深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Shenzhen China Bicycle Company (Holdings) Limited SEMI-ANNUAL REPORT 2018 August 2018 1 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Section I. Important Notice, Contents and Paraphrase Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of Shenzhen China Bicycle Company (Holdings) Limited (hereinafter referred to as the Company) hereby confirm that there are no any fictitious statements, misleading statements, or important omissions carried in this report, and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of the whole contents. Li Hai, Principal of the Company, Sun Longlong, person in charge of accounting works and Zhong Xiaojin, person in charge of accounting organ (accounting principal) hereby confirm that the Financial Report of 2018 Semi-Annual Report is authentic, accurate and complete. All directors are attended the Board Meeting for report deliberation. The Company has no plan of cash bonus, dividends and capitalizing of reserves either. 2 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Content Section I. Important Notice, Contents and Paraphrase .......................................... 2 Section II. Company Profile and Main Finnaical Indexes ...................................... 5 Section III. Summary of Company Business ............................................................ 8 Section IV. Discussion and Analysis of the Business .............................................. 10 Section V. Important Events ..................................................................................... 16 Section VI. Changes in Shares and Shareholders .................................................. 23 Section VII. Preferred Stock ..................................................................................... 29 Section VIII. Directors, Supervisors and Senior Executives ................................. 30 Section IX. Corporate Bonds.................................................................................... 31 Section X. Financial Report ...................................................................................... 32 Section XI. Documents available for reference..................................................... 145 3 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Paraphrase Items Refers to Definition 4 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Section II. Company Profile and Main Finnaical Indexes I. Company Profile Short form of the stock Zhonghua – A, Zhonghua -B Code for share 000017, 200017 Stock exchange for listing Shenzhen Stock Exchange Name of the Company (in 深圳中华自行车(集团)股份有限公司 Chinese) Short form of the Company 深中华 (in Chinese) (if applicable) Foreign name of the Company Shenzhen China Bicycle Company (Holdings) Limited (if applicable) Short form of foreign name of CBC the Company (if applicable) Legal representative Li Hai II. Contact person and ways Secretary of the Board Rep. of securities affairs Name Sun Longlong Cui Hongxia, Zhong Xiaojin Room 1201, Wantong Building, No.3002, Room 1201, Wantong Building, No.3002, Contact adds. Sungang East Road, Shenzhen Sungang East Road, Shenzhen Tel. 0755-25516998,28181666 0755-25516998,28181666 Fax. 0755-28181009 0755-28181009 E-mail dmc@szcbc.com dmc@szcbc.com III. Others 1. Way of contact Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or not □ Applicable √ Not applicable Registrations address, offices address and codes as well as website and email of the Company has no change in reporting period, found more details in Annual Report 2017. 5 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 2. Information disclosure and preparation place Whether information disclosure and preparation place changed in reporting period or not □ Applicable √ Not applicable The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparation place for semi-annual report have no change in reporting period, found more details in Annual Report 2017. IV. Main accounting data and financial indexes Whether it has retroactive adjustment or re-statement on previous accounting data or not □ Yes √ No Increase/decrease in this Current period Same period of last year report y-o-y Operating revenue (RMB) 67,734,899.35 48,929,676.27 38.43% Net profit attributable to shareholders of 554,162.06 -1,691,378.44 -132.76% the listed company (RMB) Net profit attributable to shareholders of the listed company after deducting 521,366.39 -1,902,819.26 -127.40% non-recurring gains and losses (RMB) Net cash flow arising from operating -3,362,971.19 -8,806,042.23 -61.81% activities (RMB) Basic earnings per share (RMB/Share) 0.0010 -0.0031 -132.26% Diluted earnings per share (RMB/Share) 0.0010 -0.0031 -132.26% Weighted average ROE 3.43% -12.51% 15.94% Increase/decrease in this End of current period End of last period report-end over that of last period-end Total assets (RMB) 70,833,599.30 73,559,961.28 -3.71% Net assets attributable to shareholder of 16,452,432.91 15,898,270.85 3.49% listed company (RMB) V. Difference of the accounting data under accounting rules in and out of China 1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles) □ Applicable √ Not applicable The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (International Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period. 6 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules and Chinese GAAP (Generally Accepted Accounting Principles) □ Applicable √ Not applicable The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules or Chinese GAAP (Generally Accepted Accounting Principles) in the period. VI. Items and amounts of extraordinary profit (gains)/loss √Applicable □ Not applicable In RMB Item Amount Note Other non-operating income and expenditure except for the 41,986.28 aforementioned items Less: impact on income tax 17,026.35 Impact on minority shareholders’ equity (post-tax) -7,835.74 Total 32,795.67 -- Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, explain reasons □ Applicable √ Not applicable In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss 7 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Section III. Summary of Company Business I. Main businesses of the Company in the reporting period Does the Company need to comply with the disclosure requirement of the special industry No The company is engaged in the main business for the bicycle business and lithium battery material business, including production, assembly, procurement, sales of bicycles and electric bicycles, etc. II. Major changes in main assets 1. Major changes in main assets Major assets Note of major changes Equity assets No major change Fixed assets No major change Intangible assets No major change Construction in process No major change Decreased 43.49% over that of period-begin, mainly because the bank acceptance was Monetary Fund paid on expiration in the period and the inventory increased Decreased 100.00% over that of period-begin, mainly because the note receivables in the Notes receivable period are endorsed for goods payment Increased 144.81% over that of period-begin, mainly because the advance payment for Advance payment purchasing lithium battery materials in the period increased Increased 73.21% over that of period-begin, mainly because inventory are increased from Inventory subsidiary for peak season 2. Main overseas assets □ Applicable √ Not applicable III. Core Competitiveness Analysis Does the Company need to comply with the disclosure requirements of the special industry No Despite the fierce market competition in the bicycle industry as a conventional industry, the increased awareness of green commuting, leisure and exercises as a result of the development of China’s social economy and the change of people’s living concept creates structural development opportunity for the bicycle industry. The Company will continue to do better in various aspects of operation 8 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 such as market development, product development, quality management and sales of e-commerce, extended and expansion the application of upstream & downstream industry for the industrial chain step by step, so as to maintain and improve the Company’s ability to continue as a going concern before the restructuring. On the other side, the Company has set out the condition of introduction of investors in the restructuring plan with expectation to restore its ability to continue as a going concern and its continuous profitability through the restructuring of assets. Furthermore, we strive to planning the privately placement in the period and hope to improve the operation ability and development strength of the Company. The Resolution Relating to Adjustment of the Non-public Offer of A Shares Plan and the Resolution Relating to the Plan of Non-public Offer of A Shares (the 3rd Amendment) were considered and approved by the Company at the 4th extraordinary meeting of the 10th session of the board of directors and the 1st extraordinary general meeting for 2018 held in January and February, respectively. The specific works are underway. 9 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Section IV. Discussion and Analysis of the Business I. Introduction In first half of 2018, the international political and economical situation was complex and severe, structural problems and deep-seated contradictions in the domestic economic development were highlighted, economic downturn pressure continued to increase, many unstable and uncertain factors still existed, which affected and impacted the traditional manufacturing industries and the social consumption structure demand. Under the leadership of central government and governments at all levels, the whole nation strengthened their confidence, overcame difficulties, and forged ahead, and achieved steady progress in economic and social development, and the economic fundamentals were continuously consolidated and developed. As a sector in the traditional manufacturing field, the bicycle industry continued the dilemma of rise in labor cost, manufacturing costs, cost of capital, and material costs. Due to the low entry barriers of the industry and the large number of manufacturers, the market competition was fierce and the industry reshuffle intensified. The shared bicycle brands like Mobike were quickly promoted with financial advantages, further met the users’ needs, and squeezed the market space of traditional bicycle enterprises. At the same time, as a traditional manufacturing industry, the bicycle industry also ushered in the “Made in China 2025” strategy, under the guidance of the basic principles of “Innovation Driven, Quality First, Green Development, Structure Optimization, and Talent Based”, took the important opportunity to speed up the transformation and upgrading, and also faced with the important challenges of e-commerce development impacts on channels, channel integration and Internet+. China has the world’s largest production and marketing of electric bicycles, after years of development, electric bicycles have gradually become an important means of transportation for consumers on everyday short-distance trips, at present, there are about 200 million bicycles in the entire society. Structural body, motor, power battery, and control system are the core components of electric bicycles, Shenzhen China Bicycle has been closely following up the research on their technological development, application development, and commercial value for a long period of time, and has determined the qualified suppliers for core components year by year. The non-public offering of shares for fund-raising investment project of Shenzhen China Bicycle being planned and prepared at present also covers the application researches on switched reluctance motors, super-capacitor batteries, new materials, electric car bus control systems, wearable devices, intelligent positioning lock systems, etc. As one of the core components, electric bicycle power batteries have been mainly lead-acid batteries in the past decade or two, with the development and popularization of new energy technologies and new energy materials, it is expected to be replaced by the lithium batteries in the future. According to the strategy guidelines of “Made in China 2025” by the State Council and the spirit of standardization reform, the Ministry of Industry and Information Technology, the Ministry of Public Security, the State Administration for Industry and Commerce, and the General Administration of Quality Supervision, Inspection and Quarantine have introduced a new national standard for electric bicycles to comprehensively improve the safety performance of electric bicycles, adjust and improve the speed limit, vehicle quality, pedaling and riding ability and other technical indicators. New standards not only are close to people’s livelihood, but also improve the application space for lithium battery energy storage, and lithium battery electric bicycles usher in a new stage of development. 10 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Under this background, in first half 2018, the company combined with its actual situation of weak economic foundation after restructuring, on the one hand, adhered to taking the traditional business model development as the principle, strengthened the product research and development efforts, and constantly optimized and adjusted the product structure and sales model transformation, according to the e-commerce transformation of business team and the cost control way of internal introduction and external connection, and actively expanded the e-commerce business model; on the one hand, correspondingly carried out the tracking study on industrial projects and technology applications of upstream and downstream of industrial chain in the long-term process of electric bicycle business, strived to expand the lithium battery materials business based on the extensive business consultation and business opportunity sifting, and took it as an opportunity to gradually expand its main business; on the other hand, strived to promote the selection work of the company's restructuring, planned the non-public offering of shares, and started the business upgrades and connection work of the offline sales platform for sports experience and R & D center construction projects. In preparation for non-public offering of shares, in July 2016, the company initiated the planning and preparation for non-public offering of shares and engaged securities companies, lawyers, accountants, and other intermediary agencies to carry out various tasks. Since then, the nineteenth (temporary) meeting, the twenty-second (temporary) meeting, and the twenty-sixth (temporary) meeting of the ninth session of board of directors of the company, and the second extraordinary shareholders’ meeting in 2017 reviewed and approved the relevant proposals on non-public offering of shares. Combining the capital market with the actual situation of the company, from January to February, 2018, the fourth (temporary) meeting of the 10th session of board of directors and the first extraordinary shareholders’ meeting of the company in 2018 reviewed and approved the Proposal on Adjusting the Plan for the Company’s Non-Public Offering of A-Shares, and the Proposal on the Plan for the Company’s Non-Public Offering of A-Shares (three revised versions) and other relevant proposals. According to the above proposals, the total amount of funds raised in this non-public offering of shares did not exceed 750 million Yuan, and planned to invest 680 million Yuan for the “online and offline marketing network platform construction and upgrade project” and planned to invest 70 million Yuan for the “R&D center construction project after deducting the issuance costs. Under the background that the traditional manufacturing industry at home was still sluggish, in accordance with the guidelines of “Made in China 2025”, the company insisted on accelerating its professional transformation and e-commercial transformation, striving to expand its main business, strengthening the structural adjustment, intensifying the quality management, strengthening cost control, improving the ability of traditional enterprises to adapt to economy new normal and participate in market competition. Through various efforts, the company achieved operating revenue of 67,734,900 Yuan and net profit of 491,900 Yuan in first half of 2018, of which, the net profit attributable to shareholders of listed companies was 554,200 Yuan. The company’s operations remained stable and have injected new development potential. II. Main business analysis See the “I-Introduction” in “Discussion and Analysis of the Business” Y-o-y changes of main financial data 11 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 In RMB Current period Same period last year y-o-y changes (+,-) Reasons New business of lithium Operating revenue 67,734,899.35 48,929,676.27 38.43% battery increased in the period New business of lithium Operating costs 61,164,206.33 45,686,272.83 33.88% battery increased in the period Sales expenses 2,755,927.53 2,468,701.87 11.63% Administration expenses 3,309,720.24 3,339,531.50 -0.89% Income from bank Finance expenses -260,975.81 -201,564.91 29.47% interest declined Total profit in the period Income tax expenses 233,133.98 11,629.41 1,904.69% growth Current liability were Net cash flow arising -3,362,971.19 -8,806,042.23 -61.81% paid in last period and from operating activities inventory increased Net cash flow arising from investment -31,940.00 -100.00% activities Current liability were Net increase of cash and -3,362,971.19 -8,837,982.23 -61.95% paid in last period and cash equivalent inventory increased Major changes on profit composition or profit resources in reporting period □ Applicable √ Not applicable No major changes on profit composition or profit resources occurred in reporting period. Constitution of main business In RMB Increase or Increase or Increase or decrease of decrease of decrease of gross Operating Operating cost Gross profit ratio operating revenue operating cost profit ratio over revenue over same period over same period same period of of last year of last year last year According to industries Sales of bicycles and accessories 43,534,007.87 39,127,940.50 10.12% -11.03% -14.36% 3.49% and fittings Lithium battery 24,200,891.48 22,036,265.83 8.94% 100.00% 100.00% 8.94% materials According to products Sales of bicycles and accessories 43,534,007.87 39,127,940.50 10.12% -11.03% -14.36% 3.49% and fittings 12 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Lithium battery 24,200,891.48 22,036,265.83 8.94% 100.00% 100.00% 8.94% materials According to region Domestic 67,734,899.35 61,164,206.33 9.70% 38.43% 33.88% 3.07% III. Analysis of the non-main business □Applicable √ Not applicable IV. Assets and liability 1. Major changes of assets composition In RMB End of same period of last End of the Period year Ratio Notes of major changes Ratio in total Ratio in total changes Amount Amount assets assets Monetary fund 15,814,304.99 22.33% 15,177,305.48 31.00% -8.67% Account 34,951,941.66 49.34% 10,621,799.74 21.70% 27.64% Receivable from clients increased receivable Inventory 4,810,375.32 6.79% 6,085,173.94 12.43% -5.64% Fix assets 3,756,571.22 5.30% 3,615,758.14 7.39% -2.09% Advance payment for purchasing Advance payment 6,076,785.42 8.58% 1,496,894.88 3.06% 5.52% lithium battery materials increased 2. Assets and liability measured by fair value □ Applicable √ Not applicable 3. Assets rights restricted till end of the period Purchasing six properties of Lianxin Garden with original value of 2,959,824.00 Yuan in 2016; the property purchasing refers to the indemnificatory housing for enterprise talent buying from Shenzhen Housing and Construction Bureau of Luohu District. According to the agreement, the enterprise shall not carrying any kind of property trading with any units or individuals except the government, and the company has no property certification on the above mentioned properties. V. Investment 1. Overall situation □ Applicable √ Not applicable 13 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 2. The major equity investment obtained in the reporting period □ Applicable √ Not applicable 3. The major non-equity investment doing in the reporting period □ Applicable √ Not applicable 4. Financial assets investment (1) Securities investment □ Applicable √ Not applicable The Company had no securities investment in Period. (2) Derivative investment □ Applicable √ Not applicable The Company has no derivatives investment in Period. VI. Sales of major assets and equity 1. Sales of major assets □ Applicable √ Not applicable The Company has no sales of major assets in Period. 2. Sales of major equity □ Applicable √ Not applicable VII. Analysis of main holding company and stock-jointly companies √Applicable □ Not applicable Particular about main subsidiaries and stock-jointly companies net profit over 10% In RMB Company Main Register Operating Operating Type Total assets Net Assets Net profit name business capital revenue profit Shenzhen Sales of Emmelle 31,609,935.1 44,367,011.1 -181,366.3 Subsidiary bicycles and 2000000 9,668,180.05 -207,485.52 Industry Co., 1 8 9 accessories Ltd. Particular about subsidiaries obtained or disposed in report period 14 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 □ Applicable √ Not applicable Notes of holding and shareholding companies The Company holds 70 percent equity of the Shenzhen Emmelle Industry Co., Ltd., the balance of minority equity at period-end amounting to 2900454.02 Yuan. VIII. Structured vehicle controlled by the Company □ Applicable √ Not applicable IX. Prediction of business performance from January – September 2018 Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the warning of its material change compared with the corresponding period of the last year and explanation on reason □ Applicable √ Not applicable X. Risks and countermeasures The tough international economic situation: The domestic economy is at the structural adjustment stage in the course of development, structural problems and deep-seated conflicts are highlighted. The economic downturn pressure continues to increase, many unstable and uncertain factors exist, which affect and impact the traditional manufacturing industries and the social consumption structure demand. Since the domestic economy is at the structural adjustment stage, coupled with a difficult situation of continuously rising labor cost, manufacturing cost, financing cost and material cost the bicycle industry as a conventional manufacturing field recorded a decline in the market turnover. Due to the low entry threshold and numerous manufacturers, the competition in the market is extremely fierce. The bicycle sharing brands such as Mobike have obtained large amount of financing and rapid promotion, but also further digested the user's demand, and squeezed the market space of traditional bicycle enterprises. Faced with the above problems, combine actual condition of financially insecure after reorganization, on the one hand, we adhere to traditional business model development, strengthen R&D of the products, and continue to optimize the structure for products and sales mode. According to the electricity supplier transformation and inner lead of the cost controlling, the Company proactively develop the electricity supplier business model; on the one hand, correspondingly carry out the tracking study on industrial projects and technology applications of upstream and downstream of industrial chain in the long-term process of electric bicycle business, start getting involved in the lithium battery materials business based on the extensive business consultation and business opportunity sifting, and take it as an opportunity to gradually expand its main business; on the other hand, we strive to promote the selection for recombinant party, planning a private placement of shares, and carry out a sport experience sales platform online and offline and the construction of R&D center, recently the business upgrade still in process. 15 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Section V. Important Events I. In the report period, the Company held annual shareholders’ general meeting and extraordinary shareholders’ general meeting 1. Shareholders’ General Meeting in the report period Ratio of investor Index of Session of meeting Type Date Date of disclosure participation disclosure Notice of Resolution of First First Extraordinary Extraordinary Extraordinary shareholders shareholders 12.59% 2018-02-13 2018-02-13 shareholders general meeting general general meeting 2018 meeting 2018 (No.: 2018006) Notice of Annual Resolution of Annual General General 12.45% 2018-06-19 2018-06-19 Annual General Meeting 2017 Meeting Meeting 2017 (No.: 2018013) 2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore □ Applicable √ Not applicable II. Profit distribution plan and capitalizing of common reserves plan for the Period □ Applicable √ Not applicable The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either for the semi-annual year. III. Commitments that actual controller, shareholder, related parties, buyer and committed party as the Company etc. have fulfilled during the reporting period and have not yet fulfilled by the end of reporting period □ Applicable √ Not applicable No commitments that actual controller, shareholders, related parties, buyer and committed party as the Company etc. have fulfilled during the reporting period and have not yet fulfilled by the end of reporting period 16 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 IV. Appointment and non-reappointment (dismissal) of CPA Financial report has been audit or not □ Yes √ No Not been audited. V. Explanation from Board of Directors, Supervisory Committee for “Qualified Opinion” that issued by CPA □ Applicable √ Not applicable VI. Explanation from the Board for “Qualified Opinion” of last year’s √Applicable □ Not applicable On 11 May 2012, the largest shareholder and biggest creditor of the Company, Shenzhen Guocheng Energy Investment Development Co., Ltd. applied to Shenzhen Municipal Intermediate People's Court for reforming the Company as the Company couldn’t pay off the matured debts and was seriously insolvent. On 12th, Oct., 2012, Shenzhen Municipal Intermediate People's Court ruled to accept the application proposed by Guocheng Energy according to (2012) Shenzhen Intermediate Court Po Zi No. 30 civil ruling. On the last ten-day of October 2012, Shenzhen Municipal Intermediate People's Court ruled to reform the Company since 25th, Oct., 2012 according to (2012) Shenzhen Intermediate Court Po Zi No. 30-1 civil ruling, appointed King & Wood (Shenzhen) Mallesons and Shenzhen ZhengYuan Liquidation Affairs Co., Ltd. as the custodians of the Company. On the same day, Shenzhen Municipal Intermediate People's Court made (2012) Shenzhen Intermediate Court Po Zi No. 30-1 written decision, and approved the Company to manage property and business affairs by itself under the supervision of custodians according to the law. On 5 November 2013, the Shenzhen Intermediate People’s Court (2012) Shen Zhong Fa Po Zi No. 30-6 Civil Ruling Paper judged that approved the reorganization plan of the Company. On 27 December 2013, the Civil Ruling Paper Shenzhen Intermediate People’s Court (2012) Shen Zhong Fa Po Zi No. 30-10 ruled that the reorganization plan of CBC was completed and bankruptcy procedures of CBC closed down. The Company has solved the debt problem by reforming, realized the net assets with positive value, the main business of bicycle is able to be maintained and realizes the stable development. The Company has set up the conditions for introducing the recombination party in the reforming plan, and expects to restore the abilities of sustainable operation and sustained profitability by reorganization. The conditions of introducing the recombination party includes: the assessed value of net assets should be no less than 2 billion Yuan, the net assets in the same year for implementing the major reorganization should be no less than 200 million Yuan. The Company doesn’t have the recombination party at the moment. The Company will continues to carry out vary works proactively in order to promoted the reorganization works. VII. Bankruptcy reorganization □ Applicable √ Not applicable No bankruptcy reorganization for the Company in Period. VIII. Lawsuits Material lawsuits and arbitration □ Applicable √ Not applicable 17 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 No significant lawsuits and arbitrations occurred in the reporting period. Other lawsuits events □ Applicable √ Not applicable IX. Penalty and rectification □ Applicable √ Not applicable No penalty and rectification for the Company in Period. X. Integrity of the Company and its controlling shareholders and actual controllers □ Applicable √ Not applicable XI. Implementation of the Company’s stock incentive plan, employee stock ownership plan or other employee incentives □ Applicable √ Not applicable The Company has no equity incentive plan, employee stock ownership plans or other employee incentives in Period. XII. Major related transaction 1. Related transaction with routine operation concerned □ Applicable √ Not applicable The Company had no related transaction with routine operation concerned in Period. 