Dongfeng Sci-Tech Group CO., LTD.
Independent Audit Report
D.H.S.Z. [2019]NO.004503
Da Hua Certified Public Accountants (Special General Partnership)
Dongfeng Sci-Tech Group CO., LTD.
Audit Report and Financial Statements
(1st January, 2018 to 31st December, 2018)
Content Page
I. Independent Audit Report 1-7
II. Audited Financial Statements
Consolidated Balance Sheet 1-2
Consolidated Income Statement 3
Consolidated Cash Flow Statement 4
Consolidated Statement on Changes of 5-6
Shareholders' Equity
The parent company Balance Sheet 7-8
The parent company Income Statement 9
The parent company Cash Flows Statement 10
The parent company Statement on Changes of 11-12
Shareholders' Equity
Notes to Financial Statements 1-84
D.H.S.Z.[2019]NO.004503
These matters are dealt with in the context of an audit of the financial statements as a
whole and an audit opinion is formed, and we do not express a separate opinion on
these matters.
We identified the following as key audit issues that need to be communicated in
the audit report:
1. Confirmation of construction in progress;
2. Confirmation of real estate sales income.
( I ) Confirmation of construction in progress
1.Description of matter
Please refer to Note IV (16) and Note VI (11) of the consolidated financial
statements. As of December 31, 2018, the balance of construction in progress in the
consolidated financial statements of DFST was RMB 101,650,833.16, accounting for
16.26% of the total assets. The original value of new construction in progress during
the period was RMB 99,383,669.12.
Due to the importance of the construction in progress to the financial statements
of DFST, and the management of DFST has invested heavily in construction in
progress this year, we have confirmed and measured the construction in progress as a
key audit matter.
2. Audit response
Important audit procedures we implement for the disposal of intangible assets
include:
(1) Understand and test the design and implementation of the internal control
system related to DFST and construction in progress.
(2) Obtain or prepare a list of construction in progress and impairment provision,
check whether the replenishment is correct, and whether it is consistent with the total
account number and the detailed account balance check, and whether the verification
of the impairment provision in the construction project and the number of statements
are consistent.
(3) Calculate the capitalization amount of borrowing costs based on the
borrowing and project construction, and compare it with the actual capitalization of
borrowing costs of the audited entity. Check if interest capitalization is correct.
Review the borrowing costs, capitalization rate, actual expenditures, and the start and
stop times of capitalization for calculating capitalized interest.
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D.H.S.Z.[2019]NO.004503
(4) Inquire about the increase in the construction in progress of the management
in the current year and check with the list of construction or construction in progress.
(5) Check the company's capital expenditure budget, company-related meeting
resolutions, etc., and check whether all the construction in progress increased during
the year.
(6) Check whether the original documents of the construction in progress
increased in the current year, such as the application for project, the project loan
contract, the construction contract, the invoice, the application for engineering
materials, the payment documents, the construction contract, the waybill, the
acceptance report, etc. Whether it is correct, the implementation of the letter to the
supervision and construction units.
(7) Implement the on-site inspection procedures for construction in progress.
Based on the audit work performed, we believe that the management of DFST is
reasonable to confirm the construction in progress.
( II ) Real estate sales revenue recognition
1.Description of matter
Please refer to Note IV (26) and Note VI (30) of the consolidated financial
statements. In 2018, the sales revenue of DFST's consolidated financial statements
amounted to RMB 123,508,083.90, of which real estate development project income
was RMB 118,807,719.93. Accounted for 96.19% of operating income.
Due to the importance of real estate development project income to the financial
statements of DFST, we recognize the revenue recognition of real estate development
projects as a key audit matter.
2. Audit response
Important audit procedures that we implement for the recognition of real estate
sales revenue include:
(1) Understand and test the design and implementation of the internal control
system related to sales and collections.
(2) Select a sample of the real estate sales contract to evaluate whether the
revenue recognition policy of the DFST real estate development project meets the
requirements of relevant accounting standards.
(3) Select the sales sample of the real estate project, check the sales contract and
supporting documents that can prove that the real estate has reached the delivery
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D.H.S.Z.[2019]NO.004503
conditions, to evaluate whether the relevant property sales revenue has been in
accordance with the DFST's revenue recognition policy.
(4) Obtain information such as sales progress control table, sales ledger, real
estate management department filing information, sales receipt record and
commercial housing handover procedures to determine the actual sales situation and
whether it is consistent with the financial data.
(5) For the real estate sales income recognized in the real estate development
project this year, select the sample and compare its unilateral average selling price
with the single selling price obtained from the public information; analyze the
rationality of the change in gross profit margin of each real estate.
(6) Conduct a cut-off test on the income of real estate development projects, and
check the sales revenues confirmed before and after the balance sheet date with the
supporting documents such as delivery procedures to assess whether the income is
recognized in the correct period.
Based on the audit work performed, we believe that the management of DFST
confirms that the sales revenue is in line with the accounting policies of DFST.
IV.Other information
DFST management is responsible for other information. Other information
includes information covered in the 2018 annual report, but does not include the
financial statements and our audit reports.
Our audit opinion on the financial statements does not cover other information
and we do not issue any form of assurance findings on other information.
In connection with our audit of the financial statements, it is our responsibility to
read other information and, in the process, to consider whether it is materially
inconsistent with or appears to be materially misstatement of the financial statements
or the information we have learned in the course of the audit.
Based on what we have done, we should report this fact if we determine that
there are material misstatements of other information. In this regard, we have nothing
to report on.
V.Management and Governance’s Responsibility for the Financial
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D.H.S.Z.[2019]NO.004503
Statements
Management of DFST is responsible for the preparation and present these
financial statements fairly in accordance with the requirements of Accounting
Standards for Business Enterprises, and for such internal control as management
determines is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error
Management of DFST is also responsible for evaluate DFST’s corporate
sustainability, disclose events related to its sustainability (if applicable), and
complying going concern assumption, unless the management is arranging either
liquidation, termination or no realistic option to comply.
Governance is responsible for supervise the produce of DFST’S financial reports.
VI.Certified Public Accountant’s Responsibility for the Financial
Statements’ audit
Our objective is to reach a reasonable assurance of if risks of material
misstatement of the financial statements exist, whether due to fraud or error, and issue
an independent audit report content our audit opinion.
A reasonable assurance is a high standard assurance, however, it could not ensure
an audit comply with audit standards could always detect an existed material
misstatement. Misstatement could caused due to fraud or error, should a reasonable
expectation on such a misstatement, or the combine of misstatements, is likely to
influence the economical decision made by the user of the financial statement, such
misstatement should normally be considered as material.
During our audit under audit standards, we would apply our professional
judgement, and maintain professional skepticism, as well as performing following
procedure:
1.Identify and evaluate the risk of financial statements caused due to fraud or error,
design and perform audit procedures to countermeasure these risks and obtain
reasonable evidence to fulfill such an objective as the basis of audit opinion. As fraud
could involve collaboration, falsifying, intentional omission, false statement or
override of control, the risk of unable to identify material misstatement due to fraud is
higher than unable to identify material misstatement due to error.
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D.H.S.Z.[2019]NO.004503
2.Understanding the internal control related to the audit in order to design suitable
audit procedures, however, the purpose was not to issue any opinion regarding to the
effectiveness of such internal control.
3.Evaluate the appropriateness of accounting policy adopted and reasonableness of
its disclosure by the management
4.Reach a conclusion of whether the management’s going concern assumption is
appropriate. Based on evidence obtained, reach a conclusion on events that may likely
to impair its sustainability or position that may bring uncertainty to the sustainability
of DFST. Should the conclusion considered a significant uncertainty, audit standards
required us to submit the related disclosures to the user of the financial statement;
should the disclosure considered insufficient, we would not issue our opinion as
non-qualified. Our conclusion is based on information available till the date of
reporting date, however, future events or situations may still cause impairment of
DTST’s sustainability.
5.Evaluate the presentation in general, structure and content (including disclosure),
and evaluate whether financial statements fairly reflected transactions and events.
6.Obtain sufficient and appropriate audit evidence on the financial information of
entities or business activities in the eastern fung technology group to express an
opinion on the consolidated financial statements. We are responsible for directing,
supervising and executing group audits and assume full responsibility for audit
opinions.
We communicate with governance on audit scope, time schedule and significant
audit findings, including internal control flaws that worth attention.
We also provide the governance layer with a statement of compliance with
ethical requirements relating to our independence and communicate with the
governance layer all relationships and other matters that may reasonably be
considered to affect our independence, as well as relevant precautions, if applicable.
From the matters communicated with the governance layer, we determine which
matters are most important to the audit of the current financial statements and
therefore constitute key audit matters. We describe these matters in our audit reports
unless laws and regulations prohibit public disclosure of these matters or, in rare cases,
we determine that a matter should not be communicated in an audit report if it is
reasonably expected that the adverse consequences of communicating the matter in
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Consolidated Balance Sheet
As of 31st December 2018
Prepared by：Dongfeng Sci-Tech Group CO., LTD. (The currency of the statements are Chinese Yuan, 'CNY', unless otherwise indicated)
[English Translation for Reference Only]
Assets Notes 6 Closing Balance Opening Balance
Current assets：
Cash and bank 1 36,306,825.10 74,805,209.06
Financial assets at fair value through profit and loss
Derivative assets
Notes receivable & Accounts receivable 2 11,171.25 17,608.00
Advances to suppliers 3 61,099,009.67 183,595.06
Other receivables 4 8,588,597.44 58,740,204.94
Inventories 5 151,585,557.50 234,653,825.84
Held-for-sale assets
Current portion of non-current assets
Other current assets 6 37,786,874.66 34,559,505.29
Total current assets 295,378,035.62 402,959,948.19
Non-current assets：
Available-for-sale financial assets 7 16,331,037.08 16,670,403.13
Held-to-maturity investments
Long-term receivables
Long-term equity investments 8
Investment property 9 4,236,346.34
Fixed assets 10 17,302,279.65 9,674,396.99
Construction in progress 11 101,650,833.16 2,267,164.04
Productive biological assets 12 121,437.50 17,971.39
Oil and gas assets
Intangible assets 13 56,686,960.59 51,705,311.04
Development disbursements 14 13,346,410.47 3,513,561.56
Goodwill 15 1,543,786.41 1,294,711.56
Long-term deferred expenses 16 266,884.56 219,963.84
Deferred tax assets 17 775,645.41
Other non-current assets 18 121,743,152.36 10,427,021.55
Total non-current assets 328,992,781.78 100,802,496.85
Total assets 624,370,817.40 503,762,445.04
(Attached Notes to statements are part of the consolidated financial statments)
Legal Representative： Finance Officer（CFO）： Financial Manager：
1
Consolidated Balance Sheet (Continue)
As of 31st December 2018
Prepared by：Dongfeng Sci-Tech Group CO., LTD. (The currency of the statements are Chinese Yuan, 'CNY', unless otherwise indicated)
Liability and Equity Notes 6 Closing Balance Opening Balance
Current liabilities：
Short-term borrowings
Financial liabilities at fair value through profit and loss
Derivative liabilities
Notes payable & Accounts payable 19 6,668,789.67 15,487,833.06
Advances from customers 20 16,269,319.99 64,165,709.37
Employee benefits payable 21 981,089.59 2,201,668.93
Taxes and surcharges payable 22 921,967.58 13,171,059.13
Other payables 23 118,570,218.85 25,952,193.34
Held-for-sale liabilities
Current portion of non-current liabilities
Other current liabilities
Total current liabilities 143,411,385.68 120,978,463.83
Non-current liabilities：
Long-term borrowings 24 101,710,000.00
Bonds payable
Include:Preferred stock
Include:Perpetual debt
Long-term payable
Long-term employee benefits payable
Grants payable
Provisions
Deferred income
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 101,710,000.00
Total liabilities 101,710,000.00 120,978,463.83
Shareholders' equity：
Share capital 25 706,320,000.00 706,320,000.00
Other equity instruments
Include:Preferred stock
Include:Perpetual debt
Capital reserve 26 463,681,309.55 463,681,309.55
Less: treasury shares 27 19,718,613.55
Other comprehensive income
Specialized reserve
Surplus reserve 28 76,791,550.17 76,791,550.17
Retained earnings 29 -875,480,247.09 -882,864,082.85
Total shareholders' equity attributable to parent company 351,593,999.08 363,928,776.87
Minority shareholders' equity 27,655,432.64 18,855,204.34
Total shareholders' equity 379,249,431.72 382,783,981.21
Total liabilities and shareholders' equity 480,959,431.72 503,762,445.04
(Attached Notes to statements are part of the consolidated financial statments)
Legal Representative： Finance Officer（CFO）： Financial Manager：
2
Consolidated Income Statement
For the year ended 31 December 2018
Prepared by：Dongfeng Sci-Tech Group CO., LTD. (The currency of the statements are Chinese Yuan, 'CNY', unless otherwise indicated)
Items Notes 6 Current Period Prior Period
1.Operating revenue 30 123,508,083.90 250,071,863.07
Less：operating cost 30 108,747,731.24 237,183,139.67
Taxes and surcharges 31 -247,832.89 9,791,294.48
Selling expenses 32 115,346.71 14,417,090.26
Administrative expenses 32 29,236,648.47 29,552,371.61
Research & development expenses 32 4,748,852.86 124,889.69
Finance expenses 32 -385,552.98 1,346,177.29
Including : interest expense 1,617,172.91
interest income 175,090.92 645,550.99
Impairment on assets 33 448,072.80 6,476,829.83
Add：other income 34 2,896,903.64
Investment income 36 19,646,046.57 1,501,873.01
Including：investment income from associates and joint ventures
Gain from fair value change
Gain from assets disposal 37 4,526,245.58 65,059,983.64
2.Operating profits 7,914,013.48 17,741,926.89
Add:non-operating income 38 3,125.00 24,633.24
Less:non-operating expenses 39 473,944.42 823,362.54
3.Profit before tax 7,443,194.06 16,943,197.59
Less:income tax 40 885,955.09 12,906,984.10
4.Net profit 6,557,238.97 4,036,213.49
Net profit contributed before the conbination under commen control -1,209,053.47
I. Profit classified as continuity
Continuous operating profit and loss 10,617,300.84 4,124,362.74
Termination of the business profit and loss -4,060,061.87 -88,149.25
II. Profit classified as ownership
Net profit attributable to parent company 7,383,835.76 4,102,325.89
Profit/loss attributable to minority share-holders -826,596.79 -66,112.40
5.Other comprehensive income after tax
Other comprehensive income after tax attributable to parent company
I. Comprehensive income not to be reclassified as profit or loss
i. Changes in remeasured defined benefit obligations or net assets
Portion of comprehensive income not to be reclassified as profit or loss
ii.
under equity method
iii. ……
II.Comprehensive income to be reclassified as profit or loss
Portion of comprehensive income to be reclassified as profit or loss under
i.
equity method
ii. Gain or loss from fair value changes of available-for-sale financial assets
Gain or loss from reclassification of held-to-maturity investments as
iii.
available-for-sale financial assets
iv. Gain or loss on effective cash flow hedging
v. Currency translation reserve
vi. Gain from before a invested subsidiary that no longer has control
vii. Real estate investment converted from a non-investmental real estate property
viii. ……
Other comprehensive income attributable to minority share-holders after tax
6.Total comprehensive income 6,557,238.97 4,036,213.49
Total comprehensive income attributable to parent company 7,383,835.76 4,102,325.89
Total comprehensive income attributable to minority share-holders -826,596.79 -66,112.40
7.Earnings per share：
I. Basic earnings per share 0.01 0.01
II.Diluted earnings per share 0.01 0.01
(Attached Notes to statements are part of the consolidated financial statments)
Legal Representative： Finance Officer（CFO）： Financial Manager：
3
Consolidated Cash Flows Statement
For the year ended 31 December 2018
Prepared by：Dongfeng Sci-Tech Group CO., LTD. (The currency of the statements are Chinese Yuan, 'CNY', unless otherwise indicated)
Items Notes 6 Current Period Prior Period
1.Cash flows from operating activities
Cash received from sales and services 84,460,974.01 77,634,880.19
Taxes and surcharges refunds 8,101,715.65 7,012,138.87
Other cash receipts related to operating activities 42 116,131,170.58 23,844,761.80
Total cash inflows from operating activities 208,693,860.24 108,491,780.86
Cash paid for goods and services 123,728,104.36 126,145,604.98
Cash paid to and for employees 16,697,226.16 16,357,414.95
Taxes and surcharges cash payments 32,848,901.70 8,733,973.58
Other cash payments related to operating activities 42 853,578.71 41,806,361.63
Total cash outflows from operating activities 174,127,810.93 193,043,355.14
Net cash flows from operating activities 34,566,049.31 -84,551,574.28
2.Cash flows from investing activities
Cash received from withdraw of investments 31,230,000.00 105,000,000.00
Cash received from investment income 680,926.85 2,490,847.27
Net cash received from disposal of fixed assets,intangible assets and
28,160,000.00 87,025,400.00
other long-term assets
Net cash received from disposal of subsidiaries and other business units 17,328,070.03
Other cash receipts related to investing activities
Total cash inflows from investing activities 77,398,996.88 194,516,247.27
Cash paid for fixed assets,intangible assets and other long-term assets 231,847,353.86 53,549,390.18
Cash payments for investments 1,500,000.00 130,030,000.00
Net cash paid for acquiring subsidiaries and other business units -6,604,668.64 -6,179,984.99
Other cash payments related to investing activities
Total cash outflows from investing activities 226,742,685.22 177,399,405.19
Net cash flows from investing activities -149,343,688.34 17,116,842.08
3.Cash flows from financing activities
Cash received from investments by others 9,600,000.00
Including:cash received by subsidiaries from minority shareholders' investments 9,600,000.00
Cash received from borrowings 101,710,000.00
Other cash receipts related to other financing activities
Total cash inflows from financing activities 101,710,000.00 9,600,000.00
Cash repayments for debts
Cash payments for distribution of dividends, profit and interest expenses 2,077,900.24
Including:dividends or profit paid by subsidiaries to minority shareholders
Other cash payments related to financing activities 42 19,718,613.55 698,492.97
Total cash outflows from financing activities 21,796,513.79 698,492.97
Net cash flows from financing activities 79,913,486.21 8,901,507.03
4.Effect of foreign exchange rate changes on cash and cash equivalents 269,681.12 -330,220.97
5.Net increase in cash and cash equivalents -34,594,471.70 -58,863,446.14
Add:beginning balance of cash and cash equivalents 68,107,388.69 126,970,834.83
6.Ending balance of cash and cash equivalents 33,512,916.99 68,107,388.69
(Attached Notes to statements are part of the consolidated financial statments)
Legal Representative： Finance Officer（CFO）： Financial Manager：
4
Consolidated Statement on Changes of Shareholders' Equity
For the year ended 31 December 2018
Prepared by：Dongfeng Sci-Tech Group CO., LTD. (The currency of the statements are Chinese Yuan, 'CNY', unless otherwise indicated)
Items Notes 6 Current Period
Total shareholders' equity attributed to parent company
Other
Other equity Less: treasury Specialized Total shareholders'
Share capital Capital reserve comprehensive Surplus reserve Retained earnings Minority interests
instrument shares reserve equity
income
1.Ending balance of last year 706,320,000.00 463,681,309.55 76,791,550.17 -882,864,082.85 18,855,204.34 382,783,981.21
Add:increase/decrease due to changes in accounting policies
Increase/decrease due to corrections of errors in Prior
Period
Merge and acquisition with company with same ultimate
control
Others
2.Beginning balance of current year 706,320,000.00 463,681,309.55 76,791,550.17 -882,864,082.85 18,855,204.34 382,783,981.21
3.Increase/decrease for current year 19,718,613.55 7,383,835.76 8,800,228.30 -3,534,549.49
I.Total comprehens iveincome 7,383,835.76 -826,596.79 6,557,238.97
II.Shareholders' contributions and withdrawals of captial 19,718,613.55 9,626,825.09 -10,091,788.46
i．Common stock contributed by shareholders
ii．Capital contributed by other equity instruments holders
iii．Share-based payment recorded in owner's equity
iv．Others 19,718,613.55 9,626,825.09 -10,091,788.46
III.Profits distribution
i．Appropriation of surplus reserve
ii．Distribution to owner/shareholder
iii．Others
IV.Transfer within shareholders' equity
i．Capital reserve transferred to paid-in capital
ii．Surplus reserve transferred to paid-in capital
iii．Recover of loss by surplus reserve
iv．Changes in remeasurement of defined benefit net
obligations/assets
v．Others
V.specialized reserve
i．Current year accrual
ii．Current year utilization
VI.Others
4.Ending balance of current year 706,320,000.00 463,681,309.55 19,718,613.55 76,791,550.17 -875,480,247.09 27,655,432.64 379,249,431.72
(Attached Notes to statements are part of the consolidated financial statments)
Legal Representative： Finance Officer（CFO）： Financial Manager：
5
Consolidated Statement on onChanges of Shareholders' Equity
December 2018 2018
For theForyeartheended ended
(The currency of theby：DongfengareSci-Tech Group CO., LTD.unless otherwise indicated) (The currency of the statements are Chinese Yuan, 'CNY', unless otherwise indicated)
Items Notes 6 Prior Period
Equity attributable to parent company
Other
Other equity Less: treasury Specialized Total shareholders'
Share capital Capital reserve comprehensive Surplus reserve Retained earnings Minority interests
instrument shares reserve equity
income
1.Ending balance of last year 706,320,000.00 463,681,309.55 76,791,550.17 -886,966,408.74 2,349,558.95 362,176,009.93
Add:increase/decrease due to changes in accounting policies
Increase/decrease due to corrections of errors in Prior
Period
Merge and acquisition with company with same ultimate
control
Others
2.Beginning balance of current year 706,320,000.00 463,681,309.55 76,791,550.17 -886,966,408.74 2,349,558.95 362,176,009.93
3.Increase/decrease for current year 4,102,325.89 16,505,645.39 20,607,971.28
I.Total comprehens iveincome 4,102,325.89 -66,112.40 4,036,213.49
II.Shareholders' contributions and withdrawals of captial 16,571,757.79 16,571,757.79
i．Common stock contributed by shareholders 16,571,757.79 16,571,757.79
ii．Capital contributed by other equity instruments holders
iii．Share-based payment recorded in owner's equity
iv．Others
III.Profits distribution
i．Appropriation of surplus reserve
ii．Distribution to owner/shareholder
iii．Others
IV.Transfer within shareholders' equity
i．Capital reserve transferred to paid-in capital
ii．Surplus reserve transferred to paid-in capital
iii．Recover of loss by surplus reserve
iv．Changes in remeasurement of defined benefit net
obligations/assets
v．Others
V.specialized reserve
i．Current year accrual
ii．Current year utilization
VI.Others
4.Ending balance of current year 706,320,000.00 463,681,309.55 76,791,550.17 -882,864,082.85 18,855,204.34 382,783,981.21
(Attached Notes to statements are part of the consolidated financial statments)
Legal Representative： Finance Officer（CFO）： Financial Manager：
6
The parent company Balance Sheet
As of 31st December 2018
Prepared by：Dongfeng Sci-Tech Group CO., LTD. (The currency of the statements are Chinese Yuan, 'CNY', unless otherwise indicated)
Assets Notes 13 Closing Balance Opening Balance
Current assets：
Cash and bank 28,933,135.09 12,091,839.66
Financial assets at fair value through profit and loss
Derivative assets
Notes receivable & Accounts receivable
Advances to suppliers 60,821,190.73 5,000.33
Other receivables 1 80,991,042.06 27,954,251.88
Inventories 150,581,753.98 234,077,374.89
Held-for-sale assets
Current portion of non-current assets
Other current assets 24,163,071.63 1,709,204.34
Total current assets 345,490,193.49 275,837,671.10
Non-current assets：
Available-for-sale financial assets 16,331,037.08 16,670,403.13
Held-to-maturity investments
Long-term receivables
Long-term equity investments 2 272,803,036.40 248,114,466.37
Investment property
Fixed assets 1,551,517.36 1,826,078.88
Construction in progress
productive biological assets
Oil and gas assets
Intangible assets
Development disbursements
Goodwill
Long-term deferred expenses
Deferred tax assets 750.00
Other non-current assets
Total non-current assets 290,685,590.84 266,611,698.38
Total assets 636,175,784.33 542,449,369.48
(Attached Notes to statements are part of the consolidated financial statments)
Legal Representative： Finance Officer（CFO）： Financial Manager：
7
The parent company Balance Sheet (Continue)
As of 31st December 2017
Prepared by：Dongfeng Sci-Tech Group CO., LTD. (The currency of the statements are Chinese Yuan, 'CNY', unless otherwise indicated)
Liability and Equity Notes 13 Closing Balance Opening Balance
Current liabilities：
Short-term borrowings
Financial liabilities at fair value through profit and loss
Derivative liabilities
Notes payable
Accounts payable 15,157,800.54 12,777,756.02
Advances from customers 62,427,764.58 242,747,445.35
Employee benefits payable 596,118.22 576,458.22
Taxes and surcharges payable 43,262.13 1,340,388.72
Interest payable
Dividends payable
Other payables 325,994,266.48 237,841,253.38
Held-for-sale liabilities
Current portion of non-current liabilities
Other current liabilities
Total current liabilities 404,219,211.95 495,283,301.69
Non-current liabilities：
Long-term borrowings
Bonds payable
Include:Preferred stock
其中：Perpetual debt
Long-term payable
Long-term employee benefits payable
Grants payable
Provisions
Deferred income
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities 404,219,211.95 495,283,301.69
Shareholders' equity：
Share capital 706,320,000.00 706,320,000.00
Other equity instruments
Include:Preferred stock
其中：Perpetual debt
Capital reserve 456,569,124.55 456,569,124.55
Less: treasury shares
Other comprehensive income
Specialized reserve
Surplus reserve 76,791,550.17 76,791,550.17
Retained earnings -1,101,450,517.19 -1,061,045,442.06
Total shareholders' equity 138,230,157.53 178,635,232.66
Total liabilities and shareholders' equity 542,449,369.48 673,918,534.35
(Attached Notes to statements are part of the consolidated financial statments)
Legal Representative： Finance Officer（CFO）： Financial Manager：
8
The parent company Income Statement
For the year ended 31 December 2018
Prepared by：Dongfeng Sci-Tech Group CO., LTD. (The currency of the statements are Chinese Yuan, 'CNY', unless otherwise indicated)
Items Notes 13 Current Period Prior Period
1.Operating revenue 3 121,071,870.89 252,808,109.87
Less：operating cost 3 103,821,248.79 231,621,565.96
Taxes and surcharges -1,521,613.57 8,783,840.21
Selling expenses 110,444.59 14,255,025.45
Administrative expenses 12,121,942.53 14,477,838.05
Research & development expenses
Finance expenses 2,590.40 -23,760.83
Including : interest expense
interest income
Impairment on assets -530,281.37 24,023,352.93
Add：other income 2,890,000.00
Investment income 4 53,773,285.06
Including：investment income from associates and joint
ventures
Gain from fair value change
Gain from assets disposal
2.Operating profits 63,730,824.58 -40,329,751.90
Add:non-operating income 0.04
Less:non-operating expenses 124,650.33 75,323.27
3.Profit before tax 63,606,174.25 -40,405,075.13
Less:income tax 750.00
4.Net profit 63,605,424.25 -40,405,075.13
Continuous operating profit and loss 63,605,424.25 -40,405,075.13
Termination of the business profit and loss
5.Other comprehensive income after tax
I. Comprehensive income not to be reclassified as profit or loss
i. Changes in remeasured defined benefit obligations or net assets
Portion of comprehensive income not to be reclassified as profit or
ii.
