CHENGDE NANJIANG CO., LTD.
REPORT OF THE AUDITORS
DAHUASHENZI[2015]NO.004631(EN)
CHENGDENANJIANG CO., LTD.
REPORT OF THE AUDIORS & FINANCIAL STATEMENTS
YEAR 2014
CONTENTS PAGES
1. AUDITOR’S REPORT 1-2
2. THE (CONSOLIDATED) FINANCIAL STATEMENTS 3-19
STATEMENT OF (CONSOLIDATED) FINANCIAL POSITION
STATEMENT OF (Parent Company) FINANCIAL POSITION4-6
STATEMENT OF (CONSOLIDATED) COMPREHENSIVE INCOME
STATEMENT OF (Parent Company) COMPREHENSIVE INCOME
STATEMENT OF (CONSOLIDATED) CHANGES IN OWNERS’ EQUITY
STATEMENT OF (Parent Company) CHANGES IN OWNERS’ EQUITY
STATEMENT OF (CONSOLIDATED) CASH FLOWS
STATEMENT OF (Parent Company) CASH FLOWS14
3. NOTES TO (CONSOLIDATED)FINANCIAL STATEMENTS 20-84
The auditors’ report and the accompanying financial statements are English translations
of the Chinese auditors’ report andfinancial statements.
In case the English version does not conform to the Chinese version, the Chinese versio
Report OfThe Auditors
DAHUASHENZI [2015]NO.004631(EN)
All shareholders of CHENGDE NANJIANG CO., LTD.:
We have audited the attached financial statements of CHENGDE NANJIANG CO., LTD.
(hereinafter referred to as ―“CDNJ”), including Consolidated Balance Sheet as of December 31,
2014, Consolidated Profit Statement, Consolidated Cash Flow Statement, Consolidated Statement
of Change in Stockholder Equity and Notes to Financial Statements of 2014.
I. Management's responsibility for the financial statements
The management of CDNJ shall take responsibilities for formulating and presenting the
financial statements. Such responsibilities include: (1) prepare the financial statements in
accordance with the Accounting Standards for Business Enterprises to fairly and truly reflect
situation of the Company; (2) design, implement and maintain the internal control that is
relevant to the preparation of these financial statements so as to make the financial statements
free of material misstatements which are caused by fraud and mistake.
II. CPA's responsibility
Our responsibilities are to express opinions on these financial statements based on our audit
work. We conducted our audits in accordance with Auditing Standards for CPAs of China. Auditing
Standards for CPAs of China requires us to observe occupational morality and to plan and conduct
our audit to obtain reasonable assurance on whether the financial statements are free of
material misstatement or not.
The audit involves performing auditing procedures to obtain the amounts of the financial
statements and the auditing evidences disclosed. The procedures selected depend on the CPA's
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. When making risk assessment, the CPA took the
internal control relevant to the preparation of the financial statements and fair presentation into
consideration so as to design appropriate auditing process. The audit work also includes
evaluating the appropriateness of accounting policies selected and the rationality of accounting
estimates made by management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
1
III. Audit opinions
In our opinion, the above financial statements of CDNJ are in compliance with the Corporate
Accounting System and, in all material respects, present fairly the financial standing of your
consolidation and parent company dated December 31, 2014 and the operation results and cash
flow of consolidation and parent company of 2014.
Da Hua Certified Public Accountants
(Special General Partnership)
Certified Public Accountants：
Beijing, the People’s Republic of China
April 27, 2015
2
STATEMENT OF (CONSOLIDATED) FINANCIAL POSITION
December 31, 2014
Prepared by: CHENGDE NANJIANG Co., Ltd. Unit: Yuan
Item Note Ending balance Beginning balance
Current assets:
Monetary funds 1 36,998,545.17 89,426,891.22
Financial assets measured at fair value with changes included in
current profits and losses
Notes receivable
Accounts receivable 2 2,722,676.66 117,180.60
Prepayments 3 7,780,145.39 33,836,310.22
Interest receivable
Dividends receivable
Other receivables 4 11,008,292.44 4,976,108.67
Inventory 5 515,713,286.09 190,569,964.32
Divided into assets held for sale
Non-current assets due within one year
Other current assets 6 24,131,851.80 4,478,158.24
Total current assets 598,354,797.55 323,404,613.27
Non-current assets:
Available-for-sale financial assets
Held-to-maturity investment
Long-term accounts receivable
Long-term equity investments 7 6,684,960.46 6,626,905.49
Investment property
Fixed assets 8 10,294,681.90 11,296,353.61
Construction in progress
Biological assets 9 640,727.71 258,190.34
Engineering material
Liquidation of fixed assets
Intangible assets 10 11,902,512.97 28,721,653.41
Development expenses
Goodwill 11 1,809,762.89
Long-term deferred expenses 12 8,588,027.16 7,811,572.52
Deferred income tax assets 13 834,223.19 834,223.19
Other non-current assets 14 5,201,365.53
Total non-current assets 44,146,498.92 57,358,661.45
Total assets 642,501,296.47 380,763,274.72
The Notes are the integral part of the financial statement, and the financial statement is signed by the following persons
Legal representative: Accounting supervisor: Legal representative of the accounting firm:
3
STATEMENT OF (CONSOLIDATED) FINANCIAL POSITION（Continued）
December 31, 2014
Prepared by: CHENGDE NANJIANG Co., Ltd.Unit: Yuan
Item Note Ending balance Beginning balance
Current liabilities:
Short-term loans
Financial liabilities measured at fair value with changes included in
current profits and losses
Notes payable 16 26,000,000.00
Accounts payable 17 10,425,920.41 3,660,631.16
Advance received 18 290,954,152.81 53,821,113.16
Payroll payable 19 6,233,580.16 6,205,363.50
Tax payable 20 10,023,172.67 18,026,904.58
Interests payable
Dividends payable
Other payables 21 14,624,828.17 36,044,983.70
Divided into liabilities held for sale
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 332,261,654.22 143,758,996.10
Non-current liabilities:
Long-term loans
Bonds payable
Including: preferred shares
Perpetual capital securities
Long-term payables
Long-term payroll payable
Special payables
Estimated liabilities
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities 332,261,654.22 143,758,996.10
Owners' equity:
Share capital 22 706,320,000.00 706,320,000.00
Other equity instruments
Including: preferred shares
Perpetual capital securities
Capital reserve 23 456,470,388.64 456,470,250.78
Less: treasury stocks
Other comprehensive income
Special reserves
4
Item Note Ending balance Beginning balance
Surplus reserve 24 76,791,550.17 76,791,550.17
Undistributed profits 25 -949,599,922.37 -1,029,880,318.18
Total owners' equity attributable to parent company 289,982,016.44 209,701,482.77
Minority shareholders' equity 20,257,625.81 27,302,795.85
Total shareholders' equity 310,239,642.25 237,004,278.62
Total liabilities and shareholders' equity 642,501,296.47 380,763,274.72
The Notes are the integral part of the financial statement, and the financial statement is signed by the following persons
Legal representative: Accounting supervisor: Legal representative of the accounting firm:
5
STATEMENT OF (Parent Company) FINANCIAL POSITION
December 31, 2014
Prepared by: CHENGDE NANJIANG Co., Ltd. Unit: Yuan
Item Note Ending balance Beginning balance
Current assets:
Monetary funds 18,291,266.59 5,681,141.82
Financial assets measured at fair value with changes included
in current profits and losses
Notes receivable
Accounts receivable
Prepayments 1,372,194.98 25,000,000.00
Interest receivable
Dividends receivable
Other receivables 1 16,638,184.13 316,143.39
Inventory 490,087,338.82 161,600,661.40
Divided into assets held for sale
Non-current assets due within one year
Other current assets 19,420,345.47
Total current assets 545,809,329.99 192,597,946.61
Non-current assets:
Available-for-sale financial assets
Held-to-maturity investment
Long-term accounts receivable
Long-term equity investments 2 157,284,836.37 152,284,669.73
Investment property
Fixed assets 1,183,425.73 1,314,384.81
Construction in progress
Biological assets
Engineering material
Liquidation of fixed assets
Intangible assets 15,699,628.36
Development expenses
Goodwill
Long-term deferred expenses 172,589.80
Deferred income tax assets 750.00 750.00
Other non-current assets
Total non-current assets 158,641,601.90 169,299,432.90
Total assets 704,450,931.89 361,897,379.51
The Notes are the integral part of the financial statement, and the financial statement is signed by the following persons
Legal representative: Accounting supervisor: Legal representative of the accounting firm:
6
STATEMENT OF (Parent Company) FINANCIAL POSITION（Continued）
December 31, 2014
Prepared by: CHENGDE NANJIANG Co., Ltd.Unit: Yuan
Item Note Ending balance Beginning
balance
Current liabilities:
Short-term loans
Financial liabilities measured at fair value with changes included in current profits and
losses
Notes payable
Accounts payable 3,625,964.00
Advance received 277,140,032.59 40,423,500.
00
Payroll payable 628.22
Tax payable 49,975.30 -58,959.68
Interests payable
Dividends payable
Other payables 243,993,740.20 299,169,46
4.74
Divided into liabilities held for sale
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 524,810,340.31 339,534,00
5.06
Non-current liabilities:
Long-term loans
Bonds payable
Including: preferred shares
Perpetual capital securities
Long-term payables
Long-term payroll payable
Special payables
Estimated liabilities
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities 524,810,340.31 339,534,00
5.06
Owners' equity:
Share capital 706,320,000.00 706,320,00
0.00
Other equity instruments
7
Item Note Ending balance Beginning
balance
Including: preferred shares
Perpetual capital securities
Capital reserve 449,366,024.55 449,365,88
6.69
Less: treasury stocks
Other comprehensive income
Special reserves
Surplus reserve 76,791,550.17 76,791,550.
17
Undistributed profits -1,052,836,983.14 -1,210,114,
062.41
Total owners' equity attributable to parent company
Minority shareholders' equity
Total shareholders' equity 179,640,591.58 22,363,374.
45
Total liabilities and shareholders' equity 704,450,931.89 361,897,37
9.51
The Notes are the integral part of the financial statement, and the financial statement is signed by the following persons
Legal representative: Accounting supervisor: Legal representative of the accounting firm:
8
STATEMENT OF (CONSOLIDATED) COMPREHENSIVE INCOME
2014
Prepared by: CHENGDE NANJIANG Co., Ltd.Unit: Yuan
Amount Amount
Item Note incurred in this incurred in
year previous year
I. Total operating income 322,502,631.63 363,952,258.89
Including: operating income 26 322,502,631.63 363,952,258.89
II. Total operating cost 358,297,490.43 364,595,768.48
Including: operating cost 26 325,795,009.31 339,083,312.47
Operating taxes and surcharges 27 608,376.03 3,135,115.82
Sales expenses 28 4,299,230.07 3,263,636.58
Management expenses 28 21,550,755.68 21,000,380.87
Financial expenses 28 1,816,023.18 616,644.15
Assets impairment losses 29 4,228,096.16 -2,503,321.41
Add: income from changes in fair value (―-‖ indicates the loss)
Investment profit (―-‖ indicates the loss) 30 229,054.97 164,602.55
III. Operating profit (“-” indicates the loss) -35,565,803.83 -478,907.04
Add: non-operating income 31 117,700,572.71 132,325,264.45
Including: gains from disposal of non-current assets
Less: non-operating expenditure 32 7,947,685.38 615,794.39
Including: loss from disposal of non-current assets
IV. Total profit (“-” indicates the total loss) 74,187,083.50 131,230,563.02
Less: income tax 33 951,857.73 31,295,705.90
V. Net profit (―-‖ indicates the net loss) 73,235,225.77 99,934,857.12
Net profits attributable to the parent company shareholders 80,280,395.81 94,806,811.16
Gain and loss of minority shareholders -7,045,170.04 5,128,045.96
VI. After-tax net of other comprehensive incomes
After-tax net of other comprehensive incomes owned by the owner of the parent company
(I) Other comprehensive incomes that cannot be classified into profit and loss in the future
1. Re-measurement of changes in net liabilities or net assets in defined benefit plan
2. Share in other comprehensive incomes that cannot be reclassified into profit and loss in investee by
equity method
(II) Other comprehensive incomes that would be classified into profit and loss in the future
1. Shares in other comprehensive incomes that can be reclassified into profit and loss in investee by equity
method in the future
2. Loss and profit of change in fair value of available-for-sale financial assets
3. Loss and profit of available-for-sale financial assets of held-to-maturity investments
4. Effective part of hedge profit and loss of cash flow
5. Translation difference in the foreign currency financial statement
6. Others
Net of tax from other comprehensive incomes owned by minority stockholders
VII. Total comprehensive income 73,235,225.77 99,934,857.12
Total consolidated income attributable to the shareholder of the parent company 80,280,395.81 94,806,811.16
Total consolidated income attributable to minority shareholders -7,045,170.04 5,128,045.96
VIII. Earnings per share:
(I) Basic earnings per share 0.11 0.13
(II) Diluted earnings per share 0.11 0.13
9
STATEMENT OF (Parent Company) COMPREHENSIVE INCOME
2014
Prepared by: CHENGDE NANJIANG Co., Ltd.Unit: Yuan
Amount
Amount incurred in
Item Note incurred in
this year
previous year
I. Total operating income 8,217,142.76 9,631,946.56
Including: operating income 3 8,217,142.76 9,631,946.56
II. Total operating cost 14,127,309.81 8,760,680.31
Including: operating cost 3 988,187.82 28,460.39
Operating taxes and surcharges 396,000.00 528,000.00
Sales expenses 529,129.10 240,503.11
Management expenses 11,207,134.69 7,959,458.53
Financial expenses 961,779.78 1,258.28
Assets impairment losses 45,078.42 3,000.00
Add: income from changes in fair value (―-‖ indicates the loss)
Investment profit (―-‖ indicates the loss)
III. Operating profit (“-” indicates the loss) -5,910,167.05 871,266.25
Add: non-operating income 168,058,111.85 21,920.77
Including: gains from disposal of non-current assets 113,647,960.69
Less: non-operating expenditure 4,870,865.53 9,100.00
Including: loss from disposal of non-current assets
IV. Total profit (“-” indicates the total loss) 157,277,079.27 884,087.02
Less: income tax -750.00
V. Net profit (―-‖ indicates the net loss) 157,277,079.27 884,837.02
VI. After-tax net of other comprehensive incomes
After-tax net of other comprehensive incomes owned by the owner of the parent
company
(I) Other comprehensive incomes that cannot be classified into profit and loss in
the future
1. Re-measurement of changes in net liabilities or net assets in defined benefit
plan
2. Share in other comprehensive incomes that cannot be reclassified into
profit and loss in investee by equity method
(II) Other comprehensive incomes that would be classified into profit and loss in
the future
1. Shares in other comprehensive incomes that can be reclassified into profit
and loss in investee by equity method in the future
2. Loss and profit of change in fair value of available-for-sale financial assets
3. Loss and profit of available-for-sale financial assets of held-to-maturity
investments
4. Effective part of hedge profit and loss of cash flow
5. Translation difference in the foreign currency financial statement
10
6. Others
VII. Total comprehensive income 157,277,079.27 884,837.02
11
STATEMENT OF (CONSOLIDATED) CHANGES IN OWNERS’ EQUITY
2014
Prepared by: CHENGDE NANJIANG Co., Ltd.Unit: Yuan
Current year
Total shareholders' equity attributed to parent company
Other equity instruments Minority
Item Less: Other General Total owners'
Share Perpetual Capital Special Surplus Undistributed shareholde
Preferred treasury comprehensiv risk equity
capital capital Others reserve reserve reserve profits rs' equity
share stocks e income provisions
securities
706,320,000.0
I. Balances at the end of previous year 456,470,250.78 76,791,550.17 -1,029,880,318.18 27,302,795.85 237,004,278.62
0
Add: profit or loss from accounting
policy changes
Fund for corrections of errors of
previous period
Corporate combination under
common control
Others
II. Balances at the beginning of this 706,320,000.0
456,470,250.78 76,791,550.17 -1,029,880,318.18 27,302,795.85 237,004,278.62
year 0
III. Increased/decreased amount this
137.86 80,280,395.81 -7,045,170.04 73,235,363.63
year (“-” indicates decrease)
(I) Total comprehensive income
(II) Capital paid in and reduced by
137.86 137.86
shareholders
12
1. Ordinary share invested by
shareholders
2. Capital invested by other equity
instruments holders
3. Amounts of share-based payments
recognized in shareholders' equity
4. Others 137.86 137.86
(III) Profit distribution 80,280,395.81 -7,045,170.04 73,235,225.77
1. Appropriation to surplus reserves
2. Appropriation of general risk
reserves
3. Distribution to owners (or
80,280,395.81 -7,045,170.04 73,235,225.77
shareholder)
4. Others
(IV) Internal carry-forward of
shareholders’ equity
1. Capital reserves transferred to
share capital
2. Surplus reserves transferred to
share capital
3. Surplus reserves for making up
losses
4. Others
(V) Special reserve
1. Withdrawn amount of this year
2. Utilization amount of this year
13
(VI) Others
IV. Balance at the end of this year 706,320,000.0
456,470,388.64 76,791,550.17 -949,599,922.37 20,257,625.81 310,239,642.25
0
STATEMENT OF (Parent Company) CHANGES IN OWNERS’ EQUITY
2014
Prepared by: CHENGDE NANJIANG Co., Ltd.Unit: Yuan
Current year
Other equity instruments Less: Other
Item Capital Special Surplus Undistributed Total owners'
Share capital Preferred Perpetual capital treasury comprehensive
Others reserve reserve reserve profits equity
share securities stocks income
I. Balances at the end of previous year 706,320,000.00 449,365,886.69 76,791,550.17 -1,210,114,062.41 22,363,374.45
Add: profit or loss from accounting policy
changes
Fund for corrections of errors of
previous period
Others
II. Balances at the beginning of this year 706,320,000.00 449,365,886.69 76,791,550.17 -1,210,114,062.41 22,363,374.45
III. Increased/decreased amount this year
137.86 157,277,079.27 157,277,217.13
(“-” indicates decrease)
(I) Total comprehensive income 137.86 137.86
(II) Capital paid in and reduced by
shareholders
1. Ordinary share invested by
shareholders
14
Current year
Other equity instruments Less: Other
Item Capital Special Surplus Undistributed Total owners'
Share capital Preferred Perpetual capital treasury comprehensive
Others reserve reserve reserve profits equity
share securities stocks income
2. Capital invested by other equity
instruments holders
3. Amounts of share-based payments
recognized in shareholders' equity
4. Others 137.86 137.86
(III) Profit distribution 157,277,079.27 157,277,079.27
1. Appropriation to surplus reserves
2. Distribution to owners (or
157,277,079.27 157,277,079.27
shareholder)
