was RMB 1,575,223,800 in 2013 at a decrease of 99/69% y-o-y. The main reason of great decrease isthat: the Company formed large non-operating income by reorganization and asset disposal in 2013.Reasons for difference of actual operation performance has 20% lower or higher than profit forecast of the Year disclosed

¡õ Applicable ¡Ì Not applicableChanges of main operation mode

¡õ Applicable ¡Ì Not applicable2. RevenueExplanation

Industries Item 2014 2013 Increase/decrease y-o-y

(%)

Sales volume 276,900 cars 339,600 cars -18.46

Manufacturing industry Production volume 278,900 cars 334,600 cars -16.65

Stock volume 8,000 cars 6,000 cars 33.33Whether income from physical sales larger than income from labors or not

¡õYes ¡Ì¡õ NoMaterial orders in hands

¡õ Applicable ¡Ì Not applicableMaterial changes or adjustment for products or services of the Company in reporting period

¡õ Applicable ¡Ì Not applicableMajor sales of the Company

Total top five clients in sales (RMB) 154,053,387.37

Proportion in total annual sales volume for top five clients 72.64%

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄInformation of top five clients of the Company

¡Ì Applicable ¡õ Not applicable

Serial Name Sales (RMB) Proportion in total annual sales

1 Client 1 71,677,856.36 33.80%

2 Client 2 23,294,979.32 10.98%

3 Client 3 23,152,376.34 10.92%

4 Client 4 21,411,314.75 10.10%

5 Client 5 14,516,860.60 6.84%

Total -- 154,053,387.37 72.64%Other situation of main clients

¡õ Applicable ¡Ì Not applicable3. CostIndustry classification

In RMB

2014 2013

Industry

Item Ratio in operation Ratio in operation Y-o-y changes

classification Amount Amount

cost costSales of bicycles

and accessories 198,964,665.65 100.00% 231,878,075.06 98.84% -14.19%and fittingsLease

2,712,219.43 1.16% -100.00%ManagementProduct classification

In RMB

2014 2013

Product

Item Ratio in operation Ratio in operation Y-o-y changes

classification Amount Amount

cost costSales of bicycles

and accessories 198,964,665.65 100.00% 231,878,075.06 98.84% -14.19%and fittingsLease

2,712,219.43 1.16% -100.00%ManagementNotesNilMain suppliers of the Company

Total purchase amount from top five suppliers (RMB) 175,407,156.49Proportion in total annual purchase amount for top five

88.16%suppliersInformation of top five suppliers of the Company

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

¡Ì Applicable ¡õ Not applicable

Serial Name Sum of purchase (RMB) Proportion in total annual sum of purchase

1 Supplier 1 70,238,101.49 35.30%

2 Supplier 2 64,961,248.03 32.65%

3 Supplier 3 24,137,788.03 12.13%

4 Supplier 4 8,332,323.21 4.19%

5 Supplier 5 7,737,695.73 3.89%

Total -- 175,407,156.49 88.16%Other notes of main suppliers of the Company

¡õ Applicable ¡Ì Not applicable4. ExpensesIn the Period, administration expenses decreased 83.56% than the same period of last year, mainly because ofbankruptcy reorganization expenses in the same period of last year,In the Period, financial expenses decreased 86.65% than the same period of last year, mainly because ofbankruptcy reorganization expenses in the same period of last year,In the Period, income tax decreased 97.69% than the same period of last year, mainly because income fromdisposal of assets caused the large income tax.5. R&D expensesNil6. Cash flow

In RMB

Item 2014 2013 Y-o-y changesSubtotal of cash in-flow from

223,967,528.32 184,060,170.56 21.68%operation activitySubtotal of cash out-flow from

220,046,480.14 212,270,338.42 3.66%operation activityNet cash flow from operation

3,921,048.18 -28,210,167.86 -113.90%activitySubtotal of cash in-flow from

100,500.00 1,660,347,221.12 -99.99%investment activitySubtotal of cash out-flow from

691,852.99 6,628,008.22 -89.56%investment activityNet cash flow from investment

-591,352.99 1,653,719,212.90 -100.04%activity

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄSubtotal of cash in-flow from

5,390,399.73 -100.00%financing activitySubtotal of cash out-flow from

1,656,460,634.04 -100.00%financing activityNet cash flow from financing

-1,651,070,234.31 -100.00%activityNet increased amount of cash

3,329,695.19 -25,561,189.27 -113.03%and cash equivalentReasons for y-o-y relevant data with over 30% changes

¡Ì Applicable ¡õ Not applicableNet cash flow from operation activity declined 113.90% y-o-y mainly because economic compensation are paid at same period of lastyera;Cash in-flow from investment activity declined 99.99% y-o-y mainly because at same period of last yera, obtained major cash flowfor core assets dispose due to bankruptcy reorganization;Cash out-flow from investment activity declined 89.56% y-o-y mainly because at same period of last year, replace intangibel assetsbrand with cash;Net cash flow from investment activity declined 100.04% y-o-y mainly because at same period of last yera, obtained major cash flowfor core assets dispose due to bankruptcy reorganization;Cash in-flow from financing activity has no amount occurred, at same period of last yera, obtained donation from majorityshareholders for replace intangibel assets brand;Cash out-flow from financing activity has no amount occurred, at same period of last yera, the satisfaction money paid to creditordue to bankruptcy reorganization;Net cash flow from financing activity has no amount occurred, at same period of last yera, the satisfaction money paid to creditor dueto bankruptcy reorganization;Net increase of cash and cash equivalent declined 113.03% y-o-y mainly due to the bankruptcy reorganization at same period of lastyearReasons of major difference between the cash flow of operation activity in report period and net profit of the Company

¡õ Applicable ¡Ì Not applicableIII. Composition of main business

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-yAccording to industries

Bicycles industry 206,787,455.39 194,455,356.12 5.96% -16.37% -17.11% 0.84%According to products

Bicycles 206,787,455.39 194,455,356.12 5.96% -16.37% -17.11% 0.84%According to region

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Domestic 206,787,455.39 194,455,356.12 5.96% -16.37% -17.11% 0.84%Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based onlatest one year¡¯s scope of period-end

¡õ Applicable ¡Ì Not applicableIV. Assets and liability analysis1. Major changes of assets

In RMB

End of 2014 End of 2013

Ratio

Ratio in total Ratio in total Notes of major changes

Amount Amount changes

assets assets

Mainly because reorganization

Monetary fund 30,163,866.78 58.58% 26,834,171.59 17.71% 40.87%

reduced the total assets greatlyAccount

6,790,982.50 13.19% 7,060,251.28 4.66% 8.53%receivable

Inventory 6,171,307.53 11.99% 4,545,116.43 3.00% 8.99%

Fix assets 773,961.84 1.50% 227,824.37 0.15% 1.35%

Mainly because reorganization

Other receivables 511,254.81 0.99% 107,395,429.69 70.88% -69.89%

disposed other receivables2. Major changes of liability

In RMB

End of 2014 End of 2013

Ratio

Ratio in total Ratio in total Notes of major changes

Amount Amount changes

assets assets

The major income tax arising from

Tax payable 2,232,187.80 4.34% 93,778,253.57 61.90% -57.56%

reorganization income paid last year3. Assets and liabilities measured by fair value

¡õ Applicable ¡Ì Not applicable4. Main overseas assets

¡õ Applicable ¡Ì Not applicableV. Analysis of core competenceDespite the fierce market competition in the bicycle industry as a conventional industry, the increased awarenessof green commuting, leisure and exercises as a result of the development of China¡¯s social economy and the

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄchange of people¡¯s living concept creates structural development opportunity for the bicycle industry. TheCompany will continue to do better in various aspects of operation such as market development, productdevelopment and quality management so as to maintain and improve the Company¡¯s ability to continue as a goingconcern before the restructuring. On the other side, the Company has set out the condition of introduction ofinvestors in the restructuring plan with expectation to restore its ability to continue as a going concern and itscontinuous profitability through the restructuring of assets.VI. Investment analysis1. Equity investment outside(1) Investment outside

¡õ Applicable ¡Ì Not applicableThe company had no investment outside in the reporting period.(2) Holding the equity of financial enterprise

¡õ Applicable ¡Ì Not applicableThe company had not held the equity of financial enterprise in the reporting period.(3) Securities investment

¡õ Applicable ¡Ì Not applicableThe company had no securities investment in the reporting period.(4)Explanation on equity of other listed company held

¡õ Applicable ¡Ì Not applicableThe Company had no equity of other listed company held in Period.2. Trust financing, derivative investment and entrusted loans(1) Trust financing

¡õ Applicable ¡Ì Not applicableThe company had no trust financing in the reporting period.(2) Derivative investment

¡õ Applicable ¡Ì Not applicableThe company had no derivative investment in the reporting period.(3) Entrusted loans

¡õ Applicable ¡Ì Not applicableThe company had no entrusted loans in the reporting period.

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ3. Application of raised proceeds

¡õ Applicable ¡Ì Not applicableThe company had no application of raised proceeds in the reporting period.4. Main subsidiaries and stock-jointly companies

¡Ì Applicable ¡õ Not applicableParticular about main subsidiaries and stock-jointly companies

In RMB

Main

Company Register Operating Operating

Type Industries products or Total assets Net Assets Net profit

name capital revenue profit

service

Shenzhen Sales of

Emmelle Wholesale bicycles 44,648,769. 5,309,194.6 208,519,75 3,869,670.1 2,991,068.7

Subsidiary 2000000

Industry and retail and 94 7 8.34 5 4

Co., Ltd. accessoriesNotes of main subsidiaries and stock-jointly companiesThe Company holds 70 percent equity of the Shenzhen Emmelle Industry Co., Ltd., the balance of minority equity at year-endamounting to 1,592,758.40 YuanParticular about subsidiaries obtained or disposed in report period

¡õ Applicable ¡Ì Not applicable5. Major projects invested by non-raised fund

¡õ Applicable ¡Ì Not applicableThe company had no major projects invested by non-raised fund in the reporting period.VII. Prediction of business performance from January ¨CMarch 2015Estimation on accumulative net profit from the beginning of the year to the end of next report period to be lossprobably or the warning of its material change compared with the corresponding period of the last year andexplanation on reason

¡õ Applicable ¡Ì Not applicableVIII. Special purpose vehicle controlled by the Company

¡õ Applicable ¡Ì Not applicableIX. Prospects on future development1. 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 rapiddevelopment in the past few years, the electric bicycle industry has witnessed obvious stagnation since 2007. Theshort supply of batteries as the main component of electrical machine caused by the enhanced management of rare

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄearth industry and battery industry in 2011 has constrained, to some extent, the manufacturing of electric bicycleindustry. The new standard of electric bicycle industry and the uncertainty of its launch time have also caused anegative impact on the selling of electric bicycles. Meanwhile, the electric bicycle industry as a conventionalmanufacturing field is expected to remain in a hard situation with rising material cost, manufacturing cost andfinancing cost. Due to the low entry threshold and numerous manufacturers, the market competition is extremelyfierce. However, with the development of China¡¯s social economy and the change of people¡¯s living concept, theincreased awareness of green commuting, leisure and exercises creates structural development opportunity forbicycle 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, theCompany completed the implementation of its restructuring plan and concluded its bankruptcy procedure, therebyimproving the legal environment its business faces with. The business plan of the Company for 2015 is:(1) To continuously promote restructuring while in active cooperation with shareholders and the Board.(2) To further promote the construction of internal control system and improve the operating efficiency andresults.(3) To reform and perfect the internal operating mechanism; distributed the annual targets to every marketingcompanies and every regional manager, evaluation based on manager responsibility system, following up monthby month and rolling evaluation(4) To follow closely the top-tier clients and focus on the exploration of second-tier clients to actively promote thedownward stretch of the construction of its distribution network terminals.(5) To continuously promote the regional market operation in associated market.(6) To further explore new market and support new client business.(7) To adopt multi-mode operation and explore new operating mode as the strategy of promoting medium-to-highend bicycles.(8) To put more efforts on the publicity and promotion of products, focus on brand publicize and promote;(9) To enhance the development of medium-to-high end bikes, folding 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 qualitymanagement and control, and carry out staff supplement and training as planned.(11) To enhance team building and integrate human resources to motivate the staff.3. Risk factors adverse to the Company¡¯s development:The tough international economic situation has a deep impact on the domestic consumption market wheresignificant amount of export-oriented manufacturing enterprises has shifted. The bicycle and electric bicyclemarket is facing a complex environment that price war is a major competition means. Since the domestic economyis at the structural adjustment stage, coupled with a difficult situation of continuously rising material cost,manufacturing cost and financing cost, the bicycle industry as a conventional manufacturing field recorded adecline in the market turnover. Due to the low entry threshold and numerous manufacturers, the competition in themarket is extremely fierce.To solve the above problems, the Company will on one hand strive to expand the main business while ensuring itssustainable and stable development, especially the manufacturing and selling of electric bicycles andmedium-to-high end bicycles, and will on the other hand actively promote the restructuring.X. Explanation on ¡°Modified Auditor¡¯s Report¡± from the Board and Supervisory Committee

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

¡Ì Applicable ¡õ Not applicable

thOn 11 , May 2012, the largest shareholder and biggest creditor of the Company, Shenzhen Guosheng EnergyInvestment and Development Co., Ltd. applied to Shenzhen Municipal Intermediate People's Court for reformingthe Company as the Company couldn¡¯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 Energyaccording to (2012) Shenzhen Intermediate Court Po Zi No. 30 civil ruling. In late October, 2012, ShenzhenMunicipal 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 andShenzhen ZhengYuan Liquidation Affairs Co., Ltd. as the custodians of the Company. At the same time, ShenzhenMunicipal 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 custodiansaccording to the law. On 5 November 2013, the Shenzhen Intermediate People¡¯s Court (2012) Shen Zhong Fa PoZi No. 30-6 Civil Ruling Paper judged that approved the reorganization plan of the Company. On 27 December2013, the Civil Ruling Paper Shenzhen Intermediate People¡¯s Court (2012) Shen Zhong Fa Po Zi No. 30-10 ruledthat 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 mainbusiness of bicycle is able to be maintained and realizes the stable development. The Company has set up theconditions for introducing the recombination party in the reforming plan, and expects to restore the abilities ofsustainable operation and sustained profitability by reorganization. The conditions of introducing therecombination party includes: the assessed value of net assets should be no less than 2 billion Yuan, the net assetsin the same year for implementing the major reorganization should be no less than 200 million Yuan. TheCompany doesn¡¯t have the recombination party at the moment. The Company will continue to carry out varyrelated works actively and promote the reorganization work with all efforts.XI. Explanation on changes in aspect of accounting policy, accounting estimation andcalculation method, compare with last year¡¯s financial report

¡Ì Applicable ¡õ Not applicableAt the beginning of 2014, Ministry of Finance issued the followed rules Cai Kuai [2014] No. 6; No.8; No.10;

No.11; No.14 and No.16, that is "Accounting Standards for Business Enterprises No. 39 - Fair ValueMeasurements ", " Accounting Standards for Business Enterprises No. 30 - Presentation of Financial Statements"(2014 Revised), "Accounting Standards for Business Enterprises No. 9 - Employee Remuneration(2014Revised)", " Accounting Standards for Business Enterprises No. 33 - Consolidated Financial Statements "(2014Revised), "Accounting Standards for Business Enterprises No. 40 - Joint Venture Arrangement", "AccountingStandards for Business Enterprises No. 2 - Long-term Equity Investments(2014 Revised)" and "AccountingStandards for Business Enterprises No. 41 - Disclosure of Interests in Other Entities", and requires all theenterprises implementing the accounting standards to execute since July 1, 2014. Meanwhile, the Ministry ofFinance issued the Cai Kuai[2014] No.23 "Accounting Standards for Business Enterprises No. 37 - Presentationof Financial Instruments(2014 Revised)"(¡°Presentation of Financial Instruments¡± for short), which requires theenterprises implementing the accounting standards to present the financial instruments in the financial reports of

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ2014 and the subsequent periods in accordance with the requirements of the accounting standards.The Company executed the above mentioned 7 new or revised accounting standards except the Presentation ofFinancial Instruments since 1 July 2014, and started executing the Presentation of Financial Instruments inpreparing the annual financial repot of 2014. The accounting policy changed shows no impart on items andamount of current and previous financial statements.XII. Explanation on major accounting error correction that needs retroactive re-statement inreporting period

¡õ Applicable ¡Ì Not applicableNo particular about major accounting errors correction that needs retroactive re-statement for the Company in the reporting.XIII. Explanation on changes of consolidation range, compare with last year¡¯s financial report

¡õ Applicable ¡Ì Not applicableNo changes in consolidation statement¡¯s scope for the Company in the reporting.XIV. Profit and dividend distributionEstablishment, implementation or adjustment of profit distribution policy during the reporting period

¡õ Applicable ¡Ì Not applicableThe profit distribution plan and capitalization of capital reserve plan of the Company for the last three years (reporting periodincluded)NilCash dividend in latest three years

In RMB

Net profit Ratio in net profit

attributable to attributable to

shareholders of shareholders of Proportion of the

Year for bonus Amount for cash Amount reckoned

amount reckoned

listed company in listed company into cash bonus from

shares bonus (tax included) into cash bonus from

consolidation contained in cash repurchase

cash repurchase

statement for bonus consolidation

year statement

2014 4,885,678.56

2013 1,575,223,894.89

2012 -52,443,234.29The Company gains profits in reporting period and the retained profit of parent company is positive but no plan of cash dividendproposed

¡õ Applicable ¡Ì Not applicableXV. Plan of profit distribution and capital reserve capitalizing in the reporting

¡õ Applicable ¡Ì Not applicable

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄThe Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either forthe yearXVI. Social responsibility

¡õ Applicable ¡Ì Not applicableXVII. In the report period, reception of research, communication and interview

¡Ì Applicable ¡õ Not applicable

Contents discussed and

Time Place Way Type Reception

material provided

Office of the Telephone Circulation Progress of reorganization

2014 Individual

Company communication shareholder for the Company

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Section V. Important EventsI. Significant lawsuits and arbitrations of the Company

¡õ Applicable ¡Ì Not applicableNo significant lawsuits and arbitrations occurred in the reporting periodII. Question from media

¡õ Applicable ¡Ì Not applicableNo universal questioned by media in reporting periodIII. Non-operational fund occupation from controlling shareholders and its related party

¡õ Applicable ¡Ì Not applicableNo non-operational fund occupation from controlling shareholders and its related party in period.IV. Bankruptcy reorganization

¡õ Applicable ¡Ì Not applicableNo bankruptcy reorganization for the Company in reporting periodV. Assets transaction1. Purchase of assets

¡õ Applicable ¡Ì Not applicableNo purchase of assets for the Company in reporting period2. Assets sold¡õ Applicable ¡Ì Not applicableNo assets sold for the Company in reporting period3. Enterprise merger

¡õ Applicable ¡Ì Not applicableNo enterprise merger for the Company in reporting periodVI. Implementation and its influence of equity incentive plan

¡õ Applicable ¡Ì Not applicableNo implementation of equity incentive plan for the Company in reporting period

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄVII. Material related transactions1. Related transaction with daily operation concerned¡õ Applicable ¡Ì Not applicableNo related transaction with daily operation concerned for the Company in reporting period2. Related transactions by assets acquisition and sold

¡õ Applicable ¡Ì Not applicableNo related transactions by assets acquisition and sold for the Company in reporting period3. Main related transactions of mutual investment outside

¡õ Applicable ¡Ì Not applicableNo main related transactions of mutual investment outside for the Company in reporting period4. Contact of related credit and debt

¡Ì Applicable ¡õ Not applicableWhether exist non-operating contact of related credit and debt or not

¡ÌYes ¡õNo

Balance of Amount of the

Whether exist Balance at

period-begin period

Related Type of credit Resulted non-operation period-end (in

Related party (in 10 occurrence (in

relationship and debt reason al capital 10 thousand

thousand 10 thousand

occupying Yuan)

Yuan) Yuan)

Shenzhen Guosheng Debt payable

Controlling

Energy Investment to related Loan No 650 0 650

shareholder

Development Co., Ltd. partyInfluence on operation result andfinancial statue of the Company from No influencerelated credit and debts5. Other related transactions

¡õ Applicable ¡Ì Not applicableNo other related transactions for the Company in reporting periodVIII. Major contract and implantation1. Trusteeship, contract and leasing(1) Trusteeship

¡õ Applicable ¡Ì Not applicableNo trusteeship for the Company in reporting period(2) Contract

¡õ Applicable ¡Ì Not applicable

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄNo contract for the Company in reporting period(3) Leasing

¡õ Applicable ¡Ì Not applicableNo leasing for the Company in reporting period2. Guarantee

¡õ Applicable ¡Ì Not applicableNo guarantee for the Company in reporting period3. Other material contracts

¡õ Applicable ¡Ì Not applicableNo other material contracts for the Company in reporting period4. Other material transaction

¡õ Applicable ¡Ì Not applicableNo other material transactions for the Company in reporting periodIX. Implementation of commitment1. Commitments from the Company or shareholder with over 5% share held in reporting period or continues to reportingperiod¡õ Applicable ¡Ì Not applicableNo commitment from the Company or shareholder with over 5% share held in reporting period or continues to reporting period forthe Company in the period.2. Concerning assts or project of the Company, which has profit forecast, and reporting period still inforecasting period, explain reasons of reaching the original profit forecast

¡õ Applicable ¡Ì Not applicableX. Appointment and non-reappointment (dismissal) of CPAAccounting firm appointed

Name of domestic accounting firm Ruihua Certified Public Accountant (LLP)Remuneration for domestic accounting firm (in 10

45thousand Yuan)Continuous life of auditing service for foreign

10accounting firm

Name of domestic CPA Chen Songbo, Ren WeixingWhether re-appointed accounting firms in this period or not

¡õYes ¡Ì¡õ NoAppointment of internal control auditing accounting firm, financial consultant or sponsor

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

¡Ì Applicable ¡õ Not applicableIn 2014, the Company appointed Ruihua Certified Public Accountant (LLP) as the auditing of the internal control, andauditing fee RMB 150,000.XI. Explanation from Supervisory Committee and Independent Directors (if applicable) for¡°Qualified Opinion¡± from the CPA

¡Ì Applicable ¡õ Not applicableFinancial report 2014 of the Company was audited by Ruihua Certified Public Accountant (LLP) with unqualified auditor¡¯s reportwith explanatory paragraph issued. In line with regulation of ¡°Rules of Shenzhen Stock Exchange for the Listing of Stocks¡±, board ofdirectors makes specify explanation on the events involved in the audit report. Independent directors agree the specific explanationon the events involved in the audit report from the Board.XII. Penalty and rectification

¡õ Applicable ¡Ì Not applicableNo penalty and rectification for the Company in reporting period.XIII. Particular about suspended and delisting after annual report disclosed

¡õ Applicable ¡Ì Not applicableXIV. Explanation on other significant events

¡õ Applicable ¡Ì Not applicableNo explanation on other significant events for the Company in reporting period.XV. Significant event of subsidiary of the Company

¡õ Applicable ¡Ì Not applicableXVI. Issuance of corporate bonds

¡õ Applicable ¡Ì Not applicable

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Section VI. Changes in Shares and Particulars about ShareholdersI. Changes in Shares1. Changes in Shares

In share

Before the Change Increase/Decrease in the Change (+, -) After the Change

Capitalizat

New

Bonus ion of Proportio

Amount Proportion shares Others Subtotal Amount

shares public n

issued

reserve

I. Restricted shares 11,362 0.00% -3,130 -3,130 8,232 0.00%

1. State-owned shares 0 0.00% 0 0.00%2. State-owned legal

0 0.00% 0 0.00%person¡¯s shares

3. Other domestic shares 11,362 0.00% -3,130 -3,130 8,232 0.00%Including: Domestic legal

0 0.00% 0 0.00%person¡¯s sharesDomestic natural person¡¯s

11,362 0.00% -3,130 -3,130 8,232 0.00%shares

4. Foreign shares 0 0.00% 0 0.00%Including: Foreign legal

0 0.00% 0 0.00%person¡¯s sharesForeign natural person¡¯s

0 0.00% 0 0.00%shares

551,336,5 551,339,7

II. Unrestricted shares 100.00% 3,130 3,130 100.00%

85 15

302,976,0 302,976,7

1. RMB Ordinary shares 54.95% 715 715 54.95%

18 33

2. Domestically listed 248,360,5 248,362,9

45.05% 2,415 2,415 45.05%

foreign shares 67 823. Overseas listed foreign

0 0.00% 0 0.00%shares

4. Others 0 0.00% 0 0.00%

551,347,9 551,347,9

III. Total shares 100.00% 0 0 100.00%

47 47Reasons for share changed

¡Ì Applicable ¡õ Not applicableReasons for changes: shares held by senior executive supervisor Mr. Zheng Zhonghuan has released and employee supervisor Mr.Tao Hualiang¡¯s shares released due to retirementApproval of share changed

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

¡õ Applicable ¡Ì Not applicableOwnership transfer of share changed

¡õ Applicable ¡Ì Not applicableInfluence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to commonshareholders of Company in latest year and period

¡õ Applicable ¡Ì Not applicableOther information necessary to disclose for the Company or need to disclosed under requirement from security regulators

¡õ Applicable ¡Ì Not applicable2. Changes of restricted shares

¡õ Applicable ¡Ì Not applicableII. Security offering and listing1. Previous security offering in latest three years at period-end

¡õ Applicable ¡Ì Not applicable2. Explanation on changes of total shares, shareholders structure and assets & liability structures

