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公司公告

东沣B:2018年半年度报告(英文版)2018-08-30  

						Dongfeng Sci-Tech Group Co., Ltd.

   SEMI-ANNUAL REPORT 2018




           August 2018
                                                东沣科技集团股份有限公司 2018 年半年度报告全文




         Section I. Important Notice, Contents and Paraphrase

Board of Directors, Supervisory Committee, all directors, supervisors and senior

executives of Dongfeng Sci-Tech Group Co., Ltd. (hereinafter referred to as the

Company) hereby confirm that there are no any fictitious statements, misleading

statements, or important omissions carried in this report, and shall take all

responsibilities, individual and/or joint, for the reality, accuracy and completion

of the whole contents.

Zhao Yongsheng, Principal of the Company, Zhao Yongsheng, person in charger

of accounting works and Liu Fengguo, person in charge of accounting organ

(accounting principal) hereby confirm that the Financial Report of 2018

Semi-annual Report is authentic, accurate and complete.

All directors are attended the Board Meeting for report deliberation.

The forward-looking descriptions of the future plans, development strategies, etc.

mentioned in this report do not constitute the company’s actual commitment to

investors, and investors are advised to pay attention to investment risks.

The Company has described in detail in this report the possible impact of risk

factors. Please refer to the possible impact and response in the discussion and

analysis of the company’s future development of the discussion and analysis of

business situation in Section IV.

The Company has no plan of cash dividends carried out, bonus issued and


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                                               东沣科技集团股份有限公司 2018 年半年度报告全文


capitalizing of common reserves either.

Note: The Report is prepared in bilingual versions of Chinese and English

respectively, in the event of any discrepancy in understanding the two

aforementioned versions, the Chinese version shall prevail.




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                                                                                                               东沣科技集团股份有限公司 2018 年半年度报告全文




                                                                                    Content



Section I. Important Notice, Contents and Paraphrase ............................................................................................................................1
Section II. Company Profile and Main Financial Indexes .......................................................................................................................5
Other gains and losses items complying with definition for non-current gains and losses ......................................................................7
Section III. Summary of Company Business ...........................................................................................................................................8
Section IV. Discussion and Analysis of the Business.............................................................................................................................10
Section V. Important Event ....................................................................................................................................................................20
Section VI. Changes in Shares and Particulars about Shareholders .......................................................................................................27
Section VII. Preferred Stock ..................................................................................................................................................................31
Section VIII. Directors, Supervisors and Senior Executives ..................................................................................................................32
Section IX. Corporate Bonds .................................................................................................................................................................33
Section X. Financial Report...................................................................................................................................................................34
The statement has been approved by all Directors of the Company dated 28 August 2018 for reporting. .............................................59
Totally 16 subjects are included in consolidate financial statement, information except the Company is as: ........................................59
For those expenses with discount or premium, determined the amortizable discount or premium in every fiscal year by effective .....81
interest method, than adjusted interest amount in every period .............................................................................................................81
VII. Notes to the main items of consolidate financial statements ..........................................................................................................91
XVII. Supplementary information .......................................................................................................................................................148




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                                                            东沣科技集团股份有限公司 2018 年半年度报告全文




                                       Paraphrase


                       Items      Refers to                                Contents

CSRC, SRC                         Refers to China Securities Regulatory Commission

SZ Stock Exchange, Exchange       Refers to Shenzhen Stock Exchange

Company, The Company              Refers to Dongfeng Sci-Tech Group CO., LTD

Dongfeng Investment               Refers to Chengde Dongfeng Investment Co., Ltd.

Kefeng Trading                    Refers to Chengde Kefeng Trading Co., Ltd.

Kefeng Engineering                Refers to Chengde Kefeng Engineering Project Management Co. Ltd.

Nanjiang Trading                  Refers to Chengde Nanjiang Trading Co., Ltd.

Nanjiang Technology               Refers to Chengde Nanjiang Technology Co. Ltd.

Ecological Agriculture,           Refers to Chengde Dongfeng Ecological Agriculture Co., Ltd.

Asia Investment, Nanjiang Asia    Refers to Nanjiang Asia Investment Co., Ltd.

Runhua RW                         Refers to Runhua Rural Water (Tianjin) International Trade Co., Ltd.

Hangzhou Dongfeng                 Refers to Hangzhou Dongfeng Technology Co. Ltd.

Dongfeng Technology Development   Refers to Dongguan Dongfeng Technology Development Co., Ltd.

Dongfeng Intelligent              Refers to Dongguan Dongfeng Intelligent Technology Co., Ltd.

Zhongchuang New Energy            Refers to Dongguan Zhongchuang New Energy Technology Co., Ltd.

Aolin New Materials               Refers to Dongguan Aolin New Materials Co., Ltd.

Haizhuo Energy                    Refers to Dongguan Haizhuo Energy Technology Co., Ltd.

Huijing Property                  Refers to Chengde Huijing Property Services Co., Ltd.

Company Law                       Refers to Company Law of the People’s Republic of China

Securities Law                    Refers to Securities Law of the People’s Republic of China

Listing Rules                     Refers to Rules Governing the Listing of Securities on Shenzhen Stock Exchange

Yuan, 10 thousand Yuan            Refers to RMB, RMB 10 thousand




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                Section II. Company Profile and Main Financial Indexes

I. Company Profile

Short form of the stock          Dongfeng-B                             Stock code                    200160

Short form of the Stock after
                                 Dongfeng-B
changed (if applicable)

Stock exchange for listing       Shenzhen Stock Exchange

Name of the Company (in
                                 东沣科技集团股份有限公司
Chinese)

Short form of the Company
                                 东沣 B
(in Chinese) (if applicable)

Foreign name of the Company
                                 Dongfeng Sci-Tech Group CO.,LTD
(if applicable)

Short form of foreign name of
                                 DONGFENG-B
the Company (if applicable)

Legal representative             Zhao Yongsheng


II. Contact person and ways

                                                       Secretary of the Board                    Rep. of security affairs

Name                                          Li Wenying                               Wang Haijian

                                              XiaBanCheng Town, Chengde County,        XiaBanCheng Town, Chengde County,
Contact add.
                                              Hebei Province                           Hebei Province

Tel.                                          0314-3115048                             0314-3115048

Fax.                                          0314-3111475                             0314-3111475

E-mail                                        liwy@dftechgroup.com                     wanghj@dftechgroup.com


III. Others

1. Way of contact

Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or
not
□ Applicable     √ Not applicable

Registrations address, offices address and codes as well as website and email of the Company has no change in reporting period,
found more details in Annual Report 2017.



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                                                                              东沣科技集团股份有限公司 2018 年半年度报告全文


2. Information disclosure and preparation place

Whether information disclosure and preparation place changed in reporting period or not

□ Applicable √ Not applicable

The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparation
place for semi-annual report have no change in reporting period, found more details in Annual Report 2017.


IV. Main accounting data and financial indexes

Whether it has retroactive adjustment or re-statement on previous accounting data or not
□ Yes √ No

                                                                                                            Increase/decrease in this
                                                   Current period            Same period of last year
                                                                                                                  report y-o-y

Operating revenue (RMB)                                   79,815,868.78                101,563,994.47                           -21.41%

Net profit attributable to shareholders of
                                                           -5,210,758.22                   -3,145,668.96                        -65.65%
the listed company (RMB)

Net profit attributable to shareholders of
the listed company after deducting                         -8,215,907.64                   -3,168,677.19                     -159.29%
non-recurring gains and losses (RMB)

Net cash flow arising from operating
                                                          33,925,293.02                    28,687,301.69                         18.26%
activities (RMB)

Basic earnings per share (RMB/Share)                                -0.007                        -0.004                        -75.00%

Diluted earnings per share (RMB/Share)                              -0.007                        -0.004                        -75.00%

Weighted average ROE                                             -1.44%                          -0.88%                          -0.56%

                                                                                                            Increase/decrease in this
                                                End of current period           End of last period         report-end over that of last
                                                                                                                   period-end

Total assets (RMB)                                       461,628,113.57                503,762,445.04                            -8.36%

Net assets attributable to shareholder of
                                                         358,718,018.65                363,928,776.87                            -1.43%
listed company (RMB)


V. Difference of the accounting data under accounting rules in and out of China

1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (International
Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.




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                                                                               东沣科技集团股份有限公司 2018 年半年度报告全文


2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules or
Chinese GAAP (Generally Accepted Accounting Principles) in the period.


VI. Items and amounts of extraordinary profit (gains)/loss

√Applicable    □ Not applicable
                                                                                                                                In RMB

                                  Item                                          Amount                             Note
Governmental subsidy reckoned into current gains/losses (not
including the subsidy enjoyed in quota or ration according to
                                                                                      2,890,000.00
national standards, which are closely relevant to enterprise’s
business)

Other gains and losses items complying with definition for
                                                                                        115,149.42
non-current gains and losses

Total                                                                                 3,005,149.42                   --

Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable    √ Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of
extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to
the Public --- Extraordinary Profit/loss




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                                                                                 东沣科技集团股份有限公司 2018 年半年度报告全文




                          Section III. Summary of Company Business

I. Main businesses of the Company in the reporting period

Does the Company need to comply with the disclosure requirement of the special industry

No

I. Main business operations during the reporting period

During the reporting period, the company was mainly engaged in real estate business, and hydrogen energy source and new materials
business. On the basis of steadily developing real estate business, the company actively promoted the industrialization and
marketization of cooperative projects such as hydrogen fuel cells, hydrogen energy source, and new materials (ceramic fibers), and
accelerated the strategic transformation of the company.
Real estate business: the real estate business mode is the development, sale of commercial housing and property management, and
the business scope was mainly located in Chengde area. The main products of the Company’s real estate business were residential
and commercial buildings, and we has a better brand effect and market awareness in local.
Hydrogen fuel cell business: with Dongguan Zhongchuang New Energy as the business platform, the Company mainly engaged in
the R&D, production and sales of fuel cell core raw materials (membrane electrodes) and fuel cell power systems, as well as
providing integrated solutions for platforms such as fuel cell power systems in automobiles, drones, electric forklifts, distributed
power stations, and emergency power supplies, and has the ability to develop from key materials of fuel cells to the development of
end products and to the system applications, and small batch production is underway.
Hydrogen energy business: with Haizhuo Energy as the business platform, the Company mainly engaged in the research and
development, production and sales of hydrogen production equipment, hydrogen refueling stations and high-purity alumina powders.
The Company has its own hydrogen production technology and nano-alumina material core technology, as well as complete supply
chains and production management system supports. At present, the hydrogen refueling station (including hydrogen production
equipment) project has entered the phase of pre-production joint debugging, high-purity alumina powder has completed the
pre-production and entered the small batch production stage.
New material business: with Aolin New Materials as its business platform, the Company mainly engaged in the research &
development, production and sales of high-performance ceramic fiber materials, its main products were alumina fiber and zirconia
fiber, which possess with excellent thermal insulation, energy saving, fire resistance, and fireproof performance and can be widely
used in industrial furnace wall lining, backing, lining, pipe insulation, thermal insulation and sealing, radiation and heat insulation of
petrifaction, metallurgy, non-ferrous metals, building materials, electric power, machinery, ceramics, glass, shipping and other
industries. The first production line for alumina short fiber products are in process of installation and trial run recently.
II. Main performance drivers
During the reporting period, the real estate regulation and control continues to heat up, the properties around the Beijing maintain
synchronous high pressure situation same as Beijing, the supervision on properties are tight and tight overall, market of real estate
returns to stability as a whole. The Company’s real estate development has been mainly located in the Chengde area, and the opening
of the Beijing-Shenyang high-speed railway shall make Chengde enter the ―one-hour economic circle of the capital‖ and thus has
better regional advantages. In recent years, the real estate projects developed by the Company have established a good reputation and
brand image in the local area with excellent quality and perfect property management. In the future, under the background of
Beijing-Tianjin-Hebei integration, the Company will continue to improve service quality, build high-end boutique houses, and
improve market competitiveness. At the same time, the Company will actively promote the construction of Dongfeng equipment
industrialization projects, drive the industrialization and marketization of hydrogen energy and new materials industries, speed up the


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                                                                             东沣科技集团股份有限公司 2018 年半年度报告全文


construction for production line, and cultivate new profit growth points for the Company.




II. Major changes in main assets

1. Major changes in main assets


                Major assets                                                Note of major changes


Equity assets                              N/A

Fixed assets                               Increased 80.15%, housing and buildings are purchased in the period

Intangible assets                          No major change

                                           Increased 320.85%, more investment in construction of the industrialization on
Construction in process
                                           equipment from Dongfeng New Energy in the period


2. Main overseas assets

□ Applicable √ Not applicable


III. Core Competitiveness Analysis

Does the Company need to comply with the disclosure requirements of the special industry
No
1. Team advantages. The company has an excellent management team who has an acute sense of market judgment, efficient
decision-making and executive capacity, rich management experience, strong adaptability and innovation ability, and is strong
backing to protect the company's development and promote the company's strategic transformation.
2. Brand advantages. The company has strictly controlled the quality, built high-quality and high-level residences, established a good
corporate image and reputation by precisely positioning the market.
3. Location advantage. The Company locates in Chengde, and adjacent to Beijing and Tianjin, which has a favorable location under
the background of ―integration of Beijing-Tianjin-Hebei regions‖.
4. Technical advantage: the Company cooperate with the Dongguan Beihang Institution in respect of hydrogen energy and new
materials, and owes a technical advantage in field of hydrogen energy and new materials.




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                                                                                      东沣科技集团股份有限公司 2018 年半年度报告全文




                   Section IV. Discussion and Analysis of the Business

I. Introduction

(I) Situation analysis of the industry during the reporting period

In the first half of 2018, the real estate market continued the main tone of strict regulation and control, the central government clearly
stated that the regulation and control shall not be loosened, many cities implemented the local entity responsibilities, policies were
intensively introduced, and regulation and control continued to be strengthened. During the reporting period, the real estate market in
Hebei Province strictly implemented the policy requirements of ―housing for living instead of vicious speculation‖, which maintained
the continuity and stability of a series of regulation and control policies such as purchase restriction, loan restriction and price limit,
and the real estate market steadily declined. In the first half of 2018, the investment in real estate development in Hebei Province was
196.4 billion Yuan, a decrease of 12.3% over the same period of last year, the sales area of commercial housing was 18,743,000
square meters, a year-on-year decrease of 29.2%, the area of commercial housing for sale was 8,921,000 square meters, a
year-on-year decrease of 32.7%. development and sales for real estate are turns to downtrend as a whole.
(II) The operation of the company during the reporting period
During the reporting period, under the general background of continuous high-pressure regulation on real estate, on the one hand, the
company conformed to the market situation and actively decreased the stock of real estate, at the same time, it controlled the project
quality, optimized the product design, and focused on planning and developing a new real estate project—Tianxi Housing Estate; on
the one hand, the company steadily promoted the equipment industrialization project of Dongfeng New Energy, and accelerated the
construction of plant area and the layout of production lines. At present, the nine factories have all been capped, and the equipment
customization and purchase for the first production line of ceramic staple fiber has been completed, which is in tight and orderly
installation and debugging and is expected to be put into production in the fourth quarter. At the same time, the company increased
the business market expansion and product promotion, and provided strong guarantee for the industrialization and marketization of
projects.
1. In the reporting period, developments of the property for the Company are as:

                                                               Floor area                             Completed      Total investment
                             Type of                                            Meter capacity
    Item        Area                          Equity ratio   (square metters)                         construction   estimated (100
                            operation                                            building are
                                                                                                          are         million Yuan)

   Tianxi                   Residence,           100%           25128.90         In planning               0               3.8
              Chengde
Community                   Commerce

2. In the reporting period, sales of the property for the Company are as:

                              Area available for                       Clearing the
                Type of                              Area presale in                      Operation     Operation cost Gross profit
    Item                           sales at                             area in the
                operation                            the period (㎡)                    income (Yuan)       (Yuan)       margin (%)
                              period-begin (㎡)                         period (㎡)

                                  11,242.07             4,154.33        15,015.77       61,015,827.41 53,084,696.93         13%
 Nanjiang  Residence

  Huijing                         14,190.11             9,430.55         3,448.88       15,965,947.65 15,770,155.88          1%
               Commerce




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   Tiandi         Total         25,432.18               13,584.88       18,464.65      76,981,775.06 68,854,852.81


3. In the reporting period, financing for the Company are as:

Type of financing Credit amount (10 Balance of financing Cost                    of Term of financing
                    thousand Yuan)        (in      10      thousand financing
                                          Yuan)
Bank loans          20000                 20000                     7.105%            5-year
4. In the reporting period, the Company provided guarantees to its commercial housing purchasers for bank mortgage loans:
As of the end of the reporting period, the balance of the guarantee provided by the Company for commercial housing purchasers due
to bank mortgage loans was RMB 120.21 million. During the reporting period, there was no liability guarantees or amount involved
accounting for 10% of the Company’s audited net profit in the latest period.

5. In the reporting period, the Company has no new land reserves.


II. Main business analysis

Found more in ―I. Introduction‖ in ―Discussion and Analysis of the Operation‖.
Y-o-y changes of main financial data
                                                                                                                                      In RMB

                                 Current period            Same period of last year     Y-o-y increase/decrease     Reasons for changes

Operating revenue                      79,815,868.78                101,563,994.47                      -21.41%

Operating costs                        71,967,495.21                  86,769,226.19                     -17.06%

                                                                                                                  Sales of the current real
                                                                                                                  estate projects are enter
Sales expenses                                  4,902.12                 315,835.82                     -98.45% the end of the period,
                                                                                                                  thus the sales expenses
                                                                                                                  declined

                                                                                                                  Change of the
                                                                                                                  consolidation scope and
                                                                                                                  the new amortization for
Administration expenses                14,487,054.73                  10,548,195.52                     37.34%
                                                                                                                  assets accrual of
                                                                                                                  depreciation increased in
                                                                                                                  the period

                                                                                                                  Impact by saving interest
Finance expenses                        -1,144,471.62                   -691,269.95                     -65.56% and foreign exchange
                                                                                                                  rate changed

Income tax expenses                       110,309.68

                                                                                                                  Investment in R&D
R & D investment                        5,787,836.71                   1,190,186.99                    386.30%
                                                                                                                  increased in the period

Net cash flow arising
                                       33,925,293.02                  28,687,301.69                     18.26%
from operating activities

Net cash flow arising                  -73,486,580.11                 -1,391,915.91                 -5,179.53% Account paid for


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from investment                                                                                                    construction in process
activities                                                                                                         increased in the period

Net cash flow arising                                                                                              Mortgage loan deposit
                                           2,023,800.00                  -663,800.00                    404.88%
from financing activities                                                                                          return in the period

Net increase of cash and
                                         -37,271,470.49                26,631,585.78                    -239.95%
cash equivalent

Major changes on profit composition or profit resources in reporting period
□ Applicable √ Not applicable
No major changes on profit composition or profit resources occurred in reporting period.
Constitution of main business
                                                                                                                                      In RMB

                                                                                        Increase or       Increase or         Increase or
                                                                                        decrease of       decrease of      decrease of gross
                         Operating
                                            Operating cost     Gross profit ratio operating revenue     operating cost      profit ratio over
                          revenue
                                                                                      over same period over same period     same period of
                                                                                        of last year      of last year          last year

According to industries

Real           estate
                         76,981,775.06        68,854,852.81               10.56%              -22.60%            -17.88%              -5.15%
industry

Other industry            2,834,093.72         3,112,642.40               -9.83%               35.03%              6.33%              29.65%

According to products

Real estate sales        76,981,775.06        68,854,852.81               10.56%              -22.60%            -17.88%              -5.15%

Property
management and            2,834,093.72         3,112,642.40               -9.83%               35.03%              6.33%              29.65%
other

According to region

Chengde region           79,815,868.78        71,967,495.21                   9.83%           -21.41%            -17.06%              -4.74%


III. Analysis of the non-main business

√Applicable     □ Not applicable
                                                                                                                                      In RMB

                                  Amount              Ratio in total profit               Causes                 Whether it is sustainable

Investment income                     133,320.88                    -2.53% Financial income                 No

Non operating
                                           3,121.00                 -0.06%                                  No
income

Non operating
                                           2,607.78                 -0.05%                                  No
expenses




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                                                                                      东沣科技集团股份有限公司 2018 年半年度报告全文


Other income                       2,890,000.00                  -54.91% Government subsidies                No


IV. Assets and liability

1. Major changes of assets composition

                                                                                                                                        In RMB

                                                         End of same period of last
                           End of the Period
                                                                   year                    Ratio
                                                                                                             Notes of major changes
                                       Ratio in total                     Ratio in total changes
                          Amount                          Amount
                                          assets                             assets

                                                                                                     Account paid for construction in
Monetary fund        35,513,286.88            7.69% 74,805,209.06              14.85%      -7.16%
                                                                                                     process in the period

Account
                           17,608.00          0.00%         17,608.00           0.00%       0.00%
receivable

                                                                                                     The development products are carry
                     169,853,514.3
Inventory                                    36.79% 234,653,825.84             46.58%      -9.79% over to revenue, than the inventory
                                   7
                                                                                                     declined

Investment
                      4,184,404.34            0.91%      4,236,346.34           0.84%       0.07%
property

                                                                                                     New housing and buildings increased
Fix assets           17,428,589.07            3.78%      9,674,396.99           1.92%       1.86%
                                                                                                     in the period

Construction in                                                                                      Investment for the industrialization for
                      9,541,317.29            2.07%      2,267,164.04           0.45%       1.62%
process                                                                                              Dongfeng New Energy in the period


2. Assets and liability measured by fair value

□ Applicable √ Not applicable


3. Assets rights restricted till end of the period

Limited assets rights:
                  Item                                  Closing balance                            Opening balance
Margin of the housing mortgage                                        4,677,368.68                                6,697,820.37
                  Total                                               4,677,368.68                                6,697,820.37


V. Investment

1. Overall situation

√Applicable   □ Not applicable



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                                                                                              东沣科技集团股份有限公司 2018 年半年度报告全文


                                                        Investment in the same period of last year
       Investment in the reporting (RMB)                                                                                           Changes
                                                                         ( RMB)

                                   60,000,000.00                                                         0.00                                            100.00%


2. The major equity investment obtained in the reporting period

√Applicable        □ Not applicable
                                                                                                                                                          In RMB


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                                                                                                                       and loss                     le         le
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                                                                                                                                                         Website
                                                                                                                                                         (www.c
                                                                                                                                                         ninfo.co
                                                                                                                                                         m.cn)

                                  60,000,                                                                              -1,282,0
Total          --           --                --          --       --         --         --         --          0.00                   --           --         --
                                  000.00                                                                                 72.45



                                                                                                                                                                    14
                                                                              东沣科技集团股份有限公司 2018 年半年度报告全文


3. The major non-equity investment doing in the reporting period

□ Applicable √ Not applicable


4. Financial assets investment

(1) Securities investment

□ Applicable √ Not applicable
The Company had no securities investment in Period.


(2) Derivative investment

□ Applicable √ Not applicable
The Company has no derivatives investment in Period.


VI. Sales of major assets and equity

1. Sales of major assets

□ Applicable √ Not applicable
The Company has no sales of major assets in Period.


2. Sales of major equity

□ Applicable √ Not applicable


VII. Analysis of main holding company and stock-jointly companies

√Applicable   □ Not applicable
Particular about main subsidiaries and stock-jointly companies net profit over 10%
                                                                                                                              In RMB

  Company                                Main      Register                                 Operating    Operating
                     Type                                     Total assets   Net Assets                                 Net profit
       name                          business       capital                                 revenue        profit

                                   Hardware
                                   mechanical
                                   and
Chengde
                                   electrical,
Nanjiang                                                      40,551,881.6                               -638,865.0
               Subsidiary          building      1,000,000                   4,310,887.15         0.00                  -749,174.72
Trading Co.,                                                             5                                          4
                                   materials,
Ltd.
                                   machinery
                                   and
                                   equipment



                                                                                                                                     15
                                                                          东沣科技集团股份有限公司 2018 年半年度报告全文


                            sales;
                            housing
                            rental
                            services

                            International
Nanjiang                    investment
Asia                        and trading,    US$ 20
               Subsidiary                                 5,622,938.91 5,617,967.69          0.00 265,868.35        265,868.35
Investment                  ship sales      million
Co., Ltd.                   and purchase
                            and lease

                            Sales of
                            machinery
Chengde
                            equipment
Kefeng                                                    318,412,252. 259,240,283.                 -559,731.6
               Subsidiary   and             8,500,000                                        0.00                  -559,731.62
Trading Co.,                                                       06             11                         2
                            mechanical
Ltd.
                            & electrical
                            products

                            New energy,
                            new
                            materials and
                            applied
Hangzhou                    products
Dongfeng                    research and                  24,227,163.6 24,074,605.3                 -4,139,885.
               Subsidiary                   30,000,000                                       0.00                 -4,139,885.84
Technology                  development,                            6              7                        84
Co., Ltd.                   sales and
                            technical
                            promotion,
                            technical
                            services

                            Industrial
                            investment in
                            technology
Dongguan
                            field,
Dongfeng
                            investment                    211,937,133. 69,406,542.9                 -276,076.0
Technology     Subsidiary                   100,000,000                                      0.00                  -276,076.00
                            consultant                             88              4                         0
Development
                            and
Co., Ltd.
                            management,
                            equity
                            investment

Chengde                     Cultivation
Dongfeng                    and sales of                                 -15,756,117.               -468,991.3
               Subsidiary                   10,000,000    1,566,979.67                  28,695.60                  -465,942.68
Ecological                  field crop,                                           97                         3
Agriculture                 edible


                                                                                                                             16
                                                                             东沣科技集团股份有限公司 2018 年半年度报告全文


Co., Ltd.                    mushrooms,
                             fruit and
                             vegetables as
                             well as
                             Chinese
                             Herbs;
                             breeding and
                             sales of
                             livestock

Chengde
Huijing                      Property
                                                                            -7,562,733.1                  -835,007.4
Property        Subsidiary   management 500,000                318,833.86                  2,816,803.12                  -835,007.46
                                                                                      6                            6
Services Co.,                service
Ltd.

                             Development
Dongguan                     and transfer
Zhongchuang                  of the new
                                                              24,797,530.0 24,590,265.6
New Energy Subsidiary        energy             24,600,000                                         0.00     1,560.94        1,560.94
                                                                        9             3
Technology                   technology,
Co., Ltd.                    new-type
                             fuel battery

                             Engaged in
                             the technical
Dongguan                     development
Dongfeng                     and transfer
                                                              158,890,213. 115,713,086.                   -1,281,838.
Intelligent     Subsidiary   in field of        120,000,000                                        0.00                 -1,282,072.45
                                                                       58            42                           71
Technology                   technology,
Co., Ltd.                    technical
                             consultant
                             and services;

                             Nano-fiber,
Dongguan
                             functional
Aolin New                                                     24,211,970.2 24,006,726.0                   -360,674.6
                Subsidiary   ceramics and 25,000,000                                               0.00                  -360,674.69
Materials                                                               8             2                            9
                             clean energy
Co., Ltd.
                             materials

                             Research on
                             hydrogen
Dongguan
                             power
Haizhuo
                             products                         25,388,891.9 25,264,499.0
Energy          Subsidiary                      25,000,000                                         0.00 -69,251.22        -69,251.22
                             used in                                    5             2
Technology
                             vehicle &
Co., Ltd.
                             vessels,      as
                             well as


                                                                                                                                   17
                                                                                 东沣科技集团股份有限公司 2018 年半年度报告全文


                                   special
                                   energy
                                   mechanical
                                   equipment

Particular about subsidiaries obtained or disposed in report period
√Applicable   □ Not applicable

                                                  The method of obtaining and handling       The influence to the whole production and
               Company Name
                                                   subsidiaries during the report period                     performance

                                                                                             To be a production platform for hydrogen
Dongguan Haizhuo Energy Technology                                                           energy business of the Company, has
                                                Capital increased
Co., Ltd.                                                                                    minor influence on performance of the
                                                                                             Company in period

Notes of holding and shareholding companies


VIII. Structured vehicle controlled by the Company

□ Applicable √ Not applicable


IX. Prediction of business performance from January – September 2018

Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the
warning of its material change compared with the corresponding period of the last year and explanation on reason
□ Applicable √ Not applicable


X. Risks and countermeasures

1. Policy risk. The real estate industry is affected by the macro policy, land policy, real estate tax policy, financial policy for the real
estate industry will have a direct impact on the real estate business. The company will pay close attention to the macro situation,
strengthen the research and tracking policy, rational analysis of the market, to adapt to changes in market adjustment, and to improve
the company's ability to resist risks.
2. Market risks. Under the background of the slowdown in economic growth, the real estate market has become more differentiated
and the market competition has become increasingly fierce. China’s hydrogen fuel cell industry and hydrogen energy industry are still
at the starting stage, and the market has not been fully explored, and there are also uncertainties in the presence of unlimited potential.
The company will continue to strengthen its own construction, improve the management capabilities, actively expand the market, and
continuously enhance the company’s competitive strength.
3. Technical risks: In the hydrogen fuel cell, hydrogen energy source, new materials, and other technical fields, the company already
has relatively mature technology accumulation and reserves, but the technology of the whole industry is progressing rapidly, if the
technical development trend cannot be grasped, the company will face the risk of lagging behind. The company will continue to invest
in technology research and development, build technological innovation and technological advantages with core competitiveness, and
enhance the product competitiveness.
4. Management risks: the hydrogen fuel cell, hydrogen energy source, and new materials industries have entered a new business field
for the company. The company’s preparation and operation of new projects will face risks arising from uncertainties in the market,
technology, operation and management. In addition, the products of hydrogen energy and new materials that the company has


                                                                                                                                         18
                                                                             东沣科技集团股份有限公司 2018 年半年度报告全文


strategically transformed are currently in the process of industrialization, during the period of industrialization and marketization,
whether new production lines and new projects can be completed on schedule will have an impact on the industrialization cycle of
products. The Company will further strengthen the management team’s construction, improve the management level and
management capabilities, constantly improve the corporate governance and operation management mechanism, and form a more
scientific and effective decision-making mechanism and control supervision mechanism.




                                                                                                                                   19
                                                                            东沣科技集团股份有限公司 2018 年半年度报告全文




                                          Section V. Important Event

I. In the report period, the Company held annual shareholders’ general meeting and
extraordinary shareholders’ general meeting

1. Shareholders’ General Meeting in the report period


                                              Ratio of investor
 Session of meeting               Type                                    Date             Date of disclosure    Index of disclosure
                                                participation

                                                                                                                Securities Times,
                                                                                                                Hong Kong
Annual General                                                                                                  Commercial Daily
                        AGM                               43.34% 2018-06-13            2018-06-14
Meeting of 2017                                                                                                 and Juchao Website
                                                                                                                http://www.cninfo.co
                                                                                                                m.cn

                                                                                                                Securities Times,
                                                                                                                Hong Kong
First Extraordinary     Extraordinary
                                                                                                                Commercial Daily
shareholders general shareholders general                 45.36% 2018-06-29            2018-06-30
                                                                                                                and Juchao Website
meeting 2018            meeting
                                                                                                                http://www.cninfo.co
                                                                                                                m.cn


2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore

□ Applicable √ Not applicable


II. Profit distribution plan and capitalizing of common reserves plan for the Period

□ Applicable √ Not applicable
The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either for
the semi-annual year.


III. Commitments that the actual controller, shareholders, related party, buyer and relevant
committed party as the Company have fulfilled during the reporting period and have not yet
fulfilled by the end of reporting period

√Applicable   □ Not applicable
                                                Type of                                      Commitmen Commitmen Implementa
        Commitments                 Promise                       Content of commitments
                                              commitments                                        t date         t term       tion

Commitments for share



                                                                                                                                     20
                                                                               东沣科技集团股份有限公司 2018 年半年度报告全文


merger reform

                                                               1. Commitments in aspect
                                                               of independency of listed
                                                               company:
                                                               For the equity changes, that
                                                               is 208,324,800 shares of
                                                               Chengde Dalu Co., Ltd held
                                                               by Chen Rong was transfer,
                                                               Wang Dong guarantee there
                                                               are no influence on the
                                                               independent of employee,
                                                               financial,            institution,
                                                               business and integrity of
                                                               assets of Chengde Dalu Co.,
                                                               Ltd.    After        transaction,
                                           Commitments in      Chengde Dalu Co., Ltd still
                                Controllin horizontal          has     the      ability        of
                                                                                                                Duration of
Commitments in report of        g          competition,        independent operation and                                      Implementi
                                                                                                     2012-04-24 the
acquisition or equity change    shareholde related             owes    independent           legal                            ng
                                                                                                                Company
                                r          transactions, and   person, and continues to
                                           capital occupying owes the independency of
                                                               institution, assts, employees,
                                                               production and financial. 2.
                                                               Commitments for horizontal
                                                               competition:                  after
                                                               208,324,800          shares     of
                                                               Chengde Dalu Co., Ltd held
                                                               by Chen Rong was transfer,
                                                               Wang Dong guarantee there
                                                               are    no       or      potential
                                                               horizontal           competition
                                                               between the Chengde Dalu
                                                               Co., Ltd and Wang Dong
                                                               and related parties of Wang
                                                               Dong

Commitments in assets
reorganization

Commitments in initial public
offering or re-financing

Commitments in stock option
incentive plan

Other commitments for
medium and small


                                                                                                                                       21
                                                                             东沣科技集团股份有限公司 2018 年半年度报告全文


shareholders

Completed on time                  Yes

If the commitments is not
fulfilled on time, shall explain
                                   N/A
the specify reason and the
next work plan


IV. Appointment and non-reappointment (dismissal) of CPA

Financial report has been audit or not
□ Yes   √ No
Not been audited.


