CHENGDE NANJIANG CO．，LTD.
Semi-Annual Financial Report 2014
I. Audit reports
Whether the semi-annual report was audited or not
□ Yes √ No
The financial report of this semi-annual report was unaudited
II. Financial statements
Units in Notes of Financial Statements is RMB
1. Consolidated balance sheet
Prepared by Chengde Nanjiang Co., Ltd.
In RMB
Item Closing balance Opening balance
Current assets:
Monetary funds 78,234,149.03 89,426,891.22
Settlement funds -- --
Lending funds -- --
Tradable financial assets -- --
Notes receivable -- --
Accounts receivable 3,848,325.20 117,180.60
Prepayments 67,621,592.68 33,836,310.22
Premium receivable -- --
Reinsurance accounts receivable -- --
Reinsurance contract reserve
-- --
receivable
Interest receivable -- --
Dividend receivable -- --
Other account receivable 13,297,141.73 4,976,108.67
Buying back the sale of financial
-- ---
assets
Inventory 258,149,828.81 190,569,964.32
Non-current assets due within one -- --
year
Other current assets 7,037,093.63 4,478,158.24
Total current assets 428,188,131.08 323,404,613.27
Non-current assets:
Issuance of loans and advances -- --
Financial assets available for Sale -- --
Held-to-maturity investment -- --
Long-term receivables -- --
Long term equity investment 6,577,302.37 6,626,905.49
Investment real estate -- --
Fixed asset 10,771,989.42 11,296,353.61
Project in progress -- --
Project materials -- --
Liquidation of fixed asset -- --
Productive biological asset 705,116.63 258,190.34
Oil and gas asset -- --
Intangible asset 22,641,388.24 28,721,653.41
Development expenditure -- --
Goodwill 1,809,762.89 1,809,762.89
Long-term deferred expenditure 9,864,797.52 7,811,572.52
Deferred income tax asset 834,239.22 834,223.19
Other non-current asset -- --
Total non-current asset 53,204,580.26 57,358,661.45
Total Assets 481,392,711.34 380,763,274.72
Current Liabilities:
Short-term borrowing -- --
Borrowing from the central bank -- --
Deposits and interbank deposit -- --
Borrowed capital -- --
Transaction financial liabilities -- --
Notes payable 19,500,000.00 26,000,000.00
Accounts payable 7,488,618.46 3,660,631.16
Account received in advance 153,840,376.73 53,821,113.16
Financial assets sold for
-- --
repurchase
Fees and commissions payable -- --
Salary payable 6,364,571.82 6,205,363.50
Taxes payable 9,344,881.67 18,026,904.58
Interest payable -- --
Dividend payable -- --
Other payables 30,623,813.29 36,044,983.70
Reinsurance payables -- --
Reserves for insurance contracts -- --
Agency securities trading -- --
Agency securities underwriting -- --
Non-current liabilities due within
-- --
one year
Other current liabilities -- --
Total current liabilities 227,162,261.97 143,758,996.10
Non-current liabilities
Long-term loans -- --
Bonds payable -- --
Long-term payables -- --
Special payables -- --
Accrued liabilities -- --
Deferred income tax liability -- --
Other non-current liability -- --
Total non-current liability -- --
Total liability 227,162,261.97 143,758,996.10
Owners equity (or Shareholders
equity):
Paid-in capital(share capital) 706,320,000.00 706,320,000.00
Capital surplus 456,470,250.78 456,470,250.78
Less: treasury stock -- --
Special reserve -- --
Surplus reserve 76,791,550.17 76,791,550.17
Reserve for general risks -- --
Retained profit -1,010,549,168.08 -1,029,880,318.18
Converted difference in foreign
--
currency Statements
Total owners equity attributable to
229,032,632.87 209,701,482.77
parent company
Interest of minority shareholders 25,197,816.50 27,302,795.85
Total owners equity (or shareholders
254,230,449.37 237,004,278.62
equity)
Total liabilities and owners equity (or
481,392,711.34 380,763,274.72
shareholders equity)
Legal Representative: Li Weimin Person in Charge of Accounting: Zhao Yongsheng
Person in Charge of Accounting Department: Liu Fengguo
2. Balance Sheet of Parent Company
Prepared by: Chengde Nanjiang Co., Ltd.
In RMB
Item Closing balance Opening balance
Current assets:
Monetary fund 27,673,033.46 5,681,141.82
Tradable financial assets -- --
Notes receivable -- --
Accounts receivable 120,000.00 --
Prepayments 44,400,000.00 25,000,000.00
Interest receivable -- --
Dividend receivable -- --
Other account receivable 21,708,832.37 316,143.39
Inventory 237,545,564.50 161,600,661.40
Non-current assets due within one
-- --
year
Other current assets 4,550,133.82 --
Total current assets 335,997,564.15 192,597,946.61
Non-current assets:
Financial assets available for Sale -- --
Held-to-maturity investment -- --
Long-term receivables -- --
Long term equity investment 157,284,836.37 152,284,669.73
Investment real estate -- --
Fixed assets 1,283,117.24 1,314,384.81
Project in progress -- --
Project materials -- --
Liquidation of fixed assets -- --
Productive biological asset -- --
Oil and gas asset -- --
Intangible assets 9,789,786.13 15,699,628.36
Development expenditure -- --
Goodwill -- --
Long-term deferred expenditure -- --
Deferred income tax asset 750.00 750.00
Other non-current assets -- --
Total non-current assets 168,358,489.74 169,299,432.90
Total assets 504,356,053.89 361,897,379.51
Current liabilities:
Short-term borrowing --
Transaction financial liabilities --
Notes payable --
Accounts payable 2,808,808.80 --
Account received in advance 131,928,060.17 40,423,500.00
Salary payable 258,190.22 --
Taxes payable -341,032.61 -58,959.68
Interest payable -- --
Dividend payable -- --
Others payables 319,016,458.33 299,169,464.74
Non-current liabilities due within
-- --
one year
Other current liabilities -- --
Total current liabilities 453,670,484.91 339,534,005.06
Non- current liabilities:
Long-term loans -- --
Bonds payable -- --
Long-term payables -- --
Special payables -- --
Accrued liabilities -- --
Deferred income tax liability -- --
Other non-current liability -- --
Total non-current liability -- --
Total liabilities 453,670,484.91 339,534,005.06
Owners equity (or Shareholders
equity):
Paid-in capital(share capital) 706,320,000.00 706,320,000.00
Capital surplus 449,365,886.69 449,365,886.69
Less: treasury stock -- --
Special reserve -- --
Surplus reserve 76,791,550.17 76,791,550.17
Reserve for general risks -- --
Retained profit -1,181,791,867.88 -1,210,114,062.41
Converted difference in foreign
-- --
currency
Total owners equity (or shareholders
50,685,568.98 22,363,374.45
equity)
Total liabilities and owners equity (or
504,356,053.89 361,897,379.51
shareholders equity)
Legal Representative: Li Weimin Person in Charge of Accounting: Zhao Yongsheng
Person in Charge of Accounting Department: Liu Fengguo
3. Consolidated Income Statements
Prepared by: Chengde Nanjiang Co., Ltd.
In RMB
Item Current Amount Amount of the Previous Period
I. Total operation revenue 216,832,416.09 16,818,678.04
Including: Operating revenue 216,832,416.09 16,818,678.04
Interest income --
Earned premium --
Fee and commission
--
income
II Total Operating cost 230,284,671.75 19,894,604.22
Including: Operating costs 218,143,237.30 12,003,739.65
Interest costs --
Fee and commission costs --
Cash surrender --
Net compensation expenses --
Net extraction reserves for
--
insurance contracts
Policy dividend payout --
Reinsurance expense --
Business tax and surcharge 235,514.93 911,510.90
Sales expenses 1,746,266.78 --
Administrative expenses 10,192,427.86 7,999,177.06
Financial expenses -32,775.12 428,022.67
Asset impairment losses -1,447,846.06
Add: gains from changes of
--
fair value (Loss is listed with “-”)
Investment gain (Loss is
121,396.88 77,868.49
listed with “-”)
Including: Investment gains
--
on affiliated Company and joint venture
Exchange gains (Loss is
--
listed with “-”)
III. Operating profits (Loss is listed
-13,330,858.78 -2,998,057.69
with “-”)
Add: Non-operating income 34,837,468.38 94,235,507.01
Less: Non-operating expenditure 4,304,076.70 283,931.85
Including: Disposal loss on
--
non-current liability
IV Total profits (Total loss is listed with
17,202,532.90 90,953,517.47
“-”)
Less: Income tax expenses -23,637.85 4,944,803.47
V. Net profit (Net loss is listed with “-”) 17,226,170.75 86,008,714.00
Including: Net profit generated by
--
combined party before merged
Net profit attribute to owners of
19,331,150.10 86,021,262.29
parent company
Minority interest -2,104,979.35 -12,548.29
VI. Earnings per share(EPS) -- --
(i) Basic Earnings per share(EPS) 0.03 0.12
(ii) Diluted Earnings per
0.03 0.12
share(EPS)
VII. Other consolidated income --
VIII. Total consolidated income 17,226,170.75 86,008,714.00
Total consolidated income
attributable to owners of parent 19,331,150.10 86,021,262.29
company
Total consolidated income
-2,104,979.35 -12,548.29
attributable to minority shareholders
Legal Representative: Li Weimin Person in Charge of Accounting: Zhao Yongsheng
Person in Charge of Accounting Department: Liu Fengguo
4. Profit Statement of parent company
Prepared by: Chengde Nanjiang Co., Ltd.
In RMB
Items Current Amount Amount of the Previous Period
I. Operation revenue 4,068,045.62 20,183.93
Less: Operating costs 468,045.62 16,666.64
Business tax and surcharge 198,000.00 --
Sales expenses 279,848.00 --
Administrative expenses 4,879,036.88 3,727,090.00
Financial expenses 344,699.66 -300.80
Asset impairment losses -- --
Add: gains from changes of fair
-- --
value(Loss is listed with “-”)
Investment gain(Loss is listed
-- --
with “-”)
Including: Investment gains
-- --
on affiliated Company and joint venture
III. Operating profits (Loss is listed
-2,101,584.54 -3,723,271.91
with “-”)
Add: Non-operating income 34,647,779.07 13,990.00
Less: Non-operating expenditure 4,224,000.00 5,000.00
Including: Disposal loss on
-- --
non-current liability
III. Total profit (Loss is listed with “-”) 28,322,194.53 -3,714,281.91
Less: Income tax expenses -- --
IV. Net profit (net loss is listed with “-”) 28,322,194.53 -3,714,281.91
V. Earnings per share(EPS): -- --
(i) Basic Earnings per share(EPS) -- --
(ii) Diluted Earnings per
-- --
share(EPS)
VI. Other consolidated income -- --
VII. Total consolidated income 28,322,194.53 -3,714,281.91
Legal Representative: Li Weimin Person in Charge of Accounting: Zhao Yongsheng
Person in Charge of Accounting Department: Liu Fengguo
5. Consolidated Cash Flow Statement
Prepared by: Chengde Nanjiang Co., Ltd.
In RMB
Items Current Amount Amount of the Previous Period
I. Cash flows arising from operating
activities:
Cash received from selling
commodities and providing labor 301,623,200.23 19,460,726.98
services
Net increase of customer deposit and
-- --
interbank deposit
Net increase of loan from central
-- --
bank
Net increase of capital borrowed
-- --
from other financial institution
Cash received from original
-- --
insurance contract fee
Net cash received from reinsurance
-- --
business
Net increase of insured savings and
-- --
investment
Net increase of disposal of
-- --
transaction financial asset
Cash received from interest,
-- --
commission charge and commission
Net increase of capital borrowed -- --
Net increase of returned business -- --
capital
Write-back of tax received 151,568.94 --
Other cash received concerning
52,632,278.66 34,121,294.98
operating activities
Subtotal of cash inflow arising from
354,407,047.83 53,582,021.96
operating activities
Cash paid for purchasing
commodities and receiving labor 363,427,051.94 171,080,376.89
service
Net increase of customer loans and
-- --
advances
Net increase of deposits in central
-- --
bank and interbank
Cash paid for original insurance
-- --
contract compensation
Cash paid for interest, commission
-- --
charge and commission
Cash paid for bonus of guarantee
-- --
slip
Cash paid to/for staff and workers 3,669,467.29 1,935,408.16
Taxes paid 14,510,446.47 11,507,173.62
Other cash paid concerning
12,639,311.34 31,633,642.01
operating activities
Subtotal of cash outflow arising from
394,246,277.04 216,156,600.68
operating activities
Net cash flows arising from operating
-39,839,229.21 -162,574,578.72
activities
II. Cash flows arising from investing
activities:
Cash received from recovering
9,000,000.00
investment
Cash received from investment
171,000.00 77,868.49
income
Net cash received from disposal of
fixed, intangible and other long-term 30,125,895.00 131,328,521.00
assets
Net cash received from disposal of
-- --
subsidiaries and other units
Other cash received concerning
57,483,537.07
investing activities
Subtotal of cash inflow from investing
30,296,895.00 197,889,926.56
activities
Cash paid for purchasing fixed,
1,650,407.98 2,513,250.50
intangible and other long-term assets
Cash paid for investment -- --
Net increase of mortgaged loans -- --
Net cash paid for obtaining
-- --
subsidiaries and other units
Other cash paid concerning
-- --
investing activities
Subtotal of cash outflow from investing
1,650,407.98 2,513,250.50
activities
Net cash flows arising from investing
28,646,487.02 195,376,676.06
activities
III. Cash flows arising from financing
activities
Cash received from absorbing
-- 5,000,000.00
investment
Including: Cash received from
absorbing minority shareholders -- --
investment by subsidiaries
Cash received from loans -- --
Cash received from issuing bonds -- --
Other cash received concerning
2,600,000.00 --
financing activities
Subtotal of cash inflow from financing
2,600,000.00 5,000,000.00
activities
Cash paid for settling debts -- 35,300,000.00
Cash paid for dividend and profit
-- --
distributing or interest paying
Including: Dividend and profit of
minority shareholder paid by -- --
subsidiaries
Other cash paid concerning
51,500.00
financing activities
Subtotal of cash outflow from financing 51,500.00 35,300,000.00
activities
Net cash flows arising from financing
2,548,500.00 -30,300,000.00
activities
IV. Influence on cash and cash
equivalents due to fluctuation in -- --
exchange rate
V. Net increase of cash and cash
-8,644,242.19 2,502,097.34
equivalents
Add: Balance of cash and cash
77,981,488.06 81,546,046.87
equivalents at the period -begin
VI. Balance of cash and cash
69,337,245.87 84,048,144.21
equivalents at the period -end
Legal Representative: Li Weimin Person in Charge of Accounting: Zhao Yongsheng
Person in Charge of Accounting Department: Liu Fengguo
6. Cash Flow Statement of parent company
Prepared by: Chengde Nanjiang Co., Ltd.
In RMB
Item Current Amount Amount of the Previous Period
I. Cash flows arising from operating
activities:
Cash received from selling
commodities and providing labor 102,230,505.54 --
services
Write-back of tax received -- --
Other cash received concerning
20,287,177.62 44,065,925.29
operating activities
Subtotal of cash inflow arising from
122,517,683.16 44,065,925.29
operating activities
Cash paid for purchasing
commodities and receiving labor 89,171,684.36 153,850,000.00
service
Cash paid to/for staff and workers 2,375,405.09 590,449.08
Taxes paid 5,804,152.68 3,823,299.85
Other cash paid concerning
61,627,291.75 2,943,238.52
operating activities
Subtotal of cash outflow arising from
158,978,533.88 161,206,987.45
operating activities
Net cash flows arising from operating -36,460,850.72 -117,141,062.16
activities
II. Cash flows arising from investing
activities:
Cash received from recovering
-- --
investment
Cash received from investment
-- --
income
Net cash received from disposal of
fixed, intangible and other long-term 30,000,000.00 --
assets
Net cash received from disposal of
-- --
subsidiaries and other units
Other cash received concerning
-- --
investing activities
Subtotal of cash inflow from investing
30,000,000.00 --
activities
Cash paid for purchasing fixed,
47,091.00 737,062.00
intangible and other long-term assets
Cash paid for investment 5,000,166.64 49,170,370.00
Net cash paid for obtaining
-- --
subsidiaries and other units
Other cash paid concerning
-- --
investing activities
Subtotal of cash outflow from investing
5,047,257.64 49,907,432.00
activities
Net cash flows arising from investing
24,952,742.36 -49,907,432.00
activities
III. Cash flows arising from financing
activities
Cash received from absorbing
-- --
investment
Cash received from loans 43,700,000.00 167,348,870.00
Cash received from issuing bonds -- --
Other cash received concerning
-- --
financing activities
Subtotal of cash inflow from financing
43,700,000.00 167,348,870.00
activities
Cash paid for settling debts 10,200,000.00 --
Cash paid for dividend and profit
-- --
distributing or interest paying
Other cash paid concerning
35,000.00 --
financing activities
Subtotal of cash outflow from financing
10,235,000.00 --
activities
Net cash flows arising from financing
33,465,000.00 167,348,870.00
activities
IV. Influence on cash and cash
equivalents due to fluctuation in -- --
exchange rate
V. Net increase of cash and cash
21,956,891.64 300,375.84
equivalents
Add: Balance of cash and cash
5,681,141.82 777,456.70
equivalents at the period -begin
VI. Balance of cash and cash
27,638,033.46 1,077,832.54
equivalents at the period -end
Legal Representative: Li Weimin Person in Charge of Accounting: Zhao Yongsheng
Person in Charge of Accounting Department: Liu Fengguo
7. Consolidated Statement on Changes of Owners' Equity
Prepared by: Chengde Nanjiang Co., Ltd.
Current Amount
In RMB
Current Amount
Owners' equity attributable to the parent company
Interest of
Paid-in Reserve Total
Item Less: minority
capital(s Capital Special Surplus for Retaine owners
treasury Other sharehold
hare surplus reserve reserve general d profit equity
stock ers
capital) risks
-1,029,8
I. Balance at the end of last 706,320 456,470, 76,791, 27,302,79 237,004,27
-- -- -- 80,318.1 --
year ,000.00 250.78 550.17 5.85 8.62
8
Add: Changes of
-- -- -- -- -- -- -- -- -- --
accounting policy
Error correction of
-- -- -- -- -- -- -- -- -- --
previous period
Others -- -- -- -- -- -- -- -- -- --
II. Balance at the beginning of 706,320 456,470, -- -- 76,791, -- -1,029,8 -- 27,302,79 237,004,27
this year ,000.00 250.78 550.17 80,318.1 5.85 8.62
8
III. Increase/ Decrease in this
19,331,1 -2,104,97 17,226,170
year (Decrease is listed -- -- -- -- -- --
50.10 9.35 .75
with'"-")
19,331,1 -2,104,97 17,226,170
(i) Net profit -- -- -- -- --- --
50.10 9.35 .75
(ii) Other consolidated income -- -- -- -- -- -- -- -- -- --
19,331,1 -2,104,97 17,226,170
Subtotal of (i)and (ii) -- -- -- -- -- --
50.10 9.35 .75
(III) Owners' devoted and
-- -- -- -- -- -- -- -- -- --
decreased capital
1. Owners' devoted capital -- -- -- -- -- -- -- -- -- --
2. Amount calculated into
-- -- -- -- -- -- -- -- -- --
owners' equity paid in shares
3. Others -- -- -- -- -- -- -- -- -- --
(IV)Profit distribution -- -- -- -- -- -- -- -- -- --
1. Withdrawal of surplus
-- -- -- -- -- -- -- -- -- --
reserves
2. Withdrawal of general risk
-- -- -- -- -- -- -- -- -- --
provisions
3. Distribution for owners
-- -- -- -- -- -- -- -- -- --
(shareholders)
4. Others -- -- -- -- -- -- -- -- -- --
(V) Carrying forward internal
-- -- -- -- -- -- -- -- -- --
owners' equity
1. Capital reserves conversed to
-- -- -- -- -- -- -- -- -- --
capital (share capital)
2. Surplus reserves conversed
-- -- -- -- -- -- -- -- -- --
to capital (share capital)
3. Remedying loss with
-- -- -- -- -- -- -- -- -- --
surplus reserve
4. Others -- -- -- -- -- -- -- -- -- --
(VI) Special reserve -- -- -- -- -- -- -- -- -- --
1. Withdrawal in this period -- -- -- -- -- -- -- -- -- --
2. Usage in this period -- -- -- -- -- -- -- -- -- --
(VII) Other -- -- -- -- -- -- -- -- -- --
-1,010,5
IV. Balance at the end of the 706,320 456,470, 76,791, 25,197,81 254,230,44
-- -- -- 49,168.0
report period ,000.00 250.78 550.17 6.50 9.37
8
Amount in last year
In RMB
Amount in last year
Owners equity attributable to the parent company
Interest of
Paid-in Reserve Total
Items Less: minority
capital(s Capital Special Surplus for Retaine owners
treasury Other sharehold
hare surplus reserve reserve general d profit equity
stock ers
capital) risks
-1,124,6
I. Balance at the end of last 706,320 456,470, 76,791, 114,894,67
-- -- -- 87,129.3 -- --
year ,000.00 250.78 550.17 1.61
4
Add: retroactive
adjustment arising from
-- -- -- -- -- -- -- -- -- --
enterprise consolidation under
the same control
Add: Changes of
-- -- -- -- -- -- -- -- -- --
accounting policy
Error correction of
-- -- -- -- -- -- -- -- -- --
previous period
Other -- -- -- -- -- -- -- -- -- --
-1,124,6
II. Balance at the beginning of 706,320 456,470, 76,791, 114,894,67
-- -- -- 87,129.3 -- --
this year ,000.00 250.78 550.17 1.61
4
III. Increase/ Decrease in this
94,806,8 27,302,79 122,109,60
year (Decrease is listed -- -- -- -- -- -- --
11.16 5.85 7.01
with”-”)
94,806,8 5,128,045 99,934,857
(i) Net profit -- -- -- -- -- -- --
11.16 .96 .12
(II) Other consolidated income -- -- -- -- -- -- -- -- -- --
94,806,8 5,128,045 99,934,857
Subtotal of (i)and (ii) -- -- -- -- -- -- --
11.16 .96 .12
(III) Owners devoted and 22,174,74 22,174,749
-- -- -- -- -- -- -- --
decreased capital 9.89 .89
5,000,000 5,000,000.