2. Related transactions by assets acquisition and sold □ Applicable √ Not applicable No related transactions by assets acquisition and sold for the Company in Period. 3. Main related transactions of mutual investment outside □ Applicable √ Not applicable No main related transactions of mutual investment outside for the Company in Period. 4. Contact of related credit and debt √Applicable □ Not applicable Whether has non-operational contact of related liability and debts or not √ Yes □ No Claim receivable from related party: 18 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Whether Current Balance at Current Current Ending has newly period-be recovery interest balance Related Relations non-busin added Interest Causes gin (10 (10 (10 (10 party hip ess capital (10 rate thousand thousand thousand thousand occupying thousand Yuan) Yuan) Yuan) Yuan) or not Yuan) Influence on business performance and financial status of the N/A Company from related liabilities Debts payable to related party: Current Balance at Current Current newly Ending period-begi recovery interest Related Relationshi added balance (10 Causes n (10 (10 Interest rate (10 party p (10 thousand thousand thousand thousand thousand Yuan) Yuan) Yuan) Yuan) Yuan) Shenzhen Guosheng Subsidiar Energy The largest y 650 0 0 0.00% 0 650 Investment shareholder Emmelle Developme loan nt Co., Ltd. Influence on business performance and financial N/A status of the Company from related debts 5. Other significant related transactions □ Applicable √ Not applicable The company had no other significant related transactions in reporting period. XIII. Non-business capital occupying by controlling shareholders and its related parties □ Applicable √ Not applicable No non-business capital occupied by controlling shareholders and its related parties in Period. 19 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 XIV. Significant contract and implementations 1. Trusteeship, contract and leasing (1) Trusteeship □ Applicable √ Not applicable No trusteeship for the Company in Period. (2) Contract □ Applicable √ Not applicable No contract for the Company in Period. (3) Leasing □ Applicable √ Not applicable No leasing for the Company in Period. 2. Major guarantees □ Applicable √ Not applicable No guarantee for the Company in Period. 3. Other material contracts □ Applicable √ Not applicable No other material contracts for the Company in Period. XV. Social responsibility 1. Major environmental protection The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department Not applicable Nil 2. Fulfill the precise social responsibility for poverty alleviation (1) Targeted poverty alleviation Nil 20 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 (2) Summary of annual precision poverty alleviation Nil (3) Accuracy of poverty alleviation Measurement Target Numbers/progress units I. general condition —— —— II. Implemented by detail —— —— 1. Industrial development poverty —— —— 2.Transfer employment —— —— 3. Anti-poverty by relocating in other places —— —— 4. Education poverty —— —— 5. Health poverty alleviation —— —— 6. Ecological conservation —— —— 7. Fallback protection —— —— 8. Social poverty alleviation —— —— 9. Other —— —— III. Awards (content and level) —— —— (4) Subsequent precision poverty alleviation program Nil XVI. Other major events √Applicable □ Not applicable In July 2016, the Company started to plan a non-public issue of shares with proceeds to be utilized to acquire material assets. The Plan on Non-public Issue of A shares in 2016 was considered and approved by the Board of the Company. Based on the due diligence, audit, assessment and business negation with intermediates, taking into account the conditions of capital market and actual conditions of the Company, the Board of the Company considered and approved the Proposal Relating to Adjusting the Plan of non-public of A Shares, the Explanation on non-public of A-shares for year of 2016 Amendment, the Plan on Non-public Issue of A shares in 2016 (amended), the Plan on Non-public Issue of A shares in 2016 (Second Amended) and Plan on Non-public Issue of A shares in 2016 (Third Amended) from February 2017 to February 2018. According to the three revised drafts, the number of non-public offering of shares should not exceed 110,269,586 shares, and the total amount of funds raised should not exceed 750 million Yuan. The total amount of raised funds for this non-public offering should not exceed RMB 750 million, will be used for the following projects after deducting the issuance expenses: 1. RMB 680 million of funds for “online and offline marketing network platform construction and upgrading project”; 2. RMB 70 million of funds for “R & D center construction project”. The issuing objects of this 21 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 non-public offering include four specific investors which are Ruian Information, Zhisheng High-tech, Wansheng Industry and Beier High-tech. The subscription amount of Ruian Information does not exceed 250 million Yuan, and the number of subscribed shares does not exceed 36,756,529 shares; the subscription amount of Zhisheng High-tech does not exceed 200 million Yuan, and the number of subscribed shares does not exceed 29,405,223 shares; the subscription amount of Wansheng Industry and Beier High-tech respectively does not exceed 150 million Yuan, and the number of subscribed shares does not exceed 22,053,917 shares respectively. The company convened the first extraordinary general meeting of 2018 on February 13, 2018 which reviewed and passed the Proposal on the Plan on Non-public Issue of A shares (Third Amended), etc. See details on the announcement issued by the board of directors of the company. XVII. Major event of the subsidiaries □ Applicable √ Not applicable 22 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Section VI. Changes in Shares and Shareholders I. Changes in Share Capital 1. Changes in Share Capital In Share Before the Change Increase/Decrease in the Change (+, -) After the Change Capitalizat New Bonus ion of Proportio Amount Proportion shares Others Subtotal Amount shares public n issued reserve I. Restricted shares 4,707 0.00% -750 -750 3,957 0.00% 1. State-owned shares 0 0.00% 0 0.00% 2. State-owned legal 0 0.00% 0 0.00% person’s shares 3. Other domestic shares 4,707 0.00% -750 -750 3,957 0.00% Including: Domestic legal 0 0.00% 0 0.00% person’s shares Domestic natural person’s 4,707 0.00% -750 -750 3,957 0.00% shares 4. Foreign shares 0 0.00% 0 0.00% Including: Foreign legal 0 0.00% 0 0.00% person’s shares Foreign natural person’s 0 0.00% 0 0.00% shares 551,343,2 551,343,9 II. Unrestricted shares 100.00% 750 750 100.00% 40 90 302,980,2 302,981,0 1. RMB Ordinary shares 54.95% 750 750 54.95% 58 08 2. Domestically listed 248,362,9 248,362,9 45.05% 45.05% foreign shares 82 82 3. Overseas listed foreign 0 0.00% 0 0.00% shares 4. Others 0 0.00% 0 0.00% 551,347,9 551,347,9 III. Total shares 100.00% 0 0 100.00% 47 47 Reasons for share changed 23 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 √Applicable □ Not applicable In accordance with relevatn laws and regulations, the shares held by supervisor of the Company are released for trading counted as 25% Approval of share changed □ Applicable √ Not applicable Ownership transfer of share changes □ Applicable √ Not applicable Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common shareholders of Company in latest year and period □ Applicable √ Not applicable Other information necessary to disclose or need to disclosed under requirement from security regulators □ Applicable √ Not applicable 2. Changes of restricted shares √Applicable □ Not applicable In Share Restricted Shares Opening shares Shares released in Increased Ending shares Restricted Shareholders Date for released restricted Period In restricted reasons the Period Zheng Shares held by 4,707 750 0 3,957 - Zhonghuan supervisor Total 4,707 750 0 3,957 -- -- II. Securities issuance and listing □ Applicable √ Not applicable III. Number of shares and shares held In Share Total preference shareholders Total common shareholders at with voting rights recovered at 49,697 0 period-end end of reporting period (if applicable) (note8) 24 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Particulars about common shares held above 5% by shareholders or top ten common shareholders Number Number of share pledged/frozen Amount of of Amount of Proportion common Changes in Nature of restricted un-restricte Shareholders of shares shares reporting shareholder common d common State of share Amount held held at period shares shares held period-en held d Shenzhen Guocheng Domestic Energy 63,508,74 non-State-owned 11.52% 0 0 63,508,747 0 Investment 7 legal person Development Co., Ltd. UOB Koy Hian Foreign legal 15,907,85 (Hong Kong) 2.89% 0 0 15,907,850 0 person 0 Co., Ltd. Guosen Securities Foreign legal 13,909,42 (Hong Kong) 2.52% -79000 0 13,909,425 0 person 5 brokerage Co., Ltd. Huabao Trust Co., Ltd. – Huihuang Other 1.35% 7,435,165 -4103345 0 7,435,165 0 No.33 single fund trust Huabao Trust Co., Ltd. – Huihuang Other 1.29% 7,114,435 -65200 0 7,114,435 0 No.15 single fund trust Shenwan Hongyuan Foreign legal Securities 1.22% 6,707,257 -130000 0 6,707,257 0 person (Hongkong) Co., Ltd. Huabao Trust Co., Ltd. – Huihuang Other 0.80% 4,387,288 2753888 0 4,387,288 0 No.22 single fund trust 25 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Zhongrong International Trust Co., Ltd. – Zhongrong –Dingfu No.13 Other 0.72% 3,958,923 -174900 0 3,958,923 0 structured portfolio investment trust plan Domestic nature Li Huili 0.71% 3,891,124 0 0 3,891,124 0 person Zhongrong International Trust Co., Ltd. – Zhongrong –Dingfu Other 0.67% 3,684,497 -407600 0 3,684,497 0 No.14structured portfolio investment trust plan Strategy investors or general corporation comes top 10 common N/A stock shareholders due to rights issue (if applicable) (see note 3) Li Huili, spouse of the Ji Hanfei, the actual controller of he Company- Shenzhen Guosheng Energy Investment Development Co., Ltd., holding B-share of the Company on behalf of Explanation on associated Shenzhen Guocheng Energy Investment Development Co., Ltd., beyond that, the Company relationship among the aforesaid has no idea of whether other circulated shareholders belong to concerted action persons ruled shareholders in the Administration Norms for Information Disclosure of Change on Shareholding of Shareholders of Listed Companies. Particular about top ten common shareholders with un-restrict shares held Amount of un-restrict common shares held at Type of shares Shareholders period-end Type Amount Shenzhen Guocheng Energy RMB ordinary 63,508,747 63,508,747 Investment Development Co., Ltd. shares Domestically UOB Koy Hian (Hong Kong) Co., 15,907,850 listed foreign 15,907,850 Ltd. shares Domestically Guosen Securities (Hong Kong) 13,909,425 listed foreign 13,909,425 brokerage Co., Ltd. shares 26 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Huabao Trust Co., Ltd. – Huihuang RMB ordinary 7,435,165 7,435,165 No.33 single fund trust shares Huabao Trust Co., Ltd. – Huihuang RMB ordinary 7,114,435 7,114,435 No.15 single fund trust shares Domestically Shenwan Hongyuan Securities 6,707,257 listed foreign 6,707,257 (Hongkong) Co., Ltd. shares Huabao Trust Co., Ltd. – Huihuang RMB ordinary 4,387,288 4,387,288 No.22 single fund trust shares Zhongrong International Trust Co., Ltd. – Zhongrong –Dingfu No.13 RMB ordinary 3,958,923 3,958,923 structured portfolio investment trust shares plan Domestically Li Huili 3,891,124 listed foreign 3,891,124 shares Zhongrong International Trust Co., Ltd. – Zhongrong –Dingfu RMB ordinary 3,684,497 3,684,497 No.14structured portfolio shares investment trust plan Expiation on associated relationship Li Huili, spouse of the Ji Hanfei, the actual controller of he Company- Shenzhen Guosheng or consistent actors within the top Energy Investment Development Co., Ltd., holding B-share of the Company on behalf of 10 un-restrict shareholders and Shenzhen Guocheng Energy Investment Development Co., Ltd., beyond that, the Company between top 10 un-restrict has no idea of whether other circulated shareholders belong to concerted action persons ruled shareholders and top 10 in the Administration Norms for Information Disclosure of Change on Shareholding of shareholders Shareholders of Listed Companies. Explanation on top 10 shareholders involving margin business (if N/A applicable) (see note 4) Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreement dealing in reporting period □Yes √No Top ten common shareholders or top ten common shareholders with un-restrict shares not held have a buy-back agreement dealing in reporting period IV. Changes of controlling shareholders or actual controller Changes of controlling shareholders in reporting period □ Applicable √ Not applicable Changes of controlling shareholders had no change in reporting period. Changes of actual controller in reporting period 27 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 □ Applicable √ Not applicable Changes of actual controller in reporting period had no change in reporting period. 28 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Section VII. Preferred Stock □ Applicable √ Not applicable The Company had no preferred stock in the reporting. 29 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Section VIII. Directors, Supervisors and Senior Executives I. Changes of shares held by directors, supervisors and senior executives □Applicable √ Not applicable Found more in annual report 2017 for the changes of shares held by directors, supervisors and senior executives II. Resignation and dismissal of directors, supervisors and senior executives √Applicable □ Not applicable Name Title Type Date Reason Li Xiang Supervisor Be elected 2018-02-13 General election Zheng Supervisor Be elected 2018-02-13 General election Zhonghuan Li Jialin Supervisor Be elected 2018-02-13 General election Li Hai President Appointment 2018-05-28 Re-engagement 30 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Section IX. Corporate Bonds Whether the Company has corporate bonds that issuance publicly and listed on stock exchange and without due on the date when semi-annual report approved for released or fail to cash in full on due No 31 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Section X. Financial Report I. Audit reports Whether the semi-annual report was audited or not □ Yes √ No The financial report of this semi-annual report was unaudited. II. Financial statements Units in Notes of Financial Statements is RMB 1. Consolidated Balance Sheet Prepared by Shenzhen China Bicycle Company (Holdings) Limited 2018-06-30 In RMB Item Closing balance Opening balance Current assets: Monetary funds 15,814,304.99 27,985,654.24 Settlement provisions Capital lent Financial assets measured by fair value and with variation reckoned into current gains/losses Derivative financial liability Notes receivable 1,500,000.00 Accounts receivable 34,951,941.66 29,007,775.21 Accounts paid in advance 6,076,785.42 2,482,276.54 Insurance receivable Reinsurance receivables Contract reserve of reinsurance receivable Interest receivable Dividend receivable Other receivables 606,839.17 659,706.81 Purchase restituted finance asset 32 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Inventories 4,810,375.32 2,777,174.63 Assets held for sale Non-current asset due within one year Other current assets 1,792,452.81 1,805,427.17 Total current assets 64,052,699.37 66,218,014.60 Non-current assets: Loans and payments on behalf Finance asset available for sales Held-to-maturity investment Long-term account receivable Long-term equity investment Investment property Fixed assets 3,756,571.22 3,941,117.97 Construction in progress Engineering material Disposal of fixed asset Productive biological asset Oil and gas asset Intangible assets 1,882,500.00 2,259,000.00 Expense on Research and Development Goodwill Long-term expenses to be apportioned Deferred income tax asset 741,828.71 741,828.71 Other non-current asset 400,000.00 400,000.00 Total non-current asset 6,780,899.93 7,341,946.68 Total assets 70,833,599.30 73,559,961.28 Current liabilities: Short-term loans Loan from central bank Absorbing deposit and interbank deposit Capital borrowed Financial liability measured by fair value and with variation reckoned into current gains/losses 33 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Derivative financial liability Notes payable 8,480,000.00 Accounts payable 10,827,725.61 3,928,197.27 Accounts received in advance 1,718,541.33 1,268,479.32 Selling financial asset of repurchase Commission charge and commission payable Wage payable 859,708.64 706,703.40 Taxes payable 2,733,356.50 3,807,286.87 Interest payable Dividend payable Other accounts payable 35,341,380.29 36,508,323.90 Reinsurance payables Insurance contract reserve Security trading of agency Security sales of agency Liability held for sale Non-current liabilities due within 1 year Other current liabilities Total current liabilities 51,480,712.37 54,698,990.76 Non-current liabilities: Long-term loans Bonds payable Including: preferred stock Perpetual capital securities Long-term account payable Long-term wages payable Special accounts payable Projected liabilities Deferred income Deferred income tax liabilities Other non-current liabilities Total non-current liabilities Total liabilities 51,480,712.37 54,698,990.76 34 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Owner’s equity: Share capital 551,347,947.00 551,347,947.00 Other equity instrument Including: preferred stock Perpetual capital securities Capital public reserve 627,834,297.85 627,834,297.85 Less: Inventory shares Other comprehensive income Reasonable reserve Surplus public reserve 32,673,227.01 32,673,227.01 Provision of general risk Retained profit -1,195,403,038.95 -1,195,957,201.01 Total owner’s equity attributable to 16,452,432.91 15,898,270.85 parent company Minority interests 2,900,454.02 2,962,699.67 Total owner’s equity 19,352,886.93 18,860,970.52 Total liabilities and owner’s equity 70,833,599.30 73,559,961.28 Legal Representative: Li Hai Person in charge of Accounting Works: Sun Longlong Person in charge of Accounting Institution: Zhong Xiaojin 2. Balance Sheet of Parent Company In RMB Item Closing balance Opening balance Current assets: Monetary funds 10,592,392.19 15,398,405.80 Financial assets measured by fair value and with variation reckoned into current gains/losses Derivative financial liability Notes receivable 300,000.00 Accounts receivable 17,008,339.16 17,680,663.16 Account paid in advance 5,524,648.70 2,357,662.42 Interest receivable 35 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Dividends receivable Other receivables 255,580.95 280,576.37 Inventories Assets held for sale Non-current assets maturing within one year Other current assets 1,792,452.81 1,792,452.81 Total current assets 35,173,413.81 37,809,760.56 Non-current assets: Available-for-sale financial assets Held-to-maturity investments Long-term receivables Long-term equity investments 10,379.73 10,379.73 Investment property Fixed assets 3,189,645.44 3,309,465.26 Construction in progress Project materials Disposal of fixed assets Productive biological assets Oil and natural gas assets Intangible assets 1,882,500.00 2,259,000.00 Research and development costs Goodwill Long-term deferred expenses Deferred income tax assets Other non-current assets 400,000.00 400,000.00 Total non-current assets 5,482,525.17 5,978,844.99 Total assets 40,655,938.98 43,788,605.55 Current liabilities: Short-term borrowings Financial liability measured by fair value and with variation reckoned into current gains/losses Derivative financial liability Notes payable 36 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Accounts payable Accounts received in advance 111,111.10 1,086,506.70 Wage payable 437,700.34 112,896.71 Taxes payable 1,773,220.21 2,806,928.48 Interest payable Dividend payable Other accounts payable 28,638,820.72 30,786,588.98 Liability held for sale Non-current liabilities due within 1 year Other current liabilities Total current liabilities 30,960,852.37 34,792,920.87 Non-current liabilities: Long-term loans Bonds payable Including: preferred stock Perpetual capital securities Long-term account payable Long-term wages payable Special accounts payable Projected liabilities Deferred income Deferred income tax liabilities Other non-current liabilities Total non-current liabilities Total liabilities 30,960,852.37 34,792,920.87 Owners’ equity: Share capita 551,347,947.00 551,347,947.00 Other equity instrument Including: preferred stock Perpetual capital securities Capital public reserve 627,834,297.85 627,834,297.85 Less: Inventory shares Other comprehensive income Reasonable reserve 37 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Surplus reserve 32,673,227.01 32,673,227.01 Retained profit -1,202,160,385.25 -1,202,859,787.18 Total owner’s equity 9,695,086.61 8,995,684.68 Total liabilities and owner’s equity 40,655,938.98 43,788,605.55 3. Consolidated Profit Statement In RMB Item Current Period Last Period I. Total operating income 67,734,899.35 48,929,676.27 Including: Operating income 67,734,899.35 48,929,676.27 Interest income Insurance gained Commission charge and commission income II. Total operating cost 67,051,835.24 51,337,023.25 Including: Operating cost 61,164,206.33 45,686,272.83 Interest expense Commission charge and commission expense Cash surrender value Net amount of expense of compensation Net amount of withdrawal of insurance contract reserve Bonus expense of guarantee slip Reinsurance expense Operating tax and extras 75,737.75 91,353.05 Sales expenses 2,755,927.53 2,468,701.87 Administration expenses 3,309,720.24 3,339,531.50 Financial expenses -260,975.81 -201,564.91 Losses of devaluation of asset 7,219.20 -47,271.09 Add: Changing income of fair value(Loss is listed with “-”) Investment income (Loss is listed with “-”) 38 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Including: Investment income on affiliated company and joint venture Exchange income (Loss is listed with “-”) Assets disposal income (Loss is listed with “-”) Other income III. Operating profit (Loss is listed with 683,064.11 -2,407,346.98 “-”) Add: Non-operating income 72,126.28 291,710.58 Less: Non-operating expense 30,140.00 IV. Total Profit (Loss is listed with “-”) 725,050.39 -2,115,636.40 Less: Income tax expense 233,133.98 11,629.41 V. Net profit (Net loss is listed with “-”) 491,916.41 -2,127,265.81 (I) Continuous operation net profit 491,916.41 -2,127,265.81 (Net loss is listed with “-”) (II) Discontinued operation net profit (Net loss is listed with “-”) Net profit attributable to owner’s of 554,162.06 -1,691,378.44 parent company Minority shareholders’ gains and -62,245.65 -435,887.37 losses VI. Net after-tax of other comprehensive income Net after-tax of other comprehensive income attributable to owners of parent company (I) Other comprehensive income items which will not be reclassified subsequently to profit of loss 1. Changes as a result of re-measurement of net defined benefit plan liability or asset 2. Share of the other comprehensive income of the investee accounted for using equity method which will not be reclassified subsequently to profit and loss (II) Other comprehensive income items 39 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 which will be reclassified subsequently to profit or loss 1. Share of the other comprehensive income of the investee accounted for using equity method which will be reclassified subsequently to profit or loss 2. Gains or losses arising from changes in fair value of available-for-sale financial assets 3. Gains or losses arising from reclassification of held-to-maturity investment as available-for-sale financial assets 4. The effect hedging portion of gains or losses arising from cash flow hedging instruments 5. Translation differences arising on translation of foreign currency financial statements 6. Other Net after-tax of other comprehensive income attributable to minority shareholders VII. Total comprehensive income 491,916.41 -2,127,265.81 Total comprehensive income 554,162.06 -1,691,378.44 attributable to owners of parent Company Total comprehensive income -62,245.65 -435,887.37 attributable to minority shareholders VIII. Earnings per share: (i) Basic earnings per share 0.0010 -0.0031 (ii) Diluted earnings per share 0.0010 -0.0031 Enterprise combine under the same control in the Period, the combined party realized net profit of 0 Yuan before combination, and realized 