Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
GUANGDONG JADIETE HOLDINGS GROUP COMPANY LIMITED
ANNUAL REPORT 2018
2019-009
April 2019
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Part I Important Notes, Table of Contents and Definitions
The Board of Directors (or the “Board”), the Supervisory Board as well as the Directors,
Supervisors and senior management of Guangdong Jadiete Holdings Group Company
Limited (the “Company”) hereby guarantee the factuality, accuracy and completeness of the
contents of this Report and its abstract, and shall be jointly and severally liable for any
misrepresentations, misleading statements or material omissions in this Report and its
abstract.
HongCheng Chen, the Company’s legal representative, Jincai Chen, the Company’s Chief
Financial Officer (CFO), and Zeng Zhihua, head of the Company’s financial department
(equivalent to financial manager) hereby guarantee that the Financial Statements carried in
this Report are factual, accurate and complete.
All the Company’s Directors have attended the Board meeting for the review of this Report
and its abstract.
Asia Pacific (Group) CPAs (Special General Partnership) issued a qualified audit report on
the Company's 2018 audit report. the Board of Directors, the Supervisory Committee have
explained the relevant matters in detail, please pay attention to reading.
In year 2017 and 2018, the company has been in deficit for two consecutive years. If the
company can’t make profits in 2019, it will face the risk of listing suspension.
The risk of great uncertainty in future operating earnings. The risk of great uncertainty in
future operating earnings: For the Reporting Period, the Company realized net income
attributable to the Company (as the parent company) of RMB-13.3926 million with this figure
before non-recurring gains and losses being RMB--13.77million. The Company's existing
main business scope covers gold and jewelry and garments e-commerce. In recent years, the
gold and jewelry industry has been highly competitive and its profits have declined year by
year. The garments e-commerce is constrained by less investment and effectiveness will take a
long time. Although the company acquired 49% of the other shareholders of Chinese Gold
Nobility at the end of 2018, hope to improve the current situation of profit by increasing the
support for Chinese Gold Nobility, there is still great uncertainty in future operating earnings.
The company failed to sign corresponding anti-guarantee agreements with Puning
Huafengqiang Trade Co., Ltd. and Puning Lailisheng Trade Co., Ltd. for the loans borrowed
during the term of mortgage guarantee, so then cause the risk of contingent liabilities. Refer
to relevant contents in “part V Significant Events” of this report for details.
Forward-looking statements concerning future plans does not constitute a company's
substantive commitment to investors, investors and relevant persons should have adequate
risk awareness, and should understand the differences between plans, budgets and
commitments.
The Company is required to comply with the disclosure requirements of "Guidelines for
Information Disclosure in Shenzhen Stock Exchange Industry No. 11 - Listed Company
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Engaging in Jewelry-related Business".
The main business of the company is the wholesale of gold goods, because of the relatively
small scale, in order to meet the needs of customers, the product structure of the inventory is
relatively single and the balance is large. At the same time, because the customers are
relatively single, Higher dependence on customers, and great impact of fluctuations in
customer operations, the company plans to actively expand new customer channels,
improving sales, on the premise of gradually improving the content of inventory varieties,
gradually reducing the risk of higher inventory.
The Company plans not to distribute cash or share dividend, converted either from retained
earnings or capital reserves, for the Reporting Period.
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Table of Contents
Part I Important Statements, Table of Contents and Definitions………………………………..2
Part II Corporate Profile and Key Financial Information……………………………………….6
Part III Business Summary……………………………………………………………………….10
Part IV Company Performance Discussion and Analysis……………………………………….12
Part V Significant Events………………………………………………………………………….29
Part VI Share Changes and Shareholder Information………………………………………….41
Part VII Preferred Shares………………………………………………………………………...49
Part VIII Directors, Supervisors, Senior Management and Staff……………………………...50
Part IX Corporate Governance…………………………………………………………………..56
Part X Corporate Bonds………………………………………………………………………….66
Part XI Financial Statements…………………………………………………….……………….67
Part XII Documents Available for Reference……………………………………………………85
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Definitions
Term Definition
Reporting Period January 1, 2018-December 31, 2018
CSRC China Securities Regulatory Commission
SZSE, the stock exchange Shenzhen Stock Exchange
Company, the Company GUANGDONG JADIETE HOLDINGS GROUP COMPANY LIMITED
Shenghengchang Huifu Shenzhen Shenghengchang Huifu Industrial Co., Ltd.
Risheng Chuangyuan Shenzhen Risheng Chuangyuan Asset Management Co., Ltd.
Lianhua Huiren Shenzhen Lianhua Huiren Industrial Co., Ltd.
Shenguorong Financing Guarantee Shenzhen Shenguorong Financing Guarantee Co., Ltd.
Future Growing Business Fund Shenzhen Future Growing Business Fund (Limited Partnership)
Chinese Gold Nobility Shenzhen Chinese Gold Nobility Jewelry Co., Ltd.
Yuan, wan yuan RMB, million RMB
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Part II Corporate Profile and Key Financial Information
I Corporate Information
Stock name JHG-B Stock symbol 200168
Stock exchange Shenzhen Stock Exchange
Company name in Chinese 广东舜喆（集团）股份有限公司
Abbr. 舜喆
Company name in English (if
GUANGDONG JADIETE HOLDINGS GROUP COMPANY LIMITED
any)
Abbr. (if any) JHG
Legal representative Chen Hongcheng
Registered address Meixin Industrial Park of Jun Bu Town, Puning, Guangdong
Registered address Zip code 515300
Office address 9Q of No. 990 of Yiben E-commerce Building, Xili, Nanshan District, Shenzhen
Office Zip code 518000
Company website http://www.200168.com
Email address JHG@200168.com
II Contact Information
Board Secretary Securities Representative
Name Xu Wei
9Q of No. 990 of Yiben E-commerce
Address
Building, Xili, Nanshan District, Shenzhen
Tel. 0755-82250045
Fax 0755-82251182
E-mail xw@200168.com
III Media for Information Disclosure and Place where this Report Is Kept
Newspapers designated by the Company for information
Securities Times and Ta Kung Pao (HK)
disclosure
Website designated by the China Securities Regulatory
http://www.cninfo.com.cn
Commission (CSRC) for the publication of this Report
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
9Q of No. 990 of Yiben E-commerce Building, Xili, Nanshan District,
Place where this Report is kept
Shenzhen
IV Company Registered Information and Alterations
Credibility code 914452002311318335
The main business of the Company shifted from garment making to real estate
Changes in main business activities of the
development in 2013;
Company after going public (if any)
The real estate development changed to gold and other jewelry sales in 2015.
Changes of controlling shareholder (if any) No changes
V Other Information
Independent certified public accounting (or “CPA”) firm hired by the Company:
Name Asia (Group) CPAs (Special General Partnership)
Office address Room 301, No. 2 of Tower B, No. 9 Block, Chegongzhuang Street, West City District, Beijing
Accountants writing signatures Zhou Ying, and Zhou Hanjun
Independent sponsor hired by the Company to exercise constant supervision over the Company in the Reporting Period:
□ Applicable √ Not applicable
Independent financial advisor hired by the Company to exercise constant supervision over the Company in the Reporting Period:
□ Applicable √ Not applicable
VI Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
Unit: RMB
December 31, 2018 December 31, 2017 Change of December
31, 2018 over December 31, 2016
December 31, 2017
Sales revenue (RMB) 96,715,841.62 563,989,732.95 -82.85% 353,590,916.19
Net income attributable to
shareholders of the listed company -13,392,596.16 -14,352,474.20 -6.69% 2,233,673.97
(RMB)
Net income attributable to
shareholders of the listed company -13,770,099.67 -6,842,761.55 101.24% -8,350,470.00
before nonrecurring gains and
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
losses (RMB)
Net cash flows from operating
-85,829,630.50 -8,650,294.89 892.22% -165,486,852.60
activities (RMB)
Basic earnings per share
-0.0420 -0.0450 -6.67% 0.0070
(RMB/share)
Diluted earnings per share
-0.0420 -0.0450 -6.67% 0.0070
(RMB/share)
Weighted average return on equity
-3.87% -3.99% 0.12% 0.61%
(%)
December 31, 2018 December 31, 2017 Change of December
31, 2018 over December 31, 2016
December 31, 2017
Total assets (RMB) 544,902,591.70 723,587,997.04 -24.69% 520,194,679.60
Equity attributable to shareholders
339,099,061.64 352,491,657.80 -3.80% 366,670,353.78
of the listed company (RMB)
VII Accounting Data Differences under Chinese Accounting Standards (CAS) and
International Financial Reporting Standards (IFRS) and Foreign Accounting Standards
1. Net Income and Equity Differences under CAS and IFRS
□ Applicable √ Not applicable
No such differences for the Reporting Period.
2. Net Income and Equity Differences under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No such differences for the Reporting Period.
VIII Key Financial Information by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Sales revenue 57,606,553.93 36,443,097.82 1,033,574.67 1,632,615.20
Net income attributable to
-2,556,355.94 -2,447,843.97 -2,684,050.35 -5,704,345.90
shareholders of the listed company
Net income attributable to
shareholders of the listed company
-2,723,421.34 -3,868,237.50 -2,425,833.51 -4,752,607.32
before nonrecurring gains and
losses
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Net cash flows from operating
-801,141.44 -404,549.99 -42,016.63 -84,581,922.44
activities
Indicate by tick mark whether any of the financial data in the table above or their summations differs materially from what have been
disclosed in the Company’s quarterly or semi-annual reports.
□ Yes √ No
IX Nonrecurring Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Item 2017 2016 2015 Note
Gains and losses on disposal of non-current assets
(inclusive of offset allowance for asset 11,696,303.42
impairments)
Gains and losses on changes in fair value of trading
investment income of
financial assets and liabilities & investment income
RMB536.00 from
from disposal of trading financial assets and
536.00 -7,082,693.26 -2,623,041.24 disposal of
liabilities and available-for-sale financial assets
transactional financial
(exclusive of effective portion of hedges that arise
assets
in the Company’s ordinary course of business)
Reversed portion of impairment allowance for
accounts receivable on which impairment test is 2,291,344.62
carried out separately
Non-operating income and expense other than
419,561.43 -355,915.00 7,436,312.07
above
Other gains and losses that meet definition of
-3,800,201.39
nonrecurring gain/loss
Less: Income tax effects 1,037.86 867,026.81 4,618,152.22
Non-controlling interests effects (net of tax) 41,556.06 -795,922.42 -201,578.71
Total 377,503.51 -7,509,712.65 10,584,143.97 --
Explanation of why the Company classifies an item as a nonrecurring gain/loss according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Nonrecurring Gains and
Losses, or reclassifies any nonrecurring gain/loss item listed in the said explanatory announcement as a recurring gain/loss:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Part III Business Summary
I Main Business Scope of the Company in the Reporting Period
Is the Company subject to any disclosure requirements for special industries?
Yes.
Jewelry related industry
The Company is required to comply with the disclosure requirements of "Guidelines for
Information Disclosure in Shenzhen Stock Exchange Industry No. 11 - Listed Company Engaging
in Jewelry-related Business".
The gold and jewelry business is operated by the controlled subsidiary Shenzhen Chinese Gold
Nobility Jewelry Co., Ltd. (Chinese Gold Nobility). The Company has been engaged in the
circulation field of gold and jewelry industry for many years with the main business scope of gold,
silver, platinum, diamond, jade, jewelry and its sales business.
1. Macro-economic and Industry Development
Data from the National Bureau of Statistics, The total retail sales of social consumer goods
year-on-year growth by 8.2% in December and 9.0% in January-December 2018, and gold and
silver jewelry goods year-on-year growth by 2.3% and 7.4% in December and January-December
2018. On the one hand, gold consumption with the deepening of financial deleveraging, people hold
a wait-and-see attitude to all kinds of investment and financial management, holding cash has
become the first choice of the public; On the other hand is long-term narrow volatility of gold price,
In particular the strong performance of the dollar index, causing investors to lack confidence in the
rise of gold prices.
2. Company's position in the Industry and Competitive Advantage
Chinese Gold Nobility is located in China's largest jewelry industry cluster – Shenzhen, as
consumers' consumption habits change from past gold to inlaid jewelry and diamonds, pay more
attention to brand, identity and experience, the trend of brand differentiation in jewelry industry is
obvious, the competition in the market more and more intensely. Because of its relative weakness in
capital, brand and personnel, and its relatively low position in the industry, Chinese Gold Nobility
has been greatly impacted by competition.
3. Major Business Conditions
During the reporting period, the company's main sales mode is wholesale, no direct store sales.
Income from main business during the reporting period is RMB92.991million, Operating cost RMB
92.723million，rate of margin is 0.28%.
The income of the main sales modes is as follows (unit: yuan)
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Mode Operating income Operating cost Rate of
margin
Wholesale 92,451,301.46 92,193,827.82 0.28%
Retail 539,337.43 533,212.16 1.14%
Total 92,990,638.89 92,727,039.98 0.28%
Production and procurement
During the reporting period, the main mode of production of holding subsidiaries is commissioned
processing, production capacity is 1092 kg, accounting for 100.00%. The main purchasing mode is
spot trading, with the purchasing volume of 2110 kg and the purchasing amount of 105.268 million
yuan, accounting for 100.00% of the total purchasing amount.
II Material Change in Main Assets
1. Material Change in Main Assets
Major assets Significant changes
The Company took a stake in Shenzhen Future Industry Development Funds Company
Equity assets (L.P.) with self-owned funds of RMB120 million (hereinafter referred to as “buyout
fund”).
The Company rent out the idle workshops. The accounting title of “fixed assets” was
Fixed assets
converted into “investment property” to be measured.
The Company rent out the idle workshops. The accounting title of “fixed assets” was
intangible assets
converted into “investment property” to be measured.
Notes Receivable and Accounts
Recovery of accounts receivable
Receivable
Advance payment Unfulfilled procurement contract
Other receivables Other receivables received
the company sells 30% equity of Shenguorong Guarantee，accounting subjects
Hold-for-sale assets transferred from "Long-term Equity Investment" to " Hold-for-sale assets" to
measure
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
2. Main Assets Overseas
□ Applicable √ Not applicable
III Core Competitiveness Analysis
Is the Company subject to any disclosure requirements for special industries?
Yes
Jewelry related industry
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Part IV Company Performance Discussion and Analysis
I Overview
For the Reporting Period, the Company recorded sales revenue of RMB 96.7158million, decreasing
by 82.85%from RMB 563.9897million of of last year, the Company recorded operating income of
RMN -13.4961million,increasing by 63.46% from RMB-8.2567million of last year, that is because
net profit of parent company is RMB -13.3926,decreasing by 6.69% from -14.3525million of last
year. The changes in the above-mentioned indicators are mainly due to the impact of the downturn
in the economy, insufficient consumption and fierce competition in the industry during the reporting
period.
Main Work Contents in 2018:
1. Resolve matters related to qualified opinion in the 2017 audit report
(1) On 30th Nov. 2018, the company signed an equity transfer agreement with Shenzhen Gaopu
Industrial Co., Ltd. to transfer the company's 30% equity of the financing guarantee company at a
price of RMB 150 million. As of the reporting date, the company has received a total of 75 million
yuan of equity transfer.
(2) On 30th Nov. 2018, the company received a notification from the Future Industrial Fund that the
future industrial fund plans to recover its investment by selling its Jinshitong holdings and 45% of
its equity holdings, and to pay the corresponding amount through profit distribution. By the
reporting date, the company had received a cumulative dividend of RMB 19.4 million.
(3) On 16th May, The company received a total of RMB 14.85 million from Puning Huafengqiang
Trading Co., Ltd. The counter-guaranteed amount of RMB 17 million from Puning Huafengqiang
Trading Co., Ltd. has been received by the company.
(4) On 1th Aug., The company received a total of RMB 23.25 million from Puning Lailisheng
Trading Co., Ltd. The counter-guaranteed amount of RMB 24 million from Puning Lailisheng
Trading Co., Ltd. has been received by the company.
In summary, the qualified opinions in the 2017 audit report have been resolved.
2. Improving internal control and implementing rectification plan
(1) According to the issues in 2017, The company formulated and revised "Comprehensive Budget
Management Measures", "Foreign Investment Management System", "Securities Investment
Management System", "Foreign Guarantee Management System", "Independent Director
Performance System", "Independent Director Annual Report Work System", "Audit Committee
Annual Report Work Regulations" and "Director, Supervisor and Senior Manager Training System"
a series of rules and regulations.
(2) Improve the organizational structure of the company, set up new risk control and investment
management departments, further improve the functions of power and responsibility, improve the
key nodes of risk control, make up for the shortcomings of the company control system.
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
3. Joining in Military Industry, Focusing on Industry and Seeking Change
In view of the company's business tradition and lack of growth characteristics, the company intends
to increase the capital of Hunan Microconductor Technology Co., Ltd. By adding capital to the
company, the company can enter the military industry, participate in national pre-research projects,
and decide whether to continue to increase investment according to the progress of the project. If
the future development of micro-conductor company is successful, the company can profit by
selling this part of the equity or transforming into a military enterprise. As of the deadline, due to
the characteristics of the company, Hunan Microconductor Technology Co., Ltd. terminated the
corresponding capital increase.
4. Acquisiof the rights and interests of other shareholders of Chinese Gold Nobility, preparing for
profitability in 2019
Long-term equity investment was the main investment in the company's Previous asset structure, and
the business scale was relatively small. After selling the corresponding long-term equity investment
in 2018, it is no longer in line with the actual situation of the company to re-select new business in
order to achieve the goal of profit in 2019. Therefore, the company can only seek development in its
original business. Since the capital increase of Chinese Gold Nobility in 2015, the company has
made some achievements, and cccording to the overall economic situation, adjustments have been
made in personnel, mode of operation and products in 2018. The company comprehensively
evaluates its existing businesses, and believes that by acquiring the rights and interests of other
shareholders of Chinese Gold Nobility and increasing its investment in Chinese Gold Nobility, the
company can achieve its profit target in 2019.
The Company is required to comply with the disclosure requirements of "Guidelines for
Information Disclosure in Shenzhen Stock Exchange Industry No. 11 - Listed Company Engaging
in Jewelry-related Business".
II Analysis of Main Business
1. Summary
See “I Overview” in “Part IV Company Performance Discussion and Analysis”, herein
2. Revenue and Cost
(1) Breakdown of Sales Revenue
Unit: RMB
2018 2017
Percentage of total Percentage of total Change
Sales revenue Sales revenue
sales revenue (%) sales revenue (%)
Total 96,715,841.62 100% 563,989,732.95 100% -82.85%
By operating division
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Gold jewelry
92,990,638.89 96.15% 471,002,217.43 83.51% -80.26%
wholesale
Nickel metal 89,128,220.12 15.80% -100.00%
clothing sale 14,089.29 0.01%
Clothes sales by
3,265,547.17 3.38% 2,578,894.12 0.46% 26.63%
electric business
Internal purchase
-13,259.84 -0.01%
offset
Leasing 458,826.11 0.47% 1,280,401.28 0.23% -64.17%
By operating segment
Gold jewelry 92,990,638.89 96.15% 471,002,217.43 83.51% -80.26%
Nickel metal 89,128,220.12 15.80% -100.00%
Clothes sales by
3,265,547.17 3.38% 2,578,894.12 0.46% 26.63%
electric business
Leasing 458,826.11 0.47% 1,280,401.28 0.23% -64.17%
clothing sale 14,089.29 0.01%
Internal purchase
-13,259.84 -0.01%
offset
By operating segment
Shenzhen gold
92,990,638.89 96.15% 471,002,217.43 83.51% -80.26%
jewelry sales
Domestic Nickel
89,128,220.12 15.80% -100.00%
metal sales
Clothes sales by
3,265,547.17 3.38% 2,578,894.12 0.46% 26.63%
electric business
Rents in Puning 458,826.11 0.47% 1,280,401.28 0.23% -64.17%
clothing sale 14,089.29 0.01%
Internal purchase
-13,259.84 -0.01%
offset
(2) Operating Division, Product Category or Operating Segment Contributing over 10% of Sales Revenue
or Income
□ Applicable √ Not applicable
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
3) Whether Revenue from Physical Sales Is Higher than Service Revenue
√Yes □ No
Operating division Item Unit 2018 2017 Change
Unit sales Gram 315,563.3
Gold jewelry
Output Gram 756,777.19
industry
Inventory Gram 643,527.94
Unit sales Ton 0 1,244.33 -100.00%
Nickel metal Output Ton
industry Inventory Ton
Purchase Ton 0 1,244.33 -100.00%
Reason for any over 30% YoY movements in the data above:
√ Applicable □ Not applicable
1、
2、The business of nickel trade was terminated during the reporting period.
(4) Execution Progress of Major Signed Sales Contracts in Reporting Period
□ Applicable √ Not applicable
(5) Breakdown of Cost of Sales
By operating division
By operating division
Unit: RMB
2018 2017
Operating Percentage of Percentage of
Item Change
division Cost of sales total cost of sales Cost of sales total cost of sales
(%) (%)
Gold jewelry 92,727,039.98 97.70% 455,667,340.77 83.43% 14.27%
Nickel metal 0.00 0.00% 88,078,333.76 16.13% -16.13%
Note
(6) Change in Scope of Consolidated Financial Statements for Reporting Period
√ Yes □ No
On 20th Jul. 2018, the company acquired 100% equity of Shenzhen MaJiaKe Blue Arrow
Technology Co., Ltd. directly and indirectly. Shenzhen MaJiaKe Blue Arrow Technology Co., Ltd.
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
was incorporated into the scope of merger.
(7) Major Change in Business Scope or Product or Service Range in Reporting Period
□ Applicable √ Not applicable
(8) Main Customers and Suppliers
Main customers:
Total sales to top five customers (RMB) 92,917,790.84
Total sales to top five customers as a percentage of total
96.08%
sales of Reporting Period (%)
Total sales to related parties among top five customers as
0.00%
a percentage of total sales of Reporting Period (%)
Information about top five customers:
Sales revenue generated Percentage of total sales of Reporting
No. Customer
(RMB) Period (%)
Shenzhen Yuetong International Jewelry
1 64,942,630.49 67.15%
Co., Ltd
Shanghai Wangjiao Electrical and
2 25,417,241.20 26.28%
Mechanical Equipment Co., Ltd.
3 Shanghai Jane Cheng Trading Co., Ltd. 892,382.94 0.92%
4 Anhui Yuelang Jewelry Co., Ltd. 856,395.71 0.89%
5 Wuxi Hengye Technology Co., Ltd. 809,140.50 0.84%
Total -- 92,917,790.84 96.08%
Other information about the main customers
□ Applicable √ Not applicable
Main suppliers:
Information about top five supplier:
Percentage of total purchases of Reporting
No. Supplier Payment for purchases (RMB)
Period (%)
Other information about the main suppliers
□ Applicable √ Not applicable
3. Expense
Unit: RMB
2018 2017 Change Reason for material change
Selling expenses 1,744,103.28 2,356,701.67 -25.99% Sales decline
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Administrative expenses 10,856,989.37 12,163,438.76 -10.74% cost control
Finance costs 313,896.47 764,433.31 -58.94% Interest reduction
4. Research and Development Expense
□ Applicable √ Not applicable
5. Cash Flows
Unit: RMB
Item 2018 2017 Change
Subtotal of cash generated by
305,749,150.46 651,878,822.01 -53.10%
operating activities
Subtotal of cash used in
391,578,780.96 660,529,116.90 -40.72%
operating activities
Net cash flows from operating
-85,829,630.50 -8,650,294.89 892.22%
activities
Subtotal of cash generated by
94,406,852.00 10,079,798.66 836.59%
investing activities
Subtotal of cash used in
610,130.10 122,359,785.22 -99.50%
investing activities
Net cash flows from investing
93,796,721.90 -112,279,986.56 -183.54%
activities
subtotal of cash outflow by
9,310,000.00
fund-raising activities
Net cash flow from
-9,310,000.00
fund-raising activities
Net increase in cash and cash
-1,342,859.15 -120,930,777.44 -98.89%
equivalents
Explanation of why any of the data above varies materially:
√ Applicable □ Not applicable
The decrease of net cash flows from operating activities was due to the sales decline.
The sharp decrease in net cash flow from operating activities is mainly due to the increase in cash outflow from operating activities.
The sharp increase in the subtotal of cash generated by investing activities is due to the recovery of investment
The sharp decrease in subtotal of cash used in investing activities is no large investment
Major changes in cash flow subtotal of fund-raising activities and net cash flow generated by fund-raising activities are due to
dividends.
Significant net increase in cash and cash equivalents is no large investment.
Reason for any material difference between the net operating cash flows and the net income of the Reporting Period:
□ Applicable √ Not applicable
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
III Non-Core Business Analysis
√ Applicable □ Not applicable
Unit: RMB
Percentage of pretax
Amount Source/Reason Recurring or not
income (%)
Investment profit 1,440.00 0.01% No
Profit/Loss on fair No
1,976.00 0.02%
value changes
Increase of losses on bad No
Asset impairment 1,406,206.64 10.75% debt during the Reporting
Period.
Non-operating Breach of contract No
609,312.29 4.66%
revenue compensation income
Non-operating Fine and fine for delaying No
189,750.86 1.45%
expense payment
IV Analysis of Assets and Liabilities
1. Material Change in Asset Composition
Unit: RMB
December 31, 2018 December 31, 2017
Change in
Percentage of Percentage of
percentag Reason for material change
Value total assets Value total assets
e (%)
(%) (%)
Monetary assets 1,613,340.23 0.30% 2,956,199.38 0.41% -0.11%
Accounts
22,021,179.73 4.04% 153,954,425.28 21.28% -17.24% Received accounts receivable
receivable
158,915,234.3
Inventories 29.16% 161,350,742.00 22.30% 6.86%
2
Investment
4,774,374.35 0.88% 15,057,817.47 2.08% -1.20%
property
Long-term equity 100,600,000.0 Sell Shenzhen Guorong Guarantee
18.46% 269,998,221.71 37.31% -18.85%
investment 0 Equity
Fixed assets 34,965,810.73 6.42% 29,961,223.62 4.14% 2.28%
Hold-for-sale 149,998,221.7 Sell Shenzhen Guorong Guarantee
27.53% 0.00 0.00% 27.53%
assets 0 Equity
19
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
2. Assets and Liabilities Measured at Fair Value
□ Applicable √ Not applicable
3. Restricted Asset Rights as of End of Reporting Period
①The Company mortgaged its real estate for Puning Huafengqiang Trade Co., Ltd. and signed a
maximum loan contract with ICBC Jieyang Rongcheng Sub-branch (RCZH (2014) GD Zi No. 3632;
the secured principle credit was from Nov. 11, 2014 to Nov. 11, 2019) to provide the pledge
guarantee.Puning Huafengqiang Trade Co., Ltd. signed RMB 11.7million loan contract with ICBC
Jieyang Rongcheng Sub-branch on May. 18, 2018, and the borrowing period was for 12 months
②The Company mortgaged its real estate for Puning Lailisheng Trade Co., Ltd. and signed a
maximum loan contract with ICBC Jieyang Branch to provide the pledge guarantee. the secured
principle credit was from 8th Sep.2017 to 8th Sep. 2022. Puning Lailisheng Trade Co., Ltd. signed
RMB 23.79million small business borrowing contract with ICBC Jieyang Branch on Aug. 22, 2018,
and the borrowing period was for 6 months.
V Investments Made
1. Total Investment Amount
√ Applicable □ Not applicable
Total investment amount of Reporting Total investment amount of last year
Change
Period (RMB) (RMB)
24,658,200.00 120,601,881.00 -79.55%
2. Material Equity Investments Made in Reporting Period
√ Applicable □ Not applicable
Unit: RMB
Investm Return Index
Main The
Source ent on Any to
busines Amoun Compa Project
Way of of Term of Type of progres investm legal Disclos disclose
Investe s scope t of ny’s Joint ed
investm investm investm investm s as of ent in matter ure date d
e of investm stake in investor earning
ent ent ent ent balance Reporti involve (if any) informa
investe ent investe s
funds sheet ng d tion (if
e e
date Period any)
Shenzh Announ
Chines
Self-ow en 15th cement
e Gold Gold acquisit 24,500, Perpetu Finishe 4,260,0 161,62
49.00% ned Chinese Equity No Dec. on
Nobilit jewelry ion 000.00 al d 00.00 2.47
funds Gold 2018 “Secur
y
Nobilit ities
20
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
y Times”
Jewelry , “The
Co., Dagon
Ltd. g
Daily";
Giant
Tide
Inform
ation
Networ
k
www.c
ninfo.c
om.cn;
Bulleti
n on
Acquisi
tion of
Equity
of
Shenz
hen
Chines
e Gold
Nobilit
y
Jewelr
y Co.,
Ltd.
2018-0
65）
24,500, 4,260,0 161,62
Total -- -- -- -- -- -- -- -- -- -- --
000.00 00.00 2.47
3. Material Non-Equity Investments Ongoing in Reporting Period
□ Applicable √ Not applicable
4. Financial Investments
(1) Securities Investments
√ Applicable □ Not applicable
Unit: RMB
21
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Gain/Lo
Accumu
ss on Source
Variety Symbol lated
Account fair Purchas Gain/los
Name of Initial fair Sold in of
of of ing Opening value ed in s in Closing Account
value Reporti
securitie investm measure carrying changes Reporti Reporti carrying investm
securitie securitie changes ng
ment value in ng ng value ing title
s ent cost charged Period ent
s s method Reporti Period Period
to
ng funds
equity
Period
Transact
Fair Self-ow
Foreign 8,292.0 6,316.0 6,852.0 ional
603398 BBYZ value -960.00 -960.00 0.00 536.00 0.00 ned
stock 0 0 0 financia
method funds
l assets
8,292.0 6,316.0 6,852.0
Total -- -960.00 -960.00 0.00 536.00 0.00 -- --
0 0 0
Disclosure date of
announcement on Board’s
consent for securities
investment
Disclosure date of
announcement on
shareholders’ meeting’s
consent for securities
investment (if any)
(2) Investments in Derivative Financial Instruments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Use of Funds Raised
□ Applicable √ Not applicable
No such cases in this Reporting Period.
VI Sale of Major Assets and Equity Interests
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in this Reporting Period.
2. Sale of Major Equity Interests
√ Applicable □ Not applicable
22
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Net Whethe
profit r it is
(RMB implem
10K) of The ented
the proporti as
equity on of planne
contrib net d or
ution to The profit Has all not,
Index to
Transa the Impact contrib Pricing If Relation the and if
disclose
the ction listed of uted by Principl connect ship equity No, the Disclos
Trading On sell d
date of price compa Sales equity e of ed with involve reason ure date
party Equity informat
sale (10K ny from on sale to Equity transacti trading d been s and (if any
ion (if
yuan) the Compa total Sale on party transfer measur
any)
beginni ny net red es
ng of profit of taken
the listed by the
current compa compa
period ny ny shall
to the be
date of explain
sale ed.
Announ
cement
on
“Securi
ties
Times”,
“The
Dagon
Shengu g
Shenzhe
orong Daily";
n Gaopu 30th 30th
Guaran Recove consulta Giant
Industri Sep. 15,000 0 0.00% No No No Yes Nov.
tees ry fund tion Tide
al Co., 2018 2018
30% Informa
Ltd.
Equity tion
Networ
k
www.cn
info.co
m.cn;
Bulletin
on
Acquisi
23
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
tion of
Equity
of
Shenzh
en
Chines
e Gold
Nobility
Jewelry
Co.,
Ltd.
2018-05
9）
VII Main Controlled and Joint Stock Companies
√ Applicable □ Not applicable
Main subsidiaries and joint stock companies with an over 10% influence on the Company’s net profit
Unit: RMB
Relationship Main
Company business Registered Sales Operating
with the Total assets Net assets Net income
name scope capital revenue income
Company
Shenzhen
Chinese Gold
Gold and 213,150,374. 58,169,436.7 92,990,638.8
Nobility Subsidiary 33,333,300 977,925.92 329,841.78
other jewelry 55 8 9
Jewelry Co.,
Ltd.
Shenzhen
Investment
Rieys 30,411,570.2 28,001,009.1 -2,596,376.5 -1,750,642.9
Subsidiary and import & 50,000,000 14,089.29
Industrial 6 7 5 1
export
Co., Ltd.