¡õ Applicable ¡Ì Not applicable3. Current shares held by internal staffs

¡õ Applicable ¡Ì Not applicableIII. Particulars about shareholder and actual controller of the Company1. Amount of shareholders of the Company and particulars about shares holding

In share

Total preference

Total common shareholders with

Total common shareholders at end voting rights

th

shareholders in 35,266 of the 5 trading day recovered at end of 0

reporting period-end before annual report reporting period (if

disclosed applicable) (found in

note8)

Shares held above 5% by shareholders or top ten shareholders

Total Number of share pledged/frozen

sharehold Amount Amount of

Proportio Changes

Full name of Nature of n of ers at of restrict un-restrict

in report

Shareholders shareholder shares the end of shares shares State of share Amount

held period

report held held

period

Shenzhen Domestic

63,508,74 63,508,74

Guocheng Energy non-State-owned 11.52% 0 0 0

7 7

Investment legal person

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄDevelopmentCo., Ltd.Zhuorun

Foreign legal 27,000,00 -1269382 27,000,00

Technology Co., 4.90% 0 0

person 0 2 0Ltd.Specific accountof property

Domesticdisposition for

non-State-owned 1.63% 9,001,018 0 0 9,001,018 0bankruptcy

legal personenterprise ofCBC

Domestic nature

Zeng Ying 1.15% 6,342,717 0 0 6,342,717 0

personJingchao

Foreign legal

Investment Co., 0.84% 4,601,789 0 0 4,601,789 0

personLtd.COREPACIFIC-YAMA

ICHI Foreign legal

0.82% 4,518,319 3012616 0 4,518,319 0INTERNATION personAL (H.K.)LIMITED

Domestic nature

Li Dongxuan 0.71% 3,896,799 3,896,799 0 3,896,799 0

person

Domestic nature

Li Huili 0.71% 3,891,124 0 0 3,891,124 0

person

Domestic nature

Xu Hongbo 0.57% 3,137,419 685500 0 3,137,419 0

person

Domestic nature

Ning Yimin 0.49% 2,695,021 0695021 0 2,695,021 0

person

Strategy investors or general

corporate comes to top 10

N/Ashareholders by rights issued (ifapplicable) (see note 3)

Li Huili, the spouse of actual controller Ji Hanfei, holding B-share of the Company on behalf

Explanation on associated of Shenzhen Guocheng Energy Investment Development Co., Ltd., beyond that, therelationship among the aforesaid Company has no idea of whether other circulated shareholders belong to concerted action

shareholders 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

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Type of shares

Shareholders¡¯ name Amount of un-restricted shares held at period-end

Type Amount

Shenzhen Guocheng Energy RMB common

63,508,747 63,508,747

Investment Development Co., Ltd. shares

RMB common

Zhuorun Technology Co., Ltd. 27,000,000 27,000,000

shares

RMB common

5,011,444 5,011,444

Specific account of property sharesdisposition for bankruptcy enterprise

Domesticallyof CBC

3,989,574 listed foreign 3,989,574

shares

RMB common

Zeng Ying 6,342,717 6,342,717

shares

RMB common

Jingchao Investment Co., Ltd. 4,601,789 4,601,789

sharesCORE PACIFIC-YAMAICHI

4,518,319 Other 4,518,319INTERNATIONAL (H.K.) LIMITED

RMB common

Li Dongxuan 3,896,799 3,896,799

shares

Domestically

Li Huili 3,891,124 listed foreign 3,891,124

shares

Domestically

Xu Hongbo 3,137,419 listed foreign 3,137,419

shares

RMB common

Ning Yimin 2,695,021 2,695,021

shares

Expiation on associated relationship Li Huili, the spouse of actual controller Ji Hanfei, holding B-share of the Company on behalfor consistent actors within the top 10 of Shenzhen Guocheng Energy Investment Development Co., Ltd., beyond that, theun-restrict shareholders and between Company has no idea of whether other circulated shareholders belong to concerted action

top 10 un-restrict shareholders and persons ruled in the Administration Norms for Information Disclosure of Change on

top 10 shareholders Shareholding of Shareholders of Listed Companies.Explanation on shareholdersinvolving margin business about top

ten common shareholders with N/Aun-restrict shares held(if applicable)(see note4)Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreementdealing in reporting period

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ¡õ Yes ¡Ì NoThe top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company have no buy-backagreement dealing in reporting period.2. Controlling shareholder of the CompanyCorporation

Legal rep./person

Controlling shareholder Date established Organization code Register capital Main business

in charge of unit

Industry development,

domestic commerce,Shenzhen Guocheng

materials supply and

Energy Investment Ji Hanfei 2005-04-26 440301105151303 RMB 220,000,000

sale (excluding speciallyDevelopment Co., Ltd.

run, controlled and sold

merchandises)Future development

N/AstrategyOperation result,

financial status, and N/Acash flow etc.Equity of otherdomestic/foreign listedcompany with share

controlling and share N/Aparticipation bycontrolling shareholderin reporting periodChanges of controlling shareholder in reporting period

¡õ Applicable ¡Ì Not applicableNo changes of controlling shareholder for the Company in reporting period3. Actual controller of the CompanyNature person

Whether obtained right of residence of other countries

Actual controller Nationality

or 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/Acontrolled in past decadesChanges of actual controllers reporting period

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

¡õ Applicable ¡Ì Not applicableNo changes of actual controllers for the Company in reporting periodProperty right and controlling relationship between the actual controller and the Company is as follow:

Ji Hanfei

100%

Shenzhen Guocheng Energy Investment Development Co.,

Ltd.

11.52%

Shenzhen China Bicycle Company (Holding) LimitedActual controller controlling the Company by means of entrust or other assets management

¡õ Applicable ¡Ì Not applicable4. Particulars about other legal person shareholders with over 10% shares held

¡õ Applicable ¡Ì Not applicableIV. Share holding increasing plan proposed or implemented in reporting period fromshareholder of the Company and its concerted action person

¡õ Applicable ¡Ì Not applicableAs far as the Company known, there are no shareholders of the Company and their concerted action people propose or implementoverweight in the Period

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Section VII. Preferred Stock

¡õ Applicable ¡Ì Not applicableThe Company had no preferred stock in the reporting.

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Section VIII. Particulars about Directors, Supervisors and Senior

Executives and EmployeesI. Changes of shares held by directors, supervisors and senior executives

Increasing Decreasing

Shares Shares

shares held shares held

Working Start dated End date held at held at

Title Sex Age of office of office in this in this

Name status period-beg period-end

term term

period period

in (Share) (Share)

(Share) (Share)

Luo Currently 2013-09-2 2016-09-2

Chairman M 52 0 0 0 0

Guiyou in office 6 5

Yang Currently 2013-09-2 2016-09-2

Director M 58 0 0 0 0

Fenbo in office 6 5

Director, Currently 2013-09-2 2016-09-2

Li Hai M 46 0 0 0 0

President in office 6 5

Yao Currently 2013-09-2 2016-09-2

Zhengwan Director M 40 0 0 0 0

g in office 6 5

Currently 2013-09-2 2016-09-2

Cao Fang Director M 41 0 0 0 0

in office 6 5

Currently 2013-09-2 2016-09-2

Kong Na Director F 38 0 0 0 0

in office 6 5

Independe Currently 2013-09-2 2016-09-2

Cui Jun M 51 0 0 0 0

nt director in office 6 5

Chen Independe Currently 2013-09-2 2016-09-2

M 47 0 0 0 0

Shujun nt director in office 6 5

Independe Currently 2013-09-2 2016-09-2

Li Bing F 39 0 0 0 0

nt director in office 6 5

Convener

of Currently 2014-06-2 2017-06-2

Li Xiang M 41 0 0 0 0

supervisor in office 7 6

s

Zheng Currently 2014-06-2 2017-06-2

Zhonghua Supervisor M 53 10,976 0 2,700 8,276

n in office 7 6

Staff Currently 2014-06-2 2017-06-2

Li Jialin M 54 0 0 0 0

Supervisor in office 7 6

Sun Secretary Currently 2013-09-2 2016-09-2

M 42 0 0 0 0

Longlong of Board in office 6 5

Xiao Yan Supervisor Office M 47 2011-06-2 2014-06-2 0 0 0 0

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

leaving 8 7

Tao Staff Office 2011-06-0 2014-06-2

M 61 3,220 0 3,220 0

Hualiang Supervisor leaving 7 7

Total -- -- -- -- -- -- 14,196 0 5,920 8,276II. Post-holdingMajor working experience of directors, supervisors and senior executive at the present in latest five years1. 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 ofheadquarter 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. of2010 to Oct. of 2010, he was committee of marketing management commission in planning team in GuangdongBranch of Life Insurance Holding Co., Ltd and charger of planning team of Guangdong Branch; now he takescharge of chairman of the Board and legal representative of the Company.2. Mr. Yang Fenbo, born in 1957, China senior economist with master degree of MBA and engineer, held theposition 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 LiondaGroup; took the chairman and concurrently general manager of Guangdong Sunrise Holding Co., Ltd.; now, he isthe chairman of Shenzhen Liona Group Co., Ltd.3. 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 is in charge of director and vice presidentof the Company.4. Mr. Yao Zhengwang, born in 1975, with bachelor degree of law, successively took the post of Supervisor ofSupervision Office, Deputy Manager of Sales Department, and Deputy Manager of Legal Affairs Department ofShenzhen Guomin Investment Development Co. Ltd. and deputy general manager of Administration Center ofCompliant Risk Control, as well as director, secretary of the Board and convener of supervisory committee ofCBC; now he serves as director of the Company.5. Mr. Cao Fang, born in 1974, master degree; since May of 2007, he took post of item manager of marketing andmanagement department in headquarter of Life Insurance, associate of general manager of marketing andmanagement headquarter as well as general manager of market and business department, he acted as member ofplanning team of Life Insurance Branch in Guangdong. And subsequently served in strategy and developmentcenter, Office of the Chairman, Supervision office; he serves as deputy GM of Shanghai Branch of Life Insurancesince March 2012.6. Ms. Kong Na, born in 1976, master degree; From Sep. of 2005 to Apr. of 2010, he took post of Assistant ChiefExecutive in Ruifude Health Insurance Holding Co., Ltd. From Apr. of 2010 till now, he is in charge of associateof president in Yingkong Holding Co., Ltd.7. Mr. Cui Jun, born in1964, party member of CPC, doctor of engineering, master of law and a first-grade lawyer;

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄonce he took posts of director of the 5th session of nationwide lawyers association, director of the 8th session andthe 9th session of Guangdong lawyer association, vice president of the 5th and the 6th session of Shenzhen lawyersassociation, committee of international business commission of nationwide lawyers association, deputy director oflaw business of intellectual property commission of Guangdong lawyers association, director of civil law businesscommission of Guangdong lawyers association and director of culture construction committee of Guangdonglawyers association. And now he is director of Guangdong Anke Law Firm, member of the CPPCC ShenzhenCommittee, 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 ofcreative design and intellectual property, arbitrator of mediation center of south China International economy andtrade arbitration commission, mediation expert of mediation center and arbitrator of Shenzhen arbitrationcommission.8. Mr. Chen Shujun, born in1968, master of the Chinese University of Hong Kong, majoring in businessadministration of finance, master of international accountant from City University of Hong Kong and he owes auniversity degree from law school of Tsinghua University. And he is senior accountant, China CertifiedAccountant, Chinese Certified Tax Agent, judicial authenticator and owes professional qualification of state laws;He once took post of auditor and manager of Guangzhou CPAs. From 1998 till now he acted as executive partnerof Shenzhen Guangzhou-Shenzhen CPAs, legal representative of Guangdong Guangzhou-Shenzhen Justice andAccounting judgment institution. Now he serves as the legislative consultants of standing committee ofGuangdong Province 12th session of the National People¡¯s Congress, member of a council of Guangdong Instituteof Certified Public Accountants, assessment experts of Shenzhen Municipal Government Procurement Center,assessment experts of Shenzhen Municipal Science & Technology Committee of Experts and the first batch ofsenior member of Accounting Society of Shenzhen.9. Ms. Li Bing, born in 1975, bachelor of law major and lawyer; From Jul. of 1998 to Jan. of 2002 she taught inGuizhou 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.10. Mr. Li Xiang, born in 1974, a master degree, and he used to served as organ secretary, director-general of theorganiztion department, manager of H&R dept. of Jiangxi Branch of Pacific Life. He serves as deputy GM ofShenzhen Guosheng Energy Investment Development Co., Ltd. since March 2008.11. Mr. Zheng Zhonghuan, born in 1962, engineer with bachelor degree, successively took the post in ShenzhenLight Textile Industry Company and Shenzhen Light Industry Company; since Oct. 1985, worked in ShenzhenChina Bicycle (Group) Holdings Co. Ltd. and successively took the post of Deputy Manager, Manager ofPlanning Department, Manager of Material Department and manufacturing dept.; now he is the supervisor of theCompany and Manager of Purchasing Department of the Shenzhen Emmelle Industry Co., Ltd. .12. Mr. Li Jialin, born in 1961, a master degree with a title of senior engineer. He successively served as seniorengineer of the Company in electrical & mechanical engineering division, GM assistant of Hunan GuangdianMotocycle Company, manager of the Company in H&R Dept. now he serves as commissioner of comprehensiveoffice of the Company and person in charge of the labor union.13. Mr. Sun Longlong, born in 1973, graduated from Shanghai University of Finance and Economics in 1995 witha bachelor degree, a bachelor of Economics. He successively worked as financial affairs in Shenzhen Qiongjiao

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄIndustry Co., Ltd. and Shenzhen Solar Pipe Co., Ltd., he worked in the Company since May 1999, andsuccessively served as Deputy Manager of financial department, manager of comprehensive managementdepartment, manager of enterprise management department, now he serves as secretary of the Board and managerof financial department of the Company.14. Mr. Xiao Yan, born in 1968, owes a bachelor of economics of Hunan Institute of Economics and Finance. Heworks in Sino Life Insurance Co., Ltd. since October 2006, he successively served as senior manager of enterprisesupervision of the marketing management department in Sino-Life, GM assistant of Henan Branch of Sino-Life;serves as deputy GM of management center of Shenzhen Guomin Investment Development Co., Ltd.; he resignedas the supervisor and convener of supervisory committee of the Company in June 2014.15. Mr. Tao Hualiang, born in 1954, graduated from Northwestern Polytechnic University, an engineer. Hesuccessively served as dispatcher of welding plant of the Company, deputy director of pipe workshop, director ofgeneral assembly shop, committee of party committee of Longhua 2# plant, manager assistant of enterprisemanagement department, deputy GM of financial & accounting dept. of bicycle division, deputy director of officeand director of comprehensive office of the Group, deputy secretary of the Party and person in charge of the laborunion; he resigned in June 2014Post-holding in shareholder¡¯s unit

¡Ì Applicable ¡õ Not applicable

Weather receiving

Start dated of End date of

Name Name of shareholder¡¯s units Position remuneration from

office term office term

shareholder¡¯s units

Yao Shenzhen Guocheng Energy Investment

Supervisor 2006-10-09 Yes

Zhengwang Development Co., Ltd.Note ofpost-holding in

N/Ashareholder¡¯sunitPost-holding in other unit

¡Ì Applicable ¡õ Not applicable

Weather receiving

Start dated of End date of

Name Name of other units Position remuneration from

office term office term

other units

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

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

President

Kong Na Yingkong Holding Co., Ltd. 2010-04-01 Yes

assistant

Cui Jun Guangdong Anke Laws Firm Attorney Yes

Managing

Chen Shujun Shenzhen Guangshen CPA 1998-01-01 Yes

partner

Li Bing Beijing Deheng (Shenzhen) Law Firm Attorney 2006-01-02 YesNote ofpost-holding in N/Aother unitIII. Remuneration for directors, supervisors and senior executivesDecision-making procedures, determination bases and actual payment of remunerations of directors, supervisors and seniormanagement

Decision procedure ofremuneration of directors, According to relevant rules of the Article of Association, the general meeting of shareholders decides

supervisors, senior remuneration of directors and supervisors. The Board of Directors decides senior management¡¯s.management

Confirmation basis of The Company refers to the position rank and comprehensive industry level. And then general meeting ofremuneration of directors, shareholders approves compensation standard and allowance of independent directors. According to the

supervisors and senior "Interim Measures to Annual Performance Assessment of Executives" and performance evaluation

management standards the Company issues annual performance salary.

Actual payment of The Company strictly paid remuneration of directors, supervisors and senior management accordinglyremuneration of directors, with decision procedure and confirmation basis. Total payment for remuneration of directors,

supervisors and senior supervisors and supervisors amounted to RMB 1,592,000 from January to December in 2014.managementRemuneration for directors, supervisors and senior executives in reporting period

In ten thousand Yuan

Total

Total Remuneration

remuneration

Post-holding remuneration actually

Name Title Sex Age obtained from

status obtained from obtained at

shareholder¡¯s

the Company period-end

unit

Currently in

Li Hai Director, GM M 46 74.6 0 74.6

office

Independent Currently in

Cui Jun M 51 4.76 0 4.76

director office

Independent Currently in

Chen Shujun M 47 4.76 0 4.76

director office

Independent

Li Bing F 39 Currently in 4.76 0 4.76

director

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

office

Zheng Currently in

Supervisor M 53 16.62 0 16.62

Zhonghuan office

Staff Currently in

Li Jialin M 54 22.04 0 22.04

Supervisor office

Secretary of Currently in

Sun Longlong M 42 31.66 0 31.66

Board office

Staff

Tao Hualiang M 61 Office leaving 0 0 0

Supervisor

Total -- -- -- -- 159.2 0 159.2Delegated equity incentive for directors, supervisors and senior executives in reporting period

¡õ Applicable ¡Ì Not applicableIV. Changes of directors, supervisors and senior executives

Name Title Type Date Reasons

Convener of Leaving

Xiao Yan 2014-06-27 Expiration of the term of transition

supervisors end-of-tour

Leaving

Tao Hualiang Staff Supervisor 2014-06-27 Expiration of the term of transition

end-of-tour

Convener of

Li Xiang Elected 2014-06-27 Transition

supervisors

Li Jialin Staff Supervisor Elected 2014-06-27 TransitionV. Changes of core technology team or key technicians in reporting period (not includingdirectors, supervisors and senior executives)NilVI. Particulars of workforce1. The Company has totally 49 employees at present (8 people in HQ and 41 people in subsidiary EMMELLEincluded), including: Classified according to professional/occupational composition: 16 production personnel; 9salespersons; 7 technicians; 6 financial personnel and 11 administrative personnel; Classified according to theeducational background: master degree or above: 19 persons of bachelor degree; 17 persons of junior collegegraduates. Proportion of the personnel with education background of junior college or above in the whole staff:73.46%.2. The Company did not need to bear the expenses of retirees.3. Other personnel: 0 people

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Section IX. Corporate governanceI. Brief introduction of corporate governanceDuring 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 normativedocuments. We combined the actual situation, constantly improved the corporate governance structure, and strivedto build a modern enterprise system. Operation, assembling and holding of general meeting of shareholders, theBoard of Directors and board of supervisors were strictly with relevant rules of procedure. Thus we protectedinterests of the Company. The actual situation of corporate governance structure was in accordance with therelease of normative documents about the listing Corporation management rules from China Securities RegulatoryCommission.In reporitng period, the 7th session of the supervisory has expired. The worker¡¯s conference and annual generalmeeting of 2013 were held by the Company respectively dated 22 May 2014 and 27 June 2014, selected the staffsupervisor and completed general election for the 8th session of the supervisory .According to the current requirement of internal control, the first extraordinary general meeting of 2014 was heldon 30 December 2014, deliberated and approved the ¡°proposal of revised the ¡®Interim Measure on Special FundManagement of the Board¡¯¡± and ¡°proposal of revised the ¡®Interim Measure on Assessment Reward of AnnualPerformance for Senior Executives¡¯¡± in order to improved the corporate governance structure.Is there any difference between the corporate governance and the Company Laws and relevant regulations from CSRC?

¡õYes ¡Ì¡õ NoThere is no difference between corporate governance and the requirements of the Company Law and relevantregulations of the CSRC.Progress of the special activity for corporate governance, establishment and implementation of insider informationregistration management systemProgress of the special activity for corporate governance, establishment and implementation of insider informationregistration management system: The Company established Registration Management of Inside InformationInsiders. It clearly defined scope of inside information and insiders, ruled approval, registration andconfidentiality mechanism about inside information. During reporting period, no supervision and punishmentacted from supervision department.II. In the report period, the Company held annual shareholders¡¯ general meeting andextraordinary shareholders¡¯ general meeting1. Annual Shareholders¡¯ General Meeting in the report period

Name of meeting

Session of meeting Date Situation Date of disclosure Index of disclosure

motion

¡±Work Report from

the Board for year of23rd Meeting of

2013¡±, ¡±Work

Annual Securities Times,

Report from Deliberated and

Shareholders¡¯ 2014-06-27 2014-06-28 Hong Kong

Supervisory approved one by one

General Meeting for Commercial Daily

Committee for yearyear of 2013

of 2013¡± , ¡±Financial

Results for year of

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

2013¡± , ¡°Profit

Distribution Plan of

2013¡±, ¡±Annual

Report of 2013 and

Summary¡±, ¡±Rewa

rds of 2013 for

Management

Team¡±,¡±term of 7th

session of

supervisory

expired and election

on supervisor for 8th

session of the

supervisory¡±2. Extraordinary shareholders¡¯ general meeting in the report period

Name of meeting

Session of meeting Date Situation Date of disclosure Index of disclosure

motion

¡°Re-engagement of

Ruihua Certified

Public Accountant

(LLP) ¡°, ¡°proposal

of revised the

¡®Interim Measure onFirst Extraordinary

Special Fund Securities Times,

Shareholders¡¯ Deliberated and

2014-12-30 Management of the 2014-12-31 Hong Kong

General Meeting of approved one by one

Board¡¯¡± and Commercial Daily2014

¡°proposal of revised

the ¡®Interim Measure

on Assessment

Reward of Annual

Performance for

Senior Executives¡¯¡±3. Request for extraordinary general meeting by preferred stockholders whose voting rights restore

¡õ Applicable ¡Ì Not applicableIII. Responsibility performance of independent directors in report period1. The attending of independent directors to Board meetings and shareholders¡¯ general meeting

The attending of independent directors

Name of independent Times of Board Times of Times of Times of Times of Whether absent

director meeting Presence attending by entrusted Absence the Meeting for

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

supposed to communication presence the second time

attend in the in a row or not

report period

Cui Jun 5 2 3 0 0 No

Chen Shujun 5 2 3 0 0 No

Li Bing 5 2 3 0 0 NoTimes presented in shareholders¡¯

general meeting by independent 2directorsExplanation of absent the Board Meeting for the second time in a rowNil2. Objection for relevant events from independent directorsWhether independent directors come up with objection about company¡¯s relevant matters or not¡õ Yes ¡Ì NoIndependent directors has no objections for relevant events in reporting period3. Other explanation about responsibility performance of independent directorsWhether the opinions from independent directors have been adopted or not¡Ì Yes ¡õ NoIndependent directors¡¯ explanation on adoption or not adoption of relevant recommendations of the CompanyThere is no independent directors¡¯ explanation not adoption of relevant recommendations of the Company.IV. Performance of subordinate committees of the Board in reporting periodBoard of directors set up audit commission and remuneration and appraisal commission taking responsibilitybased on Governance Rules of Listed Company, Article of Association as well as Procedure Rules of Board ofDirectors and other duties and rights various departments endowed.

As for compiling and audit on annual financial report were checked and communicated by Audit commission inaccordance with rules of Working Procedure of Annual Report of Audit Commission, and they submitted decisionto board of directors for approval.Remuneration and appraisal commission of the Company, in reporting period, according to the ¡°Interim Measureon Assessment Reward of Annual Performance for Senior Executives¡±, carry out evaluation on the managementteam members for operation works in 2013, and propose a annual reward plans. In line with the requirement ofinternal 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 fordeliberation on general meeting.V. Works from Supervisory CommitteeWhether the Company has risks or not in reporting period that found in supervisory activity from supervisory committee¡õ Yes ¡Ì NoSupervisory committee has no objection about supervision events in reporting period

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄVI. Independence of the Company in aspect of business, personnel, assets, institute andfinance relative to its controlling shareholderThe Company separate business, personnel, assets, institute and finance with largest shareholder or other related parties, owesindependent and completed self-operation ability.VII. Horizontal competition

¡õ Applicable ¡Ì Not applicableVIII. Appraisal and incentive mechanism for senior executivesThe Company initially established the standard and incentive mechanism for open and transparent performanceevaluation on directors, supervisors and management layer. The appointment of senior management staff was openand transparent, in accordance with provisions of the law.