0 Yuan at last period for combined party Legal Representative: Li Hai Person in charge of Accounting Works: Sun Longlong Person in charge of Accounting Institution: Zhong Xiaojin 40 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 4. Profit Statement of Parent Company In RMB Item Current Period Last Period I. Operating income 24,023,518.68 3,228,905.96 Less: Operating cost 20,846,218.08 1,994,075.80 Operating tax and extras 13,741.20 Sales expenses 276,827.75 Administration expenses 2,107,312.50 2,165,755.45 Financial expenses -83,003.31 2,461.63 Losses of devaluation of asset -2,008.04 Add: Changing income of fair value(Loss is listed with “-”) Investment income (Loss is listed with “-”) Including: Investment income on affiliated company and joint venture Assets disposal income (Loss is listed with “-”) Other income II. Operating profit (Loss is listed 864,430.50 -933,386.92 with “-”) Add: Non-operating income 68,105.41 259,079.00 Less: Non-operating expense III. Total Profit (Loss is listed with 932,535.91 -674,307.92 “-”) Less: Income tax expense 233,133.98 IV. Net profit (Net loss is listed with 699,401.93 -674,307.92 “-”) (I) Continuous operation net profit 699,401.93 -674,307.92 (Net loss is listed with “-”) (II) Discontinued operation net profit (Net loss is listed with “-”) V. Net after-tax of other comprehensive income (I) Other comprehensive income items which will not be reclassified subsequently to profit of loss 41 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 1. Changes as a result of re-measurement of net defined benefit plan liability or asset 2. Share of the other comprehensive income of the investee accounted for using equity method which will not be reclassified subsequently to profit and loss (II) Other comprehensive income items which will be reclassified subsequently to profit or loss 1. Share of the other comprehensive income of the investee accounted for using equity method which will be reclassified subsequently to profit or loss 2. Gains or losses arising from changes in fair value of available-for-sale financial assets 3. Gains or losses arising from reclassification of held-to-maturity investment as available-for-sale financial assets 4. The effect hedging portion of gains or losses arising from cash flow hedging instruments 5. Translation differences arising on translation of foreign currency financial statements 6. Other VI. Total comprehensive income 699,401.93 -674,307.92 VII. Earnings per share: (i) Basic earnings per share 0.0013 -0.0012 (ii) Diluted earnings per share 0.0013 -0.0012 5. Consolidated Cash Flow Statement In RMB Item Current Period Last Period I. Cash flows arising from operating activities: 42 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Cash received from selling commodities and providing labor 15,792,549.13 23,451,451.79 services Net increase of customer deposit and interbank deposit Net increase of loan from central bank Net increase of capital borrowed from other financial institution Cash received from original insurance contract fee Net cash received from reinsurance business Net increase of insured savings and investment Net increase of amount from disposal financial assets that measured by fair value and with variation reckoned into current gains/losses Cash received from interest, commission charge and commission Net increase of capital borrowed Net increase of returned business capital Write-back of tax received 5,306.26 Other cash received concerning 2,529,012.36 2,324,298.02 operating activities Subtotal of cash inflow arising from 18,326,867.75 25,775,749.81 operating activities Cash paid for purchasing commodities and receiving labor 12,448,466.83 23,835,363.39 service Net increase of customer loans and advances Net increase of deposits in central bank and interbank Cash paid for original insurance contract compensation Cash paid for interest, commission 43 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 charge and commission Cash paid for bonus of guarantee slip Cash paid to/for staff and workers 3,190,388.60 3,517,233.68 Taxes paid 1,336,400.97 1,649,135.49 Other cash paid concerning 4,714,582.54 5,580,059.48 operating activities Subtotal of cash outflow arising from 21,689,838.94 34,581,792.04 operating activities Net cash flows arising from operating -3,362,971.19 -8,806,042.23 activities II. Cash flows arising from investing activities: Cash received from recovering investment Cash received from investment income Net cash received from disposal of fixed, intangible and other long-term assets Net cash received from disposal of subsidiaries and other units Other cash received concerning investing activities Subtotal of cash inflow from investing activities Cash paid for purchasing fixed, 31,940.00 intangible and other long-term assets Cash paid for investment Net increase of mortgaged loans Net cash received from subsidiaries and other units obtained Other cash paid concerning investing activities Subtotal of cash outflow from investing 31,940.00 activities Net cash flows arising from investing -31,940.00 activities 44 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 III. Cash flows arising from financing activities Cash received from absorbing investment Including: Cash received from absorbing minority shareholders’ investment by subsidiaries Cash received from loans Cash received from issuing bonds Other cash received concerning financing activities Subtotal of cash inflow from financing activities Cash paid for settling debts Cash paid for dividend and profit distributing or interest paying Including: Dividend and profit of minority shareholder paid by subsidiaries Other cash paid concerning financing activities Subtotal of cash outflow from financing activities Net cash flows arising from financing activities IV. Influence on cash and cash equivalents due to fluctuation in exchange rate V. Net increase of cash and cash -3,362,971.19 -8,837,982.23 equivalents Add: Balance of cash and cash 19,177,276.18 24,015,287.71 equivalents at the period -begin VI. Balance of cash and cash 15,814,304.99 15,177,305.48 equivalents at the period -end 6. Cash Flow Statement of Parent Company In RMB Item Current Period Last Period 45 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 I. Cash flows arising from operating activities: Cash received from selling commodities and providing labor 6,974.00 services Write-back of tax received 5,306.26 Other cash received concerning 1,963,467.24 4,981,778.23 operating activities Subtotal of cash inflow arising from 1,975,747.50 4,981,778.23 operating activities Cash paid for purchasing commodities and receiving labor 17,278.04 service Cash paid to/for staff and workers 1,237,282.20 1,439,294.18 Taxes paid 733,058.03 186,158.39 Other cash paid concerning 4,794,142.84 3,108,206.34 operating activities Subtotal of cash outflow arising from 6,781,761.11 4,733,658.91 operating activities Net cash flows arising from operating -4,806,013.61 248,119.32 activities II. Cash flows arising from investing activities: Cash received from recovering investment Cash received from investment income Net cash received from disposal of fixed, intangible and other long-term assets Net cash received from disposal of subsidiaries and other units Other cash received concerning investing activities Subtotal of cash inflow from investing activities Cash paid for purchasing fixed, intangible and other long-term assets 46 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Cash paid for investment Net cash received from subsidiaries and other units Other cash paid concerning investing activities Subtotal of cash outflow from investing activities Net cash flows arising from investing activities III. Cash flows arising from financing activities Cash received from absorbing investment Cash received from loans Cash received from issuing bonds Other cash received concerning financing activities Subtotal of cash inflow from financing activities Cash paid for settling debts Cash paid for dividend and profit distributing or interest paying Other cash paid concerning financing activities Subtotal of cash outflow from financing activities Net cash flows arising from financing activities IV. Influence on cash and cash equivalents due to fluctuation in exchange rate V. Net increase of cash and cash -4,806,013.61 248,119.32 equivalents Add: Balance of cash and cash 15,398,405.80 1,143,418.29 equivalents at the period -begin VI. Balance of cash and cash 10,592,392.19 1,391,537.61 equivalents at the period -end 47 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 7. Statement of Changes in Owners’ Equity (Consolidated) This Period In RMB This Period Owners’ equity attributable to parent company Other equity instrument Item Less: Other Provisio Minorit Total Perpet Reason Share Capital Invento compre Surplus n of Retaine y owners’ ual able capital Prefer capita reserve ry hensive reserve general d profit interests equity red Other reserve l shares income risk stock securi ties 551,34 -1,195,9 I. Balance at the 627,834 32,673, 2,962,6 18,860, 7,947. 57,201. end of the last year ,297.85 227.01 99.67 970.52 00 01 Add: Changes of accounting policy Error correction of the last period Enterprise combine under the same control Other II. Balance at the 551,34 -1,195,9 627,834 32,673, 2,962,6 18,860, beginning of this 7,947. 57,201. ,297.85 227.01 99.67 970.52 year 00 01 III. Increase/ Decrease in this 554,162 -62,245. 491,916 year (Decrease is .06 65 .41 listed with “-”) (i) Total 554,162 -62,245. 491,916 comprehensive .06 65 .41 income (ii) Owners’ devoted and decreased capital 1.Common shares invested by shareholders 2. Capital invested by holders of other equity instruments 3. Amount reckoned into 48 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 owners equity with share-based payment 4. Other (III) Profit distribution 1. Withdrawal of surplus reserves 2. Withdrawal of general risk provisions 3. Distribution for owners (or shareholders) 4. Other (IV) Carrying forward internal owners’ equity 1. Capital reserves conversed to capital (share capital) 2. Surplus reserves conversed to capital (share capital) 3. Remedying loss with surplus reserve 4. Other (V) Reasonable reserve 1. Withdrawal in the report period 2. Usage in the report period (VI)Others IV. Balance at the 551,34 -1,195,4 627,834 32,673, 2,900,4 19,352, end of the report 7,947. 03,038. ,297.85 227.01 54.02 886.93 period 00 95 Last Period In RMB Last Period Owners’ equity attributable to parent company Minorit Item Total y Other Capital Less: Other Reason Surplus Provisio Retaine interest owners’ Share equity equity instrument reserve Invento compre able reserve n of d profit s 49 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 capital Perpet ry hensive reserve general ual shares income risk Prefer capita red Other l stock securi ties 551,34 -1,197,4 I. Balance at the 627,834 32,673, 2,913,1 17,281, 7,947. 86,788. end of the last year ,297.85 227.01 27.47 811.05 00 28 Add: Changes of accounting policy Error correction of the last period Enterprise combine under the same control Other II. Balance at the 551,34 -1,197,4 627,834 32,673, 2,913,1 17,281, beginning of this 7,947. 86,788. ,297.85 227.01 27.47 811.05 year 00 28 III. Increase/ Decrease in this 1,529,5 49,572. 1,579,1 year (Decrease is 87.27 20 59.47 listed with “-”) (i) Total 1,529,5 49,572. 1,579,1 comprehensive 87.27 20 59.47 income (ii) Owners’ devoted and decreased capital 1.Common shares invested by shareholders 2. Capital invested by holders of other equity instruments 3. Amount reckoned into owners equity with share-based payment 4. Other (III) Profit distribution 1. Withdrawal of surplus reserves 2. Withdrawal of general risk 50 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 provisions 3. Distribution for owners (or shareholders) 4. Other (IV) Carrying forward internal owners’ equity 1. Capital reserves conversed to capital (share capital) 2. Surplus reserves conversed to capital (share capital) 3. Remedying loss with surplus reserve 4. Other (V) Reasonable reserve 1. Withdrawal in the report period 2. Usage in the report period (VI)Others IV. Balance at the 551,34 -1,195,9 627,834 32,673, 2,962,6 18,860, end of the report 7,947. 57,201. ,297.85 227.01 99.67 970.52 period 00 01 8. Statement of Changes in Owners’ Equity (Parent Company) This Period In RMB This Period Other equity instrument Other Total Item Share Perpetu Less: Retaine Capital comprehe Reasonab Surplus al Inventory owners’ capital Preferre reserve nsive le reserve reserve d profit capital Other shares equity d stock income securiti es I. Balance at the 551,347, 627,834,2 32,673,22 -1,202,8 8,995,684 end of the last year 947.00 97.85 7.01 59,787. .68 51 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 18 Add: Changes of accounting policy Error correction of the last period Other II. Balance at the -1,202,8 551,347, 627,834,2 32,673,22 8,995,684 beginning of this 59,787. 947.00 97.85 7.01 .68 year 18 III. Increase/ Decrease in this 699,401 699,401.9 year (Decrease is .93 3 listed with “-”) (i) Total 699,401 699,401.9 comprehensive .93 3 income (ii) Owners’ devoted and decreased capital 1.Common shares invested by shareholders 2. Capital invested by holders of other equity instruments 3. Amount reckoned into owners equity with share-based payment 4. Other (III) Profit distribution 1. Withdrawal of surplus reserves 2. Distribution for owners (or shareholders) 3. Other (IV) Carrying forward internal owners’ equity 1. Capital reserves conversed to capital (share capital) 52 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 2. Surplus reserves conversed to capital (share capital) 3. Remedying loss with surplus reserve 4. Other (V) Reasonable reserve 1. Withdrawal in the report period 2. Usage in the report period (VI)Others IV. Balance at the 551,347, -1,202,1 627,834,2 32,673,22 9,695,086 end of the report 60,385. 947.00 97.85 7.01 .61 period 25 Last period In RMB Last period Other equity instrument Other Total Item Perpetu Less: Share Capital comprehe Reasonab Surplus Retaine al Inventory owners’ capital Preferre reserve nsive le reserve reserve d profit capital Other shares equity d stock income securiti es -1,204,2 I. Balance at the 551,347, 627,834,2 32,673,22 7,581,765 73,705. end of the last year 947.00 97.85 7.01 .88 98 Add: Changes of accounting policy Error correction of the last period Other II. Balance at the -1,204,2 551,347, 627,834,2 32,673,22 7,581,765 beginning of this 73,705. 947.00 97.85 7.01 .88 year 98 III. Increase/ 1,413,9 1,413,918 Decrease in this 18.80 .80 year (Decrease is 53 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 listed with “-”) (i) Total 1,413,9 1,413,918 comprehensive 18.80 .80 income (ii) Owners’ devoted and decreased capital 1.Common shares invested by shareholders 2. Capital invested by holders of other equity instruments 3. Amount reckoned into owners equity with share-based payment 4. Other (III) Profit distribution 1. Withdrawal of surplus reserves 2. Distribution for owners (or shareholders) 3. Other (IV) Carrying forward internal owners’ equity 1. Capital reserves conversed to capital (share capital) 2. Surplus reserves conversed to capital (share capital) 3. Remedying loss with surplus reserve 4. Other (V) Reasonable reserve 1. Withdrawal in the report period 2. Usage in the report period 54 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 (VI)Others IV. Balance at the 551,347, -1,202,8 627,834,2 32,673,22 8,995,684 end of the report 59,787. 947.00 97.85 7.01 .68 period 18 III. Company Profile 1. History and basic information According to the Approval Document SFBF (1991) No. 888 issued by the People’s Government of Shenzhen, Shenzhen China Bicycle Company (Holdings) Limited (hereinafter referred to as the Company) was reincorporated as the company limited by shares in November 1991. On 28 December 1991, upon the Approval Document SRYFZ(1991) No. 119 issued by Shenzhen Special Economic Zone Branch of the People’s Bank of China, the Company got listed on Shenzhen Stock Exchange. Registered capital of the Company amounted as 551,347,947.00 Yuan. Legal representative: Li Hai Location: No. 3008, Buxin Road, Luohu District, Shenzhen Certificate for Uniform Social Credit Code: 914403006188304524 2. Business nature and main operation activities The Company's industry: machinery manufacturing industry Main operation activities: The production and assembly of various bicycles and spare parts, components, parts, mechanical product, sport machinery, fine chemicals, carbon fiber composites material, household electrical appliance and affiliated components (products management by license excluded). The majority of its products were previously exported, however, the sales volume sharply declined in recent years because of the antidumping litigation. Hence, the Company commences on the debt reorganization and the reorganization plan was completed on 27 December 2013 with bankruptcy proceedings terminated. Meanwhile, makes greater efforts to develop and research the new products, and creates a range of electrical bicycles to occupy the domestic market. Main products and services provided so far: EMMELLE bicycles, electrical bicycles and lithium battery material 3. Release of the financial report The Financial Report released on 21 August 2018 after approved by 8th session of 10th BOD of the Company One subsidairy included in consolidate scope in the period, and no changes in the period, found more in Note VIII and IX 55 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 IV. Compilation Basis of Financial Statement 1. Compilation Basis The financial statement is prepared based on continuing operation assumptions, and according to actual occurrence, in line with relevant accounting rules and follow important accounting policy and estimation. 2. Going concern On 11 May 2012, the largest shareholder and biggest creditor of the Company, Shenzhen Guosheng Energy Investment Development Co., Ltd. applied to Shenzhen Municipal Intermediate People's Court for reforming the Company as the Company couldn’t pay off the matured debts and was seriously insolvent. On 12 October 2012, Shenzhen Municipal Intermediate People's Court ruled to accept the application proposed by Guosheng Energy according to (2012) Shenzhen Intermediate Court Po Zi No. 30 civil ruling. On the last ten-day of October 2012, Shenzhen Municipal Intermediate People's Court ruled to reform the Company since 25 October 2012 according to (2012) Shenzhen Intermediate Court Po Zi No. 30-1 civil ruling, appointed King & Wood (Shenzhen) Mallesons and Shenzhen ZhengYuan Liquidation Affairs Co., Ltd. as the custodians of the Company. On the same day, Shenzhen Municipal Intermediate People's Court made (2012) Shenzhen Intermediate Court Po Zi No. 30-1 written decision, and approved the Company to manage property and business affairs by itself under the supervision of custodians according to the law. On 5 November 2013, the Shenzhen Intermediate People’s Court (2012) Shen Zhong Fa Po Zi No. 30-6 Civil Ruling Paper judged that approved the reorganization plan of the Company. On 27 December 2013, the Civil Ruling Paper Shenzhen Intermediate People’s Court (2012) Shen Zhong Fa Po Zi No. 30-10 ruled that the reorganization plan of CBC was completed and bankruptcy procedures of the Company closed down. The Company has solved the debt problem by reforming, realized the net assets with positive value, the main business of bicycle is able to be maintained and realizes the stable development. The Company has set up the conditions for introducing the recombination party in the reforming plan, and expects to restore the abilities of sustainable operation and sustained profitability by reorganization. The conditions of introducing the recombination party includes: the assessed value of net assets should be no less than 2 billion Yuan, the net assets in the same year for implementing the major reorganization should be no less than 200 million Yuan. The Company doesn’t have the recombination party at the moment. V. Main accounting policy and Accounting Estimate Tips for specific accounting policy and estimate: Nil 56 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 1. Declaration on compliance with accounting standards The financial statement prepared by the Company, based on follow compilation basis, is comply with the requirement of new accounting standards for business enterprise issued by Ministry of Finance and its application guide, commentate as well as other regulations (collectively referred to as Accounting Standards for Business Enterprise), which is reflect a real and truth financial status of the Company, as well as operation results and cash flow situations. Furthermore, the statement has reference to the listing and disclosure requirement from “Rules Governing the Disclosure of Information for Enterprise with Stock Listed No.15-general regulation of financial report” (2014 Revised) (hereinafter referred to as NO. 15 (2014 Revised) document) 2. Accounting period Calendar year is the accounting period for the Company, which is starting from 1 January to 31 December. 3. Business cycles The business period for the Company, which is the Gregorian calendar starting from 1 January to 31 December 4. Recording currency The Company and its subsidiaries take RMB as the standard currency for bookkeeping. 5. Accounting treatment for business combinations under the same control and those not under the same control ①The business combination under the same control For a business merger that is under the same control and is achieved by the Company through one single transaction or multiple transactions, assets and liabilities obtained from that business combination shall be measured at their book value at the combination date as recorded by the party being absorbed in the consolidated financial statement of ultimate controlling party. Capital reserve shall be adjusted as per the difference between the book value of obtained net assets and the book value of paid consolidated consideration (or the nominal value of the issued shares) of the Company; retained earnings shall be adjusted if the capital reserve is not sufficient for offset. The asset or liability items of consolidated party are measured at their carrying value in the consolidated balance sheet as of the consolidation date. Consolidated Profit and Loss include all items of income, expenditures and profit from beginning till end of the period of the consolidated party(ies). Net profit made by the consolidated company should be listed exclusively in the consolidated Profit and Loss. Cash flows from beginning till end of the period of all consolidated parties are taken into the consolidated Cash Flow. 57 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 ②The business combinations not involving enterprises under common control The Company will validate the difference that the combined cost is more than the fair value of the net identifiable assets gained from the acquiree on the acquisition date as goodwill; where the combined cost is less than the fair value of net identifiable assets gained from the acquiree during business combination, the fair value and combined cost of various identifiable assets, liabilities and contingent liabilities from the acquiree must be rechecked. Where the combined cost is, after the recheck, still less than the fair value of net identifiable assets gained from the acquiree during business combination, the difference shall be charged to current profits and losses. As for business combination not under common control and realized through multiple transactions and by steps, the Company shall make accounting treatment as follows: A. Adjust the initial investment cost of long-term equity investments. As for stock equities held before the acquisition date accounted according to the equity method, re-measurement is carried out according to the fair value of the equity on the acquisition date. The balance between the fair value and the book value is included in the current investment income. If the acquiree’s stock equities held before the acquisition date involves changes of other comprehensive incomes and other owner's equities under accounting with the equity method, the balance between the fair value and the book value is included in the current investment income on the acquisition date, excluding other comprehensive incomes incurred by changes due to re-measurement of net liabilities or net assets of the defined benefit plan. B. Confirm the goodwill (or include the amount in the profits and losses). The initial investment cost of long-term equity investments adjusted in step 1 is compared with the fair value of net identifiable assets of the subsidiary shared on the acquisition date. If the former is greater than the latter, the balance is confirmed as goodwill; if the former is less than the latter, the balance is included in the current profits and losses. (2)Loss of control of a subsidiary in multiple transactions in which it disposes equity interests of its subsidiary in stages ①In determining whether to account for the multiple transactions as a single transaction A parent shall consider all the terms and conditions of the transactions and their economic effects. One or more of the following may indicate that the parent should account for the multiple arrangements as a single transaction: A. Arrangements are entered into at the same time or in contemplation of each other; B. Arrangements work together to achieve an overall commercial effect; C. The occurrence of one arrangement is dependent on the occurrence of at least one other arrangement; D. One arrangement considered on its own is not economically justified, but it is economically justified when considered together with other arrangements. ②Accounting treatment for each of the multiple transactions forming part of a bundled transactions which eventually results in loss of control the subsidiary during disposal of its subsidiary in stages 58 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 If each of the multiple transactions forms part of a bundled transactions which eventually results in loss of control the subsidiary, these multiple transactions should be accounted for as a single transaction. In the consolidated financial statements, the difference between the consideration received and the corresponding percentage of the subsidiary’s net assets in each transaction prior to the loss of control shall be recognized in other comprehensive income and transferred to the profit or loss when the parent eventually loses control of the subsidiary. The remaining equity investment shall be re-measured at its fair value in the consolidated financial statements at the date when control is lost. The difference between the total amount of consideration received from the transaction that resulted in the loss of control and the fair value of the remaining equity investment and the share of net assets of the former subsidiary calculated continuously from the acquisition date or combination date based on the previous shareholding proportion, shall be recognized as investment income for the current period when control is lost. The amount previously recognized in other comprehensive income in relation to the former subsidiary’s equity investment should be transferred to investment income for the current period when control is lost ③Accounting treatment for each of the multiple transactions NOT forming part of a bundled transactions which eventually results in loss of control the subsidiary during disposal of its subsidiary in stages If the Company doesn't lose control of investee, the difference between the amount of the consideration received and the corresponding portion of net assets of the subsidiary shall be adjusted to the capital reserve (capital premium) in the consolidated financial statements. If the Company loses control of investee, the remaining equity investment shall be re-measured at its fair value in the consolidated financial statements at the date when control is lost. The difference between the total amount of consideration received from the transaction that resulted in the loss of control and the fair value of the remaining equity investment and the share of net assets of the former subsidiary calculated continuously from the acquisition date or combination date based on the previous shareholding percentage, shall be recognized as investment income for the current period when control is lost. The amount previously recognized in other comprehensive income in relation to the former subsidiary’s equity investment should be transferred to investment income for the current period when control is lost. 6. Compilation method of consolidated financial statement Consolidated financial statements are prepared by the Company in accordance with Accounting Standard for Business Enterprise No. 33-Consolidated Financial Statements and based on financial statements of parent company and its subsidiaries and other related information. When consolidating the financial statements, the following items are eliminated: internal equity investment and owners’ equity of subsidiaries, proceeds on internal investments and profit distribution of subsidiaries, internal transactions, internal debts and claim. The accounting policies adopted by subsidiaries are the same as parent company. 