Section X Financial Report
I. Auditor’s Report
Whether the semi-annual report has been audited?
□Yes √ No
The semi-annual report of the Company has not been audited.
II. Financial Statements
The unit of the financial statements attached: RMB
1. Consolidated Balance Sheet
Prepared by Guangdong Rieys Group Company Ltd.
June 30, 2017
Unit: RMB
Item Closing balance Opening balance
Current assets:
Monetary funds 7,018,207.88 123,886,976.82
Settlement reserve
Interbank lendings
Financial assets at fair value through
9,977,189.76 15,499,631.52
profit/loss
Derivative financial assets
Notes receivable
Accounts receivable 18,387,843.59 43,557,743.28
Accounts paid in advance 8,504,750.72 207,424.73
Premiums receivable
Reinsurance premiums receivable
Receivable reinsurance contract
reserve
Interest receivable
Dividends receivable
Other accounts receivable 51,081,880.32 41,739,384.75
Financial assets purchased under
agreements to resell
Inventories 114,555,062.41 74,939,082.16
Assets held for sale
Non-current assets due within one
year
Other current assets 15,714,694.76 9,985,213.09
Total current assets 225,239,629.44 309,815,456.35
Non-current assets:
Loans and advances to customers
Available-for-sale financial assets
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investments 270,015,275.93 149,998,221.71
Investment property
Fixed assets 42,702,470.53 44,012,361.38
Construction in progress
Engineering materials
Disposal of fixed assets
Productive living assets
Oil-gas assets
Intangible assets 9,216,788.84 9,355,420.76
R&D expenses
Goodwill 2,395,820.87 2,395,820.87
Long-term deferred expense
Deferred income tax assets 4,579,598.53 4,617,398.53
Other non-current assets
Total non-current assets 328,909,954.70 210,379,223.25
Total assets 554,149,584.14 520,194,679.60
Current liabilities:
Short-term borrowings
Borrowings from the Central Bank
Money deposits accepted and
inter-bank deposits
Interbank borrowings
Financial liabilities at fair value
through profit/loss
Derivative financial liabilities
Notes payable
Accounts payable 19,318,197.56 25,524,801.45
Accounts received in advance 32,362,367.65 482,960.95
Financial assets sold for repurchase
Fees and commissions payable
Payroll payable 400,257.72 412,376.20
Taxes payable 33,827,155.34 33,965,898.62
Interest payable
Dividends payable
Other accounts payable 68,492,796.93 55,197,870.96
Reinsurance premiums payable
Insurance contract reserve
Payables for acting trading of
securities
Payables for acting underwriting of
securities
Liabilities held for sale
Non-current liabilities due within one
year
Other current liabilities
Total current liabilities 154,400,775.20 115,583,908.18
Non-current liabilities:
Long-term borrowings
Bonds payable
Of which: Preference shares
Perpetual bonds
Long-term accounts payable
Long-term payroll payable
Special payables
Provisions
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities 154,400,775.20 115,583,908.18
Owners’ equity:
Share capital 318,600,000.00 318,600,000.00
Other equity instruments
Of which: Preference shares
Perpetual bonds
Capital reserve 52,303,274.79 52,129,496.58
Less: Treasury shares
Other comprehensive income
Special reserve
Surplus reserve 86,036,260.20 86,036,260.20
Provisions for general risks
Retained earnings -98,092,507.78 -90,095,403.00
Equity attributable to owners of the
358,847,027.21 366,670,353.78
Company
Minority interests 40,901,781.73 37,940,417.64
Total owners’ equity 399,748,808.94 404,610,771.42
Total liabilities and owners’ equity 554,149,584.14 520,194,679.60
Legal representative: Ding Lihong Chief of the accounting work: Chen Jincai Chief of the accounting
organ: Zeng Zhihua
2. Balance Sheet of the Company
Unit: RMB
Item Closing balance Opening balance
Current assets:
Monetary funds 1,677,088.41 119,117,878.02
Financial assets at fair value through
profit/loss
Derivative financial assets
Notes receivable
Accounts receivable
Accounts paid in advance 29,895.87 66,198.00
Interest receivable
Dividends receivable
Other accounts receivable 66,887,351.87 75,929,989.74
Inventories
Assets held for sale
Non-current assets due within one
year
Other current assets
Total current assets 68,594,336.15 195,114,065.76
Non-current assets:
Available-for-sale financial assets
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investments 350,015,284.19 224,998,229.97
Investment property
Fixed assets 41,009,010.69 42,121,038.15
Construction in progress
Engineering materials
Disposal of fixed assets
Productive living assets
Oil-gas assets
Intangible assets 9,216,788.84 9,355,420.76
R&D expenses
Goodwill
Long-term deferred expense
Deferred income tax assets 2,718,629.60 2,718,629.60
Other non-current assets
Total non-current assets 402,959,713.32 279,193,318.48
Total assets 471,554,049.47 474,307,384.24
Current liabilities:
Short-term borrowings
Financial liabilities at fair value
through profit/loss
Derivative financial liabilities
Notes payable
Accounts payable 19,442.64 19,442.64
Accounts received in advance 376,757.66 164,667.00
Payroll payable 215,067.82 202,963.22
Taxes payable 27,214,831.30 26,764,743.75
Interest payable
Dividends payable
Other accounts payable 45,131,482.40 42,223,361.35
Liabilities held for sale
Non-current liabilities due within one
year
Other current liabilities
Total current liabilities 72,957,581.82 69,375,177.96
Non-current liabilities:
Long-term borrowings
Bonds payable
Of which: Preference shares
Perpetual bonds
Long-term payables
Long-term payroll payable
Special payables
Provisions
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities 72,957,581.82 69,375,177.96
Owners’ equity:
Share capital 318,600,000.00 318,600,000.00
Other equity instruments
Of which: Preference shares
Perpetual bonds
Capital reserve 52,129,496.58 52,129,496.58
Less: Treasury shares
Other comprehensive income
Special reserve
Surplus reserve 86,036,260.20 86,036,260.20
Retained earnings -58,169,289.13 -51,833,550.50
Total owners’ equity 398,596,467.65 404,932,206.28
Total liabilities and owners’ equity 471,554,049.47 474,307,384.24
3. Consolidated Income Statement
Unit: RMB
Item January-June 2017 January-June 2016
1. Operating revenues 190,460,084.85 200,186,975.70
Including: Sales income 190,460,084.85 200,186,975.70
Interest income
Premium income
Fee and commission income
2. Operating costs 187,846,722.05 199,776,483.69
Including: Cost of sales 178,534,654.04 190,594,842.57
Interest expenses
Fee and commission expenses
Surrenders
Net claims paid
Net amount provided as insurance
contract reserve
Expenditure on policy dividends
Reinsurance premium
Taxes and surtaxes 654,183.56 122,989.29
Selling expenses 1,434,407.39 1,189,892.46
Administrative expenses 7,324,503.57 6,961,491.74
Finance costs 310,534.11 739,933.86
Asset impairment loss -411,560.62 167,333.77
Add: Profit on fair value changes (“-”
-5,539,925.21 0.00
means loss)
Investment income (“-” means loss) 33,294.77 -1,522.94
Including: Share of profit/loss of
associates and joint ventures
Exchange gains (“-” means loss)
Other gains
3. Operating profit (“-” means loss) -2,893,267.64 408,969.07
Add: Non-operating income 0.33 0.44
Including: Profit on disposal of
non-current assets
Less: Non-operating expense 2,404.16 200,000.00
Including: Loss on disposal of
non-current assets
4. Total profit (“-” means loss) -2,895,671.47 208,969.51
Less: Corporate income tax 2,307,032.61 1,848,553.62
5. Net profit (“-” means loss) -5,202,704.08 -1,639,584.11
Net profit attributable to owners of
-7,997,104.78 -4,308,101.71
the Company
Minority interests’ income 2,794,400.70 2,668,517.60
6. Other comprehensive income net of tax
Other comprehensive income net of
tax attributable to owners of the
Company
6.1 Other comprehensive income
that will not be reclassified into
profit/loss
6.1.1 Changes in net liabilities
or assets with a defined benefit plan upon
re-measurement
6.1.2 Share of other
comprehensive income of investees that
cannot be reclassified into profit/loss
under the equity method
6.2 Other comprehensive income
to be subsequently reclassified into
profit/loss
6.2.1 Share of other
comprehensive income of investees that
will be reclassified into profit/loss under
the equity method
6.2.2 Profit/loss on fair value
changes of available-for-sale financial
assets
6.2.3 Profit/loss on
reclassifying held-to-maturity
investments into available-for-sale
financial assets
6.2.4 Effective profit/loss on
cash flow hedges
6.2.5 Currency translation
differences
6.2.6 Other
Other comprehensive income net of
tax attributable to minority interests
7. Total comprehensive income -5,202,704.08 -1,639,584.11
Attributable to owners of the
-7,997,104.78 -4,308,101.71
Company
Attributable to minority interests 2,794,400.70 2,668,517.60
8. Earnings per share
8.1 Basic earnings per share -0.030 -0.010
8.2 Diluted earnings per share -0.030 -0.010
Where business mergers under the same control occurred in this Reporting Period, the net profit achieved by the
merged parties before the business mergers was RMB0.00, with the corresponding amount for the last period being
RMB0.00.
Legal representative: Ding Lihong Chief of the accounting work: Chen Jincai Chief of the accounting
organ: Zeng Zhihua
4. Income Statement of the Company
Unit: RMB
Item January-June 2017 January-June 2016
1. Operating revenues 637,064.14 0.00
Less: Operating costs 166,356.27 0.00
Taxes and surtaxes 418,155.62
Selling expenses
Administrative expenses 5,868,665.93 4,584,885.65
Finance costs 536,679.17 642,274.67
Asset impairment loss
Add: profit on fair value changes (“-”
means loss)
Investment income (“-” means
17,054.22
loss)
Including: Share of profit/loss of
associates and joint ventures
Other gains
2. Operating profit (“-” means loss) -6,335,738.63 -5,227,160.32
Add: Non-operating income
Including: Profit on disposal of
non-current assets
Less: Non-operating expense 200,000.00
Including: Loss on disposal of
non-current assets
3. Total profit (“-” means loss) -6,335,738.63 -5,427,160.32
Less: Corporate income tax
4. Net profit (“-” means loss) -6,335,738.63 -5,427,160.32
5. Other comprehensive income net of
tax
5.1 Other comprehensive income that
will not be reclassified into profit and
loss
5.1.1 Changes in net liabilities or
assets with a defined benefit plan upon
re-measurement
5.1.2 Share of other
comprehensive income of investees that
cannot be reclassified into profit/loss
under the equity method
5.2 Other comprehensive income to
be subsequently reclassified into
profit/loss
5.2.1 Share of other
comprehensive income of investees that
will be reclassified into profit/loss
under the equity method
5.2.2 Profit/loss on fair value
changes of available-for-sale financial
assets
5.2.3 Profit/loss on reclassifying
held-to-maturity investments into
available-for-sale financial assets
5.2.4 Effective profit/loss on cash
flow hedges
5.2.5 Currency translation
differences
5.2.6 Other
6. Total comprehensive income -6,335,738.63 -5,427,160.32
7. Earnings per share
7.1 Basic earnings per share -0.020 -0.020
7.2 Diluted earnings per share -0.020 -0.020
5. Consolidated Cash Flow Statement
Unit: RMB
Item January-June 2017 January-June 2016
1. Cash flows associated with operating
activities:
Cash received from sale of
279,104,141.77 235,472,158.88
commodities and rendering of service
Net increase in money deposits from
customers and interbank placements
Net increase in loans from the
Central Bank
Net increase in funds borrowed from
other financial institutions
Cash received from premium of
original insurance contracts
Net cash received from reinsurance
business
Net increase in deposits of policy
holders and investment fund
Net increase in disposal of financial
assets at fair value through profit/loss
Interest, fees and commissions
received
Net increase in interbank borrowings
Net increase in funds in repurchase
business
Tax refunds received
Cash generated by other operating
35,298,621.21 612,905,230.54
activities
Subtotal of cash generated by operating
314,402,762.98 848,377,389.42
activities
Cash paid for goods and services 280,323,737.91 231,558,558.05
Net increase in loans and advances to
customers
Net increase in funds deposited in the
Central Bank and interbank placements
Cash paid for claims of original
insurance contracts
Interest, fees and commissions paid
Cash paid as policy dividends
Cash paid to and for employees 2,049,087.43 2,327,459.34
Taxes paid 3,962,251.90 2,120,127.84
Cash used in other operating
24,934,811.29 608,577,429.24
activities
Subtotal of cash used in operating
311,269,888.53 844,583,574.47
activities
Net cash generated by operating
3,132,874.45 3,793,814.95
activities
2. Cash flows associated with investing
activities:
Cash received from retraction of
1,326,057.76 2,867.06
investments
Cash received as investment income 50,187.43 10.00
Net cash received from disposal of
fixed assets, intangible assets and other
long-term assets
Net cash received from disposal of
subsidiaries or other business units
Cash generated by other investing
activities
Subtotal of cash generated by investing
1,376,245.19 2,877.06
activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 1,393,075.92
assets
Cash paid for investment 121,377,497.91
Net increase in pledged loans
Net cash paid to acquire subsidiaries
and other business units
Cash used in other investing
activities
Subtotal of cash used in investing
121,377,497.91 1,393,075.92
activities
Net cash generated by investing
-120,001,252.72 -1,390,198.86
activities
3. Cash flows associated with financing
activities:
Cash received from capital
contributions
Including: Cash received from
minority shareholder investments by
subsidiaries
Cash received as borrowings
Cash received from issuance of
bonds
Cash generated by other financing
activities
Subtotal of cash generated by financing
activities
Repayment of borrowings
Cash paid for interest expenses and
distribution of dividends or profit
Including: dividends or profit paid
by subsidiaries to minority interests
Cash used in other financing
activities
Sub-total of cash used in financing
activities
Net cash generated by financing
activities
4. Effect of foreign exchange rate
-390.67 66.00
changes on cash and cash equivalents
5. Net increase in cash and cash
-116,868,768.94 2,403,682.09
equivalents
Add: Opening balance of cash and
123,886,976.82 301,471,305.21
cash equivalents
6. Closing balance of cash and cash
7,018,207.88 303,874,987.30
equivalents
6. Cash Flow Statement of the Company
Unit: RMB
Item January-June 2017 January-June 2016
1. Cash flows associated with operating
activities:
Cash received from sale of
395,200.00
commodities and rendering of service
Tax refunds received
Cash generated by other operating
36,632,375.31 8,443,529.07
activities
Subtotal of cash generated by operating
36,632,375.31 8,838,729.07
activities
Cash paid for goods and services
Cash paid to and for employees 846,506.12 638,288.55
Taxes paid 27,707.62 9,663.86
Cash used in other operating
28,198,951.18 253,940,952.94
activities
Subtotal of cash used in operating
29,073,164.92 254,588,905.35
activities
Net cash generated by operating
7,559,210.39 -245,750,176.28
activities
2. Cash flows associated with investing
activities:
Cash received from retraction of
investments
Cash received as investment income
Net cash received from disposal of
fixed assets, intangible assets and other
long-term assets
Net cash received from disposal of
subsidiaries or other business units
Cash generated by other investing
activities
Subtotal of cash generated by investing
activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 1,180,000.00
assets
Cash paid for investment 120,000,000.00
Net cash paid to acquire subsidiaries
5,000,000.00
and other business units
Cash used in other investing
activities
Subtotal of cash used in investing
125,000,000.00 1,180,000.00
activities
Net cash generated by investing
-125,000,000.00 -1,180,000.00
activities
3. Cash flows associated with financing
activities:
Cash received from capital
contributions
Cash received as borrowings
Cash received from issuance of
bonds
Cash generated by other financing
activities
Subtotal of cash generated by financing
activities
Repayment of borrowings
Cash paid for interest expenses and
distribution of dividends or profit
Cash used in other financing
activities
Sub-total of cash used in financing
activities
Net cash generated by financing
activities
4. Effect of foreign exchange rate
changes on cash and cash equivalents
5. Net increase in cash and cash
-117,440,789.61 -246,930,176.28
equivalents
Add: Opening balance of cash and
119,117,878.02 250,310,105.45
cash equivalents
6. Closing balance of cash and cash
1,677,088.41 3,379,929.17
equivalents
7. Consolidated Statement of Changes in Owners’ Equity
January-June 2017
Unit: RMB
January-June 2017
Equity attributable to owners of the Company
Other equity
Item Other Retaine Minorit Total
instruments Less: General
Share Capital compre Special Surplus d y owners’
Prefer Perpet Treasur risk
capital reserve hensive reserve reserve earning interests equity
ence ual Other y shares reserve
income s
shares bonds
1. Balance at the 318,60
52,129, 86,036, -90,095, 37,940, 404,610
end of the prior 0,000.
496.58 260.20 403.00 417.64 ,771.42
year 00
Add: Changes
in accounting
policies
Correction of
errors in prior
periods
Business
mergers under the
same control
Other
2. Balance at the 318,60
52,129, 86,036, -90,095, 37,940, 404,610
beginning of the 0,000.
496.58 260.20 403.00 417.64 ,771.42
year 00
3. Increase/
decrease in the 173,778 -7,997,1 2,961,3 -4,861,9
period (“-” means .21 04.78 64.09 62.48
decrease)
3.1 Total
-7,997,1 2,794,4 -5,202,7
comprehensive
04.78 00.70 04.08
income
3.2 Capital
increased and
reduced by owners
3.2.1
Ordinary shares
increased by
shareholders
3.2.2 Capital
increased by
holders of other
equity instruments
3.2.3
Amounts of
share-based
payments charged
to owners’ equity
3.2.4 Other
3.3 Profit
distribution
3.3.1
Appropriation to
surplus reserve
3.3.2
Appropriation to
general risk
provisions
3.3.3
Appropriation to
owners (or
shareholders)
3.3.4 Other
3.4 Internal 173,778 166,963 340,741
carry-forward of .21 .39 .60
owners’ equity
3.4.1 New
increase of capital
(or share capital)
from capital
reserve
3.4.2 New
increase of capital
(or share capital)
from surplus
reserve
3.4.3 Surplus
reserve for making
up loss
3.4.4 Other
3.5 Special reserve
3.5.1
Withdrawn for the
period
3.5.2 Used in
the period
3.6 Other
318,60
52,303, 86,036, -98,092, 40,901, 399,748
4. Closing balance 0,000.
274.79 260.20 507.78 781.73 ,808.94
00
January-June 2016
Unit: RMB
January-June 2016
Equity attributable to owners of the Company
Other equity Minorit
Other Total
Item instruments Less: General Retaine y
Share Capital compre Special Surplus owners’
Treasur risk d interest
Prefer Perpet equity
capital reserve hensive reserve reserve
y shares reserve earnings s
ence ual Other
income
shares bonds
1. Balance at the 318,60
52,129, 86,036, -92,329, 33,357, 397,794
end of the prior 0,000.
496.58 260.20 076.97 710.95 ,390.76
year 00
Add: Changes
in accounting
policies
Correction of
errors in prior
periods
Business
mergers under the
same control
Other
2. Balance at the 318,60
52,129, 86,036, -92,329, 33,357, 397,794
beginning of the 0,000.