loss under equity method
iii. ……
II.Comprehensive income to be reclassified as profit or loss
Portion of comprehensive income to be reclassified as profit or loss
i.
under equity method
Gain or loss from fair value changes of available-for-sale financial
ii.
assets
Gain or loss from reclassification of held-to-maturity investments as
iii.
available-for-sale financial assets
iv. Gain or loss on effective cash flow hedging
v. Currency translation reserve
vi. Gain from before a invested subsidiary that no longer has control
Real estate investment converted from a non-investmental real
vii.
estate property
viii. ……
6.Total comprehensive income 63,605,424.25 -40,405,075.13
7.Earnings per share：
I. Basic earnings per share
II.Diluted earnings per share
(Attached Notes to statements are part of the consolidated financial statments)
Legal Representative： Finance Officer（CFO）： Financial Manager：
9
The parent company Cash Flows Statement
For the year ended 31 December 2018
Prepared by：Dongfeng Sci-Tech Group CO., LTD. (The currency of the statements are Chinese Yuan, 'CNY', unless otherwise indicated)
Items Notes 13 Current Period Prior Period
1.Cash flows from operating activities
Cash received from sales and services 79,011,942.34 72,881,435.81
Taxes and surcharges refunds 86,715.65 7,012,138.87
Other cash receipts related to operating activities 124,344,882.32 217,554,262.24
Total cash inflows from operating activities 203,443,540.31 297,447,836.92
Cash paid for goods and services 106,587,804.23 121,926,111.90
Cash paid to and for employees 5,445,538.85 6,029,524.99
Taxes and surcharges cash payments 9,232,241.12 7,703,760.87
Other cash payments related to operating activities 65,454,115.32 152,397,541.00
Total cash outflows from operating activities 186,719,699.52 288,056,938.76
Net cash flows from operating activities 16,723,840.79 9,390,898.16
2.Cash flows from investing activities
Cash received from withdraw of investments
Cash received from investment income 36,445,215.03
Net cash received from disposal of fixed assets,intangible assets and
3,678,200.00
other long-term assets
Net cash received from disposal of subsidiaries and other business units 17,328,070.03
Other cash receipts related to investing activities
Total cash inflows from investing activities 53,773,285.06 3,678,200.00
Cash paid for fixed assets,intangible assets and other long-term assets 33,304.61 358,389.88
Cash payments for investments 30,000,000.00 70,000,000.00
Net cash paid for acquiring subsidiaries and other business units
Other cash payments related to investing activities
Total cash outflows from investing activities 30,033,304.61 70,358,389.88
Net cash flows from investing activities 23,739,980.45 -66,680,189.88
3.Cash flows from financing activities
Cash received from investments by others
Cash received from borrowings
Other cash receipts related to other financing activities
Total cash inflows from financing activities
Cash repayments for debts
Cash payments for distribution of dividends, profit and interest expenses
Other cash payments related to financing activities 19,718,613.55 698,492.97
Total cash outflows from financing activities 19,718,613.55 698,492.97
Net cash flows from financing activities -19,718,613.55 -698,492.97
4.Effect of foreign exchange rate changes on cash and cash equivalents
5.Net increase in cash and cash equivalents 20,745,207.69 -57,987,784.69
Add:beginning balance of cash and cash equivalents 5,394,019.29 63,381,803.98
6.Ending balance of cash and cash equivalents 26,139,226.98 5,394,019.29
(Attached Notes to statements are part of the consolidated financial statments)
Legal Representative： Finance Officer（CFO）： Financial Manager：
10
The parent company Statement on Changes of Shareholders' Equity
For the year ended 31 December 2018
Prepared by：Dongfeng Sci-Tech Group CO., LTD. (The currency of the statements are Chinese Yuan, 'CNY', unless otherwise indicated)
Items Notes 13 Current Period
Other
Other equity Less: treasury Specialized Total shareholders'
Share capital Capital reserve comprehensive Surplus reserve Retained earnings
instruments shares reserve equity
income
1.Ending balance of last year 706,320,000.00 456,569,124.55 76,791,550.17 -1,101,450,517.19 138,230,157.53
Add:increase/decrease due to changes in accounting policies
Increase/decrease due to corrections of errors in Prior
Period
Others
2.Beginning balance of current year 706,320,000.00 456,569,124.55 76,791,550.17 -1,101,450,517.19 138,230,157.53
3.Increase/decrease for current year 19,718,613.55 63,605,424.25 43,886,810.70
I.Total comprehens iveincome 63,605,424.25 63,605,424.25
II.Shareholders' contributions and withdrawals of captial 19,718,613.55 -19,718,613.55
i．Common stock contributed by shareholders
ii．Capital contributed by other equity instruments holders
iii．Share-based payment recorded in shareholders' equity
iv．Others 19,718,613.55 -19,718,613.55
III.Profits distribution
i．Appropriation of surplus reserve
ii．Distribution to owner/shareholder
iii．Others
IV.Transfer within shareholders' equity
i．Capital reserve transferred to paid-in capital
ii．Surplus reserve transferred to paid-in capital
iii．Recover of loss by surplus reserve
iv．Changes in remeasurement of defined benefit net
obligations/assets
v．Others
V.specialized reserve
i．Current year accrual
ii．Current year utilization
VI.Others
4.Ending balance of current year 706,320,000.00 456,569,124.55 19,718,613.55 76,791,550.17 -1,037,845,092.94 182,116,968.23
(Attached Notes to statements are part of the consolidated financial statments)
138,230,157.53
Legal Representative： Finance Officer（CFO）： Financial Manager：
11
company StatementStatement onofChanges of shareholders' Equity
The parentThe
For the For theended 31ended 31 December 2018
(The currency of theby：DongfengareSci-Tech Group CO., LTD.unless otherwise indicated) (The currency of the statements are Chinese Yuan, 'CNY', unless otherwise indicated)
Items Notes 13 Prior Period
Other
Other equity Less: treasury Specialized Total shareholders'
Share capital Capital reserve comprehensive Surplus reserve Retained earnings
instruments shares reserve equity
income
1.Ending balance of last year 706,320,000.00 456,569,124.55 76,791,550.17 -1,061,045,442.06 178,635,232.66
Add:increase/decrease due to changes in accounting policies
Increase/decrease due to corrections of errors in Prior
Period
Others
2.Beginning balance of current year 706,320,000.00 456,569,124.55 76,791,550.17 -1,061,045,442.06 178,635,232.66
3.Increase/decrease for current year -40,405,075.13 -40,405,075.13
I.Total comprehens iveincome -40,405,075.13 -40,405,075.13
II.Shareholders' contributions and withdrawals of captial
i．Common stock contributed by shareholders
ii．Capital contributed by other equity instruments holders
iii．Share-based payment recorded in shareholders' equity
iv．Others
III.Profits distribution
i．Appropriation of surplus reserve
ii．Distribution to owner/shareholder
iii．Others
IV.Transfer within shareholders' equity
i．Capital reserve transferred to paid-in capital
ii．Surplus reserve transferred to paid-in capital
iii．Recover of loss by surplus reserve
iv．Changes in remeasurement of defined benefit net
obligations/assets
v．Others
V.specialized reserve
i．Current year accrual
ii．Current year utilization
VI.Others
4.Ending balance of current year 706,320,000.00 456,569,124.55 76,791,550.17 -1,101,450,517.19 138,230,157.53
(Attached Notes to statements are part of the consolidated financial statments)
Legal Representative： Finance Officer（CFO）： Financial Manager：
12
NOTES TO FINANCIAL STATEMENTS
December 31, 2018
CURRENCY UNIT: RMB
I. Company Profile
1. Background
The predecessor of Dongfeng Sci-Tech Group CO., LTD. (“the Company”) was ChengDe DiXian
Textile Corporation, Ltd (“DiXian”). According to the approval of JiGuBan(1999) No.36 issued by the
People’s Government of HeBei Province, DiXian was established in the People’s Republic of China
(the “PRC”) and obtained the Corporate Business License from HeBei Administration for Industry and
Commerce (“CSRC”). The initial registered capital of DiXian was RMB 100,000,000 (divided into
100,000,000 shares, one Yuan per share): ShuXian Wang contributed RMB 85,100,000, accounting for
85.1% of the total; HeBei province ChengDe County North Industrial Company contributed RMB
7,564,400, accounting for 7.56% of the total; ZhengSong Wang contributed RMB 5,444,400,
accounting for 5.44% of the total; ChengDe LongFeng Cosmetic Co., Ltd. contributed RMB 945,600,
accounting for 0.95% of the total; Chengde County Board Town of Red Star plastic products factory
contributed RMB 945,600, accounting for 0.95% of the total.
According to the issue [2000] 121 by the China Securities Regulatory Commission on August 29,
2000, the company issued 100,000,000 foreign capital stocks listed in China (hereinafter referred to as
the " B ") on September 19, 2000 on Shenzhen stock exchange; and excised the overallotment option
to increase issuing 15,000,000 B shares from September 29 to October 29, 2000. The registered capital
of the company after the issuance of B shares was RMB 215,000,000, and was divided into
215,000,000 shares with one Yuan of face value per share.
According to the resolution of the shareholder’s meeting on March 12, 2002, The Company
allotted 43,000,000 bonus shares to all of the shareholders according to the proportion of 2 free shares
for every 10 shares, and meanwhile increased 107500000 shares to all of the shareholding by
transferring from capital reserve according to 5 shares free for every 10 shares. The registered capital of
the company was changed to RMB 365,500,000 after it allotted bonus shares and increased by
transferring.
According to the resolution of the shareholder’s meeting on July 22, 2003, The Company allotted
73,100,000 bonus shares to all of the shareholders according to the proportion of 2 free shares for every
10 shares, and the registered capital of the company was changed to RMB 438,600,000 after such
bonus shares were allotted.
On March 11, 2004, approved by the Ministry of Commerce of the People's Republic of China,
the company was allowed to be changed to Foreign-Funded Joint Stock Companies Limited.
On July, 2004, the company increased 150,000,000 B shares directionally, during which
91,300,000 shares were subscribed in HK$, and another 58,700,000 shares were subscribed in RMB,
upon check by China Securities Regulatory Commission with the issue [2004] No.101.
According to the resolution of the shareholder’s meeting on June 8, 2006, The Company allotted
117,720,000 bonus shares to all of the shareholders according to the proportion of 2 free shares for
every 10 shares,
On August 4, 2008, according to the judgment ruled by Shenzhen Intermediate People's court,
1
112,324,800 sponsor shares held by ShuXian Wang was compensated to Rong Chen for RMB
45,491,544 Yuan, and on August 15, 2008, 96,000,000 sponsor shares held by ShuXian Wang was
compensated to Rong Chen for RMB 38,880,000 Yuan according to the judgment ruled by Dalian
Intermediate People's court.
On November 11, 2009, according to “reply to the approval of capital increase, and change of
share as well as name of 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 foreign shares listed
in China in 2004 and allotted 2 bonus shares free for every 10 shares in 2006; and it agreed that
208324800 shares of DiXian stock held by ShuXian Wang. DiXian was changed to Rong Chen; as well
as the name of the company changed to Chengde DaLu Co., Ltd. The total share capital was
706,320,000 shares and the registered capital of the company was RMB 706,320,000 Yuan after the
company increased and allotted, which has been validated by ZhongLei CPA Co., Ltd, who provided
the capital verification report with [2010] No. 10009.
On August 23 ,2011, the company renewed its Corporate Business License that was issued by
HeBei Administration for Industry and Commerce. The new registration number was
130000400001225. Both registered capital and paid-in capital are RMB 706,320,000. The company
type was a foreign joint stock limited company.
On April 6, 2012, an equity transfer agreement was signed between corporate shareholder Rong
Chen and Dong Wang. According to the agreement, Rong Chen transferred 208,324,800 shares, which
occupied 29.49% of the total share capital, to Dong Wang. After the transfer of equity, Shareholders
proportion of capital contribution was: Dong Wang (RMB 208,324,800, accounted for 29.49%); HeBei
province ChengDe County North Industrial Company (RMB 18,517,651, accounted for 2.62%);
Zhengsong Wang(RMB 13,327,891, accounted for 1.89%); ChengDe City LongFeng Cosmetic
company (RMB 2,314,829, accounted for 0.33%); Chengde County Board Town of Red Star plastic
products factory (RMB 2,314,829, accounted for 0.33%), shareholders of domestically listed foreign
shares (RMB 461,520,000, accounted for 65.34%).
On September 19, 2012, with the authorization of HeBei Administration for Industry and
Commerce, the company name was changed from ChengDe DaLu Corporation, Ltd. to ChengDe
NanJiang Corporation, Ltd.
On May 5, 2017, with the authorization of HeBei Administration for Industry and Commerce, the
company name was changed from ChengDe NanJiang Corporation, Ltd. to DongFeng Sci-Tech Group
Corporation, Ltd.
2. Business scope
New energy , R&D of new material product、sales and technology promotion、technology service ;
R&D of modern agricultural production, technology promotion service, wholesale of ecological
agricultural products; international trading of products and technology; project HuiJingTianDi
(2013-12 , 2013-13) : the development and construction of common residence and supporting
commercial facilities based on two land、sales and operation; property management.
3. Nature of Business
The company belongs to the real estate development and operation, subsidiary for new energy,
new materials, property management and agricultural breeding.
2
4. Major products and labour service
Sales of real estate, plastic raw material trading and sales of products of ecological agriculture
planting and breeding.
5. Fundamental structure of the company
The highest authority is board minutes and the company adopts the managerial responsibility
system. According to requirements from the business, the company set up Securities Department,
Administrative Department, Human Resource Department, Financial Department, Auditing Department,
Sales Department, Research and Development Department.
II. Scope of consolidated financial statements
A total of 17 entities included in the scope of the consolidated financial statements in the current
period, except for the company：
Proportion of
Subsidiary Shareholding
Subsidiary name level voting rights
type ratio（%）
（%）
Chengde Nanjiang Trading Co., Ltd.
Wholly-owned
(hereinafter referred to as "Nanjiang 1 100.00 100.00
subsidiary
Trading")
Chengde Kefeng Engineering Project
Wholly-owned
Management Co., Ltd. (hereinafter referred 1 100.00 100.00
subsidiary
to as “Science Engineering”)
Chengde Dongfeng Investment Co., Ltd. Wholly-owned
(hereinafter referred to as “Dongfeng subsidiary 1 100.00 100.00
Investment”)
Nanjiang Asia Investment Co., Ltd. Wholly-owned
1 100.00 100.00
(hereinafter referred to as "Nanjiang Asia") subsidiary
Chengde Kefeng Trading Co., Ltd. Wholly-owned
(hereinafter referred to as "Kefeng subsidiary 1 100.00 100.00
Trading")
Hangzhou Dongfeng Technology Co., Ltd. Wholly-owned
(hereinafter referred to as "Hangzhou subsidiary 1 100.00 100.00
Dongfeng")
Dongguan Dongfeng Technology
Holding
Development Co., Ltd. (hereinafter referred 1 100.00 100.00
subsidiary
to as "Dongguan Dongfeng Technology")
Chengde Kefeng Aerospace Technology
Wholly-owned
Development Co., Ltd. (hereinafter referred 1 100.00 100.00
subsidiary
to as " Kefeng Aerospace ")
Dongguan Dongfeng Power Technology
Holding
Co., Ltd. (hereinafter referred to as 1 100.00 100.00
subsidiary
"Dongfeng Power")
Chengde Dongfeng Ecological Agriculture
Wholly-owned
Co., Ltd. (hereinafter referred to as 2 100.00 100.00
subsidiary
“ecological agriculture”)
Chengde Nanjiang Technology Co., Ltd. Wholly-owned
(hereinafter referred to as "Nanjiang subsidiary 2 100.00 100.00
Technology")
Chengde Huijing Property Services Co., Wholly-owned
Ltd. (hereinafter referred to as “Huijing subsidiary 2 100.00 100.00
Property”)
3
Proportion of
Subsidiary Shareholding
Subsidiary name level voting rights
type ratio（%）
（%）
Dongguan Zhongchuang New Energy
Holding
Technology Co., Ltd. (hereinafter referred 2 60.98 60.98
company
to as “Zhongchuang New Energy”)
Dongguan Dongfeng Intelligent
Wholly-owned
Technology Co., Ltd. (hereinafter referred 2 100.00 100.00
subsidiary
to as "Dongguan Dongfeng Intelligent")
Dongguan Aolin New Materials Co., Ltd.
Holding
(hereinafter referred to as "Aolin New 2 62.00 62.00
company
Materials")
Dongguan Haizhuo Energy Technology
Holding
Co., Ltd. (hereinafter referred to as 2 62.00 62.00
company
“Haizuo Energy”)
Notes:
(1) The company transferred 100% equity of Nanjiang Trade to Chengde County Chengjin
Trading Co., Ltd. on August 14, 2018. Therefore, Nanjiang Commerce and Trade will no longer be
included in the consolidated balance sheet, but according to the Accounting Standards for Business
Enterprises. No. 33 - Consolidated Financial Statements stipulates that if the parent company disposes
of the subsidiary during the reporting period, it shall include the income, expenses and profits of the
subsidiary from the beginning of the period to the disposal date into the consolidated income statement,
which shall be from the beginning of the subsidiary to the disposal date. Cash flows are included in the
consolidated cash flow statement. Therefore, the income, expenses and profits of the Nanjiang Trading
from the beginning of the period to the disposal date are still included in the scope of consolidation.
（2）Dongguan Dongfeng Power Technology Co., Ltd. is the holding company of Dongguan
Dongfeng Technology acquired on August 28, 2018. On December 25, 2018, Dongguan Dongfeng
Technology transferred it to the company to become a holding subsidiary.
（3）Dongguan Haizhuo Energy Technology Co., Ltd. is a holding company that increased its
capital and shares on March 6, 2018.
1. Subsidiaries newly included in the consolidation scope in this issue
Name Reason for change
Dongfeng Power Business combination under the same control
Haizhuo Energy Business combination not under the same control
2. In the current period, there are no special purpose entities that are newly included in the scope
of consolidation, and business entities that form control rights through trusteeship or lease.
3. Subsidiaries that are no longer included in the consolidation period
Name Reason for change
Nanjiang Trading diposal
4. In the current period, there are no special-purpose entities that are no longer included in the
scope of consolidation, and those that lose control by entrusted operations or leases.
5. For details of the subject of the scope change, see “Note VII. Changes in the scope of
consolidation”.。
4
III. Basis for preparation of financial statements
1. Preparation basis
The financial statements were prepared on the basis of transactions and other events that actually
occurred, in accordance with
issued by the Ministry of Finance and revised with the specific accounting standards, the Application
Guidance of Accounting Standards for Business Enterprises, the Interpretation of Accounting Standards
for Business Enterprises and other regulations (hereinafter jointly referred to as “the Accounting
Standards for Business Enterprises”), as well as the Rules for Preparation Convention of Disclosure of
Public Offering Companies No.15 – General Regulations for Financial Reporting (revised in 2014) by
China Securities Regulatory Commission.
2. Continuation
There will be no such events or situations in the 12 months from the end of the reporting period
that will cause material doubts as to the continuation capability of the Company.
IV. Significant Accounting Policies and Accounting Estimates
1. Statement for Compliance with Enterprise Accounting System
The financial statements prepared by the Company fully comply with Accounting Standards for
Business Enterprise and demonstrate truly and completely the financial status of the Company and the
Group, operating performance and cash flow.
2. Accounting period
The fiscal year of the Group runs from January 1 to December 31 of each calendar year.
3. Reporting Currency
RMB is adopted as the functional currency of the Group.
4. Accounting methods for corporate merger under the same control and not under
the same control
(1)The terms, conditions and economic impact of the various transactions in the process of
enterprise merger are in accordance with one or more of the following conditions, we will deal
with multiple transactions as a package deal when making accounting treatment：
a. These transactions are made at the same time or considering the effects of each other
b. These transactions only in entirety can achieve a complete business results only when
c. The occurrence of a transaction depends on the happening of at least one other transaction
d. A single transaction is not economical, but it is economical when being considered together
with other transactions
(2)Business combinations involving entities under common control
For a business combination involving enterprises under common control, assets and liabilities that
are obtained in a business combination is measured at the carrying amount of the owners’ equity of the
party being absorbed in the consolidated financial statements of the ultimate controlling party at
5
combination date, except for the adjustments of different accounting policies. The difference between the
carrying amount of the net assets obtained and the carrying amount of the consideration paid for the
combination (or total par value of shares issued) is adjusted to capital reserve, if the capital reserve is not
sufficient to absorb the difference, any excess is adjusted against retained earnings. Business
combinations involving entities under common control achieved in stages that involves multiple
transactions.
In the separate financial statements, the initial investment cost is the absorbing party’s share of the
carrying amount of the owners’ equity of the party being absorbed in the consolidated financial
statements of the ultimate controlling party at combination date. The difference between initial
investment cost and original investment carrying amount prior combination plus newly paid
consideration at the combination date is adjusted to capital reserve (share/capital premium), if the capital
reserve is not sufficient to absorb the difference, any excess is adjusted against retained earnings.
In the consolidated financial statements, assets and liabilities that are obtained in a business
combination are measured at their carrying amount of the owners’ equity of the party being absorbed in
the consolidated financial statements of the ultimate controlling party at combination date, except for
the adjustments of different accounting policies. The difference between the original investment
carrying amount prior combination plus newly paid consideration at the combination date and the
carrying amount of the net assets obtained is adjusted to capital reserve (share/capital premium), if the
capital reserve is not sufficient to absorb the difference, any excess is adjusted against retained earnings.
The long-term equity investment of the absorbing party prior to combination, profit or loss, other
comprehensive income and changes of other owners’ equity recognized between the later of
combination date and the date that the absorbing party and the absorbed party are under common
ultimate control are offset the opening retained earnings or profit or loss for the current period in the
comparative statement.
(3)Business combination involving entities not under common control
For business combinations involving entities not under common control, the consideration for each
combination is measured at the aggregate of the fair values, at the acquisition date, of assets given,
liabilities incurred or assumed, and equity securities issued by the acquirer in exchange for control of the
acquire. At the acquisition date, the acquired assets, liabilities and contingent liabilities of the acquire are
measured at their fair value.
Where the cost of combination exceeds the acquirer’s interest in the fair value of the acquiree’ s
identifiable net assets, the difference is recognized as goodwill, and measured on the basis of its costs
minus the accumulative impairment provisions. Where the cost of combination is less than the
acquirer’s interest in the fair value of the acquiree ’s identifiable net assets, the difference is recognized
in profit or loss for the current period after reassessment.