3. Others
(IV) Internal carry-forward of shareholders’
equity
1. Capital reserves transferred to share
capital
2. Surplus reserves transferred to share
capital
3. Surplus reserves for making up
losses
4. Others
(V) Special reserve
1. Withdrawn amount of this year
2. Utilization amount of this year
15
Current year
Other equity instruments Less: Other
Item Capital Special Surplus Undistributed Total owners'
Share capital Preferred Perpetual capital treasury comprehensive
Others reserve reserve reserve profits equity
share securities stocks income
(VI) Others
IV. Balance at the end of this year 706,320,000.00 449,366,024.55 76,791,550.17 -1,052,836,983.14 179,640,591.58
16
DAHUASHENZI [2015] NO. 004631 (EN) Audit Report
STATEMENT OF (CONSOLIDATED) CASH FLOWS
2014
Prepared by: CHENGDE NANJIANG Co., Ltd.Unit: Yuan
Amount incurred in
Item Note Amount incurred in previous year
this year
I. Cash flows from operating activities:
Cash received from sales of commodities and provision of services 554,077,939.01 415,792,262.19
Refunds of taxes and levies 1,175,356.96
Cash received from other operating activities 34 31,593,592.22 59,481,903.92
Sub-total of cash inflows from operating activities 586,846,888.19 475,274,166.11
Cash paid for purchasing goods and services 599,771,483.46 590,408,836.19
Cash paid to and on behalf of employees 10,237,228.89 8,150,877.53
Payments of taxes and rates 34,673,738.35 35,021,456.47
Other cash paid relating to operating activities 34 76,978,380.81 46,246,028.58
Sub-total of cash outflows from operating activities 721,660,831.51 679,827,198.77
Net cash flows from operating activities -134,813,943.32 -204,553,032.66
II. Cash flows from investing activities:
Cash received from withdrawal of investments 38,000,000.00 9,000,000.00
Cash received from returns on investments 171,000.00 111,230.13
Net cash received from disposal of fixed assets, intangible assets & other
85,000,000.00 188,233,888.62
long-term assets
Net cash received from disposal of subsidiaries and other business units
Other cash received relating to investing activities 34 57,429,714.65
Sub-total of cash inflows from investing activities 123,171,000.00 254,774,833.40
Cash paid to acquire fixed assets, intangible assets and other long-term assets 3,149,781.23 11,010,284.50
Cash paid to acquire investments 38,000,000.00
Net cash received from payment of subsidiaries and other business units
Cash payments relating to other investment activities
Sub-total of cash outflows from investing activities 41,149,781.23 11,010,284.50
Net cash flows from investing activities 82,021,218.77 243,764,548.90
III. Cash flows from financing activities:
Cash received from capital contribution 5,000,000.00
Cash received from borrowings
Cash from issue of bonds
Other cash received relating to financing activities 34 10,029,217.89
Sub-total of cash inflows from financing activities 10,029,217.89 5,000,000.00
Cash repayments of amounts borrowed 35,300,000.00
Cash payments for interest expenses and distribution of dividends or profit 1,030,671.89
Other cash payments relating to financing activities 34 11,445,403.16
Sub-total of cash outflows from financing activities 47,776,075.05
Net cash flows from financing activities 10,029,217.89 -42,776,075.05
IV. Influence of exchange rate change on cash and cash equivalents -119,640.74
V. Net increase of cash and cash equivalents -42,883,147.40 -3,564,558.81
Add: balance of cash and cash equivalents at the beginning of period 77,981,488.06 81,546,046.87
17
DAHUASHENZI [2015] NO. 004631 (EN) Audit Report
Amount incurred in
Item Note Amount incurred in previous year
this year
VI. Balance of cash and cash equivalents at the end of period 35,098,340.66 77,981,488.06
STATEMENT OF (Parent Company) CASH FLOWS
2014
Prepared by: CHENGDE NANJIANG Co., Ltd.Unit: Yuan
Item Note Amount incurred in this year Amount incurred in
I. Cash flows from operating activities: previous year
Cash received from sales of commodities and provision of services 187,363,242.41 9,631,946.56
Refunds of taxes and levies
Cash received from other operating activities 38,138,466.36 201,813,444.46
Sub-total of cash inflows from operating activities 225,501,708.77 211,445,391.02
Cash paid for purchasing goods and services 201,137,420.79 186,629,121.79
Cash paid to and on behalf of employees 5,802,550.51 2,472,138.09
Payments of taxes and rates 22,685,179.55 1,621,088.68
Other cash paid relating to operating activities 96,706,176.51 6,302,906.34
Sub-total of cash outflows from operating activities 326,331,327.36 197,025,254.90
Net cash flows from operating activities -100,829,618.59 14,420,136.12
II. Cash flows from investing activities:
Cash received from withdrawal of investments
Cash received from returns on investments
Net cash received from disposal of fixed assets, intangible assets & other long-term
85,000,000.00 40,423,500.00
assets
Net cash received from disposal of subsidiaries and other business units
Other cash received relating to investing activities
Sub-total of cash inflows from investing activities 85,000,000.00 40,423,500.00
Cash paid to acquire fixed assets, intangible assets and other long-term assets 60,090.00 769,581.00
Cash paid to acquire investments 5,000,166.64 49,170,370.00
Net cash received from payment of subsidiaries and other business units
Cash payments relating to other investment activities
Sub-total of cash outflows from investing activities 5,060,256.64 49,939,951.00
Net cash flows from investing activities 79,939,743.36 -9,516,451.00
III. Cash flows from financing activities:
Cash received from capital contribution
Cash received from borrowings 43,700,000.00
Cash from issue of bonds
Other cash received relating to financing activities
Sub-total of cash inflows from financing activities 43,700,000.00
Cash repayments of amounts borrowed 10,200,000.00
Cash payments for interest expenses and distribution of dividends or profit
Other cash payments relating to financing activities 665,866.06
Sub-total of cash outflows from financing activities 10,865,866.06
Net cash flows from financing activities 32,834,133.94
IV. Influence of exchange rate change on cash and cash equivalents
18
DAHUASHENZI [2015] NO. 004631 (EN) Audit Report
V. Net increase of cash and cash equivalents 11,944,258.71 4,903,685.12
Add: balance of cash and cash equivalents at the beginning of period 5,681,141.82 777,456.70
VI. Balance of cash and cash equivalents at the end of period 17,625,400.53 5,681,141.82
19
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
NOTES TO FINANCIAL STATEMENTS
31 DECEMBER 2014
CURRENCY UNIT: RMB
I. Company Profile
1. Background
The predecessor of ChengDeNanJiang Corporation,Ltd. (“the Company”) was
ChengDeDiXian Textile Corporation, Ltd (“DiXian”). According to the approval of
YiGuBan(1999) No.36 issued by the People’s Government of HeBei Province, DiXian was
established in the People’s Republic of China (the “PRC”) and obtained the Corporate Business
License from HeBei Administration for Industry and Commerce (“CSRC”). The initial registered
capital of DiXian was RMB 100,000,000 (divided into 100,000,000 shares, one Yuan per share):
ShuXian Wang contributed RMB 85,100,000, accounting for 85.1% of the total; HeBei province
ChengDe County North Industrial Company contributed RMB 7,564,400, accounting for 7.56%
of the total; ZhengSong Wang contributed RMB 5,444,400, accounting for 5.44% of the total;
ChengDeLongFeng Cosmetic Co., Ltd. contributed RMB 945,600, accounting for 0.95% of the
total; Chengde County Board Town of Red Star plastic products factory contributed RMB
945,600, accounting for 0.95% of the total.
According to the issue [2000] 121 by the China Securities Regulatory Commission on
August 29, 2000, the company issued 100,000,000 foreign capital stocks listed in China
(hereinafter referred to as the " B ")on September 19, 2000 on Shenzhen stock exchange; and
excised the overallotment option to increase issuing 15,000,000 B shares from September 29 to
October 29, 2000. The registered capital of the company after the issuance of B shares was RMB
215,000,000, and was divided into 215,000,000 shares with one Yuan of face value per share.
According to the resolution of the shareholder’s 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 shareholder’s 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 to Foreign-Funded Joint Stock Companies
20
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Limited.
On 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 shareholder’s 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 ShuXian Wang was compensated to Rong Chen for RMB
45,491,544 Yuan, and on August 15, 2008, 96,000,000 sponsor shares held by ShuXian Wang was
compensated to Rong Chen for RMB 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 ChengdeDiXian Knitting Co., Ltd” with No.143 [2009] by Bureau of
Commerce of Hebei Province, it agreed that the company increased 150,000,000 foreign shares
listed in China in 2004 and allotted 2 bonus shares free for every 10 shares in 2006; and it agreed
that 208324800 shares of DiXian stock held by ShuXian Wang. DiXian was changed to Rong
Chen; as well as the name of the company changed to ChengdeDaLu Co., Ltd. The total share
capital was 706,320,000 shares and the registered capital of the company was RMB 706,320,000
Yuan after the company increased and allotted, which has been validated by ZhongLei CPA Co.,
Ltd, who provided the capital verification report with [2010] No. 10009.
On 23 Aug 2011, the company renewed its Corporate Business License that was issued by
HeBei Administration for Industry and Commerce. The new registration number was
130000400001225. Both registered capital and paid-in capital are RMB 706,320,000. The
company type was a foreign joint stock limited company.
On 6 April 2012, an equity transfer agreement was signed between corporate shareholder
Rong Chen and Dong Wang. According to the agreement, Rong Chen transferred 208,324,800
shares, which occupied 29.49% of the total share capital, to Dong Wang. After the transfer of
equity, Shareholders proportion of capital contribution was: Dong Wang (RMB 208,324,800,
accounted for 29.49%); HeBei province ChengDe County North Industrial Company (RMB
18,517,651, accounted for 2.62%); Zhengsong Wang(RMB 13,327,891, accounted for
1.89%);ChengDe City LongFeng Cosmetic company (RMB 2,314,829, accounted for 0.33%);
Chengde County Board Town of Red Star plastic products factory (RMB 2,314,829, accounted for
0.33%), shareholders of domestically listed foreign shares (RMB 461,520,000, accounted for
65.34%).
On 19 September 2012, with the authorization of HeBei Administration for Industry and
Commerce, the company name was changed from ChengDeDaLu Corporation, Ltd. to
21
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
ChengDeNanJiang Corporation, Ltd.
2. Nature of Business
The company major in real estate development and management; Subsidiaries engage in real
estate development、international trading and ecological agriculture planting and breeding.
3. Business scope
New energy、R&D of new material product、sales and technology promotion、technology
service；R&D of modern agricultural production、technology promotion service, wholesale of
ecological agricultural products; International trading of products and technology; project
HuiJingTianDi (2013-12、2013-13) : the development and construction of common residence and
supporting commercial facilities based on two land、sales and operation; property management.
4. Major products and labour service
Sales of real estate、plastic raw material trading andsales of products of ecological agriculture
planting and breeding.
5. Fundamental structure of the company
The highest authority is board minutes and the company adopts the managerialresponsibility
system. According to requirements from the business, the company set up Securities Department,
AdministrativeDepartment, Human Resource Department, Financial Department, Auditing
Department, Sales Department, Research and Development Department.
II. Scope of consolidated financial statements
The consolidated financial statements of the Group involve 8companies ,including
ChengdeNanjiang Real Estate Development Co., Ltd,Runhua Rural Water (Tianjin) International
Trade Co., Ltd., ChengDeNanJiang Investment Co., Ltd., ChengDeNanJiang Ecological
Agriculture Co., Ltd., ChengDeXingYe Paper Co., Ltd., NanJiang Asia Investment Co., Ltd.,
ChengdeMorsh Technology Co., Ltd.andChengdeHuiJing property Co., Ltd.
For details, see Note VII Change in consolidation scopeand VIII Rights and interests in
other parties.
III. Formulation basis of financial statements
The financial statements were prepared on the basis of going-concern assumption,
actual trades, Enterprise Accounting System issued by the Ministry of Finance as well as
accounting policies and accounting estimates based on Note IV "Significant Accounting
Policies and Accounting Estimates".
22
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
IV. Significant Accounting Policies and Accounting Estimates
1. Statement for Compliance with Enterprise Accounting System
The financial statements prepared by the Company fully comply with Accounting
Standards for Business Enterprise and demonstrate truly and completely the financial status
of the Company and the Group, operating performance and cash flow.
2. Accounting period
The fiscal year of the Group runs from January 1 to December 31 of each calendar year.
3. Reporting Currency
RMB is adopted as the functional currency of the Group
4. Accounting methods for corporate merger under the same control and not under the same
control
The assets and debts acquired by the Group (as the merging party) through merging
with other enterprises under common control shall be measured as per the book value of
the merged party in the consolidated financial statements of the ultimate controller on the
day of merger. The difference between the book value of net assets acquired and the book
value of the combination paid is used to adjust the capital reserves, and the retained
earnings are adjusted in case of insufficient capital reserves.
Regarding combination not under common control, the recognizable assets, liabilities
and contingent liabilities of the seller are measured upon fair value on the purchase day. The
merger cost is the sum of cash or the fair value of non-cash assets, issued or borne debts and
issued equity securities paid by the Group for acquiring the control over the acquired on the
purchase day and all of the expenses incurred to the Group directly relevant to the merging.
In case of merging by step, the merger cost is the sum of the cost of every single transaction.
Where the merger cost is more than acquired definable net assets fair proportion of the
acquired, the balance is recognized as goodwill. Where the merger cost is less than acquired
definable net assets fair proportion of the acquired, the definable assets, debts, fair value of
contingent liabilities and the fair value of the non-cash assets or issued equity securities as
merger consideration are rechecked first, and in case the merger cost is less than acquired
definable net assets fair proportion of the acquired after recheck, the balance is included in
current nonrevenue receipt.
5.Preparation method of consolidated financial statements
The Group incorporates all of the subsidiaries and structured entities under its control
into the consolidated financial statements.
For any difference occurring in accounting policies and accounting periods between the
Company and its subsidiaries when preparing consolidated financial statements, necessary
adjustments shall be made based on accounting policies and periods of the Company.
23
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
All transactions, significant balances and unrealized gains within the consolidation range
are reduced in the preparation of consolidated financial statements. For the subsidiaries, the
proportion of ownership equity not belonging to the parent company, current net profits and
losses, other comprehensive income and the proportion of the total comprehensive income
belonging to minority shareholder are included in “Equity for minority shareholder”, “Profits
and losses for minority shareholder”, “Other comprehensive income for minority
shareholder”and“Total comprehensive income for minority shareholder” respectively in the
consolidated financial statements.
For the subsidiaries under common control merged by the Group, the operation results
and cash flow of such subsidiaries are incorporated into the consolidated financial
statements from the beginning of the current period in which the merger is carried out.
When preparing the comparative consolidated financial statements, the relevant items in the
financial statements of the last year are adjusted based on the assumption that the reporting
entity exists since the ultimate controller has obtained the controlling right
For the subsidiaries not under common control merged by the Group, the operation
results and cash flow of such subsidiaries are incorporated into the consolidated financial
statements from the day of the Group acquiring the control over the subsidiary. In
preparation of consolidated financial reports, financial statements of subsidiaries shall be
adjusted based on the fair value of recognizable net assets, liabilities and contingent liability
defined on the purchasing date.
Where the Group disposed part of long-term equity investment in the subsidiaries
without losing control over of such subsidiaries, in the financial statements, the balance
between the income from disposal and the net assets proportion of the subsidiaries entitled
by the disposed long-term equity investment and continually calculated from the purchase
day or day of merger is adjusted as the capital stock premium of the capital public reserve
and retained earnings is adjusted in case of the capital public reserve not enough for
deduction.
Where the Group lost the control over the invested party for such reason as disposing
partial equity investment, the remaining equity was re-measured as per the fair value of such
equity on the day of losing controlling right when preparing the consolidated financial
statements. The balance between the sum of the consideration from the disposal of equity
and the fair value of the remaining equity and the net assets proportion of the subsidiaries
entitled by the disposed long-term equity investment and continually calculated from the
purchase day or day of merger is included in the investment income for the period and the
goodwill is deducted. Other consolidated income related to the equity investment of the
original subsidiary shall be transferred into current investment profit and loss upon losing
control.