报告期内取得和处置子公司的情况
√ 适用 □ 不适用
公司名称 报告期内取得和处置子公司方式 对整体生产经营和业绩的影响
深圳市玛伽克蓝箭科技有限公司 收购 无
主要控股参股公司情况说明
不适用
24
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
VIII Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
IX Outlook for the Future Development of the Company
1. The main problems in business are small scale, many but not lean and weak competitiveness
In 2019, the company will concentrate on the gold jewelry business. Through the support of various
resources, we hope to make the jewelry business a step forward in 2019 and reverse the loss
situation in 2018. For the trade and apparel e-commerce business, do a good job of closing, the
revenue should be collected, do a good job of subtraction
2. In terms of personnel, it is mainly necessary to increase professional personnel to develop the
market.
At the beginning of 2018, Chinese Gold Nobility anticipated the market risks faced in that year,
compressed and streamlined its cost and personnel in advance. In 2019, Chinese Gold Nobility
needs to increase the corresponding personnel to ensure the realization of the corresponding goals.
3.In 2019, the company's use of idle plant assets will also be on the agenda. The company will
formulate effective measures to revitalize this part of idle assets, so that it can generate a certain
profit for the company.
4. In view of the current situation of the main business tradition, fierce competition and weak
growth, the company is also seeking suitable projects to adjust its business at the right time on the
premise of supporting the development of the main business. Future adjustments will end years of
frequent changes in company's main business, weak scale, and weak sustainable development.
X Visits Paid to the Company for Purposes of Research, Communication, Interview, etc.
1. In this Reporting Period
√ Applicable □ Not applicable
Date of visit Way of visit Type of visitor Index to main inquiry information
By phone Individual Announcement time of company
4th Jan. 2018
performance forecast
8th Jan. 2018 By phone Individual Recent Operations of the Company
10th Jan. 2018 By phone Individual Recent Operations of the Company
12th Jan. 2018 By phone Individual Announcement time of company
performance forecast
By phone Individual The company's recent investment
2 Feb. 2018
th
situation and the implementation of
the increase plan
19th Mar.2018 By phone Individual Recent Situation of Non-tradable
25
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Shareholders
By phone Individual Company Investment and
9th Apr.2018
Shareholders' Recent Situation
By phone Individual Company Investment and
16th Apr.2018
Shareholders' Recent Situation
24th Apr.2018 By phone Individual Company investment
24th Apr.2018 Future Development Direction of the
By phone Individual
Company
Freezing of Shares of Company
4th May 2018 By phone Individual
Shareholders
Reasons for Freezing Shares of
4th May 2018 By phone Individual
Company Shareholders
8th Jun. 2018 By phone Individual Recent Operations of the Company
8th Jun. 2018 Reply time of Company Annual
By phone Individual
Report Inquiry Letter
Semi-annual performance forecast
9th Jul. 2018 By phone Individual
time of the company
15th Oct. 2018 By phone Individual Recent Operations of the Company
17th Oct. 2018 By phone Individual Measures to Stabilize Stock Prices
18th Oct. 2018 By phone Individual Measures to Stabilize Stock Prices
18th Oct. 2018 By phone Individual Measures to Stabilize Stock Prices
20th Oct. 2018 By phone Individual 增持计划实施期限
Whether the former chairman's
19 Nov. 2018
th
By phone Individual commitment to increase holding will
continue to be valid
3th Dec. 2018 By phone Individual Annual profit of the company
5th Dec. 2018 Annual profitability of the company
and the increase of shares held by
By phone Individual
the former chairman of the board of
directors
21th Dec. 2018 Does disposal of assets affect current
By phone Individual
profits
27th Dec. 2018 Does disposal of assets affect current
By phone Individual
profits
28th Dec. 2018 Does disposal of assets affect current
By phone Individual
profits
Times of visit 26
Number of visiting institutions 0
26
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Number of visiting individuals 26
Number of other visitors 0
Significant undisclosed information disclosed,
No
revealed or leaked
27
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Part V Significant Events
I Profit Distribution and Converting Capital Reserve into Share Capital for Common
Shareholders
Formulation, execution or adjustments of profit distribution policy, especially cash dividend policy, for common shareholders in this
Reporting Period
□ Applicable √ Not applicable
Plans (or preliminary plans) for profit distribution and converting capital reserves into share capital for common shareholders for the
past three years (including the Reporting Period)
Not to distribute profit dividends or convert capital reserve into share capital, retained funds continue to be used for operation
Cash dividend distribution of the Company to common shareholders over the past three years (including the Reporting Period)
Unit: RMB
Proportion in
Net profit
net profit
attributable to
attributable to
common
common
shareholders
Cash shareholders Cash
of the Ratio of cash
Cash dividends
Year dividends (tax of the dividends in Year dividends (tax
Company in in other forms
other forms
included) Company in included)
the
the
consolidated
consolidated
statements for
statements for
the year
the year (%)
2018 0.00 -13,392,596.16 0.00% 0.00 0.00% 0.00 0.00%
2017 0.00 -14,352,474.20 0.00% 0.00 0.00% 0.00 0.00%
2016 0.00 2,233,673.97 0.00% 0.00 0.00% 0.00 0.00%
The Company made profit in the Reporting Period and the profit distributable to common shareholders of the Company was positive,
but it did not put forward a preliminary plan for cash dividend distribution to its common shareholders
□ Applicable √ Not applicable
II Proposal for Profit Distribution and Converting Capital Reserve into Share Capital for this
Reporting Period
□ Applicable √ Not applicable
The Company plans not to distribute cash dividends or bonus shares or convert capital reserve into share capital.
28
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
1. Commitments of the Company’s Actual Controller, Shareholders, Related Parties and Acquirer, as well
as the Company and Other Commitment Makers, Fulfilled in this Reporting Period or Ongoing at the
Period-end
√ Applicable □ Not applicable
Date of
Commitment Type of Period of
Commitment Contents commitment Fulfillment
maker commitment commitment
making
Commitments made in share reform
Commitments made in acquisition
documents or shareholding alteration
documents
Excepting the
company
stock, it can
The
not in any
Company's
area, in any
largest
form, engaged
shareholder
in production
Shenzhen
produce or
Shenghengcha
business
ng Huifu
operation may
Industrial Co.,
form
Ltd., the May 21, 2015 Perpetual In execution
competition to
second largest
the company
Commitments made in time of asset shareholder
stock and its
restructuring Shenzhen
subsidiaries
Risheng
which
Commitments made in time of asset Chuangyuan
stipulated by
restructuring Asset
the law,
Management
regulations
Co., Ltd.
and
stipulations
from CSRC.
The Excepting the
Company's company
largest stock, it can
shareholder not in any
Shenzhen area, in any May 21, 2015 Perpetual In execution
Shenghengcha form, engaged
ng Huifu in production
Industrial Co., produce or
Ltd., the business
29
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
second largest operation may
shareholder form
Shenzhen competition to
Risheng the company
Chuangyuan stock and its
Asset subsidiaries
Management which
Co., Ltd. stipulated by
the law,
regulations
and
stipulations
from CSRC.
Commitments made in time of IPO or
refinancing
Commitments concerning stock
ownership incentive
Chen Hongcheng Chen Within two
Hongcheng months after
the
disclosure of
the
company's
third quarter
report in
2018 Within two
(October 27, months of
2018), when the two
Increase Oct. 19th 2018 Completed
the stock trading days
price is from Oct. 27,
below 2018
HK$1.5 per
share, the
company will
increase its
holdings by
not less than
1 million
shares.
Chen If the Within 6
Hongcheng company months from
Dec. 29th 2018 In execution
sells the the effective
shares of date of the
30
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Jinshitong sales
and 45% agreement
equity signed on
through the Dec. 28th
future 1028
industrial
fund and
receives less
than 120
million yuan
in the form of
equity
transfer and
profit
distribution,
or if the
future
industrial
fund fails to
distribute
according to
the agreed
profit
distribution
plan, the
actual
controller
Chen
Hongcheng
will make up
with cash
within one
month from
the date of
the
occurrence
of the matter.
The specific
arrangement
s for cash
replenishme
nt are as
follows:1. If
the amount
31
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
is less than
30 million, it
will be paid
to the
company's
account
within 10
days from
the date
when the
company
receives the
total profit
allotment or
the future
industrial
fund fails to
distribute
according to
the agreed
profit
allotment
plan. 2. If the
difference is
between 30
million and
80 million, it
will be 10
days after
the company
receives the
total profit
allotment or
the future
industrial
fund fails to
distribute
according to
the agreed
profit
allotment
plan. If the
difference is
more than 80
32
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
million, 30
million yuan
will be paid
within 10
days after
the company
receives the
total profit
allocation or
the future
industrial
fund fails to
distribute
according to
the agreed
profit
allocation
plan, and
another 50
million yuan
will be paid
within 15
days after
the company
receives the
total profit
allocation or
the future
industrial
fund fails to
distribute
according to
the agreed
profit
allocation
plan.
8,000
Whether promises are fulfilled on
Yes
time
2. Where there had been an Earnings Forecast for an Asset or Project and this Reporting Period was still
within the Forecast Period, Explain why the Forecast has been Reached for this Reporting Period.
□ Applicable √ Not applicable
33
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
IV Occupation of the Company’s Funds by the Controlling Shareholder or its Related Parties
for Non-operating Purposes
□ Applicable √ Not applicable
There is no non-operational funds occupied by controlling shareholders and its related parties during the reporting period
of the company
V Explanations Given by the Board of Directors, the Supervisory Committee and the
Independent Directors (if any) regarding the “Modified Auditor’s Report” Issued by the
CPAs Firm for this Reporting Period
√ Applicable □ Not applicable
1. Retain and emphasize statement of matters involved in audit report of audit opinions
Guangdong Jadiete holding group company limited (hereinafter referred to as "the Company" or "Jadiete Company") hired
Asia-Pacific (Group) Certified Public Accountants (Special General Partnership) as the company's financial report auditing agency in
2018, and Asia Pacific (Group) CPAs (Special General Partnership) issued a qualified audit report on the Company's 2018 audit
report.
(1) The foundation of forming reservations as below,
Jadiete Company borrowed money from Jieyang Rongcheng Branch of Industrial and Commercial Bank of China Co., Ltd. for
Puning Huafengqiang Trade Co., Ltd. (hereinafter referred to as "Huafengqiang"), and borrowed money form Jieyang Branch of
Industrial and Commercial Bank of China Co., Ltd. for Puning Lailisheng Trade Co., Ltd. (hereinafter referred to as " Lailisheng")
with real estate mortgage guarantee separately. Because the above mortgage guarantee agreement is still valid in 2018, in May 2018,
Huafengqiang borrowed RMB 11,7 million again from Jieyang Rongcheng Branch of Industrial and Commercial Bank of China Co.,
Ltd on the basis of above mortgage guarantee agreement; and in Aug 2018, Lailisheng borrowed 23.79 million again from Jieyang
Branch of Industrial and Commercial Bank of China Co., Ltd. on the basis of above mortgage guarantee agreement. Due to
Huafengqiang and Lailisheng may signed some relevant anti-guarantee agreement with the Jadiete Company, and the audit scope is
restricted, we can’t obtain sufficient and appropriate audit evidence on the impact of contingent liabilities arising from the mortgage
guarantee.
(2) Formation of emphasis paragraph and major uncertainties Relevant to going concern
We remind users of financial statements that, as stated in Notes VI 25 of the financial statements, Guangdong Jadiete
Company had accumulated a loss of RMB - 117,840,473.36 yuan till December 31, 2018, and its operating income in 2018
dropped significantly compared with the previous year, that is due to the net profit of parent company was RMB -
13,392,596.16, which had been recorded for two consecutive years. As stated in notes III 2 of the financial statements,
these matters or circumstances indicate that there are significant uncertainties that may lead to serious doubts about the
sustainability of Guangdong Jadiete Company. This matter does not affect the published audit opinions.
2. Special Note by the Board of Directors on retention of matters related to audit opinions in the reinforcing reconciliation section in
audit report for 2018
34
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
(1) The board of Directors considers that the audit opinions objectively reflect the actual situation of the company.
(2) The company formulates the following measures to resolve the issues involved in retaining the audit opinions of the reinforcing
transfer section
1. About The Company separately mortgaged its real estate to ICBC Jieyang Rongcheng Sub-branch and ICBC Jieyang Branch to
provide the pledge guarantee for Puning Lailisheng Trade Co., Ltd. (hereinafter referred to as"Lailisheng") and for Puning
Huafengqiang Trade Co., Ltd (hereinafter referred to as"Huafengqiang"), as the above mortgage guarantee agreement is still valid
in 2018, Huafengqiang borrowed RMB 11.70 million from ICBC Jieyang Rongcheng Sub-branch in May 2018 again under the
above mortgage guarantee agreement., Lailisheng borrowed RMB 23.79 million from ICBC Jieyang Branch in August 2018
again under the above mortgage guarantee agreement. Because Huafengqiang and Lailisheng have not signed any relevant
anti-guarantee agreement with the Jadiete Company, and the audit scope is restricted, we can’t obtain sufficient and appropriate audit
evidence on the impact of contingent liabilities arising from the mortgage guarantee.
Measures taken by the Company were as follows
(1) The Company mortgaged its real estate for Puning Huafengqiang Trade Co., Ltd. and signed a maximum loan contract with ICBC
Jieyang Rongcheng Sub-branch (RCZH (2014) GD Zi No. 3632; the secured principle credit was from Nov. 11, 2014 to Nov. 11,
2019) to provide the pledge guarantee.Puning Huafengqiang Trade Co., Ltd. signed RMB 11.7million loan contract with ICBC
Jieyang Rongcheng Sub-branch on May. 18, 2018, and the borrowing period was for 12 months.
The Company mortgaged its real estate for Puning Lailisheng Trade Co., Ltd. and signed a maximum loan contract with ICBC
Jieyang Branch to provide the pledge guarantee. the secured principle credit was from 8th Sep.2017 to 8th Sep. 2022. Puning
Lailisheng Trade Co., Ltd. signed RMB 23.79million small business borrowing contract with ICBC Jieyang Branch on Aug. 22, 2018,
and the borrowing period was for 6 months.
The company noticed that after successive borrowing, Puning Huafengqiang Trade Co., Ltd. and Puning Lailisheng Trade Co., Ltd.
failed to sign corresponding anti-guarantee agreement with the company in accordance with previous practice. Therefore, the
company has separately sent Puning Huafengqiang Trading Co., Ltd. and Puning Lailisheng Trading Co., Ltd many letters to discuss
this matter. Finally, the company reached an agreement with Puning Huafengqiang Trade Co., Ltd. and Puning Lailisheng Trade Co.,
Ltd. Puning Huafengqiang Trade Co., Ltd. agreed to repay the bank loan by August 31, 2019, and cancel the company's real estate
mortgage guarantee. Puning Lailisheng Trading Co., Ltd. agreed to cancel the compan’s real estate mortgage guarantee by October
30, 2019.
(2) The company will continue to pay attention to the situation of Puning Huafengqiang Trade Co., Ltd. and Puning Lailisheng
TradeCo., Ltd., regularly collect the latest financial information or audit reports of the guarantee, regularly analyze its property status
and debt paying ability, pay attention to its production and operation, assets and liabilities, external guarantees, separation and merger,
changes in legal representatives and other situations, and establishing relevant financial archives
2. About "We remind users of financial statements that as stated in Notes VI 25 of the financial statements, as of December 31, 2018,
Guangdong Jadiete Company had accumulated losses of 117,840,473.36, and its operating income in 2018 dropped significantly
compared with the previous year, that is due to the net profit of parent company was RMB - 13,392,596.16, which had been
recorded for two consecutive years As stated in notes III 2 of the financial statements, these matters or circumstances
indicate that there are significant uncertainties that may lead to serious doubts about the sustainability of Guangdong
Jadiete Company.
Measures taken by the Company were as follows
（1）Adjustment of asset structure
From the perspective of business and asset structure, the company prefers investment companies, whose main assets are long-term
equity investment, and there is no return on long-term equity investment in the short term. Operational business is more but less
35
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
sophisticated, and the scale is smaller than the same industry, such as gold jewelry sales, clothing e-commerce, etc. Therefore, in
order to solve the problem of high investment and low benefit, the company took measures at the end of November 2018 to sell 30%
of the shares held by ShenguorongGuarantee. At the same time, it urged the future industrial fund to dispose of the equity of the
target company and recover the investment through the profit distribution of the future Industrial Fund enterprises. That is the
improvement for the company's asset structure
(2) Increasing Investment, Focusing on Main Business, Making it Bigger and Stronger
In year 2017 and 2018, the company has been losing money for two consecutive years. the company will be warned of delisting risk
in 2019. If the company is not profitable in 2019, the company will face the risk of suspension of listing. there are great uncertainties
in changing the main business or re-cultivating new business in the short term. Strengthen and expand the existing gold jewelry
industry is the only way out for the company at present. In spite of the obvious decline in sales in 2018, the management team of
Chinese Gold Nobility fully realized the overall economic situation at the beginning of 2018 and actively implemented the
transformation, it has taken decisive measures and adjusted adequately , In terms of business model and cost control. Through
research, the company predicts that the whole gold and jewelry industry will recover steadily and gradually in 2019 after a period of
relatively full adjustment in 2018.
Therefore, the company acquired the shares of other shareholders of Chinese Gold Nobility, making Chinese Gold Nobility a wholly
owned subsidiary of Jadiete Company in December 2018. The company will vigorously support its development in business, capital,
personnel and management, further enrich the product category of Chinese Gold Nobility, increase the reserve of high value-added
goods such as jadeite and amber, increase the sales of jadeite and amber, enhance the competitiveness and profitability of Chinese
Gold Nobility, and make it the main source of net profit of the company.
To sum up, after the implementation of the above measures, the strategic direction of development will be very clear, the company's
resources will focus on the main business, and the development of gold and jewelry business will gradually stabilize, which will
fundamentally solve the problem of sustainable development of the company.
(3) The Influence on Listed Companies
The aforementioned reservations and audit opinions in the reinforcing reconciliation section have no significant impact on the
company's financial situation and operating results in 2018.
(4) Opinion from independent directors on items involved in the qualified opinion and targeted solutions:
As independent directors, we require the company to strictly implement relevant measures, eliminate the impact of
retained and enhanced audit opinions on the company, and earnestly safeguard the interests of investors, especially small
and medium-sized investors.
The Board of Supervisors' opinions on the matters involved in the audit report on strengthening the audit opinions in the
transfer period issued by the board of directors: The Special Note on the matters involved in the audit opinions in the
transfer period issued by the board of directors of the company objectively and faithfully reflects the actual situation of the
company. The board of supervisors will actively urge all parties to implement the corresponding measures in place.
VI YoY Changes in Accounting Policies, Estimations and Methods
√ Applicable □ Not applicable
The Ministry of Finance issued “the Circular of the Ministry of Finance on Revising and Issuing the Format of General
Enterprise Financial Statements” (Finance and Accounting [2018] No. 15 on Jun. 15th2018), Enterprises implementing
enterprise accounting standards should comply with enterprise accounting standards and the circular calls for the
preparation of financial statements for 2018 and subsequent periods
The main impact of the company executes Finance and Accounting [2018] No. 15
36
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Contents and Reason of Accounting Policy Name of affected report Amount of items in the Last restatement amount
Change item statement affected in
the current period
1. Consolidated presentation of notes Notes Receivable and 22,021,179.73 153,954,425.28
receivable and accounts receivable Accounts Receivable
2. Listing of Interest Receivable, Other receivables - -
Dividend Receivable and Other
Receivable Items
3.merge disposal of fixed assets into fixed assets - -
Listing of Fixed Assets
4.Consolidation of engineering materials Construction In Progress - -
into the list of Construction In Progress
5.Consolidated presentation of notes Notes payable and 16,141,549.26 206,507,636.62
payable and accounts payable accounts payable
6.Interest payable and dividend payable Other payables - -
are included in other accounts payable
7.Special accounts payable are included Long-term accounts payable - -
in the presentation of long-term accounts
payable
8.Presentation adjustment for administration expenses - -
administration expenses
9. Separate presentation of R&D R & D expenses - -
expenses
VII Retroactive Restatement due to Correction of Material Accounting Errors in this
Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII YoY Changes in the Scope of the Consolidated Financial Statements
√ Applicable □ Not applicable
newly set up Shenzhen MaJiaKe Blue Arrow Technology Co., Ltd.
IX Engagement and Disengagement of CPAs Firm
CPAs firm at present
37
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Name of the domestic CPAs firm Asia (Group) CPAs (Special General Partnership)
The Company’s payment for the domestic CPAs firm
55
(RMB’0,000)
Consecutive years of the audit service provided by the domestic
10
CPAs firm
Names of the certified public accountants from the domestic
Zhou Hanjun and Dai qinyong
CPAs firm
Consecutive years of the audit service provided by the domestic
2year , 1year
CPAs firm (if any)
Whether the CPAs firm was changed in the Reporting Period
□ Yes √ No
CPAs firm, financial advisor or sponsor engaged for internal control audit
√ Applicable □ Not applicable
In the Reporting Period, the Company engaged the CPAs firm for internal control audit with total fees of RMB0.25 million
X Possibility of Listing Suspension or Termination after Disclosure of this Report
□ Applicable √ Not applicable
XI Bankruptcy and Restructuring
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XII Significant Litigations and Arbitrations
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XIII Punishments and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XIV Credit Conditions of the Company as well as its Controlling Shareholder and Actual
Controller
√ Applicable □ Not applicable
Because the applicant Huaneng Guicheng Trust Co., Ltd. (hereinafter referred to as "Huaneng Guicheng") applied to execute the
dispute case of loan and pledge repurchase between "Risheng Chuangyuan" and Huaneng Guicheng, due to Fail to fulfil the
obligation of payment specified in the effective legal instruments within the limit time , the company's actual controller Chen
Hongcheng and the company's controlling shareholder Shenghengchang Huifu were listed in the list of discredited executees by the
38
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Shenzhen Intermediate People's Court.
XV Implementation of any Equity Incentive Plan, Employee Stock Ownership Plan or Other
Incentive Measures for Employees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVI Significant Related-party Transactions
1. Related-party Transactions Relevant to Routine Operation
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Related Transactions Regarding Purchase or Sales of Assets or Equity Interests
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Related Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Credits and Liabilities with Related Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
5. Other Significant Related Transactions
√ Applicable □ Not applicable
No such cases in the Reporting Period.
At the 21st Meeting of the 7th board of directors held on October 30, 2018, the company deliberated and passed
“Proposal on Capital Increase of Hunan Microconductor Technology Co., Ltd. and Related Transactions”. The company
intends to sign a capital increase agreement and increasing the capital of Hunan Micro-conductor Technology Co., Ltd.
with RMB 25 million. After the capital increase, the company holds 12.6904% equity of Hunan Micro-conductor
Technology Co., Ltd. Due to the character of the company, Hunan Microconductor Technology Co., Ltd. decided to
terminate the company's capital increase on March 22, 2019.
Interim Report Disclosure Website Related Queries on Major Related Transactions
39
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Website name for disclosure of interim
Name of provisional Interim notice Disclosure date of Interim notice
announcement
Notice on Capital Increase of Hunan
Giant Tide Information Network
Microconductor Technology Co., Ltd. and Oct. 31th 2018
（www.cninfo.com.cn）
Related Transactions
XVII Significant Contracts and Execution
1. Entrustment, Contracting and Leasing
(1) Entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leasing
□ Applicable √ Not applicable
No such cases in the Reporting Period
2. Significant Guarantees
√ Applicable □ Not applicable
(1) Guarantees Provided by the Company
Unit: RMB’0,000
Guarantees provided by the Company and its subsidiaries for external parties (excluding those for subsidiaries)
Disclosure Guarante
Actual
date of Actual e for a
Amount for occurrence date Type of Period of Executed
Guaranteed party relevant guarantee related
guarantee (date of guarantee guarantee or not
announcem amount party or
agreement)
ent not
1,700 May 18th 2018 1,170 pledge Not Not
Puning Huafengqiang Nov. 14th Nov.11th
40
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Trade Co., Ltd. 2014 2014 to
Nov.11th
2019
Sep. 8th 2017 Not Not
Puning Lailisheng Sep. 8th
2,400 2,379 pledge to Sep. 8 th
Trade Co., Ltd. 2017
2022
Total actual occurred
Total external guarantee line
amount of external
approved during the Reporting 0 4,100
guarantee during the
Period (A1)
Reporting Period (A2)
Total actual external
Total external guarantee line that
guarantee balance at the end
has been approved at the end of the 4,100 3,549
of the Reporting Period
Reporting Period (A3)
(A4)
Guarantees provided by the Company for its subsidiaries
Disclosure Guarante
Actual
date of Actual e for a
Amount for occurrence date Type of Period of Executed
Guaranteed party relevant guarantee related
guarantee (date of guarantee guarantee or not
announcem amount party or
agreement)
ent not
Guarantees provided by the subsidiaries of the Company for subsidiaries
Disclosure Guarante
Actual
date of Actual e for a
Amount for occurrence date Type of Period of Executed
Guaranteed party relevant guarantee related
guarantee (date of guarantee guarantee or not
announcem amount party or
agreement)
ent not
公司担保总额（即前三大项的合计）
Total actual occurred
Total guarantee line approved
amount of guarantee during
during the Reporting Period 0 4,100
the Reporting Period
(A1+B1+C1)
(A2+B2+C2)
Total actual guarantee
Total guarantee line that has been
balance at the end of the
approved at the end of the 4,100 3,549
Reporting Period
Reporting Period (A3+B3+C3)
(A4+B4+C4)
Proportion of total guarantee amount (A4+B4+C4) to the net 10.47%
41
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
assets of the Company
Of which:
Explanation on guarantee that adopts complex method
(2) Illegal provision of guarantees for external parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Entrusted Cash Management
(1) Entrusted Cash Management
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Entrusted Loans
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Other Significant Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period
XVIII Social Responsibilities
1. Social Responsibilities Taken
2. Targeted Measures Taken to Help People Lift Themselves out of Poverty
（1）Planning of Targeted Measures Taken to Help People Lift Themselves out of Poverty
Not yet carried out and no plan
（2）Outline of Targeted Measures Taken to Help People Lift Themselves out of Poverty
Not applicable
（3）Effect of Targeted Measures Taken to Help People Lift Themselves out of Poverty
Indicator Unit measurement Number/conduct situation
42
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
1. Overall situation —— ——
2. Subentry —— ——
2.1 Industry development —— ——
2.2 Transfer of the form of employment —— ——
2.3 Relocation —— ——
2.4 Education —— ——
2.5 Health —— ——
2.6 Ecological protection —— ——
2.7 Last line of safeguard —— ——
2.8 Social poverty alleviation —— ——
2.9 Others —— ——
3. Awards received (content and rank) —— ——
(4) Follow-up Plan of Targeted Measures Taken to Help People Lift Themselves out Poverty
Not applicable
3. Particulars Relevant to Environmental Protection
Is the Company or any of its subsidiaries a heavily polluting business identified by the environmental protection authorities of China
No
Not applicable
XIX Other Significant Events
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XX Significant Events of Subsidiaries
□ Applicable √ Not applicable
43
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Part VI Share Changes and Shareholder Information
I Share Changes
1. Share Changes
Unit: share
Before Increase/decrease (+/-) After
Increase
Percentag New Bonus from Percentag
Number Other Subtotal Number
e (%) issues shares capital e (%)
reserve
164,025,0 164,025,0
1. Restricted shares 51.48% 0 0 0 0 0 51.48%
00 00
164,025,0 164,025,0
1.1 Promoter’s shares 51.48% 0 0 0 0 0 51.48%
00 00
Of which: shares held the
0 0.00% 0 0 0 0 0 0 0.00%
state
Shares held by 164,025,0 164,025,0
51.48% 0 0 0 0 0 51.48%
domestic juridical persons 00 00
Shares held by
0 0.00% 0 0 0 0 0 0 0.00%
foreign juridical person
Other 0 0.00% 0 0 0 0 0 0 0.00%
1.2 Public corporate shares 0 0.00% 0 0 0 0 0 0 0.00%
1.3 Internal employee
0 0.00% 0 0 0 0 0 0 0.00%
shares
1.4 Preferred shares or other 0 0.00% 0 0 0 0 0 0 0.00%
154,575,0 154,575,0
2. Non-restricted shares 48.52% 0 0 0 0 0 48.52%
00 00
2.1 RMB common shares 0 0.00% 0 0 0 0 0 0 0.00%
2.2 Domestically listed 154,575,0 154,575,0
48.52% 0 0 0 0 0 48.52%
shares for foreign investors 00 00
3. Overseas listed foreign
0 0.00% 0 0 0 0 0 0 0.00%
shares
4. Other 0 0.00% 0 0 0 0 0 0 0.00%
44
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
318,600,0 318,600,0
III. Total shares 100.00% 0 0 0 0 0 100.00%
00 00
Reasons for any share changes:
□ Applicable √ Not applicable
Approval of share changes:
□ Applicable √ Not applicable
Transfer of share ownership:
□ Applicable √ Not applicable
Effects of share changes on the basic EPS, diluted EPS, net assets per share attributable to common shareholders of the Company and
other financial indexes of the prior year and the prior period:
□ Applicable √ Not applicable
Other contents that the Company considers necessary or is required by the securities regulatory authorities to disclose:
□ Applicable √ Not applicable
2. Changes in Restricted Shares
□ Applicable √ Not applicable
II Issuance and Listing of Securities
1. Securities (Excluding Preference Shares) Issued in this Reporting Period
□ Applicable √ Not applicable
2. Changes in Total Shares of the Company and the Shareholder Structure, as well as the Asset and
Liability Structures
□ Applicable √ Not applicable
3. Existing Employee-held Shares
□ Applicable √ Not applicable
III Shareholders and Actual Controller
1. Total Number of Shareholders and their Shareholdings
Unit: share
Total number of Total number of Total number of
Total number of
common preference preference
common
10,982 shareholders at 10,968 shareholders 0 shareholders 0
shareholders at
the prior with resumed with resumed
the period-end
month-end voting rights at voting rights at
45
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
before the the period-end (if the prior
disclosure of this any) (see note 8) month-end
Report before the
disclosure of this
Report (if any)
(see note 8)
5% or greater shareholders or the top 10 shareholders
Total Increase/ Number Pledged or frozen shares
Number
Sharehol shares decrease of
of
Name of Nature of ding held at during non-restri
restricted
shareholder shareholder percenta the this cted Status Number
shares
ge (%) period-en Reportin shares
held
d g Period held
Shenzhen Domestic Pledged 117,855,000
non-state-owned
Shenghengchang corporation 117,855, 117,855,
36.99% 0 0
Huifu Industrial 000 000 Freeze 117,855,000
Co., Ltd.
Shenzhen Domestic Pledged 34,020,000
non-state-owned
Shenghengchang corporation 34,020,0 34,020,0
10.68% 0 0
Huifu Industrial 00 00 Freeze 34,020,000
Co., Ltd.
GUOTAI JUNAN
SECURITIES(H Foreign 24,733,1 -1,039,79 24,733,15
7.76%
ONGKONG) corporation 53 7 3
LIMITED
Shenzhen Pledged 12,150,000
Domestic
Lianhua Huiren 12,150,0 12,150,0
non-state-owned 3.81%
Industrial Co., 00 00 Freeze 12,150,000
corporation
Ltd.
Shenwan
Hongyuan Foreign 7,715,84 1,204,20
2.42% 7,715,846
Securities (HK) corporation 60
Limited
China Everbright
Foreign 4,226,60
Securities (HK) 1.33% 865,300 4,226,600
corporation 0
Limited
46
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Domestic 1,880,82 1,880,82
Wang Xiaoyan 0.59% 1,880,826
individual 66
Domestic 1,840,00
Fan Yongyang 0.58% 51,500 1,840,000
individual 0
Domestic 1,512,21
Chen Jianxing 0.47% 356,432 1,512,219
individual 9
OCBC
SECURITIES Foreign 1,000,04 1,000,04
0.31% 1,000,041
PRIVATE corporation 11
LIMITED
Strategic investors or general
corporations becoming top-ten
N/A
shareholders due to placing of new
shares (if any) (see Note 3)
Shenzhen Shenghengchang Huifu Industrial Co., Ltd., Shenzhen Risheng Chuangyuan Asset
Management Co., Ltd. and Shenzhen Lianhua Huiren Industrial Co., Ltd., which belonged to
Related or acting-in-concert parties
action-in-concert promulgated by Measures for the Administration of disclosure of
among the shareholders above
Information on the Change of Shareholdings in Listed Companies. The Company did not
know whether there existed related relationship among other shareholders.
