东方财富网 > 数据中心 > 公告大全 > 深华发A公告一览
深华发A(000020)公告正文

深华发B:2017年半年度报告(英文版) 查看PDF原文

公告日期:2017年08月29日
SHENZHENZHONGHENGHUAFACO.,LTD. SEMI-ANNUALREPORT2017 August2017 SectionI.ImportantNotice,ContentsandParaphrase BoardofDirectors,SupervisoryCommittee,alldirectors,supervisorsandsenior executivesofShenzhenZhonghengHuafa Co.,Ltd. (hereinafter referredtoas the Company) hereby confirm that there are no any fictitious statements, misleadingstatements,orimportantomissionscarried inthisreport, andshall take all responsibilities, individual and/orjoint, for the reality, accuracy and completionofthewholecontents. Li Zhongqiu, Principal of the Company, Yang Bin, person in charger of accounting works and Wu Aijie, person in charge of accounting organ (accounting principal) hereby confirm that the Financial Report of 2017 Semi-AnnualReportisauthentic,accurateandcomplete. AlldirectorsareattendedtheBoardMeetingforreportdeliberation. Concerningtheforward-lookingstatementswithfutureplanninginvolvedinthe Report,theydonotconstituteasubstantialcommitmentforinvestors.Majority investorsareadvisedtoexercisecautionofinvestmentrisks. Risks factors are being well-described in the Report, please found more in relevantcontent. The Company has no plan of cash dividends carried out, bonus issued and capitalizingofcommonreserveseither. Contents Semi-annualReport2017 ...... 1 SectionIImportantNoticeandParaphrase...... 2 SectionIICompanyProfileandMainFinnaicalIndexes...... 5 SectionIIISummaryofCompanyBusiness...... 8 SectionIVDiscussionandAnalysisofOperation...... 9 SectionVImportantEvents...... 15 SectionVIChangesinsharesandparticularaboutshareholders ...... 30 SectionVIIPreferredStock...... 34 SectionVIIIParticularsaboutDirectors,SupervisorsandSeniorExecutives ...... 35 SectionIXCorporateBonds...... 36 SectionXFinancialReport...... 37 SectionXIDocumentsAvailableforReference ...... 128 Paraphrase Items Refersto Contents Company,ShenHuafa ReferstoSHENZHENZHONGHENGHUAFACO.,LTD. HengfaTechnology ReferstoWuhanHengfaTechnologyCo.,Ltd. HuafaProperty ReferstoShenzhenZhonghengHuafaPropertyCo.,Ltd HuafaLease ReferstoShenzhenHuafaPropertyLeaseManagementCo.,Ltd HuafaTrade ReferstoWuhanZhonghengHuafaTradeCo.,Ltd. WuhanZhonghengNewScience&TechnologyIndustrialGroupCo., WuhanZhonghengGroup Refersto Ltd. HKYutian ReferstoHongKongYutianInternationalInvestmentCo.,Ltd. HengshengPhotoelectricity ReferstoWuhanHengshengPhotoelectricityIndustryCo.,Ltd. HengshengYutian ReferstoWuhanHengshengYutianIndustrialCo.,Ltd. YutianHenghua ReferstoShenzhenYutianHenghuaCo.,Ltd. HuafaHengtian ReferstoShenzhenHuafaHengtianCo.,Ltd. HuafaHengtai ReferstoShenzhenHuafaHengtaiCo.,Ltd. ShenzhenVanke ReferstoShenzhenVankeRealEstateCo.,Ltd. VankeGuangming ReferstoShenzhenVankeGuangmingRealEstateDevelopmentCo.,Ltd SectionIICompanyProfileandMainFinnaicalIndexes I.Companyprofile Shortformofthestock ShenHuafaA,ShenHuafaB Stockcode 000020,200020 Shortformofthestockafter N/A changed(ifapplicable) Stockexchangeforlisting ShenzhenStockExchange Name of the Company (in深圳中恒华发股份有限Company Chinese)Shortformof theCompany深华发(inChinese)ForeignnameoftheCompany SHENZHENZHONGHENGHUAFACO.,LTD.(ifapplicable)Abbr.oftheforeignname(ifN/A applicable)Legalrepresentative LiZhongqiuII.Person/Waytocontact SecretaryoftheBoard Rep.ofsecurityaffairsName YangBin NiuYuxiang 33/F,No.2BuildingofDachongBusiness 33/F,No.2BuildingofDachongBusinessContactadd. Center,NanshanDistrict,Shenzhen Center,NanshanDistrict,ShenzhenTel. 0755-86360220 0755-86360201Fax. 0755-86360206 0755-86360206E-mail Huafainvestor@126.com.cn Huafainvestor@126.com.cnIII.Others1.WayofcontactWhetherregistrationsaddress,officesaddressandcodesaswellaswebsiteandemailoftheCompanychangedinreportingperiodornot □Applicable√Notapplicable Registrationsaddress,officesaddressandcodesaswellaswebsiteandemailoftheCompanyhasnochangeinreportingperiod, foundmoredetailsinAnnualReport2016. 2.Informationdisclosureandpreparationplace Whetherinformationdisclosureandpreparationplacechangedinreportingperiodornot □Applicable√Notapplicable Thenewspaperappointedforinformationdisclosure,websiteforsemi-annualreportpublishappointedbyCSRCandpreparation placeforsemi-annualreporthavenochangeinreportingperiod,foundmoredetailsinAnnualReport2016 IV.Mainaccountingdataandfinancialindexes Whetherithasretroactiveadjustmentorre-statementonpreviousaccountingdataornot □Yes √No Currentperiod Sameperiodlastyear Changesoverlastyear(+,-) Operatingincome(RMB) 439,480,144.17 309,538,525.56 41.98% Netprofitattributabletoshareholdersof 2,146,472.00 7,272,956.22 -70.49% thelistedcompany(RMB) Netprofitattributabletoshareholdersof the listed company after deducting 1,477,201.29 6,182,473.52 -76.11% non-recurringgainsandlosses(RMB) Net cash flow arising from operating -35,397,366.92 -25,424,349.57 -39.23% activities(RMB)Basicearningspershare(RMB/Share) 0.0076 0.0257 -70.43%Dilutedearningspershare(RMB/Share) 0.0076 0.0257 -70.43%ReturnonEquity 0.67% 2.31% -1.64% Changesoverperiod-endof Period-end Period-endoflastyear lastyear(+,-)Totalassets(RMB) 683,400,353.73 632,475,542.40 8.05%Netassetsattributable toshareholderof 321,845,040.63 319,698,568.63 0.67%listedcompany(RMB)V.DifferenceoftheaccountingdataunderaccountingrulesinandoutofChina1.Differenceofthenetprofitandnetassetsdisclosedinfinancialreport,underbothIAS(InternationalAccountingStandards)andChineseGAAP(GenerallyAcceptedAccountingPrinciples)□Applicable√NotapplicableTheCompanyhadnodifferenceofthenetprofitornetassetsdisclosedinfinancialreport,undereitherIAS(InternationalAccountingStandards)orChineseGAAP(GenerallyAcceptedAccountingPrinciples)intheperiod.2.Differenceofthenetprofitandnetassetsdisclosedinfinancialreport,underbothforeignaccounting rulesandChineseGAAP(GenerallyAcceptedAccountingPrinciples) □Applicable√Notapplicable TheCompanyhadnodifferenceofthenetprofitornetassetsdisclosedinfinancialreport,undereitherforeignaccountingrulesor ChineseGAAP(GenerallyAcceptedAccountingPrinciples)intheperiod. VI.Itemsandamountsofextraordinaryprofit(gains)/loss √Applicable□ Notapplicable Item Amount Note Gains/lossesfromthedisposalofnon-currentasset(includingthe -33,321.94 write-offthataccruedforimpairmentofassets) Governmental subsidyreckonedintocurrentgains/losses(not includingthesubsidyenjoyedinquotaorrationaccordingto standards, whichare closely relevanttoenterprise’s 802,269.68 nationalbusiness)Othernon-operatingincomeandexpenditureexceptforthe123,413.20 aforementioneditems Less:Impactonincometax 223,090.23 Total 669,270.71 -- Concerningtheextraordinaryprofit(gain)/lossdefinedbyQ&AAnnouncementNo.1onInformationDisclosureforCompanies OfferingTheirSecuritiestothePublic---ExtraordinaryProfit/loss,andtheitemsdefinedasrecurringprofit(gain)/lossaccordingto thelistsofextraordinaryprofit(gain)/lossinQ&AAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheir SecuritiestothePublic---ExtraordinaryProfit/loss,explainreasons □Applicable √Notapplicable Inreportingperiod,theCompanyhasnoparticularaboutitemsdefinedasrecurringprofit(gain)/lossaccordingtothelistsof extraordinaryprofit(gain)/lossinQ&AAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheirSecuritiesto thePublic---ExtraordinaryProfit/loss SectionIIISummaryofCompanyBusiness I.Mainbusinessesofthecompanyinthereportingperiod Whetherthecompanyneedstocomplywiththedisclosurerequirementsoftheparticularindustry No Afteryearsofdevelopment,theCompanyhasgraduallyformedtwomainbusinessesinindustrialproductionand property management. Among them, the industrial production includes injection molding, foam pieces (light-weightpackagingmaterials),andliquidcrystaldisplaybusiness.IndustrybusinessoftheCompanymainly referstothesupportingproductsandserviceprovidedforhomeapplianceindustry;andpropertymanagement businessismainlytheleaseofitsownproperty. II.Majorchangesinmainassets 1.Majorchangesinmainassets Majorassets Noteofmajorchanges Equityassets N/A Fixedassets N/A Intangibleassets N/A Constructioninprogress N/A 2.Mainoverseasassets □Applicable√Notapplicable III.Corecompetitivenessanalysis Whetherthecompanyneedstocomplywiththedisclosurerequirementsoftheparticularindustry No AllindustriallandofthecompanylocatedinShenzhenareincludedinthefirst-batchplanof2010Shenzhen urbanrenewalunitplanning,inthefuture,thedevelopmentandmanagementofitsownlandresourceswill becomethecompany'slong-termandstablesourceofincomeforitsprogressivedevelopmentandthenewprofits growthpoint. SectionIVDiscussionandAnalysisofOperation 1.Introduction Inthefirsthalfof2017,thedomesticapplianceindustrygrewto someextentbutwaslackofpower,asthe traditionalmanufacturingindustry,theproductionandassemblyofliquidcrystaldisplay,injectionmoldingand foampartshavealreadyenteredthematurestageandthedemandbecamesaturated.Duringthereportingperiod,the companyovercamedifficulties,positivelyrespondedandprotectedthesubstantialgrowthofoperatingincome,but theindustrialprofitmarginsweregreatlycompressed.Duringthereportingperiod,thecompanyachievedoperating incomeofRMB439,480,100,withayear-on-yeargrowthof41.98%;operatingprofitofRMB1,977,900,witha year-on-yeardecreaseof75.88%;netprofitofRMB2,146,700,withayear-on-yeardecreaseof70.49%. ●InjectionmoldingbusinessachievedoperatingincomeofRMB131,993,300inthefirsthalfoftheyear,withan increaseof45.01%onayear-on-yearbasis,thegrowthwasratherfast.Themainreasonsincludedtheincreasein newhigh-endproductsforcustomers,theriseinrawmaterialprices,there-stockingofairconditioningindustry, thepeaksellingseasonofrealestate,andthecontinuoushightemperatureweatherinthissummerandsoon. Undertheenvironmentofconstantincreaseinhumancosts,theinjectionmoldingdivisionimprovedthetechnical strengthandqualityaccordingtothemarketconditionsofhomeappliancesothattheordersincreasedrapidly; meanwhile,itstrengthenedtheinternalmanagement,introducedthecompetitionmechanism,paidattentiontothe stafftraining,andpracticallycompletedthestafflogisticsandsecuritywork,fullymobilizedtheenthusiasmofstaff, enhancedthequalityofstaff,andstrengthenedthesenseofbelongingofthestaff;thecompanydevelopedthe effectivequalitypreventionandcorrectivemeasures,strengthenedthefinemanagement,improvedtheproduct quality,andwonthetrustofcustomers,andenhancedthecompetitivenesstogainmoreproductshareswithhigh grossmargins. ●PolystyrenebusinessachievedoperatingincomeofRMB42,092,000inthefirsthalfoftheyear,withanincrease of36.59%onayear-on-yearbasis,thegrowthwasratherfast.Withtheseverechallengesofmoreintensemarket competitioninapplianceindustry,constantrisinginproductioncosts,greatcompressiononprofitmargins,the polystyrenedivisiontookthemarketdemandasguiding,activelycooperatedwithcustomerstoimproveproduct mix,constantlyexploredand innovated,constantly updateddevices, paidgreatattentionto eco-environment protectionwhileimprovingtheoutputand quality,strengthenedthesustainableproductionandmanagement philosophy,andformeditsownuniquecompetitiveadvantages.Inthefuture,thecompanywillfurtherimprovethe productquality,reducetherawmaterialloss,decreasetheproductioncosts,andensureitsownadvantagesand marketsharesbyinnovativedesignandproductoptimization. ●LCDbusinessachievedoperatingincomeofRMB244,178,800inthefirsthalfoftheyear,anincreaseof 48.41%onayear-on-yearbasis.Thefirstmainreasonwasthattheoverseasmarketordersincreasedinthefirst halfofthisyear,theshipmentstooverseasmarketsinthefirsthalfoftheyearaccountedformorethan20%ofthe overallshipments.Thesecondmainreasonwasthatthemarketdemandforlarge-sizeLCDindomesticinternet barsdeclinedalot,andmanybrandcustomerstransformedtotheindustrycustomersandsomelow-costsizesfor keepingthemarketshares,whichjustmettheproductsizesproducedbythefactory,resultingintheincreasein orders. ●PropertyleasingbusinessachievedoperatingincomeofRMB19,602,000,adecreaseof5.66%overthesame periodlastyear.Mostsitesofthecompany'sownpropertyHuafabuildinghavebeenrented,butHuafaBuildinghas beenincludedintheurbanrenewal,duetothetenancytermandotherfactors,thecompany'soverallrentalincome declinedcomparedwiththesameperiodoflastyear. II.Mainbusinessanalysis Seethe“I-Introduction”in“DiscussionandAnalysisofOperation” Changeofmainfinancialdataonay-o-ybasis InRMB Currentperiod Sameperiodlastyear y-o-ychanges Reasons Salesincreasedinthe Operatingrevenue 439,480,144.17 309,538,525.56 41.98% period Thepurchasingincreased Operatingcost 398,913,925.08 264,288,398.24 50.94% intheperiod Humanand transportationcosts Salesexpenses 7,363,051.86 5,283,735.71 39.35% increasedforthegrowth ofsales Administrativeexpenses 24,085,956.74 27,295,883.47 -11.76% Exchangeearnings Financialexpenses 4,914,890.46 2,312,379.13 112.55% declinedoverlastperiod Currentincometax Incometaxexpenses 723,746.91 2,384,214.46 -69.64%expensesdecreasedover sameperiodoflastyear Intercoursefunds Netcashflowfrom -35,397,366.92 -25,424,349.57 39.23%receivedfromenterprise operatingactivities declined Netcashflowfrom -3,903,702.73 -3,790,585.96 2.98% investmentactivities Netcashflowfrom Long-termloansarepaid 7,520,619.22 -544,260,367.28 101.38% financingactivities inlastperiod Netincreaseofcashand Long-termloansarepaid -32,170,554.64 -573,490,540.29 94.39% cashequivalent inlastperiod Majorchangesonprofitcompositionorprofitresourcesinreportingperiod □Applicable√Notapplicable Nomajorchangesonprofitcompositionorprofitresourcesoccurredinreportingperiod Constitutionofmainbusiness InRMB Operating Operatingcost Grossprofitratio Increase/decreaseIncrease/decreaseIncrease/decrease revenue ofoperating ofoperatingcost ofgrossprofit revenuey-o-y y-o-y ratioy-o-y Accordingtoindustries Display 244,178,831.40 238,599,523.48 2.28% 48.41% 53.60% -3.30% Plasticinjection 131,993,291.50 120,353,683.56 8.82% 45.01% 50.16% -3.13% hardwareFoam 42,091,942.44 37,498,945.77 10.91% 36.59% 45.78% -5.62%AccordingtoproductsDisplay 244,178,831.40 238,599,523.48 2.28% 48.41% 53.60% -3.30%Plasticinjection 131,993,291.50 120,353,683.56 8.82% 45.01% 50.16% -3.13%hardwareFoam 42,091,942.44 37,498,945.77 10.91% 36.59% 45.78% -5.62%AccordingtoregionHongKong 145,590,841.04 142,179,084.27 2.34% 28.19% 32.92% -3.48%CentralChina 272,673,224.30 254,273,068.54 6.75% 57.80% 64.85% -3.98%III.Analysisofthenon-mainbusiness□Applicable√NotapplicableIV.Assetsandliability1.Majorchangesofassetscomposition InRMB Period-end Period-endlastyearRatio Ratiointotal Ratiointotal Notesofmajorchanges Amount Amount changes assets assets Monetaryfund 66,352,098.10 9.71% 65,403,374.30 10.55% -0.84% Account 223,831,614.4 32.75%182,542,130.75 29.45% 3.30% receivable 5 Inventory 52,166,592.59 7.63% 37,519,314.34 6.05% 1.58% Investmentreal 53,277,285.84 7.80% 29,404,574.44 4.74% 3.06% estate Long-termequity 0.00% 0.00% 0.00% investmentFixassets 79,839,263.86 11.68%108,018,926.67 17.43% -5.75%Construction in 654,356.00 0.10% 654,356.00 0.11% -0.01%process 192,108,516.6Short-termloans 28.11% 85,012,392.00 13.72% 14.39%0 Long-termloans 0.00% 50,850,000.00 8.20% -8.20% 2.Assetsandliabilitymeasuredbyfairvalue □Applicable√Notapplicable 3.Assetsrightrestrictiontillendofreportingperiod WuhanZhonghengGroupCo.,Ltd.andShenzhenVankewereappliedforarbitrationduetothedisputecaseof“Contractforthe CooperativeOperationoftheOldProjectsatHuafaIndustrialPark,GongmingStreet,GuangmingNewDistrict”.OnOctober28, 2016,WuhanZhonghengGroupandthecompanyreceivedthe(2016)Yue03CaiBaoNo.51civilrulingpapersentbyShenzhen IntermediatePeople'sCourtofGuangdongProvince,whichruledtosealupandfreezethepropertyofRMB190millionunderthe nameoftherespondentsWuhanZhonghengGroupandthecompany.Seedetailsonthecompany’sannouncementpublishedat www.cninfo.com.cnonNovember1,2016. V.Investmentanalysis 1.Overallsituation □Applicable√Notapplicable 2.Themajorequityinvestmentobtainedinthereportingperiod □Applicable√Notapplicable 3.Themajornon-equityinvestmentdoinginthereportingperiod □Applicable√Notapplicable 4.Financialassetsinvestment (1)Securitiesinvestment □Applicable√Notapplicable TheCompanyhasnosecuritiesinvestmentinthePeriod. (2)Derivativeinvestment □Applicable√Notapplicable TheCompanyhasnoderivativesinvestmentinthePeriod. VI.Salesofmajorassetsandequity 1.Salesofmajorassets □Applicable√Notapplicable TheCompanyhadnosalesofmajorassetsinthereportingperiod. 2.Salesofmajorequity □Applicable√Notapplicable VII.Analysisofmainholdingcompanyandstock-jointlycompanies √Applicable□ Notapplicable Particularaboutmainsubsidiariesandstock-jointlycompaniesnetprofitover10% InRMB Company Main Register Operating Operating Type Industry Totalassets NetAssets Netprofit name business capital revenue profit R&D, production andsalesof Hengfa theproducts Production 181,643,11 516,043,80 213,759,36 419,071,092,143,271 Technology Subsidiary aswellas 2,239,178.76 sales 1.00 2.24 6.19 0.14 .75 Company import& export business etc. Leasingand Huafa Property managemen1,000,000.03,523,916.5 1,040,734.0 Property Subsidiary managemen -814,969.45 70,209.17 70,209.17 tofown 0 0 4 Company t property Leasingand Huafa Property managemen1,000,000.01,900,692.2 -5,026,990. Lease Subsidiary managemen tofown 0 0 71 Company t property Leasingand Huafa Property managemen1,000,000.0 Hengtian Subsidiary managemen 997,307.29 997,307.29 0.00 -776.57 -776.57 tofown 0 Company t property Huafa Property Leasingand 1,000,000.0 Hengtai Subsidiary managemenmanagemen 998,036.07 998,036.07 0.00 -775.94 -775.94 0 Company t tofown property Particularaboutsubsidiariesobtainedordisposedinreportperiod □Applicable√Notapplicable ExplanationVIII.StructuredvehiclecontrolledbytheCompany□Applicable√NotapplicableIX.PredictionofbusinessperformancefromJanuary–September2017Estimationonaccumulativenetprofitfromthebeginningoftheyeartotheendofnextreportperiodtobelossprobablyorthewarningofitsmaterialchangecomparedwiththecorrespondingperiodofthelastyearandexplanationonreason□Applicable√NotapplicableX.Risksandcountermeasures1.Operationalrisksofindustrialbusiness:industrialrestructuring,fluctuationsinrawmaterialprices,declineinmarketdemand,andfrustrationofnewproductpromotion.Countermeasures:continuetoopenupthemarket,maintaintheexistingcustomers, positivelydevelopnewcustomers,andcontinuetoimproveproductionefficiency;2.Financialrisks:largedemandsforfunds,substantialincreaseordecreaseinfinancialcostscausedbyexchangeratefluctuations,andbankcreditconstraintscausedbychangesinfinancialcostsandsoon.Countermeasures:paycloseattentiontomacroeconomicpolicytrends,activelyexpandthefinancingchannels,establishavirtuouscirclemechanismforfunds,improvetheserviceefficiency,andusefinancialinstrumentstoavoidexchangeraterisks. SectionV.ImportantEvents I. In the report period, the Company held annual shareholders’ general meeting and extraordinaryshareholders’generalmeeting 1.AnnualShareholders’GeneralMeetinginthereportperiod Ratioofinvestor Sessionofmeeting Type Date Dateofdisclosure Indexofdisclosure participation http://www.cninfo.co m.cn/cninfo-new/dis AnnualGeneral closure/szse_main/b AGM 0.03%2017-05-16 2017-05-17 Meetingof2016 ulletin_detail/true/12 03526132announce Time=2017-05-17 2.Requestforextraordinarygeneralmeetingbypreferredstockholderswhosevotingrightsrestore □Applicable √Notapplicable II.Profitdistributionplanintheperiodandcapitalizingofcommonreservesplan □Applicable√Notapplicable TheCompanyplansnottodistributecashdividendandbonusforthesemi-annual,andnocapitalizingofcommonreserveseither. III.Commitmentsthattheactualcontroller,shareholders,relatedparty,offerorandcommittedpartyas theCompanyetc.havefulfilledduringthereporting periodandhavenotyetfulfilledbytheend of reportingperiod □Applicable√Notapplicable TheCompanyhasnocommitmentsthattheactualcontroller,shareholders,relatedparty,offerorandcommittedpartyasthe Companyetc.havefulfilledduringthereportingperiodandhavenotyetfulfilledbytheendofreportingperiod IV.Appointmentandnon-reappointment(dismissal)ofCPA Whetherthefinancialreporthasbeenauditedornot □Yes √no Notaudited V.ExplanationfromBoardofDirectorsandSupervisoryCommitteefor“QualifiedOpinion” thatissuedbyCPA □Applicable√Notapplicable VI.ExplanationfromtheBoardfor“QualifiedOpinion”oflastyear’s □Applicable√Notapplicable VII.Bankruptcyreorganization □Applicable √Notapplicable NobankruptcyreorganizationfortheCompanyinreportingperiod VIII.Lawsuits Significantlawsuitsandarbitrations √Applicable □Notapplicable Amountof Advancesin Theresultsand Thebasicsituation money Executionofthe Predicted litigation effectsof Disclosure Disclosure oflitigation involved(in litigation liabilities(Y/N) (Arbitration litigation date index (Arbitration) 10thousand (Arbitration) ) (Arbitration) Yuan)InSeptember2016,WuhanZhonghengGroupCo.,Ltd.andtheCompanyhttp://www. andShenzhen cninfo.com. Vankewere cn/cninfo-n appliedfor Opena ew/disclosu arbitrationdueto court re/fulltext/b thedisputecaseof 46,460N WithoutjudgmentNotapplicable 2016-09-14 “Contractforthe sessionon ulletin_detai 13May217 l/true/12036 Cooperative71874anno Operationofthe unceTime= OldProjectsat 2017-07-01 HuafaIndustrial Park,Gongming Street,Guangming NewDistrict”. InMarch2016, In Courtdecisionas http://www. HuafaPropertysuit November Jifang Company cninfo.com. againstthe 2016,the has to paid cn/cninfo-n ShenzhenJifang Company 27.9023 million ew/disclosu InvestmentCo., 1,416.67N wininthe Yuan (includingImplementing 2016-11-08 re/szse_mai Ltd.forsite ruling rental, n/bulletin_d occupation, judgedby administrativefee, etail/true/12 withoutrental,and Shenzhen compensation, 02817664a utilitiespaidfora Arbitration penalty, lawyer’s nnounceTi long-time Commissionfeeandarbitration me=2016-1 fees)in total for 1-08 theCompany InMarch2016,the Companyand HuafaScience& Technologysuit againstthefollow companies,includingShenzhenHuayongxingEnvironmentalTechnologyCo., http://www.Ltd.,Shenzhen cninfo.com.Guangyong cn/cninfo-nBreadboardCo., Opena ew/disclosuLtd.,Shenzhen court re/szse_maiMingyiElectronic 1,964.92N sessionon WithoutjudgmentNotapplicable 2016-09-14 n/bulletin_dCo.,Ltd., 14February etail/true/12ShenzhenOuruilai 2017 02702423aTechnologyCo., nnounceTiLtdandShenzhen me=2016-0Kangzhengxin 9-1407:41TechnologyCo.,Ltd.,forarrearsofrent.andrefusetomovethesite,forciblyoccupiedswitchboardroomandotherpowerunitunderthenameoftheCompanyTheCompanyand http://www.HuafaPropertysuit cninfo.com.againstShenzhen cn/cninfo-nJifanginvestment ew/disclosuCo.,Ltd.and 73.38N 2017-2-13 WithoutjudgmentNotapplicable 2016-09-14 re/szse_maiShenzhen n/bulletin_dJianianhuaForeign etail/true/12TradeClothing 02702423aCityCo.,Ltd.for nnounceTirefusingtopaidthe me=2016-0rentsand 9-1407:41 administrativefee withoutjustified reasons nMarch2016,the Companyand http://www. HuafaPropertysuit cninfo.com. againstShenzhen cn/cninfo-n Huayongxing Opena ew/disclosuEnvironmental court Huayongxingand re/szse_maiTechnologyCo., 947.26N sessionon Yidaxinprosecute Notapplicable 2016-09-14 n/bulletin_dLtd.,andShenzhen 20March anappeal etail/true/12Yidaxin 2017 02702423aTechnologyCo.,nnounceTi Ltd.forcontract me=2016-0 violationand 9-1407:41 refusetomovethe