V. Explanation from Board of Directors, Supervisory Committee for “Qualified Opinion”
that issued by CPA

□ Applicable √ Not applicable


VI. Explanation from the Board for “Qualified Opinion” of last year’s

□ Applicable √ Not applicable


VII. Bankruptcy reorganization

□ Applicable √ Not applicable
No bankruptcy reorganization for the Company in Period.


VIII. Lawsuits

Material lawsuits and arbitration
□ Applicable √ Not applicable
No significant lawsuits and arbitrations occurred in the reporting period.
Other lawsuits
□ Applicable √ Not applicable


IX. Penalty and rectification

□ Applicable √ Not applicable
No penalty and rectification for the Company in Period.


X. Integrity of the Company and its controlling shareholders and actual controllers

□ Applicable √ Not applicable


                                                                                                                        22
                                                                              东沣科技集团股份有限公司 2018 年半年度报告全文


XI. Implementation of the Company’s stock incentive plan, employee stock ownership plan or
other employee incentives

□ Applicable √ Not applicable

The Company has no equity incentive plan, employee stock ownership plans or other employee incentives in Period.



XII. Major related transaction

1. Related transaction with routine operation concerned

□ Applicable √ Not applicable
The Company had no related transaction with routine operation concerned in Period.


2. Related transactions by assets acquisition and sold

□ Applicable √ Not applicable
No related transactions by assets acquisition and sold for the Company in Period.


3. Main related transactions of mutual investment outside

□ Applicable √ Not applicable
No main related transactions of mutual investment outside for the Company in Period.


4. Contact of related credit and debt

□ Applicable √ Not applicable
The Company had no contact of related credit and debt in the reporting period.


5. Other related transactions

□ Applicable √ Not applicable
The Company had no other related transaction in the reporting period.


XIII. Non-business capital occupying by controlling shareholders and its related parties

□ Applicable √ Not applicable
No non-business capital occupied by controlling shareholders and its related parties in Period.




                                                                                                                         23
                                                                             东沣科技集团股份有限公司 2018 年半年度报告全文


XIV. Significant contract and implementations

1. Trusteeship, contract and leasing

(1) Trusteeship

□ Applicable √ Not applicable
No trusteeship for the Company in reporting period.


(2) Contract

□ Applicable √ Not applicable
No contract for the Company in Period.


(3) Leasing

□ Applicable √ Not applicable
No leasing for the Company in Period.


2. Major guarantees


√ Applicable □ Not applicable


(1) Guarantee

                                                                                                                In 10 thousand Yuan

                  Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)
                       Related
                                              Actual date of                                                  Complete Guarante
    Name of the       Announce
                                   Guarantee happening (Date     Actual            Guarantee     Guarantee    implemen    e for
     Company             ment
                                     limit      of signing   guarantee limit         type          term        tation or related
    guaranteed        disclosure
                                               agreement)                                                         not     party
                         date
                                         Guarantee between the Company and the subsidiaries
                       Related
                                              Actual date of                                                  Complete Guarante
    Name of the       Announce
                                   Guarantee happening (Date     Actual            Guarantee     Guarantee    implemen    e for
     Company             ment
                                     limit      of signing   guarantee limit         type          term        tation or related
    guaranteed        disclosure
                                               agreement)                                                         not     party
                         date
Dongguan                                                                         The joint
Dongfeng                                                                         liability
Intelligent          2018-06-14         20,000 2018-07-02                      0 guaranty;      5-year        No        No
Technology Co.,                                                                  mortgage;
Ltd.                                                                             pledge

Total amount of approving                                       Total amount of actual
guarantee for subsidiaries in                            20,000 occurred guarantee for                                          0
report period (B1)                                              subsidiaries in report period


                                                                                                                                24
                                                                                    东沣科技集团股份有限公司 2018 年半年度报告全文


                                                                       (B2)

                                                                       Total balance of actual
Total amount of approved
                                                                       guarantee for subsidiaries at
guarantee for subsidiaries at the                             20,000                                                           20,000
                                                                       the end of reporting period
end of reporting period (B3)
                                                                       (B4)

                                               Guarantee of the subsidiaries for the subsidiaries
                       Related
                                                Actual date of                                                     Complete Guarante
   Name of the        Announce
                                     Guarantee happening (Date     Actual                 Guarantee    Guarantee   implemen    e for
    Company              ment
                                       limit      of signing   guarantee limit              type         term       tation or related
   guaranteed         disclosure
                                                 agreement)                                                            not     party
                         date
Total amount of guarantee of the Company( total of three abovementioned guarantee)
Total amount of approving                                            Total amount of actual
guarantee in report period                                    20,000 occurred guarantee in report                                   0
(A1+B1+C1)                                                           period (A2+B2+C2)
Total amount of approved                                             Total balance of actual
guarantee at the end of report                                20,000 guarantee at the end of report                            20,000
period (A3+B3+C3)                                                    period (A4+B4+C4)
Ratio of actual guarantee (A4+B4+C4) in net assets of the
                                                                                                                              55.75%
Company

Including:
Amount of guarantee for shareholders, actual controller and its
                                                                                                                                    0
related parties (D)
The debts guarantee amount provided for the guaranteed
parties whose assets-liability ratio exceed 70% directly or                                                                         0
indirectly (E)
Proportion of total amount of guarantee in net assets of the
                                                                                                                              2,064.1
Company exceed 50% (F)
Total amount of the aforesaid three guarantees (D+E+F)                                                                        2,064.1

Explanations on possibly bearing joint and several liquidating
                                                                       N/A
responsibilities for undue guarantees (if applicable)

Explanations    on   external      guarantee     against   regulated
                                                                       N/A
procedures (if applicable)

Explanation on guarantee with composite way

In order to meet the operation and development needs of the company’s holding sub-subsidiary Dongfeng
Intelligent, Dongfeng Intelligent planned to apply for comprehensive credit line of no more than RMB 200 million
to Bank of Dongguan, Songshan Lake Technology Sub-branch, the credit period is two years, and the single-use
period should not be more than 5 years, it is specially used to build the Dongfeng New Energy Equipment
Industrialization Project located at the east side of Fuxing Road, Ecological Park, Dongguan City, and the
company’s holding subsidiary, Dongguan Dongfeng Technology Development Co., Ltd., takes its 100% equity of
Dongfeng Intelligent as a pledge guarantee, and Dongfeng Intelligent uses its own land and above-ground
buildings as security guarantees, and Dongfeng Technology Group, Dongfeng Technology Development,
Zhongchuang New Energy, Haizhuo Energy and Aolin New Materials are jointly and severally liable for it, and
the guarantee period is 5 years. For details, please refer to the Announcement on the Provision of Mortgage
Guarantee for Subsidiary’s Application for Bank Credit‖ Announcement No. 2018-018 published on June 14,
2018 by www.cninfo.com.cn.


                                                                                                                                    25
                                                                            东沣科技集团股份有限公司 2018 年半年度报告全文


(2) Guarantee outside against the regulation


□Applicable √Not applicable
No guarantee outside against the regulation in Period.


3. Other material contracts

□ Applicable √ Not applicable
No other material contracts for the Company in reporting period.


XV. Social responsibility

1. Environmental protection

Listed company and its subsidiary belongs to the key pollution enterprise listed by Department of Environmental Protection
No
Nil


2. Execution of social responsibility of targeted poverty alleviation

The Company has no execution of targeted poverty alleviation and no follow-up plan either.


XVI. Explanation on other significant events

□ Applicable √ Not applicable
The Company had no explanation on other significant events in the reporting period.


XVII. Significant event of subsidiary of the Company

√Applicable □Not applicable




                                                                                                                             26
                                                                               东沣科技集团股份有限公司 2018 年半年度报告全文




    Section VI. Changes in Shares and Particulars about Shareholders

I. Changes in Share Capital

1. Changes in Share Capital

                                                                                                                           In Share
                                  Before the Change            Increase/Decrease in the Change (+, -)           After the Change
                                                                            Capitalizat
                                                       New
                                                                   Bonus      ion of
                              Amount Proportion       shares                              Others    Subtotal   Amount Proportion
                                                                   shares     public
                                                      issued
                                                                             reserve
                              244,800,0                                                                        244,800,0
I. Unlisted shares                           34.66%                                                                            34.66%
                                       00                                                                             00

                              244,800,0                                                                        244,800,0
1. Sponsor’s shares                         34.66%                                                                            34.66%
                                       00                                                                             00

        Domestic legal        23,147,30                                                                        23,147,30
                                              3.28%                                                                            3.28%
person’s shares                        9                                                                              9

                              221,652,6                                                                        221,652,6
        Other                                31.38%                                                                            31.38%
                                       91                                                                             91

                              461,520,0                                                                        461,520,0
II. Listed shares                            65.34%                                                                            65.34%
                                       00                                                                             00

2. Domestically listed        461,520,0                                                                        461,520,0
                                             65.34%                                                                            65.34%
foreign shares                         00                                                                             00

                              706,320,0                                                                        706,320,0
III. Total shares                           100.00%                                                                        100.00%
                                       00                                                                             00

Reasons for share changed
□ Applicable √ Not applicable
Approval of share changed
□ Applicable √ Not applicable
Ownership transfer of share changes
□ Applicable √ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common
shareholders of Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose or need to disclosed under requirement from security regulators
□ Applicable √ Not applicable




                                                                                                                                    27
                                                                               东沣科技集团股份有限公司 2018 年半年度报告全文


2. Changes of restricted shares


□ Applicable √ Not applicable


II. Securities issuance and listing


□ Applicable √ Not applicable


III. Number of shares and shares held

                                                                                                                              In Share

                                                                   Total preference shareholders
Total common shareholders at                                       with voting rights recovered at
                                                          18,755                                                                     0
period-end                                                         end of reporting period (if
                                                                   applicable) (note8)

                   Particulars about common shares held above 5% by shareholders or top ten common shareholders

                                                  Total                                                           Number of share
                                                                               Amount of         Amount of
                                  Proportion shareholders   Changes in                                             pledged/frozen
  Full name of      Nature of
                                   of shares                                    un-listed       listed shares
  Shareholders     shareholder               at the end of report period
                                     held                                                                       State of
                                                                               shares held          held                    Amount
                                              report period                                                      share

                   Domestic
Wang Dong          nature            29.49%    208,324,800 0                   208,324,800                  0
                   person

Everbright
                   Overseas
Securities                           13.78%     97,364,256 -1914600.00                      0    97,364,256
                   legal person
(H.K.) Co., Ltd.

GUOTAI
JUNAN
                   Overseas
SECURITIES(                           6.76%     47,717,944 -1120500.00                      0    47,717,944
                   legal person
HONGKONG)
LIMITED

                   Domestic
Chengde North
                   non-state
Industrial                            2.62%     18,517,651 0                    18,517,651                  0
                   owned legal
Corporation
                   person

Shenwan
HongYuan
                   Overseas
Securities                            2.01%     14,181,761 884214.00                        0    14,181,761
                   legal person
(Hong Kong)
Co., Ltd.



                                                                                                                                     28
                                                                                东沣科技集团股份有限公司 2018 年半年度报告全文


                  Domestic
Wang
                  nature                 1.89%      13,327,891 0                 13,327,891                0
Zhengsong
                  person

                  Domestic
Wang
                  nature                 1.03%       7,258,007 0.00                         0   7,258,007
Wensheng
                  person

                  Domestic
Zhou Haihong      nature                 0.95%       6,708,495 0.00                         0   6,708,495
                  person

                  Domestic
Li Tianyun        nature                 0.60%       4,218,900 -511100.00                   0   4,218,900
                  person

                  Domestic
Zhao Ziying       nature                 0.46%       3,248,916 -38000.00                    0   3,248,916
                  person

Strategy investors or general
legal person becomes top 10
shareholders due to rights         N/A
issued (if applicable) (see note
3)
Explanation on associated          The Company is unknown whether there exists associated relationship or belongs to consistent actor
relationship among the             regulated by ―management method for acquisition of listed company‖ among the above said
aforesaid shareholders             shareholders.

                                             Particular about top ten circulated shareholders

                                                                                                               Type of shares
        Shareholders’ name                    Amount of listed shares held at period-end
                                                                                                           Type            Amount

                                                                                                  Domestically
Everbright Securities (H.K.) Co.,
                                                                                     97,364,256 listed foreign                  97,364,256
Ltd.
                                                                                                  shares

GUOTAI JUNAN                                                                                      Domestically
SECURITIES(HONGKONG)                                                                 47,717,944 listed foreign                  47,717,944
LIMITED                                                                                           shares

                                                                                                  Domestically
Shenwan HongYuan Securities
                                                                                     14,181,761 listed foreign                  14,181,761
(Hong Kong) Co., Ltd.
                                                                                                  shares

                                                                                                  Domestically
Wang Wensheng                                                                         7,258,007 listed foreign                   7,258,007
                                                                                                  shares

                                                                                                  Domestically
Zhou Haihong                                                                          6,708,495                                  6,708,495
                                                                                                  listed foreign


                                                                                                                                        29
                                                                             东沣科技集团股份有限公司 2018 年半年度报告全文


                                                                                              shares

                                                                                              Domestically
Li Tianyun                                                                         4,218,900 listed foreign              4,218,900
                                                                                              shares

                                                                                              Domestically
Zhao Ziying                                                                        3,248,916 listed foreign              3,248,916
                                                                                              shares

                                                                                              Domestically
Su Youhe                                                                            3,119,116 listed foreign             3,119,116
                                                                                              shares

                                                                                              Domestically
Peng Wei                                                                           2,978,525 listed foreign              2,978,525
                                                                                              shares

                                                                                              Domestically
Chen Yan                                                                           1,947,000 listed foreign              1,947,000
                                                                                              shares

Expiation on associated relationship
or consistent actors within the top
                                       The Company is unknown whether there exists associated relationship or belongs to consistent
10 un-restrict common shareholders
                                       actor regulated by ―management method for acquisition of listed company‖ among the above
and between top 10 un-restrict
                                       said shareholders.
common shareholders and top 10
common shareholders

Explanation on shareholders
involving margin business about top
ten common shareholders with           N/A
un-restrict shares held (if
applicable) (see Note 4)

Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreement
dealing in reporting period
□Yes √No
Top ten common shareholders or top ten common shareholders with un-restrict shares not held have a buy-back agreement dealing in
reporting period.


IV. Changes of controlling shareholders or actual controller

Changes of controlling shareholders in reporting period
□ Applicable √ Not applicable
The Company had no changes of controlling shareholders in reporting period.
Changes of actual controller in reporting period
□ Applicable √ Not applicable
No changes of actual controllers for the Company in reporting period.


                                                                                                                                    30
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                                      Section VII. Preferred Stock

□ Applicable √ Not applicable
The Company had no preferred stock in the reporting.




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             Section VIII. Directors, Supervisors and Senior Executives

I. Changes of shares held by directors, supervisors and senior executives

□ Applicable √ Not applicable
Shares held by directors, supervisors and senior executives have no changes in reporting period, found more details in Annual Report
2017.


II. Resignation and dismissal of directors, supervisors and senior executives

√Applicable   □ Not applicable
        Name              Title            Type               Date                                 Reasons

Wang Liang         Director         Be elected         2018-06-13          General election

                   Independent
Zhai Hongtao                        Be elected         2018-06-13          General election
                   director

Li Jianhui         Independent      Be elected         2018-06-13          General election

Zhou Jian          Independent      Be elected         2018-06-13          General election

                   Independent      Office leaving
Guo Huibin                                             2018-06-13          General election
                                    for term expired

                   Independent      Office leaving
Zhang Zhiyong                                          2018-06-13          General election
                                    for term expired

                   Independent      Office leaving
Cao Guohua                                             2018-06-13          General election
                                    for term expired




                                                                                                                                  32
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                                        Section IX. Corporate Bonds

Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date when
semi-annual report approved for released or fail to cash in full on due
No




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                                                                             东沣科技集团股份有限公司 2018 年半年度报告全文




                                         Section X. Financial Report

I. Audit reports

Whether the semi-annual report was audited or not
□ Yes √ No
The financial report of this semi-annual report was unaudited


II. Financial statements

Units in Notes of Financial Statements is RMB


1. Consolidated balance sheet

Prepared by Dongfeng Sci-Tech Group CO., LTD
                                                                                                                     In RMB

                    Item                               Closing balance                          Opening balance

Current assets:

     Monetary funds                                                      35,513,286.88                        74,805,209.06

     Settlement provisions

     Capital lent

     Financial assets measured by fair
value and with variation reckoned into
current gains/losses

     Derivative financial liability

     Notes receivable
     Account receivable                                                     17,608.00                              17,608.00

     Accounts paid in advance                                            97,690,045.78                            183,595.06

     Insurance receivable

     Reinsurance receivables
     Contract reserve of reinsurance
receivable
     Interest receivable

     Dividend receivable

     Other account receivable                                            28,200,566.83                        58,740,204.94

     Purchase restituted finance asset

     Inventories                                                    169,853,514.37                           234,653,825.84


                                                                                                                          34
                                                     东沣科技集团股份有限公司 2018 年半年度报告全文


       Assets held for sale
       Non-current asset due within one
year
       Other current assets                      14,367,288.76                        34,559,505.29

Total current assets                            345,642,310.62                       402,959,948.19

Non-current assets:

       Loans and payments on behalf

       Finance asset available for sales         16,670,403.13                        16,670,403.13

       Held-to-maturity investment

       Long-term account receivable

       Long-term equity investment

       Investment property                        4,184,404.34                         4,236,346.34

       Fixed assets                              17,428,589.07                         9,674,396.99

       Construction in progress                   9,541,317.29                         2,267,164.04

       Engineering material

       Disposal of fixed asset

       Productive biological asset                 131,187.50                             17,971.39

       Oil and gas asset

       Intangible assets                         56,286,849.37                        51,705,311.04
    Expense           on   Research       and
                                                  9,301,398.27                         3,513,561.56
Development
       Goodwill                                   1,543,786.41                         1,294,711.56
    Long-term          expenses      to    be
                                                   122,222.16                           219,963.84
apportioned
       Deferred income tax asset                   775,645.41                           775,645.41

       Other non-current asset                                                        10,427,021.55

Total non-current asset                         115,985,802.95                       100,802,496.85

Total assets                                    461,628,113.57                       503,762,445.04

Current liabilities:

       Short-term loans

       Loan from central bank
    Absorbing deposit and interbank
deposit
       Capital borrowed

       Financial liability measured by fair
value and with variation reckoned into
current gains/losses

       Derivative financial liability


                                                                                                 35
                                                    东沣科技集团股份有限公司 2018 年半年度报告全文


       Notes payable

       Account receivable                        8,903,926.67                        15,487,833.06

       Accounts received in advance             36,938,965.65                        64,165,709.37
     Selling        financial     asset    of
repurchase
   Commission               charge        and
commission payable
       Wage payable                               668,700.23                          2,201,668.93

       Taxes payable                              288,857.84                         13,171,059.13

       Interest payable

       Dividend payable

       Other account payable                    27,790,377.86                        25,952,193.34

       Reinsurance payables

       Insurance contract reserve

       Security trading of agency

       Security sales of agency

       Liability held for sale
       Non-current liabilities due within 1
year
Other current liabilities

Total current liabilities                       74,590,828.25                       120,978,463.83

Non-current liabilities:

       Long-term loans

       Bonds payable

         Including: preferred stock

                 Perpetual capital
securities

       Long-term account payable

       Long-term wages payable

       Special accounts payable

       Projected liabilities

       Deferred income

       Deferred income tax liabilities

       Other non-current liabilities

Total non-current liabilities

Total liabilities                               74,590,828.25                       120,978,463.83

Owner’s equity:


                                                                                                36
                                                                            东沣科技集团股份有限公司 2018 年半年度报告全文


     Share capital                                                 706,320,000.00                           706,320,000.00

     Other equity instrument

       Including: preferred stock

                  Perpetual capital
securities

     Capital public reserve                                        463,681,309.55                           463,681,309.55

     Less: Inventory shares

     Other comprehensive income

     Reasonable reserve

     Surplus public reserve                                             76,791,550.17                        76,791,550.17

     Provision of general risk

     Retained profit                                               -888,074,841.07                         -882,864,082.85
Total owner’s equity attributable to
                                                                   358,718,018.65                           363,928,776.87
parent company
Minority interests                                                      28,319,266.67                        18,855,204.34

Total owner’s equity                                              387,037,285.32                           382,783,981.21

Total liabilities and owner’s equity                               461,628,113.57                          503,762,445.04


Legal Representative: Zhao Yongsheng


Person in charge of Accounting Works: Zhao Yongsheng


Person in charge of Accounting Institution: Liu Fengguo


2. Balance Sheet of Parent Company

                                                                                                                   In RMB

                     Item                             Closing balance                          Opening balance

Current assets:

     Monetary funds                                                      8,815,881.28                        12,091,839.66

     Financial assets measured by fair
value and with variation reckoned into
current gains/losses

     Derivative financial liability

     Notes receivable
     Accounts receivable

     Account paid in advance                                              100,000.00                              5,000.33

     Interest receivable



                                                                                                                        37
                                                 东沣科技集团股份有限公司 2018 年半年度报告全文


     Dividends receivable                    36,240,654.50

     Other receivables                       89,807,890.91                        27,954,251.88

     Inventories                            169,081,368.24                       234,077,374.89

     Assets held for sale

     Non-current assets maturing within
one year

     Other current assets                      790,845.12                          1,709,204.34

Total current assets                        304,836,640.05                       275,837,671.10

Non-current assets:

     Available-for-sale financial assets     16,670,403.13                        16,670,403.13

     Held-to-maturity investments

     Long-term receivables

     Long-term equity investments           248,114,466.37                       248,114,466.37

     Investment property

     Fixed assets                             1,683,588.09                         1,826,078.88

     Construction in progress

     Project materials

     Disposal of fixed assets

     Productive biological assets

     Oil and natural gas assets

     Intangible assets

     Research and development costs

     Goodwill

     Long-term deferred expenses

     Deferred income tax assets                    750.00                               750.00

     Other non-current assets

Total non-current assets                    266,469,207.59                       266,611,698.38

Total assets                                571,305,847.64                       542,449,369.48

Current liabilities:

     Short-term borrowings

     Financial liability measured by fair
value and with variation reckoned into
current gains/losses

     Derivative financial liability

     Notes payable


                                                                                             38
                                                   东沣科技集团股份有限公司 2018 年半年度报告全文


       Accounts payable                         8,613,184.67                        15,157,800.54

       Accounts received in advance            36,590,892.79                        62,427,764.58

       Wage payable                                                                    596,118.22

       Taxes payable                              222,271.11                            43,262.13

       Interest payable

       Dividend payable

       Other accounts payable                 346,918,563.52                       325,994,266.48

       Liability held for sale

       Non-current liabilities due within 1
year

       Other current liabilities

Total current liabilities                     392,344,912.09                       404,219,211.95

Non-current liabilities:

       Long-term loans

       Bonds payable

         Including: preferred stock

                 Perpetual capital
securities

       Long-term account payable

       Long-term wages payable

       Special accounts payable

       Projected liabilities

       Deferred income

       Deferred income tax liabilities

       Other non-current liabilities

Total non-current liabilities

Total liabilities                             392,344,912.09                       404,219,211.95

Owners’ equity:

       Share capita                           706,320,000.00                       706,320,000.00

       Other equity instrument

         Including: preferred stock

                 Perpetual capital
securities

       Capital public reserve                 456,569,124.55                       456,569,124.55

       Less: Inventory shares



                                                                                               39
                                                             东沣科技集团股份有限公司 2018 年半年度报告全文


     Other comprehensive income

     Reasonable reserve

     Surplus reserve                                 76,791,550.17                               76,791,550.17

     Retained profit                              -1,060,719,739.17                        -1,101,450,517.19

Total owner’s equity                               178,960,935.55                              138,230,157.53

Total liabilities and owner’s equity               571,305,847.64                              542,449,369.48


3. Consolidated Profit Statement

                                                                                                       In RMB

                    Item                Current Period                            Last Period

I. Total operating income                                79,815,868.78                          101,563,994.47

Including: Operating income                              79,815,868.78                          101,563,994.47

     Interest income

     Insurance gained

     Commission charge and commission
income

II. Total operating cost                                 88,084,229.50                          104,794,376.13

Including: Operating cost                                71,967,495.21                           86,769,226.19

     Interest expense

     Commission charge and commission
expense

     Cash surrender value

     Net amount of expense of
compensation

     Net amount of withdrawal of
insurance contract reserve

     Bonus expense of guarantee slip

     Reinsurance expense

     Tax and extras                                       2,769,249.06                            7,852,986.54

     Sales expenses                                           4,902.12                             315,835.82

     Administration expenses                             14,487,054.73                           10,548,195.52

     Financial expenses                                  -1,144,471.62                             -691,269.95

     Losses of devaluation of asset                                                                    -597.99

     Add: Changing income of fair
value(Loss is listed with ―-‖)



                                                                                                            40
                                                       东沣科技集团股份有限公司 2018 年半年度报告全文


         Investment income (Loss is listed
                                                     133,320.88
with ―-‖)

         Including: Investment income on
affiliated company and joint venture

         Exchange income (Loss is listed
with ―-‖)

              Income from assets disposal
                                                     -18,684.68
(Loss is listed with      ―-‖)

              Other income                         2,890,000.00

III. Operating profit      (Loss is listed with
                                                   -5,263,724.52                        -3,230,381.66
―-‖)

         Add: Non-operating income                     3,121.00                            30,121.27

         Less: Non-operating expense                   2,607.78                             7,113.04

IV. Total Profit     (Loss is listed with ―-‖)   -5,263,211.30                        -3,207,373.43

         Less: Income tax expense                    110,309.68

V. Net profit (Net loss is listed with ―-‖)      -5,373,520.98                        -3,207,373.43

          (i) net profit from continuous
                                                   -5,373,520.98                        -3,207,373.43
operation (Net loss is listed with ―-‖)

          (ii) net profit from discontinued
operation (Net loss is listed with ―-‖)

     Net profit attributable to owner’s of
                                                   -5,210,758.22                        -3,145,668.96
parent company

   Minority shareholders’ gains and
                                                    -162,762.76                            -61,704.47
losses

VI. Net after-tax of other comprehensive
income

   Net after-tax of other comprehensive
income attributable to owners of parent
company

          (I) Other comprehensive income
items which will not be reclassified
subsequently to profit of loss

                1. Changes as a result of
re-measurement of net defined benefit
plan liability or asset

                2. Share of the other
comprehensive income of the investee
accounted for using equity method which
will not be reclassified subsequently to


                                                                                                   41
                                                                          东沣科技集团股份有限公司 2018 年半年度报告全文


profit and loss

     (II) Other comprehensive income
items which will be reclassified
subsequently to profit or loss

               1. Share of the other
comprehensive income of the investee
accounted for using equity method which
will be reclassified subsequently to profit
or loss

               2. Gains or losses arising
from changes in fair value of
available-for-sale financial assets

               3. Gains or losses arising
from reclassification of held-to-maturity
investment as available-for-sale financial
assets

               4. The effect hedging portion
of gains or losses arising from cash flow
hedging instruments

               5. Translation differences
arising on translation of foreign currency
financial statements

               6. Other

  Net after-tax of other comprehensive
income attributable to minority
shareholders

VII. Total comprehensive income                                       -5,373,520.98                               -3,207,373.43

     Total comprehensive income
                                                                      -5,210,758.22                               -3,145,668.96
attributable to owners of parent Company

     Total comprehensive income
                                                                        -162,762.76                                  -61,704.47
attributable to minority shareholders

VIII. Earnings per share:

         (i) Basic earnings per share                                        -0.007                                      -0.004

     (ii) Diluted earnings per share                                         -0.007                                      -0.004

Enterprise combine under the same control in the Period, the combined party realized net profit of 0 Yuan before combination, and
realized 0 Yuan at last period for combined party
Legal Representative: Zhao Yongsheng
Person in charge of Accounting Works: Zhao Yongsheng
Person in charge of Accounting Institution: Liu Fengguo




                                                                                                                              42
                                                                    东沣科技集团股份有限公司 2018 年半年度报告全文


4. Profit Statement of Parent Company

                                                                                                             In RMB

                      Item                     Current period                            Last period

I. Operation income                                             76,981,775.06                          99,528,159.94

         Less: Operating cost                                   68,854,852.81                          83,879,550.47

           Tax and extras                                        2,330,768.90                           7,838,404.44

              Sales expenses                                                                             201,716.00

              Administration expenses                            5,464,817.12                           5,588,635.68

              Financial expenses                                    -1,783.91                              -7,755.36

              Losses of devaluation of asset                    -1,221,802.00

         Add: Changing income of fair
value(Loss is listed with ―-‖)

            Investment income (Loss is
                                                                36,288,157.57
listed with ―-‖)

            Including: Investment income
on affiliated company and joint venture

              Income from assets disposal
(Loss is listed with      ―-‖)

              Other income                                       2,890,000.00

II. Operating profit      (Loss is listed
                                                                40,733,079.71                           2,027,608.71
with ―-‖)

   Add: Non-operating income                                                                                    0.02

   Less: Non-operating expense                                       2,301.69                             21,596.61

III. Total Profit     (Loss is listed with
                                                                40,730,778.02                           2,006,012.12
―-‖)

         Less: Income tax expense

IV. Net profit (Net loss is listed with
                                                                40,730,778.02                           2,006,012.12
―-‖)

         (i) net profit from continuous
operation (Net loss is listed with ―-‖)

         (ii) net profit from discontinued
operation (Net loss is listed with ―-‖)

V. Net after-tax of other comprehensive
income

          (I) Other comprehensive income
items which will not be reclassified
subsequently to profit of loss


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                                                                 东沣科技集团股份有限公司 2018 年半年度报告全文


              1. Changes as a result of
re-measurement of net defined benefit
plan liability or asset

              2. Share of the other
comprehensive income of the investee
accounted for using equity method
which will not be reclassified
subsequently to profit and loss

       (II) Other comprehensive income
items which will be reclassified
subsequently to profit or loss

              1. Share of the other
comprehensive income of the investee
accounted for using equity method
which will be reclassified subsequently
to profit or loss

              2. Gains or losses arising
from changes in fair value of
available-for-sale financial assets

              3. Gains or losses arising
from reclassification of held-to-maturity
investment as available-for-sale
financial assets

              4. The effect hedging
portion of gains or losses arising from
cash flow hedging instruments

              5. Translation differences
arising on translation of foreign
currency financial statements

              6. Other

VI. Total comprehensive income                               40,730,778.02                          2,006,012.12

VII. Earnings per share:

       (i) Basic earnings per share

     (ii) Diluted earnings per share


5. Consolidated Cash Flow Statement

                                                                                                         In RMB

                    Item                    Current Period                            Last Period

I. Cash flows arising from operating
activities:


                                                                                                              44
                                                  东沣科技集团股份有限公司 2018 年半年度报告全文


       Cash received from selling
commodities and providing labor               41,330,719.96                        49,648,921.18
services

       Net increase of customer deposit
and interbank deposit

       Net increase of loan from central
bank

       Net increase of capital borrowed
from other financial institution

       Cash received from original
insurance contract fee

  Net cash received from reinsurance
business

    Net increase of insured savings and
investment

       Net increase of amount from
disposal financial assets that measured
by fair value and with variation
reckoned into current gains/losses

       Cash received from interest,
commission charge and commission

       Net increase of capital borrowed

       Net increase of returned business
capital

       Write-back of tax received                 19,411.90

       Other cash received concerning
                                              45,480,140.88                         9,487,446.88
operating activities

Subtotal of cash inflow arising from
                                              86,830,272.74                        59,136,368.06
operating activities

       Cash     paid     for    purchasing
commodities       and    receiving    labor    2,393,155.64                         2,657,862.72
service

       Net increase of customer loans and
advances

       Net increase of deposits in central
bank and interbank

       Cash paid for original insurance
contract compensation

       Cash paid for interest, commission



                                                                                              45
                                                  东沣科技集团股份有限公司 2018 年半年度报告全文


charge and commission

       Cash paid for bonus of guarantee
slip

       Cash paid to/for staff and workers     11,135,618.06                         8,045,025.91

       Taxes paid                             28,912,052.61                         5,542,118.14

       Other   cash    paid     concerning
                                              10,464,153.41                        14,204,059.60
operating activities

Subtotal of cash outflow arising from
                                              52,904,979.72                        30,449,066.37
operating activities

Net cash flows arising from operating
                                              33,925,293.02                        28,687,301.69
activities

II. Cash flows arising from investing
activities:

       Cash received from recovering
                                               8,900,000.00
investment

       Cash received from investment
                                                 47,503.07
income

       Net cash received from disposal of
fixed, intangible and other long-term         29,254,000.00
assets

       Net cash received from disposal of
subsidiaries and other units

       Other cash received concerning
investing activities

Subtotal of cash inflow from investing
                                              38,201,503.07
activities

       Cash paid for purchasing fixed,
                                             118,301,007.55                         1,391,915.91
intangible and other long-term assets