Shareholdings of the top ten non-restricted shareholders
Number of non-restricted shares held at the Type of shares
Name of shareholder
period-end Type Number
GUOTAI JUNAN Domestically
SECURITIES(HONGKONG) 24,733,153 listed foreign 24,733,153
LIMITED share
Domestically
Shenwan Hongyuan Securities (HK)
7,715,846 listed foreign 7,715,846
Limited
share
Domestically
China Everbright Securities (HK)
4,226,600 listed foreign 4,226,600
Limited
share
Domestically
Wang Xiaoyan 1,880,826 listed foreign 1,880,826
share
Domestically
Fan Yongyang 1,840,000 listed foreign 1,840,000
share
Domestically
Chen Jianxing 1,512,219 listed foreign 1,512,219
share
47
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Domestically
OCBC SECURITIES PRIVATE
1,000,041 listed foreign 1,000,041
LIMITED
share
Domestically
Wei Guobin (Ngai Kwok Pan) 798,616 listed foreign 798,616
share
Domestically
Chen Jinming 765,500 listed foreign 765,500
share
Domestically
Xing Yingsheng 731,830 listed foreign 731,830
share
Related or acting-in-concert parties
among the top ten non-restrictedly
tradable share holders and between
Unknown
the top ten non-restrictedly tradable
share holders and the top ten
shareholders
Particulars about the top ten
common shareholders participating
in the securities lending and N/A
borrowing business ( if any) (see
note 4)
Indicate by tick mark whether any of the top ten common shareholders or the top ten non-restricted common shareholders of the
Company conducted any promissory repo during this Reporting Period
□ Yea √ No
No such cases in this Reporting Period.
2. Information about the Controlling Shareholder
Nature of the controlling shareholder: natural person shareholding
Type of the controlling shareholder: legal person
Legal
Name of controlling
representative/person Date of establishment Credibility code Main business scope
shareholder
in charge
Sales of hardware, electric,
building materials,
Shenzhen Shenghengchang electronic products and
Chen Hongcheng May 14, 1997 91440300741222321M
Huifu Industrial Co., Ltd. auto parts; import and
export goods, technology
import and export (except
48
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
for projects prohibited by
laws and administrative
regulations; projects
prohibited by laws and
administrative regulations
can be operated with
permission)
Change of the controlling shareholder during this Reporting Period
□ Applicable √ Not applicable
No such cases in this Reporting Period.
3. Information about the Actual Controller
Nature of the actual controller: domestic natural person
Type of the actual controller: natural person
Whether gain the
right of residence in
Name of the actual controller Nationality Name of the actual controller
other countries or
regions or not
Chen Hongcheng Self China China
Concerted action China
(including
Chen Hongchai agreements, China
relatives, the same
control)
Concerted action China
(including
Chen Dongjia agreements, China
relatives, the same
control)
Concerted action China
(including
Ding Lihong agreements, China
relatives, the same
control)
Concerted action China
(including
Cheng Xuewen China
agreements,
relatives, the same
49
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
control)
Concerted action China
(including
Chen Hongzhen agreements, China
relatives, the same
control)
Concerted action China
(including
Chen Yuezhong agreements, China
relatives, the same
control)
Occupation and position Vice Chairman of the Company
Particulars on his controlling listed
N/A
companies over the past ten years
Change of the actual controller during this Reporting Period
□ Applicable √ Not applicable
No such cases in this Reporting Period.
Ownership and control relations between the actual controller and the Company
Che Chen Chen Chen Chen Din Chen Chen
n Hong Hong Xue Hong g Hong Yuez
Don hai cheng wen chen Lih zhen hong
gjia g ong
19.50% 30% 50.50% 12.66% 56.17% 31.17% 80% 20%
Shenghengchan Risheng Lianhua
g Company Chuangyuan Company
36.99% 10.68% 3.81%
The Company
Indicate by tick mark whether the actual controller controls the Company via trust or other ways of
asset management.
50
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
□ Applicable √ Not applicable
4. 10% or Greater Corporate Shareholders
√ Applicable □ Not applicable
Legal representative / Date of
Name of corporate shareholder Registered capital Business scope
company principal establishment
Be entrusted with asset
management, equity
investment, investment
consulting and information
consulting (the above
excluded securities,
insurance, financial
business, human resources
consulting service and other
restricted projects); invest
Shenzhen Risheng Chuangyuan
Zheng Peilin September 8, 2000 RMB308 million and initiate industries (the
Asset Management Co., Ltd.
detailed project till further
declared); domestic
trade(excluding monopoly
commodities); import and
export of goods (excluding
projects limited by laws and
administration regulations;
certification shall be gained
for the above mentioned
limited projects)
5. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder, Actual Controller,
Reorganizer and Other Commitment Makers
□ Applicable √ Not applicable
51
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Part VII Preferred Shares
□ Applicable √ Not applicable
No preferred shares in the Reporting Period.
52
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Part VIII Directors, Supervisors, Senior Management and Staff
I Changes in Shareholdings of Directors, Supervisors and Executive Officers
Increase Decrease
Opening Other Closing
in this in this
Office Incumben Starting Ending sharehold increase/d sharehold
Name Gender Age date of date of Reporting Reporting
title t/former tenure tenure ing ecrease ing
Period Period
(share) (share) (share)
(share) (share)
Chairman Male
Ding Jan. 22th Jan. 22th
of the former 48 0 0 0 0 0
Lihong 2016 2019
Board
Vice Incumben Male Jan. 22th Jan. 22th
Chen
Chairman t 2016 2019
Hongchen 61 0 0 0 0 0
of the
g
Board
Chen Incumben Male Jan. 22th Jan. 22th
Director 65 0 0 0 0 0
Honghai t 2016 2019
Chen Incumben Male Jan. 22th Jan. 22th
Director 29 0 0 0 0 0
Dongwei t 2016 2019
Independ Incumben Jan. 22th Jan. 22th
Pan
ent t Female 48 2016 2019 0 0 0 0 0
Xiaochun
director
Independ Incumben Male Jan. 22th Jan. 22th
Zhuang
ent t 46 2016 2019 0 0 0 0 0
Weidong
director
Independ Incumben Male Jan. 22th Jan. 22th
Liu Yong ent t 42 2016 2019 0 0 0 0 0
director
Chairman Incumben Male Jan. 22th Jan. 22th
of the t 2016 2019
Yan Superviso
50 0 0 0 0 0
Mingfei ry
Committe
e
Huang Superviso Incumben Jan. 22th Jan. 22th
Female 53 0 2,000 0 0 2,000
Yanfang r t 2016 2019
Superviso Incumben Male Jan. 22th Jan. 22th
Li Ning 50 0 8,200 0 0 8,200
r t 2016 2019
53
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
CFO and Incumben Male
Chen
vice t 67 0 0 0 0 0
Jincai
president
Secretary Incumben Male
of the t
Xu Wei Board 42 5,000 0 0 0 5,000
and vice
president
Total -- -- -- -- -- -- 5,000 10,200 0 0 15,200
II Changes in Directors, Supervisors and Executive Officers
√ Applicable □ Not applicable
Incumbent/forme
Name Office title Date Reason
r
Chairman of the
Ding Lihong Forme Nov.16th 2018 Job
Board
III Brief Biographies
Professional backgrounds, main working experience and current responsibilities in the Company of the incumbent directors,
supervisors and executive officers
Chairman of the Board and President Mr. Chen Hongcheng was born in 1958; bachelor degree. At present he is the vice
chairman of the board and legal representative of the Company. He has ever been the standing commissar of political consultative
conference of Puning, Guangdong, the distinguished member of political consultative conference of Guangdong Province, vice
chairman of Costume Association of Guangdong Province, vice chairman of Costume Association of Shenzhen City, the deputy of
the National People’s Congress of Jieyang City and Guangdong Province.
Director Mr. Chen Honghai was born in 1954 and graduated from university; he acts as Director of Shenzhen Shenghengchang
HuiFu Industrial Co., Ltd.
Director Mr. Chen Dongwei, was born in 1990 with a bachelor degree. Now he is the executive director of Shenzhen Jinshi Tonghe
Investment Co., Ltd. and the director of the Qianhai Hengsheng (Shenzhen) Fund Management Co., Ltd.. He once served as the
General Manager of Fun Department in Shenzhen Qianhai Pengcheng Jianxin Investment Fund Co. (Limited Partnership).
Independent Director, Mr. Zhuang Weidong, born in 1973, Chinese, acquired Master of law, finance law from University of Hong
Kong. He has lot of Chinese and foreign legal practice experience. Now he is a lawyer of China Commercial Law Firm. He once
worked in Guangdong Guang Cheng Law Firm and Guangdong Xindesheng Law Firm.
Independent Director, Mr. Pan Xiaochun born in 1971, Chinese, Postgraduate degree, with many years of enterprise
management experience, is currently the deputy general manager of the financing management center of Shenzhen
Baoneng Investment (Group) Co., Ltd. and has worked in Shenzhen Jinhongsheng Investment (Group) Co., Ltd.,
Shenzhen Maoye (Group) Co., Ltd.
Chairman of the Board of Supervisors Mr. Yan Mingfei born in 1968, university degree, engineer. At present, he is the
general manager of Shantou Lianzihua Information Technology Co., Ltd. he was an assistant engineer of Shantou Special
Electric Power Development Co., Ltd. and an engineer of Talent Exchange Center of Shantou Special Economic Zone
54
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Supervisor Ms. Huang Yanfang, born in 1966, bachelor degree, she has engaged in enterprise financial work for many years. Now
she serves in financial dep. of the Company.
Supervisor Mr. Li Ning, born in 1969, college degree, he now acts as Deputy General Manager of Administration and HR
Department of the Company. He ever acted as Supervisor of the Company, General Manager of Dongguan Riseview Knitting Co.,
Ltd.
Chief Financial Officer, Mr. Chen Jincai, born in 1952 with junior college education. He ever acted as Vice Chief and Chief of
Financial Department of Shenhua (Group) Limited, Vice GM and CFO in Guanlan Golf, Chief Accountant and Chief of Financial
Department in Shenzhen S.E.Z. Real Estate(Group) Co., Ltd., etc.
Secretary of the Board and Vice President Mr. Xu Wei, born in 1977, graduated from Zhongnan University of Economics and
Law, is a bachelor holder of economics and law. He once acted as Securities Affairs Representative and Secretary of the Board and
Supervisor of the Company, General Manager of Securities Affairs and Secretary to the Chairman of the Board of Directors in ABest
Department Store Supermarket.
Posts concurrently held in shareholding entities
√Applicable □Not applicable
Allowance from
Starting date of Ending date of
Name Shareholding entity Post the shareholding
tenure tenure
entity (yes/no)
Chen Shenzhen Shenghengchang HuiFu Chairman of
No
Hongcheng Industrial Co., Ltd. the Board
Posts held concurrently in other entities
√Applicable □Not applicable
Starting date of Ending date of Allowance from
Name Other entity Post
tenure tenure the entity (yes/no)
Shenzhen Jin Hongsheng investment Vice
Pan Xiaochun Yes
(Group) Co., Ltd. President
Zhuang
China Commercial Law Co., Ltd Lawyer Yes
weidong
Pinghai Accounting Firm, Shenzhen,
Liuyong Partner Yes
Hunan (General Partnership)
Shenzhen Jinshi Tonghe Investment Co.,
Ltd., Shenzhen Jinshi Tonghe Stock
Investment Center (L.P), Hunan Majiake
Director/exec
Chen Dongwei Blue Arrow Technology Co., Ltd., Hunan Yes
utive director
Guoguang Ceramic Group Co., Ltd. and
Qianhai Hengsheng (Shenzhen) Fund
Management Co., Ltd.
Hunan Microconductor Technology Co.,
Ltd. and Elephant Cloud Control
Xu wei Director No
(Shenzhen) Information Technology Co.,
Ltd.
55
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Punishments imposed in the recent three years by the securities regulators on the incumbent directors, supervisors and executive
officers as well as those who left in this Reporting Period
□ Applicable √ Not applicable
IV Remuneration of Directors, Supervisors and Executive Officers
Decision-making procedure, determination basis and actual remuneration payment of directors, supervisors and executive officers
In accordance with the Proposal on Setting down Remuneration of Senior Executives examined and passed at the 1st meeting of the
2nd Board of Director for the year 2002, Proposal on Adjusting Allowance of Directors, Independent Director and Supervisors
examined and passed at the 2007 Annual Meeting of Shareholders and Proposal on Remuneration Appraisal System of Directors,
Supervisors and Senior Management Staffs examined and passed at the 2012 Annual Meeting of Shareholders, directors and
independent directors of the Company drew their annual allowance of RMB50,000 (tax included) respectively from the Company;
supervisors of the Company received the annual allowance of RMB15,000 (tax included) respectively. The Company reimbursed the
reasonable charges according to the actual situation which independent directors attended the meetings of the Board, shareholders’
general meeting or exercise their functions and powers in accordance with the relevant laws and regulations and Articles of
Association.
Unit: RMB'0,000
Remuneration
Total before-tax
from related
remuneration
Name Office title Gender Age Incumbent/former parties of the
from the
Company
Company
(yes/no)
Vice Chairman of Male Incumbent No
Chen Hongcheng 61 5
the Board
Chen Honghai Director Male 65 Incumbent 5 No
Chen Dongwei Director Male 29 Incumbent 5 Yes
Independent Male Incumbent No
Liu Yong 42 5
director
Independent Incumbent No
Pan Xiaochun Male 48 5
director
Independent Incumbent No
Zhuang Weidong Female 46 5
director
supervisory board Incumbent No
Yan Mingfei Male 50 1.5
chairman
Huang Yanfang Supervisor Female 53 Incumbent 11.58 No
Li ning Supervisor Male 50 Incumbent 12.78 No
CFO and vice Male Incumbent No
Chen Jincai 67 16.68
president
Secretary of the Male Incumbent No
Xu Wei Board and vice 42 16.44
president
Ding Lihong Chairman of the Male 48 Former 25.79 Yes
56
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Board
Total -- -- -- -- 114.77 --
Equity incentives for directors, supervisors and executive officers in this Reporting Period
□ Applicable √ Not applicable
V Employees
1. Number, Functions and Educational Backgrounds of Employees
Professional composition
Type Number（person）
level of education
Type Number（person）
University
Senior school
Junior middle school
2. Employee Remuneration Policy
The establishment of remuneration policy of the Company was in line with the market and same industry standard which fully pay
attention to the cultivation and incentives of the employee team. The Company and its subsidiaries provide remuneration system
including base salary, bonuses, allowances and subsidies, employee welfare, medical insurance premiums, industrial injury insurance,
birth insurance premium, housing fund, labor union expenditure as well as employee education expenses.
3. Employee Training Plans
The Company's 2018 training plan was based on the actual situation of the Company, and in line with the adjustment of organization
structure, operation management point, and the problems happened in the operation, focused on organizing the training for leaders’
execute power of the administrative management level meanwhile actively organized employee participate the training of industrial
association, supervision department and other institutions.
4. Labor Outsourcing
□ Applicable √ Not applicable
57
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Part IX Corporate Governance
I Basic Situation of Corporate Governance
In the Reporting Period, the Company strictly in line with requirements of Company Law, Securities Laws and other relevant laws
and regulations as well as requirement of a modern enterprise system, continued to perfected corporate governance structure,
established and perfected internal management and control system, consistently dug in convene of corporate governance activities, so
as to standardizing operation of the Company and promoting corporate governance level of the Company. During the Reporting
Period, the Company’s overall operation was standard and independent, and the information disclosure is standard, and the actuality
of the corporate governance of the Company was in accordance with requirements of documentary files on corporate governance of
listed companies issued by CSRC.
Any significant incompliance with the regulatory documents issued by the CSRC governing the governance of listed companies
□ Yes √ No
No such cases in this Reporting Period.
II Independence of Businesses, Personnel, Asset, Organizations and Finance which are
Separate from the Controlling Shareholder
The Company is completely separated from its controlling shareholder in aspects such as business, personnel, assets, institutions and
finance and possesses independent and complete business and self-dependent operating ability.
1. In respect of business, the Company owned an integrated business structure and independent operation, it doesn’t depend on any
shareholder or other party; besides, it exist no horizontal competition or any obviously unfair related-party transaction between the
Company and its controlling shareholder, actual controller and other enterprises controlled by it, nor any event that the controlling
shareholder directly or indirectly intervened the operation of the Company.
2. In respect of personnel, in terms of labor, personnel and salary management, the Company and the controlling shareholder were
independent from each other. Such senior management staff as Chairman of the Board, General Manager, and Deputy General
Managers all drew remuneration from the Company, and they did not take any post in the controlling shareholder and its subsidiaries.
3. In respect of assets, separated from the controlling shareholder, the Company owned independent production and operation site,
integrated assets structure, independent production system, auxiliary production systems and ancillary facilities, land use right and
ownership of house, etc., and independent procurement and sales system. Besides, it owned complete controlling right on all the
assets, there was no illegal occupation of assets and funds by the controlling shareholder, actual controller or their controlling
enterprises that did any harm to the interest of the Company.
4. In respect of organization, the Company has set up a perfect organization that was independent from the controlling shareholder or
its functional departments.
5. In respect of financing, the Company owned independent financial department with independent accountants, established
independent accounting system and financial management system, independently made the financial decision. Besides, it opened
independent bank account and paid tax independently.
58
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
III Horizontal Competition
□ Applicable √ Not applicable
IV Annual and Special Meetings of Shareholders Convened during this Reporting Period
1. Meetings of Shareholders Convened during this Reporting Period
Index to the
Investor
Meeting Type Convened date Disclosure date disclosed
participation ratio
information
June. 30, 2018 June. 30, 2018 Announcement on
Resolutions Made at
the 2017 Annual
Meeting of
2017 Annual Shareholders
Meeting of Annual 51.56% Announcement No：
Shareholders 2018-030）Securities
Times , Hong Kong
Ta Kung Pao and
http://www.cninfo.co
m.cn
2. Special Meetings of Shareholders Convened at the Request of Preference Shareholders with Resumed
Voting Rights
□ Applicable √ Not applicable
V Performance of Independent Directors in this Reporting Period
1. Attendance of Independent Directors in Board Meetings and Meetings of Shareholders
Attendance of independent directors in board meetings and meetings of shareholders
Due presence
Presence by Presence
in this Presence on Absent for two Presence or
telecommunica through a Absence for
Independent Reporting site for board consecutive meetings of
tion for board proxy for board meetings
director Period for meetings times for board shareholders
meetings board meetings (times)
board meetings (times) meetings (times)
(times) (times)
(times)
Pan Xiaochun 8 8 0 0 0否 1
Zhuang Weidong 8 8 0 0 0 1
Liu Yong 8 8 0 0 0 1
59
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Explanations on non-attendance in person for two consecutive times
2. Objections Raised by Independent Directors on Issues of the Company
Indicate by tick mark whether any independent directors raised any objections on issues of the Company.
□ Yes √ No
No such cases in this Reporting Period.
3. Other Details about the Performance of Duties by Independent Directors
Indicate by tick mark whether any suggestions from independent directors were adopted by the Company.
√ Yes □ No
Suggestions from independent directors adopted or not adopted by the Company:
Require the company's internal audit department to conduct due diligence on whether Puning Huafengqiang Trade Co., Ltd. or
Puning Lailisheng Trade Co., Ltd. is related parties of the company. According to the report provided by the internal audit
department, the two companies mentioned above are not related parties of the company.
VI Performance of Duties by Specialized Committees under the Board during this Reporting
Period
（I） Performance of Board Audit Committee
(1)The Audit Committee of the Board of Directors reviewed the Financial Statements compiled by the Company before the CPAs’
entry for the yearly audit of the Company, believing that, the statements was in line with the Accounting Standard for Business
Enterprises published by the State, and truly reflected the Company’s financial status, operating results and cash flows in 2018, so it
was permitted that ASIA (Group) Accounting Firm carried out the annual audit for the year 2018 on the basis of the said statements.
(2) In accordance with the schedule of audit work and audit process, the audit committee will entrust special persons to follow up and
urge them to submit audit reports within the agreed time limit by telephone and mail.
(3) After auditing, the preliminary audit opinion on the company's financial report for 2018 is a qualified audit report of Asia Pacific
(Group) CPAs (Special General Partnership)
According to the preliminary audit opinions of the audit institutions, the board audit committee once again reviewed the company's
financial statements and related information, carefully understood the matters involved in the qualified opinions, and considered that
the company's financial statements reflected the actual situation of the company. The audit report issued by the accounting firm with
reservations for the company is in line with the actual situation of the company, and there is no objection to the preliminary opinions
on the financial report for the year 2018. At the same time, the company's management is obliged to formulate solutions immediately
and implement them as soon as possible for matters related to reservations, and to resolve relevant matters as soon as possible.
(4) Before the company's annual audit report for 2018 issued by the accounting firm, the board audit committee reviewed the
financial and accounting report once again, agreed with the results of the audit of the company's financial statements for 2018 by the
accounting firm, and agreed to submit the audit report to the company's board of directors for consideration.
(5) The board audit committee considers that Asia Pacific (Group) CPAs (Special General Partnership) launched and accomplished
the Company’s 2018 annual audit in strict compliance with audit regulations and rules, with sufficient audit time, professional
accountants and a strong sense of risk. The audit report issued thoroughly presented the Company’s financial status, operating results
and cash flows in the year 2016, with the audit conclusion factually reflecting the actual situation of the Company
(6) The board audit committee proposed to reengage Asia Pacific (Group) CPAs (Special General Partnership) as the audit agency
for the Company’s 2019 annual audit, considering inflation and other factors and refering to implementation in the previous years for
60
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
audit remuneration
(II) Summary of duty performance of Remuneration & Appraisal Committee
In 2018, the salary standards of directors, supervisors and senior managers of the company conform to the relevant provisions of the
company. No inconsistencies between the salary standards and the relevant system of the company were found, and no violations of
the relevant system of the company were found.
VII Performance of Duties by the Supervisory Committee
Did the Supervisory Board find any risks to the Company during its supervision in this Reporting Period?
□ Yes √ No
The Supervisory Board raised no objections in this Reporting Period.
VIII Appraisal and Incentive for Executive Officers
During the Reporting Period, the Company’s senior management staffs seriously performed their duties in strict accordance with the
Company Law, Articles of Association and relevant laws and rules, actively implemented the resolutions made in the Company’s
shareholders’ general meeting and the board sessions, continued to strengthen the internal management under the correct direction of
the Board of Directors, and well completed the tasks of the year.
IX Internal Control
1. Serious Internal Control Defects Found in this Reporting Period
□ Yes √ No
2. Internal Control Self-evaluation Report
Disclosure date of the Self-appraisal
April 23, 2018
Report on Internal Control
Index to the disclosed internal control
Giant Tide Information Network www.cninfo.com.cn
self-evaluation report
Total assets of the evaluated entities as a
100.00%
percentage in the consolidated total assets
Operating revenues of the evaluated
entities as a percentage in the consolidated 100.00%
operating revenues
Defect identification standards
Type Financial-report related Non-financial-report related
a. Major defects: a. Major defect:
(1) The directors, supervisors and senior (1) There is no legal decision making
Nature standard
management committed frauds; procedure for significant matters;
(2) There are material misstatements in the (2) Lack of decision making procedure
61
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
issued financial statements, affecting the or the undisciplined decision-making
authenticity, completeness and fairness, and procedure leads to major errors;
therefore, the company shall correct them; (3) The company is subject to criminal
(3) The certified public account discovered penalties or is ordered to suspend
materials misstatements in the current production or business operation, or
financial statements, while the internal subject to the revoking or temporary
control fails to discover such misstatements seizure of its marketing license or
in its operation; business license and other such
(4) The company audit committee and administrative penalties, because of the
internal audit body’s supervision on the violation of state laws, regulations, rules
internal control is inefficient. or normative documents;
b. Key defects: (4) The major defects in internal control
(1) The control environment is in sufficient; are not rectified;
(2) The company’s accounting policies (5) There is no system control for
violates the Accounting Standards for significant businesses or the system has a
Business Enterprises; systematic malfunction.
(3) The accounting policies applied in the
company is incompliant with the company’s
b. When there is solid evidence to prove
accounting system;
that the company is in one of the
(4) There is no corresponding control following circumstances at the end of the
mechanism for accounting treatment of evaluation period, it shall be deemed that
non-regular or special transactions, or such the internal control has key defects:
control mechanism is not put into operation;
(1) The decision making procedure
(5) There is one or more defect with the exists, but it is not perfect;
control of the financial reporting process at
(2) The irregularity of the decision
the end of the period, and therefore, it cannot
making procedure results in significant
reasonably ensure that the authenticity and
error;
completeness in the prepared financial
(3) The company is subject to criminal
statements.
penalties or is ordered to suspend
c. Minor defects: Other control defects
production or business operation, or
except the major defects and key defects.
subject to the revoking or temporary
seizure of its marketing license or
business license and other such
administrative penalties, because of the
violation of state laws, regulations, rules
or normative documents;
(4) The key business system has a key
defect;
(5) The key defects in the internal control
are not rectified.
c. Minor defects: Other control defects
except the major defects and key defects.
62
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
The quantitative standard takes the
The quantitative standard takes the amount
amount of direct property losses as the
of direct property losses as the measurement
measurement indicator. If the amount of
indicator. If the amount of direct loss in
direct loss in assets caused by one defect
assets caused by one defect alone or together
alone or together with other defects is
with other defects is lower than 5% of the
lower than 5% of the net assets in the
net assets in the consolidated financial
consolidated financial statement, the
statement, the defect is a minor defect; If the
Quantitative standard defect is a minor defect; If the amount of
amount of direct loss in assets exceeds 5% of
direct loss in assets exceeds 5% of the
the net assets in the consolidated financial
net assets in the consolidated financial
statements but less than 10%, the defect is a
statements but less than 10%, the defect
key defect; If the amount of direct loss in
is a key defect; If the amount of direct
assets exceeds 10% of the net assets in the
loss in assets exceeds 10% of the net
consolidated financial statements, the defect
assets in the consolidated financial
is a major defect.
statements, the defect is a major defect.
X Auditor’s Report on Internal Control
√ Applicable □ Not applicable
Opinion paragraph in the auditor’s report on internal control
We believe that Guangdong Jadiete Holdings Group Company Limited has maintained effective internal control of financial
reporting in all major aspects in accordance with the Basic Standards for Enterprise Internal Control and related provisions on
December 31, 2018.
Auditor’s report on internal control
Disclosed
disclosed or not
Date of full disclosure of internal
April 23, 2018
control audit report
Full-text disclosure index of
Giant Tide Information Network www.cninfo.com.cn
internal control audit report
Type of the auditor’s opinion Adverse opinion
Serious non-financial-report-related
No
defects
Indicate by tick mark whether any modified opinions are expressed by the CPAs firm in its auditor’s report on the Company’s
internal control.
□ Yes √ No
Indicate by tick mark whether the auditor’s report on the Company’s internal control issued by the CPAs firm is consistent with the
self-evaluation report of the Board.
√ Yes □ No
63
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Part X Corporate Bonds
Are there any corporate bonds publicly offered and listed on the stock exchange, which were undue before the approval date of this
Report or were due but could not be redeemed in full?
No.
64
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Part X Financial reports
I. audit report
Types of audit opinions qualified opinion
Date of Signature of Audit Report April 22th 2019
审计机构名称 Asia (Group) CPAs (Special General Partnership)
注册会计师姓名 Zhou Hanjun, and Dai qinyong
Independent Auditor’s Report
Ya-Kuai-A-Shen-Zi（2019）No. 0068
All shareholders of Guangdong Jadiete Holdings Group Company Limited:
Audit opinion
We have audited the accompanying consolidated financial statements of Guangdong Jadiete Holdings Group Company Limited
(hereinafter referred to as the Company), which comprise the consolidated and the Company’s statement of financial position, the
consolidated and the Company’s statement of profit or loss and other comprehensive income, the consolidated and the Company’s
statement of cash flows, the consolidated and the Company’s statement of changes in equity for the year ended 31 December 2018 and
notes to the financial statements.
In our opinion, except the impact of the matters mentioned in the section of “the foundation of forming reservations”, financial
statements of the Company have been prepared according to the Chinese Accounting Standards for Business Enterprises in all material
aspects, which give a true and fair view of the financial position of Guangdong Jadiete Holdings Group Company Limited and its
subsidiaries as at 31 December 2018 and of their financial performance and cash flows for the year then ended.
The foundation of forming reservations
Jadiete Company borrowed money from Jieyang Rongcheng Branch of Industrial and Commercial Bank of China Co., Ltd. for Puning
Huafengqiang Trade Co., Ltd. (hereinafter referred to as "Huafengqiang"), and borrowed money form Jieyang Branch of Industrial and
Commercial Bank of China Co., Ltd. for Puning Lailisheng Trade Co., Ltd. (hereinafter referred to as " Lailisheng") with real estate
mortgage guarantee separately. Because the above mortgage guarantee agreement is still valid in 2018, in May 2018, Huafengqiang
borrowed RMB 11,7 million again from Jieyang Rongcheng Branch of Industrial and Commercial Bank of China Co., Ltd on the basis
of above mortgage guarantee agreement; and in Aug 2018, Lailisheng borrowed 23.79 million again from Jieyang Branch of Industrial
and Commercial Bank of China Co., Ltd. on the basis of above mortgage guarantee agreement. Due to Huafengqiang and Lailisheng
may signed some relevant anti-guarantee agreement with the Jadiete Company, and our audit scope is restricted, we can’t obtain
sufficient and appropriate audit evidence on the impact of contingent liabilities arising from the mortgage guarantee.
We conducted our audit in accordance with the Chinese Standards on Auditing for Certified Public Accountants. The part of audit
report "CPA's responsibility for the audit of financial statements" further expounds our responsibilities under these guidelines.
According to the professional ethics of Chinese Certified Public Accountants, we are independent of the Company, and perform other
responsibilities of professional ethics. We believe that the audit evidence we obtained is sufficient and appropriate, and providing a
basis for publication of reservations.
Significant uncertainties that related to continuous operation
We remind users of financial statements to pay attention to that, as stated in notes VI 25 of the financial statements, the company has
65
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
accumulated loss of RMB -117,840,473.36 till 31th Dec. 2018; Operating revenue declined sharply from the previous year, that is due
to net profit of parent company is RMB -13,392,596.16, and it has showed deficits for two years running, as stated in note III 2 of the
financial statements, these matters and situations indicate that there are significant uncertainties could lead to significant doubts to the
company's continuous operation. This matter does not affect the published audit opinions.
Key audit matters
The key audit matter is the matters which we consider most important in the audit of current financial statements according to our
professional judgment. To deal with these matters should be in the background of auditing the whole financial statements and forming
audit opinions, we do not comment on these matters separately.
( 1 ) Revenue recognition
i. Description
In year 2018, the Company’s operation revenue of consolidation is RMB 96,715,841.62, the operation revenue of the subsidiary
Shenzhen Chinese Gold Nobility Jewelry Co., Ltd. (hereinafter referred to as "CGNJ Company") is RMB 92,990,638.89. As an
Important source of the Company’s consolidated profits, we identified the authenticity and cutoff of operation revenue as key auditing
matter.
According to the accounting policy of CGNJ Company, its revenue mainly comes from sales of gold jewelry and mosaic jewelry. The
company recognizes the above sales revenue as the Company’s revenue at the time point customer confirms the acceptance receipt.
( 2 ) Audit response
Our audit procedures for the authenticity and integrity of operation revenue include (but are not limited to)
i. Understand and test the design and implementation between CGNJ Company and internal control system and financial accounting
system which relevant to sales and receipts.
ii. Distinguish the categories of sales products, combine industry development with company's actual situation, execution of analytical
review procedures, judge the rationality of sales income and gross profit change.
iii. Perform detailed testing, do sample Inspection for the records of inventory receiving and dispatching, sales warehouse receipt
signed by customers and so other external evidence, check receipt records, information corroboration of occurrence amount in the
current period,
occurrence amount of prime operating revenue and combining sales contract terms and other information, at the same time, field visits
have been further implemented for large customers, audit authenticity of sales income.