24
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Where the Group lost control over a subsidiary through multiple transactions and
step-by-step disposal of the equity of the subsidiary, and such multiple transactions to a
package deal, the multiple transactions shall be deemed one transaction in which the control
in the subsidiary was lost; however, the balance between the disposal price and the net
assets proportion of the subsidiaries entitled by the disposed long-term equity investment
prior losing control over the subsidiary was recognized as other comprehensive income and
was transferred to the profits and losses of current period at the time of losing control.
6. Classification of joint arrangement and accounting methods for joint operation
The joint arrangement of the Group includes joint operation and joint venture. For
jointly operated projects, the Group as a partner recognizes the assets and debts it holds
independently and proportionally as well as recognizes the income and expenses as agreed.
Where purchase and sale of an asset during joint operation does not constitute a business,
only the part in the profits and losses from the transaction belonging to other partners is
recognized.
7. Cash and cash equivalent
Cash in the Cash Flow Statement refers to cash in hold and deposits which can be used
for payment at any time. Cash equivalents in the Cash Flow Statements refer to short-lived
(generally not more than 3 months) and highly liquid investments that are readily convertible
to known amounts of cash and which are subject to an insignificant risk of change in value.
8. Foreign currency transaction
The transactions denominated in foreign currency of the Group are converted in the
initial recognition at the rate which is approximate to the spot exchange rate on the
transaction day, which shall be the spot exchange rate of the beginning of the month when
the transaction occurs.
At the balance sheet date, the monetary items denominated in foreign currency are
translated to RMB at the spot exchange rate at the balance sheet date, and the balance
between the spot exchange rate at the balance sheet date and the rate in the initial
recognition or on the last balance sheet date is included in current profits and losses except
for 1) the balance from exchange of specific borrowings that is capitalized and included as
part of the cost qualifying asset; 2) the balance from exchange of hedge instrument adopted
for evading the exchange risks that is treated according to hedge accounting; 3) the balance
from exchange arising from the foreign currency non-monetary items available for sale (e.g.
the stock) and that arising from the change in the book value of the monetary items
available for sale except for amortized cost is recognized as other comprehensive income.
Non-monetary items of foreign currency measured by historical cost still adopt spot
exchange rate of transaction date for conversion with functional currency amount
unchanged. As for the foreign currency non-monetary items measured by fair value, the spot
exchange rate on the date when the fair value is confirmed is adopted for conversion. The
amount differences between functional currency amount after conversion and the original
25
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
functional currency amount, processed as fair value changes (including change in exchange
rate), are recognized into current profits and losses or recognized into other comprehensive
incomes.
9. Financial assets and liabilities
The Group recognizes one item of financial asset or financial liability when it becomes a
party of any financial instruments contract.
(1) Financial assets
1) Classification, recognition basis and measurement method of financial assets
The financial assets of the Group are divided into the following categories in accordance
with investment purposes and economic substance: the financial assets at fair value through
profit or loss; held-to-maturity investments, loans and receivables; and available-for-sale
financial assets.
The financial assets that are measured by fair value and the changes are recognized into
current profit or loss include trading financial assets and the financial assets that are
measured by fair value and the changes are recognized into current profit or loss when they
are initially recognized. This kind of financial assets designated by the Group includes mainly
the financial assets it holds for sale in the short period of time. For such financial assets, fair
value is adopted for subsequent measurement. Variations of fair value are recognized into
current profits and losses are recognized in the fair value variation profits and losses; interest
or cash dividends acquired during the asset holding period are recognized as investment
income; and the difference between its fair value and initial recognition amount shall be
recognized as investment profits and losses upon disposal, and fair value variation profits
and losses shall be adjusted simultaneously.
Held-to-maturity investment refers to non-derivative financial assets which have fixed
due date and fixed or confirmed recovery amount and which the Group is determined and
able to hold till maturity. As to held-to-maturity investment, effective interest method is
adopted for subsequent measurement as per amortized cost. The profit or loss occurred by
amortization, impairment or de-recognition are all recognized into current profit or loss.
Receivables refer to non-derivative financial assets which have no quotation in active
market and fixed or determined recovery amount. Effective interest method is adopted for
subsequent measurement as per amortized cost. The profit or loss occurred by amortization,
impairment or de-recognition are all recognized into current profit or loss.
Available-for-sale financial assets are those non-derivative financial assets that are
designated as available-for-sale at initial measurement or are not classified in any of the three
preceding categories. For this kind of assets, the equity instrument investment with no price in
active market and its fair value not reliably measured and the derivative financial assets
linked with the equity instrument and settled through the delivery of the equity instrument are
subsequently measured as per the cost; those with quotation in active market and the fair
26
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
value reliably measured are measured as per the fair value and the changes in fair value are
included in other comprehensive income. Fair value is adopted for subsequent measurement
for such financial assets. In addition to exchange gains or losses generated from impairment
loss and foreign currency financial assets, changes in fair value of available-for-sale financial
assets will be directly included in shareholder' equity and the accumulative amount of the
changes in the fair value that is originally directly included in equity shall be transferred in
current profit or loss upon the de-recognition of the financial assets. For the available-for-sale
liability instruments, the interest is calculated with actual interest rate during the holding
period, together with the cash dividend of the available-for-sale equity instrument investments
shall be recognized into current profits and losses as investment incomes when the invested
company distributes the dividend. The investments in equity instruments not quoted in an
active market and whose fair value cannot be reliably measured is subsequently measured
based on the cost.
2) Recognition basis and measurement method for financial asset transfer
Where a financial asset satisfies any of the following requirements, the recognition shall
be terminated: (1) the contractual rights for collecting the cash flow of the said financial
asset are terminated; (2) the said financial asset has been transferred with almost all risks
and remunerations thereof transferred to the transferee; (3) the said financial asset has been
transferred and the Group gives up the control over the financial assets even though it
neither transfers nor retains almost all risks and remunerations thereof.
Where the Company neither transfers/retains almost all risks and remunerations in
connection with the financial assets nor gives up the control over the financial assets, it shall
recognize related financial assets as well as related financial liabilities according to its
continuing involvement in the transferred financial assets.
If the overall transfer of financial assets meets the conditions for derecognition, the
balance between the following two amounts shall be recognized into current profits and
losses: (1) book value of transferred financial assets; (2)the sum of the consideration
received from the transfer and the accumulative amount of changes in the fair value that is
originally and directly recognized into other comprehensive income.
If the partial transfer of financial assets does not meet the conditions of de-recognition,
the overall book value of transferred financial assets between de-recognition and
non-de-recognition shall be amortized based on relative fair value. The balance between
following two amounts shall be recognized into current loss and profit; (1) the sum of the
consideration received from the transfer and the accumulative amount of changes in fair
value that shall be amortized for de-recognition and recognized into other comprehensive
income and (2) the balance of the amortized of the aforesaid carrying amount.
3) Financial asset depreciation test and accounting methods
The Group examines the book value of other financial assets except those which are
27
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
measured at their fair value and of which the variation is recorded into the profits and losses
of current period on each balance sheet date and accrues the provisions for impairment if
any objective evidences prove the impairment of the financial assets.
In case of impairment of financial assets measured by amortized cost, the impairment
provision of assets is accrued based on the shortfall of book value over its present value
(excluding future credit losses that have not been incurred). The formerly recognized
impairment shall be reversed and recognized into the current profit or loss if there is
objective evidence showing that the financial assets are recovered and it objectively has
relations with the items happened after the impairment is recognized.
If there is impairment loss of available-for-sale financial assets, the accumulated loss
due to the decline of fair value that is previously and directly included in the owners' equity
shall be transferred and recognized into impairment loss. As for available-for-sale debt
instruments with impairment affirmed, the fair value has been increased in the subsequent
accounting period and objectively has relations with the items happened after the
recognition of former impairment, the formerly recognized impairment shall be reversed and
recognized into the current profit or loss. As for available-for-sale debt instruments with
impairment affirmed, the increased fair value in the subsequent accounting period shall be
directly included in the shareholder's equity.
(2) Financial liabilities
1) Classification, recognition basis and measurement method of financial liabilities
Financial liabilities are divided into the following categories at the initial recognition: the
financial liabilities that are measured by fair value and whose changes are included in current
profit or loss, and other financial liabilities.
For the financial liabilities measured with fair value and the changes recognized into
current profit or loss including trading financial liabilities and the financial liabilities that are
measured with fair value and the changes recognized into current profit or loss on initial
recognition, fair value is adopted for subsequent measurement; and all profits or losses from
change in fair value as well as dividend and interest income relevant to such financial
liabilities shall be recognized into current profits and losses.
Other financial liabilities adopt effective interest method for subsequent measurement
according to amortized cost.
2) De-recognition of financial liabilities
All of or part of the current obligations of financial liabilities have been canceled.
Derecognize the financial liabilities or part with obligations being derecognized. The balance
between partial book value and the consideration paid shall be included in the current profit
or loss.
28
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
10. Provision for bad debts of accounts receivable
The following standards shall be followed to determine the provision for bad debts of
accounts receivable: debt unit cancellation, bankruptcy, insolvency, serious shortage of cash
flow, production halt due to serious natural disaster and failure to pay back debts within
foreseeable times; the debt unit fails failure to perform its obligations three (3) years after
due; and other conclusive evidences showing that such debt cannot or is unlikely to be
withdrawn.
Possible bad debt losses are accounted by allowance method with separate impairment
test or that by portfolio taken at the end of the year, and provision for bad debts are accrued
are included in current profits and losses. For accounts receivable with conclusive evidence
showing that such accounts receivable cannot be recovered, such accounts receivable are
included into bad debt losses with the approval from the Group's management and bed debt
reserves are offset.
（1）Receivables of individual account with significant amount and accrued provision for bad
debt
Recognition Criterion for individually significant amounts:
The receivables with more than RMB 1 million shall be recognized as the significant receivables;
The accruing method of the receivables with individually significant amounts:
The Group should make the impairment test separately or in combination and accrue the bad
debt provisions which shall be recorded into current profit or loss at the end of the period. If there is
defined evidence for the receivables not to or not likely to be received, which shall be recognized as
the loss of bad debt and write off the accrued bad debts provisions after going through the approval
procedure of the Group.
(1) Accounts receivable accrued bad debt provision by portfolio
Accounting aging analysis method:
Use the accounting aging of the receivables as the credit risk characteristics to classify the portfolio.
Accrue the bad debt provision by accounting aging analysis method .
Proportion for Provision for bad debt Proportion for Provision for bad debt
Aging
（receivable）% ( other receivable) %
Within 1 year 5 5
1-2 years 20 20
2-3 years 50 50
Over 3 years 100 100
(2) Individually insignificant amount accounts receivable but accrued bad debt provision
Recognition Criterion for individually insignificant amounts:
29
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Where there are obvious evidences suggesting impairment: debtor has been log-out,
bankruptcy, minus net asset, significant poor cash flow and significant nature disaster leads to
discontinue production and the debtors could not pay for the debts within the foreseeable time.
The accruing method of the receivables with individually insignificant amounts:
The Group should make the impairment test separately or in combination and accrue the bad
debt provisions which shall be recorded into current profit or loss at the end of the period. If there is
defined evidence for the receivables not to or not likely to be received, which shall be recognized as
the loss of bad debt and write off the accrued bad debts provisions after going through the approval
procedure of the Group.
11. Inventory
The inventories of the Group include mainly property development products, raw materials,
commodity stocks, low-value consumables and others.
The property development products include the properties under construction (including the
land to be developed) and as-built properties (including the leased property available for sale).
Actual costs of real estate development products include land-transferring cost, supporting
infrastructure cost, construction & installation cost, loans before completion of the development
projects and other relevant cost during development. Actual costs of delivered real estate
development products are determined by specific identification of costs.
Actual cost accounting is adopted for construction contract, including direct costs and indirect
costs from contract signing to completion of the contract and related to fulfillment of the contract.
The net amount after the offset of accumulated cost and accumulated recognized gross profits (loss)
for the properties under construction and the settlement is listed as net amount after offset in the
balance sheet. Where the sum of accumulated cost and accumulated recognized gross profits (loss)
for the properties under construction is more than the settlement, the balance is listed as inventories;
where the latter is more than the former, the balance is listed as unearned revenue.
Travel expenses, tender expenses, etc. for construction contract signing can be separately
distinguished and reliably calculated. For contracts probably to be concluded, expenses are
recognized into contract cost upon receiving the contract; otherwise, expenses are recognized into
current profits or losses.
One-off amortization method is adopted for receipt of low-value consumables and other
inventories.
The ending inventory is measured by the cost and net reliable value whichever is lower. When
the net reliable value of the property development product is less than the cost, the inventory falling
price reserve shall be withdrawn. Net reliable value refers to the amount of the predicted sale price
less predicted as-built cost and expenses arising from sale and taxes during normal production and
operation process. Estimates of net realizable value are based on the most reliable evidence
available at the time the estimates are made and take into consideration the purpose for which the
30
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
inventory is held and the influences of events occurring after the balance sheet day.
After the accrual of devaluation provision for inventory, where affecting factors for
former write-down of inventory value has disappeared, the write-down amount shall be
recovered and reversed in the formerly accrued depreciation provision amount, and reversed
amount shall be included in current profit or loss and reversed amount shall be included in
current profit or loss.
12. Long-term equity investments
The long-term equity investment of the Group includes mainly the investment to the
subsidiaries, associated enterprises and joint ventures.
The basis for the Group to define joint control is that all participating parties or the
combination of the parties control the arrangement jointly and the policies relevant to the activities
of the arrangement must be agreed by such parties.
The Group will be generally deemed to have significant impact on the invested entity if the
Group holds 20% (inclusive) to 50% of voting right of an invested entity directly or indirectly
through its subsidiaries. Where the Group holds less than 20% of voting right of an invested entity,
the Group’s significant impact on the invested entity will depend on whether the Group has its
representative in the Board of Director or any similar organ of power of the invested entity, whether
the Group participates in the formulation of financial and operation policies of the invested entity,
whether the Group has important deals with the invested entity, whether the Group dispatches
management personnel to the invested entity or whether the Group provides the invested entity with
key technical data.
Any entity under the control of the Group is the subsidiary of the Group. The long-term equity
investment acquired through merging with an enterprise under common control, the book value of
net asset of the acquiree in the consolidated financial statements of the ultimate controller on the day
of merger is taken as the initial investment cost of the long-term equity investment. Where the book
value of net asset of the acquiree on the day of merger is negative, the cost of the long-term equity
invest is recognized as zero.
Where the long-term equity investment is acquired thorough merging with an enterprise not
under common control, the merger cost is taken as initial investment cost. The merger cost is the fair
value of the assets given, debt occurred or borne and equity securities issued by the Group for
acquiring the controlling right of the acquiree on the day of merger
Aside from the above long-term equity investment acquired by the merger of enterprises,
long-term equity investment acquired by cash payment adopts the actual paid purchase amount as
the investment cost; long-term equity investment acquired by issuance of equity securitiesadopts
the fair value of issued equity securities as the investment cost; long-term equity investment
invested by investors adopts the value reached in the investment contract or agreement as
31
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
the investment cost.
The investment of the Group to the subsidiaries is calculated with cost method, and equity
method is applied for joint ventures and associated enterprises.
For the long-term equity investment with cost method applied for subsequent measurement, in
case investment is added, the book value of the long-term equity investment cost is added with the
fair value of additional investment cost and resulting transaction expenses. The cash dividend or
profit distributed by an invested entity is recognized as current return on investment based on the
distributed amount.
For the long-term equity investment with equity method applied for subsequent measurement,
the book value of the long-term equity investment is increased or decreased with the change in the
ownership equity of the invested entity. The proportion of net profit or loss of the invested company
to be enjoyed or assumed by the Group is confirmed by taking the fair value of recognizable assets
of the invested company upon obtaining the investments as the base, and offsetting the proportion of
internal transaction profits and losses occurring between the associated enterprises and joint
ventures which is due to the investing enterprise according to shareholding proportion and adjusting
the net profit of the invested unit.
For disposal of long-term equity investment, the difference between the book value and the
actual received payment shall be recognized into current income. For the disposal of the long-term
equity investments which are calculated with equity method and recognized into the owner equity
due to the changes in owner equity other than the net profits and losses of the invested company, the
part initially recognized into the owner equity shall be carried over to current income and losses in
corresponding proportion.
Where losing joint control over or significant impact on the invested entity is a result of
such fact as disposing partial equity investment, the remaining equity is calculated as the
finance asset available for sale and the balance between the fair value and the book value of
the remaining equity on the day of losing joint control or significant impact is included in
current profits and losses. For other comprehensive income of the original equity investment
recognized with equity method, the basis same as that of the invested entity directly
disposing relevant asset or debts is applied for accounting when the equity method is ceased
to be used.
Where losing control over the invested entity is a result of disposing partial long-term
equity investment and the Group has a common control over or have significant impact on
the invested entity by using the remaining equity, the equity method is applied, the balance
between the book value and disposal consideration of the disposed equity is included in the
return on investment, and the remaining equity is adjusted as if it was calculated with equity
method since the acquiring of such equity. In case the Group cannot have a common control
over or have significant impact on the invested entity by using the remaining equity,
regulations for financial assets available for sale are applied and the balance between the
32
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
book value and disposal consideration of the disposed equity is included in the return on
investment, and the balance between the fair value and book value of the remaining equity
on the day of losing control is included in current profits and losses.