Business combinations involving entities not under common control achieved in stages that
involves multiple transactions .In the separate financial statements, the initial investment cost is the sum
of the carrying amount of equity investment of the acquire held prior to the acquisition date and the
additional investment cost at the acquisition date. When the previously-held equity investment is
accounted for under the equity method, any other comprehensive income previously recognized
is not changed on the combination date and is accounted for on the same basis as would have been
required if the investor had directly disposed of the related assets or liabilities. The owners’ equity
recognized as the changes of the investee’s other owners’ equity except for net profit or loss, other
comprehensive income and profit distribution are transferred to profit or loss for the current period when
6
disposing the investment. For the previously-held equity investment which was accounted for using fair
value, the accumulated changes in fair value included in other comprehensive income is transferred to
profit or loss for the current period upon commencement of the cost method.
In the consolidated financial statements, the cost of business combination is the sum of the
consideration paid at the acquisition date plus the fair value of equity investment of the acquiree held
prior to the acquisition date. The cost of equity investment of the acquiree held prior to the acquisition
date is re-measured at the fair value at the acquisition date, the difference between the fair value and
carrying value is recognized as profit or loss for the current period. Other comprehensive income and
changes of other owners’ equity from the equity interest held in the acquire prior to the acquisition date
are transferred to profit or loss for the current period except for other comprehensive income due to the
movement of net liabilities or assets in the investee’s re-measurement defined benefit plan.
(4)Transaction costs for business combination
The intermediary and other relevant administrative expenses such as audit, legal and valuation
advisory for business combinations are recognized in profit or loss for the current year when incurred.
Transaction costs of equity or debt securities issued as the considerations of business combination are
included in the initial recognition amounts.
The assets and debts acquired by the Group (as the merging party) through merging with other
enterprises under common control shall be measured as per the book value of the merged party in the
consolidated financial statements of the ultimate controller on the day of merger. The difference between
the book value of net assets acquired and the book value of the combination paid is used to adjust the
capital reserves, and the retained earnings are adjusted in case of insufficient capital reserves.
Regarding combination not under common control, the recognizable assets, liabilities and
contingent liabilities of the seller are measured upon fair value on the purchase day. The merger cost is
the sum of cash or the fair value of non-cash assets, issued or borne debts and issued equity securities
paid by the Group for acquiring the control over the acquired on the purchase day and all of the expenses
incurred to the Group directly relevant to the merging. In case of merging by step, the merger cost is the
sum of the cost of every single transaction. Where the merger cost is more than acquired definable net
assets fair proportion of the acquired, the balance is recognized as goodwill. Where the merger cost is less
than acquired definable net assets fair proportion of the acquired, the definable assets, debts, fair value of
contingent liabilities and the fair value of the non-cash assets or issued equity securities as merger
consideration are rechecked first, and in case the merger cost is less than acquired definable net assets fair
proportion of the acquired after recheck, the balance is included in current nonrevenue receipt.
5. Preparation method of consolidated financial statements
The consolidation scope for financial statements is determined on the basis of control. The
consolidated financial statements comprise the financial statements of the Group and its subsidiaries. A
subsidiary is an enterprise or entity controlled by the Group.
The Group incorporates all of the subsidiaries and structured entities under its control into the
consolidated financial statements.
For any difference occurring in accounting policies and accounting periods between the Company
and its subsidiaries when preparing consolidated financial statements, necessary adjustments shall be
made based on accounting policies and periods of the Company.
The company prepare consolidated financial statements based on its own and the subsidiaries’
financial statements as well as other relevant information. In the preparation of the consolidated financial
7
statements, the group are identified as an accounting entity to reflect the overall financial position,
operating results and cash flow, according to the requirements of the related accounting standards for
business enterprises recognition, measurement and presentation, in accordance with the unified
accounting policy.
All the subsidiaries in the consolidation scope are as consistent in subsidiary accounting policies,
accounting period with the company. If those above are inconsistent, when preparing the consolidated
financial statements, it need make necessary adjustments according to the company's accounting policies
and accounting period .
In the process of consolidation, it is necessary to offset the impact on consolidated income statement,
consolidated cash flow statement, consolidated statement of changes in equity which are caused by
occurrence of insider trading between the company and subsidiary and also between each subsidiary. If
there is different opinion on the identity of the same transaction when standing on the point of the
consolidation statement on the enterprise group or which the company and subsidiary are the main body
of accounts , it need make adjust from the perspective of the enterprise group.
The balance which are formed because that the loss minority shareholders bear in the current period
are more than the share of the owner's equity minority shareholders have in the early period, offset the
interests minority shareholders have. For the subsidiary acquired in a business consolidation under the
same control , adjustment is made based on its book value in the financial statements with ultimate
control. For the subsidiary acquired in a business consolidation not under the same control, adjustment is
made based on the fair value of the identifiable net assets on purchasing day.
The acquired in a business combination under the same control subsidiary, with its assets and
liabilities (including the ultimate controlling party acquisition of the subsidiaries and the formation of
goodwill) adjustment is based on its financial statements on financial statements in the book value of
ultimate control.
For the subsidiary companies under the control of non-identical control, the fair value of the
identifiable net assets of the company is adjusted on the basis of the fair value of the net assets.
Where the Group disposed part of long-term equity investment in the subsidiaries without losing
control over of such subsidiaries, in the financial statements, the balance between the income from
disposal and the net assets proportion of the subsidiaries entitled by the disposed long-term equity
investment and continually calculated from the purchase day or day of merger is adjusted as the capital
stock premium of the capital public reserve and retained earnings is adjusted in case of the capital public
reserve not enough for deduction.
Where the Group lost the control over the invested party for such reason as disposing partial equity
investment, the remaining equity was re-measured as per the fair value of such equity on the day of losing
controlling right when preparing the consolidated financial statements. The balance between the sum of
the consideration from the disposal of equity and the fair value of the remaining equity and the net assets
proportion of the subsidiaries entitled by the disposed long-term equity investment and continually
calculated from the purchase day or day of merger is included in the investment income for the period
and the goodwill is deducted. Other consolidated income related to the equity investment of the original
subsidiary shall be transferred into current investment profit and loss upon losing control.
Where the Group lost control over a subsidiary through multiple transactions and step-by-step
disposal of the equity of the subsidiary, and such multiple transactions to a package deal, the multiple
transactions shall be deemed one transaction in which the control in the subsidiary was lost; however, the
balance between the disposal price and the net assets proportion of the subsidiaries entitled by the
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disposed long-term equity investment prior losing control over the subsidiary was recognized as other
comprehensive income and was transferred to the profits and losses of current period at the time of losing
control.
6. Classification of joint arrangement and accounting methods for joint operation
The joint arrangement of the Group includes joint operation and joint venture. For jointly operated
projects, the Group as a partner recognizes the assets and debts it holds independently and
proportionally as well as recognizes the income and expenses as agreed. Where purchase and sale of an
asset during joint operation does not constitute a business, only the part in the profits and losses from
the transaction belonging to other partners is recognized.
(1) Category of the joint arrangement
A joint arrangement refers to an arrangement jointly controlled by two participants or above. The
Group classifies joint arrangements into joint operations and joint ventures according to its rights and
duties in the joint arrangements. A joint operation refers to a joint arrangement where the Group enjoys
assets and has to bear liabilities related to the arrangement. A joint venture refers to a joint arrangement
where the Group is only entitled to the net assets of the arrangement.
The joint arrangement achieves not through the individual main body should be divided as joint
operation. Individual main body refers to the entity owns individual distinguishable financial structure,
including the individual legal entities and the entities without legal entity qualification but gains the legal
permits. The joint arrangement achieves through individual main body is usually divided into the joint
venture, but for the joint arrangement with definite evidence vindicates that meet with any condition of
the followings and meet with the regulations of the relevant laws and regulations should be divided into
joint operation; the legal form of other joint arrangement indicates that, the jointly owned party
respectively enjoys the rights and burdens the obligations of the relevant assets and liabilities among the
arrangement; the clauses of the contacts of the joint arrangement agrees that, the jointly owned party
respectively enjoys the rights and burdens the obligations of the relevant assets and liabilities among the
arrangement; other relevant facts and situation indicates that, the jointly owned party respectively
enjoys the rights and burdens the obligations of the relevant assets and liabilities among the arrangement,
for example, the jointly owned party enjoys almost all of the output related to the joint arrangement and
the liquidation of the liabilities of the arrangement constantly depends on the support of the jointly
owned party. It’s forbidden to regard the jointly owned party which provides the liabilities for the joint
arrangement as it has the responsibility to bear the relevant liabilities. For the jointly owned party takes
the responsibility to pay the attributive obligations for the joint arrangement, not be considered to
undertake the relevant liabilities related to the arrangement. For the relevant facts and the changes of the
situation leads the rights enjoyed and the liabilities undertook amount the joint arrangement change, the
Group should re-assess the category of the joint arrangement. For the structure agreement setting various
joint arrangements for achieving different activities, the Group respectively recognizes each category of
the joint arrangement.
For the details of the basis of recognizing the joint control and the accounting policies of the
measurement of the joint venture, please refer to Notes (IV) 13.
(2) Accounting treatment of joint operations
The following projects related to the interests portion among the joint operation recognized by the
Group and be executed according to the regulations of the relevant ASBE: recognizes the assets held
alone and the assets joint held by recognizing according to the portion; recognizes the jointly-held
assets and jointly-borne liabilities according to the Group’s stake in the joint operation; recognizes the
9
income from sale of the Group’s share in the output of the joint operation; recognizes the income from
sale of the joint operation’s outputs according to the Group’s stake in it; and recognizes the expense
solely incurred to the Group and the expense incurred to the joint operation according to the Group’s
stake in it.
When the Group, as a joint operator, transfers or sells assets (except for the assets constituting
business) to the joint operation, before the assets are sold to a third party, the Group only recognizes
the share of the other joint operators in the gains and losses arising from the sale. Where impairment
occurs to the assets as prescribed in < The Accounting Standard No. 8 for Business Enterprises—Asset
Impairment>, the Group shall fully recognizes the loss. When the Group, purchases assets from the joint
operation (except for the assets constituting business) to the joint operation, before the assets are sold to
a third party, the Group only recognizes the share of the other joint operators in the gains and losses
arising from the sale. Where impairment occurs to the assets as prescribed in , the Group shall fully recognizes the loss according
to its stake in the joint operation for a purchase of assets from the joint operation.
If the Group attributes to the participate party without joint control on the joint operation, if enjoys
the relevant assets and undertakes the relevant liabilities of the joint operation, should execute
accounting treatment according to the above principles; otherwise, should execute the accounting
treatment according to the accounting policies of the measurement of the financial instruments or the
long-term equity investment formulated by the Group.
7. Recognition standard for cash and cash equivalents
Cash in the Cash Flow Statement refers to cash in hold and deposits which can be used for payment
at any time. Cash equivalents in the Cash Flow Statements refer to short-lived (generally not more than 3
months) and highly liquid investments that are readily convertible to known amounts of cash and which
are subject to an insignificant risk of change in value.
8. Foreign currency businesses and translation of foreign currency financial
statements
(1) Accounting treatments for translation of foreign currency transactions
The transactions denominated in foreign currency of the Group are converted in the initial
recognition at the rate which is approximate to the spot exchange rate on the transaction day, which shall
be the spot exchange rate of the beginning of the month when the transaction occurs.
On the balance sheet date, the monetary items denominated in foreign currency are translated to
RMB at the spot exchange rate at the balance sheet date, and the balance between the spot exchange rate
at the balance sheet date and the rate in the initial recognition or on the last balance sheet date is included
in current profits and losses except for 1) the balance from exchange of specific borrowings that is
capitalized and included as part of the cost qualifying asset; 2) the balance from exchange of hedge
instrument adopted for evading the exchange risks that is treated according to hedge accounting; 3) the
balance from exchange arising from the foreign currency non-monetary items available for sale (e.g. the
stock) and that arising from the change in the book value of the monetary items available for sale except
for amortized cost is recognized as other comprehensive income.Non-monetary items of foreign
currency measured by historical cost still adopt spot exchange rate of transaction date for conversion with
functional currency amount unchanged. As for the foreign currency non-monetary items measured by
fair value, the spot exchange rate on the date when the fair value is confirmed is adopted for conversion.
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The amount differences between functional currency amount after conversion and the original functional
currency amount, processed as fair value changes (including change in exchange rate), are recognized
into current profits and losses or recognized into other comprehensive incomes.
(2) Translation of foreign currency financial statements
The asset and liability items in the balance sheets shall be translated at a spot exchange rate ruling
at the balance sheet date. Among the owner's equity items, except the ones as “retained earnings”, others
shall be translated at the spot exchange rate ruling at the time when they occurred.The income and
expense items in the income statements shall be translated at an exchange rate which is determined in a
systematic and reasonable way and is approximate to the spot exchange rate (calculated by the average of
starting rate and closing rate on the reporting period) ruling at the transaction date. The foreign exchange
difference arisen from the translation of foreign currency financial statements shall be presented
separately under the owner's equity in the balance sheet.
Disposal in overseas business, the balance sheet items of other comprehensive income is presented,
and the overseas business translation of foreign currency financial statements related to difference from
other comprehensive income items into the disposal of profits and losses of the current period; in the
disposal of equity investment or other reasons lead to hold environment operating outside the ratio of
equity to reduce but not a loss of overseas business control, and the offshore disposal operations in part
related to the translation of foreign currency statements difference will belong to minority interests. Do
not turn into the profits and losses of the current period. When dealing with overseas operations as an
affiliated enterprise or part of the equity of the joint venture, the foreign currency statement translation
difference with the overseas operation shall be transferred to the current profit and loss.
9. Financial tools
Financial instruments include financial assets, financial liabilities and equity instruments.
1. Categories of financial Tools
The Company divides the financial assets into four categories: financial assets measured at fair
value and their variations are recognized as current gain/loss, including trade financial assets or financial
liabilities and recognized directly as financial assets measured at fair value and their variations are
recognized as current gain/loss; Investment hold till expiration; loans and account receivable; saleable
financial assets .The company divides the financial liabilities into two categories: financial liabilities
measured at fair value and their variations are recognized as current gain/loss; other financial liabilities.
2. Recognition and measurement of financial tools
(1) Financial assets and liabilities measured at fair value and their variations are recognized as
current gain/loss
The fair value (after deducting of announced but not distributed cash dividend or due but not
obtained bond interests) is recognized as initial amount when obtained.
Interests or cash dividends during the period of holding are recognized as investment gains. The fair
value will be adjusted and accounted as current gain/loss.
When disposed, the differences between fair value and initial amount are recognized as investment
gains, and thus adjust the gain/loss of fair value.
(2) Account receivable
Receivables are non derivative financial assets that are not available in the active market and are
fixed or determined by the amount of the recovery.
The receivable debts of selling goods or providing services, and the credits of other company hold
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by the company not including the debt which has price in active market, including accounts receivable,
notes receivable, prepaid accounts, other receivables, long-term receivables, etc. The contract or
agreement price charging from purchaser should be taken as the initial confirmation amount; if it has
the nature of financing, it should be confirmed according its current value.
When retrieved or disposed of, the difference between the actual received amount and the book
value is accounted as current gain/loss.
(3) Investment hold till expiration
The fair value (after deducting of due but not obtained bond interests) plus the related trade
expenses is recognized as initial amount when obtained.
Interest gains will be calculated at amortizing of costs and actual interest rate (the face rate is
adopted when the difference between the actual rate and face rate is minor) during the period of holding,
and accounted as investment gains. Actual rate is recognized when obtained, and is not changed in the
predictable holding period or applicable shorter period.
When disposed, the difference between the obtained price and book value is accounted as
investment gains.
If the company sells or reclassifies large-amount due investments before the expired date (large
amount refers to comparing with the amount before the selling or reclassifying the investments), the
company will reclassify the rest of the investments as financial assets for sale, and in the current
accounting period or within two complete accounting years, no financial assets will be classified as
holding due assets, except for the following situations: the sale date or reclassification date is close to
the expired date of the investment (such as three months before the expired), and the change of interest
rate has no significant influence on the fair value of the investment; after all the initial principal is
mostly recovered according to periodic payments or repay in advance regulated in the contract, the rest
part will be sold or reclassified; the sale and reclassification is caused by the independent events which
are uncontrollable and unexpected and will not happen anymore.
(4) Saleable financial assets
The fair value (after deducting of announced but not distributed cash dividend or due but not
obtained bond interests) plus the related trade expenses is recognized as initial amount when obtained.
Interest or cash dividend occurred during the period of holding is recognized as investment gains.
Change of fair value is accounted as capital reserves (other capital reserves) at the end of term.
When disposed, the difference between the obtained price and book value is accounted as
investment gains.
Meanwhile, the corresponding part of accumulated change of fair value accounted as owners’
equity is transferred into investment gain/loss.
(5) Other financial liabilities
Other financial liabilities are recognized initially at the sum of fair value and related trade
expenses. Successive measurement will be on the basis of amortized costs.
(6) Investment hold till expiration by the company to sell or reclassified as available for sale
financial assets
If the amount of held to maturity investment disposal or re-classified as other financial assets, are
relatively larger than maturity investment all held by the company before sale or re-classification, it is
necessary to re-classify the rest of held to maturity investment as available-for-sale financial assets
immediately after disposal or sale. However, the following circumstances are excluded:
a. the date of sale or the date of reclassification is relatively close to the date of maturity or
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redemption date of investment (e.g., within three months prior to the expiration date), and the change in
the market interest rate has no significant effect on the fair value of the investment;
b. in accordance with the terms of payment agreed upon in the contract, the enterprise has
recovered almost all initial principal;
c. the sale or reclassification is caused by an uncontrollable event that the company is unable to
control, which is not expected to recur and is difficult to reasonably predict.
3. Recognition and measurement basis of financial asset transposition
When financial asset transposition occurred, the recognition of this particular financial asset is
terminated if almost all risks and rewards attached to the asset have been transferred to the acceptor. If
retain all the risks and rewards of ownership of financial assets, the financial assets can be confirmed.
When determine whether the transfer of financial assets meet the conditions of confirmation of the
above financial assets, the principle of substance being more important than form should be adopted.
The transfer of financial assets can be divided into overall transfer and part transfer of financial assets.
If the transfer of financial assets meet the conditions of terminating confirmation, the following the
difference of the two amounts will be included in the current profit and loss: a. Book value of the
financial asset to be transposed; b.The sum of price received due to the transposition, and the
accumulation of change in fair value originally accounted as owners’ equity (when the asset to be
transposed is saleable financial asset).
If part transfer of financial assets meet the conditions of terminating confirmation, the book value
of the transferred financial assts, the difference between the confirmed part and the unconfirmed part
(in this case, the service assets retained should be deemed as the part of unconfirmed financial assets),
should be amortized in accordance with their relative fair value, and the difference between the
following two amount should be included current profit and loss:
a. Book value of the confirmed part;
b .All fair values of financial assets and financial liabilities are recognized with reference to the
price in the active market.
If the transfer of financial assets does not meet the conditions of terminating confirmation, the
financial assets should be confirmed again, the prices received will recognized as financial liabilities.
4. The conditions to stopping the financial liabilities
The obligation of financial liabilities are already cancelled which should be stopped confirming
the financial liability or the part of it. Our company could stop confirming the currently financial
liability and begin to confirm the newly financial liability if the loaner made an agreement that they
would assume the new way of financial liability which replace the current one, and make sure the
newly financial liability is totally different from the old one in contract with our company. Stop
admitting the financial liability or a part of it, and at mean time we could admit the newly financial
liability which is in new insertions of contract as the newly financial liability if the current financial
liability has been revised.
Stop admitting the balance of value of financial liability and consideration (Including the roll-out
of non-cash assets or financial liabilities) which could be consider as current profits and losses.
Stop and continue admitting a part of value, and distribute the value of financial liability, if our
company repurchased the part of financial liability. And the balance of value of which distributed to the
part of stopping admitting and paid (Including the roll-out of non-cash assets or financial liabilities)
which could be consider as current profits and losses.
5.Recognition basis of financial assets and financial liabilities
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All fair values of financial assets and financial liabilities are recognized with reference to the price
in the active market（Using valuation technique, etc.）.
6. Impairment provision for financial assets
(1)Impairment provision for financial assets for sale:
If the fair value of financial assets for sale greatly drops at the end of the period, or after
considering all the relevant factors and expecting decrease trend is non-temporary, the impairment
should be confirmed, and the accumulative loss formed by the decrease of fair value of owner’s equity
originally included should be transferred out altogether and confirmed as impairment loss.
(2)Holding the impairment provision of expired investments:
The measurement of holding the impairment provision of expired investment will be according to
the method of the measurement of impairment provision for receivables.
7.Offset between financial assets and financial liabilities
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is
a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net
basis or realize the asset and settle the liability simultaneously. Otherwise, financial assets and financial
liabilities are separately shown in the balance sheet and not allowed to offset.
10. Provision for bad debts of accounts receivable
（1）Receivables of individual account with significant amount and accrued provision for
bad debt
Recognition Criterion for individually significant amounts:
The receivables with more than RMB 1 million shall be recognized as the significant receivables;
The accruing method of the receivables with individually significant amounts:
The Group should make the impairment test separately or in combination and accrue the bad debt
provisions which shall be recorded into current profit or loss at the end of the period. If there is defined
evidence for the receivables not to or not likely to be received, which shall be recognized as the loss of
bad debt and write off the accrued bad debts provisions after going through the approval procedure of the
Group.
（2）Accounts receivable accrued bad debt provision by portfolio
a. The basis for determining the characteristics of credit risk:
For accounts receivable of which the single amount is not significant, together with which the single
amount is significant by testing alone without impairment,are divided into several portfolio according
to the characteristics of credit risk.considering the the actual loss rate of receivable portfolio of
significant individual amount of receivables with division according to the features of credit risk with
similar credit risk characteristics in previous years and the situation in the year,we determined the amount
of provision.
The basis for determining the portfolio:
Portfolio name provisioning approach The basis for determining the portfolio
Portfolio of
no provision for bad
related party in Portfolio of related party in consolidation
debts
consolidation
According to the nature of the business, identified as
no provision for bad no credit,including employees public reserve fund,
No risk portfolio
debts social security, payment in advance and employee
loan
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Accounts receivable besides the portfolio mentioned
Portfolio of the above, company make a best estimate on the
aging analysis aging analysis method proportion of accounts receivable according to the
method previous experience,and carry on the classification on
credit risk portfolio considering the age of receivables
Accounting aging analysis method:
Use the accounting aging of the receivables as the credit risk characteristics to classify the portfolio.
Accrue the bad debt provision by accounting aging analysis method .
Proportion for Provision for bad debt Proportion for Provision for bad debt
Aging
（receivable）% ( other receivable) %
Within 1 year 5 5
1-2 years 20 20
2-3 years 50 50
Over 3 years 100 100
（3）Individually insignificant amount accounts receivable but accrued bad debt provision
Recognition Criterion for individually insignificant amounts:
Where there are obvious evidences suggesting impairment: debtor has been log-out, bankruptcy,
minus net asset, significant poor cash flow and significant nature disaster leads to discontinue production
and the debtors could not pay for the debts within the foreseeable time.
The accruing method of the receivables with individually insignificant amounts:
The Group should make the impairment test separately or in combination and accrue the bad debt
provisions which shall be recorded into current profit or loss at the end of the period. If there is defined
evidence for the receivables not to or not likely to be received, which shall be recognized as the loss of
bad debt and write off the accrued bad debts provisions after going through the approval procedure of the
Group.
11. Inventory
The inventories of the Group include mainly property development products, raw materials,
commodity stocks, low-value consumables and others.
The property development products include the properties under construction (including the land to
be developed) and as-built properties (including the leased property available for sale). Actual costs of
real estate development products include land-transferring cost, supporting infrastructure cost,
construction & installation cost, loans before completion of the development projects and other relevant
cost during development. Actual costs of delivered real estate development products are determined by
specific identification of costs.
Actual cost accounting is adopted for construction contract, including direct costs and indirect costs
from contract signing to completion of the contract and related to fulfillment of the contract. The net
amount after the offset of accumulated cost and accumulated recognized gross profits (loss) for the
properties under construction and the settlement is listed as net amount after offset in the balance sheet.
Where the sum of accumulated cost and accumulated recognized gross profits (loss) for the properties
under construction is more than the settlement, the balance is listed as inventories; where the latter is
more than the former, the balance is listed as unearned revenue.
Travel expenses, tender expenses, etc. for construction contract signing can be separately
distinguished and reliably calculated. For contracts probably to be concluded, expenses are recognized
15
into contract cost upon receiving the contract; otherwise, expenses are recognized into current profits or
losses.
One-off amortization method is adopted for receipt of low-value consumables and other inventories.
The ending inventory is measured by the cost and net reliable value whichever is lower. When the
net reliable value of the property development product is less than the cost, the inventory falling price
reserve shall be withdrawn. Net reliable value refers to the amount of the predicted sale price less
predicted as-built cost and expenses arising from sale and taxes during normal production and operation
process. Estimates of net realizable value are based on the most reliable evidence available at the time the
estimates are made and take into consideration the purpose for which the inventory is held and the
influences of events occurring after the balance sheet day.