Have Sample checks on the income at the end of 2018 and the beginning of 2019, audit deadline of sales revenue and so on.
Other information
Management of the Company (hereinafter referred to as management) is responsible for other information. Other information includes
information contained in annual reports, but excludes financial statements and our audit reports.
Our audit opinions on financial statements do not contain any other information, nor do we publish any form of forensic conclusion on
other information.
Combined with our audit of financial statements, our responsibility is to read other information, in the process, we considered whether
there is significant disagreement or major misstatement between other information with financial statements and what we know in the
process of auditing
Based on the work we have done, we should report the fact if we confirm that other information exists major misstatement. we have
nothing to report in this respect.
Responsibility of management and governance for financial statements
Management of the Company (hereinafter referred to as management) is responsible for preparing financial statements according to
the accounting standards of enterprises, making it fair to reflect, designing, implementing, and maintaining necessary internal control,
making financial statements do not exist major misstatement caused by fraud or errors.
66
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
In the preparation of financial statements, management is responsible for evaluating continuous operation ability of the Company,
disclosure of matters related to continuous operation (if applicable), and using the continuing operation hypothesis, unless the
management plan to settle accounts of the Company, terminate operation or no other realistic choice
Governance is responsible for oversight of the financial reporting process of the Company.
CPA's responsibility for the audit of financial statements
Our goal is to get a reasonable guarantee for the overall of financial statements do not exist major misstatement caused by fraud or
errors, and issue an audit report containing the audit opinion.
Reasonable assurance is high level guarantee, but it doesn't guarantee that audit performed according to auditing standards can always
be found in the presence of a major misstatement. Misstatements may be caused by fraud or error, misstatements are often considered
to be major if the reasonable anticipation of misstatement may separate or gathered affect economic decisions by the user of the
financial statements,
In implementing audit work according to auditing standards, we use professional judgement and remain professional skepticism. At the
same time, we also carry out the following works:
(1) Identified and evaluated the risk of major misstatement of financial statements caused by fraud or error, designed and implemented
audit procedures to deal with these risks and obtain sufficient and appropriate audit evidence as the basis for the publication of audit
opinions. Because fraud may involve collusion, forgery, intentional omission, false statement, or overriding internal control, the risk of
major misstatements caused by fraud is higher than the risk of failure to find major misstatements caused by errors.
(2) Understood the internal control related to audit, so as to design appropriate audit procedures.
(3) To evaluate the appropriateness of accounting policies that chose by management and make sure accounting estimation and its
related disclosure was reasonable.
(4) Came to a conclusion for the appropriateness of management using the continuous operation hypothesis. At the same time,
according to the audit evidence obtained, came to a conclusion for the matter that may cause serious doubts about the company's
continuous capacity or whether situation exists a major uncertainty. If we came to conclusion that there was a major uncertainty, the
audit guidelines required us to draw users' attention to relevant disclosures in financial statements in audit report. If the disclosure was
not enough, we should publish reservations. Our conclusion is based on information available at the end of the audit date. However,
future events or conditions may cause the Company can’t continue to operate.
(5) Evaluated overall presentation, structure and content (including disclosure) of financial statements, and evaluated whether the
financial statements reflect the related transactions and matters fairly.
(6) Obtained sufficient and appropriate audit evidence on the financial information of entity or business activities in the Company, and
comment on the financial statements. We are responsible for guiding, supervising and implementing group audits. We assume full
responsibility for the audit opinion.
We have communicated with governance about audit scope of the plan, time arrangement, major audit findings and other matters,
communication includes the notable internal control flaws we identified in the audit.
We have provided a statement to the governance about complied with the professional ethics related to independence, and
communicated with governance about all relationships and other matters that may be reasonably considered to affect our independence,
as well as related precautions (if applicable).
Through the matters that communicated with governance, we decide what matters are most important for the current financial
statement audit, thus constitutes a key audit matter. We describe these matters in the audit report, unless laws and regulations prohibit
public disclosure of these matters, or in very few cases, if the negative consequences of a reasonably expected communication of a
matter in the audit report exceed the benefits of the public interest, we are determined not to communicate the matter in the audit
report.
67
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Statement of Financial Position
for the year ended 31 Dec. 2018
Prepared by Guangdong Jadiete Expressed
Holdings Group Company Limited in RMB
Closing Balance Opening Balance
Assets Note
Consolidated The Company Consolidated The Company
Current Assets:
Monetary funds VI1 1,613,340.23 150,376.48 2,956,199.38 166,675.93
Financial assets at fair value
VI2 6,316.00
through profit or loss
Derivative financial assets
Notes receivable and Trade
VI3 22,021,179.73 153,954,425.28
receivables
Prepayment VI4 30,946,946.32 2,436,902.27
Other receivable VI5 4,189,883.29 124,003,172.06 51,173,077.48 66,228,472.94
Inventories VI6 158,915,234.32 161,350,742.00
Held for sale assets VI7
149,998,221.71 149,998,221.71
Non-current assets maturing
within one year
Other current assets VI8 23,600,078.85 23,930,553.25
Total current assets 391,284,884.45 274,151,770.25 395,808,215.66 66,395,148.87
Non-current assets:
Issued commissioned loans and
advances
Available-for-sale financial
assets
Held-to-maturity investments
Long-term trade receivable
Long-term equity investment VI9 100,600,000.00 180,758,208.26 269,998,221.71 349,998,229.97
Investing properties VI10 4,774,374.35 4,774,374.35 15,057,817.47 15,057,817.47
Property, plant and equipment VI11 34,965,810.73 33,386,544.09 29,961,223.62 28,175,564.88
Construction in progress
Production/Productive biological
68
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
assets
Oil-gas assets
Intangible assets VI12 8,444,458.00 8,316,682.67 5,742,427.70 5,742,427.70
R&D expense 300,705.00
Goodwill VI13 2,395,820.87
Long-term deferred assets VI14 536,172.24 298,544.88
Deferred tax assets VI15 3,996,186.93 2,565,371.57 4,325,725.13 2,683,594.52
Other non-current assets
Total non-current assets 153,617,707.25 229,801,180.94 327,779,781.38 401,657,634.54
Total assets 544,902,591.70 503,952,951.19 723,587,997.04 468,052,783.41
Chief of the
Chief of the
Legal representative: accounting
accounting work:
department:
Statement of Financial Position
for the year ended 31 Dec. 2018
Prepared by Guangdong Jadiete Holdings Expressed
Group Company Limited in RMB
Closing Balance Opening Balance
Libilities and Owerns' Equity Note
Consolidated The Company Consolidated The Company
Current liabilities:
Short-term brrowings
Financial liabilities at fair value
through profit or loss
Derivative financial liabilities
Notes receivable and Trade receivables VI16 16,141,549.26 19,442.64 206,507,636.62 19,442.64
Advance payment VI17 86,215,991.53 75,178,103.66 11,433,013.53 171,253.66
Accrued payroll VI18 1,369,295.25 930,883.49 788,844.58 459,301.04
Current tax liabilities VI19 23,985,993.86 16,728,652.55 23,317,798.05 15,857,461.62
Other payables VI20 46,728,023.22 14,802,406.86 88,422,479.70 56,827,110.62
Held for sale liabilities
Long-term liabilities due within one VI21 59,552.00
69
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
year
Other current liabilities
Total current liabilities 174,500,405.12 107,659,489.20 330,469,772.48 73,334,569.58
Non-current liabilities:
Long-term borrowings
Bonds payables
Of which: Preferred shares
Perpetual
bonds
Long-term payables
Estimated liabilities
Deferred income
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities - - - -
Total liabilities 174,500,405.12 107,659,489.20 330,469,772.48 73,334,569.58
Share capital VI22 318,600,000.00 318,600,000.00 318,600,000.00 318,600,000.00
Other equity instruments
Of which: Preferred shares
Perpetual bonds
Capital reserve VI23 52,303,274.80 52,129,496.58 52,303,274.80 52,129,496.58
Less: Treasury stock
Other comprehensive income
Surplus reserves VI24 86,036,260.20 86,036,260.20 86,036,260.20 86,036,260.20
Retained earnings VI25 -117,840,473.36 -60,472,294.79 -104,447,877.20 -62,047,542.95
Total equity attributable to owners of
339,099,061.64 396,293,461.99 352,491,657.80 394,718,213.83
the Company
Minority interests 31,303,124.94 40,626,566.76 -
Total equity 370,402,186.58 396,293,461.99 393,118,224.56 394,718,213.83
Total liabilities and owners’ (or
544,902,591.70 503,952,951.19 723,587,997.04 468,052,783.41
shareholders') equity
Legal representative: Chief of the Chief of the
70
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
accounting work: accounting
department:
Statement of Profit or Loss and Other Comprehensive Income
For the year 2018
Prepared by Guangdong Jadiete Holdings Group Company Expressed in
Limited RMB
2018 2017
Item Note
Consolidated The Company Consolidated The Company
I. Total operating revenue VI26 96,715,841.62 400,569.52 563,989,732.95 1,280,401.28
Less: Cost of sales VI26 94,909,543.86 131,769.39 546,192,285.61 400,788.60
Taxes and surcharges VI27 981,699.21 889,302.69 1,437,339.43 819,625.42
Sale expenses VI28 1,744,103.28 - 2,356,701.67 -
Administrative expenses VI29 10,856,989.37 7,821,359.37 12,163,438.76 8,758,173.16
R&D expenses
Finance costs VI30 313,896.47 27,211.61 764,433.31 1,267,468.53
Asset impairment losses VI31 1,406,206.64 -472,891.78 2,249,537.03 -140,140.32
Add: Gain/(loss) from change in fair value (“-” for
VI32 1,976.00 -1,976.00
loss)
Gain/(loss) from investment (“-” for loss) VI33 -1,440.00 9,690,000.00 -7,080,717.26
Including: share of profits in associates and
joint ventures
Gain/(loss) from disposal of asset(“-” for
loss)
Other revenue
II. Operating profit (“-” for loss) -13,496,061.21 1,693,818.24 -8,256,696.12 -9,825,514.11
71
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Add: non-operating income VI34 609,312.29 0.23
Less: non-operating expense VI35 189,750.86 347.13 355,915.23 353,443.26
III. Total profit (“-” for loss) -13,076,499.78 1,693,471.11 -8,612,611.12 -10,178,957.37
Less: Income tax expense VI36 329,538.20 118,222.95 3,220,677.34 35,035.08
IV. Net profit (“-” for loss) -13,406,037.98 1,575,248.16 -11,833,288.46 -10,213,992.45
Attributable to owners of the Company -13,392,596.16
-14,352,474.20
(1)Net profit from continuing operations(“-” for loss)
(2)Net profit from discontinued operations(“-” for
loss)
Minority shareholders’ income -13,441.82 2,519,185.74
V. After-tax net amount of other comprehensive incomes - - - -
After-tax net amount of other comprehensive incomes
- -
attributable to owners of the Company
(I) Other comprehensive incomes that will not be
- - - -
reclassified into gains and losses
1. Changes in net liabilities or assets with a
defined benefit plan upon re-measurement
2. Enjoyable shares in other comprehensive
incomes in investees that cannot be reclassified into
gains and losses under the equity method
(II) Other comprehensive incomes that will be
- - - -
reclassified into gains and losses
1. Enjoyable shares in other comprehensive
incomes in investees that will be reclassified into
gains and losses under the equity method
2. Gains and losses on fair value changes of
available-for-sale financial assets
3. Gains and losses on reclassifying
held-to-maturity investments into available-for-sale
financial assets
4. Effective hedging gains and losses on cash
flows
72
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
5. Foreign-currency financial statement
translation difference
After-tax net amount of other comprehensive
incomes attributable to minority shareholders
VI. Total comprehensive incomes -13,406,037.98 1,575,248.16 -11,833,288.46 -10,213,992.45
Attributable to owners of the Company -13,392,596.16 -14,352,474.20
Attributable to minority shareholders -13,441.82 2,519,185.74
VII. Earnings per share
(I) Basic earnings per share -0.0420 -0.0450
(II) Diluted earnings per share -0.0420 -0.0450
Legal representative: Chief of the accounting work: Chief of the accounting
department:
Statement of Profit or Loss and Other Comprehensive Income
For the year 2018
Prepared by Guangdong Jadiete Holdings Group Company
Expressed in RMB
Limited
2018 2017
Item Note
Consolidated The Company Consolidated The Company
I. Operating activities:
Receipts from customers/Cash generated from operations 554,284,858.19 -
245,458,316.33
Receipts from taxes and levies 2,173.89 - -
VI37
Other cash received from operating activities 60,288,660.24 60,502,794.59 97,593,963.82 50,469,320.79
（1）
Subtotal of cash inflows from operating activities 305,749,150.46 60,502,794.59 651,878,822.01 50,469,320.79
Payments to suppliers 563,459,121.13 -
328,246,025.02
Cash paid to employees 5,832,406.58 1,349,130.61 4,129,892.28 1,653,304.75
Cash paid on taxes and levies 570,554.99 15,369,255.21 12,487,452.50
Other cash payment from operating activities VI37 56,929,794.37 163,199,963.43 77,570,848.28 30,279,765.63
73
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
（2）
Subtotal of cash outflows from operating activities 391,578,780.96 164,549,094.04 660,529,116.90 44,420,522.88
Net cash generated by operating activities -85,829,630.50 -104,046,299.45 -8,650,294.89 6,048,797.91
II. Investing activities:
Proceeds from disposal of investment property 94,406,852.00 94,400,000.00 10,029,611.23 -
Proceeds from return on investments 9,690,000.00 50,187.43 -
Net cash received from disposal of property, plant and
- -
equipment, intangible assets and other long-term assets
Net cash inflow on disposal of subsidiary/ and associate - -
Other cash received from investing activities - -
Subtotal of cash inflows from investing activities 94,406,852.00 104,090,000.00 10,079,798.66 -
Payment for property,plant and equipment, intangible
611,854.67 690,599.00 -
assets and other long-term assets
Payment for investment/property 121,669,186.22 120,000,000.00
Net increase of pledged loans - -
Net cash paid to acquire subsidiaries and other business
-1,724.57 60,000.00 - 5,000,000.00
units
Other cash payments relating to investing activities - -
Subtotal of cash outflows from investing activities 610,130.10 60,000.00 122,359,785.22 125,000,000.00
Net cash generated by investing activities 93,796,721.90 104,030,000.00 -112,279,986.56 -125,000,000.00
III. Financing Activities:
Cash received from capital contributions
Including: Cash received from minority shareholder
investments by subsidiaries
Proceeds from loans and borrowings
Cash received from issuance of bonds
Other cash received from financing activities
Subtotal of cash inflows from financing activities - - - -
Repayment of loans and borrowings
Dividends and interest paid 9,310,000.00
Including: dividends or profit paid by subsidiaries to
minority shareholders
Other cash payments from financing activities
Including: Dividends or profit paid to minority
interests of subsidiaries
74
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Sub-total of cash outflows from financing activities 9,310,000.00 - - -
Net cash used in financing activities -9,310,000.00 - - -
IV. Effects of exchange rate changes on balance of cash held
49.45 -495.99
in foreign currencies
V. Net increase in cash and cash equivalents -1,342,859.15 -16,299.45 -120,930,777.44 -118,951,202.09
Add: Cash and cash equivalents at the beginning of the
2,956,199.38 166,675.93 123,886,976.82 119,117,878.02
year
VI. Cash and cash equivalents at the end of the year 1,613,340.23 150,376.48 2,956,199.38 166,675.93
Legal representative: Chief of the accounting work: Chief of the accounting
department:
75
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Consolidated Statement of Changes in Equity
For the year ended 31 Dec 2018
Prepared by Guangdong Jadiete Expressed
Holdings Group Company Limited in RMB
2018
Equity attributable to owners of the Company
Not Other equity
Item Specifi
Less: Other Minority Total
e instruments
Share Capital c Surplus Retained
treasur comprehensi Other interests equity
capital Preferre Perpetu Othe reserve reserv reserve earnings
y stock ve incomes
d shares al bonds r e
I. Balance at the end of the
318,600,000. - - - 52,303,274. - - - 86,036,260. -104,447,877. - 40,626,566. 393,118,224.
previous year
00 80 20 20 76 56
Add: Change of accounting
-
policy
Correction of errors
-
in previous periods
Business mergers
-
under the common control
Other -
II. Balance at the beginning of
318,600,000. - - - 52,303,274. - - - 86,036,260. -104,447,877. - 40,626,566. 393,118,224.
the year
00 80 20 20 76 56
III. Increase of amount in the
- - - - - - - - - -
year (“-” means decrease) -13,392,596.1 -9,323,441.8 -22,716,037.9
76
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
6 2 8
(I) Total comprehensive incomes -13,392,596.1 -13,441.82 -13,406,037.9
6 8
(II) Capital increased and
- - - - - - - - - - - - -
reduced by owners
1. Common shares increased
-
by shareholders
2. Capital increased by
holders of other equity -
instruments
3. Amounts of share-based
payments recognized in owners’ -
equity
4. Others -
(III) Profit distribution - - - - - - - - - - - -9,310,000.0
-9,310,000.00
0
1. Appropriations to surplus
-
reserves
2. Appropriations to general
-
risk provisions
3. Dividends -9,310,000.0
-9,310,000.00
0
77
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
4. Other -
(IV) Internal carry-forward of
- - - - - - - - - - - - -
owners’ equity
1. Increase of share capital
-
transferred from capital reserve
2. Increase of share capital
transferred from surplus -
reserves
3. Surplus reserves for
-
making up losses
4. Carryover the changes in
net liabilities or net assets -
from remeasured benefit plan
5. Other -
(V) Specific reserve - - - - - - - - - - - - -
1. Withdrawn for the period -
2. Used in the period (“-”
-
means decrease)
(VI) Other -
IV. Closing balance 318,600,000. - - - 52,303,274. - - - 86,036,260. -117,840,473. - 31,303,124. 370,402,186.
00 80 20 36 94 58
78
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Chief of the
Chief of the accounting
Legal representative: accounting
work:
department:
Consolidated Statement of Changes in Consolidated Statement
Equity of Changes in Equity
For the year ended 31 Dec
For the year ended 31 Dec 2018
2017
Prepared by Guangdong Jadiete Holdings Expressed
Group Company Limited in RMB
2017
Equity attributable to owners of the Company
Item Other equity instruments Minority Total
Less: Other
Share Capital Specific Surplus Retained
treasur comprehensi Other interests equity
Preferre Perpetu
capital Other reserve reserve reserve earnings
d shares al bonds y stock ve incomes
I. Balance at the end of the previous year 318,600,000. 52,129,496. 86,036,260. -90,095,403.0 37,940,417. 404,610,771.
00 58 20 0 64 42
Add: Change of accounting policy -
Correction of errors in
-
previous periods
Business mergers under the
-
common control
Other -
79
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
II. Balance at the beginning of the year 318,600,000. - - - 52,129,496. - - - 86,036,260. -90,095,403.0 - 37,940,417. 404,610,771.
00 58 20 0 64 42
III. Increase of amount in the year (“-”
- - - - 173,778.22 - - - - -14,352,474.2 - 2,686,149.1 -11,492,546.8
means decrease)
0 2 6
(I) Total comprehensive incomes -14,352,474.2 2,519,185.7 -11,833,288.4
0 4 6
(II) Capital increased and reduced by
- - - - 173,778.22 - - - - - - 166,963.38 340,741.60
owners
1. Common shares increased by
-
shareholders
2. Capital increased by holders of
-
other equity instruments
3. Amounts of share-based payments
-
recognized in owners’ equity
4. Others 173,778.22 166,963.38 340,741.60
(III) Profit distribution - - - - - - - - - - - - -
1. Appropriations to surplus reserves -
2. Appropriations to general risk
-
provisions
3. Dividends -
4. Other -
80
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
(IV) Internal carry-forward of owners’
- - - - - - - - - - - - -
equity
1. Increase of share capital
-
transferred from capital reserve
2. Increase of share capital
-
transferred from surplus reserves
3. Surplus reserves for making up
-
losses
4. Carryover the changes in net
liabilities or net assets from remeasured -
benefit plan
5. Other -
(V) Specific reserve - - - - - - - - - - - - -
1. Withdrawn for the period -
2. Used in the period (“-” means
-
decrease)
(VI) Other -
IV. Closing balance 318,600,000. - - - 52,303,274. - - - 86,036,260. -104,447,877. - 40,626,566. 393,118,224.
00 80 20 20 76 56
Consolidated Statement of Changes in Equity
For the year ended 31 Dec 2018
81
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Prepared by Guangdong Jadiete Holdings Group Expressed in
Company Limited RMB
2018
Other equity
Not Less: Other Specifi
Item Share instruments Capital Surplus Retained
e treasur comprehensiv c Total equity
capital Preferre Perpetua Othe reserve reserve earnings
y stock e incomes reserve
d shares l bonds r
I. Balance at the end of the previous year 318,600,000.0 - - - 52,129,496.5 - - - 86,036,260.2
-62,047,542.95 394,718,213.83
0 8 0
Add: Change of accounting policy -
Correction of errors in previous
-
periods
Other -
II. Balance at the beginning of the year 318,600,000.0 - - - 52,129,496.5 - - - 86,036,260.2
-62,047,542.95 394,718,213.83
0 8 0
III. Increase of amount in the year (“-” means
- - - - - - - - - 1,575,248.16 1,575,248.16
decrease)
(I) Total comprehensive incomes 1,575,248.16 1,575,248.16
(II) Capital increased and reduced by owners - - - - - - - - - - -
1. Common shares increased by shareholders -
2. Capital increased by holders of other equity
-
instruments
82
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
3. Amounts of share-based payments recognized
-
in owners’ equity
4. Others -
(III) Profit distribution - - - - - - - - - - -
1. Appropriations to surplus reserves -
2. Appropriations to general risk provisions -
3. Dividends -
4. Other -
(IV) Internal carry-forward of owners’ equity - - - - - - - - - - -
1. Increase of share capital transferred from
-
capital reserve
2. Increase of share capital transferred from
-
surplus reserves
3. Surplus reserves for making up losses -
4. Carryover the changes in net liabilities or
-
net assets from remeasured benefit plan
5. Other -
(V) Specific reserve - - - - - - - - - - -
1. Withdrawn for the period -
2. Used in the period (“-” means decrease) -
83
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
(VI) Other -
IV. Closing balance 318,600,000.0 - - - 52,129,496.5 - - - 86,036,260.2
-60,472,294.79 396,293,461.99
0 8 0
Consolidated Statement of
Consolidated Statement of Changes in Equity
Changes in Equity
For the year ended 31 Dec 2018 For the year ended 31 Dec 2017
Prepared by Guangdong Jadiete Holdings Group Expressed
Company Limited in RMB
2017
Other equity instruments Less: Other
Item Share Capital Specific Surplus Retained
Preferre Perpetua treasury comprehensiv Total equity
capital Other reserve reserve reserve earnings
d shares l bonds stock e incomes
I. Balance at the end of the previous year 318,600,000.0 - - - 52,129,496.5 - - - 86,036,260.2 404,932,206.2
-51,833,550.50
0 8 0 8
Add: Change of accounting policy -
Correction of errors in previous
-
periods
Other -
II. Balance at the beginning of the year 318,600,000.0 - - - 52,129,496.5 - - - 86,036,260.2 404,932,206.2
-51,833,550.50
0 8 0 8
84
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
III. Increase of amount in the year (“-” means
- - - - - - - - - -10,213,992.4
decrease) -10,213,992.45
5
(I) Total comprehensive incomes -10,213,992.4
-10,213,992.45
5
(II) Capital increased and reduced by owners - - - - - - - - - - -
1. Common shares increased by shareholders -
2. Capital increased by holders of other
-
equity instruments
3. Amounts of share-based payments
-
recognized in owners’ equity
4. Others -
(III) Profit distribution - - - - - - - - - - -
1. Appropriations to surplus reserves -
2. Appropriations to general risk
-
provisions
3. Dividends -
4. Other -
(IV) Internal carry-forward of owners’ equity - - - - - - - - - - -
1. Increase of share capital transferred
-
from capital reserve
85
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
2. Increase of share capital transferred
-
from surplus reserves
3. Surplus reserves for making up losses -
4. Carryover the changes in net liabilities
-
or net assets from remeasured benefit plan
5. Other -
(V) Specific reserve - - - - - - - - - - -
1. Withdrawn for the period -
2. Used in the period (“-” means decrease) -
(VI) Other -
IV. Closing balance 318,600,000.0 - - - 52,129,496.5 - - - 86,036,260.2 394,718,213.8
-62,047,542.95
0 8 0 3
86
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
I. Company Profile
1. Establishment
Under the approval of People’s Government of Guangdong Province’s YBH No. 580 (1997),
Guangdong Jadiete Holdings Group Company Limited (original name: Guangdong Rieys
Group Company Ltd, hereinafter referred to as ‘the Company’) is promoted by five
enterprises including Puning Haicheng Industrial Co., Ltd (which changed its name to
Shenzhen Shenghengchang Industrial Co., Ltd when it relocated to Shenzhen, in 2007, its
name changed to Guangzhou Shenghengchang Investment Co., Ltd, in 2008 this company
was renamed to Guangzhou Shenghengchang Trade Development Co., Ltd., on 28 Jan.2010
this company was renamed to Puning Shenghengchang Trade Development Co., Ltd., on 26
Jul. 2013, this company changed its name as Shenzhen Shenghengchang Huifu Industrial
Co., Ltd. because of relocation), an original partner of Sino-foreign cooperated enterprise of
Puning Hongxing Textile and Apparel Production Factory Co., Ltd.(hereinafter referred to
as ‘Hongxing Company’). Under the approval of Guangdong Province Administration For
Industry & Commerce, the Company‘s business license is 445200000034656. The Company
has its B-Stock listed on Shenzhen Stock Exchange.
The Company’s registration address is Meixin Industry Zone, Junbu, Puning, Guangdong,
and its parent company is Shenzhen Shenghengchang Huifu Industrial Co., Ltd., the
Company’s actual controller is Hongcheng Chen.
On 17 Nov. 1997, Hongxing Company was restructured to a limited corporation, which is
the Company’s predecessor.
The original registered capital of the Company is 80,000,000, which was divided into
80,000,000 shares of RMB1.00 each. In March 1999, with the approval of the Shareholders’
General Meeting, the Company declared a Bonus Issue of 3.5 shares per 10 shares based on
the total number of shares accrued in the register as at 31 Dec.1998 (80 million shares),
making the registered capital increased to 108,000,000 shares. The Company issued
60,000,000 shares of foreign invested stock domestically listed (‘Stock B’) for foreign
investors on 17 Oct.2000, and issued 9,000,000 shares of Stock B for exercise of
over-allotment options during the period from 27 Oct.2000 to 22 Nov.2000 in accordance
with approval of ZJFXZ No. 133 (2000) issued by China Securities Regulatory Commission
on 29 Sep.2000 The registered capital of the Company increased to RMB 177,000,000 after
issuance of Stock B, which was divided into 177,000,000 shares of RMB1.00 each. The
registered capital of the Company increased to 318,600,000 after years of bonus distribution
and transfer increase in paid-in capital, which was divided into 318,600,000 shares of
RMB1.00 each.
Up to 31 Dec. 2018, the Company’s total share capital was 318,600,000 shares, including
164,025,000 non-tradable corporate shares representing 51.48% of total shares and
154,575,000 domestic listed foreign shares (stock B) representing 48.52% of total shares.
2. Business scope
Business scope: self-operating and agent for importing and exporting goods and technology
87
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
(excluding commodities of national management, products involved in quota license
management and other specified management); processing with imported materials, the
‘Three-plus-one’ trading-mix (custom manufacturing with materials, designs or samples
supplied and compensation trade), counter trade and entrepot trade (under approval of
WJMZSHZD No. 1225 [98] ). Manufacturing and selling of clothing, knitted goods, selling
of industrial material(excluding gold and vehicle), hardware, chemical product(excluding
hazardous chemicals), daily necessities, furniture, arts and crafts (excluding golden product),
agricultural product and etc.(excluding national forbidden commodities and other specified
management shall be subject to the relevant state provisions); warehousing; various kinds of
investment; real estate development (Level three, valid till 31 Dec. 2015); property leasing;
hotel service. Technological development, designing, selling, etc. of gold, silver, platinum,
diamond, jade, jewelry and hardstone articles.
3. Limit operating term
Naught.
4. Main business activity
The Company is mainly engaged in technological development, design and sale of gold and
jewelry.
5. The approval of financial statements
The financial statements and the notes of financial statements were submitted upon approval of
25th Meeting of the 7th Term of Board on 22 Apr. 2019.
II. Merger scope
5 Entities in merger scope this year:
Name Type Share-holdings (%) Voting-rights (%)
Shenzhen Rieys Industrial Limited company
90.00 90.00
Co., Ltd.
Tianrui (HK) Trading Co., Limited company
100.00 100.00
Ltd.
Shenzhen Chinese Gold Limited company
51.00 51.00
Nobility Jewelry Co., Ltd.
Shanghai Yunpeng Internet Limited company
60.00 60.00
Technology Co., Ltd
Shenzhen MaJiaKe Blue Limited company
100% 100%
Arrow Technology Co., Ltd.
Shenzhen MaJiaKe Blue Arrow Technology Co., Ltd. is a new that be incorporated in the merger scope of
the consolidated financial statements for this period
III. Basis for the preparation of financial statements
1. Basis for the preparation of financial statements
88
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
With the going-concern assumption as the basis and based on transactions and other events that
actually occurred, the Company prepared financial statements in accordance with issued by the Ministry of Finance, revised
specific accounting standards, the Application Guidance of Accounting Standards for Business
Enterprises, the Interpretation of Accounting Standards for Business Enterprises and other
regulations(hereinafter jointly referred to as ‘the Accounting Standards for Business Enterprises’,
‘China Accounting Standards’ or ‘CAS’), as well as the Rules for Preparation Convention of
Disclosure of Public Offering Companies No.15 – General Regulations for Financial Reporting
(revised in 2014) by China Securities Regulatory Commission.
In accordance with relevant provisions of the Accounting Standards for Business Enterprises, the
Company adopted the accrual basis in accounting. Except for some financial instruments, where
impairment occurred on an asset, an impairment reserve was withdrawn accordingly pursuant to
relevant requirements.
2. Gong concern
Till 31th Dec. 2018, the company has accumulated loss of RMB -117,840,473.36, that is due to net
profit of parent company is RMB -13,392,596.16. The main reason for the loss in the past two years
is that the main business of the company doesn’t perform outstandingly, and the current gold
jewelry business market is stagnant, business has fallen sharply. According to the lastest
development plan of the company, they will focus more on the main business, adjust business
model and strengthen cost control in this changing market, at the same time, the company will
improve its asset structure, increase overall investment in major business. With the implement of
the above plan, the company’s overall revenue will gradually rebond, therefore, this financial
statement is prepared on the basis of the continuing operation assumption.
IV. Important Accounting Principles and Accounting Estimates
1. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company are in compliance with in compliance with the
Accounting Standards for Business Enterprises, which factually and completely present the
Company’s financial positions as at 31 Dec. 2018, business results and cash flows for the year of
2017, and other relevant information.
2. Fiscal year
The fiscal year of the Company is the solar calendar year, which is from January 1 to December 31.
3. Operating cycle
A normal operating cycle refers to a period from the Company purchasing assets for processing to
realizing cash or cash equivalents. An operating cycle for the Company is 12 months, which is also
the classification criterion for the liquidity of its assets and liabilities.
4.Presentation currency
The Company adopted RMB as the bookkeeping base currency when preparing the financial
89
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
statements for the reporting year
5. Accounting treatment for business combination under common control and non-common
control
(1) The judgement standards of ‘package deal’
Several transactions should be accounted for as a package deal if conditions and the economic
impact of disposal of investments in subsidiaries are in compliance with one or more of the
following circumstances in a merging through multistep transactions：
i These transactions are considered simultaneously or another case of the occurrence of the impact
of entering into a transaction depends;
ii these transactions as a whole in order to reach a complete business results;
iii have at least one other transaction;
iv see a transaction alone is not economical, but, it is economical when other transactions are taken
into account.
(2) Business combination under common control
The assets and liabilities obtained are measured at the carrying amounts as recorded by the
enterprise being absorbed at the combination date. The difference between the carrying amount of
the net assets obtained and the carrying amount of consideration paid for the combination (or the
total face value of shares issued) is adjusted to the capital premium (or share premium) in the
capital reserve. If the balance of the capital premium (or share premium) is insufficient, any excess
is adjusted to retained earnings.