13. Investment property
The investment property of the Group includes the leased land use right, the land use
right it is entitled to for assignment after appreciation, the leased properties and the
properties it holds for sale. Cost model is applied for measurement.
The investment property of the Group is amortized with the average service life method.
Estimated service life, net residual value rate and annual amortization rate of investment
property are as follows:
Items Useful Lives Residual Rates (%) Annual Depreciation Rates (%)
land usage rights 50 years 0.00-10.00 1.80-2.00
House and Building 20-28 years 0.00-10.00 3.56-4.50
14. Fixed assets
The Group's fixed assets are tangible assets that: (i) are held for use in the production or
supply of goods or services, for rental to others, or for administrative purposes; (ii) have
useful lives more than one year; and (iii) have unit value more than RMB 2,000.
The fixed assets can be recognized only when their economic interests may flow into
the Group and their costs can be reliably measured. Fixed assets of the Group are classified
as houses and buildings, machines and equipment, transportation equipment, office facility,
etc.
All fixed assets, apart from those fixed assets that have been depreciated and accrued
but are still in use and those lands that are transferred into fixed assets separately according
to actual values, are depreciated and accrued by the Group. The average service life method
is applied for accrual of depreciation.
The classification, depreciation years, estimated net residual value rate and
depreciation rate of fixed assets are as follows:
Items Useful Lives Residual Rates (%) Annual Depreciation Rates (%)
House and Building 20-28 years 5.00 3.39-4.75
Machinery equipment 4-5 years 5.00 19.00-23.75
Transportation 5-20 years 5.00 4.75-19.00
equipment
Other equipment 3.0-5 years 5.00 19.00-31.67
33
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
The Group shall check the useful life of fixed assets, expected net salvage value and
depreciation method not later than the end of the year. Any change will be disposed as
accounting estimation change.
15. Construction in progress
The constructions in progress shall be transferred into the fixed assets based on the
estimated value since the date when they are in the intended use state, according to project
budget, cost or actual cost of the project, etc., and be withdrew and depreciated since the
next month. The estimated value then is adjusted according to the actual cost after the
completion settlement has not been handled.
16. Borrowing costs
The borrowings used for fixed assets, investment property and inventories needing
more than 1 year to construct or product for intended use or sale are capitalized after the
capital is paid, borrowings are obtained and the construction or production begins, and are
ceased to be capitalized after the intended use or sale of the same is available. The
subsequent borrowings are in included in current profits and losses. If the asset in
conformity with capitalization conditions suffers abnormal disruption during the process of
purchase and construction or production, and the duration of the disruption exceeds three
(3) consecutive months, the capitalization of borrowing costs shall be suspended until the
purchase and construction or production activity of the asset resumes.
In the property development project of the Group, the construction or production
necessary for intended use or sale of the assets mean that the land use right required for the
construction has been obtained and the construction (such as the pile foundation works or
other substantial construction works) has commenced; the asset available for intended use
or sale mean the return receipt of final acceptance records of the property project is
received
In the case of loan specially borrowed for the acquisition and construction or
production of assets conforming to capitalization conditions, the capitalized amount is equal
to actual interests of the loan specially borrowed minus the interest income of the borrowed
capital that has not been used in the bank deposit or the revenue from temporary
investment from the actual interests incurred in the current period of specially borrowed
capital. The interest amount of general loan to be capitalized is calculated by multiplying the
weighted average of the part of aggregate assets expenditure in excess of the special loan
expenditure of assets by the capitalization rate of utilized general loan. The capitalization
rate is determined on the basis of weighted average interest rate of general loans.
17. Biological Assets
The biological assets in the company are consumptive biological assets and productive
biological assets. Consumptive biological assets include baby breeding and fat breeding. Productive
biological assets are hens.
34
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Biological assets are recognized only when the following criterions are met simultaneously:
(1) The company acquired the biological assets because of past transactions or events.
(2) The potential economic benefits generated by the biological assets may flow into the company
(3) The cost of biological assets can be calculated reliably
The purchase and disposal of biological assets: the costs of biological assets after the transfer
of purpose are same as the book value before the transfer of purpose; When biological assets are
sold, destroyed or have inventory loss, the differences between the proceeds of disposal and the
book value plus relevant taxes are included in the profit and loss of the current period.
The initial cost of biological assets includes purchase price, transportation cost, insurance cost,
and other cost directly attributed to purchasing the assets. The initial cost of self-breeding
productive biological assets (before the expected condition for use) includes breeding cost, wages
and other indirect costs. Before the expected condition for use, cost of biological assets, including
breeding and protection, are recorded in profits and losses of the current period.
Biological assets are depreciated using the straight-line method to allocate the cost of the assets
to their estimated useful lives. For the biological assets being provided for impairment loss, the
related depreciation charge is prospectively determined based upon the adjusted carrying amounts
over their remaining useful lives.
The estimated useful lives, residual rates and annual depreciation rates are as follows:
Items Useful Lives Residual Rates (%) Annual Depreciation Rates (%)
Chicken and Eggs 1 years 5.00 95
At the balance sheet date, if potential impairment of biological assets exists, estimation of its
net realizable value shall be made. Recognizing impairment loss where net realizable value below
its book value.Once an impairment loss is recognized, it is not reversed in a subsequent period.
When biological assets are sold, destroyed or have inventory loss, the difference between the
revenue from disposal and its book value plus relevant taxation are recorded into profits and losses
of the current period.
18. Intangible assets
The intangible assets of the Group include the land use right and software acquired for
the construction of self-used properties. The land use right acquired for daily operation is
calculated as the inventory. Intangible assets are measured at actual cost upon acquisition,
where, the actual cost of intangible assets purchased consists of the actual payment and
relevant expenses; and the cost input by the investors in intangible assets is determined in
accordance with the value stipulated in the investment contract or agreement; unless the
contract or agreement stipulates that the value is not fair, then the actual cost is measured at
35
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
the fair value.
Land use right is amortized averagely according to transfer term counted from
transferring date; software and other intangible assets shall be amortized averagely
according to the shortest term among anticipated service life, beneficiary years stipulated in
contract and valid terms formulated by law. Amortized amount is included in relevant asset
cost and current profit or loss by beneficiaries. Estimated service life and amortization
method of intangible assets with limited service life are recheck at the end of each year,
treatment of changes in accounting estimates is adopted for any change.
As for the intangible assets with limited life, its service life shall be estimated at the year-end
Item Amortisationperiods Basis
Less than the period stated at contracts or
Land use rights 50years
included in other legal rights
Patent, brand, software Less than the period stated at contracts or
5 years
and technology included in other legal rights
19. Impairment of non-financial asset excluding goodwill
When the Group found that there was an indication of impairment of long-term equity
investment, investment property, fixed assets, project under construction, and intangible
assets with limit service life on each balance sheet date, the Group conducted impairment
test. The intangible assets with uncertain service life shall be tested in impairment at the end
of the year, no matter whether there is any sign of impairment.
The recoverable amount of assets should be estimated on a single asset basis, or the
recoverable amounts of a single asset cannot be estimated, it is allowed to estimate the
recoverable amount of the asset group to which the said asset belongs. The recoverable
amount is determined to be the fair value of the asset or asset group with the disposal
expense deducted or the present value of estimated cash flow of the asset or asset group,
whichever is higher. If the book value of the asset is more than the recoverable amount, the
difference will be recognized as the impairment loss; and once the impairment loss is
recognized, it shall not be reversed in the later accounting periods.
20. Goodwill
The balance of the equity investment costs or consolidation costs not under the same
control greater than the fair value of the share of net assets or recognizable net assets of the
invested unit or seller acquired from enterprise consolidation is recognized as goodwill.
Goodwill related to the subsidiary is separately listed on the consolidated financial
statements; goodwill related to the associated enterprises and joint ventures is included in
the book value of long-term equity investment.
Impairment test is carried out for goodwill at the end of the year, no matter whether
36
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
there is any sign of impairment. The goodwill was, together with the related asset group or
combination of asset groups, subject to the impairment test. That is, the book value of
goodwill was reasonably apportioned to the asset group or combination of asset groups
which benefit from thesynergy of business merger from the purchase date. If the recoverable
amount of the asset group or combination of asset groups of goodwill with apportionment is
less than its book value, the related impairment loss shall be recognized. Impairment loss is
firstly amortized to the carrying values of goodwill in asset group or asset group portfolio,
and then deducted for the carrying value of other assets in according to the percentage
occupied of other assets (except goodwill) in the asset group or asset group portfolio.
21. Long-term deferred expenses
The long-term unamortized expenses of the Group include the improvement
expenditure of fixed assets under operating lease and other expenses with a benefit period
over 1 year. Such expenses were amortized averagely in the benefit period. Where the
long-term deferred expenses fail to benefit the subsequent accounting periods, all amortized
value that has not been amortized yet shall be transferred to the current profits and losses.
22. Employee remuneration
The remuneration of employees in the Group includes short-term remuneration,
welfare after demission, dismissal welfare and other long-term welfare.
The short-term remunerations mainly include the employee’s salary and welfare
expense of employee. The actual short-term remunerations shall be recognized as the debt
during the accounting period when the employees provide service and included in current
profits and losses or related asset costs according to the benefit object.
The welfare after demission mainly includes the basic endowment insurance premium
and unemployment insurance expense and is classified into the defined contribution plan
and the defined benefit plan according to the risk an obligation undertaken by the Company.
For the defined contribution plan, the sinking fund deposited to an independent entity for
the service provided by employee in the accounting period on the balance sheet date is
recognized as the debt and included in current profits and losses or related asset costs
according to the benefit object. There is no defined benefit plan in the Company.
When the Group cannot unilaterally withdraw the dismissal welfare provided for the
plan on the cancellation of labor relationship or layoff proposal, or recognize the cost or
expense involved with the recombination of dismissal welfare or payment of such dismissal
welfare (whichever is earlier), the employee’s remuneration incurred by the dismissal
welfare is recognized as the debt and included in current profits and losses or related asset
costs.
23. Estimated liabilities
When the businesses related to contingencies like external guarantee and pending
37
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
actions or arbitrations conform to the following conditions at the same time, they will be
recognized as the debt by the Group: the obligation is the current obligation undertaken by
the Group; the implementation of such obligation may probably cause the outflow of
economic interests from the Group; and the amount of that obligation can be measured
reliably.
24. Share payment
The equity-settled share-based payment to exchange the provision of service by
employees is measured by the fair value of the equity instrument conferred to the
employees on the grant date. Where it is exercisable upon finishing the service within the
waiting period or satisfying the regulated performance conditions, based on the optimal
estimation of the exercisable equity instrument quantity within the waiting period, the fair
value amounts are included in relevant cost or expense after calculation by the method of
line, with relevant capital surplus increased.
25. Recognition and measurement of income
The operation revenue of the Group mainly include the sales revenue, lease revenue
and property management revenue of real estate development productsand revenue
recognition policies are as follows:
1) The revenue of real estate development products are recognized under the following
conditions:
A. Seller and Purchaser sign the sales contract and file a record in the land department;
B. The revenue of real estate development products are completed and are qualified in
acceptance;
C. The company has received full house-purchase price or obtained the right of collecting the
full purchase price (e.g. the written commitment letter for releasing mortgage payment from
bank);
D. The formalities of property delivery are handled or the customers are deemed to accept
the property according to the terms in the purchase contract.
2) Lease revenue:
The lease revenue of investment property is recognized as the lease revenue by the
method of line according to rent agreed in the contract or agreement over the lease term.
3) Property management revenue:
When property management service has been provided and its relevant economic
benefit has obtained by the Company, meanwhile, relevant revenue and cost can be
measured reliably, the realization of utilities revenue is recognized .
26. Government subsidies
Government subsidies refer to monetary assets and non-monetary assets acquired
38
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
without any charge from the government. Government subsidies can only be recognized
upon meeting the condition that the Company meets all conditions of government subsidy
and is able to receive the government subsidy.
If government subsidies are monetary assets, it shall be calculated according to the
received; if the government subsidy is distributed subject to fixed quota standard or if there
is definite evidence showing that it is in conformity with relevant requirements of the
financial support policies, it shall be calculated according to the receivable amount; and if
the government subsidy is non-monetary assets, it shall be measured at the fair value; and if
the fair value fails to be obtained reliably, it shall be calculated according to nominal amount
(RMB 1).
Government subsidies in relation to assets are recognized as deferred income and
allocated equally within the service life of relevant assets, which will then be included in
current profit or loss. Government subsidies relevant with incomes and that are used to
make up future expenses or losses will be recognized as deferred income and recognized into
current profits and losses within the recognition period of relevant expenses; government
subsidies used to make up incurred relevant expenses or losses are included into current
profits or losses directly.
27.Deferred income tax assets and deferred income tax liabilities
Deferred income tax assets and deferred income tax liabilities are measured in
accordance with the tax base of assets and liabilities and difference of its book value
(temporary difference). Deferred income tax assets shall be recognized based on the
deductible losses of the income tax payable in the following year in accordance with the tax
law. A deferred tax liability shall not berecognized if the temporary difference arises from the
initial recognition of goodwill. The deferred income tax assets and liabilities shall not be
recognized to the extent that the temporary difference arises from the initial recognition of
an asset or liability in a transaction which contains both of the following characteristics (i):
the transaction is not a business combination and (ii) at the time of the transaction, it affects
neither accounting profit nor taxable profit (or deductible loss). At the balance sheet date,
the deferred income tax assets and deferred tax liabilities shall be measured at the tax rates
that are expected to apply to the period when the asset is realized or the liability is settled,
according to the requirements of tax laws.
Deferred tax assets are recognized with a limit of the future taxable income which is
likely to be used by the Group for deducting any deductible temporary difference, deductible
loss and tax deduction.
28. Leasing
The leasing business of the Group is operating lease.
The rent paid by the Group as the Lessee in the operating lease is included in related
39
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
asset costs or current profits and losses by the method of line over the lease term.
29. Change in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
1)the accounts of the company have been prepared in accordance whit eight revised
accounting standards on July 1,2014 by the Ministry of Commerce,such as No. 9 – employee
compensation,the changes of accounting policy had no significant impact on company’s
financial statements and the result of operation.
2) According to the revised Accounting Standards for Enterprises No.30 – Reporting
Financial Statement, other comprehensive income items have been added in balance sheet
of financial statement; the Company has adopted retroactive adjustment method to revise
the 2014 comparative statement by expressing the translation reserve as other new
comprehensive income items.
(2) Significant changes in accounting estimates
Not Applicable.
V. Taxation
1. Main taxes and tax rates
Tax category Tax basis Tax rate
Business tax Housing prepayment; taxable income 5%
Land value-added tax Land VAT or pre-requisitioned Super rate progressive rate
City maintenance and construction tax Transfer tax payable 5%
Education surcharge Transfer tax payable 3%
Local education surcharge Transfer tax payable 2%
Rental income or original value of real
Housing property tax 12% or 1.2%
estate
Taxable income; 25% of the taxable
Corporate income tax 25%
income
2. Corporate income tax
Company Tax rate
Parent company 25%
ChengdeNanjiang Real Estate Development Co., Ltd 25%
Runhua Rural Water (Tianjin) International Trade Co., Ltd. 25%
ChengDeNanJiang Investment Co., Ltd. 25%
ChengDeNanJiang Ecological Agriculture Co., Ltd. 25%
ChengDeXingYe Paper Co., Ltd. 25%
NanJiang Asia Investment Co., Ltd. 16.5%
ChengdeMorsh Technology Co., Ltd 25%
40
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Company Tax rate
ChengdeHuiJing property Co., Ltd 25%
NOTE：NanJiang Asia Investment Co., Ltd. is in special administrative region, and the applicable
corporate income tax rate is 16.5%.
3. The company withhold individual income tax.
VI. Notes to Major Items in Consolidated Financial Statement
With respect to the following data disclosed in the Financial Statements, unless
otherwise stated, "the beginning of the year" refers to January 1, 2014; "the end of the year"
refers to December 31, 2014; "this year" refers to the period between January 1, 2014 to
December 31, 2014, and the "previous year" refers to the period between January 1, 2013 to
December 31, 2013. The currency unit is RMB.
1. Monetary fund
Closing Balance Opening Balance
Items Currency Original Exchange RMB Original Exchange RMB
Currency rate Translation Currency rate Translation
Cash
RMB 33,252.06 1.0000 33,252.06 19,146.58 1.000 19,146.58
Sub-total 33,252.06 1.0000 33,252.06 19,146.58 --- 19,146.58
Bank deposit
CNY 30,635,611.58 1.0000 30,635,611.58 75,093,993.26 1.000 75,093,993.26
JPY --- --- --- --- --- ---
EUR --- --- --- --- --- ---
HKD 335.37 0.7889 264.57 --- --- ---
USD 802,946.84 6.1190 4,913,231.69 470,460.11 6.0969 2,868,348.22
Sub-total --- --- 35,549,107.84 --- --- 77,962,341.48
Other monetary fund
RMB 1,416,185.27 1.0000 1,416,185.27 11,445,403.16 1.000 11,445,403.16
Sub-total 1,416,185.27 --- 1,416,185.27 11,445,403.16 --- 11,445,403.16
Total --- --- 36,998,545.17 --- --- 89,426,891.22
At the End of December 31, 2014, the company does not existpledging ,freezing and
Monetary fund with recycling risk.