59 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 7. Classification of joint venture arrangement and accounting treatment for joint control (1) Affirmation and classification of joint venture arrangement Joint arrangement refers to an arrangement controlled by two or more than two participants. Joint venture arrangement has the following characteristics: 1) Each participant is bound by the arrangement; 2) Two or more participants carry out joint control on implementation of the arrangement. Any participant cannot control the arrangement independently. Any participant for joint control can stop other participants or participant combinations to independently control the arrangement. Joint control refers to the sharing of control over certain arrangement under related agreements, and related activities of the arrangement must be determined only when obtaining the unanimous consent of the parties sharing control. Joint venture arrangement is classified in to joint operation and joint venture. Joint operation refers to an arrangement that a joint party enjoys assets related to the arrangement and bears liabilities related to the arrangement. Joint venture refers to an arrangement that a joint party only has the power governing net assets of the arrangement. (2) Accounting treatment of joint venture arrangement Joint venture participants should confirm the following items related to interest shares in joint venture and carry out accounting settlement according to relevant provisions of the Accounting Standards for Business Enterprises: 1) confirm the assets held separately and confirm the assets held jointly based on shares; 2) confirm the liabilities borne separately and confirm the liabilities borne jointly based on shares; 3) confirm the income incurred after selling its shares in joint venture output; 4) confirm the income after selling the joint venture outputs based on shares; 5) confirm the expenses incurred separately and confirm the expenses incurred in joint venture based on shares. Joint venture participants should carry out accounting settlement for investments of the joint venture according to provisions of Accounting Standards for Business Enterprises No.2–Long-term Equity Investments. 8. Recognition of cash and cash equivalents Cash in cash flow statement means the inventory cash and savings available for use anytime. Cash equivalents refer to the short-term (generally due within three months since the date of purchase) highly liquid investments that are readily convertible into known amounts of cash and that are subject to an insignificant risk of change in value. 60 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 9. Foreign currency transaction and financial statement conversion (1)Conversion for foreign currency transaction When initially recognized, the foreign currency for the transaction shall be converted into CNY amount according to the spot exchange rate on the date of transaction. For the foreign currency monetary items, conversion must be based on the spot exchange rate on the balance sheet date and the exchange difference incurred from different exchange rates, except for the exchange difference of principal and interest incurred due to foreign currency loan related to acquisition or construction of assets that qualify for capitalization, shall be charged to current profits and losses; foreign currency non-monetary items measured with historical cost are still converted as per the spot exchange rate on the transaction date and keep the RMB amount unchanged; foreign currency non-monetary items measured with fair value shall be converted as per the spot exchange rate on the date of determining the fair value and the difference shall be charged to current profits and losses or other comprehensive income. (2)Conversion of financial statements presented in foreign currencies The asset and liability items in the balance sheet shall be converted at the spot exchange rate on the balance sheet date; the owner’s equity items, except for the items of “undistributed profit”, shall be converted at the spot exchange rate on the transaction date; the income and expenditure items in the profit statement shall be converted at the spot exchange rate on the transaction date. The translation difference of foreign financial statements conducted as above is recognized as other comprehensive incomes. 10. Financial instruments (1) Classification of financial instruments Financial assets can be divided into four types while initially recognized: financial assets at fair value through profit or loss (including transactional financial assets and those financial assets designated as at fair value through profit or loss), held-to-maturity investments; loans & receivables; available-for-sale financial assets. Financial liability can be divided into two types while initially recognized: financial liability at fair value through profit or loss (including transactional financial liability and those financial liabilities designated as at fair value through profit or loss) and other financial liability (2)Recognition, measurement and derecognition of financial assets and financial liabilities Financial assets or financial liabilities are recognized when the Group becomes a party to the contractual provisions of the instrument. Financial assets or financial liabilities are initially measured at fair value. For financial assets and financial liabilities at fair value through profit or loss, transaction costs are immediately recognized to profit or loss. For other financial assets or financial liabilities, transaction costs are included in their initial recognized amounts. Financial assets are subsequently measured at fair value without considering of the possible transaction costs upon 61 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 the disposal thereof in the future, except that: (1) Held-to-maturity investments and loans and receivables are subsequently measured at amortized cost using the effective interest method; and (2) Investments in equity instruments that do not have a quoted price in an active market and whose fair value cannot be reliably measured, and derivative financial assets that are linked to and must be settled by delivery of such unquoted equity instruments, they are measured at cost. Financial liabilities are subsequently measured at amortized cost using the effective interest method, except that: (1) Financial liabilities at fair value through profit are subsequently measured at fair value without considering of the possible transaction costs upon the settlement thereof in the future; (2) Derivative financial liabilities that are linked to and must be settled by delivery of an unquoted equity instrument without a quoted price in an active market whose fair value cannot be reliably measured, they are subsequently measured at cost; and (3) Financial guarantee contracts that are not designated as financial liabilities at fair value through profit or loss, or loan commitments to provide a loan at a below-market interest rate, which are not designated at fair value through profit or loss, subsequent to initial recognition, they are measured at the higher of: (1) the amount determined in accordance with ASBE No. 13 “Contingencies”; and (2) the amount initially recognized less cumulative amortization recognized in accordance with the principles set out in ASBE No. 14 “Revenue”. Any gains or losses arising from changes in the fair value on financial assets or financial liabilities, other than those hedging instrument, are accounted for as follows: (1) Gains or losses arising from the change in fair value on financial assets or financial liabilities at fair value through profit or loss are recorded as gains or losses from change in fair value; Any interest or dividend income earned during the holding on such financial assets are recognized to profit or loss. On disposal, the differences between the consideration received and initial recognized amount are recognized as investment income and adjust to the gains or losses from change in fair value accordingly; and (2) Changes in fair value of available-for-sale financial assets are recorded in the other comprehensive income. Interest calculated using the effective interest method for the periods, in which the assets are held, are recognized as investment income. Cash dividends from available-for-sale equity investments are recognized as investment income when the dividends are declared by the investee. On disposal, the differences between the considerations received and the carrying amounts of financial assets after deducting the accumulated fair values adjustments previously recorded in the other comprehensive income are recognized as investment income. A financial asset is derecognized when the contractual rights to the cash flows from the financial asset terminate, or when it transfers substantially all the risks and rewards of ownership of the asset to another entity. A financial liability (or part of it) is derecognized only when the underlying present obligations (or part of it) are discharged. (3)Recognition and measurement on transfer of financial assets If the Group has transferred substantially all the risks and rewards of ownership of the financial asset to the transferee, the financial asset should be derecognized; If the Group retains substantially all the risks and rewards 62 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 of ownership of a financial asset, the transferred financial asset should be recognized and the consideration received should be recognized as a financial liability; If the Group neither transfers nor retains substantially all the risks and rewards of ownership of a financial asset, it shall be accounted for as follows: (1)the financial asset should be derecognized if the Group waives control over the asset; (2)it recognizes the financial asset to the extent of its continuing involvement in the transferred financial asset and recognizes an associated liability if the Group does not waives control over the asset. For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, the difference of the following is recognized to profit or loss: (1) The carrying amount of the financial asset transferred; and (2) The sum of the consideration received from the transfer and any cumulative change of fair value that has been previously recognized in other comprehensive income directly. If a part of the transferred financial asset qualifies for derecognition, the carrying amount of the transferred financial asset is allocated between the part that continues to be recognized and the part that is derecognized, based on the respective fair values of those parts. The difference of the following is recognized to profit or loss: (i) The carrying amount allocated to the part derecognized; and (ii) The sum of the consideration received for the part derecognized and any cumulative change of fair value allocated to the part derecognized which has been previously recognized in other comprehensive income directly. (4)Determination of fair value of financial assets and financial liabilities For a financial asset or financial liability which has an active market, the Group considers the quoted price in the active market to determine its fair value. For a financial assets or financial liability which has no active market, the Group uses a valuation technique (valuation techniques include using recent arm’s length market transactions between knowledgeable, willing parties, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models) to determine its fair value. For a financial asset acquired or a financial liability assumed initially, its fair value is based on the price of market transactions. (5) Provision for impairment on financial assets other than account receivables At each balance sheet date, the Group assesses the carrying amounts of its financial assets other than those financial assets at fair value through profit or loss. If there is objective evidence that a financial asset is impaired, the Group determines the amount of any impairment loss. For a financial asset that is individually significant, the Company assesses the asset individually for impairment. For a financial asset that is not individually significant, the Company assesses the asset individually for impairment or includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. If the Company determines that no objective evidence of impairment exists for an individually assessed financial asset (whether significant or not), it includes the asset in a group of 63 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 financial assets with similar credit risk characteristics and collectively reassesses them for impairment. At the end of the reporting period, if there is objective evidence that an impairment loss on a financial asset carried at amortized cost has occurred, an impairment loss is recognized as the excess of the carrying amount of the financial asset over its present value of estimated future cash flows to profit or loss. If an impairment loss has been incurred on an investment in unquoted equity instrument without a quoted price in an active market whose fair value cannot be reliably measured, or on a derivative financial asset that is linked to and must be settled by delivery of such equity instrument, an impairment loss is recognized as the excess of the carrying amount of the unquoted equity investment or a derivative financial asset over its present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset to profit or loss. An impairment is recognized where there is a significant decrease in the fair value of available for sale financial assets, or taken into account all factors, the decrease trend is not temporary to profit or loss. The cumulative loss arising from decline in fair value previously recognized directly in the other comprehensive income is reclassified from the capital reserve to profit or loss. (6)There is no reclassification of held-to-maturity investment which is not due into financial assets available for sale during the period. 11. Account receivable (1) Account receivable with single significant amount and withdrawal single item bad debt provision Account with single significant amount Over RMB 5 million Conducted impairment testing separately, balance between the present value of future cash flow and its carrying value, bad debt Withdrawal method for bad debt provision of account receivable provision withdrawal and reckoned into current gains/losses. For with single significant amount those without impairment being found after test, collected into relevant combination for accrual. (2) Accounts receivable whose bad debts provision was accrued by combination based on credit risk characteristics portfolio Combination Bad debt provision accrual Bad debt provision of receivables Age analysis method Accrual bad debt provision by age analysis in combination: √ Applicable □ Not applicable Age Accrual ratio Accrual ratio for other receivable Within one year (one year included) 0.30% 0.30% 1-2 years 0.30% 0.30% 64 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 2-3 years 0.30% 0.30% Over 3 years 100.00% 100.00% In combination, withdrawal proportion of bad debt provision based on balance proportion □ Applicable √ Not applicable In combination, withdrawal proportion of bad debt provision based on other methods: □ Applicable √ Not applicable (3) Account receivable with minor single amount but with withdrawal bad debt provision for single item If any objective evidence shows that it may has impaired, such as the debtor revoke, bankruptcy or death, and after liquidate with Reasons for provision of bad debt reserve bankrupt’s estates or heritage, the money still un-collectable, and in sufficient of cash flow As for the receivable with objective evidence shows that it might Provision method of bad debt reserve be impaired, an independent impairment test may be carried out for impairment losses recognized 12. Inventory Whether the company needs to comply with the disclosure requirements of the particular industry No (1) Classification of inventory The inventory of the Company refers to such seven classifications as the raw materials, product in process, goods on hand, wrap page, low value consumables, materials for consigned processing and goods sold. (2) Valuation of inventories Inventories are initially measured at cost upon acquisition, which includes procurement costs, processing costs and other costs. The prices of inventories are calculated using weighted average method when they are delivered. (3) Provision for inventory impairment When a comprehensive count of inventories is done at the end of the period, provision for inventory impairment is allocated or adjusted using the lower of the cost of inventory and the net realizable value. The net realizable value of stock in inventory (including finished products, inventory merchandize and materials for sale) that can be sold directly is determined using the estimated saleable price of such inventory deducted by the cost of sales and relevant taxation over the course of ordinary production and operation. The net realizable value of material in inventory that requires processing is determined using the estimated saleable price of the finished product deducted by the cost to completion, estimated cost of sales and relevant taxation over the course of ordinary production and operation. The net realizable value of inventory held for performance of sales contract or labor service contract is determined based on the contractual price; in case the amount of inventory held exceeds the 65 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 contractual amount, the net realizable value of the excess portion of inventory is calculated using the normal saleable price. Provision for impairment is made according to individual items of inventories at the end of the period; however, for inventories with large quantity and low unit price, the provision is made by categories; inventories of products that are produced and sold in the same region or with the same or similar purpose or usage and are difficult to be measured separately are combined for provision for impairment. If the factors causing a previous write-off of inventory value has disappeared, the amount written-off is reversed and the amount provided for inventory impairment is reversed and recognized in profit or loss for the period. (4)Inventory system Perpetual inventory system is adopted. 13. Assets held for sale The Company classifies such corporate components (or non-current assets) that meet the following criteria as held-for-sale: (1) Disposable immediately under current conditions based on similar transactions for disposals of such assets or practices for the disposal group; (2) Probable disposal; that is, a decision has been made on a plan for disposal and an undertaking to purchase has been obtained (the undertaking to purchase means a binding purchase agreement entered into by the Company and other parties, which contains transaction price, time and adequately strict punishments for breach of contract provisions, which renders the possibility of material adjustment or revocation of the agreement is extremely minor), and the disposal is expected to be completed within a year. Besides, approval from relevant competent authorities or regulatory authorities has been obtained as required by relevant rules. The expected net residual value of asset held for sale is adjusted by the Company to reflect its fair value less selling expense, provided that the net amount shall not exceed the original carrying value of the asset. In case that the original value is higher than the adjusted expected net residual value, the difference shall be recorded in profit or loss for the period as asset impairment loss, and allowance of impairment for the asset shall be provided. Impairment loss recognized in respect of the disposal group held for sale shall be used to offset the carrying value of the goodwill in the disposal group, and then offset the carrying value of the non-current assets within the disposal group based on their respective proportion of their carrying value. In respect of the non-current assets held for sale, if the net amount after their fair value less the selling expenses increased as at the subsequent balance date, the reduced amount before will be recovered and reversed in the assets impairment loss amount recognized after being classified as held for sale, and the reversed amount will be recorded in the current profits or loss. The impairment loss on assets recognized before being classified as held for sale will not be reversed. In respect of the disposal group held for sale, if the net amount after their fair value less the selling expenses increased as at the subsequent balance date, the reduced amount before will be recovered and reversed in the assets impairment loss amount recognized in non-current assets after being classified as held for 66 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 sale, and the reversed amount will be recorded in the current profits or loss. The reduced book value of the goodwill as well as the impairment loss on assets recognized before the non-current assets are classified as held for sale will not be reversed. The subsequent reversed amount in respect of the impairment loss on assets recognized in the disposal group held for sale will increase the book value in proportion of the book value of each non-current assets (other than goodwill) in the disposal group. In respect of loss of control in a subsidiary arising from disposal of the investment in such subsidiary, the investment in a subsidiary shall be classified as held for sale in its entirety in the individual financial statement of the parent company, and all the assets and liabilities of the subsidiary shall be classified as held for sale in the consolidated financial statement subject to that the proposed disposal of investment in the subsidiary satisfies such conditions as required for being classified as held for sale notwithstanding part equity investment will be retained by the Company after such disposal. 14. Long-term equity investments (1)Determination of investment costs 1) If it is formed by the business combination under the common control, and that the combining party takes cash payment, transfer of non-cash assets, assumption of debts or issuance of equity securities as the consolidation consideration, the shares of the book value of the owner’s equity obtained from the combined party on the date of combination in the ultimate controlling party’s consolidated financial statements shall be recognized as its initial investment cost. Capital reserves shall be adjusted according to the balance between the initial investment cost for long-term equity investment and the book value of paid consolidation consideration or the total face value of issued shares (capital premium or equity premium). If capital reserves are insufficient for offset, retained earnings shall be adjusted. As for business combination under the common control realized by the Company through several transactions, the initial investment cost of the investment shall be determined based on the share of the carrying value of the owners’ equity of the consolidated party as calculated according to the shareholding proportion on the consolidation date. Difference between initial investment cost and the carrying value of long-term equity investment before combination and the sum of carrying value of newly paid consideration for additional shares acquired on the date of combination is to adjust capital reserve (capital premium or equity premium). If the balance of capital reserve is insufficient, any excess is adjusted to retained earnings. 