The cost of a combination incurred by the absorbing party, including any costs directly attributable
to the combination, shall be recognized as an expense through profit or loss for the current period
when incurred.
(3) Business combination under non-common control
A business combination involving enterprises under non-common control happens if the combining
enterprises are not ultimately controlled by the same party or parties both before and after the
business combination.
For a business combination not involving enterprises under common control, the party that, on the
acquisition date, obtains control of another enterprise participating in the combination is the
acquirer, while the other enterprise participating in the combination is the acquiree. For a business
combination not involving enterprise under common control, the combination cost including the
sum of fair value, on the acquisition date, of the assets given, liabilities incurred or assumed, and
equity securities issued by the acquirer. The intermediary expenses incurred by the acquirer in
respect of auditing, legal services, valuation and consultancy services etc. and other associated
administrative expenses attributable to the business combination are recognized in profit or loss
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when they are incurred. The transaction cost arose from issuing of equity securities or liability
securities should be initially recognized as cost of equity securities or liability securities.
Acquirer’s combination cost and the obtained identifiable net assets are measured with the fair
value on the acquisition date. The excess of the combination cost over the fair value of identifiable
net assets on the acquisition date is recorded as goodwill. When the fair value of identifiable assets
exceeds the combination cost, first of all, the fair value of items of obtained acquiree’s identifiable
assets, liabilities or contingent liabilities and combination cost need to be reassessed. And then,
when the combination cost is still less than the fair value of identifiable net assets on the acquisition
date after reassess, the difference should be recorded in the current year’s profit and loss.
The deductible temporary differences obtained from the acquiree which cannot be recognized as
deferred tax assets, on the acquisition date, because some conditions are not met. Within 12 months
after the acquisition, if new or additional information indicate that the relevant information exist on
the acquisition date and the economic benefits related with the deductible temporary difference can
be realized, the deferred tax assets should be recognized. The goodwill should be reduced and if the
goodwill is less than the deferred tax assets recognized, the rest part should be recorded in the
current year profit and loss.
For a business combination achieved in stages that involves multiple exchange transactions,
according to the ‘No.5 Inform of Printing and Distributing the Explanation of Accounting Standards
issued by the Finance of Ministry (Caikuai No.19 [2012])’ and Article 51of ‘Chinese Accounting
Standards for Business Enterprises No.33- Consolidated financial statement’, relating with the
judgment standards of package deal, a judgment about whether it is package deal or not should be
made. If it is package deal, please refer to the note IV.13 - Long-term equity investment for
accounting treatment; if it is not package deal, distinguish them as individual financial statement
and consolidated financial statement for accounting treatment:
For the individual financial statements, the book value of the long-term equity investment held
before the acquisition date plus the newly added equity investment on the acquisition date, and then
sum should be recorded as the original investment cost; the long-term equity investment involved
with other comprehensive income held before the acquisition date, the way to deal with the
investment will be the same with the way the acquiree directly dispose the related assets and
liabilities (i.e., under the equity method, beside the portion caused by the acquiree’s recalculated
defined benefit plan’s net assets and net liabilities, the rest are transferred into investment income).
For the consolidated financial statements, for the shares in acquiree held before the acquisition date,
the shares are recalculated according to the fair value on the acquisition date. The difference
between the fair value and book value should be recorded in the current year investment income; for
the shares in the acquiree held before the acquisition date involving other comprehensive income.
The way to deal with the other comprehensive income should be the same with the way the acquire
directly dispose the relevant assets and liabilities (i.e., under the equity method, beside the portion
of changes caused by the acquiree’s recalculated defined benefit plan’s net assets and net liabilities,
the rest are transferred into investment income).
6. Preparation of the consolidated financial statements
The scope of consolidation in the consolidated financial statements is determined on the basis of
control. The scope of consolidation includes all of the subsidiaries (including the enterprise or entity
under the control of parent company).
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The consolidated financial statements are based on the Company and subsidiaries’ financial
statements and other related material. When the accounting period or accounting policies of a
subsidiary are different from those of the Company, the Company makes necessary adjustments to
the financial statements of the subsidiary based on the Company’s accounting period or accounting
policies. Intra-group balances and transactions, and any unrealized profit or loss arising from
intra-group transactions, are eliminated when preparing the consolidated financial statements.
A subsidiary was acquired during the reporting period, through a business combination involving
enterprises under common control; the financial statements of the subsidiary are included in the
consolidated financial statements. The results of operations and its cash flow are appropriately
included in the consolidated balance sheet and the consolidated income statement, respectively,
from the beginning of the year to the date of acquisition and the comparative figures of the
consolidated financial statements are restated. For a subsidiary acquired through a business
combination not under common control, the operating results and cash flows from the acquisition
date (the date when the control is obtained) are included in the consolidated income statement and
consolidated statement of cash flows, as appropriate; no adjustment is made to the opening balance
and comparative figures in the consolidated financial statements. For a subsidiary being disposed of
by the Company, the operating results and cash flows before the date of disposal (the date when
control is lost) are included in the consolidated income statement and consolidated statement of
cash flows, as appropriate. For a subsidiary disposed during the period, no adjustment is made to
the opening balance of the consolidated financial statements.
Minority interest and the portion in the net profit or loss not attributable to the Company are
presented separately in the consolidated balance sheet within shareholders’/owners’ equity. Net
profit or loss attributable to minority shareholders in the subsidiaries is presented separately as
minority interest in the consolidated income statement below the net profit line item. When the
amount of loss for the current period attributable to the minority shareholders of a subsidiary
exceeds the minority shareholders’ portion of the opening balance of shareholders’/owners’ equity
of the subsidiary, the excess is still allocated against the minority interests.
When the Company still holds control of a subsidiary due to acquisition of minority interest or the
disposal of a portion of an equity investment, the difference between the amount changes of
minority interests and the fair value of the consideration paid or received is adjusted to the capital
reserve, the excess is allocated against the retained earnings.
When the Company loses control of a subsidiary due to the disposal of a portion of an equity
investment or other reasons, the remaining equity investment is re-measured at its fair value on the
date when control is lost. The difference between 1) 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 2) the carrying amounts of the interest in the former subsidiary’s net assets
immediately before the loss of the control is recognized as investment income for the current period
when control is lost. The amount recognized in other comprehensive income in relation to the
former subsidiary’s equity investment is reclassified as investment income for the current period
when control is lost. The retained interest is subsequently measured according to the rules stipulated
in the ‘Chinese Accounting Standards for Business Enterprises No.2—Long-term equity investment’
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or ‘Chinese Accounting Standards for Business Enterprises No.22—Determination and
measurement of financial instruments’.
The Company’s losing control of subsidiaries through multistep transactions of disposing of the
long-term equity investment, need to identify whether every transaction, involving with disposing
of the investment in subsidiary until losing the control, is belonging to package deal. When every
transaction involving with disposing of equity investment in subsidiary until losing control is a
package deal, they will be treated as a single deal of disposing of the investment in subsidiary until
losing control for accounting treatment. But, before the control is lost, the difference between each
receipt of every transaction and the related shared proportion of identified net assets are recognized
as other comprehensive income. The other comprehensive income will be transferred into profit and
loss in the period when losing control. If it is not package deal, every transaction of the
non-package deals is treated according to the applicable accounting standards of ‘partly disposing
of the long-term equity investment without losing control’ (refer to previous paragraphs for detail)
and ‘losing the control to subsidiary due to partly disposing the equity investment or other reasons’
(see the previous paragraph for details).
7. Standard for cash and cash equivalent
In preparing the statement of cash flows, the cash equivalents of the Company include the
investments with short period (it usually expires within three months from the purchase date),
characteristics of high liquidity, being readily convertible to a known amount of cash and being
subject to an insignificant risk of changes in value.
8. Transactions of foreign currencies and conversion of financial statements in foreign
currencies
（1）Foreign currency transactions are converted into RMB for recording purpose at the exchange
rate on the day of transaction occurs.
Adjustments are made to foreign currency accounts in accordance with the exchange rate prevailing
on the reporting date. Value of non-currency item accrued at fair value by foreign currency is
adjusted in accordance with the exchange rate prevailing on fair value confirm date. Conversion
differences arising from those specific borrowings are to be capitalized as part of the cost of the
construction in progress in the period before the PPE being acquired and constructed has not yet
reached working condition for its intended use. Conversion differences arising from other accounts
are charged to finance costs。
（2）In statement of financial position, assets and liabilities items are converted into RMB at the
exchange rate prevailing on the consolidated statement of financial position date. Owner’s equity
items (excluding undistributed profit item) are converted into RMB at the exchange rate when the
transaction occurs. In statement of profit or loss and other comprehensive income, revenue and
expenses items are accrued by the proper method and the approximate rate when the transaction
occurs. Translation difference occurred for above reason is disclosed in the consolidated statement
of financial position as a separate item.
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9. Financial instruments
When the Company becomes one party of the financial instrument contract, a financial asset or
financial liability should be recognized. Financial instrument includes financial asset, financial
liability and equity instruments.
（1）Confirmation basis of financial instruments
When the Company becomes one party of the financial instrument contract, a financial asset or financial liability should be
recognized。
The Company derecognizes a financial asset when one of the following conditions is met:
v The rights to receive cash flows from the asset have expired;
vi The enterprise has transferred its rights, and met the description below:
The Company derecognizes a financial liability (or part of it) when the underlying present obligation (or part of it) is discharged or
cancelled or has expired. An agreement between the Company (an existing borrower) and existing lender to replace original financial
liability with a new financial liability with substantially different terms is accounted for as an extinguishment of the original financial
liability and the recognition of a new liability.
Acquiring or disposing a financial asset in regular ways, recognizing or derecognizing a financial asset is based on the trade basis.
（2）Classification and measurement of financial assets
On initial recognition, the Company’s financial assets are classified into one of the four categories
based on the contract item, economic substance and purpose of financial instruments; including
financial assets at fair value though profit or loss, held-to maturity investments, loans and
receivables and available-for-sell financial assets. The initial measurement of the financial asset is
based on the fair value. For financial asset measured at fair value and designated its changes into
current period profit and loss, the related trading expense should be recorded in the profit and loss.
For the financial asset of other categories, the related trading expense should be recorded as part of
initial cost.
Financial assets at fair value though profit or loss
Financial assets at fair value though profit or loss including financial assets held-for-trade and
financial assets designated at fair value through profit or loss. Financial assets at fair value through
profit or loss are subsequently measured at the fair value. Any gains or losses arising from changes
in the fair value and any dividends or interest income earned on the financial assets are recognized
in the profit or loss.
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed or determinable
payments and fixed maturity that an entity has the positive intention and ability to hold to maturity.
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Such kind of financial assets are subsequently measured at amortized cost using the effective
interest method. Gains or losses arising from derecognition, impairment or amortization are
recognized in profit or loss for the current period.
Receivables
Receivables are non-derivative financial assets with fixed determinable payment that are not quoted
in an active market. Financial assets classified as receivables by the Company include account
receivables, and other receivables (note IV 10). Receivables are subsequently measured at
amortized cost using the effective interest method. Gain or loss arising from derecognition,
impairment or amortization is recognized in profit or loss.
Available-for-sell financial assets
Financial assets available-for-sell include non-derivative financial assets that are designated on
initial recognition as available for trade, and financial assets that are not classified as financial
assets at fair value through profit or loss, loans and receivables or investment held-to-maturity.
Financial assets available-for-trade are subsequently measured at fair value, and gains or losses
arising from changes in the fair value are recognized as other comprehensive income and included
in the capital reserve, except that impairment losses and exchange differences related to amortized
cost of monetary financial assets denominated in foreign currencies are recognized in profit or loss,
until the financial assets are derecognized, at which time the gains or losses are released and
recognized in profit or loss. Interests obtained and dividends declared by the investee during the
period in which the financial assets available-for-trade are held, are recognized in investment gains.
（3）Classification and measurement of financial liabilities
The financial liabilities are classified into financial liabilities measured at fair value with its changes
into profit and loss and other financial liabilities. The initial measurement is made at its fair value.
For the financial liabilities measured at fair value with its changes into profit and loss, the related
trading expense are recorded into current period profit and loss; for other financial liabilities, the
related trading expenses are recorded in its initial cost.
Financial liabilities measured at fair value with its changes into profit and loss
Financial liabilities measured at fair value with its changes into profit and loss including financial
liabilities held-for-trade and financial liabilities designated at fair value through profit or loss. For
the financial liabilities measured by the fair value and changes recorded in the profit or loss, fair
values are adopted for subsequent measurement. All the gains or losses on the change of fair value
and the expenses on dividends or interests related to these financial liabilities are recognized in
profit or loss for the current period.
Other financial liabilities
Derivative financial liabilities that linked with equity instruments, which do not have a quoted price
in an active market and their fair value cannot be measured reliably, is subsequently measured by
cost. Other financial liabilities are subsequently measured at amortized cost using the effective
interest method. Gains or losses arising from derecognition or amortization is recognized in profit
or loss for the current period.
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（4）The fair value of financial assets and financial liabilities
When there is active market for the financial instruments, the quotation in the active market is used
as the fair value.
When there is no active market for the financial instruments, the fair value is determined by the
valuation techniques. The valuation techniques include making a reference to the used price in
recent market trading among the parties who know the situations and is willing to trade, making a
reference to the current fair value that is used by the other substantially similar financial assets,
discounting the future cash flow and option pricing model etc.
（5）Impairment of financial assets
The Company assesses, at the balance sheet date, the carrying amount of every financial asset
except for the financial assets that measured by the fair value. If there is objective evidence
indicating a financial asset may be impaired, provision for impairment is recorded.
Financial assets measured by amortized cost
The financial assets measured by amortized cost write down their carrying value by the estimated
present value of future cash flow. The difference is recorded as impairment loss.
The Company makes an impairment test for a financial asset that is individually significant. For a
financial asset that is not individually significant, it is included in a group of financial assets with
similar credit risk characteristics and collectively assessed for impairment or individually assessed
for impairment. If no objective evidence of impairment incurs for an individually assessed financial
asset (whether the financial asset is individually significant or not individually significant), it is
included in a group of financial assets with similar credit risk characteristics and collectively
assessed for impairment. Assets for which an impairment loss is individually recognized is not
included in a group of financial assets with similar credit risk characteristics and collectively
assessed for impairment.
If there is objective evidence to indicate the recovery of value of financial assets after impairment,
and it is related with subsequent event after recognition of loss, the impairment loss recorded
originally can be reversed. The carrying value of financial assets after impairment loss reversed
shall not exceed the amortized cost of the financial assets without provisions of impairment loss on
the reserving date.
Impairment loss on available-for-trade financial assets
When an available-for-trade financial asset is impaired, the cumulative loss arising from declining
in fair value that had been recognized in capital reserve shall be removed and recognized in profit or
loss. The amount of the cumulative loss that is removed shall be difference between the acquisition
cost with deduction of recoverable amount less amortized cost, current fair value and any
impairment loss on that financial asset previously recognized in profit or loss.
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If, after an impairment loss has been recognized, there is objective evidence that the value of the
financial asset is recovered, and it is objectively related to an event occurring after the impairment
loss was recognized, the initial impairment loss can be reversed and the reserved impairment loss on
available-for-trade equity instrument is recorded in the profit or loss, the reserved impairment loss
on available-for-trade debt instrument is recorded in the current profit or loss.
Financial assets measured by cost
The equity instrument where there is no quoted price in an active market, and whose fair value
cannot be reliably measured, or impairment loss on a derivative asset that is linked to and must be
settled by delivery of such an unquoted equity instrument shall not be reversed.
（7）Recognition and measurement of financial assets transfer
The Company should terminate recognizing these financial assets when the transform occurs and
almost all risk and return of the financial assets ownership have been transferred to the transferee;
The Company should not terminate recognizing these financial assets if almost all risk and return of
the financial assets ownership have been remained.
Essence is more important than form when judging whether the transform meets the requirements of
the financial assets termination recognition conditions mentioned above. The Company divides the
transform of financial assets into entire transfer and partial transfer.
For the financial assets, the related ownership of which have not been neither, in substantial, all
transferred nor retained, the Company need to make a judgment about whether the control over the
financial assets have been kept or not and then deal with it according to the financial asset
recognition standards, as well as recognizing financial liabilities.
10. Trade reveivables
If there is objective evidence at the year end to indicate that impairment exists in accounts
receivables (including trade receivables, notes receivables, other receivables, long-term receivables,
etc.), their carrying amount should be decreasingly recorded as recoverable amount. The decreased
amount should be recognized as impairment loss of assets and be recorded into current profit or
loss.
Prepayment’s risk characteristics are subject to the nature of prepayment, if the prepayment is for
the purchase of goods or equipment, then before the agreed delivery date, or not settled but
delivered, no provision for bad debts; if the other party of the contract fails to deliver and overdue
more than one year after the contract data, provision for bad debts will be made according to the
risk characteristics of receivables. For prepayment paid for the construction project, if not fully pay
the whole price and the ownership of the construction project are expected to be obtained, no
provision for bad debts.
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For intra-group receivables, provision for bad debts will be made according to expected bad debt
losses may occur.
Conduct impairment testing separately on accounts receivable with relatively higher individual
price at end of the period. If there is objective evidence to indicate that impairment exists, recognize
impairment loss and provide for bad and doubtful debts in accordance with the difference between
its future cash flow and carrying amount.
Individual material receivables are the top five largest receivables or sum of receivables which
account for 10% of ending balance of accounts receivable. For individual receivables not material at
end of the period, the Company can conduct impairment testing separately; for receivables without
impairment through separate testing (including receivables material and not material), the Company
will categorize them into the receivables groups with similar risk factors, and assigns a certain
percentage of the end of the period balance of the receivable groups to determine the impairment
loss and make provision for bad debts.
Except the receivables provided impairment loss separately, the Company set the provision rate in
accordance with the actual loss percentage of the same or similar credit risk group by aging divided
in the previous years and the real crisis as follows:
Type Recognition Method
Aging group Aging status Aging analysis method
In the groups, adopting aging analysis method to withdraw bad debt provision:
Appropriation proportion of trade Appropriation proportion of other
Aging
receivables (%) receivables (%)
0 - 1 year 2 2
1 - 2 year 10 10
2 - 3 year 50 50
3 - 5 year 80 80
Over 5 years 100 100
11. Inventory
（1）Inventory classification
Inventory is classified to:
(1) Real estate development products: real estate development products, and cost of real estate
development products.
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(2) Non-real estate products: raw materials, working in progress, goods ready for sale, goods
delivered, commission processing materials, etc.
（2）Inventory valuation
Inventories are valued at the lower of cost and net realizable value.
Real estate development product costs include land cost, construction costs and other costs.
Borrowing costs meet the capitalization conditions are also included in real estate development
product costs. Non-real estate development product costs include purchase cost, process cost and
other costs.
The raw material purchasing is accounted through actual cost method, while the issue of raw
materials, outside processing materials, work in process and semi-finished product is carried over
on the basis of weighted average method (Diamond mosaic, jade jewelry is used specific
identification method).
（ 3 ） Confirmation of net realizable value of inventory and Recording method of provision for
inventory devaluation
At the end of the year, after overall check of the inventory, draw or adjust provision for inventory
devaluation according to the lower of the cost of inventory and net realizable values of inventory.
In normal operation process, net realizable values of commodities inventories for direct sales
including finished goods, commodities and materials for sales are determined by the estimated
selling prices minus the estimated selling expenses and relevant taxes and fees; In normal operation
process, net realizable values of materials that need further processing are determined by the
estimated selling prices of the finished goods minus estimated cost to completion, estimated selling
expenses and relevant taxes. For the inventory held to implement sales contract or work contract, its
net realizable value is calculated on the basis of contract price. For the balance of inventory beyond
the amount of the sales contract, its net realizable value is calculated on the basis of general selling
price.
Provision for inventory devaluation is provided for based on individual inventory item at end of the
period. For inventory that has large quantity and low unit price, the provision for inventory
devaluation is provided for based on categories of the inventory. For inventory related to the
products manufactured and sold in the same district, with same or similar use or purpose, and
difficult to account for separately from other items, the provision for inventory devaluation is
provided for on a consolidated basis.
When the factors that influence the decreased bookkeeping of inventory value have disappeared,
switch back from the provision for inventory devaluation amount that previously appropriated and
the amount that switched back is charged to profit or loss of current period.
（4）System of stock inventories
Perpetual inventory system is applied.
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（5）Amortization for low cost and short lived articles and package materials
For low cost and short-lived articles, use step-amortization method；
For package materials, use lump-sum amortization method.
12. Held-for-sale assets
⑴ Recognition criteria for held-for-sale assets
The company recognizes non-current assets or asset groups that simultaneously meet the following
requirements as held-for-sale assets. This constituent part can be sold immediately on the basis of
the usual term of selling such part and must be in its current situation.
This component must be immediately available for sale in its current circumstances only on the
basis of the usual terms of sale of such components. The company has made decision on the
disposal of this constituent part, according to the regulations, if approval of the shareholders is
required, it should be obtained approval from the shareholders' meeting or the corresponding
authority. The company has signed an irrevocable transfer agreement with the transferee. The
transfer will be completed within one year.
⑵ Accounting treatments for held-for-sale assets
It should adjust estimated residual value of the fixed asset for held-for-sale assets, the estimated
residual value of the fixed asset reflects the amount of its fair value minus disposal expenses, but it
shall not exceed the original book value of the fixed asset when the company meets the conditions
for sales, the difference between the original book value and the adjusted estimated residual value
shall be included in the current profit and loss as assets impairment loss. For held-for-sale other
non-current assets, according to the above treatment principles, it includes individual assets and
disposal groups, disposal group is a group of assets that are sold as a whole or disposed all at the
same time in other ways.
⑶ Liabilities in the held-for-sale disposal group
The company lists the liabilities that classified as held-for-sale disposal group. The long-term equity
investment mentioned in this section is about the equity investment of which the Company has
control, common control or significant influences over the investee. For the investments that the
Company has no control, common control or significant influences over the investee, they will be
recorded as available-for-sale or financial instrument assets measured at fair value with its changes
into profit and loss. Refer to Note IV 9” Financial Instruments” for details of its accounting policies
13. Long-term equity investments
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The long-term equity investment mentioned in this section is about the equity investment of which
the Company has control, common control or significant influences over the investee. For the
investments that the Company has no control, common control or significant influences over the
investee, they will be recorded as available-for-sale or financial instrument assets measured at fair
value with its changes into profit and loss.
（1）Determination of investment cost
As for long-term equity investments acquired by enterprise merger, if the merger is under the same
control, the share of the book value of the owner’s equity of the merged enterprise, on the date of
merger, is regarded as the initial cost of the long-term equity investment. The difference between
the initial cost of the long-term equity investment and the payment in cash, non-cash assets
transferred as well as the book value of the debts borne by the merging party shall offset against the
capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted.
For a business combination not involving enterprise under common control, the combination cost
including the sum of fair value, at the acquisition date, of the assets given, liabilities incurred or
assumed, and equity securities issued by the acquirer. The intermediary expenses incurred by the
acquirer in respect of auditing, legal services, valuation and consultancy services etc. and other
associated administrative expenses attributable to the business combination are recognized in profit
or loss when they are incurred.
The transaction cost for the equity securities or liability securities issued by the acquirer in the
business combination shall be recognized as initial amount of equity security or liability.
The equity investments other than the long-term equity through combination shall be initially
measured by cost. The cost shall be recognized to the difference in the way of acquisition of
long-term equity investment. Theses ways include the cash purchase price the Company actually
paid, the fair value of equity security issued by the Company, value specified in the investment
contract or agreement, the fair value or carrying value of the asset transferred out in the transaction
of non-monetary asset exchanges, and the fair value of the long-term equity investment. Expenses,
taxes and other necessary expenditures directly attributable to the acquisition of long-term equity
investment are taken into investment cost. For the long-term equity investments that the Company
can have significant influence or common control on the investee, but cannot control the investee,
because of the added investments, the cost of the long-term equity investment should be the sum of
original fair value of the investment and the cost of newly added investment.
（2）Subsequent measurement
Cost method of accounting for long-term equity investments
Under the cost method, a long-term equity investment is measured at initial investment cost. Except
for cash dividends or profits declared but not yet paid that are included in the price or consideration
actually paid upon acquisition of the long-term equity investment, investment income is recognized
in the period in accordance with the attributable share of cash dividends or profit distributions
declared by the investee.
Equity method of accounting for long-term equity investments
Investments in associated enterprises and joint ventures is adopted the equity method; a portion of
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investments in associated enterprises is measured at fair value though profit or loss, including
indirect equity investments through risk investment institutions, mutual funds, trust companies or
investment linked insurance companies.
If the initial cost of a long-term equity investment is more than the Company's attributable share of
the fair value of the invested entity's identifiable net assets for the investment, the initial cost of the
long-term equity investment may not be adjusted. If the initial cost of a long-term equity investment
is less than the Company's attributable share of the fair value of the invested entity's identifiable net
assets for the investment, the difference shall be included in the current profits and losses and the
cost of the long-term equity investment shall be adjusted simultaneously.
When measured by adopting equity method, respectively recognize investment income and other
comprehensive income according to the net gains and losses as well as the portion of other
comprehensive income which should be enjoyed or be shared, and at the same time adjust the book
value of the long-term equity investment; corresponding reduce the book value of the long-term
equity investment according to profits which be declared to distribute by the investees or the portion
of the calculation of cash dividends which should be enjoyed; for the other changes except for the
net gains and losses, other comprehensive income and the owners’ equity except for the profits
distribution of the investees, should adjust the book value of the long-term equity investment as
well as include in the capital reserve.
The investing enterprise shall, on the ground of the fair value of all identifiable assets of the
invested entity when it obtains the investment, recognize the attributable share of the net profits and
losses of the invested entity after it adjusts the net profits of the invested entity. If the accounting
policies adopted by the investees are not accord with that of the Company, should be adjusted
according to the accounting policies of the Company and the financial statement of the investees
during the accounting period and according which to recognize the investment income as well as
other comprehensive income.
For the transaction happened between the Company and associated enterprises as well as joint
ventures, if the assets launched or sold not form into business, the portion of the unrealized gains
and losses of the internal transaction, which belongs to the Company according to the calculation of
the enjoyed proportion, should recognize the investment gains and losses on the basis. But the
losses of the unrealized internal transaction happened between the Company and the investees
which belongs to the impairment losses of the transferred assets, should not be neutralized.
The assets launched by the Company to the associated enterprises or the joint ventures if could form
into business, the long-term equity investment without control right which acquired by the investors,
should regard the fair value of the launched business as the initial investment cost the newly added
long-term equity investment, and for the difference between the initial investment cost and the book
value of the launched business, should be included into the current gains and losses with full
amount. The assets sold by the Company to the associated enterprises or the joint ventures if could
form into business, the difference between the acquired consideration and the book value of the
business should be included in the current gains and losses with full amount. The assets purchased
by the Company to the associated enterprises or the joint ventures if could form into business,
should be accounting disposed according to the regulations of No. 20 of ASBE—Business
Combination, and should be recognized gains or losses related to the transaction with full amount.
The Company shall recognize the net losses of the invested enterprise until the book value of the
long-term equity investment and other long-term rights and interests which substantially form the
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net investment made to the invested entity are reduced to zero. However, if the Company has the
obligation to undertake extra losses, it shall be recognized as the estimated liabilities in accordance
with the estimated duties and then recorded into investment losses at current period. If the invested
entity realizes any net profits later, the Company shall, after the amount of its attributable share of
profits offsets against its attributable share of the un-recognized losses, resume recognizing its
attributable share of profits.
Disposal of long-term equity investment
For disposing of long-term equity investment, the balance between the book value of the disposed
equity and its actual payment gained shall be recorded into current profits and losses. For the
long-term equity investment measured by adopting equity method, if the remained equity after
disposal still adopts the equity method for measurement, the other comprehensive income originally
recorded into owners’ equity should adopt the same basis of the accounting disposal of the relevant
assets or liabilities directly disposed by the investees according to the corresponding proportion.
The owners’ equity recognized owning to the changes of the other owners’ equity except for the net
gains and losses, other comprehensive income and the profits distribution of the investees, should
be transferred into the current gains and losses according to the proportion.
For those the Company lost the control of the investees by disposing part of the equity investment,
the disposed remained equity should change to calculate according to the recognition and
measurement standards of financial instrument, and difference between the fair value and book
value on the date lose the control right should be included in the current gains and losses. For the
other comprehensive income recognized from the original equity investment by adopting the equity
method, should execute the accounting disposal by adopting the same basis of the accounting
disposal of the relevant assets or liabilities directly disposed by the investees when terminate the
equity method for measurement, while for the owners’ equity recognized owning to the changes of
the other owner’s equity except for the net gains and losses, other comprehensive income and the
profits distribution of the investees, should be transferred into the current investment income with
full amount when terminate adopting the equity method.
For those the Company lost the control of the investees by disposing part of the equity investment
as well as the remained equity after disposal could execute joint control or significant influences on
the investees, should change to measure by equity method when compiling the individual financial
statement and should adjust the measurement of the remained equity to equity method as adopted
since the time acquired; if the remained equity after disposal could not execute joint control or
significant influences on the investees, should change the accounting disposal according to the
relevant regulations of the recognition and measurement standards of financial instrument, and its
difference between the fair value and book value on the date lose the control right should be
included in the current gains and losses.
For the other comprehensive income recognized by adopting equity method for measurement or the
recognition and measurement standards of financial instrument before the Company acquired the
control of the investees, should execute the accounting disposal by adopting the same basis of the
accounting disposal of the relevant assets or liabilities directly disposed by the investees when lose
the control of them, while the changes of the other owners’ equity except for the net gains and
losses, other comprehensive income and the profits distribution among the net assets of the
investees which recognized by adopting the equity method for measurement, should be carried
forward into the current gains and losses according to the proportion. Of which, for the disposed
remained equity which adopted the equity method for measurement, the other comprehensive
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income and the other owners’ equity should be carried forward according to the proportion; for the
disposed remained equity which changed to execute the accounting disposal according to the
recognition and measurement standards of financial instrument, the other comprehensive income
and the other owners’ equity should be carried forward in full amount.
（3）Joint control and significant influence
Joint control, refers to the control jointly owned according to the relevant agreement on an
arrangement by the Company and the relevant activities of the arrangement should be decided only
after the participants which share the control right make consensus. This arrangement is associated
enterprise.
Significant influence refers to the power of the Company which could anticipate in the finance and
the operation polices of the investees, but could not control or jointly control the formulation of the
policies with the other parties. The Company judges the significant influence through the following
facts: (1) having representative in the investee’s board or other organ of authority; (2) involving in
the investee’s daily operating; (3) having significant transaction with investee; (4) sending manager
to investee; (5) proving key technology to investee.
（4）Impairment of long-term equity investment
On the balance date, the Company recognizes the impairment loss if the long-term equity
investment book value exceeds the investee’s owner’s equity belonging to the Company, and the
Company proceed impairment test according to No.8 of Accounting Standards for Business
Enterprises—Impairment Loss. Please refer to note IV.19 for detail.
14. Investment properties
Investment properties refer to properties held to earn rentals or for capital appreciation, or both,
including leased land use right and those held and ready to transfer after value added, and leased
buildings.
The Company uses the cost model to measure existing investment properties. For investment
properties and rental assets measured at the cost model, they will be implemented the same
depreciation policy similar to property, plant and equipment, land use right for rental will be
implemented the same amortization policy to intangible assets; for those with the indication of
impairment, the recoverable amount can only be estimated, and if recoverable amount is lower than
its book value, the corresponding impairment loss should be confirmed.
15. Property, plant and equipment
（1）Recognition standard of property, plant and equipment
Property, plant and equipment (hereinafter referred as PPE), tangible assets that are held for use in
the production or supply of services, for rental to others, or for administrative purposes; they have
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useful lives over one fiscal year. And they shall be recognized only when both of the following
conditions are satisfied:
(a) It is probable that economic benefits associated with the assets will flow to the enterprise; and
(b) The cost of the PPE can be measured reliably.
（2）Initial measurement of PPE
PPE are recorded at the actual cost on acquisition.