(1)Restricted monetary fund during the reporting period are shown below:
Item Closing Balance Opening Balance
guaranteed deposit for housing mortgages 1,416,185.27 1,045,403.16
deposit for notes payable --- 10,400,000.00
Total 1,416,185.27 11,445,403.16
NOTE: Compared to the OpeningBalance,the Closing Balance of monetary fund decreased by
41
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
RMB 52,428,346.05,with the decreased rate of 58.63%. The major explanations for the
decrease were: Increases payment for goods of RunHua.
2.Accounts receivable
(1) Types of accounts receivable
Closing Balance
Book balance Provision for bad debts
Categories
Proportion Proportion Book value
Amount Amount
(%) (%)
1 Individually significant
amounts of accounts receivable --- --- --- --- ---
accrued bad debt provision
3 Accounts receivable accrued
2,876,727.75 100.00 154,051.09 5.36 2,722,676.66
bad debt provision by portfolio
Total 2,876,727.75 100.00 154,051.09 5.36 2,722,676.66
Continued:
Opening Balance
Book balance Provision for bad debts
Categories
Proportion Proportion Book value
Amount Amount
(%) (%)
1 Individually significant
amounts of accounts receivable --- --- --- --- ---
accrued bad debt provision
2 Accounts receivable accrued
123,348.00 100.00 6,167.40 5.00 117,180.60
bad debt provision by portfolio
Total 123,348.00 100.00 6,167.40 5.00 117,180.60
(a) accounts receivable accrued bad debt provision by aging analyze method
Closing Balance Opening Balance
Aging
Bad debt Bad debt Proportion
Amount Proportion (%) Amount
provision provision (%)
Within 1 year 2,808,629.75 140,431.49 5.00 123,348.00 6,167.40 5.00
68,098.00 13,619.60 20.00 --- --- ---
1-2 years
--- --- --- --- --- ---
2-3 years
--- --- --- --- --- ---
Over 3 years
Total 2,876,727.75 154,051.09 5.36 123,348.00 6,167.40 5.00
(2) Provision for bad debts withdrawn and returned back (or taken back) in this year
Provision for bad debts extract in this year is RMB154,051.09.
42
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
(3) Top five arrears balance of accounts receivable by the end of the year
Proportion in total
Year-end balance of
Company name Closing Balance year-end balance of
provision for bad debts
accounts receivable (%)
Customer I 2,053,647.40 71.39 111,592.37
Customer II 750,750.00 26.10 37,537.50
Customer III 59,719.35 2.08 3,913.12
Customer I V 12,611.00 0.44 1,008.10
Total 2,876,727.75 100.00 154,051.09
3. Prepayments
(1) Aging of prepayments
Closing Balance Opening Balance
Item
Opening Balance Proportion (%) Amount Proportion (%)
Within 1 year 7,748,545.39 99.59 28,529,944.69 84.32
1-2 years --- --- 3,400.00 0.01
2-3 years 3,400.00 0.04 5,302,965.53 15.67
Over 3 years 28,200.00 0.36 --- ---
Total 7,780,145.39 100.00 33,836,310.22 100.00
(2)During the reporting period, the company has prepayment with an aging above 1 year
Company Name Relationship Amount Aging Reason for unsettlement
ChengDeResidence Guarantee Co., Ltd. Non-Related Party 31,600.00 Over 2 years Residence purchaser’s loan
Total --- 31,600.00 --- ---
(3) The top five prepayment accounts
Debtors Ranking Relationship Amount Aging
Supplier I Non-Related Party 5,490,100.00 Within 1 year
Supplier II Non-Related Party 759,994.98 Within 1 year
Supplier III Non-Related Party 520,000.00 Within 1 year
Supplier I V Non-Related Party 508,750.00 Within 1 year
Supplier V Non-Related Party 270,616.50 Within 1 year
Total --- 7,549,461.48 ---
(4)NOTE: Compared to the opening balance,the closing balance of accounts
receivabledecreased by RMB 26,056,164.83,with thedecrease rate of77.01%. The major
explanations for the decrease were: Engineering settlement.
4. Other receivables
1) Classification of other receivables
43
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Closing Balance
Type Book balance Provision for bad debts
Proportion Proportion Book value
Amount Amount
(%) (%)
Other receivables of
individual account
with significant
2,709,273.00 17.08 2,709,273.00 100.00 ---
amount and accrued
for provision for bad
debts
Other accounts
receivable withdrawn
provision for bad
11,220,393.72 70.76 212,101.28 1.89 11,008,292.44
debts based on credit
risk feature
combination
Other receivables of
individual account
with insignificant
1,927,957.70 12.16 1,927,957.70 100.00 ---
amount and accrued
for provision for bad
debts
Total 15,857,624.42 100.00 4,849,331.98 30.58 11,008,292.44
Continued:
Opening Balance
Type Book balance Provision for bad debts
Proportion Proportion Book value
Amount Amount
(%) (%)
Other receivables of
individual account
with significant
1,209,273.00 14.42 1,209,273.00 100.00 ---
amount and accrued
for provision for bad
debts
Other accounts
receivable withdrawn
provision for bad
5,318,030.55 63.42 341,921.88 6.43 4,976,108.67
debts based on credit
risk feature
combination
Other receivables of
individual account
with insignificant
1,857,951.91 22.16 1,857,951.91 100.00 ---
amount and accrued
for provision for bad
debts
Total 8,385,255.46 100.00 3,409,146.79 100.00 4,976,108.67
1) Other receivables which single amount is significant and bad debts reserve is withdrawn
at the end of the year
Accounts Receivable Book Amount Bad debt provision Rate(%) Reasons for Accrual
Creditor’s right from auctions 1,209,273.00 1,209,273.00 100.00 More than 3 years
Chengde county administration
1,500,000.00 1,500,000.00 100.00 Expected irrecoverable
of non-tax revenue
44
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
2,709,273.00 2,709,273.00 100.00 ---
Total
2) Other receivable with provisions of bad debts accrued by aging analysis method in the
portfolio
Closing Balance
Aging
Other receivables Provision for bad debts Accruing proportion (%)
Within 1 year 1,621,521.44 81,074.57 5
1 to 2 years 287,885.00 57,577.00 20
2 to 3 years 138,911.00 69,449.71 50
Over 3 years 4,000.00 4,000.00 100
Total 2,052,317.44 212,101.28 10.33
3) Other receivable with provisions of bad debts accrued by other method in the portfolio
Closing Balance
Aging
Other receivables Provision for bad debts Accruing proportion (%)
The prepayment of oil
108,399.29 --- ---
company
The purchase
payment of land of
3,678,200.00 --- ---
Chengde county land
reserve center
Special fund of
90,421.00 --- ---
cement
margin 3,203,400.00 --- ---
Staff’s loan 2,087,655.99 --- ---
Total 9,168,076.28 --- ---
(4)Other receivables of individual account with insignificant amount and accrued for
provision for bad debtsat the end of the year
Accounts Receivable Book Amount Bad debt provision Aging Rate(%) Reasons for Accrual
AnSheng Wang 141,005.79 141,005.79 2-3year 100.00 Expected irrecoverable
DeGangBao 356,838.00 356,838.00 2-4year 100.00 Expected irrecoverable
QiZhong Yan 270,000.00 270,000.00 2-3year 100.00 Expected irrecoverable
ChengQuan Liu 300,000.00 300,000.00 2-3year 100.00 Expected irrecoverable
TianHong Li 217,424.66 217,424.66 3-4year 100.00 Expected irrecoverable
HaiHong Zhou 642,689.25 642,689.25 1-2year 100.00 Expected irrecoverable
1,927,957.70 1,927,957.70 --- 100.00 ---
Total
(5) Provision for bad debts withdrawn and returned back (taken back) in this year
45
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Provision for bad debts extract in this year is RMB 1,599,447.27; bad debts reserve
returned back or taken back in this year is RMB 159,262.08.
(6) Classification of other receivables by nature
Book balance at the end of the Book balance at the beginning of
Fund nature
year the year
current account --- 699,000.00
Earnest money 4,753,400.00 ---
Employees deposit 4,091,754.69 2,231,143.95
Creditor’s right from auctions 1,209,273.00 1,209,273.00
The purchase payment of land 3,678,200.00 ---
To offset tariff 430,723.08 1,057,291.48
Others 1,694,273.65 3,188,547.03
Total 15,857,624.42 8,385,255.46
（7）The top five other accounts receivable
Proportion in total Year-end
year-end balance balance of
Debtors Ranking Fund nature Ending balance Aging
of other provision for
receivables (%) bad debts
Customer I Land acquisition 3,678,200.00 Within 1 year 23.20 ---
Customer II Deposit 3,203,400.00 Within 1 year 20.20 ---
bid fund use for
Customer III 1,500,000.00 Within 1 year 9.46 1,500,000.00
land
Creditor’s right
Customer I V 1,209,273.00 Over 3 year 7.63 ---
from auctions
Customer IV Employees Loan 700,000.00 Within 1 year 4.41 ---
Total --- 10,290,873.00 --- 64.90 1,500,000.00
NOTE: Compared to the opening balance,the closing balance of other receivables increased
by RMB 7,472,368.96,with the increase rate of89.11%. The major explanations for the
increase were: The purchase payment of land and increasing guarantee for project.
5.Inventories
(1)Inventories Classification
Closing Balance Opening Balance
Items
Book Balance Provision Net Book Balance Book Balance Provision Net Book Balance
Raw
906,724.95 --- 906,724.95 836,393.84 --- 836,393.84
Material
Circulation
18,498.40 --- 18,498.40 18,498.40 --- 18,498.40
materials
Finished
16,200,791.75 161,182.20 16,039,609.55 15,270,790.02 --- 15,270,790.02
goods
Development
490,087,338.82 --- 490,087,338.82 163,568,661.40 --- 163,568,661.40
costs
Product 5,936,739.90 --- 5,936,739.90 7,642,776.18 --- 7,642,776.18
46
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Items Closing Balance Opening Balance
development
Consumptive
biological 2,827,887.88 669,082.19 2,158,805.69 2,113,905.42 --- 2,113,905.42
assets
Cost of
565,568.78 --- 565,568.78 1,118,939.06 --- 1,118,939.06
production
Total 516,543,550.48 830,264.39 515,713,286.09 190,569,964.32 --- 190,569,964.32
(2) Provision for inventory
Increase during the Decrease during the current
Opening accounting period
Category current accounting Closing Balance
Balance
Reversal Written off
period
Finished goods --- 161,182.20 --- --- 161,182.20
Consumptive ---
669,082.19 --- --- 669,082.19
biological
Total --- 830,264.39 --- --- 830,264.39
(3) Development Cost
Estimation of
Time for Estimation of total Closing Opening
Item time for
commencement investment amount Balance Balance
completion
HuiJingTianDi 2013 2016 5.7bilion 490,087,338.82 161,600,661.40
Products
intended to --- --- --- --- 1,968,000.00
develop
Total --- --- --- 490,087,338.82 163,568,661.40
(4)Product development
Increase during the Decrease during the
Time for Closing
Item Opening Balance current accounting current accounting
completion Balance
period period
QianYu December
7,642,776.18 91,385.00 1,797,421.28 5,936,739.90
an Area 2012
Total --- 7,642,776.18 91,385.00 1,797,421.28 5,936,739.90
(5)Consumptive biological assets
Item Opening Balance Closing Balance
47
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Chick 421,413.94 254,001.43
Hybrid boar 1,348,806.41 1,078,535.97
Dual boar 949,176.52 637,621.37
Boer goat 108,491.01 143,746.65
Total 2,827,887.88 2,113,905.42
NOTE: Compared to the openingbalance ,the closing balance of inventories increased by
RMB 325,973,586.16,with the increased rate of171.05%. The major explanations for the
increase were: The increase of HuiJingTianDi’s development cost.
6. Other Current Assets
Items Closing Balance Opening Balance
Provisional tax 24,131,851.80 4,478,158.24
Total 24,131,851.80 4,478,158.24
7. Long-term equity investments
Accounting Increase,decrease in
Invested Company Investment at cost Opening Balance Closing Balance
method this period(decrease -)
RunHua (TianJin) Water Saving Tech Equity
2,000,000.00 2,185,406.04 44,004.49 2,229,410.53
Co., Ltd. method
MinFeng (TianJin) Material Industry Equity
4,410,000.00 4,441,499.45 14,050.48 4,455,549.93
Chemical Trading Co., Ltd. method
Total --- 6,410,000.00 6,626,905.49 58,054.97 6,684,960.46
Stake ratio Voting right ratio Cash Dividend in this
Invested Company Provision Increase in this period
（%） （%） period
RunHua (TianJin) Water Saving Tech
31.746 31.746 --- --- ---
Co., Ltd.
MinFeng (TianJin) Material Industry
49.00 49.00 --- --- ---
Chemical Trading Co., Ltd.
Total --- --- --- --- ---
(1) On October 14 2011, RunHua (TianJin) Water Saving Tech Co., Ltd. was established and
obtained the business liscence, with the registered capital of RMB 6,300 thousand, including
RunHua developing Co., Ltd. Contribute RMB 3000 thousand, accounting for 47.619% of the
total share capital, subsidiary RunHua contribute RMB 2000 thousand, accounting for 31.746% of
the total share capital, LangFangChunYuan irrigating prject Co., Ltd contribute RMB 1000
thousand, accounting for 15.873% of total share capital, HePing Zhang contribute RMB 300
thousand, accounting for 4.7619% of total share capital.
(2)On December 21 2012, MinFeng (TianJin) Material Industry Chemical Trading Co., Ltd. was
established, with the registered capital of RMB 9000 thousand, including MinFeng (ShanXi)
Material Industry Chemical Trading Co., Ltd contribute 459 thousand, accounting for 51% of the
48
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
total share capital, subsidiaryRunHua contribute RMB 4410 thousand, accounting for 49% of the
total share capital.
8.Fixed assets
(1) Statement of Fixed Assets
Machinery Transportation Other
Item Buildings Total
equipment vehicles equipment
I. Original carrying value
1. Beginning balance 8,095,437.08 1,208,815.43 3,836,318.14 716,058.25 13,856,628.90
2. Increase in the year --- 37,600.00 --- 24,297.00 61,897.00
(1) Purchasing --- 37,600.00 --- 24,297.00 61,897.00
(2) Carried over from
inventory/fixed assets/ --- --- --- --- ---
intangible assets
(3) Other increases --- --- --- --- ---
(4) Increase of corporate
--- --- --- --- ---
combination
3. Decrease in the year --- --- --- --- ---
(1) Disposal --- --- --- --- ---
(2) Carried over to
inventory/fixed assets/ --- --- --- --- ---
intangible assets
(3) Other decreases --- --- --- --- ---
4. Ending balance 8,095,437.08 1,246,415.43 3,836,318.14 740,355.25 13,918,525.90
II. Accumulative depreciation and amortization
1. Beginning balance 1,230,506.40 52,877.32 1,073,148.07 203,743.50 2,560,275.29
2. Increase in the year 307,626.60 122,965.04 498,060.25 134,916.82 1,063,568.71
(1) Withdrawing or
307,626.60 122,965.04 498,060.25 134,916.82 1,063,568.71
amortization
(2) Carried over from
inventory/fixed assets/ --- --- --- --- ---
intangible assets
(3) Other increases --- --- --- --- ---
(4) Increase of corporate
--- --- --- --- ---
combination
3. Decrease in the year --- --- --- --- ---
(1) Disposal --- --- --- --- ---
(2) Other transfer-out --- --- --- --- ---
(3) Other decreases --- --- --- --- ---
4. Ending balance 1,538,133.00 175,842.36 1,571,208.32 338,660.32 3,623,844.00
III. Provision for impairment
1. Beginning balance --- --- --- --- ---
2. Increase in the year --- --- --- --- ---
49
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Machinery Transportation Other
Item Buildings Total
equipment vehicles equipment
(1) Withdrawing --- --- --- --- ---
(2) Carried over from
inventory/fixed assets/ --- --- --- --- ---
intangible assets
(3) Increase of corporate
--- --- --- --- ---
combination
3. Decrease in the year --- --- --- --- ---
(1) Disposal --- --- --- --- ---
(2) Carried over to
inventory/fixed assets/ --- --- --- --- ---
intangible assets
4. Ending balance --- --- --- --- ---
IV. Book value
1. Ending book value 6,557,304.08 1,070,573.07 2,265,109.82 401,694.93 10,294,681.90
2. Beginning book value 6,864,930.68 1,155,938.11 2,763,170.07 512,314.75 11,296,353.61
9. Productive Biological Assets
Item Planting industry Husbandry industry Fishing industry Total
I. Original carrying
value
1. Beginning
--- 559,848.62 --- 559,848.62
balance
2. Increase in the
--- 1,861,932.97 --- 1,861,932.97
year
(1)Purchasing
(2）cultivate --- 1,861,932.97 --- 1,861,932.97
3. Decrease in the
--- 635,159.63 --- 635,159.63
year
1) Disposal or
--- 635,159.63 --- 635,159.63
discard as useless
4. Ending balance --- 1,786,621.96 --- 1,786,621.96
II. Accumulated
depreciation
1. Beginning
--- 301,658.28 --- 301,658.28
balance
2. Increase in the
--- 1,464,631.31 --- 1,464,631.31
year
(1) Withdrawing
--- 1,464,631.31 --- 1,464,631.31
3. Decrease in the
--- 620,395.34 --- 620,395.34
50
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Item Planting industry Husbandry industry Fishing industry Total
year
(1) Disposal or
--- --- --- ---
discard as useless
4. Ending balance --- 1,145,894.25 --- 1,145,894.25
III. Provision for
impairment
1. Beginning
--- --- --- ---
balance
2. Increase in the
--- --- --- ---
year
3. Decrease in the
--- --- --- ---
year
4. Ending balance --- --- --- ---
IV. Book value
1. Ending book
--- 640,727.71 --- 640,727.71
value
2. Beginning book
--- 258,190.34 --- 258,190.34
value
10. Intangible assets
(1) Details of intangible assets
Item Land use rights Software Total
I. Original carrying value
1. Beginning balance 31,622,187.84 228,000.00 31,850,187.84
2. Increase in the year --- --- ---
(1) Purchasing --- --- ---
(2) Increase of corporate
--- --- ---
combination
(3) Other increases --- --- ---
3. Decrease in the year 18,383,609.80 --- 18,383,609.80
(1) Disposal 18,383,609.80 --- 18,383,609.80
(2) Decrease of corporate
--- --- ---
combination
(3) Other decreases --- --- ---
4. Ending balance 13,238,578.04 228,000.00 13,466,578.04
II. Accumulated amortization
1. Beginning balance 2,985,534.43 143,000.00 3,128,534.43
2. Increase in the year 532,452.57 45,600.00 578,052.57
(1) Withdrawing 532,452.57 45,600.00 578,052.57
(2) Increase of corporate --- --- ---
51
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Item Land use rights Software Total
combination
(3) Other increases --- --- ---
3. Decrease in the year 2,142,521.93 --- 2,142,521.93
(1) Disposal 2,142,521.93 --- 2,142,521.93
(2) Decrease of corporate
--- --- ---
combination
(3) Other decreases --- --- ---
4. Ending balance 1,375,465.07 188,600.00 1,564,065.07
III. Provision for impairment
1. Beginning balance --- --- ---
2. Increase in the year --- --- ---
(1) Withdrawing --- --- ---
(2) Other increases --- --- ---
3. Decrease in the year --- --- ---
(1) Disposal --- --- ---
(2) Other decreases --- --- ---
4. Ending balance --- --- ---
IV. Book value
1. Ending book value 11,863,112.97 39,400.00 11,902,512.97
2. Beginning book value 28,636,653.41 85,000.00 28,721,653.41
NOTE: Compared to the opening balance,the closing balance ofIntangible assetsdecreased
by RMB 18,383,609.80,with the decrease rate of57.72%. The major explanations for the
increase were: Some land had been taken back byChengdeCounty land reserve center.