site Courtdecisionas DaiQiangbohas topaidtherental andutilitiesof 327300Yuanto HuafaProperty; InDecember2015, The paidthelate theCompanyand Company rental,and HuafaPropertysuit wininthe surchargefor againstDai ruling overdueutilities Qiangboforarrears judgedby payment,whichis ofrentand People’s countedsince6 occupiedtheleased 68N Courtof November2015, Implementing premises,and Futian basedon327300 refusetomoveout; District, Yuan,tothe DaiZhijun,Xie Shenzhen paymentactual LihuaandDai Municipal paidinfullby50 Tianyibearjoint on13 Yuanper10000 liabilityfordebts Feb.2017 Yuanascharge ofDaiQiangbo everyday;paid 867800Yuanfor occupation charge;andcourt acceptancefee 12600Yuan. Otherlawsuits □Applicable√Notapplicable IX.Penaltyandrectification √Applicable□Notapplicable Typeof Conclusion(if Dateof Indexof Name Type Reason investigationand applicable) disclosure disclosure punishment I.Failtoconsider anddisclosethe related transactionswith thecontrolling shareholder’s http://www.cninf o.com.cn/cninfo- subsidiariesby new/disclosure/fu rule.II.Failto Denouncedon ShenHuafa Other Other 2017-01-06 lltext/bulletin_det disclosethefunds ShenHuafa ail/true/12029948 transactionsby 56announceTim rule.III.Failto e=2017-01-06 considerand disclosethe excessiverelated transactionsby rule. I.Failtoconsider anddisclosethe related transactionswith thecontrolling shareholder’s http://www.cninf o.com.cn/cninfo- subsidiariesby new/disclosure/fu rule.II.Failto LiZhongqiu Actualcontroller Other Denounced 2017-01-06 lltext/bulletin_det disclosethefunds ail/true/12029948 transactionsby 56announceTim rule.III.Failto e=2017-01-06 considerand disclosethe excessiverelated transactionsby rule. I.Failtoconsider Circulateanotice http://www.cninf ChenZhigang Director anddisclosethe Other 2017-01-06 o.com.cn/cninfo- ofcriticism related new/disclosure/fu transactionswith lltext/bulletin_det thecontrolling ail/true/12029948 shareholder’s 56announceTim subsidiariesby e=2017-01-06 rule.II.Failto disclosethefunds transactionsby rule.III.Failto considerand disclosethe excessiverelated transactionsby rule. I.Failtoconsider anddisclosethe related transactionswith thecontrolling shareholder’s http://www.cninf o.com.cn/cninfo- subsidiariesby new/disclosure/fu rule.II.Failto Circulateanotice TangGanyu Seniorexecutive Other 2017-01-06 lltext/bulletin_det disclosethefunds ofcriticism ail/true/12029948 transactionsby 56announceTim rule.III.Failto e=2017-01-06 considerand disclosethe excessiverelated transactionsby rule. I.Failtoconsider anddisclosethe related transactionswith thecontrolling http://www.cninf shareholder’s o.com.cn/cninfo- subsidiariesby new/disclosure/fu Circulateanotice WengXiaojue Seniorexecutive rule.II.Failto Other 2017-01-06 lltext/bulletin_det ofcriticism disclosethefunds ail/true/12029948 transactionsby 56announceTim rule.III.Failto e=2017-01-06 considerand disclosethe excessiverelated transactionsby rule. I.Failtoconsider anddisclosethe related transactionswith thecontrolling shareholder’s http://www.cninf o.com.cn/cninfo- subsidiariesby new/disclosure/fu rule.II.Failto Circulateanotice CaoLi Seniorexecutive Other 2017-01-06 lltext/bulletin_det disclosethefunds ofcriticism ail/true/12029948 transactionsby 56announceTim rule.III.Failto e=2017-01-06 considerand disclosethe excessiverelated transactionsby rule. X.Integrityofthecompanyanditscontrollingshareholdersandactualcontrollers □Applicable√Notapplicable XI.Implementationofthecompany’sstockincentiveplan,employeestockownershipplanor otheremployeeincentives □Applicable√Notapplicable TheCompanyhadnostockincentiveplan,employeestockownershipplanorotheremployeeincentiveinthereportingperiod. XII.Majorrelatedtransaction 1.Relatedtransactionwithroutineoperationconcerned √Applicable□Notapplicable Whether Trading Related overthe Content transacti Proporti limit ClearingAvailabl Index Typeof of Pricing Related on onin approveformfor Dateof RelatedRelation related related principl transacti amount similar approve related esimilar of party ship transacti d disclosu on transacti e onprice (in10 transacti d(in10 transacti market disclos on thousan ons limited on re dYuan) thousan price ure ornot dYuan) (Y/N) Sharing PurchasiSynchro http:// thesame Telegrap www.c HK Purchas ngLCDnized 10,807.510,807.5 2017-04 controlli 45.29% 27,748N hic -- ninfo.c Yutian e monitor withthe7 7 -25 ng transfer om.cn/ s market sharehol finalpa der ge/201 7-04-2 5/1203 37458 8.PDF The average market price refersto theprice ofsame specific ations whichis searched from Confirm through edwith the 1%of world http:// current famous www.c market professi Sharing ninfo.c average onal Hengshethesame Purchasi om.cn/ pricein Telegrapmarket ng controlliPurchas ngLCD 11,446.0 2017-04finalpa principl 5,228.695,228.69 21.91% No hic survey Photoeleng e monitor 5 -25 ge/201 e,and transfer compan ctricity sharehol s 7-04-2 referto y der 5/1203 both website 37458 their http://w 8.PDF bargaini ww.wits ng view.co power m recogniz ed authorit yinthe industry and LCD professi onal market survey compan y website http://w ww.wits view.co m http:// Accordi www.c ngtothe Sharing ninfo.c order Hengshethesame Purchasi om.cn/ price, Telegrap ng controlliPurchas ngLCD 2017-04finalpa deducte 817.59 817.59 3.43%7,283.85No hic -- Photoeleng e monitor -25 ge/201 d1Yuan transfer ctricity sharehol s 7-04-2 eachfor der 5/1203 operatio 37458 ncharge 8.PDF http:// www.c Accordi Sharing Sales ninfo.c ngtothe thesame LCD om.cn/ custome Telegrap HK controlli overall 40,650.8 2017-04finalpa Sales rsales 9,954.30 9,954.3 40.76% No hic -- Yutian ng monitor 2 -25 ge/201 order transfer sharehol machine 7-04-2 price der set 5/1203 sure 37458 8.PDF 26,808.1 87,128.7 Total -- -- -- -- -- -- -- -- 5 2 Detailofsalesreturnwithmajor N/A amountinvolved Inthereporting,HengfaTechnologypurchasedLCDfromHKYutianwith$15.7128million approximately, 39.28%of theannualamountpredicted at thebeginningof theyear; Reporttheactualimplementationof purchasedLCD fromHengsheng Photoelectricity with$7.7183million approximately, thedailyrelatedtransactionswhich 46.78%oftheannualamountpredictedatthebeginningoftheyear;purchasingLCDfrom were projected about their total Hengsheng Photoelectricitywithabout$1.2069million,11.49% oftheannualamount amountbytypesduringthereporting predictedatthebeginningoftheyear;soldLCDwholemachinetoHKYutianwith period(ifapplicable) $14.4845millionapproximately,25.87%oftheannualamountpredictedatthebeginningof theyear. Reasonsformajordifferences betweentradingpriceandmarket N/A referenceprice(ifapplicable) 2.Relatedtransactionsbyassetsacquisitionandsold □Applicable√Notapplicable Noabovementionedtransactionsoccurred 3.Mainrelatedtransactionsofmutualinvestmentoutside □Applicable √Notapplicable NomainrelatedtransactionsofmutualinvestmentoutsidefortheCompanyinreportingperiod. 4.Contactofrelatedcreditanddebt □Applicable √Notapplicable Nocontactofrelatedcreditanddebtintheperiod 5.Otherrelatedtransactions □Applicable √Notapplicable Thecompanyhadnoothersignificantrelatedtransactionsinreportingperiod. XIII.Non-operationalfundoccupationfromcontrollingshareholdersanditsrelatedparty □Applicable√Notapplicable Nonon-operationalfundoccupationfromcontrollingshareholdersanditsrelatedpartyinperiod. XIV.Significantcontractandimplementations 1.Trusteeship,contractandleasing (1)Trusteeship □Applicable √Notapplicable NotrusteeshipfortheCompanyinreportingperiod (2)Contract □Applicable √Notapplicable NocontractfortheCompanyinreportingperiod (3)Leasing □Applicable √Notapplicable NoleasingfortheCompanyinreportingperiod 2.Majorguarantees √Applicable□Notapplicable (1)Guarantees In10thousandYuan ParticularsabouttheexternalguaranteeoftheCompany(Barringtheguaranteeforsubsidiaries) Nameofthe Related Guarante Guarantee Actualdateof Actual Guarantee Guarantee Implemen Company Announce efor limit happening(Date guaranteelimit type term ted(Y/N) guaranteed ment related ofsigning disclosure party date agreement) (Y/N) N/A GuaranteeoftheCompanyandthesubsidiaries Related Guarante Actualdateof Nameofthe Announce efor Guarantee happening(Date Actual Guarantee Guarantee Implemen Company ment related limit ofsigning guaranteelimit type term ted(Y/N) guaranteed disclosure party agreement) date (Y/N) WuhanHengfa Jointliability TechnologyCo., 2017-04-25 30,000 5,560.85 1year N N guarantee Ltd. Total amount of actual Total amount of approving occurred guarantee for guarantee for subsidiaries in 30,000 8,267.9 subsidiaries in reportperiod reportperiod(B1) (B2) Total balance of actual Total amount of approved guarantee for subsidiaries at guaranteeforsubsidiariesatthe 30,000 5,560.85 the end of reporting period endofreportingperiod(B3) (B4) Guaranteeofthesubsidiariesforthesubsidiaries Related Actualdateof Complete Guarante Nameofthe Announce Guarantee happening(Date Actual Guarantee Guarantee implemen efor Company ment limit ofsigning guaranteelimit type term tationor related guaranteed disclosure agreement) not partydateTotalamountofguaranteeoftheCompany(totalofthreeabovementionedguarantee)Total amount of approving Total amount of actualguarantee in report period 30,000occurredguarantee in report 8,267.9(A1+B1+C1) period(A2+B2+C3)Total amount of approved Total balance of actualguaranteeattheendof report 30,000guaranteeattheendofreport 5,560.85period(A3+B3+C2) period(A4+B4+C4)Theproportionofthetotalamountofactuallyguaranteeinthe17.28% netassetsoftheCompany(thatisA4+B4+C4) Including:Amountofguaranteeforshareholders,actualcontrollerandits0 relatedparties(D) The debts guaranteeamount provided for the guaranteed partieswhoseassets-liability ratioexceed70% directly or 0 indirectly(E)Proportionoftotalamountofguaranteeinnetassetsofthe 0Companyexceed50%(F) Totalamountoftheaforesaidthreeguarantees(D+E+F) 0 Explanationsonpossiblybearingjointandseveralliquidating N/A responsibilitiesforundueguarantees(ifapplicable) Explanations on external guarantee against regulated N/A procedures(ifapplicable) Explanationoncompoundguarantee (2)Guaranteeoutsideagainsttheregulation □Applicable√Notapplicable NoguaranteeoutsideagainsttheregulationinPeriod. 3.Othermaterialcontracts □Applicable √Notapplicable NoothermaterialcontractsfortheCompanyinreportingperiod. XV.Socialresponsibility 1.Executionofsocialresponsibilityoftargetedpovertyalleviation (1)Summaryoftargetedpovertyalleviation (2)TargetedpovertyalleviationforfirsthalfYear (3)Follow-uptargetedpovertyalleviationscheme 2.Materialenvironmentalprotection ThelistedCompanyanditssubsidiarywhetherbelongstothekeysewageunitsreleasedfromenvironmentalprotectiondepartment No XVIExplanationonothersignificantevents √Applicable□Notapplicable (I)TheCompanysignedAssetExchangeContractwithWuhanZhonghengGroupon29April2009(detailswerereferredtointhe announcementdated30April2009),andpursuanttothecontract,sincepartoftheassetsoftheCompany(namelytwoparcelof industriallandslocatedatHuafaroad,Gongmingtown,Guangmingnewdistrict,Shenzhen(thepropertycertificateNo.wereSFDZ No.7226760andSFDZNo.7226763,No.ofparcelswereA627-005andA627-007,andtheaggregateareawas48,200sq.m)werethe landslistedinthefirstbatchofplanfor2010Shenzhenurbanizationunitplanningpreparationplan.Forpromotionofsuch urbanizationprojectandjointcooperation,theCompanyhasnotcompletedthetransferproceduresinrespectoftheaforesaidland. TheCompanyconvokedthefirstextraordinarymeetingoftheBoardin2015onFebruary16,2015andthefirstextraordinarygeneral meetingoftheBoardin2015onMarch4,2015,whichconsideredandapprovedthe“Motiononpromotingandimplementingthe urbanrenewalprojectfortherenewalunitsofHuafaareaatGongmingstreet,Guangmingnewdistrict,Shenzhen”,specifiedthatthe CompanyandWuhanZhonghengGroup shallobtainthe corresponding compensatory consideration for removal from the respectively ownedprojectplots and therespectively contributed andconstructed above-groundbuildingsbefore theland development,itisestimatedthatthecompensatoryconsiderationobtainedbytheCompanyaccountsfor50.5%ofthetotal considerationandWuhanZhonghengGroupaccountsfor49.5%bycalculation. Thesixthextraordinarymeetingoftheboardofdirectorsin2015andthethirdextraordinarygeneralmeetingheldonSeptember11, 2015haveconsideredandadoptedthe“Proposalontheprojectpromotionandimplementationofurbanrenewalandtheprogressof relatedtransactionsof‘theupdatedunitsatHuafaArea,GongMingStreet,GuangmingNewDistrict,Shenzhen’”,thecompanyhas signedthe“AgreementonthecooperationofurbanrenewalprojectoftheupdatedunitsatHuafaArea,GongMingStreet, GuangmingNewDistrict,Shenzhen”,“ContractforthecooperativeventureofreconstructionprojectforHuafaIndustrialPark,Gong MingStreet,GuangmingNewDistrict”and“Agreementonhousingacquisitionandremovalcompensationandresettlement”with WuhanZhonghengNewTechnologyIndustryGroupCo.,Ltd.(hereinafterreferredtoas“WuhanZhonghengGroup”),Shenzhen VankeReal EstateCo.,Ltd.(hereinafterreferredtoas “ShenzhenVanke”),andShenzhenVankeGuangming RealEstate DevelopmentCo.,Ltd.(hereinafterreferredtoas“VankeGuangming”). On12September2016,theCompanyreceiveda“NoticeofArbitrationNo.:SHENDP20160334”fromSCIA,ShenzhenVanke appliedforarbitrationinrespectof“AgreementonthecooperationofurbanrenewalprojectoftheupdatedunitsatHuafaArea, GongMingStreet,GuangmingNewDistrict,Shenzhen”againsttheCompanyandWuhanZhonghengGroup.Thearbitracourthold hearingson12November2016and13May2017.Thejudgementwillposponeto16August2017.Progressofthecasefoundmore intheNoticesreleasedonjuchaowebsite(www.cninfo.com.cn)dated14Sept.2016,1Nov.2016,16Nov.2016,on18Feb.2017, 24March2017,25April2017andon1July2017respectively. (II)OurcontrollingshareholderWuhanZhonghengGroupholds116,489,894sharesoftheCompany,accountingfor41.14%oftotal sharecapital.Asforinvolvingthearbitrationcaseof“Agreementonthecooperationofurbanrenewalprojectoftheupdatedunitsat HuafaArea,GongMingStreet,GuangmingNewDistrict,Shenzhen”,theaboveshareswerejudiciallysealedon27September2016 forcreditor’sapplicationforpropertypreservation.Assetsfrozenfrom27September2016to26September2018.Detailsaresetout intheannouncementpublishedatJuchaoinformationwebsite(www.cninfo.com.cn)on27October2017. (III)On31December2015,the88,750,047sharesheldbyWuhanZhonghengGroup,arepledgetoChinaMerchantsSecurities AssetsCo.,Ltd.withduedateof31December2016.WuhanZhonghengGroupdeferredtherepurchasebusinessdayto31 December2017.Andon1Feb.2016,WuhanZhonghengGrouppladgethe27,349,953sharesheldtoChinaMerchantsSecurities AssetsCo.,Ltd.withduedateof31December2016.andalsodeferringtherepurchasebusiness,sameasthepledgerelease.Ended astheperiod-end,thepledgedidnotremoved.Foundmoreinnoticereleasedonjuchaowebsite (www.cninfo.com.cn)dated5July 2017 (IV)TheCompanyreceivedthenoticeaboutregisteringandinvestigatingfromChinaSecuritiesRegulatoryCommissiononJanuary 18,2016,whodecidedtoregisterandinvestigatethecompanyonsuspicionofillegalinformationdisclosure.OnSeptember18,2016, theCompanyreceivedthe“PriorNoticeofAdministrativePenalty”([2016]No.6)fromShenzhenRegulatoryBureauofChina SecuritiesRegulatoryCommission.OnDecember22,2016,theCompanyreceivedthe“WrittenDecisionofAdministrativePenalty” ([2016]No.7)fromShenzhenRegulatoryBureauofChinaSecuritiesRegulatoryCommission.Seedetailsonthe“Noticeon ReceivingWrittenDecisionofAdministrativePenaltyfromCSRC”thecompanypublishedatwww.cninfo.com.cnonDecember23, 2016.OnJanuary5,2017,theCompanyreceivedthe“NoticeonGivingPublicCensureandPunishmenttoShenzhenZhongheng Huafa Co.,Ltd. and the Relevant Parties” from the Shenzhen StockExchange, see details on thenotice published at www.cninfo.com.cnonJanuary6,2017. (V)OnMarch21,2014,HuafaPropertyandShenzhenJifangInvestmentCo.,Ltd.(hereinafterreferredtoas"JifangInvestment") signedthe"ShenzhenHousingLeasingContract"andthe"SupplementalAgreementonLeasingContract",whichwerecanceledon February5,2016.AsJifangInvestmentoccupiedthesite,anddefaultedrent,managementfeeandwaterandelectricitybillsinthe longterm,inordertosafeguardthelegitimaterightsandinterests,HuafaPropertysubmittedarequestforarbitrationtoShenzhen ArbitrationCommissiononMarch8,2016,andreceivedthe(2016)SZCZNo.346rulingpaperfromShenzhenArbitration Commission in November 2016 which ruled Huafa Property won the lawsuit. See detailson the notice published at www.cninfo.com.cnbytheCompanyonNovember8,2016. (vi)Mr.LiYongping,thedirectorandvice-presidentofthecompany,hasappliedforresigningthedirector,vice-presidentandthe committeememberofthespecialcommitteeundertheboardofdirectorsofthecompanyduetothemandatoryretirementage(60 yearsold),recommendedby thecompany’ssecondlargestshareholder, SEG(HongKong) Co.,Ltd., thecompany’sfirst extraordinarygeneralmeetingofshareholdersin2017consideredandapprovedMr.ZhangGuangliutobethedirectorofthe company,andelectedMr.ZhangGuangliuasthevice-presidentofthecompany’s9thBoardofDirectorsbythe3rdextraordinary meetingoftheboardofdirectorsofthecompanyin2017,seedetailsontherelevantannouncementthecompanyissuedat www.cninfo.com.cnonJuly19,2017. (vii)Thecompany’splanningformajorassetsrestructuring Thecompanywasplanningformajorassetreorganizationwhichinvolvedthesaleofthestockrightofthewholly-ownedsubsidiary- WuhanHengfaTechnologyCo.,Ltd.andthesmalllandandplantlocatedatWuhanplantunderthenameoftheCompany,duetothe uncertaintiesinrelevantmatters,thecompany'sstockwassuspendedsincetheopeningonMay31,2017inordertomaintainthe investorinterestsandavoidsignificantimpactonthecompany’sshareprice.OnJune22,2017,the4thmeetingofthe9thsessionofthe BoardofDirectorsoftheCompanyconsideredandapprovedtheProposalontheConsiderationofPreplanningonSaleofMajorAssets andtheSummaryandotherproposalsrelatedtothistransaction.OnJuly3,2017,thecompanyreceivedthe“ReorganizationInquiry Letter”(Non-permittedReorganizationInquiryLetterNo.[2017]13,hereinafterreferredtoas “InquiryLetter”)issuedbythe ShenzhenStockExchange,requiringthecompanytosubmitthewrittendocumentbeforeJuly6,2017.Thecompanyimmediately organizedrelevantpartiesandintermediariestoimplementandreplythequestionsinvolvedintheInquiryLettertermbyterm.Asthe relevantdataandmattersinvolvedintheInquiryLetterstillneededfurtherverificationandimprovementandalsoneededthe intermediariestoissuetheverificationopinions,thecompanyappliedtotheShenzhenStockExchangeforpostponingthereplytothe InquiryLetterinordertosufficientlycompletethereplyandprotectthelegitimaterightsandinterestsofallshareholders,afterthe questionsconcerningtheInquiryLetterbeingrepliedandapprovedbytheShenzhenStockExchange,thecompanywouldpromptly announceandapplyforresumptionofstockinaccordancewiththerelevantprovisions (viii)Changesintheownershipstructureofcontrollingshareholders LiZhongqiu,theoriginalshareholderofthecontrollingshareholder-WuhanZhonghengGroup,transferredpartofsharesheheldin WuhanZhonghengGrouptoLiLi,andWuhanHenghuiInvestmentandConsultingCo.,Ltd.transferredallsharesitheldinWuhan ZhonghengGrouptoLiLi,afterthetransfer,LiZhongqiuheld51%equitystakeofWuhanZhonghengGroup,andLiLiheld49% equitystakeofWuhanZhonghengGroup,intheabovenaturalpersonshareholders,LiZhongqiuandLiLihaveparent-child relationshipandbelongtoconcertedactionperson. XVII.SignificanteventofsubsidiaryoftheCompany □Applicable√Notapplicable SectionVI.ChangesinSharesandParticularsaboutShareholders I.ChangesinShareCapital 1.ChangesinShareCapital InShare BeforetheChange Increase/DecreaseintheChange(+,-) AftertheChange New Capitalizat Amount Proportion shares Bonus ionof Others Subtotal Amount Proportio issued shares public n reserve I.Restrictedshares 0 0.00% 0 0 0 0 0 0 0.00% 283,161,2 283,161,2 II.Unrestrictedshares 100.00% 0 0 0 0 0 100.00% 27 27 181,165,3 181,165,3 1.RMBOrdinaryshares 63.98% 0 0 0 0 0 63.98% 91 91 2.Domesticallylisted 101,995,8 101,995,8 36.02% 0 0 0 0 0 36.02% foreignshares 36 36 283,161,2 283,161,2 III.Totalshares 100.00% 0 0 0 0 0 100.00% 27 27 Reasonsforsharechanged □Applicable √Notapplicable Approvalofsharechanged □Applicable√Notapplicable Ownershiptransferofsharechanged □Applicable√Notapplicable InfluenceonthebasicEPSanddilutedEPSaswellasotherfinancialindexesofnetassetspershareattributabletocommon shareholdersofCompanyinlatestyearandperiod □Applicable√Notapplicable Otherinformationnecessarytodiscloseorneedtodisclosedunderrequirementfromsecurityregulators □Applicable√Notapplicable 2.Changesofrestrictedshares □Applicable√Notapplicable II.Securitiesissuanceandlisting □Applicable √Notapplicable III.AmountofshareholdersoftheCompanyandparticularsaboutsharesholding InShare Totalcommonstock 23,044Total preference shareholders 0 shareholdersinreporting withvotingrightsrecoveredat period-end end of reporting period (if applicable)(foundinnote8) Particularsaboutcommonsharesheldabove5%byshareholdersortoptencommonshareholders Total Numberofsharepledged/frozen Amount common of Amountof Proportion sharehold Changesin Fullnameof Natureof ofshares restricted un-restricte Shareholders shareholder ersat report held common dcommon Stateofshare Amount theendof period shares sharesheld report held period Wuhan Domestic Pledged 116,489,894 116,489,8 116,489,89 Zhongheng non-state-owned 41.14% 0 0 94 4Frozen 116,489,894 Group legalperson SEG(HONG Pledged 0 Overseaslegal 16,569,56 KONG)CO., 5.85% 0 0 16,569,560 person 0 Frozen 0 LTD. GOODHOPE Pledged 0 CORNER Overseaslegal 12,700,00 4.49% 12,700,000 INVESTMENTperson 0 Frozen 0 SLTD Changjiang Pledged 0 Securities OverseaslegalBrokerage 1.89%5,355,249 5,355,249 person Frozen 0(HongKong)Co.,Ltd.China ConstructionBank Corporation– Other 0.79%2,233,878 2,233,878 Internet connectionmediaflexiblemixedfund DomesticnatureXuDogdong 0.60%1,690,307 1,690,307personChina ConstructionBank Other 0.57%1,611,254 1,611,254Corporation–Financingleadinggrowthmixfund Domesticnature ZhouHongbing 0.43%1,221,800 1,221,800 personBankof Communications–Financing Other 0.41%1,150,439 1,150,439IndustrialProsperitySecurityFund DomesticnatureZhongJiachao 0.38%1,068,500 1,068,500personStrategyinvestorsorgeneralcorporationcomestop10N/A shareholdersduetorightsissue(if applicable)(seenote3) Among the top ten shareholders, Wuhan Zhongheng Group neither bears associated relationshipwithothershareholders,norbelongstotheconsistentactorthatareprescribedin Explanationonassociated MeasuresfortheAdministrationofDisclosureofShareholderEquityChangesofListed relationshipamongtheaforesaid Companies.TheCompanyneitherknewwhetherthereexistsassociatedrelationshipamong shareholders theothertradableshareholders,northeybelongtoconsistentactorsthatareprescribedin MeasuresfortheAdministrationofDisclosureofShareholderEquityChangesofListed Companies. Particularabouttoptenshareholderswithun-restrictcommonsharesheld Amountofun-restrictcommonsharesheldat Typeofshares Shareholders’name Period-end Type Amount RMBcommon WuhanZhonghengGroup 116,489,894 116,489,894 share Domestically SEG(HONGKONG)CO.,LTD. 16,569,560listedforeign 16,569,560 shares Domestically GOODHOPECORNER 12,700,000listedforeign 12,700,000 INVESTMENTSLTD shares Domestically