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Section X. Internal controlI. Construction of internal control(IC)Pursuit to the Basic Norms of Internal Control and relevant requirement of supporting guidelines, the Companysuccessively established a three-level organization chart as leading group of IC implementation, working teamsand business teams in 2011. Recruiting and selecting Smartdot Technologies Co., Ltd. (¡°Smartdot¡± for short) asthe implementation consultant for the regulation estbalishment of IC for the Company.At the suggestion of consultant, the implementation range are defined as the headquarter of the Group, ShenzhenEmmelle Industry Co., Ltd. (¡°Emmelle¡± for short) and Shenzhen Le-An-Ju Property Management Co., Ltd.Consolidation range of the financial reprot of CBC including the above mentioned three companies and ¡°CBC(International) Co., Ltd.¡± and ¡°CBC (Hong Kong) Co., Ltd.¡±. Implementation range for the IC covers businessactivities with 100 percent revenue obtained in cosolidated statement. The 13 IC key business procedures as salesand money-collection management defined by the Company, covers over 10 percent of the assets and revenuefrom major transaction activities, over 30 percent net assets and net profit from major transaction activities, andover 95 percent net profit¡¯s business activiteis in statement of CBC are included.Under the help of consultant, IC implementation team and every busienss team clearing up the systems, andorganized vary sub-business procedures, well-defined risk controlling points and control deficiencies, prepared therisk matrix. Subsequently, project team formulated a regulating solution, every departments optimized thebusiness in aspect of the relevant problems and deficits, improve the IC in aspect of the Company and business,the auditing deparment carried out following up inspection on the rectification works. Furthermore, exercisecompliance test and walk-through test on IC for the conrolling points, supervise and re-retificated on the problemsbeing found, up to end of 2011, the Company formulated an internal control standards system that basically meetthe requirements. In 2012, the Company continues to improve the IC procedures, revised system process ofhuman resouces, finance and business, successively clear out the IC documents as mechanism manual, processmanual, brand operation handbook, rental business manual and financial report handbook; carried out examinationand evaluation regularly and irregularly on main business process and implementation of the IC, proposerectification suggestions on time and improved relevant mechanisms and procedures. In October 2012, ShenzhenIntermediate People¡¯s Court accpeted the application of bankrupty proposed by creditor in accordance with thelaw, the Company entered into the bankruptcy reorganization procedures after that. The Company implementedself-management under the supervision by custodian, on basis of the original IC establishment andimplementation, increased IC regulations in aspect of the supervision links, including seal management, sourcebank account appointed, source bank account management, budget, contract management and invoicemanagement. Reorganization of the Company making progress in period from October 2012 to December 2013,on basis of the reorganization plan draft and equity adjsutment plan for the investor¡¯s involved have beenapproved in creditor¡¯s meeting and group of capital contributors, the Shenzhen Intermediate Court approved thereorganziation plan in November 2013. With the completion of reorganization plan implemented, main assetsdisposal, stock-transfer and redemption of debts, on 27 December 2013, Shenzhen Intermediate Court bring in averdict that the execution of reorganization plan of the Company is finished and close the bankrptcy procedures.After reorganization plan completed, bicycle business is perserved, and the implementation range for IC turns tothe headquarter and Emmelle Company, comsolidation range for financial statement was the headquarter andEmmelle Company as well.

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄDuring the reporting period, the Company has kept improving and standardizing its internal control organizationalstructure strictly in compliance with the Securities Law, the Company Law and the applicable laws andregulations in respect of the governance of listed companies by CSRC, in order to ensure the standardizedoperation of the Company¡¯s shareholders¡¯ meeting, the Board and the Board of Supervisors, and safeguard theinterests of the Company and Investors.II. Statement of the Board on responsibility of internal controlBoard of Directors promised that there¡¯s no false, misleading statement or major leaking. All the disclosedinformation was real, accurate and complete.III. Bases for construction of financial report internal controlThe Company has established a perfect financial management system, including financial management andaccounting management covering calculation, account dealing, budget management, cost control, capitalmanagement and other relevant rules and regulations. In line with the Basic Norms of Internal Control andPractice Note of Internal Control and requirment of Evaluation Guidelines of Internal Control, combine withactula condition, the Company formulated a serial systematic mechanism process as Internal Control Mechanismand Internal Control Manual. During the period, the Company organized professional team carried outexamination and evaluation regularly and irregularly on the effectiveness and implementation of the IC system,and issued the Self-evaluation Report of Internal ControlIV. Self-evaluation report of internal control

Details of major defects in self-evaluation report that found in reporting periodNo significant deficiencies in the internal control have been identified during the reporting period.Date of self-evaluation report of

2015-04-03internal control disclosed (full-text)Index of self-evaluation report of

Self-evaluation report of internal control for year of 2014, Juchao Websiteinternal control disclosed(full-text)V. Auditing report and authentication report of internal controlAuditing report of IC

Deliberation section of auditing report of ICIV. Auditing opinion of IC of financial reportWe considers that China Bicycle Company (Holdings) Limited, in line with Basic Norms of Internal Control and relevantregulations, shows an effectiveness internal control of financial report in all major aspects dated 31 December 2014.V. Emphasis of MatterWe bring to the attention of the users of auditing report of IC, China Bicycle Company has completed implementation of therestructuring plan dated 27 December 2013 and terminate the bankruptcy proceedings, in which the condition of introduction ofinvestors has been set out with a view to restoring its ability to continue as a going concern and its sustainable profitability throughasset restructuring. Up to the reporting date of auditing, the Company has not introduced any investor, but retained the business ofbicycles so as to maintain its ability to continue as a going concern before the injection of assets by investors. Therefore, there isuncertainty in the ability of China Bicycle Company to continue as a going concern, and it is stressed that the published opinions onauditing will not be impacted by the subject matter.

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄDisclosure date of audit report of

2015-04-03internal control (full-text)

Index of audit report of internal Rui Hua Zhuan Shen Zi [2015] No. 48030016 ¡°Auditing Report of Internal Control for year of

control (full-text) 2014¡±, Juchao websiteIssued a modified audit opinions for internal control¡ÌYes ¡õNoExplanation on modified audit opinions for internal control issued by CPARuihuaCertified Public Accountants (LLP) issued a qualified audit opinions with explanatory notes for theinternal control of 2014. Ruihua CPA considers that the Company, in line with Basic Norms of Internal Controland relevant regulations, shows an effectiveness internal control of financial report in all major aspects dated 31December 2014. With the explanatory notes attached, remind users of the internal control auditing report, theCompany has completed implementation of the restructuring plan dated 27 December 2013 and terminate thebankruptcy proceedings, in which the condition of introduction of investors has been set out with a view torestoring its ability to continue as a going concern and its sustainable profitability through asset restructuring. Upto the reporting date of auditing, the Company has not introduced any investor, but retained the business ofbicycles 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 isstressed that the published opinions on auditing will not be impacted by the subject matter.Auditing report of internal control issued by CPA shows the same opinion as self-evaluation report issued by the Board¡ÌYes ¡õNoVI. Establishment and enforcement of Accountability Mechanism for Major Errors in AnnualReportIn order to strengthen the Company's financial accountability mechanisms, to further improve the internalmanagement system, the Company formulated the "Accountability System on Major Error Made in InformationDisclosure¡± and strictly implemented it. During the reporting period, the Company did never correct significantaccounting error, supplement major information omissions and revise performance pre-notice etc.

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Section XI. Financial ReportI. Audit report

Type of audit opinion Unqualified auditor¡¯s report with explanatory paragraph

Signing date of audit report 2015-04-01

Name of audit institute Ruihua Certified Public Accountant (LLP)

Document serial of audit report Ruihua Shen Zi [2015] No. 48030032

Name of CPA Chen Songbo, Ren Weixing

Text of auditor¡¯s Report

Auditor¡¯s Report

Ruihua Shen Zi [2015] No. 48030032To all shareholders of Shenzhen China Bicycle Company (Holdings) LimitedWe have audited the Companying consolidated and parent Company¡¯s financial statements of Shenzhen ChinaBicycle Company (Holdings) Limited (¡°CBC¡±), including balance sheet of 31 December 2014, and profitstatement for year of 2014, cash flow statement and statement on changes of shareholders¡¯ equity for the yearended, and notes to the financial statements for the year ended.I. Management¡¯s responsibility for the financial statementsManagement of the Company is responsible for prepare and present financial statement of the Company, whichincluding: (1) Prepare financial statements with fair presentation in line with Accounting Standards for BusinessEnterprises; (2) Designing, executed and maintaining necessary internal control in order to prevent fundamentalmiscarrying in financial statement from fraudulent or errors.II. Auditor's responsibilityOur responsibility is to express an audit opinion on these financial statements based on our audit. We performedour audit in accordance with Chinese Certified Public Accountants' Auditing Standards. Those standards requireus to comply with professional ethics, and to plan and perform our audit so as to obtain reasonable assuranceabout whether the financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures of thefinancial statements. The selective audit procedures depend on auditor's judgment, including the evaluation of therisk of material misstatement of the consolidated financial statements due to frauds or errors. When evaluatingrisk, we consider internal control related to financial statements, in order to design auditing procedures, but not forthe purpose of expressing an opinion on the internal control's effectiveness. An audit also includes assessing theappropriateness of the accounting policies adopted and the reasonableness of the accounting estimates made bymanagement, 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 auditopinion.III. Auditing opinion

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄIn our opinion, in all material aspects, CBC¡¯s financial statements have been prepared in accordance with theEnterprises Accounting Standards and Enterprises Accounting System, and they fairly present the financial statusof the consolidated and parent company¡¯s as of December 31, 2014, and its operation results and cash flows forthe year ended.IV. Emphasis of MatterWe bring to the attention of the users of the financial statements, as stated in note XII of the financial statementsunder the name of CBC, China Bicycle Company has completed implementation of the restructuring plan dated27 December 2013 and terminate the bankruptcy proceedings, in which the condition of introduction of investorshas been set out with a view to restoring its ability to continue as a going concern and its sustainable profitabilitythrough asset restructuring. Up to the reporting date of auditing, the Company has not introduced any investor, butretained the business of bicycles so as to maintain its ability to continue as a going concern before the injection ofassets by investors. Therefore, there is uncertainty in the ability of China Bicycle Company to continue as a goingconcern, and it is stressed that the published opinions on auditing will not be impacted by the subject matter.

Ruihua CPAs (LLP) Chinese CPA: Chen Songbo

BeijingChina Chinese CPA: Ren Weixing

1 April 2015II. Financial statementUnit in note of financial statement refers to CNY: RMB (Yuan)1. Consolidated Balance SheetPrepared by Shenzhen China Bicycle Company (Holdings) Limited

In RMB

Item Closing balance Opening balanceCurrent assets:

Monetary funds 30,163,866.78 26,834,171.59

Settlement provisions

Capital lent

Financial liability measured by fairvalue and with variation reckoned intocurrent gains/losses

Derivative financial liability

Notes receivable 2,200,000.00

Accounts receivable 6,790,982.50 7,060,251.28

Accounts paid in advance 348,277.01 177,636.49

Insurance receivable

Reinsurance receivables

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Contract reserve of reinsurancereceivable

Interest receivable

Dividend receivable

Other receivables 511,254.81 107,395,429.69

Purchase restituted finance asset

Inventories 6,171,307.53 4,545,116.43

Divided into assets held for sale

Non-current asset due within oneyear

Other current assets

Total current assets 46,185,688.63 146,012,605.48Non-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 773,961.84 227,824.37

Construction in progress

Engineering material

Disposal of fixed asset

Productive biological asset

Oil and gas asset

Intangible assets 4,518,000.00 5,271,000.00

Expense on Research andDevelopment

Goodwill

Long-term expenses to beapportioned

Deferred income tax asset 11,997.08

Other non-current asset

Total non-current asset 5,303,958.92 5,498,824.37

Total assets 51,489,647.55 151,511,429.85Current liabilities:

Short-term loans

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Loan from central bank

Absorbing deposit and interbankdeposit

Capital borrowed

Financial liability measured by fairvalue and with variation reckoned intocurrent gains/losses

Derivative financial liability

Notes payable

Accounts payable 10,278,377.96 9,935,720.73

Accounts received in advance 2,595,736.07 3,627,323.31

Selling financial asset ofrepurchase

Commission charge andcommission payable

Wage payable 1,772,814.72 1,516,624.17

Taxes payable 2,232,187.80 93,778,253.57

Interest payable

Dividend payable

Other accounts payable 21,114,424.93 34,954,734.89

Reinsurance payables

Insurance contract reserve

Security trading of agency

Security sales of agency

Divided into liability held for sale

Non-current liabilities due within 1yearOther current liabilities

Total current liabilities 37,993,541.48 143,812,656.67Non-current liabilities:

Long-term loans

Bonds payable

Including: preferred stock

Perpetual capitalsecurities

Long-term account payable

Long-term wages payable

Special accounts payable

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Projected liabilities

Deferred income

Deferred income tax liabilities

Other non-current liabilitiesTotal non-current liabilities

Total liabilities 37,993,541.48 143,812,656.67Owner¡¯s equity:

Share capital 551,347,947.00 551,347,947.00

Other equity instrument

Including: preferred stock

Perpetual capitalsecurities

Capital public reserve 627,834,243.83 627,819,910.12

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 -1,199,952,070.17 -1,204,837,748.73Total owner¡¯s equity attributable to

11,903,347.67 7,003,335.40parent company

Minority interests 1,592,758.40 695,437.78

Total owner¡¯s equity 13,496,106.07 7,698,773.18

Total liabilities and owner¡¯s equity 51,489,647.55 151,511,429.85

Legal Representative: Luo Guiyou Person in charge of Accounting Works: Li HaiPerson in charge of Accounting Institution: Sun Longlong2. Balance Sheet of Parent Company

In RMB

Item Closing balance Opening balanceCurrent assets:

Monetary funds 1,363,097.01 1,080,836.82

Financial liability measured by fairvalue and with variation reckoned intocurrent gains/losses

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Derivative financial liability

Notes receivable

Accounts receivable 694,416.00 245,382.00

Account paid in advance 140,275.00

Interest receivable

Dividends receivable

Other receivables 13,714,033.12 116,990,372.76

Inventories

Divided into assets held for sale

Non-current assets maturing withinone year

Other current assets

Total current assets 15,911,821.13 118,316,591.58Non-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 624,330.89 109,020.00

Construction in progress

Project materials

Disposal of fixed assets

Productive biological assets

Oil and natural gas assets

Intangible assets 4,518,000.00 5,271,000.00

Research and development costs

Goodwill

Long-term deferred expenses

Deferred income tax assets

Other non-current assets

Total non-current assets 5,152,710.62 5,390,399.73

Total assets 21,064,531.75 123,706,991.31Current liabilities:

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Short-term borrowings

Financial liability measured by fairvalue and with variation reckoned intocurrent gains/losses

Derivative financial liability

Notes payable

Accounts payable 294,300.00

Accounts received in advance

Wage payable 568,210.39 6,847.09

Taxes payable 309,944.51 92,205,392.56

Interest payable

Dividend payable

Other accounts payable 11,694,785.72 26,103,724.68

Divided into liability held for sale

Non-current liabilities due within 1year

Other current liabilities

Total current liabilities 12,867,240.62 118,315,964.33Non-current liabilities:

Long-term loans

Bonds payable

Including: preferred stock

Perpetual capitalsecurities

Long-term account payable

Long-term wages payable

Special accounts payable

Projected liabilities

Deferred income

Deferred income tax liabilities

Other non-current liabilitiesTotal non-current liabilities

Total liabilities 12,867,240.62 118,315,964.33Owners¡¯ equity:

Share capita 551,347,947.00 551,347,947.00

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Other equity instrument

Including: preferred stock

Perpetual capitalsecurities

Capital public reserve 627,834,243.83 627,819,910.12

Less: Inventory shares

Other comprehensive income

Reasonable reserve

Surplus reserve 32,673,227.01 32,673,227.01

Retained profit -1,203,658,126.71 -1,206,450,057.15

Total owner¡¯s equity 8,197,291.13 5,391,026.98

Total liabilities and owner¡¯s equity 21,064,531.75 123,706,991.313. Consolidated Profit Statement

In RMB

Item Current Period Last Period

I. Total operating income 212,070,585.77 271,111,736.07

Including: Operating income 212,070,585.77 271,111,736.07

Interest income

Insurance gained

Commission charge and commissionincome

II. Total operating cost 218,798,040.74 336,247,395.00

Including: Operating cost 198,964,665.65 243,225,629.45

Interest expense

Commission charge and commissionexpense

Cash surrender value

Net amount of expense ofcompensation

Net amount of withdrawal ofinsurance contract reserve

Bonus expense of guarantee slip

Reinsurance expense

Operating tax and extras 508,902.12 1,745,928.88

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Sales expenses 5,340,463.40 6,723,428.32

Administration expenses 14,108,887.56 85,815,079.74

Financial expenses -173,453.60 -1,299,434.00

Losses of devaluation of asset 48,575.61 36,762.61

Add: Changing income of fairvalue(Loss is listed with ¡°-¡±)

Investment income (Loss is listed

72,934,048.27with ¡°-¡±)

Including: Investment income onaffiliated company and joint venture

Exchange income (Loss is listedwith ¡°-¡±)

III. Operating profit (Loss is listed with

-6,727,454.97 7,798,389.34¡°-¡±)

Add: Non-operating income 14,685,352.23 1,945,555,480.90

Including: Disposal gains of

39,731.46 1,611,736,449.40non-current asset

Less: Non-operating expense 29,038.00 284,495,050.48

Including: Disposal loss of

5,880.00 45,935.56non-current asset

IV. Total Profit (Loss is listed with ¡°-¡±) 7,928,859.26 1,668,858,819.76

Less: Income tax expense 2,145,860.08 93,000,059.74

V. Net profit (Net loss is listed with ¡°-¡±) 5,782,999.18 1,575,858,760.02

Net profit attributable to owner¡¯s of

4,885,678.56 1,575,223,894.89parent company

Minority shareholders¡¯ gains and

897,320.62 634,865.13lossesVI. Net after-tax of other comprehensiveincome

Net after-tax of other comprehensiveincome attributable to owners of parentcompany

(I) Other comprehensive incomeitems which will not be reclassifiedsubsequently to profit of loss

1. Changes as a result ofre-measurement of net defined benefitplan liability or asset

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

2. Share of the othercomprehensive income of the investeeaccounted for using equity method whichwill not be reclassified subsequently toprofit and loss

(II) Other comprehensive incomeitems which will be reclassifiedsubsequently to profit or loss

1. Share of the othercomprehensive income of the investeeaccounted for using equity method whichwill be reclassified subsequently to profitor loss

2. Gains or losses arisingfrom changes in fair value ofavailable-for-sale financial assets

3. Gains or losses arisingfrom reclassification of held-to-maturityinvestment as available-for-sale financialassets

4. The effect hedging portionof gains or losses arising from cash flowhedging instruments

5. Translation differencesarising on translation of foreign currencyfinancial statements

6. Other

Net after-tax of other comprehensiveincome attributable to minorityshareholders

VII. Total comprehensive income 5,782,999.18 1,575,858,760.02

Total comprehensive income

4,885,678.56 1,575,223,894.89attributable to owners of parent Company

Total comprehensive income

897,320.62 634,865.13attributable to minority shareholdersVIII. Earnings per share:

(i) Basic earnings per share 0.0089 2.8570

(ii) Diluted earnings per share 0.0089 2.8570Enterprise combine under the same control in the Period, the combined party realized net profit of 0 Yuan before combination, andrealized 0 Yuan at last period for combined party

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Legal Representative: Luo Guiyou Person in charge of Accounting Works: Li HaiPerson in charge of Accounting Institution: Sun Longlong4. Profit Statement of Parent Company

In RMB

Item Current Period Last Period

I. Operating income 7,287,880.92 26,304,548.63

Less: Operating cost 4,505,933.46 9,061,591.72

Operating tax and extras 195,188.86 1,230,470.42

Sales expenses

Administration expenses 13,181,561.45 84,590,538.81

Financial expenses 1,734.98 -1,069,788.29

Losses of devaluation of asset 587.29

Add: Changing income of fairvalue(Loss is listed with ¡°-¡±)

Investment income (Loss islisted with ¡°-¡±)

Including: Investment incomeon affiliated company and joint venture

II. Operating profit (Loss is listed

-10,597,125.12 -67,508,264.03with ¡°-¡±)

Add: Non-operating income 14,532,283.73 1,945,490,380.90

Including: Disposal gains ofnon-current asset

Less: Non-operating expense 23,158.00 284,450,319.19

Including: Disposal loss ofnon-current asset

III. Total Profit (Loss is listed with

3,912,000.61 1,593,531,797.68¡°-¡±)

Less: Income tax expense 1,120,070.17 92,388,206.44IV. Net profit (Net loss is listed with

2,791,930.44 1,501,143,591.24¡°-¡±)V. Net after-tax of other comprehensiveincome

(I) Other comprehensive income

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄitems which will not be reclassifiedsubsequently to profit of loss

1. Changes as a result ofre-measurement of net defined benefitplan liability or asset

2. Share of the othercomprehensive income of the investeeaccounted for using equity methodwhich will not be reclassifiedsubsequently to profit and loss

(II) Other comprehensive incomeitems which will be reclassifiedsubsequently to profit or loss

1. Share of the othercomprehensive income of the investeeaccounted for using equity methodwhich will be reclassified subsequentlyto profit or loss

2. Gains or losses arisingfrom changes in fair value ofavailable-for-sale financial assets

3. Gains or losses arisingfrom reclassification of held-to-maturityinvestment as available-for-salefinancial assets

4. The effect hedgingportion of gains or losses arising fromcash flow hedging instruments

5. Translation differencesarising on translation of foreigncurrency financial statements

6. Other

VI. Total comprehensive income 2,791,930.44 1,501,143,591.24VII. Earnings per share:

(i) Basic earnings per share 0.0051 2.7227

(ii) Diluted earnings per share 0.0051 2.72275. Consolidated Cash Flow Statement

In RMB

Item Current Period Last Period

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄI. Cash flows arising from operatingactivities:

Cash received from selling

commodities and providing labor 108,375,320.26 152,281,740.80services

Net increase of customer depositand interbank deposit

Net increase of loan from centralbank

Net increase of capital borrowedfrom other financial institution

Cash received from originalinsurance contract fee

Net cash received from reinsurancebusiness

Net increase of insured savings andinvestment

Net increase of amount fromdisposal financial assets that measuredby fair value and with variationreckoned into current gains/losses

Cash received from interest,commission charge and commission

Net increase of capital borrowed

Net increase of returned businesscapital

Write-back of tax received

Other cash received concerning

115,592,208.06 31,778,429.76operating activitiesSubtotal of cash inflow arising from

223,967,528.32 184,060,170.56operating activities

Cash paid for purchasing

commodities and receiving labor 96,445,270.32 133,314,908.16service

Net increase of customer loans andadvances

Net increase of deposits in centralbank and interbank

Cash paid for original insurance

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄcontract compensation

Cash paid for interest, commissioncharge and commission

Cash paid for bonus of guaranteeslip

Cash paid to/for staff and workers 9,113,860.33 40,519,453.59

Taxes paid 96,588,723.27 5,431,161.32

Other cash paid concerning

17,898,626.22 33,004,815.35operating activitiesSubtotal of cash outflow arising from

220,046,480.14 212,270,338.42operating activitiesNet cash flows arising from operating

3,921,048.18 -28,210,167.86activitiesII. Cash flows arising from investingactivities:

Cash received from recoveringinvestment

Cash received from investmentincome

Net cash received from disposal of

fixed, intangible and other long-term 100,500.00 1,660,347,221.12assets

Net cash received from disposal ofsubsidiaries and other units

Other cash received concerninginvesting activitiesSubtotal of cash inflow from investing

100,500.00 1,660,347,221.12activities

Cash paid for purchasing fixed,

691,852.99 5,384,449.06intangible and other long-term assets

Cash paid for investment 10,379.73

Net increase of mortgaged loans

Net cash received fromsubsidiaries and other units obtained

Other cash paid concerning

1,233,179.43investing activitiesSubtotal of cash outflow from investing

691,852.99 6,628,008.22activities

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄNet cash flows arising from investing

-591,352.99 1,653,719,212.90activitiesIII. Cash flows arising from financingactivities

Cash received from absorbinginvestment

Including: Cash received from

absorbing minority shareholders¡¯investment by subsidiaries

Cash received from loans

Cash received from issuing bonds

Other cash received concerning

5,390,399.73financing activitiesSubtotal of cash inflow from financing

5,390,399.73activities

Cash paid for settling debts 1,621,460,634.04

Cash paid for dividend and profitdistributing or interest paying

Including: Dividend and profit ofminority shareholder paid bysubsidiaries

Other cash paid concerning

35,000,000.00financing activitiesSubtotal of cash outflow from financing

1,656,460,634.04activitiesNet cash flows arising from financing

-1,651,070,234.31activitiesIV. Influence on cash and cashequivalents due to fluctuation inexchange rateV. Net increase of cash and cash

3,329,695.19 -25,561,189.27equivalents

Add: Balance of cash and cash

26,834,171.59 52,395,360.86equivalents at the period -beginVI. Balance of cash and cash

30,163,866.78 26,834,171.59equivalents at the period -end

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ6. Cash Flow Statement of Parent Company

In RMB

Item Current Period Last PeriodI. Cash flows arising from operatingactivities:

Cash received from sellingcommodities and providing laborservices

Write-back of tax received

Other cash received concerning

124,889,662.76 34,909,756.83operating activitiesSubtotal of cash inflow arising from

124,889,662.76 34,909,756.83operating activities

Cash paid for purchasingcommodities and receiving laborservice

Cash paid to/for staff and workers 5,757,714.66 35,209,438.17

Taxes paid 93,606,825.19 2,667,326.25

Other cash paid concerning

24,682,497.75 31,239,631.17operating activitiesSubtotal of cash outflow arising from

124,047,037.60 69,116,395.59operating activitiesNet cash flows arising from operating

842,625.16 -34,206,638.76activitiesII. Cash flows arising from investingactivities:

Cash received from recoveringinvestment

Cash received from investmentincome

Net cash received from disposal of

fixed, intangible and other long-term 1,660,315,221.12assets

Net cash received from disposal ofsubsidiaries and other units

Other cash received concerninginvesting activities

Subtotal of cash inflow from investing 1,660,315,221.12

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄactivities

Cash paid for purchasing fixed,

560,364.97 5,380,020.00intangible and other long-term assets

Cash paid for investment 10,379.73

Net cash received fromsubsidiaries and other units

Other cash paid concerninginvesting activitiesSubtotal of cash outflow from investing

560,364.97 5,390,399.73activitiesNet cash flows arising from investing

-560,364.97 1,654,924,821.39activitiesIII. Cash flows arising from financingactivities

Cash received from absorbinginvestment

Cash received from loans

Cash received from issuing bonds

Other cash received concerning

5,390,399.73financing activitiesSubtotal of cash inflow from financing

5,390,399.73activities

Cash paid for settling debts 1,621,460,634.04

Cash paid for dividend and profitdistributing or interest paying

Other cash paid concerning

35,000,000.00financing activitiesSubtotal of cash outflow from financing

1,656,460,634.04activitiesNet cash flows arising from financing

-1,651,070,234.31activitiesIV. Influence on cash and cashequivalents due to fluctuation inexchange rateV. Net increase of cash and cash

282,260.19 -30,352,051.68equivalents

Add: Balance of cash and cash

1,080,836.82 31,432,888.50equivalents at the period -begin

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄVI. Balance of cash and cash

1,363,097.01 1,080,836.82equivalents at the period -end7. Statement of Changes in Owners¡¯ Equity (Consolidated)This Period

In RMB

This Period

Owners¡¯ equity attributable to parent company

Other

equity instrument

Item Less: Other Provisio Minorit Total

Perpet Reason

Share

ual Capital Invento compre Surplus n of Retaine y owners¡¯

able

capital Prefer capita reserve ry hensive reserve general d profit interests equity

red Other reserve

l shares income risk

stock

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 ofaccounting policy

Errorcorrection of thelast periodEnterprisecombine underthe same control

Other

II. Balance at the 551,34 627,819 32,673,

-1,204,8

695,437 7,698,7

beginning of this 7,947. 37,748.