11. Goodwill
(1) Original value of goodwill
Invested company Beginning balance Increase of this year Decrease of this year Ending balance
RunHua 1,809,762.89 --- --- 1,809,762.89
Total 1,809,762.89 --- --- 1,809,762.89
(2)Provision for goodwill
Beginning Increase of this year Decrease of this year Ending
Invested company
balance Withdrawing Others Disposal Others balance
RunHua --- 1,809,762.89 --- --- --- 1,809,762.89
合 计 --- 1,809,762.89 --- --- --- 1,809,762.89
NOTE:Runhua had business losses and did not meet the promised performance in
2014,so goodwill need withdraw provision.
52
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
12. Long Term Deferred Expenses
Opening Closing
Items Increase in this period Decrease in this period
Balance Balance
Office’s Decoration fee 258,988.44 267,725.44 138,644.68 388,069.20
Factory Decoration fee 7,552,584.08 2,789,572.72 2,142,198.84 8,199,957.96
Total 7,811,572.52 3,057,298.16 2,280,843.52 8,588,027.16
13.Deferred income tax assets and deferred income tax liabilities
(1) Non-offset deferred income tax assets
Ending balance Beginning balance
Item Deductible Deferred Deductible Deferred
temporary income tax temporary income tax
difference assets difference assets
Provision for assets impairment 3,336,892.76 834,223.19 3,336,892.76 834,223.19
Total 3,336,892.76 834,223.19 3,336,892.76 834,223.19
(2) Unconfirmed details of deferred income tax assets
Item Ending balance Beginning balance
Deductible temporary difference 1,588,068.88 78,421.43
Deductible losses 105,931,221.32 579,739,156.38
Total 107,519,290.20 579,817,577.81
(3) Unrecognized deductible losses of deferred income tax assets will be expired at the end
of following years
Amount at the end of the Amount at the beginning of
Year Remarks
year the year
2014 --- 555,088,167.94 ---
2015 1,707,747.80 1,707,747.80 ---
2016 --- --- ---
2017 22,943,240.64 22,943,240.64 ---
2018 --- --- ---
2019 81,280,232.88 --- ---
Total 105,931,221.32 579,739,156.38 ---
14. Other non-current assets
Items Closing Balance Opening Balance
Advance payment of housing 5,201,365.53 ---
Total 5,201,365.53 ---
15.Provision for assets impairment
Items Opening Balance Increase in Decrease in this period Closing
53
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
this period Reversal Written off Balance
Bad debt provision 3,415,314.19 1,747,330.96 159,262.08 --- 5,003,383.07
Provision for
--- 830,264.39 --- --- 830,264.39
long-term equity
Impairment provision
--- 1,809,762.89 --- --- 1,809,762.89
for goodwill
Total 3,415,314.19 4,228,096.16 159,262.08 --- 7,643,410.35
16. Notes Payable
Classification Closing Balance Opening Balance
banker's acceptance bill --- 26,000,000.00
Total --- 26,000,000.00
17. Accounts payable
(1) Accounts payable
Item Ending balance Beginning balance
Payment of construction 318,150.00 ---
Payment of raw material 4,613,124.04 3,268,751.72
Payment of goods 5,494,646.37 59,611.00
Others --- 332,268.44
Total 10,425,920.41 3,660,631.16
(2) Significant accounts payable with age of more than one year
Company Name Closing Balance Reason for unsettle
XingCheng(ChengDe)ConstructionCo., Ltd. 345,551.54 Project quality assurancepayment
YongWang(ChengDe)Construction Co., Ltd. 274,349.42 Project quality assurancepayment
LiCheng(ChengDe)ConstructionCo., Ltd. 294,129.43 Project quality assurancepayment
Total 914,030.39 ---
NOTE：Compared to the opening balance, the closing balance of receivable in advance increased
by RMB 6,765,289.25, with the increase rate of 184.81%, the major explanation of this increase
were:the settlement date of project payable and goodspayable were after December 31, 2014.
18.Receivable in advance
（1） Disclosure of receivable in advance by aging：
54
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Aging Closing Balance Opening Balance
Within 1 year 290,954,152.81 53,821,113.16
1-2 years --- ---
2-3 years --- ---
Over 3years --- ---
Total 290,954,152.81 53,821,113.16
（2） Disclosure of receivable in advance by item：
Opening Closing Time of estimated Rate (%)in
Item
Balance Balance completion advance sale
House’ receivable in advance:
Project Of HuiJingTianDi --- 277,140,032.59 December,2016 36.37
Project Of DaLuQianYuan 2,149,551.00 --- December,2012 93.43
Sub-total 2,149,551.00 277,140,032.59 --- ---
Goods’ receivable in advance: 9,537,589.88 12,929,706.15 --- ---
Others 1,710,472.28 884,414.07 --- ---
Total 53,821,113.16 290,954,152.81 --- ---
（3） By the end of the current reporting period, there are no receivablein advance due
from any shareholders held over 5%.
（4） By the end of the current reporting period, there are no receivablein advance due
from any related parties.
（5） Explanation of receivablein advance:
Compared to the opening balance, the closing balance of receivable in advance increased by
RMB 237,133,039.65, with the increase rate of 440.59%.,the major explanations were house’
receivable in advance of HuiJingTianDi significantly increasing.
19.Payroll
(1) Disclosure ofPayroll:
Opening Increase in this Decrease in this Closing
Item
Balance period period Balance
The short-term compensation 98,229.60 9,227,173.20 9,198,702.24 126,700.56
Welfare of Post-employment:
9,647.30 677,368.72 677,623.02 9,393.00
Defined Contribution Plan(DCP)
Welfare of dismissal 6,097,486.60 360,903.63 360,903.63 6,097,486.60
Total 6,205,363.50 10,265,445.55 10,237,228.89 6,233,580.16
NOTE：The Closing Balance Of Welfare of dismissal （RMB6,097,486.60）was resettlement fee
for staffs by ChengDeXingYe Paper Co., Ltd.
(2) Disclosure of the short-term compensation:
Increase in this Decrease in
Item Opening Balance Closing Balance
period this period
55
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Increase in this Decrease in
Item Opening Balance Closing Balance
period this period
1 Wage, bonus, allowance and
76,950.00 6,987,908.08 6,959,341.74 105,516.34
subsidy
2、Employee welfare --- 997,688.05 997,688.05 ---
3、Social insurance charges 21,039.60 268,395.71 268,879.31 20,556.00
Including ： a.Essential medical
20,424.20 203,393.20 203,636.70 20,180.70
insurance charges
b.Supplement medical insurance
--- --- --- ---
charges
c.Industrial injury insurance 215.50 46,419.49 46,634.99 ---
d.Maternity insurance 399.90 18,583.02 18,607.62 375.30
4、Housing fund --- 280,229.00 280,229.00 ---
5、Trade union and educational
240.00 692,952.36 692,564.14 628.22
fees
6、Termination welfare --- --- --- ---
Including ： （ 1 ） welfare from
--- --- --- ---
terminating a labor contract
（2）Predicting termination cost --- --- --- ---
7、Other --- --- --- ---
Total 98,229.60 9,227,173.20 9,198,702.24 126,700.56
（3）Disclosure of Defined Contribution Plan(DCP):
Increase in this Decrease in
Item Opening Balance Closing Balance
period this period
Essential endowment insurance 9,047.50 619,844.10 620,267.00 8,624.60
Unemployment insurance 599.80 57,524.62 57,356.02 768.40
Total 9,647.30 677,368.72 677,623.02 9,393.00
20. Tax payable
Items Closing Balance Opening Balance
VAT 1,923.47 132,688.59
Business tax 94,797.17 67,762.28
Urban construction tax 6,027.43 19,182.58
Land VAT --- ---
Corporate income tax 3,953,440.14 12,078,983.62
Land use tax 2,993,193.91 2,753,192.71
Individual taxable income 1,433.95 35,510.93
Education surcharge 3,006.46 7,871.26
Stamp tax 68,843.33 34,936.86
Local education surcharge 2,004.31 5,247.55
Housing property tax 2,897,994.17 2,888,250.17
56
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Items Closing Balance Opening Balance
River defense fare 508.33 3,278.03
Total 10,023,172.67 18,026,904.58
NOTE: Compared to the opening balance, the closing balance of tax payable decrease by
RMB8,003,731.91, with the decrease rate of 44.40%,the major reason wasQianYuan’s revenue of
from sales of houses significantly decreasing, which lead to the reduction of corporate income tax.
21. Other payable
(1)Disclosure of other payable by category:
Categories Closing Balance Opening Balance
Deposit 13,859,648.05 32,922,407.15
Loan --- 1,319,199.72
The intermediary expenses 370,000.00 550,000.00
Intercourse funds 341,650.42 1,091,665.99
Withholding and remitting tax 21,518.37 10,228.29
Others 32,011.33 151,482.55
Total 14,624,828.17 36,044,983.70
(2)At the year-end of the reporting period, there are no other payable due from any
shareholders held over 5%.
(3)At the year-end of the reporting period, the other accounts payable are significant and
with an aging of over 1 year
Name Amount Nature or content
MinFeng (TianJin) Material Industry
6,500,000.00 Deposit of goods
Chemical Trading Co., Ltd.
ChengJin(ChengDe) Trading Co., Ltd. 800,000.00 Deposit of goods
YongWang (ChengDe) Construction Co., Ltd. 518,593.95 Deposit of project quality
Total 7,818,593.95 ---
(4)At the year-end of the reporting period, the other accounts payable in significant amount：
Name Amount Nature or content
MinFeng (TianJin) Material Industry Chemical
12,000,000.00 Deposit of goods
Trading Co., Ltd.
ChengJin(ChengDe) Trading Co., Ltd. 800,000.00 Deposit of goods
YongWang (ChengDe) Construction Co., Ltd. 518,593.95 Deposit of project quality
DaHua Certified Public Accountants 250,000.00 Auditing fees
Individual 193,176.00 Reserve funds
Total 13,761,769.95 ---
57
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
22. Share capital
Increase (+) and decrease (-) in this period
Items Opening Balance Issue new Reserves transfer to Closing Balance
Share bonus Other Sub-total
shares shares
1 limited shares
(1)shares held by government --- --- --- --- --- --- ---
(2)shares held by State-own Legal-person --- --- --- --- --- --- ---
(3)shares held by other domestic capital --- --- --- --- --- --- ---
Including: shares held by Legal person 23,147,309.00 --- --- --- --- --- 23,147,309.00
Shares held by natural person 221,652,691.00 --- --- --- --- --- 221,652,691.00
(4)shares held by foreign capital --- --- --- --- --- --- ---
Including: shares held by foreign Legal
--- --- --- --- --- --- ---
person
shares held by foreign nature
--- --- --- --- --- --- ---
person
(5) Other --- --- --- --- --- --- ---
Sub-total for limited shares 244,800,000.00 --- --- --- --- --- 244,800,000.00
2．Unlimited shares ---
(1) Ordinary shares in RMB --- --- --- --- --- --- ---
(2) Domestic listed foreign shares 461,520,000.00 --- --- --- --- --- 461,520,000.00
(3) Foreign listed foreign shares --- --- --- --- --- --- ---
(4) Other --- --- --- --- --- --- ---
Sub-total for unlimited shares 461,520,000.00 --- --- --- --- --- 461,520,000.00
Total 706,320,000.00 --- --- --- --- --- 706,320,000.00
58
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
23. Capital reserves
Opening Increase in this Decrease in
Items Closing Balance
Balance period this period
1 .Capital premium (share capital premium) --- --- --- ---
(1) Capital from investors 390,597,031.55 137.86 --- 390,597,031.55
(2) Effect of business combination under the
--- --- --- ---
common control
Sub-total 390,597,031.55 137.86 --- 390,597,031.55
2.Other capital reserve* 65,873,219.23 --- --- 65,873,357.09
Total 456,470,250.78 137.86 --- 456,470,388.64
24. Surplus reserves
Increase in this
Items Opening Balance Decrease in this period Closing Balance
period
Statutory surplus reserves 76,791,550.17 --- --- 76,791,550.17
Total 76,791,550.17 --- --- 76,791,550.17
25. Undistributed profits
Withdrawal or
Items Closing Balance Opening Balance
allocation proportion
Closing Balance -1,029,880,318.18 -1,124,687,129.34 ---
Add: Change of accounting policy --- --- ---
Prior period error correction --- --- ---
Opening Balance -1,029,880,318.18 -1,124,687,129.34 ---
Add: net profits belong to the parent in this ---
80,280,395.81 94,806,811.16
period
Less: Statutory surplus reserves --- --- 10%
Discretionarysurplusreserve --- --- ---
Dividends of ordinary shares payable --- --- ---
Dividends of ordinary shares transferred into
--- --- ---
share capital
Add: Other transfer --- --- ---
Less: surplus reserves for recovery of loss --- --- ---
Closing Balance -949,599,922.37 -1,029,880,318.18 ---
26. Operating income and operating cost
(1) Classification of operating income and operating cost
Items This period Last Period
59
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Items This period Last Period
Business income 322,502,631.63 363,952,258.89
Principal business income 321,397,845.14 359,002,258.47
Other business income 1,104,786.49 4,950,000.42
Business cost 325,795,009.31 339,083,312.47
Principal business cost 324,806,821.49 339,054,852.08
Other business cost 988,187.82 28,460.39
(2) Principal business income and cost (by industry)
This period Last Period
Industry
Income Cost Income Cost
Agriculture 5,642,269.36 7,487,431.46 1,112,907.68 1,583,798.68
Commerce 312,436,023.98 315,629,299.95 324,167,497.71 314,011,252.79
Real Estate industry 3,319,551.80 1,690,090.08 33,721,853.08 23,459,800.61
Tourism and
--- --- --- ---
restaurant
Total 321,397,845.14 324,806,821.49 359,002,258.47 339,054,852.08
(3) Principal business income and cost (by products)
This period Last Period
Product
Income Cost Income Cost
Agriculture product 5,642,269.36 7,487,431.46 1,112,907.68 1,583,798.68
Chemical Material 312,436,023.98 315,629,299.95 324,167,497.71 314,011,252.79
Real Estate 3,319,551.80 1,690,090.08 33,721,853.08 23,459,800.61
Including:
3,319,551.80 1,690,090.08 33,721,853.08 23,459,800.61
QianYuan
Total 321,397,845.14 324,806,821.49 359,002,258.47 339,054,852.08
(4) Principal business income and cost (by district)
This period Last Period
District
Income Cost Income Cost
ChengDe District 8,961,821.16 9,177,521.54 34,834,760.76 25,043,599.29
TianJinDistrict 312,436,023.98 315,629,299.95 324,167,497.71 314,011,252.79
Total 321,397,845.14 324,806,821.49 359,002,258.47 339,054,852.08
60
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
(5) The operating income of the top five customers of the Company
Principal business
Customer name Rate in total(%)
income
MinFeng (TianJin) Material industry
168,562,321.06 52.45
chemical industry Co.Ltd
BoLv (BeiJing) Tech Co., Ltd. 16,202,008.54 5.04
GuoZhe trading (ShangHai) Co., Ltd. 7,905,530.98 2.46
HuaRunFeng (GuangDong) Co., Ltd. 5,698,777.72 1.77
SuHan trading (WuXi) Co., Ltd. 4,178,378.20 1.30
Total 202,547,016.50 63.02
27. Business tax and surcharges
Items This Period Last Period Tax rate
Business tax 549,375.17 2,202,625.14 5%
Urban maintenance and
26,857.53 128,301.80 5%
construction tax
Education surcharge 16,226.65 71,528.75 3%
Local education surcharge 11,817.73 33,002.90 2%
Super rate
Land VAT 3,959.57 677,398.08
progressive rate
Housing property tax --- 14,784.67 12%
Others 139.38 7,474.48 ---
Total 608,376.03 3,135,115.82 ---
Note:Compared to the opening balance, the closing balance of business tax and surcharges
reduced by RMB 2,526,739.79, with the reduction rate of80.59%.the major explanations for this
decrease were the decrease ofQianYuan ’sales volume.