1. Owners devoted capital -- -- -- -- -- -- -- --
.00 00
2. Amount calculated into
-- -- -- -- -- -- -- -- -- --
owners equity paid in shares
17,174,74 17,174,749
3. Others -- -- -- -- -- -- -- --
9.89 .89
(IV)Profit distribution -- -- -- -- -- -- -- -- -- --
1. Withdrawal of surplus
-- -- -- -- -- -- -- -- -- --
reserves
2. Withdrawal of general risk
-- -- -- -- -- -- -- -- -- --
provisions
3. Distribution for owners
-- -- -- -- -- -- -- -- -- --
(shareholders)
4. Others -- -- -- -- -- -- -- -- -- --
(V) Carrying forward internal
-- -- -- -- -- -- -- -- -- --
owners equity
1. Capital reserves conversed to
-- -- -- -- -- -- -- -- -- --
capital (share capital)
2. Surplus reserves conversed
-- -- -- -- -- -- -- -- -- --
to capital (share capital)
3. Remedying loss with
-- -- -- -- -- -- -- -- -- --
surplus reserve
4. Others -- -- -- -- -- -- -- -- -- --
( VI) Special reserve -- -- -- -- -- -- -- -- -- --
1. Withdrawal in this period -- -- -- -- -- -- -- -- -- --
2. Usage in this period -- -- -- -- -- -- -- -- -- --
(VII) Other -- -- -- -- -- -- -- -- -- --
-1,029,8
IV. Balance at the end of the 706,320 456,470, 76,791, 27,302,79 237,004,27
-- -- -- 80,318.1 --
report period ,000.00 250.78 550.17 5.85 8.62
8
Legal Representative: Li Weimin Person in Charge of Accounting: Zhao Yongsheng
Person in Charge of Accounting Department: Liu Fengguo
8. Statement on Changes of Owners' Equity of Parent Company
Prepared by: Chengde Nanjiang Co., Ltd.
Current Amount
In RMB
Current Amount
Paid-in Less: Reserve Total
Items Capital Special Surplus Retained
capital(sha treasury for general owners
surplus reserve reserve profit
re capital) stock risks equity
I. Balance at the end of last year 706,320,00 449,365,88 -- -- 76,791,550 -- -1,210,114, 22,363,374
0.00 6.69 .17 062.41 .45
Add: Changes of accounting
-- -- -- -- -- -- -- --
policy
Error correction of
-- -- -- -- -- -- -- --
previous period
Other -- -- -- -- -- -- -- --
II. Balance at the beginning of 706,320,00 449,365,88 76,791,550 -1,210,114, 22,363,374
-- -- --
this year 0.00 6.69 .17 062.41 .45
III. Increase/ Decrease in this 28,322,194 28,322,194
-- -- -- -- -- --
year (Decrease is listed with”-”) .53 .53
28,322,194 28,322,194
(i) Net profit -- -- -- -- -- --
.53 .53
(II) Other consolidated income -- -- -- -- -- -- -- --
28,322,194 28,322,194
Subtotal of (i)and (ii) -- -- -- -- -- --
.53 .53
(III) Owners devoted and
-- -- -- -- -- -- -- --
decreased capital
1. Owners devoted capital -- -- -- -- -- -- -- --
2. Amount calculated into
-- -- -- -- -- -- -- --
owners equity paid in shares
3. Others -- -- -- -- -- -- -- --
(IV)Profit distribution -- -- -- -- -- -- -- --
1. Withdrawal of surplus reserves -- -- -- -- -- -- -- --
2. Withdrawal of general risk
-- -- -- -- -- -- -- --
provisions
3. Distribution for owners
-- -- -- -- -- -- -- --
(shareholders)
4. Others -- -- -- -- -- -- -- --
(V) Carrying forward internal
-- -- -- -- -- -- -- --
owners equity
1. Capital reserves conversed to
-- -- -- -- -- -- -- --
capital (share capital)
2. Surplus reserves conversed to
-- -- -- -- -- -- -- --
capital (share capital)
3. Remedying loss with surplus
-- -- -- -- -- -- -- --
reserve
4. Others -- -- -- -- -- -- -- --
(VI) Special reserve -- -- -- -- -- -- -- --
1. Withdrawal in this period -- -- -- -- -- -- -- --
2. Usage in this period -- -- -- -- -- -- -- --
(VII) Other -- -- -- -- -- -- -- --
IV. Balance at the end of the 706,320,00 449,365,88 76,791,550 -1,181,791, 50,685,568
-- -- --
report period 0.00 6.69 .17 867.88 .98
Amount in last year
In RMB
Amount in last year
Paid-in Less: Reserve Total
Item Capital Special Surplus Retained
capital(sha treasury for general owners
surplus reserve reserve profit
re capital) stock risks equity
706,320,00 449,365,88 76,791,550 -1,210,998, 21,478,537
I. Balance at the end of last year -- -- --
0.00 6.69 .17 899.43 .43
Add: Changes of accounting
-- -- -- -- -- -- -- --
policy
Error correction of previous
-- -- -- -- -- -- -- --
period
Other -- -- -- -- -- -- -- --
II. Balance at the beginning of 706,320,00 449,365,88 76,791,550 -1,210,998, 21,478,537
-- -- --
this year 0.00 6.69 .17 899.43 .43
III. Increase/ Decrease in this
-- -- -- -- -- -- 884,837.02 884,837.02
year (Decrease is listed with”-”)
(i) Net profit -- -- -- -- -- -- 884,837.02 884,837.02
(II) Other consolidated income -- -- -- -- -- -- -- --
Subtotal of (i)and (ii) -- -- -- -- -- -- 884,837.02 884,837.02
(III) Owners devoted and
-- -- -- -- -- -- -- --
decreased capital
1. Owners devoted capital -- -- -- -- -- -- -- --
2. Amount calculated into
-- -- -- -- -- -- -- --
owners equity paid in shares
3. Others -- -- -- -- -- -- -- --
(IV)Profit distribution -- -- -- -- -- -- -- --
1. Withdrawal of surplus reserves -- -- -- -- -- -- -- --
2. Withdrawal of general risk
-- -- -- -- -- -- -- --
provisions
3. Distribution for owners -- -- -- -- -- -- -- --
(shareholders)
4. Others -- -- -- -- -- -- -- --
(V) Carrying forward internal
-- -- -- -- -- -- -- --
owners equity
1. Capital reserves conversed to
-- -- -- -- -- -- -- --
capital (share capital)
2. Surplus reserves conversed to
-- -- -- -- -- -- -- --
capital (share capital)
3. Remedying loss with surplus
-- -- -- -- -- -- -- --
reserve
4. Others -- -- -- -- -- -- -- --
(VI) Special reserve -- -- -- -- -- -- -- --
1. Withdrawal in this period -- -- -- -- -- -- -- --
2. Usage in this period -- -- -- -- -- -- -- --
(VII) Other -- -- -- -- -- -- -- --
IV. Balance at the end of the 706,320,00 449,365,88 76,791,550 -1,210,114, 22,363,374
-- -- --
report period 0.00 6.69 .17 062.41 .45
Legal Representative: Li Weimin Person in Charge of Accounting: Zhao Yongsheng
Person in Charge of Accounting Department: Liu Fengguo
III. Company profile
(I) Historical development of the Company
Chengde Nanjiang Co., Ltd. (Hereinafter referred to as "Nanjiang" or the "the Company") was
formerly known as Chengde Dixian Knitting Co., Ltd., and was reorganized on 3 November 1999
by sponsorship, approved by the People's Government of Hebei Province with the issue of Ji Gu
Ban [1999]No.: 36 with license of the business corporation obtained from Hebei Administration
for Industry & Commerce; registered capital while established amounting as RMB 100,000,000,
and RMB 1.00 per share. Among the abovementioned, RMB 85.10 million contributed by Wang
Shuxian, representing 7.56 percent of the registered capital; Wang Zhengsong invested RMB
5.4444 million with 5.44 percent in total registered capital presented; Chengde Longfeng
Cosmetics Co., Ltd. contributed RMB 0.9456 million, a 0.95 percent in registered capital and
RMB 0.9456 million contributed by Chengde Xiabancheng Hongxing Plastics Products Plant with
0.95 percent in registered capital presented.
On 29 August 2000, according to the Zheng Jian Fa Xing Zi [2000] No.: 121 issued by the China
Securities Regulatory Commission, the Company issued 100,000,000 domestically listed foreign
shares in Shenzhen Stock Exchange dated 19 September 2000; and excised the over-allotment
option to increase issuing 15,000,000 B shares from September 29, 2000 to October 29, 2000. The
registered capital of the Company after the issuance of B shares was RMB 215,000,000 with one
Yuan of face value per share.
According to the resolution of the shareholders general meeting on March 12, 2002, the Company
allotted 43,000,000 bonus shares to all of the shareholders according to the proportion of 2 free
shares for every 10 shares, and meanwhile increased 107500000 shares to all of the shareholding
by transferring from capital reserve according to 5 shares free for every 10 shares. The registered
capital of the company was changed to RMB 365,500,000 after it allotted bonus shares and
increased by transferring.
According to the resolution of the shareholders general meeting on July 22, 2003, the Company
allotted 73,100,000 bonus shares to all of the shareholders according to the proportion of 2 free
shares for every 10 shares, and the registered capital of the company was changed to RMB
438,600,000 after such bonus shares were allotted.
On March 11, 2004, approved by the Ministry of Commerce of the People's Republic of China, the
Company was allowed to be changed as a foreign investment limited liability company.
In July 2004, the Company increased 150,000,000 B shares directionally, during which
91,300,000 shares were subscribed in HK$, and another 58,700,000 shares were subscribed in
RMB, upon check by China Securities Regulatory Commission with the issue [2004] No.101.
According to the resolution of the shareholders general meeting on June 8, 2006, the Company
allotted 117,720,000 bonus shares to all of the shareholders according to the proportion of 2 free
shares for every 10 shares,
On August 4, 2008, according to the judgment ruled by Shenzhen Intermediate People's Court,
112,324,800 sponsor shares held by Wang Shuxian was compensated to Chen Rong for
45,491,544 Yuan, and on August 15, 2008, 96,000,000 sponsor shares held by Wang Shuxian was
compensated to Chen Rong for 38,880,000 Yuan according to the judgment ruled by Dalian
Intermediate People's Court.
On November 11, 2009, according to “reply to the approval of capital increase, and change of
share as well as name of Chengde Dixian Knitting Co., Ltd” with No.143 [2009] by Bureau of
Commerce of Hebei Province, it agreed that the Company increased 150,000,000 domestically
listed foreign shares in 2004 and allotted 2 bonus shares free for every 10 shares in 2006; and it
agreed that 208,324,800 shares of Dixian stock held by Wang Shuxian was changed to Chen
Rong ; as well as the name of the Company changed to Chengde Dalu Co., Ltd. Total share capital
of the Company was 706,320,000 shares and the registered capital of the Company was
706,320,000 Yuan after the Companys share increased and allotted,
On 23 August 2011, the Company received the enterprise corporate business license issued from
Chengde Administration for Industry and Commerce, register serial was No.: 130000400001225;
registered capital and paid-up capital was 706.32 million Yuan with corporate type of limited
liability company (Sino-foreign joint venture, listed)
On April 6, 2012, Chen Rong, shareholder of Company, signed a share transfer agreement with Mr.
Wang Dong for transferred all of the 208,324,800 shares held by himself (accounting for 29.49%
of total capital of the Company) to Mr. Wang Dong; After equity transfer the above mentioned,
capital contribution proportion of the shareholders of the Company were: 208.3248 million Yuan
invested by Wang Dong, representing 29.49 percent of the register capital; 18517651 Yuan
contributed by Hebei Chengde Northern Industrial Corporation, representing 2.62 percent of the
register capital; 13327891 Yuan invested by Wang Zhengsong, a 0.33 percent in register capital;
2314829 Yuan invested by Chengde Xiabancheng Hongxing Plastics Products Plant, a 0.33
percent in register capital and 461.52 million Yuan contributed by shareholders of domestically
listed foreign shares, representing 65.34 percent of the register capital.
On 19 September 2012, being verified and approved by Chengde Administration for Industry and
Commerce, the Companys name changed as Chengde Nanjiang Co., Ltd.
(II) Nature of business
Nanjiang engaged in the operation and development of real estate, subsidiary of the Company
engaged in real estate industry, international trading and agricultural farming industry
(III) Business scope
R&D and sales of new energy, and new material products as well as technology promotion and
technical service; scientific research of modern eco-agriculture and technology promotion service,
wholesales of eco-agriculture products; import and export trade of goods and technology;
development and construction as well as sales and operation of general residential and supporting
commercial facilities for the two lands of NanjiangHuijing Tiandi (2013-12 and 2013-13);
property management.
(IV) Main products and labor service
Sales of the real estate development products, trading of plastic raw materials and product sales of
animall and plant breeding
(V) Basic framework of the Company
The high authority of the Company is shareholders general meeting, implemented the
general-manager responsibility system under the leadership of the Board. Set up the functional
department of security, administrative, H&R, financial, auditing, and sales, business department
and research center etc. according to the requirement of business development.
IV. Main Accounting policy, estimate and previous errors
1. Basis Preparation of the Financial Statements
The financial statements of the Company is prepared based on the going-concern in accordance
with the actually occurred transactions and events and the “Accounting Standards for Business
Enterprises – Basic Standards” and 38 specific accounting standards promulgated by the ministry
of finance on 15th, Feb., 2006, the subsequently promulgated application guide and interpretation
of the accounting standards for business enterprises and other relevant provisions (hereinafter
collectively referred to as “ASBE”), and China Securities Regulatory Commission “information
disclosure regulations No.15 for the companies publicly issuing securities - general provisions of
financial reports” (2010 Revision)
2. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company meet the requirements of the Accounting
Standards for Business Enterprises; truthfully and completely reflect the financial status, operation
results and cash flow etc. of the Company.
3. Fiscal period
The fiscal year of the Company is from 1 January to 31 December on basis of Gregorian calendar.
4. Book-keeping currency
The Company adopts RMB (CNY) as the currency when preparing this financial statement.
5. Accounting treatment for business merge under the common/different control
(1) Business merger under the common control
(1)Individual financial statements
For the merger of enterprises under the same control, with payment of cash, transfer of non-cash
assets or bearing debt and issuance of equity securities as the consideration of the merger, the
initial cost of the long-term equity investment shall be recognized at the share of the book value of
the owners equity of the merged enterprise. The difference between the initial cost of the
long-term equity investment and the payment of merger consideration shall offset against the
capital reserve. If the capital reserve is insufficient to offset, the retained earnings shall be
adjusted.
All directly relevant expenses incurred to the Company for the merger of enterprises, including
auditing fees and assessment fees and legal fees, shall be included in the current profit and loss at
occurrence. In case that there is consolidated financial statement of the party consolidated, the
initial investment cost of long term equity investment shall be determined based on the owners
equity in the consolidated financial statement of such party as at the merger date.
(2)Consolidated financial statement
The assets and liability obtained by merging party in business merge should be measured by the
book value of the merged party at date of business merger. In case of different acounting policy
adoped by the parties in business merger, the Company shall adjusted on consolidation date in line
with the accounting policy of the Company, and recognized on that basis according to the
Accounting Standards for Business Enterprises (ASBE).
(2) Business merger under the different control
As for the business merger under the different control, the merger costs refers to the assets paid by
the acquirer for obtaining the control rights of the acquiree on the acquisition date, the liabilities
incurred or assumed, and the fair value of the issued equity securities. If there is agreement on
such future events that may affect consolidated cost in the consolidation contract and if it is
estimated that such event may happen on acquisition date, the affected consolidated costs which
could be measured reliably shall be recorded in consolidated cost.
As for the Company, the intermediary fees such as auditing, legal services and consulting services
costs and other administrative costs incurred by the business merger are charged to the current
profit and loss; The transaction costs of the equity securities or debt securities issued as the
combination consideration by the Company are reckoned in the initially recognized amount of the
equity securities or debt securities.
The balance of which the merger costs are more than the net identifiable assets fair value share of
the acquiree obtained in the merger is recognized as goodwill. For those whose merger costs are
less than the net identifiable assets fair value share of the acquiree obtained in the merger, while
those whose merger costs are still less than the net identifiable assets fair value share of the
acquiree obtained in the merge after rechecking, reckon its the balance in the current profit and
loss.
As for the business merger under different control achieved in stages by multiple exchanges and
transactions, relevant accounting treatment shall be made by distinguishing the individual
financial statement and consolidated financial statement:
(1) In individual financial statement, the total of book value of equity investment held by the
acquiree before acquisition date and the investment cost, which has increased, shall be consider as
the initial investment cost for the investment; If the equity of acquiree party held before
acquisition date related to other consolidated income(such as the parts reckoned into capital
reserves from the variation of fair value of financial assets available for sales, the same below), the
other consolidated income shall transfer to current investment income while disposed the
investment.
(2) In consolidated financial statement, re-measured the fair value of the equity on acquisition
dated for those equity of acquiree party held before acquisition date, the difference of the fair
value and its book value shall reckoned into current investment income; If the equity of acquiree
party held before acquisition date related to other consolidated income, other consolidated income
related with them shall transfer to investment income of the period while acquisition date
occurred.
6. Relevant specific accounting policy for equity disposal on step-by-step basis to lose control
(1) A principle of judgment of “Package Deal”
Make the clauses, conditions and economic impact of all transactions that meet with one or more
of the following circumstances in the process of realizing the business combination step by step,
and take multiple transactions as a package deal and do the accounting treatment.
(2) Accounting method for “Package Deal”
Dispose the clauses, conditions and economic impact of all transactions to the equity investment
of the subsidiaries that meet with one or more of the following circumstances, and take multiple
transactions as a package deal and do the accounting treatment: ① These transactions are made
simultaneously or in considering the effects of each other; ② Only these overall transactions can
reach a complete business results; ③ The occurrence of one transaction depends on the occurrence
of at least one other transaction; ④ It is uneconomical to see a transaction alone, but economical
to consider along with all the others. All transactions disposing the equity investment of the
subsidiaries until losing the control right are a package deal, distinguish the individual financial
statements from the consolidated financial statements and do the relevant accounting treatment:
①In the individual financial statements, take all transactions as one that disposes the subsidiaries
and loses the control right and do the accounting treatment, the company disposes the investments
in subsidiaries, and the balance between the disposal costs and the book value corresponding to
the disposal of investment should be recognized as the current investment income in the parent
company's individual financial statements; ② In the consolidated financial statements, the balance
between each disposal cost and the share of the net assets of this subsidiary corresponding to the
disposal of investment before losing the control right should be recognized as other consolidated
income, and be transferred into the current profit and loss when losing control right.