2) As for long-term equity investment formed from business combination not under common control, the fair value of the consolidated consideration paid shall be deemed as the initial investment cost on the acquisition date. 3) Except those ones formed by the business combination, for all items obtained by means of cash payment, actually paid acquisition costs shall be taken as the initial investment cost. For those ones obtained by the issuance of equity securities, the fair value of the issued equity securities shall be taken as the initial investment cost. For those ones invested by investors, the value agreed in the investment contract or agreement shall be taken as the 67 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 initial investment cost, provided that the value agreed in the contract or agreement shall be fair. (2)Subsequent measurement and profit or loss recognition For a long-term equity investment where the Company can exercise control over the investee, the long-term investment is accounted for using the cost method in the Company’s financial statements. The equity method is adopted when the Group has joint control, or exercises significant influence on the investee. Under cost method, long term equity investment is measured at initial investment cost. Except for the price actually paid for obtaining the investment or the cash dividends or profits declared but not yet distributed which is included in the consideration, the Company recognizes cash dividends or profits declared by the investee as current investment gains, and determine whether there is impairment on long term investment according to relevant assets impairment policies. Under equity method, when the initial investment cost of the long-term equity investment exceeds the share of fair value in the net identifiable assets in the investee, the difference shall be included in initial investment cost of the long-term equity investment. When the initial investment cost is lower than the share of fair value in the net identifiable asset in the investee, such difference is recognized in profit or loss for the period with adjustment of cost of the long-term equity investment. Under equity method, after the Company acquires a long-term equity investment, it shall, in accordance with its attributable share of the net profit or loss realized by the investee, recognize the investment profit or loss and adjust carrying value of the investment. The Group recognizes its share of the investee’s net profits or losses after making appropriate adjustments to the investee’s net profits and losses based on the fair value of the investee’s identifiable assets at the acquisition date, using the Group’s accounting policies and periods, and eliminating the portion of the profits or losses arising from internal transactions with its joint ventures and associates, attributable to the investing entity according to its shareholding proportion (but impairment losses for assets arising from internal transactions shall be recognized in full). The carrying amount of the investment is reduced based on the Group’s share of any profit distributions or cash dividends declared by the investee. The Group’s share of net losses of the investee is recognized to the extent the carrying amount of the investment together with any long-term interests that in substance form part of its net investment in the investee is reduced to zero, except that the Group has the obligations to assume additional losses. The Group adjusts the carrying amount of the long-term equity investment for any changes in owners’ equity of the investee (other than net profits or losses) and includes the corresponding adjustments in the owners’ equity of the Group. (3) Determination of control and significant influence on investee Control is the power over an investee. An investor must have exposure or rights to variable returns from its involvement with the investee, and the ability to use its power over the investee to affect the amount of the investor’s returns. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control with other parties over those policies (4)Disposal of long-term equity investment 68 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 1) Partial disposal of long term investment in which control is retained When long term investment is been partially disposed but control is retained by the company, the difference between disposal proceeds and carrying amount of the proportion being disposed is accounted for through profit or loss. 2) Partial disposal of long term investment in which control is lost When long term investment is partially disposed and control is lost as a result, the carrying value of the long term invest on the stock right, the difference between carrying amount of the part being disposed and disposal proceeds should be recognized as profit or loss. The residual part should be treated as long term investment or other financial assets according to their carrying amount. After partial disposal, if the company is able to exert significant influence or common control over the investee, the investment should be measured according to cost method or equity method, in compliance with relevant accounting standards and regulations. (5)Impairment test and provision for impairment If there is objective evidence on the balance sheet date showing investment in subsidiaries, associates and joint ventures is impaired, provision of impairment shall be made against the difference between the carrying amount and the recoverable amount of the investment. 15. Investment property Measurement mode Measured by cost method Depreciation or amortization method (1) Investment property including land use right which has been rented out, land use right which is held for transfer upon appreciation and buildings which has been rented out. (2) Investment properties are initially measured at cost and subsequently measured as per the cost pattern, and relevant withdrawal of provision for depreciation or amortization is carried out by the same method for fixed assets and intangible assets. As of the balance sheet date, where there is any indication that an investment property experiences impairment, the relevant impairment provision shall be provided for based on the difference between the carrying value and the recoverable amount. 16. Fixed assets (1) Confirmation conditions Fixed assets refer to the tangible assets for production of products, provision of labor, lease or operation, and with a service life in excess of 1 financial year. 69 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 (2) Depreciation methods Categories Method Years of depreciation Scrap value rate Yearly depreciation rate Housing buildings Straight-line depreciation 20 10% 4.5% Machinery equipment Straight-line depreciation 10 10% 9% Office equipment Straight-line depreciation 5 10% 18% Electronic equipment Straight-line depreciation 5 10% 18% Means of transportation Straight-line depreciation 5 10% 18% Other equipment Straight-line depreciation 5 10% 18% (3) Recognization basis, valuation and depreciation method for financial lease assets Finance lease is determined when one or a combination of the following conditions are satisfied: (1) the ownership has been transferred to the lessee when the leasing term is due; (2) the lessee has the option to purchase the leasing asset at a price that is much lower than its fair value, so it can be reasonably determined that the lessee will take the option at the very beginning of the lease; (3) the leasing term accounts for most time of the useful life (ordinarily accounting for 75% or higher) even if the ownership does not transfer to the lessee; (4) the present value of the minimum amount of rent that the lessee has to pay at the first day of the lease amounts to 90% or higher of its fair value at the same date; or the present value of the minimum amount of rent that the lessor collects at the first day of the lease amounts to 90% or higher of its fair value at the same date; and/or (5) the leased assets are of such a specialized nature that only the lessee can use them without major modifications. Fixed assets rented-in under finance lease are recorded at the lower of fair value and the present value of the minimum lease payment at the inception of the lease, and are depreciated following the depreciation policy for self-owned fixed assets. 17. Construction in process (1)When the construction in progress has reached the intended condition for use, it will be treated as fixed assets as per the actual construction cost. If the construction in progress has reached the intended condition for use but completion accounting is not carried out, the construction in progress should be first treated as fixed assets as per the estimated value. After completion accounting is carried out, the original estimated value should be adjusted as per the actual cost, but the provision for depreciation withdrawn should not be adjusted. (2)As of the balance sheet date, where there is any indication that a construction in process experiences impairment, the relevant impairment provision shall be provided for based on the difference between the carrying value and the recoverable amount. 18. Borrowing expenses 70 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 19. Biological assets Nil 20. Oil-and-gas assets Nil 21. Intangible assets (1) Valuation method, service life and impairment test a.Intangible assets include land use right, patent right and non-patent technology, which should be initially measured at cost. b.Intangible assets with limited service life should be amortized systematically and reasonably in their service lives as per the expected form of realization economic benefits relating to the said intangible assets. If the form of realization cannot be reliably determined, the intangible assets should be amortized on a straight-line basis. c. At the balance sheet date, when there is any indication that the intangible assets with finite useful lives may be impaired, a provision for impairment loss is recognized on the excess of the carrying amounts of the assets over their recoverable amounts. Intangible assets with infinite useful lives and intangible assets not satisfying the condition for use yet are subject to impairment test each year notwithstanding whether the assets are impaired. (2)Accounting policies for expenditures for internal research and development activities Expenditures for internal research and development activities are expensed in the period as incurred. The expenses of internal research and development projects during the development stage are recognized as intangible assets when all of the following conditions are satisfied: (1) The completion of such intangible assets for use or sale is technically feasible; (2) The Company has the intention to use or sell the intangible assets upon completion; (3) The way in which the intangible assets bring economic benefits shows that there exists consumption market for the products with use of these intangible assets or the intangible assets themselves, or that they are useful in case of internal utilization; (4) The Company has sufficient technological, financial and other resources to complete the development of the intangible assets and the ability to make them available for use or sale; (5) The expenses attributable to such intangible assets can be measured reliably at the development stage. 71 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 22. Impairment of long-term assets 23. Long-term deferred expenses 23. Long-term prepaid expenses Long-term prepaid expenses are recorded with actual cost, and evenly amortized within its beneficiary period or stipulated period. If items of long-term prepaid expenses fail to be beneficial to the following accounting periods, residual values of such items are included in profit or loss. 24. Employee compensation (1) Accounting treatment for short-term compensation During the accounting period when staff providing service to the Company, the actual short-term compensation occurred shall recognized as liabilities and reckoned into current gains/losses or relevant assets costs. The non-monetary welfare is measured by fair value. (2) Accounting treatment for post-employment benefit (3) Accounting for retirement benefits When the Company terminates the employment relationship with employees before the end of the employment contracts or provides compensation as an offer to encourage employees to accept voluntary redundancy, the Company shall recognize employee compensation liabilities arising from compensation for staff dismissal and included in profit or loss for the current period, when the Company cannot revoke unilaterally compensation for dismissal due to the cancellation of labor relationship plans and employee redundant proposals; and the Company recognize cost and expenses related to payment of compensation for dismissal and restructuring, whichever is earlier. (4) Accounting for other long-term employee benefits 25. Accrued liabilities 26. Share-based payment (1)Types of share-based payment Share-based payment comprises of equity-settled share-based payment and cash-settled share-based payment. (2)Determination of fair value of equity instruments 1)determined based on the price quoted in an active market if there exists active market for the instrument. 72 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 2)determined by adoption of valuation technology if there exists no active market, including by reference to the recent arm’s length market transactions between knowledgeable, willing parties, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models. (3)Basis for determination of the best estimate of exercisable equity instruments To be determined based on the subsequent information relating to latest change of exercisable employees. (4)Accounting relating to implementation, amendment and termination of share-based payment schemes 1)Equity-settled share-based payment For equity instruments that may be exercised immediately after the grant, the fair value of such instrument shall, on the date of the grant, be recognized in relevant costs or expenses with the increase in the capital reserve accordingly. For equity-settled share-based payment made in return for the rendering of employee services that cannot be exercised until the services are fully rendered during vesting period or specified performance targets are met, on each balance sheet date within the vesting period, the services acquired in the current period shall, based on the best estimate of the number of exercisable instruments, be recognized in relevant costs or expenses and the capital reserves at the fair value of such instruments on the date of the grant. For equity-settled share-based payment made in exchange for service from other parties, such payment shall be measured at the fair value of the service as of the acquisition date is the fair value can be measured reliably. And if the fair value of the service cannot be measured reliably while the fair value of the equity instrument can be measured reliably, it shall be measure at the fair value of the instrument as of the date on which the service is acquired, which shall be recorded in relevant cost or expense with increase in owners’ equity accordingly. 2)Cash-settled share-based payment For the cash-settled share-based payment that may be exercised immediately after the grant in exchange for render of service by employees, the fair value of the liability incurred by the Company shall, on the date of the grant, be recognized in relevant costs or expenses and the liabilities shall be increased accordingly. For cash-settled share-based payment made in return for the rendering of employee services that cannot be exercised until the services are fully provided during vesting period or specified performance targets are met, on each balance sheet date within the vesting period, the services acquired in the current period shall, based on the best estimate of the number of exercisable instruments, be recognized in relevant costs or expenses and the corresponding liabilities at the fair value of the liability incurred by the Company. 3)Revision and termination of share-based payment schemes If the revision results in an increase in the fair value of the equity instruments granted, the Company shall recognize the increase in the services rendered accordingly at the increased fair value of the equity instruments. If the revision results in an increase in the number of equity instruments granted, the Company will recognize the increase in the services rendered accordingly at the fair value of the increased number of equity instruments. If the 73 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Company revises the vesting conditions on terms favorable to the employees, the Company will take into consideration of the revised vesting conditions when dealing with the vesting conditions. If the revision results in a decrease in the fair value of the equity instruments granted, the Company shall continue recognize the amount of services rendered accordingly at the fair value of the equity instruments on the date of grant without considering the decrease in the fair value of the equity instruments. If the revision results in a decrease in the number of equity instruments granted, the Company will account for such decrease by reducing part of the cancellation of equity instruments granted. If the Company revises the vesting conditions on terms not favorable to the employees, the Company will not take into consideration of the revised vesting conditions when dealing with the vesting conditions. If the Company cancels the equity instruments granted or settles the equity instruments granted during the vesting period (other than cancellation as a result of failure to satisfy the vesting conditions), such cancellation or settlement will be treated as accelerated exercisable rights and the original amount in the remaining vesting period will be recognized immediately. 27. Other financial instruments including senior shares and perpetual bonds 28. Revenue Whether the company needs to comply with the disclosure requirements of the particular industry No (1) Goods sales Income from sale of goods is recognized when the following conditions are met: (1)the Company has transferred the key risks and return on the ownership of the merchandize to the buyer; (2)the Company has not retained continued management rights associated with ownership and no longer exercises effective control on the merchandize sold; (3)the amount of income can be reliably measured; (4)the relevant economic benefits are very likely to flow to the enterprise; (5)the costs incurred or to be incurred can be reliably measured. Timing for recognition of revenue of the Company from products sales: revenue is recognized upon delivery of products to and confirmed by purchaser with signature. (2)Rendering of services When the outcome of the transaction can be estimated reliably, revenue from rendering of services is recognized using the percentage of completion method. When the outcome of the transaction cannot be estimated reliably at the balance sheet date, revenue is recognized based on the amount of the costs incurred and the costs incurred are charged off at the same amount when the costs incurred are expected to be recoverable; and no revenue is recognized and the costs incurred are charged off as an expense of the period when the costs incurred are not expected to be recovered. (3)Transfer of asset use right revenue 74 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 When the economic benefits related to the transaction is likely to flow to the Company and the income amount can be reliably calculated, the Company shall recognize income arising from transfer of asset use right. The income of interests is determined on basis of the time and real interest rate of the Company’s cash funds which is utilized by other persons. The income of royalties is determined on basis of the chargeable time and method fixed under relevant agreement or contract. 29. Government Grants (1) Determination basis and accounting for government grants related to assets (1)government grant, if granted as monetary assets, are measured at the amount received or receivable, and measured at fair value if granted as non-monetary assets. If the fair value can not be determined reliably, they shall be measured at nominal value. (2)Aggregate method for government grants: 1)government grants relating to assets are recognized as deferred income, which shall be recorded in profit or loss by installment reasonably and systematically within the useful life of the assets. If assets are sold, transferred, discarded as useless or damaged prior to expiration of the useful life, the remaining deferred income undistributed shall be transferred to profit or loss for the period in which the assets are disposed. (3)Net method for government grants 1) Government grants relating to assets are used to write off the carrying value of the relevant assets; (4)The Company adopts aggregated accounting method for the government grants received. (5)As for the government grants comprising both portions relating to assets and income, separate accounting shall be made for different portion; in case it is hard to differentiate the portions, the grants will be recorded as related to income in general. (6)The Company realizes government grants relating to its normal activities as other income based on the substance of economic business, and if not related to its normal activities, realized as non-operating income and expenditure. (7)Subsidized loans from preferential policy obtained by the Company are classified based on whether subsidy funds are paid to the loaning bank or directly to the Company by the competent financial authorities and are treated based on the following principles: 75 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 1)Where subsidy funds are paid to the loaning bank by the competent financial authorities and the bank then provides loans to the Company at a preferential policy rate, accounting shall be made by the Company as follows: a. Recognizes the actual borrowing amount received as the carrying value of the loan, and calculates the relevant borrowing costs based on the principal and the preferential policy rate. b.Recognizes the fair value of the loan as the carrying value and calculates the borrowing cost under effective interest method, and recognizes the difference between the actual amount received and the fair value of the loan as deferred income. Deferred income is amortized over the term of the loan under effective interest method and offset against the relevant borrowing costs. 2)Where subsidy funds are paid directly to the Company, the Company will offset the corresponding subsidy against the relevant borrowing expenses. (2)Judgment criteria and accounting treatment for government grants related to income (1)government grant, if granted as monetary assets, are measured at the amount received or receivable, and measured at fair value if granted as non-monetary assets. If the fair value can not be determined reliably, they shall be measured at nominal value. (2)Aggregate method for government grants: 1) If government grants relating to income are used to compensate for relevant costs or loss for the subsequent periods, they shall be recognized as deferred income, and recorded in profit or loss for the period in which the relevant costs are recognized. If government grants relating to income are used to compensate for the relevant costs or loss occurred, they shall be recorded in profit or loss for the period directly. (3)Net method for government grants 1) If government grants relating to income are used to compensate for relevant costs or loss for the subsequent periods, they shall be recognized as deferred income, and recorded in profit or loss for the period in which offset against the relevant costs. If government grants relating to income are used to compensate for the relevant costs or loss occurred, they shall be offset against the relevant costs for the period directly. (4)The Company adopts aggregated accounting method for the government grants received. (5)As for the government grants comprising both portions relating to assets and income, separate accounting shall be made for different portion; in case it is hard to differentiate the portions, the grants will be recorded as related to income in general. (6)The Company realizes government grants relating to its normal activities as other income based on the substance of economic business, and if not related to its normal activities, realized as non-operating income and expenditure. (7)Subsidized loans from preferential policy obtained by the Company are classified based on whether subsidy funds are paid to the loaning bank or directly to the Company by the competent financial authorities and are treated based on the following principles: 1)Where subsidy funds are paid to the loaning bank by the competent financial authorities and the bank then 76 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 provides loans to the Company at a preferential policy rate, accounting shall be made by the Company as follows: a. Recognizes the actual borrowing amount received as the carrying value of the loan, and calculates the relevant borrowing costs based on the principal and the preferential policy rate. b.Recognizes the fair value of the loan as the carrying value and calculates the borrowing cost under effective interest method, and recognizes the difference between the actual amount received and the fair value of the loan as deferred income. Deferred income is amortized over the term of the loan under effective interest method and offset against the relevant borrowing costs. 2)Where subsidy funds are paid directly to the Company, the Company will offset the corresponding subsidy against the relevant borrowing expenses. 30. Deferred tax assets / deferred income tax liabilities (1) Deferred tax assets or deferred tax liabilities are calculated and recognized based on the difference between the carrying amount and tax base of assets and liabilities (and the difference of the carrying amount and tax base of items not recognized as assets and liabilities but with their tax base being able to be determined according to tax laws) and in accordance with the tax rate applicable to the period during which the assets are expected to be recovered or the liabilities are expected to be settled. (2)A deferred tax asset is recognized to the extent of the amount of the taxable income, which it is most likely to obtain and which can be deducted from the deductible temporary difference. At the balance sheet date, if there is any exact evidence that it is probable that future taxable profits will be available against which deductible temporary differences can be utilized, the deferred tax assets unrecognized in prior periods are recognized. (3)At the balance sheet date, the carrying amount of deferred tax assets is reviewed. The carrying amount of a deferred tax asset is reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the benefit of the deferred tax asset to be utilized. Such reduction is subsequently reversed to the extent that it becomes probable that sufficient taxable income will be available. (4)The income tax and deferred tax for the period are treated as income tax expenses or income through profit or loss, excluding those arising from the following circumstances: ① business combination; and ② the transactions or items directly recognized in equity. 