After the accrual of devaluation provision for inventory, where affecting factors for former
write-down of inventory value has disappeared, the write-down amount shall be recovered and reversed
in the formerly accrued depreciation provision amount, and reversed amount shall be included in current
profit or loss and reversed amount shall be included in current profit or loss.
12. Divided as assets held for sale
(1)Recognition criteria of the assets held for sale
The Group recognizes the enterprise compose part (or the non-current assets, similarly hereinafter)
that simultaneously meets with the following conditions as assets held for sale:
a. The compose part must be immediately sold only according to the usual terms of selling the
compose part of this kind under the current conditions;
b. The relevant power institutions of the Group had made agreement on disposing the compose part,
if receive the approval from the shareholders according to the rules, which equals to had received the
approved of the Annual General Meeting or the corresponding power institution;
c. The Group has signed the irrevocable transfer agreement with the assignee;
d. The sale transaction is highly probable to be completed within one year.
(2) Accounting treatments of the assets held for sale
Non-current assets held for sale include single-item assets and disposal groups. Where a disposal
group is an asset group and the goodwill obtained in the business combination is apportioned to the asset
group according to the “Accounting Standard No. 8 for Business Enterprises—Asset Impairment”, or
a disposal group is an operation in such an asset group, the disposal group shall include the goodwill in
the business combination.
As for the non-current assets and disposal group which be classified held for sale by the Group,
shall be measured at the lower one of the net amounts of the book value and the fair value after deducting
the disposal expense. If the net amount the fair value minuses the disposal expenses is lower than the
original book value, the difference should be included in the current gains and losses as the assets
impairment losses; if the held for sale is the disposal group, the assets impairment losses should be
firstly distributed to the goodwill and then included in the current gains and losses by amortized
according to the proportion and attributed to the other non-current assets within the held for sale assets
scope. The deferred income tax assets, the financial assets standardized by No.22 of ASBE-Recognition
and Measurement of Financial Instruments, investment property and biological assets measured by fair
value, contacts rights occurred from the insurance contacts and the assets occurred from the employee
benefits are not suit for the held.
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13. Long-term equity investments
The long-term equity investment of the Group includes mainly the investment to the subsidiaries,
associated enterprises and joint ventures.
The basis for the Group to define joint control is that all participating parties or the combination of
the parties control the arrangement jointly and the policies relevant to the activities of the arrangement
must be agreed by such parties.
The Group will be generally deemed to have significant impact on the invested entity if the Group
holds 20% (inclusive) to 50% of voting right of an invested entity directly or indirectly through its
subsidiaries. Where the Group holds less than 20% of voting right of an invested entity, the Group’s
significant impact on the invested entity will depend on whether the Group has its representative in the
Board of Director or any similar organ of power of the invested entity, whether the Group participates in
the formulation of financial and operation policies of the invested entity, whether the Group has
important deals with the invested entity, whether the Group dispatches management personnel to the
invested entity or whether the Group provides the invested entity with key technical data.
Any entity under the control of the Group is the subsidiary of the Group. The long-term equity
investment acquired through merging with an enterprise under common control, the book value of net
asset of the acquire in the consolidated financial statements of the ultimate controller on the day of
merger is taken as the initial investment cost of the long-term equity investment. Where the book value of
net asset of the acquiree on the day of merger is negative, the cost of the long-term equity invest is
recognized as zero.
Where the long-term equity investment is acquired thorough merging with an enterprise not under
common control, the merger cost is taken as initial investment cost. The merger cost is the fair value of
the assets given, debt occurred or borne and equity securities issued by the Group for acquiring the
controlling right of the acquiree on the day of merger
Aside from the above long-term equity investment acquired by the merger of enterprises, long-term
equity investment acquired by cash payment adopts the actual paid purchase amount as the investment
cost; long-term equity investment acquired by issuance of equity securities adopts the fair value of issued
equity securities as the investment cost; long-term equity investment invested by investors adopts the
value reached in the investment contract or agreement as the investment cost.
The investment of the Group to the subsidiaries is calculated with cost method, and equity method is
applied for joint ventures and associated enterprises.
For the long-term equity investment with cost method applied for subsequent measurement, in case
investment is added, the book value of the long-term equity investment cost is added with the fair value
of additional investment cost and resulting transaction expenses. The cash dividend or profit distributed
by an invested entity is recognized as current return on investment based on the distributed amount.
For the long-term equity investment with equity method applied for subsequent measurement, the
book value of the long-term equity investment is increased or decreased with the change in the ownership
equity of the invested entity. The proportion of net profit or loss of the invested company to be enjoyed or
assumed by the Group is confirmed by taking the fair value of recognizable assets of the invested
company upon obtaining the investments as the base, and offsetting the proportion of internal transaction
profits and losses occurring between the associated enterprises and joint ventures which is due to the
investing enterprise according to shareholding proportion and adjusting the net profit of the invested unit.
For disposal of long-term equity investment, the difference between the book value and the actual
received payment shall be recognized into current income. For the disposal of the long-term equity
17
investments which are calculated with equity method and recognized into the owner equity due to the
changes in owner equity other than the net profits and losses of the invested company, the part initially
recognized into the owner equity shall be carried over to current income and losses in corresponding
proportion.
Where losing joint control over or significant impact on the invested entity is a result of such fact as
disposing partial equity investment, the remaining equity is calculated as the finance asset available for
sale and the balance between the fair value and the book value of the remaining equity on the day of
losing joint control or significant impact is included in current profits and losses. For other
comprehensive income of the original equity investment recognized with equity method, the basis same
as that of the invested entity directly disposing relevant asset or debts is applied for accounting when the
equity method is ceased to be used.
Where losing control over the invested entity is a result of disposing partial long-term equity
investment and the Group has a common control over or have significant impact on the invested entity by
using the remaining equity, the equity method is applied, the balance between the book value and
disposal consideration of the disposed equity is included in the return on investment, and the remaining
equity is adjusted as if it was calculated with equity method since the acquiring of such equity. In case the
Group cannot have a common control over or have significant impact on the invested entity by using the
remaining equity, regulations for financial assets available for sale are applied and the balance between
the book value and disposal consideration of the disposed equity is included in the return on investment,
and the balance between the fair value and book value of the remaining equity on the day of losing
control is included in current profits and losses.
14. Investment property
The investment property of the Group includes the leased land use right, the land use right it is
entitled to for assignment after appreciation, the leased properties and the properties it holds for sale.
Cost model is applied for measurement.
The investment property of the Group is amortized with the average service life method. Estimated
service life, net residual value rate and annual amortization rate of investment property are as follows:
Items Useful Lives Residual Rates (%) Annual Depreciation Rates (%)
land usage rights 50 years 0.00-10.00 1.80-2.00
House and Building 20-28 years 0.00-10.00 3.56-4.50
After initial recognition, the Company adopts the cost model to measure its investment properties.
The Company amortizes or depreciates its investment properties measured using cost model in the same
way as fixed assets and intangible assets If the Group had definite evidence indicated the usage of
the property had changed, when transferring the self-used real estate or the inventories as the
investment real estate or transferring the investment real estate as the self-used real estate, the book value
before the transfer should be regarded as the entry value after transfer.
The Group values the investment property measured using cost model at the lower of its cost and its
recoverable amount at the end of the period. Where the cost exceeds the recoverable amount, the
difference shall be recognized as impairment loss. Once a provision for impairment loss is made, it
cannot be reversed.
An investment real estate is derecognized on disposal or when the investment real estate is
permanently withdrawn from use and no future economic benefits are expected from its
disposal. The amount of proceeds on sale, transfer, retirement or damage of an investment real estate less
18
its carrying amount and related taxes and expenses is recognized in profit or loss in the period in which it
is incurred.
15. Fixed assets
The Group's fixed assets are tangible assets that: (1)are held for use in the production or supply of
goods or services, for rental to others, or for administrative purposes; (2) have useful lives more than one
year; and (3) have unit value more than RMB 2,000.
The fixed assets can be recognized only when their economic interests may flow into the Group and
their costs can be reliably measured. Fixed assets of the Group are classified as houses and buildings,
machines and equipment, transportation equipment, office facility, etc.
All fixed assets, apart from those fixed assets that have been depreciated and accrued but are still in
use and those lands that are transferred into fixed assets separately according to actual values, are
depreciated and accrued by the Group. The average service life method is applied for accrual of
depreciation.
The classification, depreciation years, estimated net residual value rate and depreciation rate of
fixed assets are as follows:
Items Useful Lives Residual Rates (%) Annual Depreciation Rates (%)
House and Building 20-28 years 5.00 3.39-4.75
Machinery equipment 4-5 years 5.00 19.00-23.75
Transportation
5-20 years 5.00 4.75-19.00
equipment
Other equipment 3-5 years 5.00 19.00-31.67
The Group shall check the useful life of fixed assets, expected net salvage value and depreciation
method not later than the end of the year. Any change will be disposed as accounting estimation change.
16. Construction in progress
The valuation of the construction in progress: recognizes the engineering cost according to the cost
actual occurred. The cost of construction in progress also includes the borrowing expenses and exchange
gains and losses which should be capitalized.
The company should transfer the construction in progress into fixes assets when the construction in
progress is ready for their intended use. If the built construction had reached the state ready for intended
use but had not settled the fixed assets of completion settlement, should recognized as fixed assets
according to the estimated value as well withdrew and depreciated; after execute the completion
settlement procedure, it should adjust the original provisional estimate value according to the actual cost
but not the original withdrew depreciation amount.
Impairment of construction in progress refers to accounting policy “Long-term assets impairment”
of the Group.
17. Borrowing costs
(1) Recognition principles for capitalization of borrowing costs and capitalization period
The borrowing costs shall include interest on borrowings, amortization of discounts or premiums on
borrowings, ancillary expenses, and exchange balance on foreign currency borrowings. When the
borrowing costs can be directly attributable to the construction or production of assets eligible for
capitalization, and the asset disbursements or the borrowing costs have already incurred, and the
construction or production activities which are necessary to prepare the asset for its intended use or sale
19
have already started, the capitalization of borrowing costs begins. When the asset eligible for
capitalization under acquisition and construction or production is ready for the intended use or sale, the
capitalization of the borrowing costs shall be ceased. Other borrowing costs shall be recognized as
expenses when incurred.
The assets which can fulfill the principles for capitalization refers to fixed assets, investment
property and inventories which need a long time to be in use or for sale .Capitalization of borrowing
costs starts when:
a. The assets expenditures have incurred. Asset expenditures include the payment of cash, transfer
of non-cash assets or the occurrence of interest bearing debt in the form of assets that are in line with the
conditions of capitalization for the purchase and construction or production;
b. The borrowing costs have incurred;
c. The acquisition and construction activities that are necessary to bring the asset to its
expected usable condition have commenced.
(2) Capitalization of borrowing costs
The period of capitalization refers to the period from the start point of capitalization to the stop point
of capitalization, the suspension period is not included.
When the assets in construction or production which can meet the capitalization conditions were in
use or sale status, the cost of borrowing need stop the capitalization.
When the assets in construction or production which can meet the capitalization conditions were
partly completed and can be used separately, the cost of borrowing need stop the capitalization.
Each part of the assets in construction or production are respectively completed, and it can only be
used or sold after the completion of the whole, at the time when the asset wholly completed need the cost
of borrowing stop the capitalization.
(3) Suspended during the period of capitalization
Capitalization of borrowing costs should be suspended during periods in which the acquisition or
construction is interrupted abnormally, and the interruption period is three months or longer. These
borrowing costs should be recognized directly in profit or loss during the current period. However,
capitalization of borrowing costs during the suspended periods should continue when the interruption is a
necessary part of the process of bringing the asset to working condition for its intended use.
(4)Calculation method of capitalized amount of borrowing costs
To the extent that funds are borrowed specifically for the purpose of acquiring or constructing a
qualifying asset, the amount of borrowing costs eligible for capitalization on that asset is determined as
the actual borrowing costs incurred on that borrowing during the period less any investment income on
the temporary investment of the borrowing.
To the extent that funds are borrowed generally and used for the purpose of acquiring or
constructing a qualifying asset, the amount of borrowing costs eligible for capitalization shall be
determined by applying a capitalization rate to the weighted average of excess of accumulated
expenditures on qualifying asset over that on specific purpose borrowing. The capitalization rate is the
weighted average rate of the general borrowings.
During the period of capitalization, the exchange balance on foreign currency special borrowings
shall be capitalized; the exchange balance on foreign currency general borrowings shall be recorded
into current profits and losses.
18. Biological Assets
20
The biological assets in the company are consumptive biological assets and productive biological
assets. Consumptive biological assets include baby breeding and fat breeding. Productive biological
assets are hens.
Biological assets are recognized only when the following criteria are met simultaneously:
(1) The company acquired the biological assets because of past transactions or events.
(2) The potential economic benefits generated by the biological assets may flow into the company
(3) The cost of biological assets can be calculated reliably
The purchase and disposal of biological assets: the costs of biological assets after the transfer of
purpose are same as the book value before the transfer of purpose; When biological assets are sold,
destroyed or have inventory loss, the differences between the proceeds of disposal and the book value
plus relevant taxes are included in the profit and loss of the current period.
The initial cost of biological assets includes purchase price, transportation cost, insurance cost, and
other cost directly attributed to purchasing the assets. The initial cost of self-breeding productive
biological assets (before the expected condition for use) includes breeding cost, wages and other indirect
costs. Before the expected condition for use, cost of biological assets, including breeding and protection,
are recorded in profits and losses of the current period.
Biological assets are depreciated using the straight-line method to allocate the cost of the assets to
their estimated useful lives. For the biological assets being provided for impairment loss, the related
depreciation charge is prospectively determined based upon the adjusted carrying amounts over their
remaining useful lives.
The estimated useful lives, residual rates and annual depreciation rates are as follows:
Items Useful Lives Residual Rates (%) Annual Depreciation Rates (%)
Chicken and Eggs 1 years 5.00 95
Boar 、sheep for
3 years 5.00 31.67
breeding
At the balance sheet date, if potential impairment of biological assets exists, estimation of its net
realizable value shall be made. Recognizing impairment loss where net realizable value below its book
value. Once an impairment loss is recognized, it is not reversed in a subsequent period.
When biological assets are sold, destroyed or have inventory loss, the difference between the
revenue from disposal and its book value plus relevant taxation are recorded into profits and losses of
the current period.
19. Intangible assets
The intangible assets of the Group include the land use right and software acquired for the
construction of self-used properties. The land use right acquired for daily operation is calculated as the
inventory. Intangible assets are measured at actual cost upon acquisition, where, the actual cost of
intangible assets purchased consists of the actual payment and relevant expenses; and the cost input by
the investors in intangible assets is determined in accordance with the value stipulated in the investment
contract or agreement; unless the contract or agreement stipulates that the value is not fair, then the actual
cost is measured at the fair value.
Land use right is amortized averagely according to transfer term counted from transferring date;
software and other intangible assets shall be amortized averagely according to the shortest term among
anticipated service life, beneficiary years stipulated in contract and valid terms formulated by law.
Amortized amount is included in relevant asset cost and current profit or loss by beneficiaries. Estimated
21
service life and amortization method of intangible assets with limited service life are recheck at the end of
each year, treatment of changes in accounting estimates is adopted for any change.
As for the intangible assets with limited life, its service life shall be estimated at the year-end
Item Amortisation periods Basis
Less than the period stated at contracts or
Land use rights 50 years
included in other legal rights
Patent, brand, software Less than the period stated at contracts or
5 years
and technology included in other legal rights
20. Impairment of long-term assets
For non-current financial Assets of fixed Assets, projects under construction, intangible Assets with
limited service life, investing real estate with cost model, long-term equity investment of subsidiaries,
cooperative enterprises and joint ventures, the Group should judge whether decrease in value exists on
the date of balance sheet. Recoverable amounts should be tested for decrease in value if it exists. Other
intangible Assets of reputation and uncertain service life and other non-accessible intangible assets
should be tested for decrease in value no matter whether it exists.
If the recoverable amount is less than book value in impairment test results, the provision for
impairment of differences should include in impairment loss. Recoverable amounts would be the higher
of net value of asset fair value deducting disposal charges or present value of predicted cash flow. Asset
fair value should be determined according to negotiated sales price of fair trade. If no sales agreement
exists but with asset active market, fair value should be determined according to the Buyer’s price of the
asset. If no sales agreement or asset active market exists, asset fair value could be acquired on the basis of
best information available. Disposal expenses include legal fees, taxes, cartage or other direct expenses
of merchantable Assets related to asset disposal. Present value of predicted asset cash flow should be
determined by the proper discount rate according to Assets in service and predicted cash flow of final
disposal. Asset depreciation reserves should be calculated on the basis of single Assets. If it is difficult to
predict the recoverable amounts for single Assets, recoverable amounts should be determined according
to the belonging asset group. Asset group is the minimum asset combination producing cash flow
independently.
In impairment test, book value of the business reputation in financial report should be shared to
beneficial asset group and asset group combination in collaboration of business merger. It is shown in the
test that if recoverable amounts of shared business reputation asset group or asset group combination are
lower than book value, it should determine the impairment loss. Impairment loss amount should firstly be
deducted and shared to the book value of business reputation of asset group or asset group combination,
then deduct book value of all assets according to proportions of other book value of above assets in asset
group or asset group combination except business reputation.
After the asset impairment loss is determined, recoverable value amounts would not be returned in
future.
21. Goodwill
The balance of the equity investment costs or consolidation costs not under the same control
greater than the fair value of the share of net assets or recognizable net assets of the invested unit or seller
acquired from enterprise consolidation is recognized as goodwill.
Goodwill related to the subsidiary is separately listed on the consolidated financial statements;
22
goodwill related to the associated enterprises and joint ventures is included in the book value of
long-term equity investment.
Impairment test is carried out for goodwill at the end of the year, no matter whether there is any
sign of impairment. The goodwill was, together with the related asset group or combination of asset
groups, subject to the impairment test. That is, the book value of goodwill was reasonably apportioned to
the asset group or combination of asset groups which benefit from the synergy of business merger from
the purchase date. If the recoverable amount of the asset group or combination of asset groups of
goodwill with apportionment is less than its book value, the related impairment loss shall be recognized.
Impairment loss is firstly amortized to the carrying values of goodwill in asset group or asset group
portfolio, and then deducted for the carrying value of other assets in according to the percentage occupied
of other assets (except goodwill) in the asset group or asset group portfolio.
22. Long-term deferred expenses
The Company recognizes all expenses which have occurred during the period but shall be
amortized beyond one year, such as improvement expenditures of operating leased fixed assets, as
long-term deferred expenses. The Company amortizes long-term deferred expenses using straight-line
method according to relevant beneficial periods.
Long term deferred expenses which have a clear benefit period are made according to the average
amortization period, in other situation , amortization need be made according to the average amortization
period of 5 years.
23. Employee remuneration
(1) Accounting treatment of short-term compensation
Employee compensation refers to the reward or compensation of various modes provided by the
Group which wants to receive the service offering by the employees or to execute the release of the labor
relationship. The employee compensation including the short-term salary, departure benefits, demission
benefits and other long-term employee benefits. The Group provides the benefits for the spouses,
children, supported families of the employees, the members of the deceased's employees and other
beneficiaries, which are also employee compensations.
The short-term compensation actually happened during the accounting period when the active
staff offering the service for the Group should be recognized as liabilities and is included in the current
gains and losses or relevant assets cost except for those be required or permitted to included in the
assets cost by other ASBE.
(2) Accounting treatment of the welfare after demission
The Group divides the departure benefits plan into defined contribution plans and defined benefit
plans. Benefits plan of after demission refer to the agreement between the Group and employees on the
departure benefits, or the regulations or methods formulated by the Group for providing welfare after
demission for the employees. Of which, defined contribution plans refers to the departure benefits plan
that the Group no more undertake the further payment obligations after the payment and deposit of the
fixed expenses for the independent funds; defined benefit plans refers to the departure benefits plan
except for the defined contribution plans.
a. Defined contribution plans
During the accounting period when providing the service for the employees, the Group will
recognize the deposited amount as the liabilities which measured by defined contribution plans and
23
include in the current gains and losses or the relevant assets cost.
b. Defined benefit plans
Other long-term employee benefits the Group had not executed the defined contribution plans or
met with the conditions of defined benefit plans.
(3) Accounting treatment of the demission welfare
When the Company is unable to unilaterally withdraw the plan on the cancellation of labor
relationship or the layoff proposal, or when recognizing the costs or expenses (the earlier one between
the two) related to the reorganization of paying the demission welfare, should recognize the payroll
liabilities from the demission welfare and include in the current gains and losses.
24. Estimated liabilities
When the businesses related to contingencies like external guarantee and pending actions or
arbitration conform to the following conditions at the same time, they will be recognized as the debt by
the Group: the obligation is the current obligation undertaken by the Group; the implementation of such
obligation may probably cause the outflow of economic interests from the Group; and the amount of that
obligation can be measured reliably.
(1) Recognition criteria of estimated liabilities
The company should recognize the related obligation as a provision for liability when the
obligation meets the following conditions:That obligation is a present obligation of the enterprise;It is
probable that an outflow of economic benefits from the enterprise will be required to settle the
obligation;A reliable estimate can be made of the amount of the obligation.
(2)Measurement of estimated liabilities
To fulfill the present obligations, which initially measured by the best estimate of the expenditure
required to settle the liability. Where there is a continuous range of possible amounts of the expenditure
required to settle the liability, as all kinds of possibilities are at same level, the best estimate should be
determined according to the average of the lower and upper limit of the range. In other cases, the best
estimate should be determined in accordance with the following methods:
Where the contingency involves a single item, the best estimate involves a singe item, the best
estimate should be determined according to the most likely outcome;
Where the contingency involves several items; The best estimate should be determined by
weighting all possible outcomes by their associated probabilities of occurrence.
To determine the best estimate, it should be considered with factors such as: related contingency
risks, uncertain matters and time value of currency. If time value of currency has a significant impact, the
best estimate should be measured at its converted present value through the relevant future cash outflows.
Where some or all of the expenditures are expected to be reimbursed by a third party, the
reimbursement should be separately recognized as an asset only when it is virtually received. The amount
of the reimbursement should not exceed the carrying amount of the liability recognized.
25. Share payment
The equity-settled share-based payment to exchange the provision of service by employees is
measured by the fair value of the equity instrument conferred to the employees on the grant date. Where
it is exercisable upon finishing the service within the waiting period or satisfying the regulated
performance conditions, based on the optimal estimation of the exercisable equity instrument quantity
within the waiting period, the fair value amounts are included in relevant cost or expense after calculation
24
by the method of line, with relevant capital surplus increased.
26. Recognition and measurement of income
The operation revenue of the Group mainly include the sales revenue, lease revenue and property
management revenue of real estate development products and revenue recognition policies are as
follows:
(1) The revenue of real estate development products are recognized under the following
conditions:
a. Seller and Purchaser sign the sales contract and file a record in the land department;
b. The revenue of real estate development products are completed and are qualified in acceptance;
c. The company has received full house-purchase price or obtained the right of collecting the full
purchase price (e.g. the written commitment letter for releasing mortgage payment from bank);
d. The formalities of property delivery are handled or the customers are deemed to accept the
property according to the terms in the purchase contract.
(2) Lease revenue:
The lease revenue of investment property is recognized as the lease revenue by the method of line
according to rent agreed in the contract or agreement over the lease term.
(3) Property management revenue:
When property management service has been provided and its relevant economic benefit has
obtained by the Company, meanwhile, relevant revenue and cost can be measured reliably, the realization
of utilities revenue is recognized.
27. Government subsidies
Government subsidies refer to monetary assets and non-monetary assets acquired without any
charge from the government. Government subsidies can only be recognized upon meeting the condition
that the Company meets all conditions of government subsidy and is able to receive the government
subsidy.
If government subsidies are monetary assets, it shall be calculated according to the received; if the
government subsidy is distributed subject to fixed quota standard or if there is definite evidence showing
that it is in conformity with relevant requirements of the financial support policies, it shall be calculated
according to the receivable amount; and if the government subsidy is non-monetary assets, it shall be
measured at the fair value; and if the fair value fails to be obtained reliably, it shall be calculated
according to nominal amount (RMB 1).
Government subsidies in relation to assets are recognized as deferred income and allocated equally
within the service life of relevant assets, which will then be included in current profit or loss.
Government subsidies relevant with incomes and that are used to make up future expenses or losses will
be recognized as deferred income and recognized into current profits and losses within the recognition
period of relevant expenses; government subsidies used to make up incurred relevant expenses or losses
are included into current profits or losses directly.
28. Deferred income tax assets and deferred income tax liabilities
The Company executes the accounting treatments of the income tax by adopting the balance sheet
liability method.
(1) Deferred income tax assets
25
Where there are deductible temporary differences between the carrying amount of assets or
liabilities in the balance sheet and their tax bases, a deferred tax asset shall be recognized for all those
deductible temporary differences to the extent that it is probable that taxable profit will be available
against which the deductible temporary difference can be utilized. Deferred tax assets arising from
deductible temporary differences should be measured at the tax rates that are expected to apply to the
period when the asset is realized or the liability is settled.