(3) Accounting method for Non “Package Deal”
The enterprises that lose the control right of the subsidiaries due to the disposal of some equity
investment or other reasons, which doesnt belong to a package deal, should do the accounting
treatment by distinguishing the individual financial statements and the consolidated financial
statements: ① In the individual financial statements, the equity to be disposed should get
accounting treatment in accordance with the provisions of "Accounting Standards For Business
Enterprises No. 2 - long-term equity investment"; at the same time, the residual equity should be
recognized as the long-term equity investment or other related financial assets according to the
book value. The residual equity that can carry out a joint control or have a significant impact on
the existing subsidiaries after the disposal should get the accounting treatment according to the
related regulations of transferring the cost method to the equity method. ②In the consolidated
financial statements, the residual equity should be re-measured in accordance with its fair value on
the date of losing the control right. The balance by subtracting the sum of the consideration
achieved by disposing the stock rights and the fair value of the residual equity from the share of
the net assets of the original subsidiary being calculated according to the original shareholding
ratio since the purchase date should be reckoned in the current investment income at the period of
losing the control right. The other consolidated income related to the equity investment of the
original subsidiary should be transferred into the current investment income when losing the
control right. The enterprise should disclose the fair value of the residual equity on the date losing
the control right after disposal in the annotations, and re-measure the generated gains or the lost
amount according to the fair value.
7. Preparing method of consolidated financial statements
(1) Preparing method of consolidated financial statements
When preparing the consolidated financial statements, for the accounting policies adopted by the
subsidiaries and the Company being inconsistent during the accounting time period, adjust in
accordance with the accounting policies of the Company and the financial statements of the
subsidiaries during the accounting time period.
The consolidated financial statements are prepared by the Company based on the individual
financial statement of the Company and subsidiaries by reference to other related information after
adjustment to the long term equity investments of the subsidiaries at equity method.
The influence on consolidated balance sheet, consolidated profit statement, consolidated cash flow
statement and consolidated changes of owners equity from inner transactions shall be neutralized
between the Company and its subsidiaries and between the subsidiaries while prepared the
consolidated financial statement.
Reduce the minority interest for those that the subsidiaries losses shared by the minority
shareholders exceed the shares that the minority shareholders gained from the owner's equity at
the beginning period of this subsidiary.
In reporting period, for the subsidiaries increased by the business merger under the common
control, opening amount of the consolidated balance sheet shall be adjusted; the revenue, expenses
and profit of the subsidiary from the beginning period of the merger to end of the Period shall
included in the consolidated profit statement; and the cash flow statement of the subsidiary from
the beginning period of the merger to end of the Period shall included in consolidated cash flow
statement.
In reporting period, for the subsidiaries increased by the business merger under the different
control, dont adjust the opening amount of the consolidated balance sheet; the revenue, expenses
and profit of the subsidiary from the purchase date to end of the Period shall included in the
consolidated profit statement; and the cash flow statement of the subsidiary from the purchase date
to end of the Period shall included in consolidated cash flow statement.
In reporting period, as for the disposed subsidiaries, the revenue, expenses and profit of the
subsidiary from the beginning of the Period to disposal date shall included in the consolidated
profit statement; and the cash flow statement of the subsidiary from the beginning of the Period to
disposal date shall included in consolidated cash flow statement.
When losing the control rights of the original subsidiaries because of disposing some equity
investment or other reasons, in consolidated financial statement, re-measure the residual equity in
accordance with its fair value on the date of losing the control rights. Use the sum of the
consideration obtained by disposing the stock rights and the fair value of the residual equity to
minus the balance among the net assets shares of the original sub companies continuously
calculated since the acquisition date in accordance with the original shareholding ratio, and then
reckon in the current investment income when losing the control rights. Transfer the other
consolidated incomes related to the equity investment of the original subsidiaries to the current
investment income when losing the control rights.
(2)Disclosure of related accounting method for buy-and-resell or sell-and-repurchase of
equities in the same subsidiary within two successive accounting years
8. Determination criteria of cash and cash equivalent
When prepared the cash flow statement, the stock cash and deposits available for payment at any
time of the Company are recognized as cash. The investment with the follow characters obtained
at the same time is recognized as cash equivalent: short term (expire within 3 months commencing
from purchase day), active liquidity, easy to convert to already-known cash, and small value
change risks.
9. Foreign currency business and foreign currency statement translation
(1)Foreign currency business
The foreign currency business shall be translated to the RMB amount at the spot exchange rate on
the transaction date.
For the foreign currency monetary items translated at the spot exchange rate, all differences are
included in the current gains/losses except for the differences arising from foreign currency
borrowings related to the acquisition or construction of fixed assets which are qualified for
capitalization. The foreign currency non-monetary items measured at historical cost shall still be
measured by the functional currency translated at the spot exchange rate on the date of the
transaction without its book-keeping currency changed. Foreign currency non-monetary items
measured at fair value are translated at the spot exchange rate on the date of determination of the
fair value, the translation differences occurred will included in the current gains/losses or capital
reserves.
(2) Foreign currency statement translation
The assets and liabilities items in the balance sheet are translated at the spot rate of the balance
sheet date; as for owners equity items, items are translated at the spot rate of the occurrence date
other than the item of “retained profit”. In profit statement, revenue and expense items are
translated at the spot rate of the transaction occurrence date. The balance arising from the
translation of foreign currency financial statements on above-mentioned, such balance are
separately listed in the owners equity in balance sheet.
When disposal of any overseas business, the balance arising from the translation of foreign
currency financial statements, which related to the overseas business, listed under the owners
equity in balance sheet shall transfer to disposal of current gains/losses from item of owners
equity; while part of the overseas business disposed, the balance arising from the translation of
foreign currency financial statements shall transfer to disposal of current gains/losses by disposal
proportion.
10. Financial instruments
Financial instruments including financial assets, financial liability and equity instrument
(1) Classification of financial instruments
In terms of purposes of obtained and holding the financial assets and financial liability undertake,
the Company divides them into financial assets and financial liability, measured by fair value and
with variation of fair value reckoned into current gains/losses, which including transactional
financial assets or financial liability ( and financial assets and financial liability, measured by fair
value and with variation of fair value reckoned into current gains/losses appointed directly);
held-to-maturity investment, account receivables, financial assets available for sales and other
financial liability etc.
(2) Recognition basis and measurement method for financial instruments
(1) Financial assets (financial liability) measured by fair value and with variation of fair value
reckoned into current gains/losses
Amount is initially measured by the fair value while obtained (deducted cash dividend which has
announced without paid or bond interest expired without received), relevant transaction expenses
reckoned into current gains/losses.
The interest or cash dividend obtained in period of holding are recognized as investment income,
the changes of fair value shall included in current gains/losses at end of the period.
In case of disposal, the difference between the fair value and initial book-keeping amount shall
recognize as investment income, and gains/losses from change of the fair value shall be adjusted at
the same time.
(2) Held-to-maturity investment
Amount is initially measured by the sum of fair value (deducted bond interest expired without
received) while obtained and relevant transaction expenses.
Interest income in period of holding shall be calculated base on amortized cost and real interest
rates, and included in investment income. The real interest rates are recognized while obtained and
remain the same in expected duration or in an applicable shorter period.
In case of disposal, the difference between the amount while obtained and book value of the
investment shall reckon into investment income.
(3) Account receivable
Account receivables represent the creditors right receivables formed from sales of goods and
provision of labor services, and claims of debt instrument of other enterprise held by the Company,
excluding the debt instrument that quoted in an active market, including account receivable and
other account receivable etc, and are initially measured at the contract or agreement amount
receivable from the purchaser; for those which has nature of financing, initially measured at the
present value.
When recovered or disposed, the difference between the amount received and the carrying value
of the account receivables shall be recorded in current profit and loss.
(4) Financial assets available for sale
Amount is initially measured by the sum of fair value (deducted cash dividend which has
announced without paid or bond interest expired without received) while obtained and relevant
transaction expenses.
Interest or cash dividend obtained in period of holding shall be recognized as investment income.
At end of the period, measured by fair value and the changes of fair value reckoned into capital
reserves (other capital reserves).
When disposed, the difference between the amount received and the carrying value of the financial
assets shall be recorded in gains/losses of investment; the portion of the accumulative amount of
changes in the fair value originally recorded in the owners equity which corresponds to the
portion whose has been disposed, reckoned into investment gain/loss at the same time.
(5) Other financial liability
Amount is initially measured by the sum of fair value and relevant transaction expenses. The
Company subsequently stated at amortized cost.
(6) Held-to-maturity investment for sales or reclassify as financial assets available for sale:
In case that the amount of held-to-maturity investments disposed or reclassified
into other categories of financial assets is greater than the total amount of all
the held-to-maturity investment of the Company before the disposal or
reclassification, the remaining held-to-maturity investment shall be recorded as
financial assets available for sale immediately after such disposal or
reclassification, unless:
① the date of disposal or reclassification is relatively close to the maturity
date or redemption date of the investment (such as three months before expiration),
and change of market rate has no material affects on the fair value of the investment.
②the enterprise has nearly recovers the entire initial principal under the payment
method as agreed by contract.
③the disposal or reclassification is due to such independent matter that the
enterprise is not able to control, will not happen again as expected and can not
predicted reasonably.
(3) Recognition and measurement of transfers of financial asset
In case of financial assets transfer, financial assets shall be derecognized if the financial asset,
along with substantially all the risk and return arising from the ownership of the financial asset,
has been transferred to the transferee; if the financial asset, along with substantially all the risk and
return arising from the ownership of the financial asset has reserved, the financial assets shall not
be derecognized.
In judging whether the financial assets transfer satisfy the abovementioned derecognized condition,
principle of substance over form shall prevail. The Company distinguishes the transfer of financial
assets as transfer totally or transfers partially. If the transfer of financial asset totally occurred
meets de-recognized condition, the balance between the followed two amounts shall reckoned into
current gains/losses:
(1) Carrying value of the financial assets transferred;
(2) Sum of the consideration, obtained due to transfer, and the accumulative amount of changes in
fair value originally recorded in the owners equity (applicable to the financial assets available for
sale involved in the transfer of financial assets).
If the transfer of financial asset partially occurred meets de-recognized condition, the carrying
value of all transfer of financial assets shall be amortized separately based on relatively fair value
between the parts which has been de-recognized and those parts which has not been de-recognized,
the balance between the followed two amount shall reckoned into current gains/losses:
(1) Carrying value of the parts de-recognized;
(2) Sum of the consideration from the de-recognized parts, and the accumulative amount of
changes in fair value originally recorded in the owners equity which corresponds to the portion
whose has been de-recognized (applicable to the financial assets available for sale involved in the
transfer of financial assets).
Transfer of financial assets meets no de-recognizes condition, the financial assets shall continue to
confirm, the consideration obtained shall recognized as financial liability.
(4) Recognition condition for termination of financial liability
When the prevailing obligations of a financial liability are relieved in all or in part, the recognition
of the financial liability shall be terminated in all or partly; Where the Company enters into an
agreement with a creditor so as to substitute the existing financial liabilities by way of any new
financial liability, and if the contractual stipulations regarding the new financial liability is
substantially different from that regarding the existing financial liability, it shall terminate the
recognition of the existing financial liability, and shall at the same time recognized the new
financial liability.
Where an enterprise makes substantial revisions to some or all of the contractual stipulations of
the existing financial liability, it shall terminated the recognition of the existing financial liability
or part of it, and at the same time recognize the financial liability after revising the contractual
stipulations as a new financial liability.
Where the recognition of a financial liability is totally or partially terminated, the gap between the
carrying amount which has been terminated from recognition and the considerations it has paid
(including the non-cash assets it has transferred out and the new financial liability it has assumed)
shall included into the profits and losses of the current period.
Where the Company buys back part of its financial liabilities, it shall distribute, on the repo day,
the carrying amount of the whole financial liabilities in light of the comparatively fair value of the
part that continues to be recognized and the part whose recognition has already been terminated.
The gap between the carrying amount which is distributed to the part whose recognition has
terminated and the considerations it has paid (including the non-cash assets it has transferred out
and the new financial liabilities it has assumed shall be recorded into the profits and losses of the
current period.
(5) Recognition method for fair value of financial assets and financial liabilities
In case of an active market, fair value of the financial assets or financial liabilities are recognized
by the quotation in active market; in case of absence of an active market, the Company recognizes
fair value by reference to valuation technology (including reference to the price adopted by parties
who are willing to make business and knowing conditions quite well in their latest transactions,
reference to prevailing fair values of other financial instruments with similar essence, discount
cash flow method and option pricing pattern etc.); as for the financial assets initially obtained or
produced at source at the financial liabilities assumed, the fair value thereof shall be determined
on the basis of the transaction price of the market.
(6) Impairment test method and impairment provision method for financial assets (not
including account receivables)
On balance sheet date, the Company conducts inspection on carrying values of financial assets,
except for those measured by fair value and its variation of fair value recorded into current
gains/losses. If there is objective evidence indicating that impairment has happened to financial
assets, impairment reserve then shall be provided.
The objective evidence of the impairment of financial assets, including but not limited to:
The issuer or debtor has serious financial difficulties;
The issuer or debtor breaches the contract terms, for example, breaks his promise to pay the
interests or the principle or exceeds the time limit, etc.
The creditor makes a concession to the debtor having the financial difficulties in considering the
economy or law;
The debtor is likely to go into liquidation or make other financial restructuring;
The financial assets cannot enliven the market and continue trading as the issuer has significant
financial difficulties;
When it cannot be identified whether the cash flow of an asset in one group of financial assets has
been reduced, but found that the future cash flow of this group of financial assets since the initial
recognition has already reduced and could be measured after making the comprehensive
evaluation according to the open data, for instance, the payment ability of the debtor of this group
of financial assets goes down, or the unemployment rate in the country or region where the debtor
lives increases, or the price of the guaranty in the debtors area declines dramatically, or the
industry is in the recession, etc.
The technology, market, economy or legal environment of the issuer of the equity instruments
have significant adverse changes, which makes the investor of the equity instrument may not be
able to take back the investment cost;
The fair value of the investment of equity instruments drops dramatically or non temporarily;
The specific impairment methods of the financial assets are as follows:
(1) Provision for impairment of available-for-sale financial assets:
Evaluate the impairment loss of the available-for-sale financial assets by adopting the individually
affirmed way, thereinto, the objective evidences showing the available-for-sale equity instruments
have impairment in investment include the fair value of the equity instruments investment
depreciates seriously or non-temporally, the specific quantitative criteria include: the Company
respectively inspects the investment of each available-for-sale equity instrument on the balance
sheet date, if the fair value of the investment of equity instrument on the balance sheet date is
lower than its initial investment cost of more than 50% (including 50%) or the duration that the
fair value is lower than its initial investment cost exceeds 12 months (including 12 months), then it
indicates the impairment occurs.
When the available-for-sale financial assets have impairment, even though the financial assets are
not derecognized, the Company will transfer the accumulated losses of the initially reckoned
owner's equity that are generated by the depreciation of fair value from the owner's equity, and
reckon in the current profit and loss. The transferred accumulated losses are equal to the balance
after deducting the recovered principal, amortized amount, current fair value and impairment loss
initially reckoned in the profit and loss from the initial acquisition cost of available-for-sale
financial assets
For the available-for-sale debt instruments, whose impairment loss has been recognized, if the fair
value has gone up and objectively concerned with the matters occurred after recognizing the initial
impairment loss in the subsequent accounting periods, the previously recognized impairment loss
shall be reversed and reckoned in the current profit and loss; the impairment loss of the
investments of available-for-sale equity instruments shall be reversed through the equity when the
price of equity instruments rises; for the investments of equity instruments that have no offer in an
active market or its fair value cannot be measured reliably, or the impairment loss that has
connection with this equity instrument and must be generated by paying the financial derivative
settled by this equity instrument cannot be reversed.
(2) Impairment reserve for held-to-maturity investment
If there has objective evidence of impairment on held-to-maturity investment, the impairment
losses shall be recognized by the gap between its carrying value and estimated future cash flow; if
there has evidence of return for the values, the impairment losses recognized originally can be
turned back, and reckoned into current gains/losses, however, the returned carrying value should
not exceed the amortized cost of the financial assets on the date of provision reversal if assets
impairment provision had not been made.
Judging standards for vary impairment of financial assets available for sale
(7)As for reclassification of un-matured held-to-maturity investments into financial assets
available for sale, explain the holding purposes or references for change of ability
11. Recognition standards and accrual method for bad debt provision for accounts
receivable
(1) Bad debt provision for accounts receivable with single major amount
Determine basis or amount standards for single significant amount Amount with one million above
Conducts and impairment test independently, accrual bad
debt reserve on the difference between the present values of
estimated future cash flow, which is lower than its carrying
withdrawal method for account with single significant amount and
value, than reckoned into current gains/losses. For those
withdrawal single item bad debt provision
account receivable without impairment been found after
testing, accrual bade debt reserves included in the
corresponding group
(2) Accounts whose bad debts provision was accrued by combination
Methods on withdrawal of
Combination bad debt provision based on Basis for combination recognized
combination
As for the receivable with single amount of over one million
Yuan without impairment being found after testing individually,
Age combination Age analysis method
and those minor receivable below one million Yuan, adopts age
analysis accrual the bad debt provision
In combination, accounts whose bad debts provision was accrued by age analysis:
√ Applicable □ Not-applicable
Account age Rate for receivables Rate for other receivables
Within one year (one year
5.00% 5.00%
included)
1－2 years 20.00% 20.00%
2－3 years 50.00% 50.00%
Over 3 years 100.00% 100.00%
In combination, withdrawal proportion of bad debt provision based on balance proportion:
□ Applicable √ Not-applicable
In combination, withdrawal proportion of bad debt provision based on other methods
□ Applicable √ Not-applicable
(3) Accounts receivable with single significant amount and bad debts provision accrued
individually
There is an objective evidence of impairment which is probably about to occurred,
Reasons for withdrawal single item bad debt such as revocation from the debtor, bankruptcy or dead, and still able to recover after
provision liquidated by the bankruptcy property or heritage as well as serious insufficient cash
flow etc.
For those account receivable with objective evidence of impairment been found,
separated them from the relevant groups for impairment testing independently, and
Withdrawal method for bad debt provision
impairment losses shall recognized and withdrawal bad debt reserves on the
difference between the present values of estimated future cash flow which is lower
than its carrying value,
12. Inventories
(1)Classification of inventories
Inventories are categorized into development cost, development products, relocation housing
animals & plants aquaculture plant products and low value consumables etc.
(2)Valuing of the delivered inventory
Valuing method: Other
The Company adopts the historical cost for obtaining or the planned cost to value the inventory
according to its actual situation, and specific identification method for the development projects.
(3) Confirmation of net realizable value for the inventory and provision for inventory
impairment
Making an overall check of the inventory at end of the year, withdrawal the lower one according
to the cost or the net realizable value, or adjusted the provision for inventory impairment.
Withdrawal the impairment provisions for the single inventory at end of the year.
In case the influencing factor for write-down of the inventory values has disappeared, the amount
which has been written down can be recover, and shall switch back within the inventory falling
price reserves which has been accrual originally, the amount switch back shall reckoned into
current gains/losses.
(4)Inventory System
Inventory system: perpetual inventory system
(5) Amortization method for the low-value consumables and wrappage
Low-value consumables
Amortization method: one-off amortization method
Wrappage
Amortization method: one-off amortization method
13. Long-term equity investment
(1) Determination of investment cost
1) Long-term equity investment arising from enterprise combination, more accounting policy
found in the accounting treatment for enterprise combined (not) under the same control
2) Long-term equity investment acquired by other methods.
The initial investment cost of a long-term equity investment obtained by making payment in cash
shall be accounted for its actual cash paid.
The initial investment cost of a long-term equity investment obtained on the basis of issuing
equity securities shall be the fair value of the equity securities issued.
The initial investment cost of a long-term equity investment of an investor shall be the value
stipulated in the investment contract or agreement (deducted the declared but not yet paid cash
dividends or profits received) except the unfair value stipulated in the contract or agreement.
The initial investment cost of a long-term equity investment of an investor shall be the value
stipulated in the investment contract or agreement except the unfair value stipulated in the contract
or agreement. Under the conditions that the exchange of non-monetary assets is characterized with
business essence, and the fair value of the assets received or surrendered can be accounted in a
reliable way, the book value of assets received is defined on basis of the fair value of assets
surrendered, except there are conclusive evidences for the stronger reliability of the fair value of
assets received. For the exchange of non-monetary assets not meeting the above premises, the
book value of assets surrendered and related taxes shall be accounted as cost of assets received
and the profits and losses shall not be concluded.