,910.12 227.01 .78 73.18

year 00 73

III. Increase/

Decrease in this 14,333. 4,885,6 897,320 5,797,3

year (Decrease is 71 78.56 .62 32.89listed with ¡°-¡±)

(i) Total 4,885,6 897,320 5,782,9comprehensive

78.56 .62 99.18income

(ii) Owners¡¯

devoted anddecreased capital1.Common shares

invested byshareholders

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ2. Capital investedby holders of otherequity instruments

3. Amount

reckoned intoowners equity withshare-basedpayment4. Other

(III) Profitdistribution1. Withdrawal ofsurplus reserves2. Withdrawal of

general riskprovisions3. Distribution for

owners (orshareholders)4. Other

(IV) Carrying

forward internalowners¡¯ equity1. Capital reserves

conversed to

capital (sharecapital)2. Surplus reserves

conversed to

capital (sharecapital)3. Remedying loss

with surplusreserve4. Other

(V) Reasonablereserve1. Withdrawal inthe report period2. Usage in thereport period

14,333. 14,333.(VI)Others

71 71

IV. Balance at the 551,34 627,834 32,673,

-1,199,9

1,592,7 13,496,

end of the report 7,947. 52,070.

,243.83 227.01 58.40 106.07

period 00 17Last Period

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

In RMB

Last Period

Owners¡¯ equity attributable to the parent Company

Other

equity instrument Minorit

Item Less: Other Provisio Total

Perpet Reason y

Share

ual Capital Invento compre Surplus n of Retaine interest owners¡¯

able equity

capital Prefer capita reserve ry hensive reserve general d profit s

red Other reserve

l shares income risk

stock

securi

ties

551,34 -2,780,0 -1,709,3

I. Balance at the 486,589 32,673, 60,572.

7,947. 61,643. 90,683.

end of the last year ,213.20 227.01 65

00 62 76

Add:

Changes ofaccounting policy

Errorcorrection of thelast periodEnterprisecombine under thesame control

Other

II. Balance at the 551,34 -2,780,0 -1,709,3

486,589 32,673, 60,572.

beginning of this 7,947. 61,643. 90,683.

,213.20 227.01 65

year 00 62 76

III. Increase/ 1,575,2 1,717,0

Decrease in this 141,230 634,865

23,894. 89,456.

year (Decrease is ,696.92 .13

89 94listed with ¡°-¡±)

(i) Total 1,575,2 1,575,8

634,865

comprehensive 23,894. 58,760.

.13

income 89 02

(ii) Owners¡¯

141,230 141,230

devoted and

,696.92 ,696.92decreased capital1.Common shares

invested byshareholders2. Capital investedby holders of otherequity instruments

3. Amount

reckoned intoowners equity with

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄshare-basedpayment4 Other

(III) Profitdistribution1. Withdrawal ofsurplus reserves2. Withdrawal of

general riskprovisions3. Distribution for

owners (orshareholders)

141,230 141,2304. Other

,696.92 ,696.92

(IV) Carrying

forward internalowners¡¯ equity1. Capital reserves

conversed to

capital (sharecapital)2. Surplus reserves

conversed to

capital (sharecapital)3. Remedying loss

with surplusreserve4. Other(V) Reasonablereserve1. Withdrawal inthe report period2. Usage in thereport period(VI)Others

IV. Balance at the 551,34 -1,204,8

627,819 32,673, 695,437 7,698,7

end of the report 7,947. 37,748.

,910.12 227.01 .78 73.18

period 00 738. Statement of Changes in Owners¡¯ Equity (Parent Company)This Period

In RMB

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

This Period

Other

equity instrument

Other Total

Item Perpetu Less:

Share Capital comprehe Reasonab Surplus Retaine

Inventory owners¡¯

capital Preferre al reserve nsive le reserve reserve d profit

capital Other shares equity

d stock income

securiti

es

-1,206,4

I. Balance at the 551,347, 627,819,9 32,673,22 5,391,026

50,057.

end of the last year 947.00 10.12 7.01 .98

15

Add: Changes

of accountingpolicy

Errorcorrection of thelast period

Other

II. Balance at the -1,206,4

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/

Decrease in this 2,791,9 2,806,264

14,333.71

year (Decrease is 30.44 .15listed with ¡°-¡±)

(i) Total

2,791,9 2,791,930comprehensive

30.44 .44income

(ii) Owners¡¯

devoted anddecreased capital1.Common shares

invested byshareholders2. Capital investedby holders of otherequity instruments

3. Amount

reckoned intoowners equity withshare-basedpayment4. Other

(III) Profitdistribution1. Withdrawal ofsurplus reserves

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ2. Distribution forowners (orshareholders)3. Other

(IV) Carrying

forward internalowners¡¯ equity1. Capital reserves

conversed to

capital (sharecapital)2. Surplus reserves

conversed to

capital (sharecapital)3. Remedying loss

with surplusreserve4. Other

(V) Reasonablereserve1. Withdrawal inthe report period2. Usage in thereport period

(VI)Others 14,333.71 14,333.71

IV. Balance at the 551,347, -1,203,6

627,834,2 32,673,22 8,197,291

end of the report 58,126.

947.00 43.83 7.01 .13

period 71Last period

In RMB

Last period

Other

equity instrument

Other Total

Item Share Perpetu Less: Retaine

Capital comprehe Reasonab Surplus

Inventory owners¡¯

capital Preferre al reserve nsive le reserve reserve d profit

capital Other shares equity

d stock income

securiti

es

-2,707,5

I. Balance at the 551,347, 486,589,2 32,673,22 -1,636,98

93,648.

end of the last year 947.00 13.20 7.01 3,261.18

39

Add: Changes

of accountingpolicy

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Errorcorrection of thelast period

Other

II. Balance at the 551,347, -2,707,5

486,589,2 32,673,22 -1,636,98

beginning of this 93,648.

947.00 13.20 7.01 3,261.18

year 39

III. Increase/ 1,501,1

Decrease in this 141,230,6 1,642,374

43,591.

year (Decrease is 96.92 ,288.16

24listed with ¡°-¡±)

(i) Total 1,501,1

1,501,143

comprehensive 43,591.

,591.24

income 24

(ii) Owners¡¯ 141,230,6 141,230,6

devoted and

96.92 96.92decreased capital1.Common shares

invested byshareholders2. Capital investedby holders of otherequity instruments

3. Amount

reckoned intoowners equity withshare-basedpayment

141,230,6 141,230,64. Other

96.92 96.92

(III) Profitdistribution1. Withdrawal ofsurplus reserves2. Distribution forowners (orshareholders)3. Other

(IV) Carrying

forward internalowners¡¯ equity1. Capital reserves

conversed to

capital (sharecapital)2. Surplus reserves

conversed to

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

capital (sharecapital)3. Remedying loss

with surplusreserve4. Other

(V) Reasonablereserve1. Withdrawal inthe report period2. Usage in thereport period(VI)Others

IV. Balance at the -1,206,4

551,347, 627,819,9 32,673,22 5,391,026

end of the report 50,057.

947.00 10.12 7.01 .98

period 15III. Company Profile(I) Company ProfileAccording to the Approval Document SFBF (1991) No. 888 issued by the People¡¯s Government of Shenzhen,Shenzhen China Bicycle Company (Holdings) Limited (hereinafter referred to as the Company) wasreincorporated as the company limited by shares in November 1991. On 28 December 1991, upon the ApprovalDocument SRYFZ(1991) No. 119 issued by Shenzhen Special Economic Zone Branch of the People¡¯s Bank ofChina, the Company got listed on Shenzhen Stock Exchange. The Company reserves the business license for theenterprise legal person (QGYSZFZ No.101165) [the registered number has been altered as 440301501122085]with the registered capital of RMB551, 347,947.00.(II) Business Scope and OperationThe Company belongs to the machinery manufacture industry and mainly engages in the production and assemblyof various bicycles and spare parts, components, parts, mechanical product, sport machinery, fine chemicals,carbon fiber composites material, household electrical appliance and affiliated components (products managementby license excluded).The Company is specialized in making the middle-top rank bicycles, the main brands are EMMELLE and variouselectrical bicycles.The majority of its products were previously exported, however, the sales volume sharply declined in recent yearsbecause of the antidumping litigation. Hence, the Company commences on the debt reorganization and thereorganization 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

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄoccupy the domestic market. Up to 31 December 2014, shares issued by the Company counted as 551,347,947shares accumulated.The financial statement has been deliberated and approved on the Board dated 1 April 2015NilIV. Compilation Basis of Financial Statement1. Compilation basisThe Company proceed on continue operating as a premise, according to the actual occurred transactions andevents, based on Accounting Standard for Enterprise¡ªBasic Rules(Ministry of Finance Order No. 33, Ministry ofFinance Order No. 76 Revised), 41 specific accounting rules issued and revised on 15 February 2006 and later, theApplication Guide of Accounting Standard for Enterprise, the Accounting Standard Explanation and other relevantregulations(together as ¡°Accounting Standards for Business Enterprises¡±) as well as the Information DisclosureRules of the Company who Publicly Issues Securities No.15¡ªGeneral 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 AccountingStandards for Enterprise. Except for some financial instruments, the financial statement is calculated based onhistorical cost. As for the non-current assets ready for sold, amount after deducted estimated cost by fair value andthe original book value qualify with condition of hold ready for sold, calculated based on the lower one. Ifimpairment occurred for assets, accrual relevant impairment provision in line with relevant regulations.2. Going concernOn 11 May 2012, the largest shareholder and biggest creditor of the Company, Shenzhen Guocheng EnergyInvestment Development Co., Ltd. applied to Shenzhen Municipal Intermediate People's Court for reforming theCompany as the Company couldn¡¯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 Energyaccording 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) Mallesonsand 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. 30-1written decision, and approved the Company to manage property and business affairs by itself under thesupervision of custodians according to the law. On 5 November 2013, the Shenzhen Intermediate People¡¯s Court(2012) Shen Zhong Fa Po Zi No. 30-6 Civil Ruling Paper judged that approved the reorganization plan of theCompany. On 27 December 2013, the Civil Ruling Paper Shenzhen Intermediate People¡¯s Court (2012) Shen

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄZhong Fa Po Zi No. 30-10 ruled that the reorganization plan of CBC was completed and bankruptcy procedures ofCBC closed down.The Company has solved the debt problem by reforming, realized the net assets with positive value, the mainbusiness of bicycle is able to be maintained and realizes the stable development. The Company has set up theconditions for introducing the recombination party in the reforming plan, and expects to restore the abilities ofsustainable operation and sustained profitability by reorganization. The conditions of introducing therecombination party includes: the assessed value of net assets should be no less than 2 billion Yuan, the net assetsin the same year for implementing the major reorganization should be no less than 200 million Yuan. TheCompany doesn¡¯t have the recombination party at the moment.V. Main accounting policy and Accounting EstimateTips 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 standardsThe financial statement prepared by the Company are compliance with the requirement of accounting rules, reflecta true and completed financial status of the Company dated 31 December 2014 and operation results and cashflows for the year of 2014. Furthermore, the financial statement, in all major aspects, conform to the InformationDisclosure Rules of the Company who Publicly Issues Securities No.15¡ªGeneral Rules of Financial Reportissued by CSRC, revised in 2014, and relevant disclosure requirement and its notes.2. Accounting periodAccounting period of the Company consist of annual and mid-term, mid-term refers to the reporting period shorterthan one annual accounting year. The company adopts Gregorian calendar as accounting period, namely form each1 January to 31 December.3. Business cyclesNormal business cycle is the period from purchasing assets used for process by the Company to the cash and cashequivalent achieved. The Company¡¯s business cycle was 12 months, and it is the determining criterion for assesliquidity and liability liquidity.4. Recording currencyRenminbi is the operation location and main economy environment¡¯s currency for the Company and subsidiariesin China, Renminbi is the book-keeping currency of the Company and subsidiaries. Renminbi is used forrecording in the financial statement under the name of the Company.5. Accounting Treatment Method for Business Combinations

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄBusiness combination is the transaction or events that two or two above independent enterprises combined as areporting entity. Business combination including enterprise combined under the same control and businesscombined under different control.(1) The business combination under the same controlEnterprise combination under the same control is the enterprise who take part in the combination are have thesame 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 datewhen 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 oncombination date. Balance of net assets¡¯s book value acquired by combining party and combine considerationpaid (or total book value of the shares issued), shall adjusted capital reserve (share premium); if the capitalreserves (share premium) is not enough for deducted, adjusted for retained earnings.Vary directly expenses occurred for enterprise combination, the combining party shall reckoned into currentgains/losses while occurring.(2) Combine not under the same controlA business combination not involving entities under common control is a business combination in which all of thecombining 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 entityparticipating in the combination is the acquiree. Acquisition date refers to the date on which the acquirereffectively obtains control of the acquiree.For business combinations not under common control, the combination cost is the assets paid, liabilities incurredor assumed and the equity securities issued by the acquirer, at fair value at the acquisition date, in exchange forthe 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 intothe amount of initial measurement of the equity securities or liability securities. The relevant contingentconsideration is recorded into the combination costs at its fair value at the acquisition date, and the goodwill isadjusted if the new or additional evidences of adjustment to contingent considerations emerged within 12 monthsfrom the acquisition date. The cost of combination and identifiable net assets obtained by the acquirer in abusiness combination is measured at fair value at the acquisition date. If the cost of combination exceeds the fair

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄvalue of the acquirer¡¯s share in the identifiable net assets, the difference is recognized as good will; if the cost ofcombination is lower than the fair value of the acquirer¡¯s share in the identifiable net assets, the acquirer shallfirstly review the measurement of the fair value of the identifiable assets obtained, liabilities incurred andcontingent liabilities incurred, as well as the combination costs. after that, if the combination costs are still lowerthan the fair value of the identifiable net assets obtained, the acquirer shall recognize the difference as the profit orloss in the current period.In relation to the deductible temporary difference acquired from the acquiree, which was not recognized asdeferred tax assets due to non-fulfillment of the recognition criteria at the date of the acquisition, if new or furtherinformation that is obtained within 12 months after the acquisition date indicates that related conditions at theacquisition date already existed, and that the implementation of the economic benefits brought by the deductibletemporary difference of the acquiree can be expected, the relevant deferred tax assets shall be recognized andgoodwill shall be deducted. When the amount of goodwill is less than the deferred tax assets that shall berecognized, the difference shall be recognized in the profit or loss of the period. Except for the abovecircumstances, deferred tax assets in relation to business combination are recognized in the profit or loss of theperiod.For a business combination not involving enterprises under common control and achieved in stages, the companyshall determine whether the business combination shall be regarded as ¡°a bundle of transactions¡± in accordancewith the standards in relation to judgment of a bundle of transactions in ¡°Notice issued by the Ministry of Financeon Interpretation 5 on Accounting standards for Business Enterprises¡±(CK(2012)No.19) and rule No. 51 of ¡°No.33 Accounting standards for Business Enterprises ¨C Consolidated Financial Statement¡± (Refer to note IV 5(2)).When the business combination is regarded as ¡°a bundle of transactions¡±, the accounting treatment for thebusiness combination shall be in accordance with the previous paragraphs and note IV 4, 13 ¡°Long term equityinvestment¡±; when the business combination is not regarded as ¡°a bundle of transactions¡±, the accountingtreatment for the business combination in the company¡¯s and the consolidated financial statements shall be asfollows:In the company¡¯s financial statements, the initial cost of the investment shall be the sum of the carrying amount ofits previously-held equity interest in the acquiree prior to the acquisition date and the amount of additionalinvestment made to the acquiree at the acquisition date. other comprehensive income involved in thepreviously-held equity interest of the acquiree prior to the acquisition date shall be treated on the same basis as ifthey were disposed of by the acquiree directly, namely be transferred to current investment income other than therelevant part of the movement arising from re-measuring net liabilities or net assets under defined benefit schemeby the acquiree which shall be calculated under equity method.

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄIn the consolidated financial statements, the previously-held equity interest of the acquiree is re-measuredaccording to the fair value at the acquisition date; the difference between the fair value and the carrying amount isrecognized as investment income for the current period; other comprehensive income involved in thepreviously-held equity interest of the acquiree prior to the acquisition date shall be treated on the same basis as ifthey were disposed of by the acquiree directly, namely be transferred to current investment income other than therelevant part of the movement arising from re-measuring net liabilities or net assets under defined benefit schemeby the acquiree which shall be calculated under equity method.6. Preparation method for consolidated financial statement1) Recognition principle of consolidated scopeThe 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 the investee¡¯srelevant activities and the ability to affect such return by use of the aforesaid right over the investee. Theconsolidated 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 orcircumstances, the Company will make separate assessment.2) Preparation of consolidated financial statementsSubsidiaries are consolidated from the date on which the company obtains their net assets and actual control overtheir operating decisions, and are deconsolidated from the date that such control ceases. For subsidiaries beingdisposed, the operating results and cash flows prior to the date of disposal are included in the consolidated incomestatement and consolidated cash flow statement; for subsidiaries disposed during the period, the opening balancesof the consolidated balance sheet would not be restated. For subsidiaries acquired from a business combinationnot under common control, their operating results and cash flows subsequent to the acquisition date are includedin the consolidated income statement and consolidated cash flow statement, and the opening balances andcomparative figures of the consolidated balance sheet would not be restated. For subsidiaries acquired from abusiness combination under common control, their operating results and cash flows from the date ofcommencement of the accounting period in which the combination occurred to the date of combination are

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄincluded in the consolidated income statement and consolidated cash flow statement, and the comparative figuresof the consolidated balance sheet would be restated.In preparing the consolidated financial statements, where the accounting policies or the accounting periods areinconsistent between the company and subsidiaries, the financial statements of subsidiaries are adjusted inaccordance with the accounting policies and accounting period of the company. For subsidiaries acquired from abusiness combination not under common control, the financial statements of the subsidiaries are adjusted based onthe fair value of the identifiable net assets at the acquisition date.All significant inter-group balances, transactions and unrealized profits are eliminated in the consolidatedfinancial statements.The portion of a subsidiary¡¯s equity and the portion of a subsidiary¡¯s net profits and losses for the period notattributable to company are recognized as minority interests and profits and losses attributable to minorityinterests. Minority interest is presented separately in the consolidated balance sheet within shareholders¡¯ equity.Net profit or loss attributable to minority shareholders is presented separately in the consolidated incomestatement under the net profit line item. When the amount of loss for the current period attributable to the minorityshareholders of a subsidiary exceeds the minority shareholders¡¯ portion of the opening balance of shareholders¡¯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 fairvalue of the remaining equity interest is re-measured on the date when the control ceased. The difference betweenthe sum of the consideration received from disposal of equity interest and the fair value of the remaining equityinterest, less the net assets attributable to the company since the acquisition date, is recognized as the investmentincome from the loss of control. Other comprehensive income relating to original equity investment insubsidiaries shall be treated on the same basis as if the relevant assets or liabilities were disposed of by theacquiree directly when the control is lost, namely be transferred to current investment income other than therelevant part of the movement arising from re-measuring net liabilities or net assets under defined benefit schemeby the original subsidiary.. Subsequent measurement of the remaining equity interests shall be in accordance withrelevant accounting standards such as ¡°Accounting Standards for business Enterprises 2 ¨C Long-term EquityInvestments¡± or ¡°Accounting Standards for business Enterprises 22 ¨C Financial Instruments Recognition andMeasurement¡±, which are detailed in Note IV 13 ¡°Long-term equity investments¡± or Note IV 9 ¡°Financialinstruments¡±.The company shall determine whether loss of control arising from disposal in a series of transactions should be

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄregarded as a bundle of transactions. When the economic effects and terms and conditions of the disposaltransactions met one or more of the following situations, the transactions shall normally be accounted for as abundle of transactions: (i) The transactions are entered into after considering the mutual consequences of eachindividual transaction; (ii) The transactions need to be considered as a whole in order to achieve a deal incommercial sense; (iii) The occurrence of an individual transaction depends on the occurrence of one or moreindividual transactions in the series; (iv) The result of an individual transaction is not economical, but it would beeconomical after taking into account of other transactions in the series. When the transactions are not regarded asa bundle of transactions, the individual transactions shall be accounted as ¡°disposal of a portion of an interest in asubsidiary which does not lead to loss of control¡± (detailed in Note IV 13 (2) (iv)) and ¡°disposal of a portion of aninterest in a subsidiary which lead to loss of control¡± (detailed in previous paragraph). When the transactions areregarded 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 eachindividual transactions before loss of control shall be recognized as other comprehensive income, and reclassifiedas profit or loss arising from the loss of control when control is lost.7. Joint arrangement classification and accounting treatment for joint operationsA 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 isentitled to relevant assets and obligations of this arrangement. Joint ventures refer to a joint arrangement duringwhich 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 withaccounting policies as set out in Note IV.13.(2) ¢Ú ¡°long-term equity investment by using equity method ofaccounting¡±.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 theCompany; recognize revenue from disposal of the share of joint operations of the Company; recognize fees solelyoccurred 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 abusiness, the same below) from joint operations, the Company shall only recognize the part of profit or lost fromthis transaction attributable to other parties of joint operations before these assets are sold to the third party. If theoccurrence of these assets meet the impairment loss of asset as set our in ¡°Accounting Standard for BusinessEnterprises No. 8 ¨C Asset Impairment¡±, the Company shall recognize the full amount of this loss in relation to the

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄCompany 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 equivalentCash and cash equivalent including stock cash, savings available for paid at any time and the cash held by theCompany with short terms(expired within 3 months since purchased), and liquid and easy to transfer as knownamount and investment with minor variation in risks.9. Foreign currency business and conversion(1) Conversion for foreign currency transactionForeign currency transactions are, on initial recognition, translated to the functional currency using the exchangerates prevailing at the dates of the transactions, except when the Company carries on a business of currencyexchange 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 itemsAt the balance sheet date, monetary items denominated in foreign currency are translated into the functionalcurrency using the spot rate of the balance sheet date. Exchange differences arising from these translations arerecognized in profit or loss for the current period, except for (i) those attributable to foreign currency borrowingsthat have been taken out specifically for the acquisition, construction or production of qualifying assets, which arecapitalised as part of the cost of those assets; (ii)exchange difference of hedge instruments used as effectivehedging for net investment of overseas operations (this difference is included in other comprehensive income untilsuch 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-currencymonetary 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 foreigncurrency monetary items that indeed constitute net investment in overseas operation, the exchange differencearising from movement of exchange rate shall be included in other comprehensive income, and transferred tocurrent 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 translatedinto 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 thefunctional currency using the spot rate on the date when fair value is determined and the resulting exchangedifferences will be recognized as fair value change (including exchange difference) in profit or loss or in othercomprehensive income as capital reserve in the current year.