At the balance sheet date, where there is strong evidence showing that sufficient taxable profit will
be available against which the deductible temporary difference can be utilized, the deferred tax asset
unrecognized in prior period shall be recognized.
The Company assesses the carrying amount of deferred tax asset at the balance sheet date. If it’s
probable that sufficient taxable profit will not be available against which the deductible temporary
difference can be utilized, the Company shall write down the carrying amount of deferred tax asset,
or reverse the amount written down later when it’s probable that sufficient taxable profit will be
available.
(2) Deferred income tax liabilities
A deferred tax liability shall be recognized for all taxable temporary differences, which are
differences between the carrying amount of an asset or liability in the balance sheet and its tax base, and
measured at the tax rates that are expected to apply to the period when the asset is realized or the liability
is settled.
(3)Other notes
The current income tax assets and liabilities of the Group should be listed by the written-off net
amount which intend to executes the net amount settlement as well as the assets acquiring and liabilities
liquidation at the same time while owns the legal rights of settling the net amount.
The deferred income tax assets and liabilities of the Group should be listed as written-off net amount
when having the legal rights of settling the current income tax assets and liabilities by net amount and
the deferred income tax and liabilities is relevant to the income tax which be collected from the same
taxpaying bodies by the same tax collection and administration department or is relevant to the different
taxpaying bodies but during each period which there is significant reverse of the deferred income assets
and liabilities in the future and among which the involved taxpaying bodies intend to settle the current
income tax and liabilities by net amount or are at the same time acquire the asset as well as liquidate the
liabilities.
29. Leasing
The leasing business of the Group is operating lease.
The rent paid by the Group as the Lessee in the operating lease is included in related asset costs or
current profits and losses by the method of line over the lease term.
30. Business Termination
The subsidiarywhich meet one of the following conditions, and the part has been disposed or classified
as part of a separate part that can be separately classified as a part of the termination of operation.
(1) the part represents an independent main business or a separate main business area.
(2) The part refers to a part of related plan to be disposed of for an independent main business or a
separate main business area.
26
(3) the part refers to a subsidiary made specifically for resale.
The operating profit and loss and the disposal gains and losses, such as the impairment loss and th
e reversal amount of the termination business, are listed as profit and loss in the profit and loss of the te
rmination business statement.
31. changes in important accounting policies and accounting estimates
(1)changes in accounting policy
For details of the changes in accounting policies during the reporting period, please refer to Note 4
(32).
(2) Change in accounting estimates
No changes were made to the main accounting estimates during the reporting period.
32. Statement of changes in financial statements
On June 15, 2018, the Ministry of Finance issued the Notice on Amending the 2018 Annual
Financial Statements of General Enterprises (Accounting [2018] No. 15), revised the financial
statements of general enterprises, and merged some of the balance sheet items. , splitting part of the
income statement project; and on September 7, 2018, issued the “Interpretation of the Issues
Concerning the Format of Financial Statements for General Enterprises in 2018”, clearly requiring that
the withholding of personal income tax fees be returned to “other income”. The government subsidies
actually received, whether related to assets or related to income, are presented as cash flows from
operating activities when preparing the cash flow statement.
The Company has prepared financial statements in accordance with the requirements of the new
corporate financial statement format. If the presentation items of the financial statements have changed,
they have been comparable in accordance with the relevant provisions of the “Accounting Standards
for Business Enterprises No. 30 – Presentation of Financial Statements”. The comparison data during
the period is adjusted.
The impact on the presentation of items and amounts in the financial statements for comparable
periods is as follows:
Presentation of the
Pre-adjustment Post-adjustment
project on December Amount affected
amount amount
31, 2017 / 2017
Bill receivable --- --- ---
Accounts receivable 17,608.00 -17,608.00 ---
Bill receivable and
--- 17,608.00 17,608.00
accounts receivable
Interest receivable --- --- ---
Dividend receivable --- --- ---
Other receivables 58,740,204.94 --- 58,740,204.94
Bills payable --- --- ---
accounts payable 15,487,833.06 -15,487,833.06 ---
Bill payable and accounts 15,487,833.06 15,487,833.06
---
payable
Interest payable --- --- ---
27
Presentation of the
Pre-adjustment Post-adjustment
project on December Amount affected
amount amount
31, 2017 / 2017
Dividend payable --- --- ---
Other payables 25,952,193.34 --- 25,952,193.34
Management costs 29,677,261.30 -124,889.69 29,552,371.61
Research and development
--- 124,889.69 124,889.69
expenses
V. Taxation
1. Main taxes and tax rates
Tax category Tax basis Tax rate
Sales of goods, taxable sales and service
Value Added Tax income, intangible assets or immovable 5%、16%
property
Land value-added tax Land VAT or pre-requisitioned Super rate progressive rate
City maintenance and construction tax Transfer tax payable 5%
Education surcharge Transfer tax payable 3%
Local education surcharge Transfer tax payable 2%
Rental income or original value of real
Housing property tax 12% or 1.2%
estate
According to the Notice of the Ministry of Finance and the General Administration of Taxation on
the Adjustment of VAT Tax Rate (No. 32 of Finance and Taxation, 2018), the company has engaged in
VAT taxable sales or imported goods since May 1, 2018. The original application rates of 17% and 11%
are adjusted to 16% and 10% respectively.
2. Corporate income tax
Company Tax rate
Parent company 25%
Chengde Nanjiang trading Co., Ltd. 25%
Chengde kefeng engineering project management Co., Ltd. 25%
Chengde Dongfeng investment Co., Ltd. 25%
NanJiang Asia investment Co., Ltd. 16.5%
Chengde kefeng trading Co., Ltd. 25%
Hangzhou Dongfeng technology Co., Ltd. 25%
Dongguan Dongfeng technology development Co., Ltd. 25%
Chengde kefeng aerospace technology development Co., Ltd. 25%
DongGuan DongFeng power Co., Ltd. 25%
Chengde Dongfeng ecological agriculture Co., Ltd. 25%
Chengde Nanjiang technology Co., Ltd. 25%
28
Company Tax rate
Chengde huijing property service Co., Ltd. 25%
Dongguan zhongzhong innovation energy technology Co., Ltd. 25%
Dongguan Dongfeng intelligent technology Co., Ltd. 25%
Dongguan AoLin new materials Co., Ltd. 25%
DongGuan HaiZhuo energy technology Co., Ltd. 25%
NOTE：NanJiang Asia Investment Co., Ltd. is in special administrative region, and the applicable
corporate income tax rate is 16.5%.
3. The company withhold individual income tax.
VI. Notes to Major Items in Consolidated Financial Statement
With respect to the following data disclosed in the Financial Statements, unless otherwise stated,
"the beginning of the year" refers to January 1, 2018; "the end of the year" refers to December 31, 2018;
"this year" refers to the period between January 1, 2018 to December 31, 2018, and the "previous year"
refers to the period between January 1, 2017 to December 31, 2017. The currency unit is RMB.
1. Monetary fund
Items Closing Balance Opening Balance
Cash on hand 368,614.69 61,945.60
Bank deposit 12,986,115.85 68,045,443.09
Other monetary fund 22,952,094.56 6,697,820.37
Total 36,306,825.10 74,805,209.06
Of which: the total amount
5,626,045.88 5,356,719.91
deposited overseas
Restricted monetary fund during the reporting period are shown below:
Item Closing Balance Opening Balance
guaranteed deposit for housing mortgages 2,793,908.11 6,697,820.37
Total 2,793,908.11 6,697,820.37
2. Accounts receivable
Item Closing Balance Opening Balance
Trade Receivable 11,171.25 17,608.00
Total 11,171.25 17,608.00
(1) Types of accounts receivable
Closing Balance
Categories
Book balance Provision for bad debts Book value
29
Closing Balance
Categories
Book balance Provision for bad debts Book value
Proportio Proportion
Amount Amount
n (%) (%)
Accounts receivable with
significant single amount with
2,320,047.40 94.84 2,320,047.40 100.00 ---
bad debt provision separately
accrued
Accounts receivable
withdrawn bad debt provision 82,138.85 3.36 70,967.60 86.40 11,171.25
by portfolio
Accounts receivable with
insignificant single amount for
44,172.00 1.81 44,172.00 100.00 ---
which bad debt provision
separately accrued
Total 2,446,358.25 100.00 2,435,187.00 99.54 11,171.25
Continued:
Opening Balance
Book balance Provision for bad debts
Categories
Proportio Proportion Book value
Amount Amount
n (%) (%)
Accounts receivable with
significant single amount with
2,320,047.40 94.84 2,320,047.40 100.00 ---
bad debt provision separately
accrued
Accounts receivable
withdrawn bad debt provision 82,138.85 3.36 64,530.85 78.56 17,608.00
by portfolio
Accounts receivable with
insignificant single amount
44,172.00 1.80 44,172.00 100.00 ---
for which bad debt provision
separately accrued
Total 2,446,358.25 100.00 2,428,750.25 99.28 17,608.00
Notes for Category:
a. Accounts receivable with significant single amount with bad debt provision separately
accrued:
Closing balance
Accounts receivable
(classified by units) Accounts Bad debt
Proportion（%） Reason
receivable provision
Beijing xiang e qing
2,320,047.40 2,320,047.40 100.00 Uncollectible
industry and trade co., LTD
30
Total 2,320,047.40 2,320,047.40 --- ---
b. In the groups, accounts receivable adopting aging analysis method to withdraw bad debt
provision:
Closing balance
Aging Withdrawal
Accounts receivable Bad debt provision
proportion（%）
Within 1 year --- --- ---
1 to 2 years 10,150.00 2,030.00 20
2 to 3 years 6,102.50 3,051.25 50
Over 3 years 65,886.35 65,886.35 100
Total 82,138.85 70,967.60 86.40
c . Accounts receivable with insignificant single amount for which bad debt provision separately
accrued are inapplicable.
Closing balance
Accounts receivable (classified by
units) Accounts Bad debt
Proportion（%） Reason
receivable provision
Inner Mongolia A Jin Nai Ma
culture development Co., 44,172.00 44,172.00 100 Uncollectible
LTD
Total 44,172.00 44,172.00 --- ---
(2) Provision for bad debts withdrawn, recovered or reversed in the current period
In the current period, the provision for bad debts was RMB 6,436.75; there was no bad debt
provision for reversal or recovery in the current period.
(3) There was no write-off the accounts receivable during the reporting period.
(4) Top 5 of the closing balance of the accounts receivable collected according to the arrears
party.
Proportion of the total year-
Closing balance of bad
Name of units Closing balance end balance of the accounts
debt provision
receivable(%)
Beijing xiang e qing industry
2,320,047.40 94.84 2,320,047.40
and trade co., LTD
Electricity Authority of
82,138.85 3.36 70,967.60
Chengde county
31
Proportion of the total year-
Closing balance of bad
Name of units Closing balance end balance of the accounts
debt provision
receivable(%)
Inner Mongolia A Jin Nai Ma
culture development co., 44,172.00 1.80 44,172.00
LTD
合计 2,446,358.25 100.00 2,435,187.00
(5) There was no account receivable which terminate the recognition owning to the transfer
of the financial assets during the reporting period.
(6) There was no amount of the assets and liabilities formed by the transfer and the continues
involvement of accounts receivable during the reporting period.
3. Prepayments
(1) The aging analysis of prepayments is as follows:
Closing Balance Opening Balance
Aging Proportion
Amount Proportion (%) Amount
(%)
Within 1 year 61,088,678.72 99.98 171,695.28 93.52
1-2 years 3,431.50 0.01 11,899.78 6.48
2-3 years 6,899.45 0.01 --- ---
Total 61,099,009.67 100.00 183,595.06 100.00
(2) There was no prepayment with an aging above 1 year.
(3) Top 5 of the closing balance of the prepayment collected according to the prepayment
target
Closing balance
Closing
Name of Units of bad debt Aging Reason
balance
provision
Chengde Wanxuan
undue settlement
Construction Engineering Co., 60,038,761.00 98.26 Within 1 year
period
Ltd.
Beijing Jianyan United
undue settlement
Architectural Design 600,000.00 0.98 Within 1 year
period
Consulting Co., Ltd.
Erfa International Supply undue settlement
205,784.00 0.34 Within 1 year
Chain Management Co., Ltd. period
32
Closing balance
Closing
Name of Units of bad debt Aging Reason
balance
provision
undue settlement
Wu Xiaojie 122,400.00 0.20 Within 1 year
period
Shenzhen Xinma Technology undue settlement
11,500.00 0.02 Within 1 year
Co., Ltd. period
Total 60,978,445.00 99.80 --- ---
4. Other receivables
Item Closing Balance Opening Balance
Other Receivables 8,588,597.44 58,740,204.94
合计 8,588,597.44 58,740,204.94
（1）Classification of other receivables
Closing Balance
Type Book balance Provision for bad debts
Proportion Proportion Book value
Amount Amount
(%) (%)
Other receivables
of individual
account with
significant amount 2,709,273.00 19.47 2,709,273.00 100.00 ---
and accrued for
provision for bad
debts
Other accounts
receivable
withdrawn
provision for bad 9,117,720.05 65.53 544,864.61 5.98 8,572,855.44
debts based on
credit risk feature
combination
Combination 1:
5,092,866.55 36.60 --- --- 5,092,866.55
risk-free combination
Combination 2:
Aging analysis 4,024,853.50 28.93 544,864.61 5.98 3,479,988.89
combination
Other receivables
of individual
account with
insignificant
2,087,074.08 15.00 2,071,332.08 99.25 15,742.00
amount and
accrued for
provision for bad
debts
Total 13,914,067.13 100.00 5,325,469.69 38.27 8,588,597.44
Continued:
Opening Balance
Type
Book balance Provision for bad debts Book value
33
Proportion Proportion
Amount Amount
(%) (%)
Other receivables
of individual
account with
significant amount 2,709,273.00 4.24 2,709,273.00 100.00 ---
and accrued for
provision for bad
debts
Other accounts
receivable
withdrawn
provision for bad 59,168,537.55 92.50 442,594.61 0.75 58,725,942.94
debts based on
credit risk feature
combination
Combination 1:
57,983,812.83 90.65 --- --- 57,983,812.83
risk-free combination
Combination 2:
Aging analysis 1,184,724.72 1.85 442,594.61 0.75 742,130.11
combination
Other receivables
of individual
account with
insignificant
2,085,594.08 3.26 2,071,332.08 99.32 14,262.00
amount and
accrued for
provision for bad
debts
Total 63,963,404.63 100.00 5,223,199.69 8.17 58,740,204.94
Notes for Category:
a. Other receivables which single amount is significant and bad debts reserve is withdrawn at the
end of the year
Closing Balance
Name of Units Provision for bad Accruing proportion Reasons for
Other receivables
debts (%) Accrual
Chengde county
Expected
administration of non-tax 1,500,000.00 1,500,000.00 100.00
irrecoverable
revenue
Expected
Creditor’s right from auctions 1,209,273.00 1,209,273.00 100.00
irrecoverable
Total 2,709,273.00 2,709,273.00 100.00 ---
Other receivables which single amount is significant refer to receivables which the single amount
is not less than RMB 1,000,000. After specific identification of those which single amount is
significant ,the receivables from Chengde county administration of non-tax revenue( RMB
1,500,000.00 ) and Creditor’s right from auctions( RMB1,209,273.00 ) are identified irrecoverable and
were made Provision for bad debts totally.
b. Other receivable with provisions of bad debts accrued by aging analysis method in the group.
Aging Closing Balance
34
Other receivables Provision for bad debts Accruing proportion (%)
Within 1 year 3,581,860.41 179,929.56 5.00
1 to 2 years 67,447.43 13,489.49 20.00
2 to 3 years 48,200.00 24,100.00 50.00
Over 3 years 327,345.66 327,345.56 100.00
Total 4,024,853.50 544,864.61 13.54
c. Other receivable with provisions of bad debts accrued by other method in the group.
Closing Balance
Aging
Other receivables Provision for bad debts Accruing proportion (%)
ChengDe NanJiang 135,241.42 --- ---
Trading Co., Ltd,
Tax Bureau of 4,942,346.42 --- ---
Chengde County
Social insurance 14,928.06 --- ---
LIMITED 350.65 --- ---
Total 5,092,866.55 --- ---
d.Other receivables of individual account with insignificant amount and accrued for provision for
bad debts at the end of the year
Accrui
ng
Bad debt
Accounts Receivable Book Amount Aging(year) propor Reasons for Accrual
provision
tion(%
)
More than 5 Expected
Qizhong Yan 270,000.00 270,000.00 100.00
years irrecoverable
More than 2 Expected
zifei Wang 61,360.00 61,360.00 100.00
years irrecoverable
Expected
Cheng Sun 10,800.00 10,800.00 3-4 100.00
irrecoverable
Expected
Fangyao Lv 5,157.10 5,157.10 2-3 100.00
irrecoverable
Beijing Ju Convenience Expected
More than
Science and Technology 10,080.00 10,080.00 100.00 irrecoverable
1year
Co.,Ltd
More than 1 Expected
Tsinghua University 100.00 100.00 100.00
year irrecoverable
More than 2 Expected
Xiashu Wang 72,290.62 72,290.62 100.00
years irrecoverable
Wenbo Yin 15,742.00 --- within 1year --- ---
More than 5 Expected
Ansheng Wang 141,005.79 141,005.79
years 100 irrecoverable
35
More than 5 Expected
Degang Bao 356,838.00 356,838.00 100
years irrecoverable
More than 5 Expected
Shuxia Li 2,000.00 2,000.00 100
years irrecoverable
More than 5 Expected
Chunwei Zhang 2,000.00 2,000.00 100
years irrecoverable
More than 5 Expected
Chengjin Liu 300,000.00 300,000.00 100
years irrecoverable
More than 5 Expected
Haihong Zhou 642,689.25 642,689.25 100
years irrecoverable
More than 5 Expected
Guangtong Company 119,000.00 119,000.00 100
years irrecoverable
More than 5 Expected
Coal money 14,000.00 14,000.00 100
years irrecoverable
Expected
Guilong Zhu 50,000.00 50,000.00 1-2 100
irrecoverable
Administration Bureau Expected
2,000.00 2,000.00 3-4 100
of Chengde County irrecoverable
Chengde public security Expected
1,000.00 1,000.00 3-4 100
bureau irrecoverable
Chengde Landscape Expected
2,000.00 2,000.00 2-3 100
Bureau irrecoverable
Chengde Zhaoyuan Expected
9,011.32 9,011.32 2-3 100
Property Service irrecoverable
Total 2,087,074.08 2,071,332.08 --- --- ---
(2) Provision for bad debts withdrawn and returned back (taken back) in this year
Provision for bad debts extract in this year is RMB 102,270.00 ; the amount of bad debt provision
for the current period is not reversed or recovered.
(3) There was no other receivables were actually written off during the reporting period.
(4) Classification of other receivables by nature
Book balance at the end of the Book balance at the beginning
Fund nature
year of the year
Cash deposit 1,520,000.00 1,762,154.50
Petty cash 1,485,155.23 872,244.72
Creditor’s right from auctions 1,209,273.00 1,209,273.00
The purchase payment of land --- 51,360,000.00
Other 9,699,638.9 8,759,732.41
Total 329,644,254.30 63,963,404.63
（5）The top five other accounts receivable
Proportion in Year-end
Debtors total year-end balance of
Fund nature Ending balance Aging
Ranking balance of other provision for
receivables (%) bad debts
Tax Bureau of Draw back of 4,942,346.42 Within 1year 1.04 ---
36
Proportion in Year-end
Debtors total year-end balance of
Fund nature Ending balance Aging
Ranking balance of other provision for
receivables (%) bad debts
Chengde increment tax
County on land value
Chengde county 1,500,000.00
administration More than 3
Cash deposit 0.32 1,500,000.00
of non-tax years
revenue
Creditor’s 1,209,273.00 1,209,273.00
Creditor’s right More than 5
right from 0.26
from auctions years
auctions
Haihong Zhou Other 642,689.25 4-5 years 0.14 642,689.25
356,838.00 More than 5 356,838.00
Degang Bao Other 0.08
years
Total --- 8,651,146.67 --- 1.84 3,708,800.25
(6)There was no receivables involved government subsidies during the reporting period.
(7)There was no other receivables recognized as a result of the transfer of financial assets
during the reporting period.
(8)There was no amount of assets and liabilities formed by non-transfer of other receivables
and continued involvement during the reporting period.
5. Inventories
(1)Inventories Classification
Closing Balance Opening Balance
Items Net Book Net Book
Book Balance Provision Book Balance Provision
Balance Balance
Raw --- ---
53,653.93 53,653.93 71,640.85 71,640.85
Material
Cost of --- ---
production 1,442,179.44 1,442,179.44 1,749,205.68 1,749,205.68
Finished
933,817.53 --- 933,817.53 150,484.25 --- 150,484.25
goods
Circulation --- ---
materials 118.83 118.83 28,170.33 28,170.33
Consumptiv
e biological
--- --- --- 2,916.05 --- 2,916.05
assets
Developmen ---
107,073,123.28 --- 107,073,123.28 86,747,495.40 86,747,495.40
t costs
Product ---
42,082,664.49 --- 42,082,664.49 145,903,913.28 145,903,913.28
development
37
Items Closing Balance Opening Balance
Total 151,585,557.50 --- 151,585,557.50 234,653,825.84 --- 234,653,825.84
(2)Provision for diminution in value of inventories
Increase during the
Decrease during the current accounting
current accounting Closing
Category Opening Balance period
period Balance
Accrual Other Reversal Written off Other
Finished goods --- --- --- --- --- --- ---
Consumptive
biological --- --- --- --- --- --- ---
assets
Total --- --- --- --- --- --- ---
(3) Description of the ending balance of the inventory without the capitalization amount of
the borrowing costs
Decrease during the Capitalization
Increase current accounting period
during the rate of the
Opening Closing
Item current recognized
Balance Sales Other Balance
accounting capitalization
reduction reduction
period
amount (%)
TianXi --- 543,616.44 --- --- 543,616.44 12.06
Total --- 543,616.44 --- --- 543,616.44 12.06
(4) Development Cost
Estimatio
Time for n of time Estimation of
investment for
total Current
Item commen for Opening Balance new products
investment Increase
cement completio development
amount
n
TianXi 2018 2020 38,000.00 86,747,495.40 20,325,627.88 ---
Total --- --- 38,000.00 86,747,495.40 20,325,627.88 ---
Continued：
Of which: the
Accumulated
Current Closing amount of interest Funds
Item amount of interest
Decrease Balance capitalization in Provided
capitalization
the current period
TianXi --- 107,073,123.28 543,616.44 543,616.44 Personal loan
Total --- 107,073,123.28 543,616.44 543,616.44 ---
38
(5)Product development
Increase
Accumulative
during the Decrease during the
Time for Opening Closing amount of
Item current current accounting
completion Balance Balance interest
accounting period
capitalization
period
HuiJing September
145,903,913.28 --- 103,821,248.79 42,082,664.49 ---
TianDi 2016
Total --- 145,903,913.28 --- 103,821,248.79 42,082,664.49 ---
(6)Consumptive biological assets
Item Closing Balance Opening Balance
Animal husbandry --- ---
Chick --- 2,916.05
Total --- 2,916.05
NOTE: Compared to the opening balance, the closing balance of inventories decreased by RMB
83,068,268.34 , with the decreased rate of 35.40%. The main reason is Product development carry over
cost last period due to the completion of HuiJing TianDi project.
6. Other Current Assets
Items Closing Balance Opening Balance
10,986,874.66 2,029,505.29
Provisional tax
Financial products 26,800,000.00 32,530,000.00
Total 37,786,874.66 34,559,505.29
7. Assets available for sale financial assets
(1) List of available-for-sale financial assets
Closing Balance Opening Balance
Items Book Book Book
Book Balance Impairment Impairment
Value Balance Value
Available for
sale equity 25,000,000.00 8,668,962.92 16,331,037.08 25,000,000.00 8,329,596.87 16,670,403.13
instruments
Fair value --- --- --- --- --- ---
Cost 25,000,000.00 8,668,962.92 25,000,000.00 8,329,596.87 16,670,403.13
Others --- --- --- --- --- ---
Total 25,000,000.00 8,668,962.92 16,331,037.08 25,000,000.00 8,329,596.87 16,670,403.13
(2) impairment of available for sale financial assets
39
Book Balance
Invested Company Shareholding
Opening Balance Current Increase Current Decrease Closing Balance
DongGuan Dongfeng New --- ---
2.56% 25,000,000.00 25,000,000.00
Energy Tech Co., Ltd.
Total 2.56% 25,000,000.00 --- --- 25,000,000.00
Continued:
Impairment Cash Dividend
Invested Company
Opening Balance Current Increase Current Decrease Closing Balance in this period
DongGuan Dongfeng New --- ---
8,329,596.87 339,366.05 8,668,962.92
Energy Tech Co., Ltd.