       Cash paid for investment

       Net increase of mortgaged loans

       Net cash received from
                                              -6,612,924.37
subsidiaries and other units obtained

       Other   cash    paid     concerning
investing activities

Subtotal of cash outflow from investing
                                             111,688,083.18                         1,391,915.91
activities

Net cash flows arising from investing
                                             -73,486,580.11                        -1,391,915.91
activities



                                                                                              46
                                                                    东沣科技集团股份有限公司 2018 年半年度报告全文


III. Cash flows arising from financing
activities

     Cash received from absorbing
investment

     Including: Cash received from
absorbing       minority      shareholders’
investment by subsidiaries

     Cash received from loans

     Cash received from issuing bonds

     Other cash received concerning
                                                                 2,558,600.00
financing activities

Subtotal of cash inflow from financing
                                                                 2,558,600.00
activities

     Cash paid for settling debts

     Cash paid for dividend and profit
distributing or interest paying

     Including: Dividend and profit of
minority shareholder paid by
subsidiaries

     Other      cash   paid     concerning
                                                                  534,800.00                              663,800.00
financing activities

Subtotal of cash outflow from financing
                                                                  534,800.00                              663,800.00
activities

Net cash flows arising from financing
                                                                 2,023,800.00                             -663,800.00
activities

IV. Influence on cash and cash
equivalents due to fluctuation in                                 266,016.60
exchange rate

V. Net increase of cash and cash
                                                            -37,271,470.49                              26,631,585.78
equivalents

     Add: Balance of cash and cash
                                                                68,107,388.69                          126,970,834.83
equivalents at the period -begin

VI. Balance of cash and cash
                                                                30,835,918.20                          153,602,420.61
equivalents at the period -end


6. Cash Flow Statement of Parent Company

                                                                                                              In RMB

                   Item                        Current Period                            Last Period


                                                                                                                   47
                                                 东沣科技集团股份有限公司 2018 年半年度报告全文


I. Cash flows arising from operating
activities:

     Cash received from selling
commodities and providing labor              39,669,174.08                        48,417,004.47
services

     Write-back of tax received                  19,411.90

     Other cash received concerning
                                             92,306,663.50                        16,464,467.95
operating activities

Subtotal of cash inflow arising from
                                            131,995,249.48                        64,881,472.42
operating activities

     Cash paid for purchasing
commodities and receiving labor               7,056,722.87                          158,077.41
service

     Cash paid to/for staff and workers       3,152,939.13                         2,981,492.09

     Taxes paid                               7,392,154.60                         5,123,209.48

     Other    cash     paid    concerning
                                            117,720,242.64                       115,820,458.32
operating activities

Subtotal of cash outflow arising from
                                            135,322,059.24                       124,083,237.30
operating activities

Net cash flows arising from operating
                                             -3,326,809.76                       -59,201,764.88
activities

II. Cash flows arising from investing
activities:

     Cash received from recovering
investment

     Cash received from investment
                                                 47,503.07
income

     Net cash received from disposal of
fixed, intangible and other long-term
assets

     Net cash received from disposal of
subsidiaries and other units

     Other cash received concerning
investing activities

Subtotal of cash inflow from investing
                                                 47,503.07
activities

     Cash paid for purchasing fixed,
                                                                                       7,199.00
intangible and other long-term assets




                                                                                             48
                                                东沣科技集团股份有限公司 2018 年半年度报告全文


     Cash paid for investment

     Net      cash     received     from
subsidiaries and other units

     Other      cash   paid    concerning
investing activities

Subtotal of cash outflow from investing
                                                                                      7,199.00
activities

Net cash flows arising from investing
                                               47,503.07                             -7,199.00
activities

III. Cash flows arising from financing
activities

     Cash received from absorbing
investment

     Cash received from loans

     Cash received from issuing bonds

     Other cash received concerning
                                            2,558,600.00
financing activities

Subtotal of cash inflow from financing
                                            2,558,600.00
activities

     Cash paid for settling debts

     Cash paid for dividend and profit
distributing or interest paying

     Other      cash   paid    concerning
                                              534,800.00                           663,800.00
financing activities

Subtotal of cash outflow from financing
                                              534,800.00                           663,800.00
activities

Net cash flows arising from financing
                                            2,023,800.00                           -663,800.00
activities

IV. Influence on cash and cash
equivalents due to fluctuation in
exchange rate

V. Net increase of cash and cash
                                            -1,255,506.69                       -59,872,763.88
equivalents

     Add: Balance of cash and cash
                                            5,394,019.29                         63,381,803.98
equivalents at the period -begin

VI. Balance of cash and cash
                                            4,138,512.60                          3,509,040.10
equivalents at the period -end




                                                                                            49
                                                                              东沣科技集团股份有限公司 2018 年半年度报告全文


7. Statement of Changes in Owners’ Equity (Consolidated)

This Period
                                                                                                                         In RMB

                                                                       This Period

                                             Owners’ equity attributable to parent company
                                     Other
                                equity instrument
       Item                                                  Less:  Other                  Provisio         Minorit Total
                                      Perpet                               Reason
                       Share                       Capital Invento compre          Surplus n of Retaine         y     owners’
                                       ual                                   able
                       capital Prefer              reserve    ry   hensive         reserve general d profit interests equity
                                      capita                               reserve
                                red          Other          shares income                    risk
                                         l
                               stock
                                      securi
                                       ties
                       706,32                                                                         -882,86
I. Balance at the                                   463,681                             76,791,                 18,855, 382,783
                       0,000.                                                                         4,082.8
end of the last year                                ,309.55                              550.17                 204.34 ,981.21
                           00                                                                              5
             Add:
Changes         of
accounting policy
             Error
correction of the
last period

 Enterprise
 combine under
 the same control
              Other

II. Balance at the 706,32                           463,681                             76,791,
                                                                                                      -882,86
                                                                                                                18,855, 382,783
beginning of this 0,000.                                                                              4,082.8
                                                    ,309.55                              550.17                 204.34 ,981.21
year                   00                                                                                  5
III.       Increase/
Decrease in this                                                                                     -5,210,7 9,464,0 4,253,3
year (Decrease is                                                                                      58.22     62.33    04.11
listed with ―-‖)
 (i)          Total                                                                                  -5,210,7 -162,76 -5,373,5
comprehensive
                                                                                                       58.22      2.76   20.98
income
 (ii)      Owners’
devoted        and
decreased capital
1.Common shares
invested         by
shareholders
2. Capital invested
by holders of other
equity instruments



                                                                                                                             50
                                            东沣科技集团股份有限公司 2018 年半年度报告全文


3.        Amount
reckoned      into
owners equity with
share-based
payment
4. Other
(III)         Profit
distribution
1. Withdrawal of
surplus reserves
2. Withdrawal of
general         risk
provisions
3. Distribution for
owners           (or
shareholders)
4. Other
(IV)       Carrying
forward internal
owners’ equity
1. Capital reserves
conversed        to
capital      (share
capital)
2. Surplus reserves
conversed        to
capital      (share
capital)
3. Remedying loss
with        surplus
reserve
4. Other
(V)     Reasonable
reserve
1. Withdrawal in
the report period

2. Usage in the
report period

                                                                             9,626,8 9,626,8
(VI)Others
                                                                              25.09   25.09

IV. Balance at the 706,32   463,681                 76,791,
                                                                   -888,07
                                                                             28,319, 387,037
end of the report 0,000.                                           4,841.0
                            ,309.55                  550.17                  266.67 ,285.32
period                 00                                               7

Last Period
                                                                                      In RMB

       Item                           Last Period



                                                                                          51
                                                                                 东沣科技集团股份有限公司 2018 年半年度报告全文


                                              Owners’ equity attributable to the parent Company
                                      Other
                                 equity instrument                                                            Minorit
                                                               Less:  Other                  Provisio                   Total
                                        Perpet                               Reason                             y
                         Share                       Capital Invento compre          Surplus n of Retaine interest    owners’
                                         ual                                   able
                         capital Prefer capita       reserve    ry   hensive         reserve general d profit          equity
                                                                             reserve                            s
                                  red          Other          shares income                    risk
                                           l
                                 stock
                                        securi
                                         ties
                     706,32                                                                             -886,96
I. Balance at the                                     463,681                              76,791,                 2,349,5 362,176
                     0,000.                                                                             6,408.7
end of the last year                                   ,309.55                              550.17                  58.95 ,009.93
                         00                                                                                   4
             Add:
Changes         of
accounting policy
             Error
correction of the
last period

Enterprise
combine under the
same control
           Other

II. Balance at the 706,32                             463,681                              76,791,
                                                                                                        -886,96
                                                                                                                   2,349,5 362,176
beginning of this 0,000.                                                                                6,408.7
                                                       ,309.55                              550.17                  58.95 ,009.93
year                   00                                                                                     4
III.       Increase/
Decrease in this                                                                                        -4,126,1 -2,349, -6,475,7
year (Decrease is                                                                                         78.02 558.95      36.97
listed with ―-‖)
  (i)            Total                                                                                  -3,145,6          -3,145,6
comprehensive
                                                                                                          68.96             68.96
income
 (ii)     Owners’
devoted        and
decreased capital
1.Common shares
invested     by
shareholders
2. Capital invested
by holders of other
equity instruments
3.          Amount
reckoned       into
owners equity with
share-based
payment
4 Other



                                                                                                                                52
                                                                          东沣科技集团股份有限公司 2018 年半年度报告全文


(III)         Profit
distribution
1. Withdrawal of
surplus reserves
2. Withdrawal of
general        risk
provisions
3. Distribution for
owners          (or
shareholders)
4. Other
(IV)       Carrying
forward internal
owners’ equity
1. Capital reserves
conversed        to
capital      (share
capital)
2. Surplus reserves
conversed        to
capital      (share
capital)
3. Remedying loss
with      surplus
reserve
4. Other

(V) Reasonable
reserve

1. Withdrawal in
the report period

2. Usage in the
report period

                                                                                                    -980,50 -2,349, -3,330,0
(VI)Others
                                                                                                       9.06 558.95     68.01

IV. Balance at the 706,32                     463,681                              76,791,
                                                                                                    -891,09
                                                                                                                     355,700
end of the report 0,000.                                                                            2,586.7
                                               ,309.55                              550.17                           ,272.96
period                 00                                                                                  6


8. Statement of Changes in Owners’ Equity (Parent Company)

This Period
                                                                                                                      In RMB

                                                                    This Period
          Item                      Other                Capital     Less:     Other Reasonab Surplus
                       Share                                                                               Retaine   Total
                               equity instrument         reserve   Inventory comprehe le reserve reserve



                                                                                                                             53
                                                                                  东沣科技集团股份有限公司 2018 年半年度报告全文


                       capital            Perpetu                        shares       nsive                       d profit   owners’
                                             al                                      income                                   equity
                                 Preferre
                                          capital    Other
                                 d stock
                                          securiti
                                             es
                                                                                                                  -1,101,4
I. Balance at the 706,320,                                   456,569,1                                76,791,55              138,230,1
                                                                                                                  50,517.
end of the last year 000.00                                     24.55                                      0.17                 57.53
                                                                                                                       19
     Add: Changes
of     accounting
policy
       Error
correction of the
last period

           Other

II. Balance at the 706,320,                                                                                       -1,101,4
                                                             456,569,1                                76,791,55              138,230,1
beginning of this                                                                                                 50,517.
                     000.00                                     24.55                                      0.17                 57.53
year                                                                                                                   19
III.       Increase/
Decrease in this                                                                                                  40,730, 40,730,77
year (Decrease is                                                                                                  778.02         8.02
listed with ―-‖)
 (i)        Total                                                                                                 40,730, 40,730,77
comprehensive
                                                                                                                   778.02         8.02
income
 (ii)     Owners’
devoted        and
decreased capital
1.Common shares
invested         by
shareholders
2. Capital invested
by holders of other
equity instruments
3.          Amount
reckoned       into
owners equity with
share-based
payment
4. Other
(III)         Profit
distribution
1. Withdrawal of
surplus reserves
2. Distribution for
owners (or
shareholders)




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                                                                             东沣科技集团股份有限公司 2018 年半年度报告全文


3. Other
(IV)       Carrying
forward internal
owners’ equity
1. Capital reserves
conversed        to
capital      (share
capital)
2. Surplus reserves
conversed        to
capital      (share
capital)
3. Remedying loss
with      surplus
reserve
4. Other
(V)     Reasonable
reserve
1. Withdrawal in
the report period

2. Usage in the
report period

(VI)Others

IV. Balance at the 706,320,                                                                                   -1,060,7
                                                          456,569,1                               76,791,55              178,960,9
end of the report                                                                                             19,739.
                     000.00                                   24.55                                    0.17                 35.55
period                                                                                                             17

Last period
                                                                                                                           In RMB

                                                                       Last period
                                        Other
                                  equity instrument
                                                                                  Other                                    Total
       Item           Share            Perpetu                           Less:                                Retaine
                                                           Capital              comprehe Reasonab Surplus
                                          al                          Inventory                                          owners’
                      capital Preferre                     reserve                nsive le reserve reserve    d profit
                                       capital    Other                 shares                                            equity
                              d stock                                            income
                                       securiti
                                          es
                                                                                                              -1,061,0
I. Balance at the 706,320,                                456,569,1                               76,791,55              178,635,2
                                                                                                              45,442.
end of the last year 000.00                                   24.55                                    0.17                 32.66
                                                                                                                   06
     Add: Changes
of     accounting
policy
       Error
correction of the
last period


                                                                                                                                   55
                                          东沣科技集团股份有限公司 2018 年半年度报告全文


           Other

II. Balance at the 706,320,                                               -1,061,0
                              456,569,1                       76,791,55              178,635,2
beginning of this                                                         45,442.
                     000.00      24.55                             0.17                 32.66
year                                                                           06
III.       Increase/
Decrease in this                                                          2,006,0 2,006,012
year (Decrease is                                                           12.12          .12
listed with ―-‖)
 (i)        Total                                                         2,006,0 2,006,012
comprehensive
                                                                            12.12          .12
income
 (ii)     Owners’
devoted        and
decreased capital
1.Common shares
invested         by
shareholders
2. Capital invested
by holders of other
equity instruments
3.          Amount
reckoned       into
owners equity with
share-based
payment
4. Other
(III)         Profit
distribution
1. Withdrawal of
surplus reserves
2. Distribution for
owners (or
shareholders)

3. Other
(IV)       Carrying
forward internal
owners’ equity
1. Capital reserves
conversed        to
capital      (share
capital)
2. Surplus reserves
conversed        to
capital      (share
capital)
3. Remedying loss
with        surplus
reserve
4. Other


                                                                                            56
                                                                              东沣科技集团股份有限公司 2018 年半年度报告全文


(V)     Reasonable
reserve
1. Withdrawal in
the report period

2. Usage in the
report period

(VI)Others


III. Company profile

III. Company profile

1. Registered place, organization structure and head office of the Company
Chengde Nanjiang Co., Ltd. (Hereinafter referred to as "Nanjiang" or the "the Company") was formerly known as Chengde Dixian
Knitting Co., Ltd., and was reorganized on 3 November 1999 by sponsorship, approved by the People's Government of Hebei
Province with the issue of Ji Gu Ban [1999] No.: 36 with license of the business corporation obtained from Hebei Administration for
Industry & Commerce; registered capital while established amounting as RMB 100,000,000, and RMB 1.00 per share. Among the
abovementioned, RMB 85.10 million contributed by Wang Shuxian, representing 7.56 percent of the registered capital; Wang
Zhengsong invested RMB 5.4444 million with 5.44 percent in total registered capital presented; Chengde Longfeng Cosmetics Co.,
Ltd. contributed RMB 0.9456 million, a 0.95 percent in registered capital and RMB 0.9456 million contributed by Chengde
Xiabancheng Hongxing Plastics Products Plant with 0.95 percent in registered capital presented.


On 29 August 2000, according to the Zheng Jian Fa Xing Zi [2000] No.: 121 issued by the China Securities Regulatory Commission,
the Company issued 100,000,000 domestically listed foreign shares in Shenzhen Stock Exchange dated 19 September 2000; and
excised the over-allotment option to increase issuing 15,000,000 B shares from September 29, 2000 to October 29, 2000. The
registered capital of the Company after the issuance of B shares was RMB 215,000,000 with one Yuan of face value per share.


According to the resolution of the shareholder’s general meeting on March 12, 2002, the Company allotted 43,000,000 bonus shares
to all of the shareholders according to the proportion of 2 free shares for every 10 shares, and meanwhile increased 107,500,000
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 general meeting on July 22, 2003, the Company allotted 73,100,000 bonus shares to
all of the shareholders according to the proportion of 2 free shares for every 10 shares, and the registered capital of the company was
changed to RMB 438,600,000 after such bonus shares were allotted.


On March 11, 2004, approved by the Ministry of Commerce of the People's Republic of China, the Company was allowed to be
changed as a foreign investment limited liability company.


In July 2004, the Company increased 150,000,000 B shares directionally, during which 91,300,000 shares were subscribed in HK$,
and another 58,700,000 shares were subscribed in RMB, upon check by China Securities Regulatory Commission with the issue
[2004] No.101.


According to the resolution of the shareholder’s general meeting on June 8, 2006, the Company allotted 117,720,000 bonus shares to


                                                                                                                                    57
                                                                                东沣科技集团股份有限公司 2018 年半年度报告全文


all of the shareholders according to the proportion of 2 free shares for every 10 shares,


On August 4, 2008, according to the judgment ruled by Shenzhen Intermediate People's Court, 112,324,800 sponsor shares held by
Wang Shuxian was compensated to Chen Rong for 45,491,544 Yuan, and on August 15, 2008, 96,000,000 sponsor shares held by
Wang Shuxian was compensated to Chen Rong for 38,880,000 Yuan according to the judgment ruled by Dalian Intermediate
People's Court.


On November 11, 2009, according to ―reply to the approval of capital increase, and change of share as well as name of Chengde
Dixian Knitting Co., Ltd‖ with No.143 [2009] by Bureau of Commerce of Hebei Province, it agreed that the Company increased
150,000,000 domestically listed foreign shares in 2004 and allotted 2 bonus shares free for every 10 shares in 2006; and it agreed that
208,324,800 shares of Dixian stock held by Wang Shuxian was changed to Chen Rong ; as well as the name of the Company changed
to Chengde Dalu Co., Ltd. Total share capital of the Company was 706,320,000 shares and the registered capital of the Company was
706,320,000 Yuan after the Company’s share increased and allotted,


On 23 August 2011, the Company received the enterprise corporate business license issued from Chengde Administration for
Industry and Commerce, register serial was No.: 130000400001225; registered capital and paid-up capital was 706.32 million Yuan
with corporate type of limited liability company (Sino-foreign joint venture, listed)


On April 6, 2012, Chen Rong, shareholder of Company, signed a share transfer agreement with Mr. Wang Dong for transferred all of
the 208,324,800 shares held by himself (accounting for 29.49% of total capital of the Company) to Mr. Wang Dong; After equity
transfer the above mentioned, capital contribution proportion of the shareholders of the Company were: 208.3248 million Yuan
invested by Wang Dong, representing 29.49 percent of the register capital; 18517651 Yuan contributed by Hebei Chengde Northern
Industrial Corporation, representing 2.62 percent of the register capital; 13327891 Yuan invested by Wang Zhengsong, a 0.33 percent
in register capital; 2314829 Yuan invested by Chengde Xiabancheng Hongxing Plastics Products Plant, a 0.33 percent in register
capital and 461.52 million Yuan contributed by shareholders of domestically listed foreign shares, representing 65.34 percent of the
register capital.
On 19 September 2012, being verified and approved by Chengde Administration for Industry and Commerce, the Company’s name
changed as Chengde Nanjiang Co., Ltd.

On 15 May 2017, approved by Administration Bureau for Industry and Commerce of Chengde City, name of the Company agreed to
changed as Dongfeng Sci-Tech Group CO., LTD
Over the years of bonus issue, rights issue and capitalization, up to 31st December 2017, the issued shares totally amounting to
706.32 million shares, registered capital of the Company was 706.32 million Yuan; registered address: Xiabancheng Town, Chengde
County, Hebei Province; HQ: Xiabancheng Town, Chengde County, Hebei Province. The Company has no parent company and Mr.
Wang Dong is the first largest shareholder of the Company and also is the controller of the Company.


 (II) Business scope

R&D and sales of new energy, and new material products as well as technology promotion and technical service; scientific research
of modern eco-agriculture and technology promotion service, wholesales of eco-agriculture products; import and export trade of
goods and technology; Engage in the real estate development and management in the scope approved by the qualification certificates;
property management.

(III) Business nature and main operating activities of the Company
Nanjiang belongs to the development operation of real estate business, subsidy engaged in commerce trading, property management
and agricultural farming and breeding etc.

(IV) Report approval for the financial statement


                                                                                                                                    58
                                                                             东沣科技集团股份有限公司 2018 年半年度报告全文


The statement has been approved by all Directors of the Company dated 28 August 2018 for reporting.


Totally 16 subjects are included in consolidate financial statement, information except the Company is as:

                                                                                               Shareholdi Voting
                                              Subsidiaries                  Type       Level    ng ratio rights ratio
                                                                                                  (%)        (%)

Chengde Nanjiang Trade and Business Co., Ltd.(―Nanjiang Trade Wholly-owned              1      100.00       100.00
and Business for short‖)                                             subsidiary
Chengde Kefeng Engineering Management Co., Ltd.(―Kefeng Wholly-owned                    1      100.00       100.00
Engineering for short‖)                                              subsidiary
Chengde Dongfeng Investment Co., Ltd.(―Dongfeng Investment for Wholly-owned             1      100.00       100.00
short‖)                                                              subsidiary
Nanjiang Asia Investment Co., Ltd.(―Nanjiang Asia for short‖)       Wholly-owned       1      100.00       100.00
                                                                      subsidiary
Chengde Kefeng Trading Co., Ltd. ( ―Kefeng Trading for short‖ )     Wholly-owned       1      100.00       100.00
                                                                      subsidiary
Hangzhou Dongfeng Technology Co., Ltd. ( ―Hangzhou Dongfeng Wholly-owned                1      100.00       100.00
for short‖ )                                                         subsidiary
Dongguan        Dongfeng    Technology   Development      Co.,    Ltd. Controlling       1       70.00       70.00
( ―Dongguan Dongfeng Technology for short ‖ )                       subsidiary
Chengde Kefeng Aerospace Technology Co., Ltd. ( ―Kefeng Wholly-owned                    1      100.00       100.00
Aerospace for short‖ )                                               subsidiary
Chengde Dongfeng Ecological Agriculture Co., Ltd.(―Ecological Wholly-owned              2      100.00       100.00
Agriculture for short‖)                                              sub-subsidiary
Chengde Nanjiang Technology Co., Ltd.(―Nanjiang Technology for Wholly-owned             2      100.00       100.00
short‖)                                                              sub-subsidiary
Chengde Huijing Property Service Co., Ltd. (―Huijing Property for Wholly-owned          2      100.00       100.00
short‖)                                                              sub-subsidiary
Dongguan Zhongchuang New Energy Technology Co., Ltd. Controlling                         2       60.98       60.98
(Zhongchuang New Energy for short)                                    sub-subsidiary
Dongguan Dongfeng Intelligent Technology Co., Ltd.(―Dongguan Wholly-owned               2      100.00       100.00
Dongfeng Intelligent for short‖)                                     sub-subsidiary
Dongguan Aolin New Material Co., Ltd. (―Aolin New Material for Controlling              2       62.00       62.00
short‖)                                                              sub-subsidiary
Dongguan Haizhuo Energy Technology Co., Ltd. (―Haizhuo Energy Controlling               2       62.00       62.00
for short‖)                                                          sub-subsidiary
Note: 1)Chengde Kefeng Engineering Management Co., Ltd. and Chengde Kefeng Trading Co., Ltd. is the new enterprise formed by
 division from Chengde Nanjiang Trade and Business Co., Ltd. on 6 March 2017
2) The formal Chengde Nanjing Investment Co., Ltd. changed its name into Chengde Dongfeng Investment Co., Ltd. on 25 October
2017.
3)The formal Hangzhou Hangfeng Sci-Tech Co., Ltd. changed its name into Hangzhou Dongfeng Sci-Tech Co., Ltd. on 5 June 2017.
4) Dongguan Dongfeng Technology Development Company is a subsidiary newly established on 17 August 2017.


                                                                                                                          59
                                                                              东沣科技集团股份有限公司 2018 年半年度报告全文


5).The formal Chengde Nanjing Biological Agriculture Co., Ltd. changed its name into       Chengde Dongfeng Biological Agriculture
Co., Ltd. on 21 June 2017.
6).Dongguan Zhongchuang New Energy Technology Co., Ltd is a controlling subsidiary of a subsidiary of the Company acquired on
24 October 2017 through capital injection to increase capital.
7).Dongguan Dongfeng Intelligent Technology Co., Ltd is a wholly owned subsidiary of a subsidiary of the Company acquired on 27
December 2017 through capital injection.
8.)Dongguan Aolin New Materials Co., Ltd is a controlling subsidiary of a subsidiary of the Company acquired on 29 December
2017 through capital increase.
9) Dongguan Haizhuo Energy Technology Co., Ltd. is a controlling sub-subsidiary acquired on 6 March 2018 through capital
increase.
   1. Subsidiary newly included in consolidation scope
                    Name                                                       Reasons
Haizhuo Energy                                             Enterprise combined not under the same control


2. In the period, there were no new special purpose entity and operation entity that with control resulted through entrust operation or
leasing newly included in consolidation scope
3. No subsidiary not included in the consolidation scope any more in the period
4. In the period, there were no special purpose entity and operation entity that with control resulted through entrust operation or
leasing not included in consolidation scope any more
5. Specific change of the entity in consolidation scope found more in Change of Consolation Scope in Note VII




IV. Basis of preparation of financial statements

1. Preparation basis

The Company conducts recognition and measurement according to actual occurrence of transactions and issues, pursuant to the
accounting principles for enterprise-basic rules and specific accounting principle as well as the application guidance for the
accounting principles for enterprise, interpretation to the accounting principles for enterprise and other related requirements
(hereinafter referred to as Enterprise Accounting Principles) issued by the ministry of finance, on that basis, combining the
Information Disclosure Preparation Rules for Company Public Issuing Securities No.15-General Rules for Financial Report
(amended in 2014) of the CSRC for statement preparation.




2. Going concern

We evaluated the sustainable management ability for 12 months since end of the period, and found out that there was a significant
doubt on sustainable management ability of the Runhua RW, listed in Note XII, while no impact on other entity in consolidation
scope. Therefore, the financial statement is prepared based on the continuing operation assumption


V. Major accounting policy and accounting estimation

Notes of specific accounting policy and estimation:

                                                                                                                                    60
                                                                                 东沣科技集团股份有限公司 2018 年半年度报告全文


No


1. Statement of Compliance with the Accounting Standards for Business Enterprises

The financial statements prepared by the Company meet the requirements of the Accounting Standards for Business Enterprises;
truthfully and completely reflect the financial status, operation results and cash flow etc. of the Company.




2. Fiscal period

The fiscal year of the Company is from 1 January to 31 December on basis of Gregorian calendar.


3. Operating cycle

One operating cycle for the Company is 12 months


4. Standard currency

The Company and its subsidiaries take RMB as the standard currency for bookkeeping.




5. Accounting treatment for business combinations under the same control and those not under the same
control

1. If the terms, conditions, and economic impact of each transaction involved in business combination achieved in stages fall
within one or more of the following situations, such transactions will be accounted for as a package deal:

(1) Such transactions are entered into simultaneously or in the case of considering the impact of each other;

(2) Such transactions as a whole in order to reach a complete business results;

(3) The occurrence of a transaction subject to that of at least one other transaction;

(4) One transaction alone is not economic, but otherwise when considered with other transactions.

2. Business combination under the same control

The Company’s assets and liabilities acquired in a business combination are measured by the book value in the consolidated financial
statements of ultimate controlling party in accordance with the assets and liabilities (including the goodwill formed by the ultimate
controlling party’s acquisition to the combined party) of combined party on combining date. If there is balance between the book
value of net assets obtained in merger and the book value of paid merger consideration (or total face value of issued shares), adjust
the stock premium in capital reserve, and adjust the retained earnings if the stock premium in capital reserve is not enough for writing
down.
If there is a contingent consideration needs to confirm the expected liabilities or assets, and there is balance between the expected
liabilities or assets amount and the settlement amount of follow-up contingent consideration, adjust the capital reserve (capital
premium or stock premium), and adjust the retained earnings if the capital reserve is not enough.
As for business combination realized through numbers of transactions, and if these transactions belong to a bundle of transactions,
then each of them shall be accounted as a transaction to acquire controlling right; and if not belong to a bundle of transactions, then



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the difference between the initial investment cost of the long term equity investment as of the date on which the Company obtains
controlling right and the carrying value of the long term equity investment prior to combination plus the carrying value of the new
consideration paid for further acquisition of shares as of the combination date shall be used to adjust capital reserve; in case of
insufficient capital reserve, adjust retained earnings. For equity investment held prior to the combination date, the other
comprehensive income recognized due to calculation by equity method or based on recognition and measurement principles for
financial instruments would not be accounted for temporarily until the Company disposes of this investment on the same basis as the
investee directly disposes of relevant assets or liabilities; other changes of owners’ equity in the net assets of investee as recognized
under equity method, except for net profit or loss, other comprehensive income and profit distribution, shall not be accounted for
until being transferred to current profit or loss when this investment is disposed of.


3. Business combination not under the same control

An acquisition date represents the date when the Company obtains the actual control of the acquiree, which means the date when the
net assets or the right of control in relation to production or operation decisions of the acquiree transfer to the Company. In general,
the Company will be deemed to materialize transfer of right of control upon satisfaction of the following conditions:
①the contracts or agreements relating to business combination has been approved by the internal authority of the Company.
②consent from the national competent authorities relating to business combination, if required, has been obtained.
③necessary property transfer procedure has been completed.
④the Company has paid a majority of the consolidated consideration, and it is capable of and scheduled to pay the outstanding
balance.
⑤the Company has actually controlled the financing and operating policies of the acquiree, and is entitled to share relevant benefits
and assume relevant risks.


The assets paid and liabilities occurred or assumed by the Company on the acquisition data as the consideration of the business
combination shall be measured at fair value, and the difference between the fair value and its carrying value shall be included in
profit or loss for the period.


The Company confirms the balance that the combined cost is greater than the fair value shares of acquiree’s recognizable net assets
obtained in the combination as the goodwill; the balance that the combined cost is less than the fair value shares of acquiree’s net
identifiable assets obtained in the combination is included in the current profit and loss after re-checking.


As for the business combination not under the same control realized through several exchange transactions step by step, part of the
package deal, than carrying accounting treatment on transactions with controlling rights obtained through vary transactions; for
equity investment held prior to combination date which is calculated under equity method, the sum between carrying value of the
equity investment prior to acquisition date and cost of additional investment made on the acquisition date is deemed to be the initial
investment cost of this investment. Other comprehensive income recognized for equity investment held prior to combination date
under equity method shall be accounted for when the Company disposes of this investment on the same basis as the investee directly
disposes of relevant assets or liabilities. In case that equity investment held prior to combination date is calculated based on
recognition and measurement principles for financial instruments, then the fair value of this equity investment as of combination date
plus new investment cost shall be deemed as initial investment cost. The difference between fair value and carrying value of the
originally held equity interests and the accumulated fair value movements as originally recorded in other comprehensive income shall
be all transferred to investment income of the period in which the combination date falls.
4. Relevant expenses from combination
The intermediate expenses occurred for business combination such as audit, legal service and appraisal consultation expenses and
other related expenses shall be recorded in current gains and losses when occurred; the trading expenses for equity securities offering

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shall be excluded while reckoned into equity transaction directly.


6. Methods for preparation of consolidated financial statements

1. Consolidated scope
The consolidation scope of the consolidated financial statements of the Company is fixed on the basis of control, and all subsidiaries
(including the independent subject control by the Company) have been consolidated.

2. Consolidated procedure
Based on financial statements of its own and the subsidiaries, the Company establishes the consolidated financial statements
according to other relevant data. The consolidated financial statements established by the Company regard the whole enterprise group
as an accounting subject, and reflect the overall financial situation, operating results and cash flow of the enterprise group by the
uniform accounting policies in accordance with the relevant confirmation, measurement and presentation requirements of accounting
standards.
The accounting policies and accounting period adopted by the subsidiaries taken into account of the consolidation scope are in line
with the Company. If it is not the same as the Company, necessary adjustments will be made when preparing consolidated financial
statements according to the accounting policy and accounting period of the Company.