28. Marketing, Administrative and financial expense
(1) Marketing expense
Item This Period Last Period
Printing expense 16,388.00 5,211.00
Repair expense 37,985.06 5,743.00
Warehouse expense 16,027.89 29,628.91
Wages 333,297.73 49,747.11
Advertise expense 141,992.00 85,850.00
Harbor expense 153,068.85 136,407.10
Manufacturing expense for unfolded
127,191.00 196,800.00
plank
61
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Item This Period Last Period
Contract fee 569,080.62 583,744.05
Transportation expense 2,098,042.30 2,159,063.23
Depreciation/ Amortization 437,332.06 ---
Material consumption 88,314.00 ---
Product packing 90,748.83 ---
Others 189,761.73 11,442.18
Total 4,299,230.07 3,263,636.58
(2)Administrative expense
Item This Period Last Period
Wages 5,157,622.44 4,903,021.63
Intermediary fees 1,157,509.29 2,976,882.80
Others 2,049,390.76 2,634,789.35
Land use tax 2,866,606.56 2,516,106.83
Business entertainment 1,673,528.24 1,929,370.81
Accumulated amortization 1,812,529.94 1,874,911.87
Travel expense 1,292,323.42 986,898.70
Welfare 950,060.65 764,976.35
Office expense 629,720.11 735,452.79
Insurance 895,186.95 638,962.59
Stamp tax 515,735.21 294,649.56
Transportation 342,033.01 242,707.83
Low-valued consumption goods 103,321.43 235,481.00
Housing provident fund 201,245.00 186,872.76
Long-term deferred expenses 138,644.68 79,296.00
Repair charge 382,736.95 ---
Material consumption 378,471.90 ---
Educational fund 692,090.36 ---
Rental fees 311,998.78 ---
Total 21,550,755.68 21,000,380.87
(3) Financial expense
62
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Item This Period Last Period
Interest expense 1,855,248.49 1,030,671.89
Less: interest income 354,411.83 662,129.17
Exchange gain or loss 126,499.41 47,786.16
Bank charges 188,687.11 200,315.27
Total 1,816,023.18 616,644.15
NOTE:Compared to the opening balance, the closing balance of financial expense decreased by
RMB 1,199,379.03, with the reduction rate of 194.50%,the major reasons were the reduction of
borrowing interest expense.
29. Asset impairment loss
Item This Period Last Period
Provision for bad debt 1,588,068.88 -2,503,321.41
Provision for inventory 830,264.39 ---
Provision for goodwill 1,809,762.89 ---
Total 4,228,096.16 -2,503,321.41
NOTE: Compared to opening balance, closing balance of asset impairment loss are increased by
RMB6,731,417.57, the major reason areNanJiang Investment’ provision for bad debt andRunHua
Water’ provision for goodwill significantly increasing.
30. Return on investment
Item This Period Last Period
1.Financial assets (return on investment) --- ---
Bank financial products in this period
171,000.00 111,230.13
(return on investment)
2.Long-term equity (return on
--- ---
investment)
Long-term equity (return on investment
58,054.97 53,372.42
based on cost accounting)
Total 229,054.97 164,602.55
31. Non-operating income
Amount in
Item This Period Last Period non-recurring
profit and loss
Disposal of non-current assets 113,807,781.40 131,918,787.19 113,807,781.40
Profit from disposal of fixed
730.00 26,318,307.45 730.00
assets
Profit from disposal of
113,647,960.69 105,600,479.74 113,647,960.69
intangible assets
63
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Amount in
Item This Period Last Period non-recurring
profit and loss
Profit from disposal of
159,090.71 --- 159,090.71
biological assets
Government grant --- 195,101.01 ---
Receive of donation --- --- ---
Other 3,892,791.31 211,376.25 3,892,791.31
Total 117,700,572.71 132,325,264.45 117,700,572.71
(1)Government grant
Relevant to
Project name This period Last period
assets/earnings
Scientific test demonstration
--- 100,000.00 Assets
expense
Technology: three item
--- 50,000.00 Assets
expense
Developing area (refund of
--- 9,859.00 Assets
duty) subsidy
VAT revenue relief --- 33,742.01 Assets
Others --- 1,500.00 Assets
Total --- 195,101.01 ---
NOTE: The transfer of land (Cheng Xian GuoTuYon(2013) No.31& No.33) from the company to
the government, in accordance with the relevant regulations, created net profits of RMB
113,647,960.69.
32. Non-operating expense
Relevant to
Item This period Last period
assets/earnings
Disposal of non-current assets 989,275.20 --- 989,275.20
Including: Disposal of fixed
--- --- ---
assets
Disposal of intangible assets 787,348.56 --- 787,348.56
Disposal of biological assets 201,926.64 201,926.64
Loss on debt restructuring --- --- ---
Loss on exchange of
--- --- ---
non-monetary assets
Donations contributed 1,500,000.00 2,000.00 1,500,000.00
Including: Public welfare
1,500,000.00 --- 1,500,000.00
donations contributed
Compensation and Tax
3,469,375.11 76,473.85 3,469,375.11
penalty
Inventory loss --- 33,480.00 ---
64
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Relevant to
Item This period Last period
assets/earnings
Other 1,989,035.07 503,840.54 1,989,035.07
Total 7,947,685.38 615,794.39 7,947,685.38
NOTE: Compared to the opening balance, the closing balance of non-operating expense increase
by RMB 7,331,890.99, with the increase rate of 1190.64%,the major reasons are donations
contributed and compensation /tax penalty significantly increasing.
33. Income tax expense
Item This Period Last Period
Current income tax calculated based on
951,857.73 30,539,586.74
tax law and relevant rules
Deferred income tax adjustment --- 756,119.16
Total 951,857.73 31,295,705.90
NOTE:Compared to the opening balance, the closing balance of income tax expense increase by
RMB 30,343,848.17, with the increase rate of 96.96%, the major reason wasQianYuan’ sale
revenue increasing significantly.
34. Notes for statement of cash flow
(1) Other cash receive from operating activities
Item This Period Last Period
Interest income 354,411.83 662,129.17
Current accounts received 27,346,389.08 58,186,692.98
Subsidy income --- 195,101.01
Other 3,892,791.31 437,980.76
Total 31,593,592.22 59,481,903.92
(2) Other cash paid to operating activities
Item This Period Last Period
Expenditure 11,849,634.17 16,469,710.73
Donation expense 1,500,000.00 2,000.00
Intercourse funds 57,686,317.22 28,541,969.74
Current accounts paid 3,469,375.11 ---
other 1,989,035.07 1,232,348.11
Total 76,494,361.57 46,246,028.58
(3) Other cash receive from investing activities
65
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Item This Period Last Period
Restricted cash at bank and in hand 10,029,217.89 ---
Total 10,029,217.89 ---
(4) Other cash paid toinvesting activities
Item This Period Last Period
Restricted cash at bank and in hand --- 11,445,403.16
Total --- 11,445,403.16
35. Supplemental information for statement of cash flow
(1) Supplemental information for statement of cash flow：
Supplemental information This Period Last Period
1.Adjustments to reconcile net profit to net cash
provided by operating activities:
Net profit 73,235,225.77 99,934,857.12
Add: impairment provision for assets 4,228,096.16 -2,503,321.41
Depreciation of fixed assets, consumption &
depreciation of fuel and gas, depreciation of 2,528,200.02 2,164,612.21
productive biological assets
Amortization for intangible assets 578,052.57 862,328.74
Amortization for long-term prepayment 2,280,843.52 664,529.03
Loss on disposal of fixed assets, intangible
-112,818,506.20 ---
assets and other long-term assets
Loss upon rejection of fixed assets --- ---
Loss on variance of fair value --- ---
Finance cost 1,855,248.49 1,030,671.89
Loss in investment -229,054.97 164,602.55
Decrease of deferred tax assets --- 756,119.16
Increase of deferred tax liability --- ---
Decrease of inventories -325,973,586.16 -159,047,494.46
Decrease of operating receivable account
31,682,338.60 -132,862,220.52
items
Increase of operating payable account items 188,303,218.12 -15,717,716.97
Other --- ---
Net cash flow from operating activities -134,329,924.08 -204,553,032.66
2 Significant investing and financing activities
66
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Supplemental information This Period Last Period
for non-cash items
Liabilities capitalized --- ---
Convertible bonds payable mature in one year --- ---
Financing leased fixed assets --- ---
3. Net increase (decrease) for cash and cash
equivalents
Closing balance for cash 35,582,359.90 77,981,488.06
Less: opening balance for cash 77,981,488.06 81,546,046.87
Add: closing balance for cash equivalent --- ---
less：opening balance for cash equivalent --- ---
Net increase (decrease) for cash and cash
-42,399,128.16 -3,564,558.81
equivalents
(2) Details for cash and cash equivalent
Item This Period Last Period
1 Cash 35,582,359.90 77,981,488.06
Including: Cash in hand 33,252.06 19,146.58
Cash at bank 35,549,107.84 77,962,341.48
Other cash and cash equivalents --- ---
2 Cash equivalent --- ---
Including: Bond matured within three months --- ---
3 Closing balance for cash and cash equivalents 35,582,359.90 77,981,488.06
36. Restricted the right of use of assets
Item Closing balance Reason
Cash at bank and in hand 1,416,185.27 Housing mortgage deposit
Total 1,416,185.27
67
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
VII. Consolidation scope change
Not Applicable.
VIII. Rights and interests in other parties
1. Rights and interests in subsidiary
（1）Organization of enterprise groupUnit: RMB 10,000
Nameof subsidiary Main Registered Registered hareholding ratio (%)
Business nature
businesses address Capital Directly Indirectly
ChengdeNanjiang Real ChengDe Real Estate Development；textile,
Real Estate 10,000,000.00
Estate Development County, HeBei clothes manufacture, import & 100 ---
Development CNY
Co.,Ltd.*1 Province export of clothes, leasing service
Runhua Rural Water (Tianjin) International trading of plastic
International 3,000.00
International Trade Co., TianJing
material
30 ---
trading CNY
Ltd*2.
Investment of new energy, new
material, mining industry,modern
agriculture project, Real Estate,
ChengDeNanJiang Investment ChengDe County, 9,000 construction project; investment
Investment 100 ---
Co., Ltd. *3 HeBei Province CNY management, investment
consultancy, trade of import and
export
68
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Nameof subsidiary Main Registered Registered hareholding ratio (%)
Business nature
businesses address Capital Directly Indirectly
Ecological
Production of coarse cereals and
ChengDeNanJiang Ecological Agriculture ChengDe County, 1,000
edible fungus; Planting of fruit、 --- 100
Agriculture Co., Ltd. *4 Planting and HeBei Province CNY
vegetable and Chinese medical herbs
Breeding
Production and marketing of
ChengDeXingYe Paper Co., Paper ChengDe County, 25,000
high-grade coated paper and kraft 100 ---
Ltd. *5 Production HeBei Province USD liner board paper series
NanJiang Asia Investment HongKong, 2,000 International investment and trading
Trading 100 ---
Co., Ltd. *6 China USD
Research, development, sales,
Chengde technical marketing and technical
Energy services of grapheme and its
Morsh ChengDe County, 5,000
Research and application materials, power --- 90
Technology HeBei Province CNY
Development batteries and battery materials, high
Co., Ltd. *7 performance membrane materials,
nano-materials
Property
ChengdeHuiJing property Co., ChengDe County, 50
management Property management service --- 100
Ltd. *8 HeBei Province CNY
service
*1.On February 20 2009, ChengdeRongyida Real Estate Development Co., Ltd was established with registered capital of RMB 10,000,000.00 (Fei Wang contributed
RMB 9,000,000.00, accounted for 90% of the total equity; LiPing Chen contributed RMB 1,000,000.00, accounted for 10% of the total equity). On July 27 2009, Fei
69
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Wang and LiPing Chen transfer 90% of Rongyida’s and 10% of RongYiDa’s equity to former largest shareholder Rong Chen at the price of RMB 9,000,000.00 and
RMB 1,000,000.00 respectively. At the same day, Rong Chen transfer 100% of RongYiDa’s equity to the company at the price of RMB 1.00. After the transfer, the
company held 100% of RongYiDa’s equity.
On April 3, 2014,ChengdeRongyida Real Estate Development Co., Ltd was renamed ChengdeNanjiang Real Estate Development Co.,Ltd.
*2.Runhua Rural Water (Tianjin) International Trade Co., Ltd. (“RunHua”) is a limited liability company registered through TianJingBinHai New District
Administration for Industry and Commerce (Runhua’s business license is 120192000028688). The initial registered capital is RMB 30 million, including: Runhua
Rural Water developing Co., Ltd contribute 4 million, accounting for 13.34% of the total registered capital, BaoSheng Yang contribute 1 million, accounting for 3.33%
of the total registered capital, QianYing Wang contribute 2 million, accounting for 6.67% of the total registered capital, PeiWen Ren contribute 2.01 million,
accounting for 6.70% of the total registered capital, XiaoFan Zhang contribute 1 million, accounting for 3.33% of the total registered capital, ChunHongLan
contribute 9.03 million, accounting for 30.10% of the total registered capital, QinHua Zhao contribute 7 million, accounting for 23.33% of the total registered capital,
ZhengHongJia contribute 3 million, accounting for 10.00% of the total registered capital, Kai Li contribute 0.96 million, accounting for 3.20% of the total registered
capital.
On June 25 2013, according to the equity’s transfer agreement, ChunHongLan and QinHua Zhao transfer 6.67% and 23.33% of share capital respectively to
NanJiang. After the transfer, Nanjiang contribute 9 million, accounting for 30% of the total share capital. After the transfer, the capital ratio is: Runhua Rural Water
developing Co., Ltd contribute 4 million, accounting for 13.34% of the total registered capital, BaoSheng Yang contribute 1 million, accounting for 3.33% of the total
registered capital, QianYing Wang contribute 2 million, accounting for 6.67% of the total registered capital, PeiWen Ren contribute 2.01 million, accounting for 6.70%
of the total registered capital, XiaoFan Zhang contribute 1 million, accounting for 3.33% of the total registered capital, ChunHongLan contribute 7.03 million,
accounting for 23.43% of the total registered capital, ZhengHongJia contribute 3 million, accounting for 10.00% of the total registered capital, Kai Li contribute 0.96
million, accounting for 3.20% of the total registered capital, Nanjiang contribute 9 million, accounting for 30% of the total share capital.
*3.On October 9 2012, ChengDeNanJiang Investment Co., Ltd. was established and invested by ChengdeRongyida Real Estate Development Co., Ltd. The
registered capital was RMB 50,000,000.00 and RongYiDa accounted for 100% of NanJiang Investment’s equity. On December 21 2012, RongYiDa transfer 100% of
NanJiang Investment’s equity to the company at the price of RMB 50,000,000.00. After the transfer, the company held 100% of NanJiang Investment’s equity. On
70
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
January 6 2013, NanJiang increase share capital of NanJiang Investment by RMB 40,000,000.00. After the increment, the registered capital of NanJiang Investment
reach RMB 90,000,000.00.
*4.On October 24 2012, ChengDeNanJiang Ecological Agriculture Co., Ltd. established and invested by ChengDeNanJiang Investment Co., Ltd. The registered
capital was RMB 5,000,000.00 and NanJiang Investment held 100% of Ecological Agriculture’s equity. On April 18 2013, NanJiang Investment increase share
capital of NanJiang Ecological Agriculture by RMB 5,000,000.00. After the increment, the registered capital of NanJiang Ecological Agriculture reach RMB
10,000,000.00.