ChangjiangSecuritiesBrokerage 5,355,249listedforeign 5,355,249 (HongKong)Co.,Ltd. shares ChinaConstructionBank Corporation–Internetconnection RMBcommon 2,233,878 2,233,878 share mediaflexiblemixedfund XuDongdong 1,690,307RMBcommon 1,690,307 share ChinaConstructionBank Corporation–Financingleading RMBcommon 1,611,254 1,611,254 share growthmixfund RMBcommon ZhouHongbing 1,221,800 1,221,800 share BankofCommunications– RMBcommon FinancingIndustrialProsperity 1,150,439 1,150,439 share SecurityFund RMBcommon ZhongJiachao 1,068,500 1,068,500 share Amongthetoptenunrestrictedshareholders,theCompanyneitherknewwhetherthereexists Expiationonassociatedrelationship associatedrelationshipamongtheothertradableshareholders,northeybelongtoconsistent orconsistentactorswithinthetop actorsthatareprescribedinMeasuresfortheAdministrationofDisclosureofShareholder 10un-restrictcommonshareholders EquityChangesofListedCompanies.Amongthetoptenshareholders,WuhanZhongheng and between top 10 un-restrict Groupneitherbearsassociatedrelationship withothershareholders,norbelongstothe common shareholdersandtop10 consistentactorthatareprescribedinMeasuresfortheAdministrationofDisclosureof shareholders ShareholderEquityChangesofListedCompanies.Explanationontop10commonshareholdersinvolvingmargin N/Abusiness(ifapplicable)(seenote4)Whethertoptencommonstockshareholdersortoptencommonstockshareholderswithun-restrictsharesheldhaveabuy-backagreementdealinginreportingperiod□Yes√NoThetoptencommonstockshareholdersortoptencommonstockshareholderswithun-restrictsharesheldoftheCompanyhavenobuy-backagreementdealinginreportingperiod.IV.ChangeofcontrollingshareholderoractualcontrollerChangesofcontrollingshareholdersinreportingperiod□Applicable√NotapplicableTheCompanyhadnochangesofcontrollingshareholdersinreportingperiodChangesofactualcontrollerinreportingperiod□Applicable√NotapplicableNochangesofactualcontrollersfortheCompanyinreportingperiod. SectionVII.PreferredStock □Applicable √Notapplicable TheCompanyhadnopreferredstockinthePeriod. SectionVIII.ParticularsaboutDirectors,SupervisorsandSenior Executives I.Changesofsharesheldbydirectors,supervisorsandseniorexecutives □Applicable√Notapplicable Foundmoreinannualreport2016forthechangesofsharesheldbydirectors,supervisorsandseniorexecutives II.Changesofdirectors,supervisorsandseniorexecutives √Applicable□Notapplicable Name Title Type Date Reasons Director,deputy LiYongping Leavetheoffice 2017-07-18 Reachesthemandatoryageforretirement president Director,deputyZhangGuangliu Election 2017-07-18 Electionpresident SectionIXCorporateBond WhethertheCompanyhasacorporationbondsthatissuancepubliclyandlistedonstockexchangeandwithout dueonthedatewhensemi-annualreportapprovedforreleasedorfailtocashinfullondue No SectionX.FinancialReport I.Auditreport Whetherthesemi-annualreportwasauditedornot □Yes√No Thefinancialreportofthissemi-annualreportwasunaudited II.Financialstatement CurrencyusedinnoteoffinancialstatementisRMB(Yuan) 1.ConsolidatedBalanceSheet PreparedbySHENZHENZHONGHENGHUAFACO.,LTD 2017-06-30 InRMB Item Closingbalance Openingbalance Currentassets: Monetaryfunds 66,352,098.10 93,332,709.81 Settlementprovisions Capitallent Financialassetsmeasuredbyfair valueandwithvariationreckonedinto currentgains/losses Derivativefinancialliability Notesreceivable 38,299,308.80 52,663,100.89 Accountsreceivable 223,831,614.45 139,808,058.20 Accountspaidinadvance 5,571,250.65 13,075,721.93 Insurancereceivable Reinsurancereceivables Contract reserve of reinsurance receivable Interestreceivable Dividendreceivable Otherreceivables 17,763,398.92 3,934,376.89 Purchaserestitutedfinanceasset Inventories 52,166,592.59 46,902,384.80 Dividedintoassetsheldforsale Non-currentassetduewithinone 1,741.47 12,191.49 year Othercurrentassets Totalcurrentassets 403,986,004.98 349,728,544.01 Non-currentassets: Loansandpaymentsonbehalf Financeassetavailableforsales Held-to-maturityinvestment Long-termaccountreceivable Long-termequityinvestment Investmentrealestate 53,277,285.84 54,145,225.02 Fixassets 79,839,263.86 81,544,707.02 Constructioninprogress 654,356.00 654,356.00 Engineeringmaterial Disposaloffixedasset 92,857,471.69 92,857,471.69 Productivebiologicalasset Oilandgasasset Intangibleassets 44,167,184.84 44,878,095.77 Expense on Research and DevelopmentGoodwill Long-term expenses to be 166,666.57 191,666.59apportioned Deferredincometaxasset 8,452,119.95 8,475,476.30 Othernon-currentassetTotalnon-currentasset 279,414,348.75 282,746,998.39Totalassets 683,400,353.73 632,475,542.40Currentliabilities: Short-termloans 192,108,516.60 181,210,467.81 Loanfromcentralbank Absorbing depositand interbankdeposit Capitalborrowed Financialliabilitymeasuredbyfair valueandwithvariationreckonedinto currentgains/losses Derivativefinancialliability Notespayable 8,373,065.43 16,714,584.01 Accountspayable 116,266,306.30 73,714,424.77 Accountsreceivedinadvance 1,678,293.04 48,846.60 Selling financial asset of repurchase Commission charge andcommissionpayable Wagepayable 3,775,280.25 4,542,531.22 Taxespayable 15,534,826.76 16,768,030.70 Interestpayable 185,285.99 123,641.69 Dividendpayable Otheraccountspayable 21,029,326.92 17,050,035.16 Reinsurancepayables Insurancecontractreserve Securitytradingofagency Securitysalesofagency Dividedintoliabilityheldforsale Non-currentliabilitiesduewithin1year Othercurrentliabilities Totalcurrentliabilities 358,950,901.29 310,172,561.96 Non-currentliabilities: Long-termloans Bondspayable Including:preferredstock Perpetualcapital securities Long-termaccountpayable Long-termwagespayable Specialaccountspayable Projectedliabilities 2,604,411.81 2,604,411.81 Deferredincome Deferredincometaxliabilities Othernon-currentliabilitiesTotalnon-currentliabilities 2,604,411.81 2,604,411.81Totalliabilities 361,555,313.10 312,776,973.77Owner’sequity: Sharecapital 283,161,227.00 283,161,227.00 Otherequityinstrument Including:preferredstock Perpetualcapital securities Capitalpublicreserve 146,587,271.50 146,587,271.50 Less:Inventoryshares Othercomprehensiveincome Reasonablereserve Surpluspublicreserve 77,391,593.25 77,391,593.25 Provisionofgeneralrisk Retainedprofit -185,295,051.12 -187,441,523.12Total owner’s equity attributable to 321,845,040.63 319,698,568.63parentcompanyMinorityinterestsTotalowner’sequity 321,845,040.63 319,698,568.63Totalliabilitiesandowner’sequity 683,400,353.73 632,475,542.40Legal representative: Li Zhongqiu Person in charge of accounting works: YangBinPersoninchargeofaccountinginstitution:WuAijie2.BalanceSheetofParentCompany InRMB Item Closingbalance OpeningbalanceCurrentassets: Monetaryfunds 12,014,665.36 10,375,152.87 Financialassetsmeasuredbyfairvalueandwithvariationreckonedintocurrentgains/losses Derivativefinancialliability Notesreceivable Accountsreceivable Accountpaidinadvance 2,500,000.00 2,500,000.00 Interestreceivable Dividendsreceivable Otherreceivables 112,395,792.64 114,067,051.57 Inventories 14,806.50 14,806.50 Dividedintoassetsheldforsale Non-currentassetsmaturingwithin oneyear Othercurrentassets Totalcurrentassets 126,925,264.50 126,957,010.94 Non-currentassets: Available-for-salefinancialassets Held-to-maturityinvestments Long-termreceivables Long-termequityinvestment 186,608,900.00 186,608,900.00 Investmentrealestate 28,189,106.32 28,796,525.38 Fixassets 5,499,002.42 6,491,983.71 Constructioninprogress 654,356.00 654,356.00 Projectmaterials Disposaloffixedassets 92,857,471.69 92,857,471.69 Productivebiologicalassets Oilandnaturalgasassets Intangibleassets 4,952,309.97 4,988,546.40 Researchanddevelopmentcosts Goodwill Long-termdeferredexpenses 166,666.57 191,666.59 Deferredincometaxassets 9,194,186.97 9,217,543.32 Othernon-currentassetsTotalnon-currentassets 328,121,999.94 329,806,993.09Totalassets 455,047,264.44 456,764,004.03Currentliabilities: Short-termborrowings 120,000,000.00 120,000,000.00 Financialliabilitymeasuredbyfairvalueandwithvariationreckonedintocurrentgains/losses Derivativefinancialliability Notespayable Accountspayable 9,740,367.33 10,745,840.16 Accountsreceivedinadvance 1,353,927.00 44,162.00 Wagepayable 891,561.16 857,735.20 Taxespayable 9,642,210.73 10,094,737.11 Interestpayable Dividendpayable Otheraccountspayable 11,942,971.48 13,383,939.40 Dividedintoliabilityheldforsale Non-currentliabilitiesduewithin1 year Othercurrentliabilities Totalcurrentliabilities 153,571,037.70 155,126,413.87 Non-currentliabilities: Long-termloans Bondspayable Including:preferredstock Perpetualcapital securities Long-termaccountpayable Long-termwagespayable Specialaccountspayable Projectedliabilities 2,604,411.81 2,604,411.81 Deferredincome Deferredincometaxliabilities Othernon-currentliabilitiesTotalnon-currentliabilities 2,604,411.81 2,604,411.81Totalliabilities 156,175,449.51 157,730,825.68Owners’equity: Sharecapita 283,161,227.00 283,161,227.00 Otherequityinstrument Including:preferredstock Perpetualcapitalsecurities Capitalpublicreserve 146,587,271.50 146,587,271.50 Less:Inventoryshares Othercomprehensiveincome Reasonablereserve Surplusreserve 77,391,593.25 77,391,593.25 Retainedprofit -208,268,276.82 -208,106,913.40 Totalowner’sequity 298,871,814.93 299,033,178.35 Totalliabilitiesandowner’sequity 455,047,264.44 456,764,004.03 3.ConsolidatedProfitStatement InRMB Item CurrentPeriod LastPeriod I.Totaloperatingincome 439,480,144.17 309,538,525.56 Including:Operatingincome 439,480,144.17 309,538,525.56 Interestincome Insurancegained Commissionchargeandcommission income II.Totaloperatingcost 437,502,286.20 301,336,765.71 Including:Operatingcost 398,913,925.08 264,288,398.24 Interestexpense Commissionchargeandcommission expense Cashsurrendervalue Netamountofexpenseofcompensation Netamountofwithdrawalofinsurancecontractreserve Bonusexpenseofguaranteeslip Reinsuranceexpense Taxesandsurcharge 2,317,887.45 2,156,369.16 Salesexpenses 7,363,051.86 5,283,735.71 Administrationexpenses 24,085,956.74 27,295,883.47 Financialexpenses 4,914,890.46 2,312,379.13 Lossesofdevaluationofasset -93,425.39 Add:Changingincomeoffairvalue(Lossislistedwith“-”) Investmentincome(Lossislistedwith“-”) Including:Investmentincomeonaffiliatedcompanyandjointventure Exchangeincome(Lossis listedwith“-”) Otherincome III.Operatingprofit (Lossislistedwith “-”) 1,977,857.97 8,201,759.85 Add:Non-operatingincome 927,283.49 1,518,636.51 Including:Disposalgainsof 1,549.73 116,007.01 non-currentasset Less:Non-operatingexpense 34,922.55 63,225.68 Including:Disposallossof 34,871.67 18,924.00 non-currentasset IV.TotalProfit (Lossislistedwith“-”) 2,870,218.91 9,657,170.68 Less:Incometaxexpense 723,746.91 2,384,214.46 V.Netprofit(Netlossislistedwith“-”) 2,146,472.00 7,272,956.22 Netprofitattributabletoowner’sof 2,146,472.00 7,272,956.22 parentcompany Minorityshareholders’gainsand losses VI.Netafter-taxofothercomprehensive income Netafter-taxofothercomprehensive incomeattributabletoownersofparent company (I)Othercomprehensiveincomeitemswhichwillnotbereclassifiedsubsequentlytoprofitofloss 1.Changesasaresultofre-measurementofnetdefinedbenefitplanliabilityorasset 2.Shareoftheothercomprehensiveincomeoftheinvesteeaccountedforusingequitymethodwhichwillnotbereclassifiedsubsequentlytoprofitandloss (II)Othercomprehensiveincomeitemswhichwillbereclassifiedsubsequentlytoprofitorloss 1.Shareoftheothercomprehensiveincomeoftheinvesteeaccountedforusingequitymethodwhich willbereclassifiedsubsequentlytoprofit orloss 2.Gainsorlossesarising fromchangesinfairvalueof available-for-salefinancialassets 3.Gainsorlossesarising fromreclassificationofheld-to-maturity investmentasavailable-for-salefinancial assets 4.Theeffecthedgingportion ofgainsorlossesarisingfromcashflow hedginginstruments 5.Translationdifferences arisingontranslationofforeigncurrency financialstatements 6.Other Netafter-taxofothercomprehensive incomeattributabletominority shareholdersVII.Totalcomprehensiveincome 2,146,472.00 7,272,956.22 Totalcomprehensiveincome 2,146,472.00 7,272,956.22attributabletoownersofparentCompany TotalcomprehensiveincomeattributabletominorityshareholdersVIII.Earningspershare: (i)Basicearningspershare 0.0076 0.0257 (ii)Dilutedearningspershare 0.0076 0.0257EnterprisecombineunderthesamecontrolinthePeriod,thecombinedpartyrealizednetprofitof0Yuanbeforecombination,andrealized0YuanatlastperiodforcombinedpartyLegal representative: Li Zhongqiu Person in charge of accounting works: YangBinPersoninchargeofaccountinginstitution:WuAijie4.ProfitStatementofParentCompany InRMB Item CurrentPeriod LastPeriodI.Operatingincome 19,368,319.99 21,050,313.65 Less:Operatingcost 2,104,257.94 2,177,884.29 Taxesandsurcharge 1,295,896.25 1,097,952.84 Salesexpenses Administrationexpenses 13,448,031.17 15,433,330.85 Financialexpenses 2,847,630.46 5,221,263.90 Lossesofdevaluationofasset -93,425.39 Add:Changingincomeoffair value(Lossislistedwith“-”) Investmentincome(Lossis listedwith“-”) Including:Investmentincome onaffiliatedcompanyandjointventure Otherincome II.Operatingprofit (Lossislisted with“-”) -234,070.44 -2,880,118.23 Add:Non-operatingincome 50,111.89 41,539.00 Including:Disposalgainsof 1,278.00 non-currentasset Less:Non-operatingexpense 50.88 18,924.00 Including:Disposallossof 18,924.00 non-currentasset III.TotalProfit (Lossislistedwith “-”) -184,009.43 -2,857,503.23 Less:Incometaxexpense -22,646.01 -714,375.81 IV.Netprofit(Netlossislistedwith “-”) -161,363.42 -2,143,127.42 V.Netafter-taxofothercomprehensive income (I)Othercomprehensiveincome itemswhichwillnotbereclassified subsequentlytoprofitofloss 1.Changesasaresultof re-measurementofnetdefinedbenefit planliabilityorasset 2.Shareoftheother comprehensiveincomeoftheinvestee accountedforusingequitymethod whichwillnotbereclassified subsequentlytoprofitandloss (II)Othercomprehensiveincome itemswhichwillbereclassified subsequentlytoprofitorloss 1.Shareoftheother comprehensiveincomeoftheinvestee accountedforusingequitymethod whichwillbereclassifiedsubsequently toprofitorloss 2.Gainsorlossesarising fromchangesinfairvalueof available-for-salefinancialassets 3.Gainsorlossesarising fromreclassificationofheld-to-maturity investmentasavailable-for-sale financialassets 4.Theeffecthedging portionofgainsorlossesarisingfrom cashflowhedginginstruments 5.Translationdifferences arisingontranslationofforeign currencyfinancialstatements 6.Other VI.Totalcomprehensiveincome -161,363.42 -2,143,127.42 VII.Earningspershare: (i)Basicearningspershare (ii)Dilutedearningspershare 5.ConsolidatedCashFlowStatement InRMB Item CurrentPeriod LastPeriod I.Cashflowsarisingfromoperating activities: Cashreceivedfromsellingcommoditiesandprovidinglabor 245,041,670.12 178,719,535.63services Netincreaseofcustomerdepositandinterbankdeposit Netincreaseofloanfromcentralbank Netincreaseofcapitalborrowed fromotherfinancialinstitution Cashreceivedfromoriginal insurancecontractfee Netcashreceivedfromreinsurance business Netincreaseofinsuredsavingsandinvestment Netincreaseofamountfromdisposalfinancialassetsthatmeasuredbyfairvalueandwithvariationreckonedintocurrentgains/losses Cashreceivedfrominterest,commissionchargeandcommission Netincreaseofcapitalborrowed Netincreaseofreturnedbusinesscapital Write-backoftaxreceived Other cash received concerning 1,905,715.83 6,735,237.88 operatingactivities Subtotalof cashinflowarising from 246,947,385.95 185,454,773.51 operatingactivities Cash paid for purchasing commodities and receiving labor 216,567,324.72 130,584,597.67 service Netincreaseofcustomerloansand advances Netincreaseofdepositsincentralbankandinterbank Cashpaidfor originalinsurancecontractcompensation Cashpaidforinterest,commissionchargeandcommission Cashpaidforbonusofguaranteeslip Cashpaidto/forstaffandworkers 36,300,498.57 30,682,437.45 Taxespaid 9,434,091.06 14,888,534.34 Other cash paid concerning 20,042,838.52 34,723,553.62 operatingactivities Subtotalofcashoutflowarisingfrom 282,344,752.87 210,879,123.08 operatingactivities Netcashflowsarisingfromoperating -35,397,366.92 -25,424,349.57 activitiesII.Cashflowsarisingfrominvestingactivities: Cashreceivedfromrecoveringinvestment Cashreceivedfrominvestmentincome Netcashreceivedfromdisposalof fixed,intangibleandotherlong-term 75,901.58 158,656.34 assets Netcashreceivedfromdisposalof subsidiariesandotherunits Other cash received concerning investingactivities Subtotalofcashinflowfrominvesting 75,901.58 158,656.34 activities Cash paidfor purchasingfixed, 3,979,604.31 3,949,242.30intangibleandotherlong-termassets Cashpaidforinvestment Netincreaseofmortgagedloans Netcashreceivedfromsubsidiariesandotherunitsobtained Other cash paid concerninginvestingactivitiesSubtotalofcashoutflowfrominvesting 3,979,604.31 3,949,242.30activitiesNetcashflowsarisingfrominvesting -3,903,702.73 -3,790,585.96activitiesIII.Cashflowsarisingfromfinancingactivities Cash received from absorbinginvestment Including: Cash received fromabsorbing minority shareholders’investmentbysubsidiaries Cashreceivedfromloans 99,600,311.57 57,020,825.00 Cashreceivedfromissuingbonds Other cash received concerning financingactivities Subtotalofcashinflowfromfinancing 99,600,311.57 57,020,825.00 activities Cashpaidforsettlingdebts 87,960,209.96 595,950,388.73 Cashpaidfordividendandprofit 4,119,482.39 5,330,803.55distributingorinterestpaying Including:Dividendandprofitofminorityshareholderpaidbysubsidiaries Other cash paid concerningfinancingactivitiesSubtotalofcashoutflowfromfinancing 92,079,692.35 601,281,192.28activitiesNetcashflowsarisingfromfinancing 7,520,619.22 -544,260,367.28activitiesIV.Influenceoncashandcashequivalentsduetofluctuationin -390,104.21 -15,237.48exchangerateV. Net increase of cash and cash -32,170,554.64 -573,490,540.29equivalents Add: Balanceof cash and cash 104,015,312.97 632,846,956.16equivalentsattheperiod-beginVI.Balanceofcashandcash 71,844,758.33 59,356,415.87equivalentsattheperiod-end6.CashFlowStatementofParentCompany InRMB Item CurrentPeriod LastPeriodI.Cashflowsarisingfromoperatingactivities: Cashreceivedfromsellingcommoditiesandprovidinglabor 10,850,641.39 11,823,161.27services Write-backoftaxreceived Othercashreceivedconcerning 37,579,467.16 31,580,866.37operatingactivities Subtotalofcashinflowarisingfrom 48,430,108.55 43,404,027.64 operatingactivities Cashpaidforpurchasing commoditiesandreceivinglabor service Cashpaidto/forstaffandworkers 2,524,734.01 2,433,244.76 Taxespaid 2,236,783.63 10,242,618.35 Other cash paid concerning 37,794,518.68 39,784,929.43 operatingactivities Subtotalofcashoutflowarisingfrom 42,556,036.32 52,460,792.54 operatingactivities Netcashflowsarisingfromoperating 5,874,072.23 -9,056,764.90 activitiesII.Cashflowsarisingfrominvestingactivities: Cashreceivedfromrecoveringinvestment Cashreceivedfrominvestmentincome Netcashreceivedfromdisposalof fixed,intangibleandotherlong-term 576.00 assets Netcashreceivedfromdisposalof subsidiariesandotherunits Other cash received concerning investingactivities Subtotalofcashinflowfrominvesting 576.00 activities Cash paidfor purchasing fixed, 1,377,592.31 2,765,792.00intangibleandotherlong-termassets Cashpaidforinvestment Net cash received fromsubsidiariesandotherunits Other cash paid concerninginvestingactivitiesSubtotalofcashoutflowfrominvesting 1,377,592.31 2,765,792.00activitiesNetcashflowsarisingfrominvesting -1,377,592.31 -2,765,216.00 activitiesIII.Cashflowsarisingfromfinancingactivities Cashreceivedfromabsorbinginvestment Cashreceivedfromloans 15,000,000.00 15,000,000.00 Cashreceivedfromissuingbonds Other cash received concerningfinancingactivitiesSubtotalofcashinflowfromfinancing 15,000,000.00 15,000,000.00activities Cashpaidforsettlingdebts 15,000,000.00 518,550,000.00 Cashpaidfordividendandprofit 2,857,775.00 4,278,638.49distributingorinterestpaying Other cash paid concerningfinancingactivitiesSubtotalofcashoutflowfromfinancing 17,857,775.00 522,828,638.49activitiesNetcashflowsarisingfromfinancing -2,857,775.00 -507,828,638.49activitiesIV.Influenceoncashandcashequivalentsduetofluctuationin 807.57 90.95exchangerateV. Net increase of cash and cash 1,639,512.49 -519,650,528.44equivalents Add: Balanceof cash and cash 10,375,152.87 524,937,734.32equivalentsattheperiod-beginVI.Balanceofcashandcash 12,014,665.36 5,287,205.88equivalentsattheperiod-end7.StatementofChangesinOwners’Equity(Consolidated)ThisPeriod InRMB Currentperiod Owners’equityattributabletoparentcompany Minorit TotalItem Share Otherequity Capital Less: Other Reason SurplusProvisioRetaine y owners’ capital instrument reserve Invento compre able reserve nof dprofitinterests equity Perpet ry hensive reserve general ual shares income risk Prefer capita red Other l stock securi ties 283,16 -187,44 I.Balanceatthe 146,587 77,391, 319,698 1,227. 1,523.1 endofthelastyear ,271.50 593.25 ,568.63 00 2 Add:Changes ofaccountingpolicyErrorcorrection of thelastperiodEnterprisecombine underthesamecontrolOtherII.Balanceatthe283,16 -187,44 146,587 77,391, 319,698beginning of this 1,227. 1,523.1year ,271.50 593.25 ,568.63 00 2III. Increase/Decrease in this 2,146,4 2,146,4year(Decrease is 72.00 72.00listedwith“-”)(i) Total 2,146,4 2,146,4comprehensive 72.00 72.00income (ii) Owners’ devoted and decreasedcapital 1.Common shares invested by shareholders2.Capitalinvestedbyholdersofotherequityinstruments3. Amountreckoned intoownersequitywithshare-basedpayment4.Other(III) Profitdistribution1. Withdrawal ofsurplusreserves 2. Withdrawal of general risk provisions3.Distributionforowners (orshareholders)4.Other(IV) Carryingforward internalowners’equity1.Capitalreservesconversed tocapital (sharecapital) 2.Surplusreserves conversed to capital (share capital) 3.Remedyingloss with surplus reserve 4.Other (V) Reasonable reserve 1. Withdrawal in thereportperiod 2. Usage in the reportperiod (VI)OthersIV.Balanceatthe283,16 -185,29 146,587 77,391, 321,845endof the report1,227. 5,051.1period ,271.50 593.25 ,040.63 00 2LastPeriod InRMB LastPeriod Owners’equityattributabletoparentcompany Otherequity instrument Minorit Item Less: Other Provisio Total Perpet Reason y owners’ Share Capital Invento compre Surplus nof Retaine interest Prefer ual able equity capital reserve ry hensive reserve general dprofit s red capita Other reserve shares income risk stock lsecuri ties 283,16 -195,42 I. Balance at the 146,283 77,391, 311,406 endofthelastyear 1,227. 9,900.9 ,642.90 593.25 ,562.20 00 5 Add:Changes ofaccountingpolicy Error 2,530,6 2,530,6correction of the 67.50 67.50lastperiodEnterprisecombineunderthesamecontrolOtherII.Balanceatthe283,16 -192,89 146,283 77,391, 313,937beginning of this 1,227. 