The initial investment cost of long-term equity investment obtained by recombination of liabilities
shall be accounted at fair value.
(2) Subsequent measurement and recognition of profit or loss
1) Subsequent measurement
Long-term equity investments of the Company in its subsidiaries are accounted for at cost method
and adjusted at equity method when preparing the consolidated financial statements.
Investments on the subsidiary company of an investing enterprise, investees not under common
control or significant influence, and long-term equity investments not quoted in an active market
and where its fair value cannot be measured reliably shall be accounted by the cost method.
Long-term equity investments under common control or significant influence shall be accounted
by the equity method. If the initial cost of a long-term equity investment is more than the investing
enterprises attributable share of the fair value of the investees 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 lower than the investing enterprise attributable share of
the fair value of the investees identifiable net assets for the investment, the difference shall be
included in the profit or loss for the current period
Treatment for other changes in owners' equity other than the net profit or loss of the investee:
where any change is made to the owners' equity other than the net profits and losses of the
investee, the book value of the long-term equity investment shall be adjusted and be included in
the owners' equity, and the capital reserves (other capital reserves) shall be accordingly adjusted,
in accordance with the attributable share of the net profits or losses of the investee.
2) Recognition of profit (gains) and losses
For long-term equity investment measured in the cost method, except for the declared but unpaid
cash dividends or profits contained in the payment or consideration actually made at the time of
investment, the Company shall recognized the cash dividends or profits declared to be paid by an
investee as investment yield as an investment income.
Under the equity method, when the Company confirms that it should share losses of the investee,
treatment shall be done in following sequence: firstly, the book value of the long-term equity
investment shall be reduced; secondly, where the book value is insufficient to cover the share of
losses, investment losses are recognized to the extent of book value of long-term equity which
form net investment in the investee in substance and the book value of long-term account
receivables shall be reduced; finally, after all the above treatments, if the Company is still
responsible for any additional liabilities in accordance with the provisions stipulated in the
investment contracts or agreements, accrual liabilities are recognized and included into current
investment loss according to the obligations estimated to undertake.
If the investee achieves profit in subsequent periods, the treatment is in the reversed sequence
described above, i.e. after deduct any unrecognized investment losses, reduce book value of
estimated liabilities recognized, restore book values of other long-term equity which form net
investment in the investee in substance, and of long-term equity investment, and recognize
investment income at the same time.
(3)Basis of determining joint control or significant influence
Jointly control is the contractually agreed sharing of control over an economic activity, and exists
only when the strategic financial and operating decisions relating to the activity require the
unanimous consent of the parties sharing control. Significant influence is the power to participate
in the financial and operating policy decisions of investee but is not control or joint control over
those polices.
(4) Testing and provision method of impairment
Balance sheet date, when the long-term equity investment has the sign of decrease in value due to
the continuous depreciation of market price or the deteriorating operation state of the investor, the
recoverable amount of the long-term equity investment is determined by choosing the higher one
from the net amount that is calculated by subtracting the disposal cost from the fair value of the
single long-term equity investment and the present value of the predicted future cash flow of the
long-term equity investment. When the recoverable amount of the long-term equity investment is
less than the book value, write down the book value of the assets to the recoverable amount,
recognize the write-down amount as the assets impairment loss and reckon in the current profit
and loss, and withdraw the corresponding provision for impairment of assets at the same time.
The long-term equity investment that is under the significant impact, has no offer in the active
market and has fair value cannot be measure reliably, of which the impairment loss is recognized
according to the balance between its book value and the present value which is determined by the
market return of the similar financial assets at that time discounting the future cash flow.
For the long-term equity investments having the sign of decrease in value, except for the business
reputation formed due to the business combination, if the measurement results of the recoverable
amount show that the recoverable amount of this long-term equity investment is less than its book
value, the balance can be recognized as the impairment loss.
For the long-term equity investment calculated by adopting the cost method, it should be
considered whether it will have a decrease in value after the investees declaring to assign cash
dividends or profits and confirm the investment income.
The impairment loss of long-term equity investment cannot be reversed once recognized.
14. Investment real estate
Investment real estate of the company are those held for rental income or capital appreciation, or
both, including land use rights already leased out, land use rights held for sale after capital
appreciation and buildings already leased out.
Investment real estate of the Company is accounted value by its cost. Cost of purchased-in
investment real estate consists of payment for purchase, relevant taxes and other expenditure
which is attributable to the assets directly; while cost of self-built investment real estate is formed
with all necessary expenditures occurred before construction completion of the assets arriving at
the estimated utilization state.
Consequent measurement of investment estate shall be measured by cost method. Depreciation
and amortization are provided to the buildings and land use right pursuant to the predicted service
life and net rate of salvage value. The predicted service life and net rate of salvage value and
annual depreciation(amortization) are listed as follows:
Type Expected operating life Predicted rate of net salvage Depreciation(amortizatio
(year) value n) rate per annum
Land Use Right 50 0%-10% 1.80%
House and buildings 20-28 0%-10% 3.56%-4.50%
When investment real estate turns to be used by holders, it shall switch to fixed assets or
intangible assets commencing from the date of such turning. And when self-used real estate turns
to be leased out for rental or additional capital, the fixed assets or intangible assets shall switch to
investment real estate commencing from the date of such turning. In situation of switch, the
carrying value before the switch shall be deemed as the credit value after the switch.
Indication of impairment is assessed, the recoverable amount shall be estimated and the
impairment shall be recognizing while the recoverable amount lower than its book value.
Impairment loss once recognized shall not be reversed.
When investment is disposed, or out of utilization forever and no economic benefit would be
predicted to obtain through the disposal, the Company shall terminate recognition of such
investment real estate. The amount of income from disposal, transfer, discarding as scrap or
damage of investment real estate after deducting the asset s carrying value and relevant taxation
shall be written into current gains and losses.
15. Fixed assets
(1) Recognition criteria of fixed assets
Fixed assets refer to the tangible assets held for the purpose of producing commodities, rendering
services, renting or business management with useful lives exceeding one fiscal year. Fixed assets
will only be recognized when all the following criteria are satisfied:
(1) It is probable that the economic benefits relating to the fixed assets will flow into the
Company;
(2) The costs of the fixed assets can be measured reliably.
(2) Basis of recognition and method of measurement of fixed assets by financing lease
(3) Method of provision for impairment of fixed assets
The fixed assets are depreciated at straight-line-method, and the depreciation rates are determined
as follows based on the results from estimated net residual values (0% - 10% of original values)
deduction by original value and estimated service life:
Category Estimated useful life (Year) Estimated residual rate Annual depreciation rate
Houses and buildings 20-28 0-10.00% 3.56-4.5
Machinery equipment 4-5 0-10.00% 18-22.04
Electronic equipment 4.5-5 0-10.00% 18-22.04
Transportation equipment 5-20 0-10.00% 6.33-23.75
(4) Testing and provision methods of impairment of fixed assets
Balance sheet date, the fixed assets are valued according to the lower one of its book value and the
recoverable amount. If the recoverable amount of the fixed assets is less than the book value, write
down the book value of the assets to the recoverable amount, the write-down amount is recognized
as the assets impairment loss and reckoned in the current profit and loss, and withdraws the
corresponding provision for impairment of assets at the same time. The impairment loss of the
fixed assets cannot be reversed in the subsequent accounting periods once recognized.
(5) Other explanation
16. Construction in progress
(1) Category of construction in progress
Construction in progress is measured on an individual basis.
(2) Criteria and timing for conversion of construction in progress into fixed assets
Construction-in-progress is transferred into fixed assets when it is ready for its intended use based
on actual cost. When a construction-in-progress is ready for its intended use but the actual cost is
not yet determined, the estimated cost incurred up to the date when the construction-in-progress is
ready for its intended use should be transferred into fixed asset and depreciated according to the
companys accounting policy. The cost of the fixed asset will be adjusted when the actual cost of
the fixed asset is determined; however, no adjustments will be made with regard to the amount
depreciated since the construction-in-progress is transferred into fixed asset.
(3) Testing and provision methods of impairment of construction in progress
Balance sheet date, the Company measures the construction in process according to the lower one
of its book value and the recoverable amount, withdraws the provision for impairment of
construction in process according to the balance between the book value and the recoverable
amount of the single assets and reckons in the current profit and loss, and withdraws the
corresponding provision for impairment of assets at the same time. The impairment loss of
construction in process cannot be reversed in the subsequent accounting periods once recognized.
17. Borrowing costs
(1) Recognition principles of capitalization of borrowing costs
The borrowing costs of the Company which can be directly attributable to the purchase or
production of the assets qualifying for capitalization shall be capitalized and recorded in related
assets cost; other borrowing expenses are confirmed as expenses upon occurrence according to the
occurrence amount and recorded in current profit and loss.
Assets qualifying for capitalization represent those fixed assets, investment property and inventory
etc. which require quite a long time of purchase or production activities to reach the conditions for
planned use or be ready for sale.
Borrowing costs start to capitalize when the following conditions are met:
(1) Assets expenditures, which include the expenditures occurred for purchasing or producing
assets qualifying for capitalization through payment of cash, transfer of non cash assets or
assuming interest debts, have occurred;
(2) Borrowing costs have occurred;
(3) Purchase or production activity for reach of the conditions for planned use or ready for sale has
occurred.
If abnormal interruption occurs during the purchasing or producing assets qualifying for
capitalization and the interruption lasts over 3 months consecutively, the borrowing expenses shall
stop capitalization temporarily.
Capitalization of borrowing costs should be ceased when the acquired and constructed or
produced assets eligible for capitalization have reached their intended use or sale condition.
If part items are completed and available for use separately when purchasing or producing assets
qualifying for capitalization, such part of assets shall stop capitalization in respect of their
borrowing expenses.
(2) Capitalization period of borrowing costs
Capitalization period refers to the period from the beginning of capitalization to the cease of
capitalization, excluding the period of capitalization suspension of borrowing costs.
(3) Period of capitalization suspend
(4) Calculation method of capitalization amount of borrowing costs
Interest expenses (after deduction of the interest income obtained from the unused borrowing
capitals as saved in bank or investment income obtained from temporary investment) and auxiliary
expenses of special borrowings are capitalized when the assets qualifying for conditions purchased
or produced reach conditions for planned use or be ready for sale.
The interest of general borrowings which should be capitalized is calculated based on the
weighted average number of the capital expenditure that the accumulative assets expenditure
exceeding special borrowings multiplies the capitalization rate taken in general borrowings.
Capitalization rate is calculated based on the weighted average interest rate of general borrowings.
For discount or premium of borrowings, the Company determines the discount or premium
amount that shall be amortized in each accounting period under effective interest method and
adjusts the interest amount for each period.
18. Biological assets
The biological assets of the Company refer to consumptive biological assets and productive
biological assets. The consumptive biological assets including young and livestock etc.,
productive biological assets including eggs etc.
Biological assets are recognized upon satisfaction of the following conditions: pup
(1) the company owns or controls the biological asset due to the past transaction
or proceeding;
(2) the economic benefits or service potential related to the biological assets are
likely to flow into the company;
(3) cost of the biological assets can be measured reliably.
Acquisition and disposal of biological assets: cost of biological assets upon change
of use is determined based on the carrying value when use changes; the disposal income
arising from disposal, damage or inventory losses of biological assets less the
carrying value and related taxes shall be recorded in current profit and loss.
The productive biological assets are initially measured according to the cost. The cost of the
outsourcing productive biological assets includes purchase cost, related taxes and dues,
transportation charge, insurance expenses and other expenses directly belonging to the purchase of
this asset. The book value of the productive biological assets of the investors is measured by
adding the value on the investment contract or the value stipulated by agreement to the payable
taxes and dues, but if the contract or agreement appoints the value as unfair, the actual cost is
determined by the fair value. The cost of the progenitive productive biological assets is
determined according to the necessary expenses occurred before achieving the anticipated
production and management purposes, including the feed cost, labor cost and indirect expenses to
be shared, etc.
The closing or the management and feeding costs occurred after achieving the predetermined
production and management purposes of the productive biological assets of the Company are
reckoned in the current profit and loss.
The Company withdraws and depreciates the productive biological assets, and the depreciation
adopts the straight-line depreciation method. The Company determines its service life and
anticipated net residual value according to the nature and service condition of the productive
biological assets and the anticipated implementation way of the related economic interests. At the
end of the year, the Company re-checks the service life, anticipated net residual value and
depreciation method of the productive biological assets, and adjusts correspondingly if it differs
from the original assessment.
The expected service life, anticipated net residual value and yearly depreciation of the productive
biological assets of the Company are as follows:
Category Estimated useful life (Year) Estimated residual rate Annual depreciation rate
Eggs 1 5% 95%
Balance sheet date, the Company measures the productive biological assets in accordance with the
lower one of its book value and the recoverable amount, withdraws the provision for impairment
of productive biological assets according to the balance between the book value and the
recoverable amount of the single assets. The impairment loss of the productive biological assets
cannot be reversed in the subsequent accounting periods once recognized.
Gain and disposal of the biological assets: The cost of the biological assets after changing the
purposes are recognized according to the book value at the time when changing the purposes;
when the biological assets being sold, damaged or having inventory losses, reckon the balance
after deducting the book value and related taxes and dues from the disposal consideration in the
current profit and loss.
19. Intangible assets
(1) Measurement of intangible assets
(1) The Company initially measures intangible assets at cost on acquisition;
The cost of an externally acquired intangible asset comprises its purchase price, related taxes and
surcharges and any other directly attributable expenditure of preparing the asset for its intended
use. If the deferred payment of purchase price of intangible assets exceeding normal credit terms
is substantially of financial nature, the cost of intangible assets should be recognized at the present
value of the purchase price.
The intangible assets which the debtor uses to pay back the debt in debt restructuring should be
recognized at the fair value of the intangible assets. The difference between the book value of
restructured debts and the fair value of intangible assets used to pay back the debt should be
recorded into the current profit and loss;
On the premise that non-monetary assets trade is of commercial nature and the fair value of the
assets traded in or out can be measured reliably, the intangible assets traded in by the trade of
non-monetary assets should be recognized at the fair value of the assets traded out, unless any
unambiguous evidence indicates that the fair value of the assets traded in is more reliable; as to the
non-monetary assets trade not meeting the aforesaid premise, the book value of the assets traded
out and related taxes payable should be recognized as the cost of the intangible assets traded in,
with gains or losses not recognized.
The intangible assets obtained by the absorption and merger of an enterprise under common
control are recognized at the book value of the merged enterprise; the intangible assets obtained by
the absorption and merger of an enterprise not under common control are recognized at the fair
value.
Costs of intangible assets developed internally and independently include: the costs of materials
and labor services used to develop the intangible assets, the registration fee, the amortization of
other patents and franchise used in the process of development, the interest of capitalization, and
other direct expenses for preparing the intangible assets for their intended use.
(2) Subsequent measurement
The useful life of intangible asset is analyzed on acquisition.
As for intangible assets with limited useful lives, straight-line amortization method is adopted in
the period when the intangible assets generate economic benefit for enterprise; if the period when
the intangible assets generate economic benefit for enterprise cannot be forecasted, the intangible
assets should be deemed as those with indefinite useful lives and should not be amortized.
(2) Estimation of useful life of intangible assets with limited useful life
Every end of the year, re-checking the useful life and amortization method for intangible assets with limited useful
life
Being checking, the useful life and amortization method shows no difference with the previous estimation
Item Expected useful life References for expected useful life
Patent right, trademark right,
non-patents and outsourcing 5 years Within the terms of contractual rights or other statutory rights
software
Land Use Right 50 years Within the terms of contractual rights or other statutory rights
(3)Judgment basis for the intangible assets with indefinite useful lives
Re-checking the useful life of intangible assets with indefinite useful lives at every end of the year
Being checking, there is no intangbile assets with indefinite usefull lives been found
(4)Provision of impairment reserve for intangible assets
Balance sheet date, the Company measures the intangible assets in accordance with the lower one
of its book value and the recoverable amount, withdraws the provision for impairment of
intangible assets according to the balance between the book value and the recoverable amount, the
corresponding asset impairment loss is reckoned in the current profit and loss. The intangible
assets impairment loss cannot be reversed in the subsequent accounting periods once recognized.
(5)Specific criteria for the division of research phase and development phase for internal
research and development projects of the Company
Research phase: Scheduled innovative investigations and research activities to obtain and
understand scientific or technological knowledge.
Development phase: Apply the research outcomes or other knowledge to a plan or design prior to
a commercial production or use in order to produce new or essentially-improved materials, devises,
products, etc.
The expenses occurred during the research stage of internal R&D projects are
accounted into profits and losses of the current period.
(6) Calculation of expenditure for internal R&D projects
Expenditure in the research stage of inner research development project should be included in the
profit or loss for the current period in which they are occurred.
Expenditure in the development stage should be recognized as intangible assets when all of the
following conditions are met:
(1) It is technically feasible that the intangible assets are completed for the purpose of their uses or
sales;
(2) The Company has an intention to complete the intangible assets for their uses or the sale;
(3) The way of how the intangible assets generate economic benefits including the ability to prove
the products generated by the intangible assets have a market or the intangible assets itself have a
market, and the ability to prove its serviceability if the intangible assets will be used internally;
(4) The Company has sufficient technical and financial resources and other supporting resources
to complete the research and development of such intangible assets and is capable of using or
selling such intangible assets;
(5) Expenditure occurred in the development stage of such intangible assets can be accurately
calculated;
20. Long-term Deferred Expenses
Amortized equally during the benefit period for those long-term expenses whose has a defined
benefit period, for those without a defined benefit period, amortized equally within 5 years.
21. Accrual liability
When the Company is involved in proceedings, debt guarantees, onerous contracts and
reorganization events, if such events may require delivery of assets or rendering of services in the
future and the amounts of such events can be reliably measured, estimated liabilities are
recognized.
(1) Recognition criteria of accrued liability
The Company recognizes the estimated liabilities when obligations related to contingencies satisfy
all the following conditions:
-- This obligation is a present obligation of the Company;
-- The performance of such obligation is likely to result in outflow of economic benefits from the
Company; and
-- The amount of the obligation can be measured reliably.
(2) Method of measuring the estimated liabilities
Estimated liabilities shall be initially measured at the best estimate of the expenditure required to
settle the related present obligation.
The Company, when determining the best estimate, has had a comprehensive consideration of
risks with respect to contingencies, uncertainties and the time value of money. If the time value of
money is significant, the best estimate shall be determined after discounting the relevant future
outflow of cash.
The best estimate will be dealt with separately in the following circumstances:
The expenses required have a successive range (or band), in which the possibilities of occurrence
of each result are the same, and the best estimate should be determined as the middle value for the
range, i.e. the average of the upper and lower limit.
The expenses required does not have a successive range (or band), or although there is a
successive range (or band), the possibilities of occurrence of each result are not the same, if the
contingency is related to individual item, the best estimate should be determined as the most likely
amount; where the contingency is related to a number of items, the best estimate should be
calculated and determined according to the possible results and the relevant possibilities.
When all or part of the expenses necessary for the settlement of an estimated liability of the
Company is expected to be compensated by a third party, the compensation should be separately
recognized as an asset only when it is virtually certain that the compensation will be received. The
amount recognized for the compensation should not exceed the book value of the estimated
liability.
22. Share-based payment and equity instrument
(1) Category of share-based payment
Share-based payment represents the transaction pursuant to which the Company grants equity
instruments or bears the liabilities as determined based on the equity instrument for the purposes
of provision of services by its employees and other parties, including two methods namely
equity-settled and cash-settled.
(2) Recognition method for fair-value of equity instrument
For equity instruments which are settled at equity for exchange of services provided
by employees, it shall be measured based on the fair value of equity instruments
granted to employees; for exchange of services provided by others, it shall be
measured based on its fair value as of the acquisition date. If the fair value of
others’ service can not be measured reliably, it shall be measured based on the
fair value of the services as of the acquisition date. Fair value of equity
instruments is determined under the following methods:
(1) If active market exists, determined based on the quotation in the active market;
(2) If no active market exists, determined under evaluation technology, including
taking references to the price used by willing parties for the latest transactions,
the prevailing fair value of other financial instruments in substantially same
nature, cash flow discount method and option pricing model.
(3) Basis of best estimation for vesting equity instrument
The Company determines the best estimate of exercisable equity instrument based on
the subsequent information such as the latest available change of number of
exercisable employees.