496.58 260.20 076.97 710.95 ,390.76
year 00
3. Increase/
decrease in the 2,233,6 4,582,7 6,816,3
period (“-” means 73.97 06.69 80.66
decrease)
3.1 Total
2,233,6 4,582,7 6,816,3
comprehensive
73.97 06.69 80.66
income
3.2 Capital
increased and
reduced by owners
3.2.1
Ordinary shares
increased by
shareholders
3.2.2 Capital
increased by
holders of other
equity instruments
3.2.3
Amounts of
share-based
payments charged
to owners’ equity
3.2.4 Other
3.3 Profit
distribution
3.3.1
Appropriation to
surplus reserve
3.3.2
Appropriation to
general risk
provisions
3.3.3
Appropriation to
owners (or
shareholders)
3.3.4 Other
3.4 Internal
carry-forward of
owners’ equity
3.4.1 New
increase of capital
(or share capital)
from capital
reserve
3.4.2 New
increase of capital
(or share capital)
from surplus
reserve
3.4.3 Surplus
reserve for making
up loss
3.4.4 Other
3.5 Special reserve
3.5.1
Withdrawn for the
period
3.5.2 Used in
the period
3.6 Other
318,60
52,129, 86,036, -90,095, 37,940, 404,610
4. Closing balance 0,000.
496.58 260.20 403.00 417.64 ,771.42
00
8. Statement of Changes in Owners’ Equity of the Company
January-June 2017
Unit: RMB
January-June 2017
Other equity instruments Other
Less: Retaine Total
Item Share Capital comprehe Special Surplus
Prefere
Perpetu Treasury d owners’
capital nce Other reserve nsive reserve reserve
al bonds shares earnings equity
shares income
1. Balance at the
318,600, 52,129,49 86,036,26 -51,833, 404,932,2
end of the prior
000.00 6.58 0.20 550.50 06.28
year
Add: Changes
in accounting
policies
Correction of
errors in prior
periods
Other
2. Balance at the
318,600, 52,129,49 86,036,26 -51,833, 404,932,2
beginning of the
000.00 6.58 0.20 550.50 06.28
year
3. Increase/
decrease in the -6,335,7 -6,335,73
period (“-” means 38.63 8.63
decrease)
3.1 Total
-6,335,7 -6,335,73
comprehensive
38.63 8.63
income
3.2 Capital
increased and
reduced by owners
3.2.1
Ordinary shares
increased by
shareholders
3.2.2 Capital
increased by
holders of other
equity instruments
3.2.3
Amounts of
share-based
payments charged
to owners’ equity
3.2.4 Other
3.3 Profit
distribution
3.3.1
Appropriation to
surplus reserve
3.3.2
Appropriation to
owners (or
shareholders)
3.3.3 Other
3.4 Internal
carry-forward of
owners’ equity
3.4.1 New
increase of capital
(or share capital)
from capital
reserve
3.4.2 New
increase of capital
(or share capital)
from surplus
reserve
3.4.3 Surplus
reserve for making
up loss
3.4.4 Other
3.5 Special reserve
3.5.1
Withdrawn for the
period
3.5.2 Used in
the period
3.6 Other
318,600, 52,129,49 86,036,26 -58,169, 398,596,4
4. Closing balance
000.00 6.58 0.20 289.13 67.65
January-June 2016
Unit: RMB
January-June 2016
Other equity instruments Other
Less: Retaine Total
Item Share Prefere Capital comprehe Special Surplus
Perpetu Treasury d owners’
capital nce Other reserve nsive reserve reserve
al bonds shares earnings equity
shares income
1. Balance at the -172,94
318,600, 52,129,49 86,036,26 283,818,9
end of the prior 6,764.5
000.00 6.58 0.20 92.25
year 3
Add: Changes
in accounting
policies
Correction of
errors in prior
periods
Other
2. Balance at the -172,94
318,600, 52,129,49 86,036,26 283,818,9
beginning of the 6,764.5
000.00 6.58 0.20 92.25
year 3
3. Increase/
decrease in the 121,113 121,113,2
period (“-” means ,214.03 14.03
decrease)
3.1 Total
121,113 121,113,2
comprehensive
,214.03 14.03
income
3.2 Capital
increased and
reduced by owners
3.2.1
Ordinary shares
increased by
shareholders
3.2.2 Capital
increased by
holders of other
equity instruments
3.2.3
Amounts of
318,600, 52,129,49
share-based
000.00 6.58
payments charged
to owners’ equity
3.2.4 Other
3.3 Profit
distribution
3.3.1
Appropriation to
surplus reserve
3.3.2
Appropriation to
owners (or
shareholders)
3.3.3 Other
3.4 Internal
carry-forward of
owners’ equity
3.4.1 New
increase of capital
(or share capital)
from capital
reserve
3.4.2 New
increase of capital
(or share capital)
from surplus
reserve
3.4.3 Surplus
reserve for making
up loss
3.4.4 Other
3.5 Special reserve
3.5.1
Withdrawn for the
period
3.5.2 Used in
the period
3.6 Other
318,600, 52,129,49 86,036,26 -51,833, 404,932,2
4. Closing balance
000.00 6.58 0.20 550.50 06.28
III. Company Profile
1. The registration place, the organization method and the headquarters address of the
Company
Guangdong Jadiete Holdings Group Company Limited (original name: Guangdong
Rieys Group Company Ltd, hereinafter referred to as ‘the Company’) was a limited
liability company registered in Guangdong Province and had been approved by the
Y-H-B [1997] No. 580 document of People’s Government of Guangdong Province on
November 17, 1997, which established by five enterprises including Puning Haicheng
Industrial Co., Ltd. (this company changed its name to Shenzhen Shenghengchang
Industrial Co., Ltd. after relocating in Shenzhen; in 2007 this company was renamed
as Guangzhou Shenghengchang Investment Co., Ltd.; in 2008 this company was
renamed as Guangzhou Shenghengchang Trade and Development Co., Ltd.; on
January 28, 2010 this company was renamed as Puning Shenghengchang Trade
Development Co., Ltd.; on July 26, 2013, this company was renamed as Shenzhen
Shenghengchang Huifu Industrial Co., Ltd. as relocation), an original Sino-foreign
cooperated enterprise of Hongxing Weaving Garment Co., Ltd. Under approval of
Guangdong Province Administration for Industry and Commerce, the Company
registered with the registration number of the license of the business corporation of:
914452002311318335. The Share B, which was the HK common stock as well as the
domestically listed foreign share issued by the Company, had listed on the SZSE. The
registration place of the Company: Meixin Industrial Park, Junbu Town, Puning,
Guangdong Province, of which the parent company was the Shenzhen
Shenghengchang Huifu Industrial Co., Ltd. and the ultimate actual controller of the
Group was Chen Hongcheng.
The Company used to be the Puning Hongxing Weaving Garment Co., Ltd., which
had reorganized as a limited liability company based on the former company on
November 17, 1997.
The original registration capital of the Company was of RMB80,000,000.00 with the
total amount of the share capital of 80,000,000 shares. And the face value of the
shares of the Company was of RMB1 per share. In March 1999, with the approval of
the Shareholders’ General Meeting, the Company declared a Bonus Issue of 3.5
shares per 10 shares based on the total number of shares accrued in the register as at
December 31, 1998 (80 million shares), making the registered capital increased to
108,000,000 shares. The Company issued 60,000,000 shares of foreign invested stock
domestically listed (“Stock B”) for foreign investors on October 17, 2000, and issued
9,000,000 shares of Stock B for exercise of over-allotment options during the period
from October 27 to November 22, 2000 in accordance with approval of ZJFXZ (2000)
No. 133 issued by China Securities Regulatory Commission on September 29, 2000.
The registered capital of the Company increased to RMB177,000,000 after issuance
of Stock B, which was divided into 177,000,000 shares of RMB1.00 each. The
registered capital of the Company increased to 318,600,000 after years of bonus
distribution and transfer increase in paid-in capital, which was divided into
318,600,000 shares of RMB1.00 each.
As at June 30, 2017, the Company’s total share capital was 318,600,000 shares,
including 164,025,000 non-tradable legal shares (representing 51.48% of total shares
and 154,575,000 domestic listed foreign shares (stock B) (representing 48.52% of
total shares).
2. Operating scope
The operating scope of the Company: executes the self-management and agent of the
import and export business of other goods and techniques except for the national
organization unified joint venture export commodities and the national approved
corporation operation export commodities; executes the processing imported materials
operation, “three-processing and one compensation”, counter trade and entrepot trade
(operates according to the [98] WZMZSHZ No. 1225 document); the production,
processing and sales of the clothing, needle and textiles. Sales of the industrial capital
goods (excluding the gold, car, dangerous chemicals), department stores, furniture,
arts and crafts (excluding the gold jewelry) and the domestic commerce (except for
those forbidden by the laws, administrative regulations and the State Council; and as
for the projects limited by the laws, administrative regulations and the State Council
should acquire the permission before operating).Crops planting. Storage. Various
investments. Real Estate development (three-level with the period of validity to 31
December 2015.) Commercial residential buildings developed owning to renting out
the Company. Hotel management. Engages in the technique development, design and
sales of the gold, silver, platinum, diamond, jade, jewelry, hardstone article and so on.
Engage itself in: technical service in the field of network technology and
communication technology, technical development, technical consultation,
technology transfer, computer software development, computer information system
integration, and wholesale and retail of computers, software and accessory equipment,
communication equipment and electronic products, and construction of computer
network engineering, e-commerce, design and production of various advertising,
publishing advertisements through self-own media, cultural and art exchange planning
and the wholesale and retail of clothing, daily articles and crafts.
3. Information of the special enterprises with limited business allotted time
Naught
4. Business nature and major operating activities of the Company
The Company is the gold jewelry vendor; mainly engages in the technique
development, design and sales of the gold jewelry.
5. Approval of the presentation of the financial statements
The financial statements and the notes to the financial statements were approved by
the 14rd Session of the 7th Board of Directors of the Company on August 28, 2017.
There were 4 main bodies included in the consolidated financial statement scope at
the period-end of the Reporting Period, which specifically including:
Name of the subsidiaries Type of the Shareholding Voting proportion
subsidiaries proportion (%) (%)
Shenzhen Rieys Industrial Co., Limited liability 90.00 90.00
Ltd. company
Tianrui (Hong Kong) Limited liability 100.00 100.00
Trading Co., Ltd. company
Shenzhen Chinese Gold Limited liability 51.00 51.00
Nobility Jewelry Co., Ltd. company
Shanghai Yunpeng Internet 60.00 60.00
Limited company
Technology Co., Ltd
There was no change of main bodies in the Reporting Period included into the scope
of consolidated financial statement compared with last period.
IV. Basis for the Preparation of the Financial Statement
1. Basis for the Preparation
The Company and its subsidiaries are prepared based on assumption of the Company’s
continuing operations, according to transactions and events actually occurred, and
based on “Basic Accounting Standard for Business Enterprises” and specific
accounting standards as well as the application guide, explanation and other relevant
regulations (generally referred to as “ASBE”) issued by Ministry of Finance. In
addition, the Company’s financial statements also comply with the relevant financial
information in “Compilation Rules for Information Disclosures by Companies that
Offer Securities to the Public No.15 - General Provisions for Financial Reports”
(hereinafter referred to as “the No. 15”) issued by CSRC (revised in 2014).
The accounting measurement of the Company based on the accrual basis. Except for
certain financial instruments, the financial statements were all based on the historical
cost for measurement. If there was impairment of the assets, should withdraw the
impairment provision according to the relevant regulations.
2. Continuing Operations
The financial statement presented based on the continuing operations. There was no
any event or situation caused major concerns on the continuing operation ability of
the Company within 12 months from the period-end.
V. Significant Accounting Policies and Estimates
Specific accounting policies and accounting estimates indicators:
Not applicable
1. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company are in compliance with in
compliance with the Accounting Standards for Business Enterprises, which factually
and completely present the Company’s, and the relevant information of the
Company’s merger and financial positions as at June 30, 2017, as well as the merger,
business results and the merger and cash flows for the first half year of 2017.
2. Fiscal Period
The Company’s fiscal year starts on January 1 and ends on December 31 of every
year according to the Gregorian calendar.
3. Operating Cycle
Normal operating cycle refers to the period from the Group purchases the assets for
processing to realize the cash or cash equivalents. The Group regards 12 months as an
operating cycle and regards which as the partition criterion of the mobility of the
assets and liabilities.
4. Recording Currency
Recording currency is RMB.
5. Accounting Treatment for Business Combinations under the Common Control and Not
under the Common Control
(1) Judgment standard of the package deal
If the terms, conditions and the economic influences of each transaction in the process
of the enterprise merger realized by multiple steps met with one or various situation of
the followings, should execute the accounting treatment by considering the multiple
transactions as the package deal:
① these transactions are considered simultaneously, or in the case of mutual influence
made;
② these transactions as a whole in order to achieve a complete business results;
③ the occurrence of a transaction depends on occurs at least one other transaction ;
④ a transaction look alone is not economical, but when considered together with
other transaction is economical.
(2) Business combination under the same control
For the business combination under the same control, the assets and liabilities that the
combining party obtains in a business combination, except for the adjustment
executed owning to the differences between the accounting policies, shall be
measured on the basis of their originally carrying amount in the combined party on
the combining date. As for the balance between the carrying amount of the net assets
obtained by the combining party and the carrying amount of the consideration paid by
it (or the total par value of the shares issued), the additional paid-in capital
(share/capital premium) shall be adjusted. If the additional paid-in capital
(share/capital premium) is not sufficient to be offset, the retained earnings shall be
adjusted.
The direct relevant expenses occurred for executing the enterprise merger should be
recorded in the current gains and losses when occurred.
(3) Business combination not under the same control
Business combination not under the common control refers to that parties involved in
the merger are not subject to the ultimate control of the same party or same
multi-parties before & after the merger.
For a business combination not under the same control, the combination costs shall
include the fair values, on the acquisition date, of the assets paid, the liabilities
incurred or assumed and the equity securities issued by the acquirer in exchange for
the control on the acquiree. On the purchase date, the merger cost occurred in the
Company and the assets, liabilities and the contingent liabilities of the acquirees
should be recognized according to the fair value.
As for the expenses for audit, legal services and assessment, and other administrative
expenses, should be recorded into the profits and losses in the current period. The
trading expenses for the equity securities or debt securities issued by the acquirer as
the combination consideration shall be recorded into the amount of initial
measurement of the equity securities or debt securities.
The Company shall recognize the positive balance between the combination costs and
the fair value of the identifiable net assets it obtains from the acquiree as business
reputation and shall execute the follow-up measurement according to the cost which
deducted the accumulative impairment provision; the Company shall record which in
the current gains and losses after the reexamination to treat the balance between the
combination costs and the fair value of the identifiable net assets it obtains from the
acquiree.
As for the deductible temporary differences the acquirer obtains from the acquiree
which are not recognized into deferred income tax liabilities due to their not meeting
the recognition standards, if new or further information shows that the relevant
situation has existed on the acquiring date and the economic benefits brought by the
deductible temporary differences the acquirer obtains from the acquiree on the
acquiring date can be realized, they shall be recognized into deferred income tax
assets and the relevant goodwill shall be reduced. Where the goodwill is not sufficient
to be offset, the difference shall be recognized into the profits and losses in the current
period. In other circumstances than the above, where the deductible temporary
differences are recognized into deferred income tax assets on the acquiring date, they
shall be recorded into the profits and losses in the current period.
In a business combination not under same control realized by two or more
transactions of exchange, according to about the 5th Notice about the Treasury Issuing
the Accounting Standards for Enterprises (Finance accounting) [2012] No. 19
Criterion about the “package deal”, whether the deals are “package deal” or not,
belong to the “package deal”, see the previous paragraphs described in this section
and note IV, 12 “long term equity investment transaction” and conduct accounting
treatment, those not belong to the “package deal” distinguish between the individual
financial statements and the consolidated financial statements and conduct relevant
accounting treatment.
In the individual financial statements, the sum of the book value and new investment
cost of the Company holds in the acquiree before the acquiring date shall be
considered as initial cost of the investment. Other related comprehensive gains in
relation to the equity interests that the Company holds in the acquiree before the
acquiring date, except for the corresponding share in the changes in the net liabilities
or assets with a defined benefit plan measured at the equity method arising from the
acquiree’s re-measurement, the others shall be transferred into current investment
gains.
In the Company’s consolidated financial statements, the merger cost is the sum of the
consideration pays on the purchase date and the fair value on the purchase date of the
equity of the acquirees hold before the purchase date. As for the equity interests that
the Company holds in the acquiree before the acquiring date, they shall be
re-measured according to their fair values at the acquiring date; the positive difference
between their fair values and carrying amounts shall be recorded into the investment
gains for the period including the acquiring date. Other related comprehensive gains
in relation to the equity interests that the Company holds in the acquiree before the
acquiring date, except for the corresponding share in the changes in the net liabilities
or assets with a defined benefit plan measured at the equity method arising from the
acquiree’s re-measurement, the others shall be transferred into current investment
gains.
6. Preparation of the Consolidated Financial Statements
The consolidation scope for financial statements is determined on the basis of control
and all the subsidiaries (including the individual main body controlled by the
Company) are all included in the consolidated financial statement.
The consolidated financial statement bases on the financial statement of the Company
and the subsidiaries and prepares according to the other relevant materials by the
Company. When preparing the consolidated financial statement, the accounting
policies and the accounting period of the Company and the subsidiaries were required
to maintain unanimous while the intercompany significant contracts and the
come-and-go balance should be offset.
For the subsidiaries increased owning to the enterprise merger under the same control
during the Reporting Period, the Company includes their income, expenses and profits
from the period-begin of the merger to the end of the Reporting Period in the
consolidated statement of income and includes the cash flow in the consolidated
statement of cash flow, as well as adjust the opening balance and the comparison
amount of the consolidated financial statement; as for the subsidiaries increased
owning to the enterprise merger not under the same control during the Reporting
Period, the Company includes their income, expenses and profits from the purchase
date to the end of the Reporting Period in the consolidated statement of income and
includes the cash flow in the consolidated statement of cash flow, while not to as
adjust the opening balance and the comparison amount of the consolidated financial
statement; during the Reporting Period, as for the disposed subsidiaries, the Company
includes their income, expenses and profits from the period-begin of the merger to the
disposal date in the consolidated statement of income and includes the cash flow in
the consolidated statement of cash flow, and not to adjust the opening balance of the
consolidated balance sheet.
The portion of a subsidiary’s shareholders’ equity and the portion of a subsidiary’s net
profits and losses for the period not held by the Company are recognized as minority
interests and minority shareholder profits and losses respectively and presented
separately under shareholders’ equity and net profits in the consolidation financial
statements. The portion of a subsidiary’s net profits and losses for the period that
belong to minority interests is presented as the item of “minority shareholder profits
and losses” under the bigger item of net profits in the consolidated financial
statements. Where the loss of a subsidiary shared by minority shareholders exceeds
the portion enjoyed by minority shareholders in the subsidiary’s opening owners’
equity, minority interests are offset.
As for the transactions purchasing minority equities of the subsidiaries or the
transitions not losing the control right of the subsidiaries owning to disposing the
equity investment on them, should be measured as the equity transactions and adjust
the book value that attributes to the equities of the shareholders of the Company and
the equities of the minority shareholders for reflecting the changes in the relevant
equities of the subsidiaries. The Company adjusts the capital surplus of the difference
between the adjusted amount of the equities of the minority shareholders and the fair
value of the paid/received consideration, if the capital surplus is insufficient to write
down, the retained income should be adjusted.
Where the Company losses control on its original subsidiaries due to disposal of some
equity investments or other reasons, the residual equity interests are re-measured
according to the fair value on the date when such control ceases. The summation of
the consideration obtained from the disposal of equity interests and the fair value of
the residual equity interests, minus the portion in the original subsidiary’s net assets
measured on a continuous basis from the acquisition date that is enjoyable by the
Company according to the original shareholding percentage in the subsidiary, is
recorded in investment gains for the period when the Company’s control on the
subsidiary ceases. Other comprehensive incomes in relation to the equity investment
in the original subsidiary are treated on the same accounting basis as the acquiree
directly disposes the relevant assets or liabilities (that is, except for the changes in the
net liabilities or assets with a defined benefit plan resulted from re-measurement of
the original subsidiary, the rest shall all be transferred into current investment gains)
when such control ceases. And subsequent measurement is conducted on the residual
equity interests according to the No. 2 Accounting Standard for Business
Enterprises-Long-term Equity Investments or the No. 22 Accounting Standard for
Business Enterprises-Recognition and Measurement of Financial Instruments.
Where the Company losses control on its original subsidiaries due to step by step
disposal of equity investments through multiple transactions, it need to distinguish the
Company losses control on its subsidiaries due to disposal of equity investments
whether belongs to a package deal. If each transaction of disposing the equity
investment of the subsidiaries until losing the control right belongs to the package
deal, should be regarded as a transaction of disposing the subsidiaries and losing the
control right for accounting treatment. Those not belong to a package deal, each of
them a deal depends on circumstances respectively conduct accounting treatment in
accordance with the applicable principles of “part disposal of subsidiaries of a
long-term equity investment under the condition of not losing control on its
subsidiaries” (see details to the first two paragraphs)and “Where the Group losses
control on its original subsidiaries due to disposal of some equity investments or other
reasons” (see the details to the first paragraph).However, before losing control, every
disposal cost and corresponding net assets balance of subsidiary of disposal
investment are confirmed as other comprehensive income in consolidated financial
statements, which together transferred into the current profits and losses in the loss of
control , when the Company losing control on its subsidiary.
7. Classification of Joint Arrangements and Accounting Treatment of Joint Operations
Not applicable
8. Confirmation Standard for Cash and Cash Equivalent
In preparing the cash flow statement, the cash equivalents of the Company include the
investments with short period (it usually expires within three months from the
purchase date), characteristics of high liquidity, easy conversion to certain amount of
cash and little risk of value change.
9. Transactions of Foreign Currencies and Conversion of Financial Statements in Foreign
Currencies
(1) Adjustments are made to foreign currency accounts in accordance with the
exchange rate prevailing on the balance sheet date
Value of non currency item accrued at fair value by foreign currency is adjusted in
accordance with the exchange rate prevailing on fair value confirm date. Conversion
differences arising from those specific borrowings are to be capitalized as part of the
cost of the construction in progress in the period before the fixed assets being
acquired and constructed has not yet reached working condition for its intended use.
Conversion differences arising from other accounts are charged to financial expenses.
(2) In balance sheet, assets and liabilities items are converted into RMB at the
exchange rate prevailing on the consolidated balance sheet date. Owner’s equity items
(excluding undistributed profit item) are converted into RMB at the exchange rate
when the transaction occurs. In income statement, revenue and expenses items are
accrued by the proper method and the approximate rate when the transaction occurs.