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ(3) Translation of foreign currency financial statementIn case that preparation of consolidated financial statement involves overseas operation, and if there is foreigncurrency monetary items that indeed constitute net investment in overseas operation, the exchange differencearising from movement of exchange rate shall be recognized in other comprehensive income as ¡°foreign statementtranslation difference¡±, and transferred to current profit or loss for the current period when the overseas operationis disposed of.The following displays the methods for translating financial statements involving foreign operations into thestatements in RMB: The asset and liability items in the balance sheets for overseas operations are translated at thespot exchange rates on the balance sheet date. Among the shareholders¡¯ equity items, the items other than¡°undistributed profits¡± are translated at the spot exchange rates of the transaction dates. The income and expenseitems in the income statements of overseas operations are translated at the spot exchange rates of the transactiondates. Opening balance of undistributed profits is equal to the closing balance of undistributed profits aftertranslation in last year; closing balance of undistributed profit is computed according to the items in profitdistribution after translation. The exchange difference arising from translation of assets, liabilities and equity itemsare recognized in other comprehensive income and is shown separately under shareholders¡¯ equity in the balancesheet, such exchange difference will be reclassified to profit or loss in current year when the foreign operation isdisposed 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. Theeffect of exchange rate changes on cash is presented separately in the cash flow statement.The opening balance and the prior year¡¯s figures are presented according to the translated amounts of the prioryear.On disposal of the entire owners¡¯ equity in a foreign operation of the Company, or upon a loss of control over aforeign operation due to disposal of certain equity investment or other reasons, the Company transfers theexchange differences arising on translation of financial statements of this foreign operation attributable to owners¡¯equity of parent company presented under owners¡¯ equity in the balance sheet, to profit or loss in the period inwhich the disposal took place.In case of partial disposal of equity investment or other reason that result in reduction in shareholding in a foreignoperation without losing control over it, the proportionate share of exchange differences arising from thetranslation 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, theproportionate share of the exchange differences arising from the translation of financial statements of foreignoperations is reclassified to profit or loss.

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ10. Financial instrumentFinancial asset or financial liability will be recognized when the Group became one of the parties under a financialinstrument contract. Financial assets and financial liabilities are initially recognized at fair value. For financialassets and financial liabilities at fair value through profit or loss, relevant transaction costs are directly recognizedin profit or loss for the period. For financial assets and financial liabilities classified as other categories, relevanttransaction costs are included in the amount initially recognized.1) Determination of fair values for financial assets and financial liabilitiesThe fair value refers to the price that will be received when selling an asset or the price to be paid to transfer aliability in an orderly transaction between market participants on the date of measurement. Financial instrumentsexist in an active market. Fair value is determined based on the quoted price in such market. An active marketrefers to where pricing is easily and regularly obtained from exchanges, brokers, industrial organizations and pricefixing 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 valuationtechniques. Valuation technologies include reference to be familiar with situation and prices reached in recentmarket transactions entered into by both willing parties, reference to present fair values of similar other financialinstruments, cash flow discounting method and option pricing models.2) Classification, recognition and measurement of financial assetsConventionally traded financial assets shall be recognized and derecognized at the trading date. Financial assetsshall be classified into financial assets at fair value through profit and loss, held-to-maturity investment, loans andaccounts receivable and available-for-sale financial assets for initial recognition.¢ÙFinancial assets at fair value through profit or lossThey include financial assets held for trading and financial assets designated as at fair value through profit or lossfor 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 financialassets is part of a portfolio of identified financial instruments that are managed together and for which there isobjective 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 financialguarantee contract, and the derivatives linked to an equity instrument investment which has no quoted price in anactive 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

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄof the following conditions is satisfied: A. Such designation eliminates or significantly reduces a measurement orrecognition inconsistency that would otherwise result from measuring assets or recognizing the gains or losses onthem on different bases; or B. The financial asset forms part of a group of financial assets or a group of financialassets and financial liabilities, which is managed and its performance is evaluated on a fair value basis, inaccordance with the Group¡¯s documented risk management or investment strategy, and information about thegrouping 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 lossesarising from changes in the fair value and any dividend or interest income earned on the financial asset arerecognized in profit or loss in the current period.¢ÚHeld-to-maturity investmentThe non-derivative financial assets with maturity date, fix return amount or amount able to determined, and theCompany 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 currentgains/losses/The effective interest method is a method of calculating the amortized cost of a financial asset and of allocatinginterest income or expense over each period based on the effective interest of a financial asset or a financialliability (including a group of financial assets or financial liabilities). The effective interest is the rate thatdiscounts future cash flows from the financial asset or financial liability over its expected life or (whereappropriate) 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 creditlosses) by taking into account all contract terms relating to the financial assets or financial liabilities whilstconsidering various fees, transaction costs and discounts or premiums which are part of the effective interest ratepaid or received between the parties to the financial assets or financial liabilities contracts.¢ÛLoan and account receivableRefers to the non-derivative financial assets for which there is no quoted price in the active market and of whichthe repo amount is fixed or determinable. The financial assets classify as loans and account receivables includingnote 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 gainsor losses arising from derecognition, impairment incurred or amortization shall reckoned into current gains/losses.

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ¢ÜFinancial assets available for saleIncluding the non-derivative financial assets initial recognition that is appointed as available for sale, and exceptfor the financial assets measured by fair value and with its variation reckoned into current gains/losses as financialassets, 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 amountas amortized against the difference between the initial recognition amount and amount as of the maturity date ateffective interest method, and less the occurred impairment loss. The closing cost of available-for-sale equityinstrument 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 valueare recognized as other comprehensive income, except for impairment loss and exchange differences arising fromforeign monetary financial assets and amortized cost which are accounted for through profit or loss for the currentperiod. The financial assets will be transferred out of the financial assets on derecognition and accounted forthrough profit or loss for the current period. However, equity investment that is not quoted in an active market andthe fair value of which cannot be measured reliably and derivative financial assets related to the equity instrumentwhich 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 arerecognized as investment income.3) Impairment of financial assetsIn addition to financial assets at fair value through profit or loss for the current period, the Group reviews the bookvalue of other financial assets at each balance sheet date and provide for impairment where there is objectiveevidence that financial assets are impaired.For a financial asset that is individually significant, the Group assesses the asset individually for impairment. Fora financial asset that is not individually significant, the Group assess the asset individually for impairment orinclude the asset in a group of financial assets with similar credit risk characteristics and collectively assess themfor impairment. If it is determined that no objective evidence of impairment exists for an individually assessedfinancial asset, whether the financial asset is individually significant or not, the financial asset is included in agroup of financial assets with similar credit risk characteristics and collectively assessed for impairment. Financialassets for which an impairment loss is individually recognized are not included in the collective assessment forimpairment.¢ÙImpairment of held-to-maturity investments, loans and receivables

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄThe carrying amount of financial assets measured as costs or amortized costs are subsequently reduced to thepresent value discounted from its projected future cash flow. The reduced amount is recognized as impairmentloss and recorded as profit or loss for the period. After recognition of the impairment loss from financial assets, ifthere is objective evidence showing recovery in value of such financial assets impaired and which is related to anyevent occurring after such recognition, the impairment loss originally recognized shall be reversed to the extentthat the carrying value of the financial assets upon reversal will not exceed the amortized cost as at the reversaldate assuming there is no provision for impairment.¢ÚImpairment of available-for-sale financial assetsIn 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 ofthe available-for-sale equity instrument. In particular, ¡°severe decline¡± refers to fair value is lower than 50% ofthe cost price and last for over one year. ¡°Non-temporary decline¡± refers to fair value is lower than 80% of thecost price and last for over three years.When the available-for-sale financial assets impair, the accumulated loss originally included in the othercomprehensive income arising from the decrease in fair value was transferred out from the capital reserve andincluded in the profit or loss for the period. The accumulated loss that transferred out from the capital reserve isthe 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 financialassets impaired and which is related to any event occurring after such recognition in subsequent periods, theimpairment loss originally recognized shall be reversed. The impairment loss reversal of the available-for-saleequity instrument will be recognized as other comprehensive income, and the impairment loss reversal of theavailable-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 measuredreliably, or the impairment loss of a derivative financial asset linked to the equity instrument that shall be settledby delivery of that equity instrument, then it will not be reversed.4) Recognition and measurement of transfers of financial assetFinancial asset that satisfied any of the following criteria shall be derecognized: ¢Ù the contract right to recoverthe cash flows of the financial asset has terminated; ¢Ú the financial asset, along with substantially all the risk andreturn arising from the ownership of the financial asset, has been transferred to the transferee; and ¢Û the financialasset 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 financialasset.

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄWhen the entity does not either assign or maintain substantially all the risk and return arising from the ownershipof the financial asset and does not give up the control on such financial asset, to the extent of its continuousinvolvement in the financial asset, the entity recognizes it as a related financial asset and recognizes the relevantliability accordingly. The extent of the continuous involvement is the extent to which the entity exposes tochanges in the value of such financial assets.On derecognition of a financial asset, the difference between the following amounts is recognized in profit or lossfor the current period: the carrying amount and the sum of the consideration received and any accumulated gain orloss 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 allocatedbetween the part that continues to be recognized and the part that qualifies for derecognition, based on the fairvalues of the respective parts. The difference between the following amounts is recognized in profit or loss for theperiod: the sum of the consideration received and the carrying amount of the part that qualifies for derecognitionand the aforementioned carrying amount.For financial assets that are sold or transferred with recourse or endorsement, the Company need to determinewhether the risk and rewards of ownership of the financial asset have been substantially transferred. If the risk andrewards of ownership of the financial asset have been substantially transferred, the financial assets shall bederecognized. If the risk and rewards of ownership of the financial asset have been retained, the financial assetsshall not be derecognized. If the Company neither transfers nor retains substantially all the risks and rewards ofownership 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 liabilityFinancial liability divide into financial liability and other financial liability which are measured by fair value andwith its variation reckoned into current gains/losses, while initially recognized. The financial liability initiallyrecognized shall be measured at their fair values. As for the financial liability measured by fair value and with itsvariation reckoned into current gains/losses, relevant transaction expenses shall reckoned into current gains/lossesdirectly; and for the other financial liability, relevant transaction expenses shall be reckoned as initialrecognization amount.¢ÙFinancial liability measured by fair value and with its variation reckoned into current gains/lossesFinancial liability held for trading and financial liability designated as at fair value through profit and loss meet

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄthe same condition to classify financial assets as financial assets held for trading and financial assets designated asat 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 lossarising from the change in fair value and the dividend and interest expenses related to the financial liability areincluded into the current profit or loss.¢ÚOther financial liabilitiesOther financial liabilities which have no quoted price in an active market, or are linked to equity instrumentwithout a reliably measured fair value and are required to be settled through that equity instrument aresubsequently measured based on cost. Other financial liabilities are subsequently measured based on amortizedcost using the effective interest rate method. The gain or loss arising from discontinuing recognition oramortization is included in current profit or loss.¢ÛFinancial guarantee contracts and loan commitmentFinancial guarantee contracts other than those designated as financial liabilities at fair value through profit or lossor loan commitments that are not designated at fair value through profit or loss and granted at a rate below marketrates are initially recognized at fair value, and shall be subsequently measured at the higher of the following: theamount determined in accordance with CAS 13 ¡°Contingencies¡± and the amount initially recognized lesscumulative amortization recognized in accordance with the principles set out in CAS No. 14¡±Revenue¡±.6) Derecognition of Financial LiabilitiesThe Group derecognizes a financial liability (or part of it) only when the underlying present obligation (or part ofit) is discharged. An agreement between the Group (an existing borrower) and an existing lender to replace theoriginal financial liability with a new financial liability with substantially different terms is accounted for as anextinguishment 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 carryingamount 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 derivativesDerivative financial instruments initially recognize at fair value at the contract date, and subsequently measured attheir fair value. Except for designated as hedge instrument and high effective hedging instruments, the gain or lossarising from changes in fair value shall be recognized into related period profit or loss on the basis of accountingstandards of hedging accounting based on hedge characteristics, and fair value change of other derivativeinstruments is recorded to current profit or loss.

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄFor hybrid instrument with embedded derivatives, where the hybrid instrument is not designated as a financialasset or financial liability at FVTPL, and the economic characteristics and risks of the embedded derivatives arenot closely related to that of the host contract and the conditions of which are the same as that of the embeddedderivatives and a separate instrument meet the definition of a derivative, the embedded derivatives are separatedfrom the hybrid instrument. If the Group is unable to measure the embedded derivative separately either atacquisition or at a subsequent balance sheet date, it designates the entire hybrid instrument as a financial asset orfinancial liability at FVTPL.8) Offsetting financial assets and financial liabilitiesWhere the Group has current enforceable legal rights to offset the recognized financial assets and financialliabilities, and intends either to settle on a net basis, or to realize the financial asset and settle the financial liabilitysimultaneously, the amount after offsetting the financial assets and the financial liabilities is presented in thebalance sheet. Except for the above circumstances, financial assets and financial liabilities shall be presentedseparately in the balance sheet and shall not be offset.9) Equity instrumentsAn equity instrument is a contract that evidences a residual interest in the assets of the Group after deducting all ofits liabilities. The Company issues (including refinancing), repurchases, sells or cancels equity instruments astreatment 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 arecharged to shareholders¡¯ equity. The Group does not recognize any changes in the fair value of equityinstruments.11. Account Receivable(1) Account Receivable Withdrawal method on single significant amount and with bad debt provisionaccrued for single itemDetermine basis or amount standards for Single Significant

The account receivable over RMB 5 millionAmount

Impairment testing for the receivables independently with single

significant amount, if no impairment being found in financialWithdrawal method on single significant amount and with bad

assets, testing in the assets portfolio with similar risk. Ifdebt provision accrued for single item

impairment losses being recognized, than not testing in the

receivable combination with similar risk.

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ(2) Receivables with bad debt provision accrual by credit portfolio

Combination Bad debt provision accrual

Age group Aging analysisAdopt age analysis method for bad debt provision withdrawal in combination:¡Ì Applicable ¡õ 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:¡õ Applicable ¡Ì Not applicableIn combination, accrual bad debt provision with other method:¡õ Applicable ¡Ì 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 value12. Inventory(1) Classification of inventoryThe inventory of the Company refers to such seven classifications as the raw materials, product in process, goodson hand, wrap page, low value consumables, materials for consigned processing and goods sold.(2)Valuing of the delivered and received inventoryPurchasing 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 ofborrowing 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 ofinventoriesNet realisable value is the estimated selling price in the ordinary course of business less the estimated costs of

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄcompletion, the estimated costs necessary to make the sale and relevant taxes. Net realisable value is determinedon the basis of clear evidence obtained, and takes into consideration the purposes of holding inventories and effectof post balance sheet events.At the balance sheet date, inventories are measured at the lower of cost and net realisable value. If the netrealisable value is below the cost of inventories, a provision for decline in value of inventories is made. Provisionfor decline in value of inventories is generally made based on the difference between the cost of single item ofinventory and its net realisable value. As for inventories with huge number and relatively low unit price, suchprovision is made under categories of inventories; as for inventories related to a series of products produced andsold in the same region, with same or similar ultimate usage or purpose and for which it is difficult to be measuredseparately 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 causedinventories to be written down below cost no longer exist so that the net realisable value of inventories is higherthan their cost, the original provision for decline in value is reversed and the reversal is included in profit or lossfor the period.4) Inventory systemPerpetual inventory system5) Amortization method for the low-value consumables and wrappageThe 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 saleIf a non-current asset can be promptly sold at its existing status only according to the practice terms in connectionwith disposal of this kind of assets, and the Company has already made resolution on disposal of the non-currentasset and entered into irrevocable transfer agreement with the transferee, and this transfer will be completedwithin one year, then the non-current asset would be calculated as non-current asset held for sale which would benot applicable to depreciation or amortisation since the date of classification as asset held for sale, and would bemeasured at the lower of its carrying value less disposal cost and fair value less disposal cost. Non-current assetheld for sale consists of single item asset and disposal group. If a disposal group is a group of assets as defined byNo.8 of Business Accounting Standards-Assets Impairment, and goodwill arising from business combination shallbe allocated to the group of assets under this accounting principle, or the disposal group constitutes one operationof the group of assets, then the disposal group includes the goodwill arising from business combination.

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄFor single non-current asset and asset in disposal group classified as assets held for sale, they shall be presented inbalance sheet separately as current assets. For liabilities in disposal group relating to the transferred assetsclassified 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-currentasset held for sale, the Company will cease such recognition and measure the asset at the lower of (1)the carryingvalue of the asset or disposal group prior to being classified as held for sale, based on the amount adjusted withthe depreciation, amortisation or impairment which should have been recognized assuming it had not beenclassified as held for sale; (2)the recoverable amount on the date when the Company decides to cease disposal.14. Long-term equity investmentsLong-term equity investments under this section refer to long-term equity investments in which the Company hascontrol, joint control or significant influence over the investee. Long-term equity investment without control orjoint control or significant influence of the Group is accounted for as available-for-sale financial assets orfinancial assets measured at fair value with any change in fair value charged to profit or loss. Details on itsaccounting policy please refer to Note 10. ¡°Financial instruments¡±.Joint control is the Company¡¯s contractually agreed sharing of control over an arrangement, which relevantactivities 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 ofan investee, but to fail to control or joint control the formulation of such policies together with other parties.1) Determination of investment costFor a long-term equity investment acquired through a business combination involving enterprises under commoncontrol, the initial investment cost of the long-term equity investment shall be the absorbing party¡¯s share of thecarrying amount of the owner¡¯s equity under the consolidated financial statements of the ultimate controllingparty on the date of combination. The difference between the initial cost of the long-term equity investment andthe cash paid, non-cash assets transferred as well as the book value of the debts borne by the absorbing party shalloffset against the capital reserve. If the capital reserve is insufficient to offset, the retained earnings shall beadjusted. If the consideration of the merger is satisfied by issue of equity securities, the initial investment cost ofthe long-term equity investment shall be the absorbing party¡¯s share of the carrying amount of the owner¡¯s equityunder the consolidated financial statements of the ultimate controlling party on the date of combination. With thetotal face value of the shares issued as share capital, the difference between the initial cost of the long-term equityinvestment and total face value of the shares issued shall be used to offset against the capital reserve. If the capitalreserve is insufficient to offset, the retained earnings shall be adjusted. For business combination resulted in anenterprise under common control by acquiring equity of the absorbing party under common control through astage-up approach with several transactions, these transactions will be judged whether they shall be treat as

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ¡°transactions in a basket¡±. If they belong to ¡°transactions in a basket¡±, these transactions will be accounted for atransaction in obtaining control. If they are not belong to ¡°transactions in a basket¡±, the initial investment cost ofthe long-term equity investment shall be the absorbing party¡¯s share of the carrying amount of the owner¡¯s equityunder the consolidated financial statements of the ultimate controlling party on the date of combination. Thedifference between the initial cost of the long-term equity investment and the aggregate of the carrying amount ofthe long-term equity investment before merging and the carrying amount the additional consideration paid forfurther share acquisition on the date of combination shall offset against the capital reserve. If the capital reserve isinsufficient to offset, the retained earnings shall be adjusted. Other comprehensive income recognized as a resultof the previously held equity investment accounted for using equity method on the date of combination orrecognized 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 undercommon control, the initial investment cost of the long-term equity investment shall be the cost of combination onthe 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 notunder common control by acquiring equity of the acquire under common control through a stage-up approach withseveral transactions, these transactions will be judged whether they shall be treat as ¡°transactions in a basket¡±. Ifthey belong to ¡°transactions in a basket¡±, these transactions will be accounted for a transaction in obtainingcontrol. If they are not belong to ¡°transactions in a basket¡±, the initial investment cost of the long-term equityinvestment accounted for using cost method shall be the aggregate of the carrying amount of equity investmentpreviously held by the acquire and the additional investment cost. For previously held equity accounted for usingequity method, relevant other comprehensive income will not be accounted for. For previously held equityinvestment classified as available-for-sale financial asset, the difference between its fair value and carryingamount, as well as the accumulated movement in fair value previously included in the other comprehensiveincome 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, andvaluation and consultation fees, and other related administration expenses are charged to profit or loss in thecurrent period at the time such expenses incurred.The long-term equity investment acquired through means other than a business combination shall be initiallymeasured at its cost. Such cost is depended upon the acquired means of long-term equity investments, which isrecognized based on the purchase cost actually paid by the Company in cash, the fair value of equity securitiesissued by the Group, the agreed value of investment contract or agreement, the fair value or original carryingamounts 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 aredirectly 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

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄwithout resulted in control, the relevant cost for long-term equity investment shall be the aggregate of fair value ofpreviously held equity investment and additional investment cost determined according to ¡°Accounting Standardfor Business Enterprises No. 22 ¨C Recognition and measurement of Financial Instruments¡±.2) Subsequent measurement and method for profit or loss recognitionLong-term equity investments with joint control (excluding those constitute joint ventures) or significant influenceon the investee are accounted for using equity method. In addition, long-term equity investments with control onthe investee are accounted for using cost method and record in the Company¡¯s financial statements.¢ÙLong-term equity investments accounted for using the cost methodUnder the cost method, a long-term equity investment is measured at its initial investment cost. The cost forlong-term equity investment is adjusted in the event of additional investment or investment recovery. Exceptreceiving the actual consideration paid for the investment or the declared but not yet distributed cash dividends orprofits which is included in the consideration, investment gains for the period is recognized as the cash dividendsor profits declared by the investee.¢ÚLong-term equity investments accounted for using the equity methodUnder the equity method, where the initial investment cost of a long-term equity investment exceeds theinvestor¡¯s interest in the fair value of the investee¡¯s identifiable net assets at the acquisition date, no adjustmentshall be made to the initial investment cost. Where the initial investment cost is less than the investor¡¯s interest inthe fair value of the investee¡¯s identifiable net assets at the acquisition date, the difference shall be charged toprofit 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 oflong-term equity investment shall be reduced based on the Group¡¯s share of profit or cash dividend distributed bythe investee. In respect of the other movement of net profit or loss, other comprehensive income and profitdistribution of investee, the carrying value of long-term equity investment shall be adjusted and included in thecapital reserves. The Group shall recognise its share of the investee¡¯s net profits or losses based on the fair valuesof the investee¡¯s individual separately identifiable assets at the time of acquisition, after making appropriateadjustments thereto. In the event of inconformity between the accounting policies and accounting periods of theinvestee and the Company, the financial statements of the investee shall be adjusted in conformity with theaccounting policies and accounting periods of the Company. Investment gain and other comprehensive incomeshall be recognized accordingly. In respect of the transactions between the Group and its associates and jointventures in which the assets disposed of or sold are not classified as operation, the share of unrealised gain or lossarising from inter-group transactions shall be eliminated by the portion attributable to the Company. Investment

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄgain shall be recognized accordingly. However, any unrealised loss arising from inter-group transactions betweenthe 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, whichresulted in acquisition of long-term equity investment by the investor without obtaining control, the initialinvestment cost of additional long-term equity investment shall be the fair value of disposed operation. Thedifference between initial investment cost and the carrying value of disposed operation will be fully included inprofit or loss for the current period. In the event that the Group sold an asset classified as operation to itsassociates or joint ventures, the difference between the carrying value of consideration received and operationshall be fully included in profit or loss for the current period. In the event that the Company acquired an assetwhich formed an operation from its associates or joint ventures, relevant transaction shall be accounted for inaccordance with ¡°Accounting Standards for Business Enterprises No. 20 ¡°Business combination¡±. All profit orloss related to the transaction shall be accounted for.The Group¡¯s share of net losses of the investee shall be recognized to the extent that the carrying amount of thelong-term equity investment together with any long-term interests that in substance form part of the investor¡¯s netinvestment in the investee are reduced to zero. If the Group has to assume additional obligations, the estimatedobligation assumed shall be provided for and charged to the profit or loss as investment loss for the period. Wherethe investee is making profits in subsequent periods, the Group shall resume recognising its share of profits aftersetting off against the share of unrecognized losses.¢ÛAcquisition of minority interestUpon the preparation of the consolidated financial statements, since acquisition of minority interest increased oflong-term equity investment which was compared to fair value of identifiable net assets recognized which aremeasured based on the continuous measurement since the acquisition date (or combination date) of subsidiariesattributable to the Group calculated according to the proportion of newly acquired shares, the difference of whichrecognized as adjusted capital surplus, capital surplus insufficient to set off impairment and adjusted retainedearnings.¢ÜDisposal of long-term equity investmentsIn these consolidated financial statements, for disposal of a portion of the long-term equity investments in asubsidiary without loss of control, the difference between disposal cost and disposal of long-term equityinvestments relative to the net assets of the subsidiary is charged to the owners¡¯ equity. If disposal of a portion ofthe long-term equity investments in a subsidiary by the parent company results in a change in control, it shall beaccounted for in accordance with the relevant accounting policies as described in Note 6. (2) ¡°Preparation Methodof the Consolidated Financial Statements¡±.On disposal of a long-term equity investment otherwise, the difference between the carrying amount of theinvestment and the actual consideration paid is recognized through profit or loss in the current period.