(4) Relevant accounting treatment for implementation, amendment and termination of
shares payment plan
23. Revenue
(1) Criteria of time for good sales recognized
When the Company has transferred significant risks and rewards of ownership of the goods to the
buyer; the Company retains neither continuous management rights associated with ownership of
the goods sold nor effective control over the goods sold; the relevant amount of revenue can be
measured reliably; it is highly likely that the economic benefits associated with the transaction will
flow into the enterprise; and the relevant amount of cost incurred or to be incurred can be
measured reliably, revenue from sales of goods shall be recognized.
(2) Recognition basis of revenue from transferring the use right of assets
The economic benefits related to transactions are probable to flow into the Company; and amount
of revenue can be measured reliably
(3) Recognition criteria of revenue from rendering of service
(1) Amount of the revenue can be measured reliably;
(2) Relevant economic profit probably flows into the enterprise;
(3) Progress of completion of the transaction can be measured reliably;
(4) Cost occurred during transactions and those is about to occurred can be measured reliably
(4) Recognition basis and method of construction progress completion while recognize
revenue from labor service providing and from construction contract by percentage of
completion method
24. Government grants
(1) Category
Government subsidies are monetary assets and non-monetary assets acquired free of charge by the
Company from the government. Government subsidies are classified into government subsidies
related to assets and government subsidies related to income.
(2) Accounting treatment
Government subsidies related to acquisition and construction of fixed assets, intangible assets and
other long-term assets are recognized as deferred income, and included in non-operating income
by stages within the useful life of the assets acquired and constructed;
The government grants related to earnings are recognized as deferred earnings while obtained if
they are used for compensating the relevant expenses or losses of the Company in subsequent
periods, and are recorded in the profit or loss in the period of recognition of relevant expenses; if
they are used to compensate the relevant expenses or losses occurred of the Company, they are
directly recorded in the non-operation revenue of the current period while obtained.
25. Deferred income tax assets and deferred income tax liabilities
(1) Recognition basis for the deferred income tax assets
The deferred income tax assets arising from deductible temporary difference shall be recognized
to the amount of taxable income which it is most likely to obtain and which can be deducted from
the deductible temporary difference.
(2) Recognition basis for the deferred income tax liabilities
The Company shall recognize the accrued taxable temporary differences of the current period and
prior periods as a deferred income tax liability. Excluding the temporary difference arising from
the transaction by goodwill and through non-business combination which, at the time of
transaction, the accounting profits will not be affected, nor will be taxable amount is affected.
26. Operation lease and financing lease
(1) Accounting treatment of operation lease
(1) The lease payment paid for leasing assets is amortized under straight line method in the entire
lease period without deduction of lease-for-free period, and is recorded in current expenses. The
initial direct expenses paid by the Company related to lease transactions shall be recorded in
current expenses.
If asset leaser assumes the lease related expenses which shall be assumed by the Company, the
Company shall deduct such expenses from the total rental and amortize based on the deducted
rental expenses during the lease period and record in current expenses.
(2) The lease fee collected by the Company for assets lease is amortized under straight line
method in the entire lease period without deduction of lease-for-free period, and is realize as lease
income. The initial direct expenses paid by the Company related to lease transactions shall be
recorded in current expenses; for significant amount, it shall be capitalized and recorded in current
income in phases under the same basis as realization of lease income in the entire lease period.
If the Company assumes the lease related expenses which shall be assumed by the lessee, the
Company shall deduct such expenses from the total rental income and allocate based on the
deducted rental expenses during the lease period.
(2) Accounting treatment of financing lease
(1) Assets leased by financing lease: the Company accounts the leased assets at the lower of the
fair value of leased assets and present value of the minimum lease payment on the inception date
of the lease, and the minimum lease payment is deemed as the accounting value of long term
account payables, and the difference is taken as unrealized financing expenses.
The Company amortizes the unrealized financing expenses at effective interest rate method in the
asset lease period and records in finance expenses.
(2) Assets leased out by financing lease: on the inception date of the lease, the Company realizes
the difference between the sum of financing lease account receivables and unguaranteed
remaining value and its present value as unrealized financing income which is conformed as lease
income in future periods involving lease. The initial direct expenses occurred by the Company
related to lease transaction shall be recorded in the initial measurement of financing lease account
receivables. And income realized in lease period shall be reduced accordingly.
(3) Accounting treatment of sale and leaseback
27. Changes of main accounting policy and estimate
Whether main accounting policy and estimate of the Company changed in the Period or not
□Yes √No
No changes in principal accounting policies and estimates in reporting period
(1) Changes of accounting policies
Whether there have changes of major accounting policies in the Period or not
□ Yes √ No
(2) Changes in accounting estimates
Whether have changes in accounting estimates in report period
□ Yes √ No
28. Error correction of previous accounting
Whether has error correction of previous accounting occurred in this period
□ Yes √ No
No error correction of previous been found
(1) Retrospective restatement method
Whether has accounting errors of previous period with retrospective restatement method in
reporting period or not
□ Yes √ No
(2) Prospective application method
Whether has accounting errors of previous period with prospective application method in
reporting period or not
□ Yes √ No
29. Other major accounting policy, accounting estimation and preparation method for
financial statement
V. Taxes
1. Main tax category and tax rate:
Tax category Tax calculation evidence Tax rate
VAT Taxable added value 17%
Business tax Taxable turnover 5%
Urban maintenance and construction tax Turnover tax payable 5%
Enterprise income tax Taxable income 25%
Land appreciation tax Appreciation value or pre-requisitioned Progressive rates
Rental income or original value of the
Property tax 12% or 1.2%
property
Income tax rate for vary branches and plants
2. Tax preference and approvals
Approved by "CXGSSYGZi[2013]No.004", Chengde Nanjiang Ecological Agriculture Co., Ltd.
can get the privilege of deducting the income from the agriculture, forestry, animal husbandry and
fishery by rule.
3. Other explanation
VI. Business Combination and Consolidated Financial Statements
1. Subsidiaries
(1) Subsidiaries acquired by means of establishment or investment
In RMB
Regist Nature Regist Actua Other Propo Prop Con Minori The sum The balance after
Full solid
Type ration of Business scope l balance rtion ortio ation ty of money the parent
name er
place equity
busine invest of items of n of or in companys
ss capital ment constitut share voti not minority owners equity
amou e net s held ng equity writing down the
nt at investm right which is excess of the
period ent in used to current loss
-end subsidia write undertaken by
ry down the minority
actually minority shareholders of
interest eth subsidiary
over the share
enjoyed by
minority
shareholders in
the original
owners equity of
the subsidiary
Investment on
industry of new
energy, new
materials, mining
Cheng and dressing,
de modern
Wholl
Nanjia Industr agriculture, real
y-own Cheng 90,000 90,00
ng ial industry and 100.0 100.
ed de ,000.0 0,000. -- Y -- -- --
Invest invest construction 0% 00%
subsidi City 0 00
ment ment engineering;
ary
Co., investment
Ltd.*1 management;
investment
consultation;
import-export
trading
Cheng
de Agricu
Cultivation and
Nanjia Wholl ltural
sale of cereals,
ng y-own cultiva
Cheng 10,000 edible mushrooms, 10,00
Ecolog ed tion 100.0 100.
de ,000.0 fruits and 0,000. -- Y -- -- --
ical sub-su and 0% 00%
City 0 vegetables and 00
Agricu bsidiar crop
herbs; livestock
lture y farmin
breeding and sales
Co., g
Ltd.*2
Cheng Wholl Cheng Paper- US$ 2 Production and 75,00 100.0 100.
-- Y -- -- --
de y-own de makin 50 sales of the 0,000. 0% 00%
Xingy ed City g millio high-end coated 00
e subsidi industr n paper and serial of
Paper ary y kraft board paper
makin
g
makin
g Co.,
Ltd.
*3
Nanjia
ng
Wholl
Asia US$ 2
y-own Hon International
Invest Tradin 0 797,5 100.0 100.
ed Kon investment and -- Y -- -- --
ment g millio 38.34 0% 00%
subsidi China trading
Co., n
ary
Ltd.
*4
Research and
development of
Cheng grapheme and its
de Holdin application
Morsh g Cheng R&D 50,000 materials, power 50,00
90.00 90.0 4,974,
Techn sub-su de of ,000.0 batteries and 0,000. -- Y -- --
% 0% 905.67
ology bsidiar City energy 0 battery materials, 00
Co., y high performance
Ltd.*5 membrane
materials,
nano-materials.
Cheng
de
Huijin Wholl
Proper
g y-own
Cheng ty Property
Proper ed 500,00 500,0 100.0 100.
de manag management -- Y -- -- --
ty sub-su 0.00 00.00 0% 00%
City ement service
Servic bsidiar
service
e Co., y
Ltd.
*6
Other explanation on subsidiary obtained by establishment or investment:
*1. Chengde Nanjiang Investment Co., Ltd (shorted as Nanjiang Investment) was founded by Rongyida on 9 th Oct.
2012. Original register capital was RMB 50 million wholly invested by shareholder Rongyida. Since Rongyida
transferred 100% equity worth RMB50 million to Nanjiang Company, Nanjiang Company held 100% equity of
Nanajiang Investment after the transfer. On 6th Jan. 2013, Nanjiang Company added RMB40 million to Nanjiang
Investment thus the register capital reached RMB90 million.
*2. Chengde Nanjiang Ecological Agriculture Co., Ltd (shorted as Ecological Agriculture) was founded by
Nanjiang Investment on 24th Oct. 2012 with original capital of RMB5 million which was wholly invested by
Nanjiang Investment. On 18th Apr. 2013, Nanjiang Investment added RMB5 million to Ecological Agriculture thus
register capital reached RMB10 million .
*3. Chengde Xingye Papermaking making Co., Ltd (shorted as Xingye Papermaking ) was founded jointly by
Nanjiang Company and (Hong Kong) Zhanxi International Group Co., Ltd (hereinafter referred to as Hong Kong
Zhanxi) on 26th Oct. 2001 authorized by the Approval Certificate issued by WJMZSAZ[2001] NO. 0065. Ruled
by the Response to Joint Operation on Fund-Adding to Chengde Xingye Papermaking making Co., Ltd, which was
issued on 28th Oct. 2002 by Ministry of Foreign Trade and Economic Cooperation of the Republic of China
(former Commerce Ministry) authorized by WJMZEH[2001]NO. 969, register capital has to be raised to US$ 250
million from US$ 100 million; newly added register capital should be paid out within 3 years since operation
certificate was changed in accordance with methods both parties ruled according to the contract and article of
association. The paid-up capital of Xingye Papermaking was US$ 100 million. Its register capital didnt paid out
within required period though shareholder had investment involved taking up 40% of the whole register capital,
including Nanjiang Company gave US$75 million with 75% equity and Hong Kong Zhanxi invested US$ 25
million with 25% equity. In December of 2006, affected by smuggler affair on the largest shareholder Wang
Shuxian and other senior directors of Nanjiang Company, Xingye Papermaking suspended all its business, which
led sharp loss to business. On 8th Dec. of 2008, Hebei Province Chengde Intermediate People's Court confirmed
liquidation for Xingye Papermaking raised by Chengde Yonghe and Cement Co., Ltd, by the Civil Ruling (2008)
th
CMPZ NO. 13. On 11 of Mar. 2009, Hebei Province Chengde Intermediate Peoples Court approved
reconciliation request raised by Xingye Papermaking by the Civic Ruling (2008) CMPZ NO. 13-2. On 23rd of
Apr 2009, Hebei Province Chengde Intermediate People's Court confirmed that largest shareholder of Xingye ever
stole the name of Hong Kong Zhanxi and set up a false foreign-capital corporation, by the Criminal Ruling (2009)
JXEZZ NO. 44. On 10th May of 2009, Hebei Province Chengde Intermediate People's Court confirmed that
Xingye Papermaking had reconciled with its creditor on 8th of May 2009 and ended the reconciliation procedure,
by the Civil Ruling (2008) CMPZ NO. 13-3. In Oct of 2012, the Chengde Intermediate Peoples Court issued Civil
Mediation Agreement (2011) CMCZ NO. 76 which showed that Wang Shuxian reached a reconciliation agreement
with Nanjiang Company and that Wang Shuxian coordinated small shareholders of Xingye Papermaking to give
up their own equity as well as interests. As return, Nanjiang Company agreed to transfer its 20% equity from
Suning Banhe, land of industry-park (34.03 acres), plant (25596.87sqm) and No. 131 land (44.4 acres) to Wang
Shuxian. After reconciliation, Nanjiang Company wholly owns Xingye Papermaking .
*4. Nanjiang Asia Investment o., Ltd (shortened as Nanjiang Asia) was founded by Nanjiang Company on 14th
Nov. 2013, located in Hong Kong, with register capital of US$ 20 million, the paid-up was US$ 797, 583.34.
*5. Chengde Morsh Technology Co., Ltd (shortened as Morsh Technology) was founded jointly by Nanjiang
Investment and Ningbo Morsh Technology on 24th Jan. 2013 with register capital of RMB50 million, including
Nanjiang Investment invested RMB45 million taking up 90% of the total investment; Ningbo Morsh Technology
invested RMB5 million taking up 10%.
*6. Chengde Huijing Property Service Co., Ltd (shortened as Huijing Property) was founded by Nanjiang
Investment on 18th Nov. 2013 with register capital of RMB500,000. Shareholder Nanjiang Investment invested
RMB500,000 wholly owning it.
(2) Subsidiaries acquired by business combination under the common control
In RMB
State
m
e
n
t The balance after
the parent
s companys owners
Balance
Amount equity writing
of other com
Invest in down the excess of
items
Regi
ment
material
Voti Minb minority the current loss
amou Holdi ng ority interest undertaken by
strati Busine Register ly
nt ng right used for minority
Name Type on ss ed Business scope
actual
forming
propo prop interi writing shareholders of the
plac nature capital net
e
at
investm
rtion ortio est n down subsidiary over the
period n minority share enjoyed by
ent to
-end e gain and minority
subsidia
loss shareholders in the
ry
d original owners
equity of the
subsidiary
or
n
o
t
Devel Development
Chengde
Who o of
Nanjian
lly-o p Real
g Real
wne Che m
Estate; import and
Estate 10,000,0 100.0 100.
d ngde e 1.00 -- Y -- -- --
export business of
Develop 00.00 0% 00%
subs City nt
text ware, apparel
ment
idiar of manufacturing and
Co., Ltd.
y Real clothing; rental
*
estate service
Other explanation on subsidiary obtained by enterprise combines under the common control
*Chengde Nanjiang Real Estate Development Co., Ltd (previously named Chengde Rongyida Real Estate
Development Co., Ltd) was set up on 20th Feb. 2009 with register capital of RMB 10 million, including Wang Fei
invested RMB9 million taking up 90% of the total capital. The rest RMB one million was raised by Chen Liping,
taking up 10%. On 27th July 2009, Wang Fei and Chen Liping transferred all their shares to the controlling
shareholder Chen Rong. At the same time, Chen Rong transferred 100% shares to Nanjiang Holding with
RMB1.00. After the transfer, Nanjiang Holding wholly owned the Company. On 14th March 2014, as approved by
Chengde County Commercial Bureau, the Company changed its name to Chengde Nanjiang Real Estate
Development Co., Ltd.
(2) Subsidiaries acquired by business combination not under the common control
In RMB
State
m
e
n
t
The balance after
c the parent
companys owners
Balance o Amount equity writing
of other
in down the excess of
items m minority
Investm Voti Minori the current loss
Regi material
Busin ent Holdi ng interest undertaken by
Busine stere ly ty b
Registratio amount ng right used for minority
Name Type ss d ess forming interes
n place actual at propo prop writing shareholders of the
nature capit
scope period-e
net
rtion ortio t i down subsidiary over the
al investm
nd n n minority share enjoyed by
ent to
gain and minority
subsidia
e loss shareholders in the
ry
original owners
equity of the
subsidiary
(
Y
/
N
)
Intern
Runhua ational
Rural Water 30,0 tradin
Holding Interna 20,222
(Tianjin) 00,0 g of 9,000,0 30.00 53.4
subsidiar Tianjin tional -- Yes ,910.8 -- --
International 00.0 plastic 00.00 % 3%
y trading 3
Trade Co., 0 raw
Ltd. * materi
als
Other explanation on subsidiary obtained by enterprise combines not under the same control
*Runhua Rural Water (Tianjin) International Trade Co., Ltd (shortened as Runhua RW) was founded on 28 th Aug.
2008 after Tianjin Binhai New District Commercial Administration Bureau registered and approved, with
corporation Certificate with registration No. 120192000028688. Original register capital was RMB30 million,
including, Runhua RW Industrial Development Company invested RMB 4 million with 13.34% ratio, Yang
Shengbao invested RMB one million with ratio of 3.33%, Wang Qianying invested RMB2 million with ratio of
6.67%, Ren Peiwen invested RMB2.01 million with ratio of 6.7%, Zhang Xiaofan invested RMB one million with
ratio of 3.33%, Lan Chunhong invested RMB9.03 million with ratio of 30.10%, Zhao Qinghua invested RMB7
million with ratio of 23.33%, Jia Zhenghong invested RMB3 million with ratio of 10.00% and Li Kai invested
RMB960,000 with ratio of 3.2%.
On 25th June 2013, in accordance with the signed equity transfer agreement, Lan Chunhong and Zhao Qinghua
respectively transferred 6.67% and 23.33% of shares they held from the Company to Nanjiang Holding. After
transfer Nanjiang Holding invested RMB9 million taking up 30% of the register capital. After this change,
investment ratio of shareholders particularized as: Runhua RWDevelopment invested RMB4 million with ratio of
13.34%, Yang Shengbao invested RMB one million with ratio of 3.33%, Wang Qianying invested RMB2 million
with ratio of 6.67%, Ren Peiwen invested RMB2.01 million with ratio of 6.7%, Zhang Xiaofan invested RMB one
million with ratio of 3.33%, Lan Chunhong invested RMB7.03 million with ratio of 23.43%, Jia Zhenghong
invested RMB3 million with ratio of 10.00%, Li Kai invested RMB960,000 with ratio of 3.2%. Nanjiang holding
invested RMB9 million with ratio of 30%.
2. Explanation on changes of consolidation range
Explanation on changes of consolidation range
□ Applicable √ Not-applicable
VII. Notes to major items in consolidated financial statements
1. Monetary fund
In RMB
Closing amount Opening amount
Item Amount in Converting Amount in Converting
Amount in RMB Amount in RMB
foreign currency rate foreign currency rate
Cash: -- -- 234,434.02 -- -- 19,146.58
RMB -- -- 234,434.02 -- -- 19,146.58
Bank savings: -- -- 69,102,811.85 -- -- 77,962,341.48
RMB -- -- 62,514,882.90 -- -- 75,093,993.26
USD 1,070,720.48 6.1528 6,587,928.95 470,460.11 6.0969 2,868,348.22
Other monetary fund: -- -- 8,896,903.16 -- -- 11,445,403.16
RMB -- -- 8,896,903.16 -- -- 11,445,403.16
Total -- -- 78,234,149.03 -- -- 89,426,891.22
Separate explanation is required for accounts with restricted application purposes, deposited overseas and of
potential recovery risks arising from pledge, mortgage or frozen:
Item Closing amount Opening amount
Margin for housing mortgage 1,096,903.16 1,045,403.16
Margin for note payable 7,800,000.00 10,400,000.00
Total 8,896,903.16 11,445,403.16
The margin unable to use at any time are excluded in the cash flow statement while prepared by the Company
2. Account receivables
(1) Classified by categories
In RMB
Closing amount Opening amount
Categories Book balance Bad debt reserve Book balance Bad debt reserve
Amount Proportion Amount Proportion Amount Proportion Amount Proportion
Account receivable of bad debt provision withdrawal by combination
3,854,492.6 123,348.0
Age group 100.00% 6,167.40 100.00% 100.00% 6,167.40 100.00%
0 0
3,854,492.6 123,348.0
Subtotal of group 100.00% 6,167.40 100.00% 100.00% 6,167.40 100.00%
0 0
3,854,492.6 123,348.0
Total -- 6,167.40 -- -- 6,167.40 --
0 0
Explanation for category of account receivables:
Account receivable with single significant amount and withdrawal bad debt provision separately at period-end
□ Applicable √ Not-applicable
Account receivable provided for bad debt reserve under aging analysis method in the groups:
√ Applicable □ Not-applicable
In RMB
Closing amount Opening amount
Age Book balance Book balance
Bad debt reserve Bad debt reserve
Amount Proportion Amount Proportion
within 1 year
Including: -- -- -- -- -- --
Subtotal of within
3,854,492.60 100.00% 6,167.40 123,348.00 100.00% 6,167.40
1 year
Total 3,854,492.60 -- 6,167.40 123,348.00 -- 6,167.40
In combination, withdrawal proportion of bad debt provision based on balance proportion: Account receivables
□ Applicable √ Not-applicable
In combination, withdrawal proportion of bad debt provision based on other methods: Account receivables
□ Applicable √ Not-applicable
Account receivable with minor single amount but with withdrawal bad debt provision for single item at period-end
□ Applicable √ Not-applicable
(2) Account receivables due from the shareholders holding 5% or above voting shares of the
Company during the reporting period
In RMB
Closing amount Opening amount
Name Bad debt provision Bad debt provision
Book balance Book balance
accrual accrual
(3) Top 5 account receivable
In RMB
Relationship with the Proportion in total
Name Amount Terms
Company account receivables (%)
Beijing Bo Lu Jing Hua
Non- related party 2,635,500.00 Within 1 year 68.37%
Technology Co., Ltd.