When consolidating financial statements, the Company shall offset all effects upon consolidated balance sheet, consolidated profit
statement, consolidated cash flow statement and consolidated statement of changes in equity arising from the internal transactions
between the Company and each subsidiary and between various subsidiaries. If there is difference between the point of view of
consolidated financial statements of enterprise group and the affirmation to the same transaction by taking the Company or its
subsidiaries as the accounting subject, adjust the transaction from the enterprise group’s point of view.
The ownership interests of subsidiaries, current net profits or losses and shares of current comprehensive income belonging to
minority shareholders are respectively and separately listed under the ownership interest item of consolidated balance sheet, the net
profit item of consolidated profit statement and the total comprehensive income item. The balance that the current losses shared by
the subsidiary's minority shareholders is greater than the shares in the ownership interests held by the minority shareholders in the
beginning period of this subsidiary offsets against the minority stockholders' interests.
For the subsidiaries acquired through business combination under the same control, take the fair value of its assets and liabilities
(including the goodwill formed by the ultimate controlling party’s acquisition to the combined party) in the financial statements of
ultimate controlling party as a basis to adjust its financial statements.
For the subsidiaries acquired through business combination not under the same control, take the fair value of net identifiable assets
on acquisition date to adjust its financial statements.
(1) Increase subsidiaries or businesses
During the reporting period, if there are subsidiaries or businesses increased by the business combination under the same control,
adjust the opening balance of consolidated balance sheet; include the income, expenses and profits of the subsidiaries or business
combination from the beginning of the period to the end of the reporting period into the consolidated profit statement; include the
cash flow of the subsidiaries or business combination from the beginning of the period to the end of the reporting period into the
consolidated statement of cash flows, adjust the relevant items of comparative statements at the same time, and regard that the
reporting entity after combination has been exiting since the ultimate controller starts controlling.
If the control can be implemented to the investees under the same control due to the additional investment, it can be regarded that all
partied in the combination can be adjusted when the ultimate controller starts controlling, i.e. by the current status and existence. For
the equity investment held before obtaining the control power of combined party, the relevant profit and loss, other comprehensive
income and other changes in net assets from the later date between the acquisition date of original stock right and the date when the
combining party and combined party are under the same control to the combination date respectively offset against the retained
earnings at the beginning of the period or the current profit and loss in the comparative statement period.
During the reporting period, if there are subsidiaries or businesses increased by the business combination not under the same control,

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don’t adjust the opening balance of consolidated balance sheet; include the income, expenses and profits of the subsidiaries or
business combination from the purchase date to the end of the reporting period into the consolidated profit statement; include the
cash flow of the subsidiaries or business combination from the purchase date to the end of the reporting period into the consolidated
statement of cash flows.
If the control can be implemented to the investees not under the same control due to the additional investment, the Company
re-measures the stock right of acquiree held before the purchase date according to the fair value of this stock right on the purchase
date, the balance between fair value and its book value is included in the current investment income. Other comprehensive income
that the stock right of acquiree held before the purchase date involving in equity method business accounting and other changes in
ownership interest except for net profit or loss, other comprehensive income and profits distribution, together with its relevant other
comprehensive income and other changes in ownership interest are transferred into the current investment income attributable to the
purchase date, besides the other comprehensive income generated by the changes in the net indebtedness and net assets re-measured
and defined benefit plans by investees.
(2) Disposal of subsidiaries or businesses
1) General approaches
During the reporting period, if the Company disposes a subsidiary or business, the income, expense and profit of this subsidiary or
business from the beginning of the period to the disposal date are included in the consolidated income statement; the cash flow of this
subsidiary or business from the beginning of the period to the disposal date are included in the consolidated statement of cash flows.
When control power over investees are lost due to disposal of some equity investment or other reasons, the Company re-measure the
remaining equity investment after disposal in accordance with its fair value on the date to lose the control power. The balance by
subtracting the sum of consideration obtained by disposing stock right and fair value of residual equity from the sum of the shares of
net assets continuously calculated according to the original shareholding ratio since the purchase date or combination date of the
original subsidiary and the goodwill are included in the investment income of the current period of losing control power. Other
comprehensive income related to the equity investment of original subsidiary and other changes in ownership interest except for
other net profit and loss, other comprehensive income and profits distribution are transferred into current investment income when
losing the control power, besides the other comprehensive income generated by the changes in the net indebtedness and net assets
re-measured and defined benefit plans by investees.
2) Dispose subsidiaries step by step
Dispose a subsidiary's equity investment until losing the control power step by step through multiple transactions, if the terms,
conditions and economic impact of the disposal to various transactions of the subsidiary's equity investment conform to following
one or various conditions, it means that the multiple transactions should have accounting treatment as a package deal:
A. These transactions are made by considering each other’s impacts;
B. These transactions can only reach a complete business result as a whole;
C. The occurrence of one transaction depends on the occurrence of at least one other transaction;
D. One transaction alone is not economical, but it is economical when it is considered together with other transactions.
The various transactions that dispose a subsidiary's equity investment until losing the control power belong to a package deal, the
Company handles accounting treatment to various transactions by taking them as a transaction disposing a subsidiary's equity
investment and losing the control power; however, the balance between every disposal price before losing control power and net
asset shares of the subsidiary corresponding to disposal of investment should be confirmed as other comprehensive income in the
consolidated financial statements and transferred into the profit and loss of the current period of losing control power when losing the
control power.
The various transactions that dispose a subsidiary's equity investment until losing the control power and don’t belong to a package
deal, before losing control power, are handled with accounting treatment according to relevant policies which used to partly dispose
the subsidiary's equity investment on the condition of not losing the control power; when losing the control power, they are handled
with accounting treatment according to the general handling methods used to dispose the subsidiary.



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(3) Purchase the minority shareholding of a subsidiary
If there is balance between the Company’s long-term equity investment newly obtained by purchasing the minority shareholding and
the net asset shares of the subsidiary continuously calculated from the acquisition date (or combination date) according to the newly
increased shareholding ratio, adjust the capital stock premium in capital reserve on consolidated balance sheet, if the capital stock
premium in capital reserve is not enough for offset, adjust the retained earnings.
(4) The partial disposal of equity investments in subsidiaries without losing the control power
If there is balance between the disposal price obtained by the partial disposal of long-term equity investments in subsidiaries without
losing the control power and the net asset shares of the subsidiary continuously calculated from the acquisition date or combination
date corresponding to the disposal of long-term equity investments, adjust the capital stock premium in capital reserve on
consolidated balance sheet, if the capital stock premium in capital reserve is not enough for offset, adjust the retained earnings.




7. Classification of joint arrangement and accounting for joint operations

1. Classification of joint arrangement
The Company classifies joint venture arrangement into joint operations and joint ventures based on the structure, legal form, agreed
terms of the arrangement and other related facts and conditions.
Joint venture arrangement not concluded through separate entity is classified as joint operation; and those concluded through separate
entity are generally classified as joint ventures. However, joint venture arrangement which meets any of the following conditions as
proven by obvious evidence and satisfies relevant laws and rules is grouped as joint operation:
1. The legal form of the arrangement shows that parties to the arrangement are entitled to and assume rights and obligations in
  respect of the relevant assets and liabilities.
2. It is agreed by the terms of the arrangement that parties to the arrangement are entitled to and assume rights and obligations in
  respect of the relevant assets and liabilities.
3. Other related facts and conditions show that parties to the arrangement are entitled to and assume rights and obligations in respect
  of the relevant assets and liabilities. For instance, joint parties are entitled to almost all the output related to joint venture
  arrangement and settlement of the liabilities under the arrangement continues to rely on supports from the joint parties.
2. Accounting for joint operations
The Company recognizes its proportion of interests in joint operation as related to the Company, and accounts for under relevant
business accounting principles:
1. To recognize separately-assumed liabilities and jointly-assumed liabilities under its proportion;

2. To recognize revenue from disposal of the output which the Company is entitled to under the proportion;
3. To recognize separately-held assets and jointly-held assets under its proportion;
4. To recognize revenue from disposal of the output under the proportion;
5. To recognize separately occurred expenses, and to recognize expenses occurred for joint operations under its proportion.
For injection to or disposal of assets of joint operations (other than those assets constituting business operation), gain or loss arising
from the transaction is only recognized to the extent it is attributable to other parties to the joint operation before the joint operation is
sold to any third party. In case those assets injected or disposed satisfy the condition for asset impairment loss under Business
Accounting Principle No.8-Assets Impairment, the Company recognizes this loss in full.
For acquisition of assets from joint operations (other than those assets constituting business operation), gain or loss arising from the
transaction is only recognized to the extent it is attributable to other parties to the joint operation before the relevant assets are sold to
any third party. In case that the acquired assets satisfy the condition for asset impairment loss under Business Accounting Principle
No.8-Assets Impairment, the Company recognizes relevant loss according to the proportion it assumes.
The Company exercises no common control over joint operations. If the Company is entitled to relevant assets of the joint operation
and assure relevant liabilities, it shall be accounted for under the above principle, otherwise it would be accounted for under the

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relevant business accounting principles.


8. Recognition standards for cash and cash equivalents

When preparing cash flow statement, the Company recognized the stock cash and deposits available for payment at any time as cash,
and investments featuring with the following four characters at the same time as cash equivalents: short term (expire within 3 months
commencing from purchase day), active liquidity, easy to convert to already-known cash, and small value change risks.


9. Foreign currency business and conversion of foreign currency statement

1. Foreign currency business
For the foreign currency business, the Company converts the foreign currency into RMB for book-keeping based on spot exchange
rate at date of trading occurred while initially recognized.
On balance sheet date, balance of foreign currency monetary items shall be converted based on the spot rate as at the balance sheet
date, and the arising exchange difference shall be recorded in current gains and losses other than those arising from the special
foreign currency borrowings related to purchasing assets qualifying for capitalization which is treated under the principle of
borrowing expense capitalization. As for the foreign currency non-monetary items measured in historical cost, conversion is still
conducted with the spot rate as at the transaction date, without any change to its functional currency.
As for the foreign currency non-monetary items measured in fair value, conversion is conducted with the spot rate as at the date for
determination of fair value, and the arising exchange difference shall be recorded in current gains and losses as the changes of fair
value. if the foreign currency non-monetary items belong to foreign currency available for sale, the arising exchange difference shall
be recorded in other comprehensive income.


2. Translation of foreign currency financial statement
Assets and liabilities in balance sheet are translated at the spot exchange rate at the balance sheet date. Equity items, excluding
―undistributed profit‖, are translated at the spot exchange rates at the transaction dates. As for those translated at the spot exchange
rates at the transaction dates or those recognized in line with the reasonable method in system, translated at the similar exchange rate
as at the transaction date. The resulting translation differences are recognized in other comprehensive income.
When disposing overseas operations, the foreign currency financial statement translation differences listed under items of other
comprehensive income in balance sheet and which are directly related to the overseas operations are transferred to profit or loss in
the period when the overseas operation is disposed; In case of partial disposal or the overseas business, which has lower operation
ratio overseas without operation controlling loss due to other reason, the translation differences           related to disposal part shall
including in equity of minority shareholders, no need to transfer into current gains/losses. In case of partial disposal of associated or
joint venture, foreign currency translation differences shall be calculated in respect of the disposed part under disposal proportion and
transferred to profit or loss in the period when the overseas operation is disposed.




10. Financial instruments

Financial instruments include financial assets, financial liabilities and equities instruments.

1. Categories of financial instruments
According to the contract terms of the financial instrument issued and economic substance reflects by such instrument, not only in
form of law, combine with purposes held for financial assets and liabilities, the management categorizes financial assets and liability
into different types at the time of initial confirmation: financial assets (or financial liabilities) at fair value through current gains and
losses; accounts receivable; financial assets available for sale; other financial liabilities, etc.

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2. Recognition and measurement for financial instrument
(1) Financial assets or liabilities at fair value through profit or loss
Financial assets or liabilities at fair value through profit or loss include transactional financial assets or financial liabilities and
financial assets or liabilities directly designated at fair value through profit or loss.
Transactional financial assets or financial liabilities refer to those meeting any of the following conditions:
1) Purpose for holding the assets or liabilities are to disposal, repurchase or redemption in a short time;
2) Constitute part of the identifiable financial instrument group for central management, and there is objective evidence proving that
  the Company manages this group in a short-time-return way recently;
3) Belong to derivative financial instrument, other than those derivatives designated as effective hedge instruments, belonging to
  financial guarantee contracts and those linked to equity instrument investment which is not quoted in an active market and whose
  fair cannot be measured reliably and the settlement of which is conditional upon delivery of the equity instrument.
Subject to satisfaction of any of the following conditions, financial assets or liabilities can be designated as financial assets or
liabilities at fair value through profit or loss upon initial measurement:
1) The designation can eliminate or substantially eliminate the inconsistencies between profit or loss from the financial assets arising
  from different measurement basis;
2) The portfolio of financial assets and liabilities in which the financial asset belongs to are designated as measured at fair value in
  the risk management report or investment strategic report handed in to key management personnel;
3) Hybrid instruments which contains one or more embedded derivatives, unless the containing of embedded derivatives does not
  have substantial effect on the cash flows of the hybrid instruments, or the embedded derivatives obviously should not be separated
  from relevant hybrid instruments;
4) Hybrid instruments which contains embedded derivatives that should split, but cannot be measured separately when acquired or on
  the subsequent balance sheet date.
Amount is initially measured by the sum of fair value (deducted bond interest expired without received) while obtained and relevant
transaction expenses.
Interest or cash dividend in period of holding shall be recognized as investment income, and reckoned into current gains/losses with
the variation of fair value at period-end.
In case of disposal, the difference between the amount while obtained and book value of the investment shall reckon into investment
income, and gains/loses of variation of the fair value shall be adjusted correspondingly.
(2) Account receivables
Account receivables refer to the non-derivative financial assets in active market, which has no quoted but has fixed amount or
amount can be determined in collection.
The contract price charged to the buyers shall be recognized as initial value for those account receivables which mainly comprise the
receivable creditor’s right caused by the sale of goods and providing of labor service to external customers by the Company, and
receivables in other companies excluding debt instruments priced in active markets, includes but not limited to trade receivables,
notes receivables, account paid in advance and other receivables. If characterized as of financing nature, the initial recognition shall
be priced at the present value.
Upon disposal, the difference between the sale value and the book value of the receivables shall be accounted into current profit or
loss on its recovery or disposal.

(3) Held-to-maturity investment
The non-derivative financial assets with maturity date, fix return amount or amount able to determined, and the Company held with
specific intention and ability.
The Company takes the sum of fair value (after deducting bond interests which is due for interest payment but not received) and
related transaction fee as initial recognition amount in respect of held-to-maturity investment upon acquisition of the investment.
During the holding period, the Company recognizes interest income at amortized cost and effective interest rate which is included in
investment income. The effective interest rate is determined upon acquisition of the investment and remains unchanged for the

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expected continuous period or appropriate shorter period. Difference between sale price and carrying value of the investment is
included in investment income.
If held-to-maturity investment is disposed or reclassified as other types of financial asset, and the relevant amount is relatively bigger
than the total amount of our all held-to-maturity investments prior to disposal or reclassification, the remaining held-to-maturity
investments shall be reclassified as available-for-sale financial assets immediately following such disposal or reclassification. On the
reclassification date, difference between the carrying value and fair value of the investment is included in other comprehensive
income and is transferred out into current profit or loss when the available-for-sale financial assets experience impairment or
derecognition. However, the followings are exceptions:
1) The date of disposal or reclassification is approaching to the date of expiration or redemption of the investment (such as three
months prior to expiration), and change of market rate has no material influences over the fair value of the investment.
2) Company has already recovered nearly all initial principal under the repayment means as agreed in contract.
3) Disposal or reclassification is arising from separate matters which are out of our control, which are expected not to occur
repeatedly and which are difficult to predict reasonably.
(4) Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale upon initial recognition
and financial assets other than other categories of financial assets.

The Company initially measures available-for-sale financial assets at the sum between their fair values when acquiring the assets or
liabilities (after deducting cash dividend already declared but not paid or bond interests which is due for interest payment but not
received) and the relevant transaction fee.
Interest or cash dividend acquired during the holding period shall be recognized as investment income. Gains or losses arising from
movement of fair value is directly included in other comprehensive income except for impairment loss and exchange difference
arising from foreign currency monetary financial assets.
When disposing available-for-sale financial assets, the Company includes the difference between the acquired price and carrying
value of the financial assets into investment profit or loss. Meanwhile, accumulated fair value movement attributable to the disposed
part which is originally directly included in other comprehensive income is transferred out and included investment profit or loss.
For equity instrument investment which is not quoted in an active market and whose fair value cannot be reliably measured, and
derivative financial assets which are linked to the equity instrument and whose settlement is conditional upon delivery of the equity
instrument, they are stated at cost by the Company.
(5) Other financial liabilities
Initial recognition amount is determined at the sum of fair value and relevant transaction fee. Subsequent measurement is conducted
at amortized cost.
(6) Held-to-maturity investment for sales or reclassify as financial assets available for sale:
In case that the amount of held-to-maturity investments disposed or reclassified into other categories of financial assets is greater
than the total amount of all the held-to-maturity investment of the Company before the disposal or reclassification, the remaining
held-to-maturity investment shall be recorded as financial assets available for sale immediately after such disposal or reclassification,
unless:
1) The date of disposal or reclassification is relatively close to the maturity date or redemption date of the investment (such as three
months before expiration), and change of market rate has no material affects on the fair value of the investment.
2) The enterprise has nearly recovers the entire initial principal under the payment method as agreed by contract.
3) The disposal or reclassification is due to such independent matter that the enterprise is not able to control, will not happen again as
expected and can not predicted reasonably.


3. Confirmation evidence and measurement methods for transfer of financial assets
When transfer of financial assets occurs, the Company shall stop recognition of such financial assets if all risks and remunerations
related to ownership of such financial assets have almost been transferred to the receiver; while shall continue to recognize such

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financial assets if all risks and remunerations related to ownership of such financial assets have almost been retained.
When judging whether or not the aforesaid terminal recognition condition for financial assets is arrived at for transfer of financial
assets, the Company generally adopts the principle that substance overweighs format. The Company divides such transfer into entire
transfer and part transfer. As for the entire transfer meeting condition for discontinued recognition, balance between the following
two items is recorded in current gains and losses:
(1) Carrying value of financial assets in transfer;
(2) Aggregate of the consideration received from transfer and accumulative movements of fair value originally recorded in owners’
equity directly (applicable when financial assets involved in transfer belong to financial assets available for sale).
As for the part transfer meeting condition for discontinued recognition, entire carrying value of financial assets in transfer is shared
by discontinued recognition part and continued recognition part, in light of their respective fair value. Balance between the following
two items is recorded in current gains and losses:
(1) Carrying value of discontinued recognition part;
(2) Aggregate of the consideration of discontinued recognition part and amount of such part attributable to accumulative movements
of fair value originally recorded in owners’ equity directly (applicable when financial assets involved in transfer belong to financial
assets available for sale).
Financial assets are still subject to recognition if transfer of such assets doesn’t satisfy the condition for discontinued recognition.
And consideration received is recognized as financial liability.


4. De-recognition condition for financial liability
As for the financial liabilities with its whole or part present obligations released, the company shall de-realize such financial
liabilities or part of it. if the company enters into agreement with its creditor to substitute for the existing financial liabilities by
means of assuming new financial liabilities, then the company shall de-realize the existing financial liabilities and realize the new
financial liabilities provided that the contract clauses of the new and the existing financial liabilities are different in substance.
If the company makes substantial amendment to the whole or part contract clauses of the existing financial liabilities, it shall
de-realize the existing financial liabilities or part of it. Meanwhile, the financial liabilities with amendment to its clauses shall be
realized as new financial liabilities.
In case of derecognizing of financial liabilities in whole or part, the difference between the carrying value of such de-realized
financial liabilities and consideration paid (including the non-cash assets exchanged or new financial liabilities assumed) shall be
recorded in current gains and losses.
In case that the company repurchases part of financial liabilities, based on the comparative fair value of the continuing recognition
part and the derecognizing part, the company shall allocate the carrying value of the financial liabilities in whole on the repurchase
date. Difference between the carrying value allocated to the derecognizing part and the consideration paid (including the non-cash
assets exchanged or new financial liabilities assumed) shall be recorded in current gains and losses.


5. Determination method for fair value of financial assets and financial liabilities

As for the financial assets or financial liability for which there is an active market, the quoted prices in the active market shall be
used to determine the fair value thereof; the quoted prices in the active market refers to the prices, which are easily available from the
stock exchanges, brokers, industry associations, pricing service institutions and etc. at a fixed term, and which represent the prices at
which actually occurred market transactions are made under fair conditions.
As for the financial assets and financial liabilities measured by fair value and in case that there are active market for those assets and
liabilities, then the fair value shall be determined based on the quotation on active market; as for the financial assets initially acquired
or financial liabilities assumed, their fair value are determined based on the market transaction prices; in case that there are no such
active market for financial assets and financial liabilities, the fair value shall be determined by evaluation technology. At time of
evaluation, the applicable evaluation technology, in the prevailing circumstance, and those have available date and other information
supporting shall be adopted, choose the input value, same with the assets or liability features that consider in transaction by market

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participants, and use the relevant observable input values as far as possible. Use the un-observable input values when relevant
observable input values unable to obtained or obtained without feasible.


6. Provision of impairment reserve for impairment of financial assets (excluding account receivables)
The company reviews the carrying value of the financial assets (excluding those measured by fair value and the change thereof is
recorded in current gains and losses) on the balance sheet date, if there is objective evidence showing impairment of the financial
assets, it shall provide impairment reserve.
Objective evidence that a financial asset is impaired includes the following observable events:
1.Significant financial difficulty of the issuer or obligor;
2.A breach of contract by the borrower, such as a default or delinquency in interest or principal payments;
3.The creditor, for economic or legal reasons relating to the borrower’s financial difficulty, granting a concession to the borrower;
4.It becoming probable that the borrower will enter bankruptcy or other financial reorganizations;
5.The disappearance of an active market for that financial asset because of financial difficulties of the issuer;
6.Observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets
since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the
group, including: adverse changes in the payment status of borrowers in the group, an increase in the unemployment rate in the
country or geographical area of the borrowers, a decrease in property prices for mortgages in the relevant area, or adverse changes in
industry conditions that affect the borrowers in the group;
7.Significant adverse changes in the technological, market, economic or legal environment in which the issuer operates, indicating
that the cost of the investment in the equity instrument may not be recovered by the investor;
8.A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost;


Details for impairment of financial assets are set out below:
(1) Impairment provision for available-for-sale financial assets
The Group has separately tested various available-for-sale equity instruments at the balance sheet date. It will be defined as
impairment if the fair value is lower than the initial investment cost by more than 50% (including 50%) or the low state has lasted for
no less than 1 year. While the lower proportion is between 20% and 50%, the Group will take other factors such as price fluctuation
into consideration to estimate whether the equity instrument has impaired or not.
Cost stated in the above paragraph is determined based on the initial acquisition cost of available for sale equity instrument
investment less recovered principal and amortized amount as well as impairment loss originally included in profit or loss; fair value
is determined at the closing price quoted on stock exchange at period end, unless the available for sale equity instrument investment
is limited for sale for certain periods. For available for sale equity instrument investment which is limited for sale for certain periods,
fair value is determined at the closing price quoted on stock exchange at period end less the compensation required by market
participator who would otherwise assume risks due to impossibility of selling the equity instrument on open market in designated
period.
When an available-for-sale financial asset is impaired, the cumulative loss arising from decline in fair value that had been recognized
in other comprehensive income is reclassified to the profit or loss even though the financial asset has not been derecognized. The
amount of the cumulative loss that is removed from equity is the difference between the acquisition cost (net of any principal
repayment and amortization) and current fair value, less any impairment loss on that financial asset previously recognized in profit or
loss.
If there are objective evidences showing that the value of available-for-sale debt instrument is recovered and it relates to the matters
happened after the impairment loss recognition, the impairment loss recognized shall be reversed and accounted in current profit or
loss. Impairment losses recognized for equity instrument investments classified as available-for-sale are reversed through equity.
However, impairment loss occurred by equity instrument investment which is not quoted in an active market and whose fair value
cannot be measured reliably and derivative financial assets which are linked to the equity instrument and whose settlement is

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conditional upon delivery of the equity instrument, shall not be reversed.
(2) Impairment provision for held-to-maturity investment
For held-to-maturity investment, if there is object evidence showing the investment is impaired, then impairment loss is determined
based on the difference between its fair value and present value of predicted future cash flow. After provision, if there is evidence
showing its value has been restored, the originally recognized impairment loss can be reversed and included in current profit or loss,
provided that the reversed carrying value shall not exceed the amortized cost of the financial asset as at reversal date assuming no
impairment provision had been made.
7. Offset of financial assets and financial liabilities
Financial assets and financial liabilities are stated in balance sheet separately without inner-offset. However, the net amount after
inner offset is stated in balance sheet date when the following conditions are all met:
(1) The Company has legal right to offset recognized amount and the right is enforceable;
(2) The Company plans to settle on a net basis, or simultaneously realize the financial assets and settle the financial liabilities.


11. Account receivable

(1) Account receivable with single significant amount and withdrawal single item bad debt provision


Determine basis or amount standards for single significant
                                                                      Account with single significant amount not less than RMB 1 million
amount

                                                                      Conducted impairment testing separately, balance between the
                                                                      present value of future cash flow and its carrying value, bad debt
Withdrawal method for bad debt provision of account receivable
                                                                      provision withdrawal and reckoned into current gains/losses. As
with single significant amount:
                                                                      for the receivable without impairment being out in test, accrual
                                                                      bad debt provision in corresponding group


(2) Accounts receivable whose bad debts provision was accrued by combination of credit risk
characteristics portfolio


                           Combination                                            Methods on withdrawal of bad debt provision

Age combination                                                       Age analysis method

Related party combination in combined range                           Other method

No risk portfolio                                                     Other method

Accrued for provision of bad debt by aging analysis method in portfolio:
√ Applicable   □Not-applicable


                Account age                                Rate for receivables                         Rate for other receivables
Within 1 year (one year included)                                                     5.00%                                            5.00%

1-2 years                                                                           20.00%                                           20.00%

2-3 years                                                                           50.00%                                           50.00%

Over 3 years                                                                        100.00%                                         100.00%

In combination, withdrawal proportion of bad debt provision based on balance proportion:



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□ Applicable √ Not-applicable
In combination, withdrawal proportion of bad debt provision based on other methods
√ Applicable   □Not-applicable

                     Item                           Accrual ratio – account receivable       Accrual ratio – other account receivable

Related party in consolidation scope                                                  0.00%                                       0.00%

No risk portfolio                                                                     0.00%                                       0.00%


(3) Accounts receivable with single significant amount and bad debts provision accrued individually


                                                                     There is an objective evidence of impairment which is probably
                                                                     about to occurred, such as revocation from the debtor,
Reasons for withdrawal single item bad debt provision                bankruptcy or dead, and still able to recover after liquidated by
                                                                     the bankruptcy property or heritage as well as serious insufficient
                                                                     cash flow etc.

                                                                     For those account receivable with objective evidence of
                                                                     impairment been found, separated them from the relevant groups
                                                                     for impairment testing independently, and impairment losses
Withdrawal method for bad debt provision
                                                                     shall recognized and withdrawal bad debt reserves on the
                                                                     difference between the present values of estimated future cash
                                                                     flow which is lower than its carrying value,


12. Inventories

Whether the company needs to comply with the disclosure requirements of the particular industry
No
1. Classification of inventories

Inventories are categorized into development cost, development products, relocation housing animals & plants aquaculture plant
products and low value consumables etc.


2. Valuing of inventory
The Company adopts the historical cost for obtaining or the planned cost to value the inventory according to its actual situation, and
specific identification method for the development projects.

Specific valuation method for consumptive biological assets found more in the biological assets listed in Note V(19)


3. Confirmation of net realizable value for the inventory and provision for inventory impairment

The ending inventory is measured at the lower of cost and net realizable value. Provision for impairment of inventory is determined
at the excess amount of the single cost of the inventory over its net realizable value. Net realizable value is determined based on the
estimated selling price in the ordinary course of business, less the estimated costs to completion and estimated costs necessary to
make the sale and related taxes.
In case the influencing factor for write-down of the inventory values has disappeared, the amount which has been written down can
be recover, and shall switch back within the inventory falling price reserves which has been accrual originally, the amount switch
back shall reckoned into current gains/losses.


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4. Inventory System
Perpetual inventory system

5. Amortization method for low-value consumables and wrappage
Low-value consumables are amortized on one-off amortization method
6. Relocation housing refers to the house for turnover purpose to arrange for relocation of residents, and amortized evenly in
50 years.
7. Calculation method of the lands for development purpose
As for the pure land development project, the costs constitute costs of the land development; the project develops along with the real
estate, costs with clear burden of objects shall split into commercial house costs with actual area.
8. Calculation method of the expenses of public supporting facilities
Public supporting facilities cannot be transfer with compensation: reckoned into commercial house costs by the benefit ratio;
Public supporting facilities can transfer with compensation: take all supporting facilities as the cost calculation subject, summarize
the costs occurred.
9.Accounting for maintenance funds
According to the relevant provisions at the location of the developed projects, the maintenance funds should be collected from the
house buyer or withdrawn and stated by the Company as development costs of relevant developed projects at the time of sale (presale)
of the developed projects and uniformly turned in to the maintenance fund management department.


10.Accounting for quality assurance funds
The quality assurance funds should be deducted from the project payment for the construction unit according to the construction
contracts. Maintenance expense incurred in the warranty period of the developed projects should be written down by the quality
assurance funds. The balance of the quality assurance funds should be returned to the construction unit upon expiry of the specified
warranty period of the developed projects.




13. Assets held for sale

1. Recognition criteria of assets held for sale
The non-current asset will recognize as held-for-sale while satisfied the followed conditions simultaneously:
(1)immediate sale is available under the existing status based on the conventional practice for sale of such kind of assets or disposal
group in similar transaction;
(2)The sale is likely to occur, that is, the Company has made resolution on the selling plan and obtained approval from regulatory
department (if applicable) and obtained definite purchase commitment, the selling is estimated to be completed within one year.
Definite purchase commitment means a binding purchase agreement entered into by the Company and other parties, which contains
transaction price, time and adequately strict punishments for breach of contract provisions, which renders the possibility of material
adjustment or revocation of the agreement is extremely minor.
2. Accounting for assets held for sale

The Company makes no provision for depreciation or amortization for non-current assets or disposal group held for sale. For
non-current asset or disposal group held for sale, for which it is found that the carrying value is higher than its fair value less disposal
expense, the carrying value shall be deducted to the net amount of fair value less disposal expense, and the reduced amount shall be
recognized as impairment loss in profit or loss for the period, and provision of impairment of assets held for sale shall be provided for
accordingly.




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As for non-current asset or disposal group classified as held for sale on the acquisition data, they are measured at the lower of their
initial measurement amount and the net amount after their fair value less the selling expenses based on the assumption that such
non-current assets or disposal group are not classified as held for sale at the time of initial measurement.


The above principle applies to all the non-current assets, other than investment property subsequently measured at fair value,
biological assets measured at the net amount of fair value less selling expense, assets formed from staff remuneration, deferred
income tax assets, financial assets regulated by financial instrument related accounting standards and right arising from insurance
contract regulated by insurance contract related accounting standards.




14. Long-term equity investment

1. Recognition of investment cost
(1) As for the long-term equity investment formed from business combination under the same control, accounting policy found in (IV)
Accounting method for business combination (not) under the same control of Note IV
(2) Long-term equity investment obtained by other means
For long-term equity investments obtained through payment with cash, then the actual payment shall be viewed as initial investment
cost. Initial investment cost including the expenses, taxes and other necessary costs that directly concerned with the long-term equity
investment that acquired.
For long-term equity investments obtained through issuance of equity securities, then the fair value of such securities shall be viewed
as initial investment cost; for transaction expenses from issuing or own equity instrument acquired, it can be deducted from the
equity when such expenses attributable directly to equity transaction.
Under the precedent condition that non-monetary assets exchanges are featured with commercial nature and fair values of
exchange-in or exchange-out assets can be reliably measured, long-term equity investment exchange-in through non-monetary assets
exchange shall be recognized with initial investment cost on the basis of the fair value of the assets exchange-out, unless there is
obvious evidence showing that fair value of exchange-in assets is more reliable; as for non-monetary assets exchanges not satisfying
such precedent condition, initial investment cost of exchange-in long-term equity investment falls to the carrying value of
exchange-out assets and relevant taxes payable.
For long-term equity investments obtained through debt reorganization, its initial investment cost is recognized based on fair value.
2. Subsequent measurement and recognition of gains and losses
(1) Cost method
The long-term equity investment control by invested entity shall counted by cost method, and pricing on initial investment cost, cost
of the long-term equity investment shall be adjusted while additional investment or dis-investment.
Other than payment actually paid for obtaining investment or cash dividend or profit included in consideration which has been
declared while not granted yet, the Company recognizes investment income according to its share in the cash dividend or profit
declared for grant by the invested unit.
(2) Equity method
The Company calculates long term equity investment in associates and joint ventures under equity method. For certain equity
investments in associates indirectly held through risk investment institutions, joint funds, trust companies or similar entities including
investment linked insurance fund, the Company measures the investment at fair value through profit or loss.
Where the initial investment cost of a long-term equity investment exceeds the Group’s share of the fair value of the investee’s
identifiable net assets at the time of acquisition, no adjustment is made to the initial investment cost. Where the initial investment
cost is less than the Group’s share of the fair value of the investee’s identifiable net assets at the time of acquisition, the difference is
recognized in profit or loss for the period.