Translation difference occurred for above reason is disclosed in the consolidated
balance sheet as a separate item.
10. Financial Instruments
The term “financial instruments” refers to the contracts under which the financial
assets of an enterprise are formed and the financial liability or right instruments of any
other entity are formed. Financial instruments include the financial assets, financial
liabilities and equity instruments.
(1) Recognition and derecognition of the financial instruments
When the Company becomes a party to a financial instrument, it shall recognize a
financial asset or financial liability.
Where a financial asset satisfies any of the following requirements, the recognition of
it shall be terminated:
① Where the contractual rights for collecting the cash flow of the said financial asset
are terminated;
② Where the said financial asset has been transferred and meets the conditions for
recognizing the termination of financial assets as follows.
Only when the prevailing obligations of a financial liability are relieved in all or in
part may the recognition of the financial liability be terminated in all or partly. Where
the Company (debtor) enters into an agreement with a creditor so as to substitute the
existing financial liabilities by way of any new financial liability, and if the
contractual stipulations regarding the new financial liability is substantially different
from that regarding the existing financial liability, it shall terminate the recognition of
the existing financial liability, and shall at the same time recognize the new financial
liability.
Buying and selling the financial assets by conventional methods and executing the
accounting recognition and derecognition according to the transaction date.
(2) Category and measurement of the financial assets
The Company classifies the financial assets into the following four kinds when
initially recognizing according to the contract terms of the issued financial
instruments and the economic nature reflected by which but not by the law methods as
well as combines with the aims of acquiring and holding the financial assets and
undertaking the financial liabilities: financial assets measured by fair value with the
changes be recorded in the current gains and losses, held-to-maturity investment,
loans and accounts receivable as well as the available-for-sale financial assets. The
financial assets should be measured by fair value when initially recognizing. As for
the financial assets measured by fair value with the changes be recorded in the current
gains and losses, the relevant transactions expenses should be directly recorded in the
current gains and losses while the relevant transactions expenses of the financial
assets of other categories should be recorded in the initially recognized amount.
Financial assets measured by fair value with the changes be included in the current
gains and losses
As for the financial assets measured by fair value with the changes are included in the
current gains and losses which include the tradable financial assets and the financial
assets be appointed as the one be measured by fair value with the changes are
included in the current gains and losses when initially recognized. For this kind of the
financial assets, should be executed the follow-up measurement by adopting the fair
value, and the profits or losses form from the changes of the fair value as well as the
dividends and the interest income related to the financial assets should be recorded in
the current gains and losses.
Held-to-maturity investment
The term “held-to-maturity investment “refers to a non-derivative financial asset with
a fixed date of maturity, a fixed or determinable amount of repo price and which the
enterprise holds for a definite purpose or the enterprise is able to hold until its
maturity. The following non-derivative financial assets shall not be classified as
investments held to their maturity. As for the held-to-maturity investment, shall make
subsequent measurement on its financial liabilities on the basis of the
post-amortization costs by adopting the actual interest rate method, while the gains or
losses of the derecognition, impairment or amortization should be recorded in the
current gains and losses.
Accounts receivable
Accounts receivable refers to the non-derivative financial assets without any quotation
in the active market but with fixed or recognizable recovery amount, which include
the accounts receivable and other accounts receivable etc. As for the accounts
receivable, shall make subsequent measurement on its financial liabilities on the basis
of the post-amortization costs by adopting the actual interest rate method, while the
gains or losses of the derecognition, impairment or amortization should be recorded in
the current gains and losses.
Available-for-sale financial assets
Available-for-sale financial assets refers to the non-derivative financial assets be
appointed as available-for-sale and the financial assets except for the above category
of the financial assets. The available-for-sale financial assets should adopt the
follow-up measurement and the premium should adopt the actual interest rate for
amortization and be recognized as the interest income. Except for the impairment
losses and the exchange differences of the foreign currency financial assets which be
regarded as the current gains and losses, the changes of the fair value of the
available-for-sale financial assets should be recognized as other comprehensive
income, and when the financial assets being derecognizing, the portion of the
accumulative amount of changes in the fair value originally recorded in the other
comprehensive income which corresponds to the portion whose recognition has been
disposed, shall be transferred and recorded in the current gains and losses. And the
dividends or the interest income related to the available-for-sale financial assets
should be recorded in the current gains and losses.
(3) Category and measurement of financial liabilities
The financial liabilities of the Company are classified as the follows when initially
recognized: financial liabilities measured by fair value with the changes are recorded
in the current gains and losses and other financial liabilities. As for those had not be
divided as the financial liabilities measured by fair value with the changes be recorded
in the current gains and losses, the relevant transaction expenses should be recorded in
the initial recognized amount.
Financial liabilities measured by fair value with the changes be recorded in the current
gains and losses
The financial liabilities measured by fair value with the changes be recorded in the
current gains and losses, which include the tradable financial liabilities and the
financial liabilities be appointed as measured by fair value with the changes be
recorded in the current gains and losses when initially recognized. For this kind of
financial liabilities should be executed the follow-up measurement according to the
fair value, while the profits or losses form from the changes of the fair value and the
dividends and the interest expenses related to the financial liabilities should be
recorded in the current gains and losses.
Other financial liabilities
For the derivative financial liabilities, which are connected to the equity instrument
for which there is no quotation in the active market and whose fair value cannot be
reliably measured, and which must be settled by delivering the equity instrument, they
shall be executed follow-up measurement on the basis of their costs. As for the other
financial liabilities, should adopt the effective interest method and be executed the
follow-up measurement according to the amortized cost with the profits or losses form
from derecognition or amortization be recorded in the current gains and losses.
(4) Fair value of the financial instruments
As for the financial assets or financial liabilities for which there is an active market,
the current offer or current price in the active market shall be used to determine the
fair values thereof.
Where there is no active market for a financial instrument, the Company concerned
shall adopt value appraisal techniques to determine its fair value. The result obtained
by adopting value appraisal techniques shall be able to reflect the transaction prices
that may be adopted in fair dealings on the value appraisal day. The value appraisal
techniques mainly include the prices adopted by the parties, who are familiar with the
condition, in the latest market transaction upon their own free will, the current fair
value obtained by referring to other financial instruments of the same essential nature,
the cash flow capitalization method and the option pricing model, etc.
To determine the fair value of a financial asset, the Company chooses those value
appraisal techniques which are generally acknowledged by market participants and
have been proved as reliable by past actual transaction prices of the market. To
determine the fair value of a financial asset by adopting value appraisal techniques,
the Company shall adopt, if possible, all the market parameters that are taken into
account by market participants in pricing financial instruments and the observable
transaction price of the current market with the same financial instruments for testing
the validity of the valuation technique.
(5) Impairment of financial assets
The Company shall carry out an inspection, on the balance sheet day, on the carrying
amount of the financial assets and where there is any objective evidence proving that
such financial asset has been impaired, an impairment provision shall be made. The
expression “objective evidence proving that the financial asset has been impaired”
refers to the actually incurred events which, after the financial asset is initially
recognized, have an impact on the predicted future cash flow of the said financial
asset that can be reliably measured by the Company.
Financial assets measured by amortized cost
If there are objective evidences indicate that the financial assets occur impairment, the
carrying amount of the said financial asset shall be written down to the current value
of the predicted future cash flow (excluding the loss of future credits not yet occurred),
and the amount as written down shall be recorded in the current gains and losses. The
current value of the predicted future cash flow shall be determined according to the
capitalization of the original actual interest rate of the said financial asset, taking into
account the value of the relevant guarantee.
An impairment test shall be made on the financial assets with significant single
amounts. If any objective evidence shows that it has been impaired, the
impairment-related losses shall be recognized and shall be recorded into the profits
and losses of the current period. With regard to the financial assets with insignificant
single amounts, an independent impairment test may be carried out, or they may be
included in a combination of financial assets with similar credit risk features so as to
carry out an impairment-related test. Where, upon independent test, the financial asset
(including those financial assets with significant single amounts and those with
insignificant amounts) has not been impaired, it shall be included in a combination of
financial assets with similar risk features so as to conduct another impairment test.
The financial assets which have suffered from an impairment loss in any single
amount shall not be included in any combination of financial assets with similar risk
features for any impairment test.
Where any financial asset measured on the basis of post-amortization costs is
recognized as having suffered from any impairment loss, if there is any objective
evidence proving that the value of the said financial asset has been restored, and it is
objectively related to the events that occur after such loss is recognized, the
impairment-related losses as originally recognized shall be reversed and be recorded
into the profits and losses of the current period. However, the reversed carrying
amount shall not be any more than the post-amortization costs of the said financial
asset on the day of reverse under the assumption that no provision is made for the
impairment.
Available-for-sale financial assets
Where there are objective evidences indicate that the available-for-sale financial
assets are impaired, the accumulative losses arising from the decrease of the fair value
of the owner’s equity which was directly included shall be transferred out and
recorded into the profits and losses of the current period. The accumulative losses that
are transferred out shall be the balance obtained from the initially obtained costs of
the sold financial asset after deducting the principals as taken back, the current fair
value and the impairment-related losses as was recorded into the profits and losses of
the current period.
As for the sellable debt instruments whose impairment-related losses have been
recognized, if, within the accounting period thereafter, the fair value has risen and are
objectively related to the subsequent events that occur after the originally
impairment-related losses were recognized, the originally recognized
impairment-related losses shall be reversed and be recorded into the profits and losses
of the current period. The impairment-related losses incurred to a sellable equity
instrument investment shall not be reversed through profits and losses.
Financial assets measured by cost
When the equity instrument investments for which there is no quotation in the active
market and whose fair value cannot be measured reliably, or the derivative financial
assets which are connected with the said equity instrument and must be settled by
delivering the said equity instrument are impaired, should recognize the book value of
the financial assets and the differences between the current value recognized from the
discounting according to the current market earnings rate of the similar financial
assets to the future cash flow as the impairment losses and record which in the current
gains and losses. And the occurred impairment losses once being recognized should
not be reversed.
(7) Transformation of the financial assets
The term “"transfer of a financial asset” refers to transferring or delivering a financial
asset to a party other than the issuer of the financial asset (the transferee).
Where the Company has transferred nearly all of the risks and rewards related to the
ownership of the financial asset to the transferee, it shall stop recognizing the
financial asset. If it retained nearly all of the risks and rewards related to the
ownership of the financial asset, it shall not stop recognizing the financial asset.
Where the Company does not transfer or retain nearly all of the risks and rewards
related to the ownership of a financial asset, it shall deal with it according to the
circumstances as follows, respectively: if it gives up its control over the financial asset,
it shall stop recognizing the financial asset; if it does not give up its control over the
financial asset, it shall, according to the extent of its continuous involvement in the
transferred financial asset, recognize the related financial asset and recognize the
relevant liability accordingly.
11. Receivables
(1) Accounts Receivable with Significant Single Amount for Which the Bad Debt Provision is
Made Individually
Individual material receivables are the top five largest receivables
Standard of significant single amounts or sum of receivables which account for 10% of ending balance of
accounts receivable.
As for the accounts receivable with significant single amount at
the period-end, could execute the impairment test individually. If
there was objective evidence to shows that it has been impaired,
Withdrawing method of provision for bad debts of significant
the impairment-related losses shall be recognized and shall be
single amounts
made bed debt provision according to the difference that the
current value of the future cash flow lowers than its book value
of the accounts receivable.
(2) Accounts Receivable Which the Bad Debt Provision is Withdrawn by Credit Risk
Characteristics
Name of portfolios Bad debt provision method
In the groups, adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Not applicable
Withdrawal proportion for accounts Withdrawal proportion for other accounts
Age
receivable receivable
Within 1 year (including 1 year) 2.00% 2.00%
1-2 years 10.00% 10.00%
2-3 years 50.00% 50.00%
Over 3 years 80.00% 80.00%
3 to 4 years 80.00% 80.00%
4 to 5 years 80.00% 80.00%
Over 5 years 100.00% 100.00%
In the groups, adopting balance percentage method to withdraw bad debt provision:
□ Applicable √ Not applicable
In the groups, adopting other methods to withdraw bad debt provision:
□ Applicable √ Not applicable
(3) Accounts Receivable with an Insignificant Single Amount but for Which the Bad Debt
Provision is Made Individually
As for the accounts receivable with insignificant single amount at
the period-end, could execute the impairment test individually.
the impairment-related losses shall be calculated and recognized
and shall be made bed debt provision according to the proportion
of the accounts receivable portfolios that are accounts receivable
Withdrawal method for bad debt provision
that didn’t incur impairment in individual test (including
accounts receivable with significant single amount and accounts
receivable with insignificant single amount ) and the accounts
receivable portfolios with similar credit risk characteristics to
closing balance.
12. Inventory
Whether the Company need to comply with the disclosure requirements of special industry?
No
(1) Inventory classification
The inventory of the Company classified as:
A. Real estate development products: developed products, development cost.
B. Non-real estate products: raw materials, products in production, stock merchandise,
delivery commodity, commission processing materials, etc.
(2) Method for inventory valuation
Inventories are valued at the lower of cost and net realizable value.
Real estate development product costs include land cost, construction costs and other
costs. Borrowing costs meet the capitalization conditions are also included in real
estate development product costs. Non-real estate development product costs include
purchase cost, process cost and other costs.
The raw materials acquired by the Company are measured according to the actual cost
and the raw materials, outside processing materials, goods in process and self-made
semi-manufactured goods adopt weighted average valuation when issued or received
(winding wheel setting and jade accessories adopt individual pricing).
(3) Confirmation of net realizable value of inventory and Recording method of
provision for inventory devaluation
At the end of the year, after overall check of the inventory, draw or adjust provision
for inventory devaluation according to the lower of the cost of inventory and net
realizable values of inventory.
In normal operation process, net realizable values of commodities inventories for
direct sales including finished goods, commodities and materials for sales are
determined by the estimated selling prices minus the estimated selling expenses and
relevant taxes and fees; In normal operation process, net realizable values of materials
that need further processing are determined by the estimated selling prices of the
finished goods minus estimated cost to completion, estimated selling expenses and
relevant taxes. For the inventory held to implement sales contract or work contract, its
net realizable value is calculated on the basis of contract price. For the balance of
inventory beyond the amount of the sales contract, its net realizable value is
calculated on the basis of general selling price.
Provision for inventory devaluation is provided for based on individual inventory item
at end of the period. For inventory that has large quantity and low unit price, the
provision for inventory devaluation is provided for based on categories of the
inventory. For inventory related to the products manufactured and sold in the same
district, with same or similar use or purpose, and difficult to account for separately
from other items, the provision for inventory devaluation is provided for on a
consolidated basis.
When the factors that influence the decreased bookkeeping of inventory value have
disappeared, switch back from the provision for inventory devaluation amount that
previously appropriated and the amount that switched back is charged to profit or loss
of current period.
(4) System of stock inventories
Perpetual inventory system is applied.
(5) Amortization for low cost and short lived articles and package materials
When consuming the low cost and short lived articles, the Company adopts the
one-time amortization method for amortization.
The turnover package materials should be recorded in the cost expenses according to
the one-time amortization method.
13. Divided as Assets Held for Sale
(1) Recognition standard of assets held for sale
The Company recognizes the non-current assets or the assets group that
simultaneously meet with the following conditions as the assets held for sale. The
compose part must be immediately sold only according to the usual terms of selling
the compose part under the current conditions; the enterprise had made resolution on
the disposal of the compose part, if needed to receive the approval from the
shareholders according to the rules, should had acquired the approval from the Annual
General Meeting or the corresponding capability mechanism; the enterprise had
signed the irrepealably transfer agreement with the transferee; and the transfer should
be completed within 1 year.
(2) Accounting treatment method of assets held for sale
As for the fixed assets held for sale, shall adjust its expected net salvage value that
lead which reflect the amount of the fair value minuses the disposal expenses but
should not exceed the original book value of the fixed assets when meet with the
conditions held for sale and as for the difference that the original book value higher
than the expected net salvage after adjustment, should be recorded in the current gains
and losses as the losses of the assets impairment. As for the other non-current assets
held for sale, should be disposed by comparing the above principles, and the
non-current assets held for sale include the single assets and disposal group, while the
disposal group refers to a group of assets sold as a whole or disposed together by
other methods.
(3) Liabilities in the disposal group of assets held for sale
As for the liabilities be divided in the disposal group held for sale, the Company lists
which as the liabilities among the disposal group held for sale. The long-term equity
investment of this part refers to the long-term equity investment owns the control,
jointly control or the significant influences on the investees of the Company. As for
the long-term equity investment not owning the control, jointly control or the
significant influences on the investees of the Company, should be regarded as the
available-for-sale financial assets or be measured as the financial assets for
measurement by fair value with the changes be recorded in the current gains and
losses, of which the details of the accounting policies in Notes IV. 9 “Financial
Instruments”.
14. Long-term Equity Investment
The long-term equity investments of this part refer to the long-term equity
investments that the Group has control, joint control or significant influence over the
investees. The long-term equity investment that the Group does not have control, joint
control or significant influence over the investees, should be recognized as
available-for-sale financial assets or be measured by fair value with the changes
should be included in the financial assets accounting of the current gains and losses.
(1) Recognition of investment costs
As for long-term equity investments acquired by enterprise merger, if the merger is
under the same control, the share of the book value of the owner’s equity of the
merged enterprise, on the date of merger, is regarded as the initial cost of the
long-term equity investment. The difference between the initial cost of the long-term
equity investment and the payment in cash, non-cash assets transferred as well as the
book value of the debts borne by the merging party shall offset against the capital
reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be
adjusted (If the consideration of the merging enterprise is that it issues equity
securities, it shall, on the date of merger, regard the share of the book value of the
shareholder's equity of the merged enterprise on the consolidated financial statement
of the ultimate control party as the initial cost of the long-term equity investment. The
total face value of the stocks issued shall be regarded as the capital stock, while the
difference between the initial cost of the long-term equity investment and total face
value of the shares issued shall offset against the capital reserve. If the capital reserve
is insufficient to dilute, the retained earnings shall be adjusted. The equities of the
combined party which respectively acquired through multiple transaction under the
same control that ultimately form into the combination of the enterprises under the
same control, should be disposed according whether belongs to package deal; if
belongs to package deal, each transaction would be executed accounting treatment by
the Company as a transaction of acquiring the control right. If not belongs to package
deal, it shall, on the date of merger, regard the enjoyed share of the book value of the
shareholder's equity of the merged enterprise on the consolidated financial statement
of the ultimate control party as the initial cost of the long-term equity investment, and
as for the difference between the initial investment cost of the long-term equity
investment and sum of the book value of the long-term equity investment before the
combination and the book value of the consideration of the new payment that further
required on the combination date, should adjust the capital reserve; if the capital
reserve is insufficient to dilute, the retained earnings shall be adjusted. The equity
investment held before the combination date which adopted the equity method for
accounting, or the other comprehensive income confirmed for the available-for-sale
financial assets, should not have any accounting disposal for the moment).
For the long-term investment required from the business combination under different
control, the initial investment cost regarded as long-term equity investment on the
purchasing date according to the combination cost, the combination costs shall be the
sum of the fair values of the assets paid, the liabilities incurred or assumed and the
equity securities issued by the Company (The equities of the acquirees which
respectively acquired through multiple transaction that ultimately form into the
combination of the enterprises under the different control, should be disposed
according whether belongs to package deal; if belongs to package deal, each
transaction would be executed accounting treatment by the Company as a transaction
of acquiring the control right. If not belongs to package deal, the sum of the book
value of the original held equity investment of the acquirees and the newly added
investment cost should be regarded as the initial investment cost of the long-term
equity investment that changed to be accounted by cost method. If the original held
equity is calculated by cost method, the other relevant comprehensive income would
not have any accounting disposal for the moment. If the original held equity
investment is the financial assets available for sale, its difference between the fair
value and the book value as well as the accumulative changes of the fair value that
include in the other comprehensive income, should transfer into the current gains and
losses).
The commission fees for audit, law services, assessment and consultancy services and
other relevant expenses occurred in the business combination by the combining party
or the purchase party, shall be recorded into current profits and losses upon their
occurrence; the transaction expense from the issuance of equity securities or bonds
securities which are as consideration for combination by the combining party, should
be recorded as the initial amount of equity securities and bonds securities.
Besides the long-term equity investments formed by business combination, the other
long-term equity investments shall be initially measured by cost, the cost is fixed in
accordance with the ways of gaining, such as actual cash payment paid by the Group,
the fair value of equity securities issued by the Group, the agreed value of the
investment contract or agreement, the fair value or original carrying amount of
exchanged assets from non-monetary assets exchange transaction, the fair value of the
long-term equity investments, etc. The expenses, taxes and other necessary
expenditures directly related with gaining the long-term equity investments shall also
be recorded into investment cost. The long-term equity investment cost for those
could execute significant influences on the investees because of appending the
investment or could execute joint control but not form as control, should be as the
sum of the fair value of the original held equity investment and the newly added
investment cost recognized according to the No. 22 of Accounting Standards for
Business Enterprises—Recognition and Measurement of Financial Instrument.