Beijing Xiangeqing
Industry & Trade Co., Associated corporate 738,676.00 Within 1 year 19.16%
Ltd.
Shanghai Guozhe
Non- related party 322,130.00 Within 1 year 8.36%
Trading Co., Ltd.
Dou Yujun Non- related party 120,000.00 Within 1 year 3.11%
Electricity Authority of
Non- related party 25,575.60 Within 1 year 0.66%
Chengde County
Total -- 3,841,881.60 -- 99.66%
(4) Account receivables due from related parties
In RMB
Proportion in total account
Name of the company Relationship with the Company Amount
receivables (%)
Beijing Xiangeqing Industry
Associated corporate 738,676.00 19.16%
& Trade Co., Ltd.
Total -- 738,676.00 19.16%
3. Other account receivables
(1) Classify by category
In RMB
Closing amount Opening amount
Book balance Bad debt reserve Book balance Bad debt reserve
Categories
Proportio Proportio Proportio
Amount Amount Amount Proportion Amount
n n n
Other receivable with
single significant amount
1,209,273.00 7.24% 1,209,273.00 34.57% 1,209,273.00 14.42% 1,209,273.00 34.57%
and withdrawal bad debt
provision separately
Other account receivable of bad debt provision withdrawal by combination
13,639,063.6
Age group 81.64% 341,921.88 10.03% 5,318,030.55 63.42% 341,921.88 10.03%
1
13,639,063.6
Subtotal of group 81.64% 341,921.88 10.03% 5,318,030.55 63.42% 341,921.88 10.03%
1
Other account receivable
with minor single
amount but withdrawal 1,857,951.91 11.12% 1,857,951.91 54.50% 1,857,951.91 22.16% 1,857,951.91 54.50%
bad debt reserves on a
single basis
16,706,288.5
Total -- 3,409,146.79 -- 8,385,255.46 -- 3,409,146.79 --
2
Explanation for category of other receivables:
Other receivable with single significant amount and withdrawal bad debt provision separately at
period-end
√ Applicable □ Not-applicable
In RMB
Other receivable Book balance Bad debt Accrual proportion Reasons
Claims obtained from
1,209,273.00 1,209,273.00 100.00% Over 3 years
auction
Total 1,209,273.00 1,209,273.00 -- --
In combination, accounts whose bad debts provision was accrued by age analysis: Other receivable
√ Applicable □ Not-applicable
In RMB
Closing amount Opening amount
Book balance Book balance
Age
Proporti Bad debt reserve Proporti Bad debt reserve
Amount Amount
on on
Within 1 year
Including:
13,401,152.61 98.25% 242,138.52 5,085,113.76 95.62% 242,138.52
Subtotal of within 1 year 13,401,152.61 98.25% 242,138.52 5,085,113.76 95.62% 242,138.52
1-2 years 233,911.00 1.72% 97,783.36 228,916.79 4.30% 97,783.36
2-3 years 4,000.00 0.03% 2,000.00 4,000.00 0.08% 2,000.00
Total 13,639,063.61 -- 341,921.88 5,318,030.55 -- 341,921.88
In combination, withdrawal proportion of bad debt provision based on balance proportion: Other receivables
□ Applicable √ Not-applicable
In combination, withdrawal proportion of bad debt provision based on other methods: Other receivables
□ Applicable √ Not-applicable
Other receivable with single minor amount while withdrawal bad debt provision separately at period-end
√ Applicable □ Not-applicable
In RMB
Other receivable Book balance Bad debt reserve Accrual proportion Accrual reasons
Un-collectible by
Wang Ansheng 141,000.00 141,000.00 100.00%
estimated
Un-collectible by
Bao Degang 356,838.00 356,838.00 100.00%
estimated
Un-collectible by
Yan Qizhong 200,000.00 200,000.00 100.00%
estimated
Un-collectible by
Liu Chengquan 300,000.00 300,000.00 100.00%
estimated
Un-collectible by
Li Tianhong 217,424.66 217,424.66 100.00%
estimated
Un-collectible by
Zhou Haihong 642,689.25 642,689.25 100.00%
estimated
Total 1,857,951.91 1,857,951.91 -- --
(2) Other receivables due from the shareholders holding 5% or above voting shares of the
Company during the reporting period
In RMB
Closing amount Opening amount
Name Bad debt amount Bad debt amount
Book balance Book balance
accrual accrual
(3) Nature or content of other receivables with significant amount
In RMB
Nature or content of the
Name Amount Proportion in total other receivable
amount
County housing and
3,420,000.00 Migrant workers margin 20.47%
Urban&Rural Planning bureau
Chengde Great Wall
1,970,000.00 Security fee 11.79%
Construction Group
Shanxi Zhuozhong Trade Co.,
1,800,000.00 Open credit 10.77%
Ltd.
Authority of County Non-Tax Margin for land
1,500,000.00 8.98%
Income purchased
Total 8,690,000.00 -- 52.01%
Explanation
(4) Top 5 other receivable
In RMB
Relationship with the Proportion in total other
Name Amount Terms
Company receivable
County housing and
Urban&Rural Planning Non- related party 3,420,000.00 Within 1 year 20.47%
bureau
Chengde Great Wall
Non- related party 1,970,000.00 Within 1 year 11.79%
Construction Group
Shanxi Zhuozhong Trade
Non- related party 1,800,000.00 Within 1 year 10.77%
Co., Ltd.
Authority of County
Non- related party 1,500,000.00 Within 1 year 8.98%
Non-Tax Income
Xingcheng Company Non- related party 750,000.00 Within 1 year 4.49%
Total -- 9,440,000.00 -- 56.50%
(5) Account receivable from related parties
In RMB
Proportion in total other
Name of the company Relationship with the Company Amount
receivables (%)
Wuchan Minfeng (Tianjin)
Related party 670,000.00 4.01%
Chemical Trade Co., Ltd.
Total -- 670,000.00 4.01%
4. Payment in advance
(1) Payments in advance by aging
In RMB
Closing amount Opening amount
Age
Amount Proportion Amount Proportion
Within 1 year 62,315,227.15 92.15% 28,533,344.69 84.33%
1-2 years 105,000.00 0.16% 101,600.00 0.30%
2-3 years 5,201,365.53 7.69% 5,201,365.53 15.37%
Total 67,621,592.68 -- 33,836,310.22 --
Explanation for aging analysis of payments in advance:
(2) Top 5 of payments in advance
In RMB
Relationship with the
Name Amount Time Reason for unsettlement
Company
Chengde Great Wall Engineering amount paid
Non- related party 42,000,000.00 Within 1 year
Construction Group in advance
SABIC (Shanghai) Amount of goods paid in
Non- related party 16,709,916.31 Within 1 year
Trading Co., Ltd. advance
Amount of housing
Tianjin Jishang
Non- related party 5,201,365.53 2-3 years purchased paid in
Investment Co., Ltd.
advance
Chengde Yongwang
Engineering amount paid
Constructional Non- related party 1,900,000.00 Within 1 year
in advance
Engineering Co., Ltd.
Handan Hanyi
Engineering amount paid
Architectural Non- related party 500,000.00 Within 1 year
in advance
Engineering Co., Ltd.
Total -- 66,311,281.84 -- --
Explanation for major units paid in advance:
(3) Shareholders holding 5% (5% included) or above voting shares of the Company in
payments in advance during the reporting period
In RMB
Name Closing amount Opening amount
Bad debt amount Bad debt amount
Book balance Book balance
accrual accrual
(4) Explanation on account paid in advance
5. Inventory
(1) Classification
In RMB
Closing amount Opening amount
Item Depreciation Depreciation
Book balance Carrying value Book balance Carrying value
provision provision
Raw materials 736,985.37 -- 736,985.37 836,393.84 -- 836,393.84
Stock products 7,351,296.58 -- 7,351,296.58 15,270,790.02 -- 15,270,790.02
Revolving materials 18,498.40 -- 18,498.40 18,498.40 -- 18,498.40
Consumptive
2,613,775.70 -- 2,613,775.70 2,113,905.42 -- 2,113,905.42
biological assets
Development cost 239,513,564.50 -- 239,513,564.50 163,568,661.40 -- 163,568,661.40
Development
7,734,161.18 -- 7,734,161.18 7,642,776.18 -- 7,642,776.18
products
Development cost 181,547.08 -- 181,547.08 1,118,939.06 -- 1,118,939.06
Total 258,149,828.81 -- 258,149,828.81 190,569,964.32 -- 190,569,964.32
(2) Inventory impairment provision
In RMB
Decrease during this period
Opening book Provision for this
Kinds of inventories Closing book Closing book balance
balance period Reversal
balance
(3) Particular about inventory impairment provision
Proportion of the reversal
Accrual basis for inventory Reason for reversal during the amount during the year in the
Item
impairment provision period period-end balance of the
inventory (%)
Explanation on inventory
6. Other current assets
In RMB
Item Closing amount Opening amount
Overpaid VAT 1,318,700.52 3,362,445.37
Land VAT paid in advance 2,352,147.44 1,115,712.87
business tax in advance 3,366,245.67
Total 7,037,093.63 4,478,158.24
Explanation on other current assets
7. Investment for affiliated enterprise and joint ventures
In RMB
Equity Proportion of
Total operation
Invested proportion held voting rights in Total assets at Total liability Total net assets Net profit in
revenue in this
company by the invested period-end at period-end at period-end this period
period
Company (%) company (%)
I. Joint venture
II. Associated company
Wuchan
Minfeng
(Tianjin) 49.00% 49.00% 78,528,622.09 69,643,272.04 8,885,350.05 188,186,435.30 -178,934.54
Chemical
Trade Co., Ltd.
Runhua RW
(Tianjin)
Water-saving 31.75% 31.75% 12,915,253.15 5,911,480.25 7,003,772.90 5,083,107.74 119,935.75
Technology
Co., Ltd.
Explanation on major accounting policy and accounting estimation in joint venture and affiliated enterprises
difference from the policy and estimation of the Company:
8. Long-term equity investment
(1) Details of long-term equity investment
In RMB
Explanati
on on the
Proportio Impairme
Proportio incongruit
Balance Balance n of nt
Increase/d n of share y in share Impairme Cash
Invested Calculatio Investme at at voting provision
ecrease(+, holding in holding nt bonus this
company n method nt cost period-be period-en rights in of
-) invested proportio provision period
gin d invested accruing
company n and
company this year
voting
proportio
n in
invested
company
Wuchan
Minfeng
(Tianjin) 4,410,000 4,441,499 -87,677.9 4,353,821
Equity 49.00% 49.00% -- -- -- --
Chemical .00 .45 2 .53
Trade
Co., Ltd.
Runhua
RW
(Tianjin)
Water-sav 2,000,000 2,185,406 2,223,480
Equity 38,074.80 31.75% 31.75% -- -- -- --
ing .00 .04 .84
Technolo
gy Co.,
Ltd.
6,410,000 6,626,905 -49,603.1 6,577,302
Total -- -- -- -- - -- --
.00 .49 2 .37
(2) Limited ability for capital transfer to investment enterprise
In RMB
Long-term equity investment that has
un-recognized investment losses
limited ability of capital transfer to Restriction reasons
accumulative in period
investment enterprise
Explanation on long-term equity investment
(1) Wuchan Minfeng (Tianjin) Chemical Trade Co., Ltd had risen up the register capital of shareholders on 21 st
Dec. 2012, totaling RMB 9 million included, Shanxi Wuchan Minfeng Chemistry Co., Ltd invested RMB 4.59
million with ratio of 51%. Subordinate Runhua RW invested RMB 4.41 million with ratio of 49%.
(2) Runhua RW (Tianjin) Water-Saving Technology Co., Ltd obtained the corporation certificate on 14th Oct. 2011
with register capital of RMB 6.3 million included, Runhua RW Industrial Development invested RMB 3 million
with ratio of 47.619%. Subsidiary Runhua RW invested RMB 2 million with ratio of 31.746%. Langfang
Chunyuan Minor Watering Engineer Co., Ltd invested RMB one million with ratio of 15.873. Zhang Heping
invested RMB300,000 with ratio of 4.7619%.
9. Fixed assets
(1) Particular about fixed assets
In RMB
Book balance at Decrease in this Book balance at
Item Increase in this period
period-begin period period-end
I. total of book balance: 13,856,628.90 47,091.00 -- 13,903,719.90
Including: Houses and
8,095,437.08 -- -- 8,095,437.08
buildings
Machinery
1,208,815.43 -- -- 1,208,815.43
equipment
Transportation tools 3,836,318.14 -- -- 3,836,318.14
Other
716,058.25 47,091.00 -- 763,149.25
equipment
Book balance at Increase during Accrual in this Decrease in this Balance at
--
period-begin this period period period period-end
II. total of accumulated
2,560,275.29 -- 571,455.19 -- 3,131,730.48
depreciation:
Including: Houses and
1,230,506.40 -- 153,813.30 -- 1,384,319.70
buildings
Machinery
52,877.32 -- 60,044.82 -- 112,922.14
equipment
Transportation tools 1,073,148.07 -- 267,149.86 -- 1,340,297.93
Other
203,743.50 -- 90,447.21 -- 294,190.71
equipment
Book balance at Balance at
-- --
period-begin period-end
III. total net value of fixed
11,296,353.61 -- 10,771,989.42
assets
Including: Houses and
6,864,930.68 -- 6,711,117.38
buildings
Machinery
1,155,938.11 -- 1,095,893.29
equipment
Transportation tools 2,763,170.07 -- 2,496,020.21
Other
512,314.75 -- 468,958.54
equipment
Other
--
equipment
V. total book value of fixed
11,296,353.61 -- 10,771,989.42
assets
Including: Houses and
6,864,930.68 -- 6,711,117.38
buildings
Machinery
1,155,938.11 -- 1,095,893.29
equipment
Transportation tools 2,763,170.07 -- 2,496,020.21
Other
512,314.75 -- 468,958.54
equipment
Depreciation in this period amounting to 571,455.19 Yuan; original price transfer from construction in progress to
fixed assets amounting as Yuan
(2) Fixed assets leasing-out by operational lease
In RMB
Types Closing book value
Houses and buildings 1,208,512.05
(3) Fixed assets without property certificates
Item Reasons for un-completed certificate Times expected for certificate completed
Assets have released the mortgage,
Houses and buildings Un-estimated
ownership procedure still in process
Explanation on fixed assets:
Plants architecture was listed as mortgage for bank loan of previous Dixian Holding and its
bankrupt subsidiary. It had been transferred to the Company during restructure and bankruptcy
process. Though Hebei Chengde Intermediate Court issued the Note to Peoples Court to Assist
Execution to Chengde Housing Urban and Rural Construction Bureau, which required it to assist
transfer the housing right of architecture of No.000196 and No.000108 to the Company, various
involving departments engagement led delay of the transfer of relevant assets, still being in
process.
10. Productive biological assets
(1) Measured by cost
In RMB
Book balance at Book balance at
Item Increase in this period Decrease in this period
period-begin period-end
I. Plantation
II. Livestock
Layer 144,010.71 383,580.04 -- 527,590.75
Rural layer 114,179.63 63,346.25 -- 177,525.88
III. Forestry
IV. Marine industry
Total 258,190.34 446,926.29 -- 705,116.63
11. Intangible assets
(1) Particular about intangible assets
In RMB
Book balance at Book balance at
Item Increase in this period Decrease in this period
period-begin period-end
I. Total original book value 31,855,457.22 -- 6,400,126.17 25,455,331.05
Land Use Right 31,627,457.22 -- 6,400,126.17 25,227,331.05
Software 228,000.00 -- -- 228,000.00
II. Total accumulated
3,133,803.81 304,544.24 624,405.24 2,813,942.81
amortization
Land Use Right 2,990,803.81 281,744.24 624,405.24 2,648,142.81
Software 143,000.00 22,800.00 -- 165,800.00
III. Total net book value of
28,721,653.41 -304,544.24 5,775,720.93 22,641,388.24
intangible assets
Land Use Right 28,636,653.41 -281,744.24 5,775,720.93 22,573,918.86
Software 85,000.00 -22,800.00 -- 62,200.00
Land Use Right -- -- -- --
Software -- -- -- --
Total carrying amount of
28,721,653.41 -304,544.24 5,775,720.93 22,641,388.24
intangible assets
Land Use Right 28,636,653.41 -281,744.24 5,775,720.93 22,579,188.24
Software 85,000.00 -22,800.00 -- 62,200.00
The amount amortized in this period accounting as 304,544.24 Yuan
12. Goodwill
In RMB
Closing
Name of invested company or Increase during the Decrease during
Opening balance Closing balance impairment
items formed goodwill period this period
provision
Combined goodwill arising from
1,809,762.89 -- -- 1,809,762.89 --
subsidiary purchased
Total 1,809,762.89 -- -- 1,809,762.89 --
Explain the impairment testing method and withdrawal method for impairment provision of goodwill:
13. Long-term deferred expense
In RMB
Increase in this Amortization Reasons for other
Item Opening amount Other decrease Closing amount
period during this period decrease
Renovation costs 7,811,572.52 2,845,963.72 792,738.72 -- 9,864,797.52 --
Total 7,811,572.52 2,845,963.72 792,738.72 -- 9,864,797.52 --
Explanation on long-term deferred expense:
14. Deferred income tax assets and deferred income tax liabilities
(1) Net amount of deferred income tax assets and deferred income tax liabilities before
deduction
Deferred income tax assets and deferred income tax liability that recognized
In RMB
Item Closing amount Opening amount
Deferred income tax assets:
Assets depreciation reserves 834,239.22 834,223.19
Subtotal 834,239.22 834,223.19
Deferred income tax liability:
Details of un-recognized deferred income tax assets
In RMB
Item Closing amount Opening amount
Deductible temporary differences 72,254.02 72,254.02
Deductible losses 137,486,697.69 137,486,697.69
Total 137,558,951.71 137,558,951.71
The deductible losses of un-recognized deferred income tax assets are expired in the follow year:
In RMB
Year Closing amount Opening amount Note
2014 114,543,457.05 114,543,457.05 --
2015 -- -- --
2016 -- -- --
2017 22,943,240.64 22,943,240.64 --
Total 137,486,697.69 137,486,697.69 --
Details of taxable difference and deductible differences
In RMB
Amount of temporary differences
Item
Amount at period-end Amount at period-begin
Items of taxable differences
Item of deductible differences
(2) Net amount of deferred income tax assets and deferred income tax liabilities after
deduction
Item of deferred income tax assets and liability after mutual offset
In RMB
Deductible of Deductible of
Deferred income tax temporary Deferred income tax temporary
assets and liability differences of assets and liability differences of
Item
after mutual offset at payable taxes after after mutual offset at payable taxes after
period-end mutual offset at period-begin mutual offset at
period-end period-begin
Deferred income tax assets 834,239.22 -- 834,223.19 --
Details of deferred income tax assets and liability after mutual offset
In RMB
Item Current mutual offset amount
Explanation on deferred income tax assets and deferred income tax liability
15. Details of asset impairment provision
In RMB
Book balance at Increase in this Decrease in this period Book balance at
Item
period-begin period Reversal Written-off period-end
I. Bad debt reserve 3,415,314.19 -- -- -- 3,415,314.19
Total 3,415,314.19 -- -- -- 3,415,314.19
Explanation on asset impairment provision:
16. Note payable
In RMB
Type Closing amount Opening amount
Bank acceptance 19,500,000.00 26,000,000.00
Total 19,500,000.00 26,000,000.00
Amount expired in next accounting period: 0.00 Yuan
Explanation on note payable:
17. Account payables
(1) Account payables
In RMB
Item Closing amount Opening amount
Within 1 year 7,189,487.12 3,361,499.82
More than one year to two years 286,757.79 286,757.79
More than two years to three years 100.00 100.00
Over 3 years 12,273.55 12,273.55
Total 7,488,618.46 3,660,631.16
(2)Accounts payable to shareholders holding 5% (5% included) or above voting shares of the
Company
In RMB
Name Closing amount Opening amount
(3) Explanation on major account payable with over one year age:
Name Amount Reasons on unsettled Note
Chengde Licheng Construction and 281,157.79 Final payment of the project ---
Installation Work Co., Ltd.