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Return on investments and other comprehensive income is recognized respectively by shares of net gains and losses realized by the
invested company and other comprehensive income after acquisition of long-term equity, and book value of such investment is
adjusted accordingly. Profit or cash dividends pro rata distributed by the invested company are to minus book value of the relative
long-term investment. Book value of long-term investment is adjusted when changes occur other than net gains and losses, other
comprehensive income and profit distribution of the invested company, and is to reported in owners’ equity accordingly
The Company should recognized net profit of invested unit after adjustment, based on fair value of vary identifiable assets of
invested unit while obtained investment, while recognized net profit or net losses of invested units that should be enjoy by investment
enterprise. the un-realized transaction gains/losses attributable to investment enterprise, internally occurred between the Company,
affiliated units and joint-ventures should calculated by proportion of shares-holding which should be offset, than recognized
investment gains/losses.
When the Company is confirmed to share losses of the invested units, the following order shall prevail for disposal: first of all, offset
carrying value of long-term equity investment. Second, for long-term equity investment whose carrying value is not enough for offset,
investment loss should be continued to recognize within the limit of carrying value of other long-term equity which substantially
forms net investment to invested units, to offset carrying value of long-term items receivable. At last, after the aforesaid treatment, if
enterprise still bears additional duties according to investment contract or agreement, projected liabilities are recognized in
accordance to the obligations which are expected to undertake, and then recorded in current gains and losses.
In the event that the invested unit realizes profit in later periods, the Company will adopt disposal adverse to the above order after
deduction the unrecognized share of loss, i.e. write off the carrying value of the recognized projected liabilities, recover carrying
value of long-term equity which substantially forms net investment to invested unit and long-term equity investment, and recognize
investment income at the same time.
3. Transfer of calculation for long term equity investment
(1) Measure at fair value transfer to equity method
For the equity investment originally held by the Company in which it has no control, common control or significant influence over
the investee and which is accounted for under recognition and measurement principle as financial assets, in case that the Company
becomes able to exercise significant influence or common control upon the investee due to additional investment while no control is
reached, the sum of fair value of the originally held equity investment as determined under Business Accounting Principles No.22-
Recognition and Measurement Principle as Financial Assets plus cost of the new investment shall be deemed as the initial investment
cost upon calculation under equity method.
If the originally held equity investment is classified as available for sale financial assets, the difference between its fair value and
carrying value and the accumulated fair value movement which is originally included in other comprehensive income shall be
transferred to current period gains and losses under equity method.
In case that the initial investment cost under equity method is lesser than share of fair value of the investee’s net identifiable assets as
of the date when additional investment is made as calculated based on the latest shareholding proportion upon additional investment,
carrying value of the long term equity investment shall be adjusted against such difference which is included in current period
non-operating income.
(2) Measure at fair value or calculation under equity method transfer to calculation under cost method
For the equity investment originally held by the Company in which it has no control, common control or significant influence over
the investee and which is accounted for under recognition and measurement principle as financial instrument, or for long term equity
investment originally held in associates or joint ventures, in case that the Company becomes able to exercise control over investee
not under common control due to additional investment, the sum of fair value of the originally held equity investment plus cost of the
new investment shall be deemed as the initial investment cost upon calculation under cost method when preparing separate financial
statement.
For other comprehensive income as recognized under equity method in respect of equity investment held prior to acquisition date,
when the Company disposes this investment, the aforesaid income shall be accounted for on the same basis as the investee would
otherwise adopt when it directly disposes relevant assets or liabilities.

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For equity investment held prior to acquisition date which is accounted for under Business Accounting Principles No.22- Recognition
and Measurement of Financial Assets, the accumulated fair value movement which originally included in other comprehensive
income shall be transferred to current period gains and losses upon calculation under cost method.
(3) Calculation under equity method transfer to fair value measurement
In case that the Company lost common control or significant influence upon investee due to disposal of part equity investment, the
remaining equity investment shall be calculated under Business Accounting Principles No.22- Recognition and Measurement of
Financial Assets, and the difference between its fair value and carrying value as of the date when the Company lost common control
or significant influence shall be included in current period gains and losses.
For other comprehensive income as recognized under equity method in respect of the original equity investment, when the Company
ceases calculation under equity method, the aforesaid income shall be accounted for on the same basis as the investee would
otherwise adopt when it directly disposes relevant assets or liabilities.
(4) Cost method transfer to equity method
In case that the Company lost control upon investee due to disposal of part equity investment, and if the remaining equity investment
can exercise common control or significant influence over the investee, equity method shall be adopted when preparing separate
financial statement, and the remaining equity investment shall be adjusted as if it had been stated under equity method since the
acquisition.
(5) Cost method transfer to fair value measure
In case that the Company lost control upon investee due to disposal of part equity investment, and if the remaining equity investment
cannot exercise common control or significant influence over the investee, Business Accounting Principles No.22- Recognition and
Measurement of Financial Assets shall be adopted for accounting treatment when preparing separate financial statement, and the fair
value and carrying value as of the date when control is lost shall be included in current period gains and losses.


4. Disposal of long term equity investment
Difference between carrying value and actual acquisition price in respect of disposal of long term equity investment shall be included
in current period gains and losses. For long term equity investment under equity method, the Company shall adopt the same basis as
the investee directly disposes relevant assets or liabilities when disposing this investment, and account for the part originally included
in other comprehensive income under appropriate proportion.
If the terms, conditions and economic impact of each transaction involved in the disposal by steps of investment in subsidiaries fall
into one or more of the following situations, such transactions will be accounted for as a package deal:
1. Such transactions are entered into simultaneously or in the case of considering the impact of each other;
2. Such transactions as a whole in order to reach complete commercial results;
3. The occurrence of one transaction is subject to that of at least one other transaction;
4. A transaction alone is not economic, but otherwise when considered with other transactions.
Enterprises that lose control of their original subsidiaries due to the disposal of partial equity investment or otherwise, and therefore
disqualify a package deal, should prepare the relevant accounting treatment in differentiation with individual financial statements and
consolidated financial statement:
(1) In separate financial statement, as for disposal of equity interest, difference between carrying value and actual acquisition price
shall be included in current period gains and losses. In case that the remaining equity interests can exercise common control or
significant influence over investee, it shall be stated under equity method in stead, and shall be adjusted as if the remaining equity
interests had been stated under equity method since the acquisition. In case that the remaining equity interests cannot exercise
common control or significant influence over investee, it shall be accounted for under Business Accounting Principles No.22-
Recognition and Measurement Principle of Financial Instruments, and the difference between its fair value and carrying value as of
the date then the Company lost control shall be included in current period gains and losses.
(2) In consolidated financial statement, for those transactions occurred before lost of control in subsidiaries, the difference between
disposal price and share of net assets of subsidiaries since purchase date or combination date shall be used to adjust capital reserve

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(equity premium), and if capital reserve is insufficient to offset, then it shall adjust retained earnings; when the Company lost control
in a subsidiary, the remaining equity interests would be re-measured at the fair value as of the control-lost date. The sum of
consideration gained from the disposal of equity and the fair value of remaining equity minus the share of net assets of original
subsidiaries since the day of purchase and based on its original shareholding ratio is credited into investment gain for the current
period, and off-set the goodwill at the same time. Other comprehensive income in relation to equity investments of original
subsidiaries should be transferred to investment gain for the period at the time of loss of control.
Each transaction involved in the disposal of equity investments of subsidiaries until loss of control falls into a package deal, carrying
accounting treatment on transaction of losing control rights and disposing the company, and should be accounted for accordingly in
differentiation with individual financial statements and consolidated financial statements:
(1) In consolidated financial statements, difference between each payment from disposal of an equity and the book value of such
long-term equity investment before the loss of control should be recognized as other comprehensive income and at the time of loss of
control, transferred to profit or loss for the current period.
(2) In consolidated financial statements, difference between each payment from disposal of a subsidiary and the share of its net assets
through investment before the loss of control should be recognized as other comprehensive income and at the time of loss of control,
transferred to profit or loss for the current period.
5. Criteria for common control and significant influence
Where the Company jointly controls an arrangement with other participators under agreed terms, and decisions which materially
affect return of such arrangement can only exist when other participators unanimously agree on the decisions, the Company is
deemed to jointly control this arrangement with other participators, and the arrangement belongs to joint venture arrangement.
In case of a joint venture arrangement concluded through separate entity, when the Company is judged to be entitled to the net assets
of the separate entity under relevant agreements, the entity shall be viewed as a joint venture under equity method. However, when
the Company is judged to be not entitled to the net assets of the separate entity under relevant agreements, the entity shall be viewed
as a joint operation, in which case, the Company recognizes items relating to its share of interests from the joint operation and
accounts for according to relevant business accounting rules.
Significant influence refers to that investor has right to participate in making decisions relating to the financial and operational
policies of the investee, while not able to control or jointly control (with others) establishment of these policies. The following one or
more conditions are based to judge whether the Company has significant influence over investee with consideration of all facts and
situations: (1) Has delegate in the board of directors or similar authority organs of investee; (2) Participate in establishing financial
and operational policies of the investee; (3) Occur material transactions with the investee; (4) Delegate management to the investee;
(5) Provide key technical data to the investee.




15. Investment real estate

Measurement model of investment real estate
Measure by cost
Depreciation or amortization method
Investment real estate is defined as the real estate with the purpose to earn rent or capital appreciation or both, including the rented
land use rights and the land use rights which are held and prepared for transfer after appreciation, the rented buildings. Besides, in
respect of any vacant building held by the Company ready for operation lease, if the Board passed a written resolution to expressly
indicate that the building will be used for operation lease and the intention of such hold will not change in a short run, the building
shall be presented as investment property either.
The investment property of the Company is accounted at its cost. Cost of investment property purchased from the external sources
includes purchase payment, related taxes and other expenditures which can be directly attributable to such assets; Cost of investment

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property constructed by the Company comprise of the necessary expenditure occurred during the construction for reaching the
condition of planned use.
Consequent measurement of investment estate shall be measured by cost method. Depreciation and amortization are provided to the
buildings and land use right pursuant to the predicted service life and net rate of salvage value. The predicted service life and net rate
of salvage value and annual depreciation (amortization) are listed as follows:

               Type                  Expected operating life       Predicted rate of net salvage Depreciation(amortizati
                                              (year)                          value                 on) rate per annum
Land Use Right                                  50                          0%-10%                     1.80%-2.00%
House and buildings                           20-28                         0%-10%                     3.56%-4.50%




When investment real estate turns to be used by holders, it shall switch to fixed assets or intangible assets commencing from the date
of such turning. And when self-used real estate turns to be leased out for rental or additional capital, the fixed assets or intangible
assets shall switch to investment real estate commencing from the date of such turning. In situation of switch, the carrying value
before the switch shall be deemed as the credit value after the switch.
Indication of impairment is assessed, the recoverable amount shall be estimated and the impairment shall be recognizing while the
recoverable amount lower than its book value.
Impairment loss once recognized shall not be reversed.
When investment is disposed, or out of utilization forever and no economic benefit would be predicted to obtain through the disposal,
the Company shall terminate recognition of such investment real estate. The amount of income from disposal, transfer, discarding as
scrap or damage of investment real estate after deducting the asset’ s carrying value and relevant taxation shall be written into current
gains and losses.




16. Fixed asset

(1) Recognition
Fixed assets is defined as the tangible assets which are held for the purpose of producing goods, providing services, lease or for
operation & management, and have more than one year of service life. Fixed assets should be recognized for qualified the followed
conditions at the same time: (1) It is probable that the economic benefits associated with the assets will flow into the Company; and
(2) The cost of the assts can be measured reliably.


 (2) Depreciation method


        Category              Depreciation method        Estimated useful life        Estimated residual rate   Annual depreciation rate

Houses and buildings        Straight-line depreciation 20.00-28.00                 5.00                         3.39%-4.75%

Machinery equipment         Straight-line depreciation 4.00-5.00                   5.00                         19.00%-23.75%

Transportation
                            Straight-line depreciation 5.00-20.00                  5.00                         4.75%-19.00%
equipment

Other equipment             Straight-line depreciation 3.00-5.00                   5.00                         19.00-31.67%



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(3) Basis of asserting, pricing and depreciation method on fixed assets under financing lease

A fixed asset leased by the Company is recognized as the fixed asset held under finance lease if one or more of the following criteria
are met:
(1) Upon the expiry of the lease term, the ownership is transferred to the Company.
(2) The Company has the option to purchase the asset at a predetermined price that is expected to be sufficiently lower than the fair
value at the date the option becomes exercisable and it is reasonably ascertained at the inception of lease that the option will be
exercised.
(3) The lease term approximates the useful life of the relevant asset even if the ownership is not transferred.
(4) At the inception of the lease, the present value of the minimum lease payments is substantially equivalent to the fair value of the
leased asset.
(5) The leased assets are of such a specialized nature that only the Company can use them without major modification.


A fixed asset held under finance lease is initially recognized at the lower of fair value of the leased asset and the present value of the
minimum lease payments, while the amount of the minimum lease payments will be recognized as the entry value of long-term
account payable, the difference between them will be recognized as unrecognized financing costs. The initial direct costs such as
commissions, attorney’s fees, and travelling expenses, stamp duties attributable to the leased item incurred during the process of
lease negotiating and signing the leasing agreement shall be recorded in the asset value. Unrealized finance costs will be amortized
using actual interest rate method over each period during the lease terms.


The Company adopts depreciation policies for leased assets consistent with those of self-owned fixed assets for the purpose of
calculating the depreciation of a leased asset. If it is reasonable to be certain that the lessee will obtain the ownership of the leased
asset when the lease term expires, the leased asset shall be fully depreciated over its useful life. If it is not reasonable to be certain
that the lessee will obtain the ownership of the leased asset at the expiry of the lease term, the leased asset shall be fully depreciated
over the shorter one of the lease term or its useful life.


17. Construction in process

1. Classification of constructions under progress

The construction in progress constructed by the Company on its own shall be measured at the actual cost which comprises of all the
necessary expenses occurred to enable the asset to meet such conditions as required for expected purpose, including engineering
materials cost, labor cost, relevant tax payment, loan expenses which should be capitalized and indirect expenses which should be
amortized, etc.
2. Standard and point of time for construction in process carrying forward to fixed assets

Fixed asset is booked with the entire expenditures occurred in the construction in process till it arrives at predicted state for use. For
those constructions in process of fixed assets which have already arrived at the predicted state for use, while still with absence of
completion settlement, they shall be carried forward to fixed assets at the estimated value based on engineering budget, construction
cost or actual cost commencing from the date of arrival of the predicted state for use. Meanwhile, they shall be also subject to the
depreciation policies applicable to fixed assets of the Company for provision of depreciation. Once completion settlement is made,
the original temporary estimated value shall be adjusted at the effective cost. However, the original provision of depreciation remains
unchanged.
3. Impairment test and impairment provision for construction in process
The Company determines whether there is evidence of impairment that may occur upon construction in progress at end of each
period.


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If there is indication of impairment of construction in progress, the Company shall estimate its recoverable amount. The recoverable
amount is to be determined by the higher between the net price of the fair value of construction in progress after subtracting costs of
disposal and the present value of expected future cash flow from construction in progress.
When the recoverable amount of construction in progress is below their book value, the book value of construction in progress shall
be written down to its recoverable amount, and the amount of write-down shall recognized as impairment loss of construction in
progress, and included into current profits and losses. At the same time, the provision for depreciation of construction in progress
shall be accrued.
After the recognition, the impairment loss of construction in progress shall not be reversed in subsequent accounting period.
If there are indications showing that impairment of certain construction in progress is possible, the Company shall estimate its
recoverable amount based on individual construction. If difficult to do so, the Company shall determine the recoverable amount of
the assets group on basis of the asset groups to which the construction in progress belongs.




18. Borrowing expenses

1. Recognition of the borrowing expenses capitalization
Borrowing expenses that attributed for purchasing or construction of assets that are complying with capitalizing conditions start to be
capitalized and counted as relevant assts cost; other borrowing expenses, reckoned into current gains and losses after expenses
recognized while occurred.
Assets satisfying the conditions of capitalization are those assets of fixed, investment real estate etc. which need a long period of time
to purchase, construct, or manufacturing before becoming usable.
Capitalizing for borrowing expenses by satisfying the followed at same time:
(1) Assets expense occurred, and paid as expenses in way of cash, non-cash assets transfer or debt with interest taken for purchasing,
constructing or manufacturing assets that complying with capitalizing condition;
(2) Borrowing expenses have occurred;
(3) Necessary activities occurred for reaching predicted usable statues or sale-able status for assets purchased, constructed or
manufactured.
2. Period of capitalization
Capitalizing period was from the time star capitalizing until the time of suspended capitalization. The period for borrowing expensed
suspended excluded in the period.
If purchasing, construction, or manufacturing process of an asset satisfying the conditions of capitalization reached its predicted
usable status or sale-able status, capitalization suspended for borrowing expenses.
If purchasing, construction, or manufacturing process of an asset satisfying the conditions of capitalization completed projects and
usable independently for part of the projects, borrowing expenses for this kind of assts shall suspended capitalization.
If the assets have been completed in every part, but can be reached the useful status or sale-able status while completed entirely, the
borrowing expense shall be suspended for capitalization while the assets completely finished in whole.
3. Period of suspended
If purchasing, construction, or manufacturing process of an asset satisfying the conditions of capitalization is suspended abnormally
for over 3 months, capitalizing of borrowing expenses shall be suspended; the suspended assets that satisfying the conditions of
capitalization meets the necessary procedure of reaching predicted usable status or sellable status, capitalizing of borrowing expenses
shall be resumed. The borrowing expenses occurred during the period of suspended shall reckon into current gains and losses until
the purchasing, construction, or manufacturing process is resumed for capitalizing.
4. Calculation for capitalization amount
Interest expenses practically occurred at the current term of a special borrowing are capitalized after deducting of the bank saving
interest of unused borrowed fund or provisional investment gains


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Capitalization amounts of common borrowings are decided by the weighted average of exceeding part of accumulated asset expenses
over the special borrowing assets multiply the capitalizing rate of common borrowings adopted. Capitalization rates are decided by
the weighted average of common borrowings.
For those expenses with discount or premium, determined the amortizable discount or premium in every fiscal year by effective
interest method, than adjusted interest amount in every period


19. Biological assets

The biological assets of the Company refer to consumptive biological assets and productive biological assets. The consumptive
biological assets including young and livestock etc., productive biological assets including eggs etc.

Biological assets are recognized upon satisfaction of the following conditions:
(1) The company owns or controls the biological asset due to the past transaction or proceeding;
(2) The economic benefits or service potential related to the biological assets are likely to flow into the company;
(3) Cost of the biological assets can be measured reliably.

2.Initial measurement of biological assets
Biological assets acquired by the Company are initially measured at the acquired cost. Cost of purchasing biological assets comprises
of purchase price, relevant tax, delivery expense, insurance premium and other expenditure directly attributable to purchase of such
asset. Biological assets injected by investors are accounted for with the value set out in the investment contract or agreement plus tax
payable as the carrying value of the assets. However, if the value set out in the contract or agreement is not fair, the actual cost shall
be determined at fair value.

3.Subsequent measurement of biological assets
(1)Subsequent expenditure
The cost of a consumptive biological asset that is propagated or bred by the Company itself is determined according to the necessary
expenses, such as the feed fee, the labor cost and the indirect cost that should be allocated before the sale. Cost of the self
propagating productive biological assets is determined according to the necessary expenses, such as the feed fee, the labor cost and
the indirect cost that should be allocated before the asset satisfies the expected production and operation purposes. The subsequent
expenditures of biological assets occurred after the asset satisfies the expected production and operation purposes, such as
management and maintenance, raising expenses, etc, are recorded in current profits and losses.


(2)Depreciation of productive biological assets
For such productive biological assets as satisfy their expected production and operation purposes, the Company makes provision of
depreciation over their periods on an average basis. The Company determines its service life and anticipated net residual value
according to the nature and service condition of the productive biological assets and the anticipated implementation way of the
related economic interests. At the end of the year, the Company re-checks the service life, anticipated net residual value and
depreciation method of the productive biological assets, and adjusts correspondingly if it differs from the original assessment.
The expected service life, anticipated net residual value and yearly depreciation of the productive biological assets of the Company
are as follows:
           Category                Estimated useful life (Year)    Estimated residual rate    Annual depreciation rate
              Eggs                                1                          5%                          95%
           Sheep and pigs                         3                          5%                       31.67%

(3)Disposal of biological assets
The Company adopts weighted average method to carry forward cost of consumptive biological assets when acquiring or disposing
such asset; cost of a biological asset after change of purpose is determined based on the carrying value as of such change; for sale,

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destroy or deficit of a biological asset, the balance between the disposal income less carrying value and relevant taxes should be
recorded in current profit or loss.


4. Impairment of biological assets
The Company conducts inspection of consumptive and productive biological assets at least once at the end of each year. If there is
any evidence proving that the net realizable value of consumptive biological assets or recoverable amount of productive biological
assets is less than carrying value due to natural disaster, disease or insect pests, animal epidemic disease invasion or market demand
change, the assets shall be measured at net realizable value or recoverable amount.
For any difference lower than the carrying value, the Company makes devaluation provision or impairment provision for biological
assets and records in current profit or loss.
In case that the factors affecting impairment of consumptive biological assets disappear, the reduced amount shall be restored and
reverted from the devaluation provision previously made with the amount reverted recorded in current profit or loss. However,
impairment provision for productive biological assets, once made, will be reverted in no way.




20. Intangible assets

(1) Pricing method, service life and impairment test

An intangible asset is an identifiable non-monetary asset without physical substance owned or controlled by the Company, including
land use right and non-patented technology etc.

1. Initial measurement of intangible assets

For those intangible assets purchased from outside, the purchase value, relevant taxes and other payments attributable to predicted
purpose obtained should recognized as cost for this assts. For those purchased amount that paid overdue exceeded the normal credit
condition, owns financing natures actually, the cost should be recognized based on the current value while purchased
As for the intangible assets acquired from the debtor in debt restructuring for the purpose of settlement of debt, the fair value of the
intangible assets shall be based to determine the accounting value. The difference between the carrying value of restructured debt and
the fair value of the intangible assets use for settlement of debt shall be recorded in current gains and losses.
With the preceding conditions that non-monetary assets exchange has commerce nature and the fair value of the assets exchanged in
or out can be measured reliably, the intangible assets exchanged in through non-monetary assets exchange are accounted at the value
based on the fair value of assets exchanged out, unless there is obvious evidence showing the fair value of assets exchanged in is
more reliable; for non-monetary assets exchange not qualifying for the preceding conditions, the carrying value of assets exchanged
out and related taxes payable shall be viewed as the cost of intangible assets exchanged in, without recognition of gains and losses.
Intangible assets obtained by means of enterprise mergered under common control, recognized book-keeping value by the book value
of mergered party; Intangible assets obtained by means of enterprise mergered under different control, recognized book-keeping
value by the its fair value.
For those cost of intangible assets development internally including: the used materials, labor cost and register charge for
development; amortization for other patent and concession used and interest expense satisfying the capitalization condition during
process of development; other directly expense before reached its predated useful purpose.

2. Subsequent measurement
Analysis and determined the service life for intangible assts while obtained. And classified into intangible assets with limited useful
life and assets without certain service life
(1) Intangible assets with limited useful life


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Those intangible assets with limited useful life are evenly amortized on straight basis from the date when they become useable to the
end of expected useful life. Particular about the estimation on intangible assets with limited service life:

                          Item                            Predicted useful life                            Basis

Patent right, trademark right, non-patents and                   5-year           Within the terms of contractual rights or other statutory
outsourcing software                                                              rights

                                                                50-year           Within the terms of contractual rights or other statutory
Land Use Right
                                                                                  rights

At end of year, revising will be performed on the useful life of intangible assets with limited useful life and the methods of
amortizing, if there is a difference with the original estimation, adjustment shall be implemented correspondingly
Being revised, the useful life of intangible assets and amortization method at period-end shows the same as previous
(2) Judgment basis of criterion for intangible assets without certain service life
Intangible assets for which it is impossible to predict the term during which the assets can bring in economic benefits are viewed as
intangible assets with indefinite life.
Intangible assets with indefinite life are not amortized during the holding period, and useful life is re-reviewed at the end of each
accounting period. In case that it is still determined as indefinite after such re-review, then impairment test will be conducted
continuously in every accounting period.
At end of year, revising will be performed on the useful life of intangible assets with uncertain life.
The Company has no such intangible assets without certain service life after review.




(2) Accounting policy for expenditure of internal R&D

1. Detail standard for classification on research stage and exploitation stage
Research stage: stage of the investigation and research activities exercising innovative-ness for new science or technology knowledge
obtained and understanding.
Exploitation stage: stage of the activities that produced new or material advance materials, devices and products that by research
results or other knowledge adoption in certain plan or design before the commercial production or usage.
The expenditure of the research stage in R&D project internally shall reckon into current gains and losses while occurred.
2. Standards for capitalization satisfaction of expenditure in exploitation state
Intangible assets recognized for expenditure in exploitation stage by satisfying the followed at same time:
(1) Owes feasibility in technology and completed the intangible assets for useful or for sale;
(2) Owes the intention for completed the intangible assets and for sale purpose;
(3) Way of profit generated including: show evidence that the products generated from the intangible assets owes a market or owes a
market for itself; if the intangible assets will use internally, than show evidence of useful-ness;
(4) Possess sufficient technique, financial resources and other resources for the development of kind of intangible assets and has the
ability for used or for sale;
(5) The expenditure attributable to the exploitation stage for intangible assets could be measured reliably.




21. Impairment of long term assets

Long term asset is judged whether for which there is indication of impairment on balance sheet date. If there is indication of
impairment, the Company would estimate its recoverable amount based on single asset; if it is difficult to estimate the recoverable

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amount of single asset, then the assets group which the single asset belongs to is based to determine the recoverable amount of the
assets group.
Recoverable amount of an asset is determined at the higher of its fair value less disposal fee and present value of its predicted future
cash flow.
If measurement of recoverable amount shows that the recoverable amount of long term asset is lower than carrying value, and then
the carrying value shall be deducted to recoverable amount, with the deducted amount recognized as impairment loss which is
included in current period gains and losses, meanwhile, asset impairment provision shall be made accordingly. Once recognized,
asset impairment loss would not be reversed in future accounting period.
Once an asset is recognized for impairment loss, its depreciation or amortization expense would be adjusted in future periods, so as to
systematically allocate the adjusted asset carrying value (after deduction of predicted net residual value) during the remaining useful
life.
Goodwill arising from business combination and intangible assets with indefinite useful life shall be tested annually for impairment
whether or not there is indication of impairment.
Goodwill is tested for impairment with the related assets group. When conducting impairment test for relevant asset group with
inclusion of goodwill, in case that there is indication of impairment for such asset group, impairment test would be firstly conducted
in respect of the asset groups without inclusion of goodwill. Then, it shall calculate the recoverable amount and determine the
corresponding impairment loss as compared to its carrying value. Second, asset group with inclusion of goodwill would be tested for
impairment. If it is found after comparison between the carrying value and recoverable amount of the asset group that the recoverable
amount is less than carrying value, the Company would recognize impairment loss for goodwill.




22. Long term prepaid expense

1. Amortization method
Long term prepaid expense represents the expense which the Company has occurred and shall be amortized in the current and later
periods with amortization period exceeding one year. Long term prepaid expense amortized on straight-line method by stages in
benefit period.
2. Amortization term
Amortized equally during the benefit period for those long-term expenses whose has a defined benefit period, for those without a
defined benefit period, amortized equally within 5 years.




23. Staff remuneration

(1) Accounting treatment of short-term remuneration

Staff remuneration refers to various forms of remuneration or compensation provided by the Company for
services provided by employees or termination of employment relations. Staff remuneration includes short-term
payoff, post employment benefits, dismissal benefits and other long-term employee benefits.

Short term remuneration refers to all the staff remuneration payable by the Company to its staff within 12 months after the end of
annual reporting period in which staff provides relevant services, other than post office benefit and dismissal benefits. The Company
recognizes short term remuneration payables as liabilities during the accounting period during which staff provides services, and
includes in cost and expense of relevant asset according to the beneficial parties of such services.

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 (2) Accounting treatment of post office benefits

Post office benefits refer to kinds of remuneration or benefits granted by the Company to staff for their provision of service upon
retirement or release of employment, other than short term remuneration and dismissal benefits. Post benefit plan is categorized as
defined withdraw plan and defined benefit plan.
Defined withdraw plan under post office benefit mainly represents participation into social basic pension insurance and
unemployment insurance operated by labor and social security authorities. During the accounting period when employee provides
services for the Company, the contribution calculated under defined withdraw plan would be recognized as liabilities and included in
current gains and losses or relevant asset cost.

Defined benefit plans for post-employment benefits are primarily clear and standard outside-plan welfare to pay the retirees and pay
the living expenses for the deceased employees’ family members. For the obligation assumed in the defined benefit plans, the
independent actuaries will accurately calculate by using the expected cumulative actuarial unit credit method on the balance sheet
date, attribute the benefit obligations arising from defined benefit plan to the period of employee providing services, and include in
the current profit or loss or associated asset cost, thereinto, unless other accounting standards require or allow the employee benefits
costs to be included in the asset cost, the service costs of defined benefit plans and the net interest of net indebtedness and net assets
of defined benefit plans should be included in the current profit and loss in the current occurrence period; changes in the net
indebtedness and net assets of re-measured defined benefit plans should be included in the other comprehensive income in the current
occurrence period, and are not allowed to switch back to profit and loss in the follow-up accounting period.


 (3) Accounting treatment of dismissal benefit

Dismissal benefit represents compensation paid to employees for release of employment before expiration or as compensation for
their willing of cut, if the Company cannot recall the dismissal unilaterally or re-organization-related costs with dismissal benefit
involved in cutting down, the liability arising from compensation for recognition of labor relationship released, reckoned into current
gains/losses at the same time.




(4) Accounting treatment of other long term staff benefits

24. Accrual liability

When the Company is involved in proceedings, debt guarantees, onerous contracts and reorganization events, if such events may
require delivery of assets or rendering of services in the future and the amounts of such events can be reliably measured, accrued
liabilities are recognized.
1. Recognition criteria of accrued liability
The Company recognizes the accrued liabilities when obligations related to contingencies satisfy all the following conditions:
This obligation is a present obligation of the Company;
The performance of such obligation is likely to result in outflow of economic benefits from the Company; and
The amount of the obligation can be measured reliably.
2. Method of measuring of accrued liabilities
Accrued liabilities shall be initially measured at the best estimate of the expenditure required to settle the related present obligation.
The Company, when determining the best estimate, has had a comprehensive consideration of risks with respect to contingencies,
uncertainties and the time value of money. If the time value of money is significant, the best estimate shall be determined after
discounting the relevant future outflow of cash.
The best estimate will be dealt with separately in the following circumstances:


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The expenses required have a successive range (or band), in which the possibilities of occurrence of each result are the same, and the
best estimate should be determined as the middle value for the range, i.e. the average of the upper and lower limit.
The expenses required does not have a successive range (or band), or although there is a successive range (or band), the possibilities
of occurrence of each result are not the same, if the contingency is related to individual item, the best estimate should be determined
as the most likely amount; where the contingency is related to a number of items, the best estimate should be calculated and
determined according to the possible results and the relevant possibilities.
When all or part of the expenses necessary for the settlement of an estimated liability of the Company is expected to be compensated
by a third party, the compensation should be separately recognized as an asset only when it is virtually certain that the compensation
will be received. The amount recognized for the compensation should not exceed the book value of the estimated liability.




25. Share-based payment

1. Category of share-based payment
Share-based payment of the Company divided into share-based payment settled by equity and by cash
2. Determination of fair value of equity instruments
If there is an active market for an equity instrument granted such as share option, the quoted price in the active market is used to
establish the fair value of the equity instrument. If there is no active market for the equity instrument granted such as share option,
the option pricing model is used to determine the fair value. Option pricing model is elected after taking into account the following
factors: (1) Exercise price of the option; (2) Effective period of the option; (3) Prevailing price of the subject shares; (4) Predicted
fluctuation rate of share prices; (5) Predicted dividend of shares; (6) Risk-free interest rate of the option in effective period.
When determining fair value of equity instruments on the date of grant, influences from market conditions among conditions
available for exercising rights and those not available for exercising rights as provided in share-based payment agreement should be
considered. If there is condition not available for exercising rights in respect of share-based payment, cost expenses attributable to
services received can be recognized provided that employees or other parties satisfy all the non-market conditions among conditions
available for exercising rights (such as service term).
3. Bases for determining the best estimate for exercisable equity instruments
On each balance sheet date during the vesting period, best estimate shall be made based on the latest available information on change
of employees who are entitled to exercise right, and number of exercisable equity instruments shall be amended accordingly. On
exercise date, number of the final predicted exercisable equity instruments shall accord to the actual number of exercisable
instruments.
4. Accounting treatment method
Equity-settled share-based payment is measured at fair value of equity instruments granted to staff. For equity instruments which are
exercisable immediately upon grant, they are included in relevant costs or expenses at fair value of the instruments as of the date of
grant, with increase of capital reserve accordingly. For instruments for which exercise is conditional upon completion of service in
vesting period or satisfaction of required results, services received in current period are included in relevant costs or expenses and
capital reserve at the fair value of the equity instrument as of the date of grant based on the best estimate of the numbers of
exercisable equity instruments on each balance sheet date during the vesting period. Recognized relevant costs or expense and total
owners’ equity will not be adjusted after the exercise date.
The cash-settled share-based payment shall be measured at the fair value of liabilities identified on the basis of shares or other equity
instruments undertaken by the Group. For the instruments that may be exercised immediately after the grant, the fair value shall, on
the date of the grant, be recognized in relevant costs or expenses and the liabilities shall be increased accordingly. For instruments
that cannot be exercised until the services are fully provided during vesting period or specified performance targets are met, on each
balance sheet date within the vesting period, the services acquired in the current period shall, based on the best estimate of the
number of exercisable instruments, be recognized in relevant costs or expenses and the corresponding liabilities at the fair value of

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the liability incurred by the Group. The Group shall, on each balance sheet date and on each account date prior to the settlement of
the relevant liabilities, re-measure the fair values of the liabilities and include the changes in the profit or loss for the period.
5. Amendment and relevant accounting treatment for those with amendment clauses and condition concerned
During the vesting period, where an equity instrument award is cancelled, it is treated as if it had vested on the date of cancellation,
and any expense not yet recognized for the award is included immediately into the profit or loss for the period and capital reserve is
recognized. Where employees or other parties are permitted to choose to fulfill non-vesting conditions but have not fulfilled during
the vesting period, equity instrument award are deemed cancelled.