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄIn respect of long-term equity investment accounted for using equity method with the remaining equity interestafter disposal also accounted for using equity method, other comprehensive income previously under owners¡¯equity shall be accounted for in accordance with the same accounting treatment for direct disposal of relevantasset or liability by investee on pro rata basis at the time of disposal. The owners¡¯ equity recognized for themovement of other owners¡¯ equity (excluding net profit or loss, other comprehensive income and profitdistribution 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 preparingseparate financial statements, the remaining equity interest which can apply common control or impose significantinfluence over the investee after disposal shall be accounted for using equity method. Such remaining equityinterest shall be treated as accounting for using equity method since it is obtained and adjustment was madeaccordingly. For remaining equity interest which cannot apply common control or impose significant influenceover the investee after disposal, it shall be accounted for using the recognition and measurement standard offinancial instruments. The difference between its fair value and carrying amount as at the date of losing controlshall be included in profit or loss for the current period. In respect of other comprehensive income recognizedusing equity method or the recognition and measurement standard of financial instruments before the Groupobtained control over the investee, it shall be accounted for in accordance with the same accounting treatment fordirect disposal of relevant asset or liability by investee at the time when the control over investee is lost.Movement of other owners¡¯ equity (excluding net profit or loss, other comprehensive income and profitdistribution under net asset of investee accounted for and recognized using equity method) shall be transferred toprofit or loss for the current period at the time when the control over investee is lost. Of which, for the remainingequity interest after disposal accounted for using equity method, other comprehensive income and other owners¡¯equity shall be transferred on pro rata basis. For the remaining equity interest after disposal accounted for usingthe 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 equityinvestment by the Group, the remaining equity interest after disposal shall be accounted for using the recognitionand measurement standard of financial instruments. The difference between its fair value and carrying amount asat the date of losing common control or significant influence shall be included in profit or loss for the currentperiod. In respect of other comprehensive income recognized under previous equity investment using equitymethod, it shall be accounted for in accordance with the same accounting treatment for direct disposal of relevantasset or liability by investee at the time when equity method was ceased to be used. Movement of other owners¡¯equity (excluding net profit or loss, other comprehensive income and profit distribution under net asset of investeeaccounted for and recognized using equity method) shall be transferred to profit or loss for the current period atthe 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

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄcontrol over the subsidiary is lost. If the said transactions belong to ¡°transactions in a basket¡±, each transactionshall be accounted for as a single transaction of disposing equity investment of subsidiary and loss of control. Thedifference between the disposal consideration for each transaction and the carrying amount of the correspondinglong-term equity investment of disposed equity interest before loss of control shall initially recognized as othercomprehensive income, and subsequently transferred to profit or loss arising from loss of control for the currentperiod upon loss of control.15. Investment propertyMeasurement modeMeasured by cost methodDepreciation or amortization methodInvestment property refers to real estate held to earn rentals or for capital appreciation, or both. Including theleased land use right, land use right held for transfer upon appreciation, leased buildings, etc. in addition, inconnection with the vacant buildings held by the Company for operating lease, if the board of directors (or similarorgan) makes written resolution that the buildings are to be used for operating lease and the holding purpose willnot 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 shallbe included in cost of investment property only when the economic benefits associated with the asset will likelyflow to the Group and its cost can be measured reliably. All other expenditures on investment property shall beincluded in profit or loss for the current period when incurred.The Group adopts cost method for subsequent measurement of investment property, which is depreciated usingthe 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 noteIV.20 ¡°Long term assets impairment¡±In the event that an investment property is converted to an owner-occupied property, such property shall becomefixed assets or intangible assets since the date of its conversion. In the event that an owner-occupied property isconverted to real estate held to earn rentals or for capital appreciation, such fixed assets or intangible assets shallbecome an investment property since the date of its conversion. Investment property is measured at cost during itsconversion. 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 beobtained from the disposal, the recognition of it as an investment property shall be terminated. When aninvestment property is sold, transferred, retired or damaged, the amount of proceeds on disposal of the property

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄnet of the carrying amount and related tax and surcharges is recognized in profit or loss for the current period.16. Fixed assets(1) Confirmation conditionsFixed assets refer to the tangible assets for production of products, provision of labor, lease or operation, and with a service life inexcess of 1 financial year. Fixed assets are recognized while relevant economic interests flow into the Company and the cost is can bereliably measured. Fixed assets shall be initially measured according to the cost and take the predicted discard expenses intoconsideration.(2) Depreciation methods

Categories Method Years of depreciation Scrap value rate Yearly depreciation rate

Housing buildings Straight-line depreciation 20 10.00% 4.5%

Machines and equipment Straight-line depreciation 10 10.00% 9%

Office equipment Straight-line depreciation 5 10.00% 18%

Electronic equipment Straight-line depreciation 5 10.00% 18%Transportation

Straight-line depreciation 5 10.00% 18%equipment

Other equipment Straight-line depreciation 5 10.00% 18%(3) Recognization basis, valuation and depreciation method for financial lease assetsLeases are classified as finance leases whenever the terms of the lease transfer substantially all the risks andrewards of asset ownership to the lessee and titles to the assets may or may not eventually be transferred. Forfixed assets acquired under finance leases, the basis for provision of leased assets depreciation is the same as thatof self-owned fixed assets. When it can be reasonably determined that the ownership of a leased asset will betransferred at the end of the lease term, it is depreciated over the period of expected use; otherwise, the lease assetis depreciated over the shorter period of the lease term and the period of expected use.17. Project under ConstructionCosts of construction in progress are recognized by actual construction expenses, including vary engineeringspendings in construction period, the capitalized borrowing cost and other related costs before the constructionreaches condition for planned use. When construction in progress reaches condition for planned use, it shall becarried forward to fixed assets.Impairment testing and provision for impairment found more in ¡°22. Long-term assets impairment¡±18. Borrowing costsBorrowing costs include interest, amortization of discounts or premiums related to borrowings, ancillary costs

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄincurred in connection with the arrangement of borrowings, and exchange differences arising from foreigncurrency borrowings. For borrowing costs that are directly attributable to the acquisition, construction orproduction of a qualifying asset, when expenditures for the asset and borrowing costs are being incurred, activitiesrelating to the acquisition, construction or production of the asset that are necessary to prepare the asset for itsintended 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 borrowingcosts 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 actualinterest expense incurred on that borrowing for the period less any bank interest earned from depositing theborrowed funds before being used into banks or any investment income on the temporary investment of thosefunds. Where funds are borrowed for general purpose, the Group shall determine the amount of interest to becapitalized on such borrowings by applying a capitalization rate to the weighted average of the excess amounts ofcumulative expenditures on the asset over and above the amounts of specific-purpose borrowings. Thecapitalization 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 foreigncurrency shall be capitalized. Exchange differences related to general-purpose borrowings denominated in foreigncurrency 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 substantialperiod 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 orproduction of a qualifying asset is interrupted abnormally, when the interruption is for a continuous period ofmore than 3 months, until the acquisition, construction or production of the qualifying asset is resumed.19. Biological assetsNil20. Oil-and-gas assetsNil21. Intangible assets(1) Valuation method, service life and impairment testAn intangible asset is an identifiable non-monetary asset without physical substance owned or controlled by the

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄCompany.An intangible asset shall be initially measured at cost. The expenditures incurred on an intangible asset shall berecognized as cost of the intangible asset only if it is probable that economic benefits associated with the asset willflow to the Company and the cost of the asset can be measured reliably. Other expenditures on an item asset shallbe 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 fixedasset. For buildings and structures purchased, the purchase consideration shall be allocated among the land useright and the buildings on a reasonable basis. In case there is difficulty in making a reasonable allocation, theconsideration 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 anyaccumulated impairment loss provision and amortized using the straight-line method over its useful life when theasset 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 methodapplied at least at each financial year-end. A change in the useful life or amortization method used shall beaccounted for as a change in accounting estimate. For an intangible asset with an indefinite useful life, the Groupshall review the useful life of the asset in each accounting period. If there is evidence indicating that the useful lifeof that intangible asset is finite, the Company shall estimate the useful life of that asset and applythe accounting policies accordingly.(2)Internal accounting policies relating to research and development expendituresResearch and development expenditure of the Group was divided into expenses incurred during the research phaseand 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 intangibleassets, while those that do not satisfy the following conditions are accounted for in the profit or loss for the currentperiod:¢Ùit is technically feasible that the intangible asset can be used or sold upon completion;¢Úthere is intention to complete the intangible asset for use or sale;

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ¢Ûthe intangible asset can produce economic benefits, including there is evidence that the products produced usingthe 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;¢Üthere is sufficient support in terms of technology, financial resources and other resources in order to completethe development of the intangible asset, and there is capability to use or sell the intangible asset;¢Ýthe 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.22. Impairment of long-term assetThe Company will judge if there is any indication of impairment as at the balance sheet date in respect ofnon-current non-financial assets such as fixed assets, construction in progress, intangible assets with a finite usefullife, investment properties measured at cost, and long-term equity investments in subsidiaries, joint controlledentities and associates. If there is any evidence indicating that an asset may be impaired, recoverable amount shallbe estimated for impairment test. Goodwill, intangible assets with an indefinite useful life and intangible assetsbeyond working conditions will be tested for impairment annually, regardless of whether there is any indication ofimpairment.If the impairment test result shows that the recoverable amount of an asset is less than its carrying amount, theimpairment provision will be made according to the difference and recognized as an impairment loss. Therecoverable amount of an asset is the higher of its fair value less costs of disposal and the present value of thefuture cash flows expected to be derived from the asset. An asset¡¯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 bedetermined based on the bid price. If there is neither sale agreement nor active market for an asset, fair value shallbe 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 theasset for its intended sale. The present value of the future cash flows expected to be derived from the asset overthe course of continued use and final disposal is determined as the amount discounted using an appropriatelyselected discount rate. Provisions for assets impairment shall be made and recognized for the individual asset. If itis not possible to estimate the recoverable amount of the individual asset, the Group shall determine therecoverable amount of the asset group to which the asset belongs. The asset group is the smallest group of assetscapable of generating cash flows independently.For the purpose of impairment testing, the carrying amount of goodwill presented separately in the financialstatements shall be allocated to the asset groups or group of assets benefiting from synergy of businesscombination. If the recoverable amount is less than the carrying amount, the Group shall recognize an impairmentloss. The amount of impairment loss shall first reduce the carrying amount of any goodwill allocated to the asset

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄgroup or set of asset groups, and then reduce the carrying amount of other assets (other than goodwill) within theasset 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 ofthe restorable value.23. Long-term Deferred ExpensesLong term unamortized expenses represent the occurred expenses which should be shared by the current periodand future periods with term more than one year. And shall be amortized by straight-line method during the periodfor estimated benefit.24. Employee compensation(1) Accounting treatment for short-term compensationShort-term compensation including salary, bonus, allowance and subsidy, welfare expenses, medical insurance,birth insurance premium, industrial injury insurance premium, housing fund, labor union expenditure, personneleducation fund and non-monetary welfare. During the accounting period when staff providing service to theCompany, the acual short-term compensation occurred shall recognized as liabilities and reckoned into currentgains/losses or relevant assets costs. The non-monetary welfare is measured by fair value.(2) Accounting treatment for post-employment benefitThe post-employment benefit including the defined contribution plans. And defined contribution plans includingbasic endowment insurance, unemployment insurance and annuity, corresponding payable amount will reckonedinto relevant assets costs or current gains/losses while occurred.(3)Accounting for retirement benefitsWhen the Company terminates the employment relationship with employees before the end of the employmentcontracts or provides compensation as an offer to encourage employees to accept voluntary redundancy, theCompany shall recognise employee compensation liabilities arising from compensation for staff dismissal andincluded in profit or loss for the current period, when the Company cannot revoke unilaterally compensation fordismissal due to the cancellation of labour relationship plans and employee redundant proposals; and theCompany 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 paidwithin 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 compensationfor termination of employment. The salaries or wages and the social contributions to be paid for the employeeswho retire before schedule from the date on which the employees stop rendering services to the scheduledretirement date, shall be recognized (as compensation for termination of employment) in the current profit or loss

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄby the Group if the recognition principles for provisions are satisfied.(4)Accounting for other long-term employee benefitsFor other long-term employee benefits provided by the Company to its employees, if satisfy with the establishedwithdraw plan, then the benefits are accounted for under the established withdraw plan, otherwise accounted forunder defined benefit scheme.25. Accrued liabilitiesObligations pertinent to the contingencies which satisfy the following conditions are recognized as accruedliabilities: (1) The obligation is a current obligation borne by the Company; (2) it is likely that an outflow ofeconomic benefits will be resulted from the performance of the obligation; and (3) the amount of the obligationcan be reliably measured.At the balance sheet date, accrued liabilities shall be measured at the best estimate of the necessary expensesrequired for the performance of existing obligations, after taking into account relevant risks, uncertainties, timevalue 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, thecompensation amount shall, on a recoverable basis, be recognized as asset separately, and compensation amountrecognized shall not be more than the carrying amount of accrued liabilities.1) Contact in lossContact in loss is identified when the inevitable cost for performance of the contractual obligation exceeds theinflow of expected economic benefits. When a contract in loss is identified and the obligations there under arequalified by the aforesaid recognition criterion for contingent liability, the difference of estimated loss undercontract over the recognized impairment loss (if any) of the subject matter of the contract is recognized ascontingent liability.2) Restructuring obligationsFor detailed, official and publicly announced restructuring plan, the direct expenses attributable to therestructuring are recognized as contingent liabilities, provided that the aforesaid recognition criterion forcontingent liability is met. For restructuring obligations arising from disposal of part business, the Company willrecognise the obligations relating to restructuring only when it undertakes to dispose part business (namelyentering into finalized disposal agreement).26. Share-based payment1)Accounting for share-based paymentShare based payment refers to the transactions involving grant of equity instrument or assume liabilities as

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄdetermined 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.¢Ùequity settled share based paymentEquity settled share based payment for exchange of service provided by employees is measured at the fair value ofthe equity instrument granted to the employees as at the grant date. Subject to completion of services during thevest period or satisfaction with the required performance conditions for exercising right, the amount of the fairvalue is included in relevant cost or expense under straight line method based on the best estimate on the numberof exercisable equity instruments during the vest period. If it becomes exercisable immediately following therelevant 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 subsequentinformation such as the latest available information about change of number of exercisable employees, thus toamend the number of equity instruments which are expected to be exercisable. Impact of the above estimate isincluded 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 theservice as of the acquisition date provided that such fair value can be measured reliably. If such fair value can notbe measured reliably, while fair value of the equity instrument can be measured reliably, the payment shall bemeasured at the fair value of equity instrument as of the acquisition date, and included in relevant cost or expensewith corresponding increase in shareholders¡¯ equity.¢Úcash settled share based paymentAs for cash settled share based payment, it is measured at the fair value of the liabilities assumed by the Companyas determined based on shares or other equity instruments. If it becomes exercisable immediately following therelevant grant, it is included in relevant cost or expense on the grant date and accordingly increase liabilities. If itis subject to completion of services during the vest period or satisfaction with the required performance conditionsfor exercising right, on each balance sheet date during the vest period, the Company makes the best estimate onthe exercisable rights, and accounts for the service obtained in the current period in relevant cost or expense withcorresponding 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 tosettlement 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 planIn case that the Company amends share based payment plan which leads to increase of fair value of the grantedequity instruments, the Company will correspondingly increase recognition for services obtained according to theincrease of fair value of equity instrument. Increase of fair value of equity instrument refers to the difference of

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄfair values of equity instruments as at the revision date before and after such revision. In case that the amendmentresults in decrease in total fair value of share based payment or adoption of other means which are not beneficialto employees, the Company will continue account for the services obtained as if such amendment had neveroccurred, 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 ofrights attaching to the granted equity instruments which are cancelled, and the remaining amount which should berecognized during the vest period is included in profit or loss for the current period promptly, meanwhile torecognise capital reserve. If employees or other parties who can choose to satisfy the non exercisable rights do notsatisfy such conditions during the vest period, the Company will regard them as cancellation of granted equityinstruments.3)Accounting for share based payment concerning the Company, its shareholders or actual controllersAs for share based payment concerning the Company, its shareholders or actual controllers, with either thesettlement entity or service-acceptance entity in the Company or not, it is accounted for in our consolidatedfinancial statement under the following provisions:¢Ùfor settlement entity making settlement with its own equity instruments, the transaction is accounted for asequity 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 termequity investment in the service-acceptance entity based on the fair value of the equity instruments as at the grantdate or the fair value of assumed liabilities, with recognition of capital reserve (other capital reserve) or liabilities.¢ÚIf service-acceptance entity is not obliged to settle or grant its own equity instruments to its employees, theshare based payment transaction is accounted for as equity settled share based payment. If service-acceptanceentity is obliged to settle or the equity instruments granted to its employee are not the own instruments of theentity, 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 notthe same enterprise, the share based payment transaction shall be recognized and measured in the respectivefinancial statement of the two entities under the aforesaid principles.27. Other financial instruments including senior shares and perpetual bondsThe perpetual bonds and senior shares issued by the Company are treated as equity instruments subject tosatisfaction of all the below conditions:¢Ùthe financial instrument excludes delivery of cash or other financial assets to others, or exchange for contractual

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄobligations on financial assets or financial liabilities with others under potential negative conditions;¢Úif its own equity instruments are required or may be used to settle the financial instruments, it excludes thecontractual obligation to deliver varied numbers of own equity instruments for settlement provided that thefinancial instruments are non-derivatives; if the financial instruments are derivatives, the Company can only settlethe financial instruments by fixed number of own equity instruments for exchange for fixed amount of cash orother 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 berecognized as liabilities at the fair value of liabilities portion. The actual amount received less fair value of theliabilities portion shall be recornised as other equity instrument. Transaction expenses occurred in issuance ofcompound financial instruments are allocated to the portions of liabilities and equities according to theirrespective proportion to the total issuance price.2)Accounting for perpetual bonds and senior sharesFor perpetual bonds and senior shares classified into financial liabilities, their relevant interest, dividends, gains orlosses and gains or losses arising from redemption or refinancing are all included in current profit or loss otherthan those borrowing expenses which meet condition for capitalisation (please refer to note 18 ¡°borrowingexpenses¡±).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 fromequity. 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. Revenue1) Income from goods salesIncome from goods sales are realized when the following conditions are met: the major risks and remunerationentitled to the ownership of goods are transferred to buyer; neither retain the continued management rightgenerally related to ownership, nor exercise effective control over the sold products; the relevant economicbenefits are probable to flow into the Company; the relevant income and costs can be measured reliably.

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ2) Provision of labor servicesWhen the outcome of a transaction involving the rendering of services can be reliably estimated, it shall, on thebalance sheet date, recognize the revenue from the rendering of services employing the percentage-of-completionmethod.The outcome of a transaction concerning the rendering of services can be reliably estimated, which shallconcurrently satisfy: ¢Ù The relevant amount of revenue can be reliably measured; ¢Ú it is probable that theeconomic benefits will flow into the enterprise; ¢Û the completion schedule of the transaction can be reliablyascertained; and ¢Ü 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 shallrecognize the revenue from the rendering of services based on the cost of rendering services already incurred andexpected to be compensated, and the cost of rendering services incurred shall be recognized as an expense for thecurrent period. If the cost of rendering services is expected not to be compensated, it shall be recognized as anexpense.When a contract or agreement signed by the Group includes sales of goods and rendering of services, if sales ofgoods and rendering of services can be differentiated and separately measured, they will be recognizedrespectively. 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 useIn line with relevant contract or agreement, recognized income on accrual basis(4) Interest incomeRecognized based on the times and real interest rates for the money used by others29. Government Grants(1)Determination basis and accounting for government grants related to assetsGovernment grants are transfer of monetary assets or non-monetary assets from the government to the Group atno consideration, excluding capital considerations from the government as an owner of the Group. Governmentgrants 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 amountreceived or receivable. If a government grant is in the form of a transfer of non-monetary asset, the item shall bemeasured at fair value. If fair value is not reliably determinable, the item shall be measured at a nominal amountand recognized immediately in profit or loss for the current period.

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄGovernment grants are generally recognized when received and measured at the amount actually received, but aremeasured at the amount likely to be received when there is conclusive evidence at the end of the accountingperiod that the Group will meet related requirements of such grants and will be able to receive the grants. Thegovernment grants so measured should also satisfy the following conditions: (1) the amount of the grants beconfirmed with competent authorities in written form or reasonably deduced from related requirements underfinancial fund management measures officially released without materialuncertainties; (2) the grants be given based on financial support projects and fund management policies officiallypublished and voluntarily disclosed by local financial authorities in accordance with the requirements underdisclosure of government information, where such policies should be open to any company satisfying conditionsrequired and not specifically for certain companies; (3) the date of payment be specified in related documents andthe 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 thesubject matter.A government grant related to an asset shall be recognized as deferred income, and evenly amortized to profit orloss over the useful life of the asset.For the repayment of a government grant already recognized, if there is any related deferred income, therepayment shall be off set against the carrying amount of the deferred income, and any excess shall be recognizedin profit or loss for the current period; if there is no related deferred income, the repayment shall be recognizedimmediately in profit or loss for the current period.(2) Determination basis and accounting for government grants related to incomeGovernment grants are transfer of monetary assets or non-monetary assets from the government to the Group atno consideration, excluding capital considerations from the government as an owner of the Group. Governmentgrants 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 amountreceived or receivable. If a government grant is in the form of a transfer of non-monetary asset, the item shall bemeasured at fair value. If fair value is not reliably determinable, the item shall be measured at a nominal amountand 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 aremeasured at the amount likely to be received when there is conclusive evidence at the end of the accountingperiod that the Group will meet related requirements of such grants and will be able to receive the grants. Thegovernment grants so measured should also satisfy the following conditions: (1) the amount of the grants beconfirmed with competent authorities in written form or reasonably deduced from related requirements under

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄfinancial fund management measures officially released without materialuncertainties; (2) the grants be given based on financial support projects and fund management policies officiallypublished and voluntarily disclosed by local financial authorities in accordance with the requirements underdisclosure of government information, where such policies should be open to any company satisfying conditionsrequired and not specifically for certain companies; (3) the date of payment be specified in related documents andthe 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 thesubject matter.For a government grant related to income, if the grant is a compensation for related expenses or losses to beincurred in subsequent periods, the grant shall be recognized as deferred income, and recognized in profit or lossover the periods in which the related costs are recognized; if the grant is a compensation for related expenses orlosses 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, therepayment shall be off set against the carrying amount of the deferred income, and any excess shall be recognizedin profit or loss for the current period; if there is no related deferred income, the repayment shall be recognizedimmediately in profit or loss for the current period.30. Deferred tax assets / deferred income tax liabilities ¡¢ Deferred income tax assets/Deferred income taxliabilities1) Current income taxAt the balance sheet date, current income tax liabilities (or assets) for the current and prior periods shall bemeasured at the amount expected to be paid (or recovered) according to the requirements of tax laws. Taxableprofits, which are the basis for calculating the current income tax expense, are determined after adjusting theaccounting profits before tax for the year in accordance with relevant requirements of tax laws.2) Deferred income tax assets and deferred income tax liabilitiesTemporary differences arising from the difference between the carrying amount of an asset or liability and its taxbase, and the difference between the tax base and the carrying amount of those items that are not recognized asassets or liabilities but have a tax base that can be determined according to tax laws, shall be recognized asdeferred 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 initialrecognition of goodwill; and the initial recognition of an asset or liability in a transaction which is neither abusiness combination nor affects accounting profit or taxable profit (or deductible loss) at the time of the

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄtransaction. In addition, the Group recognises the corresponding deferred income tax liability for taxabletemporary differences associated with investments in subsidiaries, associates and joint ventures, except when bothof the following conditions are satisfied: the Company able to control the timing of the reversal of the temporarydifference; 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 initialrecognition of an asset or liability in a transaction which is neither a business combination nor affects accountingprofit or taxable profit (or deductible loss) at the time of the transaction. In addition, the Group recognises thecorresponding deferred income tax asset for deductible temporary differences associated with investments insubsidiaries, associates and joint ventures to the extent that it is probable that taxable profits will be availableagainst which the deductible temporary differences can be utilised, except when both of the following conditionsare satisfied: it is not probable that the temporary difference will reverse in the foreseeable future; and it is notprobable 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 tosubsequent periods, to the extent that it is probable that future taxable profits will be available against which thedeductible 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 taxrates that are expected to apply to the period when the asset is realised or the liability is settled, according to therequirements of tax laws.At the balance sheet date, the Company shall review the carrying amount of a deferred income tax asset. If it isprobable that sufficient taxable profits will not be available in future periods to allow the benefit of the deferredincome tax asset to be utilised, the carrying amount of the deferred income tax asset shall be reduced. Any suchreduction in amount shall be reversed when it becomes probable that sufficient taxable profits will be available.3) Income tax expenseIncome 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 taxincome) are included in profit or loss for the current period, except for: recognized as other comprehensiveincome or current income tax and deferred income tax related to transactions or events that are directly recognizedin other comprehensive income or owners¡¯ equity, which are recognized directly in owners¡¯ equity, and deferredincome tax arising from a business combination, which is adjusted against the carrying amount of goodwill.4) Presentation of income tax

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄWhen the Group has a legal right to settle on a net basis and intends either to settle on a net basis or to realise theassets and settle the liabilities simultaneously, current tax assets and current tax liabilities are offset and presentedon a net basis.When the Group has a legal right to settle current tax assets and liabilities on a net basis, and deferred tax assetsand deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxableentity or different taxable entities which intend either to settle current tax assets and liabilities on a net basis or torealise the assets and liabilities simultaneously, in each future period in which significant amounts of deferred taxassets or liabilities are expected to be reversed, deferred tax assets and deferred tax liabilities are offset andpresented on a net basis.31. Lease(1)Accounting for operating leaseLeases are classified as finance leases whenever the terms of the lease transfer substantially all the risks andrewards of asset ownership to the lessee and titles to the assets may or may not eventually be transferred. All otherleases are classified as operating leases.1) Operating lease business with the Group recorded as lesseeLease payment for operating lease is recognized as related asset cost or profits and losses for the current periodusing the straight-line method over the lease term. The initial direct cost is directly accounted in profit or loss forthe 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 lessorRental income is recognized in profit or loss for the current period using the straight-line method over the leaseterm. The initial direct cost where the amount is larger is capitalised when incurred, and accounted for as profit orloss for the current period on the same basis as recognition of rental income over the entire lease period; the initialdirect cost where the amount is fewer is included in the profit or loss for the period when incurred. Contingentrental is accounted for as profit or loss for the period in which it is incurred.(2) Accounting for financing leaseLeases are classified as finance leases whenever the terms of the lease transfer substantially all the risks andrewards of asset ownership to the lessee and titles to the assets may or may not eventually be transferred. All otherleases are classified as operating leases.1) Financing lease business with the Group recorded as lessee

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄOn the beginning date of the lease, the entry value of leased asset shall be at the lower of the fair value of theleased asset and the present value of minimum lease payment at the beginning date of the lease. Minimum leasepayment shall be the entry value of long-term accounts payable, with difference recognized as unrecognizedfinancing expenses. In addition, initial direct costs attributable to leased items incurred during the process of leasenegotiation and signing of lease agreement shall be included in the value of leased assets. The balance ofminimum lease payment after deducting unrecognized financing expenses shall be accounted for long-termliability and long-term liability due within one year.Unrecognized financing expenses shall be recognized as financing expenses for the current period using effectiveinterest method during the leasing period. Contingent rent shall be included in profit or loss for the current periodat the time it incurred.2) Financing lease business with the Group recorded as lessorOn the beginning date of the lease, the entry value of lease receivable shall be the aggregate of minimum leasereceivable and initial direct costs at the beginning date of the lease. The unsecured balance shall be recorded. Theaggregate of minimum lease receivable, initial direct costs and unsecured balance and the different between theirpresent value shall be recognized as unrealised financing income. The balance of lease receivable after deductingunrecognized 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 effectiveinterest method during the leasing period. Contingent rent shall be included in profit or loss for the current periodat the time it incurred.32. Other important accounting policy and estimation1) Discontinued operationDiscontinued operation refers to the operation disposed or classified as held-for-sale by the Company andpresented separately under operation segments and financial statements, which has fulfilled one of the followingcriteria: ¢Ù it represents an independent key operation or key operating region; ¢Ú it is part of the proposeddisposal plan on an independent key operation or proposed disposal in key operating region; or ¢Û it onlyestablishes for acquisition of subsidiary through disposal.Accounting for discontinued operation is set out in note 13 ¡°classified as assets held for sale¡±.