9,233.4year ,642.90 593.25 ,229.70 00 5III. Increase/Decrease in this 303,628 5,457,7 5,761,3year(Decrease is .60 10.33 38.93listedwith“-”)(i) Total 5,457,7 5,457,7comprehensive 10.33 10.33income (ii) Owners’ 303,628 303,628 devoted and .60 .60 decreasedcapital 1.Common shares invested by shareholders2.Capitalinvestedbyholdersofotherequityinstruments3. Amountreckoned intoownersequitywithshare-basedpayment 303,628 303,6284Other .60 .60(III)Profitdistribution1. Withdrawal ofsurplusreserves2. Withdrawal ofgeneral riskprovisions3.Distributionfor owners (or shareholders)4.Other(IV) Carryingforward internalowners’equity1.Capitalreservesconversed tocapital (sharecapital) 2.Surplusreserves conversed to capital (share capital) 3.Remedyingloss with surplus reserve 4.Other (V)Reasonable reserve 1. Withdrawal in thereportperiod 2. Usage in the reportperiod (VI)OthersIV.Balanceatthe283,16 -187,44 146,587 77,391, 319,698endof the report 1,227. 1,523.1period ,271.50 593.25 ,568.63 00 28.StatementofChangesinOwners’Equity(ParentCompany)Currentamount InRMB Currentperiod Otherequityinstrument Perpetu Other Item Less: Total Share al Capital compreheReasonab Surplus Retaine owners’ Preferre Inventory capital capital Other reserve nsive lereserve reserve dprofit dstock shares equity securiti incomees I. Balance at the283,161, 146,587,2 77,391,59 -208,10299,033,1 endofthelastyear 227.00 71.50 3.25 6,913.4 78.35 0 Add:Changes of accounting policy ErrorcorrectionofthelastperiodOtherII.Balanceatthe283,161, -208,10 146,587,2 77,391,59 299,033,1beginning of this 6,913.4year 227.00 71.50 3.25 78.350 III. Increase/ Decrease in this -161,36-161,363. year(Decrease is 3.42 42 listedwith“-”) (i) Total -161,36-161,363. comprehensive 3.42 42 income (ii) Owners’ devoted and decreasedcapital 1.Common shares invested by shareholders2.Capitalinvestedbyholdersofotherequityinstruments3. Amountreckoned intoownersequitywithshare-basedpayment4.Other(III) Profitdistribution1. Withdrawal ofsurplusreserves2.Distributionforowners(orshareholders)3.Other(IV) Carryingforward internalowners’equity1.Capitalreservesconversed tocapital (sharecapital) 2.Surplusreserves conversedto capital(share capital) 3.Remedyingloss with surplus reserve 4.Other (V) Reasonable reserve 1. Withdrawal in thereportperiod 2. Usage in the reportperiod (VI)OthersIV.Balanceatthe -208,26 283,161, 146,587,2 77,391,59 298,871,8end ofthe report 8,276.8period 227.00 71.50 3.25 14.932 Amountlastperiod InRMB Lastperiod Otherequityinstrument Perpetu Other Item Less: Total Share al Capital compreheReasonab Surplus Retaine owners’ Preferre Inventory capital capital Other reserve nsive lereserve reserve dprofit dstock shares equity securiti income es -209,42 I. Balance at the283,161, 146,283,6 77,391,59 297,415,7 endofthelastyear 0,732.2 227.00 42.90 3.25 30.87 8 Add:Changes of accounting policy Error 2,530,62,530,667correctionofthe 67.50 .50lastperiodOtherII.Balanceatthe -206,89 283,161, 146,283,6 77,391,59 299,946,3beginning of this 0,064.7year 227.00 42.90 3.25 98.378 III. Increase/ 303,628.6 -1,216,8-913,220. Decrease in this year(Decrease is 0 48.62 02 listedwith“-”) (i) Total -1,216,8-1,216,84 comprehensive 48.62 8.62 income (ii) Owners’ 303,628.6 303,628.6 devoted and 0 0 decreasedcapital 1.Common shares invested by shareholders2.Capitalinvestedbyholdersofotherequityinstruments3. Amountreckoned intoownersequitywithshare-basedpayment 303,628.6 303,628.64.Other 0 0(III) Profitdistribution1. Withdrawal ofsurplusreserves2.Distributionforowners(orshareholders)3.Other(IV) Carryingforward internalowners’equity1.Capitalreservesconversed tocapital (sharecapital) 2.Surplusreserves conversed to capital (share capital) 3.Remedyingloss with surplus reserve 4.Other (V) Reasonable reserve 1. Withdrawal in thereportperiod 2. Usage in the reportperiod (VI)OthersIV.Balanceatthe283,161, -208,10 146,587,2 77,391,59 299,033,1end ofthe report 6,913.4period 227.00 71.50 3.25 78.350 III.Companyprofile 1.Theregistrationplaceoftheenterprise,theformoforganizationandtheheadquartersaddress ShenzhZhonghengHUAFACompanyLimited(hereinafterreferredtoasCompanyortheCompany),establishedon8December 1981.uniformsocialceditcode91440300618830372G. RegisteredplaceandheadofficeoftheCompany:411Bldg.,Huafa(N)Road,FutianDistrict,Shenzhen Legalrepresentative:LiZhongqiu Registeredcapital:RMB283,161,227.00 2.Thenatureofthebusinessandthemainbusinessactivities TheCompanybelongstothecomputer,telecommunicationandmanufacturingofotherelectronicequipment.Businessscope: producingandsalesofvarycolourTVset,liquidcrystaldisply,LCD(operatesinbranch),radio-recorder,soundequipment, electroniceatch,electronicgameandcomputers,theprintedwiringboard,precisioninjectionparts,lightpackagingmaterial (operatesinWuhan)andhardware(includingtoolandmould)forvariouselctronicproducsandsupportingparts,platingandsurface treatmentandtinwire,developmentandoperationofrealestate(ShenFangDiZiNo.:7226760)andpropertymanagement.Funded affiliatedcompaniesinWuhanandJulin.Settingupbranchesincapitaloftheprovince (LhasaCityexcluded)inChinaand municipalitydirectrlyunderthecentralgovernment. 3.Relevantpartyofferingapprovalreportingoffinancialstatementsanddatethereof ThefinancialstatementhasbeendeliberatedandapprovedbyBODon25August2017.AccordingtoArticleofAssociation,the statementshallbesubmitfordeliberationinshareholdersgeneralmeeting. 4.Scopeofconsolidatefinancialstatement ConsolidatescopeinthePeriodincluding:parentcompany–ShenzhenZhonghengHuafaCompanyLimited,subsidiaryincluding ShenzhenHuafaPerpoertyLeasingManagementCo.,Ltd.(noannualinspectionin2011,andbusinesslicenserevokeon1April 2014),ShenzhenZhonghengHuafaperpertyCo.,Ltd.,WuhanHengfaTechnologyCo.,Ltd.,ShenzhenHuafaHengtianCo.,Ltd. andShenzhenHuafaHengtaiCo.,Ltd.moreofsubsidiariesfoundin“Equityinothersubjects”. IV.PreparationbasisofFinancialStatements 1.Preparationbasis Baseontherunningcontinuouslyandactualtransactionsandevents,inlinewiththeAccountingStandardsforBusinessEnterprise– BasicStandardsandspecificprincipleofaccountingstandardsissuedbytheMinistryofFinance,theCompanypreparedand formulatethefinancialstatementliesonthefollowedimportantaccountingpolicyandestimation. 2.Goingconcern TheCompanyestimatedthattheproductionandsalesoftheCompany,in12monthssinceendoftheperiod,willinavirtuouscycle. Wehasgoodmanagementandcontinuousoperationability,andthereisnoriskofcontinuingoperations. V.Importantaccountingpolicyandestimation Notesonspecificaccountingpoliciesandaccountingestimation: Accordingtoactualoperationcharateristic,theGroupformulatespecificaccountingpolicyandaccountingestimation,including tradecycle,recognizationandmeasurementonaccountbaddebtprovisionofreceivables,inventorymeasurement,classificationand depreciationmethodoffixedassets,intangibleassetsamortizationandrecognizationandmeasurementofrevenueetc. 1.DeclarationofobediencetoAccountingStandardsforBusinessEnterprise TheFinancialStatementsoftheCompanyareuptorequirementsofAccountingStandardsforBusinessEnterpriseandalsoatrueand thoroughreflectiontotherelevantinformationastheCompany’sfinancialpositiondated30thJune2017andtheoperationresultsas wellascashflowforthefirsthalfof2017. 2.Accountingperiod TheCompany’saccountingyearisGregoriancalendaryear,namelyfrom1stJanuaryto31stDecemberofeveryyear. 3.Businesscycle TheCompany’sbusinesscycleisoneyear(12months)asanormalcycle,andthebusinesscycleisthedeterminingcriterionforthe liquidityofassetsandliabilitiesoftheCompany. 4.Bookkeepingstandardcurrency TheRenminbi(RMB)istakenasthebook-keepingstandardcurrency. 5.Accountingmethodsforconsolidationofenterprisesunderthesamecontrolorotherwise (1)Consolidationofenterprisesunderthesamecontrol WheretheCompanyforlongtermequityinvestmentarisingfrombusinesscombinationundercommoncontrolsatisfiesthe combinationconsiderationbypaymentofcash,transferofnon-cashassetsorassumptionofdebt,thecarryingvalueofthenetassets oftheacquireincombinedfinancialstatementoftheultimatecontrollersharedbytheCompanyasatthecombinationdateshallbe deemedastheinitialinvestmentcostofsuchlongtermequityinvestment.Iftheequityinstrumentissuedbycombiningpartyare considerasthecombinationconsideration,thanthetotalvalueoftheissuingsharesareconsiderasthesharecapital.Thedifference betweentheinitialcostoflong-termequityinvestmentandbookvalueofconsideration(ortotalfacevalueofthesharesissued)paid, capitalsurplusadjusted;ifthecapitalsurplusnotenoughtowrittendown,thanretainedearningadjusted. (2)Businesscombinationnotundercommoncontrol Asforbusinesscombinationnotundercommoncontrol,combinationcostsrefertothesumofthefairvalueoftheassetspaid, liabilitiesoccurredorassumedaswellasequitysecuritiesissuedbytheacquirertoobtaincontrolovertheacquireasatthe acquisitiondate. Asforacquireethatobtainedbyconsolidationnotunderthesamecontrol,thequalifiedconfirmationofidentified assets,liabilityandcontingencyliabilitiesshouldcalculatedbyfairvalueondayofpurchased.Iftheconsolidationcostlargerthan thefairvalueamountofindentifiednetassetsfromacquiree’s,thedifferencesshouldberecognizedasgoodwill.Iftheconsolidation costlessthanthefairvalueamountofindentifiednetassetsfromacquiree’s,thedifferencesshouldreckonedintocurrentgains/losses afterre-examination. 6.Preparationmethodsforconsolidatedfinancialstatements (1)Consolidationfinancialstatementrange TheCompanyincludesallthesubsidiaries(includingtheseparateentitiescontrolledbytheCompany)intoconsolidatedfinancial statement,includingcompaniescontrolledbytheCompany,non-integralpartoftheinvesteesandstructuralmainbody. (2)Centralizeaccountingpolicies,balancesheetdatesandaccountingperiodsofparentandsubsidiaries. AsfortheinconsistencybetweenthesubsidiariesandtheCompanyintheaccountingpoliciesandperiods,thenecessaryadjustment ismadeonthesubsidiaries’financialstatementsinthepreparationoftheconsolidatedfinancialstatementsaccordingtothe Company’saccountingpoliciesandperiods. (3)Setoffofconsolidatedfinancialstatement Theconsolidatedfinancialstatementsshallbepreparedonthebasisofthebalancesheetoftheparentcompanyandsubsidiaries, whichoffsettheinternaltransactionsincurredbetweentheparentcompanyandsubsidiariesandwithinsubsidiaries.Theowner’s equityofthesubsidiariesnotattributabletotheparentcompanyshallbepresentedasminorityequityundertheowner’sequityitem intheconsolidatedbalancesheet.Thelongtermequityinvestmentoftheparentcompanyheldbythesubsidiaries,deemedas treasurystockofthecorporategroupaswellasthereductionofowners’equity,shallbepresentedas“Less:treasurystock”underthe owners’equityitemintheconsolidatedbalancesheet. (4)Accountingforacquisitionofsubsidiarythroughcombination Forsubsidiaries acquired under enterprise merger involving enterprises under common control, the assets, liabilities,operatingresultsandcashflowsofthesubsidiariesareincludedintheconsolidatedfinancialstatementsfromthe beginning ofthefinancial year inwhichthe combinationtook place.When preparing the consolidated financial statements, for thesubsidiaries acquired from businesscombinationnotinvolvingentitiesunder commoncontrol,the identifiablenetassetsofthesubsidiariesareadjustedonthebasisoftheirfairvaluesonthedateofacquisition. 7.Classificationofjointarrangementsandaccountingtreatmentofjointoperation (1)Classificationofjointarrangements Jointarrangementsaredividedintojointoperationsandjointventures.Jointarrangementsachievednotthroughseparateentitiesare classifiedasjointoperations.Separateentitiesrefertotheentitieswithseparateidentifiablefinancialarchitectureincludingseparate legalentitiesandlegallyrecognizedentitieswithoutthequalificationoflegalentity.Jointarrangementsachievedthroughseparate entitiesaregenerallyclassifiedasjointventures.Incaseofchangesinrightsentitledtoandobligationsundertakenbythepartiesof jointventureunderajointarrangementduetothechangesinrelevantfactsandcircumstances,thepartiesofjointventurewill re-assesstheclassificationofjointarrangements. (2)Accountingtreatmentforjointoperations Thepartiesofjointoperationshouldrecognizethefollowingitemsinrelationtotheirshareofinterestinjointoperation,andproceed withaccountinginaccordancewiththerelevantprovisionsundertheAccountingStandardsforBusinessEnterprises:torecognize theirseparateassetsorliabilitiesheld,andrecognizetheassetsorliabilitiesjointlyheldaccordingtotheirrespectiveshares;to recognizetheincomefromthedisposaloftheiroutputshareunderjointoperation;torecognizetheincomefromthedisposalof outputunderjointoperationaccordingtotheirrespectiveshares;torecognizetheexpensesincurredseparately,andrecognizethe expensesincurredunderjointoperationaccordingtotheirrespectiveshares. Forthepartiesofajointoperationnotundercommoncontrol,iftheyareentitledtorelevantassetsandundertakerelevantliabilities ofthejointoperation,accountingwillbecarriedoutwithreferencetotheprovisionsofthepartiesofjointoperation;otherwise,it shouldbesubjecttorelevantAccountingStandardsforBusinessEnterprises. (3)Accountingtreatmentforjointventures ThepartiesofajointventureshouldperformaccountingforinvestmentsbythejointventureinaccordancewiththeAccounting StandardsforBusinessEnterprisesNo.2–Long-termEquityInvestments.Thepartiesnotundercommoncontrolshouldcarryout accountingdependingontheirinfluenceonthejointventure. 8.Determinationcriteriaofcashandcashequivalent Thecashrecognizedinthepreparationofthecashflowstatements,istheCompany’sstoragecashanddepositsavailableforpayment anytime.Thecashequivalentsrecognizedinthepreparationofthecashflowstatementsreferstotheinvestmentheldbythe Companywithcharacteristicofshort-term,strongmobility,easytransfertoknownsumcashandhasslimriskfromvaluechanges. 9.Foreigncurrencyexchangeandtheconversionofforeigncurrencystatements (1)Foreigncurrencyexchange Theforeigntrading,shallbeconvertedwiththeratesofexchange,releasedbyPeople’sBankofChinaatbeginningofthecurrent month,whentradingoccurred.Onthebalancesheetday,themonetaryitemsareconvertedonthecurrentrateonthebalancesheet day,concerningtheexchangedifferencesbetweenthespotexchangerateonthatdateandinitialconfirmationorthesportexchange rateonpreviouslybalancesheetdate,shouldreckonedintocurrentgains/lossesexceptthecapitalizingonexchangedifferencesfor foreignspecificloans,whichwasreckonedintocostforcapitalizing. Thenon-monetaryitemsmeasuredonthehistoriccostarestill measuredbytheoriginalbookkeepingratewiththesumofthebookkeepingstandardcurrencyunchanged.Itemsofnon-monetary foreigncurrencywhichwascalculatedbyfairvalue,shouldconvertedbyspotexchangerateontheconfirmationdayoffairvalue, differencebetweentheconvertedamountofbookkeepingcurrencyandoriginalamountofbookkeepingcurrency,wastreatedas changesoffairvalue(includingexchangeratechanged)reckonedintocurrentgains/lossesorrecognizedasotherconsolidated income. (2)Conversionofforeigncurrencyfinancialstatements Upontheconversionoftheforeigncurrencyfinancialstatementsofthecontrollingsubsidiaries,jointenterprises,andtheaffiliated enterprisesonthebookkeepingstandardcurrencydifferentfromtheCompany’s,theaccountingcheckandpreparationofthe consolidatedfinancialstatementsaremade.Assetsandliabilitiesitemsinthebalancesheetareconvertedonthecurrentrateonthe balancesheetday;owners’equityitemsbesidesthe“retainedprofit”item,theotheritemsareconvertedontheactualrate.The revenueandexpenses,shallbeconvertedwiththeratesofexchange,releasedbyPeople’sBankofChinaatbeginningofthecurrent month,whentradingoccurred.Theconversiondifferenceoftheforeigncurrencyfinancialstatementsislistedspecificallyinthe owners’equityinthebalancesheet.Thecashflowofforeigncurrency,whichwasrecognizedbysystematicrationalmethod,shallbe convertedwiththeratesofexchange,releasedbyPeople’sBankofChinaatbeginningofthecurrentmonth,whentradingoccurred. Thecashinfluencedbytheratefluctuationislistedspecificallyinthecashflowstatement.Asfortheforeignoperation,the conversiondifferenceoftheforeigncurrencystatementrelatedtotheforeignoperationistransferredinproportionintothedisposal ofthecurrentloss/gain. 10.Financialinstruments (1)Categoriesandrecognitionoffinancialinstruments Thefinancialinstrumentsareclassifiedasthefinancialassets,liabilitiesandequityinstruments.AstheCompanybecomesoneparty ofthefinancialinstrumentcontract,theinstrumentisrecognizedasonefinancialasset,liabilityorequityinstruments. Intheinitialrecognition,thefinancialassetsareclassifiedas,thefinancialassetsmeasuredonfairvalueandwithitschanges reckonedintothecurrentloss/gain,long-terminvest-bonds,accountreceivables,andfinancialassetsavailableforsale.Categoriesof thefinancialassetsbesidesaccountreceivablesaredependentontheholdingintentionandpurposeoftheCompanyandits subsidiariesforthefinancialassets.Intheinitialrecognition,thefinancialliabilitiesareclassifiedasthefinancialliabilitiesmeasured onthefairvalueandwithitschangesreckonedintothecurrentloss/gain,otherfinancialliabilities. Thefinancialassetsmeasuredbyfairvalueandwithitsvariationreckonedintocurrentgains/lossesincludingthetransacitonal finacnialassetsheldforsaleinshortperiod,andthefinancialassetsinitiallyrecognziedasfinancialassetsmeasuredbyfairvalue andwithitsvariationreckonedintocurrentgains/losses;receivablesarenon-derivativefinancialassetswithfixedordeterminable paymentsthatarenotquotedinanactivemarket;available-for-salefinancialassetsarenon-derivativefinancialassetsthatareeither designatedinthiscategoryornotclassifiedinanyoftheothercategoriesatinitialrecognition;held-to-maturityinvestmentsare non-derivativefinancialassetswithfixedmaturityandfixedordeterminablepaymentsthatmanagementhasthepositiveintention andabilitytoholdtomaturity. (2)Measurementoffinancialinstruments Intheinitialrecognition,thefinancialinstrumentsaremeasuredonfairvalue;andthefollow-upmeasurementsare:financialassets andfinancialassetsavailableforsalethatmeasuredbyfairvalueandwithalterationreckonedintocurrentgains/lossestogetherwith thefinancialliabilitiesthatmeasuredbyfairvaluewithalterationreckonedintocurrentgains/lossesshouldmeasuredbyfairvalue; theheld-to-maturitysecurities,loans,accountreceivableandotherfinancialliabilityaremeasuredbyamortizedcost;asforthe equityinstrumentinvestmentwithoutquoteinanactivemarketandwithitsfairvaluecannotbereliablymeasured,andthose derivativefinancialassetsorliabilitythatpaidwithequityinstrument,whichhavehookwithsuchinstrument,shouldmeasuredby cost.Theloss/gainfromthefairvaluechangesinthefollow-upmeasurementofthefinancialassetsandliabilities,besidesone relatedtothehedge,isdealtwithinthefollowingmethods:①Thefinancialassetsorliabilitiesmeasuredonthefairvalueandwith itschangesreckonedintothecurrentloss/gain,arereckonedintothefairvalueloss/gain;②Thefairvaluechangeofthefinancial assetsavailableforsale,isreckonedintotheothercomprehensiveincome. (3)Recognitionofthefairvalueforthefinancialassetsandliabilities Forthosefinancialinstrumentsexistinginactivemarkets,marketquotationintheactivemarketisusedtoconfirmtheirfairvalues; fairvalueofthefinancialinstrumentswhichhavenoactivemarketisconfirmedbyadoptionofestimationtechnology.The estimationtechnologymainlyincludingmarketapproach,incomeapproachandcostmethod (4)Recognitionbasisandmeasurementmethodforthetransferoffinancialassets/liabilities Asforthefinancialassetswithallrisksandcompensationsontheirpatenttransferred,orallrisksandcompensationsneither maintainednortransferredbutthecontrolovertheassetsgivenup,therecognitionofthefinancialassetmayterminate.Forthe financialassetsarequalifiedfortherecognitionofterminationconditions,themeasurementmaybetakenonthefinancialassets transfer,namelythedifferenceisreckonedintothecurrentloss/gain,betweenthebookvalueofthetransferredfinancialassetsand, thetotaloftheconsiderationvaluereceivedfromthetransferandthefairvaluechangeaccumulativesumoriginallybookedintothe capitalreserve.Ifthepartialtransfersatisfiesthecriteriaforderecognition,theentirecarryingvalueofthetransferredfinancialasset shallproportionallyallocatedbetweenthederecognizedportionandtheretainedportionaccordingtotheirrespectiverelativefair value. Whenallorpartofthecurrentobligationtoafinancialliabilityhasbeenterminated,theentireorpartofsuchfinancialliabilityshall bederecognized. (5)Impairmentlossonfinancialassets Whenanimpairmentlossonafinancialassetcarriedatamortizedcosthasoccurred,theamountoflossisprovidedforatthe differencebetweentheasset’scarryingamountandthepresentvalueofitsestimatedfuturecashflows(excludingfuturecreditlosses thathavenotbeenincurred).Ifthereisobjectiveevidencethatthevalueofthefinancialassetrecoveredandtherecoveryisrelated objectivelytoaneventoccurringaftertheimpairmentwasrecognized,thepreviouslyrecognizedimpairmentlossisreversedandthe amountofreversalisrecognizedinprofitorloss. Wherethereisobjectiveevidencethatanimpairmentlossonavailable-for-salefinancialassetsoccurs,thecumulativelossarising fromthedeclineinfairvaluethathadbeenrecognizeddirectlyinequityisremovedfromequityandrecognizedinimpairmentloss. Foreninvestmentindebtinstrumentclassifiedasavailable-for-saleonwhichimpairmentlosseshavebeenrecognized,if,ina subsequentperiod,itsfairvalueincreasesandtheincreasecanbeobjectivelyrelatedtoanevenoccurringaftertheimpairmentloss wasrecognizedinprofitorloss,thepreviouslyrecognizedimpairmentlossisreversedandrecognizedinprofitorlossforthecurrent period.Foraninvestmentinanequityinstrumentclassifiedasavailable-for-saleonwhichimpairmentlosseshavebeenrecognized, theincreaseinitsfairvalueinasubsequentperiodisrecognizedinequitydirectly. Forinvestmentsinequityinstruments,thespecificquantitativecriteriafortheCompanytodetermine“serious”or“nottemporary” decreaseintheirfairvalue,costcomputingmethod,methodfordeterminingclosingfairvalue,andbasisfordeterminingthe continuousdecreaseperiodaresetoutbelow: Specificquantitativecriterionon“serious”decreaseinDecreaseinclosingfairvaluerelativetothecosthasreachedor theirfairvalue exceeded50% Specific quantitative criterion on “not temporary” Fallfor12consecutivemonths decreaseintheirfairvalue Considerationofpaymentatacquisition(netofcashdividends declaredbutnotyetpaidorduebutunpaidinterestonbonds) Costcomputingmethod and the relevant transaction cost are recognized as the investmentcost. Asfor afinancialinstrumentforwhichthereisan active market,thequotedpricesintheactivemarketshallbeusedto Methodfordeterminingclosingfairvalue recognizethefairvaluesthereof.Wherethereisnoactive marketforafinancialinstrument,theenterpriseconcernedshall adoptvalueappraisaltechniquestodetermineitsfairvalue. Thereboundinthecontinuousfallortheperiodwiththetread Basisfordeterminingthe offallislessthan20%margin.Rebounddurationnotmore continuousdecreaseperiod thansixmonthsistreatedascontinuousdecreaseperiod. 