*5.On October 26 2001, ChengdeXingYe Paper Limited company was established by the company together with (Hong Kong) Zhanxi International Group Co., Ltd.
the registered capital of ChengdeXingYe Paper Limited company was 250 million U.S. dollars，the paid-in capital was $100,000,000.00, Shareholders' contribution
accounted for 40% of the registered capital, and in which the company invested 75,000,000.00 dollar ( accounting for 75%), (Hong Kong)Zhanxi invested
25,000,000.00 dollar ( proportion 25%).On October 28, 2002, according to the regulation of “ reply to investment increase of joint ventures of ChengdeXingYe Paper
Limited company” approved by the people's Republic of China Ministry of foreign trade and Economic Cooperation ( the former of the Ministry of Commerce ) with
the issuance of No.[2001]969, the registered capital was increased to $ 250 million from $ 10,000 million, The new registered capital had been paid by the two sides
in accordance with the contract, articles of agreement within three years from the date of the business license renewal. The registered capital of ChengdeXingYe
Paper Limited Company was not paid fully within the prescribed period. ChengdeXingYe Paper Limited company had been shut down completely suffered from
December 2006 serious loss since the original largest shareholder Wang Shuxian and senior executives involved in smuggling effect, On December 8, 2008, Hebei
province Chengde City Intermediate People's Court issued the No (2008)13 Chengde Civil Award and confirmed the bankruptcy liquidation of the application of
ChengdeXingYe Paper Limited company. On March 11, 2009, Hebei province Chengde City Intermediate People's Court approved the settlement request of
ChengdeXingYe Paper Limited Company according to the Civil Award with No. (2008)13. On May 10, 2009, Hebei province Chengde City Intermediate People's
Court confirmed the settlement agreement reached on May 8, 2009 between ChengdeXingYe Paper Limited Company and the creditors and terminated the
reconciliation procedure. On April 23, 2009, the Hebei Provincial Higher People's Court issued No.(2009) 44 Hebei ”criminal Award” and confirmed that
ChengdeXingYe Paper Limited company was a false foreign investment enterprise which was registered in the name of the Hong Kong ZhanXi by the company's
original shareholders of Wang Shuxian. In October 2012, the company received civil conciliation No.[2011]76 from ChengDe Intermediate People's court. The civil
conciliation confirmed the dispute settlement between the company and ShuXian Wang: ShuXian Wang was responsible for coordinating minority of
ChengDeXingYe Paper Co., Ltd to abandon their equity, assisting the company to complete the liquidation and cancellation of XingYe. After the above works were
71
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
done, the company agreed to transfer 20% equity of SuningBanhe Chemical Fiber Facsimile Fabric Co., Ltd, land of industrial park (34.03 acre), factory (25596.87
square meter) and land of No.131 (44.4 acre) to ShuXian Wang.
*6. On November 14, 2013, NanJiang Asia Investment Co., Ltd. (“NanJiang Asia”) was invested by NanJiang, with the register capital of USD 20 million. Paid-in
share capital is USD 797,538.34 and the register place is Hong Kong.
*7.On January 24, 2013, ChengdeMorsh Technology Co., Ltd. (“Morsh Technology”) was invested by NanJiang and Morsh (NingBo) Technology Co., Ltd, with the
register capital of RMB 50,000,000.00: NanJiang contribute RMB 45,000,000.00, accounting for 90% of the total share capital; Morsh (NingBo) Technology
contribute RMB 5,000,000.00, accounting for 10% of the total share capital.
*8.On November 18, 2013, ChengdeHuiJing property Co., Ltd (“HuiJing Property”) was invested by NanJiang Investment, with the register capital of RMB
500,000.00. NanJiang Investment contributes RMB 500,000.00, accounting for 100% of share capital.
72
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
2. Change of owner’s equity share in subsidiaries and subsidiaries still under control
Not Applicable.
3. Equity in joint ventures or associated enterprises
Not Applicable.
IX. Risks related to financial instruments
Not Applicable.
X. Related parties and related transaction
(I) Relation of affiliated parties
1. Controlling shareholder and ultimate controller
The company has no parent company. The related parties with controlling relationship of the
Company refer to Mr. RongChen, who held 29.49% equity of the Company.
2. Subsidiary
See VIII-1-(1) - Organization of enterprise group.
3.Joint ventures and associated enterprises
Name of related parties Relationship Organizational Code
MinFeng (TianJin) Material industry chemical
Joint venture 05874083-7
industry Co.Ltd
Runhua Rural Water (Tianjin)
Joint venture 58327621-9
Water Saving Technology Co., Ltd
4. Other related party:
Name of related parties Relationship
MinFeng (ShanXi) Material industry chemical industry
The controller of Joint venture
Co.Ltd
Runhua Rural Water Industrial development Co. The controller of Joint venture
(II) Related transactions
1. Related transaction regarding trade of goods and labor services
Purchasing products/obtaining labor services
The related transactions between parent and subsidiaries that are in consolidation scope, among
subsidiaries that are in consolidation scope, have been offset in the consolidated financial
statement.
73
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Name of related parties Trading content This period Last Period
MinFeng (TianJin) Material
industry chemical industry Sale goods 168,562,321.06 38,248,888.89
Co.Ltd
Total --- 168,562,321.06 38,248,888.89
2. Associated rental condition
Not Applicable.
74
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
3. Status of Associated Guarantee Unit: RMB 10,000
Amount of
Name of warrantee Name of guarantee Beginning date Due date Credit bank
guarantee
CHENGDE NANJIANG CO., RuiHua NongShui binhai new area branch of
2000 October 24, 2013 October 24, 2014
LTD. Industrialdevelopment co. China citic bank co., LTD.
CHENGDE NANJIANG CO., Chun Hong Lan(The second binhai new area branch of
2200 October 24, 2013 October 24, 2014
LTD. largest shareholder) China citic bank co., LTD.
4. Inter-bank lending of affiliated parties
Not Applicable.
5. Important related transactions with joint investments
Not Applicable.
6. Re-numeration for key management personnel
Not Applicable.
7. Key management personnelcompensationUnit: RMB 10,000
Item name This period Last period
Key management personnelcompensation 144.29 56.69
75
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
(III) Current balance of related parties
1. Receivables
Amount at the beginning of
Ending balance
the year
Item name Related party
Book Provision for Book Provision for
balance bad debts balance bad debts
MinFeng (TianJin)
Advance Material industry
--- --- 1,945,944.00 ---
payment chemical industry
Co.Ltd
MinFeng (TianJin)
Other receivables Material industry
--- --- 670,000.00 ---
chemical industry
Co.Ltd
2. Payables
Item name Related party Ending balance Beginning balance
MinFeng (TianJin)
Material industry
Other payables 12,000,000.00 31,000,000.00
chemical industry
Co.Ltd
MinFeng (TianJin)
Material industry
Deferred revenue 12,032,434.62 ---
chemical industry
Co.Ltd
Rui Hua NongShui
Industrialdevelopment --- 4,843,823.41
co.
XI. Contingency
By the end of December 31, 2014, the closing balance of housing mortgage deposit,for the
purchaser of commercial houses,was RMB 21,200,000.
XII. Other significant events
Not Applicable.
XIII. Commitment
Not Applicable.
76
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
XIV. Events after the Balance Sheet Date
Not Applicable.
XV. Notes to Main Items of Financial Statements of Parent Company
1. Other receivable
(1)Disclosure of other receivables by category
Closing Balance
Book balance Bad debt provision
Categories
Ratio Book value
Amount Amount Ratio（%）
（%）
1. Individually significant
amounts of accounts receivable --- --- --- --- ---
accrued bad debt provision
2. Accounts receivable accrued
16,687,262.55 99.58 49,078.42 0.29 10,100,566.22
bad debt provision by portfolio
3 .Individually insignificant
amounts of accounts receivable 70,000.00 0.42 70,000.00 100.00 ---
accrued bad debt provision
Total 16,757,262.55 100.00 119,078.42 0.71 16,638,184.13
Continue:
Opening Balance
Categories Book balance Bad debt provision
Book value
Amount Ratio（%） Amount Ratio（%）
1Individually significant
amounts of otheraccounts
--- --- --- --- ---
receivable accrued bad debt
provision
2 Other accounts receivable
accrued bad debt provision by 320,143.39 82.06 4,000.00 5.41 320,143.39
portfolio
3 Individually insignificant
amounts of other
70,000.00 17.94 70,000.00 94.59 70,000.00
accounts receivable accrued bad
debt provision
Total 390,143.39 100.00 74,000.00 100.00 390,143.39
(2)Other accounts receivable accrued bad debt provision by aging in portfolio
Closing Balance
Aging
Amount Bad debt provision Accrue ratio (%)
77
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Closing Balance
Aging
Amount Bad debt provision Accrue ratio (%)
Within 1 year 981,568.36 49,078.42 5.00
Total 981,568.36 49,078.42 5.00
(3)No other accounts receivables are accrued bad debt provision by the percentage in
Closing Balancemethod in portfolio.
(4) Other accounts receivables are accrued bad debt provision by other method in
portfolio
Closing Balance
Name Bad debt Accrue ratio
Amount
provision (%)
ChengDeNanJiang Ecological Agriculture Co., Ltd. 6,367,203.05 —— ——
ChengdeMorshTechnologyCo., Ltd. 167,018.00 —— ——
NanJiang Asia Investment Co., Ltd. 3,396.86 —— ——
The payment of petroleum company 108,399.29 —— ——
Land reserve center’acquisition 3,678,200.00 —— ——
Cement special fund 90,421.00 —— ——
deposit 3,203,400.00 —— ——
Staff loan 2,087,655.99 —— ——
Total 15,705,694.19 —— ——
Explanation for this portfolio：Considering its expected unrecoverable risk is extremely low，the
bad debt provisions of other accounts receivables, by other method in portfolio, is RMB 0.00.
(5) Individually insignificant amounts of other accounts receivable accrued bad debt
provision through individual impairment testing :
Closing Balance
Name Accrue ratio
Amount Bad debt accrued Reason
(%)
Expected
Qizhong Yan 70,000.00 70,000.00 100
irrecoverable
Total 70,000.00 70,000.00 100 ---
(6) The situation of the bad debt provision of other receivables
The bad debt provision of other receivables is RMB 49,078.42 in the current accounting
period, and no bad debt provision is recovered.
(7) No other receivables are written off in the current accounting period.
(8) Nature of other receivables by category:
78
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
Name Closing Balance Opening Balance
Intercourse funds between related party 6,537,617.91 29,000.00
The fund of oil company in advance 108,399.29 60,000.00
The acquisition of Land reserve center in ChengDe County 3,678,200.00 ---
Cement special fund 90,421.00 ---
deposit 3,203,400.00 ---
Staff loan 2,087,655.99 301,077.08
Others 1,051,568.36 66.31
Total 16,757,262.55 390,143.39
(9) At the year-end of the reporting period, the other accounts receivable in significant
amount：
Ratio in Bad debt
Debtor Nature Amount Aging
total（%） provision
Ecological agricultural Intercourse funds 6,367,203.05 Within 1 year 38.00 ---
The acquisition of Land reserve
Land acquisition 3,678,200.00 Within 1 year 21.95 ---
center in ChengDe County
Chengde housing construction
Deposit 3,203,400.00 Within 1 year 19.12 ---
Bureau
Haipeng Ma Staff loan 700,000.00 Within 1 year 4.18 ---
MoXiTechnology Co. Ltd Intercourse funds 167,018.00 Within 1 year 1.00 ---
Total --- 14,115,821.05 --- 84.25 ---
(10)No other receivables arederecognized for the transfer of financial assets.
(11) No other receivables are prepared to be converted to security assets.
(12) Other explanation for other accounts receivable:
Compared to the opening balance, the closing balance of other accounts receivable increase
by RMB 16,367,119.16, with the increase rate of 4195.15%, mainly because the intercourse funds、
land acquisition and the deposit are increasing significantly in this period.
79
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
2. Long-term equity investments
opening balance closing balance
Nature
Book balance Bad debt provision Book value Book balance Bad debt provision Book value
Subsidiaries 778,851,997.76 626,567,328.03 152,284,669.73 783,852,164.40 626,567,328.03 157,284,836.37
Joint venture/affiliated concern --- --- --- --- --- ---
Total 778,851,997.76 626,567,328.03 152,284,669.73 783,852,164.40 626,567,328.03 157,284,836.37
(1) Subsidiaries
Impairment
Accounting Initial Opening Closing Impairment in Stake Voting right
Invested Company Increase decrease accrued in
method investment cost Balance Balance Closing Balance ratio (%) (%)
this period
NanJiang Real Estate Cost 53,114,299.73 53,114,299.73 --- --- 53,114,299.73 --- --- 100.00 100.00
NanJiang Investment Cost 90,000,000.00 90,000,000.00 --- --- 90,000,000.00 --- --- 100.00 100.00
XingYe Paper Cost 626,567,328.03 626,567,328.03 --- --- 626,567,328.03 --- 626,567,328.03 100.00 100.00
RunHua Water Cost 9,170,370.00 9,170,370.00 --- --- 9,170,370.00 --- --- 30.00 53.43
Asia Investmen Cost --- --- 5,000,166.64 --- 5,000,166.64 --- --- 100.00 100.00
Total --- 778,851,997.76 778,851,997.76 --- --- 783,852,164.40 --- 626,567,328.03 --- ---
(2) No long-term equity investments of Joint venture/affiliated concern.
80
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
3. Operating income and operating cost
(1) Classification of operating income and operating cost
Item This period Last Period
Business income 8,217,142.76 9,631,946.56
Other business income 8,217,142.76 9,631,946.56
Business cost 988,187.82 28,460.39
Other business cost 988,187.82 28,460.39
(1) Principal business income and cost (by industry)
This period Last Period
Items
Income Cost Income Cost
Commerce 8,217,142.76 988,187.82 9,631,946.56 28,460.39
Total 8,217,142.76 988,187.82 9,631,946.56 28,460.39
(2) Principal business income and cost (by products)
This period Last Period
Items
Income Cost Income Cost
electric income 1,017,142.76 988,187.82 31,946.56 28,460.39
Service income 7,200,000.00 --- 9,600,000.00 ---
Total 8,217,142.76 988,187.82 9,631,946.56 28,460.39
(3) Principal business income and cost (by district)
This period Last Period
District
Income Cost Income Cost
ChengDe District 8,217,142.76 988,187.82 9,631,946.56 28,460.39
Total 8,217,142.76 988,187.82 9,631,946.56 28,460.39
(5) The operating income of the top five customers of the Company
Customer name or ranking Principal business income Rate in total (%)
NanJiang Real Estate 7,200,000.00 87.62
Chengde housing construction Bureau 1,017,142.76 12.38
Total 8,217,142.76 100.00
81
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
4. Supplemental information for statement of cash flow
Supplemental information This period Last Period
1.Adjustments to reconcile net profit to net cash provided by
operating activities:
Net profit 157,277,079.27 -12,891,377.63
Add: impairment provision for assets 45,078.42 3,000.00
Depreciation of fixed assets, consumption & depreciation of fuel
155,256.08 121,364.21
and gas, depreciation of productive biological assets
Amortization for intangible assets 245,889.05 424,343.16
Amortization for long-term prepayment 38,744.64 ---
Loss on disposal of fixed assets, intangible assets and other
-113,647,960.69 ---
long-term assets
Loss upon rejection of fixed assets --- ---
Loss on variance of fair value --- ---
Finance cost 572,000.00 ---
Loss in investment --- ---
Decrease of deferred tax assets --- -750.00
Increase of deferred tax liability --- ---
Decrease of inventories -328,486,677.42 -161,600,661.40
Decrease of operating receivable account items 5,934,406.38 463,101.60
Increase of operating payable account items 177,036,565.68 174,124,901.53
Other --- ---
Net cash flow from operating activities -100,829,618.59 14,420,136.12
2 Significant investing and financing activities for non-cash items --- ---
Liabilities capitalized --- ---
Convertible bonds payable mature in one year --- ---
Financing leased fixed assets --- ---
3. Net increase (decrease) for cash and cash equivalents --- ---
Closing balance for cash 17,625,400.53 5,681,141.82
Less: opening balance for cash 5,681,141.82 777,456.70
Add: closing balance for cash equivalent --- ---
less：opening balance for cash equivalent --- ---
Net increase (decrease) for cash and cash equivalents 11,944,258.71 4,903,685.12
82
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
XVI. Supplemental information
1. Non-recurring gains and losses
Items This period Last Period
1 Losses/gains on disposal of non-current assets 112,818,506.20 131,918,787.19
2. Government subsidies included in the current profits and
losses (government subsidies which are closely related to the
--- 193,601.01
Company’s business and received at national statutory
standard and amount are excluded)
3. Gains or loss from delegation investment 171,000.00 111,230.13
4. Other non- recurring loss and profits other than the above -3,065,618.87 -514,148.27
5. Effect of minority interest on non-recurring losses or gains -7,045,170.04 2,185,592.65
6. Effect of income tax on non-recurring losses and gains -25,719,679.32 (33,473,765.68)
Total 77,159,037.97 100,421,297.03
Notes: All non-recurring items are disclosed before taxation.
2. Return on equity and earnings per share
Earnings per share
Weighted average of
Profit in the reporting period
Return on equity（%） Basic earnings Diluted earnings
per share per share
Net profit attributable to shareholders holding
32.13 0.11 0.11
ordinary shares of the Company
Net profit attributable to shareholders holding
ordinary shares of the Company after 1.25 --- ---
deducting non-recurring gains and losses
XVII. Approval for issuance of financial statements
These financial statements have been approved by all directors on April 27, 2015.
Legal representative: Accounting supervisor:Legal representative of the accounting firm:
Chengde NanJiang Co., Ltd.April 27, 2015
83
Notes to Financial Statements of CHENGDE NANJIANG CO., LTD.
From January 01, 2014 to December 31, 2014
(Unless otherwise indicated, the unit of amount in the Financial Statements is RMB)
84