18. Account received in advance
(1) Account received in advance
In RMB
Item Closing amount Opening amount
Within 1 year 153,840,376.73 53,821,113.16
More than one year to two years -- --
More than two years to three years -- --
Over 3 years -- --
Total 153,840,376.73 53,821,113.16
(2)Accounts received in advance to shareholders holding 5% (5% included) or above voting
shares of the Company
In RMB
Name Closing amount Opening amount
(3) Explanation on major account received in advance with over one year age:
19. Wages payable
In RMB
Book balance at Book balance at
Item Increase in this period Decrease in this period
period-begin period-end
I. Wage, bonus,
allowance and 76,950.00 3,688,450.07 3,507,838.07 257,562.00
subsidy
III. Social insurance
30,686.90 513,674.07 533,365.97 10,995.00
charge
Basic medical
20,424.20 145,564.20 152,437.40 13,551.00
insurance premium
Basic old-age
9,047.50 303,318.90 314,638.40 -2,272.00
insurance premiums
Unemployment
599.80 28,315.82 29,199.62 -284.00
insurance expense
Industrial injury
215.50 22,659.85 22,875.35 --
insurance premium
Birth insurance
399.90 13,815.30 14,215.20 --
premium
IV. Housing fund 133,913.00 136,013.00 -2,100.00
VI. Other 6,097,726.60 6,577.43 6,189.21 6,098,114.82
Total 6,205,363.50 4,342,614.57 4,183,406.25 6,364,571.82
No arrears in wages payable
Outlay for labor union and staff educational charge amounting as 0.00 Yuan; no non-monetary welfare and no
compensation for dismiss of labor relationship
The wages payable expected to pay and the amount for payment:
20. Tax payable
In RMB
Item Closing amount Opening amount
VAT -267,225.23 132,688.59
Business tax -3,366,245.67 67,762.28
Enterprise income tax 3,953,440.14 12,078,983.62
Personal income tax 777.65 35,510.93
City maintenance and construction tax -168,161.67 19,182.58
Land appreciation tax 2,993,193.91 2,753,192.71
Educational surcharge -100,903.50 7,871.26
Stamp tax 109,390.35 34,936.86
Local educational surcharge -67,307.42 5,247.55
Property tax 2,888,250.17 2,888,250.17
Embankment protection fees 1.56 3,278.03
Other 3,425.71
Total 5,978,636.00 18,026,904.58
Explanation on tax payable: if the local taxation bureau agrees mutual adjustment between vary branches and
plants, explain taxation calculation:
21. Other payables
(1) Other payables
In RMB
Item Closing amount Opening amount
Within 1 year 30,025,895.72 35,447,066.13
More than one year to two years 119,168.49 119,168.49
More than two years to three years 47,779.91 47,779.91
Over 3 years 430,969.17 430,969.17
Total 30,623,813.29 36,044,983.70
(2) Others payable due to shareholders units holding over 5% (5% included) voting shares
of the Company
In RMB
Name Closing amount Opening amount
(3) Explanation on other account payable with over one year age
(4) Explanation on unit of major connected amount for other account payable
Name Amount Nature or content
Wuchan Minfeng (Tianjin) Chemical Trade 17,500,000.00 Current amount
Co., Ltd.
Shanxi Zhuozhong Trade Co., Ltd. 1,319,199.72 Futures investment amount agent
Chengde Chengjin Commerc & Trade Co., 800,000.00 Current amount
Ltd.
Chengde Yongwang Construction 518,593.95 Quality assurance of engineering
Engineering Co., Ltd.
Da Hua CPA 250,000.00 Auditing fee
22. Share capital
In RMB
Increased (decreased) in this year
Opening Shares Closing
New shares
amount Bonus shares converted from Other Sub-total amount
issued
public reserve
Total shares 706,320,000.00 -- -- -- -- -- 706,320,000.00
Explanation on share capital changes, if there has capital increase/decrease in reporting period, disclosed the CPAs
name and verification documents; for company limited within 3 years operation, explain the net assets before
establishment; for those company limited changed from limited liability company, explain the verification
condition while established.
23. Capital reserves
In RMB
Item Opening amount Increase in this period Decrease in this period Closing amount
Capital premium (share
390,597,031.55 -- -- 390,597,031.55
premium)
Other capital reserves 65,873,219.23 -- -- 65,873,219.23
Total 456,470,250.78 -- -- 456,470,250.78
Explanation on capital reserve
24. Surplus reserves
In RMB
Item Opening amount Increase in this period Decrease in this period Closing amount
Statutory surplus reserves 76,791,550.17 -- -- 76,791,550.17
Total 76,791,550.17 -- -- 76,791,550.17
Explanation on surplus reserve, if share capital converted from surplus reserve, remedy deficit and dividend
distributed, explain relevant resolutions:
25. Retained profits
In RMB
Withdrawal or allocation
Item Amount
ratio
Retained profits at the end of last year before
-1,029,880,318.18 --
adjustment
Retained profits at the beginning of the year after
-1,029,880,318.18 --
adjustment
Add: The net profits belong to owners of patent
19,331,154.91 --
company of this period
Retained profits at the end of the period -1,010,549,163.27 --
Details about adjusting the retained profits at the beginning of the year:
1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new regulations
affect the undistributed profits at the beginning of the year amounting to 0 Yuan.
2) The changes in accounting policies affect the undistributed profits at the beginning of the year amounting to 0
Yuan.
3) The major accounting error correction affects the undistributed profits at the beginning of the year amounting to
0 Yuan.
4) Merge scope changes caused by the same control affect the undistributed profits at the beginning of the year
amounting to 0 Yuan.
5) Other adjustments affect the undistributed profits at the beginning of the year amounting to 0 Yuan.
The undistributed profits explain that the company initial public offering bonds should clearly state if the
accumulated profits are decided to be shared by old and new shareholders by general meeting of stockholders
before issuing; while the company should clearly disclose that the profits in the dividends payable belong to old
shareholders after auditing if the general meeting of stockholders decides the accumulated profits are allocated and
shared by old shareholders before issuing
26. Operating income and cost
(1) Operating income and cost
In RMB
Item Amount of this period Amount of last period
Main operating income 216,029,370.47 16,572,925.76
Other operating income 803,045.62 245,752.28
Operating cost 218,143,237.30 12,003,739.65
(2) Main business (By industries)
In RMB
Amount of this period Amount of last period
Industry
Operating income Operating cost Operating income Operating cost
Agriculture 2,094,025.07 3,148,746.79 -- --
Business 213,935,345.40 214,526,444.89 -- --
Real estate -- -- 16,572,925.76 11,839,675.80
Total 216,029,370.47 217,675,191.68 16,572,925.76 11,839,675.80
(3) Main business (By products)
In RMB
Amount of this period Amount of last period
Products
Operating income Operating cost Operating income Operating cost
Agricultural products 2,094,025.07 3,148,746.79 -- --
Chemical materials 213,935,345.40 214,526,444.89 -- --
Real estate sales -- -- 16,572,925.76 11,839,675.80
Total 216,029,370.47 217,675,191.68 16,572,925.76 11,839,675.80
(4) Main business (By districts)
In RMB
Amount of this period Amount of last period
District
Operating income Operating cost Operating income Operating cost
Chengde 2,094,025.07 3,148,746.79 16,572,925.76 11,839,675.80
Tianjin 213,935,345.40 214,526,444.89 -- --
Total 216,029,370.47 217,675,191.68 16,572,925.76 11,839,675.80
(5) The operating income of the top five customers of the Company
In RMB
Customer name Primary business income The percentage in all operating income of the Company
Wuchan Minfeng (Tianjin)
121,847,191.24 56.19%
Chemical Trade Co., Ltd.
Beijing Bo Lu Jing Hua
8,362,179.49 3.86%
Technology Co., Ltd.
Guangdong Huarunfeng
5,698,777.72 2.63%
Investment Co., Ltd.
Yuanda Petrifaction Co., Ltd. 3,941,025.64 1.82%
Hebei Zhonglian Plastic
Technology Development Co., 2,655,410.26 1.22%
Ltd.
Total 142,504,584.35 65.72%
Explanation on operating income
27. Business tax and surcharges
In RMB
Item Amount of this period Amount of last period Calculating and payment standards
Business tax 157,927.92 828,646.28 5%
City maintenance and construction
6,991.68 41,432.31 5%
tax
Educational surtax 6,991.67 41,432.31 3%, 2%
Land VAT 63,603.66 Progressive rates
Total 235,514.93 911,510.90 --
Explanation on business tax and surcharges
28. Sales expense
In RMB
Item Amount of this period Amount of last period
Transport charge 1,056,036.04 --
Lump sum 192,222.35 --
工资 Salary 143,778.73 --
Production costs of panel model 125,142.00 --
Agency fee 59,528.49 --
Printing costs 16,388.00 --
Repair charge 11,761.02 --
Advertising fees 4,200.00 --
Storage fee 4,284.45 --
Other 132,925.70 --
Total 1,746,266.78 --
29. Administration expenses
In RMB
Item Amount of this period Amount of last period
Wages 2,578,207.47 1,402,682.26
Tenure tax 1,620,097.64 1,282,051.08
Business entertainment 847,398.76 1,080,986.77
Business-travel expense 691,122.01 391,394.40
Welfare expenses 478,858.62 229,856.80
Interabettor agency 632,223.81 1,238,637.12
Office allowance 602,910.60 276,619.94
Depreciation 453,503.99 607,310.45
Amortization of intangible assets 304,544.24 326,314.56
Material consumption 163,047.65 147,581.18
Amortization of low value consumables 154,716.43 171,033.00
Repair charge 117,343.98 46,786.30
Basic pension 262,718.49 113,883.60
Medical insurance 136,350.88 50,954.70
Employment injury insurance 16,230.25 8,586.60
Unemployment insurance 23,031.82 10,938.36
Maternity insurance 12,975.30 5,334.18
Housing fund 110,717.00 69,602.16
Utilities 83,333.06 113,155.90
Stamp duty 239,314.26 161,159.40
Long-term deferred expenses 39,648.00 39,648.00
Insurance expenses 35,798.47 11,618.94
Property tax 9,576.08 4,488.04
Advertising fee 8,930.00 --
Union due 6,577.43 1,441.78
Vehicle and vessel use tax 6,280.00 4,120.00
Organization costs -- 30,580.00
Travelling expenses -- 21,983.00
Other 556,971.62 150,428.54
Total 10,192,427.86 7,999,177.06
30. Financial expenses
In RMB
Item Amount of this period Amount of last period
Interest expenses 730,671.89
Interest income -152,529.12 -313,277.34
Profit/loss on exchange 25,975.42 --
Other 93,778.58 10,628.12
Total -32,775.12 428,022.67
31. Investment income
(1) Particulars about investment income
In RMB
Item Amount of this period Amount of last period
Long-term equity investment income calculated on
-49,603.12 --
equity method
Other 171,000.00 77,868.49
Total 121,396.88 77,868.49
32. Asset impairment loss
In RMB
Item Amount of this period Amount of last period
I. Bad debt loss -- -1,447,846.06
Total -- -1,447,846.06
33. Non-operating income
(1) Non-operating income
In RMB
Amount reckoned into
Item Amount of this period Amount of last period current non-recurring
gains/losses
Total income from disposal of non-current
34,647,779.07 94,211,992.12 34,647,779.07
assets
Including: income from disposal of fixed
-- 26,348,307.45 --
assets
Income from disposal of intangible
34,647,779.07 67,863,684.67 34,647,779.07
assets
Other 189,689.31 23,514.89 189,689.31
Total 34,837,468.38 94,235,507.01 34,837,468.38
Explanation on non-operating income
In accordance with Chengde Peoples Governments specialized note [2013] No.12 and county governments note
[2012] No.59, we transferred lands of CXGY(2012)Z NO.31 and CXGY(2013)Z NO.33 and got gains from
disposal of non-circulating assets RMB34,647,779.07.
34. Non-operating expenditure
In RMB
Amount reckoned into
Item Amount of this period Amount of last period current non-recurring
gains/losses
Donating 1,000,000.00 -- 1,000,000.00
Other 3,304,076.70 283,931.85 3,304,076.70
Total 4,304,076.70 283,931.85 4,304,076.70
Explanation on non-operating expenditure
On 4 May 2014, with purpose of implementing social responsibility and charitable giving, the Company donated
one million Yuan to Nanjiang Education Fund of Chengde Education Bureau, donations are used to support the
poverty-stricken students with good character as well as the excellent teachers
35. Income tax expense
In RMB
Item Amount of this period Amount of last period
Current income tax calculated by tax laws and relevant
-23,637.85 4,944,803.47
regulations
Total -23,637.85 4,944,803.47
36. Calculation of basic earnings per share and diluted earnings per share
The earning per share calculated in line with the No.9-Specific Provisions on Information
Disclosure for Companies Offering Their Securiteis to the Public -Calcualtion and Disclosure on
ROE and EPS ( 2010 Revise) (CSRC Annoucement No. [2010] No.2) and Explanatory
Annoucement No.1 on Information Disclosure for Companies Offering Their Securiteis to the
Public – Extraordinary Profit and Loss (2008) (CSRC Annoucement No. [2008] No.43) are as:
1. Calculation results
Current profit Current Period Last Period
Basic EPS Diluted EPS Basic EPS Diluted EPS
Net profits belong to common stock 0.03 0.03 0.12 0.12
stockholders of the Company (I)
Net profits belong to common stock -0.02 -0.02 -0.01 -0.01
stockholders of the Company after duducted
non-recurring gains/losses (II)
2. Calculation of EPS
Item Serial Current period Last period
Net profit attributable to ordinary shareholders of the Company 1 19,331,154.91 86,021,262.29
Non-recurring gains/losses attributable to ordinary shareholder of parent 2 30,533,391.68 93,951,575.16
company after deducted income tax impact
Net profit attributable to ordinary shareholders of the Company after 3=1-2 -7,930,312.87
deducted non-recurring gains/losses -11,202,236.77
Total shares amount at period-begin 4 706,320,000.00 706,320,000.00
Number of increased shares due to reserves conversion into share capital 5 --- ---
or distribution of dividends in Period
Number of increased shares due to issue of new shares or debt-to-equity 6 --- ---
in Period
Number of months from next month with shares increased due to new 7 --- ---
shares offering or debt-to-equity swap to end of the reporting period
Number of decreased shares due to repurchase in Period 8 --- ---
Number of accumulated months from the next month of shares decrease 9 --- ---
to the end of the reporting period
Number of contraction of shares in the reporting period 10 --- ---
Number of months in the reporting period 11 6 6
The weighted average number of ordinary shares outstanding (II) 12=4+5+6×7÷11-8 706,320,000.00 706,320,000.00
×9÷11-10
Weighted average of outstanding ordinary shares that adjsuted due to 13 706,320,000.00 706,320,000.00
enterprise combined under the same control (I) Note: (directly entered the
amount of previous line if no need to adjsuted)
Basic EPS (I) 14=1÷13 0.12
0.03
Basic EPS (II) 15=3÷12 -0.01
-0.02
Interest of dilutive potential ordinary share with expenses recognized and 16 --- ---
other influence factors
Income tax rate 17 --- ---
Conversion charge 18 --- ---
Number of shares increased due to conversion or exercise from 19 --- ---
convertible bonds, warrant and stock option etc.
Diluted EPS (I) 20=[1+(16-18)×(1 0.12
00%-17)]÷(13+19) 0.03
Diluted EPS (II) 21=[3+(16-18)×(1 -0.01
00%-17)]÷(12+19) -0.02
37. Notes to statement of cash flow
(1) Other cash received in relation to operation activities
In RMB
Item Amount
Accounts current 51,648,801.00
Interest income 152,529.12
Other 830,948.54
Total 52,632,278.66
Explanation on other cash received in relation to operation activities
(2) Other cash paid in relation to operation activities
In RMB
Item Amount
Disbursement costs 7,884,655.36
Donation costs 1,000,000.00
Accounts current 160,000.00
Other 3,594,655.98
Total 12,639,311.34
Explanation on other cash paid in relation to operation activities
(3) Cash received from other investment activities
In RMB
Item Amount
Margin of bank paper collected 2,600,000.00
Total 2,600,000.00
Explanation on cash received from other investment activities
(4) Cash paid related with other financing activities
In RMB
Item Amount
Margin of housing mortgage loan paid 51,500.00
Total 51,500.00
Explanation on cash paid related with other financing activities
38. Supplementary information to statement of cash flow
(1) Supplementary information to statement of cash flow
In RMB
Supplementary information Amount in this period Amount in last period
1. Net profit adjusted to cash flow of operation activities: -- --
Net profit 17,226,186.78 86,008,714.00
Add: assets impairment losses -1,447,846.06
Depreciation of fixed assets, consumption of oil assets and
1,165,311.98 653,935.37
depreciation of productive biology assets
Amortization of intangible assets 304,544.24 326,314.56
Amortization of long-term deferred expenses 792,738.72 119,824.21
Loss from disposal of fixed assets, intangible assets and
-34,754,036.24 -94,211,992.12
other long-term assets(gain is listed with “-”)
Financial expenses (gain is listed with “-”) 729,196.33
Investment losses(gain is listed with “-”) -121,396.88 -77,868.49
Decrease of inventory (increase is listed with “-”) -67,579,864.49 -157,683,244.61
Decrease of operating receivable accounts (increase is listed
19,683,358.07 4,903,207.58
with “-”)
Increase of operating payable accounts (decrease is listed
23,443,944.64 -1,894,819.49
with “-”)
Net cash flow arising from operating activities -39,839,229.21 -162,574,578.72
2. Material investment and financing not involved in cash -- --
flow
3. Net change of cash and cash equivalents: -- --
Balance of cash at period end 69,337,245.87 84,048,144.21
Less: Balance of cash equivalent at year-begin 77,981,488.06 81,546,046.87
Net increase of cash and cash equivalents -8,644,242.19 2,502,097.34
(2) Constitution of cash and cash equivalent:
In RMB
Item Closing amount Opening amount
I. Cash 69,337,245.87 77,981,488.06
Including: stock cash 234,434.02 19,146.58
Bank deposit available for payment at any time 69,102,811.85 77,962,341.48
Ⅲ. Balance of cash and cash equivalent at year-end 69,337,245.87 77,981,488.06
Explanation on constitution of cash and cash equivalent:
VIII. Related Parties and Transactions
1. Parent company of the Company
Proportion Proportion
Final
Legal of shares of voting
Parent Relationsh Registratio Business Registered controller Organizati
Nature representat held to the right to the
company ip n place nature capital of the on code
ive Company Company
Company
(%) (%)
Explanation on parent company of the enterprise
The Company has no parent company, actral controller of the Company also is the largest shaerhodler of the
Company –Mr. Wang Dong, he holds 29.49 percent shares of the Company.