26. Other financial instrument as preferred stock and perpetual capital securities

27. Revenue

Whether the company needs to comply with the disclosure requirements of the particular industry
No
Revenue of the Company mainly including revenue from goods selling, sale of real estate, and revenue from property rent-out and
labor service revenue etc.
1. Recognition standards of income from commodity sales:
When main risks and rewards attached to the ownership of goods have been transferred to the buyer, reserved neither continuous
management power nor effective control over the goods, incoming payment can be measured reliably, relative financial benefit
possibly inflow to the company, cost occurred or will occur can be reliably measured, sales income of goods is recognized.
2. Sales revenue recognition for property industry:
(1) Construction completion and qualified acceptance of properties;
(2) Commercial property pre-sale license granted by relevant state resources and housing bureau;
(3) Enter into sales contract;
(4) Sales contract has been certified and confirmed by property exchange center;
(5) Receive property price or obtain payment certificate from buyers;
(6) Complete deliver procedure for commercial properties.
Upon satisfaction of all the above conditions, the Company recognizes sales revenue
3. Recognition of property leasing revenue:
Property leasing revenue is recognized when the Company receives rental or obtain payment certificate from buyers based on the
payment date and rental amount to be paid by lessee as provided in the contract or agreement entered into between the Company and
the lessee.

4. Labor service revenue
(1) Income of the contract can be measured reliably
(2) Financial benefit attached to the contract is possibly inflow to the company
(3) Schedule of the contracted project can be determined reliably;
(4) And the relevant amount of cost incurred or to be incurred can be measured reliably
5. Recognition basis of revenue from transferring the use right of assets
The economic benefits related to transactions are probable to flow into the Company; and amount of revenue can be measured
reliably.




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28. Government grants

(1) Criterion and accounting treatment on government grants with assets concerned

1.Type
Government grant represents the monetary and non-monetary assets of the Company obtained from government agencies for free.
Depending on the grantees under relevant government documents, government grant is classified into grant related to assets and
income, respectively.


For such government grant under which no specific grantee is defined, it is classified as grant related to assets or income depending
on the actual grantee. The details relating to relevant judgment reference is set out in note VI to this financial statement - deferred
income/non-operating income.



Government grant related to assets refers to that obtained by the Company for the purpose of acquiring or otherwise forming long
term assets. Government grant related to income refers to that other than that related to assets.


2.Realization of government grant


Where there are evidences showing that the Company meets the requirements of the financial supporting policies and it is expected
that the financial supporting funds will be received, the government grant is recognized on the receivables. Otherwise, the
government grant is recognized when actually received.


The grant is measured as the amount received or receivable where it takes the form of a cash asset, or at fair value where it is not a
cash asset. Where the fair value cannot be reliably obtained, it should be measured at the nominal value (RMB1.00). government
grants measured at nominal value will be recorded in profit or loss for the period directly.




3.Accounting treatment
Government grant related to assets constructed or purchased is realized as deferred income, and included in profit or loss by stages
over the assets’ useful life in a reasonable and systematic manner;


 (2) Criterion and accounting treatment on government grants with revenue concerned

Government grant related to income, if it is used to compensate relevant expense or loss of a company to be occurred in future
periods, shall be recognized as deferred income and included in profit or loss during the period in which the above expense or loss is
recognized; if it is used to compensate relevant expense or loss of a company incurred, it shall be included in profit or loss upon
acquisition.


Government grant related to a company’s normal operation is recognized as other income, and otherwise, as non-operating income or
expense.


Borrowing expense shall be reduced against the government grant received by a company provided that the grant is related to policy


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preferential loan discount. If the Company is granted by lending bank with policy preferential loan interest, the amount of borrowing
actually received shall be taken as the carrying value of the borrowing with borrowing expense calculated based on principal of the
borrowing and such policy preferential loan interest.


If a government grant recognized is required to return, carrying value of the asset shall be adjusted if the carrying value is written
down at initial recognition; balance of carrying value of deferred income shall be written down if there such balance exists with the
amount of excess included in current profit or loss; it shall be directly included in current profit or loss if no relevant deferred income
exists.


29. Deferred income tax assets / Deferred income tax liabilities

Deferred tax assets and deferred tax liabilities are calculated and recognized according to the balance between the tax base and the
book value of assets and liabilities (temporary differences). At the balance sheet date, the deferred tax assets and deferred tax
liabilities are measured by the applicable tax rate during the period of expected recovery of assets or clearing off the liability.
1. The basis for confirming deferred tax assets
The Company takes the taxable income which is likely to be obtained for deducting the deductable temporary differences and can
carry over the deductable loss and tax credits as the limit to confirm the deferred income tax assets generated by deductable
temporary differences. However, the deferred income tax assets generated by the initial recognition of assets or liabilities in the
transactions with following characteristics shall not be recognized: (1) The transaction is not a business combination; (2) The
occurrence of transaction affects neither the accounting profit nor the taxable income or deductible loss.
For the deductible temporary differences associated with investments in associated enterprises and satisfying the following
conditions, confirm the corresponding deferred income tax assets: temporary difference is likely to be reversed back in the
foreseeable future, and it is likely to obtain the taxable income used for deducting the deductable temporary differences in the future.
2. The basis for confirming deferred tax liabilities
The company recognizes the currently and previously payable but not paid taxable temporary differences as the deferred income tax
liabilities. But not including:
(1) The temporary differences formed in the initial recognition of goodwill;
(2) Transactions or events formed by non-business combination, and it affects neither the accounting profit nor the temporary
differences formed by taxable income (or deductible loss) when the transactions or events occur;
(3) For the taxable temporary differences related to the subsidiary companies and investments in associated enterprises, the reversal
time of this temporary difference can be controlled and this temporary difference is unlikely to be reversed back in the foreseeable
future.
3. Deferred tax assets and liabilities are offset if all the following conditions are met
(1) An enterprise has the legal rights to settle the income tax assets and income tax liabilities for the current period by net amount;
(2) They relate to income taxes levied by the same tax authority on either the taxable entity has a legally enforceable right or set off
current income tax assets against current income tax liabilities, and different taxable entities which either intend to settle the current
income tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in
which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.




30. Lease

(1) Accounting treatment of operation lease

If a lease contains such clause that substantially transfers to the lease all the risks and reward related to the ownership of the leased


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asset, this lease is accounted for as financial leasing, and others are operating leases.


(1) Assets under operation lease-in
The lease payment paid for leasing assets is amortized under straight line method in the entire lease period without deduction of
lease-for-free period, and is recorded in current expenses. The initial direct expenses paid by the Company related to lease
transactions shall be recorded in current expenses.
If asset leaser assumes the lease related expenses which shall be assumed by the Company, the Company shall deduct such expenses
from the total rental and amortize based on the deducted rental expenses during the lease period and record in current expenses.

(2) Assets under operation rent-out
The lease fee collected by the Company for assets lease is amortized under straight line method in the entire lease period without
deduction of lease-for-free period, and is realize as lease income. The initial direct expenses paid by the Company related to lease
transactions shall be recorded in current expenses; for significant amount, it shall be capitalized and recorded in current income in
phases under the same basis as realization of lease income in the entire lease period.
If the Company assumes the lease related expenses which shall be assumed by the lessee, the Company shall deduct such expenses
from the total rental income and allocate based on the deducted rental expenses during the lease period.
(2) Accounting treatment of financing lease
(1) Assets leased by financing lease: the Company accounts the leased assets at the lower of the fair value of leased assets and
present value of the minimum lease payment on the inception date of the lease, and the minimum lease payment is deemed as the
accounting value of long term account payables, and the difference is taken as unrealized financing expenses. The recognization basis,
evaluation and depreciation method for assets leased by financing lease found more in the Fixed assets in Note IV (15)
The Company amortizes the unrealized financing expenses at effective interest rate method in the asset lease period and records in
finance expenses.
 (2) Assets leased out by financing lease: on the inception date of the lease, the Company realizes the difference between the sum of
financing lease account receivables and unguaranteed remaining value and its present value as unrealized financing income which is
conformed as lease income in future periods involving lease. The initial direct expenses occurred by the Company related to lease
transaction shall be recorded in the initial measurement of financing lease account receivables. And income realized in lease period
shall be reduced accordingly.




31. Other important accounting policies and accounting estimates

32. Changes of main accounting policy and estimate

(1) Changes of accounting policies

□ Applicable √ Not-applicable


(2) Changes in accounting estimates

□ Applicable √ Not-applicable




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33. Other

VI. Taxes

1. Main tax category and tax rate


                     Taxes                                       Basis                                         Rate

                                              Sales of goods, taxable sales service
VAT                                           income, intangible assets or immovable        3%-17%
                                              property

Urban maintenance and construction tax        Turnover tax payable                          5%

Enterprise income tax                         Taxable income                                25%

Educational surtax                            Turnover tax payable                          3%

Local educational surtax                      Turnover tax payable                          2%

                                              Rental income or original value of the
Property tax                                                                                12% or 1.2%
                                              property

Land VAT                                      VAT for the lands or pre-requisitioned land Over-rate progressive tax rate

As for the taxpaying body with different tax rate for enterprise income tax, disclosed explanations:

                             Taxpaying body                                                 Rate for income tax


2. Tax preference

3. Other

Nanjiang Asia tax in Hong Kong Special Administrative Region with rate of 16.5% for income tax.




VII. Notes to the main items of consolidate financial statements

1. Monetary funds

                                                                                                                                 In RMB

                     Item                                   Ending balance                                Opening balance

Cash in stock                                                                  118,377.59                                     61,945.60

Bank deposit                                                               30,717,540.61                                68,045,443.09

Other monetary funds                                                         4,677,368.68                                   6,697,820.37

Total                                                                      35,513,286.88                                74,805,209.06

Including: total amount deposit aboard                                       5,622,588.26                                   5,356,719.91

Other explanation


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Monetary fund with restrictions:
                    Item                                 Ending balance                               Opening balance
Margin of housing mortgage                                                 4,677,368.68                               6,697,820.37
                    Total                                                  4,677,368.68                               6,697,820.37


Ending balance of monetary fund decreased 39,291,922.18 Yuan over that of period-begin with 52.53% down, mainly because the
construction in progress are paid in the period




2. Derivative financial assets

□Applicable     √Not applicable


3. Accounts receivable

(1) Accounts receivable by type

                                                                                                                                            In RMB

                                               Ending balance                                                 Opening balance

                                                    Provision for bad
                              Book balance                                                Book balance        Provision for bad debts
         Type                                            debts
                                                                            Book
                                                                                                                                        Book value
                                        Proportio              Provision    value                 Proportio                Provision
                            Amount                  Amount                          Amount                     Amount
                                                                 ratio                                                       ratio
                                           n                                                         n

Accounts receivable
with large single
                            2,320,04                2,320,04                         2,320,0                  2,320,047
amount and accrued                       94.84%                100.00%                             94.84%                   100.00%
                                7.40                    7.40                              47.40                      .40
for provision of bad
debt on a single basis

Accounts receivable
accrued for provision 82,138.8                      64,530.8                         82,138.
                                           3.36%                78.56% 17,608.00                     3.36% 64,530.85         78.56%      17,608.00
of bad debt by                      5                     5                                 85
portfolio

Accounts receivable
with minor single
                            44,172.0                44,172.0                         44,172.
amount but accrued                         1.80%               100.00%                               1.80% 44,172.00        100.00%
                                    0                     0                                 00
for provision of bad
debt on a single basis

                            2,446,35                2,428,75                         2,446,3                  2,428,750
Total                                   100.00%                 99.28% 17,608.00                  100.00%                    99.28%      17,608.00
                                8.25                    0.25                              58.25                      .25

Accounts receivable with large single amount and accrued for provision of bad debt on a single basis at period-end:
√ Applicable □ Not-applicable


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                                                                                                                                  In RMB

   Accounts receivable                                                    Ending balance
            (unit)             Accounts receivable      Provision for bad debts        Provision ratio                Reasons

Beijing Xiangeqing
Industrial & Trade Co.,                  2,320,047.40                2,320,047.40                    100.00% Estimated uncollectible
Ltd.

Total                                    2,320,047.40                2,320,047.40             --                           --

Accounts receivable accrued for provision of bad debt by aging analysis method in portfolio:
√ Applicable □ Not-applicable
                                                                                                                                  In RMB

                                                                             Ending balance
                Aging
                                         Accounts receivable             Provision for bad debts                Provision ratio

Within 1 year

Subtotal of within 1 year                                10,150.00                             507.50                             5.00%

1-2 years                                                 6,102.50                          1,220.50                              20.00%

2-3 years                                                 6,167.00                          3,083.50                              50.00%

Over 3 years                                             59,719.35                         59,719.35                            100.00%

Total                                                    82,138.85                         64,530.85                              78.56%

Portfolio recognized:
Accounts receivable accrued for provision of bad debt by percentage of balance in portfolio:
□ Applicable √ Not-applicable
Accounts receivable accrued for provision of bad debt by other methods in portfolio:


(2) Provision for bad debts accrued, regain or switch back in the Period

In the Period, Yuan accrued for provision of bad debts; Yuan provision for bad debts regains or switch back in the Period.
Including major amount of bad debt provision regain or switch back in the Period:
                                                                                                                                  In RMB

                        Unit                         Amount regain or switch back                          Way of regain


(3) Account receivable actual charge off in the Period

                                                                                                                                  In RMB

                                  Item                                                     Amount written-off

Written-off for the major receivable:
                                                                                                                                  In RMB

                                                                                                                  Arising from related
         Unit                  Nature         Amount written off           Reasons                 Procedures
                                                                                                                    transaction (Y/N)


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Explanation on written off:


(4) Top five account receivables collected by arrears party at ending balance

                    Unit                       Ending balance             Ratio in account
                                                                                                Bad debt provision
                                                                            receivable at
                                                                                                        accrued
                                                                          period-end (%)
Beijing Xiangeqing Industrial & Trade                    2,320,047.40          94.84                        2,320,047.40
Co., Ltd.
Electricity   Authority      of   Chengde                   82,138.85           3.36                           64,530.85
County
Inner Mongolia Ajinnai Horse Culture                        44,172.00           1.80                           44,172.00
Development Co., Ltd.
                    Total                                2,446,358.25         100.00                        2,428,750.25


(5) Account receivable de-recognition due to financial assets transfer

(6) Assets and liabilities resulted by account receivable transfer and continues involvement

Other explanation


4. Prepayments

(1) Aging analysis of repayment

                                                                                                                                   In RMB

                                              Ending balance                                          Opening balance
            Aging
                                     Amount                    Proportion                    Amount                   Proportion

Within 1 year                          97,678,146.00                      99.99%                 171,695.28                     93.52%

1-2 years                                   11,899.78                       0.01%                 11,899.78                        6.48%

Total                                  97,690,045.78                 --                          183,595.06                --

Reasons for significant repayment with over one year age without settle:


(2) Top five prepayment collected by objects at ending balance

                                                                          Ratio in prepayment
                      Unit                        Ending amount                                  Time of repayment      Un-settle reasons
                                                                                    (%)

Chengde Greatwall Construction Group Co.,          95,100,000.00                 97.35%               Within 1 year        Incomplete
Ltd.                                                                                                                       traansaction

Beijing Tiangao Diaphragm Compressor                    544,000.00                0.56%               Within 1 year        Incomplete
Co., Ltd.                                                                                                                  traansaction



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Zhongtong Bus Holding Co., Ltd.                        400,000.00                  0.41%                 Within 1 year             Incomplete
                                                                                                                                 traansaction

Luoyang Shuangshi Kiln Equipment Co.,                  330,000.00                  0.34%                 Within 1 year             Incomplete
Ltd.                                                                                                                             traansaction

 Chengdu Huaqi Houpu Holding Co., Ltd.                 249,000.00                  0.25%                 Within 1 year             Incomplete
                                                                                                                                 traansaction

                     Total                                   96,623,000.00         98.91%                     ---                     ---




Other explanation
Increased 97,506,450.72 Yuan over that of last period with 53109.52% up, mainly because the construction in progress paid in
advance are not been settled in the period


5. Other account receivables

(1) Other account receivables by type

                                                                                                                                        In RMB

                                             Ending balance                                             Opening balance

                                                 Provision for bad
                             Book balance                                          Book balance         Provision for bad debts
        Type                                          debts
                                                                         Book
                                                                                                                                   Book value
                                     Proportio              Provision    value              Proportio                Provision
                         Amount                  Amount                          Amount                  Amount
                                                              ratio                                                      ratio
                                        n                                                      n

Other receivables
with large single
                         2,709,27                2,709,27                         2,709,2               2,709,273
amount and accrued                      8.11%               100.00%                            4.24%                  100.00%
                              3.00                   3.00                          73.00                       .00
for provision of bad
debt on a single basis

Other receivables
accrued for provision 28,643,1                   442,594.               28,200,56 59,168,               442,594.6                  58,725,942.
                                      85.70%                   1.55%                         92.50%                        0.75%
of bad debt by               61.44                    61                     6.83 537.55                         1                          94
portfolio

Other receivables
with minor single
                         2,071,33                2,071,33                         2,085,5               2,071,332
amount but accrued                      6.20%               100.00%                            3.26%                     99.32%      14,262.00
                              2.08                   2.08                          94.08                       .08
for provision of bad
debt on a single basis

                         33,423,7                5,223,19               28,200,56 63,963,               5,223,199                  58,740,204.
Total                                100.00%                 15.63%                            1.00%                       8.17%
                             66.52                   9.69                    6.83 404.63                       .69                          94

Other receivables with large single amount and accrued for provision of bad debt on a single basis at period-end:

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√ Applicable □ Not-applicable
                                                                                                                                       In RMB

        Other account                                                       Ending balance
   receivables (by unit)     Other account receivable    Provision for bad debts         Provision ratio             Reason for provision

Non-Taxable Revenue
Authority of Chengde                    1,500,000.00                   1,500,000.00                     100.00% Estimated uncollectible
County

Claims obtained from
                                        1,209,273.00                   1,209,273.00                     100.00% Estimated uncollectible
auction

Total                                   2,709,273.00                   2,709,273.00               --                           --

Other receivables accrued for provision of bad debt by aging analysis method in portfolio:
√ Applicable □ Not-applicable
                                                                                                                                       In RMB

                                                                               Ending balance
               Aging
                                      Other account receivable             Provision for bad debts                   Provision ratio

Within 1 year

Subtotal of within 1 year                               2,750,461.28                          37,708.95                                1.37%

1-2 years                                                  30,200.00                           6,040.00                                20.00%

2-3 years                                                   3,000.00                           1,500.00                                50.00%

Over 3 years                                             397,345.66                          397,345.66                             100.00%

Total                                                   3,181,006.94                         442,594.61                                13.92%

Portfolio recognized:
Other accounts receivable accrued for provision of bad debt by percentage of balance in portfolio:
□ Applicable √ Not-applicable
Other accounts receivable accrued for provision of bad debt by other methods in portfolio:
√ Applicable □ Not-applicable


                 Portfolio                                                  Ending balance

                                               Other accounts           Provision for bad debts        Provision ratio (%)
                                                  receivable

Land reserve center of Chengde County                   23,360,000.00             ---                          ---

Shao Yuqin                                               1,750,000.00             ---                          ---

Margin                                                    212,154.50              ---                          ---

Deposit                                                   140,000.00              ---                          ---

                   Total                                25,462,154.50             ---                          ---




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(2) Bad debt provision accrual collected or switch back

There is Yuan provision for bad debts accrued in the Period; and Yuan regains or switch back in the Period.
Including the followed significant amount:
                                                                                                                             In RMB

                     Unit                              Regains or switch back                          Way of regain


(3) Other receivables actually written-off during the reporting period

                                                                                                                             In RMB

                                  Item                                                    Amount written-off

Major other account receivables written-off:
                                                                                                                             In RMB

                                                                                                                Arising from related
         Name                 Nature           Amount written-off        Reasons              Procedures
                                                                                                                 transaction (Y/N)

Explanation on other account receivable:


 (4) Other account receivables category by nature of money

                                                                                                                             In RMB

                Nature of money                         Ending book balance                       Beginning book balance

Land acquisition account                                                 23,360,000.00                                 51,360,000.00

Margin                                                                     1,762,154.50                                 1,762,154.50

Petty cash                                                                 1,515,629.01                                  872,244.72

Debt auction                                                               1,209,273.00                                 1,209,273.00

Other                                                                      5,576,710.01                                 8,759,732.41

Total                                                                    33,423,766.52                                 63,963,404.63


(5) Top five other account receivables collected by arrears party at ending balance

                                                                                                                             In RMB

                                                                                          Proportion in total    Ending balance of
         Unit                 Nature            Ending balance            Aging
                                                                                           other receivables    bad debt provision

Land reserve center Land acquisition
                                                    23,360,000.00 Within 1 year                       69.89%
of Chengde County      account

                       Account of transfer
Shao Yuqin                                           1,750,000.00 Within 1 year                        5.24%
                       for leasehold

Non-Taxable            Margin for land
                                                     1,500,000.00 3-4 years                            4.49%            1,500,000.00
Revenue Authority      bidding


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of Chengde County

Auction of creditor’s
                         Debt auction                     1,209,273.00 Over 5 years                           3.62%            1,209,273.00
rights

Zhou Haihong                                               642,689.25 Over 5 years                            1.92%              642,689.25

Total                             --                     28,461,962.25            --                         85.15%            3,351,962.25


(6) Account receivables related to government subsidies

                                                                                                                                     In RMB

                                                                                                                      Time and amount
            Unit                        Item                   Ending balance                 Ending age
                                                                                                                      collected and basis


(7) Other receivable for termination of confirmation due to the transfer of financial assets

(8) The amount of assets and liabilities that are transferred other receivable and continued to be involved

Other explanation
Ending balance of other receivables decreased 30,539,638.11 Yuan over that of period begin with 51.99% down, mainly because the
amount for land reserves are collected in the Period.




6. Inventories

(1) Classification of inventories

                                                                                                                                     In RMB

                                          Ending balance                                                Opening balance
         Item                              Depreciation                                                  Depreciation
                         Book balance                            Book value            Book balance                          Book value
                                               reserve                                                      reserve

Raw materials                 61,290.09                              61,290.09              71,640.85                             71,640.85

Stock products               112,228.19                             112,228.19             150,484.25                            150,484.25

Revolving
                              17,581.70                              17,581.70              28,170.33                             28,170.33
materials

Consumptive
                                   0.00                                    0.00              2,916.05                              2,916.05
biological assets

Production costs           2,007,012.36                           2,007,012.36           1,749,205.68                          1,749,205.68

Development cost          90,606,341.56                          90,606,341.56          86,747,495.40                         86,747,495.40

Development
                          77,049,060.47                          77,049,060.47         145,903,913.28                       145,903,913.28
products

Total                    169,853,514.37                         169,853,514.37         234,653,825.84                       234,653,825.84


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Does the Company comply with the disclosure requirement of ―Information Disclosure Guidelines of Shenzhen Stock Exchange
No.4 – Listed Companies Engaged in Seed Industry and Planting Business‖ or not
No


 (2) Inventory depreciation reserve

                                                                                                                            In RMB

                                              Increased in Period 金额               Decreased in Period
        Item         Opening balance                                            Reversing or                      Ending balance
                                             Accrual            Other                               Other
                                                                                  write-off


(3) Explanation on capitalization of loan cost at end of the balance

(4) Assets completed without settlement from construction contract at period-end

                                                                                                                            In RMB

                                Item                                                           Amount

Other explanation
Decreased 64,800,311.47 Yuan over that of period-begin with27.62% down, mainly because development products for Huijing
Tiandi are carry forward to costs for sales in the period




7. Other current assets

                                                                                                                            In RMB

                     Item                                   Ending balance                           Opening balance

Taxes paid in advance                                                        9,737,288.76                              2,029,505.29

Financial products                                                           4,630,000.00                           32,530,000.00

Total                                                                    14,367,288.76                              34,559,505.29

Other explanation
Decreased 20,192,216.53 Yuan over that of period-begin with 58.43% down, mainly due to the redemption of financial products in
the period


8. Financial assets available for sale

(1) Financial assets available for sale

                                                                                                                            In RMB

             Item                             Ending balance                                    Opening balance



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                                                Depreciation                                           Depreciation
                               Book balance                         Book value        Book balance                             Book value
                                                  reserves                                               reserves
Instrument equity
                                25,000,000.00       8,329,596.87 16,670,403.13        25,000,000.00      8,329,596.87          16,670,403.13
available for sale:

      Measured by cost          25,000,000.00       8,329,596.87 16,670,403.13        25,000,000.00      8,329,596.87          16,670,403.13

Total                           25,000,000.00       8,329,596.87 16,670,403.13        25,000,000.00      8,329,596.87          16,670,403.13


(2) Financial assets available for sale measured by fair value at period-end

                                                                                                                                       In RMB

                                 Instrument equity        Instrument debt available
             Type                                                                                                            Total
                                 available for sale                for sale


(3) Financial assets available for sale measured by cost at period-end

                                                                                                                                       In RMB

                               Book balance                                    Depreciation reserves                 Ratio of
                                                                                                                    share-holdi      Current
 Investee
                            Increased Decreased                                Increased Decreased                    ng in           cash
   unit        Opening                                 Closing     Opening                              Closing
                            in Period   in Period                              in Period   in Period                 invested        dividend
                                                                                                                      entity

Dongguan
Dongfeng
New           25,000,000                              25,000,000 8,329,596.                            8,329,596.
                                                                                                                        2.56%
Energy                .00                                    .00          87                                  87
Technolog
y Co. Ltd.

              25,000,000                              25,000,000 8,329,596.                            8,329,596.
Total                                                                                                                   --
                      .00                                    .00          87                                  87


(4) Change of financial assets depreciation for sale during reporting period

                                                                                                                                       In RMB

                                 Instrument equity        Instrument debt available
             Type                                                                                                            Total
                                 available for sale                for sale

Balance of accrual at
                                         8,329,596.87                                                                           8,329,596.87
period-begin

Balance of accrual at
                                         8,329,596.87                                                                           8,329,596.87
period-end




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(5) Fair value of the available-for-sale equity instrument drops significantly or not contemporarily without
depreciation reserves accrued

                                                                                                                                            In RMB

                                                               Decline range of
Equity instrume                                                                         Times continued
                                                                   fair value                                 Amount accrual       Reasons for
      nts project       Investment cost Ending fair value                                 to declined
                                                               compare with the                               for impairment       un-accrual l
available for sale                                                                         (Month)
                                                                        cost

Other explanation


9. Long-term equity investment

                                                                                                                                            In RMB

                                                               Changes in Period

                                                 Investme
                                                     nt       Adjustme                                                                    Impairme
                                                                                           Cash
                           Additiona             gains/loss     nt of                                Provision                               nt
 Invested     Opening                                                          Other     dividend                              Ending
                               l       Capital      es         other                                    for                               provision
company       balance                                                          equity    or profit                 Other       balance
                           investmen reduction recognize comprehe                                    impairme                             at ending
                                                                           changes declare to
                               t                   d by        nsive                                 nt losses                            balance
                                                                                           issue
                                                  equity      income
                                                  method

I. Joint venture

II. Associated enterprise

Runhua
RW
(Tianjin)
             9,170,370                                                                                                     9,170,370 9,170,370
Internatio
                     .00                                                                                                            .00           .00
nal
Trading
Co., Ltd.