77 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 31. Lease (1)Accounting for operating lease (2)Accounting for financing lease 32. Other important accounting policy and estimation 33. Major accounting policy and changes (1) Main accounting policy changes □ Applicable √ Not applicable (2) Changes of important accounting estimate □ Applicable √ Not applicable 34. Other VI. Taxes 1. Main tax category and tax rate Tax category Tax calculation evidence Tax rate Sales of goods, taxable labor service Value added tax revenue, taxable income, intangible assets 17%, 16%, 6%, 5% income and income from property leasing Tax for maintaining and building cities Turnover tax payable 7% Business income tax Taxable income 25% Educational surtax Turnover tax payable 3% Local educational surtax Turnover tax payable 2% Property tax Turnover tax payable 1.2% Disclose reasons for different taxpaying body Taxpaying body Income tax rate 2. Tax preference Nil 78 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 3. Other Nil VII. Notes to Items in Consolidated Financial Statements 1. Monetary fund In RMB Item Ending balance Opening balance Cash on hand 55,753.64 100,034.87 Cash in bank 15,758,551.35 18,837,402.11 Other monetary fund 9,048,217.26 Total 15,814,304.99 27,985,654.24 Other explanation There were no restrited monetary fund at end of the period. No deposited overseas and of potential recovery risks at period-end 2. Financial assets measured by fair value and reckoned into current gains/losses with its variation In RMB Item Ending balance Opening balance Other explanation Nil 3. Derivative financial assets □ Applicable √ Not applicable 4. Note receivables (1) Classification of notes receivable In RMB Item Ending balance Opening balance Bank acceptance bill 1,500,000.00 Total 1,500,000.00 (2) Pledge at period-end In RMB 79 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Item Amount pledge at period-end Bank acceptance bill 0.00 Trade acceptance 0.00 Total 0.00 (3) Notes endorsement or discount and undue on balance sheet date In RMB Item Amount derecognition at period-end Amount not derecognition at period-end Bank acceptance bill 48,320,333.38 0.00 Trade acceptance 0.00 0.00 Total 48,320,333.38 0.00 (4) Notes transfer to account receivable due for failure implementation by drawer at period-end In RMB Item Amount transfer to account receivable at period-end Trade acceptance 0.00 Total 0.00 Other explanation There was no notes that converted to receivables due to the inability of the drawer to performance the contrat。 5. Accounts receivable (1) Accounts receivable by category In RMB Ending balance Opening balance Book balance Bad debt provision Book balance Bad debt provision Category Book Accrual Accrual Book value Amount Ratio Amount value Amount Ratio Amount ratio ratio Receivables with bad debt provision 36,199,3 1,247,39 34,951,94 30,247, 1,240,186 29,007,775. 96.59% 3.45% 95.95% 4.10% accrual by credit 37.45 5.79 1.66 962.05 .84 21 portfolio Accounts with single significant amount 1,278,28 1,278,28 1,278,2 1,278,283 and bad debts 3.41% 100.00% 4.05% 100.00% 3.50 3.50 83.50 .50 provision accrued individually 80 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 37,477,6 2,525,67 34,951,94 31,526, 2,518,470 29,007,775. Total 100.00% 6.74% 100.00% 7.99% 20.95 9.29 1.66 245.55 .34 21 Receivable with single significant amount and withdrawal bad debt provision separately at end of period: □ Applicable √ Not applicable In combination, accounts receivable whose bad debts provision was accrued by age analysis: √ Applicable □ Not applicable In RMB Ending balance Age Account receivable Bad debt provision Accrual ratio Within one year Within 1 year 34,155,123.80 102,465.37 0.30% Subtotal within one year 34,155,123.80 102,465.37 0.30% 1-2 years 901,989.20 2,705.97 0.30% 2-3 years 0.30% Over 3 years 1,142,224.45 1,142,224.45 100.00% Total 36,199,337.45 1,247,395.79 3.45% Explanation on combination determines: According to the business scale, business nature, and customers’ settlement, etc., the account receivable with single significant amount is determined to be RMB 5 million. The account receivable with single significant amount has no depreciation reserve, and the reserve for bad debt provision is withdrawn with age analysis method. In combination, withdrawal proportion of bad debt provision based on balance proportion for account receivable: □ Applicable √ Not applicable In combination, withdrawal proportion of bad debt provision based on other methods for account receivable: Nil (2) Bad debt provision accrual collected or switch back Bad debt provision accrual was 9,231.99 Yuan; the amount collected or switches back amounting to 2,023.04 Yuan Important bad debt provision collected or switch back: In RMB Company Collected or switch back amount Collection way Total 0.00 -- (3) Account receivable actual charge off in the Period In RMB Item Amount written off 81 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Written-off for the major receivable: In RMB Verification Arising from related Company Nature Amount written off Reason for write-off procedures transaction (Y/N) Total -- 0.00 -- -- -- Explanation for write-off of receivables: Nil (4) Top 5 receivables at ending balance by arrears party Ratio in total Relationship with Bad debt Item Amount Account age receivables Nature the company provision (%) Jinan Yuxintai Sales Co., Ltd. Unrelated party 9,043,566.55 Within 1 year 27,130.70 24.13 Paymen t for goods Shenzhen WTR New Energy Unrelated party 7,923,335.39 Within 1 year 23,770.00 21.14 Paymen Technology Co., Ltd. t for goods Shenzhen BoYiN Technology Unrelated party 5,217,743.51 Within 1 year 15,653.23 13.92 Paymen Co., Ltd. t for goods Shenzhen Jiahaosong Unrelated party 3,918,438.81 Within 1 year 11,755.32 10.46 Paymen Technology Co., Ltd. t for goods Fu Qi Unrelated party 2,933,729.40 Within 1 year 8,801.19 7.83 Paymen t for goods Total 29,036,813.66 87,110.44 77.48 (5) De-recognition for financial assets transfer Nil (6) Receivable transferred and the assets and liability resulted for continue to engagement Nil Other explanation At end of the period, there was no account receivable from shareholder unit and other related parties that holds 5% (included) voting rights of the Company among Account Receivables 82 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 6. Advance payment (1) Listed by account age In RMB Ending balance Opening balance Age Amount Ratio Amount Ratio Within 1 year 6,076,785.42 100.00% 2,482,276.54 100.00% Total 6,076,785.42 -- 2,482,276.54 -- Explanation on un-settlement in time for advance payment with over one year account age and major amounts: Nil (2) Top 5 advance payment at ending balance by prepayment object Relationship Ratio in total Item with the Amount Account age Nature advance e payment (%) company Zhaoqing Kaisite Battery Material Unrelated 5,064,187.12 Within 1 year Prepayments for 83.34 Co., Ltd. party materials Sichuan Xingsheng Lithium Industry Unrelated 660,000.00 Within 1 year Prepayments for 10.86 Co., Ltd. party materials Guangshui Qilin New Mateiral Co., Unrelated 290,598.30 Within 1 year Prepayments for 4.78 Ltd. party materials Xinjiang Tebian Electrical Unrelated 62,000.00 Within 1 year Project bid 1.02 Engineering Project Management party Co., Ltd. Total 6,076,785.42 100.00 Other explanation At end of the period, there was no advance payment from shareholder unit and other related parties that holds 5% (included) voting rights of the Company among Advance Payment 7. Interest receivable (1) interest receivable In RMB Item Ending balance Opening balance 83 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 (2) Important overdue interest Overdue time Overdue Impairment (Y/N) and Borrower Ending balance Overdue reason time judgment basis Total 0.00 -- -- -- Other explanation Nil 8. Dividend receivables (1) Dividend receivables In RMB Item (or the invested entity) Ending balance Opening balance (2) Major dividend receivables with over one year age In RMB Item or the invested Impairment (Y/N) and Ending balance Age Reasons entity) judgment basis Total 0.00 -- -- -- Other explanation Nil 9. Other accounts receivable (1) Other accounts receivable by category In RMB Ending balance Opening balance Book balance Bad debt provision Book balance Bad debt provision Category Book Accrual Accrual Book value Amount Ratio Amount value Amount Ratio Amount ratio ratio Other receivables with bad debt 1,077,73 470,894. 606,839.1 1,130,5 470,884.5 100.00% 43.69% 100.00% 41.65% 659,706.81 provision accrual by 4.01 84 7 91.40 9 credit portfolio 1,077,73 470,894. 606,839.1 1,130,5 470,884.5 Total 100.00% 43.69% 100.00% 41.65% 659,706.81 4.01 84 7 91.40 9 Other receivable with single significant amount and withdrawal bad debt provision separately at end of period: □ Applicable √ Not applicable 84 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 In combination, other accounts receivable whose bad debts provision was accrued by age analysis √ Applicable □ Not applicable In RMB Ending balance Age Other accounts receivable Bad debt provision Accrual ratio Within 1 year Within 1 year 251,572.17 754.72 0.30% Subtotal within one year 251,572.17 754.72 0.30% 1-2 years 148,388.00 445.16 0.30% 2-3 years 208,705.00 626.12 0.30% Over 3 years 469,068.84 469,068.84 100.00% Total 1,077,734.01 470,894.84 43.69% Explanations on combination determine: Other receivable with single significant amount refers to the amount with over 5 million Yuan In combination, withdrawal proportion of bad debt provision based on balance proportion for other account receivable: □ Applicable √ Not applicable In combination, withdrawal proportion of bad debt provision based on other methods for other account receivable: □ Applicable √ Not applicable (2) Bad debt provision accrual collected or switch back Bad debt provision accrual was 15.00 Yuan; the amount collected or switches back amounting to 4.75Yuan Important bad debt provision collected or switch back: In RMB Company Amount reversal or collected Collection way Total 0.00 -- Nil (3) Other receivables actually written-off during the reporting period In RMB Item Amount written off Written-off for the major other receivable: In RMB Nature of other Verification Arising from related Company Amount written off Reason for write-off receivables procedures transaction (Y/N) Total -- 0.00 -- -- -- 85 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Explanation for write-off of other receivables: Nil (4) Other receivables by nature In RMB Nature Ending book balance Opening book balance Margin or deposit 496,750.00 628,997.24 Equipment money 311,400.00 311,400.00 Staff personal loans 113,701.00 49,098.50 Other 155,883.01 141,095.66 Total 1,077,734.01 1,130,591.40 (5) Top 5 other receivables at ending balance by arrears party In RMB Ratio in total ending Ending balance of Company Nature Ending balance Age balance of other bad bet provision receivables Shenzhen Luwei Mechatronic Equipment money 300,000.00 Over 5 years 27.84% 300,000.00 Equipment Co., Ltd. Shenzhen Anjinheng Margin or deposit 150,900.00 Within 3 years 14.00% 452.70 Industrial Co., Ltd. Shenzhen Material Margin or deposit 135,723.00 Within 3 years 12.59% 407.17 Group Co., Ltd. Alipay (China) Network Technology Margin or deposit 110,000.00 Within 2 years 10.21% 330.00 Co., Ltd. Zhao Zhuqing Margin or deposit 36,000.00 Over 3 years 3.34% 36,000.00 Total -- 732,623.00 -- 67.98% 337,189.87 (6) Account receivable with government grants involved In RMB Time, amount and basis Company Item Ending balance Ending age of amount collection estimated Total -- 0.00 -- -- Nil 86 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 (7) Other account receivable derecognition due to financial assets transfer Nil (8) Assets and liability resulted by other account receivable transfer and continuous involvement Nil Other explanation At end of the period, there was no other account receivable from shareholder unit and other related parties that holds 5% (included) voting rights of the Company among Other Account Receivables 10. Inventory (1) Inventory classification In RMB Ending balance Opening balance Item Depreciation Depreciation Book balance Book value Book balance Book value reserve reserve Raw materials 442,413.52 27,465.37 414,948.15 566,193.56 27,465.37 538,728.19 Finished goods 4,399,877.37 4,450.20 4,395,427.17 2,233,386.81 4,450.20 2,228,936.61 Goods shipped in 9,509.83 9,509.83 transit Total 4,842,290.89 31,915.57 4,810,375.32 2,809,090.20 31,915.57 2,777,174.63 Does the Company comply with the disclosure requirement of “Information Disclosure Guidelines of Shenzhen Stock Exchange No.4 – Listed Companies Engaged in Seed Industry and Planting Business” or not No (2) Inventory depreciation reserve In RMB Increase in the current period Decrease in the current period Item Opening balance Switch back or Ending balance Accrual Other Other write-off Raw materials 27,465.37 27,465.37 Finished goods 4,450.20 4,450.20 Total 31,915.57 0.00 0.00 0.00 0.00 31,915.57 87 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Nil (3) Explanation on capitalization of borrowing costs at ending balance of inventory Nil (4) Assets that completed without settlement from construction contract In RMB Item Amount Other explanation Nil 11. Assets hold for sold In RMB Expected disposal Item Ending book value Fair value Expected disposal time expenses Total 0.00 0.00 0.00 -- Other explanation Nil 12. Non-current assets due within one year In RMB Item Ending balance Opening balance Other explanation Nil 13. Other current assets In RMB Item Ending balance Opening balance Prepaid intermediary fee 1,792,452.81 1,792,452.81 Prepaid tax 12,974.36 Total 1,792,452.81 1,805,427.17 Other explanation Nil 88 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 14. Financial assets available for sale (1) Financial assets available for sale In RMB Ending balance Opening balance Item Depreciation Depreciation Book balance Book value Book balance Book value reserves reserves Total 0.00 0.00 0.00 0.00 (2) Financial assets available for sale measured by fair value at period-end In RMB Equity instrument Debt instrument Type Total available for sale available for sale Cost /liability of equity instrument/ amortization 0.00 cost of debt instrument Fair value 0.00 Amount of fair value changes that accumulatively reckoned 0.00 in other comprehensive gains Amount with impairment 0.00 accrual (3) Financial assets available for sale measured by cost at period-end In RMB Book balance Depreciation reserves Ratio of The share-holdi Cash invested Period-beg Period-beg ng in Increased Decreased Period-end Increased Decreased Period-end dividend entity inning inning invested entity Total 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -- 0.00 (4) Changes of impairment in Period In RMB Type Equity instrument Debt instrument Total 89 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 available for sale available for sale Balance of impairment 0.00 accrual at period-begin Current accrual 0.00 Including: transfer-in from other 0.00 comprehensive income Current decrease 0.00 Including: switch back due to fair value rebound 0.00 at period-end Balance of impairment 0.00 accrual at period-end (5) Fair value of equity instrument available for sale sharply declined or other-than-temporary declined at period-end without depreciation reserves accrual In RMB Fair value Time of drops Amount with Reasons for Item Investment cost Ending fair value declined relative persistently impairment un-accrual to cost (month) accrual Total 0.00 0.00 -- -- 0.00 -- Other explanation Nil 15. Held-to-maturity investment (1) Held-to-maturity investment In RMB Ending balance Opening balance Item Depreciation Depreciation Book balance Book value Book balance Book value reserves reserves Total 0.00 0.00 0.00 0.00 (2) Important held-to-maturity investment at period-end In RMB Bond Face value Coupon value Actual rate Maturity date Total 0.00 -- -- -- 90 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 (3) Held-to-maturity investment reclassify in the Period Nil Other explanation Nil 16. Long-term account receivable (1) Long-term account receivable In RMB Ending balance Opening balance Discount rate Item Bad debt Bad debt Book balance Book value Book balance Book value section provision provision Total 0.00 0.00 0.00 0.00 -- (2) Long-term account receivable derecognition due to transfer of financial assets Nil (3) Assets and liability resulted by long-term account receivable transfer and continuous involvement Nil Other explanation Nil 17. Long-term equity investment In RMB v Ending Other Cash Investme balance The Additiona comprehe dividend Opening nt gains Other Ending of invested l Capital nsive or profit Impairme balance recognize equity Other balance impairme entity investmen reduction income announce nt accrual d under change nt t adjustmen d to equity provision t issued I. Joint venture Subtotal 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 II. Associated enterprise Subtotal 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 91 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Other explanation Nil 18. Investment real estate (1) Investment real estate measured at cost □ Applicable √ Not applicable (2) Investment real estate measured at fair value □ Applicable √ Not applicable (3) Certificate of title un-completed In RMB Item Book value Reasons for un-completed Other explanation Nil 19. Fixed assets (1) Fixed assets In RMB Machinery Means of Electronic Item Housing buildings Total equipment transportation equipment and other I. Original book value: 1.Opening balance 2,959,824.00 416,629.06 958,593.21 684,394.50 5,019,440.77 2.Increase in the current period (1) Purchase (2) construction in process transfer-in (3) the increase in business combination 3.Decrease in the current period 92 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 (1) Disposal or scrap 4.Ending balance 2,959,824.00 416,629.06 958,593.21 684,394.50 5,019,440.77 II. accumulated depreciation 1.Opening balance 199,788.12 109,246.12 269,780.13 499,508.43 1,078,322.80 2.Increase in the 66,596.04 18,748.32 86,273.40 12,928.99 184,546.75 current period (1) provision 66,596.04 18,748.32 86,273.40 12,928.99 184,546.75 3.Decrease in the current period (1) Disposal or scrap 4.Ending balance 266,384.16 127,994.44 356,053.53 512,437.42 1,262,869.55 III. impairment of preparation 1.Opening balance 0.00 0.00 0.00 0.00 0.00 2.Increase in the 0.00 0.00 0.00 0.00 0.00 current period (1) provision 0.00 0.00 0.00 0.00 0.00 3.Decrease in the 0.00 0.00 0.00 0.00 0.00 current period (1) Disposal or 0.00 0.00 0.00 0.00 0.00 scrap 4.Ending balance 0.00 0.00 0.00 0.00 0.00 IV. book value 1.Ending book 2,693,439.84 288,634.62 602,539.68 171,957.08 3,756,571.22 value 2. Opening book 2,760,035.88 307,382.94 688,813.08 184,886.07 3,941,117.97 value 93 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 (2) Fixed assets temporary idle In RMB Accumulated Depreciation Item Original book value Book value Note depreciation reserves (3) Fixed assets leased through operating lease In RMB Accumulated Item Original book value Depreciation reserves Book value depreciation (4) Fixed assets leased through operating lease In RMB Item Ending book value (5) Certificate of title un-completed In RMB Item Book value Reasons Six properties in Lianxin Garden 2,693,439.84 Other explanation Other explanation The six properties of Lianxin Garden have original value of 2,959,824.00 Yuan. The property purchasing refers to the indemnificatory housing for enterprise talent buying from Shenzhen Housing and Construction Bureau of Luohu District. According to the agreement, the enterprise shall not carrying any kind of property trading with any units or individuals except the government, and the company has no property certification on the above mentioned properties. 20. Construction in progress (1) Construction in progress In RMB Ending balance Opening balance Item Depreciation Depreciation Book balance Book value Book balance Book value reserves reserves Total 0.00 0.00 0.00 0.00 (2) Changes in significant construction in progress In RMB 94 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Accumul including Proporti Fixed ated : interest Interest Increase Other on of assets amount capitaliz capitaliz Opening in the decrease Ending project Sourceof Item Budget transfer-i Progress of ed ation rate balance current d in the balance investme funds n in the interest amount of the period Period nt in Period capitaliz of the year budget ation year Total 0.00 0.00 0.00 0.00 0.00 0.00 -- -- 0.00 0.00 0.00% -- (3) Depreciation reserves accrual In RMB Item Accrual Amount Reasons Total 0.00 -- Other explanation Nil 21. Engineering materials In RMB Item Ending balance Opening balance Other explanation Nil 22. Disposal of fixed assets In RMB Item Ending balance Opening balance Other explanation Nil 23. Productive biological assets (1) Productive biological assets measured by cost □ Applicable √ Not applicable (2) Productive biological assets measured by fair value □ Applicable √ Not applicable 95 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 24. Oil-and-gas assets □ Applicable √ Not applicable 25. Intangible assets (1) Intangible assets In RMB Non-patent Item Land use right Patent Trademark Total technology I. original book value: 1.Opening 5,271,000.00 5,271,000.00 balance 2.Increase in the current period (1) Purchase (2) internal R &D (3) the increase in business combination 3.Decrease in the current period (1) Disposal 4.Ending 5,271,000.00 5,271,000.00 balance II. accumulated depreciation 1.Opening 3,012,000.00 3,012,000.00 balance 2.Increase in 376,500.00 376,500.00 the current period (1) provision 376,500.00 376,500.00 3.Decrease in 96 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 the current period (1) Disposal 4.Ending 3,388,500.00 3,388,500.00 balance III. impairment of preparation 1.Opening balance 2.Increase in the current period (1) provision 3.Decrease in the current period (1) Disposal 4.Ending balance IV. book value 1.Ending book 1,882,500.00 1,882,500.00 value 2. Opening book 2,259,000.00 2,259,000.00 value Ratio of intangible assets resulted from internal R&D in balance of intangible assets at period-end (2) Land use right without certificate of title completed In RMB Item Book value Reasons Other explanation Nil 26. Development expense In RMB Opening Ending Item Increase in the current period Decrease in the current period balance balance 97 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Total 0.00 0.00 0.00 0.00 0.00 0.00 Other explanation Nil 27. Goodwill (1) Original book value of goodwill In RMB The invested entity or matters Opening balance Increase during the year Decreased during the year Ending balance of goodwill Total 0.00 0.00 0.00 0.00 (2) Depreciation reserves of goodwill In RMB The invested entity or matters Opening balance Increase during the year Decreased during the year Ending balance of goodwill Total 0.00 0.00 0.00 0.00 Process of impairment testing, parameter and recognition method for impairment losses: Nil Other explanation Nil 28. Long-term unamortized expenses In RMB Increase in the Amortized in the Item Opening balance Other decrease Ending balance current period Period Total 0.00 0.00 0.00 Other explanation Nil 29. Deferred income tax assets and deferred income tax liabilities (1) Deferred income tax assets un-offset In RMB Item Ending balance Opening balance 98 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Deductible temporary Deferred income tax Deductible temporary Deferred income tax difference assets difference assets Assets impairment 2,967,314.86 741,828.71 2,967,314.86 741,828.71 Total 2,967,314.86 741,828.71 2,967,314.86 741,828.71 (2) Deferred income tax liabilities un-offset In RMB Ending balance Opening balance Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax differences liabilities differences liabilities Total 0.00 0.00 0.00 0.00 (3) Deferred income tax assets and deferred income tax liabilities listed after off-set In RMB Ending balance of Trade-off between the Opening balance of Trade-off between the deferred income tax deferred income tax deferred income tax Item deferred income tax assets or liabilities after assets and liabilities at assets or liabilities after assets and liabilities off-set period-begin off-set Deferred income tax 0.00 741,828.71 0.00 741,828.71 assets Deferred income tax 0.00 0.00 liability (4) Details of unrecognized deferred income tax assets In RMB Item Ending balance Opening balance Total 0.00 0.00 (5) Deductible losses of un-recognized deferred income tax assets expired on the followed year In RMB Year Ending amount Opening amount Note Total 0.00 0.00 -- Other explanation Nil 99 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 30. Other non-current assets In RMB Item Ending balance Opening balance Advance payment for house 400,000.00 400,000.00 Total 400,000.00 400,000.00 Other explanation Ended as 30 June 2018, the four houses for enterprise talent, located in Yinhu Lanshan, have not yet delivered by Shenzhen Housing and Construction Bureau of Luohu District 31. Short-term loans (1)Types of short-term loans In RMB Item Ending balance Opening balance Explanation on short-term loans category: Nil (2) Overdue outstanding short-term loans Total 0.00 Yuan overdue outstanding short-term loans at period-end, including the followed significant amount: In RMB Unit Ending balance Lending rate Overdue time Overdue rate Total 0.00 -- -- -- Other explanation Nil 32. Financial liability measured by fair value and with its variation reckoned into current gains/losses In RMB Item Ending balance Opening balance Other explanation Nil 33. Derivative financial liabilities □ Applicable √ Not applicable 34. Notes payable In RMB 100 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Type Ending balance Opening balance Trade acceptance 8,480,000.00 Total 8,480,000.00 Notes expired at year-end without paid was 0.00 Yuan 35. Account payable (1) Account payable In RMB Item Ending balance Opening balance Within one year (one year included) 10,599,255.82 3,638,705.30 1-2 year (2 years included) 76,401.23 137,423.41 2-3 years (3years included) 3,084.95 3,084.95 4-5 years (5years included) Over 5 years 148,983.61 148,983.61 Total 10,827,725.61 3,928,197.27 (2) Account payable with over one year book age In RMB Item Ending balance Reasons of un-paid or carry-over Total 0.00 -- Other explanation Top 5 payables at Period-end Ratio in total Relationship with Item Amount Account age payables in Nature the company advance (%) Baodao Car Industry Group Co., Unrelated party 5,790,643.76 Within 1 year 53.48 Paymen Ltd t for goods Jinda Intillence Technology Co., Unrelated party 2,660,755.70 Within 1 year 24.57 Paymen Ltd. t for goods Tianjin Luying Car Industry Co., Unrelated party 1,196,170.33 Within 1 year 11.05 Paymen Ltd. t for goods Tianjin Jianya Electronic Unrelated party 359,431.18 Within 1 year 3.32 Paymen Tech.Co., Ltd. t for 101 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 goods Tianjin Tianrui Weisheng Sports Unrelated