(a) The cost of PPE purchased includes purchase price, related tax, transportation expenses, loading
and uploading expenses, installment expenses and specialist service expenses attributable to the
assets that arise before the assets are completed and put into use.
(b) Where payment for the purchase price of a PPE is deferred beyond normal credit terms, such
that the arrangement is in substance of a financing nature, the cost of the fixed asset shall be
determined based on the present value of the purchase price, The difference between the purchase
price and its present value shall be recognized in profit or loss over the period of credit. The cost of
a self-constructed fixed asset comprises those expenditures necessarily incurred for bringing the
asset to working condition for its intended use.
(c) For PPE formed through obtaining them by the debtor paying for debt in debt restructure,
recognize its recording value as fair value of the PPE, and record the difference between the
carrying amounts of debt restructure and the PPE used for paying debt into current profit or loss.
(d) In the circumstance of the non-monetary assets exchange has commercial nature and fair value
of surrendered or received assets can be measured reliably, recording value of received assets
should be recognized as fair value of surrendered assets unless there is clear evidence to indicate
that fair value of received assets is more reliable; for non-monetary assets exchange which doesn’t
meet the requirement of premise mentioned above, cost of received assets should be recognized as
carrying amount and related tax expenses payable of surrendered assets and should not be
recognized as profit or loss.
(d) Recording value of PPE obtained by absorbing and consolidated by enterprise under identical
control should be recognized as carrying amount of the consolidated party; recording value of PPE
obtained by absorbing and consolidated by enterprise under different control should be recognized
as fair value.
(f) Recording value of financing leasehold should be recognized as fair value of leasing assets and
present value of lowest leasing payment when leasing occurs whichever is lower.
（3）Depreciation method of PPE
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Depreciation of PPE is provided for on a straight-line basis, the depreciation rate is recognized in
accordance with category, estimated useful life and estimated residual rate of PPE.
PPE renovations expenses that meet the criteria of capitalization are depreciated on an individual
basis over the interval of two renovations or remaining useful life of the PPE, whichever is shorter
(2-5 years).
For PPE leased through finance lease, if it can reasonably determine that the ownership of the
leased assets will be obtained when the lease period expires, provision for depreciation will be made
in useful life of leased assets; if it can’t reasonably determine that the ownership of the leased assets
will be obtained when the lease period expires, provision for depreciation will be made in the lease
period and useful life of leased assets, whichever is shorter.
PPE renovations expenses that meet the criteria of capitalization are averagely amortized according
to the period between the two renovations, remaining lease period and the useful life of PPE,
whichever is short.
Estimated useful life and annual depreciation rate of PPE by categories are as follows:
Annual
Expect service life Expect residual value
Category depreciation rate
(year) rate (%)
(%)
Buildings and installations 35 5 2.71
Machines and equipment 10 5 9.50
Vehicles 8 5 11.88
Office equipment and others 5 5 19.00
The annual depreciation rate of PPE withdrawing impairment loss is based on the net value
excluding the accumulated impairment loss.
16. Construction in progress
（1）Classification of construction in progress
The Construction in progress will be calculated based on the classification of proposed projects.
（2）Transfer time of construction in progress to PPE
For the construction in progress, all expenses occurring before they are ready for the use will be the
book values as the PPE. In case the construction in progress has been ready for use but the final
accounts for completion have not been handled, from the date when such projects has been ready
for use, the Company will evaluate the values and determine the costs based on the project budgets,
prices or actual costs of projects, etc. and the depreciation amount will also be withdrawn; when the
final accounts for completion are handled, the Company will adjust the originally evaluated values
subject to the actual costs, but will not adjust the withdrawn depreciation amount.
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17. Borrowing costs
（1）Confirmation principle of capitalization of borrowing costs
In case the borrowing costs occurring in the Company may directly be attributable to the
construction and productions of assets complying with the capitalization conditions, they will be
capitalized and accrued to the relevant capital costs; other borrowing costs will be confirmed as the
expenses based on the actual amount at the time of occurrence and accrued to the current profit or
loss.
The assets complying with the capitalization conditions mean the assets such as PPE, investment
real estates and inventory, etc. that need a long time of construction and production activities before
they are ready for use or for sales.
The borrowing costs begin to be capitalized under the following circumstances:
(a) The asset payment has been made which include the payment such as the paid cashes,
transferred non-currency assets or borne liabilities with the interests to construct or produce the
assets complying with the capitalization conditions;
(b) The borrowing costs have occurred;
(c) The necessary construction or production activities to make the assets ready for use or sales have
been launched.
In case during the construction or production period the assets complying with the capitalization
conditions are abnormally suspended and the suspension period exceeds 3 months continuously, the
capitalization of borrowing costs will also be suspended.
The capitalization of borrowing costs for the assets that have been constructed or produced and are
ready for use or sales will be stopped.
When parts of the purchased assets or assets whose production satisfies the capitalization conditions
are completed respectively and can be used individually, the capitalization of the borrowing costs of
these parts will be stopped.
（2）Capitalization period of borrowing costs
The capitalization period means the period from the moment that the borrowing costs start to be
capitalized to the moment that the capitalization is stopped, which does not include the period that
the capitalization of borrowing costs is suspended.
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（3）Calculation method about capitalization amount of borrowing costs
The interest expenses for special loans (after the deduction of interest income generated by the
unused loan capitals or the investment return obtained from the temporary investments) and
auxiliary expenses will be capitalized before the assets complying with the capitalization conditions
are ready for the expected use or sales.
The interest amount of general loans to be capitalized will be determined by multiplying the
weighted average amount of the asset payment by which the accumulated assets exceed the special
loans with the capitalization rate of general loans. The capitalization rate will be determined based
on the weighted average interest rate of general loans.
In case the loans have the discounts or premiums, the Company will adjust the interest amount in
each period based on the amortized discount and premium amount in each accounting period in
accordance with the actual interest rate method.
18. Intangible assets
（1）Calculation method of intangible assets
When acquiring, the intangible assets are generally recorded according to actual cost.
(a) For those the price of intangible assets deferred paid exceed normal credit condition so
substantively has financing character, the cost of intangible assets is confirmed on the basis of
present value of purchasing price.
(b) For intangible assets formed through obtaining them by the debtor paying for debt in debt
restructure, recognize its recording value as fair value of the intangible assets, and record the
difference between the carrying amounts of debt restructure and the intangible assets used for
paying debt into current profit or loss; in the circumstance of the non-monetary assets exchange has
commercial nature and fair value of surrendered or received assets can be measured reliably,
recording value of received assets should be recognized as fair value of surrendered assets unless
there is clear evidence to indicate that fair value of received assets is more reliable; for
non-monetary assets exchange which doesn’t meet the requirement of premise mentioned above,
cost of received assets should be recognized as carrying amount and related tax expenses payable of
surrendered assets and should not be recognized as profit or loss.
(c) Recording value of intangible assets obtained by absorbing and consolidated by enterprise under
identical control should be recognized as carrying amount of the consolidated party; recording value
of PPE obtained by absorbing and consolidated by enterprise under different control should be
recognized as fair value.
（2）Useful life and amortization of intangible assets
(a) Estimation of useful life for intangible assets with finite useful life:
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
At end of each year, the Company will recheck the useful life of intangible assets with the definite
useful life and amortization method will be rechecked.
According to the re-check, the useful life and amortization method of the intangible assets at the
end of the year are not different from those estimated before.
(b) Amortization of intangible assets:
In case their useful life is limited, the intangible assets are amortized evenly over the period in
which they produce economic profit for the Company; in case it is impossible to evaluate the useful
life when the intangible assets bring the benefits to enterprises, it will be deemed that the useful life
of such intangible assets is uncertain and amortization is not applicable.
19. Long-term assets impairment
On each end of accounting period, the Company will make judgments to determine whether
there are signs for impairment to the PPE ,construction in progress, definite intangible assets
and other non-current assets. Goodwill, indefinite intangible assets and intangible assets
having not reached the usable condition, should be yearly tested for impairment no matter
whether there are signs for impairment.
If there is possibility of impairment loss, the Company estimate the recoverable amount:
(a) Estimating the recoverable amount based on an individual asset with possibility of
impairment loss;
(b) Estimating the recoverable amount based on an asset group if an individual asset is hard
for impairment test;
(c) Recoverable amount is based on the higher value between the net value of asset’s fair
value less disposal cost and predicted future cash flow.
The result of impairment test demonstrates that the recoverable amount is less than its
carrying amount, the difference will be recorded as provision for impairment and debited as
impairment loss.
When the impairment loss has been recognized, an asset’s depression amount or
amortization amount should be adjusted accordingly.
The impairment loss of the above assets would not be reversed back once they are
recognized.
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20. Long-term deferred expenses to be amortized
Long-term deferred expenses to be amortized will be averagely amortized in the benefit period,
including:
(1) Prepaid rentals for operating leased PPE will be averagely amortized according to the term
stipulated in the lease contract.
(2) PPE improvement expenses for operating leased, long-term deferred expenses will be averagely
amortized according to the remaining lease period and the useful life of leased assets, whichever is
shorter.
21.Employee benefits
The benefits of employees in the Company include short-term benefits, welfare after demission, demission welfare and other
long-term welfare.
（1）Short-term benefits
The short-term benefits include the employees’ salary, bonus, allowance and compensation,
employee welfare, medical insurance, maternity insurance, employment injury insurance, housing
fund, labor union expense and employee education expense and non-currency welfare etc. The
Company recognizes the actually incurred short-term employee benefits as liability during the
period when the employees’ services are rendered, the expenses are recorded into the current period
profit and loss or related asset costs according to the benefit object.
For the non-currency welfare, it is recognized according to its fair value.
（2）Demission welfare
When the Company cannot unilaterally withdraw the dismissal welfare provided for the plan on the
cancellation of labor relationship or layoff proposal, or recognize the cost or expense involved with
the recombination of dismissal welfare or payment of such dismissal welfare (whichever is earlier),
the employee’s remuneration incurred by dismissal welfare is recognized as the debt and included
in the current profits and losses or related assets cost.
（3）Welfare after demission
Welfare after demission mainly includes defined contribution plans and defined benefit plan.
Defined contribution plans
Defined contribution plans include basic endowment insurance, unemployment insurance
and annuity. Deposited amounts are charged to relevant asset costs or current profits and
losses during the period in which they are incurred.
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Defined benefit plan
Defined benefit plan of the Company is internal early retirement plan. According to
anticipated accumulative welfare unit, the Company makes estimates by unbiased and
consistent actuarial assumption for the demographic variables and financial variables,
measures the obligations produced in defined benefit plans, and determines the vesting
period.
The deficit or surplus of the present value of defined benefit plan less the asset fair value
recognized a net liability or asset of defined benefit plan. The net asset of defined benefit
plan is recognized as the lower between the surplus of the present value of defined benefit
plan and the asset of defined benefit plan.
The liabilities of defined benefit plan include the employee compensation to be paid in
current accounting period and following next 12 months and the liabilities are discounted to
present value according to exchange rate and market return in active market.
The defined benefit plan cost and the interest on net asset or liability of defined benefit plan
are recognized into profit and loss or related asset cost. The recalculated net asset or liability
variation is recorded to other gains, which will not be written back to gain or loss in
successive fiscal periods.
At the end of defined benefit plan, the difference between the present value and settlement price of
defined benefit plan is recorded in gain or loss.
22.Provisions
（1）Recognizing principles
When businesses related to external security, pending litigation or arbitration, product quality
assurance, retrenchment plan, contract of loss, reconstruction obligation, disposing obligation of
PPE and other contingencies satisfy all the following conditions, the Company will recognize them
as liabilities:
(a) The obligation is the present obligation of the Company;
(b) The performance of such obligation is likely to lead to an outflow of economic benefits;
(c) The amount of the obligation can be reliably measured.
（2）Measurement methods:
Provisions shall be initially measured according to the best estimated amount required to be paid
when current obligations are fulfilled.
When determining the best estimated amount, it should take full consideration of the risks,
uncertainties and time value of money related to contingencies.
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Best estimated amount is handled under the following circumstances:
(a) If the amount required is in a continuous range, and the likelihood of various outcomes within
the scope is same, then the estimated amount is determined according to the median of the range,
which is the average amount of upper and lower caps.
(b) If the amount required isn’t in a continuous range, or there isn‘t such a continuous range but the
likelihood of various outcomes within the scope isn’t same, such as the contingency involves a
single item, then the best estimated amount is determined in accordance with the amount with most
likelihood; if the contingency involves several items, then the best estimated amount is determined
according to various possible outcomes and associated probabilities.
If expenses required to settle all or part of estimated debt are expected to be compensated by a third
party, then the amount of compensation will be separately recognized as an asset upon basically
being identified to be received, and the amount of compensation recognized will not exceed the
book value of projected liabilities.
23. Revenue
⑴ Sale of goods
Revenue from the sale of goods is recognized when the enterprise has transferred to the buyer the
significant risks and rewards of ownership of the goods; the enterprise retains neither continuing
managerial involvement to the degree usually associated with ownership nor effective control over
the goods sold; the amount of income can be measured reliably; it is probable that the economic
benefits associated with the transaction will flow to the enterprise; and the relevant amount of
revenue and costs can be measured reliably.
Recognizing the realization of real estate sales income upon real estate completed and accepted,
reached the conditions of delivery stipulated in the sales contract, Obtained the payment certificate
for delivery of real estate in accordance with sales contract from the buyer (usually receiving the
down payment of the sales contract and payment arrangement of the remaing housing loan has been
confirmed)
⑵ Rendering of service
In case on the preparation date of statement of financial position the results about service
transaction can be reliably evaluated, the labor income will be confirmed by the completion
percentage method. The completed percentage of service transactions is determined by the
measurement of finished work (or the proportion of services performed to date to the total services
to be performed, or the proportion of costs incurred to date to the estimated total costs).
The Company will determine the total amount of rendering of service based on the prices in
contracts and agreements that have been received or will be receivable, except that such prices are
not fair. On the statement of financial position date, the current labor incomes will be determined
based on the amount after the total labor income amount multiplied by the completion progress
deducts the accumulated labors in the past accounting periods. At the same time, the current labor
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
costs will be carried forward based on the amount after the estimated total labor cost multiplied by
the completion progress deducts the accumulated labor costs in the past accounting periods.
In case the service transaction results on the preparation date of statement of financial position
cannot be reliably evaluated, they will be determined in the following methods:
(a) In case the labor costs that have occurred can be compensated, the labor costs will be confirmed
based on such labor costs and the same amounts will be settled as the labor costs.
(b) In case the labor costs that have occurred cannot be compensated, such labor costs will be
accrued to the current profit or loss and will not be confirmed as the labor costs.
⑶ Transferring use right
In case the economic benefits related to the transaction will probably flow into the enterprise and
the revenue amounts can be measured reliably, the Company recognizes the revenue amount by the
following means:
(a) The interest income amount will be calculated and determined based on the use time of currency
capital from the Company by others and actual interest rate.
(b) The income amount of use expenses will be calculated and determined subject to the charging
time and method agreed in the relevant contracts and agreements.
（4）Government grants
Government grants refer to monetary assets or non-monetary assets obtained free by a company
from the government, but not include the capital invested by government as a business owner.
Government grants are classified to government grants related to assets and government grants
related to income.
Government grants will be recognized upon meeting both of the following two conditions:
(a) The company can meet the conditions attached to government grants;
(b) The company can receive government grants.
Government grants related to assets are recognized as deferred income and are averagely distributed
in the life of relevant assets, and recorded to current profit or loss. Government grants related to
income are handled under the following circumstances:
(a) If such grants are used to compensate for relevant costs and losses of the company during later
periods, they will be recognized as deferred income and recorded to current profit or loss upon
recognizing related costs;
(b) If such grants are used to compensate for relevant costs and losses occurred of the company,
they will be directly recorded into current profit or loss.
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⑷ Government grants
Government grants refer to monetary assets or non-monetary assets obtained free by a company
from the government, but not include the capital invested by government as a business owner.
Government grants are classified to government grants related to assets and government grants
related to income.
Government grants will be recognized upon meeting both of the following two conditions:
(a) The company can meet the conditions attached to government grants;
(b) The company can receive government grants.
Government grants related to assets are recognized as deferred income and are averagely distributed
in the life of relevant assets, and recorded to current profit or loss. Government grants related to
income are handled under the following circumstances:
(a) If such grants are used to compensate for relevant costs and losses of the company during later
periods, they will be recognized as deferred income and recorded to current profit or loss upon
recognizing related costs;
(b) If such grants are used to compensate for relevant costs and losses occurred of the company,
they will be directly recorded into current profit or loss.
24. Deferred income tax assets / deferred income tax liabilities
Corporate income tax will be calculated by liability method of the statement of financial position.
The company’s tax base will be determined upon the company obtains the assets or liabilities; on
the statement of financial position date, take the statement of financial position as the basis, and if
the book value of related assets or liabilities are different from the tax bases provided by tax laws, it
will calculate and confirm the deferred income tax assets or deferred income tax liabilities occurred
in accordance with the provisions of tax laws, which effect will be included in current income tax
expense.
The company is subject to the limit of the amount of taxable income likely to be used to offset
temporary difference, thus confirms the deferred income tax asset produced by the deductible
temporary difference.
In addition to the cases specified under income guidelines that no need to confirm the deferred
income tax liabilities, the company should recognize related deferred income tax liabilities for all
taxable temporary differences.
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25.Leasing
If the terms of the lease will be transferred to the lessee substantially together with all the risks and
rewards related to the ownership of leased assets, then the lease is a finance lease, and other lease is
operating lease.
（1）The Company is a lessor
In finance lease, at the lease beginning date, the Company takes the minimum lease receipt and the
initial direct costs as the entry value of finance lease receivable, and records the unguaranteed
residual value; and the difference between the sum of minimum lease receipt, initial direct costs and
unguaranteed residual value and its present value is recognized as unrealized finance income. For
unrealized finance income at each period during the lease term, it will use the effective interest
method to confirm the current financing income.
For rent in operating lease, the Company will use the straight-line method to recognize profit or loss
in each period during the lease term. Initial direct costs occurred will be recorded into current profit
or loss.
（2）The Company is a lessee
In finance lease, at the lease beginning date, the Company will take the lower of the fair value of the
leased assets and the present value of minimum lease payment as the entry value of leased assets,
and take the minimum lease payment as the entry value of long-term payables, and their difference
will be as unrecognized finance cost. Initial direct costs are included in the value of leased assets.
For unrecognized finance income each period during the lease term, it will use the effective interest
method to confirm the current financing cost.
The Company uses depreciation policy consistent with its own PPE to make provision for
depreciation of leased assets.
For rent in operating leases, the Company will use the straight-line method to record it into the cost
of relevant assets or current profit or loss in each period during the lease term; and initial direct
costs occurred will be through current profit or loss.
Rent in operating leases will be recorded into the cost of relevant assets or current profit or loss in
each period during the lease term.
26. Alternation of key accounting policies, accounting estimates
The Ministry of Finance published < Notice from the ministry of Finance about revising and issuing
Format of General Enterprise Financial Statements for 2018> (Caikuai No. 15 [2018]), the company
implementing Accounting Standards for Business Enterprises shall prepare financial statements for
2018 and subsequent periods in accordance with Accounting Standards for Business Enterprises and
the requirements of the notice.
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
The main impact of the company implements Caikuai No. 15 (2018) is as follows,
Amount of items
Contents and Reasons of in the statement
Name of affected Item prior period
Accounting Policy Change affected in the
current period
1. Consolidated presentation of notes Notes receivable and
22,021,179.73 153,954,425.28
receivable and trade receivable Trade receivable
2.Incorporate Interest Receivable,
Dividend Receivable into the list of other Other receivable - -
receivable
3.Incorporate disposal of fixed assets
Property, plant and
into the list of property plant and - -
equipment
equipent
4.Incorporate engineering materials into Construction in
- -
the list of construction in prrogress progress
5. Consolidated presentation of notes Notes payables and
16,141,549.26 206,507,636.62
payables and trade payables Trade payables
6. Interest payable and dividend payable Other payables - -
are included in other payable
7. Special account payable is included in Long-term payables - -
the presentation of long-term payables
8.Presentation adjustment of Administrative
- -
Administrative expenses expenses
9. Separate presentation of R&D
R & D expenses - -
expenses
V. Taxation
Main type of tax and tax rate of the Company
Type of tax Taxable basis Tax rate (%)
VAT Sales 16
Sales of real estate (After 1 May 2016，
VAT 5
apply a simplified method)
Sales of real estate
Business tax 5
(Before 30 April 2016)
Consumption tax Taxable sale revenue 5
Corporate income tax Taxable income 25
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
a. The Company implements the uniform tax rebate policy of export, i.e. the export is exempt from
VAT and the input-VAT of goods is refunded with refund rate according to relevant rules before
export in accordance with the requirements of tax law.
b. Since 1 Jan.2008, other subsidiaries of the Company has adopted the applicable income tax rate
of 25%, except for those company established in the below-mentioned districts
Companies established in Hong Kong SAR are entitled to a profits tax rate of 16.5%.
VI. Notes to the items of consolidated financial statement
1. Monetary funds
Item Closing balance Opening balance
Cash 20,999.74 45,033.57
Amount of savings 1,223,778.75 2,468,303.12
Other monetary funds 368,561.74 442,862.69
Total 1,613,340.23 2,956,199.38
Including amount deposited in the 1,391.63 1,697.08
foreign countries
No amount is restricted and has potential risks to withdraw because of mortgage, pledge.
2. Financial assets measured by fair value with the changes be included in the current gains and
losses
⑴ In Categories
Item Closing balance Opening balance
Available for sale financial assets - 6,316.00
including：Investment in debt instrument
Investment in equity instrument - 6,316.00
Derivative financial assets
Other
Financial assets measured by fair value with the
changes be included in the current gains and
losses
117
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Item Closing balance Opening balance
Including：Investment in debt instrument
Investment in equity instrument
Other
Total - 6,316.00
3. Note receivables and Trade receivables
Item Closing balance Opening balance
Note receivables
Trade receivables 35,743,950.78 168,097,719.94
Less：bad debt provision 13,722,771.05 14,143,294.66
Total 22,021,179.73 153,954,425.28
（一）Note receivables
Category Closing balance Opening balance
bank acceptance
trade acceptance
Less：bad debt provision
Total - -
Notes receivable endorsed or discounted and not yet due on the balance sheet date at the end of this
period:
Item Closing balance Opening balance
bank acceptance
trade acceptance
Total - -
⑵. Trade receivable in categories
Closing balance
Category Carrying Write-down Proportion
Proportion (%) Book value
amount amount (%)
Significant individual amount
with individually assessed of 10,148,800.54 28.39 10,148,800.54 100.00 -
bad debts
118
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Trade receivable withdrawn bad
debt provision according to 25,167,994.68 70.41 3,159,422.00 12.55 22,008,572.68
credit risks characteristics
Among ：aging group 25,167,994.68 70.41 3,159,422.00 12.55 22,008,572.68
Subtotal of credit risks
characteristics
Insignificant individual amount
with individually assessed of 427,155.56 1.2 414,548.51 97.05 12,607.05
bad debts
Total 35,743,950.78 100.00 13,722,771.05 38.39 22,021,179.73
(Continued)
Opening balance
Category Carrying Proportion Write-down Proportion
Book value
amount (%) amount (%)
Significant individual amount
9,864,799.03 5.87 9,864,799.03 100.00 -
with individually assessed of bad
debts
Trade receivable withdrawn bad
debt provision according to
credit risks characteristics
Among ：aging group 157,818,372.40 93.88 3,863,947.12 2.45 153,954,425.28
Subtotal of credit risks
characteristics
157,818,372.40 93.88 3,863,947.12 2.45 153,954,425.28
Insignificant individual amount
with individually assessed of bad 414,548.51 0.25 414,548.51 100.00 -
debts
Total 168,097,719.94 100.00 14,143,294.66 8.41 153,954,425.28
i. Significant individual amount with individually assessed of bad debts
Closing balance
Names of balances
(by Company) Write-down Reason
Balances Proportion (%)
amount
Victoria International(USA)
5,924,495.91 5,924,495.91 100.00 *说明
INC
Hong Kong Jinhua Trading 长期挂账，企业
4,224,304.63 4,224,304.63 100.00
company 认为无法收回
Total 10,148,800.54 10,148,800.54 100.00 -
119
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
*The major customers of Victoria International (USA) INC have been bankrupt, based on the
principle of prudence, the final balance of 5,924,495.91of bad debts provision ratio 100%.
ii. Accounts receivable by aging balance
Closing balance
Age
Write-down Proportion
Carrying amount
amount (%)
0-1 year 199,593.85 3,991.88 2.00
1-2 years 24,222,754.26 2,422,275.43 10.00
2-3 years 18,344.56 9,172.28 50.00
3-4 years 14,442.76 11,554.21 80.00
4-5 years 2,155.24 1,724.19 80.00
Over 5 years 710,704.01 710,704.01 100.00
Total 25,167,994.68 3,159,422.00 12.55
（2）The reversed bad debt provision of 2018 was of 420,523.61
（3）There were no account receivables which had been written off in this accounting year;
（4）Top 5 amounts of balances on 31 Dec.2018
Percentage in the total
Names of balances Amount Witten-down Amount
receivables (%)
Shanghai Zhaoke 24,214,993.65 2,421,499.37 67.75
Commercial Co., Ltd
Victoria International (USA) 5,924,495.91 5,924,495.91 16.57
INC
Hong Kong Jinhua Trading 4,224,304.63 4,224,304.63 11.82
company
Hong Kong Heyi Co., Ltd 452,499.70 452,499.70 1.27
Hong Kong Jiasong Co., Ltd. 211,348.26 191,442.15 0.59
Total 35,027,642.15 13,214,241.76 98.00
4. Prepayment
（1）Aging analysis
120
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Closing balance Opening balance
Age
Amount Proportion (%) Amount Proportion (%)
0-1 year 30,911,067.38 99.88 2,436,902.27 100.00
1-2 years 35,878.94 0.12 - -
2-3 years
Over 3 years
Total 30,946,946.32 100.00 2,436,902.27 100.00
（2）Significant prepayment aging over 1 year
Name Closing balance Age Reason
Naught
Total - - -
（3）Top 5 amounts of balances on 31 Dec.2018
Percentage in the Time of
Name Closing balance total prepayment prepayment Reason
（%） happened
Shenzhen Zhongbao Jewelry Contract not yet
30,682,026.00 99.14 2018
Co., Ltd. completed
Shanghai JianCheng Trade Co., 96,230.97 0.31 2018 Contract not yet
Ltd. completed
Zhuoyue (Shanghai) Garment 58,016.69 0.19 2018 Contract not yet
Co., Ltd. completed
Shanghai Ruihe Garment Co., 31,453.30 0.10 2018 Contract not yet
Ltd. completed
Shanghai Mansesi costumes 69,205.17 0.22 2018 Contract not yet
Co., Ltd. completed
Total 30,936,932.13 99.96 - -
5. Other receivables
Category Closing balance Opening balance
Interest receivable
Dividend receivable
Other receivables 12,480,735.39 60,037,026.23
Less：bad debt provision 8,290,852.10 8,863,948.75
121
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Category Closing balance Opening balance
Total 4,189,883.29 51,173,077.48
⑴ Other receivables
i. In categories
Closing balance
Category Proportion
Carrying Write-down Proportio
Book value
amount (%) amount n (%)
Significant individual amount with
individually assessed of bad debts
2,331,608.20 18.68 2,331,608.20 100.00 -
Accounts receivable withdrawn
bad debt provision according to 10,029,016.78 80.36 5,957,310.45 59.40 4,071,706.33
credit risks characteristics
Among ：aging group 10,029,016.78 80.36 5,957,310.45 59.40 4,071,706.33
Subtotal
Insignificant individual amount
with individually assessed of bad 120,110.41 0.96 1,933.45 1.61 118,176.96
debts
Total 12,480,735.39 100.00 8,290,852.10 66.43 4,189,883.29
(Continues)
Opening balance
Category Carrying Proportion Write-down Proportio
Book value
amount (%) amount n (%)
Significant individual amount with
individually assessed of bad debts
40,333,622.03 67.18 2,331,608.20 5.78 38,002,013.83
Accounts receivable withdrawn
bad debt provision according to
credit risks characteristics
Among ：aging group 17,620,318.99 29.35 4,870,739.74 27.64 12,749,579.25
Subtotal 17,620,318.99 29.35 4,870,739.74 27.64 12,749,579.25
Insignificant individual amount
with individually assessed of bad 2,083,085.21 3.47 1,661,600.81 79.77 421,484.40
debts
122
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Total 60,037,026.23 100.00 8,863,948.75 14.76 51,173,077.48
1 Significant individual amount with individually assessed of bad debts
Closing balance
Names of balances
Write-down Reason
Balance Proportion (%)
amount
Long-term credit
Export drawback receivable 2,331,608.20 2,331,608.20 100.00 with little estimated
recovery possibility
Total 2,331,608.20 2,331,608.20 - -
② Other receivable by aging balance
Closing balance
Age
Carrying amount Write-down amount Proportion (%)
0-1 year 1,996,693.85 39,933.89 2.00
1-2 years 2,266,844.61 226,684.48 10.00
2-3 years 90,941.50 45,470.76 50.00
Over 3 years 5,674,536.82 5,645,221.32 99.48
Total 10,029,016.78 5,957,310.45 -
（2）The reversed bad debt provision of 2018 was of RMB 573,096.65, the reversed or collected
amount of 2018 was RMB 0.00.
（3）There were no other receivables which had been written off in this accounting year.
（4）In characters
Item Closing balance Opening balance
Revolving fund 811,744.67 99,183.33
Deposit 148,312.66 261,372.20
Suspense payment 1,734,132.15 2,280,091.58
Transaction 7,454,937.71 17,062,626.61
Dividend - 38,002,013.83
Tax 2,331,608.20 2,331,738.68
Total 12,480,735.39 60,037,026.23
（5）Top 5 amounts of balances on 31 Dec.2018
123
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Name Character Closing Age Percentage in other Write-down
balance receivables (%) amount
Export tax rebate
Tax 2,331,608.20 Over 5 years 18.68 2,331,608.20
-VAT
Shenzhen
Transaction 1,575,035.30 1-2 year 12.62 157,503.53
Minglong Trade
Co., Ltd.
Suning Banhe
Chemical Fiber advance in
800,000.00 Over 5 years 6.41 800,000.00
cash
Fabric Simulation
Co., Ltd.
Guangzhou Panyu
Tanzhou Zhenyu Transaction 800,000.00 Over 5 years 6.41 800,000.00
Textiles Printing
and Dyeing Co., Revolving
fund and
Li Yang platform 723,141.37 0-1 year 5.79 14,462.83
operating
funds
Total - 6,229,784.87 - 49.91 4,103,574.56
6. Inventories
⑴ In categories
Closing balance Opening balance
Categories Carrying Write-down Write-down
Book value Carrying amount Book value
amount amount amount
Materials for
Consigned 7,019,915.71 - 7,019,915.71 - - -
Processing
Raw material - - - 7,535,249.08 - 7,535,249.08
Goods ready
151,753,952.17 - 151,753,952.17 152,530,909.16 - 152,530,909.16
for sale
Goods
141,366.44 - 141,366.44 1,284,583.76 - 1,284,583.76
delivered
Total 158,915,234.32 - 158,915,234.32 161,350,742.00 - 161,350,742.00
（2） No impairment loss needed for inventories in the year ended 31 Dec.2018
（3） No capitalized borrowing cost in the year ended 31 Dec. 2018
124
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
7. Held-for-sale assets
Item Closing balance Opening balance
Shenzhen Shenguorong Finance
149,998,221.71 -
Guarantee Co., Ltd.