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ33. Major accounting policy and changes(1) Main accounting policy changes¡Ì Applicable ¡õ Not applicable

Content and reasons Approval procedures Note

Cai Kuai [2014] No. 6; No.8; No.10;

Seven rules newly issued Issued by Ministry of Finance

No.11; No.14 and No.16At the beginning of 2014, Ministry of Finance issued the followed rules Cai Kuai [2014] No. 6; No.8; No.10;

No.11; No.14 and No.16, that is "Accounting Standards for Business Enterprises No. 39 - Fair Value

Measurements ", " Accounting Standards for Business Enterprises No. 30 - Presentation of Financial Statements"(2014 Revised), "Accounting Standards for Business Enterprises No. 9 - Employee Remuneration(2014Revised)", " Accounting Standards for Business Enterprises No. 33 - Consolidated Financial Statements "(2014

Revised), "Accounting Standards for Business Enterprises No. 40 - Joint Venture Arrangement", "AccountingStandards for Business Enterprises No. 2 - Long-term Equity Investments(2014 Revised)" and "AccountingStandards for Business Enterprises No. 41 - Disclosure of Interests in Other Entities", and requires all theenterprises implementing the accounting standards to execute since July 1, 2014. Meanwhile, the Ministry ofFinance issued the Cai Kuai[2014] No.23 "Accounting Standards for Business Enterprises No. 37 - Presentationof Financial Instruments(2014 Revised)"(¡°Presentation of Financial Instruments¡± for short), which requires theenterprises implementing the accounting standards to present the financial instruments in the financial reports of2014 and the subsequent periods in accordance with the requirements of the accounting standards.The Company executed the above mentioned 7 new or revised accounting standards except the Presentation ofFinancial Instruments since 1 July 2014, and started executing the Presentation of Financial Instruments inpreparing the annual financial repot of 2014. The accounting policy changed shows no impart on items andamount of current and previous financial statements.(2) Changes of important accounting estimate¡õ Applicable ¡Ì Not applicable34. OtherNilVI. Taxes1. Mai tax category and tax rate

Tax category Tax calculation evidence Tax rate

Value added tax Sales income, and income from 17%

processing, maintenance, making repairs

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

and supplying replacements, and labor

service

Sales tax Taxable labor income 5%

Amount of value-added tax and sales tax

Tax for maintaining and building cities 7%

payable

25%

Business income tax Taxable income

Amount of value-added tax and sales tax

Educational surtax 3%

payable

Amount of value-added tax and sales tax

2%Local educational surtax

payable

1.2%

Property tax 70% of the original value of the propertyDisclose reasons for different taxpaying body

Taxpaying body Income tax rate2. Tax preferenceNil3. OtherNilVII. Notes to Items in Consolidated Financial Statements1. Monetary fund

In RMB

Item Ending balance Opening balance

Cash on hand 2,894.71 49,992.08

Cash in bank 30,160,972.07 26,784,179.51

Total 30,163,866.78 26,834,171.59Other explanationNil2. Financial assets measured by fair value and reckoned into current gains/losses with its variation

In RMB

Item Ending balance Opening balanceOther explanation:Nil

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ3. Derivative financial assets¡õ Applicable ¡Ì Not applicable4. 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(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 70,550,979.10

Total 70,550,979.10(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-endOther explanationNil5. Accounts receivable(1) Accounts receivable by category:

In RMB

Ending balance Opening balance

Book balance Bad debt provision Book balance Bad debt provision

Category Book

Accrual Accrual Book value

Amount Ratio Amount value Amount Ratio Amount

ratio ratio

Receivables with bad 8,101,91 100.00% 1,310,93 16.18% 6,790,982 8,346,6 100.00% 1,286,406 15.41% 7,060,251.2

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

debt provision 9.90 7.40 .50 57.41 .13 8accrual by creditportfolio

8,101,91 1,310,93 6,790,982 8,346,6 1,286,406 7,060,251.2

Total 100.00% 16.18% 100.00% 15.41%

9.90 7.40 .50 57.41 .13 8Receivable with single significant amount and withdrawal bad debt provision separately at end of period:¡õ Applicable ¡Ì Not applicableIn combination, accounts receivable whose bad debts provision was accrued by age analysis:¡Ì Applicable ¡õ Not applicable

In RMB

Ending balance

Age

Account receivable Bad debt provision Accrual ratiowithin one year

Subtotal within one year 6,634,178.97 19,902.54 0.30%

1-2 years 117,506.98 352.52 0.30%

2-3 years 59,730.80 179.19 0.30%

Over 3 years 1,290,503.15 1,290,503.15 100.00%

Total 8,101,919.90 1,310,937.40Explanation on combination determines:According to the business scale, business nature, and customers¡¯ settlement, etc., the account receivable with single significantamount is determined to be RMB 5 million. The account receivable with single significant amount has no depreciation reserve, andthe 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:¡õ Applicable ¡Ì Not applicableIn combination, withdrawal proportion of bad debt provision based on other methods for account receivable:(2) Bad debt provision accrual collected or switch backBad debt provision accrual was 24,531.27 Yuan; the amount collected or switches back amounting to 0.00 YuanImportant bad debt provision collected or switch back:

In RMB

Company Collected or switch back amount Collection way

Total 0.00 --

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ(3) Account receivable actual charge off in the Period

In RMB

Item Amount written offWritten-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:Nil(4) Top 5 receivables at ending balance by arrears partyTotal year-end balance of top five receivables by arrears party amounting to 5,939,426.45 Yuan, takes 73.31percent of the total account receivable at year-end, bad debt provision accural correspondingly at year-endamounting as 1,189,778.82 Yuan.(5) Receivable derecognition due to transfer of financial assetsNil(6) Assets and liability resulted by receivable transfer and continous involvementNilOther explanation:Nil6. Advance payment(1) advance payment by age

In RMB

Ending balance Opening balance

Age

Amount Ratio Amount Ratio

within one year 348,277.01 100.00% 3,748.01 2.11%

1-2 years 173,888.48 97.89%

Total 348,277.01 -- 177,636.49 --Explanation on reasons of failure to settle on important advance payment with age over one year:Nil

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ(2) Top 5 advance payment at ending balance by prepayment objectTotal year-end balance of top five advance payment by prepayment object amounting to 340,275.00 Yuan, takes97.70 percent of the total advance payment at year-end.Other explanationNil7. 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 basisOther explanation:Nil8. 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:Nil

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ9. Other accounts receivable(1) Other accounts receivable by category

In RMB

Ending balance Opening balance

Book balance Bad debt provision Book balance Bad debt provision

Category Book

Accrual Accrual Book value

Amount Ratio Amount value Amount Ratio Amount

ratio ratioOther receivables

with bad debt 961,528. 450,273. 511,254.8 107,821 426,229.5 107,395,42

100.00% 46.83% 100.00% 0.40%

provision accrual by 71 90 1 ,659.25 6 9.69credit portfolio

961,528. 450,273. 511,254.8 107,821 426,229.5 107,395,42

Total 100.00% 46.83% 100.00% 0.40%

71 90 1 ,659.25 6 9.69Other receivable with single significant amount and withdrawal bad debt provision separately at end of period:¡õ Applicable ¡Ì Not applicableIn combination, other accounts receivable whose bad debts provision was accrued by age analysis¡Ì Applicable ¡õ Not applicable

In RMB

Ending balance

Age

Other accounts receivable Bad debt provision Accrual ratiowithin one year

Subtotal within one year 500,793.19 1,502.38 0.30%

1-2 years 12,000.00 36.00 0.30%

Over 3 years 448,735.52 448,735.52 100.00%

Total 961,528.71 450,273.90Explanations on combination determine:According to the business scale, business nature, and customers¡¯ settlement, etc., the other account receivable with single big amountis determined to be RMB 5 million. The other account receivable with single big amount has no depreciation reserve, and the reservefor 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 :¡õ Applicable ¡Ì Not applicableIn combination, withdrawal proportion of bad debt provision based on other methods for other account receivable:¡õ Applicable ¡Ì Not applicable

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ(2) Bad debt provision accrual collected or switch backBad debt provision accrual was 24,044.34 Yuan; the amount collected or switches back amounting to 0.00 YuanImportant 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 offWritten-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:Nil(4) Other receivables by nature

In RMB

Nature Ending book balance Opening book balance

Current money 961,528.71 107,821,659.25

Total 961,528.71 107,821,659.25(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

receivablesLuwei Electrical

payment for goods 300,000.00 Over 3 years 31.20% 300,000.00Equipment Co.,After-sale service

dept. Fuxin Electric payment for goods 100,000.00 within one year 10.40% 300.00vehicle, Beilin

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄDistrict, Xi¡¯an CityShenzhen Anjinheng

Deposit 90,100.00 within one year 9.37% 270.30Industrial Co., Ltd.

Total -- 490,100.00 -- 300,570.30(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 -- --Nil(7) Other account receivable derecognition due to financial assets transferNil(8) Assets and liability resulted by other account receivable transfer and continuous involvementNilOther explanation:Nil10. 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 302,597.03 302,597.03 10,580.00 10,580.00

Finished goods 5,868,710.50 5,868,710.50 4,534,536.43 4,534,536.43

Total 6,171,307.53 6,171,307.53 4,545,116.43 4,545,116.43(2) Inventory depreciation reserve

In RMB

Item Opening balance Increase in the current period Decrease in the current period Ending balance

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Switch back or

Accrual Other Other

write-off

Total 0.00 0.00 0.00 0.00Nil(3) Explanation on capitalization of borrowing costs at ending balance of inventoryNil(4) Assets that completed without settlement from construction contract

In RMB

Item AmountOther explanation:Nil11. 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:Nil12. Non-current assets due within one year

In RMB

Item Ending balance Opening balanceOther explanation:Nil13. Other current assets

In RMB

Item Ending balance Opening balanceOther explanation:Nil

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ14. 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

Amount of fair value

Cost /liability of equity changes that

Amount with impairment

Type instrument/ amortization Fair value accumulatively reckoned

accrual

cost of debt instrument in other comprehensive

gains

Total 0.00 0.00 0.00 0.00(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

Including:

Balance of Including: switch Balance of

transfer-in from

impairment back due to fair impairment

Type Accrual other Decreased

accrual at value rebound at accrual at

comprehensive

period-begin period-end period-end

income

Total 0.00 0.00 0.00 0.00 0.00 0.00

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ(5) Fair value of equity instrument available for sale sharply declined or other-than-temporary declined atperiod-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-accural

to cost (month) accrual

Total 0.00 0.00 -- -- 0.00 --Other explanationNil15. 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 PeriodNilOther explanationNil16. Long-term account receivable(1) Long-term account receivable

In RMB

Ending balance Opening balance

Discount rate

Item Bad debt Bad debt

Book balance Book value Book balance Book value section

provision provision

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Total 0.00 0.00 0.00 0.00 --(2) Long-term account receivable derecognition due to transfer of financial assetsNil(3) Assets and liability resulted by long-term account receivable transfer and continuous involvementNilOther explanationNil17. 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 issuedI. Joint venture

Subtotal 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00II. 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 0.00Other explanationNil18. Investment real estate(1) Investment real estate measured at cost¡õ Applicable ¡Ì Not applicable(2) Investment real estate measured at fair value¡õ Applicable ¡Ì Not applicable(3) Certificate of title un-completed

In RMB

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Item Book value Reasons for un-completedOther explanationNil19. Fixed assets(1) Fixed assets

In RMB

Housing Machines and Electronic Transportation

Item Other Total

buildings equipment equipment equipment

1.Opening balance 581,452.63 590,000.00 1,171,452.63

2. increased in the

194,406.84 56,153.85 441,292.30 691,852.99Period

(1) Purchase 194,406.84 56,153.85 441,292.30 691,852.99

3.DecreasedAmount 515,478.06 515,478.06

(1) Disposal or scrap 515,478.06 515,478.06

4.Ending balance 194,406.84 637,606.48 515,814.24 1,347,827.56

1.Opening balance 391,916.33 551,711.93 943,628.26

2.increased in the

1,474.16 24,676.15 52,916.67 79,066.98Period

(1) Accrual 1,474.16 24,676.15 52,916.67 79,066.98

3.DecreasedAmount 448,829.52 448,829.52

(1) Disposal or scrap 448,829.52 448,829.52

4.Ending balance 1,474.16 416,592.48 155,799.08 573,865.72

1.Ending book value 192,932.68 221,014.00 360,015.16 773,961.84

2. Opening book value 189,536.30 38,288.07 227,824.37(2) Fixed assts 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

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ(4) Fixed assets leased through operating lease

In RMB

Item Ending book value(5) Certificate of title un-completed

In RMB

Item Book value ReasonsOther explanation20. Construction in progress(1) Construction in progress

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) Changes in significant construction in progress

In RMB

Accumul including

Proporti

Fixed ated : interest Interest

Other on of

increased assets amount capitaliz capitaliz

Opening decrease Ending project Sourceof

Item Budget in the transfer-i Progress of ed ation rate

balance d in the balance investme funds

Period n in the interest amount of the

Period nt in

Period capitaliz of the year

budget

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 Accural Amount Reasons

Total 0.00 --Other explanationNil

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ21. Engineering materials

In RMB

Item Ending balance Opening balanceOther explanation:Nil22. Disposal of fixed assets

In RMB

Item Ending balance Opening balanceOther explanation:Nil23. Productive biological assets(1) Productive biological assets measured by cost¡õ Applicable ¡Ì Not applicable(2) Productive biological assets measured by fair value¡õ Applicable ¡Ì Not applicable24. Oil-and-gas assets¡õ Applicable ¡Ì Not applicable25. Intangible assets(1) Intangible assets

In RMB

Non-patent

Item Land use right Patent Other Total

technology

1.Opening balance 5,271,000.00 5,271,000.00

4.Ending balance 5,271,000.00 5,271,000.00

2.increased in the Period 753,000.00 753,000.00

(1) Accural 753,000.00 753,000.00

4.Ending balance 753,000.00 753,000.00

1.Ending book value 4,518,000.00 4,518,000.00

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

2.Opening book value 5,271,000.00 5,271,000.00Ratio of the intangible assets from intenal R&D in balance of intangible assets at period-end(2) Land use right without certificate of title completed

In RMB

Item Book value ReasonsOther explanation:Nil26. Development expense

In RMB

increased in the Period Decreased Amount

Opening Internal Confirmed as Included in

Item Ending balance

balance development Other intangible current profits Other

expenditure assets and losses

Total 0.00 0.00 0.00 0.00 0.00Other explanationNil27. Goodwill(1) Original book value of goodwill

In RMB

Increase during the year Decreased during the year

The invested Arising from

Opening balance Ending balance

entity or items enterprise Other Disposal Other

combination

Total 0.00 0.00 0.00 0.00 0.00 0.00(2) Depreciation reserves of goodwill

In RMB

The invested Increase during the year Decreased

Opening balance Ending balance

entity or items Accrual Other Disposal Other

Total 0.00 0.00 0.00 0.00 0.00 0.00Processof impairment testing, parameter and recogniztion method for impairment lossesNil

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄOther explanationNil28. 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 0.00Other explanationNil29. 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 assetsAsset depreciation

47,988.32 11,997.08reserves

Total 47,988.32 11,997.08 0.00(2) Deferred income tax liabilities un-offset

In RMB

Ending balance Opening balance

Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax

differences liabilities differences liabilities

Total 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-setDeferred income tax

11,997.08assets

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ(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 NoteOther explanation:Nil30. Other non-current assets

In RMB

Item Ending balance Opening balanceOther explanation:Nil31. Short-term loans(1)Types of short-term loans

In RMB

Item Ending balance Opening balanceExplanation on short-term loans categoryNil(2) overdue outstanding short-term loansTotal 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:Nil32. Financial liability measured by fair value and with its variation reckoned into current gains/losses

In RMB

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Item Ending balance Opening balanceOther explanation:Nil33. derivative financial liabilities¡õ Applicable ¡Ì Not applicable34. Notes payable

In RMB

Type Ending balance Opening balanceNotes expired at year-end without paid was 0.00 Yuan35. Account payable(1) Account payable

In RMB

Item Ending balance Opening balance

payment for goods 10,278,377.96 9,935,720.73

Total 10,278,377.96 9,935,720.73(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:Nil36. Account received in advance(1) Account received in advance

In RMB

Item Ending balance Opening balance

payment for goods 2,595,736.07 3,627,323.31

Total 2,595,736.07 3,627,323.31

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ(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 AmountOther explanation:Nil37. Wages payable(1) Wages payable

In RMB

Item Opening balance Increase during the year Decreased Ending balance

I. Short-term compensation 1,516,624.17 6,694,919.12 6,444,045.53 1,767,497.76II. Post-employment

welfare- defined 393,048.90 387,731.94 5,316.96contribution plans

III. Dismiss welfare 17,310.25 17,310.25

Total 1,516,624.17 7,105,278.27 6,849,087.72 1,772,814.72(2) Short-term compensation

In RMB

Item Opening balance Increase during the year Decreased Ending balance1. Wages,bonuses,allowances

1,286,682.00 5,751,226.97 5,511,579.85 1,526,329.12andsubsidies2. Welfare for workers

193,838.00 193,838.00and staff

3. Social insurance 154,056.00 152,762.92 1,293.08

Including: Medical

134,220.00 132,926.92 1,293.08insurance

Work injury

7,416.00 7,416.00insurance

Maternity 12,420.00 12,420.00

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄinsurance4. Housing accumulation

501,600.06 490,265.62 11,334.44fund5. Labor unionexpenditure and

229,942.17 94,198.09 95,599.14 228,541.12personnel educationexpense

Total 1,516,624.17 6,694,919.12 6,444,045.53 1,767,497.76(3) Defined contribution plans

In RMB

Item Opening balance Increase during the year Decreased Ending balance1. Basic endowment

372,485.06 367,312.74 5,172.32insurance2. Unemployment

20,563.84 20,419.20 144.64insurance

Total 393,048.90 387,731.94 5,316.96Other explanation:The Company participates in the pension insurance and unemployment insurance plans established by governmentauthorities by laws. Under these plans, the Company makes monthly contribution to these plans based on 14% and2% of the paid salaries of its employees respectively. Other than the aforesaid monthly contribution, the Companytakes no further payment obligation. The relevant expenditure is included in current profit or loss or cost ofrelevant assets when occurs.38. Tax payable

In RMB

Item Ending balance Opening balance

Value-added tax 1,256,783.68 596,142.27

Business tax 25,782.60 67,744.68

Enterprise income tax 745,109.42 93,002,221.34

Individual income tax 40,662.68 31,172.70

Urban maintenance and construction tax 64,952.41 15,383.51

Educational surtax 41,575.59 6,169.20

Embankment expenses 4,198.63 6,297.08

House property tax 53,122.79 53,122.79

Total 2,232,187.80 93,778,253.57Other explanation:

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄEducational surtax including educational surtax and local educational surtax. Embankment expenses refers to the collection fees, andtax by local tax bureau for Water Affairs Group39. Interest payable

In RMB

Item Ending balance Opening balanceInterest overdue without paid:

In RMB

Borrower Amount overdue Reasons

Total 0.00 --Other explanation:Nil40. Dividends payable

In RMB

Item Ending balance Opening balanceOther explanation, including dividends payable with over one year age and disclosure un-payment reasons:Nil41. Other payable(1) Classification of other payable according to nature of account

In RMB

Item Ending balance Opening balance

Custodian and common benefit debts 9,840,809.85 26,103,724.68

Current money 9,370,269.08 8,851,010.21

Margin 1,903,346.00

Total 21,114,424.93 34,954,734.89(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 9,840,809.85 Un-cleared

Guosheng Energy 6,500,000.00 Interest-free loans

Total 16,340,809.85 --Other explanationNil

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ42. Liability holding ready for sold

In RMB

Item Ending balance Opening balanceOther explanation:Nil43. Non-current liability due within one year

In RMB

Item Ending balance Opening balanceOther explanation:Nil44. Other current liability

In RMB

Item Ending balance Opening balanceChanges of short-term bond payable:

In RMB

Accrual Premium/

Face Release Bond Issuing Opening Issued in interest discount Paid in Ending

Bond Other

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 0.00Other explanation:Nil45. Long-term loans(1)Classification of long-term loans

In RMB

Item Ending balance Opening balanceExplanation:NilOther explanation, including interest rate section:Nil

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ46. 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 andperpetual capital securities that classify as financial liability)

In RMB

Accrual Premium/

Face Release Bond Issuing Opening Issued in interest discount Paid in Ending

Bond Other

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(3) Convertible conditions and time for shares transfer for the convertible bondsNil(4) Other financial instruments classify as financial liabilityBasic information of the outstanding preferred stock and perpetual capital securities at period-endNilChanges 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 0.00Basis for financial liability classification for other financial instrumentNilOther explanationNil47. Long-term account payable(1) Listed by nature

In RMB

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Item Ending balance Opening balanceOther explanation:Nil48. Long-term employee payable(1) Long-term employee payable

In RMB

Item Ending balance Opening balance(2) Changes of defined benefit plansPresent value of the defined benefit plans:

In RMB

Item Current amount Last amount

V. Ending balance 0.00 0.00Scheme assets:

In RMB

Item Current amount Last amount

I. Opening balance 0.00 0.00

IV. Other changes 0.00 0.00

V. Ending balance 0.00 0.00Net liability (assts) of the defined benefit plans

In RMB

Item Current amount Last amountContent of defined benefit plans and relevant risks, impact on future cash flow of the Company as well as times and uncertainty:NilMajor actuarial assumption and sensitivity analysis:NilOther explanation:Nil49. Special payable

In RMB

Increase during the

Item Opening balance Decreased Ending balance Causes

year

Total 0.00 0.00 --

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄOther explanation:Nil50. Accrued liability

In RMB

Item Ending balance Opening balance CausesOther explanation, including relevant important assumptions and estimation:Nil51. 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:Nil52. Other non-current liability

In RMB

Item Ending balance Opening balanceOther explanation:Nil53. Share capital

In RMB

Changeduringtheyear(+,-)

Shares

Opening

New shares transferred Ending balance

balance Bonus share Other Subtotal

issued from capital

reserve

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Total shares 551,347,947.00 551,347,947.00Other explanation:Nil54. Other equity instrument(1) Basic information of the outstanding preferred stock and perpetual capital securities at period-endNil(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 0.00 0 0.00 0 0.00 0 0.00Changes of other equity instrument, change reasons and relevant accounting treatment basis:NilOther explanation:Nil55. Capital reserve

In RMB

Item Opening balance Increase during the year Decreased Ending balance

Other capital reserve 627,819,910.12 14,333.71 627,834,243.83

Total 627,819,910.12 14,333.71 627,834,243.83Other 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 wholeshareholders; 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 0.00Other explanation, including changes and reasons for changes:Nil

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ57. Other comprehensive income

In RMB

Current amount

Less: written in

other

Account comprehensive

Opening Belong to Belong to Ending

Item before income in

balance Less : income parent minority balance

previous period

income tax in and carried tax expense company after shareholders

tax after tax

the year forward to gains

and losses in

current period

Total other comprehensive income 0.00 0.00 0.00Other explanation, including the active part of the hedging gains/losses of cash flow transfer to initial recognization adjustment forthe arbitraged itemsNil58. Special reserves

In RMB

Item Opening balance Increase during the year Decreased Ending balance

Total 0.00 0.00Other explanation, including changes and reasons for changes:Nil59. 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 32,673,227.01Other explanation, including changes and reasons for changes:Nil60. Retained profit

In RMB

Item Current period Last period

Retained profit at period-end before adjustment -1,204,837,748.73 -2,780,061,643.62

Retained profit at period-begin after adjustment -1,204,837,748.73 -2,780,061,643.62