party 244,729.18 Within 1 year 2.26 Paymen Equipment Co., Ltd. t for goods Total 10,251,730.15 94.68 36. Account received in advance (1) Account received in advance In RMB Item Ending balance Opening balance Within one year (one year included) 1,661,866.45 1,211,804.44 1-2 years (2 years included) 19,777.88 19,777.88 2-3 years (3 years included) 36,897.00 36,897.00 Total 1,718,541.33 1,268,479.32 (2) Account received in advance with over one year book age In RMB Item Ending balance Reasons of un-paid or carry-over Total 0.00 -- (3) Projects that settle without completed from construction contract at period-end In RMB Item Amount Other explanation Nil 37. Wages payable (1) Wages payable In RMB Item Opening balance Increase during the year Decrease during the year Ending balance I. Short-term 706,703.40 3,033,554.78 2,880,549.54 859,708.64 compensation II. Post-employment 160,367.77 160,367.77 102 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 benefit – defined contribution plan Total 706,703.40 3,193,922.55 3,040,917.31 859,708.64 (2) Short-term compensation In RMB Item Opening balance Increase during the year Decrease during the year Ending balance 1. Wages, bonuses, allowances 699,994.68 2,524,848.21 2,372,089.72 852,753.17 andsubsidies 2. Welfare for workers 141,100.00 141,100.00 and staff 3. Social insurance 137,430.26 137,430.26 Including: Medical 124,611.52 124,611.52 insurance Work injury 5,932.78 5,932.78 insurance Maternity 6,885.96 6,885.96 insurance 4. Housing accumulation 189,464.40 189,464.40 fund 5. Labor union expenditure and 6,708.72 40,711.91 40,465.16 6,955.47 personnel education expense Total 706,703.40 3,033,554.78 2,880,549.54 859,708.64 (3) Defined contribution plans In RMB Item Opening balance Increase during the year Decrease during the year Ending balance 1. Basic endowment 154,517.09 154,517.09 insurance 2. Unemployment 5,850.68 5,850.68 insurance Total 160,367.77 160,367.77 Other explanation No defaulted wages payable at end of the period 38. Tax payable 103 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 In RMB Item Ending balance Opening balance Value-added tax 2,345,559.33 3,391,621.62 Enterprise income tax 129,074.09 339,193.85 Individual income tax 139,291.45 23,164.05 Urban maintenance and construction tax 7,238.49 7,615.81 House property tax 90,141.20 45,070.60 Educational surtax & local educational 351.36 620.94 surcharge Land holding tax 7,959.38 Stamp tax 13,741.20 Total 2,733,356.50 3,807,286.87 Other explanation Nil 39. Interest payable In RMB Item Ending balance Opening balance Interest overdue without paid: In RMB Borrower Amount overdue Reasons Total 0.00 -- Other explanation Nil 40. Dividends payable In RMB Item Ending balance Opening balance Other explanation, including dividends payable with over one year age and disclosure un-payment reasons: Nil 41. Other payable (1) Classification of other payable according to nature of account In RMB 104 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Item Ending balance Opening balance Custodian and common benefit debts 18,639,499.20 18,919,942.85 Current money 6,500,000.00 6,500,000.00 Warranty and guarantee money 9,773,515.24 9,615,020.00 Other payable service charge (intermediary 305,554.80 707,252.91 services included) Other 122,811.05 766,108.14 Total 35,341,380.29 36,508,323.90 (2) Significant other payable with over one year age In RMB Item Ending balance Reasons of un-paid or carry-over Custodian and common benefit debts 9,194,762.20 Shenzhen Guosheng Energy Investment 6,500,000.00 Interest-free loans Development Co., ltd. Total 15,694,762.20 -- Other explanation Nil 42. Liabilities hold for sale In RMB Item Ending balance Opening balance Other explanation Nil 43. Non-current liability due within one year In RMB Item Ending balance Opening balance Other explanation Nil 44. Other current liability In RMB Item Ending balance Opening balance Changes of short-term bond payable: 105 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 In RMB Accrual Premium/ Face Release Bond Issuing Opening Issued in interest discount Paid in Ending Bond value date period amount balance the Period by face amortizati the Period balance value on Total -- -- -- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Other explanation Nil 45. Long-term loans (1) Classification of long-term loans In RMB Item Ending balance Opening balance Explanation: Nil Other explanation, including interest rate section: Nil 46. Bonds payable (1) Bonds payable In RMB Item Ending balance Opening balance (2) Changes of bonds payable (not including the other financial instrument of preferred stock and perpetual capital securities that classify as financial liability) In RMB Total -- -- -- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (3) Convertible conditions and time for shares transfer for the convertible bonds Nil (4) Other financial instruments classify as financial liability Basic information of the outstanding preferred stock and perpetual capital securities at period-end Nil Changes of outstanding preferred stock and perpetual capital securities at period-end 106 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 In RMB Outstanding Period-begin Increase during the year Decrease during the year Period-end financial Amount Book value Amount Book value Amount Book value Amount Book value instrument Total 0 0.00 0 0.00 0 0.00 0 0.00 Basis for financial liability classification for other financial instrument Nil Other explanation Nil 47. Long-term account payable (1) Listed by nature In RMB Item Ending balance Opening balance Other explanation Nil 48. Long-term employee payable (1) Long-term employee payable In RMB Item Ending balance Opening balance (2) Changes of defined benefit plans Present value of the defined benefit plans: In RMB Item Current amount Last amount Scheme assets: In RMB Item Current amount Last amount Net liability (assts) of the defined benefit plans In RMB Item Current amount Last amount Content of defined benefit plans and relevant risks, impact on future cash flow of the Company as well as times and uncertainty: Nil Major actuarial assumption and sensitivity analysis: 107 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Nil Other explanation Nil 49. Special payable In RMB Increase during the Decrease during the Item Opening balance Ending balance Causes year year Total 0.00 0.00 -- Other explanation Nil 50. Accrued liability In RMB Item Ending balance Opening balance Causes Other explanation, including relevant important assumptions and estimation: Nil 51. Deferred income In RMB Increase during the Decrease during the Item Opening balance Ending balance Causes year year Total 0.00 0.00 -- Item with government grants involved: In RMB Amount Amount Cost Assets-relate Opening New grants reckoned in Other Ending Item reckoned in reduction in d/income balance in the Period non-operatio changes balance other income the period related n revenue Total 0.00 0.00 0.00 0.00 0.00 -- Other explanation Nil 52. Other non-current liability In RMB Item Ending balance Opening balance 108 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Other explanation Nil 53. Share capital In RMB Changeduringtheyear(+,-) Shares Opening New shares transferred Ending balance balance Bonus share Other Subtotal issued from capital reserve Total shares 551,347,947.00 0.00 551,347,947.00 Other explanation No changes in the period 54. Other equity instrument (1) Basic information of the outstanding preferred stock and perpetual capital securities at period-end Nil (2) Changes of outstanding preferred stock and perpetual capital securities at period-end In RMB Outstanding Period-begin Increase during the year Decrease during the year Period-end financial Amount Book value Amount Book value Amount Book value Amount Book value instrument Total 0 0 0.00 0 0.00 0 Changes of other equity instrument, change reasons and relevant accounting treatment basis: Nil Other explanation Nil 55. Capital reserve In RMB Item Opening balance Increase during the year Decrease during the year Ending balance Other capital reserve 627,834,297.85 627,834,297.85 Total 627,834,297.85 627,834,297.85 Other explanation, including changes and reasons for changes: 109 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Among the other capital reserves, 135,840,297.18 Yuan refers to the payment for creditor from shares assignment by whole shareholders; majority shareholder Guosheng Energy donated 5,390,399.74 Yuan. 56. Treasury stock In RMB Item Opening balance Increase during the year Decrease during the year Ending balance Total 0.00 0.00 Other explanation, including changes and reasons for changes: Nil 57. Other comprehensive income In RMB Current amount Less: written in other Account comprehensive Opening Belong to Belong to Ending Item before income in balance Less : income parent minority balance previous period income tax in and carried tax expense company after shareholders tax after tax the year forward to gains and losses in current period Total other comprehensive income 0.00 0.00 0.00 Other explanation, including the active part of the hedging gains/losses of cash flow transfer to initial recognization adjustment for the arbitraged items: Nil 58. Special reserves In RMB Item Opening balance Increase during the year Decrease during the year Ending balance Total 0.00 0.00 Other explanation, including changes and reasons for changes: Nil 59. Surplus reserves In RMB Item Opening balance Increase during the year Decrease during the year Ending balance Statutory surplus reserve 32,673,227.01 32,673,227.01 Total 32,673,227.01 0.00 0.00 32,673,227.01 110 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Other explanation, including changes and reasons for changes: Nil 60. Retained profit In RMB Item Current period Last period Retained profit at period-end before adjustment -1,195,957,201.01 -1,197,486,788.28 Retained profit at period-begin after adjustment -1,195,957,201.01 -1,197,486,788.28 Add: net profit attributable to shareholders of 554,162.06 1,529,587.27 parent company for this year Retained profit at period-end -1,195,403,038.95 -1,195,957,201.01 Adjustment for retained profit at period-begin: 1). Retroactive adjustment due to the Accounting Standards for Business Enterprise and relevant new regulations, retained profit at period-begin has 0.00 Yuan affected; 2) Due to the accounting policy changes, retained profit at period-begin has 0.00 Yuan affected; 3) Due to the major accounting errors correction, retained profit at period-begin has 0.00 Yuan affected; 4) Consolidation range changed due to the same control, retained profit at period-begin has 0.00 Yuan affected; 5) Total other adjustment impacts 0.00 Yuan retained profit at period-begin 61. Operating income and operating cost In RMB Current amount Last amount Item Income Cost Income Cost Main business 63,664,151.78 59,106,390.80 45,537,967.15 43,692,197.03 Other business 4,070,747.57 2,057,815.53 3,391,709.12 1,994,075.80 Total 67,734,899.35 61,164,206.33 48,929,676.27 45,686,272.83 62. Business tax and surcharge In RMB Item Current amount Last amount Urban maintenance and construction tax 29,269.66 45,604.48 Educational surtax 20,906.89 32,574.63 Stamp tax 25,561.20 13,173.94 Total 75,737.75 91,353.05 Other explanation Nil 111 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 63. Sales expense In RMB Item Current amount Last amount Remuneration & social public reserves 1,532,803.51 1,126,682.80 Business travel expenses 192,454.31 218,695.40 Leasing and property fee 188,033.90 180,047.47 Net sales fee 535,515.52 476,089.26 Other 307,120.29 467,186.94 Total 2,755,927.53 2,468,701.87 Other explanation Nil 64. Administration expense In RMB Item Current amount Last amount Remuneration & social public reserves 1,828,693.52 2,079,149.94 Leasing and property fee 709,919.19 702,602.38 Other 771,107.53 557,779.18 Total 3,309,720.24 3,339,531.50 Other explanation Nil 65. Financial expense In RMB Item Current amount Last amount Interest income -272,686.20 -213,713.97 Commission charge etc. 11,710.39 12,149.06 Total -260,975.81 -201,564.91 Other explanation Nil 66. Loss from Assets depreciation In RMB Item Current amount Last amount 112 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 I. Bad debt losses 7,219.20 -47,271.09 Total 7,219.20 -47,271.09 Other explanation Nil 67. Changes in fair value gains In RMB Changes resources Current amount Last amount Other explanation Nil 68. Investment income In RMB Item Current amount Last amount Other explanation Nil 69. Gains from assets disposal In RMB Sources Current amount Last amount 70. Other income In RMB Sources Current amount Last amount 71. Non-operating revenue In RMB Amount reckoned into Item Current amount Last amount non-recurring gains/losses in the Year Other 72,126.28 291,710.58 72,126.28 Total 72,126.28 291,710.58 72,126.28 Government grants reckoned into current gains/losses: In RMB Item Granting Cause of Nature Impact Special Amount in Amount last Assets 113 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 subject distribution current profit benefit (Y/N) the period period related/incom (Y/N) e related Total -- -- -- -- -- 0.00 0.00 -- Other explanation Nil 72. Non-operating expenditure In RMB Amount reckoned into Item Current amount Last amount non-recurring gains/losses in the Year Other 30,140.00 30,140.00 Total 30,140.00 30,140.00 Other explanation Nil 73. Income tax expense (1) Income tax expense In RMB Item Current amount Last amount Current income tax 233,133.98 Deferred income tax 11,629.41 Total 233,133.98 11,629.41 (2) Adjustment on accounting profit and income tax expenses In RMB Item Current amount Total profit 725,050.39 Income tax measured by statutory/applicable tax rate 233,133.98 Income tax expenses 233,133.98 Other explanation Total profit of the subsidiaries in consolidate statement was losses 74. Other comprehensive income Found more in Note 57. 114 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 75. Items of cash flow statement (1) Other cash received in relation to operation activities In RMB Item Current amount Last amount Interest and Rent and utilities etc. 1,673,601.27 1,603,116.82 Other Current money 855,411.09 721,181.20 Total 2,529,012.36 2,324,298.02 Explanation on other cash received in relation to operation activities: Nil (2) Other cash paid in relation to operation activities In RMB Item Current amount Last amount Payment of the period fee, operation 4,714,582.54 5,580,059.48 expenditure & common debt Total 4,714,582.54 5,580,059.48 Explanation on other cash paid in relation to operation activities: Nil (3) Cash received from other investment activities In RMB Item Current amount Last amount Explanation on cash received from other investment activities: Nil (4) Cash paid related with investment activities In RMB Item Current amount Last amount Explanation on cash paid related with investment activities Nil (5) Other cash received in relation to financing activities In RMB Item Current amount Last amount 115 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Explanation on other cash received in relation to financing activities: Nil (6) Cash paid related with financing activities In RMB Item Current amount Last amount Explanation on cash paid related with financing activities: Nil 76. Supplementary information to statement of cash flow (1) Supplementary information to statement of cash flow In RMB Supplementary information Current Period Last Period 1. Net profit adjusted to cash flow of -- -- operation activities: Net profit 491,916.41 -2,127,265.81 Add: Assets impairment provision 7,219.20 -47,271.09 Depreciation of fixed assets, consumption of oil assets and depreciation of productive 184,546.75 145,136.97 biology assets Amortization of intangible assets 376,500.00 376,500.00 Financial expense(gain listed with “-”) -201,564.91 Decrease of deferred income tax 11,629.41 asset( (increase is listed with “-”) Decrease of inventory (increase is listed with -2,033,200.69 -2,966,733.68 “-”) Decrease of operating receivable accounts -5,809,570.61 1,556,935.35 (increase is listed with “-”) Increase of operating payable accounts 3,419,617.75 -5,553,408.47 (decrease is listed with “-”) Net cash flow arising from operating -3,362,971.19 -8,806,042.23 activities 2. Material investment and financing not -- -- involved in cash flow 3. Net change of cash and cash equivalents: -- -- Balance of cash at period end 15,814,304.99 15,177,305.48 116 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Less: Balance of cash at year-begin 19,177,276.18 24,015,287.71 Net increasing of cash and cash equivalents -3,362,971.19 -8,837,982.23 (2) Net cash paid for obtaining subsidiary in the Period In RMB Amount Including: -- Including: -- Including: -- Other explanation Nil (3) Net cash received by disposing subsidiary in the Period In RMB Amount Including: -- Including: -- Including: -- Other explanation Nil (4) Constitution of cash and cash equivalent: In RMB Item Ending balance Opening balance Ⅰ. Cash 15,814,304.99 19,177,276.18 Including: Cash on hand 55,753.64 100,034.87 Bank deposit available for payment at 15,758,551.35 18,837,402.11 any time Other monetary fund available for 239,839.20 payment at any time Ⅲ. Balance of cash and cash equivalent at 15,814,304.99 19,177,276.18 period-end Other explanation Nil 117 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 77. Notes of changes of owners’ equity Explain the name and adjusted amount in “Other” at end of last period: Nil 78. Assets with ownership or use right restricted In RMB Item Ending book value Restriction reasons Total 0.00 -- Other explanation Nil 79. Foreign currency monetary items (1) Foreign currency monetary items In RMB Ending foreign currency Item Convert rate Ending RMB balance converted balance Other explanation Nil (2) Explanation on foreign operational entity, including as for the major foreign operational entity, disclosed main operation place, book-keeping currency and basis for selection; if the book-keeping currency changed, explain reasons □ Applicable √ Not applicable 80. Hedging Disclosed hedging items and relevant hedging instrument based on hedging’s category, disclosed qualitative and quantitative information for the arbitrage risks: Nil 81. Other Nil 118 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 VIII. Changes of consolidation range 1. Enterprise combined under different control (1) Enterprise combined under different control in the Period In RMB Income of Net profit of Standard to Time point Cost of Ratio of Acquired acquiree from acquiree from Purchasing determine the Acquiree for equity equity equity way Equity purchasing purchasing date purchasing obtained obtained obtained obtained way date to date to date period-end period-end Other explanation Nil (2) Combination cost and goodwill In RMB Combination cost Determination method for fair value of the combination cost and contingent consideration and changes: Nil Main reasons for large goodwill resulted: Nil Other explanation Nil (3) Identifiable assets and liability on purchasing date under the acquiree In RMB Fair value on purchasing date Book value on purchasing date Determination method for fair value of the identifiable assets and liabilities: Nil Contingent liability of the acquiree bear during combination: Nil Other explanation Nil (4) Gains or losses arising from re-measured by fair value for the equity held before purchasing date Whether it is a business combination realized by two or more transactions of exchange and a transaction of obtained control rights in the Period or not 119 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 □Yes √No (5) On purchasing date or period-end of the combination, combination consideration or fair value of identifiable assets and liability for the acquiree are un-able to confirm rationally Nil (6) Other explanation Nil 2. Enterprise combined under the same control (1) Enterprise combined under the same control in the Period In RMB Income of the Net profit of combined the combined Income of the Net profit of party from party from Basis of Standard to combined the combined Equity ratio period-begin period-begin combined Combination determine the party during party during Acquiree obtained in of of under the date combination the the combination combination combination same control date comparison comparison to the to the period period combination combination date date Other explanation Nil (2) Combination cost In RMB Combination cost Explanation on contingent consideration and its changes: Nil Other explanation Nil (3) Assets and liability of the combined party on combination date In RMB On purchasing date At end of last period 120 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Contingent liability of the combined party bear during combination: Nil Other explanation Nil 3. Counter purchase Basic transaction information, basis of counter purchase, whether making up business due to the assets and liability reserved by listed company and basis, determination of combination cost, amount and calculation on adjusted equity by equity transaction Nil 4. Subsidiary disposal Whether lost controlling rights while dispose subsidiary on one time or not □ Yes √ No Whether lost controlling rights in the Period while dispose subsidiary on two or more steps or not □ Yes √ No 5. Other reasons for consolidation range changed Reasons for changed on consolidation range (such as new subsidiary established, subsidiary liquidated etc.)And relevant information Nil 6. Other Nil IX. Equity in other entity 1. Equity in subsidiary (1) Constitute of enterprise group Main operation Share-holding ratio Subsidiary Registered place Business nature Acquired way place Directly Indirectly Shenzhen Emmelle Bicycle and spare Investment Shenzhen Shenzhen 70.00% Industrial Co., parts distribution establishment Ltd. Explanation on share-holding ratio in subsidiary different from ratio of voting right: Nil Basis for controlling the invested entity with half or below voting rights held and without controlling invested entity but with over half and over voting rights 121 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Nil Controlling basis for the structuring entity included in consolidated range Nil Basis on determining to be an agent or consignor: Nil Other explanation Nil (2) Important non-wholly-owned subsidiary In RMB Dividend announced to Share-holding ratio of Gains/losses attributable Ending equity of Subsidiary distribute for minority in minority to minority in the Period minority the Period Shenzhen Emmelle 30.00% -62,245.65 0.00 2,900,454.02 Industrial Co., Ltd. Explanation on share-holding ratio of minority different from ratio of voting right: Nil Other explanation Nil (3) Main finance of the important non-wholly-owned subsidiary In RMB Ending balance Opening balance Subsidia Non-curr Non-curr Non-curr Non-curr Current Total Current Total Current Total Current Total ry ent ent ent ent assets assets liability liability assets assets liability liability assets liability assets liability Shenzhe n Emmelle 30,301,1 1,308,75 31,609,9 21,941,7 21,941,7 31,672,2 1,373,48 33,045,7 23,170,0 23,170,0 0.00 0.00 Industria 80.62 4.49 35.11 55.06 55.06 52.96 1.42 34.38 68.81 68.81 l Co., Ltd. In RMB Current amount Last amount Cash flow Cash flow Total Total Subsidiary Operation from Operation from Net profit comprehensi Net profit comprehensi Income operation Income operation ve income ve income activity activity 122 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Shenzhen Emmelle 44,367,011.1 46,225,592.7 -207,485.52 -207,485.52 1,114,664.36 -1,452,957.89 -1,452,957.89 -9,054,161.55 Industrial 8 7 Co., Ltd. Other explanation Nil (4) Major restriction on using corporate assets and liquidate corporate debts Nil (5) Financial or other supporting provided to structuring entity that included in consolidated financial statement Nil Other explanation Nil 2. Transaction that has owners equity shares changed in subsidiary but still with controlling rights (1) Owners equity shares changed in subsidiary (2) Impact on minority’s interest and owners’ equity attributable to parent company In RMB Other explanation 3. Equity in joint venture and cooperative enterprise (1) Important joint venture and cooperative enterprise Share-holding ratio Accounting treatment on Main operation investment for Name Registered place Business nature place Directly Indirectly joint venture and cooperative enterprise Share-holding ratio or shares enjoyed different from voting right ratio: Basis of the voting rights with 20% below but with major influence, or without major influence but with over 20% (20% included) voting rights hold: 123 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 (2) Main financial information of the important joint venture In RMB Ending balance /Current amount Opening balance /Last amount Other explanation (3) Main financial information of the important cooperative enterprise In RMB Ending balance /Current amount Opening balance /Last amount Other explanation (4) Financial summary for un-important joint venture or cooperative enterprise In RMB Ending balance /Current amount Opening balance /Last amount Joint venture -- -- Total numbers measured by share-holding -- -- ratio Cooperative enterprise -- -- Total numbers measured by share-holding -- -- ratio Other explanation (5) Assets transfer ability has major restriction from joint venture or cooperative enterprise (6) Excess losses from joint venture or cooperative enterprise In RMB Un-confirmed losses not Cumulative un-confirmed Cumulative un-confirmed Name recognized in the Period (or net losses losses at period-end profit enjoyed in the Period) Other explanation 124 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 (7) Un-confirmed commitment with investment concerned with joint venture (8) Contingent liability with investment concerned with joint venture or cooperative enterprise 4. Co-runs operation Share-holding ratio/ share enjoyed Name Main operation place Registered place Business nature Directly Indirectly Share-holding ratio or shares enjoyed different from voting right ratio: If the co-runs entity is the separate entity, basis of the co-runs classification Other explanation 5. Equity in structuring entity that excluding in the consolidated financial statement Relevant explanation 6. Other X. Risk related with financial instrument The major financial instruments of the Company consist of monetary funds, trade receivables, other receivables, trade payables, other payables, etc. details of these financial instruments are disclosed in the relevant notes. Risks relating to these financial instruments and risk management policies adopted by the Company to minimize these risks are detailed as follows. Management of the Company manages and monitors the risk exposures, to make sure they are under control. 