Total 149,998,221.71 -
（1）In categories
Expected
Closing balance of Estimated disposal
Item Fair value disposal
book value time
expenses
Held-for-sal
e non-current 149,998,221.71 150,000,000.00 75,000.00 2019年8月03日
assets
Total 149,998,221.71 150,000,000.00 75,000.00 -
Note, the company has signed a conditional equity transfer agreement with Shenzhen Gaopu
Industrial Co., Ltd. on 30th Nov. 2018, transferred 30% shares of Shenzhen Shenguorong Finance
Guarantee Co., Ltd. to Shenzhen Gaopu Industrial Co., Ltd, transaction price is RMB 150 million,
transaction date on 30th Sep. 2018. Payment term is, (1) transffer10% of transaction price within 5
working days after the above agreement comes into effect, that is RMB 15 million; (2) transffer
40% of transaction price within 30 working days after the above agreement comes into effect, that
is RMB 60 million; (3) transffer 20% of transaction price within 70 working days after the above
agreement comes into effect, that is RMB 30 million; (4) transffer 20% of transaction price within
110 working days after the above agreement comes into effect, that is RMB 30 million; (5)The
parties agreed to intiate the procedure of transferring shares within 5 working days after the above
agreement comes into effect and the company receives 90% share transfer payment from Shenzhen
Gaopu Industrial Co., Ltd, till 31th Dec. 2018, the company has received partial payment RMB
7,5,000,000 according to the agreement.
8. Other Current Asset
Item Closing Balance Opening Balance
Pending certifying input VAT 23,600,078.85 23,930,553.25
Total 23,600,078.85 23,930,553.25
Note: Ministry of Finance of the People's Republic of China has issued (Caikuai [2016] No 22) on 3 December 2016, and
clearly requires that the closing debit balance of “tax payable” under the “VAT payable” and
125
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
“Unpaid VAT”, “pending deduct input VAT ”, “pending certifying input VAT” and “VAT credit”
and other details subjects, based on the situation, shall list in the balance sheet of “other current
assets” or “other non-current assets”. The closing credit balance of “tax payable – stay recognition
output VAT” and other subjects, based on the situation, shall list in the balance sheet of “other
current liabilities” or “other non-current liabilities”.
9. Long term investment
Increase or decrease in current period
Investment
Other
Investee company Opening balance gains and
Increase Decrease comprehensive
losses
Investment investment income
recognized in
adjustment
equity method
1.Joint venture
Sub-total - - - - -
2.Associated enterprises
Shenzhen Shenguorong
Finance Guarantee Co., Ltd.
149,998,221.71 - 149,998,221.71 - -
Shenzhen future industry
development fund enterprise 120,000,000.00 - - - -
(limited partnership).
Sub-total 269,998,221.71 - 149,998,221.71 - -
Total 269,998,221.71 - 149,998,221.71 - -
(Continues)
Increase or decrease in current period Closing
balanc
e on
Investee company Declaration of Closing balance impair
Other change for Provision for
cash dividends or Other ment
equity impairment
profits provisi
on
1.Joint venture
Sub-total - - - - - -
2.Associated
Shenzhen
Shenguorong - - - - - -
Finance Guarantee
Co., Ltd.
Shenzhen future
industry
development fund - 19,400,000.00 - - 100,600,000.00 -
enterprise (limited
partnership).
Sub-total - 19,400,000.00 - - 100,600,000.00 -
126
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Total - 19,400,000.00 - - 100,600,000.00 -
Note: the company has signed a conditional equity transfer agreement with Shenzhen Gaopu
Industrial Co., Ltd. on 30th Nov. 2018, transferred 30% shares of Shenzhen Shenguorong Finance
Guarantee Co., Ltd. to Shenzhen Gaopu Industrial Co., Ltd, transaction date on 30th Sep. 2018. The
parties agreed to intiate the procedure of transferring shares within 5 working days after the above
agreement comes into effect and the company receives 90% share transfer payment from Shenzhen
Gaopu Industrial Co., Ltd, till 31th Dec. 2018, the company has received partial payment RMB
7,5,000,000 according to the agreement.
The company received notice from Shenzhen future industry development fund enterprise
(Hereinafter referred to as "Future Industrial Fund") on 30th Nov. 2018, Future Industrial Fund has
signed a sales agreement on 28th Nov. 2018, selling its 45% shares inShenzhen Jinshitonghe
Investment Co., Ltd. at RMB 140 million, the company received the first payment RMB 20 million
on 18th Dec. 2018, Future Industrial Fund allocated RMB 19.4 million to the company on the same
day.
10. Investment property
⑴ Information
Item Buildings and Land tenure Total
installations
I Original book value
1.Opening balance 12,054,800.79 3,403,805.28 15,458,606.07
2.Increase
（1）Outsourcing
（ 2 ） Inventory\Fix assets\From
construction in process
（3）Increased from enterprise merger
3. Decrease 7,642,867.45 2,909,594.88 10,552,462.33
（1）Disposal or scrap
（2）Other 7,642,867.45 2,909,594.88 10,552,462.33
4. Closing balance 4,411,933.34 494,210.40 4,906,143.74
II. Accumulated depreciation
1. Opening balance 332,712.54 68,076.06 400,788.60
2. Increase 121,769.40 9,999.99 131,769.39
（1）Provision or amortization 121,769.40 9,999.99 131,769.39
3. Decrease 332,712.54 68,076.06 400,788.60
（1）Disposal or scrap
（2）Other 332,712.54 68,076.06 400,788.60
127
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
4. Closing balance 121,769.40 9,999.99 131,769.39
III. Impairment provision
1. Opening balance
2. Increase
（1）Withdrawing
3. Decrease
（1）Disposal or scrap
（2）Other
4. Closing balance
IV. Net book value
1.Closing balance 4,290,163.94 484,210.41 4,774,374.35
2.Opening balance 11,722,088.25 3,335,729.22 15,057,817.47
Note：
① The depreciation and amortization for the current year was RMB 131,769.39.
② Investment real estate reduction preparations for this period was RMB 0.00.
③ The information of pledged investment property’s net book value in the current period: on
31th Dec. 2018, with the houses, buildings with book value of RMB 4,774,374.35 (Original
book value RMB 4,906,143.74) to provide mortgage guarantees to Jieyang Rongcheng Branch
of Industrial and Commercial Bank of China Co. Ltd. and Jieyang Branch of Industrial and
Commercial Bank of China Co., Ltd separately with the houses and buildings, details refer to
Notes 11, 2 (1)
（2）Unfinished property certificate
Naught
（3）The transformation of real estate and the change of measurement mode
The company is rending part of its original plant, transforming the house and land into investment
real estate by cost method from the beginning of the lease
11. PPE
（1）Information
Electronics and
Buildings and
Item Vehicles other Total
installations
equipment
128
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
I Original book value
Opening balance 63,369,239.17 3,638,278.11 1,824,047.93 68,831,565.21
Increase 7,642,867.45 210,034.19 46,640.31 7,899,541.95
Purchase 210,034.19 46,640.31 256,674.50
From construction in process
Increased from enterprise
merger
Shareholder investment
Financing investment
Other 7,642,867.45 - - 7,642,867.45
Decrease
Disposal or scrap
Financing lease
Other
Closing balance 71,012,106.62 3,848,312.30 1,870,688.24 76,731,107.16
II. Accumulated depreciation
Opening balance 36,007,872.49 2,233,248.34 629,220.76 38,870,341.59
Increase 2,208,008.94 370,791.60 316,154.30 2,894,954.84
Withdrawing 2,208,008.94 370,791.60 316,154.30 2,894,954.84
Increased from enterprise
merger
Other
Decrease
Disposal or scrap
Financing lease
Other
Closing balance 38,215,881.43 2,604,039.94 945,375.06 41,765,296.43
III. Impairment provision
Opening balance
Increase
Withdrawing
Increased from enterprise
merger
Other
Decrease
Disposal or scrap
Financing lease
Other
Closing balance
IV. Net book value
129
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Closing balance 32,796,225.19 1,244,272.36 925,313.18 34,965,810.73
Opening balance 27,361,366.68 1,405,029.77 1,194,827.17 29,961,223.62
Note;
① The depreciation for the current year was RMB 2,894,954.84.
② No constructions in progress transferred to PPE during the period.
③ The information of PPE for mortgage guarantee in the current period: on 31th Dec. 2018, with
the houses, buildings with book value of RMB 14,424,253.85 （ original book value RMB
35,869,472.65）to provide mortgage guarantees to Jieyang Rongcheng Branch and Jieyang Branch
of Industrial and Commercial Bank of China Limited, details refer to note XI 2 (1)
（2）List of temporarily idle PPE
Accumulated Impairment
Item Original book Net book value
depreciation provision Note
value
Buildings and 71,012,106.62 38,215,881.43 - 32,796,225.19 -
installations
Total 71,012,106.62 38,215,881.43 - 32,796,225.19 -
（3）No PPE from financial leasing
（4）No PPE from operation leasing
（5）No PPE failed to accomplish certification of property
12. Intangible assets
（1）Information
Right to the Use of
Item Computer Software Total
State-owned Land
I Original book value
1. Opening balance 10,459,394.72 373,115.00 10,832,509.72
2. Increase
(1) Purchase
(2) Internal R&D
(3) Increased from enterprise
merger
(4) Shareholder investment
(5) Other 2,536,479.88 127,775.33 2,664,255.21
130
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
3. Decrease
(1) Disposal
(2) Other
4. Closing balance 12,995,874.60 500,890.33 13,496,764.93
II. Accumulated amortization
1.Opening balance 4,716,967.02 373,115.00 5,090,082.02
2.Increase 277,263.84 - 277,263.84
(1) Withdrawing 277,263.84 - 277,263.84
(2) Increased from enterprise
merger
(3) Other
3. Decrease 315,038.93 - 315,038.93
(1) Disposal
(2) Other 315,038.93 - 315,038.93
4. Closing balance 4,679,191.93 - 5,052,306.93
III. Impairment provision
1.Opening balance
2. Increase
(1) Withdrawing
(2) Increased from enterprise
merger
(3) Other
3. Decrease
(1) Disposal
(2) Other
4. Closing balance
IV. Net book value
1. Closing balance 8,316,682.67 127,775.33 8,444,458.00
2.Opening balance 5,742,427.70 - 5,742,427.70
Note:
①The amortization for current year was RMB 277,263.84
② The information of intangible assets for mortgage guarantee in the current eriod: on 31th Dec.
2018, with the book value was RMB 8,316,682.6 （original book value RMB 13,368,989.60 ） to
provide mortgage guarantees to Jieyang Rongcheng Branch and Jieyang Branch of Industrial and
131
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Commercial Bank of China Limited, details refer to note XI 2 (1)
（2）No Right to the Use of State-owned Land failed to accomplish certification
13. Goodwill
（1）Original book value
Name of investees or items for Opening Increase Decease Closing
formation of goodwill balance Goodwill Disposal balance
Shenzhen Chinese Gold
Nobility Jewelry Co., Ltd. 2,395,820.87 - - 2,395,820.87
Total 2,395,820.87 - - 2,395,820.87
（2）Impairment of Goodwill
Openin Increase Decease
Name of investees or
g Closing
items for formation of
balanc Withdrawing Disposal balance
goodwill
e
Shenzhen Chinese Gold
Nobility Jewelry Co., - 2,395,820.87 - 2,395,820.87
Ltd.
Total - 2,395,820.87 - 2,395,820.87
Test information：
Not recognized as
Impairment belonging to Book value of
Adjusted
Item Book balance reserve Book value minority tangible assets
book value
balance shareholders'rights in asset group
and interests
1 2 3 4=2-3 5 6=4+5 7
Shenzhen
Chinese
Gold
2,395,820.87 - 2,395,820.87 2,301,867.11 4,697,687.98 58,169,436.78
Nobility
Jewelry
Co., Ltd.
132
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Recoverable Goodwill
Book value of asset Amount of Asset Goodwill impairment
Equity Share of
group including Group impairment losses that
Auditee Units
goodwill including loss auditee should
Goodwill confirm
8=6+7 9 10=9-8 11 12=10*11
62,867,124.76 57,284,600.00 -5,582,524.76 51.00% -2,395,820.87
Note: becaused share of equity holdings of the calculated goodwill impairment lost multiplied by
the auditee holds=-5,581,224.76*51.00%= RMB -2,846,424.63, this goodwill impairment of lost
greater than Book value of goodwill 2,395,820.87, it should take the book value of goodwill that the
auditee should confirm as The Deduction Limit of Goodwill.
（4） Relevant information of the goodwill in asset group
The scope of assessment of Shenzhen Chinese Gold Nobility Jewelry Co., Ltd. on baseline date is
the company's assets involved in asset group that forming goodwill, the asset group is consistent
with the asset groups determined in the doodwill impairment tests of previous years and on the
purchase date. The asset group anticipated the present value of future cash flows (recoverable
amount) using the results of the assessment, Report No. 2 - ** of the National Association of
Representatives (2019) issued by National Association of Representatives Asset Evaluation Land
Real Estate Valuation Co., Ltd. in Apri 2019, < GUANGDONG JADIETE HOLDINGS GROUP
COMPANY LIMITED’s Asset Group Recyclable Value Assessment Project of Shenzhen Chinese
Gold Nobility Jewelry Co., Ltd. for goodwill devaluation Test>.
（5）Goodwill impairment testing process, identification method of parameters and goodwill
impairment loss
I.Important Hypothesis and Basis
① Assuming that the auditee will continue to operate, and no significant change in operation and management mode
② Assuming that no significant change in the social and economic environment that the auditee is situated in.
③ Assuming that no significant change for interest rate, exchange Rate, tax benchmark and tax rate change within the
normal scope stipulated by the state
II. Key parameter
key parameter
growth Discount
Unit rate of increase
rates in Rate
predictive period in predictive Profit margin
stable
period （WACC）
period
Shenzhen 2019-2023 Calculate
【explanation】 balance 13.28%
Chinese （Follow-up according to
133
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Gold period is stable forecast
Nobility period） revenue, cost,
Jewelry Co., cost, etc.
Ltd.
Note: According to the operation status in historical year, future strategic planning, marketing plan,
anticipated operation and other information, the company forecasts all kinds of revenue in the
predictive period. Take into account of asset group comprehensive capacity involved in goodwill
and an overall analysis of the market in the future, the growth rates of sales revenue for the
company between 2019-2023 year are expected to be 2019（51%）,2020（7%）,2021（7%）、2022
（6%）,2020（6%）.
14. Long-term deferred expenses to be amortized
Other
Opening Amortizat Closing
Item Increase Decrease reason for
balance ion balance decrease
Renovatio
298,544.88 355,180.18 117,552.82 - 536,172.24 -
n costs
Total 298,544.88 355,180.18 117,552.82 - 536,172.24 -
15. Deferred tax assets/deferred tax liabilities
（1）Deferred tax assets without off-set
Closing balance Opening balance
Item Deductible Deductible
Deferred tax Deferred tax
temporary temporary
assets assets
differences differences
Assets impairment
15,984,747.72 3,996,186.93 17,300,924.52 4,325,231.13
provision
Held for trading
- - 1,976.00 494.00
financial assets
Total 15,984,747.72 3,996,186.93 17,302,900.52 4,325,725.13
（2）Unrecognized deferred tax assets:
Item Closing balance Opening balance
Assets impairment provision
Unrecognized deductible losses 25,392,517.11 41,496,596.53
Total 25,392,517.11 41,496,596.53
（3）Unrecognized deductible losses of deferred tax assets will be expire at the end of following
134
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
years
Year Closing balance Opening balance Note
2018 - 19,429,361.72 -
2019 14,209,131.72 14,209,131.72 -
2020 2,439,938.30 2,439,938.30 -
2021
2022 5,418,164.79 5,418,164.79
2023 3,325,282.30 - -
Total 25,392,517.11 41,496,596.53 -
16. Trade payables and Notes payables
Item Closing balance Opening balance
Notes payables
Trade payables 16,141,549.26 206,507,636.62
Total 16,141,549.26 206,507,636.62
（1）Trade payables
Item Closing balance Opening balance
Bank Acceptance Bill
Commercial Acceptance Bill
Total
（2）Trade payables
Item Closing balance Opening balance
Payments for goods 16,141,549.26 206,439,280.91
Rental - 68,355.71
Total 16,141,549.26 206,507,636.62
（1）Significant trade payables aging over 1year
Name Amount Character Unpaid reason
Naught
Total - - -
17. Advance payment
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Item Closing balance Opening balance
Payments for goods 11,215,991.53 11,433,013.53
advances payment for stock
75,000,000.00 -
right transfer
Total 86,215,991.53 11,433,013.53
（1）Significant advance payment aging over 1 year
Name Amount Charter Unclosed reason
Jiangxi Yuetong Industrial Co. 10,738,840.00 Payments for goods 合同未覆行完毕
Ltd.
Total 10,738,840.00 - -
18. Accrued payroll
（1）In classification
Opening Closing
Item Increase Decrease
balance balance
Short-term remuneration 780,689.58 4,161,147.50 3,584,109.34 1,357,727.74
Post-employment benefit-defined
8,155.00 174,983.59 171,571.08 11,567.51
contribution plans
Termination benefits
Other benefits due within one year
Total 788,844.58 4,336,131.09 3,755,680.42 1,369,295.25
（2）Short-term remuneration
Opening Closing
Item Increase Decrease
balance balance
(1) Salary, bonus, allowance, subsidy 776,758.58 3,691,583.23 3,115,388.59 1,352,953.22
(2) Employee welfare - 142,436.00 142,436.00 -
(3) Social insurance 3,931.00 250,064.97 248,615.45 5,380.52
Including: ①Medical insurance 3,303.00 195,068.09 193,674.53 4,696.56
premiums
②Work-related injury insurance 293.00 6,409.32 6,491.46 210.86
③Maternity insurance 335.00 48,587.56 48,449.46 473.10
(4) Housing welfare fund - 77,063.30 77,669.30 -606.00
(5) Union fund and employee
education fundabsence with payment
(6) Short-term
136
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
(7) Short-term profit sharing plan
(8) Other
Total 780,689.58 4,161,147.50 3,584,109.34 1,357,727.74
（3）Defined contribution plans
Opening Closing
Item Increase Decrease
balance balance
Basic endowment insurance
7,946.00 165,769.03 162,450.31 11,264.72
premium
Unemployment insurance 209.00 9,214.56 9,120.77 302.79
premium
Total 8,155.00 174,983.59 171,571.08 11,567.51
19. Current tax liabilities
Categories Closing balance Opening balance
VAT 481,736.10 678,297.88
Business tax 781,313.74 781,313.74
Corporate income tax 18,047,007.75 18,070,536.48
Land appreciation tax 2,256,922.32 1,625,139.92
Property tax 623,070.00 442,980.00
Land use tax 1,795,943.95 1,719,530.03
Other 23,985,993.86 23,317,798.05
20. Other payables
Category Closing balance Opening balance
Interest payables
Dividend payables
Other payables 46,728,023.22 88,422,479.70
Total 46,728,023.22 88,422,479.70
（1）Other payables
i. In characters
Item Closing balance Opening balance
Transaction 44,505,544.22 49,006,606.49
Dividend deposit - 38,002,013.82
Payment on behalf 134,687.40 106,938.08
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Rental deposit 380,000.00 380,000.00
Other 1,707,791.60 926,921.31
Total 46,728,023.22 88,422,479.70
21. Long-term liabilities due within one year
Item Closing balance Opening balance
Long-term borrowings due
- -
within one year
Bonds payables due within
- -
one year
Long-term payables due
59,552.00 -
within one year
Total 59,552.00 -
Other note: In the period, Wuxi Yun Peng a subsidiary of Shanghai Yun Peng a holding subsidiary
of Jadiete purchased a Buick car, with VAT price is RMB 242,494.02, down payment is RMB
108,494.02, the balance is 134,000.00 divided into 18 periods, till 31th Dec. 2018, the balance will
be due withon one year.
22. Share capital
Increase/decrease (+/-)
Opening Capitalizatio Closing
Item balance balance
Newly Bonus n
Other Subtotal
Issued shares issued of surplus
reserve
Total shares 318,600,000.00 - - - - - 318,600,000.00
Note: details refer to note I Company Profile
23. Capital reserve
Item Opening Increase Decrease Closing balance
1. Capital premium
balance
52,129,496.58 - - 52,129,496.58
Including: Capital
contributed by investors
52,129,496.58 - - 52,129,496.58
2. Other 173,778.22 - - 173,778.22
138
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Total 52,303,274.80 - - 52,303,274.80
24. Surplus reserve
Opening Closing
Item Increase Decrease
balance balance
Statutory surplus 49,036,260.20 - - 49,036,260.20
reserve
Discretionary
37,000,000.00 - - 37,000,000.00
surplus reserve
Total
Statutory surplus
reserve
Discretionary
86,036,260.20 - - 86,036,260.20
surplus reserve
25. Retained earnings
Amount for the Amount for the
Item Proportion
current period prior period
Retained earnings as to 31 Dec.2016 without -104,447,877.20 -90,095,403.00 -
adjustment
Total adjustment to Retained earnings as to 31
Dec.2016 (add +, less-)
Adjusted retained earnings as to 31 Dec.2015 -104,447,877.20 -90,095,403.00 -
Add: Profit attributable to owners of the -13,392,596.16 -14,352,474.20 -
company
Less: Appropriation to statutory surplus
reserve
Appropriation to discretionary surplus reserve
Appropriation to reserve fund
Appropriation to Enterprise development fund
Appropriation to welfare fund for staff and
workers
Appropriation to risk reserve
Common Stock dividends payable
Common stock dividends transferred to
capital stock dividend
Preferred stock
Other distribution of shareholders
Profit capitalised on return of investments
Other distribution of profits
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Add: Earned surplus to make up for losses
Other internal relations of owner's equity
Retained earnings as to 31 Dec.2017
Retained earnings as to 31 Dec.2016 without -117,840,473.36 -104,447,877.20 -
adjustment
Total adjustment to Retained earnings as to 31
Dec.2016 (add +, less-)
26. Revenue and cost of sales
（1）Classification of revenue and cost of sales
Amount for the current period Amount for the prior period
Item
Revenue Cost of sales Revenue Cost of sales
Principal operating 96,257,015.51 94,777,774.47 562,709,331.67 545,791,497.01
activities
Other activities 458,826.11 131,769.39 1,280,401.28 400,788.60
Total 96,715,841.62 94,909,543.86 563,989,732.95 546,192,285.61
（2）Revenue from Principal operating activities (classified by industries)
Amount for the current period Amount for the prior period
Industry
Revenue Cost of sales Revenue Cost of sales
Gold and jewelry 92,990,638.89 92,727,039.98 471,002,217.43 455,667,340.77
Nickel metal 89,128,220.12 88,078,333.76
E-commerce
3,279,636.46 2,063,994.33 2,578,894.12 2,045,822.48
Clothing sales
Total 96,270,275.35 94,791,034.31 562,709,331.67 545,791,497.01
Off-set internal
-13,259.84 -13,259.84 - -
transactions
Total 96,257,015.51 94,777,774.47 562,709,331.67 545,791,497.01
（3）Revenue from principal operating activities (by region)
Amount for the current period Amount for the prior period
Region
Revenue Cost of sales Revenue Cost of sales
140
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Shenzhen Gold and
92,990,638.89 92,727,039.98 471,002,217.43 455,667,340.77
jewelry
Domestic Nickel
14,089.29 13,259.84 89,128,220.12 88,078,333.76
metal
E-commerce
3,265,547.17 2,050,734.49 2,578,894.12 2,045,822.48
Clothing sales
Subtotal 96,270,275.35 94,791,034.31 562,709,331.67 545,791,497.01
Off-set internal
-13,259.84 -13,259.84 - -
transactions
Total 96,257,015.51 94,777,774.47 562,709,331.67 545,791,497.01
（4）The total sales to Top 5 customers of the Company amounted to RMB 92,917,790.84,
accounting for 96.08% of total revenue of the Company this year.
Percent in total revenue of
Name Revenue
the Company (%)
Shenzhen Yuetong International
64,942,630.49 67.15
Jewelry Limited by Share Ltd
Shanghai Wangjiao Electrical and
25,417,241.20 26.28
Mechanical Equipment Co., Ltd.
Shanghai JianCheng Trade Co., Ltd. 892,382.94 0.92
Anhui Yuelang Jewelry Co., Ltd. 856,395.71 0.89
Wuxi Hengye science and Technology
809,140.50 0.84
Co., Ltd.
Total 92,917,790.84 96.08
27. Business tax and surcharges
Item Amount for the current period Amount for the prior period
Consumption tax 268.68 7,086.27
Education expenses and 11,872.52 92,615.01
surcharges
Urban maintenance and 16,825.96 128,012.36
constructiontaxtax
Land Use 180,090.00 180,090.00
Stamp tax 140,859.65 397,753.39
Property tax 631,782.40 631,782.40
Total 981,699.21 1,437,339.43
Note: according to the relevant regulations on issued by Ministry of Finance of the People's Republic of China "( Caikuai [2016]),
141
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
the subject of “business tax and surcharges” in the profit statement shall adjust to the subject of
“tax and surcharges”, and the relevant tax and expenses of property tax, land use tax, vehicle
and vessel use tax, stamp tax and other related items originally recognized in administrative
expenses shall adjust to recognize in “tax and surcharges” since 1 May 2016.
28. Sale expenses
Amount for the current period
Item Amount for the prior period
current period
Remuneration 440,830.55 989,210.60
Rental 489,149.45 610,319.02
Software expense 31,943.44 161,630.19
Service expense 486,049.48 167,486.01
Social Insurance 37,327.47 85,028.31
office expense 57,171.45 80,485.71
Purchase brokerage 28,213.52 78,191.44
Depreciation amount 24,713.84 32,661.61
Packaging 3,328.00 33,897.76
Travel expense 34,262.65 21,542.84
Business Propagandize Fee - 16,698.40
Other expense 111,113.43 79,549.78
Total 1,744,103.28 2,356,701.67
29. Administration expense
Item Amount for the current period Amount for the prior period
Remuneration 2,632,572.17 2,725,017.53
Depreciation amount 2,537,528.46 2,267,144.87
Rental expense 943,722.71 1,298,487.88
Auditing expense 800,000.00 950,000.00
Security transaction cost 426,150.00 632,160.00
Automobile expense 148,688.19 562,751.24
Travel expenses 300,134.19 435,412.39
Water and electricity 252,471.00 424,607.28
Finance consultant - 400,000.00
Board membership dues 395,000.00 395,000.00
Office expense 184,542.56 328,203.45
Entertainment expense 106,276.86 320,659.31
142
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
welfare benefits 179,452.37 288,206.47
Social Insurance 273,261.73 238,904.65
Assessment expanse - 232,332.00
Amortization of intangible assets 800,100.00 -
Other 267,263.85 209,187.78
Total 609,825.28 455,363.91
Remuneration 10,856,989.37 12,163,438.76
30. Finance costs
Item Amount for the current period Amount for the prior period
Interest expenses 21,155.43 1,332,409.72
Less: Interest incomes 5,770.02 98,517.59
Exchange losses 281,218.32 -497,747.17
Commission charges and other 17,292.74 28,288.35
Total 313,896.47 764,433.31
31. Asset impairment loss
Item Amount for the current Amount for the prior
（1）Bad debt allowance period -989,614.23 period 2,249,537.03
（2）Inventories allowance
（3）PPE impairment loss
（4）Materials held for construction
impairment loss impairment loss
（5）Goodwill 2,395,820.87 -
Total 1,406,206.64 2,249,537.03
32. Gain on fair value change
Amount for the current Amount for the prior
Item
period period
Financial assets measured at fair value a
nd changes recorded into current period 1,976.00 -1,976.00
profit or loss
Other
Total 1,976.00 -1,976.00
33. Non-operating income
143
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Amount for the Amount for the
Item
current period prior period
Gains on debt restructuring
Gains on Non-monetary transactions -1,440.00 -7,080,717.26
Donations
Government grants
Other -1,440.00 -7,080,717.26
34. Non-operating expense
Amount for the Amount for the Amount included
Item in non-recurring
current period prior period
profit or loss for
Losses on debt restructuring
Donations
Loss of assets
Fines
Other 609,312.29 0.23 609,312.29
Total 609,312.29 0.23 609,312.29
Note: ‘other’ was the indemnity income.
35. Non-operating expense
Amount included
Amount for the Amount for the in non-recurring
Item
current period prior period profit or loss for
the period
Losses on debt restructuring
Donations
Loss of assets 189,403.73 64,486.66 189,403.73
Fines 347.13 291,428.57 347.13
Other 189,750.86 355,915.23 189,750.86
Note: “Other” mostly was the less land tax when sold real estate in the last year.
36. Income tax expense
（1）Details
144
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Amount for the current Amount for the prior
Item
period period
Current tax expense calculated according
- 2,929,003.94
to tax laws and relevant requirements
Deferred income tax expense 329,538.20 291,673.40
Total 329,538.20 3,220,677.34
（2）The process of calculating the income tax based on accounting profit:
Item Amount for the current period Account for the prior period
Consolidated profit this year -13,076,499.78 -8,611,993.62
Income tax calculated at legal or applicable
-3,269,124.95 -2,152,998.41
tax rate
Impact of various tax rates applicable to
subsidiaries
Adjustment of impact on the income tax in
the previous period
Profits and losses of joint ventures or associated
enterprises calculated by equity method.
Impact of non-taxable income
Impact of non-deductible cost, expense and 28,850.33 78,350.01
loss of tax rate change on the deferred
Impact
income tax balance at the beginning of the
Impact of the deductible temporary
differences or deductible loss of unconfirmed
deferred tax assets of this year
Impact of deductible temporary difference or
deductible losses of deferred income tax 3,325,282.30 5,418,164.80
assets derecognized in Reporting Period.
Tax effect of R&D expenses deducted
Other 244,530.52 -122,839.06
Income taxes 329,538.20 3,220,677.34
Note: Because Hongkong Tian Rui company is an overseas company, it doesn't need to pay
corporate income tax. Therefore, “other” was the calculation adjustment number for the income tax
expense of Hongkong Tian Rui company.
37. Note to statement of cash flows
145
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
（1）Other cash received from operating activities
Item Amount for the Amount for the
Proceeds from other corporations period
current56,653,034.62 period
prior 92,176,965.85
Other proceeds from operating activities 3,635,625.62 5,416,997.97
Total 60,288,660.24 97,593,963.82
（2）Other cash payment from operating activities
Item Amount for the Account for the
Payments to other corporations period
current53,399,096.23 prior period
9,684,460.49
Payments to auditor or other services
1,600,000.00 600,000.00
provider
Payments to rent 406,600.00 -
Other payments in operating activities 1,524,098.14 67,286,387.79
Total 56,929,794.37 77,570,848.28
38. Supplementary information for statement of cash flows
（1）Supplementary information on cash flow statement
Amount for the Account for the prior
Item
current period period
1.Reconciliation of profit to cash flows from
operating activities:
Profit for the year -13,406,037.98 -11,833,288.46
Add: Impairment loss 1,406,206.64 2,597,244.65
Depreciations of tangible non-current assets 2,409,550.38 2,632,519.02
Amortizations of intangible assets 277,263.84 277,263.84
Amortizations of long term deferred expenses 135,925.36 -
Loss in disposal of property, plant and
equipment, intangible assets, and other
non-current assets. (“-” for gains)
Loss in scrapping property, plant and equipment.
(“-” for gains)
Loss in changes in fair value of related items
- 1,976.00
(“-” for gains)
Finance costs (“-” for gains) 1,171.04 1,803.00
Loss in investing (“-” for gains) -536.00 7,080,717.26
146
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Decreases in deferred income tax assets (“-” for
758,372.77 291,673.40
increase)
Increases in deferred income tax liabilities (“-”
for decrease)
Decreases in inventories (“-” for increase) 2,435,507.68 -86,411,659.84
Decreases in operating receivables (“-” for
207,521,176.81 -65,572,814.72
increase)
Increases in operating payables (“-” for
-287,368,231.04 141,982,669.89
decrease)
Other - 301,601.07
Net cash flows generated by operating activities -85,829,630.50 -8,650,294.89
2. Significant investing and financing
activities without cash flows:
Liabilities transferring to capital
Convertible bond matured in 12 months
Property, plant and equipment acquired in a
Finance lease
3.Net increase in cash and cash equivalents:
Closing balance of cash 1,613,340.23 2,956,199.38
Less: Opening balance of cash 2,956,199.38 123,886,976.82
Add: Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents -1,342,859.15 -120,930,777.44
（2）No acquisition subsidiaries in year ended 31 Dec.2018
（3）The composition of cash and cash equivalents
Amount for the Account for the prior
Item
current period period
I. Cash 1,613,340.23 2,956,199.38
Including: cash on hand 20,999.74 45,033.57
Bank deposit on demand 1,223,778.75 2,468,303.12
Other deposits 368,561.74 442,862.69
II. Cash equivalents
Including: Bond matured in less than 3 months
III. Closing balance of cash and cash
equivalents
147
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Including: Cash and cash equivalents under
restriction held by parent company or
subsidiaries.