11.Accountreceivable (1)Accountreceivableswithsinglemajoramountandwithdrawalbaddebtprovisionindependently Bookbalanceoftheaccountreceivablewithover0.5million Criterionoramountstandardsofmajorsingleamount Yuan Withdrawalmethodforindividualbaddebtprovisionaccrual Recognizedonthedifferencebetweenthebookvalueandthe withmajorsingleamountconcerned currentvalueoftheestimativefuturecashflow (2)Accountreceivablewithbaddebtprovisionaccrualbyportfolio Portfolio Accruedmethodforbaddebts Ageportfolio Agingofaccounts Withdrawingbadbedprovisionbyagingmethodinportfolio: √Applicable□Notapplicable Accruedproportionofotheraccounts Accountages Accruedproportionofaccountsreceivable receivable 1-2years 5.00% 5.00% 2-3years 10.00% 10.00% Overthreeyears 30.00% 30.00% Withdrawingbadbedprovisionbypercentageoftotalaccountsreceivableoutstandinginportfolio: □Applicable√Notapplicable Withdrawingbadbedprovisionbyothermethodsinportfolio: □Applicable√Notapplicable (3)Accountreceivablewithminorsingleamountbuthasindividualbaddebtprovisionaccrual Reasonsforindividualbaddebtprevisionaccrual Receivablehasminoramountandcannotreflecttherisk characteristicbywithdrawingbaddebtprovisionbygroup Recognizedonthedifferencebetweenthebookvalueandthe Accruedmethodforbaddebtprovision currentvalueoftheestimativefuturecashflow 12.Inventory Whetherthecompanyneedstocomplywiththedisclosurerequirementsoftheparticularindustry No (1)Categoriesofinventory Theinventoryisgoodsormanufacturedproductsheldforsale,productsinprocess,andmaterialsandmattersutilizedinthe productionorsupplyoflabor.Itmainlyconsistsoftherawmaterial,productsinprocess,inventorygoods,consumablelow-value product,homemadesemi-finishedproductsandcommissionedprocessingmaterialsetc. (2)Accountingmethodforinventorydelivery Wheninventoriesareissued,theactualcostisdeterminedbythefirstinfirstoutmethod. (3)Accrualmethodinventoryfallingpricereserves Onthebalancesheetday,theinventoryismeasuredontheloweronebetweenthecostandthenetrealizablevalue,andtheprovision forthefallingpricereservesisaccruedoneachinventoryitem;however,asfortheinventoryoflargequantityandlowprice,the provisionisaccruedontheinventorycategory. (4)Inventorysystem InventorysystemoftheCompanyisperpetualinventorysystem (5)Amortizationmethodforthelow-valueconsumablesandwrappage Low-valueconsumablesandpackagesareamortizedbyone-pointmethod 13.Classifytoassetsavailableforsale Thenon-currentassetsmeetthefollowingconditionsshallclassifyasassetsavailabelforsale:1.resolutionofdisposalonsuch non-currentasstsarebeingmade;2.Signinganirrevocabletransferagreementwithacquiringparty;and3.thetransferwillcomplete inoneyear. 14.Longtermequityinvestment (1)Recognitionofinitialinvestmentcost Initialinvestmentcostoflongtermequityinvestmentobtainedbycorporateconsolidation:inthecaseoftheconsolidationof enterprisesunderthesamecontrol,recognizedastheinitialcostisthebookvalueoftheowners’equityobtainedfromthe consolidatedparty;inthecaseoftheconsolidationofenterprisesnotunderthesamecontrol,recognizedastheinitialcostisthe recognizedconsolidationcostonthepurchaseday.Asforthelongtermequityinvestmentobtainedbycashpayment,theinitial investmentcostistheactualpurchasepayment.Asforthelongtermequityinvestmentobtainedbytheequitysecuritiesoffering,the initialinvestmentcost isthefairvalueof theequitysecurities. Asforthelong-termequityinvestment obtainedbydebt reorganization,initialinvestmentcostofsuchinvestmentshoulddeterminebyrelevantregulationofthe“AccountingStandardsfor BusinessEnterpriseNo.12-DebtReorganization”;Asforthelongtermequity investmentobtainedbytheexchangeof the non-monetaryassetsandthedebtsrestructuring,theinitialinvestmentcostisrecognizedontherelevantrulesinthePrinciples. (2)Subsequentmeasurementandprofitorlossrecognition Wheretheinvestorhasacontrolovertheinvestee,long-termequityinvestmentsaremeasuredusingcostmethod.Long-termequity investmentsinassociatesandjointventuresaremeasuredusingequitymethod.Wherepartoftheequityinvestmentsofaninvestorin itsassociatesareheldindirectlythroughventureinvestmentinstitutions,commonfund,trustcompaniesorothersimilarentities includinginvestmentlinkedinsurancefunds,suchpartofequityinvestmentsindirectlyheldbytheinvestorshallbemeasuredatfair valuethroughprofitorlossaccordingtoaccordingtorelevantrequirementsofAccountingStandardsforBusinessEnterprises No.22—RecognizationandmeasurementofFinancialInstrumentsregardlesswhethertheaboveentitieshavesignificantinfluenceon suchpartofequityinvestments,whiletheremainingpartshallbemeasuredusingequitymethod. (3)Basisofconclusionforcommoncontrolandsignificantinfluenceovertheinvestee Jointcontroloveraninvesteereferstowheretheactivitieswhichhaveasignificantinfluenceonreturnoncertainarrangementcould bedecidedonlybymutualconsentoftheinvestingpartiessharingthecontrol,whichincludesthesalesandpurchaseofgoodsor services,managementoffinancialassets,acquisitionanddisposalofassets,researchanddevelopmentactivitiesandfinancing activities,etc.;Significantinfluenceontheinvesteereferstothat:significantinfluenceovertheinvesteeexistswhenholdingmore than20%butlessthan50%oftheshareswithvotingrightsoreveniftheholdingisbelow20%,thereisstillsignificantinfluenceif anyofthefollowingconditionsismet:thereisrepresentativeintheboardofdirectorsorsimilargoverningbodyoftheinvestee; participationintheinvestee’spolicysettingprocess;assignkeymanagementtotheinvestee;theinvesteereliesonthetechnologyor technicalinformationoftheinvestingcompany;ormajortransactionswiththeinvestee. 15.Investmentrealestate Measurementforinvestmentrealestate Costmethod Depreciationoramortizationmethod TheleasedbuildingsintheCompany’sinvestmentpropertyadoptsstraight-linedepreciationtocalculateanddistilldepreciation,the specificdepreciationperiodis5to50years,theestimatedresidualrateis10.00%,andtheannualdepreciationrateis1.80%-18.00%; theleasedlanduserightsintheinvestmentpropertyandthelanduserightstobetransferredafterappreciationadoptstraight-line amortization,thespecificamortizationperiodis50years,theestimatedresidualrateis10.00%,andtheannualamortizationrateis 1.80% 16.Fixedassets (1)Recognition Thefixedassetsreferstothetangibleassetsthatpossessthefeaturesasfollows:1.theyareheldforthesakeofproducing commodities,renderinglaborservice,rentingorbusinessmanagement;and2.theirusefullifeisinexcessofonefiscalyearwithover 2000Yuaninvalue.Meanwhileasuptothefollowingconditions,theyarerecognized:theeconomicinterestrelatedtothefixed assetsprobablyflowintotheCompany;thecostofthefixedassetscanbemeasuredreliably. (2)Depreciationmethod Category Depreciationmethod Depreciationlife(year) Salvagerate Annualdepreciationrate Houseandbuildings Straight-linedepreciation20-50 10.00% 1.80%-4.50% Machineryequipment Straight-linedepreciation10 10.00% 9.00% Moldequipment Straight-linedepreciation3 10.00% 30.00% Transportation Straight-linedepreciation5 10.00% 18.00%equipmentInstrumentequipment Straight-linedepreciation5 10.00% 18.00%Toolequipment Straight-linedepreciation5 10.00% 18.00%Officeequipment Straight-linedepreciation5 10.00% 18.00%17.ProjectinprogressProjectinprogressoftheCompanydividedasself-runconstructionandout-bagconstruction.TheprojectinprogressoftheCompanycarriedforwardasfixedassetswhiletheconstructionisreadyfortheintendeduse.Criteriaoftheexpectedconditionforuseshouldapplyoneofthefollowconditions:Thesubstanceconstruction(installationincluded)ofthefixedassetshascompletedall orbasically;Astheprojectshavebeenintestproductionoroperation,andtheresultsshowthattheassetscanoperateproperlyand producethequalifiedproductsstably,orthetestoperationresultshowstheassetscanoperateoropenproperly.Theexpenditureof thefixedassetsontheconstructionisalittleorlittle.Thefixedassetsoftheprojectconstructedhavebeenuptotherequirementsof thedesignorcontract,orbasicallyupto. 18.Borrowingexpenses (1)Recognitionprincipleoncapitalizationofborrowingexpenses AsfortheCompany’sactualborrowingexpensesdirectlyattributabletotheassetsconstructionorproduction,itiscapitalizedand reckonedintotherelevantassetscost;asforotherborrowingexpenses,itisrecognizedontheactualsumandreckonedintothe currentloss/gain.Theassetsuptothecapitalizationareassetsasthecapitalassets,investmentrealestate,andinventoryreachingthe expectantavailabilityorsaleability. (2)Calculationofthecapitalization Capitalizationterm:theperiodfromthetimestartstocapitalizationtothetimethecapitalizationends.Theperiodofcapitalization suspendedisnotincluded.Thecapitalizationofborrowingexpensesshouldbesuspendedwhiletheabnormalinterrupt,which surpassthreemonthscontinuously,inthemiddleofacquisitionorconstructionorproduction. Asfortheborrowingofthespecificborrowing, thecapitalizationsumisrecognizedonthecurrentactualinterestexpenseslessthe interestincomeoftheborrowingcapitalnotutilizedbutdepositedinthebankorthereturnofthetemporaryinvestment;Asforthe appropriationofthegeneralborrowing,thecapitalizationsumisrecognizedontheweightedaverageof,theaccumulativeassets expenditureabovethespecificborrowing,andtimesthecapitalizationrateoftheappropriation;Asforthediscountorpremiumof theborrowing,thediscountorpremiumtobedilutedineveryaccountingperiodisrecognizedintheactualratemethod. Theeffectiveinterestmethodisthemethodforthemeasurementofthediluteddiscountorpremiumorinterestexpensesontheactual interestrate;andtheactualinterestrateistheinterestrateusedinthediscountofthefuturecashflowintheexpectantdurationperiod asthecurrentbookvalueoftheborrowing. 19.Intangibleassets (1)Accountingmethod,servicelifeandimpairmenttest TheCompany’sintangibleassetsaremeasuredinitiallyoncost.Theintangibleassetspurchasedinaretakenastheactualcostonthe actualpaymentandrelevantexpenditure.Asfortheintangibleassetsinvestedinbytheinvestors,theactualcostisrecognizedonthe valuestipulatedinthecontractoragreement;however,ifwhatisstipulatedinthecontractoragreementisnotfairvalue,theactual costisrecognizedonfairvalue.Asfortheself-developedintangibleassets,theircostistheactualtotalexpenditurebeforereaching theexpectantpurpose. Thefollow-upmeasurementsoftheCompany’sintangibleassetsrespectivelyare:thelineamortizationmethodistakenonthe intangibleassetsoffiniteservicelife,andattheyea-end,thecheckistakenontheservicelifeanddilutionoftheintangibleassets, andthecorrespondingadjustmentismadeifthereisinconsistencywiththepreviousestimativeones.Asfortheintangibleassetsof uncertainservicelife,itisnotdiluted,however,theservicelifeischeckedatyear-end;Ifthereissolidevidencetoitsfiniteservice life,itsservicelifeisestimatedanddilutedinstraightlinemethod. 20.Long-terminvestmentimpairment Long-termequityinvestments,investmentpropertiesmeasuredatcostandlong-termassetssuchasfixedassets,constructionin progress,productivebiologicalassetsatcostmethod,oilandgasassets,intangibleassetsandgoodwillaretestedforimpairmentif thereisanyindicationthatanassetmaybeimpairedatthebalancedate.Iftheresultoftheimpairmenttestindicatesthatthe recoverableamountoftheassetislessthanitscarryingamount,aprovisionforimpairmentandanimpairmentlossarerecognized fortheamountbywhichtheasset’scarryingamountexceedsitsrecoverableamount. Therecoverableamountisthehigherofanasset’sfairvaluelesscoststosellandthepresentvalueofthefuturecashflowsexpected tobederivedfromtheasset.Provisionforassetimpairmentisdeterminedandrecognizedontheindividualassetbasis.Ifitisnot possibletoestimatetherecoverableamountofanindividualasset,therecoverableamountofagroupofassetstowhichtheasset belongsisdetermined.Agroupofassetsisthesmallestgroupofassetsthatisabletogenerateindependentcashinflows. Goodwillarisingfromabusinesscombinationistestedforimpairmentatleastateachyearend,irrespectiveofwhetherthereisany indicationthattheassetmaybeimpaired.Forthepurposeofimpairmenttesting,thecarryingamountofgoodwillacquiredina businesscombinationisallocatedfromtheacquisitiondateonareasonablebasistoeachoftherelatedassetgroups;ifitis impossibletoallocatetotherelatedassetgroups,itisallocatedtoeachoftherelatedsetofassetgroups.Ifthecarryingamountofthe assetgrouporsetofassetgroupsishigherthanitsrecoverableamount,theamountoftheimpairmentlossfirstreducedbythe carryingamountofthegoodwillallocatedtotheassetgrouporsetofassetgroups,andthenthecarryingamountofotherassets (otherthanthegoodwill)withintheassetgrouporsetofassetgroups,proratabasedonthecarryingamountofeachasset. Oncetheimpairmentlossofsuchassetsisrecognized,itisnotbereversedinanysubsequentperiod. 21.Long-termdeferredexpenditure TheCompany’slong-termdeferredexpenditureisexpensespaidoutandwithoneyearabove(1-yearincluded)benefitperiod.The long-termunamortizedexpensesaredilutedbyperiodsaccordingtothebenefitperiod.Asthelong-termunamortizedexpenses cannotenabletheaccountingperiod’sbeneficiary,alldilutionvaluesoftheprojectundilutedyet,aretransferredintothecurrent loss/gain.22.Employeesbenefits(1)Accountingforshort-termbenefitsIntheperiodofemployeeservices,short-termbenefitsareactuallyrecognizedasliabilitiesandchargedtoprofitorloss,orifotherwiserequiredorallowedbyotheraccountingstandards,totherelatedcostsofassetsforthecurrentperiod.Atthetimeofactualoccurrence,TheCompany’semployeebenefitsarerecordedintotheprofitsandlossesofthecurrentyearorassetsassociatedcostsaccordingtotheactualamount.Thenon-monetaryemployeebenefitsaremeasuredatfairvalue.Regardingtothemedicalandhealthinsurance,industrialinjuryinsurance,maternityinsuranceandothersocialinsurances,housingfundandlaborunionexpenditureandpersonneleducationthattheCompanypaidforemployees,theCompanyshouldrecognizecorrespondingemployeesbenefitspayableaccordingtotheappropriationbasisandproportionasstipulatedbyrelevantrequirementsandrecognizethecorrespondingliabilitiesandincludetheseexpensesintheprofitsorlossesofthecurrentperiodorrecognizedasrespectiveassetscosts.(2)Accountingforpost-employmentbenefitsDuringtheaccountingperiodinwhichanemployeeprovidesservice,theamountpayablecalculatedunderdefinedcontributionschemeshallberecognizedasaliabilityandrecordedinprofitandlossofthecurrentperiodorinassets.Inrespectofthedefinedbenefitscheme,theCompanyshallusetheprojectedunitcreditmethodandattributethewelfareobligationscalculatedusingthe formulastipulatedbythedefinedbenefitschemetotheserviceperiodoftheemployee,andrecordtheobligationinthecurrentprofit andlossorrelatedassetscost. (3)Accountingforterminationbenefits TheCompanyrecognizesaliabilityandexpensesinthecurrentprofitorlossforterminationbenefitsattheearlierofthefollowing dates:whentheCompanycannolongerwithdrawtheofferofthosebenefits;andwhentheCompanyrecognizescostsfor restructuringinvolvingthepaymentofterminationcosts. (4)Accountingforotherlong-termemployeebenefits. TheCompanyprovidesotherlong-termemployeebenefits toitsemployees.Forthosefalling withinthescopeofdefined contributionscheme,theCompanyshallaccountforthemaccordingtorelevantrequirementsofthedefinedcontributionscheme.In addition,theCompanyrecognizesandmeasuresthenetliabilitiesornetassetsoftheotherlong-termemployeebenefitsaccordingto relevantrequirementsofthedefinedcontributionscheme. 23.Accrualliability Theobligationrelatedtocontingenciesisthecurrentobligationassumedbythecompany,andperformingthisobligationmayresult inanoutflowofeconomicbenefits,andthisobligationcanbedeterminedastheestimatedliabilitieswhentheamountcanbereliably measured.TheCompanymakesinitialmeasurementinaccordancewiththebestestimateforperformingtherelatedcurrent obligation,iftheexpenditureasneededhasacontinuousrange,andthelikelihoodofoccurrenceofvariousresultsinthisrangeisthe same,thebestestimateisdeterminedbythemedianvaluewithintherange;ifanumberofitemsareinvolved,thebestestimateis determinedbythecalculationofvariouspossibleoutcomesandrelatedprobabilities. Atthebalancesheetdate,thebookvalueofestimatedliabilitiesshouldberechecked,ifthereisconclusiveevidenceindicatesthat thisbookvaluecannottrulyreflectthecurrentbestestimate,andthenthebookvalueshouldbeadjustedinaccordancewiththe currentbestestimate. 24.Share-basedpayment TheCompany'sshare-basedpaymentincludestheequity-settledshare-basedpaymentsandthecash-settledshare-basedpayments. Theequity-settledshare-basedpaymentsinexchangefortheprovisionofservicesbyemployeesshallbemeasuredbythefairvalue oftheemployee’sequityinstruments.Whenthereisanactivemarket,itisdeterminedbythequotationintheactivemarket;ifthere isnoactivemarket,itisdeterminedbythevaluationtechnique,includingthepriceusedinthemarkettransactionsconductedbythe partieswhoarefamiliarwiththesituationandvoluntarilymaketransactions,thecurrentfairvalueofotherfinancialinstruments substantiallythesame,thediscountcashflowmethod,andtheoptionpricingmodel. Ateachbalancesheetdate,correctthestockoptionsamountofestimatedavailablerightsaccordingtothenewestachievedfollow-up informationsuchasthechangeinthenumberofavailablerights,thecompletionofperformanceindicators,etc.,andconfirmthecost shouldbeapportionedateachperiodonthebasisofthis.Asforthe optionchargesthatspanmultipleaccountingperiods,itis generallypossibletoapportionaccordingtotheproportionofthewaitingperiodofthisoptioninacertainaccountingperiod accountedfortheentirewaitingperiod. 25.Revenue Whetherthecompanyneedstocomplywiththedisclosurerequirementsoftheparticularindustry No (1)Salesofgoods TheCompanyshallascertaintherevenueincurredbysellinggoodsinaccordancewiththereceivedorreceivablepricestipulatedin thecontractoragreementsignedbetweentheenterpriseandthebuyerunlessthefollowingconditionsaremetsimultaneously:① thesignificantrisksandrewardsofownershipofthegoodshavebeentransferredtothebuyerbytheenterprise;②theenterprise retainsneithercontinuousmanagementrightthatusuallykeepsrelationwiththeownershipnoreffectivecontroloverthesoldgoods; ③therelevantamountofrevenuecanbemeasuredinareliableway;④relevanteconomicbenefitsmayflowintotheenterpriseand ⑤therelevantcostsincurredortobeincurredcanbemeasuredinareliableway. Moneycollectionforthecontractoragreementusethemodeofdeferred,actuallyhasthefinacningfeatures.Therevenueof commoditysalesarerecognizedbythefairvalueofthemoneyreceivableoncontractoragreement. (2)Laborserviceproviding Ifanenterprisecan,onthedateofthebalancesheet,reliablyestimatetheoutcomeofatransactionconcerningthelaborservicesit provides,itshallrecognizetherevenuefromprovidingservicesemployingthepercentage-of-completionmethod.Theenterprisecan ascertainthescheduleofcompletion(percentage-of-completion)underthetransactionconcerningtheprovidingoflaborservices basedoncalculationofcompletedworks. Ifanenterprisecannot,onthedateofthebalancesheet,measuretheresultofatransactionconcerningtheprovidingoflaborservice inareliableway,itshallbeconductedinaccordancewiththefollowingcircumstances,respectively:①ifthecostoflaborservices incurredisexpectedtobecompensated,therevenuefromtheprovidingoflaborservicesshallberecognizedinaccordancewiththe amountofthecostoflaborservicesincurred,andthecostoflaborservicesshallbecarriedforwardatthesameamount;②ifthecost oflaborservicesincurredisnotexpectedtocompensate,thecostincurredshouldbeincludedinthecurrentprofitsandlosses,andno revenuefromtheprovidingoflaborservicesmayberecognized. (3)Transitionofassetuseright WheneconomicbenefitsrelatingtotransitionofassetuserightislikelytoinflowintotheCompanyandtherelevantincomecanbe measuredreliably,theCompanyshallrecognizesuchincomefromtransitionofassetuseright 26.Governmentsubsidy (1)Determinationbasisandaccountingtreatmentforgovernmentgrantsrelatedtoassets GovernmentgrantobtainedbytheCompanyforthepurposeofconstructingorotherwiseforminglongtermassetsisrecognizedas governmentgrantrelatedtoassetswhichwillberecognizedasdeferredincome.Deferredincomeisaveragelyallocatedagainstthe estimatedservicelifeofassetsincetheassetisavailableforuse,andrecordedinprofitorlossforthecurrentperiod. (2)Determinationbasisandaccountingtreatmentforgovernmentgrantsrelatedtoincome Thegovernmentgrantsotherthanthegovernmentgrantsrelatedtoassetsarerecognizedasgovernmentgrantsrelatedtoincome. Governmentgrantsrelatedtoincomeshallbetreatedasfollows:thoseusedtocompensaterelevantexpensesorlossestobeincurred bytheenterpriseinsubsequentperiodsarerecognizedasdeferredincomeandrecordedinprofitandlossforthecurrentperiodwhen suchexpensesarerecognized;andthoseusedtocompensaterelevantexpensesorlossesthathavebeenincurredbytheenterpriseare recordeddirectlyinprofitorlossforthecurrentperiod. 27.Deferredincometaxasset/deferredincometaxliability (1)Wherethereisdifferencebetweenthecarryingamountoftheassetsorliabilitiesanditstaxbase,(asforanitemthathasnotbeen recognizedasanassetorliability,ifitstaxbasecanbedeterminedinlightofthetaxlaw,thetaxbaseshallrecognizedasthe difference)thedeferredincometaxanddeferredincometaxliabilitiesshallbedeterminedaccordingtotheapplicabletaxratein periodofassetsexpectedtorecoverorliabilityexpectedtopayoff. (2)Thedeferredincometaxassetsshallberecognizedtotheextentoftheamountofthetaxableincomewhichitismostlikelyto obtainandwhichcanbedeductedfromthedeductibletemporarydifference.Onbalancesheetdate,iftherehaveconcreteevidence ofobtaining,infutureperiod,enoughtaxableamountstodeductthedeductibletemporarydifference,theun-confirmeddeferred incometaxasstsinpreviousaccountingperiodshallberecognized.Iftherehasnoenoughtaxableamounts,obtainedinfutureperiod, todeductedthedeferredincometaxassets,bookvalueofthedeferredincometaxassetsshallbekeptindecreased. (3)Thetaxabletemporarydifferencesrelatedtotheinvestmentsofsubsidiarycompaniesandassociatedenterprisesshallrecognized asdeferredincometaxliability,unlesstheCompanycancontrolthetimeofthereverseoftemporarydifferencesandthetemporary differencesareunlikelytobereversedintheexpectedfuture.Asforthedeductibletemporarydifferencerelatedtotheinvestmentof thesubsidiarycompaniesandassociatedenterprises,deferredincometaxassetsshallberecognizedwhilethetemporarydifferences arelikelytobereversedintheexpectedfutureanditislikelytoacquireanyamountoftaxableincometaxthatmaybeusedfor makingupthedeductibletemporarydifferences. 28.Leasing (1)Accountingtreatmentforoperatinglease Operatingleasepaymentsarerecognizedonastraight-linebasisoverthetermoftherelevantlease,andareeitherincludedinthe costofrelatedassetorchargedtoprofitorlossfortheperiod. (2)Accountingtreatmentforfinancelease Atthecommencementoftheleaseterm,theGrouprecordstheleasedassetatanamountequaltothelowerofthefairvalueofthe leasedassetandthepresentvalueoftheminimumleasepayments.Thedifferencebetweentherecordedamountsisaccountedforas unrecognizedfinancecharge,usingtheeffectiveinterestmethodamortizationduringtheleaseterm.Minimumleasepayments deductingunrecognizedfinancingchargesarelistedaslong-termpayables. 29.Otherimportantaccountingpolicyandestimation Thecompanydoesnotdiscloseotherimportantaccountingpoliciesandaccountingestimates. 