Total 8,329,596.87 339,366.05 --- 8,668,962.92 ---
8. Long-term equity investments
1．Long-term equity investment
Closing Balance Opening Balance
Item impairment prov book impairment prov
Book balance Book balance book value
ision value ision
Associates：
RunHua(TianJin)
International Trading 9,170,370.00 9,170,370.00 --- 9,170,370.00 9,170,370.00 ---
Co., Ltd.
Total 9,170,370.00 9,170,370.00 --- 9,170,370.00 9,170,370.00 ---
2. Changes in the impairment of long-term equity investments
Proportion of Book balance
shares held by
Invested Company Opening Current Current
invested units Closing Balance
(%) Balance Increase Decrease
RunHua (TianJin)
International Trading 30.00 9,170,370.00 --- --- 9,170,370.00
Co., Ltd.
Total 30.00 9,170,370.00 --- --- 9,170,370.00
Continued：
impairment provision Current
Invested Company Opening Current Current Closing cash dividen
Balance Increase Decrease Balance d
RunHua (TianJin) 9,170,370.0
International Trading Co., 9,170,370.00 --- --- ---
Ltd. 0
9,170,370.0
Total 9,170,370.00 --- --- ---
0
9. Investment Property
40
Item land-use right Total
I. Original carrying value
1. Beginning balance 5,051,773.92 5,051,773.92
2. Increase in the year --- ---
3. Decrease in the year 5,051,773.92 5,051,773.92
(1) Disposal 5,051,773.92 5,051,773.92
4. Ending balance --- ---
II. Accumulated depreciation (amortization)
1. Beginning balance 815,427.58 815,427.58
2. Increase in the year 69,256.00 69,256.00
(1) Withdrawing or
69,256.00 69,256.00
amortization
3. Decrease in the year 884,683.58 884,683.58
(1) Disposal 884,683.58 884,683.58
4. Ending balance --- ---
III. Provision for impairment
1. Beginning balance --- ---
2. Increase in the year --- ---
3. Decrease in the year --- ---
4. Ending balance --- ---
IV. Book value
1. Ending book value --- ---
2. Beginning book value 4,236,346.34 4,236,346.34
NOTE: Decrease in the period was due to the disposal of ChengDe NanJiang Trading Co., Ltd.
And transferred its investment real estate.
10.Fixed assets
(1) Statement of Fixed Assets
Machinery Transportation Other
Item Buildings Total
equipment vehicles equipment
I. Original carrying value
1. Beginning
5,259,168.09 2,220,348.20 5,204,758.70 1,393,816.06 14,078,091.05
balance
2. Increase in the
9,860,208.19 65,384.62 151,489.66 1,853,991.82 11,931,074.29
year
(1) Purchasing 8,203,689.11 65,384.62 151,489.66 1,844,661.82 10,265,225.21
(2) Carried over --- --- --- --- ---
41
Machinery Transportation Other
Item Buildings Total
equipment vehicles equipment
from
inventory/fixed
assets/ intangible
assets
(3) Increase of
corporate --- --- --- 9,330.00 9,330.00
combination
(4) Other
1,656,519.08 --- --- --- 1,656,519.08
increases
3. Decrease in
2,076,831.05 --- --- 189,796.00 2,266,627.05
the year
(1) Disposal 1,784,350.35 --- --- 5,200.00 1,789,550.35
(2) Carried over
to
inventory/fixed --- --- --- --- ---
assets/ intangible
assets
(3) Other
292,480.70 --- --- 184,596.00 477,076.70
decreases
4. Ending
13,042,545.23 2,285,732.82 5,356,248.36 3,058,011.88 23,742,538.29
balance
II. Accumulative depreciation and amortization
1. Beginning
249,808.69 1,262,321.81 1,884,384.94 1,007,178.62 4,403,694.06
balance
2. Increase in the
1,187,270.83 101,736.04 600,669.65 378,084.09 2,267,760.61
year
(1) Withdrawing
1,187,270.83 101,736.04 600,669.65 371,832.01 2,261,508.53
or amortization
(2) Increase of --- ---
corporate --- 6,252.08 6,252.08
combination
(3) Other
--- --- --- --- ---
increases
3. Decrease in
38,411.97 --- 3,248.04 189,536.02 231,196.03
the year
(1) Disposal 10,626.21 --- 3,248.04 4,940.02 18,814.27
(2) Other
--- --- --- --- ---
transfer-out
(3) Other
27,785.76 --- --- 184,596.00 212,381.76
decreases
4. Ending 1,398,667.55 1,365,589.69 2,482,839.71 1,193,161.69 6,440,258.64
42
Machinery Transportation Other
Item Buildings Total
equipment vehicles equipment
balance
III. Provision for impairment
1. Beginning
--- --- --- --- ---
balance
2. Increase in the
--- --- --- --- ---
year
(1) Withdrawing --- --- --- --- ---
(2) Carried over
from
inventory/fixed --- --- --- --- ---
assets/ intangible
assets
(3) Increase of
corporate --- --- --- --- ---
combination
3. Decrease in
--- --- --- --- ---
the year
(1) Disposal --- --- --- --- ---
(2) Carried over
to
inventory/fixed --- --- --- --- ---
assets/ intangible
assets
4. Ending
--- --- --- --- ---
balance
IV. Book value
1. Ending book
11,643,877.68 920,143.13 2,873,408.65 1,864,850.19 17,302,279.65
value
2. Beginning
5,009,359.40 958,026.39 3,320,373.76 386,637.44 9,674,396.99
book value
(2)There was no fixed assets which has not completed the property right certificate at the
end of the period.
(3) The other transferred out of the data for the ChengDe NanJiang Trading Co., Ltd., other
increased are merged into non-identical controls.
11. Construction in process
Items Closing Balance Opening Balance
Construction in process 101,650,833.16 2,267,164.04
Total 101,650,833.16 2,267,164.04
(1)construction in progress
43
Closing Balance Opening Balance
Items Impair Impair
Book Balance Book Value Book Balance Book Value
ment ment
DongFeng
New Energy
101,650,833.16 --- 101,650,833.16 2,267,164.04 --- 2,267,164.04
Industrializa
tion Project
Total 101,650,833.16 --- 101,650,833.16 2,267,164.04 --- 2,267,164.04
(2)Changes in Construction-in-process
Opening Current Current
Items Fixed assets Closing Balance
Balance increase decrease
DongFeng New
Energy
2,267,164.04 99,383,669.12 --- --- 101,650,833.16
Industrialization
Project
Total 2,267,164.04 99,383,669.12 --- --- 101,650,833.16
Continued：
Project
Among them:
investment
Constructi Accumulative the amount of Interest
accounts
Budget on amount of interest capitalizatio Founds
Items for the
(million) progress interest capitalization n rate in this provided
proportion
(%) capitalization rate in this period(%)
of the
period
budget (%)
DongFeng
New Self-fina
Energy ncing,
38,000.00 87.00 87.00 2,271,233.65 2,271,233.65 100.00 bank
Industriali borrowin
zation g
Project
Total 38,000.00 87.00 87.00 2,271,233.65 2,271,233.65 100.00 ---
12. Productive Biological Assets
Item Husbandry industry Total
I. Original carrying value
1. Beginning balance 40,121.80 40,121.80
2. Increase in the year 218,050.20 218,050.20
(1)Purchasing 183,000.00 183,000.00
(2）cultivate 35,050.20 35,050.20
3. Decrease in the year 57,172.00 57,172.00
1) Disposal or discard as
57,172.00 57,172.00
useless
4. Ending balance 201,000.00 201,000.00
II. Accumulated depreciation
44
Item Husbandry industry Total
1. Beginning balance 22,150.41 22,150.41
2. Increase in the year 78,469.81 78,469.81
(1) Withdrawing 78,469.81 78,469.81
3. Decrease in the year 21,057.72 21,057.72
(1) Disposal or discard as
21,057.72 21,057.72
useless
4. Ending balance 79,562.50 79,562.50
III. Provision for impairment
1. Beginning balance --- ---
2. Increase in the year --- ---
3. Decrease in the year --- ---
4. Ending balance --- ---
IV. Book value
1. Ending book value 121,437.50 121,437.50
2. Beginning book value 17,971.39 17,971.39
13. Intangible assets
(1) Details of intangible assets
Item Land use rights Total
I. Original carrying value
1. Beginning balance 52,406,400.00 52,406,400.00
2. Increase in the year 6,951,748.89 6,951,748.89
(1) Purchasing 6,951,748.89 6,951,748.89
(2) Increase of corporate
--- ---
combination
(3) Other increases --- ---
3. Decrease in the year --- ---
(1) Disposal --- ---
(2) Decrease of corporate
--- ---
combination
(3) Other decreases --- ---
4. Ending balance 59,358,148.89 59,358,148.89
II. Accumulated amortization
1. Beginning balance 701,088.96 701,088.96
2. Increase in the year 1,970,099.34 1,970,099.34
45
Item Land use rights Total
(1) Withdrawing 1,970,099.34 1,970,099.34
(2) Increase of corporate
--- ---
combination
(3) Other increases --- ---
3. Decrease in the year --- ---
(1) Disposal --- ---
(2) Decrease of corporate
--- ---
combination
(3) Other decreases --- ---
4. Ending balance 2,671,188.30 2,671,188.30
III. Provision for impairment
1. Beginning balance --- ---
2. Increase in the year --- ---
(1) Withdrawing --- ---
(2) Other increases --- ---
3. Decrease in the year --- ---
(1) Disposal --- ---
(2) Other decreases --- ---
4. Ending balance --- ---
IV. Book value
1. Ending book value 56,686,960.59 56,686,960.59
2. Beginning book value 51,705,311.04 51,705,311.04
14.Development expenditure
Increase in the year Decrease in the year
Beginning Development Included in fix as Ending
Item Fix as
balance expenditure Other the current intangible balance
inventory
inside profits and assets
46
losses
The airship
2,543,414.10 881,531.28 --- 3,424,945.38 --- --- ---
project
Wind
cooling
hydrogen
fuel cell 31,847.46 3,333,663.53 --- 269,385.86 --- --- 3,096,125.13
power
system for
vehicle
ZS01
alumina 938,300.00 4,547,118.05 --- 645,862.23 --- --- 4,839,555.82
fibre
Real-time
hydrogen
--- 5,819,388.91 --- 408,659.39 --- --- 5,410,729.52
production
equipment
Total 3,513,561.56 14,581,701.77 --- 4,748,852.86 --- --- 13,346,410.47
Notes:
The air-cooled hydrogen fuel cell power system for vehicles has its capitalization starting point on
September 26, 2017. The project has a total of four phases. By the end of the period, the research and
development phase has been completed to the third phase; real-time hydrogen production equipment,
its capitalization begins. The time is September 26, 2017. The project has a total of four stages. By the
end of the period, the research and development stage has been completed to the third stage; the
capitalization of ZS01 alumina fiber began on September 26, 2017, and the project has three phases. As
of the end of the period, the specific basis for capitalization from the completion of the R&D phase to
the third phase is: 1. The intangible asset has been completed to enable it to be used or sold technically
feasible; 2. The intangible asset has been completed to enable it The ability to use or sell is technically
feasible; 3. The way in which intangible assets generate economic benefits, including the ability to
prove that the products produced using the intangible assets exist in the market or the intangible assets
exist in the market; if the intangible assets are to be used internally, Prove its usefulness; 4. There are
sufficient technical, financial and other resources to support the development of the intangible asset and
the ability to use or sell it Intangible asset; 5. attributable to the development stage of the intangible
asset can be reliably measured.
15.Goodwill
(1) Original value of goodwill
The company be Beginning Decrease in the Ending
Increase in the year
invested or the events balance year balance
47
formed goodwill Fromed of
corporate Other Disposal Other
combination
Aolin New material 1,294,711.56 --- --- --- --- 1,294,711.56
Haizhuo Energy --- 249,074.85 --- --- --- 249,074.85
Total 1,294,711.56 249,074.85 --- --- --- 1,543,786.41
(2)Provision for goodwill
Decrease of this
Invested Beginning Increase of this year Ending
year
company balance balance
Withdrawing Others Disposal Others
Aolin New
--- --- --- --- --- ---
material
Aolin New
--- --- --- --- --- ---
material
Total --- --- --- --- --- ---
(3)Information about the asset group or asset group combination in which the goodwill is
located
Aolin New Material, the subsidiary operates as an independent economic entity after the merger,
so it is regarded as an asset group during the impairment test, the book value (including goodwill) is
22,976,448.90 yuan, and the asset group or asset group combination Consistent with the asset group or
asset group combination determined on the purchase date.
Haizhuo Energy, the subsidiary operates as an independent economic entity after the merger, so it
is treated as an asset group during the impairment test, and the carrying amount (including goodwill) is
24,868,222.86 yuan, and the asset group or asset group combination The asset group or asset group
combination determined on the purchase date is consistent.
(4)Goodwill impairment test process, parameters and confirmation method of goodwill
impairment loss
At the end of the company, the asset group related to goodwill is tested for impairment. When the
impairment test is conducted, the book value of goodwill is apportioned to the asset group or asset
group combination expected to benefit from the synergy of the business combination, and then the
assets are The book value of the group is compared with the recoverable amount to determine whether
the asset group (including goodwill) has been impaired. The test results show that the recoverable
amount of the asset group including the assessed goodwill is lower than the book value, and the
corresponding impairment loss is confirmed. The specific test process is as follows:
The recoverable amount of the asset group is based on the five-year forecast prepared by the
company's management based on the future development trend and business plan, using the future cash
flow to convert the present value. After testing, the recoverable amount of Olin New Materials is RMB
35,341,494.01, which is greater than the carrying amount (including goodwill) of RMB 22,976,448.90,
and the recoverable amount of Haizhuo Energy is RMB 34,721,467.79, which is greater than the
carrying amount (including goodwill) of RMB 24,868,222.86. Asset groups including goodwill are not
impaired and no impairment provision is required.
16.Long Term Deferred Expenses
48
Amortization
Opening Increase in Other decrease Closing
Items amount in
Balance this period in this period Balance
this period
Office’s
149,963.84 --- 129,408.36 --- 20,555.48
Decoration fee
Factory
--- 154,847.48 13,786.17 --- 141,061.31
Decoration fee
Color steel
--- 99,496.91 4,229.14 --- 95,267.77
room
Fire engineering 70,000.00 --- 60,000.00 --- 10,000.00
Total 219,963.84 254,344.39 207,423.67 --- 266,884.56
17. Deferred income tax assets and deferred income tax liabilities
(1) Non-offset deferred income tax assets
Ending balance Beginning balance
Item Deductible Deferred Deductible Deferred
temporary income tax temporary income tax
difference assets difference assets
Provision for assets impairment --- --- 3,102,581.64 775,645.41
Total --- --- 3,102,581.64 775,645.41
(2) Unconfirmed details of deferred income tax assets
Item Ending balance Beginning balance
Deductible temporary
25,599,989.61 22,049,335.17
difference
Deductible losses 144,594,924.49 135,919,643.05
Total 170,194,914.10 157,968,978.22
Whether sufficient taxable income in the future can be obtained is uncertain, so there is no
deductible temporary difference and deductible losses deferred income tax assets which can be
recognized as deferred income tax assets in this period.
(3) Unrecognized deductible losses of deferred income tax assets will be expired at the end of
following years
Amount at the end of Amount at the
Year Remarks
the year beginning of the year
2019 30,576,125.82 30,576,125.82 2014
2020 33,429,382.84 33,429,382.84 2015
2021 19,481,015.78 19,481,015.78 2016
2022 52,327,940.32 52,433,118.61 2017
2023 8,780,459.73 --- 2018
Total 144,594,924.49 135,919,643.05 ---
18. Other non-current assets
Items Closing Balance Opening Balance
49
Items Closing Balance Opening Balance
Advance payment of project 120,392,369.00 ---
Advance payment of lands --- 10,427,021.55
Advance payment of equipments 1,350,783.36 ---
Total 121,743,152.36 10,427,021.55
19. Accounts payable
Item Ending balance Beginning balance
Accounts payable 6,668,789.67 15,487,833.06
Total 6,668,789.67 15,487,833.06
(1) Accounts payable
Item Ending balance Beginning balance
Payment of construction 6,596,413.67 15,406,565.98
Payment of raw material 33,996.00 ---
Payment of goods --- 7,994.50
Payments of equipments 20,200.00 8,700.00
Others 18,180.00 64,572.58
Total 6,668,789.67 15,487,833.06
(2) Significant accounts payable aging over one year
Company Name Closing Balance Reason for unsettle
XingCheng(Chengde) Construction Co.,
1,474,499.03 Engineering Warranty
Ltd..
Chengde Great Wall Group Co., Ltd. 1,353,100.46 Engineering Warranty
LiCheng(Chengde) Construction Co., Ltd 1,276,900.24 Engineering Warranty
YongWang(Chengde) Construction Co., Ltd. 867,887.22 Engineering Warranty
Hanyi（Handan） Construction Engineering
400,000.00 Engineering Warranty
Co., Ltd.
Total 5,372,386.95 ---
20. Advance account receivable
(1) List of advance account receivable
Item Opening Balance Closing Balance
Receipt of Pre-sale Property of HuiJing
14,427,450.03 62,427,764.58
TianDi
Goods’ receivable in advance 64,400.00 ---
Heating fee receivable in advance 1,561,464.19 1,530,016.02
Others 216,005.77 207,928.77
Total 16,269,319.99 64,165,709.37
(2) List of Receipt of Pre-sale Property
50
Estimated
Propotion of
Item Opening Balance Closing Balance completion
pre-sale (%)
time
HuiJing TianDi 14,427,450.03 62,427,764.58 December 2016 95.89
Total 14,427,450.03 62,427,764.58 --- ---
(3) There was no significant advance account receivable over one year in the closing
balance.
21. Payroll payable
(1)List of Payroll payable:
Opening Increase in this Decrease in this Closing
Item
Balance period period Balance
The short-term salary 2,177,237.35 19,219,751.03 20,456,998.72 951,151.59
Post-employment
benefit-defined 24,431.58 1,738,973.07 1,733,466.65 29,938.00
contribution
Termination benefits --- 350,910.00 350,910.00 ---
Total 2,201,668.93 21,309,634.10 22,541,375.37 981,089.59
(2)List of the short-term salary:
Opening Increase in Decrease in
Item Closing Balance
Balance this period this period
1.Wage, bonus, allowance and
2,159,954.12 16,584,879.67 17,820,532.20 924,301.59
subsidy
2.Employee welfare --- 1,048,726.37 1,048,726.37 ---
3.Social insurance charges 16,390.01 800,082.26 799,002.27 17,470.00
Including：a. Essential medical
14,341.26 660,767.95 659,634.21 15,475.00
insurance charges
b.Supplement medical
--- --- --- ---
insurance charges
c. Work related injury 682.92 67,528.45 67,774.37 437.00
d. Maternity insurance 1,365.83 71,785.86 71,593.69 1,558.00
4.Housing fund 495.00 793,613.40 784,728.40 9,380.00
5.Trade union and educational
398.22 3,611.26 4,009.48 ---
fees
6.Short-term accumulation
--- --- --- ---
of absence with pay
7.Short-term profit sharing
--- --- --- ---
plan
8.Other --- --- --- ---
Total 2,177,237.35 19,230,912.96 20,456,998.72 951,151.59
(3)List of Defined Contribution Plan(DCP):
51
Opening Increase in Decrease in
Item Closing Balance
Balance this period this period
Essential endowment insurance 23,646.10 1,694,363.43 1,688,889.53 29,120.00
Unemployment insurance 785.48 44,609.64 44,577.12 818.00
Total 24,431.58 1,738,973.07 1,733,466.65 29,938.00
22. Tax payable
Items Closing Balance Opening Balance
VAT 364,882.08 41,473.25
Urban construction tax 20,216.47 432.35
Land VAT 468,597.56 ---
Corporate income tax --- 12,906,984.10
Land use tax --- 136,349.73
Individual taxable income 12,830.10 47,250.06
Education surcharge 12,129.88 354.44
Stamp tax 35,224.90 37,978.90
Local education surcharge 8,086.59 236.30
Total 921,967.58 13,171,059.13
23. Other Payable
Items Closing Balance Opening Balance
Interest payable 193,333.41 ---
Other accounts payable 118,376,885.44 25,952,193.34
Total 118,570,218.85 25,952,193.34
(1) Interest payable
Items Closing Balance Opening Balance
Interest on Long-term Loans
193,333.41 ---
Payable by Stages
Total 193,333.41 ---
(2) Other accounts payable
1、Other accounts payable listed by nature of the account
Categories Closing Balance Opening Balance
Deposit and margin 971,041.20 712,541.20
Commission 309,178.00 1,525,800.00
Intercourse funds 16,327,166.66 22,953,440.32
Withholding and remitting tax 10,679.28 22,061.90
Warranty 18,000,000.00 ---
Non-financial institution
79,143,616.44 ---
borrowing
Others 3,615,203.86 738,349.92
52
Total 118,376,885.44 25,952,193.34
2、 Important other payables aged over one year
Company Name Amount Reason for unsettle
Dongguan Dongfeng New Energy
7,810,000.00 ---
Technology Co., Ltd.
Total 7,810,000.00 ---
3、The details of other payables with larger amounts are as follows:
Company Name Amount Nature
Dongguan Dongfeng New Energy
15,310,000.00 Current payment
Technology Co., Ltd.
Chengde Wanxuan Construction
18,000,000.00 Quality guarantee
Engineering Co., Ltd.
Total 33,310,000.00 ---
53
24.Long-term loans
Loan category Closing Balance Opening Balance
Mortgage loan 101,710,000.00 ---
Total 101,710,000.00 ---
As of December 31, 2018, the company's long-term loan balance of Dongguan Bank Co., Ltd. Songshan Lake Technology Sub-branch was 101.71 billion yuan, and the
loan was limited to the follow-up construction of Dongfeng New Energy Equipment Industrialization Project. Dongfeng Technology Group Co., Ltd., Dongguan Dongfeng
Technology Development Co., Ltd., Dongguan Zhongxin Energy Technology Co., Ltd., Dongguan Olin New Materials Co., Ltd., Dongguan Haizhuo Energy Technology Co.,
Ltd., together with the guarantee of guarantee; the collateral: Guangdong ( 2017) Dongguan Real Property No. 0121786 Land Use Right and Above-ground Buildings; Pledge:
Dongguan Dongfeng Technology Development Co., Ltd. holds 100% equity of Dongguan Dongfeng Intelligent Technology Co., Ltd.
25.Share capital
Increase (+) and decrease (-) in this period
Items Opening Balance Issue new Reserves transfer to Closing Balance
Share bonus Other Sub-total
shares shares
1 limited shares
(1) shares held by government --- --- --- --- --- --- ---
(2) shares held by State-own
--- --- --- --- --- --- ---
Legal-person
(3) shares held by other domestic capital --- --- --- --- --- --- ---
Including: shares held by Legal person 23,147,309.00 --- --- --- --- --- 23,147,309.00
Shares held by natural person 221,652,691.00 --- --- --- --- --- 221,652,691.00
(4) shares held by foreign capital --- --- --- --- --- --- ---
Including: shares held by foreign Legal
--- --- --- --- --- --- ---
person
shares held by foreign nature
--- --- --- --- --- --- ---
person
(5) Other --- --- --- --- --- --- ---
51
Increase (+) and decrease (-) in this period
Items Opening Balance Issue new Reserves transfer to Closing Balance
Share bonus Other Sub-total
shares shares
Sub-total for limited shares 244,800,000.00 --- --- --- --- --- 244,800,000.00
2．Unlimited shares ---
(1) Ordinary shares in RMB --- --- --- --- --- --- ---
(2) Domestic listed foreign shares 461,520,000.00 --- --- --- --- --- 461,520,000.00
(3) Foreign listed foreign shares --- --- --- --- --- --- ---
(4) Other --- --- --- --- --- --- ---
Sub-total for unlimited shares 461,520,000.00 --- --- --- --- --- 461,520,000.00
Total 706,320,000.00 --- --- --- --- --- 706,320,000.00
51
26. Capital reserves
Increase in this Decrease in
Items Opening Balance Closing Balance
period this period
1.Capital premium (share capital premium) --- --- --- ---
(1) Capital from investors 397,808,090.32 --- --- 397,808,090.32
(2) Effect of business combination under the
--- --- --- ---
common control
Sub-total 397,808,090.32 --- --- 397,808,090.32
2.Other capital reserve* 65,873,219.23 --- --- 65,873,219.23
Total 463,681,309.55 --- --- 463,681,309.55
27. Treasury stock
Opening Increase in this Decrease in this Closing
Items
Balance period period Balance
Equity-based Incentive
--- 19,718,613.55 --- 19,718,613.55
Repurchase
Total --- 19,718,613.55 --- 19,718,613.55
28. Surplus reserves
Increase in this
Items Opening Balance Decrease in this period Closing Balance
period
Statutory surplus reserves 76,791,550.17 --- --- 76,791,550.17
Total 76,791,550.17 --- --- 76,791,550.17
29. Retained profits
Withdrawal or allocation
Items Closing Balance
proportion
Opening balance of retained profits before
-882,864,082.85 ---
adjustments
Total opening balance of retained profits before
--- ---
adjustments (increase+, decrease -)
Opening balance of retained profits after adjustments -882,864,082.85 ---
Add: Net profit attributable to owners of the Company 7,383,835.76 ---
Less: Withdrawal of statutory surplus reserves --- 10%
Withdrawal of discretional surplus reserves --- ---
Dividend of common stock payable --- ---
Dividend of common stock transfer into share capital --- ---
Add: Other transfer --- ---
Less: surplus reserves for recovery of loss --- ---
Closing Balance -875,480,247.09 ---
56
30. Revenues and operating costs
(1) Revenues and operating costs
This period Last Period
Items
Income Cost Income Cost
Principal business 123,462,309.48 108,747,731.24 248,704,998.16 236,724,015.73
Other business 45,774.42 --- 1,366,864.91 459,123.94
Total 123,508,083.90 108,747,731.24 250,071,863.07 237,183,139.67
(2) Principal business income and cost (by industry)
This period Last Period
Industry
Income Cost Income Cost
Agriculture 72,510.07 108,219.97 43,700.16 193,734.40
Property management industry 4,582,079.48 4,818,262.48 3,855,595.87 4,964,668.31
Real Estate industry 118,807,719.93 103,821,248.79 244,805,702.13 231,565,613.02
Total 123,462,309.48 108,747,731.24 248,704,998.16 236,724,015.73
(3) Principal business income and cost (by products)
This period Last Period
Product
Income Cost Income Cost
Agriculture product 72,510.07 108,219.97 43,700.16 193,734.40
Heating and Property
4,582,079.48 4,818,262.48 3,855,595.87 4,964,668.31
management
Real Estate 118,807,719.93 103,821,248.79 244,805,702.13 231,565,613.02
Including: Hui Jing
118,807,719.93 103,821,248.79 244,805,702.13 231,565,613.02
Tian Di
Total 123,462,309.48 108,747,731.24 248,704,998.16 236,724,015.73
(4) Principal business income and cost (by district)
This period Last Period
District
Income Cost Income Cost
Chengde District 123,462,309.48 108,747,731.24 248,704,998.16 236,724,015.73
Total 123,462,309.48 108,747,731.24 248,704,998.16 236,724,015.73
(5) The operating income from the top five customers
Customer name This period Last Period
Huijing Tiandi 118,807,719.93 244,805,702.13
Total 118,807,719.93 244,805,702.13
57
31. Tax and surcharges
Items This Period Last Period
Business tax 547,780.45 9,120,014.46
Urban maintenance and construction tax 207,179.94 607,169.86
Education surcharge 129,234.81 364,301.93
Local education surcharge 77,945.15 242,867.96
Land VAT -2,214,613.09 -1,865,748.43
Property tax 109,230.51 90,831.37
Others 895,409.34 1,231,857.33
Total -247,832.89 9,791,294.48
.