I. Cash
Including: cash on hand 1,613,340.23 2,956,199.38
Bank deposit on demand
39. The assets with the ownership or use right restricted
Item Closing balance Reason
PPE 14,424,253.85 Performed as guarantee
Intangible assets 8,316,682.67 Performed as guarantee
Tnvestment property 4,774,374.35 Performed as guarantee
Total 27,515,310.87 -
40, Foreign currency monetary items
（1）Details
Closing balance
Closing balance in
Item in foreign Exchange rate
RMB
currency
Monetary fund
Including: USD 84.28 6.8632 578.43
EUR
HKD 928.10 0.8762 813.20
Trade receivables
Including: USD 966,279.26 6.8632 6,631,767.82
EUR
HKD
Other receivables
Including: USD 20,000.00 6.8632 137,264.00
EUR
HKD 55,780.00 0.8762 48,874.44
VII. Changes of merger scope
148
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
1. Business merger not under same control
（1）Business merger not under same control occurred in 2018
Income
Net profit
from
Equity from
Cost of Equity purchase
acquisi purchase Time of Equity
Acquiree equity acquistio date to
tion date to acquisition
acquisition method 31th
Ratio 31th Dec.
Dec.
2018
2018
Shenzhen
MaJiaKe
Blue Arrow 158,200.00 100% additional share - -77,525.28 20th Jul. 2018
Technology
Co., Ltd.
Determine
Acquiree Purchase date basis of
purchase date
Shenzhen Completion
MaJiaKe Blue date of
Arrow 20th Jul. 2018
change of
Technology registration
Co., Ltd.
Note; the company signed equity transfer agreement with Dongwei Cheng on 20th Jul. 2018,
transferred 20% shares of Shenzhen MaJiaKe Blue Arrow Technology Co., Ltd. to Shenzhen
Hongxing Liye Industry Limited (1%) and JADIETE (19%) with little counter-performance, in the
same term, Hunan MaJiaKe Blue Arrow Technology Co., Ltd. transferred its 80% shares of
Shenzhen MaJiaKe Blue Arrow Technology Co., Ltd. to JADIETE at price RMB 98.2 thousand.
On 2th Jul. 2018, Hongxing Venture Capital Company transferred its 100% shares of Hongxing
Liye Company to JADIETE (99%) and Rieys Industrial (1%), currently Hongxing Liye Company
doesn’t has financial data. In conclusion, JADIETE owns 100% shares of MaJiaKe.
（2）Merger cost and goodwill
Shenzhen MaJiaKe Blue Arrow
Item
Technology Co., Ltd.
Merger cost
Cash 158,200.00
Fair value of non-cash assets
149
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Fair value of debts issued or obligation incurred
Fair value of equity decurities issued
Fair value of contingencies counter-performance
Fair value of shares holded before the purchase date on the
purchase date
Other
Sum of merged cost 158,200.00
less：Acquired fair value share of identifiable net assets 158,200.00
Goodwill -
（3）Identifiable assets and liabilities of acquire on purchase date
Shenzhen MaJiaKe Blue Arrow Technology Co., Ltd.
Item
Fair value book value
Monetary funds 1,664.33 1,664.33
Trade receivables 28,176.96 28,176.96
Inventories
intangible assets 506,005.61 506,005.61
Deferred tax assets
Less：Payables 243,446.90 243,446.90
Accrued payroll 134,200.00 134,200.00
Net assets 158,200.00 158,200.00
Less：minority equity
Net assets acquired 158,200.00 158,200.00
①Determination method for fair value of Identifiable assets and liabilities
Recognition based on enterprise book value.
②Acquiree’s contingent liability should be undertake in business combination
Nought.
2. Disposal of subsidiaries
Naught
VIII. Equities in other entities
150
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
1. Equity in subsidiary
（1）The structure of the enterprise group
Main Proportion of
Registrati Method of
Name of the subsidiary operating Business Nature shareholding (%)
on place acquiring
place Directly Indirectly
Shenzhen Rieys Shenzh Establishin
Industrial Co. Ltd. Shenzhen Trading 90.00 -
en g
Tianrui (HK) Investing
Hong Hong
Trading Co., Ltd. Trading 100.00 -
Kong Kong
Shenzhen Chinese Investing
Gold Nobility Shenzh Sales of gold and
Shenzhen 51.00 -
Jewelry Co., Ltd. en jewelry
Shanghai Yunpeng Internet Technology Establishin
Internet Shangh services, development, g
Technology Shanghai 60.00 -
ai consultant and
Co.,Ltd
transfer.,ect
Enterprise Establishin
management services, g
network technology,
communication and
Wuxi Yun Peng information
Enterprise
Management Co., Wuxi Wuxi technology, computer - 60.00
Ltd. hardware and software
development,
technology services,
consultation and
transfer
Shenzhen Shenzh Computer software,
Shenzhen MaJiaKe en
Blue Arrow Development of
99.00 100.00 Investing
Technology Co., Ltd. Information System
Software, sales, etc.
（2）Significant not wholly owned subsidiary
151
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Shareholding The profits Declaring Balance of
Voting right
proportion of and losses dividends minority
of minority
Name minority arbitrate to distribute to shareholder Note
shareholder
shareholder the minority minority at losing
(%)
(%) shareholders shareholder period
Shenzhen
Rieys
10.00 10.00 -175,064.29 - 2,800,100.92 -
Industrial
Co. Ltd.
Shenzhen
Chinese
Gold
49.00 49.00 161,622.47 9,310,000.00 28,503,024.02 -
Nobility
Jewelry
Co., Ltd
(Continues)
Closing balance
Item
Shenzhen Rieys Industrial Co. Shenzhen Chinese Gold
Ltd. Nobility Jewelry Co., Ltd
Current assets 28,398,337.94 213,042,081.17
Non-current assets 2,013,232.32 108,293.38
Total Assets 30,411,570.26 213,150,374.55
Current liabilities 2,410,561.09 154,980,937.77
Non-current liabilities
Total liabilities 2,410,561.09 154,980,937.77
Operating revenue 14,089.29 92,990,638.89
Net profits -1,750,642.91 329,841.78
Total comprehensive income -1,750,642.91 329,841.78
Cash flow of operating
-119,319.04 18,921,542.02
activities
(Continues)
Opening Balance
Item
Shenzhen Rieys Industrial Co. Shenzhen Chinese Gold
Ltd. Nobility Jewelry Co., Ltd.
Current assets 37,993,675.26 315,002,707.66
Non-current assets 1,858,859.07 784,465.20
152
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Total Assets 39,852,534.33 315,787,172.86
Current liabilities 10,100,882.25 238,947,577.86
Non-current liabilities
Total liabilities 10,100,882.25 238,947,577.86
Operating revenue 89,128,220.12 471,002,217.43
Net profits -8,833,285.83 6,943,906.77
Total comprehensive income -8,833,285.83 6,943,906.77
Cash flow of operating
-12,980,220.19 67,927.52
activities
IX. Fair value
11. Financial instruments not measured at fair value
Financial assets and liabilities not measured at fair value mainly include: accounts receivable and
accounts payable. There is minor different between the above book value of financial assets and
liabilities not measured at fair value and its fair value.
2. Financial instruments measured at fair value
The Company listed the book value of financial assets instruments measured at fair value on 31
Dec. 2018. according to three levels of fair value, when the overall fair value classified in three
levels were in line with the first level of three levels of each significant input value used in the
calculation of fair value. The definitions of three levels were as follows:
The first level, the unadjusted offer of same assets or liabilities in active market on calculation
date;
The second level, the directly or indirectly observable input value of related assets or liabilities
excepting the input value of first level;
1) The second level input value including: Offer of similar assets or liabilities in active market;
2) The second level input value including: Offer of similar assets or liabilities in non-active
market; 3) Other observable input value excepting offer, including the observable interest rate
in interval period of common offer, profit rate curve, implied volatility and credit spread.
The third level was the unobservable input value of related assets or liabilities.
3. Closing fair value measurement
（1）Consistent fair value measurement
Item Level 1 Level 2 Level 3 Total
153
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Item Level 1 Level 2 Level 3 Total
Subtotal of available for sale
financial assets
Debt instruments
investment
Equity instruments
investment
Derivative financial
assets
Other
Total assets - - - -
4. Market price recognition basis for consistent and inconsistent fair value measurement items at
level 1
According to the transaction prices listed in the Shenzhen Stock Exchange and Shanghai
Stock Exchange.
X. Related party
1. Parent company of the Company
Name of parent Registered place Registered Business nature
company capital (RMB
E block 1611-A, South million))
Shenzhen West Sea Pearl Garden,
Shenghengchang Huifu Taoyuan Road, Taoyuan 9800 Trading
Industrial Co., Ltd. Street, Nanshan District,
Shenzhen
(Continue)
Shares holding Voting right of
Ultimate
Name of parent company of the the Company
controller
Company (%) (%)
Shenzhen Shenghengchang Huifu 36.99% 36.99% 陈鸿成
Industrial Co., Ltd.
154
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Note: the registered capital of the Company’ parent company was not changed in the current
year.
2. Subsidiaries of the Company
Details refer to note VIII 1.
3. No equities in joint ventures or associated enterprises
4. Other related parties of the Company
Name Relationship
Holding 10.68% shares
of the Company, affiliate
Shenzhen Risheng Chuangyuan Asset Management Co., Ltd. controlled under
Hongcheng Chen’s
family
Holding 3.81% shares of
the Company, affiliate
Shenzhen Lianhua Huiren Industrial Co., Ltd. controlled under
Hongcheng Chen’s
family
Direct relatives of
Xuewen Chen
Hongcheng Chen
Lihong Ding Vice-Board chairman of
Liqun Yu the Company,ofrelative of
key manager the
company, one of the
key management of
Wuxi Hengye science and Technology Co., Ltd. company control
company
Shenzhen Chinese Gold Nobility Jewelry Co., Ltd One of the shareholder of
a subsidiary
Puning Yanlilai Trading Co. Ltd. The company's legal
person is also a legal
Vice-Board chairman of
Lihong Ding the Company, relative of
Hongcheng Chen
5. Related parties transactions
（1）Purchasing goods, providing and accepting services
Transactions among the Company and its subsidiaries in merger scope and contributed to the
consolidated financial reports were offset.
①Information on acquisition of goods and reception of labor service
155
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Naught.
②Sale of commodities and provide services
Related
transact Amount of current Amount of prior
Related party
ion period period
content
Lihong Ding clothing sale 9,086.21
Wuxi Hengye
science and Operation
809,140.50 1,239,164.19
Technology Co., service
Ltd.
（2）Contracting and trusteeship among related parties
Naught.
（3）Leasing among related parties
Naught
（4）Guarantees among related parties
Naught
（5）Inter-bank borrowing among related parties
Naught.
（6）Asset transfer and debt restructuring among related parties
Naught.
（7）The remuneration of key management personnel
The number of key management personnel was 8 in 2018, and 8 in 2017,
Amount for the current Amount for the prior
Item
period period
Remuneration of key
982,676.00 685,500.00
management personnel
Total 982,676.00 685,500.00
6. Amounts due from / to related parties
156
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
（1）Amounts due from related parties
Item Related party Amount for the current Amount for the prior
period period
Receivable
Wuxi Hengye 52,035.75 380,036.66
science and
Other receivable
Liqun Yu 789,561.52 150,654.10
Puning Yanlilai - 12,000,000.00
Trading Co. Ltd.
（2）Amounts due to related parties
Amount for the current Amount for the prior
Item Related party
period period
Other payable
Lihong Ding 470,231.70 68,455.00
Liqun Yu 82,652.04 82,652.04
Xuewen Chen 532,953.03 251,608.91
Wuxi Hengye 100,000.00 100,000.00
science and
Shenzhen Risheng
Chuangyuan Asset
- 3,630,960.00
Management Co.,
Ltd.
Shenzhen Chinese 20,039,810.00 17,500,000.00
Gold Nobility
7. Commitments of related parties
Main contents of commitment: The actual controller Hongcheng Chen committed that if the
company sells Jinshitong and 45% shares through Future Industrial Fund, and the cumulative
amount received from profit distribution after acquisition of equity transfer is less than RMB 120
million or the future industrial fund is not allocated according to the agreed profit distribution plan,
the actual controller Hongcheng Chen will make up the deficiency in cash within one month from
the date of the occurrence of the matter, the specific arrangements for cash replenishment are as
follows;
157
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
(1) If the difference is less than 30 million, payment to the company account within 10 days from
the date when the company receives all the profit allotments or the future industrial fund is not
allocated according to the agreed profit distribution plan
(2) If the difference between 30-80 million, pay 30 million to the company within 10 days from the
date when the company receives all the profit allotments or the future industrial fund is not
allocated according to the agreed profit distribution plan, and the remaining payments will be paid
within the next 15 days.
(3) If the difference is higher than 80 milllio, pay 30 million to the company within 10 days from
the date when the company receives all the profit allotments or the future industrial fund is not
allocated according to the agreed profit distribution plan, 50 million within the next 15 days and the
remaining payments will be paid within the next 5 days.
XI. Commitments and contingencies
1. Significant commitments
Naught.
2. Contingencies
(1) Contingnent liabilities formed by providing debt guarantee to other units and its financial impact
① The company took real estate as conllateral (evaluation value of the collateral is RMB 36.32
million) and signed the maximum mortgage contract with Jieyang Branch of Industrial and
Commercial Bank of China Co. Ltd. to provide mortgage guarantee for Puning Huafengqiang Trade
Co., Ltd. (Zi No. 3632 High Mortgage Loan of Rongcheng Branch in 2014, guaranteed principal
creditor's right from 11th Nov. 2014 to 11th Nov. 2019). Puning Huafengqiang Trade Co., Ltd.
signed extended loan contract with Jieyang Rongcheng Branch of Industrial and Commercial Bank
of China Co. Ltd., on 22th May 2018 to borrowe RMB 17million, term of loan is 12 months.
② The company took real estate as conllateral (evaluation value of the collateral is RMB
47,704,862) and signed the maximum mortgage contract with Jieyang Branch of Industrial and
Commercial Bank of China Co.Ltd. to provide mortgage guarantee for Puning Lailisheng Trade Co.,
Ltd (Zi No. 0042, 0201900134- year 2017 Small businesses(mortgage) guaranteed principal
creditor's right from 8th Sep 2017 to 8th Sep 2018). Puning Lailisheng Trade Co., Ltd signed 24
millions loan contract of small businesses with Jieyang Branch of Industrial and Commercial Bank
of China Co. Ltd. on 8th Sep. 2017, term of loan is 12 months. Continue borrowing RMB 23.79
million when the loan matures on 22th Aug. 2019, the contract has been signted and term of loan is
6 months.
158
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Till 31th Dec. 2018, the company provides guarantees to loans of non-affiliated units as below,
Name Content Amount RMB Time limit Note
Puning Lailisheng Trade Bank loan on
2,379.00 8th Sep. 2017 to 8th Sep. 2018
Co., Ltd mortgage
Puning Huafengqiang Trade Co., Bank loan on
1,170.00 18th Nov. 2017 to 18th Nov. 2018
Ltd. mortgage
Total - 3,549.00 - -
（ 2 ） Up to 31 Dec. 2018, no unsettled litigation or arbitration needs to be disclosed. No other
contingencies need to be disclosed excepted the above.
XII. Events after the reporting period
The company transferred its 99% holding shares of Shenzhen MaJiaKe Blue Arrow Technology Co.,
Ltd. to Hunan MaJiaKe Blue Arrow Technology Co., Ltd. at RMB 173,200 on 22th Feb. 2019.
Till 22th Apr. 2019 (date of the company approves reports), no other events after the reporting
period need to be disclosed excepted the above.
XIII. Other significant events
(1) After deliberation at the twenty-third meeting of the seventh board of directors of the company,
Guandong Jadiete Holding Group Co. Ltd. (hereinafter referred to as "Company") and Shenzhen
Chinese Gold Nobility Investment Co., Ltd. (hereinafter referred to as “CGN investment”) signed
on 14th Dec. 2018, the company acquired CGN investment’s 49%
share of Shenzhen Chinese Gold Nobility Jewelry Co., Ltd. (hereinafter referred to as “CGNJ”) at
the price of RMB 24.5 million yuan.
Till 31th Dec. 2018, no events after the reporting period need to be disclosed excepted the above.
XIV. Notes to the items of the parent company’s financial statement
1. Trade receivables
（1）In categories
Closing balance
Category Carrying Proportion Write-down Proportion
Book value
Amount (%) amount (%)
159
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Significant individual
amount with individually 4,608,276.88 100.00 4,608,276.88 100.00 0.00
assessed of bad debts
Accounts receivable
withdrawn bad debt
provision according to
credit risks characteristics
Among ：aging group
Subtotal
Insignificant individual
amount with individually
assessed of bad debts
Total 4,608,276.88 100.00 4,608,276.88 100.00 0.00
(Continued)
Opening balance
Category Carrying Proportion Write-down Proportion
Book value
Amount (%) amount (%)
Significant individual
amount with individually 4,608,276.88 100.00 4,608,276.88 100.00 0.00
assessed of bad debts
Accounts receivable
withdrawn bad debt
provision according to
credit risks characteristics
Among ：aging group
Subtotal
Insignificant individual
amount with individually
assessed of bad debts
Total 4,608,276.88 100.00 4,608,276.88 100.00 0.00
①Significant individual amount with individually assessed of bad debts
Closing balance
Names of balances bad debt Proportion
Balances provision Reason
(%)
Long-term
Beijing Capital Airport 21,713.00 21,713.00 100.00 credit with little
estimated
160
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
recovery
possibility
Long-term
credit with little
Ningbo Industrial and
26,354.45 26,354.45 100.00 estimated
Commercial Bureau
recovery
possibility
Long-term
credit with little
Shunqin Chen 335,904.80 335,904.80 100.00 estimated
recovery
possibility
Long-term
credit with little
Hongkong Jinhua Trading
4,224,304.63 4,224,304.63 100.00 estimated
Company
recovery
possibility
Total 4,608,276.88 4,608,276.88 100.00 -
（2）Top 5 amounts of balances on 31 Dec.2018
Witten-down Percentage in the
Names of balances Amount total receivables
amount
(%)
Beijing Capital
21,713.00 21,713.00 0.47
Airport
Ningbo Industrial
and Commercial 26,354.45 26,354.45 0.57
Bureau
Shunqin Chen 335,904.80 335,904.80 7.29
Hongkong Jinhua
4,224,304.63 4,224,304.63 91.67
Trading Company
Total 4,608,276.88 4,608,276.88 100.00
2. Other receivables
（1）In categories
Closing balance
Category Carrying Proportion Write-dow Proporti
Book value
amount (%) n amount on (%)
161
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Significant individual 125,976,687.22 97.20 2,331,608.20 1.85 123,645,079.02
amount with individually
Accounts receivable 3,625,168.26 2.80 3,267,075.22 90.12 358,093.04
withdrawn bad debt
Among ：aging group 3,625,168.26 2.80 3,267,075.22 90.12 358,093.04
Subtotal
Insignificant individual
amount with individually
Total 129,601,855.48 100.00 5,598,683.42 4.32 124,003,172.06
(Continues)
Opening balance
Category
Carrying Proportion Write-down Proportion Book value
amount (%) amount (%)
Significant individual 68,645,635.74 94.95 2,931,608.20 4.27 65,714,027.54
amount with individually
Accounts receivable
withdrawn bad debt
Among ：aging group 2,176,185.04 3.01 1,661,739.64 76.36 514,445.40
Subtotal 2,176,185.04 3.01 1,661,739.64 76.36 514,445.40
Insignificant individual 1,478,227.36 2.04 1,478,227.36 100.00 -
amount with individually
Total 72,300,048.14 100.00 6,071,575.20 8.40 66,228,472.94
①Significant individual amount with individually assessed of bad debts
Closing balance
Names of balances Write-down Proportion
Balances Reason
amount (%)
In the merger
scope，no
Tianrui (HK) Trading Co., Ltd. 19,705,079.02 - -
provision for
bad debts
In the merger
Shenzhen Chinese Gold Nobility scope，no
103,940,000.00 - -
Jewelry Co., Ltd. provision for
bad debts
Long-term
credit with little
Export drawback receivable 2,331,608.20 2,331,608.20 100.00 estimated
recovery
possibility
162
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Total 125,976,687.22 2,331,608.20 1.85 -
②Other receivable by aging balance
Closing balance
Age Carrying Write-down Proportion
amount amount (%)
0-1 year 67,612.25 1,352.25 2.00
1-2 years 307,226.65 30,722.67 10.00
2-3 years 11,257.92 5,628.96 50.00
Over 3 years 3,239,071.44 3,229,371.34 99.70
Total 3,625,168.26 3,267,075.22 90.12
（2）The reversed bad debt provision of 2018 was of RMB -472,891.78, the reversed or collected
amount of 2018 was RMB 0.00
（3）In characters
Item Closing balance Opening balance
Transaction among related parties 123,645,079.02 65,714,027.54
Transaction 3,578,522.73 4,236,451.07
Tax 2,331,608.20 2,331,608.20
Payment for others 41,476.53 12,792.33
Deposit 3,000.00 3,000.00
Revolving fund 2,169.00 2,169.00
Total 129,601,855.48 72,300,048.14
（4）Top 5 amounts of balances on 31 Dec.2018
Percentage in
Closing Write-down
Name Character Age the total other
Balance amount
receivables (%)
Shenzhen Chinese Transaction
Gold Nobility among related 103,940,000.00 0-1 year 80.20 -
Jewelry Co., Ltd.
parties
Tianrui (HK) Transaction
19,705,079.02 2-3 year 15.20 -
Trading Co., Ltd. among related
parties
163
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Guangdong Transaction Over 5 years
Yuanfeng Trade
700,000.00 0.54 700,000.00
Development Co.,
Ltd.
Shenzhen Transaction Over 5 years
Zhaotong
600,000.00 0.46 600,000.00
Investment Co.,
Ltd.
Guangzhou Transaction Over 5 years
Nanxiang 500,000.00 0.39 500,000.00
Construction
Engineering
Total - 125,445,079.02 - 96.79 1,800,000.00
3. Long-term equity investments
Closing balance Opening balance
Item Provision Provision
Book Book
for Book value for Book value
balance balance
impairment impairment
Investment in
80,158,208.26 - 80,158,208.26 80,000,008.26 - 80,000,008.26
subsidiaries
Investment in Associate 100,600,000.00 - 100,600,000.00 269,998,221.71 - 269,998,221.71
Total 180,758,208.26 - 180,758,208.26 349,998,229.97 - 349,998,229.97
（1）Investments in subsidiaries
Closing
Provision
balance of
Opening Closing for
Investee Increase Decrease Provision
balance balance impairme
for
nt
impairment
Shenzhen Rieys
45,000,000.00 - - 45,000,000.00 - -
Industrial Co., Ltd.
Tianrui (HK)
8.26 - - 8.26 - -
Trading Co., Ltd.
Shenzhen
Chinese Gold
30,000,000.00 - - 30,000,000.00 - -
Nobility Jewelry
Co., Ltd.
Shanghai
5,000,000.00 - - 5,000,000.00 - -
Yunpeng Internet
164
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Technology Co.,
Ltd
Shenzhen
MaJiaKe Blue
- 158,200.00 - 158,200.00 - -
Arrow Technology
Co., Ltd.
Total 80,000,008.26 158,200.00 - 80,158,208.26 - -
4. Revenue and cost of sales
Amount for the current period Amount for the prior period
Item
Revenue Cost of sales Revenue Cost of sales
Other activities 400,569.52 131,769.39 1,280,401.28 400,788.60
Total 400,569.52 131,769.39 1,280,401.28 400,788.60
Note: the revenue from Other activities was the rental revenue.
XV. Supplementary information
1. Statement of non-recurring gains or losses for the year ended 31 Dec.2018
Amount for the current
Item Remark
period
1. Profit or loss from disposal of
non-current assets, including write-off
impairment.
2. Ultra vires approval, or without official
approval, or occasional tax return or
relief;
3. Government subsidies through current
profit or loss. (Excluding that could be
continuously received in normal
operations according to certain standard
amount or quantities, due to being in
accord national policies and regulations.
4. Interest from non-financial enterprises
5. Gain from acquiring subsidiaries or
other entities with a consideration less
than the fair value of the net assets.
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
6. Non-monetary transactions profit or
loss;
7. Profit or loss from entrusting others to
invest or manage assets;
8. Various impairment losses made due to
force majeure, such as natural disasters;
9. Debt restructuring gains and losses;
10. Corporate restructuring costs, such as
the employees arrange expenses,
integration costs, etc.;
11. Profit or loss over the part of fair value
generated by transactions with obviously
unfair trading price;
12. Profit or loss generated by subsidiaries
acquired( under the same control before
acquisition) from year beginning to the
combination date;
13. Profit or loss generated by
contingencies unrelated to normal
business;
14. Profit or loss from changes in fair
values of financial assets at fair value
through profit or loss, and liabilities at fair
value through profit or loss or from Investment income
disposals of financial assets at fair value from disposal of held
536.00
through profit or loss, liabilities at fair for trading financial
value through profit or loss and assets RMB 536.00
available-for-sale financial assets.
Excluding effective hedging in normal
operations.
15. Reversal of write-off of receivables
through separate impairment test;
16. Profit or loss from entrusted loans lend
to other entities;
17. Profit or loss generated from changes
in fair value of investment property that
using fair value method for subsequent
measurement;
18. According to tax, accountancy law and
other regulations, one-time adjustment on
166
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
19. Commission Income obtained from
commission operation;
20. Other non-operating income and
419,561.43 -
expenditure in addition to the above items;
21. Other profit or loss items meet the
definition of non-recurring gains and
losses.
Subtotal 420,097.43 -
Less: Income tax expense that should be
deducted from aforementioned -1,037.86 -
non-recurring gains and losses
Net non-recurring gains and losses 419,059.57 -
Less: Effects attributable to minority 41,556.06 -
interests (after tax)
Total 377,503.51 -
2. ROE, basic EPS and diluted EPS
Weighted average EPS
Profit of year ended31 Dec.2017
ROE (%) Basic EPS Diluted EPS
Net profit attributable to ordinary shareholders -3.87 -0.0420 -0.0420
Net profit attributable to ordinary shareholders
-3.98 -0.0432 -0.0432
after deducting non-recurring gain or loss
The above data is calculated using the following formula:
Weighted average return on net asset
Weighted average return on net asset = P0/(E0＋NP÷2＋Ei×Mi÷M0– Ej×Mj÷M0±Ek×Mk÷M0)
Where: P0 is net profit attributable to ordinary shareholders of the Company or net profit
attributable to ordinary shareholders of the Company after deducting non-recurring gain or loss; E0
is the year beginning equity attributable to ordinary shareholders of the Company; Ei is increased
equity attributable to ordinary shareholders of the Company which arises from new issuance of
shares or conversion of debt instruments to stocks in the reporting period; Ej is reduced equity
attributable to ordinary shareholders of the Company due to stock repurchase or cash dividend in
the reporting period; M0 is the number of months of the reporting period; Mi is the number of
167
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
accumulative months from the next month that equity is increased to the year end of the reporting
period; Mj is the number of months from the next month that equity is decreased to the year end of
the reporting period; Ek is the change of equity resulting from other transactions or events and
attributable to ordinary shareholders; Mk is the number of accumulative months from the next
month that other change of equity occurs to the year end of the reporting period.
Basic earnings per share
Basic earnings per share = P0÷S
S= S0＋S1＋Si×Mi÷M0– Sj×Mj÷M0-Sk
Where: P0 is net profit attributable to ordinary shareholders of the Company or net profit
attributable to ordinary shareholders of the Company after deducting non-recurring gain or loss; S is
weighted average number of ordinary shares outstanding; S0 is the total number of shares at the
beginning of the year; S1 is the number of increased shares as a result of capitalization of reserves
or scrip dividend during the reporting period; Si is the number of increased shares as a result of new
issuance of shares or conversion of debt instruments to stocks during the reporting period; Sj is the
number of reduced shares as a result of stock repurchase; Sk is the number of consolidated shares in
the reporting period; M0 is the number of months of the reporting period; Mi is the number of
accumulative months from the next month that the number of shares is increased to the year end of
the reporting period; Mj is the number of accumulative months from the next month that the number
of shares is decreased to the year end of the reporting period.
(If the Company have any dilutive potential ordinary shares , they should be adjusted respectively
and attributable to net profit of reporting period of ordinary shareholders and weighted average
common shares outstanding, and by which calculate the diluted earnings per share)
Diluted earnings per share = P1/(S0＋S1＋Si×Mi÷M0–Sj×Mj÷M0–Sk+weighted average number
of increased ordinary shares arising from warrants, stock options and convertible debts)
168
Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
Where: P1 is net profit attributable to ordinary shareholders of the Company or net profit
attributable to ordinary shareholders of the Company after deducting non-recurring gain or loss, and
after the consideration of the effects of dilutive potential ordinary shares, make adjustment
according to relevant provisions of “Accounting Standards of Enterprises”.
In calculating the diluted earnings per share, the Company has taken into consideration the effects
of all dilutive potential ordinary shares on net profit attributable to the Company's common
shareholders or net profit attributable to the Company's common shareholders after deducting
non-recurring profit or loss as well as weighted average number of shares, until the diluted earnings
per share reach the lowest amount.
(1) During period from statement of financial position date to the date approved to issue the
financial report, if the occurred stock dividend, reserve capitalization, share split or share
consolidation impact the number of outstanding ordinary shares or potential common shares but
without influent the amount of owner's equity, it should recalculate the earnings per share each
comparative period at adjusted number of shares.
(2) If business combination under identical control occurred during the reporting period, and the
merging parties issue new shares as the price in the merger date, when calculate basic earnings per
share for the reporting period, such new shares should be treated as outstanding common shares
issued at the beginning of merger (weight average by weight of 1).When calculating of basic
earnings per share during the comparison period, such shares should be treated as outstanding
common shares issued at the beginning of comparison period. When calculating the earnings per
share after deducting non-recurring profit or loss at the end of reporting period, the new shares
issued by the merging parties on the merger date will be weighted from the month next to the
combined date. When calculating the earnings per share after deducting non-recurring profit or loss
during the comparison period, the new shares issued by the merging parties on the merger date will
not be weighted (the weight is 0). For the occurrence of business combination under identical
control at the reporting period, and the merging parties issue new shares as the price in the merger
date, when calculating the diluted earnings per share in the reporting period and comparison period,
it should be treated according to the principles on calculation of basic earnings per share。
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
(3) In the reporting period, if the company realizes the unlisted companies to list indirectly through
share issue to purchase assets or other means and which composing a reverse purchase, then when
calculating earnings per share of the reporting period:
Weighted average number of ordinary shares in reporting period ＝ weighted average number in
the month from reporting period beginning to purchase date ＋ weighted average number from the
next month to purchase date to reporting period end
Weighted average number in the month from reporting period beginning to purchase date ＝
weighted average number of purchaser (subsidiary in law) × exchange ratio in Purchase Agreement
× number of cumulative months from year beginning to purchase date ÷ number of months of
reporting period
Weighted average number in the next month to purchase date to reporting period end ＝ weighted
average number of acquirer (parent company in law) × number of cumulative months from the next
month to purchase date to reporting period end ÷ number of months of reporting period
In the reporting period, if the company realizes the unlisted companies to list indirectly through
share issue to purchase assets or other means, then when calculating earnings per share of the
comparison period:/
Weighted average number of common shares in comparison period ＝ Purchaser (subsidiary in
law) × exchange ratio in Purchase Agreement
Guangdong Jadiete Holdings Group Company Limited
22th Apr. 2019
（stamp）
Note: Prevail the Chinese version of all the above information disclosed.
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Guangdong Jadiete Holdings Group Company Limited Annual Report 2018
XII. Contents of Reference File
1. Financial statements with the signature and seal of the person in charge of the company, the
person in charge of accounting and the person in charge of accounting
2. The original audit report with the seal of the accounting firm and the signature and seal of the
certified public accountant
3. Reserved copy and original announcements of all company documents publicly disclosed on the
designated website of CSRC during the reporting period
This Report and its abstract have been prepared in both Chinese and English. Should there be any
discrepancies or misunderstandings between the two versions, the Chinese versions shall prevail.
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