(2) Subsequent measurement and recognition of gains or losses
Long-term equity investment measured by cost method
The long-term equity investment which the Company could execute the control on the
investees, should be measured by cost method and shall be included at its initial
investment cost and append as well as withdraw the cost of investing and adjusting
the long-term equity investment.
As for the long-term equity investment measured by cost method, the return on
investment at current period shall be recognized in accordance with the cash dividend
or profit announced to distribute by the invested entity, except the announced but not
distributed cash dividend or profit included in the actual payment or consideration
upon gaining the investment.
Long-term equity investment measured by equity method
As for the long-term equity investment of the joint ventures and the associated
enterprises, the Company adopts the equity method for measurement; as for the one
part of the equity investment that indirectly held by the joint ventures through the
similar main bodies such as the venture capital Institutions, mutual fund, trust
company or the unit-linked Insurance funds, should be measured by adopting fair
value with the changes be recorded in the gains and losses.
If the initial cost of a long-term equity investment is more than the Company’s
attributable share of the fair value of the invested entity’s identifiable net assets for
investment, the initial cost of the long-term equity investment may not be adjusted. If
the initial cost of a long-term equity investment is less than the Company’s
attributable share of the fair value of the invested entity’s identifiable net assets for
investment, the difference shall be included in the current profits and losses.
After the Company acquires the long-term equity investment, respectively recognize
investment income and other comprehensive income according to the net gains and
losses as well as the portion of other comprehensive income which should be enjoyed
or be shared, and at the same time adjust the book value of the long-term equity
investment; corresponding reduce the book value of the long-term equity investment
according to profits which be declared to distribute by the investees or the portion of
the calculation of cash dividends which should be enjoyed; for the other changes
except for the net gains and losses, other comprehensive income and the owners’
equity except for the profits distribution of the investees, should adjust the book value
of the long-term equity investment as well as include in the owners’ equities.
When executes the measurement on the long-term equity investment by the equity
method, the Company should adjust the net profits of the investees in the aspects such
as the fair value, accounting policies and accounting period of each identifiable asset
of the investees when acquiring firstly and secondly recognize the current investment
gains and losses according to the net gains and losses which should enjoyed or
undertook of the investees.
For the unrealized profits or losses of internal transactions occurred among the
Company and joint ventures, the proportion attributable to the Company will be
recognized based on the offset as the investment gains and losses.
Recognition of share of losses of the invested companies under the equity method is
treated in the following steps: First, reduce the book value of the long-term equity
investment. Second, when the book value is insufficient to cover the share of losses,
investment losses are recognized up to a limit of book values of other long-term
equity which form net investment in substance by reducing the book value of long
term receivables, etc. Finally, after all the above treatments, if the Company is still
responsible for any additional liabilities in accordance with the provisions stipulated
in the investment contracts or agreements, estimated liabilities are recognized and
charged into current investment loss according to the liabilities estimated. If the
invested company achieve profit in subsequent periods, the treatment is in the
reversed steps described above after deduction of any unrecognized investment losses,
i.e., reduce book value of estimated liabilities recognized, restore book values of other
long-term equity which form net investment in substance, and in long-term equity
investment, and recognize investment income at the same time.
Disposal of the long-term equity investment
When disposing of a long-term equity investment, the difference between its book
value and the actual purchase price shall be included in the current profits and losses.
As for the long-term equity investment measured by adopting the equity method,
when disposing the investment, should adopt the same basis as the investees when
directly disposing the relevant assets or liabilities and execute the accounting
treatment on the part which originally be recorded in the other comprehensive income
according to the corresponding proportion. As for the owners’ equities recognized
owning to the changes of the other owners’ equities except for the net gains and losses,
other comprehensive income and the profits distribution of the investees, should be
carried down in the current gains and losses according to the proportion. If lost the
jointly control or the significant influences on the investees owning to the reasons
such as disposing part of the equity investment, the retained equities after the disposal
should change to be recognized according to the financial instruments and be
measured by the measure criterion, with the difference between the fair value on the
date losing the jointly control or the significant influences and the book value, should
be recorded in the current gains and losses. As for the other comprehensive income
recognized owning to the original equity investment which be measured by adopting
the equity method, should be executed the accounting treatment bases on the same
basis as directly disposing the relevant assets or liabilities by the investees when
terminating the measurement by adopting the equity method. And the owners’ equities
recognized owning to the changes of the other owners’ equities except for the net
gains and losses, other comprehensive income and the profits distribution, should be
totally transferred in the current gains and losses when terminating the measurement
by adopting the equity method.
As for those lost the control right on the investees owning to the reasons such as
disposing part of the equity investment, when preparing the individual financial
statement, if the retained equities after the disposal could execute the jointly control or
significant influences on the investees, should change to be measured by equity
method and execute the adjustment of the retained equity by regarding which as
adopting the equity method for measurement the time when acquires; and if the
retained equities after the disposal could not execute the jointly control or significant
influences on the investees, should change to be recognized according to the financial
instruments and be executed the accounting treatment according to the relevant
regulations of the measure criterion with the difference between the fair value on the
date lost the control and the book value, should be recorded in the current gains and
losses.
If the disposed equity is acquired by the enterprise merger owning to the reasons such
as the additional investment, when preparing the individual financial statement, as for
the disposed retained equities be measured by adopting the cost method or the
equity method, the other comprehensive income and the other owners’ equities
recognized owning to the equity investment which adopts the equity method for
measurement before the purchase date should be carried forward according to the
proportion; as for the disposed retained equities change to be recognized according to
the financial instruments and be executed the accounting treatment according to the
measure criterion, the other comprehensive income and other owners’ equities should
be totally carried forward.
(3) Judgment criterion of the jointly control and significant influences
If the Company jointly control certain arrangement according to the relevant
agreement with the other participants and owns the activity decision-making with
significant influences on the return of the arrangement, which only exists through the
consensus of the participants with enjoy and control right, should regard the Company
and other participants jointly control certain arrangement and the arrangement is the
joint venture arrangement.
As for the joint venture arrangement reaches through the individual main body, when
judging the Company enjoying the right on the net assets of the individual main body
according to the relevant agreement, should regard the individual main body as the
joint venture and should measure which by adopting the equity method. If the
Company not enjoys the right on the net assets of the individual main body according
to the relevant agreement after the judgment, the individual main body should be
regarded as the jointly operation and the Company should recognize the projects
related to the interest shares of the joint operation and execute the accounting
treatment according to the regulations of the relevant ASBE.
The term “significant influence” means having the power to participate in the
formulation of financial and operating policies of an enterprise, but not the power to
control or jointly control the formulation of these policies together with other parties.
The Company judges whether there are significant influences on the investees through
one or various situations of the following and comprehensively considers all the facts
and situations. (1) there are representatives assigned in the Board of Directors or the
similar capability mechanisms in the investees; (2) participates in the decision-making
process of the financial and operating policies of the investees; (3) there are
significant transactions with the investees; (4) sends the administrative staffs to the
investees; (5) provides the key technical materials to the investees.
(4) Impairment testing and impairment provision methods
On the balance sheet date, if there are similar situations such as the book value of the
long-term equity investment larger than the shares of the book value of the owners’
equities of the investees, the Company should execute the impairment test of the
long-term equity investment according to the No. 8 of ASBE – Assets Impairment and
as for the recoverable amount less than book value of the long-term equity investment,
should be withdrawn the impairment provision. As for the specific methods for
withdrawing the assets impairment, please refer to Notes IV. 19.
15. Investment Real Estates
Measurement mode of investment real estates
Measurement of cost method
Depreciation or amortization method
Investment real estates refer to the real estate held for gaining the rental or the capital
appreciation or for both causes mentioned above, which includes the leased land use
right, held-to-transferred land use right after appreciation and the leased buildings.
The Company adopts cost mode measurement on the current investment real estates.
For investment properties and rental assets measured at the cost model, they will be
implemented the same depreciation policy similar to fixed assets, land use right for
rental will be implemented the same amortization policy to intangible assets; for those
with the indication of impairment, the recoverable amount can only be estimated, and
if recoverable amount is lower than its book value, the corresponding impairment loss
should be confirmed.
16. Fixed Assets
(1) Conditions for Recognition
Fixed assets are tangible assets that are held for use in the production or supply of
services, for rental to others, or for administrative purposes; they have useful lives
over one fiscal year. And they shall be recognized only when both of the following
conditions are satisfied: A. It is probable that economic benefits associated with the
assets will flow to the enterprise; B. The cost of the fixed assets can be measured
reliably.
(2) Depreciation Methods
Expected net salvage
Category of fixed assets Method Useful life Annual deprecation
value
Buildings and Average method of
35 years 5% 2.71%
constructions useful life
Average method of
Machinery equipment 10 years 5% 9.50%
useful life
Transportation Average method of
8 years 5% 11.88%
equipment useful life
Office equipment and Average method of
5 years 5% 19.00%
others useful life
Not applicable
(3) Recognition Basis, Pricing and Depreciation Method of Fixed Assets by Finance Lease
The fixed assets gained from financing leasing, if could ensure reasonable to gain the
ownership of the leasing assets when the term expired, should withdraw the
depreciation during the service period of the leasing assets; if could not ensure
reasonable to gain the ownership of the leasing assets when the term expired, should
withdraw the depreciation during the shorter period between the leasing period and
the service period of the leasing assets.
If the fixed assets gained from the financing leasing method met with the
capitalization condition of the remodeling expense, should average amortized
according to the shortest period among the period between the two decorations, the
rest leasing period and the service period of the fixed assets.
17. Construction in Progress
(1) Classification of construction in progress
The Construction in progress will be calculated based on the classification of
proposed projects.
(2) Transfer time of construction in progress to fixed assets
For the construction in progress, all expenses occurring before they are ready for the
use will be the book values as the fixed assets. In case the construction in progress has
been ready for use but the final accounts for completion have not been handled, from
the date when such projects has been ready for use, the Company will evaluate the
values and determine the costs based on the project budgets, prices or actual costs of
projects, etc and the depreciation amount will also be withdrawn; when the final
accounts for completion are handled, the Company will adjust the originally evaluated
values subject to the actual costs, but will not adjust the withdrawn depreciation
amount.
18. Borrowing Expenses
(1) Confirmation principle of capitalization of borrowing expenses
In case the borrowing expenses occurring in the Company may directly be attributable
to the construction and productions of assets complying with the capitalization
conditions, they will be capitalized and accrued to the relevant capital costs; other
borrowing expenses will be confirmed as the expenses based on the actual amount at
the time of occurrence and accrued to the current profit or loss.
The assets complying with the capitalization conditions mean the assets such as fixed
assets, investment real estates and inventory, etc that need a long time of construction
and production activities before they are ready for use or for sales.
The borrowing expenses begin to be capitalized under the following circumstances:
A. The asset payment have been made which include the payment such as the paid
cashes, transferred non-currency assets or borne liabilities with the interests to
construct or produce the assets complying with the capitalization conditions;
B. The borrowing expenses have occurred;
C. The necessary construction or production activities to make the assets ready for use
or sales have been launched.
In case during the construction or production period the assets complying with the
capitalization conditions are abnormally suspended and the suspension period exceeds
3 months continuously, the capitalization of borrowing expenses will also be
suspended.
The capitalization of borrowing expenses for the assets that have been constructed or
produced and are ready for use or sales will be stopped.
When parts of the purchased assets or assets whose production satisfies the
capitalization conditions are completed respectively and can be used individually, the
capitalization of the borrowing expenses of these parts will be stopped.
(2) Capitalization period of borrowing expenses
The capitalization period means the period from the moment that the borrowing
expenses start to be capitalized to the moment that the capitalization is stopped, which
does not include the period that the capitalization of borrowing expenses is
suspended.
(3) Calculation method about capitalization amount of borrowing expenses
The interest expenses for special loans (after the deduction of interest income
generated by the unused loan capitals or the investment return obtained from the
temporary investments) and auxiliary expenses will be capitalized before the assets
complying with the capitalization conditions are ready for the expected use or sales.
The interest amount of general loans to be capitalized will be determined by
multiplying the weighted average amount of the asset payment by which the
accumulated assets exceed the special loans with the capitalization rate of general
loans. The capitalization rate will be determined based on the weighted average
interest rate of general loans.
In case the loans have the discounts or premiums, the Company will adjust the interest
amount in each period based on the amortized discount and premium amount in each
accounting period in accordance with the actual interest rate method.
19. Biological Assets
Not applicable
20. Oil-gas Assets
21. Intangible Assets
(1) Pricing Method, Service Life and Impairment Test
Pricing method of the intangible assets
When acquiring, the intangible assets are generally recorded according to actual cost;
A. For those the price of intangible assets deferred paid exceed normal credit
condition so substantively has financing character, the cost of intangible assets is
confirmed on the basis of present value of purchasing price.
B. For fixed assets formed through obtaining them by the debtor paying for debt in
debt restructure, recognize its recording value as fair value of the fixed assets, and
record the difference between the carrying amounts of debt restructure and the fixed
assets used for paying debt into current profit or loss; in the circumstance of the non
monetary assets exchange has commercial nature and fair value of surrendered or
received assets can be measured reliably, recording value of received assets should be
recognized as fair value of surrendered assets unless there is clear evidence to indicate
that fair value of received assets is more reliable; for non monetary assets exchange
which doesn’t meet the requirement of premise mentioned above, cost of received
assets should be recognized as carrying amount and related tax expenses payable of
surrendered assets and should not be recognized as profit or loss.
C. Recording value of fixed assets obtained by absorbing and consolidated by
enterprise under the common control should be recognized as carrying amount of the
consolidated party; recording value of fixed assets obtained by absorbing and
consolidated by enterprise under different control should be recognized as fair value.
Service life and amortization of the intangible assets
A. Estimation of useful life for intangible assets with finite useful life
At end of each year, the Company will recheck the useful life of intangible assets with
the definite useful life and amortization method will be rechecked.
According to the re-check, the useful life and amortization method of the intangible
assets at the end of the year are not different from those estimated before.
B. Amortization of the intangible assets:
In case their useful life is limited, the intangible assets are amortized evenly over the
period in which they produce economic profit for the Company; in case it is
impossible to evaluate the useful life when the intangible assets bring the benefits to
enterprises, it will be deemed that the useful life of such intangible assets is uncertain
and amortization is not applicable and not execute the amortization.
(2) Accounting Policy for Internal Research and Development Expenditures
Not applicable
22. Long-term Assets Impairment
For the long-term non-current financial assets of the fixed assets, projects under
construction and intangible assets, the Company would judge whether decrease in
value exists on the date of balance sheet at every period-end. No matter whether there
is any sign of possible assets impairment, the business reputation formed by the
merger of enterprises and intangible assets with uncertain service lives shall be
subject to impairment test every year.
If there is the sign of possible impairment of the assets, should estimate the
recoverable amount:
(1) Where there is any evidence indicating a possible impairment of assets, the
enterprise shall, on the basis of single item assets, estimate the recoverable amount.
(2) Where it is difficult to do so, it shall determine the recoverable amount of the
group assets on the basis of the asset group to which the asset belongs.
(3) The recoverable amount shall be determined on the basis of the higher one of the
net amount of the fair value of the asset minus the disposal expenses and the current
value of the expected future cash flow of the asset
Where the recoverable amount of the assets is lower than its carrying value, the book
value of the assets should be written down to the recoverable amount with the
written-down amount be recognized as the impairment losses of the assets and record
which in the current gains and losses as well as at the same time withdraw the
corresponding impairment provision of the assets.
After the recognition of the impairment losses of the assets, the depreciation or the
amortization expenses of the impairment assets should be corresponding adjusted in
the future period to lead the assets in the retained service life so that to systematically
sharing the book value of the assets after the adjustment (deducted the expected net
salvage).
The impairment losses of the long-term non-current financial assets of the fixed assets,
projects under construction and intangible assets once being recognized should no
longer be reversed in the accounting period afterwards.
23. Long-term Expenses to be Amortized
Long-term expenses to be amortized will be averagely amortized in the benefit period,
including:
(1) Prepaid rentals for operating leased fixed assets will be averagely amortized
according to the term stipulated in the lease contract.
(2) Fixed assets improvement expenses for operating leased fixed assets will be
averagely amortized according to the remaining lease period and the useful life of
leased assets, whichever is shorter.
24. Payroll
(1) Accounting Treatment of Short-term Compensation
Short-term compensation refers to the Company needs to pay all of the payroll for the
employees within 12 months after the end of the annual Reporting Period during
which the employees provide the relevant service and exclude the welfare after
demission and the demission welfare. The short-term compensation actually happened
during the accounting period when the active staff offering the service for the
Company should be recognized as liabilities and is included in the current gains and
losses or relevant assets cost. During the accounting period the service workers
providing the service, the social insurance charges such as the medical treatment,
industrial injury, birth insurance and the housing fund paid for the employees by the
Company as well as the labor union expenditure and the personnel education fund
withdrawn according to the regulations, should be calculated the corresponding
amount of the payroll according to the stipulated withdraw basis and withdraw
proportion
If the employee services and benefits is the non-monetary welfare, should be
measured by fair value.
(2) Accounting Treatment of the Welfare After Demission
Welfare after demission refers to various forms of the compensation and benefits
provided by the Company which receive the service from the employees after the
retirement or the relief of the labor relation with the enterprise of the service workers,
except for the short-term compensation and demission welfare. Welfare plan after
demission is classified into defined contribution plans and defined benefit plans.
A. Defined contribution plans
During the accounting period the service workers providing the service for the
Company, the Company should pay the basic endowment insurance and
unemployment insurance for the employees according to the relevant regulations of
the local government and the payable amount calculated according to the cardinal
number of the payment as well as the proportion stipulated by the local, should be
recognized as the liabilities and record which in the current gains and losses or the
relevant assets cost.
The Company pays the fees for the local social insurance agencies according to the
certain proportion of the total amount of the staff salaries and the corresponding
expenses should be recorded in the current gains and losses or the relevant assets cost.
B. Defined benefit plans
The Company attributes the benefits obligations from the defined benefit plans
according to the formula recognized by the expected accumulative benefit units to the
period the employees providing the service and records which in the current gains and
losses or the relevant assets cost.
The deficits or surplus formed from the current value of the defined benefit plans
obligations minuses the fair value of the defined benefit plans assets should be
recognized as a net liability or net assets of the defined benefit plans. If there is
surplus of the defined benefit plans, the Company should measure the net assets of the
defined benefit plans according to the lower one between the surplus and the assets of
the defined benefit plans.
All the obligations of the defined benefit plans, including the obligations paid within
12 months after the end of the expected annual Reporting Period the service workers
providing the service, should be discounted according to the national debt matched
with the obligatory term of the defined benefit plans and the currency on the balance
sheet date or the market returns of the high-quality company bonds on the active
market.
The service cost from the defined benefit plans and the net liabilities or the net
amount of the interests of the net assets from the defined benefit plans should be
recorded in the current gains and losses or the relevant assets cost; the net liabilities of
the defined benefit plans be remeasured or the changes from the net assets should be
recorded in the other comprehensive income and should not be reversed to the gains
and losses in the follow-up accounting period.
When settling the defined benefit plans, should recognize the settled gains or losses
according to the difference between the current value of the defined benefit plans
recognized on the settlement date and the settlement price.
(3) Accounting Treatment of the Demission Welfare
Demission welfare which refers to that the Company cancels the labor relationship
with any employee prior to the expiration of the relevant labor contract or brings
forward any compensation proposal for the purpose of encouraging the employee to
accept a layoff was recorded into current gains and losses in the Current Period. When
the Company cannot unilaterally withdraw the earlier one between the demission
welfare provided owning to the relieve of the labor relation plans or the reduction
advices and the recognition of the cost or expenses related to the reorganization
involved with the payment of the demission welfare, the liabilities of the employee
compensation from the demission welfare should be recognized and be recorded in
the current gains and losses.
(4) Accounting Treatment of the Welfare of Other Long-term Staffs
Not applicable
25. Estimated Liabilities
(1) Recognition principles:
Only if the obligation pertinent to a contingencies such as external guarantee,
unsettled lawsuits or arbitrations, quality guarantee of the products, losses contracts,
restructuring obligations, retirement obligations of fixed assets shall be recognized as
an estimated debts when the following conditions are satisfied simultaneously:
A. That obligation is a current obligation of the Company;
B. It is likely to cause any economic benefit to flow out of the Company as a result of
performance of the obligation; and
C. The amount of the obligation can be measured in a reliable way.
(2) Measurement methods:
The Company shall measure the estimated debts in accordance with the best estimate
of the necessary expenses for the performance of the current obligation.
When recognizing the current best estimate, the Company should comprehensive
consider the elements such as the risks, uncertainty and currency time and value of the
contingencies.