32. Sales expenses, Administrative expenses, R&D expenses and financial expenses
(1) Sales expenses
Item This Period Last Period
Repair expense --- 196,990.00
Wages 89,350.00 ---
Advertise expense 1,200.00 148,130.00
Harbor expense --- 61,286.00
Product packing 4,902.12 162,064.81
Commission --- 13,848,419.45
Others 19,894.59 200.00
Total 115,346.71 14,417,090.26
(3) Administrative expenses
Item This Period Last Period
Wages 11,289,704.54 13,255,871.45
Intermediary fees 2,712,227.89 3,684,947.19
Business entertainment 4,503,880.70 4,067,254.25
Accumulated amortization 3,993,026.12 2,160,421.40
Travel expense 1,299,616.63 1,615,666.00
Office expense 723,349.13 928,976.58
Transportation 47,218.03 199,479.05
Low-valued consumption goods 111,693.84 35,015.42
58
Item This Period Last Period
Long-term deferred expenses 41,682.82 153,935.87
Repair charge 415,429.92 245,340.37
Material consumption 390,272.71 354,911.66
Rental fees 5,700.00 201,720.00
Insurance expenses 129,447.86 117,794.81
Residual premium 8,746.67 169,852.55
Others 3,564,651.61 2,361,185.01
Total 29,236,648.47 29,552,371.61
(3) R & D expenses
Item This Period Last Period
Wages 2,989,415.84 120,080.00
Fuel & power costs 15,191.25 ---
Material cost 305,017.96 4,809.69
Depreciation cost 131,417.67 ---
Others 1,307,810.14 ---
Total 4,748,852.86 124,889.69
(4) Financial expenses
Item This Period Last Period
Interest expense --- 1,617,172.91
Less: interest income 175,090.92 645,550.99
Exchange gain or loss -269,681.12 330,220.97
Bank charges 59,219.06 44,334.40
Total -385,552.98 1,346,177.29
33. Asset impairment loss
Item This Period Last Period
Provision for bad debt 108,706.75 367,061.18
Provision for inventory --- -3,960.15
Impairment of available for sale
339,366.05 6,113,728.80
financial assets
Total 448,072.80 6,476,829.83
59
34. Other income
（1）Details of other income
Sources of other income This Period Last Period
Government subsidies 2,896,903.64 ---
Total 2,896,903.64 ---
（2） Government Subsidies Included in Other Benefits
Asset-related/
Item This Period Last Period
Revenue-related
Subsidies for Renewable Energy Revenue-related
2,890,000.00 ---
Building Demonstration Projects
Employment subsidy 6,000.00 --- Revenue-related
VAT reduction and exemption 903.64 --- Revenue-related
Total 2,896,903.64 --- ---
35．Government subsidy
（1）Basic situation of government subsidies
Amount included in
Type This Period current profit and Remarks
loss
Government subsidies that include See note 37 in Note 5
2,896,903.64 2,896,903.64
other income for details.
Total 2,896,903.64 2,896,903.64 ---
36. Investment income
（1）Details of investment income
Item This Period Last Period
1.Financial assets --- ---
Investment income from bank financial
1,144,246.03 2,482,382.07
products in this period
2.Long-term equity --- ---
Long-term equity (investment income
--- -980,509.06
accounted by equity)
3.Investment income arising from
18,501,800.54 ---
disposal of long-term equity investments
Total 19,646,046.57 1,501,873.01
37.Asset disposal income
Items This period Last period
Income arising from disposal of
-18,684.68 -304,370.98
biological assets
Income arising from disposal of
--- 17,692,850.63
intangible assets
Income arising from disposal of
4,544,930.26 47,671,503.99
fixed assets
Total 4,526,245.58 65,059,983.64
38.Non-operating gains
60
Recorded in the amount of the
Item This Period Last Period non-recurring gains and losses
this period
Other 3,125.00 24,633.24 3,125.00
Total 3,125.00 24,633.24 3,125.00
39.Non-operating expenses
Recorded in the amount of
Item This period Last period the non-recurring gains
and losses in this period
Disposal of non-current assets 259.98 43,889.51 259.98
Donations contributed 384,980.00 700,000.00 384,980.00
Including: Public welfare
--- --- ---
donations contributed
Compensation and Tax penalty 2,373.71 32,943.78 2,373.71
Compensation --- 30,000.00 ---
Other 86,330.73 16,529.25 86,330.73
Total 473,944.42 823,362.54 473,944.42
40.Income tax expense
(1) Lists of income tax expense
Item This Period Last Period
Current income tax calculated based on tax 110,309.68 12,906,984.10
law and relevant rules
Deferred income tax adjustment 775,645.41 ---
Total 885,955.09 12,906,984.10
(2) Adjustment process of accounting profit and income tax expense
Item This period
Total profits 7,443,194.06
Current income tax expense accounted by tax and relevant regulations 1,860,798.52
Influence of different tax rate suitable to subsidiary -44,438.79
Influence of income tax adjustment for the internal transaction ---
Impact from tax preferential rate in certain subsidiaries ---
Influence of income tax before adjustment 110,309.68
Influence of non taxable income ---
Influence of not deductible costs, expenses and losses 659,772.96
Influence of deductible losses of deferred income tax assets derecognized used in
-4,756,971.25
previous period
61
Influence of deductible temporary difference or deductible losses of deferred
3,056,483.97
income tax assets derecognized in reporting period.
Income tax expense 885,955.09
41. Notes to the cash flow statement
(1)Other cash receive relevant from operating activities
Item This Period Last Period
Interest income 175,090.92 645,550.99
Intercourse funds 47,378,409.76 20,201,421.06
Subsidy income 2,896,000.00 ---
Other 65,681,669.90 2,997,789.75
Total 116,131,170.58 23,844,761.80
(2) Other cash paid relevant to operating activities
Item This Period Last Period
Expenditure 264,339.21 17,015,616.01
Donation expense 384,980.00 700,000.00
Intercourse funds 163,483.99 20,683,332.74
Penalty and late fee 2,373.71 32,943.78
Other expense 38,401.80 3,374,469.10
Total 853,578.71 41,806,361.63
(3)Other cash paid relevant to financing activities
Item This Period Last Period
Restricted currency fund changes --- 698,492.97
Repurchase stock funds 19,718,613.55 ---
Total 19,718,613.55 698,492.97
42. Supplementary information on cash flow statement
(1) Supplemental information for statement of cash flow
Supplemental information This Period Last Period
1.Adjustments to reconcile net profit to net cash
provided by operating activities:
Net profit 6,557,238.97 4,036,213.49
Add: impairment provision for assets 448,072.80 6,476,829.83
62
Supplemental information This Period Last Period
Depreciation of fixed assets, consumption &
depreciation of fuel and gas, depreciation of
productive biological assets 2,261,508.53 1,751,789.36
Amortization for intangible assets 1,970,099.34 747,346.80
Amortization for long-term prepayment 207,423.67 153,935.87
Loss on disposal of fixed assets, intangible assets
-4,526,245.58 -66,313,983.64
and other long-term assets
Loss upon rejection of fixed assets 259.98 43,889.51
Loss on variance of fair value --- ---
Finance cost --- ---
Loss in investment -19,646,046.57 -1,501,873.01
Decrease of deferred tax assets 775,645.41 ---
Increase of deferred tax liability --- ---
Decrease of inventories 83,068,268.34 107,315,235.57
Decrease of operating receivable account items -58,983,097.43 6,341,395.52
Increase of operating payable account items 22,432,921.85 -143,602,353.58
Other --- ---
Net cash flow from operating activities 34,566,049.31 -84,551,574.28
2 Significant investing and financing activities for
non-cash items
Liabilities capitalized --- ---
Convertible bonds payable mature in one year --- ---
Financing leased fixed assets --- ---
3. Net increase (decrease) for cash and cash
equivalents
Closing balance for cash 33,512,916.99 68,107,388.69
Less: opening balance for cash 68,107,388.69 126,970,834.83
Add: closing balance for cash equivalent --- ---
less：opening balance for cash equivalent --- ---
Net increase (decrease) for cash and cash
equivalents -34,594,471.70 -58,863,446.14
(2) Cash and cash equivalent
Item This Period Last Period
1.Cash 33,512,916.99 68,107,388.69
Including: Cash in hand 368,614.69 61,945.60
63
Item This Period Last Period
Cash at bank 33,144,302.30 68,045,443.09
Other cash and cash equivalents --- ---
2.Cash equivalent --- ---
Including: Bond matured within three months --- ---
3.Closing balance for cash and cash equivalents 33,512,916.99 68,107,388.69
Including: the use of restricted cash and cash
equivalents by the parent company or a group --- ---
subsidiary
Notes on the supplementary information of the cash flow statement:
The final balance of cash and cash equivalents in December 31, 2018 was RMB 33,512,916.99,
and the final balance of money funds was RMB 36,306,825.10, with a difference of RMB
2,793,908.11. It was mainly due to the existence of a housing mortgage deposit that could not be
freely changed within three months of the final balance of money and money. In 2017, it was the same.
VII. Consolidation scope change
(1) business combination under different control
1. Different control business combination occurred in the current period
Revenue
Basis for Net profit of
from the
Name of Equity Equity Equity Equity determining the
purchase purchaser
the acquisition acquisition acquisition acquisition the purchaser to
date to the end
purchaser point cost ratio (%)) way purchase the end of the
of the
date period
period
business
Haizhuo combination
2018-3-6 15,956,000.00 62.00 under 2018-3-6 *1 --- -465,527.38
Energy different
control
Note：
*1: The investment agreement has been approved by the board of directors, has undergone
industrial and commercial changes, and the equity investment has been paid 100%. In fact, the
financial and operating policies of the merged party have been controlled.
Note：
DongGuan HaiZhuo Energy Technology Co., Ltd. was established on September 15, 2015 with a
registered capital of RMB 25 million. On December 28, 2017, it signed a capital increase agreement
with Dongguan Dongfeng Technology Co., Ltd., increasing its registered capital from RMB 9.5 million
to RMB 25 million. Dongguan Hangda Venture Capital Co., Ltd. and Dongfeng Technology
Development agreed to increase the capital of DongGuan HaiZhuo Energy Technology Co., Ltd. with
64
RMB 15.956 million, of which RMB 15.5 million was used as capital for registered capital and RMB
0.456 million was recorded as capital reserve of DongGuan HaiZhuo Energy Technology Co., Ltd. On
March 06, 2018, Dongguan Dongfeng Technology Co., Ltd. invested RMB 15.5 million, accounting
for 62.00% of the registered capital.
2. Identified assets and liabilities of acquiree on the purchase date.
DongGuan HaiZhuo Energy Technology Co., Ltd.
Items Fair value at the date of Book value at the date of
purchase purchase
Current assets 25,267,549.36 25,267,549.36
Non-current assets 172,368.64 172,268.64
Less：current liabilities 106,167.76 106,167.76
Non-current liabilities --- ---
Net assets 25,333,750.24 25,333,650.24
Less ：Minority shareholders' equity 9,626,825.09 9,626,787.09
Net assets acquired 15,706,925.15 15,706,863.15
Current assets 106,361.24 106,360.82
Non-current assets 15,600,563.91 15,600,502.33
Net assets acquired 25,267,549.36 25,267,549.36
(2) business combination under common control
1. Common control business combination occurred in the current period
Income of the Net profit of the
Proportion of
Name of the combined party from combined party from
equity acquired in Combination
combined the beginning of the beginning of
business date
party current period to the current period to the
combination (%)
date of merger date of merger
Dongfeng
100.00 2016-4-7 --- ---
Power
Notes:
Dongfeng Power was established on April 7, 2016 by Tibet Dongsheng Investment Co., Ltd., and
its ultimate owner is Mr. Wang Dong, who is the company's largest shareholder, so it is under the same
control. The earliest time is April 7, 2016.
2.Combination cost
Dongfeng Power was established on April 7, 2016 with a registered capital of RMB 70 million.
On August 28, 2018, Dongguan Dongfeng Technology Co., Ltd. and Tibet Dongfeng Investment Co.,
Ltd. signed an equity transfer agreement, and the agreement price was RMB 0.00 to transfer 100%
equity. On December 25, 2018, Dongguan Dongfeng Technology Co., Ltd. signed a shareholder
transfer agreement with the company, and the agreement price was RMB 0.00 to transfer 100% equity.
3. Book value of assets and liabilities on the combination date
Items DongGuan DongFeng Power Co., Ltd.,
65
Items DongGuan DongFeng Power Co., Ltd.,
Combination date Last period
Other payables 500.00 500.00
Net assets -500.00 -500.00
Less ：Minority shareholders' equity --- ---
Net assets acquired -500.00 -500.00
(3) Disposal of subsidiaries
1. Single disposal of investment in subsidiaries and loss of control
The difference
between the
disposal price and
the net assets
Basis for share of the
Equity
Equity Equity Time of determining subsidiary at the
Name of disposal
disposal disposal loss of the point of level of
subsidiaries ratio
price way control loss of consolidated
(%)
control financial
statements
corresponding to
the disposal
investment
ChengDe
NanJiang Transfer of
22,639,500.00 100.00 sell 2018-8-30 18,328,070.03
Trading Co., control
Ltd
continued：
The amount of
Determination other
Book
Proportion Fair value Re-measure method and comprehensive
value of
of of the the gain or main income related
the
remaining remaining loss arising assumption of to the equity
Name of remaining
equity on equity on from the the fair value investment of
subsidiaries equity on
the date of the date of remaining of remaining original
the date of
loss of loss of equity at equity on the company
loss of
control (%) control fair value date of loss of transferred into
control
control investment
gains and losses
ChengDe
NanJiang
--- --- --- --- --- ---
Trading Co.,
Ltd
Note：
The company transferred the 100% equity of Chengde Nanjiang Trading Co., Ltd. held by the
company to Chengde Chengjin Trading Co., Ltd. on August 14, 2018. Therefore, Chengde Nanjiang
Trading Co., Ltd. will no longer be included in the consolidated balance sheet. However, according to
the "Accounting Standards for Business Enterprises No. 33 - Consolidated Financial Statements": if the
parent company disposes of the subsidiary during the reporting period, it shall include the income,
expenses and profits of the subsidiary from the beginning of the period to the disposal date into the
consolidated income statement. Cash flows from the beginning of the subsidiary to the disposal date
66
are included in the consolidated cash flow statement. Therefore, the income, expenses and profits of
Chengde Nanjiang Trading Co., Ltd. from the beginning to the date of cancellation are still included in
the scope of consolidation.
VIII. Rights and interests in other parties
1.Rights and interests in subsidiary
(1)Organization of enterprise group
Main hareholding ratio
Name of Registered Acquisition
businesses Business nature (%)
subsidiary address method
land Directly Indirectly
ChengDe ChengDe Construction
Kefeng
County, County, project
Construction Co., 100 --- set up
HeBei HeBei management and
Ltd.
Province Province consulting
ChengDe ChengDe
NanJiang Asia
County, County, International
Investment Co., 100 --- set up
HeBei HeBei investment
Ltd.
Province Province
Production of
Chengde coarse cereals and
ChengDe ChengDe
Dongfeng edible fungus;
County, County,
ecological Planting of fruit、 --- 100 set up
HeBei HeBei
agriculture co., vegetable and
Province Province
Ltd. Chinese medical
herbs
Chengde ChengDe ChengDe
Dongfeng County, County, Investment of
100 --- set up
Investment Co., HeBei HeBei Industry
Ltd. Province Province
ChengDe ChengDe
Kefeng Trade Co., County, County,
Business trading 100 --- set up
Ltd. HeBei HeBei
Province Province
67
Main hareholding ratio
Name of Registered Acquisition
businesses Business nature (%)
subsidiary address method
land Directly Indirectly
Hangzhou Hangzhou Hangzhou Research,
Dongfeng Co., city,Zhejiang city,Zhejiang development of 100 -- set up
Ltd. Province Province technical services
Dongguan
Dongfenf Science New material
Dongguan Dongguan 70 --- set up
and Technology technology research
Co., Ltd.
Corporate
DongGuan Clean energy consolidation
DongFeng Power Dongguan Dongguan technology 100.00 --- under the
Co., Ltd. development same control
Nanjiang Science Production and
and Technology ChengDe ChengDe sales of inflatable --- 100 set up
Co., Ltd cysts and graphene
ChengDe KeFeng
Aerospace product
Aerospace
technology research
Technology ChengDe ChengDe 100 --- set up
and development,
Development Co.,
technical advice,
Ltd
Huijing property
Chengde Chengde Estate management --- 100 Set up
company Co., Ltd
Corporate
consolidation
Zhongchuangxin Research of new
Dongguan Dongguan --- 60.98 not under the
Energy Co., Ltd energy
same control
68
Main hareholding ratio
Name of Registered Acquisition
businesses Business nature (%)
subsidiary address method
land Directly Indirectly
Corporate
Dongguan
Technical research consolidation
Dongfeng
Dongguan Dongguan in the new realm of --- 100 under the
Intelligence Co.,
science same control
Ltd
Corporate
consolidation
Aolin New Nanotechnology
Dongguan Dongguan --- 62 not under the
Material Co., Ltd materials
same control
Corporate
DongGuan
Technical consolidation
HaiZhuo Energy
Dongguan Dongguan development of --- 62.00 not under the
Technology Co.,
new materials same control
Ltd.
（1）The shareholding ratio of the subsidiary is different from the proportion of voting
rights
This was not happened in the current year.
（2）Hold half or less of the voting rights but still control the investee
This was not happened in the current year.
（3）Basis for holding more than half of the voting rights but not controlling the invested
units
This was not happened in the current year.
（4）Basis for important structured subject control to be included in the scope of
consolidation
This was not happened in the current year.
（5）Determine the basis for the company to be an agent or a principal
This was not happened in the current year.
（6）Other statement：
*1. On October 9 2012, ChengDe NanJiang Investment Co., Ltd. was established and invested by
Chengde Rongyida Real Estate Development Co., Ltd. The registered capital was RMB 50,000,000.00
and RongYiDa accounted for 100% of NanJiang Investment’s equity. On December 21 2012,
RongYiDa transfer 100% of NanJiang Investment’s equity to the company at the price of RMB
50,000,000.00. After the transfer, the company held 100% of NanJiang Investment’s equity. On
69
January 6 2013, NanJiang increase share capital of NanJiang Investment by RMB 40,000,000.00. After
the increment, the registered capital of NanJiang Investment reach RMB 90,000,000.00..
*2. On October 24 2012, ChengDe NanJiang Ecological Agriculture Co., Ltd. established and
invested by ChengDe NanJiang Investment Co., Ltd. The registered capital was RMB 5,000,000.00 and
NanJiang Investment held 100% of Ecological Agriculture’s equity. On April 18 2013, NanJiang
Investment increase share capital of NanJiang Ecological Agriculture by RMB 5,000,000.00. After the
increment, the registered capital of NanJiang Ecological Agriculture reach RMB 10,000,000.00.
*3. On November 14, 2013, NanJiang Asia Investment Co., Ltd. (“NanJiang Asia”) was invested
by NanJiang, with the register capital of USD 20 million. Paid-in share capital is USD 797,538.34 and
the register place is Hong Kong.
*4. On January 24, 2013, Chengde Nanjiang Technology Co., Ltd. (“Nanjiang Technology”) was
invested by NanJiang and Morsh (NingBo) Technology Co., Ltd, with the register capital of RMB
50,000,000.00: NanJiang contribute RMB 45,000,000.00, accounting for 90% of the total share capital;
Morsh (NingBo) Technology contribute RMB 5,000,000.00, accounting for 10% of the total share
capital.
*5. On November 18, 2013, Chengde HuiJing property Co., Ltd (“HuiJing Property”) was
invested by NanJiang Investment, with the register capital of RMB 500,000.00. NanJiang Investment
contributes RMB 500,000.00, accounting for 100% of share capital.
*6. Dongfeng Power was established on April 7, 2016 by Tibet Dongsheng Investment Co., Ltd.
with a registered capital of RMB 70 million and actual capital contribution of RMB 0. On August 28,
2018, it signed an equity transfer agreement with Dongguan Dongfeng Technology to make it 100%.
The equity of company was transferred to Dongguan Dongfeng Technology for RMB0.00. On
December 25, 2018, Dongguan Dongfeng Technology transferred its 100% equity to the company at
RMB0.00. As of December 31, 2018, it has not actually invested.
*7. On September 21 2016, HangZhou HangFeng Technology Co., Ltd. established and invested
by ChengDe NanJiang Investment Co., Ltd. The registered capital was RMB 50 million with the actual
investment 30 million yuan..
*8. On December 12, 2016, Chengde KeFeng Aerospace Technology Development Co. Ltd.
Established, invested by ChengDe NanJiang Investment Co., Ltd. The registered capital was RMB 30
million. As of December 31, 2018, it has not actually invested.
*9. KeFeng Construction and KeFeng Trading is a new company established in March 6, 2017,
with the registered capital of 500 thousand yuan and 8 million 500 thousand yuan respectively, and
Dongfeng Technology Group contributed 100% of its registered capital.
*10. Dongguan Dongfeng Technology Co. Ltd. was established on August 17, 2017, the registered
capital of 100 million yuan, on September 2017 Dongfeng Technology Group invested RMB100
million , accounting for 100% of the registered capital.
*11. The Public Innovative Energy Co. Ltd. was established on July 4, 2017, with a registered
capital of RMB 24.6 million. In September 5, 2017, Dongguan DongFeng Technology Development
and Dongguan Airlines venture capital investment signed a capital increase agreement, the registered
capital increased from RMB 1 million to RMB 24.6 million, Dongguan DongFeng science and
technology development of RMB 15 million, with money, accounting for 60.98%. In October 24, 2017,
Dongguan DongFeng invested RMB 15 million in science and technology.
*12. Dongguan DongFeng Intelligence Co. Ltd. was set up on 14 February, 2017. The registered
capital was RMB 60 million. December 5, 2017, Dongguan science and technology development
70
and Dongguan Dong New Energy signed an agreement on equity transfer, the price of the agreement
was RMB 15 million, and the registered capital was paid RMB 45 million in December 27, 2017, and
the proportion of the stock was 100%.
*13. Aolin New Material Co. Ltd. was set up in October 23, 2015, with a registered capital of
RMB25 million. In December 4, 2017, it signed a capital increase agreement with Dongguan
DongFeng Technology. It increased the registered capital of 9 million 500 thousand yuan to 25 million
yuan before the increase of capital and expansion. The Dongguan Airlines venture Capital Co., Ltd.