             9,170,370                                                                                                     9,170,370 9,170,370
Subtotal
                     .00                                                                                                            .00           .00

             9,170,370                                                                                                     9,170,370 9,170,370
Total
                     .00                                                                                                            .00           .00

Other explanation




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10. Investment real estate

(1) Investment real estate measured at cost

√ Applicable □ Not-applicable
                                                                                                                 In RMB

           Item                   Houses, buildings   Land use right       Construction in process     Total

I. Original book value

     1.Opening balance                                      5,051,773.92                                 5,051,773.92

     2.Increased in
Period

     (1) Outsourcing

     (2) Inventory \
Fixed assets \ Transferred
from construction in
process

     (3) Increased by
enterprise combination



     3.Decreased in
Period

     (1) Disposal

     (2) Other
transfer-out



     4.Ending balance                                       5,051,773.92                                 5,051,773.92

II. Accumulated
depreciation and
accumulated
amortization

     1.Opening balance                                        815,427.58                                   815,427.58

     2.Increased in
                                                               51,942.00                                       51,942.00
Period

     (1) Accrual or
                                                               51,942.00                                       51,942.00
amortization



     3.Decreased in
Period



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     (1) Disposal

     (2) Other
transfer-out



     4.Ending balance                                   867,369.58                                 867,369.58

III. Depreciation reserve

     1.Opening balance

     2.Increased in
Period

     (1) Accrual



     3、Decreased in
Period

     (1) Disposal

     (2) Other
transfer-out



     4.Ending balance

IV. Booking value

     1. Ending book
                                                      4,184,404.34                                4,184,404.34
value

     2. Beginning book
                                                      4,236,346.34                                4,236,346.34
value


(2) Investment real estate measured by fair value

□ Applicable √ Not-applicable


 (3) Investment real estate without property rights certificate held

                                                                                                       In RMB

                      Item                        Book value                           Reasons

Other explanation


11. Fixed assets

(1) Fixed assets

                                                                                                       In RMB


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                           Houses and       Machinery        Transportation
          Item                                                                  Other equipment       Total
                           buildings        equipment         equipment

I. Original book
                             5,259,168.09     2,220,348.20       5,204,758.70        1,393,816.06    14,078,091.05
value

  1.Opening balance          5,259,168.09     2,220,348.20       5,204,758.70        1,393,816.06    14,078,091.05

  2.Increased in
                             8,203,689.11        65,384.62          88,800.00          136,215.90     8,494,089.63
Period

          (1) Purchase       8,203,689.11        65,384.62          88,800.00          122,955.13     8,480,828.86

     (2) Transferred
from construction in
process

     (3) Increased by
enterprise                                                                               9,330.00         9,330.00
combination



  3.Decreased in
Period

     (1) Disposal or
scrap



  4.Ending balance          13,462,857.20     2,285,732.82       5,293,558.70        1,530,031.96    22,572,180.68

II. Accumulated
depreciation

  1.Opening balance            249,808.69     1,262,321.81       1,884,384.94        1,007,178.62     4,403,694.06

  2.Increased in
                               254,796.94        48,566.76         342,401.28           94,132.57      739,897.55
Period

     (1) Accrual               254,796.94        48,566.76         342,401.28           88,619.12      734,384.10

             ( 1 ) Other
                                                                                         5,513.45         5,513.45
transfer-in

  3.Decreased in
Period

     (1) Disposal or
scrap



  4.Ending balance             504,605.63     1,310,888.57       2,226,786.22        1,101,311.19     5,143,591.61

III. Depreciation
reserve

  1.Opening balance


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  2.Increased in
Period

     (1) Accrual



  3.Decreased in
Period

     (1) Disposal or
scrap



  4.Ending balance

IV. Booking value

  1. Ending book
                            12,958,251.57            974,844.25          3,066,772.48              428,720.77        17,428,589.07
value

  2. Beginning book
                              5,009,359.40           958,026.39          3,320,373.76              386,637.44         9,674,396.99
value


(2) Temporarily idle fixed assets

                                                                                                                              In RMB

                                                Cumulative           Depreciation
         Item          Original book value                                                    Book value              Note
                                                depreciation            reserves


(3) Fixed assets acquired by financing lease

                                                                                                                              In RMB

          Item               Original book value     Cumulative depreciation       Depreciation reserves         Book value


(4) Fixed assets acquired by operating lease

                                                                                                                              In RMB

                              Item                                                        Ending book value


(5) Fixed assets without property certificates

                                                                                                                              In RMB

                    Item                                   Book value                                      Reasons

Other explanation
Increased 7,754,192.08 Yuan over that of period-begin with 80.15% up, mainly due to the fixed assets purchased in the period




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12. Construction in progress

(1) Construction in progress:

                                                                                                                                                 In RMB

                                              Ending balance                                                   Opening balance
         Item                                   Depreciation                                                     Depreciation
                         Book balance                                   Book value           Book balance                              Book value
                                                  reserves                                                            reserves

Industrialization
project of
                             9,541,317.29                                9,541,317.29           2,267,164.04                              2,267,164.04
Dongfeng New
energy equipment

Total                        9,541,317.29                                9,541,317.29           2,267,164.04                              2,267,164.04

(2) Changes of major projects under construction:
                                                                                                                                                 In RMB

                                                                                     Proporti               Accumul including
                                                 Fixed                                on of                    ated     : interest Interest
                                                              Other
                                     Increase    assets                              project                amount capitaliz capitaliz
                         Opening                             decrease Ending                     Progress                                      Sourceof
     Item    Budget                    d in     transfer-i                          investme                   of          ed     ation rate
                         balance                             d in the    balance                   (%)                                           funds
                                     Period      n in the                             nt in                 interest     amount     of the
                                                              Period
                                                 Period                              budget                 capitaliz    of the   year (%)
                                                                                       (%)                   ation        year

Industria
lization
project
of
             300,000, 2,267,16 7,274,15                                  9,541,31
Dongfen                                                                                3.18% 3.18%                                             Other
                000.00        4.04       3.25                                7.29
g New
energy
equipme
nt

             300,000, 2,267,16 7,274,15                                  9,541,31
Total                                                                                   --          --                                            --
                000.00        4.04       3.25                                7.29


(3) The provision for impairment of construction projects:

                                                                                                                                                 In RMB

                      Item                                   Amount accrual in the period                               Accrual reasons

Other explanation
Increased 7,274,153.25 Yuan over that of period-begin with 320.85% up, mainly because investment for industrialization project in
Dongfeng New Energy increased in the period


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13. Productive biological assets

(1) Measured by cost

√ Applicable □ Not-applicable
                                                                                                        In RMB

           Item             Plantation   Livestock        Forestry        Aquaculture           Total



I. Original book
value

  1.Opening balance                           40,121.80                                            40,121.80

  2.Increased in
                                            185,050.20                                           185,050.20
Period

     (1) Outsourcing                        185,050.20                                           185,050.20

     (2)
Self-cultivation



  3.Decreased in
                                              57,172.00                                            57,172.00
Period

     (1) Disposal                             57,172.00                                            57,172.00

     (2) Other



  4.Ending balance                          168,000.00                                           168,000.00

II. Accumulated
depreciation

  1.Opening balance                           22,150.41                                            22,150.41

  2.Increased in
                                              41,269.41                                            41,269.41
Period

     (1) Accrual                              41,269.41                                            41,269.41



  3.Decreased in
                                              26,607.32                                            26,607.32
Period

     (1) Disposal                             26,607.32                                            26,607.32

     (2) Other



  4.Ending balance                            36,812.50                                            36,812.50

III. Depreciation


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reserve

  1.Opening balance

  2.Increased in
Period

     (1) Accrual



  3.Decreased in
Period

     (1) Disposal

     (2) Other



  4.Ending balance

IV. Booking value

  1. Ending book
                                                      131,187.50                                           131,187.50
value

  2. Beginning book
                                                       17,971.39                                             17,971.39
value


(2) Measured by fair value

□ Applicable √ Not-applicable


14. Oil & gas assets

□ Applicable √ Not-applicable


15. Intangible assets

(1) Intangible assets

                                                                                                                  In RMB

                                                                   Non-patent
          Item           Land Use Right          Patent right                                             Total
                                                                   technology

I. Original book
value

     1.Opening
                              52,406,400.00                                                              52,406,400.00
balance

     2.Increased in
                                  6,508,062.90
Period 金额


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            (1)
                          6,508,062.90
Purchase

          (2) Internal
R&D

          (3) Increased
by enterprise
combination



  3.Decreased in
Period

          (1) Disposal



     4.Ending
balance

II. Accumulated
amortization

     1.Opening
                           701,088.96                                       701,088.96
balance

     2.Increased in
                          1,926,524.57                                     1,926,524.57
Period

          (1) Accrual



     3.Decreased in
Period

          (1) Disposal



     4.Ending
                          2,627,613.53                                     2,627,613.53
balance

III. Depreciation
reserve

     1.Opening
balance

     2.Increased in
Period

          (1) Accrual



     3.Decreased in
Period


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     (1) Disposal



     4.Ending
balance

IV. Booking value

     1. Ending book
                               56,286,849.37                                                                         56,286,849.37
value

     2. Beginning
                               51,705,311.04                                                                         51,705,311.04
book value

Intangible assets formulated no by means of internal R&D in balance of total intangible assets at period-end


 (2) Land use right without property certificate

                                                                                                                           In RMB

                     Item                                   Book value                                     Reasons

Other explanation


16. Development expenditure

                                                                                                                           In RMB

                    Opening                                                                                             Ending
     Item                                 Increased in Period                        Decreased in Period
                    balance                                                                                             balance

Airship         2,543,414.10     811,496.72                                                                           3,354,910.82

Air-cooled
hydrogen fuel
cell power           31,847.46 1,396,450.87                                                                           1,428,298.33
system for
vehicle used

ZS01
                    938,300.00 1,262,854.11                                                                           2,201,154.11
alumina fiber

High purity
alumina
powder and
vehicle
mounted
                                2,317,035.01                                                                          2,317,035.01
hydrogen
generator
( R&D of
hydrogen
buses)



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    Total        3,513,561.56 5,787,836.71                                                                      9,301,398.27

Other explanation


17. Goodwill

(1) Original book value of goodwill

                                                                                                                      In RMB

Name of invested
company or items Opening balance              Increased in Period                    Decreased in Period     Ending balance
 formed goodwill

Aolin New
                        1,294,711.56                                                                            1,294,711.56
Material

Haizhuo Energy                               249,074.85                                                           249,074.85

        Total           1,294,711.56         249,074.85                                                         1,543,786.41


(2) Impairment loss of goodwill

                                                                                                                      In RMB

Name of invested
company or items Opening balance              Increased in Period                    Decreased in Period     Ending balance
 formed goodwill

Process of impairment testing, parameter and recognization method for impairment losses:
Other explanation


18. Long-term unamortized expenses

                                                                                                                      In RMB

                                                                    Amortized in current
         Item           Opening balance      Increased in Period                           Other decrease   Ending balance
                                                                          period

Office remodeling
                               149,963.84                                     67,741.68                            82,222.16
costs

Fir protection
                                 70,000.00                                    30,000.00                            40,000.00
engineering

Total                          219,963.84                                     97,741.68                           122,222.16

Other explanation

19. Deferred income tax assets and deferred income tax liabilities




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(1) Deferred income tax assets un-offset

                                                                                                                                          In RMB

                                                 Ending balance                                          Opening balance
          Item                Taxable temporary           Deferred income tax             Taxable temporary          Deferred income tax
                                   differences                    liabilities                 differences                   liabilities

Preparations of assets
                                        3,102,581.64                     775,645.41                 3,102,581.64                   775,645.41
depreciation

Total                                   3,102,581.64                     775,645.41                 3,102,581.64                   775,645.41


(2) Deferred income tax liabilities un-offset

                                                                                                                                          In RMB

                                                 Ending balance                                          Opening balance
          Item                Taxable temporary           Deferred income tax             Taxable temporary          Deferred income tax
                                   differences                    liabilities                 differences                   liabilities


(3) Deferred income tax assets and deferred income tax liabilities listed after off-set

                                                                                                                                          In RMB

                                                            Ending balance of           Trade-off between the         Opening balance of
                             Trade-off between the
                                                           deferred income tax           deferred income tax          deferred income tax
          Item                deferred income tax
                                                         assets or liabilities after    assets and liabilities at   assets or liabilities after
                             assets and liabilities
                                                                   off-set                   period-begin                    off-set

Deferred income tax
                                                                         775,645.41                                                775,645.41
assets


(4) Details of unrecognized deferred income tax assets

                                                                                                                                          In RMB

                      Item                                   Ending balance                                   Opening balance

Deductible temporary differences                                                 12,878,965.17                                 12,878,965.17

Deductible losses                                                               144,828,914.84                                135,919,643.05

Total                                                                           157,707,880.01                                148,798,608.22


(5) Deductible losses of un-recognized deferred income tax assets expired on the followed year

                                                                                                                                          In RMB

               年份                       Ending amount                          Opening amount                           Note

2018


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2019                                                  30,576,125.82                      30,576,125.82

2020                                                  33,429,382.84                      33,429,382.84

2021                                                  19,481,015.78                      19,481,015.78

2022                                                  52,433,118.61                      52,433,118.61

2023                                                   8,909,271.79

Total                                                144,828,914.84                     135,919,643.05                  --

Other explanation


20. Other non-current assets

                                                                                                                                   In RMB

                    Item                                       Ending balance                                Opening balance

Account of land and ground attachments
                                                                                                                             10,427,021.55
paid in advance

Total                                                                                                                        10,427,021.55

Other explanation
Decreased 10,427,021.55 Yuan over that of period-begin, mainly the account of land and ground attachments paid in advance are
transfer to intangible assets and fixed assets in the period


21. Account payable

(1) Account payable

                                                                                                                                   In RMB

                    Item                                       Ending balance                                Opening balance

Account payable for engineering                                                 8,819,293.79                                 15,406,565.98

Account payable for goods                                                               0.00                                      7,994.50

Account payable for equipment                                                      16,350.00                                      8,700.00

Other                                                                              68,282.88                                     64,572.58

Total                                                                           8,903,926.67                                 15,487,833.06


(2) Accounts payable with major amount and aging of over one year

                                                                                                                                   In RMB

                    Item                                       Ending balance                   Reason for non-repayment or carryover

Chengde Xingcheng Construction                                                                 Quality retention money for the
                                                                                2,274,499.03
Installation Company                                                                           engineering

Chengde Licheng Construction Installation                                       2,226,900.24 Quality retention money for the



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Engineering Co., Ltd.                                                                       engineering

Chengde Yongwang Construction                                                               Quality retention money for the
                                                                            1,467,887.22
Engineering Co., Ltd.                                                                       engineering

Chengde Greatwall Construction Group                                                        Quality retention money for the
                                                                            1,353,100.46
Co., Ltd.                                                                                   engineering

Total                                                                       7,322,386.95                        --

Other explanation
Decreased 6,583,906.39 Yuan over that of period-begin with 42.51% down, mainly because the engineering account are paid in the
period


22. Account received in advance

(1) Account received in advance

                                                                                                                                 In RMB

                    Item                                   Ending balance                                 Opening balance

Deposit received for house-Huijing Tiandi                                 36,590,892.79                                   62,427,764.58

Resident heating fees received in advance                                       67,172.09                                   1,530,016.02

Other                                                                          280,900.77                                     207,928.77

Total                                                                     36,938,965.65                                   64,165,709.37


(2) Major account received in advance for over one year age

                                                                                                                                 In RMB

                    Item                                   Ending balance                     Reason for non-repayment or carryover


(3) Project closed for account without complete in construction from construction contract at period-end

                                                                                                                                 In RMB

                               Item                                                               Amount

Other explanation
Ending balance of account received in advance decreased 27,226,743.72Yuan over that of period-begin with 42.43% declined, mainly
because the deposit received for house-Huijing Tiandi are transfer to revenue in the period


23. Wages payable


(1) Wages payable

                                                                                                                                 In RMB

            Item               Opening balance           Increased in Period        Decreased in Period              Ending balance


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I. Short-term employee
                                 2,177,237.35            8,003,084.38              9,538,934.38           641,387.35
benefits

II. Post-employment
benefits - defined                  24,431.58              729,336.15                726,454.85            27,312.88
contribution plans

Total                            2,201,668.93            8,732,420.53             10,265,389.23           668,700.23


(2) Short-term employee benefits

                                                                                                              In RMB

           Item           Opening balance       Increased in Period       Decreased in Period     Ending balance

1. Salary, bonus,
                                 2,159,954.12            7,152,476.82              8,671,043.59           641,387.35
allowance and subsidy

3. Social insurance
                                    16,390.01              466,628.72                483,018.73
premium

Including: medical
                                    14,341.26              393,087.06                407,428.32
insurance expenses

Work injury insurance
                                      682.92                29,100.30                 29,783.22
expenses

Maternity insurance                  1,365.83               44,441.36                 45,807.19

4. Housing provident
                                      495.00               382,283.70                382,778.70
funds
5. Labor union
expenditures and
                                      398.22                 1,695.14                  2,093.36
employee education
expenses

Total                            2,177,237.35            8,003,084.38              9,538,934.38           641,387.35


(3) Details of defined contribution plans

                                                                                                              In RMB

           Item           Opening balance       Increased in Period       Decreased in Period     Ending balance

1.Basic       endowment
                                    23,646.10              713,622.67                709,955.89            27,312.88
insurance expenses

2.Unemployment
                                      785.48                15,713.48                 16,498.96
insurance expenses

Total                               24,431.58              729,336.15                726,454.85            27,312.88


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Other explanation


24. Tax payable

                                                                                                                         In RMB

                      Item                              Ending balance                            Opening balance

VAT                                                                        56,946.49                                  41,473.25

Enterprise income tax                                                           0.00                             12,906,984.10

Individual income tax                                                      36,608.99                                  47,250.06

Urban maintenance and construction tax                                     17,740.79                                     432.35

Land use tax                                                              157,929.78                                 136,349.73

Educational surtax                                                         10,644.48                                     354.44

Local educational surtax                                                    7,096.31                                     236.30

Stamp tax                                                                   1,891.00                                  37,978.90

Total                                                                     288,857.84                             13,171,059.13

Other explanation
Ending balance of tax payable decreased 12,882,201.29 Yuan over that of beginning of the Period, with 97.81% down, mainly because
the enterprise income taxes are paid in the period


25 .Other account payables

(1) Other account payables by nature

                                                                                                                         In RMB

                      Item                              Ending balance                            Opening balance

Intercourse current                                                    25,889,842.66                             22,953,440.32

Deposit and margin                                                        937,600.00                                 712,541.20

Agency fee                                                                675,000.00                                1,525,800.00

Withhold and remit tax                                                     26,855.09                                  22,061.90

Other                                                                     261,080.11                                 738,349.92

Total                                                                  27,790,377.86                             25,952,193.34


(2) Other payables with large amount and aging of over one year

                                                                                                                         In RMB

                      Item                              Ending balance                 Reason for non-repayment or carryover

Other explanation




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26. Share capital

                                                                                                                                 In RMB

                                                          Increased (decreased) in Period
                      Opening                                         Shares
                                    New shares                                                                        Ending balance
                      balance                       Bonus shares converted from          Other            Subtotal
                                       issued
                                                                   public reserve

Total shares       706,320,000.00                                                                                     706,320,000.00

Other explanation


27. Capital reserves

                                                                                                                                 In RMB

           Item                 Opening balance         Increased in Period         Decreased in Period          Ending balance

Capital premium (share
                                      397,808,090.32                                                                  397,808,090.32
premium)

Other capital reserves                 65,873,219.23                                                                   65,873,219.23

Total                                 463,681,309.55                                                                  463,681,309.55

Other explanation, including changed in Period as well as reasons for changes:


28. Surplus reserves

                                                                                                                                 In RMB

           Item                 Opening balance         Increased in Period         Decreased in Period          Ending balance

Statutory surplus
                                       76,791,550.17                                                                   76,791,550.17
reserves

Total                                  76,791,550.17                                                                   76,791,550.17

Explanation on surplus reserve, including changed in Period as well as reasons for changes:


29. Retained profits

                                                                                                                                 In RMB

                         Item                                   Current period                               Last period

Retained profits at the end of last period before
                                                                           -882,864,082.85                           -886,966,408.74
adjustment

Retained profits at the beginning of the period
                                                                           -882,864,082.85                           -886,966,408.74
after adjustment

Add: The net profits belong to owners of patent
                                                                              -5,210,758.22                                -3,145,668.96
company of this period



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Retained profits at the end of the period                                     -888,074,841.07                        -890,112,077.70

Details about adjusting the retained profits at the beginning of the year:
1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new regulations affect the
undistributed profits at the beginning of the year amounting to 0 Yuan.
2) The changes in accounting policies affect the undistributed profits at the beginning of the year amounting to 0 Yuan.
3) The major accounting error correction affects the undistributed profits at the beginning of the year amounting to 0 Yuan.
4) Merge scope changes caused by the same control affect the undistributed profits at the beginning of the year amounting to 0 Yuan.
5) Other adjustments affect the undistributed profits at the beginning of the year amounting to 0 Yuan.


30. Operating income and operating cost

                                                                                                                                  In RMB

                                               Current Period                                          Last Period
            Item
                                     Income                       Cost                        Income                     Cost

Main business                           79,815,868.78              71,967,495.21              101,493,229.09             86,731,511.45

Other business                                                                                     70,765.38                    37,714.74

Total                                   79,815,868.78              71,967,495.21              101,563,994.47             86,769,226.19


31. Business tax and surcharges

                                                                                                                                  In RMB

                     Item                                    Current Period                                Last Period

Urban maintenance and construction tax                                         156,332.31                                   360,349.17

Educational surtax                                                             156,332.33                                   360,349.18

Property tax                                                                    41,701.98                                         838.10

Land use tax                                                                   455,907.91                                   127,235.53

Vehicle and vessel use tax                                                         3,880.00                                      9,880.00

Stamp tax                                                                       68,045.30                                       67,598.20

Business tax                                                                   547,830.45                                  4,938,432.50

Land VAT                                                                      1,339,218.78                                 1,988,303.86

Total                                                                         2,769,249.06                                 7,852,986.54

Other explanation
Taxes and surcharge decreased 5,083,737.48 Yuan over that of last period with 64.74% down, mainly because the business tax from
Huijing Tiandi declined in the period




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32. Sales expense

                                                                                             In RMB

                    Item        Current Period                           Last Period

Advertising fees                                                                          88,066.00

Business publicity expense                                                               113,450.00

Packaging fee                                                                            114,119.82

Other                                               4,902.12                                 200.00

Total                                               4,902.12                             315,835.82

Other explanation


33. Administration expenses

                                                                                             In RMB

                    Item        Current Period                           Last Period

Salary                                           4,045,124.60                           3,921,799.98

Depreciation and amortization                    2,649,290.58                            540,961.54

Business entertainment                           2,027,808.43                           1,220,199.01

Social insurance                                 1,115,574.30                            784,247.48

Business-travel expense                           658,480.06                             551,869.73

Welfare                                           572,380.68                             372,685.72

Repair charge                                     318,588.09                             117,778.09

Housing fund                                      240,465.20                             235,434.20

Office allowance                                  177,410.63                             228,411.68

Material consumption                              149,022.03                             339,236.49

Low value consumables                             107,303.84                             280,130.27

Intermediary organs                               101,587.29                             927,762.26

Utilities                                          46,009.05                              38,644.36

Long-term deferred expenses                         6,075.00                              46,203.48

Union dues                                           2,112.98                               4,009.32

Other                                            2,269,821.97                            938,821.91

Total                                        14,487,054.73                             10,548,195.52

Other explanation


34. Financial expenses

                                                                                             In RMB

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                    Item                       Current Period                            Last Period

Interest expenses

Less: Interest income                                             903,639.76                            709,763.28

Profit/loss on exchange                                          -266,016.60

Bank handling charges                                              25,184.74                             18,493.33

Total                                                           -1,144,471.62                           -691,269.95

Other explanation


35. Asset impairment loss

                                                                                                            In RMB

                    Item                       Current Period                            Last Period

I. Bad debt loss                                                                                           -597.99

Total                                                                                                      -597.99

Other explanation


36. Investment income

                                                                                                            In RMB

                     Item                         Current Period                          Last Period

Investment income from financing products in
                                                                      133,320.88
bank

Total                                                                 133,320.88

Other explanation


37. Income from assets disposal

                                                                                                            In RMB

             Income resources                  Current Period                            Last Period

Gains/losses from biological assets
                                                                  -18,684.68
disposal

Total                                                             -18,684.68


38. Other income

                                                                                                            In RMB

             Income resources                  Current Period                            Last Period

Renewable energy subsidies                                      2,890,000.00



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                                                                              东沣科技集团股份有限公司 2018 年半年度报告全文


Total                                                                       2,890,000.00


39. Non-operating income

                                                                                                                               In RMB

                                                                                                        Amount reckoned into current
             Item                        Current Period                       Last Period
                                                                                                         non-recurring gains/losses

Other                                                     3,121.00                          30,121.27

Total                                                     3,121.00                          30,121.27

Government grants reckoned into current gains/losses:
                                                                                                                               In RMB

                                                             Impact on                                                   Assets-relate
                Distributed                                    current        Special         Current                         d
    Item                       Reasons         Nature                                                      Last Period
                     by                                     gains/losses grants (Y/N)          Period                    /income-relat
                                                               (Y/N)                                                          ed

Other explanation


40. Non-operating expenditure

                                                                                                                               In RMB

                                                                                                        Amount reckoned into current
             Item                        Current Period                       Last Period
                                                                                                         non-recurring gains/losses

Other                                                     2,607.78                           7,113.04

Total                                                     2,607.78                           7,113.04

Other explanation


41. Income tax expense

(1) Statement of income tax expenses

                                                                                                                               In RMB

                     Item                                  Current Period                                  Last Period

Current income tax                                                           110,309.68

Total                                                                        110,309.68


(2) Adjustment on accounting profit and income tax expenses

                                                                                                                               In RMB

                              Item                                                            Current Period




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                                                                                 东沣科技集团股份有限公司 2018 年半年度报告全文


Total profit                                                                                                         -5,263,211.30

Income tax measured by statutory/applicable tax rate                                                                 -1,315,802.83

Impact on different tax rate for subsidiary                                                                             43,868.28

Impact on deductible losses for deferred income tax recognized
                                                                                                                       -845,073.72
at period-end before adjustment

The deductible temporary differences or deductible losses of the
                                                                                                                      2,227,317.95
un-recognized deferred income tax assets in the Period

Income tax expenses                                                                                                    110,309.68

Other explanation


42. Other comprehensive income

Found in Note


43. Notes to statement of cash flow

(1) Other cash received in relation to operation activities

                                                                                                                           In RMB

                      Item                                   Current Period                            Last Period

Intercourse current                                                           41,000,000.00                           2,737,235.86

Subsidy income                                                                 2,890,000.00

Interest income                                                                 894,404.17                             709,446.69

Other                                                                           695,736.71                            6,040,764.33

Total                                                                         45,480,140.88                           9,487,446.88

Explanation on other cash received in relation to operation activities:


 (2) Other cash paid in relation to operation activities

                                                                                                                           In RMB

                      Item                                   Current Period                            Last Period

Disbursement costs                                                             7,500,856.76                           4,634,876.43

Intercourse current                                                            2,260,000.00                            832,000.00

Other                                                                           703,296.65                            8,737,183.17

Total                                                                         10,464,153.41                          14,204,059.60


Explanation on other cash paid in relation to operation activities:




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 (3) Cash received from other investment activities

                                                                                                                         In RMB

                    Item                                   Current Period                            Last Period

Explanation on cash received from other investment activities:


 (4) Cash paid related with other investment activities

                                                                                                                         In RMB

                    Item                                   Current Period                            Last Period

Explanation on cash paid related with other investment activities:


 (5) Cash received from other financing activities

                                                                                                                         In RMB

                    Item                                   Current Period                            Last Period

Guarantee for mortgage loan returned                                         2,558,600.00

Total                                                                        2,558,600.00

Explanation on cash received from financing activities:


 (6) Cash paid related with other financing activities

                                                                                                                         In RMB

                    Item                                   Current Period                            Last Period

Guarantee for mortgage loan paid                                              534,800.00                             663,800.00

Total                                                                         534,800.00                             663,800.00

Explanation:


44. Supplementary information to statement of cash flow

(1) Supplementary information to statement of cash flow

                                                                                                                         In RMB

         Supplementary information                          Current Period                           Last Period

1. Net profit adjusted to cash flow of
                                                                     --                                  --
operation activities:

Net profit                                                                  -5,373,520.98                          -3,207,373.43

Depreciation of fixed assets, consumption of
oil assets and depreciation of productive                                     830,843.55                             521,039.05
biology assets


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                                                               东沣科技集团股份有限公司 2018 年半年度报告全文


Amortization of intangible assets                            1,926,524.57                           30,461.06

Amortization of long-term deferred expenses                    97,741.68                            86,310.60

Loss from disposal of fixed assets, intangible
assets and other long-term assets(gain is                      18,684.68                           -21,731.42
listed with ―-‖)

Investment losses(gain is listed with ―-‖)                64,800,311.47                       54,521,751.22

Decrease of operating receivable accounts
                                                            27,243,279.39                       17,625,680.12
(increase is listed with ―-‖)

Increase of operating payable accounts
                                                           -55,618,571.34                      -40,868,835.51
(decrease is listed with ―-‖)

Net cash flow arising from operating
                                                            33,925,293.02                       28,687,301.69
activities

2. Material investment and financing not
                                                      --                                  --
involved in cash flow

3. Net change of cash and cash equivalents:           --                                  --

Balance of cash at period end                               30,835,918.20                      153,602,420.61

Less: Balance of cash equivalent at
                                                            68,107,388.69                      126,970,834.83
year-begin

Net increase of cash and cash equivalents                  -37,271,470.49                       26,631,585.78


(2) Net cash payment for the acquisition of a subsidiary of the current period

                                                                                                      In RMB

                                                                                 Amount

Including:                                                                         --

Including:                                                                         --

Including:                                                                         --

Other explanation


(3) Net cash received from the disposal of subsidiaries

                                                                                                      In RMB

                                                                                 Amount

Including:                                                                         --

Including:                                                                         --

Including:                                                                         --

Other explanation




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(4) Constitution of cash and cash equivalent

                                                                                                                              In RMB

                      Item                                 Ending balance                             Opening balance

Ⅰ. Cash                                                                   30,835,918.20                              68,107,388.69

Including: Cash in stock                                                      118,377.59                                   61,945.60

     Bank deposit available for payment at
                                                                           30,717,540.61                              68,045,443.09
any time

Ⅲ. Balance of cash and cash equivalent at
                                                                           30,835,918.20                              68,107,388.69
period-end

Including: Cash and cash equivalent with
restriction for used in parent company or                                    4,677,368.68                                6,697,820.37
subsidiary in the Group

Other explanation
Balance of cash and cash equivalent on 30 June 2018 amounted as 30,835,918.20 Yuan, monetary fund has 35,513,286.88 Yuan in
end of the balance, there is a difference of 4,677,368.68 Yuan, mainly because there was a mortgage security deposit that unable to
cash in freely within three months in end of the balance of monetary fund; balance of period-begin found abovementioned


45. Notes on items of changes of owner’s equity

Name and adjusted amount on ―Other‖ at balance of year-end of last year:


46. Assets with ownership or right-to-use restricted

                                                                                                                              In RMB

                      Item                                Ending book value                          Restriction reasons

Monetary fund                                                                4,677,368.68 Deposit for housing mortgage

Total                                                                        4,677,368.68                     --

Other explanation


47. Foreign currency monetary items

(1) Foreign currency monetary items

                                                                                                                              In RMB

                                   Balance of foreign currency at
               Item                                                     Exchange rate convert         RMB concert at Period-end
                                             period-end

Including: USD                                         849,770.01 6.6166                                                 5,622,588.26

Other explanation




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                                                                             东沣科技集团股份有限公司 2018 年半年度报告全文


(2) Explanation on foreign operational entity, as for major foreign operational entity, disclosed foreign
main operation land, book-keeping currency and basis; and disclosed reasons if the book-keeping currency
changed

□ Applicable √ Not-applicable


48. Other

VIII. Changes of consolidation range

1. Enterprise combined not under the same control

(1) Enterprise combined not under the same control in the period

                                                                                                                                 In RMB

                                                                                                         Revenue of        Net profit of
                                                                                                         the acquiree      the acquiree
                  Time for         Cost for       Ratio of                                Basis of the
                                                                 Way to     Purchasing                      from              from
  Acquiree          equity          equity         equity                                 purchasing
                                                                obtained       date                      purchasing        purchasing
                  obtained         obtained       obtained                                    date
                                                                                                           date to           date to
                                                                                                         period-end        period-end

                                                                                         Obtained
Haizhuo                           15,956,000.0                Capital
               2018-03-06                            62.00%                2018-03-06    controlling               0.00      -69,251.22
Energy                                        0               increase
                                                                                         rights

Other explanation


(2) Combined cost and goodwill

                                                                                                                                 In RMB

                             Combined cost

-- Cash                                                                                                                   15,956,000.00

Total combined costs                                                                                                      15,956,000.00

Amount of the goodwill/combined cost less than the
                                                                                                                             249,074.85
recognizable fair value of the net assets

Explanation on determination method for fair value of combine cost, contingent consideration and its changes:
Reason of major goodwill resulted:
Other explanation


(3) Acquiree's identifiable assets and liabilities on purchasing date

                                                                                                                                 In RMB




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                                                                                   东沣科技集团股份有限公司 2018 年半年度报告全文


                                                     Fair value on purchasing date                   Book value on purchasing date

Assets:                                                                     25,439,918.00                                   25,439,918.00

Monetary fund                                                               19,994,549.36                                   19,994,549.36

Account receivable                                                            5,273,000.00                                   5,273,000.00

Fixed assets                                                                         3,324.13                                    3,324.13

Liability:                                                                         106,167.76                                  106,167.76

Account payable                                                                    106,167.76                                  106,167.76

Net assets                                                                  25,333,750.24                                   25,333,750.24

Less: minority’s interest                                                    9,626,825.09                                   9,626,825.09

Net assets obtained                                                         15,706,925.15                                   15,706,925.15

Determination method for fair value of the identifiable assets and liabilities:
Contingent liability of the acquiree taken during enterprise merger:
Other explanation


 (4) Gains/losses arising from re-calculation on fair value for the equity held before purchasing date

Whether the enterprise combine through multiple transaction by steps or not and obtained controlling rights during the reporting
period


□Y   √N


(5) Explanation on the combination consideration, which is unable to confirm rationally on purchasing date
or combination date or on the fair value of identifiable assets and liabilities for the acquiree

(6) Other explanation

2. Enterprise combined under the same control

(1) Enterprise combined under the same control in the period

                                                                                                                                   In RMB

                                                                              Revenue of        Net profit of
                                                                             the combined the combined Revenue of            Net profit of
                                 Basis for
                Equity ratio                                    Basis of          party from     party from     the combined the combined
  Combined                     merger under Combination
                      in                                      combination         period of      period of      party during party during
      party                      the same          date
                combination                                       date        combined to combined to comparative comparative
                                  control
                                                                              combination combination              period       period
                                                                                     date           date

Other explanation




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(2) Combine cost

                                                                                                                                In RMB

                           Combine cost

Explanation on contingent consideration and its changes:
Other explanation


(3) Book value of the combined party's assets and liabilities on combine date

                                                                                                                                In RMB



                                                            Combination date                             End of last period

Contingent liability of the combined party taken in combination:
Other explanation


3. Counter purchase

General information about the transaction, basis for constitution of reverse acquisition, whether the assets and liabilities retained by
the listed issuer constitute any business and basis for this constitution, determination of combination costs, amount of equity adjusted
in accounting treatment on a equity-based transaction basis and the calculation thereof:


4. Subsidiary disposal

Whether there is a single disposal of the investment in subsidiaries that is the loss of control
□ Yes √ No
Whether there is disposal of the investment in subsidiaries through multiple transactions step by step and loss of control in the current
period
□ Yes √ No


5. Other reasons for consolidation range changed

Reasons for changed on consolidation range (such as new subsidiary established, subsidiary liquidated etc.)And relevant information:


6. Other

IX. Equity in other entity

1. Equity in subsidiary

(1) Constitute of enterprise group


    Subsidiary       Main operation      Registered place    Business nature             Share-holding ratio           Acquired way



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                                                            东沣科技集团股份有限公司 2018 年半年度报告全文


                      place                                    Directly      Indirectly

                                                                                            Enterprise
Nanjiang Trade
                 Chengde      Chengde    Commercial trade          100.00%                  combined under
and Business
                                                                                            the same control

                                         Management and
Kefeng                                   consultant of
                 Chengde      Chengde                              100.00%                  Establishment
Engineering                              engineering
                                         project

Kefeng Trading   Chengde      Chengde    Commercial trade          100.00%                  Establishment

Dongfeng                                 Industrial
                 Chengde      Chengde                              100.00%                  Establishment
Investment                               investment

Ecological                               Animal
                 Chengde      Chengde                                             100.00% Establishment
Agriculture                              husbandry

                                         International
Nanjiang Asia    Chengde      Chengde                              100.00%                  Establishment
                                         investment

                                         Inflatable
Nanjiang                                 capsule,
                 Chengde      Chengde                                             100.00% Establishment
Technology                               production and
                                         sale of Grapheme

                                         Property
Huijing Property Chengde      Chengde                                             100.00% Establishment
                                         management

Hangzhou                                 High-tech
                 Hangzhou     Hangzhou                             100.00%                  Establishment
Dongfeng                                 development

                                         Aerospace
Kefeng                                   product
                 Chengde      Chengde                              100.00%                  Establishment
Aerospace                                technology
                                         development

Dongfeng                                 Technology
Technology       Dongguan     Dongguan   development of             70.00%                  Establishment
Development                              new materials

                                                                                            Enterprise
Dongguan                                 Technology
                                                                                            combined not
Zhongchuang      Dongguan     Dongguan   Development of                            60.98%
                                                                                            under the same
New Energy                               new energy
                                                                                            control

                                         Technology
Dongguan                                                                                    Enterprise
                                         Development in
Dongfeng         Dongguan     Dongguan                                            100.00% combined under
                                         field of
Intelligent                                                                                 the same control
                                         technology

Dongguan Aolin                           Nano metric                                        Enterprise
                 Dongguan     Dongguan                                             62.00%
New Energy                               technology                                         combined not


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                                                          material                                                under the same
                                                                                                                  control

                                                                                                                  Enterprise
Dongguan                                                  Hydrogen energy                                         combined not
                    Dongguan           Dongguan                                                          62.00%
Haizhuo Energy                                             power products                                         under the same
                                                                                                                  control

Explanation on share-holding ratio in subsidiary different from ratio of voting right:
Basis for controlling the invested entity with half or below voting rights held and without controlling invested entity but with over
half and over voting rights:
Controlling basis for the structuring entity included in consolidated range:
Basis on determining to be an agent or consignor:
Other explanation
*1 Chengde Rongyida Real Estate Development Co., Ltd (―Rongyida‖ for short) was established on 20 February 2009 with
registered capital of 10 million Yuan, of which, Wang Fei invested 9 million Yuan, representing 90 percent of the registered capital
while one million Yuan contributed by Chen Liping, presenting 10 percent of the registered capital; On 27 th July 2009, Wang Fei and
Chen Liping transferred all their shares to the controlling shareholder Chen Rong. At the same time, Chen Rong transferred 100%
shares to Nanjiang Company with RMB1.00. After the transfer, Nanjiang Company wholly owned the Rongyida. On 3 April 2014, as
approved by Industry & Commercial Bureau of Chengde County, Rongyida changed its name to Chengde Nanjiang Real Estate
Development Co., Ltd. (―Nanjiang Real Estate‖ for short). On 12 December 2016, being approved from Chengde Administration for
Industry and Commerce, the name of the enterprise are re-named as Chengde Nanjiang Trade and Business Co., Ltd (hereinafter
referred to as Nanjiang Trade and Business), business cope: sales of hardware electrical, construction material and mechanical
equipment; house leasing services.