The best estimate should be respectively disposed according to the following
situations:
A. If there is a sequent range (or section) for the necessary expenses and if all the
outcomes within this range are equally likely to occur, the best estimate shall be
determined in accordance with the middle estimate which is equaled to the average
amount of the bound amount within the range.
B. When there is not a sequent range (or section) for the necessary expenses, or there
is a sequent range but the possibility of various kinds of results happed would be
different within the range, so if the contingencies concern a single item, the best
estimate shall be determined in the light of the most likely outcome; and if the
contingencies concern two or more items, the best estimate should be calculated and
determined in accordance with all possible outcomes and the relevant probabilities.
When all or some of the expenses necessary for the liquidation of an estimated debts
of an enterprise is expected to be compensated by a third party, the compensation
should be separately recognized as an asset when it is virtually certain that the
reimbursement will be obtained and the amount recognized for the reimbursement
should not exceed the book value of the estimated debts.
26. Share-based Payment
Not applicable
27. Other Financial Instruments Such as Preferred Shares and Perpetual Capital Securities
Not applicable
28. Revenue
Whether the Company needs to comply with the disclosure requirements of special industry?
No
(1) Sales of goods
Revenue from the sale of goods is recognized when the enterprise has transferred to
the buyer the significant risks and rewards of ownership of the goods; the enterprise
retains neither continuing managerial involvement to the degree usually associated
with ownership nor effective control over the goods sold; it is probable that the
economic benefits associated with the transaction will flow to the enterprise; and the
relevant amount of revenue and costs can be measured reliably.
Real estate sales will be confirmed the realization of revenue thereof upon the
complete and acceptance of real estate, meeting the delivery terms of sales contract,
and obtaining the proof of payment made by the purchasers according to the
agreement under the contract on delivering real estate (usually after receiving the first
phase of sales contract payment and confirming the payment arrangements of the
remaining).
(2) Providing service
In case on the preparation date of balance sheet the results about service transaction
can be reliably evaluated, the labor income will be confirmed by the completion
percentage method. The completed percentage of service transactions is determined
by the measurement of finished work (or the proportion of services performed to date
to the total services to be performed, or the proportion of costs incurred to date to the
estimated total costs).
The Company will determine the total amount of rendering of service based on the
prices in contracts and agreements that have been received or will be receivable,
except that such prices are not fair. On the balance sheet date, the current labor
incomes will be determined based on the amount after the total labor income amount
multiplied by the completion progress deducts the accumulated labors in the past
accounting periods. At the same time, the current labor incomes will be carried
forward based on the amount after the estimated total labor cost multiplied by the
completion progress deducts the accumulated labors in the past accounting periods.
In case the service transaction results on the preparation date of balance sheet cannot
be reliably evaluated, they will be determined in the following methods:
A. In case the service costs that have occurred can be compensated, the service
income will be confirmed based on such service costs and the same amounts will be
settled as the service costs.
B. In case the service costs that have occurred cannot be compensated, such service
costs will be accrued to the current profit or loss and will not be confirmed as the
service costs.
(3) Use right of transferred assets
In case the economic benefits related to the transaction will probably flow into the
enterprise and the income amounts can be reliably calculated, the Company will
determine the income amount about use right of transferred assets by the following
means:
A. The interest income amount will be calculated and determined based on the use
time of currency capital from the Company by others and actual interest rate.
B. The income amount of use expenses will be calculated and determined subject to
the charging time and method agreed in the relevant contracts and agreements.
29. Government Subsidies
(1) Judgment Basis and Accounting Treatment of Government Subsidies Related to Assets
Government grants refer to monetary assets or non-monetary assets obtained free by a
company from the government, but not include the capital invested by government as
a business owner.
The government grants should be recognized when simultaneously met with the
following conditions:
A. The Company can meet the conditions for the government subsidies;
B. The enterprise can obtain the government subsidies.
Government grants related to assets are recognized as deferred income and are
averagely distributed in the life of relevant assets, and recorded to current profit or
loss.
(2) Judgment Basis and Accounting Treatment of Government Subsidies Related to Income
Government grants related to income are handled under the following circumstances:
A. If such grants are used to compensate for relevant costs and losses of the company
during later periods, they will be recognized as deferred income and recorded to
current profit or loss upon recognizing related costs;
B. If such grants are used to compensate for relevant costs and losses occurred of the
company, they will be directly through current profit or loss.
30. Deferred Income Tax Assets/Deferred Income Tax Liabilities
Corporate income tax will be calculated by liability method of the balance sheet.
The company’s tax base will be determined upon the company obtains the assets or
liabilities; on the balance sheet date, take the balance sheet as the basis, and if the
book value of related assets or liabilities are different to the tax bases provided by tax
laws, it will calculate and confirm the deferred income tax assets or deferred income
tax liabilities occurred in accordance with the provisions of tax laws, which effect will
be included in current income tax expense.
The company is subject to the limit of the amount of taxable income likely to be used
to offset temporary difference, thus confirms the deferred income tax asset produced
by the deductible temporary difference.
In addition to the cases specified under income guidelines that no need to confirm the
deferred income tax liabilities, the company should recognize related deferred income
tax liabilities for all taxable temporary differences.
31. Lease
(1) Accounting Treatment of Operating Lease
If the terms of the lease will be transferred to the lessee substantially together with all
the risks and rewards related to the ownership of leased assets, then the lease is a
finance lease, and other lease is operating lease.
(1) The Company as the leaser
As for the rent expenses from operating leases, the Company recognizes the current
gains and losses by using the straight-line method over each period of the lease term.
The initial direct costs shall be recognized as the profits and losses of the current
period
(2) The Company as the leasee
The Company uses depreciation policy consistent with its own fixed assets to make
provision for depreciation of leased assets.
For rent in operating leases, the Company will use the straight-line method to record it
into the cost of relevant assets or current profit or loss in each period during the lease
term; and initial direct costs occurred will be through current profit or loss.
Rent in operating leases will be recorded into the cost of relevant assets or current
profit or loss in each period during the lease term.
(2) Accounting Treatments of Finance Lease
The Company as the leaser
In finance lease, at the lease beginning date, the Company takes the minimum lease
receipt and the initial direct costs as the entry value of finance lease receivable, and
records the unguaranteed residual value; and the difference between the sum of
minimum lease receipt, initial direct costs and unguaranteed residual value and its
present value is recognized as unrealized finance income. For unrealized finance
income each period during the lease term, it will use the effective interest method to
confirm the current financing income.
The Company as the leasee
In finance lease, at the lease beginning date, the Company will take the lower of the
fair value of the leased assets and the present value of minimum lease payment as the
entry value of leased assets, and take the minimum lease payment as the entry value
of long-term payables, and their difference will be as unrecognized finance cost.
Initial direct costs are included in the value of leased assets. For unrecognized finance
income each period during the lease term, it will use the effective interest method to
confirm the current financing cost.
32. Other Significant Accounting Policies and Estimates
Not applicable
33. Changes in Main Accounting Policies and Estimates
(1) Change of Accounting Policies
□ Applicable √ Not applicable
(2) Significant Changes in Accounting Estimates
□ Applicable √ Not applicable
34. Other
Not applicable
VI. Taxation
1. Main Taxes and Tax Rate
Category of taxes Tax basis Tax rate
VAT Revenue of product 17
Consumption tax Revenue of sale of taxable product 5
Consumption tax, VAT and business tax
Urban maintenance and construction tax 7
the taxpayer actually paid
Corporate income tax Income tax payable 25
Revenue of sales of real estate (after May
VAT 5
1, 2016, apply a simplified method)
Revenue of sales of real estate (before
Business tax 5
April 30, 2016)
Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
Name Income tax rate
2. Tax Preference
3. Other
1. The Company implements the uniform tax rebate policy of export, i.e. the export is
exempt from VAT and the input-VAT of goods is refunded with refund rate according
to relevant rules before export in accordance with the requirements of tax law.
2. Since January 1, 2008, other subsidiaries of the Company has adopted the
applicable income tax rate of 25%, except for those company established in the
below-mentioned districts.
Companies established in Hong Kong SAR are entitled to a profits tax rate of 16.5%.
VII. Notes on Major Items in Consolidated Financial Statements of the Company
1. Monetary Funds
Unit: RMB
Item Closing balance Opening balance
Cash on hand 525,024.48 49,087.45
Bank deposits 6,491,008.82 123,834,488.84
Other monetary funds 2,174.58 3,400.53
Total 7,018,207.88 123,886,976.82
Of which: total amount deposited in
4,308.67 39,715.34
overseas
Other notes:
There was no any account pledged, frozen or with potential recovery risks of the
Company at the period-end.
2. Financial Assets Measured by Fair Value and the Changes be Included in the Current
Gains and Losses
Unit: RMB
Item Closing balance Opening balance
Trading financial assets 9,977,189.76 15,499,631.52
Equity tool investment 9,977,189.76 15,499,631.52
Total 9,977,189.76 15,499,631.52
Other notes:
3. Derivative Financial Assets
□ Applicable √ Not applicable
4. Notes Receivable
(1) Notes Receivable Listed by Category
Unit: RMB
Item Closing balance Opening balance
(2) Notes Receivable Pledged by the Company at the Period-end
Unit: RMB
Item Pledged amount at the period-end
(3) Notes Receivable which had Endorsed by the Company or had Discounted and had not
Due on the Balance Sheet Date at the Period-end
Unit: RMB
Amount of recognition termination at the Amount of not terminated recognition at
Item
period-end the period-end
(4) Notes Transferred to Accounts Receivable Because Drawer of the Notes Fails to Executed
the Contract or Agreement
Unit: RMB
Item Transferred accounts receivable amount at the period-end
Other notes:
5. Accounts Receivable
(1) Accounts Receivable Disclosed by Category
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category Withdra
Book
Proportio wal Proportio Withdrawal Book value
Amount Amount value Amount Amount
n proportio n proportion
n
Accounts receivable
with significant
single amount for 10,072,1 10,072,1 10,212, 10,212,50
33.33% 100.00% 18.30% 100.00%
which bad debt 46.03 46.03 506.65 6.65
provision separately
accrued
Accounts receivable
withdrawal of bad
19,733,6 1,345,83 18,387,84 45,174, 1,617,034 43,557,743.
debt provision of by 65.30% 6.82% 80.96% 3.58%
77.94 4.35 3.59 777.63 .35 28
credit risks
characteristics:
Accounts receivable
with insignificant
single amount for 414,548. 414,548. 414,548 414,548.5
1.37% 100.00% 0.74% 100.00%
which bad debt 51 51 .51 1
provision separately
accrued
30,220,3 11,832,5 18,387,84 55,801, 12,244,08 43,557,743.
Total 100.00% 39.15% 100.00% 21.94%
72.48 28.89 3.59 832.79 9.51 28
Accounts receivable with single significant amount and withdrawal bad debt provision separately at end of period
√ Applicable □ Not applicable
Unit: RMB
Accounts receivable Closing balance
(classified by units) Account receivable Bad debt provision Withdrawal proportion Withdrawal reason
Long-term credit, the
Victoria
5,847,841.40 5,847,841.40 100.00% Company believe it
International(USA) INC
irrecoverable
Long-term credit, the
Hong Kong Jinhua Trade
4,224,304.63 4,224,304.63 100.00% Company believe it
Limited
irrecoverable
Total 10,072,146.03 10,072,146.03 -- --
In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Not applicable
Unit: RMB
Closing balance
Aging
Account receivable Bad debt provision Withdrawal proportion
Sub-item within 1 year
Subtotal within 1 year 18,990,846.30 617,438.92 3.25%
1 to 2 years 14,442.76 1,444.28 10.00%
2 to 3 years 2,155.24 1,077.62 50.00%
Over 3 years 726,233.64 725,873.53 99.95%
Total 19,733,677.94 1,345,834.35 6.82%
Notes of confirming the basis of the groups:
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision
□ Applicable √ Not applicable
In the groups, accounts receivable adopting other methods to withdraw bad debt provision:
(2) Accounts Receivable Withdraw, Reversed or Collected during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB 0.00; the amount of
the reversed or collected part during the Reporting Period was of RMB 411,560.62.
Significant amount of reversed or recovered bad debt provision:
Unit: RMB
Name of the entity Amount Method
(3) The Actual Write-off Accounts Receivable
Unit: RMB
Item Amount
Of which the significant write-off accounts receivable:
Unit: RMB
Whether produced
Name Nature Amount Reason Procedure by related
transaction
Notes of accounts receivable write-off:
(4) Top 5 of the Closing Balance of the Accounts Receivable Collected According to the
Arrears Party
Name Amount Bad debt Proportion
provision %
Shanghai Zhaoke Trading Co., Ltd 18,384,868.25 615,537.83 60.84
Victoria International(USA) INC 5,847,841.40 5,847,841.40 19.35
Hong Kong Jinhua Trade Limited 4,224,304.63 4,224,304.63 13.98
Hong Kong Heyi Co., Ltd 452,499.70 452,499.70 1.50
Chen Shunqin 335,904.80 335,904.80 1.11
Total 29,245,418.78 11,476,088.36 96.78
(5) Account Receivable which Terminate the Recognition Owning to the Transfer of the
Financial Assets
(6) The Amount of the Assets and Liabilities Formed by the Transfer and the Continues
Involvement of Accounts Receivable
Other notes:
6. Prepayment
(1) List by Aging Analysis
Unit: RMB
Closing balance Opening balance
Aging
Amount Proportion Amount Proportion
Within 1 year 8,504,750.72 100.00% 207,424.73 207,424.73%
Total 8,504,750.72 -- 207,424.73 --
Notes of the reasons of the prepayment ages over 1 year with significant amount but failed settled in time:
(2) Top 5 of the Closing Balance of the Prepayment Collected According to the Prepayment
Target
Name of the entity Closing amount Proportion (%) Time Reason
Shenzhen Zhaokang Investment 7,753,398.40 91.17 Y2017 The contract is not
Co., Ltd fulfilled
Shanghai Jiancheng Trading Co., 350,000.00 4.12 Y2017 The contract is not
Ltd fulfilled
Shandong Humon Smelting Co., 199,567.19 2.35 Y2017 The contract is not
Ltd. fulfilled
Shenzhen Wenxing Industrial Co., 76,331.63 0.90 Y2017 The contract is not
Ltd fulfilled
Mcs Outfitters (Shanghai) Limited 37,846.19 0.45 Y2017 The contract is not
fulfilled
Total 8,417,143.41 98.99
Other notes:
7. Interest Receivable
(1) Category of Interest Receivable
Unit: RMB
Item Closing balance Opening balance
(2) Significant Overdue Interest
Impairment or not and its
Borrowing unit Closing balance Time Reason
judgment basis
Other notes:
8. Dividend Receivable
(1) Dividend Receivable
Unit: RMB
Item (or investee unit) Closing balance Opening balance
(2) Significant Dividend Receivable with Aging over 1 Year
Unit: RMB
Impairment or not and its
Item (or investee unit) Closing balance Aging Reason
judgment basis
Other notes:
9. Other Accounts Receivable
(1) Other Accounts Receivable Disclosed by Category
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category Withdra
Book
Proportio wal Proportio Withdrawal Book value
Amount Amount value Amount Amount
n proportio n proportion
n
Other accounts
receivable with
significant single 40,333,6 2,331,60 38,002,01 40,333, 2,331,608 38,002,013.
67.68% 5.78% 80.26% 5.78%
amount for which 22.03 8.20 3.83 622.03 .20 83
bad debt provision
separately accrued
Other accounts
receivable withdrawn 16,481,7 3,401,84 13,079,86 6,822,6 3,401,847 3,420,834.9
27.66% 20.64% 13.58% 49.86%
bad debt provision 14.35 7.86 6.49 82.78 .86 2
according to credit
risks characteristics
Other accounts
receivable with
insignificant single 2,780,16 2,780,16 3,096,6 2,780,160
4.66% 100.00% 6.16% 89.78% 316,536.00
amount for which 0.81 0.81 96.81 .81
bad debt provision
separately accrued
59,595,4 8,513,61 51,081,88 50,253, 8,513,616 41,739,384.
Total 100.00% 14.29% 100.00% 16.94%
97.19 6.87 0.32 001.62 .87 75
Other accounts receivable with single significant amount and withdrawal bad debt provision separately at end of
period：
√ Applicable □ Not applicable
Unit: RMB
Closing balance
Other accounts
Other accounts
receivable (unit) Bad debt provision Withdrawal proportion Withdrawal reason
receivable
Long-term credit, the
Refund of tax for export
2,331,608.20 2,331,608.20 100.00% Company believe it
receivable
irrecoverable
Puning Tianhe Weaving The amount had been
& Garments Factory Co., 38,002,013.83 collected by Jadiete
Ltd. Holding Group.
Total 40,333,622.03 2,331,608.20 -- --
In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Not applicable
Unit: RMB
Closing balance
Aging
Other accounts receivable Bad debt provision Withdrawal proportion
Sub-item within 1 year
Subtotal within 1 year 12,865,021.19 62,119.80 0.48%
1 to 2 years 141,526.37 14,152.63 10.00%
2 to 3 years 50,790.42 25,395.22 50.00%
Over 3 years 3,424,376.37 3,300,180.21 96.37%
Total 16,481,714.35 3,401,847.86 20.64%
Notes:
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable √ Not applicable
In the groups, other accounts receivable adopting other methods to withdraw bad debt provision:
□ Applicable √ Not applicable
(2) Bad Debt Provision Withdrawal, Reversed or Collected during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB0.00; the amount of the
reversed or collected part during the Reporting Period was of RMB0.00.
Of which the significant amount of the reversed or collected part during the Reporting Period:
Unit: RMB
Name of the entity Reversed or collected amount Method
(3) The Actual Write-off Other Accounts Receivable
Unit: RMB
Item Amount
Of which the significant write-off other accounts receivable:
Unit: RMB
Whether produced
Name Nature Amount Reason Procedure by related
transaction
Notes of other accounts receivable write-off:
(4) Other Account Receivable Classified by Account Nature
Unit: RMB
Nature Closing book balance Opening book balance
The cash pledge and guarantee 120,960.00 319,536.00
Payment on behalf 467,381.47 2,948,349.86
Intercourse funds 18,673,533.69 6,651,363.25
Bonus 38,002,013.83 38,002,013.83
Tax 2,331,608.20 2,331,738.68
Total 59,595,497.19 50,253,001.62
(5) Top 5 of the Closing Balance of the Other Accounts Receivable Collected According to
the Arrears Party
Unit: RMB
Closing balance of
Name of the entity Nature Closing balance Aging Proportion%
bad debt provision
Puning Tianhe
Bonus 38,002,013.83 Within 1 year 63.77%
Weaving &
Garments Factory
Co., Ltd.
Puning Yanlilai
Intercourse funds 12,000,000.00 Within 1 year 20.14%
Trade Co., Ltd
Refund of tax for
export Tax 2,331,608.20 Over 5 years 3.91% 2,331,608.20
receivable-VAT
Suning Banhe
Chemical Fiber
Intercourse funds 800,000.00 Over 5 years 1.34% 800,000.00
Fabric Simulation
Co., Ltd.
Guangzhou Panyu
Tanzhou Zhenyu
Intercourse funds 800,000.00 Over 5 years 1.34% 800,000.00
Textile Printing and
Dyeing Co., Ltd
Total -- 53,933,622.03 -- 90.50% 3,931,608.20
(6) Accounts Receivable Involved with Government Subsidies
Unit: RMB
Estimated time, amount
Name of the units Projects name Closing balance Closing aging
and basis
(7) Other Account Receivable which Terminate the Recognition Owning to the Transfer of
the Financial Assets
(8) The Amount of the Assets and Liabilities Formed by the Transfer and the Continues
Involvement of Other Accounts Receivable
Other notes:
10. Inventory
Whether the Company needs to comply with the disclosure requirements of the real estate industry
No
(1) Category of Inventory
Unit: RMB
Closing balance Opening balance
Item Falling price Falling price
Book balance Book value Book balance Book value
reserves reserves
Raw materials 3,538,001.64 3,538,001.64
Inventory goods 111,017,060.77 111,017,060.77 47,695,584.06 47,695,584.06
Commissioned
processing 18,861,349.18 18,861,349.18
materials
Delivery
8,382,148.92 8,382,148.92
commodity
Total 114,555,062.41 114,555,062.41 74,939,082.16 74,939,082.16
Whether the Company needs to comply with the disclosure requirements of Shenzhen Stock Exchange Industry
Information Disclosure Guidelines No. 4 - Listed companies engaged in seed industry and planting business
No
(2) Falling Price Reserves of Inventory
Unit: RMB
Increased amount Decreased amount
Item Opening balance Reverse or Closing balance
Withdrawal Other Other
write-off
No such case in Reporting Period
(3) Notes of the Closing Balance of the Inventory which Includes Capitalized Borrowing
Expenses
There was no closing balance of the inventory which includes capitalized borrowing
expenses
(4) Completed Unsettled Assets Formed From the Construction Contact at the Period-end
Unit: RMB
Item Amount
Other notes:
11. Assets Divided as Held-to-sold
Unit: RMB
Estimated disposal
Item Closing book value Fair value Estimated disposal time
expense
Other notes:
12. Non-current Assets Due Within 1 Year
Unit: RMB
Item Closing balance Opening balance
Other notes:
13. Other Current Assets
Unit: RMB
Item Closing balance Opening balance
Input tax to be verified 15,714,694.76 9,985,213.09
Total 15,714,694.76 9,985,213.09
Other notes:
Ministry of Finance issued Regulations of VAT Accounting Treatment (CK [2016]
No. 22) on December 3, 2016, which specifically required that debit balance at the
period-end of classification item, such as “VAT payable”, “unpaid VAT”, “input tax
to be deducted”, and “input tax to be verified” in the course of “tax payable” should
be listed in the item of “other current assets” or “other non-current assets” of balance
sheet according to the situations. Credit balance at the period-end of course, like “tax
payable—tax to be written-off” should be listed in the item of “other current liabilities”
or “other non-current liabilities” of balance sheet according to the situations.