30.Changesinimportantaccountingpoliciesandestimates (1)Changesinimportantaccountingpolicies □Applicable√Notapplicable (2)Changesinimportantaccountingestimates □Applicable√Notapplicable VI.Taxes 1.Majortaxandtaxrate Taxes Taxationbasis Taxrate VAT Taxableincome 6%, 17% Urbanmaintenanceandconstructiontax Transfertaxpayable 7% Corporateincometax Taxableincome 25% Educationalsurtax Transfertaxpayable 3% Localeducationalsurtax Transfertaxpayable 2%, 1.5% Propertytax 70%oforiginalvalueoftheproperty 1.2% Explainthedifferenttaxationentityoftheenterpriseincometax Taxationentity Incometaxrate VII.Notestomajoritemsinconsolidatedfinancialstatements 1.Monetaryfund InRMB Item Closingbalance Openingbalance Cashonhand 219,461.32 235,039.12 Bankdeposit 59,375,612.16 91,075,765.36 Othermonetaryfund 6,757,024.62 2,021,905.33 Total 66,352,098.10 93,332,709.81 Otherexplanation (1)Othermonetaryfundsatperiod-endreferstothebankacceptancedeposits. (2)Amongthemonetaryfundsatperiod-end,capitalrestrictedamountedto6,757,024.62Yuan.Theamountedrestrictedat period-beginamountedto2,021,905.33Yuan. 2.Notereceivable (1)Category InRMB Item Closingbalance Openingbalance Bankacceptancebill 15,192,326.33 30,321,803.17 Commercialacceptancebill 23,106,982.47 22,341,297.72 Total 38,299,308.80 52,663,100.89 (2)Notereceivablepledgedatperiod-end InRMB Item Amountpledgedatperiod-end Bankacceptancebill 6,523,922.13 Total 6,523,922.13 (3)Notereceivablewhichhaveendorsedanddiscountatperiod-endandhasnotexpiredonbalancesheet date InRMB Item De-recognizationamountatperiod-end Unde-recognizationamountatperiod-end Bankacceptancebill 32,612,996.83 Commercialacceptancebill 17,913,186.02 Total 50,526,182.85 (4)Notestransfertoaccountreceivableforun-implementationfromthedraweratperiod-end InRMB Item Amounttransferredtoreceivableatperiod-end Otherexplanation 3.Accountreceivable (1)Categoryofaccountreceivable InRMB Closingbalance Openingbalance Category Bookbalance Baddebtprovision Book Bookbalance Baddebtprovision Bookvalue Proportio Accrual value Proportio Accrual Amount Amount Amount Amount n ratio n ratio Accountreceivable withsingle significantamount 7,556,36 7,556,36 7,649,7 7,649,789 3.19% 100.00% 5.00% 100.00% andwithdrawalbad 3.72 3.72 89.11 .11 debtprovision separatelyAccountreceivablewithbaddebt 223,856, 24,580.6 223,831,6139,832 139,808,05 94.46% 0.01% 91.36%24,580.65 0.02%provisionaccrualby 195.10 5 14.45 ,638.85 8.20portfolioAccountswithsinglesignificantamount 5,576,97 5,576,97 5,576,9 5,576,978andbaddebts 2.35% 100.00% 3.64% 100.00% 8.19 8.19 78.19 .19provisionaccruedindividually 236,989, 13,157,9 223,831,6153,059 13,251,34 139,808,05Total 100.00% 100.00% 537.01 22.56 14.45 ,406.15 7.95 8.20Accountreceivablewithmajorsingleamountandwithdrawalbaddebtprovisionsingleatperiod-end:√Applicable□Notapplicable InRMBAccountreceivable(by Closingbalance units) Accountreceivable Baddebtprovision Accrualratio AccrualreasonsShenzhenPortman 2,555,374.75 2,555,374.75 100.00%Un-collectableBowlingClubCo.,Ltd.HongKongHaowei 1,870,887.18 1,870,887.18 100.00%Un-collectableIndustrialCo.Ltd.TCLACEELECTRICAPPLIANCE 1,325,431.75 1,325,431.75 100.00%Un-collectable(HUIZHOU)CO.,LTDQingdaoHaierParts 1,225,326.15 1,225,326.15 100.00%Un-collectableProcurementCo.,Ltd.SKYWORTHMultimedia(Shenzhen) 579,343.89 579,343.89 100.00%Un-collectableCo.,Ltd.Total 7,556,363.72 7,556,363.72 -- --Accountreceivablewithbaddebtprovisionwithdrawalbymethodofaccountageinportfolio:√Applicable□Notapplicable InRMB Closingbalance Accountage Accountreceivable Baddebtprovision Accrualratio Sub-itemofwithinoneyear Subtotalofwithinoneyear 223,364,582.05 1-2year 491,613.05 24,580.65 5.00% Total 223,856,195.10 24,580.65 Explanationonportfoliobasis: Withdrawingbadbedprovisionbypercentageoftotalaccountsreceivableoutstandinginportfolio: □Applicable√Notapplicable Withdrawingbadbedprovisionbyothermethodsinportfolio: Accountswithsinglesignificantamountandbaddebtsprovisionaccruedindividually Accrual Debtor Bookbalance Baddebtprovision Accrualratio(%) reasons ShenzhenHuixin Un-collectable VideoTechnology 381,168.96 381,168.96 100.00 Co.,Ltd. ShenzhenWandelai Un-collectable DigitalTechnology 351,813.70 351,813.70 100.00 Co.,Ltd. ShenzhenDalong Un-collectable ElectronicCo.,Ltd. 344,700.00 344,700.00 100.00 ShenzhenKeya Un-collectable ElectronicCo.,Ltd. 332,337.76 332,337.76 100.00 YuehaiInternational Un-collectable Shipping 323,405.97 323,405.97 100.00 InternationalCo., Ltd. ShenzhenQunping Un-collectable ElectronicCo.,Ltd. 304,542.95 304,542.95 100.00 ChinaGalaxy Un-collectable Electronics(Hong 288,261.17 288,261.17 100.00 Kong)Co.,Ltd. DongguanWeite Un-collectable ElectronicCo.,Ltd. 274,399.80 274,399.80 100.00 HongKongNew Un-collectable CenturyElectronics 207,409.40 207,409.40 100.00 Co.,Ltd. ShenyangBeitai Un-collectable ElectronicCo.,Ltd. 203,304.02 203,304.02 100.00 BeijingXinfang Un-collectable WeiyeTechnology 193,000.00 193,000.00 100.00 Co.,Ltd. TCL Un-collectable ELECTRONICS 145,087.14 145,087.14 100.00 (HONGKONG) CO.,LTD. HuizhouTCLXinte Un-collectable ElectronicsCo.,Ltd. 142,707.14 142,707.14 100.00 ShenzhenSkyWorth Un-collectable –RGBElectronic 133,485.83 133,485.83 100.00 Co.,Ltd. Other Un-collectable 1,951,354.35 1,951,354.35 100.00 Total 5,576,978.19 5,576,978.19(2)Baddebtprovisionaccrual,switch-backortakenbackintheperiodBaddebtprovisionaccrualwas0.00Yuan;theamountcollectedorswitchesbackamountingto93,425.39Yuan.Includingmajoramountofbaddebtprovisionthatswitch-backortakenbackinthePeriod: InRMB Company Amountswitchbackortakenback Collectionway(3)Accountreceivableactuallychargeoffintheperiod InRMB Item AmountchargeoffIncludingmajoraccountreceivablechargeoff: InRMB Accountarising Accountreceivable Chargeoff Company Amountchargeoff Reasons fromrelated nature procedures transactions(Y/N)Explanationonaccountreceivablechargeoff(4)TopfivereceivablescollectedbyarrearspartyatendingbalanceTotalclosingbalanceoftopfivereceivablesbyarrearspartyamountingto196,189,807.89Yuan,takes82.78percentofthetotalaccountreceivableatyear-end,baddebtprovisionaccrualcorrespondinglyatyear-endamountingas1,225,326.15Yuan.Theamountoftopfivereceivablescollectedbyarrearspartyatendingbalancehasincreasedoverthatoflastperiod,mainlyduetothegrowthofproductssalesrevenue.(5)Accountreceivablederecognitionduetofinancialassetstransfer (6)Assetsandliabilitiesresultedbyaccountreceivabletransferandcontinuesinvolvement Otherexplanation: 4.Prepayments (1)Prepaymentslistedbyaccountage InRMB Closingbalance Openingbalance Accountage Amount Proportion Amount Proportion Withinoneyear 5,288,241.11 94.92% 12,760,284.18 97.59% 1-2year 57,639.57 1.03% 17,494.85 0.13% 2-3year 225,369.97 4.05% 297,942.90 2.28% Total 5,571,250.65 -- 13,075,721.93 -- Explanationonprepaymentswithoveroneyearinageandreasonsofun-settle: (2)Top5prepaymentscollectedbyobjectsatendingbalance Totalyear-endbalanceoftopfiveadvancepaymentbyprepaymentobjectamountedto4,285,000.00Yuan,takes76.91percentof thetotaladvancepaymentatyear-end. Otherexplanation: 5.Otheraccountreceivable (1)Categoryofotheraccountreceivable InRMB Closingbalance Openingbalance Bookbalance Baddebtprovision Bookbalance Baddebtprovision Category Book Proportio Accrual Proportio Accrual Bookvalue Amount Amount value Amount Amount n ratio n ratio Otheraccount receivablewith singlesignificant 19,668,2 6,042,82 13,625,42 7,572,2 6,042,827 1,529,426.6 61.20% 30.72% 41.36% 79.80% amountand 54.02 7.38 6.64 54.02 .38 4 withdrawalbaddebt provisionseparately Otheraccount 4,117,06 12.81% 57,893.1 1.41%4,137,972 2,384,0 13.02%57,893.17 2.43%2,326,151.8 receivablewithbad 7.05 7 .28 45.02 5 debtprovision accrualbyportfolio Otheraccount receivablewith singleminoramount 8,351,89 8,273,10 8,351,8 8,273,100 25.99% 99.06% 45.62% 99.06% 78,798.40 butwithdrawalsingle 8.56 0.16 98.56 .16 itembaddebt provision 32,137,2 14,373,8 17,763,39 18,308, 14,373,82 3,934,376.8Total 100.00% 100.00% 19.63 20.71 8.92 197.60 0.71 9Otheraccountreceivablewithmajorsingleamountandwithdrawalbaddebtprovisionsingleatperiod-end:√Applicable□Notapplicable InRMBOtheraccountreceivable Closingbalance (units) Otheraccountreceivable Baddebtprovision Accrualratio AccrualreasonsShenzhenJifang 12,096,000.00 WithoutbaddebtrisksInvestmentCo.,Ltd.ShenzhenJifang 1,268,800.00 380,640.00 30.00%PartiallyrecyclableInvestmentCo.,Ltd.Portman 4,021,734.22 4,021,734.22 100.00%Un-collectableWuwuBranchofShenzhenDachong 641,266.64 WithoutbaddebtrisksIndustrialCo.,Ltd.ZhaoBaomin 564,646.35 564,646.35 100.00%Un-collectableTrafficaccident 555,785.81 555,785.81 100.00%Un-collectablecompensationHebeiBotouCourt 520,021.00 520,021.00 100.00%Un-collectableTotal 19,668,254.02 6,042,827.38 -- --Otheraccountreceivablewithbaddebtprovisionwithdrawalbymethodofaccountageinportfolio:√Applicable□Notapplicable InRMB Closingbalance Accountage Otheraccountreceivable Baddebtprovision AccrualratioSub-itemofwithinoneyearSubtotalofwithinoneyear 3,826,013.051-2year 64,299.00 7,937.67 12.34%2-3year 90,355.00 9,035.50 10.00%Overthreeyears 136,400.00 40,920.00 30.00% Total 4,117,067.05 57,893.17 Explanationonportfoliobasis: Withdrawingbadbedprovisionbypercentageoftotalaccountsreceivableoutstandinginportfolio: □Applicable√Notapplicable Withdrawingbadbedprovisionbyothermethodsinportfolio: √Applicable□Notapplicable Otheraccountreceivablewithsingleminoramountbutwithdrawalsingleitembaddebtprovisionatperiod-end Debtor Bookbalance Baddebtamount Accrualratio(%) Accrualreasons Jiantao(Fogang)Laminates 465,528.10 465,528.10 Un-collectable Co.,Ltd. 100.00 Shenzhen Lotus Island 236,293.80 236,293.80 Un-collectable RestaurantCo.,Ltd. 100.00 ShenzhenMingliCo.,Ltd. 170,394.84 170,394.84 Un-collectable 100.00 ChinaGreatWallComputer 168,436.33 168,436.33 Un-collectable ShenzhenCompanyLimited 100.00 Shenzhen Hongya 156,390.00 156,390.00 Un-collectable ElectronicCo.,Ltd. 100.00 Shangxi Shengyi 156,239.32 156,239.32 Un-collectable TechnologyCo.,Ltd. 100.00 ChangchunArtificialResin 147,486.96 147,486.96 Un-collectable Co.,Ltd. 100.00 Shenzhen Xinlan 138,038.00 138,038.00 Un-collectable TechnologyCo.,Ltd. 100.00 Fujian Zhangzhou Weili 112,335.62 112,335.62 Un-collectable Electronic Enterprise Co., 100.00 Ltd. ChuangjingStudio 192,794.00 192,794.00 Un-collectable 100.00 Individualsborrow 1,799,073.12 1,799,073.12 Un-collectable 100.00 Laborunion 332,402.55 332,402.55 Un-collectable 100.00 Staffcanteenetc. 856,753.66 856,753.66 Un-collectable 100.00 Other 3,340,933.86 3,340,933.86 Un-collectable 100.00 Shenzhen Poly Property 78,798.40 Marginwithout GroupCo.,Ltd. accrual Total 8,351,898.56 8,273,100.16 —— —— (2)Baddebtprovisionaccrual,switch-backortakenbackintheperiod Baddebtprovisionaccrualwas0.00Yuan;theamountcollectedorswitchesbackamountingto0.00Yuan. Includingmajoramountofbaddebtprovisionthatswitch-backortakenbackinthePeriod: InRMB Company Amountswitch-backortakenback Collectionway (3)Otheraccountreceivableactuallychargeoffintheperiod InRMB Item Amountchargeoff Includingmajorotheraccountreceivablechargeoff: InRMB Accountarising Otheraccount Chargeoff Company Amountchargeoff Reasons fromrelated receivablenature procedures transactions(Y/N) Explanationonotheraccountreceivablechargeoff: (4)Otheraccountreceivableclassifyaccordingtonature InRMB Nature Endingbookbalance Openingbookbalance Margin 720,065.04 1,793,485.04 Borrowmoney 1,687,485.10 2,719,549.04 Intercoursefunds 9,829,847.66 7,503,053.91 Rentreceivable 19,868,931.85 6,195,824.01 Other 30,889.98 96,285.60 Total 32,137,219.63 18,308,197.60 (5)Top5otherreceivablescollectedbyarrearspartyatendingbalance InRMB Proportionintotal Endingbalanceof Company Nature Closingbalance Accountage otherreceivablesat baddebtprovision year-end ShenzhenJifang Rentreceivable 13,364,800.00Within1year 41.59% InvestmentCo.,Ltd. Portman Rentreceivable 4,021,734.22Overthreeyears 12.51% 4,021,734.22 WuwuBranchof ShenzhenDachong Leasingmargin 740,909.97Within1year 2.31% IndustrialCo.,Ltd. ZhaoBaomin Rentreceivable 564,646.35Overthreeyears 1.76% 564,646.35 Trafficaccident Intercoursefunds 555,785.81Overthreeyears 1.73% 555,785.81 compensationTotal -- 19,247,876.35 -- 59.89% 5,142,166.38(6)Accountreceivablesrelatedtogovernmentsubsidies InRMB Estimatedtime/amount Company Governmentsubsidies Closingbalance Endingaccountage ofcollectionandbasis(7)Otherreceivableforterminationofconfirmationduetothetransferoffinancialassets(8)TheamountofassetsandliabilitiesthataretransferredotherreceivableandcontinuedtobeinvolvedOtherexplanation:6.InventoryWhetherthecompanyneedstocomplywiththedisclosurerequirementsoftherealestateindustryNo (1)Categoryofinventory InRMB Closingbalance Openingbalance Item Provisionfor Provisionfor Bookbalance Bookvalue Bookbalance Bookvalue pricefall-down pricefall-down Rawmaterials 27,425,146.08 1,089,943.56 26,335,202.52 29,871,068.31 1,089,943.56 28,781,124.75 Goodsinprocess 65,822.68 65,822.68 0.00 Inventorygoods 22,953,891.26 914,927.55 22,038,963.71 15,940,570.96 914,927.55 15,025,643.41 Lowvalue 933,846.23 24,626.66 909,219.57 404,377.39 24,626.66 379,750.73 consumablesHomemadesemi-finished 2,859,200.40 41,816.29 2,817,384.11 2,757,682.20 41,816.29 2,715,865.91productsTotal 54,237,906.65 2,071,314.06 52,166,592.59 48,973,698.86 2,071,314.06 46,902,384.80DoestheCompanycomplywiththedisclosurerequirementof“InformationDisclosureGuidelinesofShenzhenStockExchangeNo.4–ListedCompaniesEngagedinSeedIndustryandPlantingBusiness”ornotNo (2)Provisionforpricefall-down InRMB Currentincreased Currentdecreased Item Openingbalance Switchbackor Closingbalance Accrual Other Other Written-off Rawmaterials 1,089,943.56 1,089,943.56 Inventorygoods 914,927.55 914,927.55 Lowvalue 24,626.66 24,626.66 consumablesHomemadesemi-finished 41,816.29 41,816.29productsTotal 2,071,314.06 2,071,314.06(3)Explanationoncapitalizationofborrowingcostsinendingbalanceofinventory(4)Assetscompletedwithoutsettleresultedbyconstructioncontractatperiod-end InRMB Item AmountOtherexplanation:7.Non-currentassetsduewithinoneyear InRMB Item Closingbalance OpeningbalanceDecorationfee 1,741.47 12,191.49Total 1,741.47 12,191.49Otherexplanation:8.Investmentrealestate (1)Investmentrealestatemeasuredatcost √Applicable□Notapplicable InRMB Item Houseandbuilding Landuseright Constructioninprocess Total I.Originalbookvalue 1.Openingbalance 133,661,686.94 133,661,686.94 2.Currentincreased (1)outsourcing (2)inventory\fixedassets\constructioninprocesstransfer-in (3)increasedbycombination 3.Currentdecreased (1)disposal(2)Othertransfer-out 4.Closingbalance 133,661,686.94 133,661,686.94II.Accumulateddepreciationandaccumulatedamortization 1.Openingbalance 79,516,461.92 79,516,461.92 2.Currentincreased 867,939.18 867,939.18 (1)accrualor 867,939.18 867,939.18amortization 3.Currentdecreased (1)disposal(2)Othertransfer-out 4.Closingbalance 80,384,401.10 80,384,401.10 III.Depreciationreserves 1.Openingbalance 2.Currentincreased (1)accrual 3、Currentdecreased (1)disposal(2)Othertransfer-out 4.ClosingbalanceIV.Bookvalue 1.Endingbook 53,277,285.84 53,277,285.84value 2.Openingbook 54,145,225.02 54,145,225.02 value (2)Investmentrealestatemeasureonfairvalue □Applicable√Notapplicable (3)Investmentrealestatewithoutpropertycertificationheld InRMB Item Bookvalue Reasons Otherexplanation 9.Fixedassets (1)Fixedassets InRMB Houseand Machinery Transportatio Tool Office Mold Instrument Item Total buildings equipment nequipment equipment equipment equipment equipment I.Original bookvalue: 1.Opening 65,608,798.8 77,069,199.6 12,606,833.3 174,538,795. 5,213,153.64 4,384,205.71 6,900,942.25 2,755,661.49 balance 5 9 9 02 2.Current 1,899,888.15 1,333,235.05 315,125.87 58,908.93 942,051.20 135,923.084,685,132.28increased 1,899,888.15 1,333,235.05 315,125.87 58,908.93 942,051.20 135,923.084,685,132.28(1)purchasing(2)Constructionin progresstransfer-in(3)increasedbycombination3.Current 280,526.00 152,298.00 1,181.28 2,101.06 436,106.34decreased(1)disposalor 280,526.00 152,298.00 432,824.00scrapping 4.Closing 65,608,798.8 78,688,561.8 13,548,884.5 178,787,820. 6,394,090.69 4,698,150.30 6,957,750.12 2,891,584.57balance 5 4 9 96II. Accumulative depreciation 1.Opening 12,890,366.5 57,558,303.0 92,994,088.0 3,162,640.76 2,566,496.57 5,197,749.19 9,192,414.59 2,426,117.30balance 6 3 02.Current 2,650,840.26 2,163,890.44 304,424.38 260,214.75 147,151.49 764,354.05 35,839.446,326,714.81increased 2,650,840.26 2,163,890.44 304,424.38 260,214.75 147,151.49 764,354.05 35,839.446,326,714.81(1)accrual3.Current 252,473.40 116,818.20 1,063.15 1,890.96 372,245.71decreased(1)disposalor 252,473.40 116,818.20 1,063.15 1,890.96 372,245.71scrapping 4.Closing 15,541,206.8 59,469,720.0 3,350,246.94 2,825,648.17 5,343,009.72 9,956,768.64 2,461,956.74 98,948,557.1balance 2 7 0 III. Depreciationreserves1.Openingbalance 2.Currentincreased(1)accrual3.Currentdecreased(1)disposalorscrapping4.Closingbalance IV.Book value 1.Ending 50,067,592.0 19,218,841.7 79,839,263.8 3,043,843.75 1,872,502.13 1,614,740.40 3,592,115.95 429,627.83 Bookvalue 3 7 6 2.Opening 52,718,432.2 19,510,896.6 81,544,707.0 2,050,512.88 1,817,709.14 1,703,193.06 3,414,418.80 329,544.19 Bookvalue 9 6 2 (2)Temporarilyidlefixedassets InRMB Accumulated Depreciation Item Originalbookvalue Bookvalue Note depreciation reserves (3)Fixedassetsacquiredbyfinancinglease InRMB Accumulated Item Originalbookvalue Depreciationreserves Bookvalue depreciation (4)Fixedassetsacquiredbyoperatinglease InRMB Item Endingbookvalue Houseandbuildings 931,635.11 (5)Certificateoftitleun-completed InRMB Item Bookvalue Reasons Otherexplanation 10、Constructioninprocess (1)Constructioninprocess InRMB Closingbalance Openingbalance Item Depreciation Depreciation Bookbalance Bookvalue Bookbalance Bookvalue reserves reserves RenovationprojectofHuafa 654,356.00 654,356.00 654,356.00 654,356.00BuildingTotal 654,356.00 654,356.00 654,356.00 654,356.00(2)Changesofmajorconstructioninprocessintheperiod InRMB AccumulincludingProporti Fixed ated :interest Interest Other onof assets amount capitaliz capitaliz Opening Current decrease Closing project Sourceof Item Budget transfer-i Progress of ed ationrate balance increased dinthe balance investme funds ninthe interest amount ofthe Period ntin Period capitaliz ofthe year budget ation year (3)Theprovisionforimpairmentofconstructionprojects InRMB Item Currentaccrualamount Accrualreason Otherexplanation 11.Disposaloffixedassets InRMB Item Closingbalance Openingbalance GongmingHuafaElectronicCity 92,857,471.69 92,857,471.69 Total 92,857,471.69 92,857,471.69 Otherexplanation: 12.Intangibleassets (1)Intangibleassets InRMB Non-patented Item Landuseright Patentright Softwareexpenses Total technology I.Originalbook value 1.Opening 55,187,826.36 661,878.97 55,849,705.33balance 2.Currentincreased(1)purchasing (2)internalR&D (3)increased bycombination 3.Currentdecreased (1)disposal4.Closing 55,187,826.36 661,878.97 55,849,705.33balance II.Accumulated amortization1.Opening 10,569,435.45 402,174.11 10,971,609.56balance 2.Current 685,967.97 24,942.96 710,910.93 increased (1)accrual 685,967.97 24,942.96 710,910.933.Currentdecreased (1)disposal4.Closing 11,255,403.42 427,117.07 11,682,520.49balance III.Depreciation reserves1.Openingbalance 2.Currentincreased(1)accrual3.Currentdecreased (1)disposal4.Closingbalance IV.Bookvalue 1.Endingbook 43,932,422.94 234,761.90 44,167,184.84 value 2.Opening 44,618,390.91 259,704.86 44,878,095.77 bookvalue TheproportionofintangibleassetsformbyinternalR&Dintotalbookvalueofintangibleassetsatperiod-end (2)Landuserightswithoutcertificateofownership InRMB Item Bookvalue Reasons Otherexplanation: 13.Long-termdeferredexpenditure InRMB Item Openingbalance Currentincreased AmortizedinPeriod Otherdecreased Closingbalance Golfmembershipfee 191,666.59 25,000.02 166,666.57 Total 191,666.59 25,000.02 166,666.57 Otherexplanation 14.Deferredincometaxasset/deferredincometaxliability (1)Deferredincometaxassetsun-offset InRMB Closingbalance Openingbalance Item Deductibletemporary Deferredincometax Deductibletemporary Deferredincometax differences asset differences asset Provisionforimpairment 26,449,578.92 6,612,394.73 26,543,004.31 6,635,751.08 ofassets Accrualliability 2,604,411.81 651,102.95 2,604,411.81 651,102.95 Other 4,754,489.08 1,188,622.27 4,754,489.08 1,188,622.27 Total 33,808,479.81 8,452,119.95 33,901,905.20 8,475,476.30 (2)Deferredincometaxliabilitiesun-offset InRMB Closingbalance Openingbalance Item Taxabletemporary Deferredincometax Taxabletemporary Deferredincometax differences liabilities differences liabilities (3)Amountofdeferredincometaxassetanddeferredincometaxliabilityaftertrade-off InRMB Endingbalanceof Trade-offbetweenthe Openingbalanceof Trade-offbetweenthe deferredincometax deferredincometax deferredincometax Item deferredincometax assetsorliabilitiesafter assetsandliabilitiesat assetsorliabilitiesafter assetsandliabilities off-set period-begin off-set Deferredincometax 8,452,119.95 8,475,476.30 asset (4)Deferredincometaxassetwithoutconfirmed InRMB Item Closingbalance Openingbalance Deductibleloss 936,025.05 1,006,234.22 Provisionforimpairmentofassets 3,153,478.41 3,153,478.41 Total 4,089,503.46 4,159,712.63 (5)Deductiblelossesofdeferredincometaxassetwithoutconfirmedwillexpiredinlateryear InRMB Year Closingamount Openingamount Note 2015 2016 2017 410,676.72 480,885.89 2018 525,348.33 525,348.33 2019 Total 936,025.05 1,006,234.22 -- Otherexplanation: 15.Short-termborrowing (1)Categoryofshort-termborrowing InRMB Item Closingbalance Openingbalance Pledgeloan 6,500,000.00 6,500,000.00 Mortgageborrowing 110,000,000.00 100,000,000.00 Guaranteedloan 20,000,000.00 20,000,000.00 Collateralloan 55,608,516.60 54,710,467.81 Total 192,108,516.60 181,210,467.81 Explanationoncategoryofshort-termborrowing: (2)Overdueshort-termloanswithoutpayment Theoverdueshort-termloanswithoutpaymentatperiod-endwere0.00Yuan,includingmajorloansas: InRMB Borrower Closingbalance Lendingrate Overduetime Overduechargerate Otherexplanation: 16.Notepayable InRMB Category Closingbalance Openingbalance Bankacceptance 8,373,065.43 16,714,584.01 Total 8,373,065.43 16,714,584.01 Totally0Yuanduenotepayablearepaidatperiod-end 17.Accountpayable (1)Accountpayable InRMB Item Closingbalance Openingbalance Within1year(oneyearincluded) 106,141,596.28 61,929,564.68 Over1year 10,124,710.02 11,784,860.09 Total 116,266,306.30 73,714,424.77 (2)Majoraccountpayableoveroneyear InRMB Item Closingbalance Reasonsofun-paidorcarry-over ShenzhenYuehaiGlobalLogisticsCo., 2,858,885.97Unsettled Ltd. TaiwanLGCompany 1,906,267.50Unsettled Total 4,765,153.47 -- Otherexplanation: 18.Accountreceivedinadvance (1)Accountreceivedinadvance InRMB Item Closingbalance Openingbalance Within1year(oneyearincluded) 1,674,598.44 1,067.00 Over1year 3,694.60 47,779.60 Total 1,678,293.04 48,846.60 (2)Importantaccountreceivedinadvancewithaccountageoveroneyear InRMB Item Closingbalance Reasonsofun-paidorcarry-over (3)Itemshavealreadyclearedwithoutcompletionfromtheconstructioncontractatperiod-end InRMB Item Amount Otherexplanation: 19.Salarypayable (1)Salarypayable InRMB Increaseduringthe Decreaseduringthis Item Openingbalance Closingbalance period period I.Short-term 4,547,625.04 32,966,654.41 33,718,817.98 3,795,461.46 compensationII.Post-employmentwelfare-defined -5,093.82 2,377,173.35 2,392,260.75 -20,181.21contributionplansTotal 4,542,531.22 35,343,827.76 36,111,078.73 3,775,280.25(2)Short-termcompensation InRMB Increaseduringthe Decreaseduringthis Item Openingbalance Closingbalance period period1.Wages,bonuses,allowances 3,542,662.41 29,015,314.91 29,836,231.63 2,721,745.69andsubsidies2.Welfareforworkers 2,669,959.73 2,641,302.75 28,656.98andstaff3.Socialinsurance 23,041.98 926,216.85 929,180.44 20,078.38 Including:Medical 23,041.98 770,109.84 772,419.45 20,732.37insurance Workinjury 86,571.04 86,808.16 -237.12insurance Maternity 69,535.97 69,952.84 -416.87insurance4.Housingaccumulation 24,310.00 309,863.16 309,863.16 24,310.00fund 5.Laborunion expenditureand 957,610.65 45,299.76 2,240.00 1,000,670.41 personneleducation expenseTotal 4,547,625.04 32,966,654.41 33,718,817.98 3,795,461.46(3)Definedcontributionplans InRMB Increaseduringthe Decreaseduringthis Item Openingbalance Closingbalance period period1.Basicendowment -5,093.82 2,334,402.36 2,349,283.87 -19,975.32insurance2.Unemployment 42,770.99 42,976.88 -205.89insuranceTotal -5,093.82 2,377,173.35 2,392,260.75 -20,181.21Otherexplanation:20.Taxpayable InRMB Item Closingbalance OpeningbalanceValue-addedtax 6,167,030.04 5,921,066.33Enterpriseincometax 6,414,180.44 8,460,507.90Individualincometax 324,480.28 72,577.79Urbanmaintenanceandconstructiontax 54,052.60 444,600.28Businesstax 0.00 958.14Housepropertytax 295,173.21 763,249.59Landusetax 743,005.32 324,212.71Educationsurcharge 127,271.02 191,311.22Localeducationsurcharge 72,755.02 101,317.51Dikefee 1,149.33 1,149.33Stamptax 43,149.50 20,009.90Disposalfundofwasteelectricalproducts 1,292,580.00 467,070.00Total 15,534,826.76 16,768,030.70Otherexplanation: 21.Interestpayable InRMB Item Closingbalance Openingbalance Interestpayableofshort-termloans 185,285.99 123,641.69 Total 185,285.99 123,641.69 Majorinterestoverduewithoutpayment InRMB Borrower Overdueamount Overduereasons Otherexplanation: 22.Otherpayable (1)Classificationofotherpayableaccordingtonatureofaccount InRMB Item Closingbalance Openingbalance Marginanddeposit 8,451,301.12 5,957,390.38 Leasemanagementfee 753,558.41 2,003,231.87 Payablesonequipment 32,665.00 Intercoursefunds 8,497,970.52 5,330,161.96 Aftersaleandrepairmen 1,917,385.00 1,302,101.54 Other 1,376,446.87 2,457,149.41 Total 21,029,326.92 17,050,035.16 (2)Significantotherpayablewithoveroneyearage InRMB Item Closingbalance Reasonsofun-paidorcarry-over ShenzhenHuayongxingEnvironmental 1,000,000.00Margin ProtectionTechnologyCo.,Ltd. LinghangTechnology(Shenzhen)Co.,Ltd. 656,345.28Unsettled ShenzhenSEDPropertyDevelopmentCo., 787,057.45Unsettled Ltd. ShenzhenTongxingElectronicsCo.,Ltd. 578,259.83Unsettled ShenzhenYongdashengInvestment 558,970.00Margin DevelopmentCo.,Ltd. Total 3,580,632.56 -- Otherexplanation 23.Accrualliability InRMB Item Closingbalance Openingbalance Causes Pendingaction 2,604,411.81 2,604,411.81Businessandlabordisputes Total 2,604,411.81 2,604,411.81 -- Otherexplanations,includingimportantassumptionsandestimationaboutimportantestimatedliabilities: 24.Sharecapital InRMB ChangesinthePeriod(+,-) Opening Sharestransfer Closing balance Issuingnew balance Bonusshares frompublic Other Subtotal shares reserves Totalshares 283,161,227.00 283,161,227.00 Otherexplanation: Endedas30June2017,thesharesoftheCompanyheldbycontrollingshareholderhas116,100,000sharesinstatusofpledge,taking 41%ofthetotalsharecapital;pmortgageeisChinaMerchantsSecuritiesAssetsManaegmentCo.,Ltd.Sharesinjudicialfeeze amountedas116,489,894shares. 