2. Subsidiary of the Company
Subsidiary Legal Proportion Proportion
Registration Business Registered Organizatio
of the Type Nature representati of shares of voting
place nature capital n code
Company ve held (%) right (%)
Real Estate
Nanjiang Holding Limited Chengde Zhao 10 million
developmen 100.00% 100.00% 68434235-0
Real Estate subsidiary liability City Yongsheng Yuan
t
Holding Limited Shi Internationa 30 million
Runhua RW Tianjin 30.00% 53.43% 67941456-7
subsidiary liability Xiangkun l trading Yuan
Asia Holding Limited Internationa US$ 20
H.K. --- 100.00% 100.00% ---
Investment subsidiary liability l investment million
Production
Morsh Holding Limited Chengde Zhao 50 million
and sales of 90.00% 90.00% 06335124-6
Technology subsidiary liability City Yongsheng Yuan
grapheme
Huijing Holding Limited Chengde Zhao Property 0.5 million 100.00% 100.00% 08269716-2
Property subsidiary liability City Yongsheng managemen Yuan
t
Xingye
Papermakin Holding Limited Chengde Wang Paper-maki US$ 250
100.00% 100.00% 60125211-5
g -making subsidiary liability City Shuxian ng million
industry
Ecological Holding Limited Chengde Zhao Stock 10 million
100.00% 100.00% 05549562-9
Agriculture subsidiary liability City Yongsheng farming Yuan
Nanjiang Holding Limited Chengde Zhao 90 million
Industrial 100.00% 100.00% 05545532-8
Investment subsidiary liability City Yongsheng Yuan
3. Details of joint-venture and affiliated enterprise of the Company
Proportion
Equity
of voting
Invested Register Business Register proportion Relationshi Organizatio
Type Legal rep. rights in
company place nature capital held by the p n code
invested
Company
company
I. Joint venture
II. Associated company
Wuchan Internationa
Minfeng l trading,
(Tianjin) Zhao developmen 9,000,000.0
Commerce Tianjin City 49.00% 49.00% Y 05874083-7
Chemical Guomin t and 0
Trade Co., transfer of
Ltd. technology
Runhua RW
(Tianjin) Developme
Water-savin Shi nt and 6,300,000.0
Industry Tianjin City 31.75% 31.75% Y 58327621-9
g Xiangkun transfer of 0
Technology technology
Co., Ltd.
4. Particulars about other related parties
Other related parties Relationship with the Company Organization code
Beijing Xiangeqing Group Co., Ltd. Associated corporate 1772721-5
Explanation on other related parties:
5. Related transaction
(1) Statement of commodity purchased and labor service received
In RMB
Amount of this period Amount of last period
Pricing way and
Ratio in Ratio in
Related party Content decision making
Amount similar Amount similar
procedures
transactions transactions
Wuchan Minfeng
(Tianjin) Chemical Agent of import goods Market price 9,827,322.60 3.80% -- --
Trade Co., Ltd.
Statement of commodity sales and labor service provided
In RMB
Amount of this period Amount of last period
Pricing way and
Ratio in Ratio in
Related party Content decision making
Amount similar Amount similar
procedures
transactions transactions
Wuchan Minfeng
(Tianjin) Chemical Sales of goods Market price 121,847,191.24 56.19% -- --
Trade Co., Ltd.
Beijing Xiangeqing
Sales of goods Market price 679,276.00 28.92% -- --
Co., Ltd.
(2) Related trusteeship/contract
Statement of trusteeship/contract
In RMB
Pricing basis of
Earnings
Trustee/contracto earnings from
Client/contractee Assets type Start date Expiry date recognized in
r trusteeship/contra
Period
ct
Statement of delegated management /package
In RMB
Trustee fee and
Pricing basis of
Trustee/contracto contract fee
Client/contractee Assets type Start date Expiry date trustee fee/
r recognized in
contract fee
Period
Explanation on related trusteeship/contract
(3) Related leasing
Statement of rent out
In RMB
Leasing earnings
Pricing basis of
Lessor Lessee Assets type Start date Expiry date recognized in
leasing earnings
Period
Statement of accepting leases
In RMB
Pricing basis of Rent recognized
Lessor Lessee Assets type Start date Expiry date
rent in Period
Explanation on related leasing
(4) Related guarantee
In RMB
Whether the
Guarantor Secured party Guarantee amount Start date Expiry date guarantee
implemented or not
Runhua RW Runhua Rural Water
Industrial (Tianjin)
20,000,000.00 2013-10-24 2014-10-24 No
Development Co., International Trade
Ltd. Co., Ltd.
Runhua Rural Water
(Tianjin)
Lan Chunhong 22,000,000.00 2013-10-24 2014-10-24 No
International Trade
Co., Ltd.
Explanation on related guarantee
(1) On 17th of Oct. 2012, Binhai New District branch of China CITIC Bank Corporation Limited credited the
Company RMB 20 million (contract code: 2013JYZBZ NO.BS0956, duration: 24th of Oct. 2013 to 24th of Oct.
2014). Runhua RW Industrial Development Company guaranteed for the Company a series of debts rising from the
above credit (including but not limited to various borrowings, notes, guarantees, letters of credit etc. businesses).
(2) On 21st of Oct. 2013, Binhai New District branch of China CITIC Bank Corporation Limited credited the
Company RMB 22 million (contract code: 2013JYZBZ NO. BS0956-1, duration: 24th of Oct. 2013 to 24th of Oct.
2014). The second-largest shareholder Lan Chunhong guaranteed for the Company a series of debts rising from the
above credit (including but not limited to various borrowings, notes, guarantees, letters of credit etc. businesses).
(5) Borrowed funds from related party
In RMB
Related party Borrowing amount Start date Expiry date Note
Inter-bank borrowing
Lending transaction
(6) Assets transfer, debt restructure of related party
In RMB
Amount of this period Amount of last period
Ratio in Ratio in
Related
Transaction type Content Pricing principle similar similar
party Amount Amount
transactio transactio
ns ns
(7) Other related transactions
6. Account receivable/payable for related parties
Account receivable from related parties
In RMB
Period-end Period-begin
Item Related party
Book balance Bad debt reserve Book balance Bad debt reserve
Wuchan Minfeng
Other receivables (Tianjin) Chemical 670,000.00 -- 670,000.00 --
Trade Co., Ltd.
Wuchan Minfeng
Payment advance (Tianjin) Chemical 15,518.38 -- 1,945,944.00 --
Trade Co., Ltd.
Beijing Xiangeqing
Accounts receivables 738,676.00 -- -- --
Co., Ltd.
Account payable for related parties
In RMB
Item Related party Amount at period-end Amount at period-begin
Wuchan Minfeng (Tianjin)
Other account payable 17,500,000.00 31,000,000.00
Chemical Trade Co., Ltd.
IX. Contingency
1. Contingent liability and its financial influence formed by un-settle lawsuits or arbitration
2. Contingent liability and its financial influence formed from debt guarantee offered to
other units
Other contingent liability and its financial influence
X. Commitments
1. Material commitments
2. Commitments made previously
XI. Subsequent events of balance sheet
1. Explanation on major event after balance sheet date
In RMB
Impact amount on financial Reasons of impact amount
Item Content
status and operation results unable to estimated
2. Profit distribution after balance sheet date
In RMB
3. Other explanation after balance sheet date
On 5 August 2014, the Ludian Couty, Shaotong City, Yunnan Province suffered a 6.5 magnitude earthquake. In
aspect of the attention and support for the stricken brothers, being discussion by the management of the Company,
the Company donated 500,000 Yuan to the disaster area via the disaster relief donation account of Civil Affairs
Bureau of Chengde Couty, Hubei Province.
XII. Other major event
1. Other
(1) Due to that Nanjiang Holding didnt reported an accounting error which was supposed to be disclosed before
2012, until the 2012 annual financial report. Securities Authority decided to investigate Dalu Holding for this issue.
The case is that: on 6th of April 2012, original shareholder of the Company Chen Rong and Wang Dong signed
equity transfer agreement which demonstrated that Chen Rong transferred his 208,324,800 of shares holding from
Nanjiang Holding with ratio of 29.49% in the overall capital to Mr. Wang Dong. Nanjiang Holding recognized the
managing level. The new management revised the pervious accounting errors. Since previous management and
shareholders had left Nanjiang Holding and errors had been disclosed, the investigation may not cause influential
to Nanjiang Holding.
(2) On 18th of May 2014, in accordance with Chengde Peoples Government Special note [2014] No. 10, County
Government withdrew the actual land of 26.0464 acres with number of CXGY2013 NO.019 which was owned by
subsidiary Rongyida without charge, allocating it to County Cultural and Sport & TV and Broadcast Bureau for
cultural and sport activities center. Book value of this land was RMB821, 343.02.
(3) On 9th of Apr. 2014, Mosh Technology bided the use right for national construction land with number of
CXTGZ [2014] NO.03 during a listing activity held by Chengde National Land Bureau. This land was located in
Liugou Toan, Beishuiquan and Pingtai Village, with area of 35953.42 sqm, for purpose of industry, charged at
RMB 6,480,000.
XIII. Principle notes of financial statements of parent company
1. Accounts receivable
(1) Accounts receivable
In RMB
Amount at period-end Amount at period-begin
Book balance Bad debt reserve Book balance Bad debt reserve
Type
Propo Proporti Proporti Proporti
Amount Amount Amount Amount
rtion on on on
Receivable of bad debt provision withdrawal by combination
100.0
Age combination 120,000.00 -- -- -- -- -- --
0%
100.0
Subtotal of group 120,000.00 -- -- -- -- -- --
0%
Total 120,000.00 -- -- -- -- -- -- --
Explanation on types of accounts receivable:
account receivable with single significant amount and withdrawal bad debt provision separately at period-end
□ Applicable √ Not-applicable
In combination, accounts whose bad debts provision was accrued by age analysis: accounts receivable
□ Applicable √ Not-applicable
In combination, withdrawal proportion of bad debt provision based on balance proportion: accounts receivable
□ Applicable √ Not-applicable
In combination, withdrawal proportion of bad debt provision based on other methods: accounts receivable
□ Applicable √ Not-applicable
Account receivable with minor single amount but with withdrawal bad debt provision for single item at period-end
□ Applicable √ Not-applicable
(2) account receivables due from the shareholders holding 5% (5% included) or above
voting shares of the Company during the reporting period
In RMB
Amount at period-end Amount at period-begin
Name Bad debt amount Bad debt amount
Book balance Book balance
accrual accrual
2. Other accounts receivable
(1) Other accounts receivable
In RMB
Amount at period-end Amount at period-begin
Book balance Bad debt reserve Book balance Bad debt reserve
Type
Propo Propo Propo Propo
Amount Amount Amount Amount
rtion rtion rtion rtion
Other receivable of bad debt provision withdrawal by combination
99.68 82.06
Age combination 21,712,832.37 4,000.00 5.41% 320,143.39 4,000.00 5.41%
% %
99.68 82.06
Subtotal of group 21,712,832.37 4,000.00 5.41% 320,143.39 4,000.00 5.41%
% %
Other account receivable
with minor single amount 94.59 17.94 94.59
70,000.00 0.32% 70,000.00 70,000.00 70,000.00
but withdrawal bad debt % % %
reserves on a single basis
Total 21,782,832.37 -- 74,000.00 -- 390,143.39 -- 74,000.00 --
Explanation on types of other accounts receivable:
Other account receivable with single significant amount and withdrawal bad debt provision separately at
period-end
□ Applicable √ Not-applicable
In combination, accounts whose bad debts provision was accrued by age analysis: other accounts receivable
√ Applicable □ Not-applicable
In RMB
Amount at period-end Amount at period-begin
Book balance Book balance
Age
Proporti Bad debt reserve Proporti Bad debt reserve
Amount Amount
on on
Within 1 year
Including: -- -- -- -- -- --
21,692,832.37 99.91% -- 300,143.39 93.75% --
Subtotal of
21,692,832.37 99.91% -- 300,143.39 93.75% --
within 1 year
1-2 years 20,000.00 0.09% 4,000.00 20,000.00 6.25% 4,000.00
Total 21,712,832.37 -- 4,000.00 320,143.39 -- 4,000.00
In combination, withdrawal proportion of bad debt provision based on balance proportion: other accounts
receivable
□ Applicable √ Not-applicable
In combination, withdrawal proportion of bad debt provision based on other methods: other accounts receivable
□ Applicable √ Not-applicable
Other account receivable with minor single amount but with withdrawal bad debt provision for single item at
period-end
√ Applicable □ Not-applicable
In RMB
Other receivables Book balance Bad debt amount Accrual proportion Reasons
Estimated unable to
Yan Qizhong 70,000.00 70,000.00 100.00%
collected
Total 70,000.00 70,000.00 -- --
(2) Other account receivables due from the shareholders holding 5% (5% included) or above
voting shares of the Company during the reporting period
In RMB
Amount at period-end Amount at period-begin
Name Bad debt amount Bad debt amount
Book balance Book balance
accrual accrual
(3) Nature or content of other receivables with significant amount
(4) Top 5 other account receivable
In RMB
Relationship with the Proportion in total other
Name Amount Terms
Company account receivables
Chengde Nanjiang
Wholly-owned 10,137,776.70 Within 1 year 46.54%
Investment Co., Ltd.
Department of housing
and urban & rural
No relationship 3,420,000.00 Within 1 year 15.70%
planning bureau of
county
Chengde Nanjiang
Ecological Agriculture Wholly-owned 2,811,705.38 Within 1 year 12.91%
Co., Ltd.
Great Wall Group
No relationship 1,970,000.00 Within 1 year 9.04%
Company
Chengde Morsh
Controlling of subsidiary 1,040,310.00 Within 1 year 4.78%
Technology Co., Ltd.
Total -- 19,379,792.08 -- 88.97%
(5) Other account receivables due from related parties
In RMB
Proportion in total other account
Name Relationship with the Company Amount
receivables
Chengde Nanjiang Investment
Wholly-owned 10,137,776.70 46.54%
Co., Ltd.
Chengde Nanjiang Ecological
Wholly-owned 2,811,705.38 12.91%
Agriculture Co., Ltd.
Chengde Morsh Technology
Controlling of subsidiary 1,040,310.00 4.78%
Co., Ltd.
Total -- 13,989,792.08 64.23%
3. Long-term equity investment
In RMB
Incre
Countin
ase g and
Balance Description of Prov drawing Cash
Share
Calcul and Vote inconformity of dividen
Company ating at Balance at holding percentage share holding ision impairm ds at
investmen decre percentage ent
name method period-end in invested in invested percentage and vote reser reserves the
t costs period-be
s ase units percentage in current
gin units ve at the
invested units period
chang current
period
es
Nanjiang
53,114,29 53,114,29 53,114,29
Real Estate Cost -- 100.00% 100.00% -- -- -- --
9.73 9.73 9.73
Company
Nanjiang 90,000,00 90,000,00 90,000,00
Cost -- 100.00% 100.00% -- -- -- --
Investment 0.00 0.00 0.00
626,
Xingye
626,567,3 626,567,3 626,567,3 567,
Papermakin Cost -- 100.00% 100.00% -- -- --
28.03 28.03 28.03 328.
g making
03
Runhua 9,170,370 9,170,370 9,170,370.
Cost -- 30.00% 53.43% -- -- -- --
Rural Water .00 .00 00
5,000
ASIA 5,000,166 5,000,166.
Cost ,166. 100.00% 100.00% -- -- -- --
Investment .64 64
64
626,
5,000
783,852,1 778,851,9 783,852,1 567,
Total -- ,166. -- -- -- -- --
64.40 97.76 64.40 328.
64
03
Explanation on long-term equity investment
On 25th of June 2013, Nanjiang Holding purchased RMB 9 million shares from Runhua RW, 30% of its whole
shares, becoming the largest shareholder. All shareholders of Runhua RW approved to recognize the board of
directors. 3 out of 5 directors came from Nanjiang Holding. The second largest shareholder Lan Chunhong who
held RMB 7.03 million shares from Runhua RW with ratio of 23.43% reached concerted action agreement with
Nanjiang Holding. Lan Chunhong transferred part of her rights of shares to Nanjiang Holding (expect the dividend
and right to transfer). Hence, Nanjiang Holding held 53.43% shares of voting and decision rights from Runhua
RW.
4. Operating income and cost
(1) Operating income
In RMB
Item Amount of this period Amount of last period
Other operating income 4,068,045.62 20,183.93
Total 4,068,045.62 20,183.93
Operating cost 468,045.62 16,666.64
(2) Main business (by industry)
In RMB
Amount of this period Amount of last period
Industry
Operating income Operating cost Operating income Operating cost
(3) Main business (by product)
In RMB
Amount of this period Amount of last period
Product
Operating income Operating cost Operating income Operating cost
(4) Main business (by districts)
In RMB
Amount of this period Amount of last period
Districts
Operating income Operating cost Operating income Operating cost
(5) The operating income of the top five customers of the Company
In RMB
The percentage in all
Customer name Primary business income operating income of the
Company
Nanjiang Real Estate Company 3,600,000.00 88.49%
Total 3,600,000.00 88.49%
Explanation on operating income
5. Supplementary information of cash flow statement
In RMB
Supplementary information Amount of this period Amount of last period
1. Adjust the net profits to be cash flow for operating activities -- --
Net profits 28,322,194.53 -3,714,281.91
Fixed assets depreciation, oil-and-gas assets loss , productive living
78,358.57 47,579.39
beings depreciation
Intangible assets amortization 134,121.30 212,171.58
losses from handling fixed assets, intangible assets and assets(profits
-34,647,779.07 --
fill with “-“ )
Financial costs(profits fill with “-“ ) 352,000.00 --
Stock decreases(increases fill with “-“ ) -75,944,903.10 -157,612,750.00
Operating receivables decrease(increases fill with “-“ ) -30,774,912.28 81,940.97
Operating payables increase(decreases fill with “-“ ) 76,020,069.33 43,844,277.81
Net cash flow generated by operating activities -36,460,850.72 -117,141,062.16
2. Significant investment financial activities not involving and cash -- --
deposit and withdrawal
3. Net changes of cash and cash equivalents -- --
Ending balance of cash 27,638,033.46 1,077,832.54
Less: opening balance of cash equivalents 5,681,141.82 777,456.70
Net increase of cash and cash equivalents 21,956,891.64 300,375.84
XIV. Supplementary Information
1. Current non-recurring gains/losses
In RMB
Item Amount Note
Gains/losses from the disposal of non-current asset (including the
34,647,779.07 --
write-off that accrued for impairment of assets)
Other non-operating income and expenditure except for the
-4,114,387.39 --
aforementioned items
Total 30,533,391.68 --
Explain recognition reasons item-by-item if the government subsidy reckoned into current gains/losses was the
recurring gains/losses
□ Applicable √ Not-applicable
2. ROE and EPS
In RMB
EPS
Profit in the Period Weighted average ROE
Basic EPS Diluted EPS
Net profit attributable to common shareholders
8.81% 0.03 0.03
of the Company
Net profit attributable to common shareholders
of the Company after deducting non-recurring -5.11% -0.02 -0.02
gains/losses
3. Abnormalities and reasons of the accounting statement items of the Company
Balance sheet Closing balance Opening balance Variable-ratio (%) Reason for change
Account receivable 3,848,325.20 117,180.60 3184.10% Sales increased in the period.
Advance payment 67,621,592.68 33,836,310.22 99.85%
Project funds paid in advance
increased in the period.
13,297,141.73 4,976,108.67 167.22% The current amount received from
Other account receivable
units increased in the Period
258,149,828.81 190,569,964.32 35.46% Development costs of real estate
Inventory
business increased in the period.
Other Liquid assets 7,037,093.63 4,478,158.24 57.14% Tax in advance increased in the period
Productive biological asset 705,116.63 258,190.34 173.10% Purchase of laying hens etc. biological
asset increased in the period.
Account payable 7,488,618.46 3,660,631.16 104.57%
Accounts payable to goods purchasing
increased in the period.
Advance receivable 153,840,376.73 53,821,113.16 185.84% Housing fund received in advance
increased in the period.
Taxes payable 9,344,881.67 18,026,904.58 -66.83% Payment of tax.
Profit sheet Currunt period Last period Variable-ratio (%) Reason for change
216,832,416.09 16,818,678.04 1189.24% Runhua RW included in consolidated
Operation revenue
range in the period
218,143,237.30 12,003,739.65 1717.29% Runhua RW included in consolidated
Operation cost
range in the period
Business tax and surcharges 235,514.93 911,510.90 -74.16% Real estate business tax decreased
y-o-y in the period.
Financial cost -32,775.12 428,022.67 -107.66% Payment of loan interest decreased in
the period.
Non-operating income 34,837,468.38 94,235,507.01 -63.03% Gains from disposal of intangible
assets decreased in the period.
Non-operating expenditure 4,304,076.70 283,931.85 1415.88% Donation and non-operating other
expenditure increased in the period.
Income tax expense -23,637.85 4,944,803.47 -100.48% Taxable income decreased in the
period.
Cash flow sheet Currunt period Last period Variable-ratio (%) Reason for change
Net cash flow arising from -39,839,229.21 -162,574,578.72 75.49% Amount received in advance for
operation activities housing sales increased in the Period
Net cash flow arising from 28,646,487.02 195,376,676.06 -85.34% Land assets recovered by the
investment activities government decreased in the period.
Net cash flow arising from 2,548,500.00 -30,300,000.00 108.41% Payment of loans decreased in the
financing activities Period
Net increase of cash and cash -8,644,242.19 2,502,097.34 -445.48% Inventory increased in the period.
equivalent