14. Available-for-sale Financial Assets
(1) List of Available-for-sale Financial Assets
Unit: RMB
Closing balance Opening balance
Item Depreciation Depreciation
Book balance Book value Book balance Book value
reserves reserves
(2) Available-for-sale Financial Assets Measured by Fair Value at the Period-end
Unit: RMB
Category of the
Available-for-sale equity Available-for-sale
available-for-sale Total
instruments liabilities instruments
financial assets
(3) Available-for-sale Financial Assets Measured by Cost at the Period-end
Unit: RMB
Book balance Depreciation reserves Shareholdi Cash
ng bonus of
Investee Period-beg Period-beg proportion the
Increase Decrease Period-end Increase Decrease Period-end
in in among the Reporting
investees Period
(4) Changes of the Impairment of the Available-for-sale Financial Assets during the
Reporting Period
Unit: RMB
Category of the
Available-for-sale equity Available-for-sale
available-for-sale Total
instruments liabilities instruments
financial assets
(5) Relevant Notes of the Fair Value of the Available-for-sale Equity Instruments which
Seriously Fell or Temporarily Fell but not Withdrawn the Impairment Provision
Unit: RMB
Item of
Falling range of Withdrawn Reason of not
available-for-sale Fair value of the Continued falling
Investment cost the fair value amount of withdrawn the
equity period-end time (month)
against the cost impairment impairment
instruments
Other notes:
15. Investment Held-to-maturity
(1) List of Investment Held-to-maturity
Unit: RMB
Closing balance Opening balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
(2) Significant Investment Held-to-maturity at the End of the Reporting Period
Unit: RMB
Item Book value Coupon rate Actual interest rate Due date
(3) The Current Reclassified Investment Held-to-maturity
Other notes
16. Long-term Accounts Receivable
(1) List of Long-term Accounts Receivable
Unit: RMB
Closing balance Opening balance
Interval of
Item Provision for Provision for
Book balance Book value Book balance Book value discount rate
impairment impairment
(2) Long-term Accounts Receivable Derecognized for the Transfer of Financial Assets
(3) Amount of Assets and Liabilities Generated from the Transfer of Long-term Accounts
Receivable and Continuous involvement
Other notes
17. Long-term Equity Investment
Unit: RMB
Increase/decrease
Closing
Gains and Adjustme
Cash Withdraw balance
Additiona losses nt of
Opening Reduced Changes bonus or al of Closing of
Investees l recognize other
balance investmen of other profits impairme Other balance impairme
investmen d under comprehe
t equity announce nt nt
t the equity nsive
d to issue provision provision
method income
I. Joint ventures
II. Associated enterprises
Shenzhen
Shenguor
ong 149,998,2 150,014,5
16,324.24
Financing 21.71 45.95
Guarantee
Co., Ltd.
Shenzhen
Future
Growing
Business 120,000,0 120,000,7
729.98
Fund 00.00 29.98
(Limited
Partnershi
p)
149,998,2 120,000,0 270,015,2
Subtotal 17,054.22
21.71 00.00 75.93
149,998,2 120,000,0 270,015,2
Total 17,054.22
21.71 00.00 75.93
Other notes
The 7th meeting of 7th board of directors held on Jan. 17, 2017, reviewed and passed
the Proposal of participating and establishing a merger and acquisition fund:
Shenzhen Future Growing Business Fund (Limited Partnership). The company
participated and established the merger and acquisition fund: Shenzhen Future
Growing Business Fund (Limited Partnership) with RMB 12 million on Mar. 14,
2017. After capital increase, the company takes up 30% of Shenzhen Future Growing
Business Fund (Limited Partnership). For details please see (1) in Note XII.
18. Investment Property
(1) Investment Property Adopting the Cost Measurement Mode
□ Applicable √ Not applicable
(2) Investment Property Adopting Fair Value Measurement Mode
□ Applicable √ Not applicable
(3) Details of Investment Property without Certificate of Property Right
Unit: RMB
Item Book value Reason
Other notes
19. Fixed Assets
(1) List of Fixed Assets
Unit: RMB
Houses and Machinery Transportation Electronic and other
Item Total
buildings equipment equipment equipment
I. Original book
value
1. Opening
75,424,039.96 3,638,278.11 1,525,484.27 80,587,802.34
balance
2. Increased
amount of the period
(1) Purchase
(2) Transfer of
construction in
progress
(3) Increased
from enterprise
merger
3. Decreased
amount of the period
(1) Disposal or
Scrap
4. Closing balance 75,424,039.96 3,638,278.11 1,525,484.27 80,587,802.34
II. Accumulative
34,343,519.23 1,883,250.46 348,671.27 36,575,440.96
depreciation
1. Opening
balance
2. Increased
998,532.90 174,998.94 136,359.01 1,309,890.85
amount of the period
(1) Withdrawal 998,532.90 174,998.94 136,359.01 1,309,890.85
3. Decreased
amount of the period
(1) Disposal or
Scrap
4. Closing balance 35,342,052.13 2,058,249.40 485,030.28 37,885,331.81
III. Depreciation
reserves
1. Opening
balance
2. Increased
amount of the period
(1) Withdrawal
3. Decreased
amount of the period
(1) Disposal or
Scrap
4. Closing balance
IV. Book value
1. Closing book
35,342,052.13 2,058,249.40 485,030.28 37,885,331.81
value
2. Opening book
41,080,520.73 1,755,027.65 1,176,813.00 44,012,361.38
value
(2) List of Temporarily Idle Fixed Assets
Unit: RMB
Accumulative Impairment
Item Original book value Book value Notes
depreciation provision
Houses and
20,962,955.00 11,625,378.60 9,337,576.40
buildings
(3) Fixed Assets Leased in from Financing Lease
Unit: RMB
Accumulative
Item Original book value Impairment provision Book value
depreciation
(4) Fixed Assets Leased out from Operation Lease
Unit: RMB
Item Closing book value
(5) Details of Fixed Assets without Certificate of Property Right
Unit: RMB
Item Book value Reason
Other notes
①Current period depreciation: RMB 1,309,890.85
②Original price of fixed assets changed from projects under construction in current
period.
③In current period, the situation of fixed assets being used as guaranties: on Jun. 30,
2017, houses and buildings with a book value of RMB 9,337,576.40 (original value:
RMB 20,962,955.00) are used to provide guaranty to ICBC Jieyang Rongcheng
Sub-branch. Please see 2 (1) in Note XI.
④In current period, “disposal or crapping” of “houses and buildings”, please see Note
XIII for details.
20. Construction in Progress
(1) List of Construction in Progress
Unit: RMB
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
(2) Changes of Significant Construction in Progress
Unit: RMB
Of
Amount Proporti which:
Accumul
that on the Capitaliz
Other ative
transferr estimate amount ation rate
Estimate decrease amount
Name o f Opening ed to Closing d of the Project of the of the Capital
d Increase d amount of
item balance fixed balance project progress capitaliz interests resources
number of the capitaliz
assets of accumul ed of the
period ed
the ative interests period
interests
period input of the
period
(3) List of the Withdrawal of the Impairment Provision of the Construction in Progress
Unit: RMB
Item Amount of provision Reason of provision
Other notes
21. Engineering Material
Unit: RMB
Item Closing balance Opening balance
Other notes:
22. Liquidation of Fixed Assets
Unit: RMB
Item Closing balance Opening balance
Other notes:
23. Productive Biological Assets
(1) Productive Biological Assets Adopting Cost Measurement Mode
□ Applicable √ Not applicable
(2) Productive Biological Assets Adopting Fair Value Measurement Mode
□ Applicable √ Not applicable
24. Oil and Gas Assets
□ Applicable √ Not applicable
25. Intangible Assets
(1) List of Intangible Assets
Unit: RMB
Item Land use right Patent right Non-patent right 373,115.00 Total
I. Original book
value
1. Opening
13,863,200.00 373,115.00 14,236,315.00
balance
2. Increased
amount of the period
(1) Purchase
(2) Internal R
&D
(3) Increased
from enterprise
merger
3. Decreased
amount of the period
(1) Disposal
4. Closing 13,863,200.00 373,115.00 14,236,315.00
balance
II. Total accrued
amortization
1. Opening
4,507,779.24 373,115.00 4,880,894.24
balance
2. Increased
138,631.92 138,631.92
amount of the period
(1)
138,631.92 138,631.92
Withdrawal
3. Decreased
amount of the period
(1) Disposal
4. Closing
4,646,411.16 373,115.00 5,019,526.16
balance
III. Depreciation
reserves
1. Opening
balance
2. Increased
amount of the period
(1)
Withdrawal
3. Decreased
amount of the period
(1) Disposal
4. Closing
balance
IV. Book value
1. Closing book
9,216,788.84 9,216,788.84
value
2. Opening
9,216,788.84 9,355,420.76
book value
The proportion of the intangible assets formed from the internal R&D through the Company among the balance of
the intangible assets at the period-end is 000%.
(2) Details of Land Use Right without Certificate of Property Right
Unit: RMB
Item Book value Reason
Other notes:
①In current period the amortization amount is RMB 138,631.92
②The situation of intangible assets being used as guaranties: on Jun. 30, 2017, a book
value of RMB 2,061,759.21 (original value: RMB 3,206,000.00) is used to provide
guaranty to ICBC Jieyang Rongcheng Sub-branch. Please see 2 (1) in Note XI.
③“Disposal” in current period, please see annotation Thirteen for details.
(2) No such cases of land use right without certificate of ownership in the Reporting
Period.
26. R&D Expenses
Unit: RMB
Opening Closing
Item Current increased amount Current decreased amount
balance balance
Other notes
27. Goodwill
(1) Original Book Value of Goodwill
Unit: RMB
Name of the
invested units or
Opening balance Increase Decrease Closing balance
events generating
goodwill
CHINESE GOLD
2,395,820.87 2,395,820.87
NOBILITY
Total 2,395,820.87 2,395,820.87
(2) Impairment Provision of Goodwill
Unit: RMB
Name of the
invested units or
Opening balance Increase Decrease Closing balance
events generating
goodwill
CHINESE GOLD
NOBILITY
Notes to the recognition methods of the goodwill impairment test process, parameters and goodwill impairment
losses:
In line with the Capital increase agreement signed by the Company and the CHINESE
GOLD NOBILITY, the CHINESE GOLD NOBILITY had fulfilled 100% profits
committed, after test, the recoverable goodwill was no less than RMB2,395,820.87,
thus, the impairment provision of goodwill would not been withdrawn in Reporting
Period.
Other notes
28. Long-term Unamortized Expenses
Unit: RMB
Amortization
Item Opening balance Increased amount Decreased amount Closing balance
amount
Other notes
29. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets Had Not Been Off-set
Unit: RMB
Closing balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference assets difference assets
Assets impairment
14,563,051.00 3,640,762.75 14,714,251.00 3,678,562.75
provision
Trading financial assets 3,755,343.11 938,835.78 3,755,343.11 938,835.78
Total 18,318,394.11 4,579,598.53 18,469,594.11 4,617,398.53
(2) Deferred Income Tax Liabilities Had Not Been Off-set
Unit: RMB
Closing balance Opening balance
Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax
differences liabilities differences liabilities
(3) Deferred Income Tax Assets or Liabilities Listed by Net Amount after Off-set
Unit: RMB
Mutual set-off amount of Amount of deferred Amount of deferred
Mutual set-off amount of
deferred income tax income tax assets or income tax assets or
Item deferred income tax
assets and liabilities at liabilities after off-set at liabilities after off-set at
assets and liabilities
the period-end the period-end the period-begin
Deferred income tax
4,579,598.53 4,617,398.53
assets
(4) List of Unrecognized Deferred Income Tax Assets
Unit: RMB
Item Closing balance Opening balance
Deductible losses 39,946,051.50 39,946,051.50
Total 39,946,051.50 39,946,051.50
(5) Deductible Losses of Unrecognized Deferred Income Tax Assets Will Due the Following
Years
Unit: RMB
Years Closing balance Opening balance Notes
2016 3,205,969.16 3,205,969.16
2017 661,650.60 661,650.60
2018 19,429,361.72 19,429,361.72
2019 14,209,131.72 14,209,131.72
2020 2,439,938.30 2,439,938.30
Total 39,946,051.50 39,946,051.50 --
Other notes:
30. Other Non-current Assets
Unit: RMB
Item Closing balance Opening balance
Other notes:
31. Short-term Loans
(1) Category of Short-term Loans
Unit: RMB
Item Closing balance Opening balance
Notes of short-term loans category:
(2) List of the Overdue Short-term Loans
The amount of the overdue short-term loans at the period-end was of RMB000, of which the significant overdue
short-term loans are as follows:
Unit: RMB
Borrower Closing balance Lending rate Overdue time Overdue rate
Other notes:
32. Financial Liabilities Measured by Fair Value and the Changes Included in the Current
Gains and Losses
Unit: RMB
Item Closing balance Opening balance
Other notes:
33. Derivative Financial Liabilities
□ Applicable √ Not applicable
34. Notes Payable
Unit: RMB
Category Closing balance Opening balance
The total amount of the due but not paid notes payable at the period-end was of RMB000.
35. Accounts Payable
(1) List of Accounts Payable
Unit: RMB
Item Closing balance Opening balance
Payment for goods 19,318,197.56 25,524,801.45
Total 19,318,197.56 25,524,801.45
(2) Notes of the Significant Accounts Payable Aging over One Year
Unit: RMB
Item Closing balance Unpaid/ Un-carry-over reason
Other notes:
36. Advance from Customers
(1) List of Advance from Customers
Unit: RMB
Item Closing balance Opening balance
Payment for goods 32,362,367.65 482,960.95
Total 32,362,367.65 482,960.95
(2) Significant Advance from Customers Aging over One Year
Unit: RMB
Item Closing balance Unpaid/ Un-carry-over reason
(3) Particulars of Settled but Unfinished Projects Formed by Construction Contract at
Period-end.
Unit: RMB
Item Amount
Other notes:
37. Payroll Payable
(1) List of Payroll Payable
Unit: RMB
Item Opening balance Increase Decrease Closing balance
I. Short-term salary 412,376.20 2,171,660.75 2,183,779.23 400,257.72
II. Post-employment
benefit-defined 112,912.35 112,912.35
contribution plans
Total 412,376.20 2,284,573.10 2,296,691.58 400,257.72
(2) List of Short-term Salary
Unit: RMB
Item Opening balance Increase Decrease Closing balance
1. Salary, bonus,
412,376.20 1,940,891.86 1,953,010.34 400,257.72
allowance, subsidy
2. Employee welfare 130,867.38 130,867.38
3. Social insurance 57,692.63 57,692.63
Of which: Medical
52,626.12 52,626.12
insurance premiums
Work-related
2,230.66 2,230.66
injury insurance
Maternity
2,835.85 2,835.85
insurance
4. Housing fund 30,821.95 30,821.95
5. Labor union budget
and employee education 11,386.93 11,386.93
budget
Total 412,376.20 2,171,660.75 2,183,779.23 400,257.72
(3) List of Drawing Scheme
Unit: RMB
Item Opening balance Increase Decrease Closing balance
1. Basic pension benefits 107,308.82 107,308.82
2. Unemployment
5,603.53 5,603.53
insurance
Total 112,912.35 112,912.35
Other notes:
38. Taxes Payable
Unit: RMB
Item Closing balance Opening balance
VAT 3,347,385.57 3,458,437.91
Corporate income tax 20,320,138.26 20,871,916.64
Business tax 781,313.74 781,313.74
Land VAT 2,560,000.00 2,560,000.00
Property tax 3,144,771.10 2,850,741.80
Land use tax 1,855,116.00 1,735,056.00
Others 1,818,430.67 1,708,432.53
Total 33,827,155.34 33,965,898.62
Other notes:
39. Interest Payable
Unit: RMB
Item Closing balance Opening balance
List of the significant overdue interest:
Unit: RMB
Borrower Overdue amount Overdue reasons
Other notes:
40. Dividends Payable
Unit: RMB
Item Closing balance Opening balance
Note: Including significant unpaid dividends payable over one year, the unpaid reason shall be disclosed:
41. Other Accounts Payable
(1) Other Accounts Payable Listed by Nature of the Account
Unit: RMB
Item Closing balance Opening balance
Intercourse funds 29,941,672.96 16,358,621.28
Bonus margin 38,002,013.82 38,002,013.82
Payment on behalf 67,448.40 360,771.83
Rental bond 380,000.00 380,000.00
Others 101,661.75 96,464.03
Total 68,492,796.93 55,197,870.96
(2) Other Significant Accounts Payable with Aging over One Year
Unit: RMB
Item Closing balance Unpaid/ Un-carry-over reason
Other notes
42. Liabilities Classified as Held-for-Sale
Unit: RMB
Item Closing balance Opening balance
Other notes:
43. Non-current Liabilities Due within 1 Year
Unit: RMB
Item Closing balance Opening balance
Other notes:
44. Other Current Liabilities
Unit: RMB
Item Closing balance Opening balance
Increase/decrease of the short-term bonds payable:
Unit: RMB
Withdraw Overflow
The Pay in
Bonds Face Issuing Bonds Opening interest discount Closing
Amount current current
name value date maturity balance by face amortizati balance
issue period
value on
Other notes:
45. Long-term Loan
(1) Category of Long-term Loan
Unit: RMB
Item Closing balance Opening balance
Notes of long-term loans category:
Other notes including interest rate range:
46. Bonds Payable
(1) Bonds Payable
Unit: RMB
Item Closing balance Opening balance
(2) Increase/Decrease of Bonds Payable (Excluding the Other Financial Instruments
Classified as the Preference Shares, Perpetual Capital Securities of the Financial Liabilities)
Unit: RMB
(3) Notes to the Conditions and Time of the Shares Transfer of the Convertible Corporate
Bonds
(4) Notes to the Other Financial Instruments Classified as Financial Liabilities
Basic situation of outstanding preferred stock, perpetual capital securities and other financial instrument at the
period-end
Change in outstanding preferred stock, perpetual capital securities and other financial instrument at the period-end
Unit: RMB
Outstanding Opening period Increase Decrease Closing period
financial
Amount Book value Amount Book value Amount Book value Amount Book value
instrument
Notes to judgment of other financial instrument classified as financial liabilities
Other notes:
47. Long-term Payables
(1) Long-term Payables Listed by the Nature of the Account
Unit: RMB
Item Closing balance Opening balance
Other notes:
48. Long-term Payroll Payable
(1) Long-term Payroll Payable Chart
Unit: RMB
Item Closing balance Opening balance
(2) List of the Changes of Defined Benefit Plans
Obligation present value of defined benefit plans:
Unit: RMB
Item Reporting period Same period of last year
Plan assets:
Unit: RMB
Item Reporting period Same period of last year
Liabilities (net assets) of defined benefit plans:
Unit: RMB
Item Reporting period Same period of last year
Notes of influence of content of defined benefit plans and its relevant risks to the future cash flow, time and
uncertainty of the Company:
Notes to the results of significant actuarial assumptions and sensitivity analysis of defined benefit plans:
Other notes:
49. Special Payable
Unit: RMB
Item Opening balance Increase Decrease Closing balance Reasons
Other notes:
50. Accrued Liabilities
Unit: RMB
Item Closing balance Opening balance Reasons
Other notes, including significant assumptions, valuation explanation related to significant estimated liabilities:
51. Deferred Revenue
Unit: RMB
Item Opening balance Increase Decrease Closing balance Reason
Item involving government subsidies:
Unit: RMB
Amount recorded
into Related to
Amount of newly
Item Opening balance non-operating Other changes Closing balance assets/related
subsidy
income in report income
period
Other notes:
52. Other Non-current Liabilities
Unit: RMB
Item Closing balance Opening balance
Other notes:
53. Share Capital
Unit: RMB
Increase/decrease (+/-)
Opening Capitalized Closing
New shares
balance Bonus shares Capital Others Subtotal balance
issued
reserves
The sum of
318,600,000.00 318,600,000.00
shares
Other notes:
Notes: for more details, please refer to Note I. Basic Information of the Company.