1. Risk management targets and policies The objectives of the Company’s risk management is to balance the risk and income, reduce the negative risk impact of operating performance to the lowest level, maximize the interests of shareholders and other equity investors. Based on these objectives, the Company has established risk management policies to identify and analyze the risks faced by the Company, set adequate risk acceptable level and designed relevant internal control system to monitor the level of risks. The Company regularly reviews these policies and related internal control system to adapt to market development and change of operating activities of the Company. The major risks arising from the Company’s financial instruments are credit risk and liquidity risk. (1)Credit risk Credit risk represents the risk of financial loss suffered by a party to a financial instrument due to failure of performance obligation of another party. Credit risk of the Company is managed by category. Credit risk mainly arises from bank deposits and trade receivables. Since the bank deposits of the Company are mainly placed with those banks of high credit rating, the 125 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Company expects no significant credit risk on bank deposits. As for trade receivables, the Company establishes relevant policies to control credit risk exposure. The Company, based on financial position of debtors, their credit records, market conditions and other factors, makes assessment on debtors’ credit quality and sets relevant limit on amount of debt and credit term. The maximum credit risk exposure assumed by the Company equals to the sum of carrying value of every financial asset in the balance sheet. The Company provides no guarantee that may lead it to be exposed to credit risks. (2)Liquidity risk Liquidity risk refers to the risk of capital shortage of the Company when performing settlement obligation via delivery of cash or other financial assets. When managing liquidity risk, the Company maintains and monitors such cash and cash equivalents as deemed adequate by the management, so as to satisfy its operation needs and minimize influence of fluctuation of cash flow. Management of the Company monitors application of bank borrowings to make sure it complies with relevant borrowing agreements. 2. Capital management The capital management policy of the Company is designed to ensure sustainable operation Of the Company so as to bring shareholders return and benefit other stakeholders, and to minimize capital cost by maintaining optimal capital structure. In order to maintain and adjust capital structure, the Company may adjust share dividend paid to shareholders or issue new shares. The Company monitors capital structure based on gearing ratio (total liabilities divided by total assets). As at 30 June 2018, the gearing ratio of the Company was 72.68% (31 December 2017: 74.36%) XI. Disclosure of fair value 1. Ending fair value of the assets and liabilities measured by fair value In RMB Ending fair value Item First-order Second-order Third-order Total I. Sustaining measured by -- -- -- -- fair value (I) Financial assets 0.00 measured at fair value and 126 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 changes accounted in the current profits and losses 1. Transaction financial 0.00 assets (1) Investment in debt 0.00 instruments (2) Investment in equity 0.00 instruments (3) Derivative financial 0.00 assets 2. Financial assets appointed to measure at fair value and changes 0.00 accounted in the current profits and losses (1) Investment in debt 0.00 instruments (2) Investment in equity 0.00 instruments (II) Financial assets 0.00 available for sale (1) Investment in debt 0.00 instruments (2) Investment in equity 0.00 instruments (3) Other 0.00 (III) Investment real estate 0.00 1. Rental land use rights 0.00 2. Rental buildings 0.00 3. Land use rights holding and preparing to transfer 0.00 after add value (IV) Biological assets 0.00 1. Consumption biological 0.00 assets 2. Productive biological 0.00 assets Total assets continuously 0.00 measured by fair value 127 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 (V) Transaction financial 0.00 liabilities Among them: issue of 0.00 transaction bonds Derivative 0.00 financial liabilities Other 0.00 (VI) Financial liabilities appointed to measure at fair value and changes 0.00 accounted in the current profits and losses Total liabilities continuously measured by 0.00 fair value II. Non-sustaining -- -- -- -- measured by fair value (I) Assets held for sale 0.00 Total assets non-continuously 0.00 measured by fair value Total liabilities non-continuously 0.00 measured by fair value 2. Recognized basis for the market price sustaining and non-persistent measured by fair value on first-order Nil 3. Valuation technique and qualitative and quantitative information on major parameters for the fair value measure sustaining and non-persistent on second-order Nil 4. Valuation technique and qualitative and quantitative information on major parameters for the fair value measure sustaining and non-persistent on third-order Nil 128 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 5. Adjustment information and sensitivity analysis of unobservable parameters for the fair value measure sustaining and non-persistent on third-order Nil 6. Sustaining items measured by fair value, as for the conversion between at all levels, reasons for conversion and policy for conversion time point Nil 7. Changes of valuation technique in the Period Nil 8. Financial assets and liability not measured by fair value Nil 9. Other Nil XII. Related party and related transactions 1. Parent company of the enterprise Share-holding ratio Voting right ratio on Parent company Registration place Business nature Registered capital on the enterprise for the enterprise parent company Explanation on parent company of the enterprise We do not have parent company presently Ultimate controlling party: Nil Other explanation: Controlling shareholder and actual controller of the Company have changed on 20 Feburary 2017. Before changed, the first majority shareholder of the Company was Shenzhen Guosheng Energy Investment Developmetn Co., Ltd., actual controller was Mr. Ji Hanfei; the Company has no actual controller and controlling shareholder after changed. Found more in the Annual Report 2016 released on 27 April 2017 and “Reply on Surveillance Attention Letter on CBC from Shenzhen Stock Exchange” released on 26 May 2017 2. Subsidiary of the Enterprise Found more in Note IX-1 129 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 3. Cooperative enterprise and joint venture Found more in Note IX-3 Other cooperative enterprise and joint venture that have related transaction with the Company in the Period or occurred in pervious period Name Relationship Other explanation Nil 4. Other related party Other related party Relationship with the Enterprise Shenzhen Guosheng Energy Investment Development Co., Ltd. The first majority shareholder Other explanation Shenzhen Guosheng Energy Investment Development Co., Ltd. holds 11.52% shares 5. Related transaction (1) Goods purchasing, labor service providing and receiving Goods purchasing/labor service receiving In RMB Approved transaction Whether more than Related party Content Current amount Last amount amount the transaction amount Goods sold/labor service providing In RMB Related party Content Current amount Last amount Explanation on goods purchasing, labor service providing and receiving Nil (2) Related trusteeship/contract and delegated administration/outsourcing Trusteeship/contract In RMB Income from Client/ Entrusting party/ Yield pricing Assets type Starting date Maturity date trusteeship/contra contract-out party contractor basis ct Explanation on related trusteeship/contract Nil Delegated administration/outsourcing 130 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 In RMB Pricing basis of trustee Client/ Entrusting party/ trustee fee/outsourcing contract-out Assets type Starting date Maturity date contractor fee/outsourcing fee recognized in party fee the Period Explanation on related administration/outsourcing Nil (3) Related lease As a lessor for the Company: In RMB Lease income in recognized in Lease income in recognized last Lessee Assets type the Period the Period As a lessee for the Company: In RMB Lease income in recognized in Lease income in recognized last Lessor Assets type the Period the Period Explanation on related lease Nil (4) Related guarantee As a guarantor for the Company In RMB Guarantee completed Secured party Amount guarantee Starting date Maturity date (Y/N) As a secured party for the Company In RMB Guarantee completed Guarantor Amount guarantee Starting date Maturity date (Y/N) Explanation on related guarantee Nil (5) Borrowed funds of related party In RMB Related party Borrowed funds Starting date Maturity date Note Borrowing Lending 131 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 (6) Assets transfer and debt restructuring of related party In RMB Related party Transaction content Current amount Last amount (7) Remuneration of key manager In RMB Item Current amount Last amount Remuneration of key manager 1,258,900.00 1,091,420.00 (8) Other related transactions Nil 6. Receivable/payable items of related parties (1) Receivable item In RMB Ending balance Opening balance Item Related party Book balance Bad debt provision Book balance Bad debt provision (2) Payable item In RMB Item Related party Ending book balance Opening book balance Shenzhen Guosheng Energy Other account payable Investment Development Co., 6,500,000.00 6,500,000.00 Ltd. 7. Commitments of related party Nil 8. Other Nil 132 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 XIII. Share-based payment 1. General share-based payment □ Applicable √ Not applicable 2. Share-based payment settled by equity □ Applicable √ Not applicable 3. Share-based payment settled by cash □ Applicable √ Not applicable 4. Revised and termination on share-based payment Nil 5. Other Nil XIV. Commitment or contingency 1. Important commitments Important commitments in balance sheet date Nil 2. Contingency (1) Contingency on balance sheet date Nil (2) For the important contingency not necessary to disclosed by the Company, explained reasons The Company has no important contingency that need to disclosed 3. Other Nil 133 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 XV. Events after balance sheet date 1. Important non-adjustment items In RMB Impact on financial status and Reasons on un-able to estimated Item Content operation results the impact number 2. Profit distribution In RMB 3. Sales return Nil 4. Other events after balance sheet date Nil XVI. Other important events 1. Previous accounting errors collection (1) Retrospective restatement In RMB Impact items of statement Content Treatment procedures Cumulative impacted number during a comparison (2) Prospective application Reasons for prospective application Accounting error correction Approval procedures adopted 134 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 2. Debt restructuring 3. Assets replacement (1) Non-monetary assets replacement (2) Other assets replacement 4. Pension plan 5. Discontinued operations In RMB Discontinued operations profit Income tax Item Revenue Expenses Total profit Net profit attributable to expenses owners of parent company Other explanation 6. Segment (1) Recognition basis and accounting policy for reportable segment (2) Financial information for reportable segment In RMB Item Offset between segments Total (3) The Company has no reportable segments, or unable to disclose total assts and total liability for reportable segments, explain reasons (4) Other explanation 7. Major transaction and events makes influence on investor’s decision 8. Other 1. Instructions for continuing operations On 11 May 2012, the largest shareholder and biggest creditor of the Company, Shenzhen Guosheng Energy Investment and Development Co., Ltd. applied to Shenzhen Municipal Intermediate People's Court for reforming the Company as the Company couldn’t pay off the matured debts and was seriously insolvent. On 12 October 135 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 2012, Shenzhen Municipal Intermediate People's Court ruled to accept the application proposed by Guosheng Energy according to (2012) Shenzhen Intermediate Court Po Zi No. 30 civil ruling. In late October, 2012, Shenzhen Municipal Intermediate People's Court ruled to reform the Company since 25 October 2012 according to (2012) Shenzhen Intermediate Court Po Zi No. 30-1 civil ruling, appointed King & Wood (Shenzhen) Mallesons and Shenzhen ZhengYuan Liquidation Affairs Co., Ltd. as the custodians of the Company. Subsequently, Shenzhen Municipal Intermediate People's Court made (2012) Shenzhen Intermediate Court Po Zi No. 30-1 written decision, and approved the Company to manage property and business affairs by itself under the supervision of custodians according to the law. On 5 November 2013, the Shenzhen Intermediate People’s Court (2012) Shen Zhong Fa Po Zi No. 30-6 Civil Ruling Paper judged that approved the reorganization plan of the Company. On 27 December 2013, the Civil Ruling Paper Shenzhen Intermediate People’s Court (2012) Shen Zhong Fa Po Zi No. 30-10 ruled that the reorganization plan of CBC was completed and bankruptcy procedures of the Company closed down. The Company has solved the debt problem by reforming, realized the net assets with positive value, the main business of bicycle is able to be maintained and realizes the stable development. The Company has set up the conditions for introducing the recombination party in the reforming plan, and expects to restore the abilities of sustainable operation and sustained profitability by reorganization. The conditions of introducing the recombination party includes: the assessed value of net assets should be no less than 2 billion Yuan, the net assets in the same year for implementing the major reorganization should be no less than 200 million Yuan. The Company doesn’t have the recombination party at the moment. 2. Non-public placement for year of 2016 In July 2016, the Company started to plan a non-public issue of shares with proceeds to be utilized to acquire material assets. The Plan on Non-public Issue of A shares in 2016 was considered and approved by the Board of the Company. Based on the due diligence, audit, assessment and business negation with intermediates, taking into account the conditions of capital market and actual conditions of the Company, the Board of the Company considered and approved the Proposal Relating to Adjusting the Plan of non-public of A Shares, the Explanation on non-public of A-shares for year of 2016 Amendment, the Plan on Non-public Issue of A shares in 2016 (amended), the Plan on Non-public Issue of A shares in 2016 (Second Amended) and Plan on Non-public Issue of A shares in 2016 (Third Amended) from February 2017 to February 2018. According to the three revised drafts, the number of non-public offering of shares should not exceed 110,269,586 shares, and the total amount of funds raised should not exceed 750 million Yuan. The issuing objects of this non-public offering include four specific investors which are Ruian Information, Zhisheng High-tech, Wansheng Industry and Beier High-tech. The subscription amount of Ruian Information does not exceed 250 million Yuan, and the number of subscribed shares does not exceed 36,756,529 shares; the subscription amount of Zhisheng High-tech does not exceed 200 million Yuan, and the number of subscribed shares does not exceed 29,405,223 shares; the subscription amount of Wansheng Industry and Beier High-tech respectively does not exceed 150 million Yuan, and the number of subscribed shares does not exceed 22,053,917 shares respectively. See details on the announcement issued by the board of directors of the company. 136 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 The Company convened the first extraordinary general meeting of 2018 on February 13, 2018 which reviewed and passed the Proposal on Plan on Non-public Issue of A shares in 2016 (Third Amended), etc. XVII. Principle notes of financial statements of parent company 1. Accounts receivable (1) Category In RMB Ending balance Opening balance Book balance Bad debt provision Book balance Bad debt provision Types Book Accrual Accrual Book value Amount Ratio Amount value Amount Ratio Amount ratio ratio Account receivable withdrawal bad debt 17,059,5 51,178.5 17,008,33 17,733, 17,680,663. provision by group of 100.00% 0.30% 100.00% 53,201.59 0.30% 17.71 5 9.16 864.75 16 credit risk characteristics 17,059,5 51,178.5 17,008,33 17,733, 17,680,663. Total 100.00% 0.30% 100.00% 53,201.59 0.30% 17.71 5 9.16 864.75 16 Receivable with single significant amount and withdrawal bad debt provision separately at end of period: □ Applicable √ Not applicable In combination, accounts receivable whose bad debts provision was accrued by age analysis: √ Applicable □ Not applicable In RMB Ending balance Age Account receivable Bad debt provision Accrual ratio Within 1 year Within 1 year 17,059,517.71 51,178.55 0.30% Subtotal within one year 17,059,517.71 51,178.55 0.30% Total 17,059,517.71 51,178.55 0.30% Explanation on combination determines: According to the business scale, business nature, and customers’ settlement, etc., the account receivable with single significant amount is determined to be RMB 5 million. The account receivable with single significant amount has no depreciation reserve, and the reserve for bad debt provision is withdrawn with age analysis method. In combination, withdrawal proportion of bad debt provision based on balance proportion for account receivable: □ Applicable √ Not applicable In combination, withdrawal proportion of bad debt provision based on other methods for account receivable: 137 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 (2) Bad debt provision accrual collected or switch back Bad debt provision accrual was 53,201.59 Yuan; the amount collected or switches back amounting to 2,023.04 Yuan. Important bad debt provision collected or switch back: In RMB Company Collected or switch back amount Collection way Total 0.00 -- Nil (3) Account receivable actual charge off in the Period In RMB Item Amount written off Written-off for the major receivable: In RMB Verification Arising from related Company Nature Amount written off Reason for write-off procedures transaction (Y/N) Total -- 0.00 -- -- -- Explanation for write-off of receivables: Nil (4) Top 5 receivables at ending balance by arrears party Top 5 account recevieblaes at period-end Bad debt Ratio in total Relationship with Item Amount Account age provision receivables Nature the company (%) Shenzhen WTR New Energy Unrelated party 7,923,335.39 Within 1 year 23,770.00 46.44 Paymen Technology Co., Ltd. t for goods Shenzhen BoYiN Technology Unrelated party 5,217,743.51 Within 1 year 15,653.23 30.59 Paymen Co., Ltd. t for goods Shenzhen Jiahaosong Unrelated party 3,918,438.81 Within 1 year 11,755.32 22.97 Paymen Technology Co., Ltd. t for goods Total 17,059,517.71 51,178.55 100.00 138 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 (5) Receivable derecognition due to transfer of financial assets Nil (6) Assets and liability resulted by receivable transfer and continuous involvement Nil Other explanation At end of the period, there was no account receivable from shareholder unit and other related parties that holds 5% (included) voting rights of the Company among Account Receivables 2. Other accounts receivable (1) Other accounts receivable by category In RMB Ending balance Opening balance Book balance Bad debt provision Book balance Bad debt provision Category Book Accrual Accrual Book value Amount Ratio Amount value Amount Ratio Amount ratio ratio Other receivables with bad debt 256,350. 255,580.9 251,350 100.00% 769.05 0.30% 89.34% 754.05 0.30% 250,595.95 provision accrual by 00 5 .00 credit portfolio Other account receivable with individual minor 29,980. amount but 10.66% 29,980.42 42 withdrawal bad debt provision independently 256,350. 255,580.9 281,330 Total 100.00% 769.05 0.30% 100.00% 754.05 0.27% 280,576.37 00 5 .42 Other receivable with single significant amount and withdrawal bad debt provision separately at end of period □ Applicable √ Not applicable In combination, other accounts receivable whose bad debts provision was accrued by age analysis √ Applicable □ Not applicable In RMB Ending balance Age Other receivable bad debts provision Accrual ratio Within 1 year 139 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Within one year (one year 5,000.00 15.00 0.30% included) Subtotal within one year 5,000.00 15.00 0.30% 1-2 years 200.00 0.60 0.30% 2-3 years 251,150.00 753.45 0.30% Total 256,350.00 769.05 0.30% Explanation on combination determines: According to the business scale, business nature, and customers’ settlement, etc., the account receivable with single significant amount is determined to be RMB 5 million. The account receivable with single significant amount has no depreciation reserve, and the reserve for bad debt provision is withdrawn with age analysis method. In combination, withdrawal proportion of bad debt provision based on balance proportion for other account receivable: □ Applicable √ Not applicable In combination, withdrawal proportion of bad debt provision based on other methods for other account receivable: □ Applicable √ Not applicable (2) Bad debt provision accrual collected or switch back Bad debt provision accrual was 15.00 Yuan; the amount collected or switches back amounting to 0.00 Yuan. Important bad debt provision collected or switch back: In RMB Company Amount reversal or collected Collection way Total 0.00 -- Nil (3) Other receivables actually written-off during the reporting period In RMB Item Amount written off Written-off for the major other receivable: In RMB Nature of other Verification Arising from related Company Amount written off Reason for write-off receivables procedures transaction (Y/N) Total -- 0.00 -- -- -- Explanation for write-off of other receivables: Nil (4) Other receivables by nature In RMB 140 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Nature Ending book balance Opening book balance Intercourse funds 29,980.42 Margin or deposit 239,950.00 239,950.00 Equipment money 11,400.00 11,400.00 Staff borrowing 5,000.00 Total 256,350.00 281,330.42 (5) Top 5 other receivables at ending balance by arrears party In RMB Ratio in total ending Ending balance of Company Nature Ending balance Age balance of other bad bet provision receivables Shenzhen Material Deposit or margin 135,723.00 2-3 years 52.94% 407.17 Group Co., Ltd. Shenzhen Anjinheng Deposit or margin 90,100.00 2-3 years 35.15% 270.30 Industrial Co., Ltd. Shenzhen Baifanghe Deposit or margin 13,627.00 2-3 years 5.31% 40.88 Property Co., Ltd. Shenzhen Hongkang Instrument Equipment money 11,400.00 2-3 years 4.45% 34.20 Technology Co., Ltd. Cui Hongxia Staff borrowing 5,000.00 Within 1 year 1.95% 15.00 Total -- 255,850.00 -- 99.80% 767.55 (6) Account receivable with government grants involved In RMB Time, amount and basis Company Item Ending balance Ending age of amount collection estimated Total -- 0.00 -- -- Nil (7) Other account receivable derecognition due to financial assets transfer Nil 141 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 (8) Assets and liability resulted by other account receivable transfer and continuous involvement Nil Other explanation Nil 3. Long-term equity investment In RMB Ending balance Opening balance Item Book balance Impairment Book value Book balance Impairment Book value Investment for 1,400,000.00 1,389,620.27 10,379.73 1,400,000.00 1,389,620.27 10,379.73 subsidiary Total 1,400,000.00 1,389,620.27 10,379.73 1,400,000.00 1,389,620.27 10,379.73 (1) Investment for subsidiary In RMB Ending balance of Increase during Decrease during Impairment The invested entity Opening balance Ending balance impairment the year the year accrual provision Shenzhen Emmelle Industrial 1,400,000.00 0.00 0.00 1,400,000.00 0.00 1,389,620.27 Co., Ltd. Total 1,400,000.00 0.00 0.00 1,400,000.00 0.00 1,389,620.27 (2) Investment for associates and joint venture In RMB +,- Ending Other Cash Investme balance Additiona comprehe dividend Opening nt gains Other Ending of Company l Capital nsive or profit Impairme balance recognize equity Other balance impairme investmen reduction income announce nt accrual d under change nt t adjustmen d to equity provision t issued I. Joint venture Subtotal 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 II. Associated enterprise Subtotal 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 142 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Total 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (3) Other explanation Nil 4. Operating income and cost In RMB Current amount Last amount Item Income Cost Income Cost Main business 20,600,065.94 18,788,402.55 Other business 3,423,452.74 2,057,815.53 3,228,905.96 1,994,075.80 Total 24,023,518.68 20,846,218.08 3,228,905.96 1,994,075.80 Other explanation Nil 5. Investment gains In RMB Item Current amount Last amount 6. Other Nil XVIII. Supplementary Information 1. Current non-recurring gains/losses √ Applicable □ Not applicable In RMB Item Amount Note Other non-operating income and expenditure 41,986.28 except for the aforementioned items Less: Impact on income tax 17,026.35 Impact on minority shareholders’ equity -7,835.74 Total 32,795.67 -- Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to 143 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, explain reasons □ Applicable √ Not applicable 2. REO and earnings per share Earnings per share Profits during report period Weighted average ROE Basic EPS (RMB/Share) Diluted EPS (RMB/Share) Net profits belong to common stock 3.43% 0.0010 0.0010 stockholders of the Company Net profits belong to common stock stockholders of the Company after 3.22% 0.0009 0.0009 deducting nonrecurring gains and losses 3. Difference of the accounting data under accounting rules in and out of China (1) Difference of the net profit and net assets disclosed in financial report, under both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles) □ Applicable √ Not applicable (2) Difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules and Chinese GAAP (Generally Accepted Accounting Principles) □ Applicable √ Not applicable (3) Explain accounting difference over the accounting rules in and out of China; as for the difference adjustment for data audited by foreign auditing organ, noted the name of such foreign organ Nil 4. Other Nil 144 深圳中华自行车(集团)股份有限公司 2018 年半年度报告全文 Section XI. Documents available for reference 1. Accounting statement carrying the signatures and seals of the legal representative, person in charge of accounting and person in charge of accounting organ. 2. Originals documents of the Company and manuscripts of public notices that disclosed in the newspaper designated by CSRC in the report period 3. English version of the Semi-Annual Report 2018 145