Add: net profit attributable to shareholders of 4,885,678.56 1,575,223,894.89

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄparent company for this year

Retained profit at period-end -1,199,952,070.17 -1,204,837,748.73Adjustment for retained profit at period-begin:1). Retroactive adjustment due to the Accounting Standards for Business Enterprise and relevant new regulations, retained profit atperiod-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-begin61. Operating income and operating cost

In RMB

Current amount Last amount

Item

Income Cost Income Cost

Main business 206,787,455.39 194,455,356.12 247,257,421.93 234,590,294.49

Other business 5,283,130.38 4,509,309.53 23,854,314.14 8,635,334.96

Total 212,070,585.77 198,964,665.65 271,111,736.07 243,225,629.4562. Business tax and surcharge

In RMB

Item Current amount Last amount

Business tax 250,697.67 1,317,642.75

Urban maintenance and construction tax 150,619.25 239,184.73

Educational surtax 107,585.20 189,101.40

Total 508,902.12 1,745,928.88Other explanation:Nil63. Sales expense

In RMB

Item Current amount Last amount

Salary 2,403,392.34 3,420,253.11

market promotion costs 721,113.68 1,713,098.01

Lease and property management fee 666,701.92 163,976.00

Travel expenses 479,398.60 443,084.40

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Other 1,069,856.86 983,016.80

Total 5,340,463.40 6,723,428.32Other explanation:Nil64. Administration expense

In RMB

Item Current amount Last amount

Salary 4,776,645.93 6,397,040.34

Lease and property management fee 2,801,452.78

Repair charge 1,287,036.57 423,179.00

Intermediary services charge 1,495,493.10 638,000.00

Listing and three Meetings charge 1,273,981.93 1,536,025.55

Taxes 224,462.19 1,260,217.97

Amortization and depreciation charge 79,066.98 1,505,441.25Restructuring expenses Restructuring

70,732,704.23charge

Other 2,170,748.08 3,322,471.40

Total 14,108,887.56 85,815,079.74Other explanation:Nil65. Financial expense

In RMB

Item Current amount Last amountInterest expenditure

Less: Interest income 200,059.09 1,353,603.77

exchange loss -18.12 12,474.33

Other 26,623.61 41,695.44

Total -173,453.60 -1,299,434.00Other explanation:Nil66. Loss from Assets depreciation

In RMB

Item Current amount Last amount

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

I. Bad debt losses 48,575.61 36,762.61

Total 48,575.61 36,762.61Other explanation:Nil67. Changes in fair value gains

In RMB

Changes resources Current amount Last amountOther explanation:Nil68. Investment income

In RMB

Item Current amount Last amountInvestment income obtained from disposal of

72,934,048.27long-term equity investment

Total 72,934,048.27Other explanation:Nil69. Non-operation revenue

In RMB

Amount reckoned into

Item Current amount Last amount non-recurring gains/losses in

the YearTotal gains from disposal of

39,731.46 1,611,736,449.40 39,731.46non-current assetsIncluding: Gains from disposal

39,731.46 1,611,736,449.40 39,731.46of fixed assets

gains from debt restructuring 333,713,048.78

Income from fine and penalty 103,000.00 103,000.00

Other 14,542,620.77 105,982.72 14,542,620.77

Total 14,685,352.23 1,945,555,480.90 14,685,352.23Government grants reckoned into current gains/losses:

In RMB

Item Current amount Last amount Assets-related/gains-related

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Total 0.00 0.00 --Other explanation:Other income refers to the common interests debts paid by custodian70. Non-operating expenditure

In RMB

Amount reckoned into

Item Current amount Last amount non-recurring gains/losses in

the YearTotal non-current assets

5,880.00 45,935.56 5,880.00disposal lossesIncluding: fixed assets disposal

5,880.00 45,935.56 5,880.00losses

Accrual liability 284,397,067.92

Other 23,158.00 52,047.00 23,158.00

Total 29,038.00 284,495,050.48 29,038.00Other explanation:71. Income tax expense(1) Income tax expense

In RMB

Item Current amount Last amount

Current income tax 2,157,857.16 93,000,059.74

Deferred income tax -11,997.08

Total 2,145,860.08 93,000,059.74(2) Adjustment on accounting profit and income tax expenses

In RMB

Item Current amount

Total profit 7,928,859.26

Income tax measured by statutory/applicable tax rate 1,982,214.82

Impact on cost, expenses and losses that unable to deducted 163,645.26

income tax expenses 2,145,860.08Other explanationNil

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ72. Other comprehensive incomeFound more in Note 5773. Items of cash flow statement(1) Other cash received in relation to operation activities

In RMB

Item Current amount Last amount

Rent and utilities etc. 4,171,494.61 23,856,389.01

Custodian 107,015,588.61

Other Current money 4,405,124.84 7,922,040.75

Total 115,592,208.06 31,778,429.76Explanation on other cash received in relation to operation activitiesNil(2) Other cash paid in relation to operation activities

In RMB

Item Current amount Last amount

utilities 816,881.52 5,385,307.52

Restructuring expenses 14,444,965.40Market sales phase expenses as

2,937,071.06 3,271,397.32advertisement promotedManagement phase expenses as listing

charge, agency fee and three Meetings 5,033,523.00 5,085,457.84operations expenses and office expenses

Rent and property fee and maintenance fee 4,088,489.35 2,650,243.01

Deposit and Margin paid 2,800,580.55

Other Current money 2,222,080.74 2,167,444.26

Total 17,898,626.22 33,004,815.35Explanation on other cash paid in relation to operation activitiesNil(3) Cash received from other investment activities

In RMB

Item Current amount Last amountExplanation on cash received from other investment activitiesNil(4) Cash paid related with investment activities

In RMB

Item Current amount Last amount

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Cash reduce by subsidiary disposal 1,233,179.43

Total 1,233,179.43Explanation on cash paid related with investment activitiesNil(5) Other cash received in relation to financing activities

In RMB

Item Current amount Last amountReplacement money received by Shenzhen

Guosheng Energy Investment 5,390,399.73Development Co., Ltd.

Total 5,390,399.73Explanation on other cash received in relation to financing activitiesNil(6) Cash paid related with financing activities

In RMB

Item Current amount Last amountLoans from Shenzhen Guosheng Energy

35,000,000.00Investment Development Co., Ltd. paid

Total 35,000,000.00Explanation on cash paid related with financing activitiesNil74. Supplementary information to statement of cash flow(1) Supplementary information to statement of cash flow

In RMB

Supplementary information This Period Last Period1. Net profit adjusted to cash flow of

-- --operation activities:

Net profit 5,782,999.18 1,575,858,760.02

Add: Assets impairment provision 48,575.61 36,762.61Depreciation of fixed assets, consumption of

oil assets and depreciation of productive 79,066.98 1,627,072.67biology assets

Amortization of intangible assets 753,000.00 862,862.04Loss from disposal of fixed assets, intangible

assets and other long-term assets(gain is -33,851.46 -1,611,690,513.84listed with ¡°-¡±)

Investment loss (gain is listed with ¡°-¡±) -72,934,048.27

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄDecrease of deferred income tax

-11,997.08asset( (increase is listed with ¡°-¡±)Decrease of inventory (increase is listed with

-1,626,191.10 13,067,081.42¡°-¡±)Decrease of operating receivable accounts

104,734,227.53 8,054,676.92(increase is listed with ¡°-¡±)Increase of operating payable accounts

-105,804,781.48 56,907,178.57(decrease is listed with ¡°-¡±)Net cash flow arising from operating

3,921,048.18 -28,210,167.86activities2. Material investment and financing not

-- --involved in cash flow

3. Net change of cash and cash equivalents: -- --

Balance of cash at period end 30,163,866.78 26,834,171.59

Less: Balance of cash at year-begin 26,834,171.59 52,395,360.86

Net increasing of cash and cash equivalents 3,329,695.19 -25,561,189.27(2) Net cash paid for obtaining subsidiary in the Period

In RMB

Amount

Including: --

Including: --

Including: --Other explanation:Nil(3) Net cash received by disposing subsidiary in the Period

In RMB

Amount

Including: --

Including: --

Including: --Other explanation:Nil(4) Constitution of cash and cash equivalent:

In RMB

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Item Ending balance Opening balance

¢ñ. Cash 30,163,866.78 26,834,171.59

Including: Cash on hand 2,894.71 49,992.08

Bank deposit available for

30,160,972.07 26,784,179.51payment at any time¢ó. Balance of cash and cash equivalent at

30,163,866.78 26,834,171.59period-endOther explanation:Nil75. Notes of changes of owners¡¯ equityExplain the name and adjusted amount in ¡°Other¡± at end of last period:Nil76. Assets with ownership or use right restricted

In RMB

Item Ending book value Restriction reasons

Total 0.00 --Other explanation:Nil77. Foreign currency monetary items(1) Foreign currency monetary items

In RMB

Ending foreign currency

Item Convert rate Ending RMB balance converted

balance

HKD 32.25 0.78887 25.44Other explanation:Nil

(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-keepingcurrency changed, explain reasons¡õ Applicable ¡Ì Not applicable

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ78. HedgingDisclosed hedging items and relevant hedging instrument based on hedging¡¯s category, disclosed qualitative and quantitativeinformation for the arbitrage risks:Nil79. OtherNilVIII. Changes of consolidation range1. 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-endOther explanation:Nil(2) Combination cost and goodwillNilDetermination method for fair value of the combination cost and contingent consideration and changes:NilMain reasons for large goodwill resulted:NilOther explanation:Nil(3) Identifiable assets and liability on purchasing date under the acquireeNilDetermination method for fair value of the identifiable assets and liabilities:NilContingent liability of the acquiree bear during combination:

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄNilOther explanation:(4) Gains or losses arising from re-measured by fair value for the equity held before purchasing dateWhether it is a business combination realized by two or more transactions of exchange and a transaction of obtainted control rights inthe Period or not¡õY ¡ÌN(5) On purchasing date or period-end of the combination, combination consideration or fair value ofidentifiable assets and liability for the acquiree are un-able to confirm rationallyNil(6) Other explanationNil2. 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 comparision comparision

to the to the

period period

combination combination

date dateOther explanation:Nil(2) Combination costExplanation on contingent consideration and its changes:NilOther explanation:Nil

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ(3) Assets and liability of the combined party on combination dateNilContingent liability of the combined party bear during combinationNilOther explanation:Nil3. Counter purchaseBasic transaction information, basis of counter purchase, whether making up business due to the assets and liability reserved by listedcompany and basis, determination of combination cost, amount and calculation on adjusted equity by equity transactionNil4. Subsidiary disposalWhether lost controlling rights while dispose subsidiary on one time or not¡õY¡ÌNWhether lost controlling rights in the Period while dispose subsidiary on two or more steps or not¡õY¡ÌN5. Other reasons for consolidation range changedReasons for changed on consolidation range (such as new subsidiary established, subsidiary liquidated etc.)And relevant informationNil6. OtherNilIX. Equity in other entity1. Equity in subsidiary(1) Constitute of enterprise group

Main operation Share-holding ratio

Subsidiary Registered place Business nature Acquired way

place Directly IndirectlyShenzhen

Emmelle Bicycle and spare

Shenzhen Shenzhen 70.00% Investment

Industrial Co., parts distributionLtd.

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄExplanation on share-holding ratio in subsidiary different from ratio of voting right:NilBasis for controlling the invested entity with half or below voting rights held and without controlling invested entity but with overhalf and over voting rightsNilControlling basis for the structuring entity included in consolidated rangeControlling 70%Basis on determining to be a agent or consignor:NilOther 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 PeriodShenzhen Emmelle

30.00% 897,320.62 1,592,758.40Industrial Co., Ltd.Explanation on share-holding ratio of minority different from ratio of voting right:NilOther 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 liabilityShenzhen

Emmelle 44,487,1 161,628. 44,648,7 39,339,5 39,339,5 37,646,0 118,804. 37,764,8 35,446,7 35,446,7

Industria 41.91 03 69.94 75.27 75.27 22.22 37 26.59 00.66 00.66l Co.,Ltd.

In RMB

Subsidiary Current amount Last amount

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Cash flow Cash flow

Total Total

Operation from Operation from

Net profit comprehensi Net profit comprehensi

Income operation Income operation

ve income ve income

activity activityShenzhen

Emmelle 208,519,758. 246,343,829.

2,991,068.74 2,991,068.74 3,078,423.02 2,116,217.11 2,116,217.11 5,738,378.32

Industrial 34 03Co., Ltd.Other explanation:Nil(4) Major restriction on using corporate¡¯s assets and liquidate corporate¡¯s debtsNil(5) Financial or other supporting provided to structuring entity that included in consolidated financialstatementNilOther explanation:Nil2. Transaction that has owners equity shares changed in subsidiary but still with controlling rights(1) Owners equity shares changed in subsidiaryNil(2) Impact on minority¡¯s interest and owners¡¯ equity attributable to parent companyNilOther explanationNil3. Equity in joint venture and cooperative enterprise(1) Important joint venture and cooperative enterprise

Share-holding ratio Accounting

treatment on

Main operation

Name Registered place Business nature investment for

place Directly Indirectly

joint venture and

cooperative

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

enterpriseShare-holding ratio or shares enjoyed different from voting right ratio:NilBasis of the voting rights with 20% below but with major influence, or without major influence but with over 20% (20% included)voting rights hold:Nil(2) Main financial information of the important joint ventureNilOther explanationNil(3) Main financial information of the important cooperative enterpriseNilOther explanationNil(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

-- --ratioOther explanationNil(5) Assets transfer ability has major restriction from joint venture or cooperative enterpriseNil(6) Excess losses from joint venture or cooperative enterprise

In RMB

Cumulative un-confirmed Un-confirmed losses not Cumulative un-confirmed

Name

losses recognized in the Period (or net losses at period-end

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

profit enjoyed in the Period)Other explanationNil(7) Un-confirmed commitment with investment concerned with joint ventureNil(8) Contingent liability with investment concerned with joint venture or cooperative enterpriseNil4. Co-runs operation

Share-holding ratio/ share enjoyed

Name Main operation place Registered place Business nature

Directly IndirectlyShare-holding ratio or shares enjoyed different from voting right ratio:NilIf the co-runs entity is the separate entity, basis of the co-runs classificationNilOther explanationNil5. Equity in structuring entity that excluding in the consolidated financial statementRelevant explanationNil6. OtherNilX. Risk related with financial instrumentNilXI. Disclosure of fair value1. Ending fair value of the assets and liabilities measured by fair value

In RMB

Item Ending fair value

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

First-order Second-order Third-order TotalI. Sustaining measured by

-- -- -- --fair value

II. Non-persistent measure -- -- -- --2. Recognized basis for the market price sustaining and non-persistent measured by fair value onfirst-orderNil3. Valuation technique and qualitative and quantitative information on major parameters for the fair valuemeasure sustaining and non-persistent on second-orderNil4. Valuation technique and qualitative and quantitative information on major parameters for the fair valuemeasure sustaining and non-persistent on third-orderNil5. Adjustment information and sensitivity analysis of unobservable parameters for the fair value measuresustaining and non-persistent on third-orderNil6. Sustaining items measured by fair value, as for the conversion between at all levels, reasons forconversion and policy for conversion time pointNil7. Changes of valuation technique in the PeriodNil8. Financial assets and liability not measured by fair valueNil9. OtherNil

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄXII. Related party and related transactions1. 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

investment, domestic

commerce, supply

Shenzhen Guosheng and marketing

Energy Investment materials (excluding

Shenzhen RMB 220 million 11.52% 11.52%

Development Co., monopolized

Ltd. commodities, and

commodity under

special government

control)Explanation on parent company of the enterpriseNilUltimate controller of the Company is Ji HanfeiOther explanation:Nil2. Subsidiary of the EnterpriseFound more in VI (4) of Section IV3. Cooperative enterprise and joint ventureFound more in IX. 3 of Note XI.Other cooperative enterprise and joint venture that have related transaction with the Company in the Period or occurred in perviousperiod

Name RelationshipOther explanationNil4. Other related party

Other related party Relationship with the EnterpriseOther explanationNil

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ5. Related transaction(1) Goods purchasing, labor service providing and receivingGoods purchasing/labor service receiving

In RMB

Related party Content Current amount Last amountGoods sold/labor service providing

In RMB

Related party Content Current amount Last amountExplanation on goods purchasing, labor service providing and receivingNil(2) Related trusteeship/contract and delegated administration/outsourcingTrusteeship/contract

In RMB

Income from

Client/ Entrusting party/ Yield pricing

Assets type Starting date Maturity date trusteeship/contra

contract-out party contractor basis

ctExplanation on related trusteeship/contractNilDelegated administration/outsourcing

In RMB

Pricing basis of trustee

Client/

Entrusting party/ trustee fee/outsourcing

contract-out Assets type Starting date Maturity date

contractor fee/outsourcing fee recognized in

party

fee the PeriodExplanation on related administration/outsourcingNil(3) Related leaseAs a lessor for the Company

In RMB

Lease income in recognized in Lease income in recognized last

Lessee Assets type

the Period the Period

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄAs a lessee for the Company

In RMB

Lease income in recognized in Lease income in recognized last

Lessor Assets type

the Period the PeriodExplanation on related leaseNil(4) Related guaranteeAs 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 guaranteeNil(5) Borrowed funds of related party

In RMB

Related party Borrowed funds Starting date Maturity date NoteBorrowingLending(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 1,592,000.00 2,164,100.00

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ(8) Other related transactionsNil6. 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 partyNil8. OtherNilXIII. Share-based payment1. General share-based payment¡õ Applicable ¡Ì Not applicable2. Share-based payment settled by equity¡õ Applicable ¡Ì Not applicable3. Share-based payment settled by cash¡õ Applicable ¡Ì Not applicable

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ4. Revised and termination on share-based paymentNil5. OtherNilXIV. Commitment or contingency1. Important commitmentsImportant commitments in balance sheet dateNil2. Contingency(1) Contingency on balance sheet dateNil(2) For the important contingency not necessary to disclosed by the Company, explained reasonsThe Company has no important contingency that need to disclosed3. OtherNilXV. Events after balance sheet date1. Important non-adjustment items

In RMB

Impact on financial status and Reasons on un-able to estimated

Item Content

operation results the impact number2. Profit distribution

In RMB

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ3. Sales return4. Other events after balance sheet dateXVI. Other important events1. 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

adopted2. Debt restructuringThe Company is looking forward a restructuring party3. Assets replacement(1) Non-monetary assets changeNil(2) Other assets replacementNil4. Pension planNil5. Discontinued operations

In RMB

Discontinued

Income tax operations profit

Item Revenue Expenses Total profit Net profit

expenses attributable to

owners of parent

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

companyOther explanationNil6. Segment(1) Recognition basis and accounting policy for reportable segmentNil(2) Financial information for reportable segmentNil(3) The company has no reportable segments, or unable to disclose total assts and total liability forreportable segments, explain reasonsNil(4) Other explanationNil7. Major transaction and events makes influence on investor¡¯s decisionNil8. OtherNilXVII. Principle notes of financial statements of parent company1. 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 694,416. 694,416.0 245,382

100.00% 100.00% 245,382.00

debt provision 00 0 .00

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄaccrual by creditportfolio

694,416. 694,416.0 245,382

Total 100.00% 100.00% 245,382.00

00 0 .00Receivable with single significant amount and withdrawal bad debt provision separately at end of period:¡õ Applicable ¡Ì Not applicableIn combination, accounts receivable whose bad debts provision was accrued by age analysis:¡Ì Applicable ¡õ Not applicable

In RMB

Ending balance

Age

Account receivable Bad debt provision Accrual ratiowithin one year

within one year 694,416.00

Total 694,416.00Explanations on combination determine:NilIn combination, withdrawal proportion of bad debt provision based on balance proportion for account receivable:¡õ Applicable ¡Ì Not applicableIn combination, withdrawal proportion of bad debt provision based on other methods for account receivable:Nil(2) Bad debt provision accrual, collected or reversedAccrual 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 --Nil(3) Receivables actually written-off during the reporting period

In RMB

Item Amount written offWritten-off for the major receivable

In RMB

Nature of Procedures Arising from related

Company Amount written off Reason for write-off

receivables implemented transactions

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Total -- 0.00 -- -- --Explanation for write-off of receivablesNil(4) Top 5 receivables at ending balance by arrears partyEnding balance of receivable at period end for the parent company 694,416.00 Yuan was the good money receivablefrom associated subsidiary Shenzhen Emmelle Industrial Co., Ltd.(5) Receivable derecognition due to transfer of financial assetsNil(6) Assets and liability resulted by receivable transfer and continuous involvementNilOther explanation:Nil2. Other accounts receivable(1) Classification

In RMB

Ending balance Opening balance

Book balance Bad debt provision Book balance Bad debt provision

Type Book

Accrual Accrual Book value

Amount Ratio Amount value Amount Ratio Amount

ratio ratioOther receivables

with bad debt 13,714,6 13,714,03 116,990 116,990,37

100.00% 587.29 100.00%

provision accrual by 20.41 3.12 ,372.76 2.76credit portfolio

13,714,6 13,714,03 116,990 116,990,37

Total 100.00% 587.29 100.00%

20.41 3.12 ,372.76 2.76Other receivable with single significant amount and withdrawal bad debt provision separately at end of period¡õ Applicable ¡Ì Not applicableIn combination, other accounts receivable whose bad debts provision was accrued by age analysis¡Ì Applicable ¡õ Not applicable

In RMB

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Ending balance

Age

Other receivable bad debts provision Accrual ratiowithin one year

Subtotal of within one year 13,714,620.41 587.29

Total 13,714,620.41 587.29Explanations on combination determine:NilIn combination, withdrawal proportion of bad debt provision based on balance proportion for other account receivable¡õ Applicable ¡Ì Not applicableIn combination, withdrawal proportion of bad debt provision based on other methods for other account receivable¡õ Applicable ¡Ì Not applicable(2) Bad debt provision accrual, collected or reversedAccrual 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 --Nil(3) Other receivables actually written-off during the reporting period

In RMB

Item Amount written offWritten-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

Current money 13,714,620.41 116,990,372.76

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Total 13,714,620.41 116,990,372.76(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

receivablesShenzhen Emmelle

Current money 13,518,858.41 within one year 98.57%Industrial Co., Ltd.

Total -- 13,518,858.41 -- 98.57%(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 assetsNil(8) Assets and liability resulted by other receivable transfer and continuous involvementNilOther explanation:Nil3. Long-term equity investment

In RMB

Ending balance Opening balance

Item

Book balance Impairment Book value Book balance Impairment Book valueInvestment for

1,400,000.00 1,389,620.27 10,379.73 1,400,000.00 1,389,620.27 10,379.73subsidiary

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

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Ending balance of

Impairment

The invested entity Opening balance Increased Decreased Ending balance impairment

accrual

provisionShenzhen

Emmelle Industrial 1,400,000.00 1,400,000.00 1,389,620.27Co., Ltd.

Total 1,400,000.00 0.00 0.00 1,400,000.00 0.00 1,389,620.27(2) Investment for associates and joint venture

In RMB

+,-

Ending

Other Cash

Investme balance

comprehe dividend

Opening Capital nt gains Other Ending of

Company Additional nsive or profit Impairme

balance reductio recognize equity Other balance impairme

investment income announce nt accrual

n d under change nt

adjustmen d to

equity provision

t issuedI. Joint ventureII. Associated enterprise(3) Other explanationNil4. Operating income and cost

In RMB

Current amount Last amount

Item

Income Cost Income Cost

Main business 475,138.46 427,068.73

Other business 7,287,880.92 4,505,933.46 25,829,410.17 8,634,522.99

Total 7,287,880.92 4,505,933.46 26,304,548.63 9,061,591.72Other explanation:Nil5. Investment gains

In RMB

Item Current amount Last amount

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ6. OtherNilXVIII. Supplementary Information1. Current non-recurring gains/losses¡Ì Applicable ¡õ Not applicable

In RMB

Item Amount NoteGains/losses from the disposal of

non-current asset (including the write-off 33,851.46that accrued for impairment of assets)Other non-operating income and expenditure

14,622,462.77except for the aforementioned items

Less: Impact on income tax 3,664,078.56

Impact on minority shareholders¡¯ equity 33,117.41

Total 10,959,118.26 --Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for CompaniesOffering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according tothe lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering TheirSecurities to the Public --- Extraordinary Profit/loss, explain reasons¡õ Applicable ¡Ì Not applicable2. 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

51.72% 0.0089 0.0089stockholders of the CompanyNet profits belong to common stockstockholders of the Company after

-64.30% -0.0110 -0.0110deducting nonrecurring gains andlosses

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ3. 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 (InternationalAccounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)¡õ Applicable ¡Ì Not applicable(2) Difference of the net profit and net assets disclosed in financial report, under both foreign accountingrules and Chinese GAAP (Generally Accepted Accounting Principles)¡õ Applicable ¡Ì Not applicable(3) Explain accounting difference over the accounting rules in and out of China; as for the differenceadjustment for data audited by foreign auditing organ, noted the name of such foreign organNil4. Supplementation for change of accounting policy¡õ Applicable ¡Ì Not applicable5. OtherNil

ÉîÛÚÖлª×ÔÐгµ(¼¯ÍÅ)¹É·ÝÓÐÏÞ¹«Ë¾ 2014 ÄêÄê¶È±¨¸æÈ«ÎÄ

Section XII. Documents available for reference1. Accounting statement carrying the signatures and seals of the legal representative, person incharge 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 thenewspaper designated by CSRC in the report period;4. English version of the Annual Report 2014

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