54. Other Equity Instruments
(1) The Basic Information of Other Financial Instruments such as Preferred Stock and
Perpetual Bond Outstanding at the End of the Period
(2) The Statement of Changes in Financial Instruments such as Preferred Stock and
Perpetual Bond Outstanding at the End of the Period
Unit: RMB
Outstanding The beginning of the
Increase Decrease The end of the period
financial period
instruments Amount Book value Amount Book value Amount Book value Amount Book value
The current changes in other equity instruments and the corresponding reasons and the basis of the relevant
accounting treatment
Other notes:
55. Capital Surplus
Unit: RMB
Item Opening balance Increase Decrease Closing balance
Capital premium 52,129,496.58 173,778.21 52,303,274.79
Total 52,129,496.58 173,778.21 52,303,274.79
Other notes, including changes and reason of change:
Due to the failure of Shenzhen Chinese Gold Nobility Jewelry Co., Ltd in fulfilling a
net profit of RMB 10 million as indicated in performance commitment requirement,
the shareholders: Zhang Jielin and Yu Shizhen will, as regulated in the performance
commitment, provide accordingly Chinese Gold Nobility with a performance
compensation of RMB 340,741.60, which has been transferred to the account of
Chinese Gold Nobility on Apr. 20, 2017.
56. Treasury Stock
Unit: RMB
Item Opening balance Increase Decrease Closing balance
Other notes, including changes and reason of change:
57. Other Comprehensive Income
Unit: RMB
Reporting Period
Less: recorded
in other
Amount comprehensive Attributable
Opening before income in Less: to owners Attributable Closing
Item
balance income tax prior period Income tax of the to minority balance
in current and transferred expense Company shareholder
period to profit or after tax s after tax
loss in current
period
Other explanation, including the active part of the hedging gains/losses of cash flow transferred to initial
reorganization adjustment for the arbitraged items:
58. Special Reserves
Unit: RMB
Item Opening balance Increase Decrease Closing balance
Other notes, including changes and reason of change:
59. Surplus Reserves
Unit: RMB
Item Opening balance Increase Decrease Closing balance
Statutory surplus
49,036,260.20 49,036,260.20
reserves
Discretionary surplus
37,000,000.00 37,000,000.00
reserves
Total 86,036,260.20 86,036,260.20
Other note, including changes and reason of change
60. Retained Earnings
Unit: RMB
Item Reporting Period Same period of last year
Opening balance of retained profits before
-90,095,403.00 -92,329,076.97
adjustments
Opening balance of retained profits after
-90,095,403.00 -92,329,076.97
adjustments
Add: Net profit attributable to owners of the
-7,997,104.78 2,233,673.97
Company
Closing retained profits -98,092,507.78 -90,095,403.00
List of adjustment of opening retained profits:
1) RMB000 opening retained profits was affected by retrospective adjustment conducted according to the
Accounting Standards for Business Enterprises and relevant new regulations.
2) RMB000 opening retained profits was affected by changes on accounting policies.
3) RMB000 opening retained profits was affected by correction of significant accounting errors.
4) RMB000 opening retained profits was affected by changes in combination scope arising from same control.
5) RMB000 opening retained profits was affected totally by other adjustments.
61. Revenues and Operating Costs
Unit: RMB
Reporting Period Same period of last year
Item
Sales revenue Cost of sales Sales revenue Cost of sales
Main operations 189,823,020.71 178,368,297.77 200,186,975.70 190,594,842.57
Other operations 637,064.14 166,356.27
Total 190,460,084.85 178,534,654.04 200,186,975.70 190,594,842.57
62. Business Tax and Surcharges
Unit: RMB
Item Reporting Period Same period of last year
Consumption tax 4,062.05 1,171.35
Urban maintenance and construction tax 58,068.04 71,083.83
Education Surcharge 42,204.68 50,734.11
Property tax 294,029.30
Land use tax 120,060.00
Stamp duty 135,759.49
Total 654,183.56 122,989.29
Other notes:
According to relevant provisions in “Provisions Concerning the Accounting
Treatments on Value-Added Tax” (Caikuai No. [2016] 22) published by ministry of
finance, item “business tax and surcharges” in profit statement is adjusted to “tax and
surcharges”. House property tax, land use tax, vehicle and vessel use tax, stamp tax
and relevant taxes, which were counted into management fees before, are now
adjusted into the item “tax and surcharges” since May 1, 2016.
63. Sale Expenses
Unit: RMB
Item Reporting Period Same period of last year
Salary 669,390.73 658,210.13
Office expenses 28,406.15 2,048.00
Depreciation 16,854.16 15,631.58
Business entertainment fees 14,088.40 29,936.80
Social security premiums 44,068.52 57,162.44
Business travel charges 10,830.60 57,635.40
Testing fees 1,810.00 62,651.00
Software expenses 216,912.77 94,273.08
Rental fees 270,270.29
Others 161,775.77 212,344.03
Total 1,434,407.39 1,189,892.46
Other notes:
64. Administration Expenses
Unit: RMB
Item Reporting Period Same period of last year
Depreciation 1,126,680.42 1,903,295.30
Salary 1,262,796.56 1,284,020.04
Charge for fund management 1,200,000.00
Automobile expenses 335,203.77 475,858.98
Rental fees 578,986.10 1,055,680.49
Auditing fees 411,527.23
Welfare fees 130,867.38 377,624.98
Entertainment expenses 243,390.31 326,342.90
Office expenses 222,043.08 556,227.81
Social security premiums 134,483.43 134,414.08
Water & electricity fees 140,232.92 159,475.84
Amortization of intangible assets 138,631.92 336,594.12
Others 1,399,660.45 351,957.20
Total 7,324,503.57 6,961,491.74
Other notes:
65. Financial Expenses
Unit: RMB
Item Reporting Period Same period of last year
Interest expenses 605,207.50 645,695.56
Less: Interest income 88,059.03 17,501.15
Exchange loss 16,755.99 104,650.69
Less: exchange earning 241,014.94 14,180.07
Handling and other 17,644.59 21,268.83
Total 310,534.11 739,933.86
Other notes:
66. Asset Impairment Loss
Unit: RMB
Item Reporting Period Same period of last year
I. Bad debt loss -411,560.62 167,333.77
Total -411,560.62 167,333.77
Other notes:
67. Gains and Losses from Changes in Fair Value
Unit: RMB
Sources of changes in fair value gains Reporting period Same period of last year
Financial assets measured by fair value and
the changes be included in the current -5,539,925.21
profits and losses
Total -5,539,925.21 0.00
Other notes:
68. Investment Income
Unit: RMB
Item Reporting Period Same period of last year
Income received from long-term equity
17,054.22
investment by equity method
Investment income arising from disposal of
16,240.55 -1,522.94
long-term equity investments
Total 33,294.77 -1,522.94
Other notes:
69. Other Income
Unit: RMB
Sources of other income Reporting period Same period of last year
70. Non-operating Gains
Unit: RMB
Recorded in the amount of the
Item Reporting Period Same period of last year
non-recurring gains and losses
Total 0.33 0.44
Government subsidies recorded into current profits and losses
Unit: RMB
Whether
subsidies
Special Related to
Distribution Distribution influence the Reporting Same period
Item Nature subsidy or assets/related
entity reason current Period of last year
not income
profits and
losses or not
Other notes:
71. Non-operating Expenses
Unit: RMB
Recorded in the amount of the
Item Reporting Period Same period of last year
non-recurring gains and losses
Donation 200,000.00
Fine for delaying payment 2,404.16 2,404.16
Total 2,404.16 200,000.00 2,404.16
Other notes:
72. Income Tax Expense
(1) Lists of Income Tax Expense
Unit: RMB
Item Reporting Period Same period of last year
Current income tax expense 2,269,232.61 1,848,553.62
Deferred income tax expense 37,800.00
Total 2,307,032.61 1,848,553.62
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
Item Reporting Period
Total profits -2,895,671.47
Influence of deductible temporary difference or deductible losses
1,384,981.30
of deferred income tax assets derecognized in Reporting Period.
Profit and loss of joint ventures and associated enterprises
17,054.22
accounted by equity method
Others 867,197.09
influence of using unrecognized deductible losses and deductible
37,800.00
temporary differences of previous years (“-“ means loss)
Income tax expenses 2,307,032.61
Other notes
73. Other Comprehensive Income
See note.
74. Information of Cash Flow Statement
(1) Other Cash Received Relevant to Operating Activities
Unit: RMB
Item Reporting Period Same period of last year
Other intercourse fund 30,187,830.43 612,825,000.00
Amount related business activities 5,110,790.78 80,230.54
Total 35,298,621.21 612,905,230.54
Note to other cash received relevant to operating activities:
(2) Other Cash Paid Relevant to Operating Activities
Unit: RMB
Item Reporting Period Same period of last year
Other intercourse fund 19,500,000.00 604,410,000.00
Audit intermediary fees, etc 356,000.00 800,000.00
Amount related business activities 5,078,811.29 3,367,429.24
Total 24,934,811.29 608,577,429.24
Note to other cash paid relevant to operating activities:
(3) Other Cash Received Relevant to Investment Activities
Unit: RMB
Item Reporting Period Same period of last year
Note to other cash received relevant to investment activities:
(4) Other Cash Paid Relevant to Investment Activity
Unit: RMB
Item Reporting Period Same period of last year
Note to other cash paid relevant to investment activities:
(5) Other Cash Received Relevant to Financing Activities
Unit: RMB
Item Reporting Period Same period of last year
Note to other cash received relevant to financing activities:
(6) Other Cash Paid Relevant to Financing Activities
Unit: RMB
Item Reporting Period Same period of last year
Note to other cash paid relevant to financing activities:
75. Supplemental Information for Cash Flow Statement
(1) Supplemental Information for Cash Flow Statement
Unit: RMB
Supplemental information Reporting Period Same period of last year
1. Reconciliation of net profit to net cash
-- --
flows generated from operating activities
Net profit -5,202,704.08 -1,639,584.11
Depreciation of fixed assets, of oil-gas
1,309,890.85 1,918,926.88
assets, of productive biological assets
Amortization of intangible assets 138,631.92 336,594.12
Losses on changes in fair value (gains:
5,539,925.21
negative)
Financial cost (gains: negative) -66.00
Investment loss (gains: negative) -33,294.77 1,522.94
Decrease in deferred income tax assets
37,800.00
(gains: negative)
Decrease in inventory (gains: negative) -39,615,980.25 -7,203,140.64
Decrease in accounts receivable from
65,800,489.84 481,536,676.02
operating activities (gains: negative)
Increase in payables from operating
-25,183,016.54 -471,157,114.26
activities (decrease: negative)
Others 341,132.27
Net cash flows generated from operating
3,132,874.45 3,793,814.95
activities
2. Significant investing and financing
activities without involvement of cash -- --
receipts and payments
3. Net increase in cash and cash equivalents: -- --
Closing balance of cash 7,018,207.88 303,874,987.30
Less: Opening balance of cash 123,886,976.82 301,471,305.21
Net increase in cash and cash equivalents -116,868,768.94 2,403,682.09
(2) Net Cash Paid of Obtaining the Subsidiary
Unit: RMB
Amount
Including: --
Including: --
Including: --
Other notes:
(3) Net Cash Receive from Disposal of the Subsidiary
Unit: RMB
Amount
Including: --
Including: --
Including: --
Other notes:
(4) Cash and Cash Equivalents
Unit: RMB
Item Closing balance Opening balance
I. Cash 7,018,207.88 123,886,976.82
Including: Cash on hand 525,024.48 1,208,935.64
Bank deposit on demand 6,491,008.82 302,636,688.39
Other monetary funds on demand 2,174.58 29,363.27
III. Closing balance of cash and cash
7,018,207.88 123,886,976.82
equivalents
Other notes:
76. Note to Items in the Statement of Change in Equity
Particulars about the name of the item of “Other” adjusting last closing balance and the adjustment amount:
Not applicable
77. Assets with Restricted Ownership and Right to Use
Unit: RMB
Item Closing book value Restricted reason
Fixed assets 9,337,576.40 External guaranty
Intangible assets 2,061,759.21 External guaranty
Total 11,399,335.61 --
Other notes:
78. Foreign Currency Monetary Items
(1) Foreign Currency Monetary Items
Unit: RMB
Closing foreign currency Closing convert to RMB
Item Exchange rate
balance balance
Including: USD 64.28 6.7744 435.45
HKD 4,462.65 0.86792 3,873.22
Including: USD 863,226.47 6.7744 5,847,841.40
Other accounts receivable
Including: USD 20,000.00 6.7744 135,488.00
EUR
HKD 55,780.00 0.86792 48,412.58
Other notes:
(2) Note to Oversea Entities Including: for Significant Oversea Entities, Shall Disclose Main
Operating Place, Recording Currency and Selection Basis, if there Are Changes into
Recording Currency, Shall Also Disclose the Reason.
□ Applicable √ Not applicable
79. Arbitrage
Disclosure of arbitrage items according to the category of arbitrage and the qualitative and quantitative information
of related arbitrage tools and hedging risk:
Not applicable
80. Other
Not applicable
VIII. Change of Consolidation Scope
1. Business Combination Not under the Same Control
(1) Business Combination Not under the Same Control during the Reporting Period
Unit: RMB
Proportion of The The income The net profit
Name of the Time of the Cost of the Way of the Date of
the determination of the of the
acquiree acquisition of acquisition of acquisition of acquisition
acquisition of basis of acquiree from acquiree from
the stock the stock the stock the stock acquisition the the
date acquisition acquisition
date to the date to the
end of the end of the
period period
Other notes:
No such cases in the Reporting Period.
(2) Combination Cost and Goodwill
Unit: RMB
Cost of business combination
The explanations on the contingent consideration and its changes as well as the determination method of the fair
value of the cost of business combination:
The main reason for the formation of large goodwill:
Other notes:
(3) The Identifiable Assets and Liabilities of Acquiree at Purchase Date
Unit: RMB
The fair value of the Purchase date The book value of the purchase date
The determination method of the fair value of the recognizable assets and liabilities:
Not applicable
The contingent liabilities of the acquiree undertaken in business combination:
Not applicable
Other notes:
Not applicable
(4) The Profit or Loss from Equity Held by the Date before Acquisition in Accordance with
the Fair Value Measured Again
Whether there is a transaction that through multiple transaction step by step to realize enterprises merger and
gaining the control during the Reporting Period
□ Yes √ No
(5) The Explanations on the Situation in which the Merger Price Cannot Be determined
Rationally at the Date of Acquisition or the End of the Period of Merger and Explanations
on the Fair Value of the Acquiree’s Recognizable Assets and Liabilities
Not applicable
(6) Other Notes
Not applicable
2. Business Combination under the Same Control
(1) Business Combination under the Same Control during the Reporting Period
Unit: RMB
Income of the Net profits of
merged party the merged
Proportion of Basis of the Income of the Net profits of
Determinatio from the party from
equity enterprise merged party the merged
Name of the Date of n basis of the beginning of the beginning
acquired in merger under during the party during
merged party merger date of the period of of the period
business the same period of the period of
merger merger to the of merger to
combination control comparison comparison
date of the date of
merger merger
Other notes:
Not applicable
(2) Combination Cost
Unit: RMB
Combination cost
Explanations on contingent consideration and its changes:
Other notes:
Not applicable
(3) The Book Value of the Assets and Liabilities of the Combined Party at Combining Date
Unit: RMB
At combining date At the end of last period
The contingent liabilities of the merged party undertaken in enterprise merger:
Not applicable
Other notes:
Not applicable
3. Counter Purchase
The basic information of transactions, the constitutive basis of counter purchase, whether the retained assets and
liabilities of listed companies constitute the business or not and the relevant basis, the determination of the cost of
merger, the amount and accounting of the equity adjusted when treated as equity transaction:
Not applicable
4. The Disposal of Subsidiary
Whether there is such a situation where the control power of the subsidiary is lost for a single disposal of the
investment to the subsidiary
□Yes √ No
Whether there is such a situation where many transactions are made to dispose the investment to the subsidiary in
phases losing the control power of it during the report period
□Yes √ No
5. Other Reasons for the Changes in Combination Scope
Explanations on changes in consolidation scope caused by other reasons (such as the establishment of new
subsidiary and liquidation of subsidiary) and the relevant information:
6. Other
IX. Equity in Other Entities
1. Equity in Subsidiary
(1) The Structure of the Enterprise Group
Main operating Nature of Holding percentage (%)
Name Registration place Way of gaining
place business Directly Indirectly
Shenzhen Rieys
Industrial Co., Shenzhen Shenzhen Trading 90.00% 100.00
Ltd.
TIANRUI (HK)
TRADING
Hong Kong Hong Kong Trading 100.00% Combination
COMPANY
LIMITED
Chinese Gold
Shenzhen Shenzhen Trading 100.00% Combination
Nobility
Technical service,
Shanghai development,
Yunpeng Network consulting,
Shanghai Shanghai 60.00% Set-up
Technology Co., transfer of
Ltd. network
technology etc.
Notes: holding proportion in subsidiary different from voting proportion:
Not applicable
Basis of holding half or less voting rights but still been controlled investee and holding more than half of the
voting rights not been controlled investee:
Not applicable
Significant structure entities and controlling basis in the scope of combination:
Not applicable
Basis of determine whether the Company is the agent or the principal:
Not applicable
Other notes:
(2) Significant Not Wholly Owned Subsidiary
Unit: RMB
The profits and losses Declaring dividends Balance of minority
Shareholding proportion
Name arbitrate to the minority distribute to minority shareholder at closing
of minority shareholder
shareholders shareholder period
Shenzhen Rieys
10.00% -593,234.95 3,265,258.85
Industrial Co., Ltd.
Chinese Gold Nobility 49.00% 3,387,635.65 37,636,522.88
Holding proportion of minority shareholder in subsidiary different from voting proportion:
Other notes:
(3) The Main Financial Information of Significant Not Wholly Owned Subsidiary
Unit: RMB
Closing balance Opening balance
Non-curr Non-curr Non-curr Non-curr
Name Current Total Current Total Current Total Current Total
ent ent ent ent
assets assets liabilities liabilities assets assets liabilities liabilities
assets liabilities assets liabilities
Shenzhe
n Rieys
49,949,7 2,863,71 52,813,4 52,813,4 20,160,8 50,919,3 3,000,94 53,920,2 15,335,3 15,335,3
Industria
59.41 7.42 76.83 76.83 88.38 08.96 7.92 56.88 18.97 18.97
l Co.,
Ltd.
Chinese
130,659, 159,450. 130,819, 54,010,0 54,010,0 98,646,4 219,218. 98,865,7 29,310,7 29,310,7
Gold
876.81 28 327.09 96.72 96.72 82.14 75 00.89 54.26 54.26
Nobility
Unit: RMB
Name Reporting period The same period of last year
Cash flow Cash flow
Total Total
Operation from Operation from
Net profit consolidated Net profit consolidated
revenue operating revenue operating
income income
activities activities
Shenzhen
Rieys 21,009,771.2 47,950,476.6 -26,948,658.0
-5,932,349.46 -5,932,349.46 -2,925,265.06 -1,503,299.26 -1,503,299.26
Industrial 3 6 7
Co., Ltd.
Chinese Gold 167,918,918. 305,270,090.
6,913,542.14 6,913,542.14 1,189.55 9,659,258.40 9,659,258.40 -667,194.24
Nobility 82 96
Other notes:
(4) Significant Restrictions of Using Enterprise Group Assets and Paying Off Enterprise
Group Debt
(5) Provide Financial Support or Other Support for Structure Entities Incorporate into the
Scope of Consolidated Financial Statements
Other notes:
X. The Risk Related Financial Instruments
Not applicable
XI. The Disclosure of the Fair Value
1. Closing Fair Value of Assets and Liabilities Calculated by Fair Value
Unit: RMB
Fair value at the end of the reporting period
Item First level Second level Third level
Total
Fair value measurement Fair value measurement Fair value measurement
I. Sustaining fair value
-- -- -- --
measurement
(2) equity instruments
9,977,189.76 9,977,189.76
investment
Total assets continuously
9,977,189.76 9,977,189.76
measured at fair value
II. Non-Sustaining fair
-- -- -- --
value measurement
2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement
Items at Level 1
Based on the stock trade price in SZSE and SSE.
3. Consistent and Inconsistent Fair value Measurement Items at Level 2, Valuation
Techniques Adopted, the Qualitative and Quantitative Information of Important
Parameters
Not applicable
4. Consistent and Inconsistent Fair Value Measurement Items at Level 3, Valuation
Techniques Adopted, the Qualitative and Quantitative Information of Important
Parameters
Not applicable
5. Consistent Fair Value Measurement Items at Level 3, the Adjustment Information of the
Opening and Closing Book Value, and the Sensitivity Analysis of Unobservable Parameters
Not applicable
6. Consistent Fair Value Measurement Items, Conversion between All Levels during the
Reporting Period, the Reasons for Conversion and Policies at the Time of Determination of
Conversion
Not applicable
7. Change and Change Reason of Valuation Techniques in the Reporting Period
Not applicable
8. Particulars about the Fair Value of the Financial Assets and Financial Liabilities Not
Measured at Fair Value
Not applicable
9. Other
Not applicable
XII. Related Party and Related Transaction
1. Information Related to Parent Company of the Company
Proportion of voting
Proportion of share
rights owned by
Name of parent held by parent
Registration place Nature of business Registered capital parent company
company company against the
against the Company
Company (%)
(%)
Room No. 1805 of
Shenzhen
Nepstar Building in
Shenghengchang
Yuehai Street, Trading 9800 36.99% 36.99%
Huifu Industrial Co.,
Nanshan District,
Ltd.