25.Capitalreserve InRMB Increaseduringthe Decreaseduringthis Item Openingbalance Closingbalance period period Capitalpremium(equity 96,501,903.02 96,501,903.02 premium)Othercapitalreserve 50,085,368.48 50,085,368.48Total 146,587,271.50 146,587,271.50Otherexplanation,includingchangesandreasonsofchanges:26.Surplusreserve InRMB Increaseduringthe Decreaseduringthis Item Openingbalance Closingbalance period period Statutorysurplus 21,322,617.25 21,322,617.25 reservesDiscretionarysurplus 56,068,976.00 56,068,976.00reserve Total 77,391,593.25 77,391,593.25 Otherexplanation,includingchangesandreasonsforchanges: 27.Retainedprofit InRMB Item Currentperiod Lastperiod Retainedprofitattheendofthepreviousperiod -187,441,523.12 -195,429,900.95 beforeadjustment Totalundistributedprofitatthebeginningof 2,530,667.50 adjustmentperiod(+,-) Retainedprofitatperiod-beginafteradjustment -187,441,523.12 -192,899,233.45 Add:netprofitattributabletoownersoftheparent 2,146,472.00 5,457,710.33 companyRetainedprofitatperiod-end -185,295,051.12 -187,441,523.12Detailsaboutadjustingtheretainedprofitsatthebeginningoftheperiod:1)TheretroactiveadjustmentstoAccountingStandardsforBusinessEnterprisesanditsrelevantnewregulationsaffecttheretainedprofitsatthebeginningoftheperiodamountingto0.00Yuan.2)Thechangesinaccountingpoliciesaffecttheretainedprofitsatthebeginningoftheperiodamountingto0.00Yuan.3)Themajoraccountingerrorcorrectionaffectstheretainedprofitsatthebeginningoftheperiodamountingto0.00Yuan4)Mergescopechangescausedbythesamecontrolaffecttheretainedprofitsatthebeginningoftheperiodamountingto0.00Yuan.5)Otheradjustmentsaffecttheretainedprofitsatthebeginningoftheperiodamountingto0.00Yuan28.Operatingincomeandoperatingcost InRMB CurrentPeriod LastPeriodItem Income Cost Income CostMainbusiness 418,264,065.34 396,452,152.81 286,371,182.79 261,215,066.60Otherbusiness 21,216,078.83 2,461,772.27 23,167,342.77 3,073,331.64Total 439,480,144.17 398,913,925.08 309,538,525.56 264,288,398.2429.Taxandsurcharges InRMB Item CurrentPeriod LastPeriod Citymaintenanceandconstructiontax 171,863.36 648,491.13 Educationalsurtax 99,530.65 279,899.79 Housepropertytax 1,349,909.12 184,274.40 Landusetax 432,592.87 119,997.05 Vehicleusetax 3,555.62 Stamptax 245,831.90 Businesstax 0.00 741,511.13 Localeducationdevelopmentfee 14,603.93 181,617.29 Other 0.00 578.37 Total 2,317,887.45 2,156,369.16 Otherexplanation: 30.Salesexpenses InRMB Item CurrentPeriod LastPeriod Employeecompensation 2,485,833.89 1,895,241.77 Transportationfee 2,120,964.03 1,626,969.69 Commodityinspectionfee 425,265.68 417,538.75 Customsfee 10,754.07 50,422.80 Commodityloss 486,106.38 184,429.08 Other 1,834,127.81 1,109,133.62 Total 7,363,051.86 5,283,735.71 Otherexplanation: 31.Administrativeexpenses InRMB Item CurrentPeriod LastPeriod Salary 4,544,763.62 4,515,773.03 Depreciationcharge 2,821,716.89 2,634,069.61 Socialinsurancepremium 1,744,892.34 3,582,840.30 Entertainmentexpense 1,480,848.53 1,402,388.24 Taxesandsurcharges 0.00 1,587,116.48 Employeebenefits 1,210,380.49 1,178,133.14 Travelexpenses 2,451,878.65 2,012,899.56 Amortizationofintangibleassets 710,910.93 747,147.36 Transportationfee 552,799.31 836,651.41 Consultingfee 1,201,427.16 1,507,497.56 Securityfee 1,010,168.29 545,366.05 Repairsfee 957,282.03 571,994.61 Auditfee 972,000.00 734,235.85 Officeallowance 397,708.36 1,550,706.35 Communicationfee 148,788.78 189,732.98 Amortizationoflowvalueconsumables 174,265.51 210,497.70 Securitiesinformationdisclosurefee 560,425.00 36,071.80 Litigationfee 10.00 264,923.00 Employeeeducationfunds 53,821.70 Waterandelectricityfee 149,863.85 Leasefee 2,246,800.90 Greefee 127,614.00 Premium 50,736.43 Otherexpenses 516,853.97 3,187,838.44 Total 24,085,956.74 27,295,883.47 Otherexplanation: 32.Financialexpenses InRMB Item CurrentPeriod LastPeriod Interestcosts 4,180,114.84 5,330,803.55 Less:interestincome 794,663.73 613,209.75 Add:Exchangeloss 1,209,235.54 -3,716,468.30 Add:Otherexpense 320,203.81 1,311,253.63 Total 4,914,890.46 2,312,379.13 Otherexplanation: 33.Lossesonassetsimpairment InRMB Item CurrentPeriod LastPeriod I.Baddebtlosses -93,425.39 Total -93,425.39 Otherexplanation: 34.Non-operatingincome InRMB Amountreckonedincurrent Item CurrentPeriod LastPeriod non-recurringgains/losses Totalincomefromdisposalof 1,549.73 116,007.01 non-currentassets Including:gainsfromdisposal 1,549.73 116,007.01 offixedassets Receivedonations 51,500.00 Governmentsubsidy 802,269.68 1,163,469.00 Unabletopay 7,130.19 175,522.50 Penaltyrevenue 48,833.89 41,539.00 Fineincome 16,000.00 22,099.00 Total 927,283.49 1,518,636.51 Governmentsubsidyreckonedintocurrentgains/losses: InRMB Subsidy impact Thespecial Assets-relate Issuing Offering Amountin Amountin Item Nature current subsidy d/income-rela subject causes thePeriod lastperiod gains/losses (Y/N) ted (Y/N) Subsidy obtainedfor Economic& conforms Information withthelocal Enterprise Bureauof support Income-relatedevelopment Subsidy N Y 100,000.00 Caidian policyfor dsubsidy District, investment Wuhan incentiveto encourage investment Excellent Caidian Subsidy enterprise Bureauof obtainedfor Income-relate Reward N Y 200,000.00 200,000.00 awardfor Finance, conforms d yearof2016 Wuhan withthelocal support policyfor investment incentiveto encourage investment Subsidy obtainedfor conforms Commercial withthelocal Bureauof support Income-relateExportbonusCaidian Reward N Y 343,769.68 863,469.00 policyfor dDistrict,investment Wuhan incentivetoencourage investment Subsidy obtainedfor conforms Caidian withthelocal Subsidized Bureauof support Income-relate Subsidy N Y 258,500.00 loan Finance, policyfor d Wuhan investment incentiveto encourage investment Total -- -- -- -- -- 802,269.681,163,469.00 -- Otherexplanation: 35Non-operatingexpenditure InRMB Amountreckonedincurrent Item CurrentPeriod LastPeriod non-recurringgains/losses Totallossesondisposalof 34,871.67 18,924.00 34,871.67 non-currentassets Other 50.88 50.88 Total 34,922.55 63,225.68 34,922.55 Otherexplanation: 36Incometaxexpenses (1)Statementofincometaxexpense InRMB Item CurrentPeriod LastPeriod Currentincometaxexpense 746,392.92 3,098,590.27 Deferredincometaxexpense -22,646.01 -714,375.81 Total 723,746.91 2,384,214.46 (2)Adjustmentonaccountingprofitandincometaxexpenses InRMB Item CurrentPeriod Totalprofit 2,870,218.91 Incometaxbasedonstatutory/applicablerate 717,554.73 Cost,expensesandlosswhicharenotdeductible 23,356.35 Impactofthedeductiblelossfordeferredincometaxassets, -17,552.29 whichhasnotrecognizedbeforeused Impactondeductibletemporarydifferencesorlossesdeductible 388.13 whichwasun-recognizedasdeferredincometaxassets Incometaxexpense 723,746.91 Otherexplanation 37Itemsofcashflowstatement (1)Othercashreceivedinrelationtooperationactivities InRMB Item CurrentPeriod LastPeriod Unitintercourseaccount 614,876.45 2,902,221.40 Collectionmanagementfeeandutilities 159,474.66 2,932,023.33 etc. Repaymentfromemployees 23,555.74 23,221.40 Margin 15,271.20 264,562.00 Interestincome 290,268.10 613,209.75 Governmentsubsidy 802,269.68 Total 1,905,715.83 6,735,237.88 Explanation:(2)Othercashpaidinrelationtooperationactivities InRMB Item CurrentPeriod LastPeriodUnitintercourseaccount 412,358.54 8,763,196.37Advancestoemployees 1,737,524.56 1,390,022.62Litigationfee 2,200,000.00 264,923.00Margin,deposit 441,370.00 6,601,906.95Entertainmentexpense 1,220,133.12 1,477,186.54Waterandelectricity 1,623,214.94 2,001,355.59Travelexpenses 1,394,764.69 2,034,807.36Transportationfee 2,120,964.03 1,896,893.96Transportationfee 739,779.60 967,138.76Repairs 956,708.92 571,994.61Auditfees,consultingfees 2,686,552.16 1,507,497.56Security 218,400.00 545,366.05Financialinstitutionshandlingfee 213,790.21 1,311,253.63Officeexpenses 457,621.51 1,553,388.35Communicationfee 153,528.16 200,451.18Leasefee 2,233,640.64 2,245,877.49Other 1,232,487.44 1,390,293.60Total 20,042,838.52 34,723,553.62Explanation:(3)Cashreceivedfromotherinvestmentactivities InRMB Item CurrentPeriod LastPeriodExplanation:(4)Cashpaidrelatedwithotherinvestmentactivities InRMB Item CurrentPeriod LastPeriodExplanation:(5)Othercashreceivedinrelationtofinancingactivities InRMB Item CurrentPeriod LastPeriod Explanation:(6)Cashpaidrelatedwithotherfinancingactivities InRMB Item CurrentPeriod LastPeriodExplanation:38Supplementaryinformationtostatementofcashflow(1)Supplementaryinformationtostatementofcashflow InRMB Supplementaryinformation ThisPeriod LastPeriod1.Netprofitadjustedtocashflowof -- --operationactivities:Netprofit 2,146,472.00 7,272,956.22Depreciationoffixedassets,consumptionofoilassetsanddepreciationofproductive 6,822,408.28 7,271,576.88biologyassetsAmortizationofintangibleassets 710,910.93 747,147.36Amortizationoflong-termdeferredexpenses 35,450.04 35,450.04Lossfromdisposaloffixedassets,intangibleassetsandotherlong-termassets(gainis 227,675.02 -97,083.01listedwith“-”)Abandonmentlossoffixedassets(gainislistedwith“-”) 34,871.67Financialexpenses(gainislistedwith“-”) 5,488,969.99 5,330,803.55Decreaseofdeferredincometaxasset((increaseislistedwith“-”) -714,375.81Decreaseofinventory(increaseislistedwith“-”) -5,264,207.79 -10,387,188.43Decreaseofoperatingreceivableaccounts(increaseislistedwith“-”) -74,799,461.03 -78,574,397.07Increaseofoperatingpayableaccounts 29,199,543.97 43,690,760.70(decreaseislistedwith“-”) Netcashflowarisingfromoperating -35,397,366.92 -25,424,349.57 activities2.Materialinvestmentandfinancingnot -- --involvedincashflow3.Netchangeofcashandcashequivalents: -- --Balanceofcashatperiodend 71,844,758.33 59,356,415.87Less:Balanceofcashequivalentat 104,015,312.97 632,846,956.16year-beginNetincreasingofcashandcashequivalents -32,170,554.64 -573,490,540.29(2)Netcashpaymentfortheacquisitionofasubsidiaryofthecurrentperiod InRMBAmount Including: -- Including: -- Including: -- Otherexplanation: (3)Netcashreceivedfromthedisposalofsubsidiaries InRMB Amount Including: -- Including: -- Including: -- Otherexplanation: (4)Constitutionofcashandcashequivalent InRMB Item Closingbalance Openingbalance Ⅰ.Cash 71,844,758.33 104,015,312.97 Including:Cashonhand 219,461.32 235,039.12 Bankdepositavailableforpayment 59,375,612.16 91,075,765.36 atanytime Ⅲ.Balanceofcashandcashequivalentat 71,844,758.33 104,015,312.97 period-endOtherexplanation:39.NotesforthestatementofownersequitychangesExplaintheitemsandadjustedamountedwhichhaveadjustedin“Other”oflastyear’sendingbalance:40.Assetswithownershiporuserightrestricted InRMB Item Endingbookvalue RestrictionreasonsMonetaryFund 4,557,024.62BankacceptancebillFixedassets 45,441,469.26BankloansecuredIntangibleassets 38,980,112.97BankloansecuredInvestmentrealestate 28,189,106.32Bankloansecured LoansfromHai’erFinancialCompanyAccountreceivable 7,268,495.46secured Total 124,436,208.63 -- Otherexplanation: 41.Itemofforeigncurrency (1)Itemofforeigncurrency InRMB Closingbalanceofforeign Item Rateofconversion EndingRMBbalanceconverted currency Including:USD 312,246.566.77 2,115,283.10 HKD 32.660.89 28.95 Including:USD 13,348,631.026.77 90,428,965.98 Shorttermloan Including:USD 5,254,163.466.77 35,593,804.94 Accountpayable Including:USD 1,738,127.256.77 11,774,769.24 Otherexplanation: (2) Explanationon foreign operational entity, includingas for themajor foreign operational entity, disclosed main operation place, book-keeping currency and basis for selection; if the book-keeping currencychanged,explainreasons □Applicable√Notapplicable VIII.Equityinotherentity 1.Equityinsubsidiary (1)Constituteofenterprisegroup Mainoperation Share-holdingratio Subsidiary Registeredplace Businessnature Acquiredway place Directly Indirectly HuafaLease Property Investment Shenzhen Shenzhen 60.00% Company management establishment HuafaProperty Property Investment Shenzhen Shenzhen 100.00% Company management establishment Hengfa Productionand Investment Technology Wuhan Wuhan 100.00% sales establishment CompanyHuafaHengtian Property Investment Shenzhen Shenzhen 100.00%Company management establishmentHuafaHengtai Property Investment Shenzhen Shenzhen 100.00%Company management establishmentExplanationonshare-holdingratioinsubsidiarydifferentfromratioofvotingright:Basisforcontrollingtheinvestedentitywithhalforbelowvotingrightsheldandwithoutcontrollinginvestedentitybutwithoverhalfandovervotingrights:Controllingbasisforthestructuringentityincludedinconsolidatedrange:Basisondeterminingtobeaagentorconsignor:Otherexplanation:(2)Importantnon-wholly-ownedsubsidiary InRMB Dividendannouncedto Share-holdingratioof Gains/lossesattributable Endingequityof Subsidiary distributeforminorityin minority tominorityinthePeriod minority thePeriodExplanationonholdingratiodifferentfromthevotingrightratioforminorityshareholders:Otherexplanation:(3)Mainfinanceoftheimportantnon-wholly-ownedsubsidiary InRMB Closingbalance Openingbalance Subsidia Non-curr Non-curr Non-curr Non-curr ry Current Total Current Total Current Total Current Total ent ent ent ent assets assets liability liability assets assets liability liability assets liability assets liability InRMB CurrentPeriod LastPeriod Cashflow Cashflow Subsidiary Total Total Operation from Operation from Netprofit comprehensi Netprofit comprehensi Income operation Income operation veincome veincome activity activity Otherexplanation: (4)MajorrestrictioninaspectofusingtheGroup’sassetsandpayoffthedebtsoftheGroup (5) Financialsupports orother supportingfor the structured bodyincluded in consolidate financial statementrange Otherexplanation: IX.Theriskassociatedwithfinancialinstruments TheGroup'smainfinancialinstrumentsincludeloans,receivables,payables,tradablefinancialassets,trading financialliabilities,etc.,pleaserefertothedetailsofeachfinancialinstrumentinNoteVII.Therisksassociated withthesefinancialinstrumentsandtheriskmanagementpoliciesadoptedbytheGrouptoreducetheserisksare describedbelow.ThemanagementoftheGroupmanagesandmonitorstheseriskexposurestoensurethatthe aboverisksarecontrolledwithinthelimits. 1.Variousriskmanagementobjectivesandpolicies TheobjectiveoftheGroup'sriskmanagementistostrikeaproperbalancebetweenrisksandprofits,minimizethe negativeimpactofrisksontheGroup'soperatingresults,andmaximizethebenefitsofshareholdersandother equityinvestors.Basedonthisriskmanagementobjectives,theGroup'sbasicstrategyforriskmanagementisto identifyandanalyzetherisksfacedbytheGroup,establishappropriateriskbottomlinesandcarryoutrisk management,andtimelyandreliablymonitortheriskscontrolthemwithinthelimits. (1)Marketrisk Themarketriskoffinancialinstrumentsreferstotheriskthatthefairvalueorthefuturecashflowsoffinancial instrumentsfluctuateduetothechangesinmarketprices,includingforeignexchangerisk,interestrateriskand otherpricerisk. 1)Exchangeraterisk TheGroup'sexchangerateriskismainlyrelatedtoUSdollarsandHongKongdollars.ExcepttheGroup'ssecond levelsubsidiary,HengfaTechnologyCompany’smonitorbusinesshasday-to-dayoperationsinUSdollars,other principalbusinessactivitiesoftheGroupsettleaccountsinRMB.On30June2017,exceptfortheUSdollar balanceofassetsandliabilitiesinbelowtableandthesporadicHongKongdollarbalance,theGroup'sassetsand liabilitiesareallRMBbalance.TheexchangerateriskarisingfromtheassetsandliabilitiesoftheUSdollar, HongKongdollarbalancemayhaveanimpactontheGroup'soperatingresults. Item 2017-6-30(RMBconvertion) 2016-12-31(RMBconvertion) MonetaryFund-USD 312,246.56 16,473.78 MonetaryFund-HKD 32.66 29.21 Accountreceivable-USD 13,348,631.02 46,955,995.68 Advanceaccount-USD 0.00 8,873,087.08 Accountpayable-USD 1,738,127.25 1,172,353.00 Shorttermborrowings-USD 5,254,163.46 34,710,467.81 TheCompanyeyesontheinfluencefromviarationofexchange 2)Interestraterisk TheinterestrateriskoftheGrouparisesfrombankloans.Thefinancialliabilitiesoffloatinginterestratemake theGroupfacecashflowinterestraterisk,andthefinancialliabilitiesoffixedratemaketheGroupfacethe interestrateriskoffairvalue. TheGroupdeterminestherelativeproportionoffixedrateandfloatinginterest ratecontractsbasedontheprevailingmarketenvironment.On30June2017,theGroup'sinterest-bearingdebt wasmainlythefloatinginterestrateloancontractdenominated inRenminbiand USdollars,amountingto 192,108,516.60Yuan(December31,2016:181,210,467.81Yuan). TheGroup'sriskofchangesinthecashflowoffinancialinstrumentsduetochangesininterestratesismainly relatedtothefloatinginterestratebankloans.TheGroup'spolicyistomaintainthefloatinginterestrateofthese loanssoastoeliminatethefairvalueriskoftheinterestratechanges. 3)Pricerisk TheGroupsellsmonitorsandsoonatmarketpricesandisthereforeaffectedbysuchpricefluctuations. (2)Creditrisk Creditriskreferstotheriskthatapartyofthefinancialinstrumentdoesnotfulfillitsobligationsandcauses propertylosstoanotherparty.OnDecember31,2016,themaximumcreditriskexposurethatmaycausefinancial lossestotheGroupismainlyattributabletothefailureoftheotherpartytofulfillitsobligationsresultinginthe lossesoftheGroup'sfinancialassetsandtheGroup'sfinancialguarantees,including: Thecarryingamount ofthefinancialassetsrecognizedintheconsolidatedbalance sheet;for thefinancial instrumentsmeasuredatfairvalue,thebookvaluereflectsitsriskexposuresbutnotthemaximumriskexposure, anditsmaximumriskexposurechangeswiththefuturechangesinfairvalue. Inordertoreducethecreditrisk,theGrouphassetupaspecialdepartmenttodeterminethecreditline,carryout thecreditapproval,andimplementothermonitoringprocedurestotakenecessarymeasurestorecovertheoverdue credit.Inaddition,theGroupreviewstherecoveryofeachindividualreceivableateverybalancesheetdateto accruesufficientprovisionforbaddebtsofuncollectiblefunds.Asaresult,theGroup'smanagementbelievesthat theGroup'screditriskhasbeengreatlyreduced. TheGroup'sworkingcapitalisdepositedinbankswithhighercreditratings,sothecreditriskofworkingcapital islow. TheGrouphasadoptednecessarypoliciestoensurethatallcustomershavegoodcreditrecords.Inadditiontothe topfiveaccountreceivables,theGrouphasnoothersignificantcreditrisk. Thetotalamountofthetopfiveaccountreceivablesis196,189,807.89Yuan. (3)Liquidityrisk TheliquidityriskistheriskthattheGroupisunabletofulfillitsfinancialobligationsontheduedate.TheGroup's approachtomanageliquidityriskistoensurethatthereissufficientfinancialliquiditytofulfillitsduedebtsbut notcauseunacceptablelossesordamagestothecorporatereputation.TheGroupregularlyanalyzesthestructure anddurationofliabilitiestoensuretherearesufficientfunds.ThemanagementoftheGroupmonitorstheuseof bankloansandensuresthecompliancewithloanagreement,andconductsfinancingconsultationswithfinancial institutionsinordertomaintainacertainlineofcreditandreducetheliquidityrisk. Thefinancialassets and financialliabilitiesheldbytheGroupbased onthematurityoftheundiscounted outstandingcontractualobligationsareanalyzedasfollows Amountdated30June2017 Item Within1year 1-2years 2-3years Overthree Total years Financialassets MonetaryFund 66,352,098.10 66,352,098.10 Notesreceivable 38,299,308.80 38,299,308.80 Accountreceivable 223,831,614.45 223,831,614.45 Otheraccountreceivable 17,763,398.92 17,763,398.92 Advanceaccount 5,571,250.65 5,571,250.65 Financialliabilities Shorttermborrowings 192,108,516.60 192,108,516.60 Notespayable 8,373,065.43 8,373,065.43 Accountpayable 116,266,306.30 116,266,306.30 Otherpayables 21,029,326.92 21,029,326.92 Advancereceivable 1,678,293.04 1,678,293.04 Employeesalarypayable 3,775,280.25 3,775,280.25 2.Sensitivityanalysis TheGroupusesthesensitivityanalysistechniquetoanalyzethepossibleimpactsofthereasonableandpossible changesinriskvariableonthecurrentsprofitandlossesortheowner'sequity.Sinceanyriskvariablerarely changesinisolation,andthecorrelationamongthevariableshasasignificanteffectonthefinaleffectamountofa certainriskvariablechanges,andthefollowingcontentsareontheassumptionthatthechangeineachvariableis independent.(1)SensitivityanalysisofforeignexchangeriskSensitivityanalysisofforeignexchangeriskassumesthatalloverseasoperatingnetinvestmenthedgesandcashflowhedgesarehighlyeffective.Onthebasisoftheaboveassumptions,incasethatothervariabledon’tchange,theafter-taxeffectofthepossibleandreasonablechangesintheexchangerateonthecurrentprofitsandlossesareasfollowsItem Exchangerate Jan.