And Dong Feng Technology Development agreed to increase the capital of new materials to the new
materials with 16 million 402 thousand and 500 yuan. Of which, 15 million 500 thousand yuan is
registered capital increase, and 902 thousand and 500 yuan is the capital surplus added to the new
material of Olin. In December 29, 2017, Dongguan DongFeng Technology invested 15 million 500
thousand yuan, accounting for 62% of the registered capital.
*14. Dongguan Haizhuo Energy Co., Ltd. was established on September 15, 2015 with a
registered capital of RMB 25 million. On December 28, 2017, it signed a capital increase agreement
with Dongguan Dongfeng Technology Co., Ltd., increasing its registered capital from RMB 9.5 million
to RMB 25 million. Dongguan Hangda Venture Capital Co., Ltd. and Dongfeng Technology
Development Co., Ltd agreed to increase the capital of Haizhuo Energy with RMB 15.956 million, of
which RMB 15.5 million was used as capital for registered capital and RMB 456,000 was recorded as
capital reserve for Haizhuo Energy Co., Ltd. On March 06, 2018, Dongguan Dongfeng Technology Co.,
Ltd invested RMB 155,000, accounting for 62.00% of the registered capital.
2. Change of owner’s equity share in subsidiaries and subsidiaries still under
control
Not Applicable.
3. Equity in joint ventures or associated enterprises
Important joint ventures or associated enterprises
Name of joint shareholding ratio Accounting
Main
ventures or (%)
business Registered place Business nature treatment
associated
place method
enterprises Directly Indirectly
Joint venture --- --- --- --- --- ---
Runhua Rural Water
(Tianjin)Water
Tianjin Tianjin International trade 30 --- equity
Saving Technology
Co., Ltd
IX. Related parties and related transaction
1. Relation of affiliated parties
（1）Controlling shareholder and ultimate controller
The company has no parent company. The related parties with controlling relationship of the
Company refer to Mr. Wang Dong, who held 29.49% equity of the Company.
71
（2）Subsidiary
See VIII-1-(1) - Organization of enterprise group.
（3） Joint ventures and associated enterprises
Name of related parties Relationship Organizational Code
Runhua Rural Water (Tianjin)
Joint venture 91120116679414567F
Water Saving Technology Co., Ltd
（4）Other related party:
Name of related parties Relationship
Runhua Rural Water Industrial development Co. The controller of Joint venture
MinFeng (ShanXi) Material industry chemical industry Co.Ltd The controller of Joint venture
Non-controlling shareholder of a
Dongguan Hangda Venture Capital Co., Ltd.
subsidiary of the company
2. Related transactions
（1）The subsidiaries which are under control in the consolidation ,its transaction with each
other and with parent company and have already been set off in consolidation scope.
（2）Related transaction regarding purchasing products and obtaining labor services
Not Applicable.
（3）Related transactions regarding selling goods and providing services
Not Applicable.
（4）Associated managed enterprise
Not Applicable.
（5）Related contract situation
Not Applicable.
（6）Associated rental condition
Company charter：
Lease fee is Lease fee
Type of
Lessor name confirmed in the confirmed in the
leased assets
current period. previous period
Dongguan Hangda Venture Factory and
1,268,486.50 ---
Capital Co., Ltd. dormitory
Total --- 1,268,486.50 ---
Notes：
Leasing factory: Dongguan Hangda Venture Capital Co., Ltd. leased to Dongguan Olin New
Materials Co., Ltd., Dongguan Haizhuo Energy Technology Co., Ltd., Dongguan Zhongchuang
New Energy Technology Co., Ltd. The factory is located in Dongguan Songshan Lake High-tech
Industrial Development Zone Industrial East No. 24, Modern Enterprise Accelerator Unit No. 6
Building 101--102, with a total construction area of 6,399.60 square meters, of which Dongguan
Olin New Materials Co., Ltd. leased a building area of 3,226.95 square meters. Dongguan Haizhuo
Energy Technology Co., Ltd. leased construction area 2,008.20 square meters, Dongguan
Zhongchuang New Energy Technology Co., Ltd. leased a building area of 1,164.45 square meters;
of which the factory rent standard (including property management fee) was 36.00 yuan / m2 /
month (including tax),
Rental Dormitory: Dongguan Hangda Venture Capital Co., Ltd. leased to Dongguan Olin New
Materials Co., Ltd., Dongguan Haizhuo Energy Technology Co., Ltd., Dongguan Zhongchuang
72
New Energy Technology Co., Ltd. The dormitory is located in Dongshan Industrial Zone, Songshan
Lake, Dongguan City Road No. 24 Modern Enterprise Accelerator 8 dormitories on the 7th floor, a
total of 19 sets of single-family units. Among them, Dongguan Olin New Materials Co., Ltd. leased
8 sets of dormitory including 706, 707, 708, 709, 710, 711, 712, 713; Dongguan Haizhuo Energy
Technology Co., Ltd. leased dormitory 6 sets including 714, 715, 717, 718, Room 719： 720,
Dongguan Zhongchuang New Energy Technology Co., Ltd. leased 5 sets of dormitory including
701, 702, 703, 704, 705 rooms, dormitory rent standard (including property management fee) for a
single apartment type 620 yuan / set / month (including tax).
（7）Status of Associated Guarantee
The company as a guarantor
Whether
Guarantee Guarantee
Guarantee the guarantee
The secured party start date due date
amount has been
fulfilled
Dongguan Dongfeng
Intelligent Technology Co., 20,000.00 2018-7-2 2023-7-2 No
Ltd.
Total 20,000.00 --- --- ---
Notes：
In order to meet the operation and development needs of Dongguan Dongfeng Intelligent
Technology Co., Ltd. (hereinafter referred to as “Dongfeng Intelligent”), which is the holding
company of Dongfeng Technology Group, the application amount of Dongguan Bank’s Songshan
Lake Technology Sub-branch is not more than RMB 200 million. Yuan's comprehensive credit, with
a credit period of two years and a single-use period of no more than five years, is dedicated to the
construction of the Dongfeng New Energy Equipment Industrialization Project located on the east
side of Fuxing Road, Dongguan Ecological Park. And the company's controlling subsidiary
Dongguan Dongfeng Technology Development Co., Ltd. (hereinafter referred to as “Technology
Development”) holds the 100% equity of Dongfeng Intelligent as the pledge guarantee, and
Dongfeng Intelligent uses its own land and above-ground buildings as collateral guarantee.
Dongfeng Technology Group, Science and Technology Development, Dongguan Zhongchuang
New Energy Technology Co., Ltd., Dongguan Haizhuo Energy Technology Co., Ltd. and Dongguan
Aolin New Materials Co., Ltd. are jointly and severally guaranteed. The guarantee period is 5 years.
As of December 31, 2018, Dongfeng Intelligent obtained the long-term loan balance of Dongguan
Bank Co., Ltd. Songshan Lake Technology Subsidiary of RMB 101,710 million. The borrowing was
limited to the follow-up construction of Dongfeng New Energy Equipment Industrialization Project.
Dongfeng Technology Group Co., Ltd., Dongguan Dongfeng Technology Development Co., Ltd.,
Dongguan Zhongchuang New Energy Technology Co., Ltd., Dongguan Aolin New Materials Co.,
Ltd., Dongguan Haizhuo Energy Technology Co., Ltd., together with the guarantee of guarantee; the
collateral: Guangdong ( 2017) Dongguan Real Property No. 0121786 Land Use Right and
Above-ground Buildings; Pledge: Dongguan Dongfeng Technology Development Co., Ltd. holds
100% equity of Dongguan Dongfeng Intelligent Technology Co., Ltd.
（8）Inter-bank lending of affiliated parties
Not Applicable.
（9）Important related transactions with joint investments
Not Applicable.
73
（10）Re-numeration for key management personnel
Not Applicable.
（11）Key management personnel compensation Unit: RMB 10,000
Item name This period Last period
Key management personnel compensation 221.56 181.60
（12）Accounts receivable from related parties
a. Receivables
Not Applicable.
b. payables
Not Applicable.
X. Commitments and contingencies
1.Important commitments
Not Applicable.
2.Important contingencies existing on the balance sheet date
By the end of December 31, 2018, the closing balance of housing mortgage deposit, for the
purchaser of commercial houses, was RMB 70,740,000.00.
In addition to the above contingencies, as at 31 December 2018 the company has no other material
contingencies that should be disclosed
XI. Events after the Balance Sheet Date
(1) Important non-adjusting matters
On March 13, 2019, at the 10th meeting of the 7th Board of Directors, the company plans to
increase the capital of Dongguan Dongfeng Technology Development Co., Ltd. by RMB 100,000,000
and increase the registered capital of Dongguan Dongfeng Technology from RMB 100,000,000 to
RMB 200,000,000, the company still holds 100% equity. As of the date of approval of the financial
report, the company has not actually increased its capital. As of December 31, 2018, the controlling
shareholder did not hold equity pledge.
Except for the events after the balance sheet date mentioned above, as of the date of approval of
the financial report, the company has no other matters that should disclose.
XII. Other Important Events
1.Business termination
Nanjing Trading termination items
Item
This period Last period
Income of Business termination --- 66,640,312.36
Expenses of Business termination 3,949,752.19 13,970,394.00
Profit of Business termination -3,949,752.19 52,669,918.36
74
Nanjing Trading termination items
Item
This period Last period
Taxes of Business termination 110,309.68 12,906,984.10
Net profit of Business termination -4,060,061.87 39,762,934.26
Including: Net profit of Business
-4,060,061.87 39,762,934.26
termination attributed to parent company
Profit and loss of Business termination --- ---
Income tax costs of Business termination --- ---
Business termination &Disposal net loss --- ---
Business termination &Disposal net loss
--- ---
attributed to parent company
cash flow of Profit and loss of Business
-96,600.88 -2,253,430.86
termination
Including: Net cash flow of operating
12,784,053.62 -14,558,880.64
activities
Net cash flow of investing
--- 21,305,449.78
activities
Net cash flow of financing
-12,880,654.50 -9,000,000.00
activities
XIII. Notes to Main Items of Financial Statements of Parent Company
1. Other receivable
Item Closing Balance Opening Balance
Other receivable 80,991,042.06 27,954,251.88
Total 80,991,042.06 27,954,251.88
(1)Disclosure of other receivables by category
Closing Balance
Book balance Bad debt provision
Categories
Ratio Ratio Book value
Amount Amount
（%） （%）
Other receivables of individual
account with significant amount
16,668,186.90 16.98 16,665,104.90 99.98 3,082.00
and accrued for provision for
bad debts
Other accounts receivable
withdrawn provision for bad
81,270,949.93 82.79 282,989.87 0.35 80,987,960.06
debts based on credit risk
feature combination
Combination 1: risk-free
77,635,291.98 79.08 --- --- 77,635,291.98
combination
Combination 2: Aging analysis
3,635,657.95 3.71 282,989.87 0.35 3,352,668.08
combination
Other receivables of individual
account with insignificant
229,787.72 0.23 229,787.72 100.00 ---
amount and accrued for
provision for bad debts
Total 98,168,924.55 100.00 17,177,882.49 17.50 80,991,042.06
75
Continue:
Opening Balance
Book balance Bad debt provision
Categories
Ratio Ratio Book value
Amount Amount
（%） （%）
Other receivables of individual
account with significant amount
17,782,439.90 38.66 17,686,906.90 99.46 95,533.00
and accrued for provision for
bad debts
Other accounts receivable
withdrawn provision for bad
27,989,554.17 60.84 130,835.29 0.47 27,858,718.88
debts based on credit risk
feature combination
Combination 1: risk-free
27,181,447.41 59.09 --- --- 27,181,447.41
combination
Combination 2: Aging analysis
808,106.76 1.75 130,835.29 677,271.47
combination
Other receivables of individual
account with insignificant
229,787.72 0.50 229,787.72 100.00 ---
amount and accrued for
provision for bad debts
Total 46,001,781.79 100.00 18,047,529.91 39.23 27,954,251.88
a. Other receivables which single amount is significant and bad debts reserve is withdrawn at
the end of the year.
Closing Balance
Unit Provision for Accruing
Receivables Reason
bad debts proportion（%）
Dongfeng Ecological Excepted
16,668,186.90 16,665,104.90 99.98
Agriculture irrecoverable
Total 16,668,186.90 16,665,104.90 --- ---
b. Other receivable with provisions of bad debts accrued by aging analysis method in the
portfolio
Closing Balance
Aging
Other receivables Provision for bad debts Accruing proportion (%)
Within 1 year 3,499,589.52 174,979.38 5
1 to 2 years 17,447.43 3,489.49 20
2 to 3 years 28,200.00 14,100.00 50
Over 3 years 90,421.00 90,421.00 100
Total 3,635,657.95 282,989.87 7.78
c. Other receivable with provisions of bad debts accrued by other method in the portfolio
Closing Balance
Aging Provision for bad Accruing proportion
Other receivables
debts (%)
76
Closing Balance
Aging Provision for bad Accruing proportion
Other receivables
debts (%)
Nanjiang trading Co., Ltd 135,241.42 --- ---
Chengde County Taxation Bureau 4,942,346.42 --- ---
NanJiang Asia Investment Co., Ltd. 4,971.22 --- ---
Kefeng Construction Co., Ltd 112,000.00 --- ---
HuiJing Property company 7,380,732.92 --- ---
. ChengDe KeFeng Aerospace Technology
60,000.00 --- ---
Development Co. Ltd
DongGuan DongFeng Technolgy Co., Ltd. 65,000,000.00 --- ---
Total 77,635,291.98 --- ---
Notes for determining the basis of the portfolio:
In the portfolio, the provision for bad debts in other methods is RMB 0.00, mainly considering
that the expected unrecoverable risk is extremely low.
d.Other receivables of individual account with insignificant amount and accrued for
provision for bad debts at the end of the year
Accruing
Accounts Receivable Book Amount Bad debt provision proportion( Reasons for Accrual
%)
Qizhong Yan 70,000.00 70,000.00 100.00 Expected irrecoverable
Zifei Wang 61,360.00 61,360.00 100 Expected irrecoverable
Cheng Sun 10,800.00 10,800.00 100 Expected irrecoverable
Fangyan Lv 5,157.10 5,157.10 100 Expected irrecoverable
Beijing Jufangbian
10,080.00 10,080.00 100 Expected irrecoverable
Technology Co., Ltd.
Tsinghua University 100.00 100.00 100 Expected irrecoverable
Xiashu Wang 72,290.62 72,290.62 100 Expected irrecoverable
Total 229,787.72 229,787.72 100.00 ---
(2) Provision for bad debts withdrawn and returned back (taken back) in this year
Provision for bad debts extract in this year is RMB152,154.58, bad debts reserve returned back or
taken back in this year is RMB1,021,802.00.
(3) No other receivables were actually written off during the reporting period.
(4) Classification of other receivables by nature
77
Book balance at the end of the Book balance at the beginning of
Fund nature
year the year
Intercourse fund 89,225,891.04 44,963,887.31
Employees deposit 1,399,398.05 800,332.72
Refundable land value added tax 4,942,346.42 ---
Others 2,601,289.04 237,561.76
Total 98,168,924.55 46,001,781.79
(5)The top five other accounts receivable
Proportion in total
Year-end balance
year-end balance of
Debtors Ranking Fund nature Ending balance Aging of provision for
other receivables
bad debts
(%)
Dongguan Kefeng
Science and Technology Intercourse fund 65,000,000.00 Within 1 year, 66.21 ---
Co., Ltd.
ChengDe NanJiang Within 1
Ecological Agriculture Intercourse fund 16,668,186.90 year,1-2years,2-3 16.98 16,665,104.90
Co., Ltd. years
Within 1
HuiJing Property Co.,
Intercourse fund 7,380,732.92 year,1-2years,2-3 7.52 ---
Ltd.
years
Chengde County
Intercourse fund 4,942,346.42 Within 1 year 5.03 ---
Taxation Bureau
Chengde Liyuan
Investment Consulting Intercourse fund 1,776,513.60 Within 1 year 1.81 ---
Co., Ltd.
Total --- 95,767,779.84 --- 97.56 16,665,104.90
(6) There was no other receivables which are in termination due to the transfer of financial
assets.
(7) There was no amount of assets and liabilities that are formed by the transfer of other
receivables and the continued involvement.
2. Long-term equity investments
opening balance closing balance
Nature Bad debt Bad debt
Book balance Book value Book balance Book value
provision provision
Subsidiaries 272,803,036.40 --- 272,803,036.40 248,114,466.37 --- 248,114,466.37
Joint
venture/affiliated 9,170,370.00 9,170,370.00 --- 9,170,370.00 9,170,370.00 ---
concern
Total 281,973,406.40 9,170,370.00 272,803,036.40 257,284,836.37 9,170,370.00 248,114,466.37
78
(1)Subsidiaries
Impairment Impairment in Stake Voting
Invested Accounting Initial Opening
Increase decrease Closing Balance accrued in this Closing ratio right
Company method investment cost Balance
period Balance (%) (%)
NanJiang Trading
Cost methods 5,311,429.97 5,311,429.97 --- 5,311,429.97 -- --- --- --- ---
Company
NanJiang
Cost methods 90,000,000.00 90,000,000.00 --- --- 90,000,000.00 --- --- 100.00 100.00
Investment
NanJiang Asia Cost methods 5,000,166.64 5,000,166.64 --- --- 5,000,166.64 --- --- 100.00 100.00
HangZhou
Cost methods 30,000,000.00 30,000,000.00 --- --- 30,000,000.00 --- --- 100.00 100.00
DongFeng
Kefeng Trading
Cost methods 45,147,154.77 45,147,154.77 --- --- 45,147,154.77 --- --- 100.00 100.00
Company
Kefeng
Construction Cost methods 2,655,714.99 2,655,714.99 --- --- 2,655,714.99 --- --- 100.00 100.00
Company
Dongguan
Dongfeng
Cost methods 70,000,000.00 70,000,000.00 30,000,000.00 --- 100,000,000.00 --- --- 100.00 100.00
Science and
Technology
Dongguan
Dongfeng Cost methods --- --- --- --- --- --- --- 100.00 100.00
Power
Total 278,114,466.37 248,114,466.37 30,000,000.00 5,311,429.97 272,803,036.40 --- --- --- ---
79
(2) long-term equity investments of Joint venture/affiliated concern.
Changes in the current period
Investment unit Opening Balance Confirmation of equity Other comprehensive
Additional investment Reduced investment
method income adjustments
Joint venture
--- --- --- --- --- ---
Sub Total --- --- --- --- ---
Associates
Runhua Agriculture Water 9,170,370.00 --- --- --- ---
Sub total 9,170,370.00 --- --- --- ---
Total 9,170,370.00 --- --- --- ---
Changes in the current period
Closing balance of
Investment unit Allowance for Closing balance impairment
Changes in other Statement of cash
depreciation Other allowances
equity dividends&profit
reserves
Joint venture
--- --- --- --- --- --- ---
Sub Total
Associates
Runhua Agriculture Water --- --- --- --- 9,170,370.00 9,170,370.00
Sub Total --- --- --- --- 9,170,370.00 9,170,370.00
Total --- --- --- --- 9,170,370.00 9,170,370.00
80
3. Revenues and operating costs
(1) Classification of Revenues and operating costs
This period Last Period
Items
Income Cost Income Cost
Principal business 118,807,719.93 103,821,248.79 244,805,702.13 231,565,613.02
Other business 2,264,150.96 --- 8,002,407.74 55,952.94
Total 121,071,870.89 103,821,248.79 252,808,109.87 231,621,565.96
(2) Principal business income and cost (by industry)
This period Last Period
Industry
Income Cost Income Cost
Real Estate industry 118,807,719.93 103,821,248.79 244,805,702.13 231,565,613.02
Total 118,807,719.93 103,821,248.79 244,805,702.13 231,565,613.02
(3) Principal business income and cost (by products)
This period Last Period
Product
Income Cost Income Cost
Hui Jing Tian Di 118,807,719.93 103,821,248.79 244,805,702.13 231,565,613.02
Total 118,807,719.93 103,821,248.79 244,805,702.13 231,565,613.02
(4) Principal business income and cost (by district)
This period Last Period
District
Income Cost Income Cost
Chengde District 118,807,719.93 103,821,248.79 244,805,702.13 231,565,613.02
Total 118,807,719.93 103,821,248.79 244,805,702.13 231,565,613.02
(5) The operating income from the top five customers
Customer name This period Last Period
Hui Jing Tian Di 118,807,719.93 244,805,702.13
Total 118,807,719.93 244,805,702.13
4. Investment Income
1、Details of investment income
Item This period Last period
Investment income on long-term stockholder’s equity 17,328,070.03 ---
Long-term equity (investment income accounted by ---
36,240,654.50
cost)
Investment income from bank financial products 204,560.53 ---
Total 53,773,285.06 ---
81
XIV. Supplemental information
1. Current non-recurring gains and losses
Items This period Notes
1 Losses/gains on disposal of non-current assets 4,526,245.58 ---
2. Government subsidies included in the current profits and
losses (government subsidies which are closely related to the
2,896,000.00 ---
Company’s business and received at national statutory
standard and amount are excluded)
3. Gains or loss from delegation investment --- ---
4. Except for the effective hedging business related to the
normal business of the company, the gains and losses from
Income of
changes in fair value arising from the holding of trading
1,144,246.03 financial
financial assets and trading financial liabilities, as well as the
products
disposal of trading financial assets, trading financial liabilities
and available-for-sale financial assets Investment income
5.Gains or loss from the contingency irrelevant with normal
--- ---
operation
6.Other non-operating revenue and expense -470,819.42 ---
Disposal
7. Other non-recurring gains and losses 18,501,800.54
subsidiary
8. Effect of income tax on non-recurring losses and gains 6,649,368.19 ---
Total 19,948,104.54 ---
Notes: All non-recurring items are disclosed before taxation.
2. Return on equity and earnings per share
Earnings per share
Weighted average of
Profit in the reporting period
Return on equity（%） Basic earnings Diluted earnings
per share per share
Net profit attributable to shareholders holding
2.01 0.01 0.01
ordinary shares of the Company
Net profit attributable to shareholders holding
ordinary shares of the Company after -3.42 -0.02 -0.02
deducting non-recurring gains and losses
3. Description of abnormal situation and cause of main accounting statement items
Variable
Closing Opening
Item interest Reason
Balance Balance
rate、%、
82
Variable
Closing Opening
Item interest Reason
Balance Balance
rate、%、
Mainly due to the decrease in prepayments
Monetary funds 36,306,825.10 74,805,209.06 -51.47
in the current period.
Accounts Mainly due to the advance payment of new
62,449,793.03 183,595.06 33,914.96
receivable projects in the current period
Advance Mainly due to the decrease in current
8,588,597.44 58,740,204.94 -85.38
payment transactions
Mainly due to the development of products
Inventory 151,585,557.50 234,653,825.84 -35.40
in the current period
Mainly due to the purchase of fixed assets in
Fixed assets 17,302,279.65 9,674,396.99 78.85
the current period
Construction in Mainly due to new construction in progress
101,650,833.16 2,267,164.04 43.84
process during the period
Productive Mainly due to the purchase of productive
121,437.50 17,971.39 575.73
biological assets biological assets in the current period
Development Mainly due to new development projects in
13,346,410.47 3,513,561.56 279.85
expenditure this period
Other
Mainly due to the increase in prepaid
non-current 120,392,369.00 10,427,021.55 1054.62
engineering funds
assets
Mainly due to the reduction of the amount
Trade payable 6,668,789.67 15,487,833.06 -56.94
payable for the project in the current period
Advance Mainly due to the decrease in sales of
16,269,319.99 64,165,709.37 -74.65
payment properties in the current period
Payroll payable Mainly due to the reduction of employees in
Payroll 981,089.59 2,201,668.93 -55.44
the current period
Mainly due to the disposal of land for
Taxes payable 921,967.58 13,171,059.13 -93.00
income tax in the current period
Mainly due to the increase in current
Other payable 118,570,218.85 25,952,193.34 356.88
payments
Operating Mainly due to the decrease in sales of
123,508,083.90 250,071,863.07 -50.61
income properties in the current period
Taxes and Mainly due to the tax refund for land
-247,832.89 9,791,294.48 -102.53
surcharges value-added tax in the current period
Mainly due to no advance sales agent fees in
Sales cost 115,346.71 14,417,090.26 -99.20
this period
Mainly due to non-interest expenses in the
Financial cost -385,552.98 1,346,177.29 -128.64
current period
Investment Mainly due to the receipt of dividends and
19,646,046.57 1,501,873.01 1208.10
income disposal of subsidiaries in the current period
income
83
Variable
Closing Opening
Item interest Reason
Balance Balance
rate、%、
Mainly due to the reduction of disposal of
Asset disposal
4,526,245.58 65,059,983.64 -93.04 fixed assets and intangible assets in the
income
current period.
Mainly due to the payment of income tax on
Income tax costs 110,309.68 12,906,984.10 -99.15
the disposal of assets in the previous period
Dongfeng Sci-Tech Group CO., LTD.
(Official seal)
April 11, 2019
84