Shenzhen
Notes: Information on the parent company:
There was no change in the registered capital of the parent company during the
Reporting Period.
The final controller of the Company is Chen Hongcheng.
Other notes:
2. Subsidiaries of the Company
For more details, please refer to Note IX. 1. Equity in Subsidiaries.
3. Information on the Joint Ventures and Associated Enterprises of the Company
For information of the major joint ventures or associated enterprises of the Company, please refer to note
List of other joint ventures and associated enterprises that made related-party transactions with the Company
generating balance during or before the report period:
Name of the joint venture or associated enterprise Relationship with the Company
Other notes
4. Information on Other Related Parties of the Company
Name Relationship
Shareholder holding 10.68% stake of the Company, affiliate
Shenzhen Rishen Investment Co., Ltd.
controlled under Chen Hongcheng’s family
Shareholder holding 3.81% stake of the Company, affiliate
Shenzhen Lianhua Huiren Industrial Co., Ltd.
controlled under Chen Hongcheng’s family
Chen Xuewen Direct relative of Chen Hongcheng
Ding Lihong Board chairman of the Company, relative of Chen Hongcheng
Other notes
5. List of Related-party Transactions
(1) Information on Acquisition of Goods and Reception of Labor Service (Unit: Ten
Thousand Yuan)
Information on acquisition of goods and reception of labor service
Unit: RMB
The approval trade Whether exceed trade Same period of last
Related-party Content Reporting Period
credit credit or not year
Information of sales of goods and provision of labor service
Unit: RMB
Related-party Content Reporting Period Same period of last year
Information on related-party transactions of sales of goods and provision and reception of labor service
(2) Relating Commissioned Management/Contract and Entrusted Management/Outsourcing
List of commissioned management/contract of the Company:
Unit: RMB
Pricing basis of Revenue from
Name of the Start date of End date of
Name of the Type of the commissioned commissioned
entrusting commissioned commissioned
commissioned commissioned/co management management/cont
party/contract-out management/cont management/cont
party/contractor ntracted assets revenue/contract ract confirmed in
party ract ract
revenue the report period
Explanations on relating commissioned management/contract
List of entrusted management/outsourcing:
Unit: RMB
Trustee
Name of the Start date of End date of Pricing basis of
Name of the Type of the fee/expense on
entrusting entrusted entrusted trustee
commissioned entrusted/outsour outsourcing
party/contract-out management/outs management/outs fee/expense on
party/contractor ced assets confirmed in the
party ourcing ourcing outsourcing
report period
Explanations on relating management/outsourcing
(3) Information of Related Lease
The Company serves as the lessor:
Unit: RMB
Rental income confirmed in the Rental income confirmed in the
Name of leasee Type of leased assets
Report period same period of last year
The Company serves as the leasee:
Unit: RMB
Rental expense confirmed in the Rental expense confirmed in the
Name of lessor Type of leased assets
report period same period of last year
Explanations on related-party lease
(4) Related-party Guarantee
The Company serves as the guarantee
Unit: RMB
Secured party Amount Start date Maturity date Fulfill or not
The Company serves as the secured party
Unit: RMB
Guarantee Amount Start date Maturity date Fulfill or not
Explanations on related-party guarantee
(5) Borrowing and Lending of Related Parties
Unit: RMB
Related party Amount Start date Maturity date notes
Borrowing
Lending
(6) Related Party Asset Transfer and Debt Restructuring
Unit: RMB
Contents of related-party
Related party Reporting period Same period of last year
transactions
(7) Rewards for the Key Management Personnel
Unit: RMB
Item Reporting period Same period of last year
Rewards for the key management
337,000.00 253,000.00
personnel
(8) Other Related-party Transactions
6. Receivables and Payables of Related Parties
(1) Receivables
Unit: RMB
Closing balance Opening balance
Name o f item Related-party
Book balance Bad debt provision Book balance Bad debt provision
(2) Payables
Unit: RMB
Name o f item Related-party Closing book balance Opening book balance
Other accounts payable Chen Xuewen 177,923.60 64,404.72
64,404.72 10,570,000.00
7. Related Party Commitment
There was no related party commitment for the Company to disclose.
8. Other
XIII. Share-based Payment
1. General Share-based Payment
□ Applicable √ Not applicable
2. Shared-based Payment Settled by Equity
□ Applicable √ Not applicable
3. Shared-based Payment Settled by Cash
□ Applicable √ Not applicable
4. Modification and Termination on Share-based Payment
Not applicable
5. Other
Not applicable
XIV. Commitments and Contingencies
1. Significant Commitments
Significant commitments at balance sheet date
As of June 30, 2017, there were no significant commitments to be disclosed.
2. Contingencies
(1) Significant Contingencies at Balance Sheet Date
The Company mortgaged its real estate (The mortgaged property assessment value
was RMB36.32 million) for Huafengqiang Trade Co., Ltd. and the Jieyang
RongCheng sub-branch of The Industrial and Commercial Bank of China Co., Ltd.
signing Maximum amount mortgage contract, the Maximum amount mortgage
contract was: Maximum amount mortgage in 2014 NO. 3632 of RongCheng
sub-branch. The secured principle credit was from November 11, 2014 to November
11, 2019. Huafengqiang Trade Co., Ltd. signed RMB17,000,000.00 loan contract with
Jieyang RongCheng sub-branch of The Industrial and Commercial Bank of China Co.,
Ltd. on May 22, 2017, which was the guarantee for the Company. The borrowing
period was for 12 months. The Huafengqiang Trade Co., Ltd. provided counter
guarantee for the Company with this loan.
As of June 30, 2017, the Company provide guarantee for non-related party were as
followed:
Entity Events Amount involved Period Notes
(RMB’0,000)
Huafengqiang Trade Co., Ltd. Bank loan pledge 1,700.00 05/22/2017-05/19/2018 -
Total - 1,700.00 - -
As of June 30, 2017, there was no contingencies such as pending litigation, external
guarantee for the Company to disclose.
As of June 30, 2017, there was no other contingency to disclose for the Company
except for the aforesaid event.
(2) If the Company Has No Significant Contingency to Disclose, Relevant Explanations
Should Also Be Given
There was no significant contingency for the Company to disclose.
3. Other
XV. Events after Balance Sheet Date
1. Significant Non-adjusting Events
Unit: RMB
Effects on financial condition Reason for inability to estimate
Item Content
and operating result the influence number
2. Profit Distribution
Unit: RMB
3. Sales Return
4. Notes of Other Events after Balance Sheet Date
Shenzhen Rieys Industrial Co., Ltd. a subsidiary of the company, has sold by lots
465364 shares of BanBao Educational Toys own by the former from July 28 to
August 4, 2017, the stock trade of which has caused an investment loss of
RMB7,069,898.22. Up to Aug. 28, 2017, there are 6600 shares of BanBao
Educational Toys left on the paper.
Up to Aug. 28, 2017, (date of report approval by the board), apart from the above
important items, the company has no other events after the balance sheet date that
should be disclosed.
XVI. Other Significant Events
1. The Accounting Errors Correction in Previous Period
(1) Retroactive Restatement
Unit: RMB
Name of each affected item of
Contents of the correction of
Procedures of processing statement during the period of Cumulative effects
accounting errors
comparison
(2) Prospective Application
Contents of the correction of accounting Reason for adopting method of prospective
Procedures of approval
errors application
2. Debt Restructuring
Not applicable
3. Assets Replacement
(1) Exchange of Non-monetary Assets
Not applicable
(2) Replacement of Other Assets
Not applicable
4. Annuity Plan
Not applicable
5. Discontinued Operation
Unit: RMB
Profits generated
from
discontinued
Income tax
Item Income Expense Total profits Net profits operation
expense
attributable to
owners’ of the
Company
Other notes
Not applicable
6. Segment Information
(1) Recognition Basis and Accounting Policies of Reportable Segment
Not applicable
(2) The Financial Information of Reportable Segment
Unit: RMB
Item Offset between segments Total
(3) If There Is No Reportable Segment, or the Total Amount of Assets and Liabilities of
Each Part of Reportable Segment Cannot Be Disclosed, the Relevant Reasons Should Be
Given
Not applicable
(4) Other Notes
Not applicable
7. Other Important Transactions and Events that Have an Impact on Investors’
Decision-making
Not applicable
8. Other
Not applicable
XVII. Notes of Main Items in the Financial Statements of the Company
1. Accounts Receivable
(1) Accounts Receivable Classified by Category
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category Withdra
Book
Proportio wal Proportio Withdrawal Book value
Amount Amount value Amount Amount
n proportio n proportion
n
Accounts receivable
with significant
single amount for 4,608,27 4,608,27 4,608,2 4,608,276
100.00% 100.00% 0.00 100.00% 100.00% 0.00
which bad debt 6.88 6.88 76.88 .88
provision separately
accrued
4,608,27 4,608,27 4,608,2 4,608,276
Total 100.00% 100.00% 100.00% 100.00%
6.88 6.88 76.88 .88
Accounts receivable with single significant amount and withdrawal bad debt provision separately at end of period
√ Applicable □ Not applicable
Unit: RMB
Accounts receivable Closing balance
(classified by units) Account receivable Bad debt provision Withdrawal proportion Withdrawal reason
Long-term credit, the
Capital airport 21,713.00 21,713.00 100.00% Company believe it
irrecoverable
Long-term credit, the
Ningbo Industrial and
26,354.45 26,354.45 100.00% Company believe it
Commercial Bureau
irrecoverable
Long-term credit, the
Chen Shunqin 335,904.80 335,904.80 100.00% Company believe it
irrecoverable
Long-term credit, the
Hong Kong Jinhua
4,224,304.63 4,224,304.63 100.00% Company believe it
Trading Company
irrecoverable
Total 4,608,276.88 4,608,276.88 -- --
In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
□ Applicable √ Not applicable
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable √ Not applicable
In the groups, accounts receivable adopting other methods to withdraw bad debt provision:
(2) Accounts Receivable Withdrawn, Reversed or Collected during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB000; the amount of the
reversed or collected part during the Reporting Period was of RMB000.
Significant amount of reversed or recovered bad debt provision:
Unit: RMB
Name of unit Collected or reversed amount Way
(3) Particulars about Accounts Receivable Actually Verified during the Reporting Period
Unit: RMB
Item Amount of verification
The verification of significant accounts receivable:
Unit: RMB
Whether the
Procedures of accounts are
Nature of other Amount of Reason for
Name of unit verification generated from
accounts receivable verification verification
performed related-party
transactions or not
Notes of the verification of accounts receivable:
(4) Accounts Receivable of the Top 5 of the Closing Balance Collected According to the
Arrears Party
Name of the entity Amount Bad debt provision Proportion
%
Capital airport 21,713.00 21,713.00 0.47
Ningbo Industrial and 26,354.45 26,354.45 0.57
Commercial Bureau
Chen Shunqin 335,904.80 335,904.80 7.29
Hong Kong Jinhua 4,224,304.63 4,224,304.63 91.67
Trading Company
Total 4,608,276.88 4,608,276.88 100.00
(5) Accounts Receivable Derecognized for the Transfer of Financial Assets
(6) Amount of Assets and Liabilities Generated from the Transfer of Accounts Receivable
and Continued Involvement
Other notes:
2. Other Accounts Receivable
(1) Other Accounts Receivable Classified by Category
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category Withdra
Book
Proportio wal Proportio Withdrawal Book value
Amount Amount value Amount Amount
n proportio n proportion
n
Other accounts
receivable with 69,709,4 2,931,60 66,777,86 75,469, 2,931,608 72,537,567.
95.36% 4.21% 5.94% 36.94%
significant single 77.93 8.20 9.73 176.05 .20 85
amount for which
bad debt provision
separately accrued
Other accounts
receivable withdrawn
1,594,82 1,485,34 109,482.1 4,877,7 1,801,879 3,075,885.8
bad debt provision 2.18% 93.14% 5.94% 36.94%
6.10 3.96 4 65.85 .96 9
according to credit
risks characteristics
Other accounts
receivable with
insignificant single 1,794,76 1,794,76 1,794,7 1,478,227
2.46% 100.00% 2.19% 82.36% 316,536.00
amount for which 3.36 3.36 63.36 .36
bad debt provision
separately accrued
73,099,0 6,211,71 66,887,35 82,141, 6,211,715 75,929,989.
Total 100.00% 8.50% 100.00% 7.56%
67.39 5.52 1.87 705.26 .52 74
Other receivable with single significant amount and withdrawal bad debt provision separately at end of period:
√ Applicable □ Not applicable
Unit: RMB
Closing balance
Other accounts receivable
Other accounts
(unit） Bad debt provision Withdrawal proportion Withdrawal reason
receivable
Included in consolidated
Tianrui (HK) Trading Co., related party did not
57,707,092.85
Ltd. withdraw bad debt
provision
Included in consolidated
Shenzhen Rieys Industrial related party did not
9,070,776.88
Co., Ltd. withdraw bad debt
provision
Long-term credit, the
Refund of tax for export
2,331,608.20 2,331,608.20 100.00% Company believe it
receivable
irrecoverable
Long-term credit, the
Shenzhen Zhao Tong
600,000.00 600,000.00 100.00% Company believe it
Investment Co., Ltd.
irrecoverable
Total 69,709,477.93 2,931,608.20 -- --
In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Not applicable
Unit: RMB
Aging Closing balance
Other accounts receivable Bad debt provision Withdrawal proportion
Subentry within 1 year
Subtotal within 1 year 49,814.10 58,199.26 116.83%
1 to 2 years 40,201.83 4,020.18 10.00%
2 to 3 years 8,298.65 4,149.33 50.00%
Over 3 years 1,496,511.52 1,418,975.19 94.82%
Total 1,594,826.10 1,485,343.96 93.14%
Notes:
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable √ Not applicable
In the groups, other accounts receivable adopting other methods to withdraw bad debt provision:
□ Applicable √ Not applicable
(2) The Bad-debt Provision Withdrawn, Reversed or Collected during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB000; the amount of the
reversed or collected part during the Reporting Period was of RMB000.
Of which the significant amount of the reversed or collected part during the Reporting Period:
Unit: RMB
Name of unit Collected or reversed amount Way
(3) Other Accounts Receivable Actually Verified during the Reporting Period
Unit: RMB
Item Amount of verification
The verification of significant other accounts receivable:
Unit: RMB
Whether the
Procedures of accounts are
Nature of other Amount of Reason for
Name of unit verification generated from
accounts receivable verification verification
performed related-party
transactions or not
Notes of the verification of other accounts receivable:
(4) Other Accounts Receivable Classified by Account Nature
Unit: RMB
Nature Closing book balance Opening book balance
Fund of related party 66,777,869.73 72,537,567.85
Intercourse funds 3,780,300.83 4,014,013.16
Tax 2,331,608.20 2,331,608.20
Payment on behalf 209,288.63 2,938,980.05
Margin 319,536.00
Total 73,099,067.39 82,141,705.26
(5) The Top Five Other Account Receivable Classified by Debtor at Period-end
Unit: RMB
Proportion to the
total of closing Closing balance of
Name of unit Nature of accounts Closing balance Aging
balance of other bad-debt provision
accounts receivable
Tianrui (HK) Trading Intercourse of
57,707,092.85 Over 5 years 78.94%
Co., Ltd. related party
Shenzhen Rieys Intercourse of
9,070,776.88 Within 1 year 12.41%
Industrial Co., Ltd. related party
Refund of tax for
Tax 2,331,608.20 Over 5 years 3.19% 2,331,608.20
export receivable
Guangdong Yuanfeng
Intercourse funds 700,000.00 Over 5 years 0.96% 700,000.00
Trade Co., Ltd.
Shenzhen Zhao Tong
Intercourse funds 600,000.00 Over 5 years 0.82% 600,000.00
Investment Co., Ltd.
Total -- 70,409,477.93 -- 96.32% 3,631,608.20
(6) Account Receivable Involving Government Subsidies
Unit: RMB
Name of the government Account-age at the end Estimated time, amount
Name of unit Closing balance
subsidy item of the period and basis of charge
(7) Other Account Receivable Derecognized Due To the Transfer of Financial Assets
(8) Amount of Assets and Liabilities Generated from the Transfer of Other Accounts
Receivable and Continued Involvement
Other notes:
3. Long-term Equity Investment
Unit: RMB
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Investment to the
80,000,008.26 80,000,008.26 75,000,008.26 75,000,008.26
subsidiary
Investment to
joint ventures and
270,015,275.93 270,015,275.93 149,998,221.71 149,998,221.71
associated
enterprises
Total 350,015,284.19 350,015,284.19 224,998,229.97 224,998,229.97
(1) Investment to the Subsidiary
Unit: RMB
Withdrawn
Closing balance
impairment
Investee Opening balance Increase Decrease Closing balance of impairment
provision in the
provision
Reporting Period
Shenzhen Rieys
45,000,000.00 45,000,000.00
Industrial Co., Ltd.
Tianrui (HK)
8.26 8.26
Trading Co., Ltd.
Chinese Gold
30,000,000.00 30,000,000.00
Nobility
Shanghai Yunpeng
Network
5,000,000.00 5,000,000.00
Technology Co.,
Ltd.
Total 75,000,008.26 5,000,000.00 80,000,008.26
(2) Investment to Joint Ventures and Associated Enterprises
Unit: RMB
Increase/decrease Closing
Profit and Adjustme Cash, balance
Additiona loss on nt of dividends Impairme for
The Opening Reduced Changes Closing
l investmen other and nt impairme
investor balance investmen in other Others balance
investmen ts comprehe profits provision nt
ts equity
ts confirmed nsive declared s provision
according income to issue s
to equity
law
I. Joint ventures
II. Associated enterprises
Shenzhen
Shenguor
ong 149,998,2 150,014,5
16,324.24
Financing 21.71 45.95
Guarantee
Co., Ltd.
Shenzhen
Future
Growing
Business 120,000,7
729.98
Fund 29.98
(Limited
Partnershi
p)
149,998,2 270,015,2
Subtotal 17,054.22
21.71 75.93
149,998,2 270,015,2
Total 17,054.22
21.71 75.93
(3) Other Notes
Not applicable
4. Revenues and Operating Costs
Unit: RMB
Reporting Period Same period of last year
Item
Sales revenue Cost of sales Sales revenue Cost of sales
Other operations 637,064.14 166,356.27
Total 637,064.14 166,356.27
Other notes:
The current other operations income was generated from the housing lease.
5. Investment Income
Unit: RMB
Item Reporting Period Same period of last year
Long-term equity investment income
17,054.22
accounted by equity method
Total 17,054.22
6. Other
XVIII. Supplementary Materials
1. Items and Amounts of Extraordinary Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Item Amount Explanation
Government subsidies recorded into the (1) gains and losses of changes in fair
current gains and losses (excluding the value generated from holding trading
government subsidies that are closely financial assets was RMB-5,539,925.21 (2)
-5,523,684.66
relative to business and enjoyed in normed investment income received from the
way or quantitatively in accordance with the disposal of trading financial assets was
national standards) RMB16,240.55
Write-back of impairment provision of
accounts receivable with separate 411,560.62
impairment test
Other non-operating income and expenses
14,650.39
other than the above
Less: amount affected by income tax 72,063.56
Minority interests effects -452,702.47
Total -4,716,834.74 --
Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in
the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Extraordinary Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said
explanatory announcement as a recurrent gain/loss item.
□ Applicable √ Not applicable
2. Return on Net Equity and Earnings Per Share
EPS（Yuan/share）
Profit as of Reporting Period Weighted average ROE (%)
EPS-basic EPS-diluted
Net profit attributable to common
-2.21% -0.030 -0.030
shareholders of the Company
Net profit attributable to common -0.90% -0.0103 -0.0103
shareholders of the Company after
deduction of non-recurring profit
and loss
3. Differences between Accounting Data under Domestic and Overseas Accounting
Standards
(1) Differences of Net Profit and Net Assets Disclosed in Financial Reports Prepared under
International and Chinese Accounting Standards
□ Applicable √ Not applicable
(2) Differences of Net Profit and Net Assets Disclosed in Financial Reports Prepared under
Overseas and Chinese Accounting Standards
□ Applicable √ Not applicable
(3) Explain Reasons for the Differences between Accounting Data under Domestic and
Overseas Accounting Standards, for Audit Data Adjusting Differences Had Been Foreign
Audited, Should Indicate the Name of the Foreign Institutions
4. Other
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