-Jun.2017 Jan.-Jun.2016fluctuation Impactonnetprofit Impactonowner's Impactonnetprofit Impactonowner's equity equityAll foreign5% appreciation 1,694,088.89 1,694,088.89 1,298,817.96 1,298,817.96currency oftheRMBAll foreign5%devaluarionof -1,694,088.89 -1,694,088.89 -1,298,817.96 -1,298,817.96currency theRMBX.Relatedpartyandrelatedtransactions1.Parentcompanyoftheenterprise Share-holdingratio Votingrightratioon Parentcompany Registrationplace Businessnature Registeredcapital ontheenterprisefor theenterprise parentcompany Productionandsales,WuhanZhongheng realestateNewScience& developmentandTechnology Wuhan 34,500,000.00 41.14% 41.14% sales,housingIndustrialGroup leasingandCo.,Ltd.management ExplanationonparentcompanyoftheGroup TheultimatecontroloftheenterpriseisLiZhongqiu. Otherexplanation: 2Subsidiaryoftheenterprise Foundmorein.VII.EquityinotherentityintheNote 3.Otherrelatedparty Otherrelatedparty RelationshipwiththeEnterprise ShenzhenZhonghengHuafaScienceandTechnologyCo.,Ltd. Controlbysamecontrollingshareholderandultimatecontroller WuhanHengshengYutianIndustrialCo.,Ltd. Controlbysamecontrollingshareholderandultimatecontroller WuhanHengshengPhotoelectricityIndustryCo.,Ltd. Controlbysamecontrollingshareholderandultimatecontroller HongKongYutianInternationalInvestmentCo.,Ltd. Controlbysamecontrollingshareholderandultimatecontroller WuhanNewOrientalRealEstateDevelopmentCo.,Ltd. Controlbysamecontrollingshareholderandultimatecontroller WuhanZhonghengPropertyManagementCo.,Ltd. Controlbysamecontrollingshareholderandultimatecontroller WuhanOpticalValleyDisplaySystemCo.,Ltd. Controlbysamecontrollingshareholderandultimatecontroller WuhanYutianXingyePropertyCo.,Ltd. Controlbysamecontrollingshareholderandultimatecontroller WuhanYutianDongfangPropertyCo.,Ltd. Controlbysamecontrollingshareholderandultimatecontroller WuhanXiahuaZhonghengElectronicsCo.Ltd. Controlbysamecontrollingshareholderandultimatecontroller WuhanZhonghengYutianTradeCo.,Ltd. Controlbysamecontrollingshareholderandultimatecontroller WuhanYutianHongguangRealEstateCo.,Ltd. Controlbysamecontrollingshareholderandultimatecontroller ShenzhenZhonghengHuayuInvestmentHoldingCo.,Ltd. Controlbysamecontrollingshareholderandultimatecontroller YutianInvestmentCo.,Ltd.(FamousSkyCapitalLimited) Controlbysamecontrollingshareholderandultimatecontroller YutianInternationalCo.,Ltd. Controlbysamecontrollingshareholderandultimatecontroller HongKongZhonghengYutianCo.,Ltd. Controlbysamecontrollingshareholderandultimatecontroller ShenzhenYutianHenghuaCo.,Ltd. Controlbysamecontrollingshareholderandultimatecontroller ShenzhenZhonghengYongyeTechnologyCo.,Ltd. Controlbysamecontrollingshareholderandultimatecontroller ShenzhenYutianHengruiCo.,Ltd. Controlbysamecontrollingshareholderandultimatecontroller Otherexplanation 4.Relatedtransaction (1)Goodspurchasing,laborserviceprovidingandreceiving Goodspurchasing/laborservicereceiving InRMB Relatedparty Relatedtransaction CurrentPeriod Tradinglimit Whetheroverthe LastPeriod approved approvedlimitedor not HongKongYutian International Purchasegood 108,075,657.11 277,480,000.00N 85,710,600.86InvestmentCo.,Ltd. WuhanHengsheng Photoelectricity Purchasegood 60,462,785.68 187,299,000.00N 27,331,191.04 IndustryCo.,Ltd. Goodssold/laborserviceproviding InRMB Relatedparty Relatedtransaction CurrentPeriod LastPeriod HongKongYutianInternational Salesgood 99,543,022.00 108,182,506.77 InvestmentCo.,Ltd. WuhanHengsheng PhotoelectricityIndustryCo., Salesgood 1,237,955.69 1,325,408.25 Ltd. Explanationongoodspurchasing,laborserviceprovidingandreceiving (2)Relatedguarantee Astheguarantor InRMB Securedparty Amountguarantee Validfrom Duedate Completedornot(Y/N) HengfaTechnology 50,000,000.002016-11-01 2017-11-01 N CompanyHengfaTechnology 30,000,000.002016-09-19 2018-09-19 NCompanyAsthesecuredparty InRMB Guarantor Amountguarantee Validfrom Duedate Completedornot(Y/N)LiZhongqiu 5,000,000.002016-12-12 2017-12-12 NLiZhongqiu 55,000,000.002016-07-25 2017-07-24 YLiZhongqiu 10,000,000.002016-08-11 2017-08-10 YLiZhongqiu 20,000,000.002016-08-11 2017-08-10 YLiZhongqiu 15,000,000.002016-08-11 2017-08-10 YExplanationonrelatedguarantee(3)Relatedparty’sfundloan InRMB Relatedparty Fundborrowed Validfrom Duedate Note BorrowingLending(4)Relatedparty’sassetstransferanddebtreorganization InRMB Relatedparty Transactions CurrentPeriod LastPeriod(5)Remunerationofkeymanager InRMB Item CurrentPeriod LastPeriodTotalremuneration 744,034.16 640,060.60(6)Otherrelatedtransactions5.Receivable/payableitemsofrelatedparties(1)Receivableitem InRMB Closingbalance Openingbalance Item Relatedparty Bookbalance Baddebtprovision Bookbalance Baddebtprovision HongKongYutianAccountreceivable International 59,803,239.61 41,299,300.89 InvestmentCo.,Ltd. HongKongYutianAdvancepayment International 8,873,087.08 InvestmentCo.,Ltd.(2)Payableitem InRMB Item Relatedparty Endingbookbalance OpeningbookbalanceAccountpayable WuhanHengsheng 7,525,071.38 7,173,172.20 PhotoelectricityIndustryCo., Ltd. HongKongYutianInternational Accountpayable 15,821,707.14 InvestmentCo.,Ltd. 6.Commitmentsofrelatedparty 7.Other XI.Commitmentorcontingency 1.Importantcommitment Importantcommitmentonbalancesheetdate TheCompanyhasnomajorcommitmentneedtodisclosedbyendof30June2017 2.Contingency (1)Contingencyonbalancesheetdate InAugust2015,ShenzhenHUAFAandWuhanZhonghengNewTechnologyIndustryGroupCo.,Ltd.(hereinafterreferredtoas “WuhanZhongheng”)signedthe“CooperationAgreementonUrbanRenewalProjectofUpdateUnitsatHuafaIndustrialPark, GongmingStreet,GuangmingNewDistrict,Shenzhen”.AsShenzhenHUAFAandWuhanZhonghengplannedtocooperatewith ShenzhenVankeRealEstateCO.,Ltd.(hereinafterreferredtoas“ShenzhenVanke”)ontheHuafaurbanrenewalproject(hereinafter referredtoas“HuafaRenovationProject)atGongmingStreet,GuangmingNewDistrict,Shenzhen,bothpartiesappointedthat ShenzhenHUAFAentrustedWuhanZhonghengtorepresentitinthiscooperation,andestablishedprojectcompany-Shenzhen VankeGuangmingRealEstateCo.,Ltd.(hereinafterreferredtoas“VankeGuangming”)asthesubjectofprojectimplementation withShenzhenVanke;VankeGuangmingsigned“DemolitionCompensationAgreement” withShenzhenHUAFAandWuhan Zhongheng,andpaidthecompensationfordemolition. OnAugust21,2015,ShenzhenHUAFA,WuhanZhonghengandShenzhenVankesignedthe“CooperativeOperationContractof RenovationProjectatHuafaIndustrialPark,GongmingStreet,GuangmingNewDistrict”(hereinafterreferredtoas“Cooperative OperationContract”),thecontractrefinedandappointedthecooperationmodelandoperatingstepsofbothsides.AndthenShenzhen HUAFA,WuhanZhonghengandShenzhenVankesignedthe“AgreementontheHousingAcquisitionandRemovalCompensation andSettlement”.Aftersigningtheaboveagreement,ShenzhenVankepaidthecooperationpriceof600millionYuantoWuhan ZhonghengthroughVankeGuangming. InSeptember2016,ShenzhenVankefiledanarbitrationtoSouthChinaInternationalEconomicandTradeArbitrationCommission (hereinafterreferredtoas“SouthChinaArbitration”)asShenzhenHUAFAandWuhanZhonghengviolatedtheappointmentof “CooperativeOperationContract”andhandledthe“ConfirmationofSubjectofReconstructionImplementation”atanoverduetime, andrequiredShenzhenHUAFAandWuhanZhonghengtopayliquidateddamagesandattorneys'feesofRMB464.60million. Whilefilingthearbitration,ShenzhenVankealsoappliedforpropertypreservationof400millionYuanofpropertyunderthename ofShenzhenHuafaandWuhanZhonghengtoShenzhenIntermediate People’sCourt.AccordingtotherulingofShenzhen IntermediatePeople'sCourtand“NotificationofSealingup,SeizingandFreezingAssets”(Thereferencenumbersare(2016)Yue03 CaiBaoNo.51,(2016)Yue03CaiBaoNo.53),the27houseproperties(Note:thepropertywithinthescopeofHuafarenovation project)underthenameofShenzhenHUAFAand116,489,894shares(Note:ofwhich116,100,000shareshavebeenpledged)of ShenzhenHUAFAstockheldbyWuhanZhonghengwerefrozen. OnNovember12,2016,thearbitrationcourtheldahearingonthiscase. InDecember2016,WuhanZhonghengtoShenzhenHUAFAissueda“CommitmentLetter”whichincludedthatifthearbitration (Note:thecase)ruledinfavorofShenzhenVanke,thelossofarbitrationcausedbythecontractdisputesshouldbefullyassumedby ourcompany.Intheabovecontingentlosses,ifthejudicialdecisionruledyourcompanytopaythecompensationinadvance,our companypromisedtopayyourcompanyincashwithinonemonth,ifourcompanycouldnotpayontimeduetouncontrollable factors,ourcompanywouldliketopaythecorrespondinginterestaccordingtothebenchmarkinterestrateofbankloansinthe correspondingperiod.Becausetheplotsintherenovationprojectplacedinourcompanyhadn’tbeenappliedfortransferprocedures andwerestillunderyourcompany’sname(Note:basedonthe“AssetReplacementContract”signedbyWuhanZhonghengand ShenzhenHUAFAonApril29,2009),therefore,therewasnoriskofcompliance,atthesametime,ourcompanypromisedtogive prioritytopayingtheabovecompensationwiththecompensationfordemolitionofrenovationproject. OnMarch14,2017,ShenzhenHUAFAreceivedthe“DecisionofArbitratornotGrantingAvoiding”issuedbySouthChina Arbitration,whichrejectedtheapplicationforavoidingofchiefarbitratorproposedbyShenzhenVanke.OnMarch15,2017, ShenzhenHUAFAreceivedthe“LetterAbouttheResignationoftheChiefArbitratorofNo.SHENDP20160334Case”signedby thechiefarbitratorandforwardedbySouthChinaArbitration.OnMarch20,2017,ShenzhenHUAFAreceivedthe“LetterAboutthe ResignationoftheArbitratorofNo.SHENDP20160334Case”forwardedbySouthChinaArbitration,thearbitratorselectedby ShenzhenVankesaidtoresignfromthearbitratorofthiscaseduetophysicalreasons. ThedeadlineforgivingarulingtothiscasewasoriginallyscheduledonFebruary12,2017.Accordingtothe“Decisionof AdjourningtheRuling”issuedbySouthChinaArbitrationonFebruary10,2017,thedeadlineforgivingarulingtothiscaseshallbe prolongedtoMay12,2017.Duetothechangesinthemembersofabovearbitrationcourt,thiscaseneedsSouthChinaArbitrationto reassignthechiefarbitratorandShenzhenVanketoreselectthearbitrators.Accordingtotheprovisionsofarticle32ofthe ArbitrationRulesofSouthChinaArbitration,afterconstitutingthenewarbitrationcourt,itshalldecidewhetherallorpartofthe hearingproceduresthathavebeencarriedoutbeforeneedtobereopened;ifthearbitrationcourtdecidestoreopenallhearing procedures,thenthedeadlineforgivingarulingshallbecalculatedfromthedatethatthearbitrationcourtdecidestoreopenthe hearingprocedures.Therefore,thedeadlineforgivingarulinginthistimeislikelytobefurtherextended. (2)FortheimportantcontingencynotnecessarytodisclosedbytheCompany,explainedreasons TheCompanyhasnoimportantcontingencythatneedtodisclosed XII.Eventsafterbalancesheetdate 1.Explanationonothereventsafterbalancesheetdate Tillendofthefinancialreportdisclosed,theCompanydidnothasmajoreventsafterbalancesheetdateneedtoreleased XIII.Principlenotesoffinancialstatementsofparentcompany 1.Accountreceivable (1)Categoryofaccountreceivable InRMB Closingbalance Openingbalance Bookbalance Baddebtprovision Bookbalance Baddebtprovision Category Book Accrual Accrual Bookvalue Amount Ratio Amount value Amount Ratio Amount ratio ratio Accountreceivable withsingle significantamount 5,000,98 5,000,98 5,094,4 5,094,414 48.58% 100.00% 49.05% 100.00% andwithdrawalbad 8.97 8.97 14.36 .36 debtprovision separatelyAccountswithsinglesignificantamount 5,292,43 5,292,43 5,292,4 5,292,435andbaddebts 50.12% 100.00% 50.95% 100.00% 5.32 5.32 35.32 .32provisionaccruedindividually 10,293,4 10,293,4 10,386, 10,386,84Total 100.00% 100.00% 24.29 24.29 849.68 9.68Accountreceivablewithmajorsingleamountandwithdrawalbaddebtprovisionsingleatperiod-end:√Applicable□Notapplicable InRMB Accountreceivable Closingbalance (byunit) Accountreceivable Baddebtprovision Accrualratio AccrualreasonsTCLACEELECTRICAPPLIANCE 1,325,431.75 1,325,431.75 100.00%Un-collectable(HUIZHOU)CO.,LTDSKYWORTHMultimedia 579,343.89 579,343.89 100.00%Un-collectable(Shenzhen)Co.,Ltd.HongKongHaowei 1,870,887.18 1,870,887.18 100.00%Un-collectableIndustrialCo.Ltd.QingdaoHaierParts 1,225,326.15 1,225,326.15 100.00%Un-collectableProcurementCo.,Ltd.Total 5,000,988.97 5,000,988.97 -- --Accountreceivablewithbaddebtprovisionwithdrawalbymethodofaccountageinportfolio:□Applicable√Notapplicable Withdrawingbadbedprovisionbypercentageoftotalaccountsreceivableoutstandinginportfolio: □Applicable√Notapplicable Withdrawingbadbedprovisionbyothermethodsinportfolio: Accountswithsinglesignificantamountandbaddebtsprovisionaccruedindividuallyatyear-end Debtor Bookbalance Baddebtamount Accrualratio Accrual reasons ShenzhenHuixinVideoTechnologyCo.,Ltd. 381,168.96 381,168.96 100 Un-collectable ShenzhenWandelaiDigitalTechnologyCo.,Ltd. 351,813.70 351,813.70 100 Un-collectable ShenzhenDalongElectronicCo.,Ltd. 344,700.00 344,700.00 100 Un-collectable ShenzhenKeyaElectronicCo.,Ltd. 332,337.76 332,337.76 100 Un-collectable YuehaiInternationalShippingInternationalCo.,Ltd. 323,405.97 323,405.97 100 Un-collectable ShenzhenQunpingElectronicCo.,Ltd. 304,542.95 304,542.95 100 Un-collectable ChinaGalaxyElectronics(HongKong)Co.,Ltd. 288,261.17 288,261.17 100 Un-collectable DongguanWeiteElectronicCo.,Ltd. 274,399.80 274,399.80 100 Un-collectable HongKongNewCenturyElectronicsCo.,Ltd. 207,409.40 207,409.40 100 Un-collectable ShenyangBeitaiElectronicCo.,Ltd. 203,304.02 203,304.02 100 Un-collectable BeijingXinfangWeiyeTechnologyCo.,Ltd. 193,000.00 193,000.00 100 Un-collectable TCLELECTRONICS(HONGKONG)CO.,LTD. 145,087.14 145,087.14 100 Un-collectable HuizhouTCLXinteElectronicsCo.,Ltd. 142,707.14 142,707.14 100 Un-collectable ShenzhenSkyWorth–RGBElectronicCo.,Ltd. 133,485.83 133,485.83 100 Un-collectable Other 1,666,811.48 1,666,811.48 100 Un-collectable Total 5,292,435.32 5,292,435.32 (2)Baddebtprovisionaccrual,switch-backortakenbackintheperiod Baddebtprovisionaccrualwas0.00Yuan;theamountcollectedorswitchesbackamountingto93,425.39Yuan. Includingmajoramountofbaddebtprovisionthatswitch-backortakenbackinthePeriod: InRMB Company Amountswitchbackortakenback Collectionway (3)Accountreceivableactuallychargeoffintheperiod InRMB Item Amountchargeoff Includingmajoraccountreceivablechargeoff: InRMB Accountreceivable Chargeoff Accountarisingfrom Company Amountchargeoff Reasons nature procedures relatedtransactions (Y/N) Explanationonaccountreceivablechargeoff (4)Topfivereceivablescollectedbyarrearspartyatendingbalance Company Closingbalance Ratiointotalaccountreceivable(%) Balanceofbaddebt provision HongKongHaoweiIndustrialCo.Ltd. 1,870,887.18 18.18 1,870,887.18 TCLACEELECTRICAPPLIANCE 1,325,431.75 12.88 1,325,431.75 (HUIZHOU)CO.,LTD QingdaoHaierPartsProcurementCo.,Ltd. 1,225,326.15 11.90 1,225,326.15 SKYWORTHMultimedia(Shenzhen)Co.,Ltd. 579,343.89 5.63 579,343.89 ShenzhenHuixinVideoTechnologyCo.,Ltd. 381,168.96 3.70 381,168.96 Total 5,382,157.93 52.29 5,382,157.93 (5)Accountreceivablederecognitionduetofinancialassetstransfer (6)Assetsandliabilitiesresultedbyaccountreceivabletransferandcontinuesinvolvement Otherexplanation: 2.Otheraccountreceivable (1)Categoryofotheraccountreceivable InRMB Closingbalance Openingbalance Bookbalance Baddebtprovision Bookbalance Baddebtprovision Category Book Accrual Accrual Bookvalue Amount Ratio Amount value Amount Ratio Amount ratio ratio Otheraccount receivablewith singlesignificant 121,553, 10,601,6 110,951,4123,637 10,601,68 113,035,81 92.85% 57.23% 93.25% 57.23% amountand 144.31 86.53 57.78 ,504.36 6.53 7.83 withdrawalbaddebt provisionseparately Otheraccount receivablewithbad 1,378,58 13,050.4 1,365,536965,485 1.05% 0.07% 0.73%13,050.45 0.07% 952,435.34 debtprovision 6.91 5 .46 .79 accrualbyportfolio Otheraccount receivablewith singleminoramount 7,988,48 7,909,68 7,988,4 7,909,685 6.10% 42.70%78,798.40 6.02% 42.70% 78,798.40 butwithdrawalsingle 4.16 5.76 84.16 .76 itembaddebt provision 130,920, 18,524,4 112,395,7132,591 18,524,42 114,067,05Total 100.00% 100.00% 100.00% 100.00% 215.38 22.74 92.64 ,474.31 2.74 1.57Otheraccountreceivablewithmajorsingleamountandwithdrawalbaddebtprovisionsingleatperiod-end:√Applicable□Notapplicable InRMB ClosingbalanceOtheraccountreceivable (units) Otheraccount Baddebtprovision Accrualratio Accrualreasonsreceivable HengfaTechnology 97,326,031.14 Withoutbaddebtrisks CompanyShenzhenJifang 12,096,000.00 WithoutbaddebtrisksInvestmentCo.,Ltd.ShenzhenJifang 1,268,800.00 380,640.00 30.00%PartiallyrecyclableInvestmentCo.,Ltd.HuafaLeaseCompany 4,558,859.15 4,558,859.15 100.00%Un-collectablePortman 4,021,734.22 4,021,734.22 100.00%Un-collectableWuwuBranchofShenzhenDachong 641,266.64 WithoutbaddebtrisksIndustrialCo.,Ltd.ZhaoBaomin 564,646.35 564,646.35 100.00%Un-collectableTrafficaccident 555,785.81 555,785.81 100.00%Un-collectablecompensationHebeiBotouCourt 520,021.00 520,021.00 100.00%Un-collectableTotal 121,553,144.31 10,601,686.53 -- --Otheraccountreceivablewithbaddebtprovisionwithdrawalbymethodofaccountageinportfolio:√Applicable□Notapplicable InRMB Closingbalance Accountage Otheraccountreceivable Baddebtprovision AccrualratioSub-itemofwithinoneyearSubtotalofwithinoneyear 1,237,932.911-2year 44,299.00 2,214.95 5.00%2-3year 90,355.00 9,035.50 10.00% Overthreeyears 6,000.00 1,800.00 30.00% Total 1,378,586.91 13,050.45 Explanationonportfoliobasis: Withdrawingbadbedprovisionbypercentageoftotalaccountsreceivableoutstandinginportfolio: □Applicable√Notapplicable Withdrawingbadbedprovisionbyothermethodsinportfolio: √Applicable□Notapplicable Otheraccountreceivablewithsingleminoramountbutwithdrawalsingleitembaddebtprovisionatyear-end Debtor Bookbalance Baddebt Accrualratio(%) Accrual amount reasons Jiantao(Fogang)LaminatesCo.,Ltd. 465,528.10 465,528.10 100 Un-collectab le ShenzhenLotusIslandRestaurantCo.,Ltd. 236,293.80 236,293.80 100 Un-collectab le ShenzhenMingliCo.,Ltd. 170,394.84 170,394.84 100 Un-collectab le China Great Wall Computer Shenzhen 168,436.33 168,436.33 100 Un-collectab CompanyLimited le ShenzhenHongyaElectronicCo.,Ltd. 156,390.00 156,390.00 100 Un-collectab le ShangxiShengyiTechnologyCo.,Ltd. 156,239.32 156,239.32 100 Un-collectab le ChangchunArtificialResinCo.,Ltd. 147,486.96 147,486.96 100 Un-collectab le ShenzhenXinlanTechnologyCo.,Ltd. 138,038.00 138,038.00 100 Un-collectab le Fujian Zhangzhou Weili Electronic 112,335.62 112,335.62 100 Un-collectab EnterpriseCo.,Ltd. le ChuangjingStudio 192,794.00 192,794.00 100 Un-collectab le Individualsborrow 1,799,073.12 1,799,073.12 100 Un-collectab le Laborunion 332,402.55 332,402.55 100 Un-collectab le Staffcanteenetc. 856,753.66 856,753.66 100 Un-collectab le Other 2,977,519.46 2,977,519.46 100 Un-collectab le ShenzhenPolyPropertyGroupCo.,Ltd. 78,798.40 Total 7,988,484.16 7,909,685.76 —— —— (2)Baddebtprovisionaccrual,switch-backortakenbackintheperiod Baddebtprovisionaccrualwas0.00Yuan;theamountcollectedorswitchesbackamountingto0.00Yuan. Includingmajoramountofbaddebtprovisionthatswitch-backortakenbackinthePeriod: InRMB Company Amountswitch-backortakenback Collectionway Nil (3)Otheraccountreceivableactuallychargeoffintheperiod InRMB Item Amountchargeoff Includingmajorotheraccountreceivablechargeoff: InRMB Accountarisingfrom Otheraccount Chargeoff Company Amountchargeoff Reasons relatedtransactions receivablenature procedures (Y/N) Otheraccountreceivablechargeoff: Nil (4)Otheraccountreceivableclassifyaccordingtonature InRMB Nature Endingbookbalance Openingbookbalance Margindeposit 720,065.04 720,065.04 Borrowmoney 1,687,485.10 2,570,694.91 Intercoursefunds 109,015,166.21 123,104,890.35 Rentrevenue 19,466,609.05 6,195,824.01 Other 30,889.98 Total 130,920,215.38 132,591,474.31 (5)Top5otherreceivablescollectedbyarrearspartyatendingbalance InRMB Proportionintotal Endingbalanceof Company Nature Closingbalance Accountage otherreceivablesat baddebtprovision year-end HengfaTechnology Intercoursefunds 97,326,031.14Within1year 74.34% CompanyShenzhenJifang Leasereceivable 13,364,800.00Within1year 10.21% 380,640.00InvestmentCo.,Ltd. etc.HuafaLease Intercoursefunds 4,558,859.15Overthreeyears 3.48% 4,558,859.15Company LeasereceivablePortman 4,021,734.22Overthreeyears 3.07% 4,021,734.22etc.WuwuBranchofShenzhenDachong Leasingmargin 641,266.64Within1year 0.49%IndustrialCo.,Ltd.Total -- 119,912,691.15 -- 91.59% 8,961,233.373.Long-termequityinvestment InRMB Closingbalance Openingbalance Item Depreciation Depreciation Bookbalance Bookvalue Bookbalance Bookvalue reserves reservesInvestmentfor 187,208,900.00 600,000.00 186,608,900.00 187,208,900.00 600,000.00 186,608,900.00subsidiaryTotal 187,208,900.00 600,000.00 186,608,900.00 187,208,900.00 600,000.00 186,608,900.00(1)Investmentforsubsidiary InRMB Currentaccrualof Closingbalance Increaseduring Decreaseduring Investedunit Openingbalance Closingbalance thedepreciation ofdepreciation theperiod thisperiod reserves reservesHuafaLease 600,000.00 600,000.00 600,000.00CompanyHuafaProperty 1,000,000.00 1,000,000.00CompanyHengfa Technology 183,608,900.00 183,608,900.00 CompanyHuafaTrade0.00 CompanyHuafaHengtian 1,000,000.00 1,000,000.00CompanyHuafaHengtai 1,000,000.00 1,000,000.00CompanyTotal 187,208,900.00 187,208,900.00 600,000.004.Operatingincomeandoperatingcost InRMB CurrentPeriod LastPeriodItem Income Cost Income CostOtherbusiness 19,368,319.99 2,104,257.94 21,050,313.65 2,177,884.29Total 19,368,319.99 2,104,257.94 21,050,313.65 2,177,884.29Otherexplanation:XIV.SupplementaryInformation1.Currentnon-recurringgains/losses√Applicable□Notapplicable InRMB Item Amount NoteGains/losses from the disposal of-33,321.94 non-currentasset Governmentalsubsidyreckonedintocurrent gains/losses (not including the subsidy enjoyed in quota or ration according to 802,269.68 national standards, which are closely relevanttoenterprise’sbusiness) Othernon-operatingincomeandexpenditure 123,413.20 exceptfortheaforementioneditems Less:impactonincometax 223,090.23 Total 669,270.71 -- Concerningtheextraordinaryprofit(gain)/lossdefinedbyQ&AAnnouncementNo.1onInformationDisclosureforCompanies OfferingTheirSecuritiestothePublic---ExtraordinaryProfit/loss,andtheitemsdefinedasrecurringprofit(gain)/lossaccordingto thelistsofextraordinaryprofit(gain)/lossinQ&AAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheir SecuritiestothePublic---ExtraordinaryProfit/loss,explainreasons □Applicable√Notapplicable 2.REOandearningspershare Earningspershare Profitsduringreportperiod WeightedaverageROE BasicEPS(RMB/Share) DilutedEPS(RMB/Share) Netprofitsbelongtocommonstock 0.67% 0.0076 0.0076 stockholdersoftheCompany Netprofitsbelongtocommonstock stockholdersoftheCompanyafter 0.46% 0.0052 0.0052 deductingnonrecurringgainsand losses SectionXI.Documentsavailableforreference I.TextoftheSemi-AnnualReportcaringsignatureoftheChairman; II.FinancialstatementcarryingthesignaturesandsealsofthepersoninchargeoftheCompany,principalofthe accountingworksandpersoninchargeofaccountingorgan; III.All documentsoftheCompanyandmanuscriptsofpublicnoticesthatdisclosedintheChinaSecurities Journal,SecuritiesTimesandHongKongCommercialDailydesignatedbyCSRCinthereportperiod; IV.ArticleofAssociation V.Otherrelevantfiles.