On 6 March 2017, Nanjiang Trade and Business split-off to Kefeng Engineering, Kefeng Trade and Business and Nanjiang Trade and
Business. Registered capital of Nanjiang Trade and Business turns to one million Yuan from 100 million Yuan.


*2 Kefeng Engineering and kefeng Trading are the new enterprise derivative split from Dongfeng Trade and Business on 6 March
2017, registered capital amounted as 0.5 million Yuan and 8.5 million Yuan respectively. Totally 100% of the registered capitals are
taken by Dongfeng Technology Group


*3 Nanjiang Investment was established by Nanjiang Real Estate dated 9 October 2012, original registered capital was 50 million
Yuan, shareholder Nanjiang Real Estate contribute 50 million Yuan, presenting 100 percent of the registered capital; on 21 December
2012, the 100 percent equity held by Nanjiang Real Estate are transferred to Nanjiang Company with 50 million Yuan, after
transferred, Dongfeng Technology Group holds total equity of the Nanjiang Investment; on 6 January 2013, Dongfeng Technology
Group increase capital 40 million Yuan to Nanjiang Investment, and registered capital comes to 90 million Yuan after capital
increased. On 25 October 2017, Chengde Nanjiang Investment Co., Ltd. changed its name to Chengde Dongfeng Investment Co.,
Ltd.


*4 Ecological Agriculture was established by Nanjiang Investment on 24 October 2012, original registered capital was 5 million
Yuan, shareholder Nanjiang Investment contributes 5 million Yuan with 100 percent held in total registered capital. On 18 April
2013, Nanjiang Investment increase 5 million Yuan to Ecological Agriculture and the registered capital turns to 10 million Yuan after
increased. On 21 June 2017, Chengde Nanjiang Ecological Agriculture Co., Ltd renamed as Chengde Dongfeng Ecological
Agriculture Co., Ltd

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*5 Nanjiang Asia was founded by Nanjiang Company on 14th Nov. 2013, located in Hong Kong, with register capital of US$ 20
million, the paid-up was US$ 797, 583.34.


*6 Morsh Technology was founded jointly by Nanjiang Investment and Ningbo Morsh Technology on 24 th Jan. 2013 with register
capital of RMB50 million, including Nanjiang Investment invested RMB45 million taking up 90% of the total investment; Ningbo
Morsh Technology invested RMB5 million taking up 10%. In July 2016, the Nanjiang Investment entered into a equity transfer
agreement with Ningbo Morsh Technology, that is transfer 10% shares of the Ningbo Morsh; and after transfer, 100% shares of
Morsh Technology are held by Nanjiang Investment. On 26 September 2016, being approved from Chengde Administration for
Industry and Commerce, the name of the enterprise are re-named as Chengde Nanjiang Technology Co., Ltd. (Nanjiang Technology),
business scope: R&D, production and sales of inflatable sac., grapheme, grapheme application materials, power cell and battery
material, high-performance membrane material and nanophase materials, and promotion and technical service for the above
mentioned products.


*7 Huijing Property was founded by Nanjiang Investment on 18th Nov. 2013 with register capital of RMB500, 000. Shareholder
Nanjiang Investment invested RMB500, 000 wholly owning it.


*8 Hangzhou Hangfeng established on 21 September 2016 by Dongfeng Technology Group, registered capital was 50 million Yuan;
actually paid-in capital was 30 million Yuan. On 5 June 2017, Hangzhou Hangfeng Technology Co., Ltd. renamed as Hangzhou
Dongfeng Technology Co., Ltd.



*9 Kefeng Aerospace established on 12 December 2016 by Dongfeng Technology Group Co., Ltd., registered capital was 30 million
Yuan; no paid-up capital till end of 31 December 2017.



*10 Dongguan Dongfeng Technology established on 17 August 2017 with registered capital of 100 million Yuan. Dongfeng
Technology Group invested 70 million Yuan on 20 September 2017, a 70% of the registered capital takes.


*11 Dongguan Zhongchuang New Energy established on 4 July 2017 with registered capital of 24.6 million Yuan. On 5 September
2017, the Dongguan Dongfeng Technology Development entered into a capital increase agreement with Dongguan Hangda Venture
Investment, registered capital goes to 24.6 million Yuan from one million Yuan. Among them, Dongguan Dongfeng Technology
Development contributes 15 million Yuan in monetary, a 60.98% in total shares. Dongguan Dongfeng Technology contributed 15
million Yuan on 24 October 2017


*12 Dongguan Dongfeng Intelligent established on 14 February 2017 with registered capital of 60 million Yuan. On 5 December
2017, Dongfeng Technology Development entered into an equity transfer agreement with Dongguan Dongfeng New Energy with
consideration of 15 million Yuan. Registered capital of 45 million Yuan are paid on 27 December 2017 with totally 100% holds in
shares


*13 Dongguan Aolin New Energy established on 23 October 2015 with registered capital of 25 million Yuan. On 4 December 2017,
Aolin entered into a capital increase agreement with Dongguan Dongfeng Technology, registered capital comes to 25 million Yuan
from 9.5 million Yuan. In line with the agreement between Dongguan Hangda Venture Investment Co., ltd. and Dongfeng
Technology Development, increasing capital of 16.4025 million Yuan to Aolin New Material, among which, 15.5 million Yuan will
increased for registered capital, the 902500 Yuan will reckoned into the capital reserves of Aolin New Material. On 29 December

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                                                                                       东沣科技集团股份有限公司 2018 年半年度报告全文


2017, Dongguan Dongfeng Technology invested 15.5 million Yuan, a 62% in total registered capital.
*14 Dongguan Haizhuo Energy established on 15 September 2015 with registered capital of 25 million Yuan. On 4 December 2017,
Dongguan Haizhuo Energy entered into a capital increase agreement with Dongguan Dongfeng Technology, registered capital comes
to 25 million Yuan from 9.5 million Yuan. In line with the agreement between Dongguan Hangda Venture Investment Co., ltd. and
Dongfeng Technology Development, increasing capital of 15.956 million Yuan to Dongguan Aolin New Energy, among which, 15.5
million Yuan will increased for registered capital, the 456,000 Yuan will reckoned into the capital reserves of Dongguan Aolin New
Energy. On 6 March 2018, Dongguan Dongfeng Technology invested 15.956 million Yuan, a 62% in total registered capital.




(2) Important non-wholly-owned subsidiary

                                                                                                                                                In RMB

                                                                                            Dividend announced to
                                 Share-holding ratio of     Gains/losses attributable                                           Ending equity of
         Subsidiary                                                                         distribute for minority in
                                       minority             to minority in the Period                                              minority
                                                                                                   the Period

Dongguan Dongfeng
Technology                                        30.00%                            0.00                                                           0.00
Development Co., Ltd.

Dongguan Zhongchuang
New Energy Technology                             39.02%                          609.08                                                  9,596,201.16
Co., Ltd.

Dongguan Aolin New
                                                  38.00%                   -137,056.38                                                    9,122,555.89
Material Co., Ltd.

Dongguan Haizhuo
Energy Technology Co.,                            38.00%                    -26,315.46                                                    9,600,509.63
Ltd.

Explanation on share-holding ratio of minority different from ratio of voting right:
Other explanation


(3) Main finance of the important non-wholly-owned subsidiary

                                                                                                                                                In RMB

                                     Ending balance                                                      Opening balance
Subsidia               Non-curr                           Non-curr                           Non-curr                            Non-curr
            Current                  Total    Current                  Total      Current                 Total     Current                    Total
    ry                   ent                                ent                                 ent                                 ent
             assets                 assets    liability               liability    assets                 assets    liability                 liability
                        assets                            liability                            assets                             liability

Donggua
            44,578,6 167,358, 211,937, 142,530,                       142,530, 6,923,46 91,402,5 98,325,9 28,643,3                            28,643,3
n
               33.88     500.00      133.88    590.94                  590.94         0.66       00.00      60.66        41.72                   41.72
Dongfen



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                                                                                    东沣科技集团股份有限公司 2018 年半年度报告全文


g
Technolo
gy
Develop
ment
Co., Ltd.

Donggua
n
Zhongch
uang
            23,220,7 1,576,76 24,797,5 207,264.                    207,264. 24,491,4 1,090,03 25,581,4 26,515.0                        26,515.0
New
                 68.18       1.91     30.09         46                    46       28.69       6.98     65.67           0                       0
Energy
Technolo
gy Co.,
Ltd.

Donggua
n Aolin
            21,218,1 2,993,78 24,211,9 205,244.                    205,244. 22,602,5 2,815,47 25,418,0 43,720.7                        43,720.7
New
                 81.69       8.59     70.28         26                    26       84.99       6.28     61.27           1                       1
Material
Co., Ltd.

Donggua
n
Haizhuo
            23,022,9 2,365,89 25,388,8 124,392.                    124,392. 9,377,66                  9,381,48
Energy                                                                                     3,816.55               600.00                 600.00
                 92.64       9.31     91.95         93                    93        8.64                  5.19
Technolo
gy Co.,
Ltd.

                                                                                                                                         In RMB

                                         Current Period                                                   Last Period

                                                                  Cash flow                                                         Cash flow
                                                     Total                                                           Total
    Subsidiary     Operation                                         from          Operation                                          from
                                    Net profit    comprehensi                                     Net profit      comprehensi
                    Income                                         operation        Income                                          operation
                                                   ve income                                                       ve income
                                                                    activity                                                         activity

Dongguan
Dongfeng
                                                                 76,513,673.2
Technology               0.00       -276,076.00    -276,076.00                             0.00            0.00              0.00            0.00
                                                                               2
Development
Co., Ltd.

Dongguan
Zhongchuang                                                      -23,861,349.7
                         0.00          1,560.94       1,560.94                             0.00            0.00              0.00            0.00
New Energy                                                                     7
Technology


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Co., Ltd.

Dongguan
Aolin New                                                     -19,670,168.1
                         0.00     -360,674.69   -360,674.69                         0.00          0.00          0.00            0.00
Material Co.,                                                              5
Ltd.

Dongguan
Haizhuo
Energy                   0.00      -69,251.22    -69,251.22 -8,698,314.81           0.00          0.00          0.00            0.00
Technology
Co., Ltd.

Other explanation


(4) Significant restrictions on the use of enterprise group assets and pay off debts of the enterprise group

(5)Financial or other supporting offer to structuring body included in consolidate statement scope

Other explanation


2. Transaction that has owners equity shares changed in subsidiary but still with controlling rights

(1) Explanation on changes in owner's equity in subsidiaries

(2) Impact on minority interest and owner's equity attributable to parent company from transaction

                                                                                                                              In RMB



Other explanation


3. Equity in joint venture and cooperative enterprise

(1) Important joint venture and cooperative enterprise


                                                                                     Share-holding ratio           Accounting
                                                                                                                   treatment on
                      Main operation                                                                              investment for
       Name                             Registered place   Business nature
                          place                                                   Directly         Indirectly    joint venture and
                                                                                                                   cooperative
                                                                                                                       enterprise

Share-holding ratio or shares enjoyed different from voting right ratio:
Basis of the voting rights with 20% below but with major influence, or without major influence but with over 20% (20% included)
voting rights hold:




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 (2) Main financial information of the important joint venture

                                                                                                                               In RMB

                                                  Ending balance/Current Period                  Opening balance/Last Period



Other explanation


(3) Main financial information of the important affiliated business

                                                                                                                               In RMB

                                                  Ending balance/Current Period                  Opening balance/Last Period



Other explanation


(4) Financial summary for non-important Joint venture and affiliate enterprise

                                                                                                                               In RMB

                                                  Ending balance/Current Period                  Opening balance/Last Period

Joint venture:                                                  --                                           --

Total on below item by shareholding ratio                       --                                           --

Affiliated enterprise:                                          --                                           --

Total on below item by shareholding ratio                       --                                           --

Other explanation


(5) Major limitation on capital transfer ability to the Company from joint venture or affiliates

(6) Excess loss occurred in joint venture or affiliates

                                                                                                                               In RMB

                                                                     Losses un-determined in the
                                   Cumulated previous losses                                               Cumulated losses
             Name                                                    Period(net profit share in the
                                            determined                                                un-determined at period-end
                                                                                Period)

Other explanation




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(7) Unconfirmed commitment with joint venture investment concerned

(8) Intangible liability with joint venture or affiliates investment concerned

4. Major conduct joint operation


                                                                                                    Shareholding ratio/quota enjoy
   Joint operation      Main operation site       Register place            Business
                                                                                                     Directly               Indirectly

Explanation on shareholding ratio or quota enjoy in joint operation different from voting rights:
If the joint operation was the independent body, basis of classification of joint operation:
Other explanation


5. Structured body excluding in consolidate financial statement

Relevant explanation:


6. Other

X. Risk related with financial instrument

XI. Related party and related transactions

1. Parent company of the enterprise


                                                                                               Share-holding ratio
                                                                                                                       Voting right ratio on
   Parent company        Registration place      Business nature       Registered capital      on the enterprise for
                                                                                                                          the enterprise
                                                                                                 parent company

Explanation on parent company of the enterprise
The Company has no parent company; controller refers to the first largest shareholder Mr. Wang Dong, who holds 29.49% equity of
the Company.


Ultimate controller of the Company:
Other explanation


2. Subsidiary of the Enterprise

Found more in Note


3. Cooperative enterprise and joint venture

Found more in Note
Other cooperative enterprise and joint venture that have related transaction with the Company in the Period or occurred in pervious
period:


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                               Name                                                           Relationship

Other explanation


4. Other related party


                         Other related party                                      Relationship with the Enterprise

Eagles Men Aeronautic Science and Technology Group Co., Ltd. Related legal person of the Company

Shanxi Eagles Men Aeronautic Science and Technology Co., Ltd. Related legal person of the Company

Runhua RW Industrial Development Company                         Controller of the joint venture of the Company

Shanxi Wuchan Minfeng Chemical Co., Ltd.                         Controller of the joint venture of the Company

Other explanation


5. Related transaction

(1) Goods purchasing, labor service providing and receiving

Goods purchasing/labor service receiving
                                                                                                                                 In RMB

                                                                                          Whether over the
   Related party            Content            The Period     Amount approved                                       Last Period
                                                                                          transaction limit

Goods sold/labor service providing
                                                                                                                                 In RMB

         Related party                         Content                   Current Period                       Last Period

Explanation on goods purchasing, labor service providing and receiving


 (2) Related trusteeship management/contract & entrust management/ outsourcing

Trusteeship management/contract:
                                                                                                                                 In RMB

                                                                                                                        Income
Client/contract-ou Commissioned
                                           Assets type      Start date         Expire date         Pricing basis   recognized in the
      t party       party/contractor
                                                                                                                            period

Explanation
Entrust management/ outsourcing:
                                                                                                                                 In RMB

                                                                                                                       Expenses
Client/contract-ou Commissioned
                                           Assets type      Start date         Expire date         Pricing basis   recognized in the
      t party       party/contractor
                                                                                                                            period

Explanation



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(3) Related leasing

As a lessor for the Company:
                                                                                                                           In RMB

                                                               Lease income recognized in the Lease income recognized in last
             Lessee                       Assets type
                                                                            Period                            Period

As a lessee for the Company:
                                                                                                                           In RMB

                                                                 Rental fee recognized in the      Rental fee recognized in last
             Lessor                       Assets type
                                                                            Period                            Period

Explanation on related lease


 (4) Related guarantee

The Company acts as a secured party
                                                                                                                           In RMB

                                                                                                         Whether the guarantee
      Secured party            Guarantee amount           Start date                 Expiry date
                                                                                                          implemented or not

As a secured party by the Company
                                                                                                                           In RMB

                                                                                                         Whether the guarantee
        Guarantor              Guarantee amount           Start date                 Expiry date
                                                                                                          implemented or not

Explanation on related guarantee


 (5) Borrowed funds from related party

                                                                                                                           In RMB

      Related party            Borrowing amount           Start date                 Expiry date                    Note

Inter-bank borrowing

Lending transaction


 (6) Related party’s assets transfer and debt reorganization

                                                                                                                           In RMB

         Related party                      Content                      Current Period                    Last Period


(7) Remuneration of key management personnel

                                                                                                                           In RMB

                    Item                                Current Period                                Last Period


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Remuneration of key management
                                                                             797,313.00                             783,050.00
personnel


(8) Other related transaction

6. Account receivable/payable from/to related party

(1) Account receivables

                                                                                                                       In RMB

                                                            Ending balance                        Opening balance
        Item                Related party
                                                 Book balance       Bad debt provision    Book balance    Bad debt provision


(2) Account payable

                                                                                                                       In RMB

                Item                        Related party               Ending book balance        Beginning book balance


7. Commitment of related party

8. Other

XII. Share-based payment

1. Share-based payment

□ Applicable     √ Not applicable


2. Share-based payment settled by equity

□ Applicable     √ Not applicable


3. Share-based payment settled by cash

□ Applicable     √ Not applicable




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4. Modification and termination of the share-based payment

5. Other

XIII. Commitment and contingency

1. Important commitment

Important commitment on balance sheet date
As of 30 June 2018, as for the mortgage loans from the owner of commercial property, balance for guarantee providing amounted as
120.21 million Yuan.




2. Contingency

(1) Important contingency on balance sheet date

(2) If the Company has no important contingency need to disclosed, explain reasons

The Company has no important contingency that need to disclose.


3. Other

XIV. Events after balance sheet date

1. Important non adjustment matters

                                                                                                                            In RMB

                                                                  Impact on financial status and   Reasons of fails to estimate the
              Item                           Content
                                                                        operation results                      impact


2. Profit distribution

                                                                                                                            In RMB


3. Sales return

4. Other events after balance sheet date

On 14 August 2018, Dongfeng Sci-Tech Group Co., Ltd. entered into a equity transfer agreement with Chengde Chengjin Trading
Co., Ltd., according to the agreement, the 100% shares of Chengde Nanjiang Trading Co., Ltd. held by Dongfeng Sci-Tech Group are
transferred to Chengde Chengjin Trading with consideration of 22.6395 million Yuan. After equity transferred, Chengde Nanjiang
Trading Co., Ltd. will not include in consolidation scope of the Company any more




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XV. Other important events

1. Previous accounting errors collection

(1) Retrospective restatement

                                                                                                                    In RMB

                                                              Items impact during vary
             Content              Treatment procedure                                          Accumulated impact
                                                                   comparative period


 (2) Prospective application


                    Content                      Approval procedure                             Reasons


2. Debt restructuring

3. Assets replacement

(1) Non-monetary assets

(2) Other assets

4. Pension plan

5. Discontinuing operation

                                                                                                                    In RMB

                                                                                                              Profit of
                                                                                                           discontinuing
                                                                                                             operation
      Item              Revenue     Expenses        Total profit         Income tax      Net profit
                                                                                                           attributable to
                                                                                                          owners of parent
                                                                                                              company

Other explanation


6. Segment

(1) Recognition basis and accounting policy for reportable segment

(2) Financial information for reportable segment

                                                                                                                    In RMB

             Item                                                  Offset of segment                  Total


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(3) The Company has no segment, or unable to disclose total assets and liability of the segment, explain
reasons

(4) Other explanation

7. Major transaction and events makes influence on investor’s decision

8. Other

XVI. Principle notes of financial statements of parent company

1. Accounts receivable

(1) Accounts receivable by type

                                                                                                                                 In RMB

                                             Ending balance                                        Opening balance

                                                Provision for bad
                            Book balance                                       Book balance        Provision for bad debts
         Type                                         debts
                                                                      Book
                                                                                                                             Book value
                                   Proportio             Provision    value            Proportio               Provision
                        Amount                  Amount                        Amount                Amount
                                                              ratio                                                ratio
                                         n                                                n

Accounts receivable with large single amount and accrued for provision of bad debt on a single basis at period-end:
□ Applicable √ Not-applicable
Accounts receivable accrued for provision of bad debt by aging analysis method in portfolio:
□ Applicable √ Not-applicable
Accounts receivable accrued for provision of bad debt by percentage of balance in portfolio:
□ Applicable √ Not-applicable
Accounts receivable accrued for provision of bad debt by other methods in portfolio:


(2) Provision for bad debts accrued, regain or switch back in the Period

In the Period, 0 Yuan accrued for provision of bad debts; 0 Yuan provision for bad debts regains or switch back in the Period.
Including major amount of bad debt provision regain or switch back in the Period:
                                                                                                                                 In RMB

                     Unit                              Amount regain or switch back                        Way of regain


(3) Account receivable actual charge off in the Period

                                                                                                                                 In RMB

                                  Item                                                        Amount written-off

Written-off for the major receivable:


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                                                                                                                                            In RMB

                                                                                                                             Arising from related
              Unit                  Nature           Amount written off           Reasons                Procedures
                                                                                                                                transaction (Y/N)

Explanation on written off:


(4) Top five account receivables collected by arrears party at ending balance

(5) Account receivable de-recognition due to financial assets transfer

(6) Assets and liabilities resulted by account receivable transfer and continues involvement

Other explanation


2. Other account receivables

(1) Other account receivables by type

                                                                                                                                            In RMB

                                                 Ending balance                                               Opening balance

                                                     Provision for bad
                                Book balance                                              Book balance        Provision for bad debts
          Type                                            debts
                                                                             Book
                                                                                                                                        Book value
                                         Proportio              Provision    value                Proportio                Provision
                              Amount                 Amount                             Amount                 Amount
                                                                  ratio                                                      ratio
                                             n                                                       n

Other          receivables
with      large      single
                              16,465,1               16,465,1                           17,782,               17,686,90
amount and accrued                        15.44%                100.00%          0.00              38.66%                    99.46%      95,533.00
                                04.90                  04.90                             439.90                    6.90
for provision of bad
debt on a single basis

Other          receivables
accrued for provision 89,938,7                       130,835.               89,807,89 27,989,                 130,835.2                 27,858,718.
                                          84.34%                   0.15%                           60.84%                       0.47%
of      bad     debt    by      26.20                     29                     0.91 554.17                           9                        88
portfolio

Other          receivables
with     minor       single
                              229,787.               229,787.                           229,787               229,787.7
amount but accrued                          0.22%               100.00%          0.00                0.50%                  100.00%
                                   72                     72                                .72                        2
for provision of bad
debt on a single basis

                              106,633,               16,825,7               89,807,89 46,001,                 18,047,52                 27,954,251.
Total                                    100.00%                 15.78%                           100.00%                    39.23%
                               618.82                  27.91                     0.91 781.79                       9.91                         88

Other receivables with large single amount and accrued for provision of bad debt on a single basis at period-end:
√ Applicable □ Not-applicable


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                                                                                                                                   In RMB

                                                                           Ending balance
Other receivables (by unit)       Other account
                                                        Provision for bad debts          Provision ratio          Provision reasons
                                   receivable

Dongfeng Ecological
                                      16,465,104.90                16,465,104.90                     100.00% Estimated uncollectible
Agriculture

Total                                 16,465,104.90                16,465,104.90                --                         --

Other receivables accrued for provision of bad debt by aging analysis method in portfolio:
√ Applicable □ Not-applicable
                                                                                                                                   In RMB

                                                                               Ending balance
                Aging
                                      Other account receivable           Provision for bad debts                 Provision ratio

Within 1 year

Subtotal within 1 year                                2,520,885.79                          34,374.29                              1.36%

1-2 years                                                 30,200.00                          6,040.00                              20.00%

Over 3 years                                              90,421.00                         90,421.00                           100.00%

Total                                                 2,641,506.79                         130,835.29                              4.95%

Portfolio recognized:
Other accounts receivable accrued for provision of bad debt by percentage of balance in portfolio:
□ Applicable √ Not-applicable
Other accounts receivable accrued for provision of bad debt by other methods in portfolio
√ Applicable □ Not-applicable




                Portfolio                                             Ending balance

                                         Other accounts        Provision for bad debts      Provision ratio(%)
                                           receivable

Dongguan Dongfeng Technology                 80,000,000.00               ---                         ---
Development

Huijing Property                                7,182,248.19             ---                         ---

Kefeng Aerospace                                  60,000.00              ---                         ---

Kefeng Engineering                                50,000.00              ---                         ---

Nanjiang Asia                                      4,971.22              ---                         ---

                                                                         ---                         ---

                 Total                       87,297,219.41               ---                         ---

Portfolio recognized:




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In portfolio, the accrual of bad debt in way of other method was 0.00 Yuan, mainly because there is minor
estimated recoverable risk.




(2) Bad debt provision accrual collected or switch back

There is Yuan provision for bad debts accrued in the Period; and 1,221,802.00 Yuan regains or switch back in the Period.
Including the followed significant amount:
                                                                                                                                 In RMB

                      Unit                              Regains or switch back                          Way of regain

Ecological Agriculture                                                     1,221,802.00

Total                                                                      1,221,802.00                         --


(3) Other receivables actually written-off during the reporting period

                                                                                                                                 In RMB

                                  Item                                                     Amount written-off

Major other account receivables written-off:
                                                                                                                                 In RMB

                                                                                                                 Arising from related
        Name                   Nature          Amount written-off       Reasons              Procedures
                                                                                                                     transaction (Y/N)

Explanation on other account receivable:


 (4) Other account receivables category by nature of money

                                                                                                                                 In RMB

                Nature of money                          Ending book balance                       Beginning book balance

Intercourse current                                                      104,286,437.91                                   44,963,887.31

Petty cash                                                                 1,255,256.91                                      800,332.72

Other                                                                      1,091,924.00                                      237,561.76

Total                                                                    106,633,618.82                                   46,001,781.79


(5) Top five other account receivables collected by arrears party at ending balance

                                                                                                                                 In RMB

                                                                                          Proportion in total        Ending balance of
         Unit                  Nature           Ending balance           Aging
                                                                                          other receivables          bad debt provision

Dongguan Dongfeng
                         Intercourse current        80,000,000.00 Within 1 year                       75.02%
Technology



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Development

Ecological
                       Intercourse current              16,465,104.90 1-2 years                              15.44%           16,465,104.90
Agriculture

Huijing Property       Intercourse current               7,182,248.19 Within 1 year                           6.74%

Chengde Liyuan
Investment Consultant Intercourse current                  524,113.60 Within 1 year                           0.49%
Co., Ltd.

Chengde Petroleum
                       Intercourse current                  92,164.28 Within 1 year                           0.09%
Sub-branch

Total                           --                  104,263,630.97                --                         97.78%           16,465,104.90


(6) Account receivables related to government subsidies

                                                                                                                                     In RMB

                                                                                                                      Time and amount
               Unit                    Item                    Ending balance                 Ending age
                                                                                                                      collected and basis


 (7) Other receivable for termination of confirmation due to the transfer of financial assets

(8)The amount of assets and liabilities that are transferred other receivable and continued to be involved

Other explanation


3. Long-term equity investment

                                                                                                                                     In RMB

                                       Ending balance                                                   Opening balance
        Item                            Depreciation                                                     Depreciation
                      Book balance                              Book value             Book balance                          Book value
                                             reserves                                                      reserves

Investment for
                      248,114,466.37                           248,114,466.37          248,114,466.37                        248,114,466.37
subsidiary

Investment for
joint venture and
                        9,170,370.00          9,170,370.00                               9,170,370.00      9,170,370.00
associated
enterprises

Total                 257,284,836.37          9,170,370.00     248,114,466.37          257,284,836.37      9,170,370.00      248,114,466.37


(1) Investment for subsidiary

                                                                                                                                     In RMB




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                                                                                                           Depreciation       Ending balance of
                                               Increased in      Decreased in
Invested company Opening balance                                                    Ending balance        reserves accrual       depreciation
                                                 Period               Period
                                                                                                           in the Period           reserves

Nanjiang Trade
                            5,311,429.97                                               5,311,429.97
and Business

Nanjiang
                          90,000,000.00                                               90,000,000.00
Investment

Nanjiang Asia               5,000,166.64                                               5,000,166.64

Hangzhou
                          30,000,000.00                                               30,000,000.00
Dongfeng

Kefeng Trading            45,147,154.77                                               45,147,154.77

Kefeng
                            2,655,714.99                                               2,655,714.99
Engineering

Dongguan
Dongfeng                  70,000,000.00                                               70,000,000.00
Technology

Total                    248,114,466.37                                             248,114,466.37


(2) Investment for joint venture and associated enterprise

                                                                                                                                          In RMB

                                                               Changes in Period

                                                  Investme                            Cash                                              Ending
                                                                Other
                                                     nt                              dividend                                           balance
 Unit of                 Additiona                            comprehe                           Depreciat
             Opening                 Negative gains/loss                   Other     or profit                               Ending       of
investmen                     l                                 nsive                               ion
              balance                investmen       es                    equity   announce                    Other        balance depreciati
     t                   investmen                             income                            reserves
                                           t      recognize               changes      d to                                               on
                              t                               adjustmen                           accrual
                                                    d by                            distribute                                          reserves
                                                                  t
                                                   equity                               d

I. Joint venture

II. Associated enterprise

Runhua       9,170,370                                                                                                     9,170,370 9,170,370
RW                 .00                                                                                                            .00           .00

             9,170,370                                                                                                     9,170,370 9,170,370
Subtotal
                   .00                                                                                                            .00           .00

             9,170,370                                                                                                     9,170,370 9,170,370
Total
                   .00                                                                                                            .00           .00




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(3) Other explanation

4. Operation income and operation cost

                                                                                                                          In RMB


                                                   Current Period                                       Last Period
           Item
                                        Income                      Cost                       Income                     Cost

Main business                            76,981,775.06               68,854,852.81              99,465,192.85             83,841,835.73

Other business                                                                                      62,967.09                    37,714.74

Total                                    76,981,775.06               68,854,852.81              99,528,159.94             83,879,550.47

Other explanation


5. Investment gains

                                                                                                                                   In RMB

                     Item                                      Current Period                               Last Period

Long-term equity investment income
                                                                             36,240,654.50
measured by cost

Other                                                                             47,503.07

Total                                                                        36,288,157.57


6. Other



XVII. Supplementary information



1. Details of current non-recurring profits and losses


√ Applicable □ Not-applicable
                                                                                                                                   In RMB

                     Item                                           Amount                                      Remark

Governmental subsidy reckoned into current
gains/losses (not including the subsidy
enjoyed in quota or ration according to                                         2,890,000.00
national   standards,    which    are    closely
relevant to enterprise’s business)

Gains/losses satisfied definition of the
                                                                                 115,149.42
non-recurring gains/losses



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Total                                                                       3,005,149.42                        --

Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not-applicable




2. REO and earnings per share


                                                                                        Earnings per share
    Profits during report period        Weighted average ROE
                                                                    Basic EPS (Yuan/share)        Diluted EPS (Yuan/share)

Net profits belong to common stock
                                                           -1.44%                      -0.007                            -0.007
stockholders of the Company

Net profits belong to common stock
stockholders of the Company after
                                                           -2.27%                     -0.0120                           -0.0120
deducting nonrecurring gains and
losses


3. Difference of the accounting data under accounting rules in and out of China

(1) Difference of the net profit and net assets disclosed in financial report, under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable √ Not-applicable


(2) Difference of the net profit and net assets disclosed in financial report, under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable √ Not-applicable


(3) Explanation on data differences under the accounting standards in and out of China; as for the
differences adjustment audited by foreign auditing institute, listed name of the institute

4. Other




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                       Section XI. Documents available for reference

1. Financial statement carried with the signature and seal of the Person in charge of the Company, person in charge of the accounting
works and accountant in charge.
2. Text and original draft of the notice that disclosed in reporting period on newspapers appointed by CSRC.




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